219 Conn. 339 | Conn. | 1991
The principal issue in this appeal is whether an insurer who pleads concealment or misrepresentation as a special defense in an action to recover on a fire insurance policy is required to prove that defense by clear and convincing evidence or by a preponderance of the evidence. We conclude that the preponderance of the evidence standard is the appropriate burden of proof.
The plaintiff, Zelia S. Rego, was the owner of two adjacent multi-family houses in Waterbury that were insured against fire loss under policies issued by the defendant, the Connecticut Insurance Placement Facility. After both of the dwellings were damaged by fire during the early morning hours of July 15, 1984, and the defendant subsequently denied coverage, the plaintiff filed a two count complaint to recover under the policies. Each count represented a claim for one of the dwellings. The defendant alleged in its answer that the plaintiff was not entitled to recover because: (1) the fire was set by or with the assistance of the plaintiff; and (2) the plaintiff “intentionally concealed and mis
The circumstances surrounding the cause and origin of the fire were disputed at trial. The plaintiff testified that at the time the fire began she and Eliud Rivera, with whom she was living at the time and whom she subsequently married, were asleep in a bedroom on the third floor of one of the two buildings. Rivera
The defendant presented evidence that shortly after the fire Rivera had said that an unidentified man had poured gasoline on him when he went out into the hallway.
I
The defendant contends that the trial court improperly rejected its request for an instruction to the jury that the defendant had to prove its special defense of concealment or misrepresentation by a preponderance of the evidence. We agree.
It is not disputed that a claim of common law fraud must be proven by a higher burden of proof than the preponderance of the evidence standard. We have described this standard alternatively as “clear and satisfactory” evidence, or “clear, precise and unequivocal” evidence. Kilduff v. Adams, Inc., 219 Conn. 314, 327-28, 593 A.2d 478 (1991).
The plaintiff contends that the clear and convincing standard charged by the trial court is the correct burden of proof because the defendant’s allegation of concealment or misrepresentation is tantamount to a claim of common law fraud. The defendant, on the other hand, argues that in light of the fact that the special defenses of arson and concealment or misrepresentation are usually raised together, it would be illogical and impractical to apply different standards to the two defenses. The defendant also contends that a claim that an insured has concealed or misrepresented material facts concerning a claim for coverage is distinct from a claim of common law fraud and, therefore, the clear and convincing standard should not be applied to that defense. We agree.
The majority of courts that have addressed this issue have concluded that the preponderance of the evidence standard is the appropriate burden of proof to apply to an insurer’s defense that a policy is void because the insured has concealed or misrepresented material facts concerning a claim for coverage.
We note that, as in the present case, insurers commonly raise the special defenses of arson and concealment or misrepresentation in tandem. See, e.g., Verrastro v. Middlesex Ins. Co., supra, 180; Dairy Queen of Fairbanks, Inc. v. Travelers Indemnity Co.,
Our conclusion is supported by the distinction between the elements of common law fraud and the elements of an insurer’s defense of concealment or misrepresentation. An insurer who raises this special defense must prove only that the insured wilfully concealed or misrepresented a material fact with the intention of deceiving the insurer. Chauser v. Niagara Fire Ins. Co., 123 Conn. 413, 423, 196 A. 137 (1937). Unlike a party asserting a cause of action for common law fraud, an insurer who raises the special defense of concealment or misrepresentation does not have to prove that the insurer actually relied on the concealment or
The plaintiff next claims that even if the trial court improperly instructed the jury on the required burden of proof for the defense of concealment or misrepresentation, the error was harmless and a new trial is not necessary because the court properly charged the jury that the preponderance of the evidence standard applied to the arson defense and the jury found that the defendant had not satisfied its lesser burden of proof as to the arson. The defendant contends, however, that its two defenses are not so inextricably intertwined that the decision on one should control the other. Specifically, the defendant argues that the error was harmful because the jury reasonably could have concluded that the plaintiff did not know, before and possibly even after the fire, of Rivera’s plans for arson, but that she did make material misrepresentations concerning Rivera’s whereabouts at the time the fire started or about the presence of gasoline in the apart
The relationship between arson and misrepresentation on the record in this case is a close question. We conclude that although the jury did not find that the defendant had proven its special defense of arson by a preponderance of the evidence, the jury reasonably could have found that the defense of concealment or misrepresentation had been proven by a preponderance of the evidence if the jury had been charged properly on the burden of proof for that defense.
Because a new trial is necessary, we will consider the second issue certified since it may arise on the retrial.
II
The defendant claims that the trial court’s instruction to the jury that it should consider the misrepresentations “relating to the cause or origin of the fire” improperly restricted the jury’s consideration of whether the plaintiff concealed or misrepresented facts concerning the whereabouts of Rivera at the time the fire started, the plaintiff’s ownership interest in the property and her financial situation. The defendant also argues that the jury was entitled to consider misrepresentations allegedly made by the plaintiff at any time after the fire loss, including her testimony at trial, but was prevented from doing so by the trial court’s instructions.
It is well established that the pleadings of the parties frame the issues before the trial court. Doublewal Corporation v. Toffolon, 195 Conn. 384, 390, 488 A.2d
In support of its claim that misrepresentations made by an insured at trial can be used by an insurer to deny coverage, the defendant relies primarily on Lomartira
In American Paint Service v. Home Ins. Co. of New York, 246 F.2d 91 (3d Cir. 1957), the court provided a thorough statement of the rationale underlying the majority rule. “The fraud and false swearing clause is one beneficial to the insurer and it reasonably extends to protect the insurer during the period of settlement or adjustment of the claim. When settlement fails and suit is filed, the parties no longer deal on the non-adversary level required by the fraud and false swearing clause. If the insurer denies liability and compels the insured to bring suit, the rights of the parties are fixed as of that time for it is assumed that the insurer, in good faith, then has sound reasons based upon the terms of the policy for denying the claim of the insured. To permit the insurer to await the testimony at trial to create a further ground for escape from its contractual obligation is inconsistent with the function the trial normally serves. It is at the trial that the insurer must
We conclude, therefore, that during the retrial the defendant is entitled to introduce evidence that the plaintiff concealed or misrepresented material facts concerning matters other than the cause and origin of the fire. The defendant, however, cannot rely on any alleged misrepresentations made after it denied coverage.
The judgment of the Appellate Court is reversed and the case is remanded to that court with direction to remand the case to the trial court for a new trial.
In this opinion the other justices concurred.
The defendant asserted that by concealing and misrepresenting material facts the plaintiff had violated the following provision of the fire insurance policies it had issued: “Concealment or fraud. We do not provide coverage if [the insured] ha[s] intentionally concealed or misrepresented any material fact or circumstance relating to this insurance.”
That provision of the policy was based on the following clause from the standard fire policy set forth in General Statutes § 38a-307 (formerly General Statutes § 38-98): “Concealment, fraud. This entire policy shall be void if, whether before or after a loss, the insured has wilfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto.”
In addition, the plaintiff’s ex-husband stated that about one week after the fire the plaintiff had told him that the fire started when someone threw gasoline and fire on Rivera when he answered a knock on the apartment door.
The investigator also concluded that although the cause of the fire was arson, the actual ignition of the fire occurred accidentally.
The plaintiff presented evidence that the gasoline found at the scene contained low-level hydrocarbons that would only be found in gasoline that had not been subjected to the high temperatures accompanying a fire. The plaintiff relied on this evidence in arguing that the gasoline found by investigators had been placed there after the fire.
In Kilduff v. Adams, Inc., 219 Conn. 314, 330, 593 A.2d 478 (1991), we held that a plaintiff in a fraud action must prove damages by a preponderance of the evidence but must prove all the other elements of common law fraud by “clear and satisfactory” evidence.
See, e.g., Palace Entertainment, Inc. v. Bituminous Casualty Corporation, 793 F.2d 842, 843-46 (7th Cir. 1986) (Indiana law); Transportation
We also note that when the predecessor of General Statutes § 38a-307 was enacted in 1893, it included a provision concerning concealment or misrepresentation substantially the same as that contained in § 38a-307. See Public Acts 1893, c. CCXXVI, § 7. Although the case law is not entirely clear, it appears that when the original version of § 38a-307 was enacted, common law fraud had to be proven only by a preponderance of the evidence. See Kilduff v. Adams, Inc., 219 Conn. 314, 327-28, 593 A.2d 478 (1991).
In claiming that the defendant should be limited to presenting evidence concerning the alleged misrepresentation or concealment of facts related to the cause and origin of the fire, the plaintiff also relies upon the defendant’s response to one of its interrogatories. Specifically, in response to a question asking for a statement of how the plaintiff intentionally concealed or misrepresented any material facts concerning the fire loss claim, the defendant stated that in certain oral and written statements made subsequent to the fire, the “plaintiff repeatedly stated that she did not know how the fire began, and intentionally concealed and misrepresented her knowledge of the cause of the fire, her knowledge of the presence of gasoline in her apartment and her knowledge of what Eliud Rivera had said to her.”
Although we have held that ordinarily a response to a discovery interrogatory is not a judicial admission and is not conclusive on the party making it; Piantedosi v. Floridia, 186 Conn. 275, 278, 440 A.2d 977 (1982); Howat v. Passaretti, 11 Conn. App. 518, 525, 528 A.2d 834 (1987); we note that some courts have relied on a party’s answers to interrogatories in limiting that party’s proof on the ground that the opposing party was prejudiced by an omission in the answer. See annot., 86 A.L.R.3d 1089, and cases cited therein. Because the plaintiff is now aware that the defendant intends to offer proof concerning facts allegedly concealed or misrepresented that do not relate to the cause or origin of the fire, she cannot claim at the retrial that the interrogatory response in question has prejudiced her.