Anastasia v. General Casualty Company of Wisconsin
An insurer is entitled to a reduction of its limits of liability for uninsured and underinsured motorist coverage by an amount equal to the sum of punitive damages paid to the insured. Theresa Anastasia, was severely injured in a head-on motor vehicle collision with a vehicle operated by Donna Mitsock, and owned by Mark Mitsock, which suddenly had crossed the center line. Allegedly, Donna Mitsock fled and, when apprehended, her blood alcohol level was above the legal limit. The Mitsocks' liability coverage limit was $100,000 per person and $300,000 per accident. In settlement of her suit against the Mitsocks, Theresa Anastasia received $100,000 under the liability policy to settle her negligence claim for compensatory damages and $315,000 personally paid by the Mitsocks to settle her claim for exemplary and common-law punitive damages. Anastasia commenced this suit against her motor vehicle insurance carrier, General Casualty Company of Wisconsin, seeking to recover under a provision for underinsured motorist coverage of up to $250,000. The court granted the defendant's motion for summary judgment. The plaintiff appealed claiming that summary judgment was improperly granted because the court improperly concluded that the defendant could reduce its underinsured motorist coverage liability by an amount equal to the punitive damages she received. The Supreme Court affirmed the judgment. The plaintiff claimed that the policy language was ambiguous and incongruous with the requirements of C.G.S. §38a-334-6 of the Regulations of Connecticut State Agencies. That regulation provides that an insurer may reduce its underinsured motorist coverage limits to the extent that "damages" have been paid. The plaintiff's policy stated that the defendant may reduce its liability by "all sums" paid because of the bodily injury. Under the Supreme Court's 1992 decision in Bodner v. United Services Automobile Association, the plain meaning of the term "damages," in §38a-334-6(d)(1) encompasses common-law punitive damages. Therefore, the regulation permits an insurer to offset its underinsured motorist liability by an amount equal to punitive damages paid to an insured by the tortfeasor. The policy's use of "all sums" in the limitation provision corresponded in all material respects to the regulation's use of "damages." The trial court properly determined that the policy language was unambiguous and substantially congruent with the regulation. Public policy underlying underinsured motorist coverage was not violated because the plaintiff was sufficiently compensated.