Justia.com Opinion Summary: Plaintiffs brought a declaratory judgment action seeking a determination that certain medical malpractice claims that they had asserted in an action against a medical association were covered under an insurance policy issued to the facility by Insurer. Due to Insurer's insolvency during the pendency of the action, Connecticut Insurance Guaranty Association assumed liability for Insurer's obligations to the extent that claims were covered under the Connecticut Insurance Guaranty Act. The Association filed a counterclaim, contending that the claims against the medical association were not covered because they were subject to a policy provision that excluded them from corporate coverage liability. The trial rendered rendered judgment in Plaintiffs' favor. The Supreme Court affirmed, holding that that the policy exclusion was inapplicable to the medical association's coverage for claims brought against it predicated solely on liability that it may have occurred through the acts of one of its nurse practitioners.
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CHRISTOPHER E. JOHNSON ET AL. v.
CONNECTICUT INSURANCE GUARANTY ASSOCIATION ET AL.
(SC 18712)
Rogers, C. J., and Palmer, Zarella, McLachlan, Eveleigh, Harper and
Vertefeuille, Js.
Argued September 21—officially released November 8, 2011
Mark D. Robins, pro hac vice, with whom was
Charles W. Pieterse and, on the brief, Michael F. Cavolo
and Thomas P. O’Connor, for the appellant (named
defendant).
Sean K. McElligott, for the appellees (plaintiffs).
Opinion
HARPER, J. The plaintiffs, Christopher E. Johnson,
individually and in his capacity as administrator of the
estate of Debra L. Johnson, his deceased wife, brought
the present declaratory judgment action seeking, inter
alia, a determination that certain medical malpractice
claims that they had asserted in an action against the
defendant Middlesex Obstetrics and Gynecology Associates, P.C. (Middlesex), were covered under an insurance policy issued to Middlesex by Medical InterInsurance Exchange (Exchange). Due to Exchange’s
insolvency during the pendency of the malpractice
action, the named defendant, Connecticut Insurance
Guaranty Association (association), assumed liability
for Exchange’s obligations to the extent that claims
were covered under the Connecticut Insurance Guaranty Act (guaranty act).1 Thereafter, the association
filed a counterclaim for a declaratory judgment in the
present action, contending that the claims against Middlesex were not covered because they were subject to a
policy provision that excluded from corporate coverage
liability based on ‘‘injury arising solely out of acts or
omissions in the rendering or failure to render professional services . . . by any paramedical for whom a
premium charge is shown on the declarations page.’’
Following cross motions for summary judgment, the
trial court rendered judgment in the plaintiffs’ favor.
The association appeals from that judgment,2 contending that the trial court improperly determined that
the policy exclusion was inapplicable. We affirm the
trial court’s judgment.
The record reveals the following undisputed facts.
Following the death of Debra Johnson, the plaintiffs
brought a medical malpractice action against Middlesex
and Sally J. Irons, an obstetrician, seeking damages for
negligence and loss of consortium. Middlesex and Irons
were insureds under the Exchange policy. The plaintiffs
thereafter determined that their claims against Middlesex were predicated on the acts of one of its nurse
practitioners, Kathy Hoffman. Hoffman was not named
as a defendant in the malpractice action.3
After a dispute arose between the plaintiffs and the
association as to Middlesex’s coverage, these parties
each sought a declaratory judgment. In subsequent
cross motions for summary judgment, the limited issue
before the trial court was whether Middlesex was covered under the Exchange policy for liability predicated
on Hoffman’s alleged negligence in light of the policy’s
paramedical exclusion to corporate coverage. The trial
court rendered judgment in the plaintiffs’ favor, apparently determining that the exclusion plainly did not
apply. It underscored the fact that Hoffman was not a
named insured, a dispositive fact in a question of coverage in Connecticut Medical Ins. Co. v. Kulikowski, 286
Conn. 1, 942 A.2d 334 (2008). Ultimately, the court con-
cluded that the exception did not apply because ‘‘the
premium charge for paramedicals under Coverage Part
C was listed as ‘included’ and there were no paramedicals identified in or premium charges for paramedicals
listed on [the] declaration pages . . . .’’
The association appeals from that judgment, claiming
that Kulikowski does not support the trial court’s conclusion and that the Exchange policy unambiguously
indicates that the exclusion applies. Although we agree
that Kulikowski does not control the present case,4 we
conclude that the pertinent policy terms are ambiguous
and, therefore, must be construed in favor of coverage.
Accordingly, we affirm the trial court’s judgment, but
under different reasoning.
We undertake our task in the present case pursuant
to well established principles. ‘‘[C]onstruction of a contract of insurance presents a question of law for the
court which this court reviews de novo. . . . 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. . . .
‘‘In determining whether the terms of an insurance
policy are clear and unambiguous, [a] court will not
torture words to import ambiguity where the ordinary
meaning leaves no room for ambiguity . . . . Similarly,
any ambiguity in a contract must emanate from the
language used in the contract rather than from one
party’s subjective perception of the terms. . . . As with
contracts generally, a provision in an insurance policy
is ambiguous when it is reasonably susceptible to more
than one reading. . . . Under those circumstances, any
ambiguity in the terms of an insurance policy must be
construed in favor of the insured because the insurance
company drafted the policy.’’ (Citations omitted; internal quotation marks omitted.) Connecticut Medical Ins.
Co. v. Kulikowski, supra, 286 Conn. 5–6.
Mindful of these principles, we turn to the Exchange
policy at issue in the present case. That policy effectively consists of two parts: (1) the ‘‘Medical Group
Practice, Professional Liability Insurance, Permanent
Protection Policy,’’ a form contract; and (2) the declara-
tions pages, which tailor coverage, effective dates and
premiums to the individual insureds.5
Section I of the policy, ‘‘Coverage Agreements,’’ indicates that there are three types of coverage available:
‘‘Coverage A–Individual Professional Liability’’; ‘‘Coverage B–Corporate/Partnership Liability’’; and ‘‘Coverage
C–Paramedical Employee Liability.’’ With respect to
Coverage B, § I provides in relevant part: ‘‘The
Exchange will pay on behalf of the insured all sums
that the insured shall become legally obligated to pay
as damages because of . . . [i]njury arising out of the
rendering of or failure to render . . . professional services by any person for whose acts or omissions the
corporation/partnership insured is legally responsible
. . . .’’ The association does not dispute that, but for
any applicable exclusion, the plaintiffs’ claims against
Middlesex would be covered pursuant to § I.
Section III of the policy sets forth ‘‘Exclusions.’’ It
provides in relevant part: ‘‘This insurance does not
apply to liability of the insured . . . (i) corporation/
partnership under Coverage Agreement B with respect
to injury arising solely out of acts or omissions in the
rendering or failure to render professional services by
individual physicians or nurse anesthetists, or by any
paramedical for whom a premium charge is shown
on the declarations page.’’ (Emphasis added.) It is
undisputed in the present case that Hoffman is a paramedical employee, that Hoffman’s alleged acts constitute professional services6 and that her acts alone are
the claimed basis for Middlesex’s liability. Thus, the
issue in the present case turns on the meaning of the
emphasized phrase in the relevant exclusion, in connection with the declarations page.
Although the exception refers to the declarations
‘‘page,’’ there are in fact several declarations pages.
The ‘‘Common Policy Declarations’’ provide as follows:
‘‘Insurance is afforded only with respect to the Coverage
Part(s) for which a premium charge or ‘no charge’ is
indicated. This page of the declarations provides information for the policy in total. Refer to schedules on
following pages of these declarations for information
on individual insureds.
Premium
PART I–PROFESSIONAL LIABILITY COVERAGES
Coverage A–Individual Professional Liability
$2,885,333.00
Coverage B–Corporate/Partnership Liability
$
15,000.00
Coverage C–Paramedical Employee Liability
$
Included
$
N/A
PART II–OTHER COVERAGES
TOTAL PREMIUM $2,900,333.00’’
In addition to the Common Policy Declarations, the
policy contains a ‘‘Coverage Part A Declarations, Schedule of Individual Insureds’’ and a ‘‘Coverage Part B
Declarations, Schedule of Individual Corporation/Partnerships.’’7 There is no Coverage Part C Declarations,
Schedule of Paramedical Insureds. In the Coverage Part
A Declarations, the schedule reflects, inter alia: the
names of 133 individuals covered, including Irons; their
principal practice; limits of coverage; and a premium,
which ranges from $2402 for medical directors to
$23,588 for certain individuals whose principal practice
is obstetrics/gynecology. In the Coverage Part B Declarations, the schedule reflects the names of twenty-eight
corporations or partnerships and the coverage limit for
the lead corporation only, but no premiums.
Having laid out the essential terms of the policy, we
now turn to the interpretation advanced by the association in this appeal. It claims that the policy’s exclusion
to Middlesex’s corporate coverage unambiguously
applies in the present case because: (1) the exclusion
applies to paramedical employees as a class, as long
as there is a premium shown for that class on the declarations page; and (2) such a premium is shown on the
Common Policy Declarations in that the word
‘‘included’’ under Part C Coverage indicates that some
portion of the $15,000 premium charged for Part B Coverage is attributable to Part C Coverage. In support of
its construction, the association contends that treatment of paramedical employees as a class is consistent
with the policy language defining who is insured.8 It
further contends that the meaning it ascribes to the
term ‘‘included’’ is consistent with the collective limit
on liability shared by a corporation and any of its
unscheduled employees under the policy.9 Accordingly,
the association asserts that the trial court improperly
determined that Hoffman had to be named on the declarations page in order for the exclusion to apply. The
association concedes that the policy was intended to
cover the type of claim alleged in the underlying malpractice action but contends that, because that coverage existed only under Coverage C Paramedical
Employee Liability, the plaintiffs’ failure to name Hoffman as a defendant results in there being no coverage
under the policy to shield Middlesex from liability.
We cannot help but note at the outset the seemingly
bizarre result called for by the association’s position:
that a medical practice might purchase coverage for a
particular and foreseeable risk—liability for the negligence of its professional employees—but that actual
coverage would depend upon the way a given plaintiff
happens to formulate its claim, a contingency that is
outside of the insured’s control and never expressly
articulated in the policy. In response to questions at
oral argument before this court, the association could
not offer a persuasive reason why a medical practice
would purchase such a policy,10 suggesting only that
perhaps Middlesex would have had to pay a higher
premium for its Coverage B had it elected not to obtain
separate coverage for paramedical employees or
elected to obtain separate coverage for such employees
at no charge.11
Despite the counterintuitive result that the association’s construction yields, we would be bound to apply
it if the policy terms unambiguously and inexorably led
to the conclusion that the parties manifested such an
intention. See Liberty Mutual Ins. Co. v. Lone Star
Industries, Inc., 290 Conn. 767, 796, 967 A.2d 1 (2009)
(‘‘[t]he court must conclude that the language should
be construed in favor of the insured unless it has ‘a
high degree of certainty’ that the policy language clearly
and unambiguously excludes the claim’’). We conclude,
however, that the policy does not unambiguously manifest a clear intention to exclude coverage for Middlesex
in the present case.
As we previously have noted, the exception to Middlesex’s Coverage B applies to ‘‘injury arising solely out
of acts or omissions in the rendering or failure to render
professional services by individual physicians or nurse
anesthetists, or by any paramedical for whom a premium charge is shown on the declarations page.’’
(Emphasis added.) The association’s contention that
this exclusion unambiguously applies to paramedical
employees as a class, such that Hoffman need not be
individually named on the declarations page, necessarily depends on the fact that a premium charge for that
class is shown on the declarations page. We conclude
that the policy does not unambiguously demonstrate
that fact. Therefore, even under the association’s questionable construction of the exception, it cannot
prevail.12
In our view, a layperson reasonably could understand
the phrase ‘‘premium charge . . . shown on the declarations page’’ to mean that a specific amount has been
assessed for coverage of paramedical employees and
that this specific amount will be evident on a declarations page. See Holy Trinity Church of God in Christ
v. Aetna Casualty & Surety Co., 214 Conn. 216, 223
n.5, 571 A.2d 107 (1990) (‘‘[i]t is a basic principle of
insurance law that policy language will be construed as
laymen would understand it’’ [internal quotation marks
omitted]). The Common Policy Declarations list a specific dollar figure for premiums for Coverage A–Individual Professional Liability and for Coverage
B–Corporate/Partnership Liability, but simply indicate
‘‘Included’’ under the premium column associated with
Coverage C–Paramedical Employee Liability. The term
‘‘included’’ is not defined in the policy and is not linked
directly with any other term that illuminates its meaning. Compare State v. Jones, 51 Conn. App. 126, 137,
721 A.2d 903 (1998) (‘‘[a]lthough ‘including’ has been
found to be ambiguous by itself, other language [in the
statute] may remove the ambiguity, as in this case’’),
cert. denied, 247 Conn. 958, 723 A.2d 814 (1999).
More specifically, the reference to ‘‘[i]ncluded’’ is not
accompanied by an express indication what is included
where. Even if we were to accept the association’s con-
tention that the term ‘‘included’’ necessarily refers to
the $15,000 premium listed for Coverage B because of
the collective limits of liability that apply; see footnote
9 of this opinion; that term could just as easily indicate
that Coverage C is provided at no additional charge as
some portion of the $15,000 premium is charged for
Coverage C.13 The policy provides no means of ascertaining which portion, if any, of that $15,000 premium
is being charged for Coverage C. Indeed, we question
how the insured could have weighed the options that
the association claims were available if separate figures
were not provided for Coverage B and Coverage C.
By comparison, the basis for the $2,885,333 premium
charged for Individual Professional Liability can be
ascertained by reference to the Coverage Part A Declarations, which assigns specific premiums to each individual listed. The Coverage Part B Declarations for
corporations list no premium charges, however, and
there are no Coverage Part C Declarations. Even if the
parties intended to cover paramedical employees as a
class, a Coverage Part C Declarations page could have
listed Middlesex’s paramedical employees as a class
and shown a specific premium charged for coverage of
that class to make clearer that the exclusion applies.
The association contends, however, that ‘‘included’’
can only be interpreted as showing a premium charge
when read in light of a statement that precedes it in the
Common Policy Declarations. That statement provides:
‘‘Insurance is afforded only with respect to the Coverage
Part(s) for which a premium charge or ‘no charge’ is
indicated.’’ The association claims that this language
gives rise to only three possibilities: a premium charge
is indicated and coverage is afforded; no charge is indicated but coverage nonetheless is afforded; or no coverage is afforded. It contends that we cannot construe
‘‘included’’ to mean ‘‘no charge,’’ because the policy
requires that precise term to be used to make such
an election. The association further contends that, if
‘‘included’’ is construed to mean no premium charge is
shown, then no coverage is afforded for paramedical
employee liability, leaving a broad swath of employees
unprotected from malpractice actions. We disagree.
The association’s contentions overlook an important
principle and the narrow scope of the issue before us.
We construe ambiguities in favor of coverage. That
means that the exclusion at issue in the present case
is read narrowly. See Allstate Ins. Co. v. Barron, 269
Conn. 394, 406, 848 A.2d 1165 (2004) (‘‘[W]hen the words
of an insurance contract are, without violence, susceptible of two [equally reasonable] interpretations, that
which will sustain the claim and cover the loss must,
in preference, be adopted. . . . [T]his rule of construction favorable to the insured extends to exclusion
clauses.’’ [Internal quotation marks omitted.]). The
present case does not require us to determine whether
the designation of ‘‘included’’ affords insurance for par-
amedical employees under Coverage C. If, at some
point, a court is called on to do so, it will construe
broadly the policy provisions that bear on that question,
some of which have no bearing on the issue in the
present case. For purposes of the present case, we
simply conclude that, even if we assume that the exclusion refers to paramedicals as a class, as the association
contends, the policy does not ambiguously show a premium charge for that class on the declarations page.
The effect of this conclusion exposes the insurer to
no greater liability than the risk contemplated under
the association’s construction of the policy. Indeed,
given that Middlesex paid for coverage for the claimed
negligence, our construction is most consistent with
the reasonable expectations of the parties. See Pacific
Indemnity Ins. Co. v. Aetna Casualty & Surety Co.,
240 Conn. 26, 33 n.8, 688 A.2d 319 (1997) (‘‘[i]t is a basic
principle of insurance law that policy language will
be construed as laymen would understand it and not
according to the interpretation of sophisticated underwriters, and that ambiguities in contract documents are
resolved against the party responsible for its drafting;
the policyholder’s expectations should be protected as
long as they are objectively reasonable from the layman’s point of view’’ [internal quotation marks omitted]). Accordingly, we conclude that the policy
exclusion is inapplicable to Middlesex’s coverage for
claims brought against it predicated solely on liability
that it may incur for Hoffman’s acts. Therefore, the trial
court properly rendered judgment in the plaintiffs’
favor.
The judgment is affirmed.
In this opinion the other justices concurred.
1
The guaranty act, General Statutes § 38a-836 et seq., defines the scope
of a ‘‘covered claim’’; General Statutes § 38a-838 (5); and prescribes a limit
on the association’s liability for each such claim, which in the present case
is $300,000. See General Statutes § 38a-841.
2
The association appealed from the trial court’s judgment to the Appellate
Court, and we thereafter transferred the appeal to this court. See General
Statutes § 51-199 (c) and Practice Book § 65-1.
3
The plaintiffs indicated in filings to the trial court in the declaratory
judgment action that Hoffman’s alleged negligence was ascertained in discovery, after the statute of limitations had expired.
4
In Connecticut Medical Ins. Co. v. Kulikowski, supra, 286 Conn. 3, the
sole issue before this court was ‘‘whether the trial court properly concluded
as a matter of law that a nurse practitioner referenced by job title, but not
listed as a named insured, in the declarations page of a physician’s medical
malpractice insurance policy, was not a separately insured individual under
the policy.’’ The policy at issue in that case required the ‘‘individual’’ to be
‘‘named’’ on the declaration page in order to be an insured. Id., 8–9. The
Exchange policy at issue in the present case has numerous features that
distinguish it from the one at issue in Kulikowski, including the absence
of any linkage between ‘‘paramedicals’’ and either the term ‘‘individual’’ or
the express requirement that they be named or identified. See footnote 8
of this opinion. We note that the plaintiffs do not contend that Kulikowski
controls, or even has any bearing on, the present case.
5
In addition to the ‘‘Permanent Protection,’’ or primary, policy, Middlesex
has an excess coverage policy with the Exchange. The parties agree that
coverage under the excess policy is determined by our decision as to coverage under the primary policy. We also note that the primary policy includes
various endorsements that reflect modifications to coverage, none of which
is relevant to the present case.
6
‘‘ ‘Professional services’ ’’ are defined in part under the policy as ‘‘services
requiring specialized knowledge and mental skill in the practice of the
profession described in the declarations page . . . .’’ There is no definition
of paramedicals in the policy, and, although there is a reference to ‘‘Paramedical Employee Liability’’ on the Common Policy Declarations page, there is
no description of professions that are deemed paramedical on any of the
declarations pages.
7
The Coverage Part B Declarations page is accompanied by a ‘‘Schedule
of Additional Named Insureds.’’ Middlesex is listed on that schedule.
8
The association contrasts language that requires naming or identifying
persons and entities under Coverage A and Coverage B with the term ‘‘any’’
under Coverage C. Section IV of the policy provides: ‘‘Each of the following
is an insured to the extent set forth below:
‘‘(a) under Coverage A, any individual named in the Schedule of Insureds;
‘‘(b) under Coverage B, any partnership identified in the declarations
page, and any member thereof with respect to the acts or omissions of others;
‘‘(c) under Coverage B, any corporation named in the declarations page,
and any executive officer, director or shareholder thereof while acting within
the scope of his duties as such with respect to acts or omissions of others;
‘‘(d) under Coverage C, any employee of an insured under Coverage B
(other than a physician or surgeon or an individual named on the Schedule
of Insureds) while acting within the scope of his duties as such.’’ (Emphasis added.)
9
Section V (a) of the policy provides in relevant part: ‘‘The limit of liability
stated in the declarations page as ‘each medical incident’ is the total limit
of the Exchange’s liability for damages due to each medical incident. This
limit of liability shall apply:
‘‘1) separately to each individual named in the Schedule of Insureds; and
‘‘2) collectively, to the corporation or partnership named in the declarations as an insured and the employees (other than a physician, surgeon
or an individual named on the Schedule of Insureds) of a corporation or
partnership insured under Coverage B. . . .’’
10
We note that, for reasons that are not apparent to this court, the insured,
Middlesex, filed an appearance and answer in the present case but did not
thereafter participate in any of the proceedings. Therefore, because the
association has assumed liability for the Exchange’s claims that are covered
under the guaranty act, we are presented with a circumstance in which we
are called on to construe an insurance policy without the benefit of the
views of either the insured or the insurer who drafted the policy. As we
recently noted with respect to the rule requiring interpretation of ambiguous
policy language in favor of coverage, there is ‘‘no reason to distinguish
between the rule’s application as to an insurance company that drafted the
policy . . . and its application as to another entity that assumes the drafter’s
responsibilities, in other words, that stands in the shoes of the drafter.’’
Connecticut Ins. Guaranty Assn. v. Fontaine, 278 Conn. 779, 789, 900 A.2d
18 (2006).
11
As we previously noted, according to the Common Policy Declarations
page of the policy, coverage is afforded ‘‘only with respect to the Coverage
Part(s) for which a premium charge or ‘no charge’ is indicated.’’
12
We note that, by contrast to the strange results yielded by the association’s interpretation, construing the exception to refer to individual paramedical employees appears to have some basis in logic. A medical practice or
the insurer reasonably might want to identify, either in Coverage A or
Coverage C Declarations, those paramedical employees who are subject to
a higher risk of being named in a malpractice action, either because of the
nature of their job or their past history, and provide a separate limit of
coverage for those individuals at an additional premium based on the relative
risk. Although this construction would not completely avoid the problem
that a plaintiff’s pleading could determine the availability of coverage under
the exception, it does not create the anomalous situation in the association’s
construction under which a medical practice shares a collective limit of
liability with its paramedical employees, covers the premiums for its paramedical employees within its own premium but has no coverage if its paramedical employees are not named in the action.
13
The association cites one dictionary defining ‘‘included’’ as ‘‘being part
of the whole; contained; covered’’; Random House Unabridged Dictionary
(2d Ed. 1993); as evidence that this term unambiguously indicates a premium
charge. We first note that this court previously has deemed the term
‘‘included’’ ambiguous when used in a statute. See, e.g., State v. White, 204
Conn. 410, 422–23, 528 A.2d 811 (1987); Hartford Electric Light Co. v.
Sullivan, 161 Conn. 145, 150, 285 A.2d 352 (1971). We further note that a
premium ‘‘covered’’ or ‘‘contained’’ in another premium charge does not
necessarily mean that a separate premium, above and in addition to some
part of the premium listed, has been assessed.
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