Author by : Joesph R. Ciollo
Superior Court – Claims Against Insurance Agent – Motion to Strike
In New Canaan Pool Service, LLC v. Liberty Mutual Ins. Co. et al, the plaintiff filed suit against an insurer and insurance agent (“defendant agent”) following a dispute over the alleged failure to cancel three insurance policies. The plaintiff claimed that the defendant agent was negligent in its failure to cancel said policies when the plaintiff terminated the defendant agent and appointed a new insurance agent, which allegedly resulted in double billing for policy premiums. The defendant agent argued that it had no duty to cancel the policies when it was terminated and replaced as agent, that any such cancellation was the duty of the successor agency, and that the plaintiff failed to allege facts to show duty and breach in that there is no allegation the plaintiff authorized cancellation of the policies by the defendant agent. The defendant agent filed a motion to strike as to the claims against for negligence, unjust enrichment and breach of contract. As for the negligence claim, the Court recognized the established general rule that an insurance broker owes no legal duty to the insured after the broker has successfully procured the requested policy. In the present case, the plaintiff did not allege that the defendant agent continued to act as its agent regarding cancellation of the policies after it was replaced as the agent. No facts alleged a continuing duty or breach of duty after its replacement as agent, which were necessary allegations to satisfy the elements of a professional negligence claim. The plaintiff alleged that the defendant agent was unjustly enriched by failing to cancel the policies because it billed and accepted premiums from the plaintiff after its replacement and failed to reimburse the plaintiff for the premiums received. The plaintiff did not allege acts committed by the defendant agent that unjustly enriched it in connection with insurance premiums paid. Finally, while the Court acknowledged that professional negligence and breach of contract may be alleged in the same complaint, in the present case there were no allegations from which it could be inferred that the defendant agent assumed a contractual obligation to cancel the policies. The Court granted the motion to strike in its entirety.
Superior Court – Extracontractual Claims – Motion to Strike
In Jinjika et. al. v. The Hanover Ins. Group et al, the plaintiffs filed suit against their homeowners insurer and alleged that the insurer improperly denied payment for claimed property damages arising out of a hail storm. The plaintiffs’ complaint included counts for breach of contract, negligent adjustment, violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) / Connecticut Unfair Insurance Practices Act (“CUIPA”), and bad faith. The insurer filed a motion to strike as to the latter three counts. The insurer argued that the claim for negligent adjustment was barred by the economic loss doctrine, contending that recovery in tort is prohibited when the parties’ relationship is contractual and the only alleged losses are economic. The plaintiffs asserted that the doctrine applied only in commercial disputes involving sophisticated parties and as to certain contracts. The Court agreed with the insurer and noted that the claim did not allege a duty separate and apart from contractual duties. Although the asserted that the insurer’s negligence arose “separate and apart from any duties arising under the contract,” the Court found this to be a conclusory characterization belied by the factual allegations themselves, all of which pointed to the contractual relationship between the parties as the foundation of the negligence claim. As for the claimed violation of CUTPA / CUIPA, the insurer argued that the claim was legally insufficient because the plaintiffs did not allege unfair insurance practices or a “general business practice” with the frequency that is statutorily required. The Court noted that some of the plaintiffs’ allegations were the kind of bald assertion that courts have routinely rejected when addressing motions to strike. Most of the allegations invoked exact or paraphrased statutory language and/or they used conclusory language without alleging facts. Also, the plaintiffs alleged other instances of misconduct which did not match the allegations concerning the insurer’s handling of their claim. As for the bad faith claim, the insurer argued it was based on conclusory allegations that suggested nothing more than a coverage dispute. In response, the plaintiffs pointed to their detailed allegations as pleading specific facts that alleged sinister intent and bad faith. The Court found that the allegations were sufficient to plead that the insurer’s denial of the plaintiffs’ claim was not mere negligence, because the allegations asserted that the denial was instead the result of a conscious decision intended to create financial advantage to the defendant to the detriment of the plaintiffs. The Court granted the motion to strike as to the negligent adjustment and CUTPA / CUIPA claims, but denied it as to the bad faith claim.
Superior Court – Extracontractual Claims – Motion to Strike
In Jones v. Candlewood Village Condo. Assoc. et. al., the plaintiff filed suit in connection with a slip and fall incident at a condominium property.The complaint included claims against the liability insurers of a snow removal contractor sounding in bad faith and violation of CUTPA. The plaintiff alleged that the insurers’ agent, without initially identifying herself as their agent, entered the plaintiff’s residence and questioned him about the alleged incident, intentionally and purposefully bypassed his attorney, improperly and unlawfully made an effort to obtain information directly from the plaintiff, and attempted to persuade him to resolve his claim without the involvement of his attorney. The insurers moved to strike the counts for bad faith and violation of CUTPA. The insurer argued that the bad faith claims were actually claims for a breach of the duty of good faith and fair dealing, and that because there was no contractual relationship between the plaintiff and the insurers, the plaintiff is a third-party claimant. The insurers further argued the plaintiff was a third-party claimant without any direct cause of action in the absence of a judgment against the defendants’ insured. The plaintiff argued that the bad faith claims relied upon common law tort principles and were specifically pleaded as “tortious bad faith” claims. The insurers countered that the label did not transform a contract action into a claim grounded in common law tort principles, and further, that the duty to act fairly and in good faith arose from a contractual relationship and did not extend from an insurer to a third-party claimant. While Connecticut courts recognize an independent cause of action in tort arising from an insurer’s common law duty of good faith, that duty arises from a contractual relationship and does not extend to third parties. In the present case, the plaintiff failed to allege any contractual relationship between himself and the insurers, and his claim against the insured was still pending and without final judgment.The plaintiff’s CUTPA claim relied upon an allegation violation of Connecticut General Statutes § 38a-832(a), which prohibits insurers from making communications to bodily injury claimants which discourage the retention of an attorney.In comparing the various statutes, the Court noted that the plaintiff failed to establish that a violation of § 38a-832(a) violates CUIPA, and, therefore, had not sufficiently alleged a cause of action under CUTPA. Additionally, the Court found that regardless of whether a violation of § 38a-832(a) violates CUIPA, as a third-party claimant, the plaintiff could not assert a private cause of action for CUIPA violations through CUTPA. The Court granted the motion to strike in its entirety.
