Authored by: Joseph Ciollo
Superior Court – Motor Vehicle Damage – Good Faith and Fair Dealing
In Mullane v. State Farm Mutual Automobile Ins. Co, the plaintiff submitted a claim to his insurer for alleged damage sustained to his vehicle as a result of water entering the vehicle’s interior. The defendant insurer determined that coverage was partially excluded by the terms of the applicable insurance policy which specifically excluded damage or loss due to wear and tear and/or freezing. The plaintiff filed suit and a court trial was held on the plaintiff’s claims for breach of contract and breach of the covenant of good faith and fair dealing. After the plaintiff had initially submitted his claim, the insurer determined based upon an inspection of the damage and the information from the plaintiff’s mechanic that the damage was caused by cracked sunroof drain pockets which led to water leaking into the car. The insurer issued a partial denial but approved payment for the damage to the interior rug and cleanup of the water. After the partial denial, the plaintiff filed a complaint with the Connecticut Insurance Department. The Insurance Department did not find any wrongdoing on the part of the insurer for the partial denial, but noted that the insurer did not provide sufficient information about the partial denial. In response, the insurer sent new correspondence to the plaintiff containing additional details about the basis for denial. At trial, the plaintiff was unable to point to a specific provision in the policy as support for his claim. The insurer, in describing the available coverage, stated that the policy was not a vehicle service contract or a warranty on the vehicle. The Court found that the insurer’s decision to deny the portion of the claim concerning the sunroof drains was clearly supported by the terms of the policy and thus there was no breach of the contract for the refusal to pay for replacement or repair of the sunroof drains. As for the plaintiff’s claim for breach of the covenant of good faith and fair dealing, the Court found that the claim proceeded in a swift fashion with multiple adjusters viewing the claimed damage at a location convenient for the plaintiff. The Court also found that the plaintiff’s testimony contained inconsistencies and unattainable expectations during the progression of his claim. The Court also found that the plaintiff did not provide what credible and supportable testimony or evidence that the insurer conducted the investigation in a discriminatory manner or in any way to treat the plaintiff unfavorably. According to the Court, other than speculation and surmise, the plaintiff did not present any credible testimony or evidence for the Court to determine that there were any malicious, intentional actions to prevent a review of the claim by the plaintiff or to prevent him from bringing his vehicle to any desired repair shop. Additionally, the plaintiff had no evidence to support the claim that the insurer’s employees, representatives or any adjusters bullied him, treated him poorly, or with disrespect because of his claim of a disability. The Court found the latter claim to be “perhaps the most egregious of the unsupported claims by the plaintiff” because it had no basis. The Court ruled that the plaintiff did not satisfy his burden of proof that the insurer breached the covenant of good faith and fair dealing.
Superior Court – Suit Limitations Period – Motion to Strike
In Guarnia v. Underwriters at Lloyd’s, London, the plaintiff sustained a property loss when certain stored property was stolen and/or damaged. The plaintiff filed suit against the defendant insurer alleging that the insurer breached the insurance policy contract by failing to provide coverage for stolen and/or damaged property and loss of business income. Suit was commenced more than two years after the reported date of loss. The subject policy included a condition requiring any suit against the insurer to be filed within two years after the insured first has knowledge of the direct loss or damage. As an initial response to the complaint, the insurer filed a request to revise, wherein the insurer requested that the plaintiff attach a copy of the subject policy to the complaint. Without objection, the plaintiff filed a revised complaint and attached the policy as an exhibit. The insurer then filed a motion to strike, arguing that all claims were barred by the two-year suit limitations period contained in the policy. Although a statute of limitations defense is typically raised as a special defense, Connecticut courts have allowed use of a motion to strike to raise the defense of the statute of limitations where the parties agree that the complaint sets forth all the facts pertinent to the question whether the action is barred by the statute of limitations. Although the present case involved a contractual suit limitations period, the Court noted that the applicable policy language was based on language in Connecticut General Statutes § 38a-307, which generally mandated the language used in a policy of that type. In the present case, although there was no express “agreement” between the parties that the revised complaint contained all the facts pertinent to the question whether the action is barred by the statute of limitations, the Court noted that the plaintiff did not identify any possible additional information that might need to be considered to allow a proper determination of the issue. Nor did the plaintiff identify any principle that might allow a deviation from the presumptive straightforward concept of comparing the contractual benchmarks of the date of loss and the date on which this action was commenced. The motion to strike was granted.
Superior Court – Good Faith and Fair Dealing – Motion For Summary Judgment
In Napolitano v. Ace American Ins. Co. et al, the plaintiff sued various defendants, including his workers compensation insurer, when his workers compensation insurance coverage did not cover a claim brought by his injured employee. Prior to the occurrence of the injury, the plaintiff had received a series of written notices from the insurer. The first notice informed the plaintiff of an audit noncompliance charge, indicating that the insurer had not received payroll and tax records that were required for a policy premium audit and that the failure to provide access to those records would result in the imposition of a charge. The notice was resent soon thereafter but the insurer never imposed the noncompliance charge. Subsequently, the insurer sent two separate notices on the same day. There was no indication as to which notice was sent first or intended to be read first; nor did either notice expressly reference the other. One of the notices stated that the plaintiff had failed to comply with the insurer’s requests in connection with the audit, that failure to comply would result in cancellation of the policy and that if the audit was not conducted prior to the effective date of cancellation, the cancellation would remain in effect. The noncooperation notice did not include a cancellation date. The second of the two simultaneous notices, without making any explicit reference to the noncooperation notice sent the same day, stated in relevant part that the policy was cancelled and provided a specific effective date. The insurer denied the claim submitted by the injured employee and refused to defend or indemnify the plaintiff under the policy, citing the cancellation. The plaintiff was required to litigate at his own expense with the injured employee in workers compensation proceedings and in a civil action. Ultimately, the plaintiff and the Second Injury Fund settled with the injured employee. The plaintiff’s complaint included claims for breach of contract and breach of the covenant of good faith and fair dealing. During earlier proceedings in the civil action, the trial court granted the insurer’s motion to strike the claim for breach of the covenant of good faith and fair dealing. The claim was repleaded, which prompted a second motion to strike and resulted the court’s ruling that the claim could not repleaded. On the breach of contract claim, the trial court entered summary judgment for the plaintiff, finding that the policy had not been validly cancelled. The Appellate Court reversed the trial court’s decision on the breach of contract claim but found that the plaintiff had adequately alleged a breach of the implied covenant of good faith and fair dealing, remanding the case for further proceedings. In a further appeal, the Supreme Court ruled that the policy had not been validly cancelled, therefore upholding the trial court’s judgment on the breach of contract claim. The action was now back with the trial court, at which time the insurer filed a motion for summary judgment on the claim for breach of the covenant of good faith and fair dealing. In reviewing the evidence, and citing applicable standards for such claims, the trial court found that the plaintiff’s submissions did not include any evidence of “actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one’s rights or duties, but by some interested or sinister motive” on the part of the insurer. The trial court disagreed with the plaintiff’s arguments that a factfinder could infer bad faith from the insurer’s conflicting notices. As to the plaintiff’s arguments that he had a good faith belief that the policy remained in effect and a reasonable expectation of coverage, the trial court noted that the plaintiff’s state of mind does not raise a triable issue as to the insurer having a sinister motive or engaging in fraud. The motion for summary judgment was granted.
