author: Santaniello, J.

text:
    City of West Haven v. Hartford Insurance Company
    (14293)
    Peters, C. J., Glass, Covello, Borden and Santaniello, Js.

      Argued November 5, 1991
    decision released February 11, 1992

      Edward Gallant, with whom, on the brief, were Michael G. Kinsella, Ann Gallant and Keith Bradoc Gallant, for the appellant (plaintiff).

      Timothy W. Donahue, with whom, on the brief, was Edward T. Falsey, for the appellee (defendant).
   Santaniello, J.

The principal issue in this appeal is whether the plaintiff city had a legal obligation under General Statutes §§ 7-101a or 7-465 to indemnify two city police officers for the punitive damages for which they had been held liable in a federal civil rights suit.

The underlying facts are established by the trial court’s memorandum of decision. In 1984, Tracy McAneny instituted an action in the United States District Court for Connecticut against two West Haven police officers, Joseph Innamorato and Joseph Conzo,* alleging that his civil rights had been violated under 42 U.S.C. § 1983. The basis of McAneny’s complaint was that Innamorato and Conzo had prepared and furnished a false affidavit to establish probable cause to support a warrant for his arrest. The following facts were alleged in the civil rights suit: On December 15, 1983, McAneny was on duty as manager of the Super 8 Motel in West Haven. On that date, he was advised by a guest of the motel that property was missing from the guest’s room. McAneny contacted the West Haven police department and Innamorato and Conzo responded to the scene. The officers advised McAneny that there were no signs of forced entry and asked him to provide them with the name and address of the maid responsible for taking care of the room. Pursuant to company policy, McAneny declined to provide that information. Innamorato and Conzo threatened to arrest McAneny for not providing the requested information, but McAneny still refused. The complaint further alleged that: “From their prior investigation, the . . . [Police Officers] knew that December 29 was . . . [McAneny’s] birthday. On December 29,1983, at approximately 2:30 P.M., the . . . [Police Officers] visited . . . [McAneny] at his . . . place of employment. As [McAneny] extended his hand to greet them . . . [one of the Police Officers] placed a handcuff upon . . . [McAneny’s] wrist and stated: ‘Happy Birthday, sucker. You’re under arrest.’ [The Police Officers] . . . thereupon arrested . . . [McAneny based on the arrest warrant supported by the false affidavit] .... [The Police Officers] . . . thereupon transported . . . [McAneny] in handcuffs and in police custody to the headquarters of the West Haven Police Department and subjected him to routine booking procedures and thereafter required . . . [McAneny] to appear in the Connecticut Superior Court at West Haven on many occasions as an accused criminal.” On June 20, 1984, approximately six months after the arrest, the criminal charges against McAneny were dismissed.

The Hartford Insurance Company (Hartford), which insured West Haven under a Comprehensive Business Policy, furnished independent counsel to defend the police officers in the underlying federal lawsuit under a reservation of rights. After trial, the jury found in favor of McAneny against both police officers, and awarded $30,000 in compensatory damages and $60,000 in punitive damages. Hartford paid the compensatory damages portion of the judgment, plus attorney’s fees awarded to McAneny’s counsel pursuant to 42 U.S.C. § 1988, but refused to pay the punitive damages awarded against the police officers. West Haven paid the $60,000 punitive damages award, and then commenced the instant action to recover that sum from Hartford.

Both parties filed motions for summary judgment with respect to count one of the amended complaint, which alleged breach of contract by Hartford. By memorandum of decision dated August 14, 1990, the trial court granted Hartford’s motion, holding that West Haven was not required to pay the punitive damages awarded in the civil rights suit in favor of McAneny against Innamorato and Conzo. Therefore, the court held that Hartford had no responsibility to indemnify West Haven under the terms of the insurance contract. On December 27,1990, summary judgment was granted as to count two of the amended complaint.

West Haven has appealed from the trial court’s decisions of August 14,1990, and December 27, 1990. On appeal, West Haven claims that the trial court improperly concluded that: (1) West Haven had no legal obligation to pay the punitive damages award; (2) Hartford had no contractual duty to reimburse West Haven for the punitive damages paid in the underlying federal action; and (3) Hartford did not waive its reservation of rights by advising West Haven that its counsel need not be present at trial. We transferred the appeal to this court pursuant to Practice Book § 4023. We affirm the judgments of the trial court.

I

We first address West Haven’s claim that the trial court erred in granting Hartford’s motion for summary judgment and concluding that West Haven had no legal obligation to pay the punitive damages award. “When reviewing a trial court’s ruling on a motion for summary judgment, we must decide whether the trial court erred in determining that there was no ‘genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’ Practice Book § 384; Mingachos v. CBS, Inc., 196 Conn. 91, 111, 491 A.2d 368 (1985); D.H.R. Construction Co. v. Donnelly, 180 Conn. 430, 434, 429 A.2d 908 (1980).” Aetna Casualty & Surety Co. v. Jones, 220 Conn. 285, 292-93, 596 A.2d 414 (1991). There was no genuine issue of fact as to count one of the amended complaint, on which summary judgment was granted. Therefore, the dis-positive issue in this appeal is whether Hartford was entitled to judgment as a matter of law.

The United States Supreme Court has made it clear that a municipality is immune from punitive damages under 42 U.S.C. § 1983. Newport v. Facts Concerts, Inc., 453 U.S. 247, 271, 101 S. Ct. 2748, 69 L. Ed. 2d 616 (1981). The trial court therefore correctly concluded that if West Haven is to be held vicariously liable for punitive damages, it must be found liable under a statutory basis. West Haven claims that it was obligated to pay the punitive damages award pursuant to either § 7-465 or § 7-101a.

We first examine § 7-465, which provides, in pertinent part, that a municipality “shall pay on behalf of any employee of such municipality . . . all sums which such employee becomes obligated to pay . . . for damages awarded for infringement of any person’s civil rights ... if the employee, at the time of the occurrence, accident, physical injury or damages complained of, was acting in the performance of his duties and within the scope of his employment, and if such occurrence, accident, physical injury or damage was not the result of any wilful or wanton act of such employee in the discharge of such duty. ” (Emphasis added.)

The plain and unambiguous language of § 7-465 provides that a municipality is not obligated to pay damages if the employee was acting in a wilful or wanton manner. This court will not ordinarily construe a statute whose meaning is plain and unambiguous. Wright v. Commissioner of Correction, 216 Conn. 220, 225, 578 A.2d 1071 (1990); Lamb v. Burns, 202 Conn. 158, 168, 520 A.2d 190 (1987). This statute, on its face, imposes no liability on West Haven in the circumstances of this case.

At all times relevant to this case, § 7-101a (a) provided that “[e]ach . . . city . . . shall protect and save harmless any . . . full-time . . . employee . . . from financial loss and expense . . . arising out of any claim ... by reason of alleged negligence, or for alleged infringement of any person’s civil rights, on the part of such . . . employee while acting in the discharge of his duties. ” (Emphasis added.) Subsection (b) of § 7-101a provided that “[i]n addition to the protection provided under subsection (a) of this section, each . . . city . . . shall protect and save harmless any . . . employee from financial loss and expense . . . arising out of any claim . . . by reason of alleged malicious, wanton or wilful act or ultra vires act, on the part of such . . . employee while acting in the discharge of his duties.” (Emphasis added.) Significantly, the second sentence of subsection (b) provides that “[i]n the event such . . . employee has a judgment entered against him for such act in a court of law, such municipality shall be reimbursed by such . . . employee for expenses it incurred in providing such defense and shall not be held liable to such officer and employee for any financial loss or expense resulting from such act.” (Emphasis added.)

West Haven argues that the unambiguous language of subsection (a) requires that a municipality protect employees and hold them harmless from damages awarded by reason of infringement of civil rights. According to West Haven, since § 7-101a (b) is specifically designated as being “[i]n addition to the protection provided under subsection (a)”; (emphasis added); and since subsection (a) specifically refers to “civil rights” while subsection (b) does not, the trial court erred in concluding that § 7-101a (a) and (b) must be read together and that subsection (b) controls. We find this argument unpersuasive.

“When construing a statute, we do not interpret some clauses in a manner that nullifies others, but rather ‘ “read the statute as a whole and so as to reconcile all parts as far as possible.” ’ Martone v. Lensink, 207 Conn. 296, 302, 541 A.2d 488 (1988); Grodis v. Burns, 190 Conn. 39, 44, 459 A.2d 994 (1983).” Statewide Grievance Committee v. Rozbicki, 211 Conn. 232, 241, 558 A.2d 986 (1989). Furthermore, “ ‘ “[i]n construing a statute, common sense must be used, and courts will assume that the legislature intended to accomplish a reasonable and rational result.” ’ King v. Board of Education, 203 Conn. 324, 332-33, 524 A.2d 1131 (1987); Gentry v. Norwalk, 196 Conn. 596, 606, 494 A.2d 1206 (1985).” Ford Motor Credit Co. v. B. W. Beardsley, Inc., 208 Conn. 13, 20, 542 A.2d 1159 (1988). “The factors that this court looks to in construing a statute include ‘its legislative history, its language, the purpose it is to serve, and the circumstances surrounding its enactment.’ ” Verrastro v. Sivertsen, 188 Conn. 213, 221, 448 A.2d 1344 (1982).

In 1977, the legislature amended § 7-101a; see Public Acts 1977, No. 77-399; to include the provisions regarding protection against alleged malicious, wanton, wilful, or ultra vires acts as subsection (b). The legislative history of Public Acts 1977, No. 77-399 indicates that the portion of House Bill No. 6314 that added the language that we must now interpret was intended, as the trial court noted, “to add the right to a defense only in a frivolous case claiming wilful and wanton acts which did not exist under subsection (a).” On the House floor, Representative Dorothy Barnes stated that “[t]he need for this bill arose most recently when two suits occurring in the New Haven area involved spurious claims against individual members of Zoning Commissions. Here members were sued individually for committing wanton and wilful acts in connection with [a] particular application. The cases were generally considered harassment suits. The cost of undergoing such an ordeal is too much for most people to absorb, and the importance of attracting qualified and competent people to serve in local public office makes it imperative that we remove . . . this kind of burden from those who are willing to serve in these communities.” 20 H.R. Proc., Pt. 7, 1977 Sess., p. 2843.

“Although statements made on the floor of the legislature are not controlling on statutory interpretation, we may take judicial notice of those statements, which are strong indications of legislative intent. American Universal Ins. Co. v. DelGreco, 205 Conn. 178, 195 n.8, 530 A.2d 171 (1987); Manchester Sand & Gravel Co. v. South Windsor, 203 Conn. 267, 276, 524 A.2d 621 (1987); Verrastro v. Sivertsen, supra, 223 n.9.” Winchester Woods Associates v. Planning & Zoning Commission, 219 Conn. 303, 310-11, 592 A.2d 953 (1991).

In view of the foregoing, it becomes apparent that the trial court was correct when it observed that “[cjonstruing subjection] (a) as requiring indemnification for damages resulting from wilful or wanton acts would fly in the face of subsection (b) which provides that the municipality is to pay for the defense of claims predicated on malicious, wanton or wilful acts, but if a judgment is entered finding the municipal employee acted in such a manner, then the employee must reimburse the municipality for the costs of the defense and the municipality shall not be liable for indemnification of any financial loss resulting from such malicious, wilful or wanton acts.”

We thus conclude that the municipality is obligated, pursuant to § 7-465, to indemnify a municipal employee unless the municipal employee acted wilfully or wantonly. We also conclude that, pursuant to § 7-101a, the municipality is not liable for indemnification of any financial loss resulting from a malicious, wilful or wanton act.

We now address whether the trial court correctly held that West Haven was under no legal obligation under either statute to pay the punitive damages award. According to West Haven, the trial court improperly concluded that “wanton” acts excluded under the state statutes are necessarily equivalent to acts performed in “reckless and callous disregard” of the rights of others, which give rise to damages in a § 1983 civil rights suit. We agree with the decision of the trial court.

Title 42 of the United States Code, § 1983 permits an award of compensatory damages; Carey v. Piphus, 435 U.S. 247, 254-56, 98 S. Ct. 1042, 55 L. Ed. 2d 252 (1978); and an award of punitive damages in a “proper” case. Carlsonv. Green, 446 U.S. 14, 22, 100 S. Ct. 1468, 64 L. Ed. 2d 15 (1980). In Smith v. Wade, 461 U.S. 30, 56,103 S. Ct. 1625, 75 L. Ed. 2d 632 (1983), the United States Supreme Court held that punitive damages may be assessed in a § 1983 action “when the defendant’s conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others.” In the underlying federal civil rights action, McAneny v. Innamorato, the court, in accordance with the Smith v. Wade standard, charged the jury that “[y]ou may only award punitive damages if you find the defendants acted with evil motive or intent or with reckless and callous disregard of or indifference to the rights of the plaintiff.” The jury’s verdict form, which awarded punitive damages against both defendant officers, indicates that, in accordance with the court’s instruction, the jury found that the police officers acted either with evil motive or intent or with reckless and callous disregard of or indifference to the rights of the plaintiff McAneny.

We have previously held that in order to award punitive damages, evidence must reveal a reckless indifference to the rights of others or an intentional and wanton violation of those rights. Venturi v. Savitt, 191 Conn. 588, 592, 468 A.2d 933 (1983); Collens v. New Canaan Water Co., 155 Conn. 477, 489, 234 A.2d 825 (1967). “Wanton misconduct is reckless misconduct. Menzie v. Kalmonowitz, 107 Conn. 197, 199, 139 A. 698 (1928). Tt is such conduct as indicates a reckless disregard of the just rights or safety of others or of the consequences of the action.’ Bordonaro v. Senk, 109 Conn. 428, 431, 147 A. 136 (1929).” Markey v. Santangelo, 195 Conn. 76, 78, 485 A.2d 1305 (1985); see also Seymour v. Carda, 24 Conn. App. 446, 451, 589 A.2d 7 (1991). If this element is present, an actual intention to do harm to the plaintiffs is not necessary. Collens v. New Canaan Water Co., supra, 490. Although West Haven tries to create a distinction between the recklessness and callousness that give rise to punitive damages under § 1983 and “wanton” acts excluded under the state statutes, we do not find any meaningful distinction between the two. We hold that wanton acts are the equivalent of acts done recklessly or with callous disregard for the purposes of General Statutes §§ 7-101a and 7-465.

It is true that a comparison of the Smith v. Wade standard for the award of punitive damages and the instruction given by the trial court in the underlying federal civil rights case reveals a subtle difference. While the federal standard allows punitive damages when the defendant’s conduct “involves reckless or callous indifference to the federally protected rights of others”; Smith v. Wade, supra, 56; the federal trial judge charged that jury that punitive damages may be awarded if the defendant acted with “reckless and callous disregard of or indifference to the rights of the plaintiff.” West Haven argues, based on the above distinction, that the “reckless and callous” in that instruction did not modify the noun, “indifference,” and that, therefore, the jury in the underlying action may have premised its award of punitive damages on a finding that the defendant officers acted with simple indifference to the plaintiff McAneny’s civil rights. According to West Haven, if the jury awarded the punitive damages based on a finding of indifference, this would not preclude liability by West Haven under either § 7-101a or § 7-465, since “indifference” is a lesser standard than Connecticut’s standard of “malicious, wanton or wilful” under § 7-101a or “wilful or wanton” under § 7-465. We disagree.

The law is clear that a jury charge must be tested by viewing it as a whole. Filakosky v. Valente, 175 Conn. 192, 195-96, 397 A.2d 95 (1978); see Fernandez v. Fitzgerald, 711 F.2d 485 (2d Cir. 1983). In so doing, it becomes clear that the jury could not have awarded punitive damages based on mere indifference. Prior to instructing the jury on the punitive damages standard, which is now at issue, the federal judge charged that “[pjunitive damages are additional damages beyond those awarded as compensatory to be awarded to the plaintiff as a deterrent to the defendants to discourage them from committing the conduct complained of in the future.” Immediately after giving the instruction now at issue, the federal judge charged the jury that “[y]ou have latitude in determining the amount [of] punitive damages to add to nominal or compensatory damages. You may add such amount as you shall unanimously agree is proper to punish the defendants for extraordinary misconduct and to serve as an example or warning to others not to engage in such conduct.” (Emphasis added.)

Viewing the jury charge as a whole, we are persuaded that mere indifference is not equivalent to the extraordinary misconduct required for an award of punitive damages under federal law. Rather, the reasonable construction of this jury charge is that “reckless and callous” did modify “indifference” so that the jury was instructed that “[y]ou may . . . award punitive damages if you find the defendants acted with evil motive or intent or with reckless and callous disregard of or [reckless and callous] indifference to the rights of the plaintiff.” Such a construction is consistent with the federal Smith v. Wade standard and rises to the level of “wantonness,” which would preclude liability by West Haven under the state statutes.

II

West Haven next argues that since the trial court erred in finding that West Haven was under no legal obligation to pay the punitive damages award, it never properly addressed the contractual duty of Hartford to indemnify West Haven.

The Comprehensive Business Policy at issue provides, in section I, that “[t]he company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, property damage, personal injury or advertising injury . . . .” (Emphasis added.) In section V, personal injury is defined to include “false arrest, detention or imprisonment, or malicious prosecution.” Since the jury in the underlying federal action awarded McAneny punitive damages as a result of false arrest, West Haven argues that Hartford had a duty to indemnify it for such an award. West Haven further argues that the phrase “all sums” becomes significant when examined in light of the exclusions section of the policy, which fails to include punitive damages. According to West Haven, since the policy makes no reference to punitive damages, an ambiguity exists, which must be resolved in favor of the insured, so that “all damages” includes punitive damages. See Avis Rent A Car System, Inc. v. Liberty Mutual Ins. Co., 203 Conn. 667, 526 A.2d 522 (1987).

West Haven’s argument has one serious flaw. The insurance contract unambiguously provides that Hartford was bound to pay only those sums that its insured, West Haven, became legally obligated to pay as damages. As already discussed, West Haven was under no legal obligation under either § 7-101a or § 7-465 to pay the punitive damages award. Therefore, Hartford was never contractually bound to pay that sum on behalf of West Haven. Furthermore, having concluded that West Haven was under no legal obligation to pay the punitive damages award under either § 7-101a or § 7-465, we need not consider West Haven’s claim that the public policy of Connecticut does not prohibit a municipality from insuring itself against punitive damage awards against municipal employees.

Ill

West Haven’s final argument is that the trial court erred in concluding that Hartford did not waive its reservation of rights by advising West Haven that its counsel need not be present at trial.

Some factual background is necessary to understand this claim. By letter dated November 7,1984, Hartford informed West Haven that it would defend the McAneny lawsuit under a reservation of rights. Subsequently, counsel for Hartford informed the corporation counsel for West Haven that it was unnecessary for him to attend the actual trial. According to West Haven, such an action by Hartford amounted to a waiver of its reservation of rights. We disagree.

It is generally held that if an insurer conducts an investigation or defense under a notice of reservation of rights, it will not thereby be estopped to set up any policy defenses that may be available to it. See 7C J. Appleman, Insurance Law and Practice (1979) § 4694, p. 336. If, however, the insurer conducts itself in a manner inconsistent with the reservation of rights or makes assurances to the insured that the claim will be taken care of, the reservation of rights may be waived. Id., p. 362.

In Basta v. United States F & G Co., 107 Conn. 446, 450, 140 A. 816 (1928), we stated the rule that the insurer may avoid a waiver of the reservation of rights if it clearly informs the insured that the appearance of its attorneys on the insured’s behalf is under a reservation of rights, and the insurer performs no acts inconsistent with such reservation. The court then stated that “[a]n insurer is not estopped to set up the defense that the assured’s loss was not covered by the contract of indemnity by the fact that the insurer participated in the action against the assured, if at the same time it gives notice to the assured that it does not waive the benefits of such defense.” Id., 450; see also Fellows v. Mauser, 302 F. Sup. 929, 935-36 (D. Vt. 1969).

The statement made by counsel for Hartford to the corporation counsel for West Haven does not rise to the level of an act “inconsistent with [Hartford’s] reservation” such as to become a waiver of the reservation. See Fellows v. Mauser, supra, 936; Tomerlin v. Canadian Indemnity Co., 61 Cal. 2d 638, 394 P.2d 571, 39 Cal. Rptr. 731 (1964); Ebert v. Balter, 83 N. J. Super. 545, 558-60, 200 A.2d 532 (1964). Counsel for Hartford did not tell counsel for West Haven not to attend the trial. Rather, the statement simply informed counsel for West Haven that it was not necessary for him to attend the trial, leaving the final choice up to West Haven. Hartford made no representation that full coverage existed for West Haven and West Haven was not prevented from participating in any way. We therefore hold that there has been no waiver of Hartford’s reservation of rights.

The judgments are affirmed.

In this opinion the other justices concurred.

       At the times relevant to this case, General Statutes (Rev. to 1983) § 7-101a provided: “protection of municipal officers and full-time MUNICIPAL EMPLOYEES FROM DAMAGE SUITS. REIMBURSEMENT OF DEFENSE EXPENSES. LIABILITY INSURANCE. TIME LIMIT FOR [FILING NOTICE AND COMMENCEMENT of action], (a) Each town, city, borough, consolidated town and city and consolidated town and borough shall protect and save harmless any municipal officer, whether elected or appointed, of any board, committee, council, agency or commission, or any full-time municipal employee, of such municipality from financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand, suit or judgment by reason of alleged negligence, or for alleged infringement of any person’s civil rights, on the part of such officer or such employee while acting in the discharge of his duties.
      “(b) In addition to the protection provided under subsection (a) of this section, each town, city, borough, consolidated town and city and consolidated town and borough shall protect and save harmless any such municipal officer or full-time municipal employee from financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand or suit instituted against such officer or employee by reason of alleged malicious, wanton or wilful act or ultra vires act, on the part of such officer or employee while acting in the discharge of his duties. In the event such officer or employee has a judgment entered against him for such act in a court of law, such municipality shall be reimbursed by such officer or employee for expenses it incurred in providing such defense and shall not be held liable to such officer and employee for any financial loss or expense resulting from such act.
      “(c) Each such municipality may insure against the liability imposed by this section in any insurance company organized in this state or in any insurance company of another state authorized to write such insurance in this state or may elect to act as self-insurer of such liability.
      “(d) No action shall be maintained under this section against such municipality or employee unless such action is commenced within two years after the cause of action therefor arose nor unless written notice of the intention to commence such action and of the time when and the place where the damages were incurred or sustained has been filed with the clerk of such municipality within six months after such cause of action has accrued.”
      At the times relevant to this case, General Statutes (Rev. to 1983) § 7-465 provided: “assumption of liability for damage caused by employees. JOINT LIABILITY OF MUNICIPALITIES IN DISTRICT DEPARTMENT OF HEALTH OR REGIONAL PLANNING AGENCY, (a) Any town, city or borough, notwithstanding any inconsistent provision of law, general, special or local, shall pay on behalf of any employee of such municipality, except firemen covered under the provisions of section 7-308, all sums which such employee becomes obligated to pay by reason of the liability imposed upon such employee by law for damages awarded for infringement of any person’s civil rights or for physical damages to person or property, except as hereinafter set forth, if the employee, at the time of the occurrence, accident, physical injury or damages complained of, was acting in the performance of his duties and within the scope of his employment, and if such occurrence, accident, physical injury or damage was not the result of any wilful or wanton act of such employee in the discharge of such duty. This section shall not apply to physical injury to a person caused by an employee to a fellow employee while both employees are engaged in the scope of their employment for such municipality if the employee suffering such injury or, in the case of his death, his dependent has a right to benefits or compensation under chapter 568 by reason of such injury. If an employee or, in the case of his death, his dependent has a right to benefits or compensation under chapter 568 by reason of injury or death caused by the negligence or wrong of a fellow employee while both employees are engaged in the scope of their employment for such municipality, such employee or, in the case of his death, his dependent shall have no cause of action against such fellow employee to recover damages for such injury or death unless such wrong was wilful and malicious. This section shall not apply to libel or slander proceedings brought against any such employee and, in such cases, there is no assumption of liability by any town, city or borough. Any employee of such municipality, although excused from official duty at the time, for the purposes of this section shall be deemed to be acting in the discharge of duty when engaged in the immediate and actual performance of a public duty imposed by law. Such municipality may arrange for and maintain appropriate insurance or may elect to act as a self-insurer to maintain such protection. No action for personal physical injuries or damages to real or personal property shall be maintained against such municipality and employee jointly unless such action is commenced within two years after the cause of action therefore arose nor unless written notice of the intention to commence such action and of the time when and the place where the damages were incurred or sustained has been filed with the clerk of such municipality within six months after such cause of action has accrued. Governmental immunity shall not be a defense in any action brought under this section. In any such action the municipality and the employee may be represented by the same attorney if the municipality, at the time such attorney enters his appearance, files a statement with the court, which shall not become part of the pleadings or judgment file that it will pay any verdict rendered in such action against such employee. No mention of any kind shall be made of such statement by any counsel during the trial of such action. As used in this section, ‘employee’ shall include a member of a town board of education and any teacher, including a student teacher doing practice teaching under the direction of such a teacher, or other person employed by such board. Nothing in this section shall be construed to abrogate the right of any person, board or commission which may accrue under section 10-235.”

        Tracy McAneny v. Joseph Innamorato et al., United States District Court, District of Connecticut, Civil No. N-84-548 [EBB].

       We have previously stated that “[w]hile we have attempted to draw definitional distinctions between the terms wilful, wanton or reckless, in practice the three terms have been treated as meaning the same thing.” Dubay v. Irish, 207 Conn. 518, 533, 542 A.2d 711 (1988); see also State v. Alterio, 154 Conn. 23, 25, 220 A.2d 451 (1966).

       “A recklessly or callously indifferent violation occurs ... if the official believes (or reasonably should believe) that his conduct is very likely (but not certain) to result in such a violation.” (Emphasis in original.) Germany v. Vance, 868 F.2d 9, 18 n.10 (1st Cir. 1989).

       The trial court simply stated that since the city was not required to pay the punitive damages awarded in the civil rights suit, but rather paid it as a mere volunteer, Hartford had no responsibility to indemnify West Haven under the terms of the contract.

       The letter stated:
      “Please be on notice that the Hartford Insurance Group, in investigating and defending this matter, does so without prejudice to its right to deny coverage on all or part of the premises underlying the Suit instituted in the United States District Court, New Haven, Conn.
      “The Complaint alleges willful, intentional and malicious acts and an intent to injure and humiliate the plaintiff. The policy does not provide coverage for Civil Right[s] Deprivation nor punitive damages.”

       Brian T. Fischer, assistant corporation counsel of the city of West Haven, stated in his affidavit: “Although I attended an unsuccessful pretrial settlement conference on June 4,1986 . . . I did not attend the actual trial because The Hartford’s counsel informed me that it was unnecessary for me to do so.”


source: Caselaw Access Project

author: Callahan, J.

license: Public Domain

text:
    Peter Gallacher et al. v. Commissioner of Revenue Services
    (14194)
    Shea, Callahan, Glass, Covello, Borden, Berdon and Santaniello, Js.

      Argued October 29, 1991
    decision released February 11, 1992

      Thomas P. Heslin, with whom was Frederick L. Cad-man, for the appellants (plaintiffs).

      Robert L. Klein, assistant attorney general, with whom, on the brief, was Richard Blumenthal, attorney general, for the appellee (defendant).
   Callahan, J.

This is an appeal from the action of the defendant, the commissioner of revenue services (commissioner), denying the plaintiffs’ publications an exemption from the Connecticut use tax as “newspapers” pursuant to General Statutes (Rev. to 1981) § 12-412 (f) and levying use tax assessments.* The commissioner’s assessments were sustained by a state trial referee.

In the Superior Court the parties stipulated to the following pertinent facts. The plaintiffs are the owners and publishers of a weekly publication known as “TV Facts.” “TV Facts” contains television listings for the coming week and also contains features found in “ ‘shoppers’ publications,’ ” including an entertainment world gossip column, a crossword puzzle and an astrology column. “TV Facts” contains no articles of opinion, such as editorials, advocates no opinions, and does not carry items of general news interest. The Middlesex News Corporation of Framingham, Massachusetts, prints “TV Facts” under contract with the various plaintiffs, who, in turn, distribute the publications. “TV Facts” is distributed weekly to places of business in Connecticut such as grocery stores and drug stores where it is available to the general public. No charge is made either to the stores or to the public for copies of “TV Facts.” The publications are delivered to the plaintiffs by contract or common carrier and are distributed by the plaintiffs entirely within Connecticut. If “TV Facts” were mailed through the United States Postal Service, it would be accorded second class postal rates, which are applicable to all newspapers, magazines and periodicals.

The commissioner of revenue services assessed use taxes against the plaintiffs pursuant to General Statutes §§ 12-416 (1) and 12-411 (l). The assessments were based on the estimated amount paid by the plaintiffs when they purchased the “TV Facts” publications in Massachusetts for distribution in Connecticut.

The plaintiffs timely petitioned the commissioner for a reassessment pursuant to General Statutes § 12-418 (1) and (2) and requested an oral hearing. Thereafter, the deputy commissioner, who heard the matter on April 10, 1981, concluded that: (a) the plaintiffs’ purchase of the publications in question from the printer was a purchase of tangible personal property, from a retailer for storage, acceptance, consumption or use in this state as those words are used in § 12-411 (1) which imposes the use tax; (b) the publications in question do not qualify as “newspapers” within the meaning of § 12-412 (f) and, therefore, are not exempt from the use tax; and (c) the imposition of the use tax did not violate the first amendment or the commerce or equal protection clauses of the United States constitution. The deputy commissioner affirmed the assessment.

The plaintiffs filed a timely appeal from the deputy commissioner’s ruling to the Superior Court pursuant to General Statutes § 12-422.* **** In their appeal, the plaintiffs claimed that their publications were newspapers and that, consequently, they and their publications were exempt from the Connecticut use tax because they were engaged in the “storage, use or other consumption of newspapers circulated among the public.” They asserted, therefore, that they were entitled to an exemption from the use tax pursuant to § 12-412 (f), and a reversal of the deputy commissioner’s decision.

The Superior Court by stipulation referred the plaintiffs’ appeal to Hon. Charles S. House, state trial referee, who heard the matter as the trial court. After trial, the trial court reached the following conclusions. “I. The‘TV Facts’publications were . . . purchased by the plaintiffs from a retailer in Massachusetts for storage and use in Connecticut and were so stored and used. II. The publications were not ‘newspapers’ within the meaning of that term as used in General Statutes § 12-412 (f). . . . III. The imposition of the Connecticut use tax on ‘TV Facts’ publications [did] not violate the plaintiffs’ constitutional rights. ... IV. The burden of proving any claimed exemption to a tax [was] on the [plaintiffs].” The court affirmed the commissioner’s use tax assessments. The plaintiffs subsequently filed a motion for reargument and to open judgment. After reargument, the trial court denied the motion to open judgment. The plaintiffs appealed to the Appellate Court and we transferred the appeal to this court pursuant to Practice Book § 4023. We affirm.

I

On appeal, the plaintiffs have not contested the fact that their publications were “used” in Connecticut within the meaning of § 12-411 (1). The plaintiffs do, however, dispute the court’s conclusion that their publications were not “newspapers” entitled to a use tax exemption pursuant to § 12-412 (f). The plaintiffs argue that the court, in concluding that their “TV Facts” publications were not newspapers, misconstrued this court’s decision in Caldor, Inc. v. Heffernan, 183 Conn. 566, 440 A.2d 767 (1981). We disagree.

In Caldor, Inc., the question addressed was whether advertising inserts were “newspapers.” This court, after finding that there was no statutory, regulatory or Connecticut case law definition of the word “newspaper,” determined that the word should be given its plain, ordinary meaning and should be construed according to its commonly approved usage. Id., 570; see Bolt Technology Corporation v. Commissioner of Revenue Services, 213 Conn. 220, 228, 567 A.2d 371 (1989); Rosnick v. Aetna Casualty & Surety Co., 172 Conn. 416, 422, 374 A.2d 1076 (1977); Carlson v. Kozlowski, 172 Conn. 263, 374 A.2d 207 (1977). We therefore examined dictionaries and case law from other jurisdictions to ascertain that meaning and usage. Caldor, Inc. v. Heffernan, supra, 570-72; see State Medical Society v. Board of Examiners in Podiatry, 208 Conn. 709, 717, 546 A.2d 830 (1988); Johnson v. Manson, 196 Conn. 309, 316, 493 A.2d 846 (1985), cert. denied, 474 U.S. 1063, 106 S. Ct. 813, 88 L. Ed. 2d 787 (1986); Wisconsin Department of Revenues. J. C. Penney Co., 108 Wis. 2d 662, 669-71, 323 N.W.2d 168 (1982). We cited two dictionary sources, that defined “newspaper” in similar fashion as “ ‘a paper that is printed and distributed daily, weekly, or at some other regular and usu. short interval and that contains news, articles of opinion (as editorials), features, advertising or other matters regarded as of current interest . . . Webster, Third New International Dictionary; see Black’s Law Dictionary (5th Ed.) for a similar definition.” Caldor, Inc. v. Heffernan, supra, 571. We also noted that a federal court; Christopher v. American News Co., 171 F.2d 275, 281 (7th Cir. 1948); in defining the term “newspaper” had indicated that among the ingredients of a newspaper were “news” and “opinions.” Caldor, Inc. v. Heffernan, supra. We further cited several other state and federal cases, all of which included “news” as a component of a newspaper. Id., 571-72.

In determining whether the advertising inserts at issue in Caldor, Inc., qualified as “newspapers,” however, we found it necessary to consider only two “common characteristics” of a newspaper that we said were contained in all the definitions. Id., 572. Those characteristics were: “(1) It is published at short, regular intervals, usually not exceeding a week, and (2) it routinely reports a myriad of topics so that it appeals, at least in part, to a wide spectrum of the general public.” Id. Because in Caldor, Inc., there was no stipulation or evidence that the advertising inserts in question appeared at short, regular intervals and because the inserts contained only information regarding Caldor sale items, it was not necessary to discuss other facets of the definition of a newspaper. We did not, however, eschew the dictionary definitions of the word “newspaper” or those articulated by the courts cited in the opinion, all of which included news as an essential ingredient of what is commonly understood to be a newspaper.

In fact, not surprisingly, the cases and authorities generally indicate that news is commonly thought to be a necessary component of a newspaper. The Supreme Court of Tennessee, faced with the issue of what constitutes a “newspaper,” agreed that the criteria in the regulations promulgated by that state’s commissioner of revenue comported with the customarily accepted meaning of the term and determined that, in order to qualify for exemption from the sales and use tax as a “newspaper,” a publication must contain “ ‘general news of the day, information of current events, [or] news of importance and of current interest to the general public.’ ” Shoppers Guide Publishing Co. v. Woods, 547 S.W.2d 561, 563 (Tenn. 1977); Memphis Shoppers News, Inc. v. Woods, 584 S.W.2d 196, 199 (Tenn. 1979). Other courts confronted with the question, “What is a newspaper?” have formulated comparable common sense answers. “[Publications and pennysavers such as the petitioner’s which do not contain news articles or expressions of opinion are generally not newspapers within the meaning of the Tax Law . . . Scotsmen Press v. Tax Appeals Tribunal, 165 App. Div. 2d 630, 634, 569 N.Y.S.2d 991 (1991). The applicable test to determine whether a publication is a newspaper is one of “ ‘common understanding.’ ” If “[t]here are no news articles or expressions of opinion,” a publication is not a newspaper. Twin Coast Newspapers, Inc. v. State Tax Commission, 101 App. Div. 2d 977, 477 N.Y.S.2d 718 (1984). “In distinguishing between a newspaper and a shopper for purposes of the exemption, the question is whether the primary purpose of the publication is the dissemination of news or the advertising of business concerns.” Campus Communications v. Department of Revenue, 473 So. 2d 1290, 1295 (Fla. 1985). “In the ordinary understanding, a newspaper may be defined generally as a publication . . . containing news, that is, reports of happenings of recent occurrence and of varied character, including political, social, moral, religious, and other subjects of similar nature, local or foreign, and intended for the information of the general reader.” 58 Am. Jur. 2d, Newspapers, Etc. § 1; see also 66 C.J.S., Newspapers § 1.

An examination of the format of the plaintiffs’ publications reveals that they do not fit within the common understanding of what one would envision as a newspaper. Although the plaintiffs’ publications contain some “features” as well as television listings, they do not “routinely report a myriad of topics” as contemplated by the test in Caldor, Inc., and certainly do not contain what is generally thought to be news. Moreover, the primary purpose of the plaintiffs’ publication is obviously not the dissemination of news but the advertising of business concerns. The mere publication of universally available television listings and some “features” do not make a newspaper. See Matter of Assessment of Additional North Carolina and Orange County Use Taxes Against Village Publishing Corporation, 312 N.C. 211, 322 S.E.2d 155 (1984), appeal dismissed, 472 U.S. 1001, 105 S. Ct. 2693, 86 L. Ed. 2d 710 (1985). We conclude that if we afford the word “newspaper” its commonly accepted meaning, as we must in the absence of a clearly expressed legislative intent to the contrary, then the plaintiffs’ publications are not “newspapers” and, therefore, are not entitled to the exemption accorded “newspapers” by § 12-412 (f). See Kilpatrick v. Board of Education, 206 Conn. 25, 28, 535 A.2d 1311 (1988); Ganim v. Roberts, 204 Conn. 760, 763, 529 A.2d 194 (1987).

II

The plaintiffs next contend that the trial court improperly concluded “that the commissioner was permitted to apply a content-based test as the basis for denying the newspaper exemption to [the plaintiffs’] publications, in violation of first and fourteenth amendment guarantees of freedom of the press.”

The trial of a sales and use tax appeal taken pursuant to § 12-422 is a trial de novo. Kimberly-Clark Corporation v. Dubno, 204 Conn. 137, 145, 527 A.2d 679 (1987). To state, therefore, that the commissioner “was permitted” by the trial court to do anything is to misconstrue the proceeding. The commissioner had already acted when this matter was before the trial court and it was simply the function of the trial court to determine the legality of that action. It is the trial court’s decision that is appealed from, not that of the commissioner, and it is the trial court’s decision that we review.

The trial court concluded that the plaintiffs’ “publications were not ‘newspapers’ within the meaning of that term as used in General Statutes Section 12-412 (f) . . . .” For that conclusion the court cited Caldor, Inc. v. Heffernan, supra, 570-71, and an annotation in 25 A.L.R.4th 750, entitled “What constitutes newspapers, magazines, periodicals, or the like, under sales or use tax law exemption.” A review of those citations clearly reveals that the trial court based its decision not on the content of the plaintiffs’ publications but rather the absence of most of the features usually found in newspapers. Neither Caldor, Inc., nor the cases cited in 25 A.L.R.4th 750, discuss the content or viewpoint of any material that appears in any publication but rather discuss the type of material, regardless of its content or viewpoint, that must appear in a publication to have it constitute a newspaper. For example, a universal requirement for a newspaper is that it contain news.

Clearly, the trial court determined that “TV Facts” lacked essential ingredients in its form to constitute a newspaper under the statute. There is certainly no indication that it based its conclusion on the content or viewpoint of any material that appeared in the plaintiffs’ publications. In fact, a discussion of the content of any of the material that appeared in “TV Facts” is conspicuous by its absence. The trial court simply found differences between the plaintiffs’ publications and what is ordinarily understood to be a newspaper based on noncontent factors. Hearst Corporation v. Iowa Department of Revenue & Finance, 461 N.W.2d 295, 301 (Iowa 1990). We find no merit to this claim of the plaintiffs.

Ill

We next address the plaintiffs’ claims that disallowing the exemption provided by § 12-412 (f) to their publications denied them their constitutionally guaranteed rights of freedom of the press and equal protection of the law.

A

It should first be made clear that the first amendment “does not prohibit all [government] regulation of the press.” Minneapolis Star & Tribune v. Minnesota Commissioner of Revenue, 460 U.S. 575, 581, 103 S. Ct. 1365, 75 L. Ed. 2d 295 (1983); Hope Evangelical Lutheran Church v. Iowa Department of Revenue & Finance, 463 N.W.2d 76 (Iowa 1990), cert. denied, U.S. , 111 S. Ct. 1585, 113 L. Ed. 2d 649 (1991). Generally applicable economic regulations may be imposed on the press by the states and the federal government without causing constitutional problems. Jimmy Swaggart Ministries v. Board of Equalization, 493 U.S. 378, 392, 110 S. Ct. 688, 107 L. Ed. 2d 796 (1990); Minneapolis Star & Tribune v. Minnesota Commissioner of Revenue, supra, 581. Further, the first amendment is not interpreted so broadly as to require that all media need be taxed in the same way. Hearst Corporation v. Iowa Department of Revenue & Finance, supra, 301. It is only when “a discriminatory tax on the press burdens rights protected by the First Amendment” that problems arise. Arkansas Writers’ Project, Inc. v. Ragland, 481 U.S. 221, 227, 107 S. Ct. 1722, 95 L. Ed. 2d 209 (1987). A legislature cannot enact a special tax that applies only to the press or that singles out and taxes exclusively a small group of publications, or that taxes publications on the basis of their content, without shouldering the heavy burden of demonstrating that its action is necessary to serve a compelling state interest and is narrowly drawn to achieve that end. Leathers v. Medlock, 499 U.S. , 111 S. Ct. 1438, 1445, 113 L. Ed. 2d 494 (1991); Arkansas Writers’ Project, Inc. v. Ragland, supra, 228; Minneapolis Star & Tribune v. Minnesota Commissioner of Revenue, supra, 581, 591. The United States Supreme Court has found that there exists too great a potential for abuse if the states are permitted to tax the press exclusively or to tax selected members of the press. Minneapolis Star & Tribune v. Minnesota Commissioner of Revenue, supra, 592. Such selective taxation “is constitutionally suspect when it threatens to suppress the expression of particular ideas or viewpoints.” Leathers v. Medlock, supra, 1443.

Connecticut sales and use tax legislation does not, however, fashion a tax that is applicable only to the press or to certain publications or that singles out and taxes exclusively a small group of publications, or that taxes on the basis of content. To the contrary, the Connecticut sales and use tax is a broad based, generally applicable tax that, for the most part, taxes the gross receipts from all retail sales of tangible personal property and the use or storage of all personal property in this state, including most publications. See General Statutes c. 219. There is no indication that Connecticut has targeted the media or publications such as the plaintiffs’ in a purposeful attempt to interfere with their first amendment activities. Nor is the tax one that is structured to raise suspicion that it was intended to do so. Unlike the taxes that the United States Supreme Court has invalidated as too selective, the Connecticut sales and use tax is a general tax that “has not selected a narrow group to bear fully the burden of the tax.” Leathers v. Medlock, supra, 1444; see Arkansas Writers’ Project, Inc. v. Ragland, supra, 228; Minneapolis Star & Tribune v. Minnesota Commissioner of Revenue, supra, 575; Grosjean v. American Press Co., 297 U.S. 233, 56 S. Ct. 444, 80 L. Ed. 660 (1936). “When the state imposes a generally applicable tax, there is little cause for concern. We need not fear that a government will destroy a selected group of taxpayers by burdensome taxation if it must impose the same burden on the rest of its constituency. See Railway Express Agency, Inc. v. New York, 336 U.S. 106, 112-13, 69 S. Ct. 463, 467, 93 L. Ed. 533 (1949) (Jackson, J., concurring.)” Minneapolis Star & Tribune v. Minnesota Commissioner of Revenue, supra, 585. Because the Connecticut use tax has not singled out the press, “[it] does not therefore threaten to hinder the press as a watchdog of government activity.” Leathers v. Medlock, supra, 1444.

Moreover, the fact that “newspapers” are the beneficiaries of an exemption from the sales and use tax does not mean that all other publications must be extended the same subsidy or a first amendment violation results. Hearst Corporation v. Iowa Department of Revenue & Finance, supra, 303-304. While government may not deny a benefit to a person because he exercises a constitutional right; see Perry v. Sindermann, 408 U.S. 593, 597, 92 S. Ct. 2694, 33 L. Ed. 2d 570 (1972); government is not required to subsidize that right. Regan v. Taxation With Representation of Washington, Inc., 461 U.S. 540, 545, 103 S. Ct. 1997, 76 L. Ed. 2d 129 (1983); Cammarano v. United States, 358 U.S. 498, 513, 79 S. Ct. 524, 3 L. Ed. 2d 462 (1959). Because the government chooses to subsidize one protected right, it does not mean that “it must subsidize analogous counterpart rights.” Rust v. Sullivan, 500 U.S. , 111 S. Ct. 1759, 1773, 114 L. Ed. 2d 233 (1991). Consequently, the legislature may choose to subsidize one form of publication, such as newspapers, by means of a tax exemption without being required by the first amendment to subsidize other forms of publications such as “TV Facts.” See Regan v. Taxation With Representation of Washington, Inc., supra. The “[l]egislature may subsidize one form of publication (i.e., ‘newspapers’), but is not required by the first amendment to also subsidize other forms of publications as long as it has a rational noncontent basis for doing so.” Hearst Corporation v. Iowa Department of Revenue & Finance, supra, 304. Different taxation of speakers “does not implicate the First Amendment unless the tax is directed at, or presents the danger of suppressing, particular ideas.” Leathers v. Medlock, supra, 1447.

In Connecticut all forms of written media are free to exercise their first amendment privileges without interference. The legislature, however, has chosen to favor only newspapers with a sales tax exemption. As long as the legislature had a legitimate noncontent reason for doing so, the first amendment rights of other publications are not violated. Id.

In summary, because the Connecticut sales and use tax is a general tax that does not target the media or discriminate among media sources of the same type and therefore does not subject only a small, select number of publications to the tax, and because the exemption contained in the statute is not content based, the tax, which exempts newspapers but not the plaintiffs’ publications, is not a suspect tax. The legislature “has chosen simply to exclude or exempt certain media from a generally applicable tax.” Leathers v. Medlock, supra, 1447. There is nothing in that statutory scheme that suggests censorship or intimates that Connecticut’s broad based, content neutral use tax is likely to stifle the free exchange of ideas. We conclude that exempting newspapers from the generally applicable use tax while not exempting other media does not violate the first amendment. Id.

B

The plaintiffs next argue that the extension of a sales and use tax exemption to newspapers but not to their publications violates their constitutional right to equal protection. The first step in confronting the plaintiffs’ equal protection argument is to ascertain whether the rational basis test or the more stringent strict scrutiny test applies. We conclude that it is the rational basis test.

In tax matters, more so than in other fields, legislatures possess considerable liberty in classification. Regan v. Taxation With Representation of Washington, Inc., supra, 547;Madden v. Kentucky, 309 U.S. 83, 87-88, 60 S. Ct. 406, 84 L. Ed. 590 (1940); see also Saw Antonio Independent School District v. Rodriguez, 411 U.S. 1, 40-41, 93 S. Ct. 1278, 36 L. Ed. 2d 16 (1973); Kellems v. Brown, 163 Conn. 478, 487-90, 313 A.2d 53 (1972), appeal dismissed, 409 U.S. 1099, 93 S. Ct. 911, 34 L. Ed. 2d 678 (1973). “Generally, statutory classifications [as to what is or is not to be taxed, such as that created by § 12-412 (f),] are valid if they bear a rational relation to a legitimate governmental purpose. Regan [v. Taxation With Representation of Washington, Inc., supra,] 547 . . . Hearst Corporation v. Iowa Department of Revenue & Finance, supra, 305. If a subsidy in the form of a tax exemption is granted to a particular variety of publication such as newspapers, as long as the exemption is not aimed at the suppression of ideas, and does not interfere with the fundamental rights of those publications not exempted, the legislature has broad power to encourage action deemed to be in the public interest. Furthermore, as noted earlier, all publications do not have to be afforded the same exemption. See Regan v. Taxation With Representation of Washington, Inc., supra, 550; see also Maher v. Roe, 432 U.S. 464, 476, 97 S. Ct. 2376, 53 L. Ed. 2d 484 (1977); Hearst Corporation v. Iowa Department of Revenue & Finance, supra, 305. “Strict scrutiny is not required whenever the legislature subsidizes some speech but not all speech.” Regan v. Taxation with Representation of Washington, Inc., supra, 548. “[A] legislature’s decision not to subsidize the exercise of a fundamental right does not infringe the right, and thus is not subject to strict scrutiny. Buckley v. Valeo, [424 U.S. 1, 96 S. Ct. 612, 46 L. Ed. 2d 659 (1976)].” Id., 549. Therefore, the legislature’s decision to subsidize newspapers by means of a tax exemption, but not to subsidize other forms of publications such as the plaintiffs’, does not require strict scrutiny but, rather, is subject to review under the rational basis standard. Id., 548-49.

Under that standard, a legislatively enacted sales and use tax exemption will withstand judicial scrutiny if it bears a rational relationship to a legitimate government purpose. We determine that the newspaper exemption of § 12-412 (f) possesses that rational relationship. The state has a legitimate interest in encouraging the inexpensive and wide dissemination of newspapers in order that its citizens might read about and be informed of current affairs, and thereby become more cognizant of, among other things, the workings of their government. Newspapers also enhance the general knowledge of the populace and contribute to its literacy. Therefore, to make newspapers available at the lowest possible price is a legitimate government purpose to which the sales and use tax exemption for newspapers bears a rational relationship. See Hearst Corporation v. Iowa Department of Revenue & Finance, supra, 306. We find no merit in the plaintiffs’ equal protection claim.

Finally, the plaintiffs argue that the trial referee was incorrect in placing upon them the burden of proving that they were entitled to the claimed exemption. It is the plaintiffs’ contention that the burden of justifying the tax should have been upon the commissioner. The plaintiffs’ argument is premised on their contention that the commissioner’s denial of a use tax exemption for their publications was based on their content and that the denial of the exemption created a tax that targeted a small, select group of “newspapers.” See Arkansas Writers’Project, Inc. v. Ragland, supra, 231, 234. Since we have determined that the denial of the exemption was not content based and that the plaintiffs’ publications are not “newspapers,” the plaintiffs’ argument has no merit. We conclude, therefore, that the trial court was correct when it strictly construed the statute against the plaintiffs and placed upon them the burden of proving that the assessment was in error. Stop ’N Save, Inc. v. Department of Revenue Services, 212 Conn. 454, 462, 562 A.2d 512 (1989).

The judgment is affirmed.

In this opinion the other justices concurred.

       General Statutes (Rev. to 1981) § 12-412 (f) provides in pertinent part: “exemptions. Taxes imposed by this chapter shall not apply to the gross receipts from the sale of and the storage, use or other consumption in this state with respect to the following items . . .
      “(f) newspapers and magazines. (1) Sales of magazines by subscription; (2) sales of and the storage, use or other consumption of newspapers circulated among the public.”

        That section has been recodified as General Statutes § 12-412 (6), and amended by Public Acts, Spec. Sess., June, 1991, No. 91-3, § 114 to read: “Taxes imposed by this chapter shall not apply to the gross receipts from the sale of and the storage, use, or other consumption in this state with respect to the following items ... (6) (A) Sales of magazines by subscription; (B) sales of newspapers by subscription.”

       “The difference between a sales and a use tax is that generally a sales tax is imposed on items acquired within the state and a use tax is imposed on items acquired outside the state for use within this state.” White Oak Corporation v. Department of Revenue Services, 198 Conn. 413, 419, 503 A.2d 582 (1986); see also Hartford Parkview Associates Limited Partnership v. Groppo, 211 Conn. 246, 255-56, 558 A.2d 993 (1989); Fusco-Amatruda Co. v. Tax Commissioner, 168 Conn. 597, 600, 362 A.2d 847 (1975).

       There are a number of plaintiffs who distribute “TV Facts” in different areas of the state. A designation of the area in which the publication is distributed is normally added to the sobriquet “TV Facts.” For example, the publication of the named plaintiff is entitled “TV Facts of West Hartford.”

       General Statutes (Rev. to 1981) § 12-416 (1), as amended by Public Acts 1981, No. 81-64, § 8, provides in pertinent part: “ASSESSMENTS IF NO RETURN MADE. (1) ASSESSMENT; FAILURE TO FILE RETURN. If any person fails to make a return, the commissioner shall make an estimate of the amount of the gross receipts of the person or, as the case may be, of the amount of the total sales price of services or tangible personal property sold or purchased by the person, the storage, acceptance, consumption or other use of which in this state is subject to the use tax. The estimate shall be made for the period or periods in respect to which the person failed to make a return and shall be based upon any information which is in the commissioner’s possession or may come into his possession. Upon the basis of this estimate the commissioner shall compute and determine the amount required to be paid to the state, adding to the sum thus arrived at a penalty of ten per cent of the amount or fifty dollars, whichever amount is greater. One or more assessments may be made for one or for more than one period.”
      General Statutes (Rev. to 1981) § 12-411 (1) provides in pertinent part: “the use tax. (1) imposition and rate. An excise tax is hereby imposed on the storage, acceptance, consumption or any other use in this state of tangible personal property purchased from any retailer for storage, acceptance, consumption or any other use in this state at the rate of seven and one-half per cent of the sales price of the property, and in lieu of said rate of seven and one-half per cent at the rate of three and one-half per cent with respect to the rendering of any service described in subdivision (i) of subsection (2) of section 12-407.”

       General Statutes (Rev. to 1981) § 12-418 (1) and (2) provide in pertinent part: “reassessments. (1) petition for reassessment. Any person against whom an assessment is made under section 12-415 or 12-416 or any person directly interested may petition for a reassessment within thirty days after service upon such person of notice thereof. If a petition for reassessment is not filed within the thirty-day period, the assessment becomes final at the expiration of the period.
      “(2) oral hearing. If a petition for reassessment is filed within the thirty-day period, the commissioner shall reconsider the assessment and, if the person has so requested in his petition, shall, in his discretion, grant the person an oral hearing and shall give him ten days notice of the time and place of the hearing. The commissioner may continue the hearing from time to time, as may be necessary, and may assign the conduct of such hearing to his representative.”

       “[General Statutes (Rev. to 1981)] Sec. 12-422. appeal. Any taxpayer aggrieved because of any order, decision, determination or disallowance of the commissioner of revenue services under section 12-418, 12-421 or 12-425, may, within one month after service upon the taxpayer of notice of such order, decision, determination or disallowance, take an appeal therefrom to the superior court for the judicial district of Hartford-New Britain, which shall be accompanied by a citation to the commissioner of revenue services to appear before said court. Such citation shall be signed by the same authority, and such appeal shall be returnable at the same time and served and returned in the same manner, as is required in case of a summons in a civil action. The authority issuing the citation shall take from the appellant a bond or recognizance to the state of Connecticut, with surety to prosecute the appeal to effect and to comply with the orders and decrees of the court in the premises. Such appeals shall be preferred cases, to be heard, unless cause appears to the contrary, at the first session, by the court or by a committee appointed by it. Said court may grant such relief as may be equitable and, if such tax has been paid prior to the granting of such relief, may order the treasurer to pay the amount of such relief, with interest at the rate of six per cent per annum, to the aggrieved taxpayer. If the appeal has been taken without probable cause, the court may tax double or triple costs, as the case demands; and, upon all such appeals which are denied, costs may be taxed against the appellant at the discretion of the court, but no costs shall be taxed against the state.”

        In re Sterling Cleaners & Dyers, 81 F.2d 596, 597 (7th Cir. 1936); Friedman’s Express v. Mirror Transportation Co., 71 F. Sup. 991 (D.N. J. 1947), aff'd, 169 F.2d 504 (3d Cir. 1948); In re Paradise News Press, 151 Cal. App. 2d 496, 498-99, 311 P.2d 555 (1957); Nevada State Press Assn. v. Fax, Inc., 79 Nev. 82, 84-85, 378 P.2d 674 (1963) (may be a newspaper if it also publishes news of a general character and of a general interest); East Suburban Press, Inc. v. Township of Penn Hills, 40 Pa. Commw. 438, 440-41 n.2, 397 A.2d 1263 (1979).

       The primary definition of the word “news” is “a report of recent events.” Webster, Ninth New Collegiate Dictionary; see also The Random House Dictionary of the English Language (2d Ed.).

       In a case remarkably similar to the present case, where the publication in question contained features and announcements of local interest, the court found that it did not qualify as a “newspaper” for the purpose of the sales and use tax. Matter of Assessment of Additional North Carolina and Orange County Use Taxes Against Village Publishing Corporation, 312 N.C. 211, 322 S.E.2d 155 (1984), appeal dismissed, 472 U.S. 1001, 105 S. Ct. 2693, 86 L. Ed. 2d 710 (1985).

       “[T]ax exemptions and tax deductibility are a form of subsidy that is administered through the tax system.” (Emphasis added.) Regan v. Taxation With Representation of Washington, Inc., 461 U.S. 540, 544, 103 S. Ct. 1997, 76 L. Ed. 2d 129 (1983).

         That legitimate purpose is the government’s interest in the wide, inexpensive dissemination of newspapers. See infra, p. 183.

       The plaintiffs also contend that they were deprived of equal protection of the law because their publications are subject to the use tax, but the similar television guides inserted in newspapers are not. Those television guides, however, like the comics and unlike the advertising inserts in Caldor, Inc. v. Heffernan, 183 Conn. 566, 440 A.2d 767 (1981), become an integral part of the newspaper. See Friedman’s Express, Inc. v. Mirror Transportation Co., 71 F. Sup. 991, 992 (D.N.J. 1947), aff' d, 169 F.2d 504 (3d Cir. 1948).

       The plaintiffs cite three cases decided by other state courts that they argue require a different result. The first two are Tennessee cases decided by the Tennessee Supreme Court on the same day. See Southern Living, Inc. v. Celauro, 789 S.W.2d 251 (Tenn. 1990), cert. denied, U.S. , 111 S. Ct. 1639, 113 L. Ed. 2d 734 (1991); Newsweek, Inc. v. Celauro, 789 S.W.2d 247 (Tenn. 1990), cert. denied, U.S. , 111 S. Ct. 1639, 113 L. Ed. 2d 734 (1991). Those cases were decided on analogous facts and issues. The issue was whether a sales and use tax exemption afforded newspapers but not magazines violated the first amendment rights of the magazine publishers. The Tennessee Supreme Court determined that any distinction between newspapers and magazines was necessarily “content based” and therefore placed a heavy burden on the state to prove a compelling justification for the selective content based taxation of the plaintiffs’ publications. The court determined that such a justification was not demonstrated and therefore held that the tax was unconstitutional.
      In this case, we have determined that the distinction drawn by the trial referee between the plaintiffs’ publications and newspapers was not content based and that the state was required to show only a rational relationship between the use tax exemption and a legitimate government purpose. The cases, therefore, are distinguishable. Moreover, we do not necessarily agree with the Tennessee court that a distinction cannot be drawn between a magazine and a newspaper based on form rather than content and that the legislature may not opt to tax one and not the other without creating a first amendment violation.
      The third case relied on by the plaintiffs is Department of Revenue v. Magazine Publishers of America, Inc., 565 So. 2d 1304 (Fla. 1990), decided by the Florida Supreme Court. Therein the court concluded simply that a sales and use tax statute that differentiated between newspapers and magazines burdened first amendment rights and was unconstitutional in the absence of a showing that such differential treatment was necessary to serve a compelling state interest and was narrowly drawn to achieve that end. The department of revenue services applied for a writ of certiorari to the United States Supreme Court. The court granted the writ and remanded the case to the Florida Supreme Court for further consideration in light of Leathers v. Medlock, 499 U.S. , 111 S. Ct. 1438, 113 L. Ed. 2d 494 (1991). Department of Revenue v. Magazine Publishers of America, Inc., supra.

        Leathers held that a differential burden on speakers is insufficient to raise first amendment concerns and that a differential tax even between members of the same medium does not implicate the first amendment unless the tax is directed at, or presents the danger of suppressing particular ideas. Leathers v. Medlock, supra, 1445. The remand, therefore, appears to portend a different result. We are unpersuaded.


author: Covello, J.

text:
    Louise Harlach et al. v. Metropolitan Property and Liability Insurance Company
    (14344)
    Shea, Glass, Covello, Borden and Berdon, Js.
    Argued October 30, 1991
    decision released February 11, 1992

      Donald R. Holtman, for the appellant (defendant).

      Kerin Margaret Woods, for the appellees (plaintiffs).
   Covello, J.

This is an appeal from a declaratory judgment that determined that the plaintiffs were entitled to $300,000 of uninsured motorist coverage pursuant to an automobile insurance policy issued by the defendant. The sole issue is whether the insured was bound by his written request for a lesser amount of uninsured motorist coverage when he later claimed that: (1) he did not understand the nature of his coverage; and (2) he did not intend to request a lesser amount of coverage.

The relevant facts are not in dispute. On December 30,1986, the named plaintiff, Louise Harlach, was injured in an automobile accident under circumstances that entitled her to present a claim under the uninsured motorist provisions of an automobile liability insurance policy issued by the defendant, Metropolitan Property and Liability Insurance Company, to her husband, the plaintiff, John Harlach (plaintiff). The circumstances concerning the amount of uninsured motorist coverage available under the policy are as follows.

On February 18,1980, the defendant issued an automobile liability insurance policy to the plaintiff. The policy provided single limit liability coverage in the amount of $300,000 and uninsured motorist coverage in the amount of $20,000 per person and $40,000 per accident. Each policy renewal thereafter, to and including December 30, 1986, provided the same levels of coverage. Prior to obtaining automobile insurance with the defendant, the plaintiff had dealt with other carriers. Throughout these dealings, the plaintiff always obtained the minimum amounts of coverage required by law.

On July 5,1983, the General Assembly enacted Public Acts 1983, No. 83-461, amending General Statutes § 38-175c (now General Statutes § 38a-336). The act required that every automobile liability policy “issued or renewed on and after July 1, 1984,” was to have uninsured motorist coverage equal to the liability coverage of the policy “unless the insured requests in writing a lesser amount. ” (Emphasis added.)

In October, 1983, in order to apprise its Connecticut policyholders of the change in the law, and in order to give them an opportunity to request in writing lesser amounts of uninsured motorist coverage, the defendant sent to all its policyholders, including the plaintiff, a computer generated notice. The notice invited the reader to “take a minute to read this important letter about a change of the law in Connecticut.” The notice stated: “[T]he law was changed to require that your limits of coverage for uninsured motorist must be the same as your liability limits, unless you request in writing a lower limit. ” (Emphasis added.)

The notice further stated that higher uninsured motorist coverage, equal to the liability limits, would be provided and the “policy premium [would] be adjusted accordingly.” The notice advised the policyholders that they could “request a lower limit of coverage at a lower premium” by placing their initials next to the desired option on a tear sheet at the bottom of the notice, signing the same and returning it to the defendant in an envelope that was provided. Finally, the notice provided: “If you have any questions, please contact your sales representative or call our policyholder services department at the toll-free number (800) 422-4272.”

On November 8,1984, the plaintiff, a forty year old college graduate, initialed the minimum coverage option, i.e., “$20,000/$40,000,” signed his name “John M. Harlach,” dated the form “8 Nov 84,” and mailed it to the defendant. On the basis of its receipt of this request, the defendant issued a renewal policy to the plaintiff providing uninsured motorist coverage in the same amount as in prior years, i.e., $20,000 per person and $40,000 per accident. The defendant mailed the renewal policy and five subsequent renewal policies to the plaintiff, each of which reflected the $20,000/$40,000 uninsured motorist coverage limits.

The attorney trial referee found that the plaintiff did not fully understand what protection was provided to him by the uninsured motorist provisions of his policy when he completed and executed the tear sheet, and that he did not understand that “he was giving up his right to insurance coverage of $300,000 for protection for himself and his family in the event he or a family member was injured by an uninsured or underinsured tortfeasor.” The attorney trial referee concluded that the plaintiff “did not make a conscious, knowing and purposeful waiver to accept less uninsured motorist coverage.” The trial court agreed, concluding that since the plaintiff did not fully perceive what coverage he was surrendering at the time he returned the tear sheet, he had not waived his statutorily mandated right to uninsured motorist coverage equal to the insurance policy’s liability coverage. The trial court opined that “[ijnasmuch as the waiver question is a factual one, it is not subject to review by this court.” The trial court then rendered judgment in accordance with the referee’s report. The defendant appealed to the Appellate Court and we thereafter transferred the matter to ourselves pursuant to Practice Book § 4023.

The defendant claims that despite its aleatory nature, a contract of insurance is nonetheless fundamentally a contract. The defendant argues that the trial court has reformed the contract that unambiguously provided uninsured motorist coverage of $20,000 per person and $40,000 per accident because the policyholder was unilaterally mistaken as to what coverage he was surrendering when he requested the lesser amount of coverage. The defendant argues that reformation of a contract is not available when the mistake, if any, is unilateral and is not accompanied by fraud or inequitable conduct on the part of the other party. We agree.

The contractual nature of insurance and the commercial relationship between insurer and insured are not altered by any peculiarities of uninsured motorist coverage. “The relationship between the insured and the insurer clearly is contractual in nature, and we find nothing in [the uninsured motorist statute] that alters the traditionally commercial setting in which insurance policies are purchased. Our [uninsured motorist] statute creates no fiduciary obligations .... As offeror, [the carrier] had no contractual duty voluntarily to explain the terms of its offer or the advantages and disadvantages to procuring uninsured motorist coverage. ... All that is required ... for an effective rejection is a writing signed by the named insured.” (Emphasis in original.) Silver v. Slusher, 770 P.2d 878, 883 (Okla. 1988), cert. denied, 493 U.S. 817, 110 S. Ct. 70, 107 L. Ed. 2d 37 (1989).

“Reformation is appropriate in cases of mutual mistake—that is where, in reducing to writing an agreement made or transaction entered into as intended by the parties thereto, through mistake, common to both parties, the written instrument fails to express the real agreement or transaction. 5 Pomeroy, Equity Jurisprudence (2d Ed.) § 2096; 53 C. J. p. 941; Amer. Law Institute Restatement, Contracts, Vol. 2, §§ 504, 505 .... [Reformation is also available in equity when the instrument does not express the true intent of the parties owing to mistake of one party coupled with fraud, actual or constructive, or inequitable conduct on the part of the other. 5 Pomeroy, Equity Jurisprudence (2d Ed.) § 2097; 53 C.J. p. 949 . . . .” (Citations omitted.) Home Otoners’ Loan Corporation v. Stevens, 120 Conn. 6, 9-10, 179 A. 330 (1935). Here, there was neither claim nor proof of a mutual mistake, fraud or inequitable conduct on the part of either party. Since none of these elements was present, application of the equitable principle of reformation was not proper.

The plaintiff argues, however, that reformation of the contract here is required since an insurance contract must be read to include provisions which the law requires be included. The plaintiff claims that the 1983 amendment to § 38-175c required that uninsured motorist coverage in automobile liability insurance contracts must thereafter be equal to the limits of liability coverage unless the insured requested a lesser amount in writing. The plaintiff argues that since his written request for a lesser amount was not a knowing one, the doctrine of waiver, in effect, voids his request for a lesser amount, thereby entitling him to uninsured motorist coverage equal to the $300,000 liability coverage found in this policy. We do not agree.

It is well settled that an insurance contract must be read to include provisions that the law requires be included and to exclude provisions that the law prohibits. See, e.g., Nicolletta v. Nationwide Ins. Co., 211 Conn. 640, 645-46, 560 A.2d 964 (1989). “Unless the agreement indicates otherwise, [an applicable] statute existing at the time an agreement is executed becomes a part of it and must be read into it just as if an express provision to that effect were inserted therein.” Hatcho Corporation v. Della Pietra, 195 Conn. 18, 21, 485 A.2d 1285 (1985).

The amendment to § 38-175c directed that automobile insurance contracts should thereafter provide for equal amounts of liability and uninsured motorist coverage. A statute that establishes contractual rights, however, is equally capable of setting forth the manner in which those rights may be surrendered. In this instance, an insured could relinquish his entitlement to the larger amount of uninsured motorist coverage by “requesting] in writing a lesser amount.” This is exactly what the plaintiff did.

It is uncontroverted that the plaintiff read the defendant’s notice explaining the 1983 changes to § 38-175c; that he selected one of five available uninsured motorist coverages offered on the tear sheet; that he indicated his preference by placing his initials next to the coverage selected; that he dated and signed the tear sheet; and that he mailed the same to the defendant. Despite this overwhelming evidence that the plaintiff completely and fully complied with the statute, the plaintiff argued, and the referee agreed, that there had not been a legally effective waiver because of the plaintiff’s “lack of understanding of what the coverage provided” and that “the notice sent . . . did not in any way increase the [plaintiff’s] understanding of the meaning of uninsured motorist coverage.”

Although the word “waiver” nowhere appears in the statute, even if we assume, arguendo, that the waiver doctrine was applicable to the circumstances here, application of its principles would not support the plaintiff’s position. “Waiver is the voluntary relinquishment of a known right. It involves the idea of assent, and assent is an act of understanding. This presupposes that the person to be affected has knowledge of his rights, but does not wish to assert them. Intention to relinquish must appear, but acts and conduct . . . inconsistent with intention to terminate the contract are sufficient. The rule is applicable that no one shall be permitted to deny that he intended the natural consequences of his acts and conduct. ” (Emphasis added.) MacKay v. Aetna Life Ins. Co., 118 Conn. 538, 547-48, 173 A. 783 (1934).

“In order to waive a claim of law it is not necessary . . . that a party be certain of the correctness of the claim and its legal efficacy. It is enough if he knows of the existence of the claim and of its reasonably possible efficacy.” Jenkins v. Indemnity Ins. Co., 152 Conn. 249, 257-58, 205 A.2d 780 (1964). The plaintiff knew that he was selecting less coverage than that to which he was entitled. The notice made it very clear that increased amounts of coverage were available at a higher premium and that an election to accept less would reduce both the amount of coverage and the policy premium.

“Under the [trial] court’s theory, waiver of a claim of law could rarely, if ever, be established, since the [plaintiff] could always claim, as in effect Pie] did here, that [he] knew nothing about, or at least did not fully understand [the insurance coverage he was declining]. . . . The conclusion that a party has waived a right is one of fact for the trier and not one which can be drawn by this court, unless, on the subordinate facts found, such a conclusion is required as a matter of law.” Id., 258. We hold that such a conclusion is required here.

The judgment is reversed and the matter is remanded with direction to render judgment for the defendant.

In this opinion the other justices concurred.

       Although Louise Harlach was the named plaintiff on the complaint, references to the plaintiff throughout the balance of this opinion are to John Harlach.

       General Statutes (Rev. to 1983) § 38-175c (a), as amended by Public Acts 1983, No. 83-461, provided in part: “(2) Notwithstanding any provision of this section to the contrary, every such policy issued or renewed on and after July 1, 1984, shall provide uninsured motorist coverage with limits for bodily injury and death equal to those purchased to protect against loss resulting from the liability imposed by law unless the insured requests in writing a lesser amount, but not less than the limits specified in subsection (a) of section 14-112. Such written request shall apply to all subsequent renewals unless changed in writing by the insured.”

       The tear sheet at the bottom of the notice stated: “I UNDERSTAND MY POLICY LIMITS FOR UNINSURED MOTORISTS COVERAGE MAY BE THE SAME, BUT NOT HIGHER THAN MY LIMITS FOR LIABILITY COVERAGE (CURRENTLY XXX,XXX), AND I ACKNOWLEDGE THAT I HAVE BEEN OFFERED THESE LIMITS.
      “I HEREBY REQUEST THE UNINSURED MOTORISTS COVERAGE LIMITS INDICATED BELOW WHICH ARE LESS THAN MY CURRENT LIABILITY LIMITS. (NOTE: SELECT ONLY ONE OPTION) _50,000/50,000 _300,000/300,000
      _20,000/40,000 _100,000/100,000 __500,000/500,000
      NAME OF POLICY HOLDER POLICY NUMBER: XXX-XX-XXX-X
      SIGNATURE
      DATE

       The referee relied extensively on our holding in Travelers Indemnity Co. v. Malec, 215 Conn. 399, 576 A.2d 485 (1990). In Malec, we concluded that the American Red Cross did not make a conscious decision to select a lesser amount of uninsured motorist coverage pursuant to General Statutes § 38-175 (c) because the insured’s request predated the enactment of the enabling legislation by more than two years. Since the insured was unaware of the statute at the time of its request, we concluded that this did not constitute a request for a lesser amount pursuant to the statute. Malee is distinguishable from the present case where the plaintiff’s response was the result of his carrier specifically informing him of the amendment to the statute and the options available to him.

       The referee did not conclude that the defendant’s conduct was fraudulent or inequitable but that, as a matter of law, “[an] analysis of the case law construing Section 38-175c (a) (2) indicates that [the defendant] was required to provide [the plaintiff] with understandable information concerning his selection of uninsured motorist coverage so as to enable him to intelligently accept or reject the increased limits of coverage . . . .”