In an issue of first impression, and a rare opinion about insurance coverage, the Connecticut Supreme Court addressed whether an insurer has a duty to defend an additional insured when the complaint in the underlying personal injury action draws no connection between the injured person's use of the insured premises and her injuries, and undisputed extrinsic facts indicate that the underlying action falls outside of the scope of coverage under the policy.
In Misiti, LLC v. Travelers Prop. Cas. Co. of Am., 308 Conn. 146 (2013) (Mar. 26, 2013), the named plaintiff, Misiti, LLC (Misiti), was an additional insured on a commercial general liability insurance policy, which was issued to Misiti's tenant, Church Hill Tavern, LLC in Sandy Hook, CT, by the named defendant, Travelers Property Casualty Company of America (Travelers). Travelers’s policy included an endorsement that named Misiti as an additional insured, “but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to [the tavern] ….”
Sarah Middeleer was a business invitee who was injured on the premises. She claimed that she had been injured after falling on Misiti's premises. Middeleer did not sue the tavern nor did she mention the tavern in her complaint. Misiti, the tavern’s landlord, claimed that Travelers had a duty to defend it under the policy issued to the tavern. Sarah Middeleer was injured in a fall on Misiti's property and brought the underlying action against Misiti. Travelers denied any duty to defend Misiti, since Middeleer did not allege that she fell on the portion of Misiti’s premises that was leased by Travelers’s named insured, the tavern.
The endorsement stated:
WHO IS AN INSURED … is amended to include [Misiti] as an insured … but only with respect to liability arising out of the … use of that part of the premises leased to [the tavern] ….
The issue was whether the claimed injury arose out of the area leased to the tavern and whether that was adequately alleged in the complaint.
The Connecticut Supreme Court affirmed the Connecticut Appellate Court interpretation of “arising out of” to mean liability originating, stemming or resulting from a person's legal or proper enjoyment of the tavern.
The court held Travelers’s duty to defend had not been triggered because the allegations in the underlying complaint were silent with respect to the tavern. It made no mention of the tavern or any of Misiti's other commercial tenants. Moreover, Middeleer brought her action against Misiti but not the tavern, which further supported Travelers's claim that Middeleer's injuries were not causally connected to the use of the tavern's leased premises. Even though the insured premises on which the tavern operated fell within Misiti's overall premises, to which the underlying complaint referred, that was not enough to justify an inference that the injuries alleged in the underlying complaint arose out of the use of the leased premises.
The dissent argued that the court should have considered not only the allegations contained in the four corners of the complaint but also any facts known by the insurer that suggest that the claim falls within the scope of coverage when determining whether the insurer has a duty to defend. The dissent points to facts outside the complaint indicating that Middeleer was injured after leaving the tavern, which could lead to the possibility that Middeleer's injuries arose out of her use of the leased premises and, thus, Travelers would have a duty to defend.
Admittedly, the Misiti court sided with the insurer; however, we question the long-term significance of this case. The underlying claimant here failed inexplicably to join the named insured – the tavern lessee – as a codefendant. In our view, that is unlikely to happen in future cases; indeed, the principal “takeaway” from Misiti for plaintiffs may very well be that, when suing for injuries allegedly arising from the use of leased premises, be sure to sue not only the tenant but also the premises owner. Accordingly, while some comment on any Connecticut Supreme Court insurance coverage opinion is warranted – particularly given the rarity of such decisions from Connecticut’s high court – as a practical matter, Misiti may very well be viewed as a “one off” situation with limited precedential value.