ALLSTATE INS. CO. v. LIMONE, No. HHB CV08 4016936 (Oct. 10, 2008)

PATTY JENKINS PITTMAN, Judge.

The plaintiff Allstate Insurance Company filed this declaratory judgment action against the defendant Donna Limone, seeking a judgment determining that the plaintiff does not have a duty to defend or indemnify Limone in a lawsuit known as Gargano v Town of Branford pending in the Judicial District of New Haven. In the Gargano lawsuit, Limone and various other defendants are alleged to have committed torts of defamation, negligent infliction of emotional distress, and intentional infliction of emotional distress. The plaintiff alleges its policy of insurance does not provide coverage for such conduct and does not obligate Allstate to defend or indemnify Limone. Limone denies Allstate's allegations that the insurance policy provides no coverage. In addition, Limone has filed four special defenses that Allstate has moved to strike. For reasons stated herein, the court grants the motion to strike the special defenses.

THE PURPOSE OF A SPECIAL DEFENSE

Conn. P.B. § 10-50 states:

No facts may be proved under either a general or special denial except such as show that the plaintiff's statements of fact are untrue. Facts which are consistent with such statements but show, notwithstanding, that the plaintiff has no cause of action, must be specially alleged.

Thus, in an action for declaratory judgment based on a contract, if the plaintiff alleges that the contract does not cover the situation, and the defendant's defense is that the contract does cover the situation, the defendant is entitled to present this defense pursuant to a simple denial, with no need to file a special defense.

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THE SPECIAL DEFENSE OF ESTOPPEL

The defendant pleads as follows in the First Special Defense:

The plaintiff having assumed responsibility for the defense of the defendant in the underlying action and based on the complaint filed therein, is now estopped from denying the defendant said defense.

Both sides agree that this special defense refers to the fact that the plaintiff is currently providing a defense to Limone in the underlying case under a reservation of rights. Limone alleges that the plaintiff, having undertaken to do so, cannot now assert that the contract does not obligate the plaintiff to provide a defense.

This is essentially an attempt to assert an equitable defense to an action at law. Rarely can such a defense be asserted, and it is entirely inapt in this situation. The law in Connecticut is clear that either an insured or an insurer may bring a declaratory judgment action to determine the duty of the insurer to defend and indemnify the insured relative to an occurrence that may be covered by their insurance policy. See Holy Trinity Church of God in Christ v. Aetna Casualty Surety Co., 214 Conn. 216, 571 A.2d 107 (1990) (insured vs. insurer); St. Paul Fire and Marine Ins. Co. v. Shernow, 222 Conn. 823, 610 A.2d 1281 (1992) (insurer vs. insured). Moreover it is not at all unusual for an insurer to provide an initial defense to the insured while the insurer's obligations under the policy are being tested simultaneously through a declaratory judgment action. See, e.g., Nationwide Mutual Ins. Co. v. Allen, 83 Conn.App. 526, 850 A.2d 1047 (2004); Employers Reinsurance v. Muro, 86 Conn.App. 55, 861 A.2d 1216 (2004).

There is no persuasive authority for the proposition that the insured can assert estoppel in such a situation.

THE SPECIAL DEFENSE OF LACK OF RIPENESS

The defendant's second special defense is "[n]o indemnity obligation has arisen and if and until said obligation materializes, this action is not ripe." A review of the case law indicates that the appellate courts have not distinguished between ripeness on the issues of obligation to defend and obligation to indemnify. When a declaratory judgment action is brought, the court has proceeded to analyze the contract language to determine if both duties exist. See, e.g. Mitchell v. Medical Inter-insurance Exchange, 101 Conn.App. 721, 923 A.2d 790 (2007). CT Page 16446 Indeed in DaCruz v. State Farm Fire Casualty Co., 268 Conn. 675, 846 A.2d 849 (2004), the court determined that a decision in a declaratory judgment action on the duty to defend necessarily was a decision on the duty to indemnify as well, whether or not the indemnification issue had become fully ripe. There is no persuasive authority for the proposition that either party must wait until the insured is found liable before obtaining a decision on whether the indemnity duty is present, at least where the duty to defend is also raised as an issue in the declaratory judgment action.

THE SPECIAL DEFENSE THAT THE OCCURRENCE INVOLVES NEGLIGENT, AS OPPOSED TO INTENTIONAL, CONDUCT

Paragraph Thirteen of the plaintiff Allstate's complaint in this case states that the events alleged in the Gargano lawsuit implicate intentional, willful and purposeful conduct that do not meet the definition of an "occurrence" subject to coverage under the Allstate policy. In addition to denying that paragraph, Limone asserts in her third special defense that the underlying set of occurrences involve negligent as well as intentional conduct. This would have the effect, if proved, of negating Allstate's allegation that it has no duty to Limone under the policy provision regarding such conduct.

The allegation in the special defense is no more than a denial of Allstate's allegation and is not a proper subject of a special defense. In order for Limone to assert this as a special defense, she would have to allege facts "which are consistent with such statements but show, notwithstanding, that the plaintiff has no cause of action," Conn. P.B. § 10-50, rather than assert facts which simply deny the plaintiff's allegation.

THE FOURTH SPECIAL DEFENSE THAT THE POLICY APPLIES

The allegation in the fourth special defense is that the "personal umbrella policy covers the clams asserted by [Gargano] regardless of the `foundation allegations'" identified by Allstate. This appears to be no different from the allegation in the third special defense, which, as explained above, is simply the equivalent of a general denial. Moreover Limone does not address this special defense in her objection and memorandum in opposition to the motion to strike, so that the court deems her objection waived.

CONCLUSION

CT Page 16447 The defendant Donna Limone has denied Allstate's claims that the insurance policy contains no provisions that obligate Allstate to defend and indemnify Limone in the Gargano lawsuit. Her special defenses do not allege legally cognizable claims outside the scope of a denial of Allstate's allegations. Accordingly the Motion to Strike the Special Defenses is granted.

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