Connecticut Supreme Court
The Supreme Court advance released an opinion about insurance coverage for false imprisonment, which I review below. The Court did not release any other opinions.
Nationwide Mut. Ins. Co. v. Pasiak – Pasiak had a home office for his construction company. He hired Socci to do office work at the home office. During Socci’s second week, a masked intruder entered the office and demanded that Socci open the safe. Socci didn’t know there was a safe and certainly didn’t have the combination. The intruder tied her up and threatened to kill her family if she didn’t give him the combination. The intruder was still there when Pasiak returned and the two had a struggle. Pasiak pulled off the intruder’s mask and it turned out that the intruder was Pasiak’s lifelong friend. Pasiak wouldn’t let Socci leave or call the police. He didn’t call the police either. A little later, Pasiak let his friend leave. After that, Pasiak drove Socci to Greenwich to discuss the incident with a mutual friend, who said they should call the police. Pasiak let Socci go, but did not call the police until later that day after Socci and her husband went to Pasiak’s house.
Pasiak’s friend was arrested, prosecuted and convicted. Socci prosecuted a personal injury action for false imprisonment against Pasiak and was awarded compensatory and punitive damages. Pasiak sought indemnification under a personal umbrella policy. The insurer brought a declaratory judgment action.
The umbrella policy covered “personal injury”, which was broad enough to cover Socci’s injuries, but the policy had a business pursuits exclusion. The exclusion precluded coverage for occurrences “arising out of” Pasiak’s “business pursuits.”
The trial court concluded that the exclusion did not apply. Though Socci testified that Pasiak said he didn’t want to call the police because he was trying to protect his friend and because calling the police would be bad for business, there was a lack of proof of any negative impact on the business from calling the police. So, in the trial court’s view, Pasiak was really just protecting his friend, which was not a business pursuit.
The Appellate Court reversed, finding that the exclusion applied essentially because everything that happened while Socci was at work necessarily “arose out of” Pasiak’s business pursuits – if she wasn’t at work doing her job, she would not have been victimized by Pasiak or his friend. Pasiak’s subjective motivations for his conduct were irrelevant.
The Supreme Court concluded that the trial court was too restrictive, and the Appellate Court too broad, about the scope of the exclusion. Specifically, Pasiak’s apparent desire to help his friend did not necessarily trump his concern about the impact on his business. And the mere fact that Socci was at work did not necessarily mean that the false imprisonment arose out of that work. In the end, the Supreme Court found the record insufficient to determine whether the exclusion applied as a matter of law and reversed and remanded to the trial court for further proceedings.
The Supreme Court also rejected all of the insurer’s alternate grounds for affirmance: (i) worker’s compensation exclusion did not apply because (a) Pasiak was sued in his personal capacity, not as Socci’s employer, and (b) there was no proof that Socci’s injuries would have been compensable under the worker’s compensation act in any event; (ii) physical or mental abuse exclusion did not apply because “abuse” is something different from false imprisonment; and (iii) public policy did not preclude coverage for punitive damages because those punitive damages arose from the intentional tort of false imprisonment, which the policy covers.