HARTFORD, Conn. (Legal Newsline) - Nationwide Insurance doesn’t have to cover damages awarded to a woman who was bound, gagged and terrorized by a masked intruder who turned out to be a close friend of her boss, the Connecticut Supreme Court ruled.
The decision ends a long-running dispute over whether the incident triggered an exclusion for “business pursuits” under the boss’s homeowners’ policy.
Sara Socci was working in the Stamford, Conn., home office of construction-company owner Jeffrey Piasek in May 2006 when a masked man broke into the room and demanded she open a safe containing money. She protested she didn’t know about any safe, but the intruder bound her and terrorized her with a gun for 45 minutes, threatening to kill her and her family if she didn’t open the safe.
At some point Piasek returned to the house, confronted the intruder and ripped off his mask to discover he was Richard Kotulsky, a close friend. The two went into the office, where Kotulsky untied Socci and explained he staged the robbery to get back at Piasek because he allegedly was having an affair with Kotulsky’s girlfriend.
The two “reached some degree of resolution of their dispute and spoke amicably,” according to court records. Socci, meanwhile, begged to leave the house but Piasek allegedly kept her there against her will until she agreed not to tell the police about the incident, because it would ruin his business.
Piasek pled guilty to interfering with an officer and threatening Socci. Socci quit and later sued Piasek, winning more than $800,000 in damages.
Piasek didn’t have any commercial liability but sought to cover the damages under his homeowners’ and umbrella policies. Nationwide refused, citing an exclusion for “business pursuits.” A trial court ruled for Piasek, but Nationwide won reversal on appeal. The Connecticut Supreme Court reversed again, remanding the case for a new trial to determine whether Socci’s kidnapping was related to Piasek’s business.
The second time around, the trial court ruled for Nationwide and Piasek appealed again. But he lost before the Connecticut Supreme Court, which ruled in a Feb. 21 opinion that the trial court was correct to determine coverage was excluded.
Piasek argued the trial court should have used a stricter standard than preponderance of the evidence and rule for him unless the policy language “unambiguously excludes the claim.” In insurance law, contracts are typically interpreted to hold insurers strictly to the language they wrote, the Supreme Court observed.
But that standard “applies only when construing language in a policy; it does not apply when a trial court is determining, as a factual matter, whether a party has met its burden of establishing that the policy exclusion unambiguously applies.”
No one questioned that Piasek’s construction-related activities in the house met the definition of a business pursuit, the court wrote, but it is also true that kidnapping and false imprisonment aren’t business activities. The trial court correctly analyzed the facts in this case to determine that Piasek unlawfully restrained his employee from leaving while he tried to convince her not to go to the police because it would ruin his business, the court ruled. Given these facts, the court correctly determined the damages verdict stemmed from Piasek’s business activities, the Supreme Court concluded.