author: Glass, J. Shea, J.,

text:
    Cally Curtis Company v. John G. Groppo, Commissioner of Revenue Services
    (13733)
    Peteks, C. J., Healey, Shea, Callahan, Glass, Covello and Hull, Js.
    Argued December 5, 1989
    decision released March 27, 1990

      Richard K. Greenberg, assistant attorney general, with whom, on the brief, were Clarine Nardi Riddle, attorney general, and Shelagh P. McClure, assistant attorney general, for the appellant (defendant).

      Christopher F. Droney, with whom was Michael L. Coyle, for the appellee (plaintiff).
   Glass, J.

This is an appeal from a judgment of the Superior Court sustaining an appeal by the plaintiff, Cally Curtis Company (Curtis), from an assessment by the defendant, commissioner of revenue services (commissioner), of Connecticut sales and use tax for the review period of January 1, 1982, through May 31, 1985 (review period). We find no error.

The facts stipulated by the parties may be summarized as follows. Curtis is a California corporation engaged in the business of producing, selling, leasing and distributing industrial films and videotapes (films) for personnel training purposes. In late 1985, the commissioner, acting through his representative, conducted a review of the books and records of Curtis for the period of January 1, 1982, through May 31, 1985. As a result of the review, the commissioner, pursuant to General Statutes § 12-411, assessed a Connecticut use tax liability against Curtis in the amount of $5020.40 plus interest and penalty with respect to certain rentals and sales of films by Curtis to customers in Connecticut.

During the review period, Curtis was engaged in the sale and rental of its films to customers in Connecticut. None of the rentals exceeded three days. Some of the sales and rentals resulted from preview transactions in which customers were allowed to examine films for three days before deciding whether to purchase or rent them for training purposes. During the review period, the gross receipts for sales, rentals for training purposes and previews to customers in Connecticut were as follows:

For the review period, Curtis marketed its sales and rentals in Connecticut only through: (a) trade shows held in states other than Connecticut, at which catalogs were distributed to patrons; (b) mailing lists; and (c) referrals. Catalogs were mailed to Connecticut customers identified on mailing lists or by referrals. Curtis did not utilize the services of any (a) salesmen, personnel or independent representatives in or visiting Connecticut, (b) own or rent offices or warehouses, or any inventory, in Connecticut, or (c) advertise by newspaper, radio or television in Connecticut. A Connecticut customer who wished to order a film from Curtis would have had to complete a purchase or rental order for the film and have sent it to Curtis at its California offices for acceptance in California. In addition, all deliveries and returns of films to and from customers in Connecticut, by sale or rental, were made by common carrier or the United States mail. Curtis had no telephone in Connecticut, nor any property in Connecticut other than the films previewed or rented, and Curtis did not visit its customers in Connecticut.

By way of letters dated December 21, 1985, and January 29,1986, Curtis duly protested and appealed the assessment with the department of revenue services. On May 27,1986, the commissioner issued a final determination letter in which he ruled that the assessment was proper and, therefore, denied Curtis’ appeal. Curtis then appealed the commissioner’s final determination to the Superior Court pursuant to General Statutes § 12-422. Before the trial court, Curtis claimed that the commissioner “wrongfully assessed sales or use tax against [it] because it [did] not have the level of contacts or nexus with Connecticut necessary to tax a foreign corporation; and it contends that without such contacts or nexus, the tax assessed against it by the commissioner violates the Due Process and Commerce Clauses.” Conversely, the commissioner contended that “personal property within a taxing state is a sufficient nexus between the taxing state and the entity being taxed to satisfy due process; [and] that Curtis is leasing and thus maintaining films and videotapes, which are personal property, within Connecticut.” The trial court sustained Curtis’ appeal, stating that “the presence in Connecticut of Curtis’ films which are then being leased to its customers in Connecticut is not the kind of‘property within [the taxing] State . . .’which constitutes a nexus sufficient to satisfy Constitutional requirements.” The commissioner then appealed the judgment of the trial court to the Appellate Court and we thereafter transferred the case to ourselves pursuant to Practice Book § 4023.

On appeal, the commissioner argues that the trial court erred in ruling that there was an insufficient nexus between Curtis and the state of Connecticut to subject Curtis to the Connecticut use tax. We disagree. Not every out-of-state seller can be held liable for obtaining payment for use tax without a constitutional violation occurring. Such a collection burden when placed upon an out-of-state seller triggers due process concerns as well as imposes a restraint upon interstate commerce. See National Bellas Hess, Inc. v. Department of Revenue, 386 U.S. 753, 756, 87 S. Ct. 1389, 18 L. Ed. 2d 505 (1967); L.L. Bean, Inc. v. Department of Revenue, 516 A.2d 820, 824 (Pa. Cmwlth. 1986). In determining whether a state tax comports with constitutional due process requirements, the United States Supreme Court has stated that the “ ‘simple but controlling question is whether the state has given anything for which it can ask return.’ ” National Bellas Hess, Inc. v. Department of Revenue, supra, quoting Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444, 61 S. Ct. 246, 85 L. Ed. 267 (1940). In regard to the question of restraint on interstate commerce, the United States Supreme Court has held that “ ‘[sjtate taxation falling on interstate commerce . . . can only be justified as designed to make such commerce bear a fair share of the cost of the local government whose protection it enjoys.’ ” National Bellas Hess, Inc. v. Department of Revenue, supra, quoting Freeman v. Hewit, 329 U.S. 249, 253, 67 S. Ct. 274, 91 L. Ed. 265 (1946). Accordingly, when examining the constitutionality of imposing the duty of collection of a use tax upon an out-of-state seller, the relevant legal inquiry is whether there exists “ ‘some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax.’ ” National Bellas Hess, Inc. v. Department of Revenue, supra, quoting Miller Brothers Co. v. Maryland, 347 U.S. 340, 344-45, 74 S. Ct. 535, 98 L. Ed. 744 (1954); see L.L. Bean, Inc. v. Department of Revenue, supra. The existence of such a link or nexus will thus turn upon the individual facts of each case. See L.L. Bean, Inc. v. Department of Revenue, supra.

“Case law has established that a sufficient nexus is found to exist where local agents of the seller are present in the taxing state. Felt & Tarrant Manufacturing Co. v. Gallagher, 306 U.S. 62, 59 S. Ct. 376, 83 L. Ed. 488 (1939); General Trading Co. v. State Tax Commission of the State of Iowa, 322 U.S. 335, 64 S. Ct. 1028, 88 L. Ed. 1309 (1944). A similar result has been reached where the seller has local retail stores which are present in the taxing state. Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 61 S. Ct. 586, 85 L. Ed. 888 (1941) .... And in National Geographic Society [v. California Equalization Board, 430 U.S. 551, 97 S. Ct. 1386, 51 L. Ed. 2d 631 (1977)], the presence in the taxing state of two offices which solicited advertisements and received the benefit of municipal protection (fire, police, etc.) was held a sufficient nexus.” L.L. Bean, Inc. v. Department of Revenue, supra, 824-25.

In Miller Brothers Co. v. Maryland, supra, however, the United States Supreme Court held that Maryland “could not constitutionally impose upon a Delaware seller an obligation to collect use taxes where the Delaware firm had no retail outlets or sales solicitors in Maryland, despite the presence of advertising in Maryland which resulted in substantial sales and the delivery of goods into Maryland by the seller using its own trucks and drivers.” L.L. Bean, Inc. v. Department of Revenue, supra, 825. Furthermore, in National Bellas Hess, Inc. v. Department of Revenue, supra, the United States Supreme Court found an insufficient nexus where the only contacts between the seller and the taxing state were through the United States mail or common carrier.

In National Geographic Society v. California Board of Equalization, supra, 559, the United States Supreme Court stated the following regarding National Bellas Hess, Inc.: “Illinois subjected appellant Bellas Hess, a national mail-order house centered in Missouri, to use tax liability based upon mail-order sales to customers in that State. Bellas Hess owned no tangible property in Illinois, had no sales outlets, representatives, telephone listings, or solicitors in that State, and did not advertise there by radio, television, billboards, or newspapers. It communicated with potential customers by mailing catalogues throughout the United States, including Illinois, twice a year and occasionally supplemented this effort by mailing out ‘flyers. ’ All orders for merchandise were mailed to Bellas Hess’ Missouri plant, and the goods were sent to customers by mail or common carrier. Bellas Hess held that, constitutionally, the basis for the requisite nexus was not to be found solely in Bellas Hess’ mail-order activities in the State. The Court’s opinion carefully underscored, however, the ‘sharp distinction . . . between mail order sellers with retail outlets, solicitors, or property within [the taxing] State, and those [like Bellas Hess] who do no more than communicate with customers in the State by mail or common carrier as part of a general interstate business.’ [National Bellas Hess, Inc. v. Department of Revenue, supra, 758.]”

In the present case, the facts are remarkably similar to those of National Bellas Hess, Inc. Just as all of Bellas Hess’ contacts with Illinois were via the United States mail or common carrier, all of Curtis’ contacts with Connecticut were via the United States mail or common carrier. The commissioner argues, however, that National Bellas Hess, Inc., is distinguishable from the instant case by virtue of the fact that, unlike Bellas Hess, Curtis did not merely sell, but rather, also leased property (films) in Connecticut. Therefore, the commissioner contends that, since Curtis retained title to the films while they were previewed or leased in Connecticut, Curtis had property in the state, which in turn, constituted a sufficient nexus to the state to subject Curtis to the state’s use tax. We disagree.

As to the question of “whether the state has given anything for which it can ask return,” under the facts of this case, we discern no significant difference between a sale and a three day preview or lease of the films. See National Bellas Hess, Inc. v. Department of Revenue, supra; Freeman v. Hewit, supra; Wisconsin v. J. C. Penny Co., supra. The commissioner relies on Union Oil Co. of California v. Board of Equalization, 60 Cal. 2d 441, 386 P.2d 496, 34 Cal. Rptr. 872 (1963), appeal dismissed, 377 U.S. 404, 84 S. Ct. 1629, 12 L. Ed. 2d 495 (1964), to support his assertion that a sufficient nexus existed. We find the facts of Union Oil Co. of California, however, to be inapposite. In Union Oil Co. of California, the California Supreme Court held that an out-of-state lessor of two oil tankers to a California lessee was liable for California’s use tax because the tankers were physically used within the state. This fact pattern is distinguishable from the present case, however, because, unlike Curtis’ films, the out-of-state lessor’s property clearly enjoyed benefits bestowed upon it by the local government such as use of harbors, and fire and police protection.

In short, just because Curtis leased instead of sold the films in Connecticut, does not mean that Curtis “ ‘received] benefits from [Connecticut] for which [Connecticut] has the power to exact a price.’ ” National Bellas Hess, Inc. v. Department of Revenue, supra, quoting Nelson v. Sears, Roebuck & Co., supra, 365. Although Curtis did have property (films) within Connecticut, such contact with Connecticut, like the contact of the appellant’s delivery trucks with Maryland in Miller Brothers Co. v. Maryland, supra, was de minimus, as the films were only in the state for three day periods, and did not benefit from the services of local government.

In conclusion, we hold that the trial court properly ruled that there was an insufficient nexus between Curtis and the state of Connecticut to subject Curtis to the Connecticut use tax pursuant to General Statutes § 12-411.

There is no error.

In this opinion Peters, C. J., Healey, Callahan, Covello and Hull, Js., concurred.

Shea, J.,

dissenting. I disagree with the conclusion reached by the majority that there is an insufficient “nexus” between the plaintiff and this state to justify, under the due process clause, the imposition of the duty to collect use taxes on transactions with customers in Connecticut. The fact that the plaintiff owns property in the form of training films in this state from which it receives rental fees of substantial sums is a sufficient relationship, as the commissioner contends. The protection of these films, like all property in this state, through the services of policemen and firemen is a benefit provided to the plaintiff by the state “for which it can ask return.” Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444, 61 S. Ct. 246, 85 L. Ed. 267 (1940).

The reliance of the majority opinion on National Bellas Hess, Inc. v. Department of Revenue, 386 U.S. 753, 87 S. Ct. 1389, 18 L. Ed. 2d 505 (1967), is misplaced, because the court in that case expressly recognized the “sharp distinction . . . drawn between mail order sellers with retail outlets, solicitors, or property within a State, and those who do no more than communicate with customers in the State by mail or common carrier as part of a general interstate business.” (Emphasis added.) Id., 758. This plaintiff does more than communicate with Connecticut customers, because it owns property of substantial value in this state from which it receives rental payments on a continuing basis. This business activity of the plaintiff is plainly distinguishable from the mail order sales considered in National Bellas Hess, Inc., in which the seller’s interest in the item sold terminates on passage of title to the buyer.

Accordingly, I dissent.

       “[General Statutes] Sec. 12-411. 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 or the acceptance or receipt of any services constituting a sale in accordance with subdivision (i) of subsection (2) of section 12-407, at the rate of seven and one-half per cent of the sales price of the property or the consideration paid for any such services.
      “(2) liability FOR TAX. Every person storing, accepting, consuming or otherwise using in this state services or tangible personal property purchased from a retailer is liable for the tax. His liability is not extinguished until the tax has been paid to this state, except that a receipt from a retailer engaged in business in this state or from a retailer who is authorized by the commissioner, under such regulations as he may prescribe, to collect the tax and who is, for the purposes of this chapter relating to the use tax, regarded as a retailer engaged in business in this state, given to the purchaser pursuant to subsection (3) of this section is sufficient to relieve the purchaser from further liability for the tax to which the receipt refers.
      “(3) collection by retailer. Every retailer engaged in business in this state and making sales of services or of tangible personal property for storage, acceptance, consumption or any other use in this state, not exempted under this chapter, shall, at the time of making a sale or, if the storage, acceptance, consumption or other use is not then taxable hereunder, at the time the storage, acceptance, consumption or use becomes taxable, collect the use tax from the purchaser and give to the purchaser a receipt therefor in the manner and form prescribed by the commissioner. For the purpose of uniformity of tax collection by the retailer the tax brackets set forth in subsection (3) of section 12-408 pertaining to the sales tax shall be employed in the computation of the tax imposed by this section.
      “(4) tax AS debt. The tax required to be collected by the retailer constitutes a debt owed by the retailer to this state.
      “(5) unlawful advertising. The provisions of subsection (4) of section 12-408 pertaining to the sales tax apply with equal force to the use tax.
      “(6) SEPARATE STATEMENT OF tax. The tax required to be collected by the retailer from the purchaser shall be displayed separately from the list price, the price advertised in the premises, the marked price, or other price on the sales check or other proof of sales.
      “(7) UNLAWFUL ACTS. Any person violating the provisions of subsection (3), (5) or (6) shall be fined five hundred dollars.
      “(8) registration of retailers. Every retailer selling services or tangible personal property for storage, acceptance, consumption or any other use in this state shall register with the commissioner and give the name and address of all agents operating in this state, the location of all distribution or sales houses or offices or other places of business in this state and such other information as the commissioner may require.
      “(9) PRESUMPTION OF PURCHASE FOR USE; RESALE CERTIFICATE. For the purpose of the proper administration of this chapter and to prevent evasion of the use tax and the duty to collect the use tax, it shall be presumed that services or tangible personal property sold by any person for delivery in this state is sold for storage, acceptance, consumption or other use in this state until the contrary is established. The burden of proving the contrary is upon the person who makes the sale unless he takes from the purchaser a certificate to the effect that the property is purchased for resale.
      “(10) EFFECT OF certificate. The certificate relieves the person selling the services or property from the burden of proof only if taken in good faith from a person who is engaged in the business of selling services or tangible personal property and who holds the permit provided for by section 12-409 and who, at the time of purchasing the services or tangible personal property, intends to sell it in the regular course of business or is unable to ascertain at the time of purchase whether the service or property will be sold or will be used for some other purpose.

        “(11) form OF certificate. The certificate shall be signed by and bear the name and address of the purchaser, shall indicate the number of the permit issued to the purchaser and shall indicate the general character of the service or tangible personal property sold by the purchaser in the regular course of business. The certificate shall be substantially in such form as the commissioner may prescribe.
      ‘ ‘(12) liability OF purchaser, (a) If a purchaser who gives a certificate makes any storage or use of the service or property other than retention, demonstration or display while holding it for sale in the regular course of business, the storage or use is taxable as of the time the service or property is first so stored or used.
      “(b) Notwithstanding the provisions of subdivision (a) of this subsection, any storage or use by a certificated air carrier of an aircraft for purposes other than retention, demonstration or display while holding it for sale in the regular course of business shall not be deemed a taxable storage or use by such carrier as of the time the aircraft is first stored or used by such carrier, irrespective of the classification of such aircraft on the balance sheet of such carrier for accounting and tax purposes.
      “(13) presumption of purchase from retailer. It shall be presumed that tangible personal property shipped or brought to this state by the purchaser was purchased from a retailer for storage, use or other consumption in this state.”

       The parties agree that the following is an accurate description of a typical transaction. If a customer wished to preview a film before deciding whether to purchase or rent it for training purposes, Curtis would provide the customer with a film to preview for a charge. In this transaction, Curtis would send the film to the customer, who would then be permitted to use the film for three days for evaluation purposes, not for training, and the film must then be returned to Curtis. At all times, Curtis remained the owner of the film. If a customer decided to rent or purchase the same film within sixty days, Curtis then deducted the preview charge from the rental or purchase price.

       Furthermore, the commissioner relies upon In re Heftel Broadcasting Honolulu, Inc., 57 Haw. 175, 554 P.2d 242 (1976), cert. denied, 429 U.S. 1073, 97 S. Ct. 811, 50 L. Ed. 2d 791 (1977), to support his assertion that a sufficient nexus existed. This case, too, is inapposite. In Heftel, the Supreme Court of Hawaii upheld an assessment of a privilege tax by the state of Hawaii against taxpayers located out-of-state who licensed films to be shown on television in Hawaii. Specifically, CBS Enterprises, Inc., entered into license agreements under which Hawaii television stations were granted the right to show certain CBS films. In finding an adequate nexus to override the constitutional prohibitions, however, the court held that “physical presence of CBS’ films was not the only contact with Hawaii,” and also relied on the licensing arrangement for the films as constituting a continuing activity in the state of Hawaii. Id., 182.


source: Caselaw Access Project

author: Glass, J.

license: Public Domain

text:
    Jagdish M. Sanghavi v. The Paul Revere Life Insurance Company
    (13810)
    Peters, C. J., Healey, Callahan, Glass and Covello, Js.
    Argued January 4
    decision released March 27, 1990

      J. Kevin Golger, for the appellant-appellee (defendant).

      Richard J. Shapiro, for the appellee-appellant (plaintiff).
   Glass, J.

This appeal concerns the interpretation and application of certain provisions of an income option rider (rider) to a disability insurance policy that was issued by the defendant, The Paul Revere Life Insurance Company (Paul Revere), to the plaintiff, Jagdish Sanghavi.

The parties have agreed, by a stipulation of facts dated October 13,1987, that Paul Revere issued to Sanghavi a disability policy on July 7,1976, that provided for indemnity benefits of $600 per month during the period of disability. For additional consideration, Paul Revere issued a rider to the policy that provided for seven future income options, each in the amount of $100 per month, that could be exercised by Sanghavi pursuant to the terms and conditions of the policy until July 7,1990. Specifically, the rider stated that monthly payments would be increased, regardless of the status of Sanghavi’s health, provided that he met the following four conditions:

“1. That the insured submit a written request and pay an additional premium, unless the premium is waived, within prescribed time limits.
“2. The requested increase cannot exceed the maximum disability income coverage then being offered by the company to new applicants of the same classification of risk as is the insured, according to the company’s then published underwriting and participation limits.
“3. The insured’s monthly earned income is sufficient to qualify for an increase on the anniversary option date according to the company’s then published income limits.
“4. The insured may exercise only one increase during each period of the continuous disability regardless of the number of anniversary options which become due during such disability.”

On July 7,1978, Sanghavi completed and forwarded an application to exercise the first option pursuant to the rider. His application was approved and his monthly benefit was increased by $100 to $700 per month.

In February, 1979, Sanghavi was declared to be totally disabled and has remained totally disabled since that time. In accordance with the policy, Paul Revere has paid Sanghavi $700 per month because of his disability and continues to make such payments to him. By correspondence dated May 24, 1982, Sanghavi attempted to exercise two options to purchase additional monthly benefits which, if granted, would have increased his monthly benefits to $900. Paul Revere, however, refused to honor Sanghavi’s request, claiming, pursuant to condition three of the rider: (1) that Sanghavi failed to provide adequate information concerning his income and other sources of disability insurance; and (2) that Sanghavi’s income was insufficient to warrant such an increase in monthly benefits.

Sanghavi then commenced this action by filing a three count complaint dated June 1,1983. In the first count, he alleged that Paul Revere breached its contract with him by not increasing his monthly benefits in accordance with the rider. The second count alleged that Paul Revere’s issuance of the insurance policy and refusal to grant increased benefits constituted a violation of General Statutes § 42-110b, the Connecticut Unfair Trade Practices Act (CUTPA). In his third count, Sanghavi sought a declaratory judgment entitling him to all indemnity increases that would have fallen due subsequent to the commencement of the action.

By memorandum of decision dated June 13,1988, the state trial referee, Hon. Milton J. Herman, found in favor of Sanghavi as to the first and third counts and as to Paul Revere on the second count. In particular, the trial court found that conditions three and four of the rider were invalid, and, as a result, retroactively awarded Sanghavi the two increase options that he attempted to exercise on May 24,1982. The trial court also held, pursuant to the third count, that Sanghavi was entitled to all future increase options as they became due. Finally, the trial court found “nothing in the stipulated factual situation to support” Sanghavi’s CUTPA claim. Each party then appealed the adverse portions of the decision to the Appellate Court, and, pursuant to Practice Book § 4023, this court transferred the appeal to itself.

Specifically, Paul Revere claims on appeal that the trial court erred: (1) in finding conditions three and four of the rider to be invalid, and, therefore, awarding Sanghavi the two increase options that he had attempted to exercise; and (2) in ruling that Sanghavi was entitled to all future increases in disability benefits. Sanghavi, on cross appeal, argues that the trial court erred in not finding Paul Revere’s actions pursuant to his policy to be a violation of CUTPA. In addition, Sanghavi asserts that the trial court’s finding that conditions three and four were invalid could have been supported on broader grounds than those set forth in the memorandum of decision. We find no error, except in regard to the trial court’s invalidation of condition four of the rider. As a result, the ruling of the trial court stands, except that Sanghavi should be allowed only one increase, instead of two.

I

Paul Revere does not take issue with Sanghavi’s eligibility as to the first two conditions in the rider. Therefore, the dispositive issue in this appeal is whether the trial court correctly ruled that conditions three and four were invalid, and, therefore, Sanghavi, having met the only two valid conditions in the rider, was entitled to the increases in question.

A

The trial court ruled that condition three was invalid because it violated General Statutes § 38-167. We agree. “The privilege of engaging in the insurance business within this state necessarily implies the requirement of conforming to existing statutes . . . .” Whitfield v. Empire Mutual Ins. Co., 167 Conn. 499, 507, 356 A.2d 139 (1975). “[A]ny provisions of a private contract of insurance which conflict with the statutes or regulations must give way to the latter.” Safeco Ins. Co. v. Vetre, 174 Conn. 329, 333, 387 A.2d 539 (1978). General Statutes § 38-167 mandates that each policy of health or accident insurance delivered to any person in Connecticut shall contain the following language, or alternative approved language that is not less favorable to the insured: “ ‘ENTIRE CONTRACT: CHANGES’: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance.” As the trial court noted, “[t]he purpose of the ‘entire contract’ provision is to apprise the insured of all his rights, and duties under the agreement. Such an ‘entire contract’ provision was included in [Sanghavi’s] disability policy.”

Condition three, however, bases the determination of whether an increase in benefits will be granted by reference to “the company’s then published income limits.” It is undisputed that such limits were not appended to Sanghavi’s policy, and at no time were such limits made available to him. The trial court thus struck condition three from the rider, ruling that it was violative of § 38-167 because the income limitation tables were not appended to the policy. In particular, the trial court stated that “by failing to attach or provide the plaintiff with . . . income limits, the defendant failed to present the plaintiff with the entire contract or to apprise him of all his rights under the policy. Rather, the defendant drafted its policy in such a way that the plaintiff’s right to increased benefits can be modified, controlled and defined solely by the defendant. This is contrary to the purpose of [General Statutes] § 38-167. . . . Therefore, [condition three] must give way to the statute in order to give full effect and meaning to the ‘entire contract’ provision.” We agree with this analysis of the trial court which properly applied the relevant law to this issue.

B

Condition four limits the insured to only one increase during each period of disability. The trial court held that this condition was invalid and, therefore, awarded Sanghavi the two increases that he had requested during his period of disability. Paul Revere, however, asserts that the trial court erred in invalidating condition four. We agree.

The trial court’s award implicitly rested on one of three grounds, as Sanghavi suggests, that condition four may be invalid: (1) because it is in conflict with the rider itself, creating an ambiguity in the contract that must be resolved against the insurance company; (2) because it is in violation of General Statutes § 38-166 (a) (5); and (3) because it is inconspicuous and unenforceable.

Sanghavi claims that condition four’s limitation of one increase during a period of disability is in conflict with the rider’s provision of guaranteed physical insurability. Specifically, Sanghavi contends that, given the fact that the rider provides that his health would not be a factor in his application for increases in benefits, condition four’s taking into account of the insured’s disability circumvents this guarantee. We disagree. In particular, we perceive a distinction between “health” and “disability.” Sanghavi bargained for a situation whereby he could, except during periods of disability, apply for increases in benefits without his health being at issue. Thus, by the terms of the policy, if Sanghavi did indeed become disabled, he would then be limited to only one increase.

Sanghavi also contends that condition four is violative of General Statutes § 38-166 (a) (5). Specifically, he argues that § 38-166 “requires that exceptions and reductions to indemnity be isolated and properly captioned or, if they relate to a particular benefit provision, they should be included with the particular benefit to which the said exception or reduction applies. In the rider issued to the plaintiff, neither requirement has been fulfilled. There is no paragraph which is captioned in compliance with this statute nor does the limitation appear in the same paragraph entitled ‘Benefits.’ ” We do not believe, however, that § 38-166 is applicable to condition four, because condition four is in fact a condition and not an exception. “ ‘The object of an exception is to exclude that which would otherwise be included, to take special cases out of a general class.’ ” Young v. American Fidelity Ins. Co., 2 Conn. App. 282, 286, 479 A.2d 244 (1984), quoting Black’s Law Dictionary (5th Ed.). Condition four does not operate to reduce indemnity benefits to which the insured is already entitled. Rather, it operates prospectively, as a condition that must be satisfied before the insured can exercise additional options.

In sum, condition four of the rider clearly and unambiguously states that the insured has bargained for only one increase in monthly benefits during a period of disability. We are unpersuaded by Sanghavi’s assertion that condition four is invalid, and, therefore, hold that the trial court erred in striking condition four from the rider.

II

Finally, on the cross appeal, Sanghavi argues that the trial court erred in failing to sustain his CUTPA claim. The trial court stated: “There is nothing of evidentiary significance that the court can rely on to support the plaintiffs position in support of this count.” Sanghavi asserts, however, that his CUTPA claim is supported by the facts of the stipulation. We disagree.

CUTPA provides that “[n]o person shall engage in unfair ... or deceptive acts or practices in the conduct of any trade or commerce.” General Statutes § 42-110b. In determining whether the practice in question violates CUTPA, courts employ the following criteria: “ ‘ “(1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — whether, in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers . . . . ” ’ ” Mead v. Burns, 199 Conn. 651, 664-65, 509 A.2d 11 (1986), quoting FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 244 n.5, 92 S. Ct. 898, 31 L. Ed. 2d 170 (1972). After examination of the stipulated facts in light of the above criteria, we agree with the trial court that there is no proper evidentiary support for Sanghavi’s assertion of a CUTPA violation.

In conclusion, we hold that the trial court correctly ruled that condition three of the rider was invalid. We also hold, however, that the trial court erred in invalidating condition four. As a result, Sanghavi is entitled only to one increase in benefits.

There is error in part on the appeal, the judgment is set aside and the case is remanded with direction to render judgment awarding to the plaintiff one retroactive increase only; there is no error on the cross appeal.

In this opinion the other justices concurred.

       Sanghavi also argues that condition three is invalid as it is an illusory promise and is ambiguous and in conflict with itself. Because we hold condition three to be invalid pursuant to General Statutes § 38-167, we need not, however, examine Sanghavi’s assertions regarding these alternate grounds for invalidating condition three.

       General Statutes § 38-166 (a) (5) provides: “[T]he exceptions and reductions of indemnity are set forth in the policy and, except as provided in section 38-167, are printed, at the insurer’s option, either included with the benefit provision to which they apply, or under an appropriate caption such as ‘EXCEPTIONS’ or ‘EXCEPTIONS AND REDUCTIONS,’ provided, if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies.”

       The future income option rider reads, in part, as follows: “INCREASE IN MONTHLY INDEMNITY OPTION. The Company agrees, subject to the terms and conditions hereinafter set forth and while this Benefit and the policy to which it is attached are in force, to increase, without evidence of physical insurability, the Monthly Indemnity for Total Disability specified in the Policy Schedule of the policy in an amount equal to the Unit of Monthly Indemnity Increase or portion thereof set. forth for this Benefit in the Table of Supplementary Benefits of the Policy Schedule upon each of the Anniversary Option Dates described below, provided (1) the written request of the Insured for such Monthly Indemnity Increase or portion thereof is received by the Company at its Home Office within sixty days immediately preceding an Anniversary Option Date and the required first additional premium is paid during such period or not later than thirty-one days after the Anniversary Option Date, unless the payment of such premium is waived in accordance with the ‘Premium’ provision below; and (2) such Monthly Indemnity Increase together with similar total disability indemnity benefits under the policy and all other valid disability income coverage (excluding Workmen's Compensation benefits) provided by this or any other insurer or by any state, provincial or federal governmental agency does not exceed the maximum disability income coverage being offered by the Company to new applicants of the Insured’s classification of risk on the Anniversary Option Date according to the Company’s then published underwriting and participation limits; and (3) the Insured’s monthly earned income is sufficient to qualify for an increase in Monthly Indemnity on the Anniversary Option Date according to the Company’s then published income limits; and provided further that the Insured may exercise only one Increase in Monthly Indemnity Option during each period of the continuous disability regardless of the number of Anniversary Options which become due during such disability.
      “For purposes of this Benefit, ‘earned income’ means the greater of the monthly earnings of the Insured on the date of request for such Monthly Indemnity Increase or his average monthly earnings during any consecutive two-year period in which his average monthly rate of earnings is the highest in the last five years immediately preceding the date of such request, and shall not include any investment income or other income not derived from the Insured’s vocational activities.”

       Furthermore, we conclude that condition four is not inconspicuous and therefore invalid.

       In addition, our holding condition four to be valid necessarily renders erroneous the trial court’s declaratory judgment granting Sanghavi the right to receive future income option increases as they became due. Given that Sanghavi has been totally disabled since 1979, under the terms of condition four, he is not entitled to exercise any future options, aside from the one increase that we have upheld, until such time as he ceases to be disabled.


author: Glass, J.,

text:
    Personnel Director, Department of Income Maintenance v. Freedom of Information Commission et al.
    (13757)
    Shea, Callahan, Glass, Covello and Hull, Js.

      Argued January 11
    decision released March 27, 1990

      Victor R. Perpetua, commission counsel, for the appellant (named defendant).

      Arnold B. Feigin, assistant attorney general, with whom were Arnold I. Menchel, assistant attorney general, and, on the brief, Clarine Nardi Riddle, attorney general, for the appellee (plaintiff).
   Glass, J.,

This is an appeal by the defendant freedom of information commission (FOIC) from a judgment sustaining an appeal by the plaintiff, the personnel director of the department of income maintenance (director), from a decision of the FOIC. We find no error.

The facts are essentially undisputed. Daniel Sorensen, the complainant, who was an employee of the department of income maintenance (DIM), together with twenty-nine other persons, took a merit examination for the position of program supervisor within the DIM. Sorensen was unsuccessful in obtaining the position, and because he was concerned that he had been denied fair and impartial consideration for the position, requested, by a letter dated March 25,1987, that the director provide him with copies of all instructional material and criteria used by the grading panel to evaluate material submitted by the applicants, all material submitted by the applicants, and the official personnel records of each applicant. Sorensen later modified his request to include only the most recent evaluation of each applicant contained in their respective personnel files. The director notified Sorensen that she was sending him copies of the following documents:

“Job Specification — Program Supervisor
“Position Analysis — Merit Promotion Plan (MPS-2)
“Promotional Announcement — Merit Promotion Plan (MPS-21A)
“Program Supervisor — (Public Assistance) Factors and Rating Criteria
“Rating Conversion Guidelines
“Examination Certification List — Merit Promotion Plan (MPS-4)
“Rate Participants (MPS-5).”

In addition, the director sent Sorensen a copy of his complete examination package. At the hearing on the complaint conducted by FOIC commissioner E. Bartlett Barnes, Sorensen acknowledged that he had received all of these documents. Therefore, at the time of the FOIC hearing, the only requested records at issue were the personnel records of the other applicants. As a result of the hearing, the commissioner issued a report that was subsequently adopted by the FOIC as its final decision.

In that decision, the FOIC found that General Statutes § 5-225 does not explicitly or implicitly prohibit the public from exercising its rights under the Freedom of Information Act (FOIA) to request copies of a candidate’s papers, markings and other such documents. The FOIC also found that an agency cannot by regulation supersede the mandate of the disclosure provisions of the FOIA, and, therefore, § 5-225-1 of the Regulations of Connecticut State Agencies can exempt the examination materials only to the extent that that regulation does not conflict with §§ 1-15 and 1-19 (a) of the General Statutes. The FOIC found further that the records compiled by the director as part of the program supervisor merit promotional examination were recorded data used to determine promotions of state employees, and that those records were public records as defined in General Statutes § l-18a (d). In addition, the FOIC found that each merit promotion examination file contained an evaluation of the candidate’s job experience, performance appraisals, educational history, previous employment, salary history, training, ratings supplied by an evaluator and a personality assessment of the candidate.

The FOIC ordered the director to release to Sorensen the applications and evaluations of the other twenty-nine applicants for the position of program supervisor, deleting all references to medical information regarding each applicant or member of the applicant’s family. The practical effect of the FOIC’s order was to compel the director to release to Sorensen each of the twenty-nine applicants’ personnel files. The director appealed the FOIC’s order to the Superior Court, which held that the information contained in the requested personnel files fell within the exemption from disclosure provided by General Statutes § 1-19 (b) (2). The director’s appeal was, therefore, sustained. The FOIC appealed to the Appellate Court claiming: (1) that the trial court had exceeded the scope of its review in determining the applicability of General Statutes § 1-19 (b) (2) to the records at issue; and (2) that the trial court had erred in concluding that General Statutes §§ 5-225 and 5-237 condition the public’s right of access to records in the custody of DIM. This court, pursuant to Practice Book § 4023, transferred the appeal to itself.

We will consider the claims of the FOIC in the reverse order of that stated above. Accordingly, we first consider the FOIC’s claim that the trial court erred in concluding that General Statutes §§ 5-225 and 5-237 condition the public’s right of access to personnel records in the custody of DIM. The FOIC argues that the subject records constitute public records that are not exempt from disclosure under General Statutes § 1-19 (a) by virtue of §§ 5-225 and 5-237. Section 1-19 (a) provides in pertinent part that “[ejxcept as otherwise provided by any federal law or state statute, all records maintained or kept on file by any public agency . . . shall be public records and every person shall have the right to inspect such records . . . .”

The FOIC argues that §§ 5-225 and 5-237 “do not provide a bar to the disclosure of the subject records, and that the plaintiff [director] failed to prove that any information ordered disclosed is statutorily exempt from disclosure.” The director argues that §§ 5-225 and 5-237 are state statutes that trigger the application of the “[e]xcept as otherwise provided by . . . state statute” exception to § 1-19 (a), and therefore, the requested personnel files of applicants other than Sorensen fall outside the ambit of public records. Although the FOIC concedes that the two statutes guarantee the rights of state employees to inspect promotional examination materials and service ratings, nonetheless, the FOIC argues that these two statutes do not condition in any way the public’s right of access to these same records.

Section § 5-237 provides classified service employees access to their “service ratings” at reasonable times during office hours. Section § 5-225, in pertinent part, unambiguously provides that “[t]he papers, markings and other items used in determining the final earned ratings, other than the questions and other materials constituting the test itself, shall be open to inspection by the candidate, subject to such regulations as may be issued by the commissioner of administrative services.” (Emphasis added.) The FOIC concedes that both §§ 5-225 and 5-237 are clear and unambiguous and, therefore, are not subject to statutory construction. “When the language of a statute is plain and unambiguous, we need look no further for interpretive guidance because it is assumed that the language itself reflects the legislative intent. Rhodes v. Hartford, [201 Conn. 89, 513 A.2d 124 (1986)]; 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, reh. denied, 475 U.S. 1061, 106 S. Ct. 1290, 89 L. Ed. 2d 597 (1986).” Commissioner v. Freedom of Information Commission, 204 Conn. 609, 620, 529 A.2d 692 (1987).

Thus, we are persuaded that the disclosure and inspection referred to under § 5-225 applies only to the candidate who has taken the examination. Otherwise, § 5-225 would be superfluous and useless legislation, since the public, including state employees, would be entitled to disclosure of a candidate’s promotional examination records under § 1-19 (a). Equally persuasive is the regulation, § 5-225-1, which clarifies § 5-225. Section 5-225-1 of the regulations contains such references as: the “applicant” who has taken the examination; “he did not pass”; “inspect his papers”; “his [rJesuits of [ejxamination(s)’ ”; “his examination results”; “he disagrees”; and “his point of view.” All of these pronouns refer only to the person who has taken the examination.

In conclusion, § 1-19 (a) provides that all records kept on file by public agencies shall be public records “[ejxcept as otherwise provided by any federal law or state statute.” We hold that §§ 5-225 and 5-237 provide such an exception for the requested personnel files, which contained the promotional examination records of candidates for program supervisor other than the candidate’s own records.

Because of our determination that §§ 5-225 and 5-237 are statutory exceptions within the purview of § 1-19 (a), it is unnecessary to consider the FOIC’s claim that the trial court exceeded the scope of its review in determining the applicability of § 1-19 (b) (2) and the balancing test between disclosure and the invasion of privacy regarding the records at issue in this case.

There is no error.

In this opinion the other justices concurred.

       Daniel J. Sorensen, by letter dated March 25,1987, requested that the director provide him with the following:
      “(1) Copies of all instructional material and criteria used by the panel in grading the test material submitted by the applicants to test # 152-5467.
      “(2) Copies of all test material submitted by all applicants to test # 152-5467.
      “(3) Copies of material used by the panel in grading the material submitted by the applicants to test # 152-5467.
      “(4) Copies of all the official personnel records of all applicants to test # 152-5467.”

       “[General Statutes] Sec. 5-225. notices of eatings on examinations, candidate’s eight of inspection. All persons competing in any test shall be given written notice of their final earned ratings and except in the case of an examination administered in accordance with the provisions of subsection (b) of section 5-216, shall be given written notice of their relative standing upon the eligible lists or of their failure to attain a plaee upon such lists. The papers, markings and other items used in determining the final earned ratings, other than the questions and other materials constituting the test itself, shall be open to inspection by the candidate, subject to such regulations as may be issued by the commissioner of administrative services.”

       Section 5-225-1 of the Regulations of Connecticut State Agencies provides: “examination results; review of papers
      “(a) An applicant will be notified of the results of his examination as soon as practicable following promulgation of the employment list or following grading of the phase of the examination which he did not pass.
      “(b) The application and answer papers of an applicant shall be open to his inspection for sixty days following promulgation of the employment list, or for the sixty days following notification that he did not pass a phase of the examination provided that
      “(I) The applicant requests an appointment in advance to inspect his papers and presents his ‘Results of Examination(s)’ slip at the time of appointment;
      “(2) The applicant inspecting his answer papers shall limit such inspection to a length of time which the Commissioner of Administrative Services or his designated representative shall prescribe as reasonable; and
      “(3) The applicant shall not copy any material provided to him for his inspection.
      “(c) When an applicant questions the accuracy of his score on a phase or phases of an examination, he may file a written request for review by the Commissioner of Administrative Services provided that such request is filed no later than ten days after the applicant has inspected his examination results.
      “(d) The applicant’s request shall state the area or areas with which he disagrees or wherein the results of the examination are allegedly incorrect and shall set forth his arguments, citing the reasons, or the authority where applicable, supporting his point of view.
      “(e) The Commissioner of Administrative Services or his representative shall make a final determination of the scoring within 21 days of the receipt of the request for review.”

       “[General Statutes] Sec. 1-15. application for copies of public records. certified copies. FEES. Any person applying in writing shall receive, promptly upon request, a plain or certified copy of any public record. The fee for any copy provided in accordance with this section and sections l-18a, 1-19 to l-19b, inclusive, and 1-21 to l-21k, inclusive, shall not exceed twenty-five cents per page. If any copy provided in accordance with said sections requires a printout or transcription, or if any person applies for a printout or transcription of a public record, the fee for such printout or transcription shall not exceed the cost thereof to the public agency. A public agency may require the prepayment of any fee required or permitted under this chapter if such fee is estimated to be ten dollars or more. The sales tax provided in chapter 219 shall not be imposed upon any transaction for which a fee is required or permissible under this section or section l-21c. The public agency shall waive any fee provided for in this section when (1) the person requesting the records is an indigent individual, (2) the records located are determined by the public agency to be exempt from disclosure under subsection (b) of section 1-19, or (3) in its judgment, compliance with the applicant’s request benefits the general welfare. Except as otherwise provided by law, the fee for any person who has the custody of any public records or files for certifying any copy of such records or files, or certifying to any fact appearing therefrom, shall be for the first page of such certificate, or copy and certificate, one dollar; and for each additional page, fifty cents. For the purpose of computing such fee, such copy and certificate shall be deemed to be one continuous instrument.”
      “[General Statutes] Sec. 1-19. access to public records, exempt records. (a) Except as otherwise provided by any federal law or state statute, all records maintained or kept on file by any public agency, whether or not such records are required by any law or by any rule or regulation, shall be public records and every person shall have the right to inspect such records promptly during regular office or business hours or to receive a copy of such records in accordance with the provisions of section 1-15. Any ageney rule or regulation or part thereof, that conflicts with the provisions of this subsection or diminishes or curtails in any way the rights granted by this subsection shall be void. Each such agency shall keep and maintain all public records in its custody at its regular office or place of business in an accessible place and, if there is no such office or place of business, the public records pertaining to such agency shall be kept in the office of the clerk of the political subdivision in which such public agency is located or of the secretary of the state, as the case may be. Any certified record hereunder attested as a true copy by the clerk, chief or deputy of such agency or by such other person designated or empowered by law to so act, shall be competent evidence in any court of this state of the facts contained therein. Each such agency shall make, keep and maintain a record of the proceedings of its meetings.”

       General Statutes § l-18a (d) provides in pertinent part: “ ‘Public records or files’ means any recorded data or information relating to the conduct of the public’s business prepared, owned, used, received or retained by a public agency, whether such data or information be handwritten, typed, tape-recorded, printed, photostated, photographed or recorded by any other method.”

       General Statutes § 1-19 (b) (2) provides: “Nothing in sections 1-15, l-18a, 1-19 to l-19b, inclusive, and 1-21 to l-21k, inclusive, shall be construed to require disclosure of . . . (2) personnel or medical files and similar files the disclosure of which would constitute an invasion of personal privacy.”

         “[General Statutes] Sec. 5-237. service standards and ratings, (a) The commissioner of administrative services shall issue regulations for the administration of such service rating system as he or she shall deem practicable. Such service ratings shall be used in determining salary and wage increases and decreases within the limits provided by statute and within the limits of the schedules of compensation, as a means of discovering employees in the classified service who, by reason of their unsatisfactory service, ought to be demoted or dismissed. Reports of service ratings or of information to be used as a basis for service ratings shall not be required for any employee or group of employees oftener than once in three months without the consent of the appointing authorities. Any employee in the classified service shall have the right, at reasonable times during office hours, to inspect his service ratings, as shown by the records of the department of administrative services or of the department, agency or institution in which such employee is employed.
      “(b) Notwithstanding the provisions of subsection (a) of this section, the director of personnel and labor relations shall provide for the administration of a performance appraisal system as he or she shall deem practical for employees whose positions have been designated as managerial, except in the legislative and judicial departments. Such performance appraisals shall be used in determining managerial compensation in accordance with the provisions of subsection (d) of section 5-210, and shall be required periodically as determined by the director of personnel and labor relations.”
      See footnote 2, supra, for General Statutes § 5-225.


author: Hull, J.

text:
    Commission on Hospitals and Health Care v. Kenneth M. Lakoff et al.
    (13812)
    Peters, C. J., Healey, Glass, Hull and Santaniello, Js.

      Argued January 9
    decision released March 27, 1990

      David K. Jaffe, with whom, on the brief, was Hollace P. Brooks, for the appellants (defendants).

      Henry A. Salton, assistant attorney general, with whom were Patricia Gerner, assistant attorney general, and, on the brief, Clarine Nardi Riddle, attorney general, and Richard J. Lynch, assistant attorney general, for the appellee (plaintiff).
   Hull, J.

The dispositive issue in this appeal is whether the defendants, Kenneth M. Lakoff et al., were required by law to seek permission from the plaintiff, the commission on hospitals and health care (commission), prior to providing magnetic resonance imaging (MRI) services at the Cromwell Imaging Center located in the town of Cromwell. The defendants acquired a Technicare 0.6 Teslacon MRI system and began offering MRI services to the public on March 21, 1988. Upon investigation, the commission determined that the defendants’ failure to secure the approval of the commission prior to acquiring the MRI system and instituting the MRI services was in violation of General Statutes §§ 19a-154 and 19a-155. Consequently, the commission brought an enforcement action under General Statutes § 19a-159, seeking temporary and permanent injunctions barring the defendants from providing MRI services at the Cromwell Imaging Center until such time as the defendants had secured the necessary commission approval. A de novo hearing on the merits of the commission’s action was held, after which the court rendered judgment, in part, for the commission and, accordingly, granted the requested relief. From this judgment the defendants appeal. We find no error.

The following facts are relevant to this appeal. The commission filed a three count complaint against the defendants. The first count alleged a violation of § 19a-154 in that the defendants, in operating a health care facility, had failed to seek permission from the commission prior to their introduction of an additional function or service into their program of health care. The second and third counts alleged that the defendants had failed to seek permission from the commission prior to spending in excess of $400,000 for major medical equipment, in violation of § 19a-155 (a), and for imaging equipment, in violation of § 19a-155 (b).

In considering the issues presented by the commission’s action, the court made the following factual findings: “The defendants are Kenneth M. Lakoff, M.D. and a series of interlocking corporations which together own and operate a radiological center and an MRI center in the same quarters (but in different suites) of a building in Cromwell. Separate corporations have acquired the equipment in question . . . from the leasing and operating corporations. Separate corporations operate the radiology service and the MRI service. For the purposes of this action, the court will find that the defendants are jointly controlled by Dr. Lakoff and Medscan, Inc.”

The court further found that the “MRI Service is performed for the defendants’ MRI operating company, MRI of Cromwell Diagnostic, P.C., by an independent group of radiologists. The service is strictly a diagnostic function. This company receives virtually no business on its own but only from referring physicians. Hospitals make no referrals to it, nor does the company perform any imaging services for hospitals.”

With these facts as its backdrop, the court rendered judgment in favor of the commission on the first count. The court’s ruling was based on its conclusion that the defendants operate a “health care facility” under § 19a-145 and are thus subject to the approval provision of § 19a-154. With respect to the second and third counts, the court found in favor of the defendants, concluding that the defendants had not exceeded the statutory limit of $400,000 in the acquisition of the MRI system. Given its ruling on the first count, the court granted the requested injunctions, ordering that the defendants cease operating and providing MRI services at the Cromwell Imaging Center until such time as they received the necessary commission approval. On appeal the defendants claim that the court erred in determining that the defendants were subject to the approval provision of § 19a-154 because: (1) the defendants are not a “health care facility” as defined by § 19a-145; and (2) the defendants are not introducing “an additional function or service” as that term is used in § 19a-154 (a).

I

We turn first to the defendants’ claim that the court erred in its conclusion that the defendants operate a “health care facility” as defined by our statutes.

General Statutes § 19a-145 provides in pertinent part: “ ‘health care facility or institution’ means any facility or institution engaged primarily in providing services for the prevention, diagnosis and treatment of human health conditions, including, but not limited to, home health care agencies, homemaker-home health aide agencies . . . clinical laboratory or central service facilities serving one or more health care facilities, practitioners or institutions . . . . ” (Emphasis added.) The court determined that “the legislature intended to include in this definition institutions which perform all of the health care functions of diagnosis, treatment and prevention, but in addition thereto, certain others which the statute specifically designates.” Because the defendants perform only a (¿agnostic function, the court found that the defendants do not fall within the parameters of the statute’s general definition. The court determined, however, that the additional facilities designated by the statute are exceptions to the general definition of a health care facility and are not required to perform all of the services of prevention, diagnosis, and treatment. The court then concluded that “the MRI Center operated by the defendants falls within the statutory definition of a central service facility serving practitioners,” and thus held that the defendants are a “health care facility or institution” under § 19a-145 and as such are subject to the provisions of § 19a-154.

The defendants argue that the trial court’s conclusion is erroneous for three reasons: (a) the defendants do not provide all the services necessary to be categorized as a “health care facility or institution”; (b) MRI of Cromwell Diagnostic, P.C., is not a “central service facility”; and (c) to categorize the defendants as a “health care facility” violates the defendants’ constitutional right to equal protection of the laws. We are not persuaded by the defendants’ arguments.

A

The definition of “health care facility or institution” contained in § 19a-145 is comprised of two sections, a general definition and a list of specific facilities included thereunder. The trial court concluded that the defendants are a “health care facility,” not under the general definition, but as a “central service facility,” a specifically designated exception to the general definition. While we agree with the trial court that the defendants are a “central service facility,” discussed in part B, infra, we disagree with the court’s reading of the general definition of “health care facility or institution” in § 19a-145.

The general definition of a health care facility as “any facility or institution engaged primarily in providing services for the prevention, diagnosis and treatment of human health conditions”; General Statutes § 19a-145; clearly applies to the specific operations listed after this definition. In leading from the general definition to the specific types of service organizations listed thereafter, the statute states: “including, but not limited to . . . central service facilities . . . . ” (Emphasis added.) General Statutes § 19a-145. To hold, as did the trial court, that the specific facilities listed in the statute are exceptions to the general definition would be to ignore the plain meaning of the words employed and the inexorable logic of the sentence structure of the statute. Therefore, the question to be answered in this appeal is the meaning of the general definition. The commission argues that the word “and” in the phrase “prevention, diagnosis and treatment” should be construed as “or” so that an entity performing only one of the three functions would meet the definition of a “health care facility or institution.” We agree.

We will review § 19a-145 in the light of well established principles that require us to ascertain and give effect to the apparent intent of the legislature. Rhodes v. Hartford, 201 Conn. 89, 93, 513 A.2d 124 (1986); Norwich v. Silverberg, 200 Conn. 367, 370-71, 511 A.2d 336 (1986); State v. Kozlowski, 199 Conn. 667, 673, 509 A.2d 20 (1986); 2A J. Sutherland, Statutory Construction (4th Ed. Sands 1984) § 45.05. An examination of the overall structure of § 19a-145 reveals that many of the itemized facilities do not provide all three of the services in question. Thus, the proper interpretation to be given the word “and” is not clear and unambiguous. “When we are confronted . . . with ambiguity in a statute, we seek to ascertain the actual intent by looking to the words of the statute itself; State v. Kozlowski, supra, 673; Dukes v. Durante, 192 Conn. 207, 214, 471 A.2d 1368 (1984); the legislative history and circumstances surrounding the enactment of the statute; State v. Kozlowski, supra, 673; DeFonce Construction Corporation v. State, 198 Conn. 185, 187, 501 A.2d 745 (1985); State v. Parmalee, 197 Conn. 158, 161, 496 A.2d 186 (1985); State v. Delafose, [185 Conn. 517, 522, 441 A.2d 158 (1981)]; and the purpose the statute is to serve. Peck v. Jacquemin, 196 Conn. 53, 64, 491 A.2d 1043 (1985); Verrastro v. Sivertsen, 188 Conn. 213, 221, 448 A.2d 1344(1982); Robinson v. Unemployment Security Board of Review, 181 Conn. 1, 8, 434 A.2d 293 (1980).” Rhodes v. Hartford, supra, 93. “ ‘It is an elementary rule of construction that statutes should be considered as a whole, with a view toward reconciling their separate parts in order to render a reasonable overall interpretation; the application, moreover, of common sense to the statutory language is not to be excluded.’ ” Dukes v. Durante, supra, 214, quoting La Providenza v. State Employees’Retirement Commission, 178 Conn. 23, 29, 420 A.2d 905 (1979).

“To effectuate the intention of the legislature . . . ‘and’ may be construed to mean ‘or.’ 3 C.J.S. 1068. What the legislative intent expressed by the phrase [in question] as used in the statute is cannot be determined by resort to a definition of the word ‘and’ per se but must be deduced from a consideration of the several pertinent statutory provisions indicative of the policy of the state in conferring upon [the commission, the responsibility at issue]. . . . The ‘reason and purpose of the legislation as shown by its provisions may well be more significant than technical definitions in determining the meaning of the particular words employed.’ Hartford Electric Light Co. v. McLaughlin, 131 Conn. 1, 5, 37 A.2d 361 [1944]; Snyder v. Reshenk, 131 Conn. 252, 257, 38 A.2d 803 [1944]; West Hartford v. Thomas D. Faulkner Co., 126 Conn. 206, 211, 10 A.2d 592 [1940].” Bania v. New Hartford, 138 Conn. 172, 176-77, 83 A.2d 165 (1951).

Examples of elements of § 19a-145 that conflict with the trial court’s conclusion concerning the meaning of “and” abound. The statute specifically includes in its definition of “health care facility or institution,” “diagnostic and treatment facilities,” an obvious contradiction to the court’s conclusion that the use of “and” is conjunctive. Likewise, “home health care agencies,” “homemaker-home health aide agencies,” and “nursing home facilities,” three types of operations also included within the statute, do not provide all three of these services. See General Statutes § 19a-490 (d) (definition of home health care agency); General Statutes § l9a-490 (e) (definition of homemaker-home health aide agency); General Statutes § 19a-521 (definition of nursing home facility). Only the construction of “and” as disjunctive makes the inclusion of these four specific services logically consistent with the general definition of “health care facility or institution.” “In construing a statute, we will assume the legislature intended to accomplish a reasonable and rational result.” Peck v. Jacquemin, supra, 66. “Insofar as it is possible, the entire enactment is to be harmonized, each part made operative.” State v. Grant, 176 Conn. 17, 20, 404 A.2d 873 (1978).

The legislative intent expressed by the phrase in question can also be found in the fact that the legislature recently amended § 19a-145 to read in pertinent part: “prevention, diagnosis or treatment.” (Emphasis added.) Public Acts 1989, No. 89-72, § 4. During the House of Representatives debate on the proposed amendment, Representative Doreen M. Del Bianco stated that the purpose of the amendment was one of clarification. 32 H.R. Proc., Pt. 9, 1989 Sess., pp. 3000-3002. “[A] clarifying act, which ‘in effect construes and clarifies a prior statute must be accepted as the legislative declaration of the meaning of the original act.’ ” State v. Blasko, 202 Conn. 541, 557, 522 A.2d 753 (1987), quoting Tax Commissioner v. Estate of Bissell, 173 Conn. 232, 246, 377 A.2d 305 (1977).

Finally, the restrictive interpretation of § 19a-145 adopted by the trial court, and urged by the defendants, would undermine the overall purpose of the legislature in creating the commission. The broad scope of the legislative scheme is evident in the provision of General Statutes § 19a-150 defining the general duties of the commission on hospitals and health care: “The commission, in consultation with the state bureau of health planning and development, shall carry out a continuing state-wide health care facility utilization review, including a study of existing health care delivery systems; recommend improvements in health care procedures to the health care facilities and institutions; recommend to the commissioner legislation in the area of health care programs; and report annually to the governor and the general assembly, on January first, its findings, recommendations and proposals for improving efficiency, lowering health care costs, coordinating use of facilities and services and expanding the availability of health care throughout the state.”

The commission regulates rates and budgets for health care facilities. General Statutes §§ 19a-151, 19a-152, 19a-156, 19a-166. It also regulates the capital expenditures and acquisition of major medical equipment for health care facilities in an effort to increase the quality, accessibility, and cost-effectiveness of health care delivery in Connecticut. General Statutes § 19a-155. Clearly, in order to meet its panoramic responsibilities, the commission must be able to regulate the provision of health care services in facilities that fulfill any or all of the three broad statutory functions of “prevention, diagnosis and treatment.”

To adopt the trial court’s reading of the general definition would enable providers of health care services to avoid regulation by the commission by the mere juggling of corporate entities or careful allocation of services to different operations. Such “Balkanization” of inherently unitary health services can only chip away at the commission’s authority in this vitally important area of service to Connecticut’s citizens. We will not advance such an undertaking. In order to achieve a reasonable and rational result that is harmonious with the broad socially ameliorative purposes of the statute, we construe the word “and” in § 19a-145 to mean “or.” Therefore, since the defendants provide a diagnostic service, they operate a “health care facility or institution.”

B

The defendants next claim that the court erroneously determined that the defendants are a “central service facility.” The main thrust of the defendants’ argument is somewhat difficult to grasp. They claim that the court answered a question that was not before it. The question before the court, the defendants argue, was not whether Cromwell Imaging Center or Cromwell Diagnostic, P.C., were health care facilities, but rather whether MRI of Cromwell Diagnostic, P.C., was a health care facility, because the commission sought injunctions only against MRI of Cromwell Diagnostic, P.C. This argument is seriously in error. In its prayer for relief, the commission sought temporary and permanent injunctions “barring the defendants from operating and providing MRI services at the ‘Cromwell Imaging Center’ until such time as the defendants . . . received the necessary approval . . . .” The gravamen of the commission’s complaint embraces the concept that, despite the labyrinthian corporate and management structure involved, all of the defendants together control the provision of services at the Cromwell Imaging Center. Paragraph one of the first count alleges that all of the defendants operate and control the center. Paragraph 12 then alleges that “[t]hese related entities . . . constitute a health care facility ... as defined in Conn. Gen. Stat. § 19a-145.”

It is significant that the defendants at trial did not directly challenge the court’s conclusion that the defendants are jointly controlled by Lakoff and Med-scan, Inc. The defendants also did not specifically challenge the court’s conclusion that all of the defendants together, operating the Cromwell Imaging Center, are encompassed by the definition of a “health care facility” in § 19a-145, because they operate a “central service facilit[y] serving one or more . . . practitioners . . . . ” The defendants’ argument thus fails if the interlocking entities constitute a “central service facility.”

The defendants rely principally on the unreported Superior Court decision of Commission on Hospitals & Health Care v. Neuro-Diagnostics, P.C., Court of Common Pleas, Hartford County, Docket No. 143812 (December 20, 1977), to argue that the court erroneously determined that, in operating a “central service facility,” the defendants are subject to the approval provision of General Statutes § 19a-154. In NeuroDiagnostics, P.C., a group of neurologists had formed a professional corporation to provide all manner of neurological services. The court denied the commission’s request for an injunction, under the statutory predecessors of General Statutes §§ 19a-145 and 19a-155, against the defendants’ proposed purchase and operation of a C.T. Scanner. In the opinion, the court stated that “the purpose and intention of the legislature was to regulate hospitals and public institutions and not the private practice of medicine.” We note first that this opinion of the trial court, although entitled to serious consideration, is not binding authority in this court. More cogently, Neuro-Diagnostics, P.C., concerned the private practice of medicine, and has remote relevance to the instant case where the private practice of medicine is not involved. In the present case, the defendants’ operation resembles a hospital type of diagnostic service in that patients are referred to the center for particular tests rather than to specific physicians.

We are thus left with the simple question of whether the court correctly concluded that the Imaging Center is a “central service facility.” No litany of canons of statutory construction is required for this task. General Statutes § 1-1 (a) provides: “In the construction of the statutes, words and phrases shall be construed according to the commonly approved usage of the language . . . .” “When the words of a statute are plain and unambiguous, we need look no further for interpretive guidance because we assume that the words themselves express the intention of the legislature. 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); Mazur v. Blum, 184 Conn. 116, 118-19, 441 A.2d 65 (1981).” Rhodes v. Hartford, supra, 93. As the trial court stated, an imaging center “provides a diagnostic service to doctors or other facilities in its surrounding area, or . . . from‘all over.’The geographical location of a center such as this must be central to the surrounding referring physicians.” (Emphasis in original.) We agree that the Cromwell Imaging Center is a “central service facility.”

C

The defendants next claim that to subject them to the approval provision of General Statutes § 19a-154 violates their constitutional rights to equal protection under the federal and state constitutions. The basis of the defendants’ claim is that a diagnostic facility should be treated no differently than are private doctors offices as in Neuro-Diagnostics, P.C. Since this claim was not raised below, we do not consider it. Practice Book § 4185. We note, in passing, however, that the defendants state the following: “If the court were to: (a) hold that MRI of Cromwell Diagnostic, P.C., is within the reach of § 19a-154, but (b) acknowledge that the group in Neuro-Diagnostics, P.C., is not within the statute (which was the determination of the Neuro-Diagnostics, P.C. court . . .), then a classification [that is unrelated to the purposes of the legislation] would be placed between the two groups.” The defendants’ equal protection argument is, therefore, based on a scenario that has not occurred. We have not acknowledged that the group in Neuro-Diagnostics, P.C., is not within the statute. That case is obviously not before us.

II

The defendants’ second claim is that the court erred in implicitly holding that they were introducing an “additional function or service” as that term is used in § 19a-154 (a). This claim focuses on the statutory language that provides for the regulation of those health care facilities “which intend[s] to introduce any additional function or service into its program of care.” General Statutes § 19a-154 (a). The basis of the defendants’ argument is that MRI of Cromwell Diagnostic, P.C., is a new MRI service just beginning operation and, as such, it seeks not to add to an existing service but to start an MRI service where nothing previously existed. We find this claim to be without merit. It overlooks completely the trial court’s central finding concerning the functional unity of all the pieces of the corporate jigsaw puzzle that operated the Cromwell Imaging Center. The defendants did not seek articulation of the court’s reasoning in reaching this conclusion. Given the state of the record, we cannot say that the court’s conclusion that the Imaging Center, made up in varying degrees of all of the defendants, was an addition of a new service, was clearly erroneous.

There is no'error.

In this opinion the other justices concurred.

       The defendants-appellants are the following: Kenneth M. Lakoff, M.D.; Kenneth M. Lakoff, M.D., d/b/a MRI of Cromwell Diagnostic, P.C.; Kenneth M. Lakoff, M.D., d/b/a Cromwell Diagnostic, P.C.; Medscan, Inc.; Cromwell MRI Associates, L.P.; Cromwell Imaging Center Associates, L.P.; and John A. Bennett, M.D.
      The Bucks County Bank and Trust Company was also named as a defendant; it did not, however, appear in the case or participate in this appeal.

       This system, also referred to as nuclear magnetic resonance, “permits imaging of soft tissues of the body by distinguishing between hydrogen atoms in different environments.” Dorland’s Illustrated Medical Dictionary (27th Ed. 1988) p. 1449.

       General Statutes § 19a-154 provides in pertinent part: “(a) . . . any health care facility or institution . . . which intends to introduce any additional function or service into its program of health care . . . shall prior to the proposed date ... of institution of such function or service . . . submit to the commission a request for permission to undertake such function or service .... The commission shall make such review of the proposal as it deems necessary, including ... in the case of the introduction of an additional function or service, ascertaining the availability of such service dr function at other inpatient rehabilitation facilities, health care facilities or institutions or state health care facilities or institutions within the area to be served, the need for such service or function within such area and any other factors which the commission deems relevant to a determination of whether the facility or institution is justified in introducing such additional functions or services into its program . . . .”
      General Statutes § 19a-145 defines “health care facility or institution” as follows: “any facility or institution engaged primarily in providing services for the prevention, diagnosis and treatment of human health conditions, including, but not limited to, home health care agencies, homemaker-home health aide agencies . . . clinical laboratory or central service facilities serving one or more health care facilities, practitioners or institutions; hospitals; personal care homes; nursing homes; nonprofit health centers; diagnostic and treatment facilities; rehabilitation facilities, and mental health facilities . ”

       General Statutes § 19a-155 provides in pertinent part: “(a) . . . any health care facility or institution . . . proposing . . . the acquisition of major medical equipment having a cost exceeding four hundred thousand dollars, including the leasing of equipment or a facility, which expenditure was not included in a budget approved under section 19a-156, shall submit a request for approval of such expenditure to the commission, with such data, information and plans as the commission requires in advance of the proposed initiation date of such project . . . . The commission shall thereupon hold a public hearing with respect to such request .... The commission shall consider such request in relation to the community or regional need for such capital program or purchase of land, the possible effect on the operating costs of the health care facility or institution, and such other relevant factors as the commission deems necessary. . . .
      “(b) Except as provided for in subsection (a) of this section, any person proposing a capital expenditure to acquire imaging equipment having a cost exceeding four hundred thousand dollars, including the lease of such equipment, which imaging equipment will not be owned by or located in a health care facility or institution, or state health care facility or institution, shall submit a request for approval of any such imaging equipment acquisition pursuant to the provisions of subsection (a) of this section.”

       General Statutes § 19a-159 provides: “The superior court on application of the commission or the attorney general, may enforce, by appropriate decree or process, any provision of this chapter [chapter 368c entitled ‘Commission on Hospitals and Health Care’] or any act or any order of the commission rendered in pursuance of any statutory provision.”

       The plaintiff reserved this issue as an alternate ground upon which the judgment may be affirmed pursuant to Practice Book § 4013. Given our disposition of this issue, we could decide the case on this basis and go no further. We have determined, however, in light of the significance of the issues in this case, that we should also consider whether the court correctly concluded that the Imaging Center is a “central service facility.”