USE OF MOTOR VEHICLE EXCLUSION

Serious Injuries Seek to Stretch the Law

Carbon Dioxide Poisoning

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Two houseguests suffered serious injuries after their host left her car running overnight in an attached garage and the house filled with carbon monoxide. The Connecticut Supreme Court was asked, in New London County Mutual Insurance v. Maria v. Nantes et al., No. (SC 18758), (Conn. 02/21/2012), to determine if the guests’ injuries are covered by a homeowner’s insurance policy issued by the plaintiff, New London County Mutual Insurance Company, to the named defendant, Maria V. Nantes, that excludes coverage for injuries “[a]rising out of . . . [t]he . . . use” of a motor vehicle.

The plaintiff brought this declaratory judgment action against Nantes, the homeowner, her guests, Armenui Dzhgalian and Aida Melikyan, and Nantes’ automobile insurer, Government Employees Insurance Company (GEICO), seeking a declaration that Nantes’ homeowner’s policy does not cover the injuries suffered by Dzhgalian and Melikyan. The plaintiff filed a motion for summary judgment, claiming that the policy does not cover these injuries because they fall within the policy exclusion for injuries “[a]rising out of . . . [t]he . . . use” of a motor vehicle. The trial court granted the plaintiff’s motion and rendered judgment for the plaintiff, and the defendants appealed.

UNDISPUTED FACTS

Dzhgalian and Melikyan are medical school graduates and residents of California. In February, 2007, they traveled to Connecticut to participate in a month long, unpaid internship at Griffin Hospital (hospital) in the town of Derby. During their internships, Dzhgalian and Melikyan lived with Nantes, a hospital employee, at her home in the town of Ansonia. As part of the living arrangement, Nantes drove Dzhgalian and Melikyan to and from the hospital each day. Dzhgalian and Melikyan each agreed to pay Nantes $460 to cover their share of utilities and car expenses.

At the end of the work day on February 12, 2007, Nantes drove Dzhgalian and Melikyan to her house and parked her car in the attached garage. Nantes exited the car without turning off the engine, closed the garage door, and went into the living quarters of the house, which did not contain a carbon monoxide detector. The car’s engine continued to run overnight, and the house filled with carbon monoxide. Dzhgalian and Melikyan suffered serious neurological injuries from carbon monoxide poisoning. They suffered additional injuries when Nantes dragged them, unconscious, out of the house.

The plaintiff promptly disclaimed coverage, relying mainly on the fact that Nantes’ homeowner’s policy contained the following exclusion:

[c]overage [for] [p]ersonal [l]iability and . . . [m]edical [p]ayments to [o]thers do[es] not apply to ‘bodily injury’ or ‘property damage’ . . . [a]rising out of . . . [t]he ownership, maintenance, use, loading or unloading of motor vehicles or all other motorized land conveyances, including trailers, owned or operated by or rented or loaned to an ‘insured’…

Soon thereafter, Dzhgalian and Melikyan returned to California. Nantes subsequently relocated to California as well. Dzhgalian and Melikyan settled with Nantes and obtained an assignment of her rights to sue the plaintiff for indemnity and bad faith tort damages.

The plaintiff filed this declaratory judgment action against the defendants. Relying primarily on the motor vehicle exclusion, the plaintiff sought a declaration that Nantes’ homeowner’s policy does not cover Dzhgalian’s and Melikyan’s injuries. The trial court concluded that Dzhgalian and Melikyan’s lodging and transportation arrangement with Nantes constituted a purposeful business transaction within the meaning of Connecticut statutes and that the plaintiff’s cause of action against Dzhgalian and Melikyan arose out of this transaction.  The Supreme Court concluded that the trial court was correct that Connecticut had jurisdiction.

The Purpose of a Declaratory Relief Action

In Connecticut, the purpose of a declaratory judgment action is to secure an adjudication of rights when there is a substantial question in dispute or a substantial uncertainty of legal relations between the parties.  The Supreme Court noted that the Connecticut declaratory judgment statute is unusually liberal. An action for declaratory judgment is, in Connecticut, a statutory action as broad as it could be made. One type of controversy to which the Connecticut declaratory judgment statute often has been applied is a dispute over rights and liabilities under an insurance policy.

In the present case, the plaintiff sought an adjudication of its rights with respect to an unsettled question of law pertaining to its liability under the homeowner’s insurance policy that it had issued to Nantes.  As the defendants acknowledged the settlement agreement “demonstrated the intent of . . . Melikyan and Dzhgalian to pursue legal action against [the plaintiff], upon the anticipated attainment of an award in arbitration.” A clearer case of an actual bona fide issue in dispute would be difficult to imagine.

The defendants last contention was that the complaint was an abusive attempt to deprive the true plaintiffs of their chosen forum. The defendants assert that the real purpose behind the plaintiff’s declaratory judgment action was to avoid defending a breach of contract action in the defendants’ preferred forum. This purpose, the defendants maintain, has been admonished by courts across the country.

A Forum Cannot Be Chosen if a Party Prefers to Litigate Elsewhere or Prefer to be the Plaintiffs

The defendants failed to cite a single Connecticut case in support of this argument. Even if there were such a case, the Supreme Court concluded it would not be persuaded that the action is an instance of impermissible forum shopping. Rather, the attempt to seek relief in California was, in fact, an instance of forum shopping since the action was brought by a Connecticut insurance company to determine whether a Connecticut homeowner’s insurance policy covers injuries that occurred in a Connecticut home. Under the law in Connecticut, as it should across the country, a forum does not become inappropriate simply because the defendants would prefer to litigate elsewhere or because they would prefer to be the plaintiffs.

On appeal, the defendants advance three arguments:

  1. The injuries that Dzhgalian and Melikyan suffered as a result of the carbon monoxide poisoning do not fall under the policy’s motor vehicle exclusion because the injuries did not arise out of the use of a motor vehicle.
  2. Even if those injuries did arise out of the use of a motor vehicle, they fall within the scope of coverage under the doctrine of concurrent causes.
  3. The additional injuries that Dzhgalian and Melikyan sustained as a result of being dragged out of the house did not arise out of the use of a motor vehicle and, therefore, do not fall within the motor vehicle exclusion.

First, well established principles that govern the Supreme Court’s review of the defendants’ arguments. In the present case the Supreme Court was called on to ascertain the meaning of the phrase, “[a]rising out of” the “use” of “motor vehicles,” a phrase that is clear and unambiguous because our case law explicitly defines it. In Connecticut it is sufficient to show only that the accident or injury was connected with, had its origins in, grew out of, flowed from, or was incident to the use of the automobile, in order to meet the requirement that there be a causal relationship between the accident or injury and the use of the automobile. One may “use” an automobile without personally operating it, as the term use is broader than operation. Finding the provision to be unambiguous the Supreme Court construed it according to its natural and ordinary meaning and determine whether the provision so construed encompasses the injuries that Dzhgalian and Melikyan sustained as a result of their prolonged exposure to carbon monoxide while guests at Nantes’ home.

The defendants do not seriously dispute that Dzhgalian’s and Melikyan’s injuries arose out of Nantes’ act of leaving her car running in the garage because those injuries obviously were connected with that act. The defendants contended that, even if the injuries that Dzhgalian and Melikyan sustained as a result of their exposure to carbon monoxide did arise out of the use of a motor vehicle within the meaning of the motor vehicle exclusion of Nantes’ homeowner’s insurance policy, the doctrine of concurrent causes brings their injuries within the scope of coverage.

The present case involves injuries that stem from two causes, one falling within the exclusion, that is, Nantes’ act of leaving her car running in the garage, and the other arguably falling outside the exclusion, that is, Nantes’ act of closing the garage door. Here it is irrelevant that an arguably covered event – Nantes’ closing of the garage door – was a contributing cause of Dzhgalian’s and Melikyan’s injuries. The fact that Nantes’ use of her motor vehicle was connected to or created a condition that caused Dzhgalian’s and Melikyan’s injuries is enough to bring them within the motor vehicle exclusion.

Finally, facing a loss of the argument, the defendants contended that the bodily injuries that Dzhgalian and Melikyan sustained when Nantes dragged them out of the house (dragging injuries) do not fall within the policy’s motor vehicle exclusion because they neither arose out of nor were causally connected to the use of a motor vehicle. The Supreme Court dealt with the imaginative argument quickly and found, contrary to the defendants’ claim, the dragging injuries arose out of the use of a motor vehicle because Nantes’ negligent act of leaving her car running in the garage was the proximate cause of those injuries.

ZALMA OPINION

When an insurer denies a claim it will invariably find itself a defendant in a case seeking bad faith tort damages. In this case, because the defendant did not have coverage sufficient to pay for the injuries suffered by the two young doctors, the lawyers for the doctors attempted to set up the homeowners insurer for tort damages, including punitive damages, in California although none of the injuries were suffered in California — a forum know to provide large punitive damages awards against insurers.

Connecticut, where the policy was issued and where the injuries occurred refused to allow the injured to select a forum of their choice and allowed the declaratory relief action filed by the Connecticut insurer to have its coverage question resolved by a Connecticut court. They read a clear and unambiguous policy exclusion to apply and refused to apply the creative use of the concurrent cause doctrine to reach a result that applied the clear language of the policy.

Barry Zalma, Esq.

© 2012 – Barry Zalma

Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud. Mr. Zalma serves as a consultant and expert, almost equally, for insurers and policyholders.

He founded Zalma Insurance Consultants in 2001 and serves as its senior consultant. He recently published the e-books, “Zalma on Diminution in Value Damages – 2012,”“Zalma on Insurance,” “Heads I Win, Tails You Lose — 2011,” “Zalma on Rescission in California,” “Arson for Profit,” “Insurance Fraud,” and others that are available at www.zalma.com/zalmabooks.htm.

Mr. Zalma can also be seen on World Risk and Insurance News’ web based television program “Who Got Caught” with copies available at his website at http://www.zalma.com.

 

About Barry Zalma

Barry Zalma, Esq., CFE, is a California attorney who limits his practice to consultation regarding insurance coverage, insurance claims handling, insurance bad faith and fraud and acting as a mediator or arbitrator on insurance disputes. Mr. Zalma serves as a consultant and expert almost equally for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. He recently published the e-books, "Zalma on Insurance Fraud - 2013;" "Zalma on Rescission in California - 2013"; "Random Thoughts on Insurance" containing posts from this blog; "Zalma on Insurance;" "Murder and Insurance Don't Mix;" “Heads I Win, Tails You Lose — 2011,” “Zalma on Diminution in Value Damages,” “Arson for Profit” and “Zalma on California Claims Regulations,” which are all available at http://www.zalma.com/zalmabooks.htm. Contact the author or access his free "Zalma's Insurance Fraud Letter" at http://www.zalma.com/ZIFL-CURRENT.htm or write to him at zalma@zalma.com.
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