The Appellate Court of Connecticut affirmed a verdict that found an insurer did not have to defend or indemnify an insured based on the motor vehicle exclusion in the insured's homeowners policy. The case is Liberty Ins. Corp. v. Johnson, 2023 Conn. App. LEXIS 279 (Conn. App. Ct. 2023).
The underlying case alleged that Theodore and Kim Johnson (Johnsons) had negligently allowed their minor son, Aaron, to consume alcohol at home after he arrived visibly intoxicated, then permitted him to drive Theodore's car (the vehicle). Jordan Torres was a passenger in the car and suffered severe injuries when Aaron lost control of the vehicle and hit a telephone pole.
The Johnsons sought coverage from their automobile policy with Safeco as well as their homeowners and umbrella policies, both issued by Liberty. Both insurers denied the claim and filed for summary judgment. Safeco asserted that the Johnsons had voluntarily cancelled bodily injury coverage for Theodore's vehicle shortly before the accident. Liberty claimed the damages had arisen from the ownership and use of an automobile and were therefore excluded under the homeowners policy. Liberty also argued umbrella coverage didn't apply because there was no supporting coverage. The Johnsons argued that Torres's allegations of negligence precluded application of the motor vehicle exclusion in their homeowners policy, and therefore it was possible the claims could be covered.
The trial judge granted the insurers' motions for summary judgment. Safeco produced evidence showing bodily injury coverage for the vehicle had been voluntarily cancelled before the accident. The judge also found that Torres's injuries arose from Aaron's use of a motor vehicle, so the motor vehicle exclusion in the homeowners policy applied. The umbrella policy was unavailable because there was no underlying coverage to support it.
On appeal, the Johnsons argued the negligence claims had not been properly analyzed to determine whether any one of them could support coverage, and the trial court had improperly relied on case law relating to negligent drivers because the Johnsons' case was distinguishable from those cases. They also argued that, since coverage could exist under the homeowners policy, the duty to defend arose under the umbrella policy.
The appellate court acknowledged the bedrock principle of the duty of defense: An insurer is obliged to defend an insured if any allegation could be covered. According to the Johnsons, at least some of the seventeen claims against them did not connect the use of a motor vehicle and their alleged negligence. Since those negligence claims could be covered, Liberty had to provide a defense.
The court referenced an earlier Connecticut case, Hogle v. Hogle, 356 A.2d 172 (Conn. 1975), where a man sought homeowners coverage of an auto accident allegedly caused by his dog, who had jumped into the driver's seat and struck the man while he was driving. The man claimed the policy would extend to cover the damages, but the insurer denied the claim based on an exclusion for the use of an auto away from the residence premises. In granting summary judgment to the insurer, the court stated that "it [was] sufficient to show only that the accident or injury was connected with…the use of an automobile."
The Johnsons argued their case was distinguishable from Hogle because any alleged negligence in that case had occurred inside the car and was inseparable from the defendant's use of a motor vehicle. The Johnsons' alleged negligence in allowing Aaron to consume alcohol and then drive drunk had taken place in their home, so it bore no temporal, causal, or geographic connection to Torres's injuries. Ergo, their claim was outside the scope of the motor vehicle exclusion and Liberty was obligated to provide a defense.
The court disagreed. The distinction drawn by the Johnsons was built on facts the Hogle court hadn't relied on in their decision. Furthermore, the motor vehicle exclusion in their homeowners policy precluded coverage for bodily injury, not negligence, arising out of the use of an automobile. Like the court in Hogle, the central focus was "whether the use of the car was connected with the accident or the creation of a condition that caused the accident."
Though some of the Johnsons' negligence occurred in their home, it was indisputable that Torres's injuries arose directly from the auto accident caused by Aaron's drunk driving. Since the homeowners policy from Liberty definitively excluded coverage for incidents arising out of the use of a motor vehicle, coverage was unavailable.
The Johnsons' umbrella policy offered no solace. Umbrella coverage cannot, by nature, stand on its own. Umbrella policies cover only the excess amount over the limit of another policy. Without a supporting policy, umbrella coverage will not apply. Since homeowners coverage was precluded by the motor vehicle exclusion, and the vehicle's bodily injury coverage had been voluntarily cancelled before the accident, there was no underlying policy to anchor the umbrella coverage.
The verdict in favor of Liberty was affirmed.
Editor's Note: This case illustrates the importance of understanding policy exclusions. The Johnsons tried to establish that their claim was covered, thus triggering Liberty's duty to defend, because it was their alleged negligence in allowing their son to drive drunk that had caused the injuries in the underlying complaint. However, the operative event that spurred the underlying complaint was the car crash caused by Aaron's drunk driving, not the Johnsons' negligence. Since there was a clear connection between the injuries alleged in the underlying complaint and the use of an automobile, the incident was excluded.
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