INSURANCE LAW: Supreme Court restricts the scope of “arising out of” coverage provisions

In Misiti, LLC v. Travelers Property Cas. Co. of America, 308 Conn. 146 (March 26, 2013), the Supreme Court affirmed the Appellate Court’s conclusion that the required causal connection between the accident and the covered cause of loss was lacking, and therefore found no duty to defend. The issue was whether the alleged fall down “arose out of” the ownership, maintenance, or use premises demised to the named insured; if so, the lessor would qualify as an additional insured.

The Court rejected mere a incidental or a non-causal connection, requiring causation. 308 Conn. at 161-63. “In determining whether the facts of the underlying complaint give rise to a duty to defend, our case law instructs that there is a limit to what may constitute an adequate causal connection.” 308 Conn. at 163.

In footnote 11, the Court stated: “The dissent asserts that our analysis, which focuses solely on the facts alleged in the complaint, is overly narrow. Instead, the dissent would consider certain extrinsic facts as set forth in the parties’ stipulation, maintaining that “facts outside of the complaint that were known by [Travelers] … suggest that the claim falls within the scope of coverage….” Such facts, in the dissent’s view, include the following: (1) “prior to sustaining her injuries, Middeleer ‘ate food and drank wine at the tavern’ with her supervisor”; (2) they “walked down a path toward the parking area … [and] as the two approached the parking area, they did not take the branch of the path that led directly to where the car was parked, but instead they continued to walk along the river in a park like area located next to the tavern in order to look at the river and a waterfall”; and (3) “Middeleer was injured after the wood fence that was located on the top of the riverbank collapsed, causing her to fall.” According to the dissent, if we had considered such facts, we would have determined that “there clearly [was] an allegation tying [Middeleer’s injuries] to the particular premises leased to the tavern.” We disagree. Even if we assume that these facts were appropriately before us, such facts would not alter our analysis because they do not establish a causal nexus between Middeleer’s injuries and the use of the tavern’s premises. We are therefore unpersuaded that such facts support coverage.  See Hartford Casualty Ins. Co. v. Litchfield Mutual Fire Ins. Co., supra, 274 Conn. at 466–67, 876 A.2d 1139.”

At most, as the Appellate Court reasoned, such facts suggest that Middeleer’s injuries and the use of the tavern occurred in sequence, which is insufficient to establish the requisite causal connection. Thus, even if we were to consider the facts highlighted by the dissent, in addition to our analysis of the complaint in the underlying action, we could not conclude that Middeleer’s injuries arose out of the use of the leased premises under these circumstances. 308 Conn. 180 n. 11.

For full text of the decision see: this link