Authored by: Joseph Ciollo
Superior Court – Uninsured Motorist Benefits – Reduction of Limits
In Earlington v. Ortiz et al, the plaintiff was injured in a motor vehicle accident and filed an action against the identified tortfeasors, who were co-owners of the vehicle that struck the plaintiff’s vehicle. The tortfeasor vehicle had been operated by an unidentified person who had taken the vehicle and then fled the scene after the accident. The plaintiff settled her claim against the co-owners of the tortfeasor vehicle for $225,000. In the same action, the plaintiff also asserted a claim against Allstate Fire and Casualty Insurance Company (“Allstate”) for Uninsured Motorist (“UM”) coverage in the amount of $25,000 each person/$50,000 each accident as the insurer of the motor vehicle in which she was a passenger. The plaintiff also asserted a UM claim against Allstate in the amount of $50,000 each person/$100,000 each accident under her own automobile policy with Allstate. Allstate moved for summary judgment on the grounds that the plaintiff received a settlement from the defendant tortfeasors that far exceeded the limits of Allstate’s UM coverage, arguing that any award in the plaintiff’s favor against Allstate would be reduced to zero. The Court disagreed with Allstate’s reasoning and held that the plaintiff’s settlement with the identified tortfeasors would not bar her UM claim against Allstate, in which the insurer stands in the shoes of the unidentified tortfeasor. The Court also stated that under this scenario, the same rules of apportionment in a multi-tortfeasor context would apply. As a result, Allstate’s motion for summary judgment was denied.
U.S. District Court – Connecticut Unfair Insurance Practices Act
In Perry v. Government Employees Insurance Company et al, the plaintiff filed an action arising out of his procurement of insurance from GEICO through its agent. The plaintiff sought leave of court to amend his complaint to update the extent of his injuries, to add factual allegations learned through discovery, and to add a cause of action under the Connecticut Unfair Trade Practices Act (“CUTPA”) premised upon violations of the Connecticut Unfair Insurance Practices Act (“CUIPA”) as well as a common law claim for negligent misrepresentation. The proposed claims under CUTPA/CUIPA and for negligent misrepresentation were based upon allegations of deceptive and misleading advertising. The defendants objected to the amendments as untimely and argued that the plaintiff did not show good cause to amend at a late juncture of the case, and asserted, in the alternative, that the amendments were futile because the alleged misrepresentations—mere puffery—failed to state a viable CUTPA/CUIPA violation, and because negligent misrepresentation shared the same elements and allegations as the CUIPA claims, that claim was likewise futile. The plaintiff alleged that GEICO misrepresented the benefits, advantages, conditions, or terms of its umbrella insurance policies generally in its advertisements and that the umbrella insurance policy GEICO sold to the plaintiff did not conform to those advertisements. The Court did not grant leave as to those particular amendments because it found that such allegations did not give rise to a plausible claim under CUIPA. However, the plaintiff also identified advertisements that GEICO made to the public, which the plaintiff alleged were false or misrepresented the benefits, advantages, conditions, or terms of its umbrella insurance policies, that GEICO was aware that the advertisements were false or contained misrepresentations, that the plaintiff relied on those advertisements, and suffered damages as a result because his umbrella policy did not provide the coverage as advertised after he reached the limits of his automobile policy. The Court found that such allegations gave rise to a plausible claim under CUIPA. The Court concluded that the allegations were specific, concrete, and factual in nature. The Court acknowledged that there may be some subjectivity to the allegations, but given the context in which they are made, a finder of fact could find that the plaintiff reasonably relied upon them when procuring his GEICO policy. As such, the Court concluded that the plaintiff adequately alleged a CUTPA/CUIPA claim, as well as a common law negligent misrepresentation claim. For these reasons, the plaintiff’s motion for leave to amend his complaint was granted in part and denied in part.
Superior Court – Improper Joinder of Claims
In Champagne et al v. Pacific Specialty Insurance Company et al, the plaintiffs filed an action against the defendants from whom they purchased a residential property (“sellers”), alleging that the sellers made false representations about certain conditions of the property which were later discovered and caused water damage throughout the property. In the same action, the plaintiffs filed separate claims against their homeowners insurer, Pacific Specialty Insurance Company (“Pacific Specialty”). The plaintiffs had previously submitted a claim to Pacific Specialty in connection with the same intrusion of water throughout their property. Pacific Specialty denied the claim on the basis of exclusions in the applicable insurance policy. The plaintiffs then appealed the denial of coverage, leading Pacific Specialty to engage an engineer to review certain evidence and provide a report. The plaintiffs alleged that the engineer’s report contained readily apparent factual inaccuracies which Pacific Specialty accepted as true. The plaintiffs alleged that due to Pacific Specialty’s mishandling of the claim from inception through the denial of coverage and appeal, the plaintiffs suffered damage caused by the delayed remediation as well as the remediation of the water intrusion, and emotional distress. The plaintiffs’ claims against the sellers sounded in tort. The plaintiffs’ claims against Pacific Specialty were for breach of contract, bad faith, and alleged violations of the Connecticut Unfair Trade Practices Act (“CUTPA”) and Connecticut Unfair Insurance Practices Act (“CUIPA”). Pacific Specialty filed a motion to strike the claims against on the basis that those claims were improperly joined with the plaintiffs’ separate claims against the sellers, and argued that the two groups of claims did not arise out of the same set of operative facts or the same transaction. The Court recognized a split of authority in Connecticut courts regarding the extent to which the various causes of action must “affect all the parties to the action.” However, the Court found that it need not reach the split of authority issue because the plaintiffs’ claims were insufficient to support joinder under either interpretation. Even under the broad interpretation of the language, Pacific Specialty had no interest in the outcome of the claims against the sellers, and vice versa. The plaintiffs’ claims against Pacific Specialty did not arise out of the same transaction or transactions connected with the same subject of action against the sellers. Specifically, whether the sellers made misrepresentations in the property disclosure report prior to the plaintiffs’ purchase of the property did not affect the liability of Pacific Specialty in allegedly mishandling the plaintiffs’ insurance claim after the plaintiffs became the owners of the property, even if there was a common fact of water intrusion as to both defendants. The plaintiffs’ claims against Pacific Specialty related to contractual insurance coverage and the claims handling practices, procedures, and denial of coverage, which were wholly distinct and separate from the plaintiffs’ claims against the sellers for negligent and intentional misrepresentation in an earlier residential real estate disclosure. The Court also undertook a close examination of the injuries claimed, which clearly demonstrated the disparities in the claims. Pacific Specialty’s motion to strike was granted.
