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CHARLES V. SONSON v. UNITED SERVICES

AUTOMOBILE ASSOCIATION

(AC 35890)

Alvord, Keller and Peters, Js.

Argued May 20—officially released September 16, 2014

(Appeal from Superior Court, judicial district of

Stamford-Norwalk, Hon. David R. Tobin, judge trial

referee.)

Stephen R. Sugrue, for the appellant (plaintiff).

James J. Noonan, with whom, on the brief, was John

W. Cannavino, Jr., for the appellee (defendant).
Opinion

PETERS, J. ‘‘Standardized contracts of insurance

continue to be prime examples of contracts of adhesion,

whose most salient feature is that they are not subject to

the normal bargaining processes of ordinary contracts.’’

(Internal quotation marks omitted.) Rumbin v. Utica

Mutual Ins. Co., 254 Conn. 259, 264 n.6, 757 A.2d 526

(2000). In light of this industry practice, courts sometimes have allowed policyholders to obtain coverage

despite their failure to comply strictly with the terms

of their policy. See Arrowood Indemnity Co. v. King,

304 Conn. 179, 39 A.3d 712 (2012). The dispositive issue

in this appeal is whether the trial court properly refused

to extend this principle of lenity to the plaintiff, the

owner of a race car, and require his automobile insurer

to pay for damages to the car that occurred while he

was preparing for an organized racing contest even

though his insurance contract expressly excluded coverage for losses so incurred. The plaintiff has appealed

from the judgment of the trial court enforcing the racing

exclusion and thus denying his claim forreimbursement

for the cost of repairs to his car. We affirm the judgment

of the trial court.

On August 31, 2007, the plaintiff, Charles V. Sonson,

filed a one count complaint claiming that the defendant,

United Services Automobile Association, breached its

insurance contract to pay for damages to the plaintiff’s

Ferrari. After a trial, the court found in favor of the

defendant on two grounds. First, the Ferrari was damaged in a racing accident, and a clause in the plaintiff’s

automobile insurance policy expressly excluded coverage for losses incurred competing in or preparing for

an automobile race. Second, the plaintiff had materially

misrepresented where the car would be garaged and

registered at the time the policy was issued, allowing

for rescission under Virginia law. The plaintiff has

appealed.

The plaintiff does not challenge the propriety of the

court’s findings of the relevant facts. In the spring of

2006, the plaintiff decided to acquire a Ferrari model

F430 Challenge race car, an automobile designed for

operation on race tracks and not ‘‘street legal,’’ i.e., it

cannot be driven on town and city streets because it

does not have the safety equipment required for registration of automobiles in this country. The plaintiff

already had several vehicles insured by the defendant,

an insurance company that primarily provides insurance for present orformer members of the armed forces

of the United States and their dependents. Despite

recently having been informed by a representative of

the defendant that the defendant categorically does not

issue policies on race cars, on March 20, 2006, the plaintiff telephoned the defendant’s headquarters to add the

Ferrari to his existing automobile insurance policy.

Over the course of two telephone calls, the defendant’s
representatives asked the plaintiff for information

about the automobile he was seeking to have covered,

including where it would be garaged and registered.

Although the plaintiff claims he did not provide this

information, the representatives noted in the defendant’s computer system that the car would be garaged

at the plaintiff’s home in Williamsburg, Virginia, and

would be registered in the state of Delaware.

On March 21, 2006, the defendant added the Ferrari

to the plaintiff’s existing policy. The policy contained

a provision that excluded losses incurred while racing,

or practicing or preparing for a race, in a facility

designed for racing.

On January 24, 2007, the Ferrari was severely damaged, when, at Infineon Race Track in Sonoma, California, the plaintiff lost control of the car and crashed into

a guardrail. The plaintiff promptly notified the defendant of the accident.

In response to this notification, on February 22, 2007,

the defendant acknowledged that it had issued the automobile policy in question, but expressly reserved its

right to enforce the terms of the insurance contract

that, in its view, defeated the plaintiff’s claim for compensation. During its investigation, the defendant discovered that the car had not been garaged in the

location indicated in its computer system, nor had it

been registered in Delaware or any other state. Thereafter, on May 30, 2007, the defendant sent the plaintiff

a letter stating that the plaintiff’s policy was rescinded

because of the plaintiff’s material misrepresentations

that the car would be garaged at his home in Williamsburg and that the car would be registered in

Delaware.

The plaintiff initiated the present action to enforce his

policy with the defendant. In response, the defendant

asserted the following special defenses: (1) the plaintiff

intentionally, recklessly or negligently misrepresented

or concealed material facts at the time when he applied

for the policy; (2) coverage for damage to the Ferrari

was barred by the racing exclusion of the policy; (3)

the plaintiff’s claim was barred by provisions of the

policy regarding fraudulent statements or actions made

in connection with an accident or loss; (4) the plaintiff

did not have an insurable interest in the Ferrari; and

(5) the plaintiff’s claims were barred to the extent that

the plaintiff had received compensation for his losses

from others. After a trial to the court, the court concluded that the defendant properly had rescinded the

policy for material misrepresentations under Virginia

law, finding not credible the plaintiff’s claims that the

defendant’s computer system had inaccurately

recorded the information he had provided when securing the policy. Addressing the racing exclusion, the

court concluded that coverage would have been properly denied on that basis had the policy not been
rescinded. On appeal, the plaintiff challenges both of

these conclusions. We agree with the court that the

racing exclusion was a proper basis for denial of coverage. Accordingly, we need not address the issue of

rescission.

The plaintiff maintains that the court improperly considered the racing exclusion in the plaintiff’s insurance

policy because (1) that issue was not raised in the

defendant’s initial specification of the reasons for its

denial of the plaintiff’s insurance claim, and (2) the loss

suffered by the plaintiff did not fall within the racing

exclusion. We are not persuaded.

At the outset, we note that both parties agree with

the court’s determination that Virginia substantive law

governs the issues presented by this case. SeeAmerican

States Ins. Co. v. Allstate Ins. Co., 282 Conn. 454, 466,

922 A.2d 1043 (2007)(Florida law applied to automobile

insurance dispute when parties contemplated Florida

as principal location of automobile).

Our standard of review is well settled. ‘‘With regard

to the trial court’s factual findings, the clearly erroneous

standard of review is appropriate. . . . A factual finding is clearly erroneous when it is not supported by

any evidence in the record or when there is evidence

to support it, but the reviewing court is left with the

definite and firm conviction that a mistake has been

made. . . . Simply put, we give great deference to the

findings of the trial court because of its function to

weigh and interpret the evidence before it and to pass

upon the credibility of witnesses. . . . The trial court’s

legal conclusions [however] are subject to plenary

review. [W]here the legal conclusions of the court are

challenged, we must determine whether they are legally

and logically correct and whether they find support in

the facts set out in the memorandum of decision . . . .’’

(Internal quotation marks omitted.) Miller v. Guimaraes, 78 Conn. App. 760, 766–67, 829 A.2d 422 (2003).

The plaintiff’s claim that the court acted improperly

in considering the racing exclusion1

is not persuasive

in light of the record as a whole. Although the plaintiff

correctly notes that the racing exclusion was not mentioned by the defendant as a basis for denial of coverage

in its May 30, 2007 letter informing the plaintiff that his

policy had been rescinded, the plaintiff fails to account

for the February 22, 2007 reservation of rights letter

issued by the defendant that expressly informed the

plaintiff of the possibility of denial of coverage on the

basis of the racing exclusion.2 The plaintiff has failed

to provide any authority, and we know of none, in

support of his contention that an insurer that denies

coverage on one basis is precluded from asserting

another basis of denial in later legal proceedings, when

proper notice has been issued to the policy holder.

Accordingly, the court acted properly in considering

the racing exclusion.
Next, we consider the plaintiff’s claim that the loss

suffered in the accident did not fall within the terms

of the racing exclusion. Specifically, the plaintiff argues

that at the time of the accident he was not competing

in, or preparing or practicing for, a race.

‘‘The interpretation of a contract presents a question

of law subject to de novo review. . . . [O]n appeal [this

court is not] bound by the trial court’s interpretation

of the contract provision at issue; rather, [this court

has] an equal opportunity to consider the words of the

contract within the four corners of the instrument itself.

. . . Each phrase and clause of an insurance contract

should be considered and construed together and seemingly conflicting provisions harmonized when that can

be reasonably done, so as to effectuate the intention

of the parties as expressed therein. . . . Additionally,

[i]nsurance policies are contracts whose language is

ordinarily selected by insurers rather than by policyholders. The courts, accordingly, have been consistent

in construing the language of such policies, where there

is doubt as to their meaning, in favor of that interpretation which grants coverage,ratherthan that which withholds it. Where two constructions are equally possible,

that most favorable to the insured will be adopted.

Language in a policy purporting to exclude certain

events from coverage will be construed mostly strongly

against the insurer. . . . When an insurer drafts policy

language setting forth exclusions that limit coverage

under a policy, the insurer is required to use language

that clearly and unambiguously defines the scope of

the exclusions. . . . Exclusionary language in an insurance policy will be construed most strongly against the

insurer and the burden is upon the insurer to prove

that an exception applies.’’ (Citations omitted; internal

quotation marks omitted.) PBM Nutritionals, LLC v.

Lexington Ins. Co., 283 Va. 624, 633–34, 724 S.E.2d

707 (2012).

In the present case, the relevant provision of the

policy stated: ‘‘We will not pay for . . . [l]oss to your

covered auto or any non-owned auto, located inside

a facility designed for racing, for the purpose of: a.

Competing in; or b. Practicing or preparing for; any

prearranged or organized racing or speed contest.’’ It

is undisputed that the loss occurred at Infineon Race

Track, a facility designed for racing. Therefore, the

question before us is whether the circumstances of the

plaintiff’s activities, as found by the court, constitute

competing in or practicing or preparing for any prearranged or organized racing or speed contest under the

terms of the policy.

The court found that the plaintiff was accompanied

by a mechanic and driving coach, was travelling at

speeds of approximately seventy miles per hour on

curves and ninety miles per hour on straightaways, and

was wearing a fire suit, helmet, boots, and possibly
gloves.3 Further, the court specifically found the plaintiff’s claim that he had given up racing the Ferrari not

to be credible. Even keeping in mind that any ambiguity

in the language of the policy must be resolved in favor

of the insured, it is apparent that the plaintiff’s activities

fell within the terms of the racing exclusion, as these

findings clearly demonstrate that the plaintiff was practicing or preparing for a prearranged or organized racing

or speed contest. Accordingly, the court properly determined that the racing exclusion was applicable.4

The judgment is affirmed.

In this opinion the other judges concurred.

1 The plaintiff initially raised this issue, among others, in his January 13,

2011 motion for summary judgment. The court rejected the argument and

denied the motion.

2 The reservation of rights letter stated: ‘‘With respect to the loss that

occurred on January 24, 2007 at Napa Valley, California, we believe that

the policy may not provide coverage for the following reasons.’’ It then

reproduced the text of the racing exclusion provision of the policy. The letter

also stated: ‘‘We’re willing to continue with the investigation or settlement of

any claim or lawsuit resulting from the incident. We will continue, however,

only on the condition that our actions will not [h]arm any rights or defenses

we currently have under the policy, including the rights and defenses that

aren’t specifically referred to in this letter. Please also note the following:

We reserve the right to deny coverage at a later date. We reserve the right

to bring legal action to have the rights of the parties decided. Our actions

should not be interpreted as waiving or as preventing us from exercising

our rights. Our actions should not be interpreted as an acknowledgment of

liability or coverage. You may wish to consult your attorney about this

incident.’’

3 To the extent that the plaintiff challenges the court’s factual findings

regarding the circumstances of the accident, we conclude that they are not

clearly erroneous, as they find support in the record, and we are not left

with a firm and definite conviction that a mistake has been made. See 19

Perry Street, LLC v. Unionville Water Co., 294 Conn. 611, 624, 987 A.2d

1009 (2010).

4 Nothing in the record suggests that the court improperly placed the

burden on the plaintiff to prove that the exclusion did not apply. Rather,

the court expressly acknowledged that the burden was on the defendant to

prove the applicability of the racing exclusion, a burden it met in demonstrating that the plaintiff was engaged in racing activities.