Opinion
HHDCV156063454S
04-24-2017
Hartford Underwriters Insurance Company v. Rottjer Renovation Company, LLC
UNPUBLISHED OPINION
ORDER RE: MOTION TO STRIKE #118
CESAR A. NOBLE, J.
This matter is before the court on the plaintiff's motion to strike the defendant's Second Revised Counterclaim (counterclaim.) The plaintiff's motion is granted in part and denied in part.
This action was started by the plaintiff, Hartford Underwriters Insurance Company, to recover unpaid premiums it claims it is owed by the defendant, Rottjer Renovation Company, LLC, for a workers' compensation insurance policy (the policy) issued by the plaintiff to the defendant providing coverage for the latter's contracting business. The factual predicate for the present counterclaim, and two prior counterclaims, is the imposition by the plaintiff on the defendant of an " earned premium" in the third year of the policy that reflected coverage for the owner of the defendant despite a specific request for exclusion from coverage. The plaintiff is alleged to have cancelled the policy after the defendant protested the significantly increased premium. The one-count counterclaim asserts a cause of action pursuant to General Statutes, § 42-110b, et seq., the Connecticut Unfair Trade Practices Act (CUTPA), as a consequence of the claimed violation of two provisions of the Connecticut Unfair Insurance Practices Act (CUIPA), General Statutes § 38a-815 et seq. Specifically, the defendant claims the plaintiff violated § 38a-816(1)(A) by misrepresenting the benefits, advantages and conditions of the workers' compensation policy when it renewed the workers' compensation policy for the period starting October 1, 2013, and violated § 38a-816(1)(F) by misrepresenting the premium when it renewed the workers' compensation policy for the same period. The plaintiff argues that factual allegations do not support the claimed violations of CUIPA. For the reasons stated below the court grants the plaintiff's motion to strike the counterclaim as to paragraph 12(b) of the counterclaim but denies it as to paragraph 12(a).
General Statutes § 38a-815 prohibits certain practices in the business of insurance. Section 38a-816 specifically defines the prohibited practices.
Standard
" 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, 815 A.2d 1188 (2003). " A motion to strike . . . may properly be used to challenge the sufficiency of a counterclaim." (Internal quotation marks omitted.) Cadle Co. v. D'Addario, 131 Conn.App. 223, 235, 26 A.3d 682 (2011). " 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.) Santorso v. Bristol Hospital, 308 Conn. 338, 349, 63 A.3d 940 (2013). The court construes the factual allegations in the light most favorable to sustaining its legal sufficiency. Geysen v. Securitas Security Services USA, Inc., 322 Conn. 385, 398, 142 A.3d 227 (2016).
Analysis
This court agrees with the majority of federal and Connecticut state courts which have held that there is no private cause of action provided by CUIPA. See Watton v. Geico Indemnity Co., Superior Court, judicial district of Hartford, Docket No. 085018837, (November 13, 2008, Aurigemma, J.) (2008 WL 5220493, at *1). A violation of CUIPA may nevertheless serve as the basis for a private cause of action as permitted under CUTPA. Mead v. Burns, 199 Conn. 651, 663, 509 A.2d 11 (1986). This is so because CUIPA articulates the public policy governing general insurance practices the transgression of which triggers a CUTPA violation. State v. Acordia, Inc., 310 Conn. 1, 37, 73 A.3d 711 (2013). The defendant has in the present counterclaim advanced CUTPA as the vehicle for asserting a CUIPA claim.
The first two counterclaims were stricken by the court, Peck, J., on the grounds that the plaintiff failed to allege sufficient facts to support a violation of CUIPA. See Entry Nos. 106.86 and 111.86.
Section 38a-816(1) prohibits misrepresentations and false advertising of insurance policies by, inter alia and as relevant to the present case, issuing an estimate which misrepresents the terms of any insurance policy under § 38a-816(1)(A), or is a misrepresentation for the purpose of inducing the purchase of an insurance policy under § 38a-816(1)(F).
The only allegations of the complaint which might support a violation of § 38a-816(1)(A) are that the plaintiff quoted a premium in 2013, which was the same as that in prior years and which presumably reflected an exclusion from coverage of the owner, but sold a different insurance product to the defendant, one that provided coverage for the owner and which required a substantially higher premium. " Misrepresentation" is defined as " [t]he act of making a false or misleading assertion about something, usu. with the intent to deceive." Black's Law Dictionary (10th Ed. 2014). Certainly the allegations are susceptible of an interpretation involving a simple mistake. However, viewed in a manner most favorable to finding legal sufficiency, as it is required to do, the court holds that the counterclaim supports a claimed violation of § 38a-816(1)(A) because the allegations are consistent with the quote constituting a false or misleading assertion as to either the ultimate premium for, or the coverage of, the policy that was sold. The plaintiff's motion is therefore denied as to this specific claimed violation of CUIPA.
The allegations of the counterclaim do not, however, even when read in a manner most likely to sustain its legal sufficiency, support a violation of § 38a-816(1)(F). Section § 38a-816(1)(F) encompasses an estimate which constitutes a " misrepresentation, including, but not limited to, an intentional misquote of a premium rate for the purpose of inducing or tending to induce to the purchase . . . of any insurance policy . . ." " [T]he plain language of the statute permits recovery only if an insured establishes that its insurer made a purposeful misrepresentation. To show such a purposeful misrepresentation, an insured must necessarily [establish] that the insurer acted intentionally." Heyman Associate No. 1 v. Ins. Co. of State of Pennsylvania, 231 Conn. 756, 795, 653 A.2d 122 (1995). Lax clerical or administrative procedures are insufficient to bring the conduct within the ambit of § 38a-816(1)(F). Id. Because no such intent has been pled the court strikes this claimed violation of CUIPA.
The court is mindful that under prior rules of practice it was generally improper to strike a paragraph, or sub-paragraph, unless the portion sought to be stricken purported to state a separate cause of action. See Doe v. Hartford Roman Catholic Diocesan Corp., Superior Court, judicial district of Hartford, Docket No. 115035749S (January 7, 2014, Peck. J.) (2014 WL 3511700, at *3) [58 Conn.L.Rptr. 132, ]. This court is, however, persuaded by the reasoning of Judge Silbert in Cook v. Stender, Superior Court, judicial district of Middlesex, Docket No. CV-04-0104110-S, (December 22, 2004, Silbert, J.) (2004 WL 3130557) (38 Conn.L.Rptr. 439, 440, ). Such prior law and rules " ought not to be read for the proposition that clearly improper allegations upon which relief may not be granted as a matter of law must remain in a complaint indefinitely, leading to confusion for the court, the parties and the jury, just because there are aspects of the complaint that are otherwise valid." Id. A rule against striking a legally insufficient paragraph or sub-paragraph which does not state an independent cause of action may result in the consideration of an unrecognized claim as a basis for liability or oblige a court to somehow withhold the insufficient claim from inclusion in the adjudication of the remaining issues. There is no set procedural device for the latter course and the former is a proposition antithetical to the administration of justice.
For the foregoing reasons the plaintiff's motion to strike is granted as to paragraph 12(b) of the defendant's Second Revised Counterclaim but denied as to paragraph 12(a).