Rep Matters: Summary Judgment Granted in Favor of Insurance Company in $4.8 Million Property Loss Claim; In Known Litigation Holdings, LLC v. Navigators Insurance Company, et al., 2016 WL 3566653 (D. Conn.), the U.S. District Court recently granted summary judgment in favor of Navigators Insurance Company, Navigators Management (UK) Ltd., and Certain Interested Underwriters at Lloyd's of London (collectively Navigators ) in connection with the plaintiff's $4.8 Million property loss claim.; The Court summarized the facts of the case as follows. In 2006, New England Cash Dispensing Systems, Inc. ( NECD ), an ATM services company, entered into a Courier Agreement with Domestic Bank, under which NECD was required to pick up cash owned by Domestic Bank from Mount Vernon Money Center, an armored car and cash management service, and transfer the money to Domestic Bank's ATMs. The Courier Agreement additionally provided that NECD would maintain insurance for any losses of Domestic Bank's money, and that such insurance would name Domestic Bank as a loss payee.; In January of 2006, NECD and its affiliate, Integrated Merchant Systems, LLC ( IMS ), submitted an application for insurance to Navigators Insurance Company. In the application for insurance, as well as all subsequent renewal applications, NECD/IMS represented that they had suffered no losses in the past 6 years. In reliance upon these representations, Navigators issued policies of insurance to NECD/IMS for the period of 2006 through 2011.; NECD's representations regarding losses turned out to be completely false and fraudulent. Beginning in 2005 and continuing through 2010, NECD/IMS sustained massive losses of cash in the ATM network as a result of a conspiracy to defraud Domestic Bank carried out by Joseph Sarlo, CEO of NECD/IMS, and at least three of his fellow officers, directors and employees. Domestic Bank claimed that it did not learn of the scheme to defraud until February, 2010 when it made a demand upon NECD/IMS for an accounting of ATM cash. Shortly thereafter, Sarlo and three other NECD/IMS employees were indicted for carrying out the scheme to defraud Domestic Bank, and each ultimately pled guilty to conspiracy to commit bank fraud.; Domestic Bank submitted a claim to Navigators under the subject policies. Following an investigation, Navigators rescinded each of the policies issued to NECD/IMS on the grounds that the insureds made material misrepresentations regarding losses in the applications for insurance. KLH, a successor of Domestic Bank, then filed suit against Navigators.; In ruling on the parties' respective motions for summary judgment, the Court determined that [e]ach of the policies of insurance issued by Navigators Insurance Company to NECD and IMS was properly rescinded due to the material misrepresentations made by NECD and IMS in the procurement of said policies of insurance. The Court ruled that [b]ecause such knowing misrepresentations constitute material misrepresentations and grounds for rescission as a matter of law, summary judgment in Navigators' favor is granted on [the plaintiff's] breach of contract claim.; The plaintiff also asserted a claim of promissory estoppel against Navigators, alleging that Domestic Bank relied upon representations made by Navigators' agents that coverage would be available under the policies in instances involving losses from fraud or dishonesty by NECD's employees. The Court rejected this claim on the grounds that the plaintiff may not use estoppel to expand insurance coverage beyond the express terms of the policy. The Court held that the plaintiff could not rely on promissory estoppel to claim that its losses, which resulted from acts and omissions of NECD/IMS's CEO, should have been covered. Therefore, the Court granted summary judgment in favor of Navigators with respect to the plaintiff's promissory estoppel count.; Navigators was represented by Jeffrey F. Gostyla, a partner in Halloran & Sage's insurance coverage department.; Representative Probate Matters; Southport Congregational Church v. Hadley (Bridgeport Superior Court: Docket No. 12-CV-6029522), subsequently appealed to the Connecticut Appellate Court under Docket No. AC 35289 and, thereafter to the Connecticut Supreme Court under Docket No. SC 19398 with decision reported at 320 Conn. 103. Also pending as the Estate of Albert L. Hadley (Fairfield Probate Court - PD09); This case involved the Estate of Albert Hadley, who is generally regarded as America's preeminent interior designer. Mr. Hadley, a resident of New York City, owned a country estate in Southport, CT. In his Will, he devised the property to Southport Congregational Church. Prior to his death, however, he entered into a contract to sell the property to Evelyn Winn and executed a codicil/pledge to donate the proceeds from the sale to our client, Cheekwood Botanical Garden & Museum of Art. Mr. Hadley died after the execution of the contract but before the closing had occurred. Cheekwood claimed that the property transferred to Ms. Winn via the doctrine of equitable conversion. Southport Congregational claimed that equitable conversion didn't apply because a mortgage contingency clause in the real estate contract was unsatisfied at the time of Mr. Hadley's death. On January 6, 2016, after years of litigation, the Supreme Court held that the mortgage contingency clause did not preclude the application of equitable conversion following Mr. Hadley's death. Southport Congregational Church v. Hadley, 320 Conn. 103 (2016).; Estate of Ann L. Pasquale (Dist. of Hamden-Bethany - PD37); The decedent's daughter and daughter-in-law made claims against the decedent's estate seeking over $500,000.00 as compensation and reimbursement for caregiving services provided to the decedent from 2007 to the date of her death on November 2, 2014. Following a two-day evidentiary hearing, the Probate Court issued a Decree which concurred with our argument that services rendered by family members are presumed to be gratuitous and that the claimants failed to overcome that burden and presumption.; Matter of Leroy C. Ferguson and Verna W. Ferguson (Tobacco Valley Probate Court - PD37); This is a case involving the financial exploitation of senior citizens. After being appointed as conservator of estate for both respondents, an elderly couple from Bloomfield, it was discovered that their son misappropriated hundreds of U.S. Savings Bonds in the names of his parents and was redeeming them for his own personal financial gain. We have taken steps to bring this case to local law enforcement authorities, shut down bank accounts and credit cards, successfully petition for an accounting from the son who previously served as attorney-in-fact under a power of attorney and move for and obtain an order granting our motion for sanctions. More recently, we moved for permission to commence and prosecute a civil action against the son under Public Act 15-236.; Estate of John P. Bigos (Niantic Regional Probate Court - PD32); In one of the many appeals from probate filed in this case, the Superior Court (Leuba, J.T.R.) described the case as follows: Prior to the death of Dr. Bigos there had been a high conflict divorce action between the doctor and Susan Norz resulting in a judgment of divorce. The minor child of that marriage, Patricia Lilian Bigos, who is now 7 years old, presently lives with her mother who is her guardian. There were several post-judgment matters in dispute after the divorce. Some of these involved personal property. These matters could not be resolved in that case after the death of Dr. Bigos.; Stambovsky v. Norz, 2010 WL 4227128 (Conn. Super Ct., J.D. of New London, Sept. 22, 2010). Once Dr. Bigos died, thus ending the divorce action, his ex-wife litigated the outstanding matters in dispute in the Probate Court. Throughout the pendency of this case, we successfully defended the executors against multiple petitions for removal, claims of financial mismanagement, claims of mismanagement of trust property and the ex-wife's claims for various support payments.; Matter of Deborah Banks (Hartford Probate Court - PD01); Represented mother of intellectually challenged adult daughter. For many years, our client and her son served as plenary guardian and standby plenary guardian, respectively, for Deborah. For just as many years, our client battled fiercely with the State of Connecticut Department of Developmental Services ( DDS ) and the State of Connecticut Office of Protection and Advocacy for Persons With Disabilities ( OPA ) regarding her daughter's placement, treatment and care. DDS/OPA raised unfounded claims of abuse and neglect against our client, which were investigated but ultimately rejected by law enforcement authorities. DDS/OPA then shifted their sights to getting our client and her son removed as guardians. They convinced the court-appointed attorney for Deborah to file a petition for removal of guardians. On June 3, 2010, DDS/OPA finally got their wish. On that date, the Probate Court issued a decree stating that, despite the fact that the Court does not think the Mother [Patricia Sherman] has hit Deborah [Banks], it would grant the relief requested in the application and suspend the plenary guardianship of our client and the standby plenary guardianship of her son. Our client filed an appeal from probate.; We endured years of dilatory motion practice and discovery abuses. Sherman v. Kowalyshyn, et al., 2011 WL 803005 (Jan. 28, 2011); Sherman v. Kowalyshyn, et al., 2013 WL 2278974 (May 3, 2013). On May 22, 2014, the Superior Court (Wiese, J.) sustained our client's appeal and vacated the underlying Probate Court Order concerning her removal. Sherman v. Kowalyshyn, et al., 2014 WL 3360693 (Conn. Super. Ct., J.D. of Hartford, May 22, 2014). In doing so, the Court noted that DDS/OPA did not submit any evidence in support of the petition for removal. Additionally, the Court found that Deborah Banks was not present at the June 3, 2010 probate hearing and the Probate Court failed to make the required findings under Conn. Gen. Stat. 45a-675 to justify her absence.; Estate of Heinz Herrmann (Tolland-Mansfield Probate Court - PD25); Represented Everyday Democracy, Inc., a local nonprofit charitable organization, in connection with an interpleader action filed by the trustee of the decedent's 2005 Trust and 2007 Trust. Savings Institute Bank & Trust Co. v. Virginia H. Herrmann, et al., Docket No. X03-HHD-CV-10-6015894-S. The parties, all charities, litigated the issue of whether or not the 2007 Trust operated to revoke the 2005 Trust.; Estate of Judith Andriulli (Greenwich Probate Court - PD54) & Estate of Nixon Henry (Stamford Probate District - PD53); Represented Progressive Casualty Insurance Company in connection with applications for permission to settle certain doubtful or disputed claims arising from an automobile accident which resulted in a double fatality.; Estate of Selma Kovalik (Berlin Probate Court - PD08); This is another case involving the financial exploitation of a senior citizen. A few years prior to her death, Selma Kovalik befriended Mary Ann Smolicz, a bank teller at a local bank. Eventually, Kovalik named Smolicz as her attorney-in-fact under a durable power of attorney, and also changed her Will so as to name Smolicz as her executrix. After Kovalik died, her grandchildren realized that her assets had been depleted at an alarming rate in the years leading up to her death. After being retained by Kovalik's grandchildren, we successfully petitioned the Probate Court to remove Smolicz as Executrix of Kovalik's Estate and appoint our client as Administratrix, c.t.a. We also filed a petition for accounting regarding Smolicz's actions as attorney-in-fact under the power of attorney. The Probate Court granted our petition for accounting, but Smolicz completely ignored the Probate Court's Order. We filed a Motion for Contempt pursuant to Conn. Gen. Stat. 51-33. The Probate Court denied our Motion for Contempt, holding that as a court of limited jurisdiction, it did not have the power to hold someone in contempt. We then filed suit against Smolicz in the Superior Court, asserting claims of breach of fiduciary duty, conversion, statutory theft (Conn. Gen. Stat. 52-564) and unjust enrichment. See, Sara Hernandez, Administratrix, c.t.a. of the Estate of Selma Kovalik v. Mary Ann Smolicz, New Britain Superior Court: Docket No. HHB-CV08-4016805-S.; After Smolicz's attorney filed a motion to withdraw, Smolicz proceeded pro se. Midway through the litigation, Smolicz mysteriously sent the sum of $15,000.00 to the Estate. Smolicz was ultimately defaulted for failure to plead and the case proceeded to a hearing in damages. Following the hearing in damages, the Court (Pittman, J.) entered an award of damages in the amount of $536,765.00 in favor of our client and against Smolicz, calculated as follows: As to missing cash and accounts, $131,918.00, calculated as $146,918.00, less $15,000 that was paid over by Mary Ann Smolicz; and, as to missing personal property, $25,000.00.; As part of its award, the Court trebled our client's damages as a result of Smolicz's theft and awarded punitive damages equal to attorney's fees. Smolicz died approximately six months after the Court's ruling. Smolicz's estate is currently pending in the Region 19 Probate Court. We successfully petitioned the Probate Court to allow our claim arising from the Superior Court's award of damages. We also successfully petitioned to remove Smolicz's children as fiduciaries of her estate pursuant to Conn. Gen. Stat. 45a-242. To this day, we continue with our efforts to recover the monies which Smolicz misappropriated from Kovalik.; Matter of Marilyn Plank (Greenwich Probate Court - PD54); Represented one of the 89-year-old respondent's daughters in a conservatorship proceeding which involved the issue of the respondent's domicile and her desire to return to Michigan.; Estate of Norman Holland & Estate of Holly Holland (Windham - Colchester Probate Court - PD28); Represented Teachers Insurance Company and Horace Mann Insurance Companies in connection with application for permission to settle certain claims arising from an automobile accident which resulted in a double fatality.; H&S Secures Victory for Insurance Company in Action to Recover Accidental Death Benefits Under ERISA-Governed Group Accident and Sickness Plan in Ablow v. Canada Life Assurance Co., 2003 WL 23325805 (D.Conn. 2003); In Ablow, the employee covered under an ERISA-governed group accident and sickness plan was found dead in a secured hotel room while on a business trip. Present in the hotel room was a bottle of vodka that was 3/4 empty and a bottle of Ephedrine with 45 missing tablets. Drug paraphernalia at the scene suggested that the Ephedrine was crushed and insufflated by the decedent. On cross-motions for summary judgment, Jeffrey Gostyla prevailed on each of the following arguments: (i) death was not an accident; (ii) death was intentionally self-inflicted injury; (iii) death was due to illness or disease; (iv) death was due to poisoning. This was the first case in Connecticut to apply the Wickman test to a claim for accidental death benefits where death was caused by a drug overdose.; Aggressive Discovery Approach Leads to Withdrawal of Claims Against Insurance Company; In Lafayette Capital Group, Inc. v. Mount Vernon Fire Ins. Co., Docket No. DBD-CV12-6015882-S, (Danbury Superior Court), the plaintiff was the owner of a commercial property known as One Gallows Hill Road, New Milford, CT. The plaintiff obtained a policy of insurance from Mount Vernon Insurance Company with effective dates of December 15, 2010 through December 15, 2011. The plaintiff claimed that on or about November 22, 2011, it suffered a vandalism loss to its property.; The subject policy contained the following endorsement: VACANT BUILDING PROTECTION WARRANTY; The Insured acknowledges that this Policy was issued based on the following representation and warranty. Furthermore, the Insured agrees to maintain the following Warranty for the entire term of the Policy and any renewals thereof, as a condition of coverage.; In consideration of the payment of premium and the issuance of this Policy by the Company, the Insured represents and warrants that: 1. All windows, doors and passageways for ingress and egress to a building or portion of a building covered by this Policy of insurance that is vacant or partially vacant are and shall remain fully secured and protected from all forms of unauthorized entry.; On December 17, 2010 and February 24, 2011, Mount Vernon notified Lafayette Capital that it required an inspection of the subject property. The inspection, which was ultimately conducted on March 9, 2011, revealed that not all windows and doors were installed at the property. Indeed, the inspection revealed that there were two open bay doors and that approximately two-thirds of the 20,000 sq. ft. building was open for possible unauthorized entry.; As a result of the inspection, on March 30, 2011, Mount Vernon sent a notice to the plaintiff, through which it required the plaintiff comply with the following mandatory recommendation in order to avoid policy cancellation: All doors and windows must be locked, secured and/or boarded to help prevent unauthorized entry into the building. On March 31, 2011, the plaintiff executed the mandatory recommendation document. However, the plaintiff took no steps to lock, secure or board up the building.; When the plaintiff presented its claim to Mount Vernon arising from the November 22, 2011 vandalism loss, Mount Vernon disclaimed coverage based upon the plaintiff's violation of the Vacant Building Protection Warranty. Mount Vernon also relied upon a Theft Exclusion in disclaiming coverage.; Through an aggressive discovery approach, which included a Freedom of Information Act request to obtain police reports concerning prior theft incidents at the subject property, Mount Vernon leaned that the plaintiff had suffered prior vandalism losses at the property. This revelation created an entirely new set of issues in the case. When Lafayette Capital submitted its insurance policy application to Mount Vernon, it answered none in response to the following question: Loss information for the past 3 years . Lafayette Capital also provided no details concerning any losses for the past 3 years. In the application, Lafayette Capital answered true to the following question: No Property losses/claims incurred in the past 3 years (excluding closed no pay) . Additionally, Lafayette Capital answered true to the following question: In the past 3 years, no more than 1 Property loss (excluding closed no pay), no open claims and no one loss over $10,000 . When confronted with these facts, the plaintiff voluntarily withdrew its lawsuit against Mount Vernon and agreed that the policy should be rescinded based upon these statements in the application.; Mount Vernon was represented by Jeffrey A. Gostyla, a partner in Halloran & Sage's insurance coverage department.; H & S Obtains Judgment in Insurance Coverage Action Involving Wrongful Death Claim; In Mount Vernon Fire Ins. Co. v. El Rancho De Pancho LLC, 2013 WL 6326609 (D. Conn. 2013), the District Court held that coverage was barred as a result of the insured's material breach of certain warranty endorsement provisions in a commercial liquor liability policy.; The Court found the following facts to be undisputed: On October 9, 2011, shortly after 2:00 a.m., Nick E. Vallas appeared at the door of El Rancho De Pancho, a bar and restaurant located in Norwalk, Connecticut, with three friends. At this time, El Rancho was closed to the public. Vallas sought to be let into the restaurant with his friends and, despite initially refusing to do so, the acting manager of El Rancho eventually let them in. Once inside, employees of El Rancho provided beer, tequila and margaritas to Vallas and his friends, and did not charge anything for them.; At some time between 3:30 a.m. and 4:47 a.m., Vallas and his friends left El Rancho, either individually or as a group. After leaving El Rancho, at approximately 4:47 a.m., Vallas drove his vehicle off the road and struck two utility poles. Vallas subsequently died from the injuries sustained in the accident. On January 5, 2012, George Vallas was appointed by a Connecticut probate court as administrator of the estate of Nick E. Vallas.; At the time of the accident, El Rancho was insured under a commercial policy issued by Mount Vernon Fire Insurance Company, which contained a Liquor Liability Coverage Part. The insurance agreement provided, in part, for the handling and payment of suits brought against El Rancho based on its contribution to the intoxication of any person. The following Warranty Endorsement appeared in the Liquor Liability Coverage Part of the policy: SECTION I - LIQUOR LIABILITY COVERAGE; 2. Exclusions is amended to add the following: Loss or expense, including but not limited to the cost of defense arising or resulting from a claim against any insured for injury based on the selling, serving or furnishing of any alcoholic beverage, if at any time, you have breached one or more of the warranties set forth in this Warranty Endorsement attached to and made a part of this policy.; * * *; The insured warrants as follows: * * *; As a condition of coverage, the insured agrees to maintain the following warranties during the term of this policy and any renewals thereof: * * *; The establishment closes by 2:30 AM daily.; Alcohol sales cease by 2:00 AM.; The insured does not offer beer for less than $1.00.; The insured does not offer liquor or wine for less than $1.50.; On November 22, 2011, the Estate provided notice of its intention to pursue a claim against El Rancho for serving Vallas alcoholic beverages after hours and while Vallas was allegedly intoxicated. Mount Vernon filed a declaratory judgment action in the United States District Court against El Rancho and the Estate. Mount Vernon sought a declaration that El Rancho materially breached the warranties set forth in the policy and, as a result of such breach, Mount Vernon's performance under the policy with respect to any claims arising from the October 9, 2011 incident involving Vallas should be excused. The parties ultimately agreed to litigate the action under the case stated procedures derived from the courts of the Commonwealth of Massachusetts.; The Court recognized that [u]nder Connecticut law, ' [a]s to compliance with a warranty in a contract of insurance, the general rule is that its terms must be strictly and literally fulfilled or the contract is vitiated.' Id. at *2. The Court further explained as follows: This means that there can be no variance or departure in any particular as to any matter warranted, since the validity of the entire contract depends on absolute truth and conformity, the very purpose and meaning of a strict warranty being to preclude all question as to the purpose, if any, for which it was made; and this whether the breach proceeds from negligence, misinformation, or to whatever cause non-compliance is attributable.; Id. The Court also recognized that the breach of a warranty renders an insurance policy void or voidable.; The Court analyzed whether or not El Rancho breached the warranty that [t]he establishment closes by 2:30 AM daily. In doing so, Judge William G. Young specifically rejected the Estate's argument that the Court must review the warranty provisions in light of Connecticut's plain English rule. The Court held that since the policy at issue was a commercial policy, it did not fit the definition of a consumer contract and, thus, the plain English rule did not apply.; The Court also rejected the Estate's argument that the warranty requiring that the establishment close by 2:30 AM daily merely requires that El Rancho must close, as a matter of its general business operation, before that time. The Court concluded that it would have to add language to the policy to clarify that meaning, as opposed to simply interpreting the warranty to mean that every day the restaurant must close by 2:30 a.m.; The Court ruled that El Rancho materially breached the warranty endorsement provisions of the policy, and therefore coverage was barred under the policy for any claims asserted by the Estate against El Rancho arising out of the subject incident.; Mount Vernon was represented by Jeffrey F. Gostyla, a partner in Halloran & Sage's Insurance Law Group.; Summary Judgment Granted in Favor of Insurance Company in Property Loss Claim; In Ricardo Soria v. Marc R. Necatera, et al., 2015 WL 9911485 (Conn. Super Ct., J.D. of Stamford-Norwalk at Stamford), the Court recently granted summary judgment in favor of Mount Vernon Fire Insurance Company ( Mount Vernon ) in connection with the plaintiffs' property loss claim.; The Court summarized the facts of the case as follows. The plaintiff, Ricardo Soria, is the owner of Ace Green, LLC a janitorial/maintenance company. The plaintiffs obtained a commercial general liability insurance policy from Mount Vernon for the policy period of February 1, 2011 through February 1, 2012. On February 18, 2011, Ace Green's employees cleaned a commercial wall-to-wall carpet at an office building in Greenwich, CT. The carpet ultimately shrank and the landlord demanded payment to replace the carpet.; The plaintiffs claimed that they were forced to pay for the cost to replace the carpet when the landlord threatened the withholding of payments on three other buildings the plaintiffs serviced if the plaintiffs did not comply. The plaintiffs paid the landlord's demand and made a claim to Mount Vernon for coverage. Mount Vernon denied the claim citing several policy exclusions. As a result of the denial, the plaintiffs filed suit claiming damages in the form of the cost to replace the carpet, attorney's fees and costs and interest on the loan to pay for the carpet. Additionally, Ace Green claimed that it was forced to cease operations as a result of Mount Vernon's denial of coverage.; The subject policy contained the following exclusions: This insurance does not apply to: * * *; j. Damage to Property; * * *; (6) that particular part of any property that must be restored, repaired or replaced because your work was incorrectly performed on it.; * * *; I. Damage To Your Work; Property damage to your work arising out of it or any part of it and included in the products-completed operations hazard.; This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.; The Court also found that Your work is defined in the policy as including work or operations performed by you or on your behalf.; During discovery and depositions, the plaintiffs admitted that Ace Green's employees incorrectly performed carpet cleaning work on the date in question, and thus caused the damage to the carpet. However, in their briefs in opposition to Mount Vernon's motion for summary judgment, the plaintiffs argued that there was a genuine issue of material fact where defendant has failed to provide any evidence whatsoever that plaintiffs' work was incorrectly performed on February 18, 2011 to support the insurance policy exclusion. The Court rejected the plaintiffs' argument, stating that the plaintiffs' proffered interpretation of the policy would result in an insurer being a guarantor of the plaintiffs' work. The Court determined that was not the intent of the policy and concluded that coverage was barred based on the policy exclusion for damage to that particular part of any property that must be restored, repaired or replaced because ' your work' was incorrectly performed on it.'soria, 2015 WL 9911485 at *4.; The Court also granted summary judgment in favor of Mount Vernon on the grounds that coverage was barred by the policy exclusion for Damage To Your Work. Citing Capstone Building Corp. v. American Motorists Ins. Co., 308 Conn. 760, 808 (2013), a case relied upon by Mount Vernon, the Court held that [p]roperty damage resulting from the plaintiffs' own faulty work... is precluded from coverage by the ' your work' exclusion.'soria, 2015 WL 9911485 at *6-7.1 The Court noted that the fact the plaintiffs deny any wrongdoing misses the point because the issue is whether there is a claim that the plaintiffs did something wrong, for without a claim of negligence, there would be nothing that might even trigger an obligation for Mount Vernon to respond.; Mount Vernon was represented by Jeffrey F. Gostyla, a partner in Halloran & Sage's insurance coverage department.; 1. The plaintiffs filed an appeal from the trial court's decision on January 19, 2016.