Authored by: Joseph Ciollo
Superior Court – Property Loss – Breach of Contract and Extracontractual Claims
In KRM Realty, LLC et al v. Selective Insurance Company of South Carolina et al, the plaintiffs were the owner and tenant of a commercial building that was damaged after a motorist crashed a vehicle into it. The building owner maintained a commercial insurance policy with Selective Insurance Company of South Carolina (“Selective”) and the tenant maintained a business owner’s insurance policy with Twin City Fire Insurance Company (“Twin City”). The insurers agreed that Selective would cover the structural damage to the exterior of the building, windows, and the roof if it was damaged, while Twin City would cover the interior damages to the building and the awning if it was damaged. Over the course of several months, multiple disputes arose concerning the cost of repair and coverage in connection with both insurance claims. The plaintiffs filed suit against both insurers alleging breach of contract, bad faith, tortious interference with contractual relations and violations of the Connecticut Unfair Insurance Practices Act (“CUIPA”) / Connecticut Unfair Trade Practices Act (“CUTPA”). Each insurer filed a motion for summary judgment on various counts of the operative complaint. As to the breach of contract claim against Twin City, the Court found there to be numerous issues of material fact that precluded entry to summary judgment. As to the bad faith claim against Twin City, the Court found there to be an issue of material fact whether Twin City’s conduct amounted to bad faith or reflected a reasonable, albeit disputed, interpretation of its policy obligations, which could not be decided as a matter of law. As to the CUIPA / CUTPA claim against Twin City, the Court noted multiple factual disagreements including the significance the stretch coverage process, conflicting explanations for certain denied components of the claim, and whether certain promotional materials were misleading and relied upon. As a result, whether Twin City acted in a manner amounting to unfair trade practices or unfair settlement conduct and whether the evidence pointed to general business practice, rather than it being an isolated incident, was not subject to summary judgment. The bad faith and CUIPA / CUTPA claim against Selective involved different types of factual disputes, but were nonetheless found by the Court to preclude the entry of summary judgment. The only claim for which summary judgment was granted was claim against Selective for tortious interference with contractual relations. Based on the record, there was no evidence that Selective acted with the requisite malicious intent. Even assuming that Selective’s coverage determination had some adverse impact on the plaintiffs’ contractual rights, the plaintiffs cited no evidence that Selective acted with an improper motive, or with an intent to tortiously interfere with the relationship without justification. The Court also noted that even assuming that the plaintiffs could establish intent and tortious conduct, they failed to demonstrate actual compensable loss caused by Selective.
Superior Court – Property Loss – Breach of Contract
In Kimble v. Liberty Mutual Personal Insurance Company, the plaintiff’s home sustained roof damage following a storm. The plaintiff filed suit against the insurer for breach of contract and claimed that the insurer refused to pay the claim. The insurer filed a motion for summary judgment and argued that no reasonable factfinder could conclude, on this record, that it failed to comply with all terms and conditions of the insurance policy at issue insofar as the plaintiff had been fully paid for the claim. The plaintiff objected, pointing to evidence that he contended created a genuine dispute regarding whether the insurer breached the insurance policy. The central question was whether the insurer’s estimate for repair/replacement, which it paid to the plaintiff, was the full amount that it owed to the plaintiff under the contract, despite the plaintiff’s contractor estimating the cost to be more than twice as much. The insurer argued that the evidence demonstrated, as a matter of law, that the insurer owed no more than the cost actually incurred by the plaintiff to repair the damage to the property, minus the $1,500.00 deductible. The applicable policy language required the insurer to pay the lesser of either the replacement cost or the necessary amount actually spent to repair or replace the damage. The Court observed that the record was insufficient to determine, as a matter of law, what the “replacement cost” or “necessary amount actually spent” was. The record included the insurer’s estimate, the plaintiff’s contractor’s estimate, and other contractors’ general estimates, but there was no determinative evidence regarding the undisputed replacement cost or necessary amount actually spent for repair or replacement. While it was undisputed that the plaintiff had not paid his contractor more than his $1,500 deductible, the insurer did not argue – nor could it argue persuasively – that the meaning of “necessary amount actually spent to repair or replace” simply means the insured’s deductible amount. Accordingly, there was a genuine issue of disputed fact for trial about what the “replacement cost” and “necessary amount actually spent to repair or replace” were. In addition, the insurer did not persuasively argue that it complied with the policy language which provided that a loss will be payable within 30 days after the insured’s submission of proof of loss and one of three other events: the insurer and the insured reach an agreement, final judgment enters, or an appraisal award is filed. The plaintiff contended that none of these three events had occurred, and the insurer pointed to no evidence that any of them has occurred. The motion for summary judgment was denied.
U.S. District Court – Bodily Injury Liability Coverage – Household Member
In Martin et al v. Integon National Insurance Company, the plaintiffs Natalia Martin and Edgardo Ramos sued Integon National Insurance Company (“Integon”) for the unsatisfied portion of a five-million dollar stipulated judgment in an underlying personal injury lawsuit. The stipulated judgment resolved a motor vehicle accident case stemming Hugh Ireland’s collision with plaintiff Martin, while he was driving his mother’s vehicle. In the ensuing state court lawsuit, the plaintiffs and Ireland ultimately stipulated to a judgment of $4.5 million in favor of plaintiff Martin and $500,000 in favor of plaintiff Ramos, Martin’s husband, for loss of consortium. The plaintiffs contended that Integon was directly liable to them for the amount awarded in the stipulated judgment, pursuant to C.G.S. § 38a-321, because Ireland was covered under his grandparents’ insurance policy with Integon, as a resident of their household. Integon had previous denied coverage and asserted that Ireland was not a resident of his grandparents’ household on the date of loss and, therefore, he was not a “family member” within the meaning of that term as defined in the Integon policy, nor was Ireland operating a covered vehicle at the time of the accident. The parties did not dispute that Ireland was not operating a covered vehicle. The evidence of Ireland’s residency included various affidavits executed by Ireland, his parents and his grandparents, and deposition testimony taken in the present case. Among other evidence, Ireland’s earlier affidavit conflicted with his subsequent deposition testimony concerning whether or not he ever lived at his grandparents’ home. This conflicting evidence alone raised a genuine factual dispute that could only be resolved by a jury. The Court noted that the jury must decide which version of events offered by Ireland at different points in time is credible. The Court also identified other conflicting facts about Ireland’s residency, as evaluated through relevant, albeit non-exhaustive factors which have been identified by the Connecticut Supreme Court. The Court observed that Integon essentially sought to have the Court determine that its evidence supporting its position that Ireland did not reside with his grandparents on the date of the accident was weightier than the plaintiffs’ evidence to the contrary. In so arguing, Integon attempted to sow doubt as to the truth of the statements in the plaintiffs’ evidence, based on alleged motivations of Ireland and his father to avoid liability for the significant judgment owed to the plaintiffs in the underlying action. However, the Court noted that credibility assessments, choices between conflicting versions of the events, and the weighing of evidence are matters for the jury, not the Court on a motion for summary judgment. For these reasons, the motion for summary judgment was denied.
