David J. Dacruz v. State Farm Fire and Casualty Company

The dispositive issue raised by this certified
appeal is whether a judgment declaring that the
defendant, State Farm Fire and Casualty Company
(State Farm), had no duty to defend its insured against
a claim brought by the plaintiff, David J. DaCruz, bars
the plaintiff, under principles of collateral estoppel,
from holding State Farm liable, pursuant to General
Statutes § 38a-321,1 for damages awarded pursuant to
a judgment obtained by the plaintiff against the insured.

The trial court, Levin, J., rendered judgment for State
Farm, from which the plaintiff appealed to the Appellate
Court. The Appellate Court concluded, contrary to the
determination of the trial court, that State Farm is liable
to the plaintiff under § 38a-321 for the judgment
obtained by the plaintiff against State Farm's insured
despite the earlier judgment declaring that State Farm
had no duty to defend the insured. See DaCruz v. State
Farm Fire & Casualty Co., 69 Conn. App. 507, 516, 794
A.2d 1117 (2002). We disagree with the Appellate Court
and, accordingly, reverse its judgment.

The following undisputed facts and procedural history
are relevant to our resolution of this appeal. On
January 14, 1994, the plaintiff was assaulted by a classmate,
Michael Bullock, while attending Amity Regional
Junior High School in Orange. The plaintiff subsequently
commenced an action2 (DaCruz action) against
Amity Regional School District and Michael Bullock,
among others,3 seeking damages for injuries that he had
sustained as a result of that assault. In one count of
the complaint, the plaintiff alleged that Michael Bullock
had committed an intentional assault by threatening
him verbally, pushing him and then repeatedly striking
him in the face and body. According to the plaintiff, he
was knocked to the ground and rendered unconscious.

In a second count, the plaintiff alleged the same facts
but claimed that Michael Bullock's actions were negligent.
4 In another count, the plaintiff alleged that Michael
Bullock's parents, Curtis Bullock and Sheila Meadows,
were negligent in failing to use reasonable care to control
and to restrain their son, and that they were jointly
and severally liable under General Statutes § 52-5725 for
their son's conduct.

At the time of the assault, Michael Bullock was residing
with his father, Curtis Bullock, and Susan Bullock.
Susan Bullock was not married to Curtis Bullock at the
time of the assault but married him approximately five
months later. Susan Bullock owned a homeowner's
insurance policy issued by State Farm that was in effect
on the date of the assault. That policy provided coverage
for any claim or action brought against an insured6 or
‘‘any . . . person under the age of [twenty-one]'' in
Susan Bullock's care7 for damages caused by an ‘‘occurrence.''

The policy defines an ‘‘occurrence'' as an ‘‘accident''
that results in bodily injury or property damage.
Claims brought for bodily injury caused by an insured
that the insured either expected or intended are
expressly excluded from coverage under the policy.

State Farm initially retained an attorney to represent
Michael Bullock and Curtis Bullock in the DaCruz
action. Thereafter, however, State Farm brought a separate
action (State Farm action) seeking a judgment
declaring that it had no duty either to defend or to
indemnify Michael Bullock and Curtis Bullock in the
DaCruz action. The defendants in the State Farm action
included Michael Bullock, Curtis Bullock, Susan Bullock,
the plaintiff and the plaintiff's parents, Herminio
DaCruz and Maria DaCruz. The court in the State Farm
action rendered a default judgment as to Michael Bullock
and Curtis Bullock on the basis of their failure to
appear.8 The plaintiff and Herminio DaCruz, however,
appeared by counsel and vigorously contested the State
Farm action.

State Farm filed a motion for summary judgment in
the State Farm action. Upon concluding that there were
no material facts in dispute, the trial court, Blue, J.,
granted State Farm's motion for summary judgment
with respect to State Farm's claim that it had no duty
to defend Michael Bullock and Curtis Bullock in the
DaCruz action. In his memorandum of decision, Judge
Blue explained that the facts alleged in the DaCruz
action permitted only one possible inference with
respect to Michael Bullock's state of mind when he
had attacked the plaintiff, namely, that he had done
so intentionally. Judge Blue concluded that ‘‘it [was]
impossible to imagine any conceivable scenario under
which an assault like the one described in the DaCruz
complaint could be done negligently.'' Judge Blue further
concluded that, because the plaintiff in the DaCruz
action alleged no facts other than those pointing ineluctably
to the conclusion that the assault was intentional,
‘‘the general allegations of negligence in the . . . complaint
[were] a transparent attempt to trigger insurance
coverage.'' (Internal quotation marks omitted.) Judge
Blue also concluded that State Farm had no duty to
defend Curtis Bullock because he was not married to
Susan Bullock, the policyholder, at the time of the
assault and, therefore, was not an ‘‘insured'' within the
meaning of the policy. See footnote 6 of this opinion
and accompanying text.

Judge Blue declined, however, to render judgment
declaring that State Farm did not have a duty to indemnify
Michael Bullock and Curtis Bullock for any damages
for which they might become liable in the DaCruz
action. Judge Blue concluded that it would be inappropriate
to decide the indemnification issue in light of
Hartford Accident & Indemnity Co. v. Williamson, 153
Conn. 345, 216 A.2d 635 (1966), in which we held that
the trial court in that case properly had concluded,
in the circumstances presented, that the claim of the
plaintiff insurer that it owed no duty of indemnification
to its insured properly was raised ‘‘in a defense to an
action under [what is now § 38a-321] should the occasion
for that [action] arise''; id., 350; rather than in a
declaratory judgment action that is commenced prior
to a judicial determination of the insured's liability. Id.

No party appealed from the judgment rendered in
the State Farm action. In accordance with Judge Blue's
decision in the State Farm action, the attorney retained
by State Farm to represent Michael Bullock and Curtis
Bullock in the DaCruz action withdrew his appearance.

Thereafter, the plaintiff filed motions for default as
to Michael Bullock, Curtis Bullock and Sheila Meadows
in the DaCruz action.9 The trial court, Curran, J.,
granted the plaintiff's motions. Judge Curran then held
a hearing in damages. At the conclusion of the hearing,
Judge Curran found that Michael Bullock's conduct was
intentional and that Michael Bullock and his parents
were jointly and severally liable to the plaintiff for
$31,398 in economic damages, $93,602 in noneconomic
damages and $25,000 in punitive damages. At the urging
of the plaintiff's counsel, Judge Curran thereafter indicated
that Michael Bullock's conduct also was negligent.
10

Although Judge Curran neither filed a memorandum
of decision nor signed the transcript of his oral
finding, he did sign and issue a judgment setting forth
his findings in regard to damages. The judgment, which
had been prepared by the plaintiff's counsel, provided
in relevant part: ‘‘It is further adjudged that this court
has found that the conduct of . . . Michael Bullock
. . . was an intentional assault . . . as alleged in count
[one] of the amended complaint . . . and, further, that
the conduct of . . . Michael Bullock . . . was negligent
and careless [as alleged in count two of the
amended complaint] in that [he] used an excessive and
unreasonable amount of force upon the plaintiff.'' The
judgment further provided that ‘‘the court finds [that]
. . . Curtis Bullock and Sheila Meadows . . . are liable
as parents and guardians of . . . Michael Bullock
. . . pursuant to count [three of the amended complaint].''
Finally, the judgment provided that it ‘‘is joint
and several as to all three defendants.''

The plaintiff then commenced the present action
against State Farm under § 38a-321 seeking satisfaction
of the judgment in the DaCruz action. State Farm
claimed, by way of special defense, that the incident
was not covered under Susan Bullock's homeowner's
insurance policy because (1) it was not an ‘‘occurrence''
as defined by the policy, and (2) the policy expressly
excludes coverage for injury or damage that is expected
or intended. State Farm also raised a second special
defense, contending that the plaintiff's claim was precluded
by (1) the judgment rendered by Judge Blue
declaring that State Farm had no duty to defend Michael
Bullock and Curtis Bullock in the DaCruz action, and
(2) Judge Blue's determination that the conduct attributed
to Michael Bullock in the complaint filed in the
DaCruz action necessarily was intentional rather than
negligent. The plaintiff and State Farm each filed a
motion for summary judgment. The trial court, Levin,
J., denied the plaintiff's motion for summary judgment
and granted State Farm's motion for summary judgment,
essentially concluding that the incident was an
intentional assault not covered by the policy.11 Having
decided the issue before him on that ground, Judge
Levin declined to address State Farm's alternate special
defense that the plaintiff's claim was barred, under principles
of collateral estoppel, by virtue of Judge Blue's
decision to reject the plaintiff's contention that State
Farm had a duty to defend Michael Bullock and Curtis
Bullock. Judge Levin thereupon rendered judgment for
State Farm.

The plaintiff appealed to the Appellate Court, which
concluded that Judge Levin improperly had determined
that State Farm had no duty to indemnify Michael Bullock.
12 See DaCruz v. State Farm Fire & Casualty Co.,
supra, 69 Conn. App. 516. Specifically, the Appellate
Court held that, ‘‘[b]ecause the judgment rendered in
the DaCruz action was based on negligence in part,
[Michael] Bullock would have had a viable contractual
claim against State Farm. Therefore, the plaintiff may
recover against State Farm pursuant to § 38a-321 as a
matter of law.'' Id. Upon so concluding, the Appellate
Court reversed the judgment of the trial court, Levin,
J., and remanded the case ‘‘for further proceedings to
determine the amount of damages attributable to State
Farm because of [Michael] Bullock's negligent conduct.''
Id.Wesubsequently granted State Farm's petition
for certification to appeal limited to the following issue:

‘‘Did the Appellate Court properly conclude that the
plaintiff may recover against [State Farm] pursuant to
. . . § 38a-321 as a matter of law?'' DaCruz v. State
Farm Fire&Casualty Co., 261 Conn. 938, 808 A.2d 1132
(2002). We answer the certified question in the negative.
We are persuaded that the plaintiff's action under
§ 38a-321 is barred, under principles of collateral estoppel,
by virtue of Judge Blue's determination that State
Farm had no duty to defend Michael Bullock in the
DaCruz action. ‘‘The applicability of the doctrine of
collateral estoppel . . . presents a question of law
. . . . The fundamental principles underlying the doctrine
of collateral estoppel are well established. The
common-law doctrine of collateral estoppel, or issue
preclusion, embodies a judicial policy in favor of judicial
economy, the stability of former judgments and
finality. . . . Collateral estoppel means simply that
when an issue of ultimate fact has once been determined
by a valid and final judgment, that issue cannot
again be litigated between the same parties in any future
lawsuit. . . . Issue preclusion arises when an issue is
actually litigated and determined by a valid and final
judgment, and that determination is essential to the
judgment.'' (Citations omitted; internal quotation marks
omitted.) Cumberland Farms, Inc. v. Groton, 262 Conn.
45, 57–58, 808 A.2d 1107 (2002). ‘‘In other words, [the
doctrine of] collateral estoppel precludes a party from
relitigating issues and facts actually and necessarily
determined in an earlier proceeding between the same
parties or those in privity with them upon a different
claim. . . . An issue is actually litigated if it is properly
raised in the pleadings or otherwise, submitted for
determination, and in fact determined. . . . An issue
is necessarily determined if, in the absence of a determination
of the issue, the judgment could not have been
validly rendered. . . . If an issue has been determined,
but the judgment is not dependent upon the determination
of th[at] issue, the parties may relitigate the issue
in a subsequent action. Findings on nonessential issues
usually have the characteristics of dicta.''13 (Internal
quotation marks omitted.) Id., 58 n.17.

There is no dispute that the issue of State Farm's
duty to defend Michael Bullock in the DaCruz action
was fully and fairly litigated by the plaintiff, who vigorously
opposed State Farm's claims in the State Farm
action. Thus, under principles of collateral estoppel,
the plaintiff is barred from relitigating, in the present
action, any issues that actually and necessarily were
decided in the State Farm action. We conclude that the
judgment of the trial court, Blue, J., declaring that State
Farm had no duty to defend Michael Bullock in the
DaCruz action actually and necessarily determined that
State Farm also had no duty to indemnify Michael
Bullock.

As we repeatedly have stated, the duty to defend is
considerably broader than the duty to indemnify. E.g.,
Schilberg Integrated Metals Corp. v. Continental Casualty
Co., 263 Conn. 245, 256, 819 A.2d 773 (2003); Board
of Education v. St. Paul Fire & Marine Ins. Co., 261
Conn. 37, 40, 801 A.2d 752 (2002); Imperial Casualty &
Indemnity Co. v. State, 246 Conn. 313, 324, 714 A.2d
1230 (1998). ‘‘[A]n insurer's duty to defend, being much
broader in scope and application than its duty to indemnify,
is determined by reference to the allegations contained
in the [underlying] complaint. . . . The
obligation of the insurer to defend does not depend on
whether the injured party will successfully maintain a
cause of action against the insured but on whether he
has, in his complaint, stated facts which bring the injury
within the coverage. If the latter situation prevails, the
policy requires the insurer to defend, irrespective of
the insured's ultimate liability. . . . It necessarily follows
that the insurer's duty to defend is measured by
the allegations of the complaint.'' (Internal quotation
marks omitted.) Security Ins. Co. of Hartford v. Lumbermens
Mutual Casualty Co., 264 Conn. 688, 711–12,
826 A.2d 107 (2003). Moreover, ‘‘[i]f an allegation of the
complaint falls even possibly within the coverage, then
the insurance company must defend the insured.''
(Emphasis added; internal quotation marks omitted.)
Moore v. Continental Casualty Co., 252 Conn. 405, 409,
746 A.2d 1252 (2000). ‘‘In contrast to the duty to defend,
the duty to indemnify is narrower: while the duty to
defend depends only on the allegations made against
the insured, the duty to indemnify depends upon the
facts established at trial and the theory under which
judgment is actually entered in the case.'' (Internal quotation
marks omitted.) Board of Education v. St. Paul
Fire & Marine Ins. Co., supra, 48–49, quoting Home
Ins. Co. v. St. Paul Fire & Marine Ins. Co., 229 F.3d
56, 66 (1st Cir. 2000).

Thus, the duty to defend is triggered whenever a
complaint alleges facts that potentially could fall within
the scope of coverage, whereas the duty to indemnify
arises only if the evidence adduced at trial establishes
that the conduct actually was covered by the policy.
Because the duty to defend is significantly broader than
the duty to indemnify, ‘‘where there is no duty to defend,
there is no duty to indemnify . . . .'' QSP, Inc. v. Aetna
Casualty & Surety Co., 256 Conn. 343, 382, 773 A.2d
906 (2001); see also EAD Metallurgical, Inc. v. Aetna
Casualty & Surety Co., 905 F.2d 8, 11 (2d Cir. 1990) (no
duty to defend necessarily means no duty to indemnify);
Crum & Forster Managers Corp. v. Resolution Trust
Corp., 156 Ill. 2d 384, 398, 620 N.E.2d 1073 (1993)
(same). Consequently, Judge Blue's determination that
State Farm had no duty to defend Michael Bullock in
the DaCruz action necessarily means that State Farm
also had no duty to indemnify Michael Bullock in that
action. As we have explained, that determination is
binding on the plaintiff, under principles of collateral
estoppel, in view of the fact that he was a party to the
State Farm action.

The plaintiff contends that State Farm may not invoke
the doctrine of collateral estoppel against him in the
present action because, under Hartford Accident &
Indemnity Co. v. Williamson, supra, 153 Conn. 345,
the issue of an insurer's duty to indemnify must be
litigated and decided in an action brought under § 38a-
321. We do not read Williamson so broadly.
As we previously have explained, in Williamson, this
court rejected a claim that the trial court improperly
had declined to render a judgment, during the pendency
of the underlying action against the insured, declaring
that the insurer had no duty to indemnify the insured.
Id., 349–50. In Williamson, however, the insurer had
provided an attorney to represent the insured in the
underlying action; id., 348; and the issue of the insurer's
duty to defend was not before this court on appeal. See
id., 348–49. To the extent that the issue of an insurer's
duty to indemnify may be more appropriately addressed
in an action brought under § 38a-321 rather than in an
action for a declaratory judgment brought prior to the
resolution of the underlying action against the insured,
that ‘‘principle . . . is only operative in cases [in
which] . . . the insurer's duty to defend its insured has
arisen.'' Crum & Forster Managers Corp. v. Resolution
Trust Co., supra, 156 Ill. 2d 398. In cases such as Williamson,
in which the insurer's duty to defend has not
been the subject of a successful challenge, there
remains the possibility that the facts adduced in the
underlying action will demonstrate that the insurer also
has a duty to indemnify. In such circumstances, if the
plaintiff in the underlying action obtains a judgment
against the insured, the plaintiff's action against the
insurer under § 38a-321 provides the insurer with an
appropriate forum in which to raise the defense that it
has no duty to indemnify. Because Williamson stands
only for that limited proposition, our holding in that
case is not a bar to State Farm's invocation of the
doctrine of collateral estoppel, predicated on Judge
Blue's determination in the State Farm action that State
Farm had no duty to defend Michael Bullock, to establish
that State Farm had no duty to indemnify Michael
Bullock as well.14

More importantly, the plaintiff's claim is foreclosed
by this court's opinion in Jensen v. Nationwide Mutual
Ins. Co., 158 Conn. 251, 259 A.2d 598 (1969). In Jensen,
the insurer obtained a judgment declaring that it had
no duty either to defend or to indemnify its insured in
connection with a pending action brought against the
insured by a third party who had sustained injuries in
an automobile accident with the insured. Id., 253–54.
Because that injured third party also was a party to the
declaratory judgment action; id., 254; we gave preclusive
effect to the judgment in that action when the
injured third party sought to recover against the insurer
in a direct action under what is now § 38a-321. Id.,
258–59. In so doing, we expressly rejected the insured's
claim ‘‘that the trial court [in the declaratory judgment
action] should have refused to entertain [that] action
. . . on the ground that the [insured] had a more appropriate
remedy under [what is now § 38a-321] . . . .''
Id., 260. Thus, not only is Williamson no impediment
to an action for a declaratory judgment seeking a determination
of the insurer's obligations under an insurance
policy, but Jensen expressly permits such an action,
and, under Jensen, a judgment obtained in a declaratory
judgment action is entitled to preclusive effect to the
same extent that any other judgment would be entitled
to such effect upon proper application of collateral
estoppel principles.15

The plaintiff also asserts, as he did in the Appellate
Court; see DaCruz v. State Farm Fire & Casualty Co.,
supra, 69 Conn. App. 511; that State Farm is barred by
principles of collateral estoppel from challenging Judge
Curran's finding, following the hearing in damages in
the DaCruz action, that Michael Bullock's conduct was
intentional and negligent. As the Appellate Court cor-
rectly indicated, however, the plaintiff cannot invoke
the doctrine of collateral estoppel against State Farm
in the present action because State Farm was neither
a party to the DaCruz action nor in privity with Michael
Bullock.16 See DaCruz v. State Farm Fire & Casualty
Co., supra, 69 Conn. App. 513–14 & n.7; see also Mazziotti
v. Allstate Ins. Co., 240 Conn. 799, 813, 695 A.2d
1010 (1997) (collateral estoppel ‘‘requires an identity of
issues between the prior and subsequent proceedings
and operates only against the same parties or those in
privity with them''). Contrary to the plaintiff's claim,
therefore, Judge Curran's finding of negligence is not
entitled to preclusive effect in the present action.

Even if the plaintiff were not precluded by principles
of collateral estoppel from recovering against State
Farm under § 38a-321, we agree with Judge Levin that
the plaintiff nevertheless would not be entitled to
enforce the judgment he has obtained in the DaCruz
action against State Farm. As Judge Levin concluded,
a review of the testimony adduced by the plaintiff at
the hearing in damages in the DaCruz action makes it
abundantly clear that only one possible inference can
be drawn regarding Michael Bullock's state of mind
when he assaulted the plaintiff: Michael Bullock
attacked the plaintiff with the specific intent to cause
him bodily harm. In such circumstances, State Farm
has no duty to indemnify Michael Bullock because his
conduct falls within the policy exclusion for bodily
injury that is expected or intended.

The Appellate Court concluded that Judge Levin
failed to give proper effect to Judge Curran's finding,
following the hearing in damages in the DaCruz action,
that Michael Bullock's conduct, though intentional, also
was negligent.17 See DaCruz v. State Farm Fire&Casualty
Co., supra, 69 Conn. App. 516. To the contrary,
Judge Levin correctly concluded that Judge Curran's
finding of negligence was both factually and legally
insupportable. Judge Curran's finding of negligence was
factually untenable because it cannot be squared either
with the allegations of the complaint or with the evidence
adduced in support of those allegations at the
hearing in damages. Both the allegations and the evidence
lead inescapably to the conclusion that Michael
Bullock's assault on the plaintiff was intentional. Judge
Curran's finding of negligence was legally untenable
because, as we previously have observed, ‘‘the same
conduct [cannot] reasonably be determined to have
been both intentionally and negligently tortious.'' American
National Fire Ins. Co. v. Schuss, 221 Conn. 768,
777, 607 A.2d 418 (1992). ‘‘[I]ntentional conduct and
negligent conduct, although differing only by a matter
of degree; Mingachos v. CBS, Inc., 196 Conn. 91, 103,
491 A.2d 368 (1985); are separate and mutually exclusive.
. . . Although in a given case there may be doubt
about whether one acted intentionally or negligently,
the difference in meaning is clear. ‘As [Oliver Wendell]
Holmes observed, even a dog knows the difference
between being tripped over and being kicked.' [W. Prosser
& W. Keeton, Torts (5th Ed. 1984) p. 33].'' (Citation
omitted.) American National Fire Ins. Co. v. Schuss,
supra, 775–76. In the present case, the nature of the
conduct at issue is not in doubt. As Judge Curran
expressly found, ‘‘[t]he act that was perpetrated upon
[the plaintiff by Michael Bullock] was intentional and
was particularly vicious . . . .'' Thus, because Judge
Curran's nominal finding of negligence lacks any basis
in law or in fact, it is without legal force.18