Tabor File Photo
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First Selectman Jamie Cosgrove yesterday took the first step to overturn a recent judicial decision that found the town of Branford was not covered by its insurers when it seized the 77-acre Tabor property (pictured) by eminent domain a decade ago. The argument: The judge ruled that eminent domain was excluded as an insured category when the town seized the property.
Cosgrove said he was acting within a court deadline in order to preserve the town’s right to appeal “while we complete the legal review necessary to determine whether there exists any basis for a successful appeal.” In short the town is buying some needed time to analyze a long and complicated case that was first filed in 2008. This is the last in a series of Tabor-related cases still on the court docket.
Cosgrove said he asked Town Counsel Bill Aniskovich to file a notice of intent to appeal via the town’s newly hired New Haven law firm, Brenner, Saltzman & Wallman. The law firm will undertake the review, Cosgrove said, “and make a recommendation as soon as possible.” The case has generated hefty legal fees over the five plus years it has wended its way through the state courts.
“I do not intend to commit additional taxpayer funds to this case absent some compelling grounds for reversal,” Cosgrove said in a statement.
Former First Selectman Anthony “Unk” DaRos has said that he first moved by eminent domain to take the Tabor property in 2003 because the parcel shared a border with the contaminated town dump and he didn’t want residents living in condos then proposed for the site. The town’s boards backed his position. He also knew the town’s insurers did not cover eminent domain cases, but he and former town attorneys believed this case was based on civil rights issues, not eminent domain per se.
Tabor Litigation
Tabor File Photo
At the time of the taking, New England Estates (NEE), the would-be developer of the property, had not exercised its option to purchase the land in order to erect a large-scale housing development, one that in various incarnations ranged from 275 to 354 units. Also, the developers did not have necessary approvals and permits for a proposed affordable housing plan that was part of the large condo development.
Nor, said the State Supreme Court in a major decision in 2010, did the developers own the land. In 2010, the state’s highest court reversed the $12.4 million jury damage verdict against the town, ruling that NEE was not entitled to any damages because it did not own the land; it only had an option to build on the land. (Click here to read that story.)
NEE claimed that the town took the property to prevent an affordable housing development and argued the company had the right to recover lost business profits as if they had purchased and developed the property as a profitable enterprise. NEE never purchased the property.
In 2008, before the state’s highest court reversed the $12. 4 million jury award, the town also sued its insurers for breach of contract. The town had sought to obtain up to $10 million in damages for breach of contract from Arrowood Indemnity Co. and American Alternative Insurance Co. (AAIC of Princeton, N.J.).
At the time the town filed against its insurers, it knew it was not covered by overall eminent domain actions, DaRos told the Eagle in 2008. “But there were some parts that I feel the insurance company should have covered. I want to make sure to cover all bases,” he said, referring to the massive jury award against the town.
Specifically, DaRos and then town counsel William H. Clendenen, Jr., sought to show that the developer’s case against the town arose not from eminent domain per se, but from the jury’s decision at trial that the town had violated NEE’s civil rights.
NEE sued the town on July 18, 2003, claiming then and at trial that there was an unconstitutional taking of property in a manner that was in bad faith, pre-textual, unreasonable or an abuse of power. The taking of the land, NEE asserted was not for a “public use or purpose,” NEE claimed. DaRos said he and town boards wanted to put ball fields on the property and they served a public purpose.
The Insurance Decision
In the end, Superior Court Judge David M. Sheridan, who heard the insurance case in the complex litigation section in Hartford, agreed with the insurers in a 30-page written opinion. The town’s lawsuit against its carriers runs eleven long docket pages and contains 337 filings beginning in June 2008 and ending on Jan 16, 2014, when the judge filed his decision.
The insurance policies state up front that their policies do not cover “any claim arising out of inverse condemnation, adverse possession, dedication by adverse use or eminent domain.”
Judge Sheridan wrote: “The Town argues that the language in the eminent domain exclusion is ambiguous. However, the ambiguity of which the Town complains is not a lack of clarity or difficulty of comprehension of meaning, but a lack of specificity as to the intended scope of the words ‘any claim arising out of’ in the exclusion.”
What the town argued was that the insurance company had “a duty” to defend the town against claims made in an underlying action, not eminent domain per se, but in the costs the town spent to investigate, defend, settle or pay any judgment in the civil rights action.
Since the town did not have to pay $12.4 million plus interest as a result of the State Supreme Court decision, the insurance funds, had the town won this case, would have been applied to legal fees and other costs emanating from this case’s litigation.
But the judge said no. He found “as a matter of law” that the eminent domain exclusion in the Arrowood policy “would apply to, and preclude coverage for, all the claims against the Town in the underlying action…”
In short, the judge found that the language (“any claim arising out of … eminent domain”) was not ambiguous “such that it must be construed against the insurer.”
Enter Holly Winger
Holly Winger, one of Brenner’s most experienced litigators in the area of environmental and toxic tort issues, will handle the town’s preliminary appeal, Aniskovich said. In her one-page statement to the appeals court, she went straight to the language issue.
She asked if the trial judge erred “in its interpretation of the policy language ‘arising out of’” the eminent domain exclusion of the Arrowood policy, determining “there was no duty to defend or indemnify” the town “for damages for violation of civil rights and for tortious interference with contractual relations?”
Her second question asks the same set of questions but applies them to American Alternative’s umbrella policy. Winger will serve as lead attorney in this case and review the long case file and the reasons why the town first brought the case in 2008. She has represented a variety of national manufacturers in complex product liability and breach of warranty matters.
Besides this case and the Supreme Court decision overturning the Tabor jury verdict, the town has also settled its Tabor malpractice case against the Marcus Law Firm, the town’s former town counsel under Cheryl Morris, who served as first selectwoman from 2005 to 2007.
In 2008, the town also sued the Marcus Law Firm and David Doyle, the firm’s litigator who handled the preparation for the Tabor case, for missing a crucial deadline that deprived the town of calling expert witnesses at trial. These witnesses were supposed to testify about contamination at the town dump and soil costs connected to the 77-acre parcel, which has been stripped of its soil. Click here to read about the jury’s verdict.
Superior Court Judge Robert Young, the trial judge had there been a trial in the Marcus case, told the law firm in court he was unpersuaded by an argument that there was no deadline issued for expert witnesses.
In June, the Marcus Law Firm agreed to pay the town $1 million under its malpractice insurance and the case was settled. Click here to read the story.
The Marcus Law Firm and Doyle are now in litigation against the town they once represented and defended. They are representing resident Wayne Cooke in a series of law suits he has filed against the town of Branford in both state and federal court.
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