Nationwide's not on your side in this case of false imprisonment at a home business

The Connecticut Supreme Court determined that Nationwide Mutual Insurance Co. did not have to compensate a business owner under a personal umbrella insurance policy for liability over his false imprisonment of his employee at work.

This is the second time the state Supreme Court has seen this case.

In 2012, a trial court found that Nationwide had to indemnify defendant Jeffrey S. Pasiak, according to the opinion. But the Appellate Court reversed the judgment “on the basis that the claim fell within the business pursuits exclusion of the insurance policy,” the opinion said.

The Supreme Court then reversed the Appellate Court, finding that the case must be remanded for a trial de novo “to allow the plaintiffs to conduct appropriate discovery,” the opinion said.

Home insurance, umbrella policy

According to the opinion, Pasiak owned Pasiak Construction Services, and its only office was located in his home in Stamford. This allowed him to have a homeowners’ insurance policy and an umbrella insurance policy through Nationwide, the opinion said.

Sara Socci, a part-time office manager, worked out of the defendant’s home office, the opinion said. In May 2006, a man wearing a mask and carrying a gun came into the office while Socci was working, the opinion said.

“The individual demanded that Socci show him to the defendant’s safe and open it,” the opinion said. “Socci had no knowledge of the safe or its combination. The individual became enraged, and he bound, gagged, and blindfolded Socci and forced her down on the floor of the bedroom. He put a gun to her head and told her he would kill her and her family if she did not open the safe.”

When Pasiak returned home, he was attacked by the intruder. When the individual was finally unmasked, he was revealed to be Richard Kotulsky, “a longtime friend of the [Pasiak],” the opinion said.

“Kotulsky and [Pasiak] went into the office, and [Pasiak] insisted that Socci join them, notwithstanding her reluctance because of Kotulsky’s threats,” the opinion said. “Socci joined them in the office, where a discussion revealed that Kotulsky was motivated to rob [Pasiak] because he was upset with [Pasiak] for his purported affair with Kotulsky’s girlfriend, and because he needed money to cover his debts.”

Socci requested to leave, but Pasiak did not let her, the opinion said. Kotulsky and Pasiak told Socci not to call the police.

Pasiak was later charged with kidnapping in the second degree and witness tampering, and pleaded guilty under the Alford doctrine, the opinion said. Socci and her husband also filed a tort action against Pasiak, and alleged false imprisonment, negligence, intentional, reckless and negligent infliction of emotional distress, and loss of consortium, the opinion said.

“The jury awarded Socci $628,200 in compensatory damages and $175,000 in punitive damages,” the opinion said. “The jury also awarded Socci’s husband $32,500 in compensatory damages.”

‘No duty to defend’

Nationwide sought a declaration that it “had no duty to defend or indemnify the defendant in the Socci action,” the opinion said.

“The plaintiffs argued, among other things, that the defendant’s policies did not cover his liability for the Socci action because coverage was barred under the policy exclusion for business pursuits,” the opinion said. “The plaintiffs also claimed that indemnification for the punitive damages contravened public policy.”

After the Supreme Court remanded the case for a new trial, the trial court ruled in favor of the insurer, the opinion said.

“The trial court found that the plaintiffs satisfied their burden of establishing, by a preponderance of the evidence, that the false imprisonment arose out of the defendant’s business pursuits and that the business pursuits exclusion bars coverage,” the opinion said. “The trial court rendered judgment for the plaintiffs, concluding that they have no obligation to indemnify the defendant.”

The plaintiffs’ attorney, Robert D. Laurie of Gfeller Laurie, declined to comment, and the defendants’ attorney, David J. Robertson of Heidell, Pittoni, Murphy & Bach, did not respond to a request for comment.

Read the opinion:

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