New London Cnty. Mut. Ins. Co. v. Sielski

159 Conn.App. 650

123 A.3d 925

NEW LONDON COUNTY MUTUAL INSURANCE COMPANY

v.Andrew SIELSKI et al.

No. 36792.

Appellate Court of Connecticut.

Argued May 14, 2015.

Decided Sept. 15, 2015.

Glenn E. Knierim, Jr., Avon, for the appellant (named defendant).

MaryKate J. Geary, with whom, on the brief, was Matthew G. Conway, West Hartford, for the appellee (plaintiff).

DiPENTIMA, C.J., and PRESCOTT and BEAR, Js.

Opinion

BEAR, J.

This appeal arises out of a declaratory judgment action in which the plaintiff, New London County Mutual Insurance Company, asserted that it did not have a duty to defend the insured defendant Andrew Sielski in a separate action brought by Meghan Wishneski and James Wishneski (Wishneskis) against the defendant.¹ On appeal, the defendant claims that the trial court improperly (1) rendered summary judgment in favor of the plaintiff because the damages claimed in the separate action were property damages as defined in the defendant's homeowners insurance policy (policy) with the plaintiff, and (2) determined that the question of whether the alleged damages constituted property damages within the meaning of the policy was a question of law rather than a question of fact. We affirm the judgment of the trial court.

The following facts and procedural history are relevant to the present appeal. On May 11, 2011, the Wishneskis commenced an action against the defendant (Wishneski action).² In their seven count, second amended complaint dated February 22, 2013, the Wishneskis alleged that they had entered into a contract to buy a residential property from the defendant. As part of his contractual obligations, the defendant completed a disclosure report, which included representations that he had no knowledge of any problems concerning basement water seepage, rot and water damage, water drainage problems, or driveway problems. After the Wishneskis purchased the property, however, they encountered a variety of problems, including drainage problems on the perimeter of the property, water coming into the property, and severe flooding that washed away their driveway. They also discovered rotten and moldy beams in the basement. The Wishneskis alleged that the defendant knew or should have known of these issues and misrepresented the condition of the home because of the exposure of the property to severe flooding during the period that the defendant owned it, and the Wishneskis' discovery of newer beams attached to older moldy and rotten beams in the basement. The Wishneskis alleged seven theories of recovery, all of which were predicated on the alleged misrepresentations of the defendant.

On June 6, 2011, and June 11, 2012, the plaintiff commenced this action against the defendant and the Wishneskis, respectively. In its December 19, 2012 amended complaint, the plaintiff alleged that although the defendant had a policy with it that was operative from February 28, 2007, until it was cancelled effective March 13, 2009, the date of the closing of the sale of the property to the Wishneskis, no claims alleged in the Wishneski action required it to defend or indemnify the defendant.

On April 8, 2013, the plaintiff filed a motion for summary judgment on the ground that there was no genuine issue of material fact in dispute and that the court could determine as a matter of law whether the plaintiff had a duty to defend or indemnify the defendant. On April 17, 2014, the court rendered summary judgment in favor of the plaintiff on its amended complaint, holding, inter alia, that the theory of negligent misrepresentation and resulting injury alleged in the Wishneski action did not constitute property damage as defined in the policy.³ This appeal followed. Additional facts will be provided as necessary.

I

The defendant first claims that the court improperly rendered summary judgment in favor of the plaintiff because the alleged damages claimed in the Wishneski action as a result of the defendant's alleged misrepresentations constituted property damage within the meaning of the policy. The defendant relies heavily on Capstone Building Corp. v. American Motorists Ins. Co., 308 Conn. 760, 67 A.3d 961 (2013), and argues that our Supreme Court's decision in Capstone Building Corp. controls this case. The defendant argues that in Capstone Building Corp., the court interpreted policy definitions of “occurrence” and “property damage” similarly to those found in the policy at issue in the present case and found that an insurable injury had been alleged. Thus, the defendant argues that his alleged misrepresentations and the harm that allegedly resulted from them constitute both an occurrence and property damage within the coverage of the policy in the present case. We disagree.

We begin by setting forth the standard of review and legal principles that inform our analysis. “With respect to summary judgment, our standard of review is well established. Summary judgment rulings present questions of law; accordingly, [o]ur review of the ... decision to grant [a] ... motion for summary judgment is plenary.... In addition, the interpretation of an insurance contract presents a question of law, over which our review is plenary.... Finally, with respect to an insurer's duty to defend a claim brought against the insured, [t]he question of whether an insurer has a duty to defend its insured is purely a question of law, which is to be determined by comparing the allegations of [the] complaint with the terms of the insurance policy.” (Citations omitted; internal quotation marks omitted.) Misiti, LLC v. Travelers Property Casualty Co. of America, 308 Conn. 146, 154, 61 A.3d 485 (2013).

“Under the well established four corners doctrine, the duty to defend is broader than the duty to indemnify.... An insurer's duty to defend is triggered if at least one allegation of the complaint falls even possibly within the coverage.... Indeed, [i]t is well established ... that a liability insurer has a duty to defend its insured in a pending lawsuit if the pleadings allege a covered occurrence, even though facts outside the four corners of those pleadings indicate that the claim may be meritless or not covered.... The obligation of the insurer to defend does not depend on whether the injured party will successfully maintain a cause of action against the insured but on whether he has, in his complaint, stated facts which bring the injury within the coverage. If the latter situation prevails, the policy requires the insurer to defend, irrespective of the insured's ultimate liability.... In contrast to the duty to defend, the duty to indemnify is narrower: while the duty to defend depends only on the allegations made against the insured, the duty to indemnify depends upon the facts established at trial and the theory under which judgment is actually entered in the case.... Thus, the duty to defend is triggered whenever a complaint alleges facts that potentially could fall within the scope of coverage....” (Internal quotation marks omitted.) Travelers Casualty & Surety Co. of America v. Netherlands Ins. Co., 312 Conn. 714, 739, 95 A.3d 1031 (2014). “Because the duty to defend is significantly broader than the duty to indemnify, where there is no duty to defend, there is no duty to indemnify....” (Internal quotation marks omitted.) DaCruz v. State Farm Fire & Casualty Co., 268 Conn. 675, 688, 846 A.2d 849 (2004).

The question of whether the alleged damages in the present case constitute property damage as defined in the policy requires this court to interpret the policy. “An insurance policy is to be interpreted by the same general rules that govern the construction of any written contract.... In accordance with those principles, [t]he determinative question is the intent of the parties, that is, what coverage the ... [insured] expected to receive and what the [insurer] was to provide, as disclosed by the provisions of the policy.... If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning.... Under those circumstances, the policy is to be given effect according to its terms.... When interpreting [an insurance policy], we must look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in order to reach a reasonable overall result.” (Internal quotation marks omitted.) Lexington Ins. Co. v. Lexington Healthcare Group, Inc., 311 Conn. 29, 37–38, 84 A.3d 1167 (2014).

In the present case, section II, coverage E, of the policy defines the defendant's liability coverage. It provides, in relevant part, that the plaintiff will defend and indemnify the defendant “[i]f a claim is made or a suit is brought ... for damages because of ‘bodily injury’ or ‘property damage’ caused by an ‘occurrence’ to which this coverage applies....” The policy defines an “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in: a. ‘Bodily injury’; or b. ‘Property damage.’ ” “Property damage,” in turn, is defined as “physical injury to, destruction of, or loss of use of tangible property.”

Neither this court nor our Supreme Court has addressed whether damages arising from a negligent misrepresentation may be considered property damage or under what circumstances a negligent misrepresentation can give rise to an occurrence within the meaning of a homeowners insurance policy. Decisions from our Superior Court have uniformly held that damages flowing from misrepresentations are not property damage as that term is normally used in homeowners insurance policies. See Amica Mutual Ins. Co. v. Paradis, Superior Court, judicial district of Hartford, Docket No. CV–13–6041224–S, 2014 WL 6804534 (October 16, 2014) (59 Conn. L. Rptr. 151, 153 ) (claim in underlying action not property damage because “the alleged...