GL E-Note 12-20-2023
Connecticut Appellate Court Affirms No Duty to Defend and/or Indemnify Claims Arising Out of Motor Vehicle Accidents Under Homeowners’ Insurance Policies
By: Kaylee Navarra
The Connecticut Appellate Court recently affirmed Connecticut’s longstanding precedent that homeowners’ insurers have no duty to defend their insureds in actions involving injuries arising out of the use of a motor vehicle, where their policies contain auto liability exclusions. The decision is a “win” for insurers as to Connecticut-based risks because under Connecticut law, the duty to defend otherwise is quite broad.
On December 5, 2023, the Appellate Court issued its decision in Liberty Insurance Corporation et al. v. Theodore Johnson, et al. (AC 45933), in which it found that Liberty Insurance Corporation (“Liberty Insurance”), Liberty Mutual Insurance Company (“Liberty Mutual”), and Safeco Mutual Insurance Company (“Safeco”) had no duty to defend their mutual insureds, Theodore, Kim, and Aaron Johnson, in an underlying tort case arising out of a motor vehicle accident.
On December 26, 2019, Aaron Johnson—Theodore and Kim Johnson’s minor son—left their home and operated Theodore’s 1997 Audi, in which Jordan Torres was a passenger. Aaron lost control of the Audi and struck a telephone pole. Torres allegedly sustained personal injuries as a result of the accident and commenced the underlying tort action against the Johnsons. Torres alleged that Aaron had consumed alcohol at the Johnson’s home before operating the Audi; Torres also alleged that Theodore and Kim were negligent and vicariously liable for Aaron’s negligence. Specifically, Torres alleged that Torres’s resulting “injuries, damages, and losses” were caused, in whole or in part, by Theodore and Kim allowing Aaron to consume and have access to alcohol, despite his minor status, and allowing Aaron to leave their home and operate a vehicle despite Aaron’s alleged intoxication.
After Torres initiated his lawsuit, the Johnsons sought a defense from Liberty Insurance, their homeowners’ insurer; Safeco, their auto insurer; and Liberty Mutual, their umbrella carrier.
Thereafter, Liberty Insurance, Safeco, and Liberty Mutual commenced a declaratory judgment action seeking a court declaration that they were not obligated to defend or indemnify the Johnsons in the underlying Torres action. The insurers promptly moved for summary judgment, arguing that none of the insurers’ respective policies provided coverage for the allegations in the Torres action; specifically: (1) the Liberty Insurance homeowners’ policy contained a motor vehicle liability exclusion and a vicarious liability exclusion; (2) the Safeco auto policy covering the Audi had previously been canceled; and (3) the Liberty Mutual umbrella policy only provided coverage for claims also covered by underlying insurance.
The Connecticut Superior Court granted the insurers’ motion, and the Johnsons appealed. On appeal, they argued that Theodore and Kim’s alleged negligence arose from their conduct inside their home and, therefore, that conduct was separate from Aaron’s operation of the motor vehicle, which the Superior Court failed to consider in determining that there was no duty to defend.
The Connecticut Appellate Court examined the policies at issue and affirmed the Superior Court’s decision, agreeing that the insurers did not have a duty to defend the Johnsons in the underlying Torres action.
The Liberty Insurance homeowners’ policy “specifically excludes coverage for claims of bodily injury arising out of the ‘ownership, maintenance or use’ of a motor vehicle.” The Appellate Court was guided by Hogle v. Hogle, 167 Conn. 572 (1975) and United Services Automobile Association v. Kaschel, 84 Conn. App. 139 (2004), in which similar homeowners’ policy exclusions barred insureds’ coverage for the insureds’ dog allegedly jumping into the front seat of the insured’s vehicle, purportedly causing the accident (Hogle), and coverage for the insured’s failure to render aid to the victim—instead, leaving the scene—after recklessly and negligently causing a motor vehicle accident (Kaschel). The Appellate Court explained that the Connecticut Supreme Court has held that for an injury to “arise out of” the “use” of a motor vehicle for purposes of determining coverage under a liability insurance policy, an insurer need only show that the injury was connected to the use of the automobile. In other words, where a motor vehicle accident is the operative event giving rise to injuries alleged in a complaint, such injuries “arise out of” the “use” of a motor vehicle.
After examining the Liberty Insurance homeowners’ policy language and the Torres complaint, the Appellate Court determined that the operative event giving rise to Torres’s claimed injuries was the motor vehicle accident that Aaron Johnson allegedly caused. The Court noted that Torres specifically alleged that his injuries were sustained “[a]s a result of the collision.”
The Appellate Court further noted that the Liberty Insurance homeowners’ policy provides coverage for “bodily injury arising out of” motor vehicle use, and not negligence arising out of motor vehicle use, explaining that the appropriate inquiry is whether there is a sufficient causal link between bodily injuries claimed and the use of the motor vehicle.
The Safeco automobile policy did not provide coverage to the Johnsons because the Johnsons had cancelled it shortly before the motor vehicle accident giving rise to the coverage dispute. Thus, the Appellate Court concluded that the Liberty Mutual umbrella policy also did not provide coverage for the Johnsons as to Torres’s claims because no underlying coverage—either the Liberty Insurance homeowners’ policy or the Safeco auto policy—did so either.
While Johnson does not create new Connecticut law, it strengthens Connecticut precedent that homeowners’ policies will not provide coverage for bodily injury sustained as a result of an insured’s negligence if such bodily injury arises out of conduct from which the motor vehicle accident had its origins.