Opinion
No. FST CV 07 5004413 S
July 6, 2009
MEMORANDUM OF DECISION RE MOTION TO STRIKE (#152)
FACTS
On June 28, 2007, the plaintiffs, Jane Grossman and Ezra Grossman, commenced this action by service of process against the defendants, Homesite Insurance Company (Homesite) and Eagle Adjusting Services, Inc. (Eagle). The plaintiffs filed a twelve-count amended complaint dated August 26, 2008, alleging the following facts.
The plaintiffs were owners of property located at 38 Circle Drive in Greenwich (residence). On July 6, 2006, a fire occurred at the plaintiffs' residence destroying their personal property and rendering the residence uninhabitable. The residence was insured with Homesite. After the fire, Homesite retained Eagle, a property and casualty adjusting service, to investigate the plaintiffs' claims for additional living expenses and damages to their personal property and their residence.
The plaintiffs prepared and submitted to Homesite a list of all damaged and destroyed personal property with a replacement cost of $192,342.84 and an actual cash value of $154,797.30. The plaintiffs also submitted a claim for additional living expenses. On behalf of Homesite, Eagle prepared and submitted to the plaintiffs a list of damaged and destroyed personal property with a replacement cost of $100,755 and an actual cash value of $70,529. Homesite advanced to the plaintiffs the sum of approximately $79,000 to compensate them for the loss of their personal property and the sum of approximately $34,000 for additional living expenses.
Eagle, acting on behalf of and pursuant to the direction of Homesite, denied a portion of the plaintiffs' claim for additional living expenses incurred while residing at temporary housing rentals, stating that the plaintiffs stayed at an unlicensed bed and breakfast. The insurance contract provides for an appraisal of the loss sustained by the plaintiffs in the event that Homesite and the plaintiffs fail to agree on the amount of the losses. On June 14, 2007, Eagle issued a letter denying the payment of all future claims for insurance coverage and any future appraisal demands.
On October 27, 2008, Eagle filed this motion to strike, accompanied by a memorandum of law in support of the motion. The plaintiffs filed an objection to the motion on January 27, 2009. In their objection, the plaintiffs withdrew the second, fourth and tenth counts of their amended complaint. Pl. Memorandum, 3-4. Eagle filed a reply brief on March 19, 2009. The matter was heard at short calendar on March 23, 2009.
DISCUSSION
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498 (2003). "It is fundamental that in determining the sufficiency of a [pleading] challenged by a [party's] motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Gazo v. Stamford, 255 Conn. 245, 260, (2001).
"A motion to strike . . . does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 588, (1997). "[The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency . . . [I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Sullivan v. Lake Compounce Theme Park, Inc., 277 Conn. 113, 117-18, (2006). "A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 498.
At issue on this motion is the legal sufficiency of counts six, eight and twelve.
Count Six
In count six, sounding in negligent infliction of emotional distress, the plaintiffs allege that Eagle knew or should have known that its alleged conduct would cause both plaintiffs severe emotional distress which would have adverse physical consequences, and that this conduct did cause distress to both plaintiffs.
Eagle argues that the plaintiffs' negligent infliction of emotional distress claim is insufficient as a matter of law because Eagle owed no duty of care to the plaintiffs. Specifically, Eagle asserts that it owed no duty of care to the plaintiffs "because an independent insurance adjuster does not owe a tort duty to the insured for reasons of precedent, statutory and regulatory provisions and sound public policy."
"To establish a claim of negligent infliction of emotional distress, a plaintiff must prove the following elements: (1) the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress; (2) the plaintiff's distress was foreseeable; (3) the emotional distress was severe enough that it might result in illness or bodily harm; and (4) the defendant's conduct was the cause of the plaintiff's distress . . . Our Supreme Court continually [has] held that in order to prevail on a claim of negligent infliction of emotional distress, the plaintiff must prove that the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm.
"Further, it has reasoned that a successful claim of negligent infliction of emotional distress essentially requires that the fear or distress experienced by the plaintiffs be reasonable in light of the conduct of the defendants. If such a fear were reasonable in light of the defendants' conduct, the defendants should have realized that their conduct created an unreasonable risk of causing distress, and they, therefore, properly would be held liable. Conversely, if the fear were unreasonable in light of the defendants' conduct, the defendants would not have recognized that their conduct could cause this distress and, therefore, they would not be liable." (Citations omitted; internal quotation marks omitted.) Murphy v. Lord Thompson Manor, Inc., 105 Conn.App. 546, 552-53, cert. denied, 286 Conn. (2008).
"Before considering whether the necessary facts have been alleged, however, the court must first decide whether the defendant owed a duty of care to [the plaintiffs] capable of maintaining their claim of negligent infliction of emotional distress." Witt v. Yale-New Haven Hospital, Superior Court, judicial district of New Haven, Docket No. CV 06 5005021 (September 30, 2008, Bellis, J.) [46 Conn. L. Rptr. 486]. "The existence of a duty is a question of law and only if such a duty is found to exist does the trier of fact then determine whether the defendant violated that duty in the particular situation at hand . . . We have stated that the test for the existence of a legal duty of care entails (1) a determination of whether an ordinary person in the defendant's position, knowing what the defendant knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result, and (2) a determination, on the basis of a public policy analysis, of whether the defendant's responsibility for its negligent conduct should extend to the particular consequences or particular plaintiff in the case . . . The first part of the test invokes the question of foreseeability, and the second part invokes the question of policy . . . We also have noted, however, that we are not required to address the first prong as to foreseeability if we determine, based on the public policy prong, that no duty of care existed." (Citation omitted; internal quotation marks omitted.) Neuhaus v. DeCholnoky, 280 Conn. 190, 217-18, 905 A.2d 1135 (2006).
In deciding the question of whether the Eagle owed the plaintiffs a duty of care in adjusting their insurance claims, the court first addresses the question of whether public policy supports recognition of such a duty. There is no Connecticut case law addressing whether public policy supports the recognition a duty of care owed by a, perhaps inaptly described, independent insurance adjuster to an insured individual. In its memorandum of law in support of its motion, Eagle, however, does cite numerous cases in other jurisdictions where this issue has been decided. Those cases find that an independent insurance adjuster does not owe a duty of care to the insured for public policy reasons.
"There is a split of authority among those state jurisdictions that have addressed whether a negligence claim can be brought against an independent adjuster. The majority does not allow this cause of action."fn1 Charleston Dry Cleaners v. Zurich American Ins. Co., 355 S.C. 614, 618, 586 S.E.2d 586, 588 (2003).
In Meineke v. GAB Business Services, Inc., 195 Ariz. 564, 991 P.2d 267 (Ariz.Ct.App. 1999), the plaintiffs made a claim under their homeowners insurance policy after a fire destroyed their house. The insurance company contracted with an independent adjusting company to investigate the plaintiffs' claim. The plaintiffs disagreed with the disposition of their claim and brought suit against the insurance company and the independent adjusting company. In a motion for summary judgment, the adjusting company argued that it did not owe a duty to the plaintiffs, and, as a result, could not be liable for negligence. Id. 565-66. The trial court granted the motion and entered a judgment in the company's favor. Id. The Arizona Court of Appeals affirmed the lower court's decision, stating: "We conclude that the relationship between adjuster and insured is sufficiently attenuated by the insurer's control over the adjuster to be an important factor that militates against imposing a further duty on the adjuster to the insured . . . More important . . . imposing a duty on the adjuster in these circumstances would work a fundamental change in the law. The law of agency requires a duty of absolute loyalty of the adjuster to its employer, the insurer . . . The independent adjuster's obligation is measured by the contract between the adjuster and the insurer . . . Creating a separate duty from the adjuster to the insured would thrust the adjuster into what could be an irreconcilable conflict between such duty and the adjuster's contractual duty to follow the instructions of its client, the insurer." Id., 567-68.
In Charleston Dry Cleaners Laundry, Inc. v. Zurich American Ins. Co., supra, 355 S.C. 619, the South Carolina Supreme Court likewise declined "to recognize a general duty of due care from an independent insurance adjuster or insurance adjusting company to the insured." The court, in addressing the public policy considerations, reasoned that the insured could still bring a bad faith claim against the insurer as a source of recovery. Therefore, in a bad faith action against the insurer, the acts of the adjuster may be imputed to the insurer, allowing the injured insured plaintiff a remedy. Id.
The South Carolina Supreme Court also noted that "some states, however, have recognized a duty, and therefore allow a negligence claim in this context. See Continental Ins. Co. v. Bayless and Roberts, Inc., 608 P.2d 281 (Alaska 1980); Brown v. State Farm Fire and Casualty Co., 58 P.3d 217 (Okla.Ct.App. 2002); see also Bass v. California Life Ins. Co., 581 So.2d 1087 (Miss. 1991) (allowing claim for gross negligence)." Charleston Dry Cleaners Laundry, Inc. v. Zurich American Ins. Co., supra, 355 S.C. 619. For example, in Morvay v. Hanover Ins. Cos., 127 N.H. 723, 506 A.2d 333 (1986), the Supreme Court of New Hampshire recognized a duty owed by an independent insurance investigator to the insured. In Morvay, independent insurance investigators were hired by an insurance company to investigate a plaintiffs' claim after a fire damaged their home. The court found that the independent investigators were not in privity with the plaintiffs. The court reasoned, however, that the investigators "were fully aware that the plaintiffs could be harmed financially if they performed their investigation in a negligent manner and rendered a report to [the insurance company] that would cause the company to refuse payment to the plaintiffs. [The investigators] were also aware that there was a mutual duty of fair dealing between [the insurance company] and the plaintiffs." Id., 726. The court, therefore, held that the plaintiffs stated a cause of action in negligence against the independent insurance investigators. Id. The court's analysis of the duty of care in Morvay, differed from that of the Connecticut courts in that it only focused on the foreseeability prong of the duty of care test, and did not address public policy issues.
As previously indicated, the majority of courts from other jurisdictions have held that an independent insurance adjuster owes a duty only to the insurance company that hired it and, therefore, does not owe a duty of care to the insured plaintiff. This is partly based on the public policy ground that if the adjuster also owed a duty of care to the insured, it would "thrust the adjuster into what could be an irreconcilable conflict between such duty and the adjuster's contractual duty to follow the instructions of its client, the insurer." GAB Business Services, Inc., supra, 195 Ariz. 568. Having reviewed the foregoing cases and the various rationales employed therein, this court agrees with the reasoning applied by the majority of courts that have refused to find that an independent adjustor, hired by an insurance company to investigate or adjust the claim of one of its insureds, owes a duty to the insured on the basis of public policy grounds. See also Akpan v. Farmers Ins. Exchange, 961 So.2d. 865, 874 (Ala. Cir.App. 2007).
Eagle, therefore, did not owe a duty to of care to the plaintiffs. As there is no duty of care owed, the plaintiffs' claim for negligent infliction of emotional distress cannot survive. Eagle's motion to strike count six of the plaintiff's complaint is therefore granted.
Count Eight
In count eight, the plaintiffs allege that "Eagle's conduct . . . was immoral, unethical, unscrupulous" and constitutes conduct in violation of the Connecticut Unfair Trade Practices Act (CUTPA). Eagle moves to strike this count on the grounds that the plaintiffs fail to allege any immoral or unethical conduct on the part of Eagle and that all of the plaintiffs' allegations relate to Eagle's handling of the plaintiffs' single insurance claim and as such do not rise to the level of a general business practice as required by General Statutes § 38a-816(6). It is the plaintiffs' position that reading the allegations in a light most favorable to sustain their claim, Eagle was the primary actor in the conduct undertaken in the allegations against Homesite and these allegations should, therefore, apply to Eagle as well.
General Statutes § 42a-110b(a) provides in relevant part: "No person shall engage in any unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." "A party seeking to recover damages under CUTPA must meet two requirements: 1) he must establish that the conduct at issue constitutes an unfair or deceptive trade practice, and 2) he must prove a reasonable estimate of the damage suffered — that is, he has suffered ascertainable loss." (Internal quotation marks omitted.) Smith v. Geico General Ins. Co., Superior Court, judicial district of New London, Docket No. CV 08 5006746 (April 7, 2009, Martin, J.).
"It is well established that CUTPA affords a private cause of action to individuals." Nazami v. Patrons Mutual Ins. Co., 280 Conn. 619, 625, 910 A.2d 209 (2006); see Mead v. Burns, 199 Conn. 651, 663, 509 A.2d 11 (1986). "[A] CUTPA claim based on an alleged unfair claim settlement practice prohibited by § 38a-816(6) require[s] proof, as under [the Connecticut Unfair Insurance Practices Act (CUIPA), ] that the unfair settlement practice had been committed or performed by the defendant with such frequency as to indicate a general business practice . . . The term `general business practice' is not defined in the statute, so we may look to the common understanding of the words as expressed in a dictionary . . . `General' is defined as prevalent, usual [or] widespread . . . and `practice' means [p]erformance or application habitually engaged in . . . [or] repeated or customary action . . .
General Statutes § 38a-815 et seq., provides in relevant part: "No person shall engage in this state in any . . . unfair method of competition or an unfair or deceptive act or practice, in the business of insurance."
"In requiring proof that the insurer has engaged in unfair claim settlement practices with such frequency as to indicate a general business practice, the legislature has manifested a clear intent to exempt from coverage under CUIPA isolated instances of insurer misconduct. Therefore, claims of unfair settlement practices under CUIPA require a showing of more than a single act of insurance misconduct . . . Alleging improper conduct in the handling of a single insurance claim, without any evidence of misconduct by the defendant in the processing of any other claim, does not rise to the level of a general business practice." (Citations omitted; internal quotation marks omitted.) Palmieri v. Nationwide Mutual Ins. Co., Superior Court, judicial district of Fairfield, Docket No. CV 07 5012326 (January 28, 2009, Tobin, J.).
In the present case, the plaintiffs allege that "Eagle's conduct in the manner set forth in paragraph fifteen of . . . count [seven] was immoral, unethical, unscrupulous and constitutes conduct in violation of [CUTPA]. Paragraph fifteen of count seven, however, only makes allegations against Homesite. The plaintiffs allege within paragraph fifteen of count seven that Homesite failed to "honestly and fairly adjust claims with respect to the [plaintiffs] and others with such frequency as to constitute a method of doing business in violation of . . . CUIPA." No such allegations of general business practices are directed towards Eagle. Even interpreting these allegations in a light most favorable to the plaintiffs there is nothing in paragraph fifteen of count seven that suggests that Eagle "engaged in unfair claim settlement practices with such frequency as to indicate a general business practice." (Internal quotation marks omitted.) Palmieri v. Nationwide Mutual Ins. Co., supra, Superior Court, Docket No. CV 07 5012326. As such, the plaintiffs have failed to state a legally sufficient cause of action under CUTPA against Eagle.
Eagle's motion to strike count eight of the plaintiffs' amended complaint is granted.
Count Twelve
In count twelve, the plaintiffs claim that Eagle, by its actions, "intended to inflict emotional distress upon the [plaintiffs] or should have known that emotional distress was a likely result of its . . . extreme and outrageous . . . conduct." Eagle moves to strike this count on the ground that it fails to state a claim for intentional infliction of emotional distress because it does not allege extreme and outrageous conduct on the part of the defendant Eagle.
"In order for a plaintiff to make out an intentional infliction of emotional distress claim, [i]t must be shown: (1) that the actor intended to inflict emotional distress or that he knew or should have known that emotional distress was the likely result of his conduct; (2) that the conduct was extreme and outrageous; (3) that the defendant's conduct was the cause of the plaintiffs' distress; and (4) that the emotional distress sustained by the plaintiff was severe . . .
"Liability for intentional infliction of emotional distress requires conduct that exceeds all bounds usually tolerated by decent society . . . Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, Outrageous! . . . On the other hand, [c]onduct on the part of the defendant that is merely insulting or displays bad manners or results in hurt feelings is insufficient to form the basis for an action based upon intentional infliction of emotional distress . . . Whether a defendant's conduct is sufficient to satisfy the requirement that it be extreme and outrageous is initially a question for the court to determine . . . Only where reasonable minds disagree does it become an issue for the jury." (Citations omitted; internal quotation marks omitted.) Kontos v. Laurel House, Inc., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 06 5001408 (January 17, 2007, Adams, J.) (42 Conn. L. Rtpr. 709, 710).
"[I]t is the intent to cause injury that is the gravemen of the tort . . . [I]n assessing a claim for intentional infliction of emotional distress, the court performs a gatekeeping function. In this capacity, the role of the court is to determine whether the allegations of a complaint . . . set forth behaviors that a reasonable fact finder could find to be extreme or outrageous. In exercising this responsibility, the court is not fact finding, but rather it is making an assessment whether, as a matter of law, the alleged behavior fits the criteria required to establish a claim premised on intentional infliction of emotional distress." (Citation omitted; internal quotation marks omitted.) Davis v. Davis, 112 Conn.App. 56, 66, 962 A.2d 140 (2009).
In their complaint the plaintiffs allege that Eagle "acting on behalf of and pursuant to the direction of Homesite, denied a portion of [the] plaintiffs' claims for additional living expenses incurred while temporarily residing at . . . temporary house rentals." The plaintiffs also allege that Eagle "issued a letter denying the payment of all future claims for insurance coverage and any future appraisal demands to resolve the dispute between the parties." The plaintiffs further claim that "[b]y its conduct as aforesaid, including its actions constituting bad faith insurance claims, Eagle intended to inflict emotional distress upon the [plaintiffs], or should have known that emotional distress was a likely result of its conduct. Moreover, Eagle's conduct was extreme and outrageous and the conduct was the cause of the plaintiffs' distress."
The plaintiffs set forth their claims for bad faith insurance claims in count ten of their complaint. The plaintiffs, however, have withdrawn that count. Furthermore, even if the plaintiffs had not withdrawn the count, they also fail to state that they are incorporating the allegations contained within count ten of the complaint into count twelve. As such, this court will not consider the allegations contained in count ten in its analysis of whether the plaintiffs have sufficiently alleged a cause of action for the intentional infliction of emotional distress.
In the present case, the plaintiffs merely allege that Eagle denied certain claims that the plaintiffs believe that they are rightfully entitled to. Although the plaintiffs state that the conduct engaged in was "extreme and outrageous," they must also allege facts supporting this legal conclusion. Reasonable persons could not disagree that the facts alleged do not rise to the requisite level of extreme and outrageous conduct necessary to support a claim for intentional infliction of emotional distress. Accurso v. Gallo, supra, Superior Court, Docket No. CV 07 5009983; see, e.g., Carrol v. Allstate Insurance Co., 262 Conn. 433, 438-44, 815 A.2d 119 (2003) (finding that false conclusion that fire at plaintiffs' home was arson, based on inadequate and non-neutral investigation, was legally insufficient); Carnemolla v. Walsh, 75 Conn.App. 319, 331-32, 815 A.2d 1251, cert. denied, 263 Conn. 913, 821 A.2d 768 (2003) (holding that false accusation of criminal conduct insufficient for claim of intentional infliction of emotional distress); Major v. Allstate Ins. Co., Superior Court, judicial district of New Britain, Docket No. CV 05 4004913 (February 9, 2009, Pittman, J.) (holding that failure to make good faith efforts to adjust plaintiffs' claim, even if intended to frustrate the plaintiffs' contractual rights or to force her to accept a lower sum than warranted, did not constitute intentional infliction of emotional distress); Heinrichs v. Danbury Ins. Co., Superior Court, judicial district of Waterbury, Docket No. CV 05 4017531 (January 7, 2009, Scholl, J.) (finding failure to interview certain witnesses and letting plaintiff begin costly repairs with the expectation that he would be reimbursed and then denying was not extreme or outrageous). In this case, the court concludes that Eagle's motion to strike count twelve of the plaintiffs' amended complaint should be granted.
CONCLUSION
The motion to strike counts six, eight and twelve is granted.