Superior Court – Motion to Strike – CUTPA / CUIPA

In Gomez v. Nationwide Insurance Company, the plaintiff filed an insurance claim following a fire that caused damage to her dwelling and personal property.  A dispute arose concerning the scope of repairs to be completed and coverage was denied for a portion of the claim.  The plaintiff’s complaint alleged violations of the Connecticut Unfair Trade Practices Act (CUTPA) and the Connecticut Unfair Insurance Practices Act (CUIPA), which the defendant moved to strike.  The Court recognized that although there is currently a split of authority among the judges of the Superior Court as to the degree of factual specificity required to allege a general business practice in violation of CUIPA, the trend is to strike CUTPA/CUIPA claims where a plaintiff has merely inserted the “magic words” of other acts of insurance misconduct by the defendant without stating any factual basis for that claim.  Following the trending majority of Superior Court judges, the Court ruled that that when pleading a general business practice under CUIPA, a plaintiff must plead facts that demonstrate insurer misconduct that goes beyond the plaintiff’s immediate claim.  By applying this standard, the Court granted the defendant’s motion to strike the counts of for CUTPA/CUIPA violations.

Supreme Court – Coverage Exclusion – Standard of Proof

In Nationwide Mutual Insurance Company v. Pasiak, the insurer filed a declaratory judgment action to resolve the issue of whether it was obligated to indemnify the defendant, a business owner, under a personal umbrella insurance policy for liability arising from his false imprisonment of his company’s employee at her workplace.  This decision was the second time the case had come before the Supreme Court after a lengthy litigation process and multiple appeals.  The insurer argued that it had no duty to indemnify because the false imprisonment or the claimant’s injury was connected with, had its origins in, grew out of, flowed from, or was incident to the defendant’s business pursuits, which triggered an exclusion to the liability coverage under the applicable policy.  In the most recent appeal to the Supreme Court, the defendant argued that the insurer should have been held to a heightened standard of proof, and not to the preponderance of the evidence standard, in light of the Supreme Court’s statement in the prior appeal that “[w]hen construing exclusion clauses, the language should be construed in favor of the insured unless [the court] has a high degree of certainty that the policy language clearly and unambiguously excludes the claim.”  The Supreme Court noted that the defendant’s argument conflated the legal standard for construction of a policy exclusion and the burden of proof to be applied in a declaratory judgment action to determine whether, as a factual matter, a policy exclusion applies.  In this regard, the trial court, on remand, properly applied the preponderance of the evidence standard to determine the factual question of whether the plaintiff established that the business pursuits exclusion of the umbrella insurance policy barred coverage.  The Supreme Court also noted that this case was unusual in the sense that the Supreme Court had already interpreted the relevant policy language in the specific factual context that defined the dispute between the parties.  This distinctive procedural posture meant that the trial court, on remand, was not required to reinterpret the contract and, therefore, had no need to apply the usual interpretive presumptions.

Superior Court – Coverage Denial – Material Misrepresentation

In Baker v. Eyvazzadeh et al, the plaintiff motorist filed a personal injury action against the operator and owner of the motor vehicle that rear-ended her.  The insurer for the alleged tortfeasors, Plymouth Rock Assurance Corporation (Plymouth Rock), provided a defense to the individual defendants but denied a duty to indemnify them.  Plymouth Rock argued that the insured owner had committed a material misrepresentation by failing to disclose the driver on policy renewals.  The plaintiff then filed a motion to cite in Old Dominion Insurance Company (Old Dominion), her uninsured (UM) and underinsured motorist (UIM) carrier, as an additional party defendant.  In turn, Old Dominion filed a third-party complaint against Plymouth Rock, asserting that Plymouth Rock improperly denied coverage and seeking a declaratory judgment along other requested relief.  Old Dominion moved for summary judgment to recover money it paid to the plaintiff in settlement of the claim.  Plymouth Rock moved for summary judgment seeking a declaration that it had no obligation to make an indemnity payment.  The parties stipulated that Massachusetts law applied to the particular coverage dispute, including applicable law concerning material misrepresentations and their effect on insurance coverage.  In reviewing the facts, the Court found there to be no genuine issue of material fact that: (1) at no time after the driver obtained his driver’s license and before the subject accident, did the owner inform Plymouth Rock that the driver was an operator of the insured vehicle; (2) the non-disclosure constituted a misrepresentation; and (3) the misrepresentation was material in that the addition of driver increased the insurance premium by $1,288.  The driver and owner contended that even though the driver secured his license after the inception of the original policy and prior to the inception of the first renewal period, Plymouth Rock never requested or required renewal applications through the date of the accident.  However, significant to the Court’s analysis was language in the Plymouth Rock policy which imposed a burden on the insured to inform Plymouth Rock, in forthright fashion, about any new licensed drivers or customary operators in the household and also informed the insured that he may forfeit coverage if he were to fail to do so.  The Court found that Plymouth Rock was within its rights to deny indemnity for the plaintiff’s bodily injury claims.  The Court granted Plymouth Rock’s motion for summary judgment and denied Old Dominion’s motion for summary judgment.

Superior Court – Underinsured Motorist Benefits – Res Judicata

In DeGumbia v. Geico General Insurance Company, the plaintiff, was injured in a motor vehicle accident while in the scope of his employment as a police officer.  The plaintiff settled his claim against the tortfeasor, exhausting the applicable liability insurance policy limits. The plaintiff then brought an action against Geico as his personal automobile insurance carrier.  Geico filed a motion for summary judgment on the basis that its coverage was secondary to the policy issued by American Southern Home Insurance Company (ASHIC) which covered the plaintiff’s police cruiser and had not been exhausted.  Geico’s motion was granted by the trial court and affirmed on appeal.  The trial court then granted the plaintiff’s motion to cite in ASHIC as a defendant.  ASHIC moved for summary judgment alleging that the amounts received from the tortfeasor and from workers’ compensation benefits exceeded the uninsured/underinsured policy limits of the ASHIC policy. That motion for summary judgment was granted.  The plaintiff then brought the present action against Geico for underinsured motorist benefits. Geico moved for summary judgment on the basis of res judicata.  Geico argued that in the earlier action, the trial court had found that the plaintiff had not exhausted all possible insurance policies potentially available on the police cruiser, which made it premature to assert a claim for underinsured motorist benefits against Geico.  However, the Court found that implicit in the prior trial court order was that the plaintiff was not precluded from a future claim against Geico for underinsured benefits, once the issue of exhaustion of the ASHIC policy was resolved, which it now was.  Accordingly, Geico’s motion for summary judgment was denied.