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Nationwide Mutual Insurance Co. v. Pasiak

Supreme Court of Connecticut

December 19, 2017

NATIONWIDE MUTUAL INSURANCE COMPANY ET AL.
v.
JEFFREY S. PASIAK ET AL.

          Argued December 5, 2016

          David J. Robertson, with whom were Christopher H. Blau, and, on the brief, Madonna A. Sacco, for the appellants (named defendant et al.).

          Robert D. Laurie, with whom, on the brief, were Heather L. McCoy and Elizabeth F. Ahlstrand, for the appellees (plaintiffs).

          Rogers, C. J., and Palmer, Eveleigh, McDonald, Espinosa, Robinson and D'Auria, Js. [*]

          OPINION

          McDONALD, J.

         This declaratory judgment action concerns whether an insurer is obligated to indemnify a business owner under a personal insurance policy for liability arising from his false imprisonment of his company's employee at her workplace and the evidentiary basis on which such a determination is to be made. In this certified appeal, the defendant Jeffrey S. Pasiak[1]challenges the Appellate Court's determination that such liability fell under the business pursuits exclusion to coverage under his personal umbrella policy. The plaintiffs, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company, contend that coverage not only is barred under the business pursuits exclusion, but also that (1) coverage is barred under policy exclusions for workers' compensation obligations and for mental abuse, (2) construing the policy to provide indemnification for common-law punitive damages arising from intentional wrongdoing violates public policy, and (3) the trial court improperly limited the scope of discovery and the declaratory judgment trial, depriving the plaintiffs of a trial de novo on coverage issues that they could not litigate in the underlying tort action.

         We hold that the case must be remanded to the trial court for further proceedings, limited to the issue of whether the business pursuits exclusion applies. We conclude that neither the Appellate Court nor the trial court employed the correct standard for determining whether the defendant's tortious conduct was an occurrence ‘‘arising out of'' the business pursuits of the insured and that further factual findings would be necessary to determine whether this exception applies under the correct standard. We further conclude that the plaintiffs cannot prevail on their alternative grounds regarding the other exclusions and public policy as a matter of law. Finally, we conclude that the plaintiffs are not limited to the evidentiary record in the underlying tort action to establish that the business pursuits exclusion barred coverage. Accordingly, we reverse the judgment of the Appellate Court with direction to remand the case to the trial court for a trial de novo on that issue.

         I

         BACKGROUND

         The Appellate Court's opinion summarized the facts that the jury reasonably could have found in the underlying tort action; see Nationwide Mutual Ins. Co. v. Pasiak, 161 Conn.App. 86, 90-91, 127 A.3d 346 (2015); which we have supplemented with the limited additional facts found by the trial court in the declaratory judgment action, also gleaned from the evidence in the underlying action.[2] At the time of the incident in question, the defendant operated a construction company, Pasiak Construction Services, LLC. The sole office for the company was a room located on the second floor of the defendant's home in Stamford; the company's construction equipment was stored at another site. Sara Socci was hired by the defendant to perform duties as an office worker for the construction company and worked at that office in the defendant's home. Her work hours were from 9:30 a.m. to 2:30 p.m., four days a week.

         During Socci's second week of employment, while she was alone at the office performing her duties, a masked intruder carrying a gun entered the office and demanded that she open the safe. Unaware that a safe existed in the home, Socci could not provide the intruder with the safe's combination. The intruder led Socci into a bedroom, where he tied her hands, gagged her, and blindfolded her. At one point, he pointed a gun at her head and threatened to kill her family if she did not give him the combination.

         The defendant returned home during the incident and was attacked by the intruder. During an ensuing struggle, the defendant pulled off the intruder's mask, revealing him to be Richard Kotulsky, a lifelong friend of the defendant. The defendant began talking to Kotulsky and inquired about Socci. Kotulsky led the defendant to Socci, who was crying and hysterical. After the defendant made Kotulsky untie Socci, the three of them returned to the office, where a discussion continued between the defendant and Kotulsky about a woman.[3]Socci asked to leave, but the defendant told her to stay and sit down. After further discussions with Kotulsky, the defendant allowed him to leave the house. Socci then told the defendant about the threats that Kotulsky had made to her and her family, but the defendant would not call the police. He told Socci to stay with him and refused to let her call the police or to discuss the incident further. She remained with the defendant for several hours, in fear that, if she left, she or her family might be harmed by Kotulsky. Only after he drove Socci to Greenwich to discuss the incident with a mutual friend, Denise Taranto, who advised them to call the police, did he allow Socci to leave.

         The police were not contacted until later that day, after Socci and her husband, Kraig Socci, went to the defendant's home and learned that he had not yet contacted them. In the presence of the Soccis and the police, the defendant telephoned Kotulsky and told him that ‘‘the girl'' had identified him to the police. Some days later, Kotulsky was arrested and eventually convicted of various criminal offenses in connection with this incident.[4] The safe was never opened, and its contents were never divulged.

         As a result of the incident, Socci developed post-traumatic stress disorder, requiring extensive therapy, and was unable to return to work.

         The record reveals the following additional undisputed facts and procedural history. Socci and Kraig Socci commenced a tort action against the defendant (Socci action), alleging (1) false imprisonment, (2) negligence, (3) negligent infliction of emotional distress, (4) intentional infliction of emotional distress, and (5) loss of consortium as to Kraig Socci.[5] The first two claims related to the defendant's conduct in preventing Socci from leaving until she and the defendant returned from their meeting with Taranto. The third and fourth claims related to the entirety of the defendant's conduct leading up to his comments on the telephone to Kotulsky implicating Socci as the police informant. The complaint alleged that Socci had sustained permanent physical and emotional injuries and requested compensatory and punitive damages.

         At the time of the relevant events, the defendant was covered by insurance policies issued by the plaintiffs, including a homeowners policy covering bodily injury and a personal umbrella policy covering bodily injury and personal injury. He did not have a separate commercial liability policy. The plaintiffs provided the defendant with an attorney to defend him in the Socci action, but notified him by letter that they were reserving their right to contest coverage.

         In accordance with that reservation, the plaintiffs commenced the present action seeking a declaration that they had no duty to defend or indemnify the defendant in the Socci action. The plaintiffs then filed a motion for summary judgment, and the defendant filed a motion for summary judgment solely as to the duty to defend. The court concluded that the allegations of the complaint were sufficiently broad to obligate the plaintiffs to provide the defendant with a defense under both his homeowners policy and his personal umbrella policy. The court deemed it improper at that juncture to determine the plaintiffs' duty to indemnify the defendant. Accordingly, it granted the defendant's motion for summary judgment as to the duty to defend and denied the plaintiffs' motion seeking a declaratory judgment in their favor.

         The Socci action proceeded to trial with the plaintiffs providing defense counsel to the defendant. At the conclusion of evidence, the parties agreed not to submit special interrogatories to the jury. The jury returned a general verdict in favor of the Soccis. It awarded Socci $628, 200 in compensatory damages and $175, 000 in punitive damages, and awarded Kraig Socci $32, 500 in compensatory damages.

         Following judgment in the Socci action, the plaintiffs filed a second motion for summary judgment in the declaratory judgment action regarding their duty to indemnify the defendant.[6] In support of their motion, the plaintiffs argued that the defendant's policies did not provide coverage for his liability in the Socci action because those policies cover accidents, not intentional acts, and do not cover claims for emotional distress. The plaintiffs further contended that any coverage would be barred under policy exclusions for intentional acts, wilful violations of law, business pursuits, workers' compensation, and mental abuse. Finally, they contended that indemnification for the punitive damages would contravene public policy.

         The trial court framed its decision on the motion in three parts: (1) the effect of the general verdict; (2) the duty to indemnify under the homeowners policy; and (3) the duty to indemnify under the umbrella policy. The court concluded that the general verdict rule[7] precluded the plaintiffs' arguments premised on characterizing the defendant's conduct as exclusively intentional and, therefore, not a covered accidental occurrence. The court reasoned that the absence of jury interrogatories created an ambiguity as to the counts on which the verdict rested, and that because the plaintiffs had failed to afford themselves of the opportunity to seek such interrogatories, the verdict must be construed to rest on both intentional and negligent conduct as alleged in the complaint. The court did not, at this stage, explain how the plaintiffs could have availed themselves of this opportunity.

         With regard to the duty to indemnify, the court concluded that the plaintiffs were entitled to summary judgment under the homeowners policy, but were not entitled to judgment under the broader umbrella policy. Specifically, the court pointed to the homeowners policy coverage limited to ‘‘bodily injury, '' which was defined to exclude emotional distress unless caused by a physical injury, and the lack of evidence in the Socci action establishing such physical injury. Although the umbrella policy contained a similar definition for bodily injury, that policy also covered ‘‘personal injury, '' a term defined by reference to specified injuries/acts, including ‘‘false imprisonment.'' In light of that express coverage, the trial court concluded that many of the policy exclusions on which the plaintiffs relied were inapplicable. The court also concluded that the requisite facts to support other exclusions on which the plaintiffs relied were not supported by evidence or jury interrogatories in the Socci action. The court rejected the plaintiffs' public policy argument regarding the punitive damages. Accordingly, it granted in part and denied in part the plaintiffs' motion for summary judgment.

         After the trial court clarified that its decision on the motion for summary judgment was not a final judgment for purposes of appeal, a dispute arose over the scope of evidence, and, hence, discovery, that would be permitted in the declaratory judgment trial. In a written decision addressing that dispute, the trial court cast the parties' positions as polar opposites, with the plaintiffs contending that they were entitled to a trial de novo regarding the issue of indemnification, unfettered as to what evidence may be proffered on that issue, and the defendant contending that the trial must be limited to the evidence presented in the Socci action. Ultimately the court concluded that ‘‘[i]t was [the plaintiffs'] choice in the [Socci] action to not actively pursue in greater detail the issues affecting the exclusions in the policy, '' that the plaintiffs could have submitted interrogatories to the jury to determine the basis of its decision, and that they should not be permitted to have a second bite at the apple. The court suggested that the plaintiffs could have requested interrogatories through defense counsel, with whom they were in close contact, or through their intervention as a party. Accordingly, it denied the plaintiffs' request to permit unrestricted evidence. However, a week before the trial commenced, the court permitted the plaintiffs to obtain certain limited discovery related to the workers' compensation exclusion, and they were able to depose the defendant on that matter. At the conclusion of that deposition, the plaintiffs stated for the record that the trial court had precluded discovery on matters other than those on which they questioned the defendant that the plaintiffs believed were relevant.

         Thereafter, the declaratory judgment trial proceeded with only documentary evidence submitted to the court, largely originating from the Socci action, except as to certain matters related to workers' compensation. Following argument, the court issued a decision declaring that the plaintiffs were obligated to indemnify the defendant for his liability in the Socci action. In setting forth the procedural history of the case, the court cast its earlier ruling on the scope of discovery as precluding new evidence relating to the basis of liability in the Socci action, and not that relating to the issue of coverage under the policy. In analyzing the substantive issue, the court largely followed its prior reasoning when denying the plaintiffs' motion for summary judgment. Accordingly, it rendered judgment for the defendant.

         The plaintiffs appealed from the judgment to the Appellate Court. They challenged the trial court's limitations on discovery, the scope of the declaratory judgment trial, the court's determinations regarding the policy exclusions, except the intentional acts and wilful violation of law exclusions, and its rejection of the public policy argument. The Appellate Court determined that the trial court improperly had concluded that the business pursuits exclusion of the policy did not apply. Therefore, it reversed the trial court's judgment on that basis without reaching the other issues raised by the plaintiffs. Nationwide Mutual Ins. Co. v. Pasiak, supra, 161 Conn.App. 89. The defendant's certified appeal to this court followed. See Nationwide Mutual Ins. Co. v. Pasiak, 320 Conn. 913, 130 A.3d 266 (2016).

         II

         INSURANCE POLICY AND ITS CONSTRUCTION

         We begin with the relevant policy provisions and the principles of construction that guide our review of those provisions.

         A

         The defendant's personal umbrella policy obligated the plaintiffs to pay for damages an insured is legally obligated to pay due to an ‘‘occurrence'' in excess of certain sums. This term and others of significance are defined in the policy as follows:

‘‘Occurrence(s) means an accident including continuous or repeated exposure to the same general conditions. It must result in bodily injury, property damage, or personal injury caused by an insured. . . .
‘‘Bodily injury means bodily harm, including resulting sickness, disease, or death. Bodily injury does not include emotional distress, mental anguish, humiliation, mental distress or injury, or any other similar injury unless the direct result of bodily harm. . . .
‘‘Personal injury means:
‘‘[a] false arrest, false imprisonment, wrongful conviction, wrongful entry . . . .'' (Emphasis added.)
The policy provides exclusions to this coverage. Those exclusions include:
‘‘An occurrence arising out of the business pursuits . . . of an insured'';
‘‘Any insured's obligation, including benefits required to be paid, under any of the following laws . . . workers' compensation''; and
‘‘Bodily injury or personal injury resulting from acts or omissions relating directly or indirectly to sexual molestation, physical or mental abuse, harassment, including sexual harassment, whether actual, alleged or threatened. . . .''

         B

         In considering the meaning of these exclusions and their application to the facts, we are guided by settled principles. ‘‘[C]onstruction of a contract of insurance presents a question of law for the [trial] court which this court reviews de novo. . . . The 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. . . . In evaluating the expectations of the parties, we are mindful of the principle that provisions in insurance contracts must be construed as laymen would understand [them] and not according to the interpretation of sophisticated underwriters and that the policyholder's expectations should be protected as long as they are objectively reasonable from the layman's point of view. . . . [W]hen the words of an insurance contract are, without violence, susceptible of two [equally responsible] interpretations, that which will sustain the claim and cover the loss must, in preference, be adopted. . . . [T]his rule of construction favorable to the insured extends to exclusion clauses.'' (Citations omitted; internal quotation marks omitted.) Vermont Mutual Ins. Co. v. Walukiewicz, 290 Conn. 582, 591-92, 966 A.2d 672 (2009). When construing exclusion clauses, ‘‘the language should be construed in favor of the insured unless it has a high degree of certainty that the policy language clearly and unambiguously excludes the claim.'' (Internal quotation marks omitted.) Connecticut Ins. Guaranty Assn. v. Drown, 314 Conn. 161, 188, 101 A.3d 200 (2014). While the insured bears the burden of proving coverage, the insurer bears the burden of proving that an exclusion to coverage applies. See Capstone Building Corp. v. American Motorists Ins. Co., 308 Conn. 760, 788 n.24, 67 A.3d 961 (2013).

         This court previously has applied these rules of construction to policy definitions similar to those in the present case. In Imperial Casualty & Indemnity Co. v. State, 246 Conn. 313, 327-29, 714 A.2d 1230 (1998), this court confronted the internal inconsistency between a policy limiting coverage to accidents (i.e., unintentional conduct) while also providing coverage for certain injuries that could result only from intentional conduct, such as false imprisonment. Consistent with our rules of construction, we construed this ambiguity in favor of the insured to provide coverage for the intentional acts specified.[8] See id., 330-31.

         Our prior construction of those provisions has particular significance to the present case. As the trial court emphasized in its decision on the second motion for summary judgment regarding indemnification, ‘‘the provision within the umbrella policy that includes coverage for false imprisonment is crucial in the determination of whether the policy provides coverage for the plaintiffs' verdict entered in the underlying Socci [action].'' The trial court identified the injury of false imprisonment, and no other, as covered under the policy at issue.[9]With that focus in mind, we turn to the certified issue.

         III

         BUSINESS PURSUITS EXCLUSION

         The defendant contends that the Appellate Court improperly concluded that the false imprisonment of Socci was ‘‘[a]n occurrence arising out of the business pursuits . . . of an insured.'' As we explain subsequently in this opinion, although we agree with the defendant that the Appellate Court's analysis was flawed, we conclude that the trial court's analysis also was flawed.

         The trial court made no separate factual findings with regard to this exclusion. However, its analysis referred to critical testimony in the Socci action regarding certain statements the defendant purportedly made to Socci after Kotulsky left as to reasons why they should not call the police. The defendant purportedly cited his long, close friendship with Kotulsky and the ruinous effect on his business.

         The trial court framed its analysis in terms of two related issues. First, it noted that ‘‘the real issue is whether the actions of [the defendant] in response to the robbery arose out of the business pursuits for the Pasiak Construction business or [arose] as the defendant contends because he was trying to protect a lifelong friend.'' (Emphasis added.) Second, it considered whether the defendant's actions evidenced the continuity and profit motive necessary under the business pursuits test. The court rejected the plaintiffs' reliance on Socci's testimony indicating that the defendant had claimed (at the time of the incident) that the incident would ruin his business, reasoning that this argument ignored the testimony reflecting Kotulsky's friendship with the defendant, and the lack of proof of any impact on the defendant's business had the robbery succeeded.

         The Appellate Court determined that the trial court's analysis reflected a misapplication of the business pursuits exclusion. Nationwide Mutual Ins. Co. v. Pasiak, supra, 161 Conn.App. 89, 100-101. The Appellate Court concluded that the defendant's operation of his construction company, and his employment of Socci in support thereof, constituted the requisite ‘‘business pursuits, '' and that Socci's injuries arose out of that business pursuit. Id., 99. As to the latter conclusion, the court reasoned that ‘‘the sine qua non of the defendant's tortious conduct was . . . Socci's presence at his business office fulfilling her responsibilities as his employee. . . . Stated alternatively, had . . . Socci not been at the office performing her duties as an employee of the defendant's business, there is no reason to believe that she would have been assaulted by Kotulsky and, consequently, detained by the defendant. Indeed, there was no other reason for . . . Socci's presence on the premises, and her acquiescence in obeying the defendant's commands to wait and not leave were, in part, a function of their employer-employee relationship.'' Id., 99-100. The Appellate Court deemed the defendant's subjective motivations for his actions irrelevant. Id., 101.

         On appeal to this court, the defendant contends that the Appellate Court's analysis improperly focused on the sequence of events rather than the mechanism of the injury. He also contends that the Appellate Court improperly found facts insofar as it concluded that Socci's acquiescence in obeying the defendant's commands was a function of their employer-employee relationship. He claims that the trial court properly focused on whether his actions met the continuity and profit motive test for a business pursuit articulated by this court. We conclude that the analysis in both of the lower courts' decisions was a misapplication of the business pursuits exclusion, and that the case should be remanded to the trial court to allow it to reconsider the evidence, adduced after further proceedings, under the proper standard.

         Although the policy defines the term ‘‘business'' as ‘‘a trade, profession, occupation, or employment including self-employment, '' it does not define ‘‘business pursuits'' or ‘‘arising out of.'' The meaning of both terms, however, has been articulated by this court as well as other jurisdictions considering this exclusion.

         This court adopted a definition of ‘‘business pursuits'' in Pacific Indemnity Insurance Co. v. Aetna Casualty & Surety Co., 240 Conn. 26, 30, 688 A.2d 319 (1997), that conformed to the meaning ascribed in most other jurisdictions: ‘‘[T]he term business pursuits encompasse[s] two elements, continuity and profit motive. As to the first, there must be a customary engagement or a stated occupation; as to the latter, there must be shown to be such activity as a means of livelihood; gainful employment; means of earning a living; procuring subsistence or profit; commercial transactions or engagements.'' (Internal quotation marks omitted.) This test casts a broader net to include activities other than those that bear the formal or legal hallmarks of an established business or a full-time occupation. See, e.g., id., 27-28 (boarding horses by persons otherwise employed full-time was business pursuit). ‘‘The determination of whether a particular activity constitutes a business pursuit is to be made by a flexible fact-specific inquiry.'' Id., 33.

         In the present case, no one questions that the activities of the defendant's construction company meet the two elements of a business pursuit. Nor does anyone contend that false imprisonment constitutes a business pursuit. Therefore, the question is not whether the false imprisonment itself satisfied the continuity/profit elements of a business pursuit, as the trial court's rationale suggested, but rather whether the defendant's false imprisonment of Socci ‘‘arose out of'' his business pursuits in operating the construction company. See Neal v. Celina Mutual Ins. Co., 522 S.W.2d 179, 180-81 (Ky. 1975) (‘‘[o]f course accidents of any kind are not business pursuits in themselves; the exclusion clause plainly has reference to accidents that occur in the carrying on of a business pursuit''); Greenman v. Michigan Mutual Ins. Co., 173 Mich.App. 88, 94, 433 N.W.2d 346 (1988) (‘‘[t]he complained of acts themselves need not be performed for profit; the acts need only be performed during the business pursuit of the insured''); 46 C.J.S. 226, Insurance § 1353 (2007) (‘‘[w]hen the questioned conduct is incidental to the insured's regular employment, profit motive is irrelevant to a business pursuits determination''); see also Cambridge Mutual Fire Ins. Co. v. Sakon, 132 Conn.App. 370, 378, 31 A.3d 849 (2011) (conducting separate inquiries as to whether actions alleged in counterclaim for which indemnification was sought were business pursuits and whether actions arose from insured's business pursuit of commercial development plan), cert. denied, 304 Conn. 904, 38 A.3d 1202 (2012). Therefore, the present case turns on the meaning of ‘‘arising out of'' the defendant's business pursuits.

         The meaning of ‘‘arising out of'' in the context of insurance policies was already well established when this court first defined business pursuits. In Hogle v. Hogle, 167 Conn. 572, 577, 356 A.2d 172 (1975), this court explained that ‘‘it is sufficient to show only that the accident or injury ‘was connected with, ' ‘had its origins in, ' ‘grew out of, ' ‘flowed from, ' or ‘was incident to' the [specified subject] in order to meet the requirement that there be a causal relationship between the accident or injury and the [subject].'' See also Misiti, LLC v. Travelers Property Casualty Co. of America, 308 Conn. 146, 158, 61 A.3d 485 (2013) (recognizing that definition in Hogle applies outside of motor vehicle context). This court has described the definition in Hogle as ‘‘expansive, '' underscoring that it is less demanding than the standard for proximate cause. New London County Mutual Ins. Co. v. Nantes, 303 Conn. 737, 759, 36 A.3d 224 (2012); accord Board of Education v. St. Paul Fire & Marine Ins. Co., 261 Conn. 37, 48, 801 A.2d 752 (2002); see also Fibreboard Corp. v. Hartford Accident & Indemnity Co., 16 Cal.App.4th 492, 504, 20 Cal.Rptr.2d 376 (1993) (citing same definition and noting that‘‘ ‘[a]rising out of' are words of much broader significance than ‘caused by' ''); Metropolitan Property & Casualty Ins. Co. v. Fitchburg Mutual Ins. Co., 58 Mass.App. 818, 820-21, 793 N.E.2d 1252 (2003) (‘‘[t]he terms ‘arising out of' and ‘in connection with' are not be to be construed narrowly but are read expansively in insurance contracts''); United States Fire Ins. Co. v. New York Marine & General Ins. Co., 268 A.D.2d 19, 21-22, 706 N.Y.S.2d 377 (2000) (‘‘when used in automobile exclusion clauses, the words arising out of the . . . use are deemed to be broad, general, comprehensive terms, ordinarily understood to mean originating from, incident to, or having connection with the use of the vehicle'' [internal quotation marks omitted]).

         Although Hogle involved a provision affording coverage, its expansive definition also has been applied when the phrase was used in coverage exclusions; see, e.g., New London County Mutual Ins. Co. v. Nantes, supra, 303 Conn. 753-54; including the business pursuits exclusion. See Cambridge Mutual Fire Ins. Co. v. Sakon, supra, 132 Conn.App. 380. Numerous other jurisdictions apply the same definition to the business pursuits exclusion. See, e.g., Metropolitan Property & Casualty Ins. Co. v. Fitchburg Mutual Ins. Co., supra, 58 Mass.App. 821; Blomdahl v. Peters, Docket No. 2014AP2696, 2016 WL 413174, *2 (Wis. App. February 4, 2016). But see Farm Bureau Life Ins. Co. v. Holmes Murphy & Associates, Inc., 831 N.W.2d 129, 134 n.7 (Iowa 2013) (‘‘a phrase like ‘arising out of' may be given a narrower scope in an exclusion when a court finds the exclusion ambiguous and therefore determines the phrase means ‘proximately caused by' ''); South Carolina Farm Bureau Mutual Ins. Co. v. S.E.C.U.R.E. Underwriters Risk Retention Group, 347 S.C. 333, 339-40, 554 S.E.2d 870 (App. 2001) (concluding that narrower construction of arising out of applied to business pursuits exclusion under rule of construction specific to exclusions), rev'd on other grounds, 353 S.C. 249, 578 S.E.2d 8 (2003).

         Our case law indicates that the question of whether the defendant's false imprisonment of Socci was connected with, had its origins in, grew out of, flowed from, or was incident to his business pursuits would also be a factual matter. See Kolomiets v. Syncor International Corp., 252 Conn. 261, 265, 746 A.2d 743 (2000) (considering whether injury arose out of employment in workers' compensation claim as matter of fact); Whitney Frocks, Inc. v. Jobrack, 135 Conn. 529, 534, 66 A.2d 607 (1949) (‘‘the question whether or not the transaction arose out of the business for which the corporation was organized was a question of fact for the jury to decide''). But see Northern Security Ins. Co. v. Rosenthal, 186 Vt. 578, 579, 980 A.2d 805 (2009) (‘‘[t]he court's determination that there was no coverage presents a mixed question of fact and law: [1] a factual determination concerning the nature of the conduct giving rise to the liability; and [2] a legal conclusion as to whether the conduct falls within the business-pursuits exclusion'').

         Our case law construing the phrase ‘‘arising out of'' offers useful, but limited, guidance. Although broadly construed, this court's application of this phrase indicates that the requisite causal nexus would not be met merely by a sequential relationship between the injury and the business pursuit. Compare Misiti, LLC v. Travelers Property Casualty Co. of America, supra, 308 Conn. 162-63 n.11 (causal nexus to establish liability arising out of use of part of premises leased to tavern not established simply because use of tavern and injury occurred in sequence; injury occurred after patron left tavern, took detour from walkway to parking lot to scenic area, and was injured on part of premises not leased to tavern), with Board of Education v. St. Paul Fire & Marine Ins. Co., supra, 261 Conn. 45, 47-48 (causal nexus to establish liability resulting from use of covered vehicle established when bus driver negligently allowed special education student to depart from bus unsupervised and student thereafter was sexually assaulted in school bathroom when driver's negligence was direct factor in causing injury). Accordingly, this case law makes clear that the mere fact that the false imprisonment occurred after Socci arrived at her workplace would not, in and of itself, establish the requisite nexus.

         Given the paucity of Connecticut case law applying this exclusion, it is useful to consider other courts' applications of this common exclusion, albeit with a critical eye in light of other textual differences.[10] See an not., 35 A.L.R.5th 375 (1996) (noting that business pursuits exclusions may be found in ‘‘practically all homeowners' policies, '' ‘‘nearly all of the provisions employ virtually the same language, '' ‘‘provisions . . . include broad exclusionary language for liabilities ‘arising out of business pursuits of an insured' '').

         Although the workplace as the locus of the injury is always a significant factor, as one early commentator noted: ‘‘There seems almost unanimous accord in the decisions that the location at which an act is performed is not decisive on the question of whether the act constitutes part of an excluded business pursuit. Rather, it is the nature of the particular act involved and its relationship, or lack of relationship, to the business that controls.'' L. Frazier, ‘‘The ‘Business Pursuits' Exclusion in Personal Liability Insurance Policies: What the Courts Have Done with It, '' 1970 Ins. L.J. 519, 533-34 (1970). The requisite connection is obvious in cases in which the act giving rise to liability occurred in the usual course of employment or the acts were incidental to those occurring in the usual course of employment. See, e.g., Metropolitan Property & Casualty Ins. Co. v. Fitchburg Mutual Ins. Co., supra, 58 Mass.App. 821 (focusing on fact that act injuring coworker at workplace, although not itself related to employment, occurred while coworker was working, and injury would not have occurred but for fact that insured tortfeasor had been performing task for her employer just before injury occurred); Berkshire Mutual Ins. Co. v. LaChance, 115 N.H. 487, 489, 343 A.2d 642 (1975) (accident injuring coworker at workplace arose out of business pursuit when it occurred while insured was engaged in his regular occupation).

         Because ‘‘arising out of'' is an expansive phrase, however, the causal connection to the business pursuit extends beyond such obvious examples. For example, the purpose of the activity or action giving rise to the liability, in connection with other employment related facts, may support the requisite causal nexus. Altercations causing bodily injury and even death have been deemed to arise from a business pursuit when the dispute giving rise to the action was business related. Liberty Mutual Ins. Co. v. Miller, 549 So.2d 1200, 1200-1201 (Fla. App. 1989) (exclusion applied to confrontation between physicians at hospital, regarding care and treatment of mutual patient, that resulted in personal injury); Otero v. United States Fire Ins. Co., 314 So.2d 208, 209 (Fla. App. 1975) (exclusion applied to assault of tenant by insured landlord's son-in-law when assault arose in course of dispute regarding insured's return of security deposit and tenant's return of key), cert. denied, 328 So.2d 843, 844 (Fla. 1976); Reliance Ins. Co. v. Fisher, 164 Mont. 278, 280, 284-85, 521 P.2d 193 (1974) (exclusion applied when teacher struck another teacher over disciplining of student during school hours); U.S. F. & G. Ins. Co. v. Brannan, 22 Wn.App. 341, 342, 350, 589 P.2d 817 (1979) (killing of one business associate and wounding of another fell within exclusion when altercation arose over business matter and took place on business site during business hours); see also Kermans v. Pendleton, 62 Mich.App. 576, 579, 233 N.W.2d 658 (1975) (exclusion applied when insured owner of bar shot patron because owner ‘‘was engaged in his business pursuit at the time of the shooting and . . . but for this business pursuit, the shooting would not have occurred''; shooting incident was related to physical safety of bar and its patrons); Luneau v. Peerless Ins. Co., 170 Vt. 442, 443, 446, 750 A.2d 1031 (2000) (exclusion applied when insured, engaged as disc jockey at wedding, knocked over negligently stacked speakers when he got into fight with one wedding guest about song insured had forgotten to play, injuring another wedding guest). Although courts often have placed emphasis on the fact that the incident occurred at a work site during normal business hours; see 9A S. Plitt et al., Couch on Insurance (3d Ed. Rev. 2015) § 128.19, p. 128-58 (‘‘liabilities in connection with workplace altercations have been held to necessarily involve the insured's business pursuits and therefore fall within the business pursuits exclusion''); the absence of such facts has not precluded application of the exclusion as a matter of law when an employment relationship existed and related to the basis of the dispute. See, e.g., Smith v. Sears, Roebuck & Co., 191 W.Va. 563, 566, 447 S.E.2d 255 (1994) (material question of fact as to whether business pursuits exclusion applied because, although initial disagreement between coworkers was related to business, conflict occurred after they left workplace).

         In other circumstances in which the business nexus of the activity itself is not clear, the purpose of the activity may be a decisive factor. Compare South Carolina Farm Bureau Mutual Ins. Co. v. S.E.C.U.R.E. Underwriters Risk Retention Group, supra, 347 S.C. 339-40 (exclusion did not apply to dog owner's liability for dog bite sustained by minor at office because dog was family pet; it was not kept for security purposes, as mascot or any function associated with business), with Safeco Ins. Co. v. Leslie, 276 Or. 221, 224, 554 P.2d 469 (1976) (exclusion applied to injury from accidental discharge of gun kept by service station employee when he brought gun to work to protect large amounts of cash that accumulated at station on Friday nights). In addition, injuries sustained in social gatherings initiated by the employer may be deemed to arise out of a business pursuit if the purpose of the gathering related to the business, i.e., improving employee relationships or workplace morale. See West American Ins. Co. v. California Mutual Ins. Co., 195 Cal.App.3d 314, 323-24, 240 Cal.Rptr. 540 (1987). The mere fact that a dual social and business purpose exists will not, in and of itself, take the activity outside the scope of the exclusion.[11] See id., 324; see also New London County Mutual Ins. Co. v. Nantes, supra, 303 Conn. 756-58.

         In addition, even when no business purpose reasonably could motivate or be furthered by the action, use of the employment relationship or status to effectuate the harmful act may provide the requisite causal connection. Thus, sexual assaults have been deemed to arise out of a business pursuit when the employer or employee used his or her position of authority or trust attendant to that position to perpetrate the acts. See, e.g., Armed Forces Ins. Exchange v.Transamerica Ins. Co., 88 Haw. 373, 381, 386, 966 P.2d 1099 (App. 1998) (sexual assaults by public housing inspector against residents arose from business pursuit because inspector gained entry to residents' homes purportedly to conduct inspections, which was function performed as part of employment), cert. denied sub nom. Armed Forces Ins. Exchange v.Sagawa, Hawaii Supreme Court, Docket No. 21183 (October 26, 1998); Rubin v.United Services Automobile Assn., Docket No. 04-P-1629, 2006 WL 1543972, *1-2 (Mass. App. June 6, 2006) (dentist's sexual harassment of employee at office and at YMCA arose out of business pursuit; latter ‘‘was related to, linked to, or associated with her employment'' because dentist paid employee for her time during both periods [internal quotation marks omitted]); Greenman v.Michigan Mutual Ins. Co., supra, 173 Mich.App. 90, 94 (employer's sexual harassment of employee occurred at law firm where both worked; additional support for finding that act arose from business pursuit is that claim could not legally exist but for employer-employee relationship); Frankenmuth Mutual Ins. Co. v.Kompus, 135 Mich.App. 667, 677, 354 N.W.2d 303 (1984) (insured therapist ‘‘was able to commit the complained-of acts [against patients] apparently only because of the trust imposed in him as doctor by his patients''), appeal denied, Supreme Court of Michigan, Docket Nos. 74742, 74743 (February 28, 1985); Zimmerman v.Safeco Ins. Co. of America, 605 N.W.2d 727, 731 (Minn. 2000) (‘‘[B]ecause the sexual harassment for which [the insured] was found liable can only happen in the workplace-for example, the creation of a hostile work environment-by definition it falls within the ‘business pursuits' exclusion. . . . [T]he liability-creating conduct is based upon the employment relationship in the business setting.''). But see Scheer v.State Farm Fire & Casualty Co., 708 So.2d 312, 313 (Fla. App.) (where court did not distinguish between two policies at issue, respectively including ‘‘caused by'' and ‘‘arising out of'' business pursuits, exclusions did not bar duty to defend physician alleged to have touched employees' breasts and buttocks because acts did not arise out of his profession and conduct was not primarily undertaken in furtherance of business interest), review denied, 719 So.2d 893 (Fla. 1998); Miller v.McClure, 326 N.J.Super. 558, 570, 742 A.2d 564 (App. Div. ...


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