Authored by: Joseph Ciollo
Superior Court – Connecticut Unfair Trade Practices Act
In Barrett v. Allied World Specialty Insurance Company et al, the plaintiff filed an action alleging that Allied World breached a settlement agreement in connection with a separate civil action. The present action included claims for alleged violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) and the Connecticut Unfair Insurance Practices Act (“CUIPA”). The defendants filed a motion to strike on the basis that the plaintiff failed to plead a legally sufficient claim alleging a violation of CUTPA on the grounds of violations of CUIPA. Both parties acknowledged that there was a split of authority by the Connecticut Superior Courts in the determination of the sufficiency of a CUTPA/CUIPA claim. The defendants pointed to a general trend among Superior Court judges to grant a motion to strike a CUTPA claim when the plaintiff has inserted the “magic words” of other acts of insurance conduct by the defendant, but has not stated the factual basis for that claim. The plaintiff argued the court should apply a more lenient approach in which specific instances of unfair claims practices as to other insureds are not required to survive a motion to strike for failure to allege a general business practice. The Court observed that although there is a split of authority among Superior Court judges as to the degree of factual specificity required to allege a general business practice in violation of CUIPA, the “emerging majority” of Superior Courts have required a plaintiff to plead more than broad business practices in order to survive a motion to strike. In the present action, the Court found that the plaintiff made only bald and conclusory allegations of misconduct in various types of business practices, without any factual predicate, which could not survive a motion to strike. An isolated claim of misconduct arising from the plaintiff’s claim does not allege a legally sufficient CUTPA/CUIPA claim. As such, the defendant’s Motion to Strike was granted.
Superior Court – Subject Matter Jurisdiction – Standing
In Newsome v. AAA Insurance Company, the plaintiff was injured in an accident while operating a dirt bike when it was struck by a vehicle that disregarded a stop sign. The plaintiff settled with the tortfeasor and exhausted the available liability insurance coverage. The plaintiff filed an action against AAA seeking Underinsured Motorist (“UIM”) coverage, alleging that the tortfeasor’s liability coverage was inadequate to fully compensate him for his injuries. The plaintiff argued that he was an insured under the AAA policy because his mother had a prior relationship with AAA’s named insured. Specifically he argued that he was covered based on his residence with the named insured and his relationship with the named insured, which he characterized as “father and son” through a “domestic partnership” between the plaintiff’s mother and the named insured. AAA filed a motion to dismiss based on a lack of subject matter jurisdiction, arguing that the plaintiff had no standing to pursue the claim as the plaintiff was neither a named insured nor an intended third-party beneficiary under the policy. The Court observed that the issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss. The Court conducted an analysis of the applicable insurance policy language, including the definitions of “insured,” “family member,” and “domestic partner.” Important to the Court’s analysis, the policy definition of “domestic partnership” conditioned the designation as being “registered and is a valid domestic partnership under the laws of the jurisdiction where it was formed and is not prohibited by law in the state where this policy is issued.” Because Connecticut law does not recognize domestic partnerships or “common law” marriage, the plaintiff’s argument for such status under the policy failed. The Court determined that such status is prohibited by law due to the absence of a law allowing it. Accordingly, the Court granted the motion to dismiss based on AAA presenting facts and that demonstrate the lack of coverage under the clear and unambiguous contract language of the policy and the plaintiff failing to present facts that demonstrate he is covered person or a third-party beneficiary under the policy.
Superior Court – Property Loss – Summary Judgment
In Kutrolli v. Liberty Mutual Insurance Corporation, the plaintiff was the owner of a residential property that was damaged by a fire. The Plaintiff submitted a claim to his homeowners insurance carrier, Liberty Mutual, which evaluated the claim and issued payments Coverage A (dwelling), Coverage C (personal property) and Coverage D (additional living expense or “ALE”). The plaintiff filed suit claiming that Liberty Mutual did not properly compensate him for his losses. Liberty Mutual filed a motion for summary judgment on the basis that plaintiff had been fully compensated. It was determined that the time necessary to repair the dwelling to its pre-loss condition was four months. Even though the repairs were not made within four months, Liberty Mutual agreed to pay 10 months of ALE. The plaintiff did not repair the home to its pre-loss condition but instead chose to build an entirely different structure than the one damaged in the fire. As to ALE, the plaintiff claimed that he incurred unreimbursed expenses which far exceeded the policy limit of 12 months for ALE. The plaintiff argued that he did not move back into home until approximately two and one half years after the fire because it was still under construction. The new home had more than 3,000 square feet of living space and included an attached garage, nearly double the existing structure. The plaintiff did not present any line-item estimate of the cost to repair the original structure to its pre-loss condition, but instead submitted a one-page un-itemized proposal from a contractor. The un-itemized proposal exceeded the policy’s Extended Coverage A limits by more than $200,000. There was no way to determine what the proposal included. In addition to a new, much larger home, there were numerous upgrades including the kitchen, bathrooms and basement. Under the policy, the plaintiff was entitled to “[t]he replacement cost of that part of the building damaged using like kind and quality construction on the same premises and intended for the same occupancy and use.” The Court determined that the plaintiff had been fully paid for like kind and quality reconstruction of his existing home. He plaintiff submitted an affidavit explaining his reasoning for why he needed to construct a new and larger home. The Court observed that while self-serving in nature, the plaintiff’s reasoning could be an accurate statement, but still did not support the plaintiff’s contention that Liberty breached provisions of the policy. The plaintiff also submitted a letter from a doctor who had begun treating the plaintiff’s son almost seven months after the fire. The doctor stated that the son had environmental allergies which caused him to have trouble breathing. According to the doctor, the allergies had been occurring more frequently since the family began living at their current address. It was the doctor’s opinion that the family should be allowed to move to a residence. The Court questioned the effect of the doctor’s letter because the doctor never examined the son while he was living in the home before the fire. Even if the doctor’s letter was true and motivated the plaintiff to construct a new and larger home, the Court did not view it as evidence that Liberty Mutual breached the policy provisions. Based on the undisputed material facts, the Court granted Liberty Mutual’s motion for summary judgment as to the plaintiff’s claim for breach of contract. For similar reasons, summary judgment was also granted as to the plaintiff’s claims for bad faith and violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) and the Connecticut Unfair Insurance Practices Act (“CUIPA”).
