214 Conn. 484 | Conn. | 1990
This is an appeal from the decision of the Appellate Court affirming a judgment of the trial court, Maloney, J., that the defendants Conrad A. Stella (Stella) and Stella Insurance Agency, Inc. (agency), were negligent in failing to obtain fire insurance on the plaintiff’s property, and that the agency breached its contract with the plaintiff to provide that insurance. The trial court awarded the plaintiff $60,300 in damages. The issues certified on appeal are: (1) in a tort action, does the collateral source rule apply to proceeds received by the plaintiff which are not payments of compensation for the plaintiff’s injury or loss; and (2) in a contract action, must the calculation of the plaintiff’s damages consider the effect of the third party sales agreement entered into subsequent to the breach, which would diminish the plaintiff’s actual loss. We answer both questions in the negative, and we affirm the decision of the Appellate Court.
The trial court found the following: The plaintiff owned certain real property on Rocky Hill Avenue in New Britain that consisted of ten lots and a 235 year
In March or April, 1986, the plaintiff met with Stella at the agency office and told him that she was considering selling the Rocky Hill Avenue property. At that time the property was insured for $60,000 against loss by fire under a policy issued by the Terra Nova Insurance Company, Ltd. On March 29, 1986, the defendants received a copy of a notice from the Terra Nova Insurance Company, addressed to the plaintiff, that stated that the policy would not be renewed after its expiration on May 6, 1986. On May 2, 1986, the plaintiff went to the agency and met with the office manager, Maria Stella. The plaintiff told Ms. Stella that she had a buyer, Frank Pascale, for the property, and that she wanted insurance coverage to protect her interest until the closing date.
After the May 2, 1986 meeting with the plaintiff, Stella unsuccessfully attempted to obtain $60,000 coverage on the property from one of the various insurance companies that the agency represented. The defendants then, as a last resort, applied for coverage to the Connecticut Insurance Placement Facility (Fair Plan), a pool of insurers that provides coverage for risks that are uninsurable on a direct basis. On June 11,1986, Fair Plan sent an approval notice to the defendants, which the defendants received on June 12. The plaintiffs notice of approval was sent to the 319 Rocky Hill Avenue address, which was the address the agency had indicated on the application as the location of the property. The defendants knew that the plaintiff did not reside at 319 Rocky Hill Avenue, yet they had not included any other mailing address for her and thus, she never received this notice.
The approval notice stated that Fair Plan would provide fire insurance coverage in the amount of $60,000 for a premium of $650.
After the fire, the plaintiff refused to sell the property to Pascale, and Pascale brought suit against her, seeking specific performance of their contract. On October 3,1986, the plaintiff reached a new agreement with Pascale, whereby he agreed to withdraw his suit, and she agreed to sell the property for the original sales price of $190,000. The plaintiff also agreed to institute an action against the defendants for their failure to obtain insurance on the property and to divide the proceeds of any recovery with Pascale.
The plaintiff then brought the present action against the defendants in two counts, claiming: (1) that both defendants were negligent in failing to obtain insurance oft the property; and (2) that the defendant agency breached its contract to obtain insurance on the property. On July 21,1988, the trial court found the defendants jointly and severally liable on the negligence count and found the agency liable on the breach of contract count. The trial court then awarded $60,000 in damages on the negligence count and, in the alternative, $60,300 damages on the contract count.
An action against an insurance agent for failure to obtain insurance may be brought under a theory of either negligence or breach of contract. Ursini v. Goldman, 118 Conn. 554, 559-60, 173 A. 789 (1934). The measure of the plaintiff’s damages is the amount that should have been recovered under the policy. Id., 563. In the present case, the trial court determined that the defendants’ negligence resulted in an immediate loss to the plaintiff of $60,000, i.e., the value of the policy that should have been in effect at the time of the fire.
Under the collateral source rule, “a defendant is not entitled to be relieved from paying any part of the compensation due for injuries proximately resulting from his act where payment [for such injuries or damages] comes from a collateral source, wholly independent of him.” Lashin v. Corcoran, 146 Conn. 512, 515, 152 A.2d 639 (1959); Gorham v. Farmington Motor Inn, Inc., 159 Conn. 576, 579, 271 A.2d 94 (1970). “The basis
The defendants argue that the proceeds from the renegotiated contract for the sale of the subject property are not a “payment” for such injuries or damages within the meaning of the collateral source rule, and therefore, they should be credited against the loss suffered by the plaintiff. We agree that the collateral source rule is inapplicable to the proceeds received by the plaintiff but disagree that there must therefore be a different result in this case. The types of payments that typically come within the collateral source rule include insurance proceeds, medical benefits, and payments made by an employer pursuant to a statutory compensation scheme. See, e.g., Gorham v. Farmington Motor Inn, Inc., supra; see also Apuzzo v. Seneco, 178 Conn. 230, 233, 423 A.2d 866 (1979); Healy v. White, 173 Conn. 438, 448, 378 A.2d 540 (1977).
We decline to extend the application of the collateral source rule to encompass the proceeds received by the plaintiff from the subsequent sale of her property. The subsequent sales agreement between the plaintiff and Pascale for the sale of the property at the original sales price was a completely independent act that was wholly unrelated and irrelevant to the defendants’ negligence and the damages that thereafter followed. The sales proceeds did not reimburse the plaintiff for the $60,000 she would have received from an insurer had the appropriate policy been in force, but in fact reflected the parties’ perception of the fair market value of the property regardless of the fire. Had her property been insured by the defendants, the plaintiff would still have been
The plaintiff suffered an actual economic loss that was not compensated by the proceeds of the subsequent sale of her property. While the proceeds from the subsequent sale of the property, a sale that was renegotiated after the destruction of the property, do not qualify as a payment within the ambit of the collateral source rule,
The agency further argues that the subsequent sale of the plaintiff’s property must be considered in determining whether the plaintiff has suffered any actual
The rights of the parties to an insurance contract are determined at the time or moment the loss is sustained, and damages are measured as of the date of the breach. West Haven Sound Development Corporation v. West Haven, 207 Conn. 308, 317, 541 A.2d 858 (1988); Vines v. Orchard Hills, Inc., 181 Conn. 501, 513, 435 A.2d 1022 (1980); Levesque v. D & M Builders, Inc., 170 Conn. 177, 181, 365 A.2d 1216 (1976); Spera v. Audiotape Corporation, 1 Conn. App. 629, 633, 474 A.2d 481 (1984). In this instance, the plaintiffs damages were fixed at the moment that the fire loss exceeded the $60,000 value of the policy. Since both the loss and the subsequent damages were fixed at that time, there was nothing the plaintiff could do further to mitigate them. The concept of mitigation of damages presupposes that an injured party has one or more courses of conduct available at or after the time a breach occurs and an obligation therefore exists to pursue that course that results in the least damages to the offending party. See generally 3 Restatement (Second), Contracts § 350 (1981), and the accompanying comments.
The general rule of damages in a breach of contract action is that the award should place the injured party in the same position as he would have been in had the contract been performed. Vespoli v. Pagliarulo, 212 Conn. 1, 3, 560 A.2d 980 (1989); West Haven Sound Development Corporation v. West Haven, 207 Conn. 308, 317, 541 A.2d 858 (1988); Danpar Associates v. Somersville Mills Sales Room, Inc., 182 Conn. 444, 446,
The decision of the Appellate Court is affirmed.
In this opinion the other justices concurred.
The plaintiff executed a bond for deed under which she agreed to sell the 319 Rocky Hill Avenue property to Pascale for $190,000, and in which she agreed to assume the risk of any loss due to fire until the closing date,
The premium shown on the agency’s notice was $585. The difference represented the agency’s commission.
The agency, without informing the plaintiff, applied the $300 deposit that the plaintiff had paid on May 2, 1986, to unrelated charges owed by the plaintiff.
During the period from May 2, 1986, to July 4, 1986, the defendants did not communicate with the plaintiff.
That figure represents the $60,000 the plaintiff would have received had the policy been in effect at the time of the fire and the $300 deposit the plaintiff had given to the defendant agency to be applied toward the purchase of an insurance policy. The trial court specifically found that $60,000 in damages was attributable to the defendants’ negligence, and that $60,300 in damages was attributable to the defendant agency’s breach of contract.
Although we will ordinarily consider certified issues in the form in which they have been framed in the Appellate Court, “we are not limited to the issues presented in the petition if the judgment of the Appellate Court may be affirmed on some other ground.” State v. Hodge, 201 Conn. 379, 384, 517 A.2d 621 (1986); see also Nardini v. Manson, 207 Conn. 118, 119, 119-20 n.1, 540 A.2d 69 (1988); State v. Torrence, 196 Conn. 430, 433, 434 n.5, 493 A.2d 865 (1985).