Date: 01-13-2009

Case Style: National Grange Mutual Insurance Company v. Felix, C. Santaniello, et al.

Case Number: SC 17961

Judge: Norcott

Court: Supreme Court of Connecticut

Plaintiff's Attorney: John W. Lemega, Halloran & Sage LLP, Hartford, Connecticut, with whom, on the brief, was Elizabeth M. Festa, Goldberg Segalla LLP, West Hartford, Connecticut, for the appellee (plaintiff).

Defendant's Attorney: John H. Van Lenten, with whom was John P. Clifford, Jr., Gersten Clifford & Rome, Hartford, Connecticut for the appellants (named defendant et al.).

Description: In this appeal, we consider the relationship between general garage operations insurance coverage and a specific dealer plate endorsement with respect to the coverage of dealer plates affixed to a recently sold used car. The named defendant, Felix C. Santaniello, and the defendant Felix R. Santaniello, administrators of the estate of Elizabeth Santaniello, appeal1 from the declaratory judgment rendered in favor of the plaintiff, the National Grange Mutual Insurance Company, declaring that it had no duty to defend or indemnify the defendant insureds, Carbone’s Auto Body, Inc. (Carbone’s), and Nikolas Topintzis, in a wrongful death action brought against them by Felix C. Santaniello and Felix R. Santaniello.2 On appeal, the defendants claim that the trial court improperly concluded that the garage insurance policy (policy) that the plaintiff had issued to Carbone’s did not provide liability coverage for a 1993 Plymouth Voyager (Voyager) operated by Topintzis because: (1) its dealer plate coverage had been deleted by subsequent endorsement; and (2) the garage operations provision of the policy does not extend to the sale of used cars. We affirm the judgment of the trial court.

The record, including the trial court’s findings in its memorandum of decision, reveals the following facts and procedural history. On May 20, 2003, Topintzis purchased the Voyager from Carbone’s for $320. Because Carbone’s had not yet obtained the title to the Voyager from its wholesaler, Tony March Buick, Inc., Topintzis could not register it in his own name and operated it pursuant to a loaner agreement that he had entered into with Carbone’s on that date.3 Pursuant to that agreement, the Voyager was equipped with dealer plates, numbered DD 929, which the state had issued to Carbone’s pursuant to General Statutes § 14-60 (a).4

Six days later, on May 26, 2003, Topintzis was operating the Voyager on Interstate 91 heading southbound, and was involved in an accident that injured Felix C. Santaniello and killed Elizabeth Santaniello. Thereafter, the defendants commenced a wrongful death action against Topintzis and Carbone’s in the Superior Court for the judicial district of New Britain.

The policy at issue herein was issued by the plaintiff to Carbone’s on January 9, 2003, with an effective date of December 12, 2002. According to the trial court’s memorandum of decision, the ‘‘policy . . . originally insured three rather than four sets of dealer plates for [Carbone’s]. Although the application for insurance sought coverage for four sets of dealer plates, the plaintiff learned from Mitchell Marcus, the insurance agent with whom it worked, that the fourth plate would be permanently affixed to a 2000 International truck [a flatbed tow truck].5 Since the policy separately listed and insured the truck, there was no reason for the policy to cover a fourth dealer plate and it accordingly did not do so. . . .

‘‘On or about February 2, 2003, the plaintiff deleted coverage of the three dealer plates with the consent or authorization of Carbone’s.6 . . . The court credits the testimony of Jeffrey Burns [an underwriter for the plaintiff] that this deletion meant that there was no longer any separate coverage for dealer plates under the policy.

‘‘Carbone’s received notice of this deletion shortly after February 10, 2003, when Marcus mailed to Carbone’s the plaintiff’s notice of change in policy, along with a covering memo[randum].7 To be sure, Carbone’s already had notice of this change because, as the court has found, Carbone’s requested or at least authorized it.8 ‘‘An inspection conducted on or about February 27, 2003, revealed that, notwithstanding this deletion of coverage with Carbone’s approval and knowledge, Carbone’s was using ‘four dealer plates . . . as floaters . . . primarily on vehicles being towed.’ Carbone’s was thus not relying on a mistaken belief that the plaintiff was insuring one remaining dealer plate. Instead, Carbone’s was still using all four plates despite its request to delete coverage for three such plates and the notice it received that the plaintiff had done so. Further, Carbone’s was no longer paying, and the plaintiff was accordingly not receiving, a premium for any dealer plates.’’9

Accordingly, the plaintiff brought this action seeking a declaratory judgment that it had no obligation to defend or indemnify Topintzis and Carbone’s in the wrongful death action.10 In the first count of the amended complaint, the plaintiff claimed that the Voyager was not a ‘‘covered auto’’ under the relevant policy provisions. In the second count, the plaintiff claimed that Carbone’s had materially misrepresented the nature of its business when it applied for the policy, which would bar coverage thereunder.

After a two day trial, the trial court concluded that the Voyager was not covered under the policy because: (1) the dealer plate endorsement was not in effect at the time of the accident; and (2) the Voyager was not a ‘‘covered auto’’ under the ‘‘garage operations’’ provision of the policy because the sale and lease of used cars is not a use commonly ‘‘in connection with,’’ or ‘‘necessary or incidental,’’ to Carbone’s ‘‘repair shop’’ operations.11 Accordingly, the trial court rendered a declaratory judgment concluding that the policy did not provide coverage. This appeal followed.12

Before turning to the defendants’ specific claims on appeal, we begin with the well established legal principles applicable to insurance coverage disputes, as well as the appropriate standard of review. ‘‘[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. . . . This rule of construction may not be applied, however, unless the policy terms are indeed ambiguous.’’13 (Internal quotation marks omitted.) Zulick v. Patrons Mutual Ins. Co., 287 Conn. 367, 372–73, 949 A.2d 1084 (2008); see also id., 378 (not considering evidence of insured’s subjective intent with respect to desired scope of coverage because policy was clear and unambiguous).

Finally, a trial court’s resolution of factual disputes that underlie coverage issues is reviewable on appeal subject to the clearly erroneous standard. See Holy Trinity Church of God in Christ v. Aetna Casualty & Surety Co., 214 Conn. 216, 222, 571 A.2d 107 (1990) (whether insureds were engaged in demolition ‘‘activities excluded by the policies is a factual question, to which the ordinary rules of appellate review apply’’); ACMAT Corp. v. Greater New York Mutual Ins. Co., 88 Conn. App. 471, 481–83, 869 A.2d 1254 (sufficiency of evidence to prove existence of insurance policy), cert. denied, 274 Conn. 903, 876 A.2d 11 (2005). Such a ‘‘finding of fact will not be disturbed unless it is clearly erroneous in view of the evidence and pleadings in the whole record . . . . [A] finding is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’’ (Citation omitted; internal quotation marks omitted.) Echavarria v. National Grange Mutual Ins. Co., 275 Conn. 408, 417–18, 880 A.2d 882 (2005) (whether notice of cancellation of policy was sent subject to clearly erroneous review). Thus, ‘‘[i]t is well established that [i]t is within the province of the trial court, when sitting as the fact finder, to weigh the evidence presented and determine the credibility and effect to be given the evidence. . . . Credibility must be assessed . . . not by reading the cold printed record, but by observing firsthand the witness’ conduct, demeanor and attitude. . . . An appellate court must defer to the trier of fact’s assessment of credibility because [i]t is the [fact finder] . . . [who has] an opportunity to observe the demeanor of the witnesses and the parties; thus [the fact finder] is best able to judge the credibility of the witnesses and to draw necessary inferences therefrom.’’ (Internal quotation marks omitted.) Ravetto v. Triton Thalassic Technologies, Inc., 285 Conn. 716, 728, 941 A.2d 309 (2008).

I

We begin with the defendants’ claim that the trial court improperly concluded that the policy did not provide liability coverage for the dealer plates on the Voyager. Specifically, the defendants contend that: (1) the plaintiff failed to execute a clear and unambiguous endorsement that amended the policy to delete the dealer plate endorsement; and (2) even if the policy was amended properly, the original policy provided coverage for four dealer plates, and deleting coverage for three unspecified dealer plates still left coverage on the remaining set. The defendants argue further that this remaining set could have been affixed to the Voyager at the time of the accident, which creates an ambiguity that requires the plaintiff, as the insurer, to bear the burden of resolving the resulting confusion by providing coverage. We address each claim in turn.

A

We begin with the defendants’ claim that the deletion of the dealer plate coverage was not a proper endorsement, and, therefore, did not effectively amend the policy. 14 Relying on Israel v. State Farm Mutual Automobile Ins. Co., 259 Conn. 503, 789 A.2d 974 (2002), the defendants contend that the document issued by the plaintiff on February 2, 2003, ‘‘[d]eleting three sets of dealer plates,’’ is not a proper endorsement that clearly and unambiguously amended the policy. In response, the plaintiff distinguishes Israel and argues that it clearly and unambiguously amended the policy via an endorsement, despite the addendum’s failure to use that particular word, because of the messages on the form that was used, as well as the transmission to Marcus and Carbone’s of a revised premium balance. Weagree with the plaintiff, and conclude that the addendum was an endorsement that clearly and unambiguously deleted dealer plate coverage from the policy.

The record reveals the following additional relevant facts. The total premium for the policy, as originally issued and effective on December 12, 2002, was $14,171, and $7317 of that premium was attributable to the dealer plate endorsement that provided liability and uninsured motorists coverage for the ‘‘[three] sets of dealer plates.’’ Indeed, the schedule of covered autos specifically listed the 2000 International truck, coverage for which cost $4756, and also the three dealer plates costing $2439 each for a total of $7317.15 The dealer plate endorsement itself was printed on form CA 2003 1097, which advised: ‘‘This endorsement changes the policy. Please read it carefully.’’16 It then provided coverage for, inter alia, customers who had purchased cars, the registration of which had not yet taken effect.17

Thereafter, on January 17, 2003, Marcus sent a memorandum to Wendy Paro, an underwriter for the plaintiff, asking her to make the following changes to Carbone’s policy, to be effective December 12, 2002: ‘‘Delete [three] sets of dealer plates from the above policy, ASAP.’’ On February 2, 2003, the plaintiff sent an addendum to Marcus refunding $7317 to Carbone’s and stating: ‘‘Description of Change: MTC #1 Effective 12/12/ 02—Deleting three sets of dealer plates and form CA2003, which no longer applies.’’ (Emphasis added.) Accordingly, on February 10, 2003, Marcus forwarded that addendum to Carbone’s, with a cover memorandum stating in relevant part: ‘‘Confirming your [recent] request, we have deleted [three] sets of dealer plates from your policy. Attached is the corresponding endorsement.’’

‘‘A rider or endorsement is a writing added or attached to a policy or certificate of insurance which expands or restricts its benefits or excludes certain conditions from coverage.’’ 2 L. Russ & T. Segalla, Couch on Insurance (3d Ed. 2005) § 18:17, p. 18-24. ‘‘When properly incorporated into the policy, the policy and the rider or endorsement together constitute the contract of insurance, and are to be read together to determine the contract actually intended by the parties.’’ Id., p. 18-26. ‘‘Because the policy is the contract, the intent to incorporate endorsements and riders into the contract, and thus change its terms, must be made clear. The manner of making an endorsement is immaterial, as long as the intent that it be a part of the contract can be ascertained. Outside papers such as riders and slips must be clearly imported into the policy so as to leave no doubt of the intention of the parties.’’ Id., p. 18-27. Moreover, ‘‘[a] later endorsement supersedes a conflicting earlier one.’’ 1 B. Ostrager & T. Newman, Insurance Coverage Disputes (14th Ed. 2008) § 1.01 [a], p. 10.

We recently discussed the use of endorsements in Israel v. State Farm Mutual Automobile Ins. Co., supra, 259 Conn. 507, wherein we concluded that an umbrella insurance policy was ambiguous because its provisions were ‘‘inconsistent regarding the consequences of the [plaintiff insured’s] failure to maintain the underlying coverage required by the policy.’’18 We concluded that the ‘‘provisions conflict[ed], creating an uncertainty as to the status of the umbrella coverage when the underlying coverage is not maintained and rendering the policy ambiguous,’’ and required ‘‘that the policy must be construed so as to provide [the plaintiff insured] with coverage.’’ Id., 508. In so concluding, we rejected the defendant insurer’s argument that the ‘‘uninsured addendum,’’ which provided that the failure to maintain the underlying coverage would completely vitiate the umbrella coverage, was an ‘‘endorsement . . . [that] controls other, more general policy provisions’’ because ‘‘[i]t is clear from the text of the policy that when the [defendant insurer] issued a policy endorsement, they explicitly labeled the endorsement as such. There are two endorsements in the policy at issue in the present case, and they are entitled, respectively, ‘Policy Endorsement’ and ‘Amendatory Endorsement.’ In accordance with their status as policy endorsements, these sections clearly and unambiguously indicate to the reader that their terms supersede other terms in the policy. In contrast, the word endorsement does not appear in the uninsured addendum, and . . . that addendum in no way suggests that its terms control over other policy terms.’’19 Id., 510–11.

We conclude that Israel is distinguishable from the present case, despite the fact that the subsequent endorsement that deleted the original dealer plate endorsement did not use the formal amendatory language or labeling utilized in the endorsements initially attached to the policy. See footnote 16 of this opinion and the accompanying text. In Israel, the conflicting provisions at issue were confusing because they both could be read as presently effective. In contrast, the deletion endorsement herein makes absolutely clear and unambiguous that it is deleting both the dealer plate endorsement printed on form CA 2003 and the three sets of dealer plates, as well as crediting back the relevant portion of the premium. A review of the initial schedule of covered autos makes clear that the policy initially covered a 2000 International truck and three sets of unidentified dealer plates. By way of comparison, the amended schedule of covered autos, issued with the endorsement that deleted the dealer plate coverage, lists only the 2000 International truck as still covered. Thus, the deletion endorsement at issue herein clearly and unambiguously effectuated a change to the underlying policy by deleting the floating dealer plate coverage in its entirety.

B

Having determined that the dealer plate endorsement properly was deleted from the policy via the subsequent endorsement, we next address the defendants’ claim that the trial court improperly concluded that the policy initially provided coverage only for three, rather than four dealer plates.20 Specifically, the defendants rely on the entry on the application requesting coverage for four dealer plates, and contend that the policy initially insured four dealer plates, meaning that the cancellation of coverage for three plates left one unidentified plate still covered, which then would require the plaintiff to extend coverage to the dealer plate on the Voyager.

They argue that the ambiguity in the application should be resolved in favor of affording coverage because there are four sets of dealer plates, four entries on the declaration for which a premium was paid on the schedule of covered autos, and only three plates in the dealer plate endorsement, meaning that the policy is ambiguous with respect to the number of plates covered.

The defendants further note the distinction between dealer plates authorized by § 14-60 (a); see footnote 4 of this opinion; and those ordinarily affixed to a vehicle, and contend that the dealer plates are intended to be moved between vehicles.

In response, the plaintiff contends that the number of insured plates was a ‘‘central issue at trial,’’ and emphasizes that it never conceded that coverage existed for the fourth set of dealer plates independent of the 2000 International truck. It contends that those plates were covered solely by virtue of their status as affixed to the truck. Thus, the plaintiff argues that the policy clearly and unambiguously limited coverage to ‘‘[three] sets of dealer plates’’ as described in the dealer plate endorsement, prior to its deletion. We agree with the plaintiff.

A review of the ‘‘schedule of covered auto[s] you own’’ in the initial policy makes clear that the policy, with the dealer plate endorsement, covered the 2000 International truck registered in Connecticut and three unidentified Connecticut plates. The premium for the truck is $4756 and the three unidentified plates cost $2439 each to insure—a total of $7317. Reading this schedule in conjunction with the dealer plate endorsement, which provides liability coverage for $7020 and uninsured motorists coverage for the three plates for $297—a total of $7317, makes clear and unambiguous the policy’s coverage of only three floating dealer plates—coverage that was deleted in its entirety by the subsequent endorsement.21 See part I A of this opinion.

The trial court, therefore, properly concluded that the policy never provided coverage for a fourth floating dealer plate.

We disagree with the defendants’ reliance on the application entry seeking coverage for four dealer plates. When there is a discrepancy between the application and the policy, ‘‘the policy, not including the application, is considered to embody the contract of the parties.’’ 3 E. Holmes, Appleman on Insurance (2d Ed. 1998) § 15.17, p. 269; see also id. (application ‘‘is usually given great weight in determining the intention of the parties, particularly where the insurance contract is sought to be reformed’’); 2 L. Russ & T. Segalla, supra, § 21.25, pp. 21-47 through 21-48 (‘‘[i]f there is an irreconcilable conflict between an application and the policy proper, the latter ordinarily is regarded as controlling’’).

Moreover, to the extent that the application entry is relevant given the unambiguous policy terms, the extrinsic evidence credited by the trial court readily indicates that the dealer plate coverage was never for more than three floating plates. The application as reviewed by Burns, the plaintiff’s underwriter, indicates that the plaintiff contemplated that the policy was to cover four dealer plates: ‘‘[three] floaters and one is on the vehicle listed on the auto application—the 2000 International [truck].’’22 Burns’ handwritten notes from January 6, 2002, noting the existence of ‘‘[four] dealer plates,’’ and stating, ‘‘[p]er agent—[one] dealer plate on the truck,’’23 further support this conclusion. Indeed, Burns testified consistently at trial as well,24 permitting the trial court to conclude that the parties intended the policy to insure no more than three floating dealer plates, prior to its amendment deleting that coverage. See Ceci v. National Indemnity Co., 225 Conn. 165, 168–69, 622 A.2d 545 (1993) (construing policy ‘‘from the perspective of a reasonable layperson in the position of the purchaser of the policy’’ and noting that underwriter preparing underinsured motorist endorsement ‘‘had considerable information about the insured,’’ namely, that it was small family owned and operated business). Thus, keeping in mind that the appropriate viewpoint from which to read the policy and view the circumstances of its procurement is that of the insured, rather than an injured party seeking to collect from that insured; see, e.g., Israel v. State Farm Mutual Automobile Ins. Co., supra, 259 Conn. 509; we agree with the trial court that the policy did not insure the dealer plate that was on the Voyager.

II

The defendants next claim that the trial court improperly concluded that the accident did not result from ‘‘garage operations,’’ because the statutory definition of ‘‘ ‘repair shop’ ’’ under General Statutes § 14-65e contemplates used car sales and the loan of vehicles as ‘‘ ‘operations necessary or incidental to [that] business,’ ’’ under the ‘‘ ‘[g]arage operations’ ’’ provision of the policy. In response, the plaintiff contends that the sale of used cars was ‘‘not necessary or incidental’’ to Carbone’s auto repair business, thereby precluding coverage under the ‘‘ ‘[g]arage operations’ ’’ clause under case law interpreting and applying such policy language. We agree with the plaintiff, and conclude that the policy’s garage operations coverage does not cover the use of the dealer plates on the Voyager sold by Carbone’s.

As noted by the trial court, the policy provides liability coverage for ‘‘covered autos’’ enumerated in § I of the policy, namely, symbol twenty-seven, ‘‘Specifically Described ‘Autos,’ ’’ symbol twenty-eight, ‘‘Hired ‘Autos’ Only,’’ and symbol twenty-nine, ‘‘Non-Owned ‘Autos’ Used In Your Garage Business.’’ Section II A of the policy, which provides that liability coverage, states that the plaintiff ‘‘will pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies caused by an ‘accident’ and resulting from ‘garage operations’ other than the ownership, maintenance or use of covered ‘autos.’ ’’25 (Emphasis added.)

The defendants do not seriously dispute the trial court’s conclusion that the Voyager may only be considered a ‘‘covered auto’’ for purposes of the garage operations policy under symbol twenty-nine, ‘‘Non-Owned ‘Autos’ Used In Your Garage Business.’’26 That definition provides that ‘‘Non-Owned ‘Autos’ Used In Your Garage Business’’ are ‘‘[a]ny ‘auto’ you do not own, lease, hire, rent or borrow used in connection with your garage business described in the Declarations. This includes ‘autos’ owned by your ‘employees’ or partners (if you are a partnership), members (if you are a limited liability company), or members of their households while used in your garage business.’’ (Emphasis added.) According to the garage policy declarations, Carbone’s is considered a ‘‘repair shop’’ for coverage purposes as a ‘‘garage business.’’

The policy defines ‘‘ ‘[g]arage operations’ ’’ as ‘‘the ownership, maintenance or use of locations for garage business and that portion of the roads or other accesses that adjoin these locations. ‘Garage operations’ [include] the ownership, maintenance or use of the ‘autos’ indicated in SECTION I of this Coverage Form as covered ‘autos’. ‘Garage operations’ also include all operations necessary or incidental to a garage business.’’ (Emphasis added.) Accordingly, a significant threshold issue with respect to this claim on appeal is whether the provision of dealer plates for used cars that it has sold, prior to their registration by their purchasers, is ‘‘necessary or incidental’’ to Carbone’s ‘‘repair shop’’ business.

The policy’s definition of ‘‘ ‘[g]arage operations’ ’’ as ‘‘all operations necessary or incidental to a garage business’’ is one of broad applicability. With respect to the word incidental, that term in ‘‘ordinary speech’’ ‘‘means subordinate, nonessential, occurring merely by chance or without intention or calculation, or being likely to ensue as a chance or minor circumstance.’’ Lumbermens Mutual Casualty Co. v. Pennsylvania National Mutual Casualty Ins. Co., 70 N.C. App. 742, 745, 321 S.E.2d 10 (1984); id., 744–46 (answering service call on highway to help start recently repaired truck was ‘‘incidental’’ to garage operations). Similarly, necessary in this context has been defined as ‘‘indispensable to some purpose; something that one cannot do without; a requisite, an essential.’’ (Internal quotation marks omitted.) North Carolina Farm Bureau Mutual Ins. Co. v. Weaver, 134 N.C. App. 359, 362, 517 S.E.2d 381 (1999); id., 363 (shooting not covered under policy because self-help attempt at repossessing car with unpaid repairs was not ‘‘ ‘necessary or incidental’ ’’ to repair shop operations). Thus, ‘‘whether an accident arose out of the operation of a service station must depend upon the circumstances of the particular case, the nature of the transaction, its connection with the business and whether it can be said to be a natural and necessary incident or consequence of the operation of the service station even though not a foreseen or expected consequence of that operation.’’ (Internal quotation marks omitted.) Rinehart v. Anderson, 985 S.W.2d 363, 370 (Mo. App. 1998); id. (in context of motion for summary judgment, jury could find that activity of refueling garage van after returning repaired vehicles to customers is ‘‘ ‘necessary or incidental’ ’’ to repair shop’s garage operations); see also Northland Ins. Co. v. Boise’s Best Autos & Repairs, 132 Idaho 228, 234, 970 P.2d 21 (App. 1997) (activity of unloading advertising materials for pawn shop that accepted used cars to be sold by associated dealer was incidental to garage operations of that dealership); American Hardware Mutual Ins. Co. v. Darv’s Motor Sports, Inc., 427 N.W.2d 715, 718 (Minn. App. 1988) (child’s operation of motorbike was for ‘‘promotional purposes’’ of her parents’ shop and therefore ‘‘incidental to garage operations’’). At first glance, then, it seems that the broad ‘‘necessary or incidental’’ language of the garage operations clause in the policy might well serve to provide liability coverage in the present case, particularly if we were to assume, without deciding, that the trial court improperly determined that the sale of used cars is not by itself an activity ‘‘incidental’’ to the garage operations of a ‘‘repair shop,’’27 as Carbone’s is described on the policy declaration.28 See footnote 11 of this opinion and accompanying text. Indeed, the provision of dealer plates to a customer who has recently purchased a car, but has not yet registered it, has been held to be necessary or incidental to the garage operations of those engaging in the sale of vehicles. See Aetna Casualty & Surety Co. v. A.L.J.A., Inc., 905 F. Sup. 36, 43 (D. Mass. 1995) (provision of dealer plates to prospective purchaser of used vehicle, when sale could not be finished because of missing title certificate, was ‘‘ ‘necessary or incidental’ ’’ to merchant’s garage operations to ‘‘salvag[e] its goodwill and . . . eventually complet[e] the deal’’); Hartford Ins. Group v. Rubinshteyn, 66 N.Y.2d 732, 734, 488 N.E.2d 98, 497 N.Y.S.2d 352 (1985) (‘‘[T]he only way [the purchaser] could lawfully drive the vehicle before having obtained his own license plates was with [the] [g]arage’s plates attached. Therefore, in permitting [the purchaser] to use the dealer plates . . . [the] [g]arage was rendering a service to its customer that constituted an act ‘necessary or incidental’ to its business . . . .’’ [Citations omitted.]); cf. McLeod v. Nationwide Mutual Ins. Co., 115 N.C. App. 283, 292–93, 444 S.E.2d 487 (placement of dealer tags on car not ‘‘necessary or incidental’’ to garage operations when vehicle was not needed by dealer personnel for travel or operated by ‘‘prospective dealership customer such that his use of the tag furthered customer goodwill’’), review denied, 337 N.C. 694, 448 S.E.2d 528 (1994).

Nevertheless, the broad ‘‘necessary or incidental’’ clause does not necessarily mean that the policy’s garage operations provision will extend to cover the dealer plates on the Voyager in this case. The only two cases that we have found wherein dealer plate coverage was extended via the ‘‘necessary or incidental’’ garage operations definition have ‘‘covered auto’’ descriptions that are broader than the symbol twenty-nine definition at issue herein. Indeed, the policies at issue in those cases defined ‘‘covered auto’’ most broadly, namely, as ‘‘any auto’’ or ‘‘any motor vehicle . . . .’’ (Emphasis added; internal quotation marks omitted.) See Aetna Casualty & Surety Co. v. A.L.J.A., Inc., supra, 905 F. Sup. 39 (motor vehicle hazard coverage extends to ‘‘ ‘any motor vehicle for the purpose of garage operations’ ’’); Hartford Ins. Group v. Rubinshteyn, supra, 66 N.Y.2d 733–34 (‘‘‘covered auto’ is expressly defined to include ‘any auto,’ as distinguished from . . . other descriptions of ‘covered autos’ contained in . . . the policy’’).

Moreover, our research reveals that other courts have concluded that the ‘‘necessary or incidental’’ policy language does not provide coverage when the policyholder had, but failed to exercise, the opportunity to purchase more appropriately tailored coverage. Thus, we find persuasive the plaintiff’s reliance on the United States Court of Appeals for the Eighth Circuit’s recent analysis in Lindsay v. Safeco Ins. Co. of America, 447 F.3d 615, 618–19 (8th Cir. 2006), wherein that court rejected an argument that the sale of an all-terrain vehicle was ‘‘ ‘necessary or incidental’ ’’ to a repair shop’s garage operations. The court declined to extend the policy language this far, noting that the shop owner had the opportunity to elect coverage that clearly would have included ‘‘Dealer’s Autos and Autos Held for Sale by Non-Dealers,’’ but declined to do so. (Internal quotation marks omitted.) Id., 619. Similarly, in American Economy Ins. Co. v. Otte, 869 S.W.2d 179, 181 (Mo. App. 1993), the court rejected an attempt to extend the ‘‘ ‘necessary or incidental’ ’’ clause to the sale of a dune buggy by a repair shop, noting that, although ‘‘the established rule is to construe in favor of coverage . . . that rule is inapplicable where the policy form clearly provides the insured an opportunity to obtain the specific coverage claimed for an additional premium.’’ (Citation omitted.)

Thus, in the present case, Carbone’s had the opportunity to purchase dealer plate coverage that appropriately would have covered the risks presented by the use of such plates in the sale of used cars.29 See Toker v. Hartford, 60 App. Div. 2d 251, 257, 400 N.Y.S.2d 85 (1977) (rejecting argument that dealer plate endorsement provides coverage only until vehicle is sold because ‘‘of the common practice of permitting buyers to drive a car with dealer plates for a few days, and the common understanding that during that period the buyer is covered by the dealer’s insurance’’). Indeed, Carbone’s did in fact exercise its right to purchase such coverage, and then promptly acted to eliminate that coverage from its policy. See part I A of this opinion. Accordingly, we conclude that the garage operations portion of the policy does not provide coverage for Topintzis’ operation of the Voyager with dealer plates.

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http://www.jud.ct.gov/external/supapp/Cases/AROcr/CR290/290CR23.pdf

Outcome: The judgment is affirmed.

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Defendant's Experts:

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