Opinion
FSTCV176031032S
12-28-2017
GERALD METALS, LLC v. CERTAIN UNDERWRITERS AT INTERNATIONAL UNDERWRITING
UNPUBLISHED OPINION
OPINION
POVODATOR, J.
Background
This is a case in which plaintiffs Gerald Metals, LLC and Gerald Metals S.A. seek to recover against defendant(s) Certain Underwriters at International Underwriting Association of London for breach of contract, breach of the covenant of good faith and fair dealing, and violation of the Connecticut Unfair Trade Practices Act (CUTPA) by way of claimed violations of the Connecticut Unfair Insurance Practices Act (CUIPA).
There is at least some level of uncertainty/ambiguity as to whether the singular or plural is appropriate. " Certain Underwriters" suggests a plural, but only one defendant has been identified in the summons- the collective " Certain Underwriters." The plaintiffs generally used the singular in their description of the parties, while the defendant(s) utilize the plural. To the extent that the court normally follows the nomenclature as established by the plaintiff in the complaint and on the summons and as incorporated into docketing entries, the court will utilize the singular. (As will be discussed below, this has some substantive implications.)
The plaintiff claims that the defendant insurer improperly denied the existence of coverage under an endorsement in the policy issued by the defendant, an all-risk marine cargo insurance policy covering the period from November 1, 2013 to October 31, 2014. In particular, the plaintiffs claim that the defendant has failed and continues to refuse to pay Gerald’s claim for insurance coverage arising from a claimed covered loss of 25, 250 metric tons of alumina from a bonded warehouse at the Port of Qingdao, China.
The defendant has moved to strike the claim of breach of the covenant of good faith and fair dealing and the claimed violation of CUTPA. In addition to claiming a facial inadequacy in the allegations of the respective counts (lack of sufficiently-detailed factual allegations), the defendant also contends that the CUTPA violation, and especially the claims for punitive damages and attorneys fees under the statute, are legally barred by preemption by maritime law, which is claimed to be applicable to this situation. The plaintiffs respond by claiming that they have alleged legally sufficient claims of breach of the covenant of good faith and fair dealing and a violation of CUTPA. They also contend that the claim of preemption is inapplicable to the claims that they have alleged.
The court heard argument on the motion and objection on September 5, 2017. After obtaining permission from the court, the parties submitted post-argument (supplemental) memoranda, the last of which was filed on October 16, 2017.
Discussion
The court will not recite in detail the well-established principles governing a motion to strike. The court is required to assume the truth of all well-pleaded facts and give the non-moving party the benefit of all reasonable inferences. That brief recitation, however, suggests that the court needs to address certain procedural issues before getting to the more substantive and potentially dispositive issues that have been presented.
Notwithstanding suggestions in the plaintiffs’ objection, the fact that the court sustained almost all of the objections to the defendant’s request to revise has no bearing on the issues before the court at this time. Although perhaps overly informal, a request to revise addresses editorial-type issues, arguably format issues, focusing on how the complaint is worded, e.g., whether greater specificity is required, whether there should be fewer conclusory or inflammatory allegations, whether multiple causes of action in a single count should be set forth in separate counts, etc. A motion to strike focuses on legal sufficiency, assuming that the facts alleged are true. That most of the requests to revise were not needed in order to ensure a proper understanding and framing of the issues being claimed does not equate to legal sufficiency. " Adequately pled" for purposes of a request to revise cannot consider the legal sufficiency, which is the focus of a motion to strike. Certainly the onus is not on the defendant to ensure that the allegations of a complaint are sufficient to survive a motion to strike.
" Notably, Underwriters sought revisions to Counts II and III, which this Court denied, finding them adequately pled, and now Underwriters seek to strike those same claims, again, for inadequate pleading."
In the objection to the request to revise, the plaintiffs explicitly recognized the distinction. Thus, in the objection to the 11th request, the plaintiffs stated: " The requested revision is improper because it makes a legal argument about the merits of Gerald’s claim. This is clearly not appropriate in a request to revise, which is used primarily to set up a motion to strike." (The court does not necessarily agree that a request to revise " is used primarily to set up a motion to strike, " although the court recognizes that it often is used for that purpose.)
More problematic is the fact that the motion that has been filed by the defendant goes beyond the scope of the operative complaint. Just as a request to revise does not get into the legal issues, a motion to strike does not get into the actual facts- the court relies upon the record established by the facts alleged by the operative complaint, assuming them to be correct/true. When a defendant attempts to go beyond the record established by the complaint, the argument goes beyond the proper scope of a motion to strike.
It is well established that a motion to strike must be considered within the confines of the pleadings and not external documents, such as the agreement between the parties. We are limited, however, to a consideration of the facts alleged in the complaint. A " speaking" motion to strike (one imparting facts outside the pleadings) will not be granted. (Internal quotation marks and citation, omitted.) Zirinsky v. Zirinsky, 87 Conn.App. 257, 268 n.9 (2005).
The brief initially submitted by the defendant in support of the motion seemingly if sometimes indirectly relies upon some matters not of record. The reply brief filed by the defendant very clearly recites facts that are not to be found in the complaint, and therefore must be disregarded for purposes of this motion. (If facts outside the record established by the complaint would defeat one or more counts, then a motion for summary judgment is the proper tool to be used to accomplish such a purpose.) Thus, when the defendant recites (claimed) specific facts relating to its investigation of the claim, and the (claimed) factual background concerning the plaintiffs’ inability to obtain possession of the goods that are the subject of the claim that underlies this lawsuit, those may well be matters justifying what the defendant has or has not done, but they are not matters that the court can consider for purposes of this motion.
Not to belabor the point, but if the defendant were to try to present these facts in the context of a motion for summary judgment, there would need to be an affidavit or other competent evidence, not merely recitals by counsel.
Thus, for purposes of this motion, the court cannot consider any specific aspect or provision in a bill of lading that was not referenced in the complaint. (There is a passing reference to a bill of lading having been submitted as part of the initial claim (¶ 22), but absolutely no details whatsoever.) Instead, the court is faced with an allegation that states that there were goods in a bonded warehouse, and the plaintiff has not been able to obtain possession of those goods notwithstanding having purchased the goods and having obtained title to the goods, in the context of an all-risk policy issued by the defendant. (A copy of the policy is attached to the original complaint as an exhibit, such that the court can consider the language of the policy as incorporated into the pleadings.) Proceeding to the merits:
I. Breach of Covenant of Good Faith and Fair Dealing
The defendant contends that the plaintiffs have not alleged a legally-adequate claim of the breach of the covenant of good faith and fair dealing.
The common-law duty of good faith and fair dealing implicit in every contract requires that neither party [will] do anything that will injure the right of the other to receive the benefits of the agreement ... Essentially it is a rule of construction designed to fulfill the reasonable expectations of the contracting parties as they presumably intended ... To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff’s right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith ... (Citations and internal quotation marks omitted; brackets as in cited case.) Welch v. Stonybrook Gardens Cooperative, Inc., 158 Conn.App. 185, 200 (2015).
The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party’s discretionary application or interpretation of a contract term. (Internal quotation marks and citation, omitted.) De La Concha of Hartford v. Aetna Life Insurance Co., 269 Conn. 424, 433 (2004).
The heart of the defendant’s argument is that this is nothing more than a dispute as to whether the defendant has breached its contractual obligations by failing/refusing to pay the claim submitted by the plaintiffs, with an associated but immaterial claim that there were unreasonable delays in reaching a decision. The plaintiffs do not seem to dispute the proposition that a dispute as to whether a claim should be paid, in and of itself, does not constitute a breach of the covenant, and although repeatedly referring to a perceived pattern of delay, it is not clear how a delay inherently converts an ordinary dispute into a breach of the covenant. (Would the plaintiffs prefer a quick denial, which might have been reached without as much consideration of the details?)
Specifically, the plaintiffs claim that the defendant’s misconduct consists (consisted) of failing to pay plaintiffs’ claim, conducting a dilatory investigation, failing to properly adjust the claim, placing the defendant’s own interest ahead of those of the plaintiff, and forcing plaintiffs to commence litigation.
The parties are in agreement that there is no clear consensus of courts as to the level of detail needed for purposes of a claim of breach of the covenant of good faith and fair dealing- to what extent can the plaintiffs rely on general inferences as opposed to explicit assertions of fact to support a claim of bad faith, etc.? With one key exception, the court agrees that the plaintiff has said little more (in effect) than that it took a long time for the defendant to deny (improperly) their claim, and the court recognizes that such generic allegations, even if liberally laced with descriptive modifiers such as dilatory, might well be insufficient.
In this regard, ¶¶ 31-33 of the operative count recite:
The court, however, must examine each and every specification, and if any allegation suffices, then the motion must be denied- the court must avoid throwing the proverbial baby out with the bathwater. According to the complaint, the initial notice of claim was given to the defendant in January 2015; extensive claims documentation had been provided, and substantial investigation had been completed by the middle of 2016. (¶¶ 22-27.) Nonetheless, as of January 2017 when the original complaint was drafted, and inferentially continuing to be the case as of June 2017 when the revised (operative) complaint was filed, defendants have " refused, and continue to refuse, to promptly or timely inform Gerald of their coverage position."
The court does not believe it to be appropriate to draw an automatic inference of bad faith from a claimant’s perception that an insurance company took " too long" to investigate a multi-million dollar claim with a focus in China, or from a conclusory and arguably self-serving contention that the claim was wrongfully denied. Perhaps fortuitously, the reason for such an approach provides something of a segue to the determinative allegation for purposes of this issue.
The court is hesitant to allow a bare claim of wrongful denial to be the basis for a claim of bad faith because that would seem to be both over-inclusive and speculative; there often is likely to be a good reason for the denial (even though any answer other than " yes" might be deemed unacceptable to the claimant). The determinative allegation is the claim that the defendant had not given an answer to the issue of coverage, two years or more after the initial claim was submitted (" [the defendants] refused, and continue to refuse, to promptly or timely inform Gerald of their coverage position" (emphasis added)). The court must read the complaint in a common-sense manner- broadly and realistically, Williams v. Housing Authority of the City of Bridgeport, 327 Conn. 338, 372 (2017)- and according to the plaintiffs, the defendant had not provided an answer to coverage questions as of the dates of the original and revised complaints, years after the defendant was first apprised of the claim. While the defendant may deny this particular assertion as a factual matter, the court must accept it for purposes of this motion. (As a corollary, the court must assume that there is a good faith basis for the plaintiffs to make this claim.)
There is a qualitative/substantive difference between a denial that the plaintiffs deem erroneous or dilatory, and the failure to provide an answer/explanation as to coverage after two or more years of pendency of a multi-million dollar insurance claim.
The court cannot evaluate the strength or plausibility of the parties’ positions, only whether the plaintiffs have articulated a legally-sufficient claim- one that, if backed by appropriate facts, might or would entitle the plaintiffs to recover damages. Having determined that at least one specific allegation sufficiently supports a claim of breach of the covenant of good faith and fair dealing, the court need not engage in any further detailed analysis of the other claimed bases. The court concludes that there is enough of a claim of improper conduct, conduct that improperly and impermissibly frustrates the reasonable expectations of the plaintiffs, to allow the claim of breach of the (implied) covenant of good faith and fair dealing to proceed.
II. CUTPA
The parties are in agreement that there is no clear consensus among trial court judges as to the level of specificity required to invoke CUIPA as a basis for a CUTPA violation- do specific prior instances need to be alleged or is a general statement of business practice sufficient? The parties discuss, extensively, trial court decisions addressing this issue, attempting to distinguish adverse decisions and explaining why favorable decisions should be deemed applicable to this case. The court will not engage in a detailed analysis of the authorities cited by the parties, because the unusual aspects of this case, perhaps unique if taken in the aggregate, make the authorities cited by the parties of uncertain value.
Perhaps simplistically, the starting point appears to be the answer to the question: what is the universe of cases in which the claimed conduct constitutes a regular business practice? This is not a " typical" motor vehicle case or a homeowner-liability case in which any given insurer engaged in regular business in Connecticut would have hundreds if not thousands if not tens of thousands of policies in effect, with an unknown but not trivial percentage resulting in potential claims. As attached to the complaint, the policy in this case is highly customized- it is a commercial marine policy with certain core provisions and 58 endorsements attached. Unlike most insurance issued in Connecticut, the actual risks have little or no connection or possible connection to Connecticut (other than that one of the parties to whom the policy was issued is a Connecticut business). To the contrary, at least facially, the policy is primarily concerned with maritime risks associated with transportation of goods/materials, and the specific claim involves a claimed occurrence/loss that took place in a warehouse in China. That leads to a number of concerns, especially:
There is an endorsement 11A in addition to endorsement 11, such that the numbering through 57 signifies a total of 58 endorsements.
1. Is the proper frame of reference all policies issued by the defendant or just marine/maritime policies?
2. Is there any basis to believe that there are/were any other comparable situations in Connecticut, involving this type of policy and/or this defendant?
3. If not, should a Connecticut court accept arguably similar instances in another jurisdiction (other countries?) as sufficient for identifying a practice that offends Connecticut’s insurance laws (CUIPA) to the extent of allowing a recovery for an unfair Connecticut business practice (CUTPA) (and again, is there any basis to believe that there are/were similar instances elsewhere)?
4. Assuming a possible affirmative answer to either of the previous two points, who is the party engaged in the allegedly unfair insurance practice?
Point # 4 probably requires some explanation. As reflected in footnote 1, there is an inherent ambiguity as to whether there is a singular defendant or multiple defendants. Paragraph 6 of the complaint asserts that the policy was sold to the plaintiffs through " an association of underwriters and individual insurance companies." To the extent that there is a collective defendant involved (" association"), is the proper framework the collective defendant (" association"), or each individual underwriter/insurer, or a majority of the underwriters/insurers, or ...? In other words, can the plaintiff establish a business practice by finding even a single insurer (within the collective issuer of the subject policy) who engaged in similar practices in the past, or is there a need to establish a broader-based " actor" ? Whatever level of generality of allegation may be acceptable in " generic" insurance cases, the plaintiffs’ own complaint demonstrates that there are numerous questions about sufficiency implicated by these unusual facts, as alleged.
The court notes that the defendant discussed aspects of this point in its reply brief; although issues first raised in a reply brief generally cannot be relied upon by the court, as already noted, the plaintiffs filed a sur-reply, thereby availing themselves of an opportunity to respond. Further, this is a sub-issue of the dispute as to the level of particularity required for a CUTPA claim, and the court cannot ignore something as fundamental as the level of actor that the court must consider, both as a matter of pleading and as a matter of (eventual) proof.
Consistent with the avoidance of reliance on any speaking quality of the motion or supporting briefs, the court has not relied on the particulars recited, but rather the general concept of multiple insurers, which, as noted, is already part of the case.
The court believes that the foregoing considerations preclude deeming a conclusory allegation as to other instances- especially as qualified by " on information and belief" - to suffice for purposes of legal sufficiency. Simplistically, in the context of the facts alleged in the complaint, the court cannot discern who allegedly did what as a business practice, that allegedly comes within the scope of CUIPA and therefore CUTPA.
The defendant also claims preemption of CUTPA by admiralty law. The court cannot agree, on the present record, that the CUIPA/CUTPA count is barred by admiralty law. The presentation of the defendant is somewhat contaminated by the speaking quality of the motion. The plaintiffs’ complaint makes no mention of any aspect of transit much less transit by waterway/sea, instead focusing on owned goods in a warehouse, coupled with assertions limited to the warehouse and whether the claimed absence of the goods comes within the scope of an all-risk warehouse endorsement. Other than the policy being characterized as a marine policy, there is no linkage to admiralty law as the circumstances are described in the complaint.
Conversely, the court is not satisfied that the defendant adequately has addressed the proper interplay between admiralty and insurance law. Although the defendant has cited cases supporting the proposition that attorneys fees and punitive damages under admiralty law are limited in the respects identified, the cases cited are based on evaluating claims that come within the scope of admiralty (generally with little or no dispute as to applicability of admiralty). The defendant has not established the inability to have a statutory claim somewhat related to a maritime claim, with attorneys fees and/or punitive damages arising under such a statute, either as a true absolute proposition or in the narrow context of this case. The defendant does state, in its initial brief, that " [w]here a conflict arises between a state statute and judicially-established admiralty law, the state law must yield to admiralty law. See Wilburn Boat Co. v. Fireman ’s Insurance Co., 348 U.S. 310, 314 (1955), " and Wilburn does contain language of that general nature. A careful reading of the analysis and holding in Wilburn reveals that insurance regulatory issues are not presumptively part of admiralty but instead generally are left to the states. As something of a contextual reminder, CUIPA is a state regulatory scheme directed to insurance, and the consequences of violation of the insurance regulations can trigger CUTPA liability,
For example, to the extent that admiralty generally has adopted the " American Rule" as to attorneys fees, a claim under admiralty generally would not allow attorneys fees absent suitable aggravating factors (bad faith). See, e.g., American National Fire Ins. Co. v. Kenealy, 72 F.3d 264 (2d Cir. 1995).
The whole judicial and legislative history of insurance regulation in the United States warns us against the judicial creation of admiralty rules to govern marine policy terms and warranties. The control of all types of insurance companies and contracts has been primarily a state function since the States came into being. In 1869, this Court held ... that States possessed regulatory power over the insurance business and strongly indicated that the National Government did not have that power. Three years later, it was first authoritatively decided ... that federal courts could exercise " jurisdiction" over marine insurance contracts. In 1894, years after the Dunham holding, this Court applied the doctrine of Paul v. Virginia and held that States could regulate marine insurance the same as any other insurance. Later, the power of States to regulate marine insurance was reaffirmed ... This constitutional doctrine carrying implications of exclusive state power to regulate all types of insurance contracts remained until 1944 when this Court decided United States v. Southeastern Underwriters Ass’n, 322 U.S. 533, 64 S.Ct. 1162, 88 L.Ed. 1440. Thus it is clear that at least until 1944 this Court has always treated marine insurance contracts, like all others, as subject to state control. The vast amount of insurance litigation in state courts throughout our history also bears witness that until recently state legislatures and state courts have treated marine insurance as controlled by state law to the same extent as all other insurance. (Internal quotation marks, footnotes and citations, omitted.) Wilburn Boat Co. v. Fireman ’s Fund Ins. Co., 348 U.S. 310, 316-17, 75 S.Ct. 368, 371-72, 99 L.Ed. 337 (1955).
The court continued by discussing Congressional involvement in the issue as well as other considerations, and eventually concluded:
Under our present system of diverse state regulations, which is as old as the Union, the insurance business has become one of the great enterprises of the Nation. Congress has been exceedingly cautious about disturbing this system, even as to marine insurance where congressional power is undoubted. We, like Congress, leave the regulation of marine insurance where it has been- with the States. (Footnote omitted.) Id., 348 U.S. 320-21, 75 S.Ct. 374.
In something of a contextual vacuum, if the defendant were addressing the circumstances under admiralty law under which punitive damages and/or attorneys fees were recoverable, its analysis might be facially convincing. However, there is a context- the ability of the State of Connecticut to establish standards for insurance companies in handling claims within its borders, including facial applicability to companies selling/underwriting marine coverage as purchased by Connecticut residents, with the correlative ability to create a limited compensatory scheme for violations of insurance practice standards, with compensation, in turn, potentially exceeding the scope of general principles of admiralty. With the issue framed in this manner, the court cannot conclude that the defendant has (on the current record) established that admiralty law preempts the plaintiffs’ CUTPA/CUIPA claims (to the extent that the plaintiffs are seeking attorneys fees and punitive damages, pursuant to statute). In other words, the defendant has not established that preemption by admiralty extends to state regulation of claim practices and a state’s efforts to bar unfair settlement practices (with the potential for non-admiralty-recognized relief), simply because there is a claimed (and in this case, highly indirect and disputed) claimed underlying connection to maritime issues.
Absent authorities and analysis focusing on preemption of state efforts to regulate insurance practices, and especially state efforts to prohibit unfair practices with the potential for a claim focusing on compensation for such unfair practices, the court cannot conclude that admiralty preemption applies here, as a matter of law. (This is complemented if not reinforced by the dearth of admiralty-invoking allegations in the complaint.)
Conclusion
In arguing that this motion to strike is a delay tactic, the plaintiffs ignore their own role- the motion is not directed to the core breach-of-contract claim based on the claimed wrongful failure to pay a claim under the policy, but rather to the plaintiffs’ attempted expansion of the scope of the action, and especially the attempt to obtain attorneys fees and punitive damages under CUTPA.
In evaluating a motion to strike, the court does not need to address each specification of improper conduct, but rather needs to determine whether there is a viable cause of action contained within the attacked count. As discussed above, the court cannot state that a claimed continued failure/refusal by an insurer to provide answers relating to coverage (the defendants " refused, and continue to refuse, to promptly or timely inform Gerald of their coverage position" (emphasis added)), if proven, would not constitute a breach of the implied covenant of good faith and fair dealing. The reality of insurance is that not all claims will be honored and that some claims take longer than others to investigate- whatever question there may be as to whether the plaintiffs’ allegations in these respects suffice for a claim of breach of the covenant of good faith and fair dealing, there would seem to be no issue that a claimant is entitled to answers relating to coverage to the extent that coverage is a (or the) basis for a denial of a claim. A claimed continued failure/refusal to provide an answer as to the insurer’s position as to coverage with respect to a multi-million dollar claim would seem to suffice, as a matter of pleading sufficiency.
For purposes of the CUTPA claim, the court does not believe that boilerplate references to other similar conduct can suffice, in the context of this case. (" 54. Upon information and belief, Defendant Underwriters have repeatedly engaged in the acts and practices set forth above with respect to policyholders in addition to Gerald, such that these practices constitute a general business practice.") Aside from the lack of any particularity as to which insurers/underwriters engaged in similar conduct, and whether such conduct related to marine or other policies, and whether it may have occurred in other jurisdictions where the conduct may or may not be deemed improper, the court notes that the plaintiffs have effectively argued, at least in part, that this actually may be a calculated " first" - that the defendant is attempting to avoid setting a precedent.
" Instead of honoring their obligations under the Policy, and apparently fearful that any payment to Gerald will open the floodgate to similar demands from other policyholders who also suffered losses at the Qingdao port, Underwriters have engaged in dilatory tactics in the course of their investigation, including ..." (page 9 of memorandum in opposition to motion to strike).
Perhaps simplistically, the defendant has focused on the underlying claim as arising under admiralty- something disputed by the plaintiffs- when for purposes of CUTPA/CUIPA, the issue is state regulation of insurance practices. Assuming that the underlying claim is governed by admiralty law, do the business practices of an insurer in handling a maritime claim necessarily follow that characterization, particularly given the deference expressed in Wilburn ? The parties discuss cases seemingly pointing in conflicting directions, but few of the cases explicitly address state regulation of insurance practices by way of formal statute or regulation, separate from the merits of the underlying claim itself.
The court cannot conclude that the defendant has established that, as a matter of law, CUTPA/CUIPA are preempted by admiralty law when the issue is unfair insurance practices. Cases such as American National Fire Ins. Co. v. Kenealy, 72 F.3d 264 (2d Cir. 1995) focus on the availability of attorneys fees as part of litigation directed to the merits of a specific insurance claim, arguably requiring application of admiralty law; they do not address the broader issue of state regulation of insurance practices that encompass the claim in issue. In Pace v. Insurance Company of North America, 838 F.2d 572, 579-80 (1st Cir. 1988), the court implicitly recognized a similar distinction (determining that a Rhode Island statute applicable to bad faith denials could be applicable to a maritime claim): " Construction and enforcement of the marine insurance contract itself will, of course, remain based in all cases upon uniform federal law. And there can be no recovery under the Rhode Island law unless plaintiff prevails on his admiralty contract claim."
Somewhat highlighting the distinction: the Rhode Island statute was deemed preempted by ERISA, with respect to an insurance claim that came within its ambit; Desrosiers v. Hartford Life & Accident Insurance Co., 354 F.Supp.2d 119, 128-29 (D.R.I. 2005), aff’d sub nom. Desrosiers v. Hartford Life & Accident Co., 515 F.3d 87 (1st Cir. 2008).
For all of these reasons, then, the motion to strike is granted as to the CUTPA claim but denied as to the assertion of a claimed breach of the covenant of good faith and fair dealing.
In an " unauthorized" sur-reply brief (Practice Book § 11-10(c)), the plaintiffs point out that the attachments to the reply brief are improper, accentuating the speaking motion quality of defendant’s submission. The court read the reply brief submitted by the defendant which made reference to those attachments, but the court did not read any such (improper) attachment.
31. Defendant Underwriters have engaged in dilatory tactics in the course of their investigation and failure to pay the claim. Defendant Underwriters have delayed in responding to Gerald’s submission of its claim and have made repeated requests for additional information beyond that needed to adjust the claim. 32. Despite having sufficient knowledge to determine that Gerald’s Loss was covered under the Policy, Defendant Underwriters refused, and continue to refuse, to acknowledge the validity of Gerald’s claim and refused, and continue to refuse, to promptly or timely inform Gerald of their coverage position. 33. Although Defendant Underwriters were aware of the facts necessary to determine that Gerald’s Loss was covered, they failed, and continue to fail, to fulfill their obligations under the Policy to pay Gerald for its Loss and costs incurred by Gerald to recover for its Loss.
Although the court does not believe that this is set forth specifically in the complaint, this would seem to support a claim of breach of the covenant of good faith and fair dealing.