File photo
Tabor site.
First Selectman Jamie Cosgove will not appeal a recent court ruling that the town of Branford was not covered by insurance when it seized the 77-acre Tabor property by eminent domain a decade ago.
Last month Cosgrove asked Town Attorney Bill Aniskovich to file a notice of appeal in order to preserve a court deadline and buy time for a full review of the insurance case, the last in a series of Tabor-related cases that have dominated Branford’s legal landscape.
At issue in this final leg of litigation is the insurance policy between the town and Arrowood Indemnity Co. and American Alternative Insurance Co. The town sought up to $10 million in damages for breach of contract. In January Superior Court Judge David M. Sheridan in Hartford ruled for the insurers.
Attorney Holly Winger of the town’s new law firm, Brenner, Saltzman & Wallman in New Haven, undertook the legal analysis of the long and complex Tabor case to determine if an appeal to reverse Judge Sheridan’s 30-page ruling could be achieved.
In her Feb. 25 letter to Cosgrove she wrote: “It is our opinion based on information made available to use that the Town is unlikely to succeed in reversing the decision in this case on appeal.”
She said given the passage of time in this lawsuit, and a recent 2013 Connecticut Supreme Court decision, “the Town has more and different information in making that decision than what the Town had when it chose to file the [2008] insurance coverage action.”
She noted the most recent State Supreme Court ruling favors the language insurance carriers use in these types of cases, that the overall $14 million judgment against the town was overturned and that to date the Town has spent about $347,000 in legal fees to pursue insurance recovery.
“The Town would likely have a difficult time prevailing” before the state Supreme Court, she wrote.
Cosgrove reviewed Attorney Winger’s findings and announced last week “the time has come to put an end to one of the most disappointing chapters in Branford’s history,” he said, adding this is the “final piece of Tabor-related litigation.”
Tabor Trial History
In September 2007, a six-member Waterbury Superior Court jury leveled $12.4 million in damages against the town, plus damages for civil rights violations. After Unk DaRos was elected to serve a second term as first selectman in November 2007, he hired Clendenin & Shea of New Haven to serve as town counsel.
William H. Clendenin, Jr., then put together a team of outside attorneys with expertise in certain areas to examine how best to confront the staggering jury award, plus attorney’s expenses and other costs. In 2010, the state’s highest court reversed the $12.4 million award on the grounds that the developers did not own the land, an argument made during the trial but ignored by the trial judge.
In 2008, two years before the high court reversed the Tabor jury’s damage award, the town also sued Arrowood. At the time, DaRos said he knew the town was not covered by overall eminent domain takings, but he decided to hire an outside firm because he wanted to make sure “to cover all bases and leave no stone unturned,” he said back then.
In her six-page legal memorandum, Winger discloses for the first time that the town had two outside legal opinions at the time it decided to sue its insurers. The first opinion, advising the town not to sue its insurance carriers, came from Attorney Edwin L. Doernberger, who practices law in Hamden and is an expert in insurance liability. He was asked to provide an “insurance coverage analysis,” a step attorneys often take before going forward with a lawsuit.
Doernberger submitted his opinion to the town after the jury’s September, 2007 decision. Cosgrove noted in a prepared statement released last week that “the town was given a legal opinion in 2007 that insurance coverage under the Arrowood policy was unlikely, based on legal precedent and the wording of the policy.
“Notwithstanding the 2007 opinion,” Cosgrove said, “the Town retained a New York law firm in 2008 to develop a new theory of recovery in order to pursue a claim against Arrowood.”
In her memorandum, Winger said the 2007 Doernberger opinion cited various court decisions and concluded that it was “unlikely that a court would find that the insurer had a duty to defend.”
So the town looked elsewhere, not an unusual course of action for attorneys faced with a $12.4 million jury verdict against a town. Nearly a year later, the town hired the law firm of ReedSmith, a gigantic national and international law firm whose expertise includes insurance recovery.
The ReedSmith 2008 recovery theory was based not on eminent domain but on a violation of the developer’s civil rights. The developer, New England Estates, argued over and over that the town acted in bad faith when it seized the 77-acre Tabor property by eminent domain. This argument, Winger said, was the “core assertion” of the developer and the owner’s complaint. “They first termed the exercise of eminent domain negligent, then later claimed that the exercise of eminent domain by the town violated their protections under the federal civil rights act,” she said.
In her six-page memorandum, Attorney Winger wrote that the 2008 ReedSmith opinion noted that while “recovery for the Town under this (civil rights violations) theory would be ‘an uphill battle’ it ‘was worth pursuing’ due to the significance of the liability facing the Town at the time and the ‘legitimate’ arguments in favor of coverage.” Click here to read story.
But in the end the theory didn’t work.
The theory had to confront three little words. The policy states up front that the insurance policy does not cover any claim “arising out of” inverse condemnation, adverse possession, dedication by adverse use or eminent domain.”
“Arising out of” doesn’t give much wiggle room, Winger said, as did Judge Sheridan. The insurance policy language clearly states that the policies exclude from coverage any “claim arising out of eminent domain.”
Cosgrove said that even if the Town were successful in overturning Judge Sheridan’s decision, which, he added after reading Winger’s analysis, “I am convinced would not be the case,” the litigation would continue because there are other defenses Arrowood could raise, “but which have not yet been considered by the court. This will be mean hundreds of thousands of dollars more in legal fees, with no clear prospect of recovery.
“In short, I do not believe Branford should throw good money after bad. The Town will not appeal the Arrowood decision,” Cosgrove said.
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