ACE AMERICAN INS. CO. v. KEYSTONE CONSTRUCTION & MAINTENANCE SERVICES, INC.
United States District Court, D. Connecticut.
September 27, 2012.
Sprague does allege that in the Agreement, "Pike promised to Sprague that Pike `shall have responsibility for and assume any liability with respect to said Gas after its delivery to Buyer at the Delivery Point(s).'" Id. at ¶ 8. The terms of the contract, however, do not bind Pike, but instead state that "Buyer shall have responsibility for and any assume any liability with respect to said Gas after its delivery to Buyer. . . ." Sprague's Mot. to Serve, Ex. B at ¶ 8.1. There is thus no indication that the contract was entered into by both Pike and Kleen, or that Pike was acting as anything other than an agent. There are no grounds for Pike's liability under the contract, and the motion for leave to file is therefore denied.
D. Algonquin's Motion to Dismiss
Algonquin, which delivered the natural gas to the Kleen Plant, moves to dismiss all claims against it.
1. Strict Liability Claim
In Connecticut, a defendant who engages in an ultrahazardous activity is strictly liable for any injuries that result from that activity. "`[A] plaintiff is not required to show that his loss was caused by the defendant's negligence. It is sufficient to show only that the defendant engaged in an ultrahazardous activity that caused the defendant's loss.'" Collins v. Olin Corp., 418 F.Supp.2d 34, 47 (D. Conn. 2006) (quoting Green v. Ensign-Bickford Co., 25 Conn.App. 479, 482 (1991)). An activity is ultrahazardous if it is "`an instrumentality capable of producing harm; circumstances and conditions [exist] in its use which, irrespective of a lawful purpose or due care, involve a risk of probable injury to such a degree that the activity fairly can be said to be intrinsically dangerous to the person or property of others; and a causal relation [exists] between the activity and the injury for which damages are claimed.'" Id. (quoting Caporale v. C.W. Blakeslee & Sons, Inc., 149 Conn. 79, 85 (1961). Traditionally, strict liability has been applied in cases involving explosions, and Algonquin does not contest that a gas blow is an ultrahazardous activity. Algonquin argues that the strict liability claim should be dismissed because the plaintiffs have failed to allege that Algonquin engaged in an ultrahazardous activity. During oral argument, the plaintiffs conceded that there was no basis to believe that Algonquin did anything other than transport gas through a gas pipeline. Algonquin was not involved in the gas blow itself, and thus did not engage in the ultrahazardous activity. Accordingly, Algonquin's motion to dismiss the strict liability claim is granted.
2. Negligence and Recklessness Claims
1. Unless otherwise noted, all background information is taken from the Third Amended Complaint.
2. Although the plaintiffs made similar allegations with regard to Algonquin, at the motion hearing the plaintiffs admitted that they had no reason to believe Algonquin was involved in developing gas blow protocols.
3. In response to the motion to dismiss, the plaintiffs provided the court with an affidavit describing Spectra's involvement in the gas blows. I am unable to consider that additional material at the motion to dismiss stage.
4. Plaintiffs' various builder's risk insurance policies follow the form of a single lead policy issued by Ace American Insurance Company. Unless otherwise noted, the term "insurance policy" refers to Kleen's insurance agreements with the plaintiffs.
5. In support of their argument, the plaintiffs cite Stop & Shop Supermarket Co. v. Abco Refrigeration Supply Corp., 48 Conn.Sup. 301 (2003). Stop & Shop was also a subrogation action, in which the defendant claimed to be an additional insured. The contract in that case stated that "Unless otherwise provided, the Owner shall purchase and maintain . . . property insurance upon the entire Work at the site to the full insurable value thereof. This insurance shall be on an all-risk policy form and shall include interests of the Owner, the Contractor, Subcontractors, and Sub-subcontractors in the Work and shall insure against the perils of fire." Id. at 305. The Court concluded that the defendant was not an "additional insured" under that agreement because "[w]hen Stop & Shop wanted to designate others as additional insureds, it did so." Id. at 311. I believe there is more evidence in this case that the subcontractors were actual insureds under the contract, including the fact that the Contractor was considered a fiduciary for the "insureds," including the subcontractors.
6. Perhaps the least convincing of Bluewater's arguments is that the contract should be read in the subcontractors' favor because the contract is ambiguous. "`As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading. . . . Under those circumstances, any ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy.'" Johnson v. Conn. Ins. Guar. Ass'n, 302 Conn. 639, 640 (2011) (quoting Conn. Med. Ins. Co. v. Kulikowski, 286 Conn. 1, 5-6 (2008)). The ambiguity here stems not from the insurance agreement, however, but the contract between Kleen and O&G. There is no indication that Kleen alone drafted the contract, and thus the usual rule regarding ambiguity in insurance agreements does not apply here.