CT Property and Casualty Insurance Law Newsletter – October 2022
October 13, 2022
Superior Court of Connecticut – Insured’s Breach of Contractual Duties
In Cleveland v. GEICO General Ins. Co., a plaintiff injured in a motor vehicle accident filed a direct action against GEICO as the liability insurer for the responsible tortfeasor, arguing that GEICO breached its duty to defend and indemnify its insured in the underlying tort action. GEICO argued that it was relieved of its obligations under the insurance contract because its insured failed to timely report the accident, or cooperate in its investigation, as required by the contract. The vehicle that the insured was driving at the time of the accident was not owned by him and had been rented from Enterprise Rent-A-Car by a third party. GEICO submitted evidence of numerous attempts that were made to contact and communicate with its insured. The Court observed that without the insured, GEICO was deprived of a key witness that could have provided a factual basis to dispute or limit liability for the accident generally, testified as to whether the insured’s vehicle was provided to him by the third-party for his regular use (thus triggering a contractual exclusion), disputed the nature and extent of any claimed damages or injuries to the plaintiff, or provided a factual basis to claim that either the third-party’s or Enterprise’s insurance could have provided the primary insurance coverage for the accident. The Court entered judgment for GEICO upon finding that insured breached the terms of his insurance contract by failing to provide any notice of the accident and not cooperating in the investigation of the accident, and that said breaches prejudiced GEICO.
Superior Court of Connecticut – Insurer’s Duty to Defend
In Dengler v. John Moriarty & Assoc., Inc. et al., a personal injury action arising out of a construction site accident, the defendant site owner and defendant contractor impleaded a subcontractor, State-Wide Electric, Inc. (“State-Wide”) as well as State-Wide’s insurer, Acadia Insurance Company (“Acadia”). State-Wide’s policy with Acadia named both the owner and the contractor as additional insureds. Acadia filed a motion for summary judgment as to the third-party complaint, arguing that it had no duty to defend the owner or contractor because the plaintiff’s injuries were not caused, in whole or in part, by State-Wide’s work. Although the injured plaintiff alleged that he slipped on a “pile [that] contained pipes used by different trades that resemble pipes that each of the subcontractors acknowledge using on the construction site,” the plaintiff made no allegations against, or mention of, State-Wide. The Court found that the mere mention of the pipes by the plaintiff, without connecting them to State-Wide, even by inference, was insufficient to reasonably allege an injury “caused by” State-Wide. As such, Acadia’s motion for summary judgment was granted.
Appellate Court of Connecticut – Duty to Defend in Business Contracts
In Brass Mill Center, LLC v. Subway Real Estate Corp. et al., the Appellate Court held, as a matter of first impression, that the duty to defend in the context of insurance contracts applies equally to similar contracts between sophisticated business parties. On appeal, the defendant security company argued that the trial court improperly concluded that it had a contractual duty (1) to defend the plaintiff premises owner in an underlying wrongful death action brought against the premises owner and (2) to indemnify the premises owner in that same wrongful death action, including for attorney’s fees and costs that the premises owner incurred in pursuing claims against third parties. The Appellate Court reviewed the language of the indemnification provision within the applicable security agreement, as well as the allegations of the underlying wrongful death complaint, to determine whether the security company’s defense obligations had been triggered. The Appellate Court found that the trial court erroneously conflated certain allegations of the wrongful death complaint with the security company’s responsibility for crime prevention as the security contractor for the property. Citing precedent from the Connecticut Supreme Court, the Appellate Court declined to “predicate the duty to defend on a reading of the complaint that is…conceivable but tortured and unreasonable.” The Appellate Court reversed the judgment of the trial court, finding that the security company did not have a duty to defend the premises owner, and as consequence thereof, that the security company did not have a duty to indemnify the premises owner either.
Appellate Court of Connecticut – Connecticut Unfair Insurance Practices Act
In Harrigan v. Fidelity National Title Ins. Co., the Appellate Court affirmed a trial court judgment and found that the plaintiff failed to set forth a valid claim under the Connecticut Unfair Insurance Practices Act (“CUIPA”), which as a result was fatal to the plaintiff’s associated claim under the Connecticut Unfair Trade Practices Act (“CUTPA”). The plaintiff and defendant insurer had engaged in protracted negotiations during which the only issue between the parties was the value of the plaintiff’s claim, not its legitimacy. Significant to the Appellate Court’s decision on the CUIPA claim was the fact that at no time did the defendant refuse to pay or deny the claim. Although the parties disagreed about certain aspects of the claim, the evidence did not demonstrate any misrepresentations by the defendant. The trial court had determined that the insurer did not act in bad faith, and this finding was based on the court’s credibility assessment of the testimony of the insurer’s claims counsel. The Appellate Court declined to second-guess the credibility determinations of the trial court. The plaintiff argued that the insurer had engaged in unfair claim settlement practices with such frequency as to indicate a general business practice (a required element for CUIPA claims, and attempted to prove this element by introducing decisions from other courts around the country involving instances of insurance misconduct by the insurer or its affiliates and similar insurance policies. However, the Appellate Court analyzed the other decisions and found that they had they had little, if any, evidentiary value because the claims involved therein were not sufficiently similar to the one in the present case. The plaintiff failed to present any testimony or other documentary evidence relating to the alleged business practice of the insurer. Finally, insofar as a plaintiff alleging a CUIPA violation must demonstrate more than a single act of misconduct to establish that a defendant performed or committed an unfair claim settlement practice as a general business practice, the Appellate Court declined to set any precise number of similar acts that must be demonstrated. The Appellate Court concluded that such a determination must be made on the basis of the facts of each case and an examination of the evidence presented.
Appellate Court of Connecticut – Underinsured Motorist Benefits – Tolling
In Pollard v. GEICO General Insurance Company, which involved a claim for Underinsured Motorist (“UIM”) benefits, the Appellate Court analyzed the issue of whether or not the plaintiff’s written notice of a claim to GEICO was sufficient to invoke the subject insurance policy’s tolling provision. In affirming the trial court’s granting of summary judgment for the insurer, the Appellate Court found that the plaintiff’s written notice to GEICO, which advised the insurer of the subject motor vehicle accident, retention of counsel, and the existence of physical injuries, did not contain a specific reference to a potential claim for UIM benefits as required by the plain and unambiguous language of the insurance policy. As such, the plaintiff’s letter did not satisfy the written notice requirement as a matter of law. The tolling provision of the subject insurance policy required both that the plaintiff (1) provide written notice to the insurer within three years of the date of the accident that she may have a claim for UIM benefits and (2) commence an action within 180 days from the date of exhaustion. Because both requirements of the tolling provision must be satisfied, the failure to meet either requirement renders the tolling provision inapplicable.