author: CALLAHAN, J.

text:
    GLORIA ROGERS v. BOARD OF EDUCATION OF THE CITY OF NEW HAVEN
    (SC 16176)
    McDonald, C. J., and Borden, Katz, Palmer, Sullivan, Callahan and Gaffney, Js.

      Argued January 12
    officially released May 3, 2000

      John M. Gesmonde, for the appellant (plaintiff).

      William H. Narwold, with whom were Charles D. Ray and, on the brief, Jay E. Bovilsky, for the appel-lee (defendant).

       May 3, 2000, the date that this decision was released as a slip opinion, is the operative date for all substantive and procedural purposes.

   Opinion

CALLAHAN, J.

The plaintiff, Gloria Rogers, appeals from the judgment of the trial court dismissing her appeal from a decision of the defendant board of education of the city of New Haven (board) terminating her contract of employment. In her appeal, the plaintiff claims that the trial court incorrectly concluded that: (1) her dismissal by the defendant did not violate her state and federal procedural due process rights; and (2) there was substantial evidence in the record to support the board’s conclusions. We affirm the judgment of the trial court.

The relevant facts as found by the hearing panel, and adopted by the board, are as follows. The plaintiff was a teacher in the New Haven school system since 1984. From that time until the date of the incident prompting her termination, her record was unblemished. On March 27, 1997, the plaintiff was a tenured teacher and was employed as an assistant principal at Jackie Robinson Middle School in New Haven. On that day, the plaintiff was summoned from an assembly for seventh and eighth grade students to a fifth and sixth grade physical education class taught by Marie Young, who had indicated that a “serious problem” had arisen and that there were no other administrators available to handle it. The plaintiff asked Cassandra Lang, a school security guard who was also in attendance at the assembly, to accompany her to the gymnasium area.

The plaintiff met Young and her twenty-two female students in the gymnasium locker room at approximately 1:00 p.m. Young informed the plaintiff that D, a student in her class, had reported a theft of $91. Upon further inquiry of D, the plaintiff concluded that only $40 was actually missing.

The plaintiff knew that the students in the class were from different neighborhoods and that intemeighbor-hood problems often led to fighting among the students. Fearing that the theft could lead to violence outside the school, she concluded that the matter must be resolved that day, before the start of a three day weekend. The plaintiff searched student S, a suspect in the theft, in the locker room, asking her to remove her shoes and socks and to pull out her pockets. She then ordered Young and Lang to search all the students individually in Young’s office, which adjoined the locker room, while she conducted a search of the locker room. Although the plaintiff never entered Young’s office while the searches she ordered were being conducted, she was in the locker room directly outside Young’s office during that time.

Prior to commencing the searches ordered by the plaintiff, Young loudly and emphatically warned the girls, “All right, line up, if that money is in this gym, we’re going to find it, even if it’s in your panties, because you could hide it anywhere.” S, who already had been searched by the plaintiff, was the first student searched in the office by Young and Lang. The plaintiff wrote late passes for the students at a desk outside Young’s office while the searches were being conducted because the searches extended into the next class period. After being searched, some of the students made comments to each other about what had happened in Young’s office. Student S stated: “It’s nasty; they made me pull down my pants and my panties”; other students made similar comments as they left Young’s office, seeming to indicate that a “strip search” was being conducted. The plaintiff was either at the desk directly outside Young’s office or otherwise within earshot of those students making comments while the comments were being made. The demeanor and temperament of the students indicated that something was wrong, and the plaintiff should have been aware that something was wrong. The plaintiff, however, did nothing either to investigate how the searches of the girls were being conducted or to halt the searches, even though she was in charge until the search incident concluded. In fact, the plaintiff left the area before the searches she had ordered were completed and without informing Young or Lang.

The board’s administrative procedure manual provides that “[s]chool officials have the duty to protect the health, safety and welfare of all students under their authority. . . . At no time should school officials conduct a search which requires a student to remove more clothing than his/her shoes or jacket. . . . ‘Strip searches’ of students by employees of this school district are prohibited.” The plaintiff had read and reviewed the search and seizure policy of the board prior to the date of the incident. The plaintiff further understood her duty as a school official to protect the students and her responsibility as an administrator “for enforcing all of the policies of the Board of Education.”

After the New Haven superintendent of schools informed the plaintiff by letter that termination of her contract was being considered on the basis of the results of an investigation of the search incident, the plaintiff requested a hearing by an impartial three person panel pursuant to General Statutes § 10-151 (d). The majority of the panel found that “[the plaintiff] knew or should have known from the demeanor of the students and the claims made by the students searched, in reference to the searches, that something was amiss and that she should have immediately checked to see what was going on in the office where the children were being searched.” Nonetheless, a majority of the panel concluded that the plaintiff was not culpable and recommended that she not be punished. The board rejected the panel’s recommendation and terminated the plaintiffs employment, relying on the factual findings of the majority, as well as referring to the factual findings of a dissenting panel member. Specifically, the board determined that, although the plaintiff knew or should have known that the student searches were improper, she did nothing to investigate or halt them, and that she had neglected her duty to enforce board policies and to protect the students’ welfare. The plaintiffs administrative appeal was dismissed by the trial court.The plaintiff appealed from that judgment to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 65-1 and General Statutes § 51-199 (c). We affirm the judgment of the trial court.

I

The plaintiff first claims that her state and federal due process rights were violated in the following ways: (1) by the board’s rejection of the findings of fact made by the hearing panel in favor of facts found only by the dissenter on the panel; (2) by the board’s reliance on ex parte statements made by parents of the students searched; and (3) by the admission before the hearing panel of the hearsay statements of two students. We disagree with the plaintiff.

“When considering termination of a tenured teacher’s employment contract, a school board acts, like an administrative agency, in a quasi-judicial capacity. . . . Barnett v. Board of Education, 232 Conn. 198, 206, 654 A.2d 720 (1995); see also Tomlinson v. Board of Education, 226 Conn. 704, 712, 629 A.2d 333 (1993). A school board has discretion to accept or reject a recommendation from an impartial hearing panel, though it is bound by the panel’s findings of fact unless unsupported by the evidence. . . . The board is bound by the panel’s findings of fact, but not by its legal conclusions or by its recommendations. . . . Barnett v. Board of Education, supra, 206; see also Rado v. Board of Education, 216 Conn. 541, 555, 583 A.2d 102 (1990); Petrino v. Board of Education, 179 Conn. 428, 430, 426 A.2d 795 (1980).

“Judicial review of the school board’s administrative decision follows established principles of administrative law. The court’s ultimate duty is only to decide whether, in light of the evidence, the [board] has acted unreasonably, arbitrarily, illegally, or in abuse of its discretion. . . . Conclusions of law reached by the [board] must stand if the court determines that they resulted from a correct application of the law to the facts found and could reasonably and logically flow from such facts. . . . Barnett v. Board of Education, supra, 232 Conn. 207-208; see also Ottochian v. Freedom of Information Commission, 221 Conn. 393, 397, 604 A.2d 351 (1992); New Haven v. Freedom of Information Commission, 205 Conn. 767, 774, 535 A.2d 1297 (1988); Griffin Hospital v. Commission on Hospitals & Health Care, 200 Conn. 489, 496, 512 A.2d 199, appeal dismissed, 479 U.S. 1023, 107 S. Ct. 781, 93 L. Ed. 2d 819 (1986).” (Internal quotation marks omitted.) Sekor v. Board of Education, 240 Conn. 119, 125-26, 689 A.2d 1112 (1997).

A

The plaintiffs initial due process argument is that the board incorrectly rejected the conclusions and recommendations of the majority of the hearing panel, which essentially were that the plaintiff was not incompetent or insubordinate. Instead, the plaintiff contends, the board improperly relied on the findings of the dissenting panel member to reach its decision. The dissenting panel member made numerous specific findings adverse to the plaintiff and recommended that her employment be terminated. The plaintiffs conclusion that the board acted improperly rests on two principal grounds: first, that the board rejected the panel’s ultimate recommendation; and second, that the board stated in its decision that it had “discussed the additional Findings of Panel member John M. Romanow [the dissenter].” We disagree with the plaintiffs argument.

We reiterate the well established principle that the board is bound only by the factual findings of the hearing panel and may accept or reject the panel’s legal conclusions and recommendations. Sekor v. Board of Education, supra, 240 Conn. 125. A rejection by the board of the legal conclusions or recommendations of the panel is not a rejection of the factual findings, and is not improper.

The board’s decision, however, makes clear that the panel majority’s factual findings alone support its conclusion. The board “accepts and adopts the 157 findings of the majority of the Panel . . . and incorporates those findings of fact in [its] decision.” The board’s analysis cites extensively and exclusively to the panel majority’s findings of fact. Prior to its analysis, the board did state that it had “discussed” the dissenter’s findings. The dissenter’s findings of fact, however, were not referred to in the board’s analysis and were not essential to its conclusion. The relevant findings of the dissenter dealt with the specific nature of the searches and of the comments made by students in the presence of the plaintiff. These findings did not contradict the majority’s finding that the manner of the searches “exceeded the type of search authorized by the Administrative Procedures Manual” and that the plaintiff knew or should have known that “something out of the ordinary had happened” and that “something was amiss.” We conclude from this record, therefore, that the board’s decision rests squarely upon the panel majority’s findings and not on the findings of the dissent.

B

The plaintiff next claims that the trial court improperly determined that the board had not been influenced by certain ex parte statements made by the parents of some of the students involved in the search incident. We disagree.

The following additional facts are necessary to the disposition of this claim. The record indicates that some parents made statements to the members of the board regarding the search of their children, and how they and their children were reacting. Most of these comments were made at public meetings of the board of education at which the plaintiff was not present. New Haven Mayor John DeStefano, a board member, indicated at a special meeting of the board on January 30, 1998, that he had “received some mail about this” and had “heard from parents as he sat up here as a Board member and parents talked about what happened . . . .’’The board’s attorney advised DeStefano that the mailings could not be considered and that the statements of parents were relevant only insofar as they did not conflict with the findings of fact of the majority of the impartial hearing panel.

We have stated consistently that boards of education “[have] a duty under [General Statutes] § 10-151 (b) to afford a tenured teacher a fair hearing and to terminate the employment contract only for one or more of six [statutorily prescribed] reasons, which must be supported by a preponderance of the evidence.” Cantino v. Board of Education, 174 Conn. 414, 417, 389 A.2d 754 (1978). Whether the fair hearing requirement has been satisfied, however, is not measured by the same standard used to make that determination in other administrative contexts, and for good reason.

Although a board of education considering termination of a tenured teacher’s employment contract acts in a quasi-judicial capacity; Barnett v. Board of Education, supra, 232 Conn. 198; a board of education is not an administrative agency as defined by the Uniform Administrative Procedure Act (UAPA); General Statutes § 4-166 et seq.; and is not subject to the provisions of the UAPA. See Mauriello v. Board of Education, 176 Conn. 466, 469, 408 A.2d 247 (1979). General Statutes § 4-181, a provision of the UAPA, strictly prohibits the receipt of ex parte communications by hearing officers and agency members in contested cases. Applying that standard, we have concluded that “once it has been demonstrated that an improper ex parte communication has occurred, a presumption of prejudice arises. Although this presumption is rebuttable, the burden of showing that a prohibited ex parte communication between a commission and an applicant has not prejudiced a party must be allocated to those seeking to uphold the validity of the commission’s decision.” Blaker v. Planning & Zoning Commission, 212 Conn. 471, 480, 562 A.2d 1093 (1989).

This standard, however, is ill suited in the context of boards of education, where an impartial hearing panel has acted as the factfinder. Unlike most administrative agencies, a board of education has a special relationship with and responsibility to the community. A board of education has the task of overseeing the local school system as well as serving as the vehicle for state and local interests vis-a-vis the school system. See General Statutes § 10-220; T. Mooney, A Practical Guide to Connecticut School Law (1994) pp.5-6; S. Romer, The Handbook of Connecticut School Law (1990) § 2.23, pp. 21-22. Public involvement and input is a regular feature of a board of education. See General Statutes § 1-225, formerly General Statutes § 1-21; New Haven Public Schools Policy Series 1000, No. 1120. A board of education also has the responsibility to adjudicate matters such as teacher terminations. Because of the board’s very nature, ex parte communications are to be expected. In the present case, for instance, it is not surprising that parents would express their views at the public board meetings during the same time period the board was considering the plaintiffs termination.

In the present case, the plaintiff requested an impartial hearing panel, which acted as a factfinder. Ex parte communications present the greatest danger at the hearing stage because the panel as a factfinder has broad discretion in assessing credibility and weighing the evidence. The board, on the other hand, has discretion to terminate a tenured teacher’s employment contract only when the findings of fact support that decision. Thus, a complaining party is protected against the negative impact of ex parte communications by the requirement that the board’s decision must be supported by and be defensible on the findings of fact of the hearing panel alone.

Our approach to ex parte communications must preserve the integrity of a teacher’s fair hearing right while recognizing the reality that parents in a case like this will voice their concerns to the board. With this in mind, we distinguish ex parte communications made to the impartial hearing panel from ex parte communications made to the board of education. Ex parte communications made to an impartial hearing panel will be presumed prejudicial, subject to rebuttal, as in other administrative contexts. Ex parte communications made to a board of education acting upon the factual findings of an impartial hearing panel will not be viewed as presumptively prejudicial as long as the board’s decision rests upon a factual basis determined by the panel free from any taint of ex parte influence. Instead, the party challenging the board’s action should bear the burden of demonstrating both that improper ex parte contact occurred and that the contact prejudiced that party. This distinction makes sense because the hearing panel’s primary responsibility is that of an impartial factfinder, whereas the board’s ultimate decision-making role is constrained by the panel’s findings. Because the plaintiff has failed to demonstrate any prejudice to her, we reject this claim.

C

The plaintiff further claims that her right to a fair hearing was violated by the panel’s admission of hearsay statements of two students. The plaintiff claims that the hearing panel should not have allowed students L and T to testify to statements made by other students because those statements constituted hearsay. We are not persuaded.

Certain additional facts are necessary. During the panel hearing, L testified to statements made by S, the first student to have been searched. The plaintiff did not object. T also testified before the panel as to statements that S had made after being searched. T stated that S had said, “It’s nasty; they made me pull down my pants and panties.” Again, the plaintiff did not object. The plaintiff cross-examined both L and T.

There is no prohibition against the admission of hearsay evidence in teacher termination proceedings. See Paquette v. Hadley, 45 Conn. App. 577, 581, 697 A.2d 691 (1997) (hearsay generally admissible at administrative hearings). Moreover, even if hearsay were inadmissible, the statements at issue are not hearsay. Hearsay is an out-of-court statement offered for the truth of the matter asserted therein. State v. King, 249 Conn. 645, 670, 735 A.2d 267 (1999); State v. Blades, 225 Conn. 609, 632, 626 A.2d 273 (1993). “ ‘A statement made out of court is not hearsay unless it is offered to establish the truth of the facts contained in the statement.’ State v. James, 211 Conn. 555, 576, 560 A.2d 426 (1989); accord State v. Esposito, 223 Conn. 299, 315, 613 A.2d 242 (1992).” State v. Booth, 250 Conn. 611, 635-36, 737 A.2d 404 (1999).

Our review of the pertinent transcript reveals that the line of questioning pursued with both T and L indicates that S’ statements were not offered for their truth but rather for the relevant purpose of showing that the statements had been made in the presence of the plaintiff. Therefore, we conclude that the statements were not hearsay and were properly admitted by the panel.

II

The plaintiff next claims that the trial court improperly concluded that the board’s decision was not “unreasonable, arbitrary or capricious or characterized by abuse of discretion, or a clearly unwarranted exercise of discretion, based on the findings of fact of the majority of the impartial hearing panel . . . .” Specifically, the plaintiff argues that: (1) there is insufficient evidence to support the board’s conclusion that she was incompetent or inefficient or that there was “other due and sufficient cause” for termination of her contract; and (2) as a matter of law, a single act of incompetence or inefficiency cannot provide the basis for her termination. We disagree.

A

“Judicial review of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency’s findings of basic fact and whether the conclusions drawn from those facts are reasonable. . . . This so-called substantial evidence rule is similar to the sufficiency of the evidence standard applied in judicial review of jury verdicts, and evidence is sufficient to sustain an agency finding if it affords a substantial basis of fact from which the fact in issue can be reasonably inferred. . . . [I]t imposes an important limitation on the power of the courts to overturn a decision of an administrative agency . . . and [provides] a more restrictive standard of review than standards embodying review of weight of the evidence or clearly erroneous action. . . . The United States Supreme Court, in defining substantial evidence in the directed verdict formulation, has said that it is something less than the weight of the evidence, and [that] the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence. ...” (Citations omitted; internal quotation marks omitted.) Sweetman v. State Elections Enforcement Commission, 249 Conn. 296, 331-32, 732 A.2d 144 (1999).

“The essential inquiry, when a board decides to terminate a teacher for incompetence under § 10-151, is whether the teacher’s overall performance falls below the requisite standard.” Sekor v. Board of Education, supra, 240 Conn. 129. Stated otherwise, when a teacher’s overall performance falls below a base standard, termination may be justified. See Benke v. Neenan, 658 P.2d 860, 861-62 (Colo. 1983) (“[c]ompetence indicates the ability to perform ably and above a minimum level of sufficiency . . . incompetence indicates the inability to perform”). The plaintiff was acting in her capacity as an assistant principal. As an administrator, her duties included the protection of her students’ health and welfare, and the enforcement of the board’s policies. The relevant question is whether the board acted within its discretion by concluding that those duties had not been fulfilled and that the plaintiffs performance had fallen below that required of an administrator in her position.

“The jurisdiction and discretion to determine what . . . may be [due and sufficient cause] rests in the hands of the school authorities.” (Internal quotation marks omitted.) Petrino v. Board of Education, supra, 179 Conn. 430. That determination must conform, of course, to the meaning of “other due and sufficient cause.” General Statutes § 10-151 (d). “[We have] treated that phrase as equivalent to good cause, citing with evident approval a definition of that term taken from Rinaldo v. School Committee of Revere, 294 Mass. 167, 169, 1 N.E.2d 37 (1936): Good cause includes any ground which is put forward by the [school] committee in good faith and which is not arbitrary, irrational, unreasonable, or irrelevant to the committee’s task of building up and maintaining an efficient school system. In Tucker [v. Board of Education, 177 Conn. 572, 418 A.2d 933 (1979)], we declared that the decision to terminate must be reached after a careful examination of all pertinent factors relating to the particular situation, with due consideration of the effect the teacher’s conduct will have on the school authorities as well as on the students. Id., 580. Thus, in deciding whether particular conduct constitutes due and sufficient cause for termination, the impact of that conduct upon the operation of the school is a significant consideration.” (Internal quotation marks omitted.) Rado v. Board of Education, supra, 216 Conn. 554.

The majority’s findings of fact support the conclusion of the board that the termination criteria of incompetence and inefficiency and other due and sufficient cause had been met. A majority of the hearing panel found that the plaintiff “knew or should have known from the demeanor of the students and the claims made by the students searched in reference to the searches that something was amiss and that she should have immediately checked to see what was going on in the office where the children were being searched.” The panel further found that “[p]rior to taking the first girl into her office, Marie Young raised her voice and emphatically told the girls, ‘[a]ll right, line up, if that money is in this gym, we’re going to find it, even if it’s in your panties, because you could hide it anywhere.’ ” After being searched, some of the students made comments to each other about what had happened. The plaintiff was either at a desk directly outside Young’s office or otherwise within earshot of those students making comments while those statements were made. The demeanor and temperament of the students indicated that something was wrong, and the plaintiff should have been aware of this.

The board’s administrative procedure manual’s search and seizure section provides that “[sjchool officials have the duty to protect the health, safety and welfare of all students under their authority. ... At no time should school officials conduct a search which requires a student to remove more clothing than his/ her shoes or jacket. ...” The plaintiff had read and reviewed that policy of the board prior to the incident. The plaintiff understood her duty as a school official to protect the students and her responsibility as an administrator for enforcing all of the policies of the board of education.

It is evident that the plaintiffs conduct implicated the well-being of the students as well as the operation of the school. The ability to protect students and enforce board policies was essential to the plaintiffs job. The board’s determination that the plaintiffs failure to act under the circumstances constituted due and sufficient cause for her termination was not an abuse of its discretion.

B

Having determined that there was sufficient evidence to support the board’s decision to terminate the plaintiffs employment contract on the basis of incompetence and other due and sufficient cause, we next consider the plaintiffs claim that the single incident in this case cannot, as a matter of law, justify termination. Specifically, the plaintiff asserts that termination is an arbitrary and capricious punishment for one incident when weighed against an otherwise unblemished record. We disagree.

Section 10-151 (d) provides that aboard of education has discretion to terminate a tenured teacher for one or more of six enumerated reasons, including incompetence and inefficiency and other due and sufficient cause. Whether termination is justifiable on the basis of a single incident is a qualitative not quantitative analysis; one serious incident can suffice. See Redcay v. Board of Education, 130 N.J.L. 369, 370, 33 A.2d 120 (1943), aff'd, 131 N.J.L. 326, 36 A.2d 428 (1944); In re Shurgin, 83 App. Div. 2d 665, 666, 442 N.Y.S.2d 212 (1981), aff'd, 56 N.Y.2d 700, 436 N.E.2d 1324, 451 N.Y.S.2d 722 (1982).

Although we recognize that this one incident exists against the backdrop of an excellent record, we cannot ignore the fact that the plaintiffs action compromised the privacy of the students whom it was her duty to protect through the enforcement of the board’s policies. Under these circumstances, we cannot conclude as a matter of law that the board’s action was arbitrary and capricious or an abuse of discretion.

The judgment is affirmed.

In this opinion the other justices concurred.

       General Statutes § 10-151 (d) provides: “The contract of employment of a teacher who has attained tenure shall be continued from school year to school year, except that it may be terminated at any time for one or more of the following reasons: (1) Inefficiency or incompetence; (2) insubordination against reasonable rules of the board of education; (3) moral misconduct; (4) disability, as shown by competent medical evidence; (5) elimination of the position to which the teacher was appointed or loss of a position to another teacher, if no other position exists to which such teacher may be appointed if qualified, provided such teacher, if qualified, shall be appointed to a position held by a teacher who has not attained tenure, and provided further that determination of the individual contract or contracts of employment to be terminated shall be made in accordance with either (A) a provision for a layoff procedure agreed upon by the board of education and the exclusive employees’ representative organization or (B) in the absence of such agreement, a written policy of the board of education; or (6) other due and sufficient cause. Nothing in this section or in any other section of the general statutes or of any special act shall preclude a board of education from making an agreement with an exclusive bargaining representative which contains a recall provision. Prior to terminating a contract, the superintendent shall give the teacher concerned a written notice that termination of such teacher’s contract is under consideration and, upon written request filed by such teacher with the superintendent, within seven days after receipt of such notice, shall within the next succeeding seven days give such teacher a statement in writing of the reasons therefor. Within twenty days after receipt of written notice by the superintendent that contract termination is under consideration, such teacher may file with the local or regional board of education a written request for a hearing. A board of education may designate a subcommittee of three or more board members to conduct hearings and submit written findings and recommendations to the board for final disposition in the case of teachers whose contracts are terminated. Such hearing shall commence within fifteen days after receipt of such request, unless the parties mutually agree to an extension, not to exceed fifteen days (A) before the board of education, or a subcommittee of the board, (B) if indicated in such request or if designated by the board before an impartial hearing panel or, (C) if the parties mutually agree, before a single impartial hearing officer chosen by the teacher and the superintendent. If the parties are unable to agree upon the choice of a hearing officer within five days after their decision to use a hearing officer, the hearing shall be held before the board or panel, as the case may be. The impartial hearing panel shall consist of three members appointed as follows: The superintendent shall appoint one panel member, the teacher shall appoint one panel member, and those two panel members shall choose a third, who shall serve as chairperson. If the two panel members are unable to agree upon the choice of a third panel member within five days after the decision to use a hearing panel, the third panel member shall be selected with the assistance of the American Arbitration Association using its expedited selection process and in accordance with its rules for selection of a neutral arbitrator in grievance arbitration. If the third panel member is not selected with the assistance of such association within five days, the hearing shall be held before the board of education or a subcommittee of the board. Within seventy-five days after receipt of the request for a hearing, the impartial hearing panel, subcommittee of the board or hearing officer, unless the parties mutually agree to an extension not to exceed fifteen days, shall submit written findings and a recommendation to the board of education as to the disposition of the charges against the teacher, and shall send a copy of such findings and recommendation to the teacher. The board of education shall give the teacher concerned its written decision within fifteen days of receipt of the written recommendation of the impartial hearing panel, subcommittee or hearing officer. Each party shall pay the fee of the panel member selected by it and shall share equally the fee of the third panel member or hearing officer and all other costs incidental to the hearing. If the hearing is before the board of education, the board shall render its decision within fifteen days after the close of such hearing, and shall send a copy of its decision to the teacher. The hearing shall be public if the teacher so requests or the board, subcommittee, hearing officer or panel so designates. The teacher concerned shall have the right to appear with counsel at the hearing, whether public or private. A copy of a transcript of the proceedings of the hearing shall be furnished by the board of education, upon written request by the teacher within fifteen days after the board’s decision, provided the teacher shall assume the cost of any such copy. Nothing herein contained shall deprive a board of education or superintendent of the power to suspend a teacher from duty immediately when serious misconduct is charged without prejudice to the rights of the teacher as otherwise provided in this section.”

       As we note subsequently, the dissenter’s relevant findings dealt with the specific nature of the searches and of the comments made by students in the presence of the plaintiff.

       We, therefore, disagree with the trial court’s apparent characterization of the board’s decision as resting equally on factual findings of the majority as well as factual findings of the dissenter.

       New Haven Public Schools Policy Series 1000, Policy No. 1120 provides in relevant part: “The regular and special meetings of the Board of Education are open to the public and representatives of the press except that a part of any meeting may be designated an executive session as provided by law. . . . The Board of Education welcomes participation of interested organizations and individuals. . .

       Although in her brief the plaintiff does not cite specifically to the relevant pages in the transcript or quote the exact statements that she asserts are hearsay, we were able to discern those statements and to locate the relevant portions of the transcript.

       The transcript of the direct examination of T reads in relevant part:
      “[Attorney Jay Bovilsky]: After S went into Miss Young’s office, where did [the plaintiff] go?
      “A. She was sitting at the desk.
      “Q. And when S came out, did S say anything?
      “A. Yes.
      “Q. What did she say?
      “A. She said, ‘It's nasty; they made me pull down my pants and my panties.’ . . .
      “Q. What did [the plaintiff] do when S came out of the office?
      “A. She didn’t say nothing. She just gave S a pass to the room. . . .
      “Q. As the girls came out of the office, what happened with those girls as they came out?
      “A. They was saying the same thing S said: It was nasty; stuff like that.”
      The sealed transcript of the examination of L reveals that the questions and answers followed along similar lines.

       Although we have concluded in other circumstances that termination was an arbitrary and capricious punishment for a single incident in an otherwise unblemished record, such a determination is rare and reserved for extraordinary circumstances. See Tucker v. Board of Education, supra, 177 Conn. 572.
      In Tucker, the plaintiff, a tenured school teacher, had twice requested and was twice refused a two day leave of absence to take a trip with her husband. The Norfolk board of education warned her of the consequences of taking the leave without permission but she did so regardless. An impartial hearing panel that was convened pursuant to § 10-151 determined that the plaintiffs conduct constituted insubordination but recommended against termination. The board nonetheless terminated the plaintiffs employment contract on the ground of insubordination. Although this court agreed that facts supported the finding of insubordination, we concluded that “the drastic disciplinary action of dismissal constituted exceedingly excessive punishment for the plaintiffs misconduct, and an abuse of discretion, especially in the light of the plaintiffs excellent and unblemished school record as a capable, dedicated teacher.” Tucker v. Board of Education, supra, 177 Conn. 581-82.
      Although the plaintiffs conduct is an allegedly negligent omission in this case as opposed to the wilful insubordination in the Tucker case, the plaintiffs inaction exposed the students not only to potential violations of rights but, more practically, to potential emotional harm. Under the circumstances, we cannot say that the board abused its discretion in terminating the plaintiffs employment.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    E & A DEVELOPMENT, INC. v. PARAGON BUILDERS OF CONNECTICUT, INC.
    (SC 16184)
    McDonald, C. J., and Borden, Katz, Palmer and Vertefeuille, Js.
    Argued March 21
    officially released May 9, 2000

      Lawrence P. Weisman, with whom, on the brief, was Deanna S. Levine, for the appellant (defendant).

      Mallkew J. Broder, for the appellee (plaintiff).
   Opinion

PER CURIAM.

After examining the record on appeal and considering the briefs and oral arguments of the parties, we have determined that the appeal in this case should be dismissed on the ground that certification was granted improvidently.

The appeal is dismissed.

       We granted the defendant’s petition for certification to appeal from the judgment of the Appellate Court; E & A Development, Inc. v. Paragon Builders of Connecticut, Inc., 54 Conn. App. 355, 735 A.2d 830 (1999); limited to 1he following issues: (1) “Did the Appellate Court properly conclude that the defendant’s claim is moot because the funds had already been distributed in accordance with the trial court’s order discharging the mechanic’s lien?”; (2) “Did the Appellate Court correctly conclude that because the trial court properly discharged the mechanic’s lien, there was no need for the funds to have been held as security?”; (3) “Did the Appellate Court properly conclude that the defendant's claim is moot because we can no longer grant any practical relief?”; and (4) “Did the Appellate Court properly conclude that the decision of the trial court discharging the mechanic’s lien without imposing the seven day stay mandated by General Statutes § 49-35c (b) was correct?” E & A Development, Inc. v. Paragon Builders of Connecticut, Inc., 250 Conn. 929, 738 A.2d 655 (1999).


text:
    REICHHOLD CHEMICALS, INC. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY ET AL.
    (SC 16156)
    McDonald, C. J., and Borden, Norcott, Katz, Palmer, Sullivan and Callahan, Js.
    Argued February 16
    officially released May 3, 2000

      Francis J. Brady, with whom were Barry J. Fleish-man, pro hac vice, and, on the brief, Elizabeth J. Stewart, April Lieberman, Leon B. Kellner, pro hac vice, and Robert W. Pommer III, pro hac vice, for the appellant (plaintiff).

      Stephen A. Fennell, pro hac vice, with whom were John L. Altieri, Jr., pro hac vice, John B. Farley and
      John T. Harris, and, on the brief, Charles G. Cole, pro hac vice, Mary Woodson Poag, pro hac vice, Ralph DeSanto, pro hac vice, Michael G. Clear and Sheila A. Huddleston, for the appellees (defendant Home Insurance Company et al.).

      Robert Kehmna filed a brief for the Insurance Association of Connecticut as amicus curiae.

      Kathleen F. Munroe, Laura A. Foggan, pro hac vice, Daniel E. Troy, pro hac vice, and Keith U. Kuder, pro hac vice, filed a brief for the Insurance Environmental Litigation Association as amicus curiae.

       May 3, 2000, the date that this decision was released as a slip opinion, is the operative date for all substantive and procedural purposes.

   Opinion

CALLAHAN, J.

The principal issue in this appeal is whether the trial court in the present insurance coverage case properly applied New York law under the analytical approach of the Restatement (Second) of Conflict of Laws, which this court adopted in Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., 243 Conn. 401, 703 A.2d 1132 (1997).

The relevant underlying facts are described fully in Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 401. We briefly review those facts supplemented by certain additional facts relevant to the present appeal. Seeking reimbursement for pollution cleanup costs at various sites in several states, the plaintiff, Reichhold Chemicals, Inc., brought this suit against sixteen primary and excess liability insurance carriers from which it had purchased policies between 1952 and 1985. The trial court divided the action into separate trials based on site location. The trial at issue in the present appeal concerned only the plaintiffs facility located in Tacoma, Washington. Because of settlements and other proceedings, there now remain only six defendants, all excess liability carriers who either were headquartered in New York or who dealt with the plaintiff through their New York offices.

The trial court bifurcated the trial into separate notice and coverage phases. At the first phase, the trial court determined that New York law applied to the issue of notice compliance and so instructed the jury. After the jury rendered a verdict in the defendants’ favor, the plaintiff appealed from the judgment to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 65-1 and General Statutes § 51-199 (c).

In Reichhold Chemicals, Inc., we considered whether the trial court was correct when it applied New York law to the issue of notice compliance under our traditional lex loci contractus approach to choice of law questions. Prior to our decision in that case, we had moved away from the lex loci approach of the Restatement of Conflict of Laws § 332 et seq. (1934), and toward the more flexible “most significant relationship” approach taken in the Restatement (Second) of Conflict of Laws § 188 (1971) in other substantive areas of the law. Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 412-13, citing Elgar v. Elgar, 238 Conn. 839, 840, 679 A.2d 937 (1996) (ante-nuptial contract); Cleveland v. U.S. Printing Ink, Inc., 218 Conn. 181, 182, 588 A.2d 194 (1991) (workers’ compensation); O’Connor v. O’Connor, 201 Conn. 632, 633-64, 519 A.2d 13 (1986) (tort claim). As we noted then, this shift was consistent with the modern trend of many jurisdictions. Ultimately, we determined in Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 406-14, that the most significant relationship approach of the Restatement (Second) should be followed in contract cases. We therefore adopted “the . . . general presumption [of the Restatement (Second), supra, § 188], which provides that unless another state has an overriding policy-based interest in the application of its law, the law of the state in which the bulk of the contracting transactions took place should be applied. We also [adopted, however,] the . . . special presumption for liability insurance contracts [of the Restatement (Second), supra, § 193], which provides that unless another state has an overriding policy-based interest in the application of its law, the law of the state in which the insured risk is located should be applied.” Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 414. We subsequently concluded that Washington law should apply to the issue of notice compliance. Id., 423. We therefore reversed the judgment of the trial court and remanded the case for a new trial. Id., 426.

Upon the remand, there arose the two additional choice of law issues that are the subject of this appeal, namely, the pollution exclusion clauses in the relevant policies and the question of allocation of damages. The remaining defendants issued policies containing pollution exclusion clauses that excluded from coverage all pollution that is not “sudden and accidental” or “sudden, unexpected and unintended,” the exact language depending on the particular policy. The laws of New York and Washington differ with respect to the interpretation of “sudden.” The Washington Supreme Court has concluded “that ‘sudden’ means ‘unexpected’ in the context of CGL [Comprehensive General Liability] policies . . . .Thus [with respect to pollution coverage in Washington,] ‘sudden and accidental’ means ‘unexpected and unintended’.” Queen City Farms, Inc. v. Central National Ins. Co., 126 Wash. 2d 50, 90, 882 P.2d 703 (1994). The Court of Appeals of New York, on the other hand, has emphasized “the temporal element of sudden — as an abrupt happenstance . . . .” (Emphasis in original.) Northville Industries Corp. v. National Union Fire Ins. Co., 89 N.Y.2d 621, 633, 679 N.E.2d 1044, 657 N.Y.S.2d 564 (1997); id., 634 (“abruptly or within a short timespan”). Under New York law, “for a release or discharge to be ‘sudden’ within the meaning of [a] pollution exclusion, it must occur abruptly or quickly or ‘over a short period of time ....’” Borg-Warner Corp. v. Ins. Co. of North America, 174 App. Div. 2d 24, 31, 577 N.Y.S.2d 953, leave to appeal denied, 80 N.Y.2d 753, 600 N.E.2d 632, 587 N.Y.S.2d 905 (1992).

The laws of Washington and New York also differ with respect to the question of allocation of damages. New York law rejects joint and several liability in favor of a pro rata allocation of covered property damage that occurs during the policy period based on the time during which the insurer was on the risk. Stonewall Ins. Co. v. Asbestos Claims Management Corp., 73 F.3d 1178, 1203 (2d Cir. 1995); Olin Corp. v. Ins. Co. of North America, 986 F. Sup. 841, 844-45 (S.D.N.Y. 1997); Uniroyal, Inc. v. Home Ins. Co., 707 F. Sup. 1368, 1392 (S.D.N.Y. 1988); Diamond Shamrock Chemicals Co. v. Aetna Casualty & Surety Co., 258 N.J. Super. 167, 244-45, 609 A.2d 440 (1992), cert. denied, 134 N.J. 481, 634 A.2d 528 (1993) (interpreting New York law). The Washington Supreme Court, however, has rejected a pro rata allocation of liability and has indicated that any insurer that was on the risk when a triggering event occurred will be jointly and severally liable for the entire amount of damages up to its policy limits. American National Fire Ins. Co. v. B & L Trucking & Construction Co., 134 Wash. 2d 413, 428-29, 951 P.2d 250 (1998).

Upon remand in this case following Reichhold, Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 401, the trial court, as a preliminary matter, conducted a choice of law analysis beginning with the presumption that the law of the site applied. See 1 Restatement (Second), supra, § 193. It determined, however, that “New York has an overriding interest in having its laws applied to the issues of the pollution exclusion and allocation of damages.”

Relying on the court’s determination that New York law applied, the defendants moved for summary judgment on two grounds. First, they sought summary judgment on the ground that the pollution exclusion clauses contained in their policies precluded coverage because the spills for which coverage was sought were not “sudden” as New York law defines that term. Second, the defendants asserted that they were entitled to summary judgment because New York law, which requires allocation, so limited the recoverable damages that the damages would not reach their respective excess liability coverages.

The trial court granted summary judgment as to two defendants, National Union Fire Insurance Company of Pittsburgh, Pennsylvania, and Granite State Insurance Company, whose policies included pollution exclusion clauses. That court granted partial summary judgment as to the other defendants, namely, American Home Assurance Company, Century Indemnity Company, Commercial Union Insurance Company and The Home Insurance Company, on certain policies. Some of the policies issued by those other defendants, however, did not include such clauses. With respect to allocation, the trial court granted summary judgment to the five defendants that had moved for summary judgment, concluding that the method of allocating damages precluded any of the excess policies from being triggered because the respective threshold amounts would not be reached. The court noted that, even if the plaintiffs maximum potential damage figure were accepted, the primary and other underlying layers of excess coverage would cover the maximum amount allocable to each year without the defendants’ policy amounts being reached. Accordingly, the trial court rendered summary judgment for the defendants. The plaintiff appealed from the judgment to the Appellate Court, and upon the plaintiffs motion, we transferred the appeal to this court, pursuant to Practice Book § 65-2 and General Statutes § 51-199 (c).

The plaintiff claims that the trial court should have applied Washington law rather than New York law to the pollution exclusion and damage allocation clauses of its liability insurance policies. We agree.

Under the framework that we adopted in Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 407, 414, Connecticut’s choice of law approach for contracts is the “most significant relationship” test of the Restatement (Second), supra, § 188. The choice of law determination in this case involves an interplay among § § 193,188 and 6 of the Restatement (Second), supra. Where there is no choice of law provision in the contract, the general rule to be applied is that of § 188. Section 188, in turn, directs us to other provisions for specific types of contracts.

With respect to liability insurance contracts, the starting point is § 193 of the Restatement (Second), supra, which creates a rebuttable presumption in favor of the state where the insured risk is located. In order to overcome this presumption, another state’s interest must outweigh those of the state where the insured risk is located and must be sufficiently compelling to trump the § 193 presumption. Section 6 (2) of the Restatement (Second), supra, provides the criteria by which that overriding interest should be evaluated. It must be remembered that even if another state has a substantial interest under § 6 (2), that interest will not defeat the § 193 presumption unless it is sufficiently compelling. As we indicated in Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 417, the analysis begins but does not end with §193.

Section 193 of the Restatement (Second), supra, provides: “The validity of a contract of fire, surety or casualty insurance and the rights created thereby are determined by the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the transaction and the parties, in which event the local law of the other state will be applied.” (Emphasis added.)

“Section 6 (2) of the Restatement (Second), [supra] which is applicable to all substantive areas, sets forth seven overarching considerations in determining which state has the ‘most significant relationship’: ‘(a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular- field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.’ ” Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 409.

“[T]he contacts to be taken into account in applying the principles of § 6 [of the Restatement (Second), supra] to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicil, residence, nationality, place of incorporation and place of business of the parties.” 1 Restatement (Second), supra, § 188 (2).

Reichhold Chemicals, Inc., dealt only with the issue of notice compliance and does not preclude the application of the law of a state other than Washington to other issues in the case, a principle known as depecage. Nevertheless, in the light of our determination of the interests of the respective states of Washington and New York in Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 414—16, and the apparent similarity of concerns with respect to the issues in this appeal, a principled explanation would be required to justify a different result in the present case. We can discern no rationale for such an explanation. We therefore conclude that the respective interests of New York and Washington, which this court identified in Reichhold Chemicals, Inc., exist with equal force here.

As we noted in Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 414, New York has a public policy interest in limiting the availability of liability coverage, which reflects both its concern for protecting insurers and its desire “to deter deliberate pollution by withholding the shelter of liability insurance for injuries resulting from such conduct.” Technicon Electronics Corp. v. American Home Assurance Co., 141 App. Div. 2d 124, 143, 533 N.Y.S.2d 91 (1988), aff'd, 74 N.Y.2d 66, 542 N.E.2d 1048, 544 N.Y.S.2d 531 (1989). Because the plaintiff and three of the defendants are headquartered in New York and the other defendants negotiated and executed the insurance contracts through their New York offices; see 1 Restatement (Second), supra, § 188 (2); the application of New York law would further New York’s public policy of hmiting liability coverage in order to deter deliberate pollution and to protect insurers.

Washington has an interest in the application of its own law because the location of the insured risk is Tacoma, Washington. See 1 Restatement (Second), supra, §§ 188 (2) (d) & 193. “Washington courts .... have recognized that the state in which the hazardous waste site is located has a compelling interest in the application of its own law. Washington has a paramount interest in the health and safety of its people. Washington bears the responsibility under [the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)] for ensuring the site cleanup and will bear the burden if the site is not cleaned. The existence or absence of insurance proceeds can determine whether or not a hazardous waste site is remediated. Washington, therefore, has a significant interest in [the plaintiffs] insurance coverage.’ Canron, Inc. v. Federal Ins. Co., [82 Wash. App. 480, 494, 918 P.2d 937 (1996)].” Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 416. The application of Washington law, whose public policy favors construing insurance policies in favor of coverage, advances Washington’s interest in protecting its environment and its citizens, both as taxpayers and as inhabitants.

On the basis of this comparison of the interests of New York and Washington, we cannot conclude that New York’s interests so substantially outweigh Washington’s interests as to overcome the presumption of § 193 of the Restatement (Second), supra. Moreover, New York’s public policy limiting coverage is undercut by the fact that the section of the New York insurance law that was enacted in 1971 to require pollution exclusion clauses in general liability policies; 1971 N.Y. Laws c. 765; was repealed in 1982. 1982 N.Y. Laws c. 856. Under the 1982 revision, pollution exclusion provisions are permissible but no longer mandatory. Whereas the 1971 language was presented as a means of deterring pollution by forcing industry to bear the costs of cleanup, the 1982 revision was presented as part of a revised comprehensive package to help industry manage risks and to protect the public. The official memorandum by New York state Senator John R. Dunne, a sponsor of the 1982 bill, noted that the former rationale had not held up in practice and that insurance should now be viewed as a legitimate and sensible means of providing clean-up costs and protecting the public and the environment. See also New York State Legislative Annual-1982, Governor’s Approval Memorandum, p. 272 (“[t]he bills represent a major step in our comprehensive effort to encourage industry responsibly to handle its hazardous wastes and eliminate the attendant risks, and simultaneously to safeguard the public from the adverse consequences of hazardous waste handlers which become financially disabled”). At the very least, this change of focus represents an erosion of New York’s previous public policy precluding pollution coverage. It is difficult for us to conclude that a public policy interest enunciated in 1971 and subsequently recanted in 1982 should control our interest analysis today.

Connecticut’s present interests are limited by the fact that its sole contact with the litigation is that it provides the forum. See 1 Restatement (Second), supra, § 6 (2), comment (e), p. 13. We may not “ignore well-established principles of the conflict of laws [or] disregard the law of a sister state affecting substantive rights merely because that law differs from our own.” Bohenek v. Niedzwiecki, 142 Conn. 278, 284, 113 A.2d 509 (1955). The contacts listed in § 188 that are to be taken into account in applying § 6 are conspicuously absent from the present case. Although the primary insurers are headquartered in Connecticut, they are no longer involved in the action and were never part of this appeal. The plaintiff is headquartered in New York. The plaintiffs insurance broker is located in New York. Three of the defendant insurance companies are based in New York, the others being based in Massachusetts, Pennsylvania and New Hampshire. The defendants negotiated, executed and administered their policies with the plaintiff through their New York offices. The only site at issue in the trial is located in Tacoma, Washington. At this stage of the litigation, Connecticut has no contacts other than providing the forum, nor have the defendants pointed to any important Connecticut public policy that would be offended by the application of either New York or Washington law.

As an additional important consideration, the application of a state’s law should not run counter to the justified expectations of the parties, which is “the basic policy underlying the particular field of contracts.” 1 Restatement (Second), supra, § 188, comment (b), p. 577. Applying Washington law, however, does not violate the justified expectations of the parties when the targeted site is in Washington and the other risks that they insured are located in multiple jurisdictions all outside New York. The defendants expressly concede that the highest courts of eleven states construe the pollution exclusion clause consistent with the law of Washington, as opposed to that of New York. See Alabama Plating Co. v. United States Fidelity & Guaranty Co., 690 So. 2d 331, 336 (Ala. 1996); Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083, 1092 (Colo. 1991); Claussen v. Aetna Casualty & Surety Co., 259 Ga. 333, 338, 380 S.E.2d 686 (1989); Outboard Marine Corp. v. Liberty Mutual Ins. Co., 154 Ill. 2d 90, 129, 607 N.E.2d 1204 (1992); American States Ins. Co. v. Kiger, 662 N.E.2d 945 (Ind. 1996); Morton International, Inc. v. General Accident Ins. Co., 134 N.J. 1, 61, 629 A.2d 831 (1993), cert. denied, 512 U.S. 1254, 114 S. Ct. 2764, 129 L. Ed. 2d 878 (1994); St. Paul Fire & Marine Ins. Co. v. McCormick & Baxter Creosoting Co., 324 Or. 184, 213, 923 P.2d 1200 (1996); Greenville County v. Insurance Reserve Fund, 313 S.C. 546, 548, 443 S.E.2d 552 (1994); Queen City Farms, Inc. v. Central National Ins. Co., supra, 126 Wash. 2d 50; Joy Technologies, Inc. v. Liberty Mutual Ins. Co., 187 W. Va. 742, 748-49, 421 S.E.2d 493 (1992); Just v. Land Reclamation, Ltd., 155 Wis. 2d 737, 758-59, 456 N.W.2d 570 (1990). None of the defendants availed themselves of choice of law provisions in their policies, even though the laws of New York, Connecticut and Washington favor enforcement of contractual choice of law provisions, as does the Restatement (Second). See Krock v. Lipsay, 97 F.3d 640, 645 (2d Cir. 1996); McGowan v. Pillsbury Co., 723 F. Sup. 530, 537 (W.D. Wash. 1989); Pollak v. Danbury Mfg. Co., 103 Conn. 553, 557, 131 A. 426 (1925); 1 Restatement (Second), supra, § 187. To the contrary, the trial court concluded in its February 24, 1993 memorandum of decision regarding choice of law that “[t]hese insurance companies which write thousands of contracts have deliberately omitted the choice of law provision from these contracts.” The plaintiff, on the other hand, might justifiably expect that its insurers would cover damages related to the insured risk according to the law of the site of the risk.

Finally, the interests of uniformity and predictability within Connecticut’s forum are well served by our holding today because insurers will be on notice that the “most significant interest” test mandates that, in the absence of extraordinaiy circumstances, the law of the state where the principal insured risk is located will apply. We will depart from this rule only in those exceptional circumstances where the interests of another state substantially outweigh the interests of the site state.

We conclude that New York’s interest is not sufficiently compelling to overcome the presumption in favor of Washington law. We therefore conclude that, pursuant to Restatement (Second), supra, § 193, Washington law should be applied to the pollution exclusion and allocation issues.

The judgment is reversed and the case is remanded with direction to deny the motions for summary judgment and for further proceedings according to law.

In this opinion the other justices concurred.

       “The six remaining defendants are American Home Assurance Company, Century Indemnity Company, Commercial Union Insurance Company, Granite State Insurance Company, The Home Insurance Company and National Union Fire Insurance Company of Pittsburgh, Pennsylvania. Hereafter, we refer to the six remaining defendants as the defendants.” Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., supra, 243 Conn. 404 n.2.

       Pollution exclusion clauses were included in ail of the policies issued to the plaintiff by the defendants National Union Fire Insurance Company of Pittsburgh, Pennsylvania, and Granite State Insurance Company. Each of the other defendants issued policies containing pollution exclusion clauses, but not all of their respective policies included such clauses.

       The Home Insurance Company did not move for summary judgment on this issue, presumably because its threshold level of coverage was lower as a first layer excess coverage provider.

       Section 188 of the Restatement (Second), supra, provides: “(1) The rights and duties of the parties with respect to an issue in contract axe determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6.

        “(2) In the absence of an effective choice of law by the parties (see § 187), the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicil[e], residence, nationality, place of incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue.
      “(3) If the place of negotiating the contract and the place of performance are in the same state, the local law of this state will usually be applied, except as otherwise provided in §§ 189-199 and 203.”

       The principle of depecage has been “described as the framework under which different issues in a single case . . . may be decided according to the substantive law of different states.” (Internal quotation marks omitted.) Crellin Technologies v. Equipmentlease Corp., 18 F.3d 1, 11 (1st Cir. 1994), quoting Putnam Resources v. Pateman, 958 F.2d 448, 465 (1st Cir. 1992).

       Senator Dunne’s memorandum provided in part: “The purpose of this bill is to authorize the sale of ‘gradual’ or ‘nonsudden’ pollution liability insurance in New York. In 1971, then Governor [Nelson] Rockefeller, signed a bill into law that prevented the writing of gradual pollution liability insurance. The law was based on the rationale that polluters ‘might pollute with impunity’ if such liability coverage was available. The tragedy at Love Canal and the potential for similar incidents has changed that rationale. A new public policy would be forged by the bill in New York. That public policy would demand swift and just compensation for persons who are iryured, made sick, or whose property has been damaged because of someone else’s pollution, gradual or otherwise. Liability insurance can help provide the financial resources from which such compensation can be made. . . . Through the loss prevention programs of the insurance industry and selective underwriting, the net result will be to foster maximum protection of the environment, make available compensation for those injured or whose property is damaged, and reduce government involvement.” (Emphasis added.) New York State Legislative Annual-1982, Memorandum of Senator John R. Dunne, p. 271.

       The defendants assert that the 1971 policy rationale is also relevant to the justified expectations of the parties. This argument places the cart before the horse because it relies on the assumption that New York law would apply. For the reasons we discuss subsequently, the defendants were not justified in that assumption.


author: VERTEFEUILLE, J.

text:
    NANCY HOSKINS v. TITAN VALUE EQUITIES GROUP, INC., ET AL.
    (SC 16120)
    Borden, Katz, Vertefeuille, Callahan and Pellegrino, Js.

      Argued February 15
    officially released May 4, 2000

      Francis A. Miniter, with whom was Christine E. Corriveau, legal intern, for the appellant (plaintiff).

      Daniel L. Schwartz, for the appellees (defendants).

       May 4, 2000, the date that this decision was released as a slip opinion, is the operative date for all substantive and procedural purposes.

   Opinion

VERTEFEUILLE, J.

The plaintiff, Nancy Hoskins, appeals from the judgment of the trial court rendered following the granting of the motion for summary judgment filed by the defendants, Titan Value Equities Group, Inc. (Titan), and Ellen Lefferts Schowaiter. On appeal, the plaintiff claims that the trial court, in granting the defendants’ motion on all three counts of the plaintiffs amended complaint, improperly concluded that the third count of the plaintiffs complaint, alleging a breach of the implied duty of good faith and fair dealing, was barred by the three year statute of limitations for torts set forth in General Statutes § 52-577. She contends that the trial court wrongly characterized the cause of action for breach of the duty of good faith and fair dealing as a tort rather than a claim in contract, which would be governed by the longer, six year statute of limitations under General Statutes § 52-576. We affirm the judgment of the trial court on the alternate ground that there was no contract for the rendering of investment advice between the plaintiff and Schowalter and, consequently, there was no basis for the implication of the duty of good faith and fair dealing.

The record reveals the following undisputed pertinent facts. In May and June, 1990, the plaintiff, who had recently become a widow, consulted with Schowalter, a licensed representative for Titan, a securities broker, for advice with respect to investing the proceeds of two life insurance policies of which the plaintiff was the beneficiaiy. Schowalter and the plaintiff met at least twice to discuss possible investments. At Schowalter’s request, the plaintiff completed a “client data form,” containing personal information and investment objectives. Schowalter provided the plaintiff, a practicing attorney for more than ten years, with information, including prospectuses, with respect to several limited partnership investments. On June 21, 1990, the plaintiff invested a total of $140,000 in seven limited partnerships recommended by Schowalter. The purchase of the investments was effected through various subscription agreements and order forms provided by Schowalter.

In early 1991, the plaintiff became concerned about the suitability of these investments. She consulted a financial planner, who advised her that the limited partnerships were not appropriate investments for her. After further consultations, the plaintiff concluded during the summer of 1991 that the investments were not suitable for her. She began selling her interests in the limited partnerships in early 1992. The plaintiff did not consult an attorney with respect to bringing an action against the defendants until early 1995, when this action was filed.

The gravamen of the plaintiffs amended complaint is that Schowalter recommended securities that were unsuitable for the plaintiffs needs and investment objectives. More specifically, in the third count of the complaint, the plaintiff alleged that Schowalter breached the implied duty of good faith and fair dealing by failing to remain “faithful to the agreed common purpose of the parties . . . .”

“The standard of review of a trial court’s decision to grant summary judgment is well established. [W]e 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.” (Internal quotation marks omitted.) Sherwood v. Danbury Hospital, 252 Conn. 193, 201, 746 A.2d 730 (2000). “In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. . . . The test is whether a party would be entitled to a directed verdict on the same facts.” (Internal quotation marks omitted.) Serrano v. Burns, 248 Conn. 419, 424, 727 A.2d 1276 (1999).

The defendants contend that there is no genuine issue of fact that a contract for the provision of investment advice did not exist between the parties and that, in the absence of such a contract, no duty of good faith and fair dealing could arise. They claim therefore that they are entitled to judgment as a matter of law. We agree.

It is axiomatic that the implied duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship. See Magnan v. Anaconda Industries, Inc., 193 Conn. 558, 566, 479 A.2d 781 (1984); see also 2 Restatement (Second), Contracts § 205 (1979) (“[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement”). “The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party’s discretionary application or interpretation of a contract term.” Neiditz v. Housing Authority, 43 Conn. Sup. 283, 294, 654 A.2d 812 (1994), aff'd, 231 Conn. 598, 651 A.2d 1295 (1995). In accordance with these authorities, the existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing.

In support of their motion for summary judgment, the defendants filed portions of the transcripts from two depositions of the plaintiff. At her first deposition, the plaintiff denied having any type of contract with Schowalter. At her second deposition, more than one year later, she again denied having entered into any contract with Schowalter, written or oral, and further denied the existence of any contract with Titan, written or oral. After the defendants submitted these damaging admissions to the trial court, the plaintiff filed two affidavits in opposition to the motion for summary judgment. In her second affidavit, the plaintiff addressed the deposition admissions, averring that she “never meant to indicate or imply that the business relationship [with the defendants] . . . was not based in contract.” (Emphasis added.) A conclusory assertion that the relationship was “based in contract” does not constitute evidence sufficient to establish the existence of a disputed material fact for purposes of a motion for summary judgment. Gupta v. New Britain General Hospital, 239 Conn. 574, 583, 687 A.2d 111 (1996).

The plaintiff contends in her brief that the client data form that she completed constituted a written contract between the parties. This claim is inconsistent with the plaintiffs amended complaint in which she alleged only an oral agreement. Moreover, it was neither presented to nor decided by the trial court and, therefore, is not properly before this court. See Connecticut Ins. Guaranty Assn. v. Union Carbide Corp., 217 Conn. 371, 385, 585 A.2d 1216 (1991).

The plaintiff also claims in her brief that the subscription documents and order forms for each of the seven investments that she purchased constitute written contracts between the parties. A review of these documents reveals that they are agreements for the purchase of the seven limited partnership interests, authorizing Titan to place orders for the specified securities. They clearly are not, however, contracts pursuant to which Scho-walter or Titan agreed to render investment advice.

“Where the trial court reaches a correct decision but on [alternate] grounds, this court has repeatedly sustained the trial court’s action if proper grounds exist to support it.” Favorite v. Miller, 176 Conn. 310, 317, 407 A.2d 974 (1978). “[W]e . . . may affirm the court’s judgment on a dispositive alternate ground for which there is support in the trial court record.” Skuzinski v. Bouchard Fuels, Inc., 240 Conn. 694, 702, 694 A.2d 788 (1997).

After a careful review of the record, we conclude that there was no genuine issue of material fact that a contract for the rendering of investment advice did not exist between the parties and, therefore, there is no basis for the implication of a duty of good faith and fair dealing. Accordingly, we affirm the trial court’s granting of the defendants’ motion for summary judgment on this alternate ground.

The judgment is affirmed.

In this opinion the other justices concurred.

       The plaintiff appealed from the judgment of the trial court to the Appellate Court and we transferred the appeal to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-1.

       The plaintiff does not appeal from the granting of the motion for summary judgment with respect to the first and second counts of the complaint, also on statute of limitations grounds.

       General Statutes § 52-577 provides: “No action founded upon a tort shall be brought but within three year's from the date of the act or omission complained of.”

       General Statutes § 52-576 (a) provides in relevant part: “No action . . . on any simple or implied contract, or on any contract in writing, shall be brought but within six years after the right of action accrues . . . .”