Shenkman, a former advertising executive, is jailed without bail on arson and other charges related to the beach home fire as well as the 2009 standoff and fire in South Windsor. He awaits trial in both cases.

Superior Court Judge Emmet Cosgrove was wrong to dismiss Shenkman's emotional distress claims last year, the Appellate Court ruled, but it also upheld Cosgrove's decision to dismiss other allegations Shenkman made against Central Mutual, based in Van Wert, Ohio.

Shenkman has the standing to allege that Central Mutual's conduct “caused him direct harm,” Judge Lubbie Harper Jr. wrote in the unanimous decision, which sends Shenkman's case back to Superior Court.

Shenkman and his ex-wife, medical malpractice lawyer Nancy Tyler, were married in 1993. Tyler filed for divorce in 2006 and it was finalized two years later after lengthy legal fights. The divorce ruling gave Tyler the East Lyme house and awarded her all the proceeds of any insurance settlement related to the fire there.

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Shenkman's advertising firm in Bloomfield produced “The Gayle King Show,” hosted by Oprah Winfrey's best friend, and commercials for state government. Shenkman is the brother of Mark Shenkman, founder and president of Shenkman Capital Management, one of the nation's largest money management firms.

Though Shenkman has no stake in the East Lyme property or any insurance settlement related to the fire, he's suing Central Mutual on principle, said his lawyer, Benjamin Gettinger.

“He honestly believes he's entitled to monetary damages for the insurance company's actions,” Gettinger said. “I commend the Appellate Court for making the right decision. I'm glad to see in Connecticut that we still have checks and balances in the judicial system even when the decision is not popular.”

It's not clear whether Central Mutual plans to appeal to the state Supreme Court. Messages were left for the company's lawyer and spokesmen. If Monday's decision isn't appealed, discovery could continue in the case as it heads for potential jury selection in New London.

A message was also left for Tyler on Monday.

She endured a harrowing 12-hour ordeal in July 2009. Police said Shenkman kidnapped her from a Hartford street just before the pair were due in Family Court for a hearing. Lawyers said Shenkman was to pay Tyler $100,000 for legal fees or turn over the South Windsor house.

Police said Shenkman took Tyler to the South Windsor house and held her hostage. Tyler managed to escape without serious injury, but police said Shenkman kept them at bay with claims that he booby-trapped the house with explosives, then set the house on fire and finally surrendered as flames engulfed the home.