Opinion
No. CV 04 0084733S
February 9, 2005
MEMORANDUM OF DECISION ON THE DEFENDANT'S MOTION TO STRIKE
STATEMENT OF THE CASE
Pending before the court is the motion to strike filed by the defendant Assurance Company of America. For the following reasons, the motion to strike is denied.
The plaintiff, Alfred Hebert, alleges the following facts in his substitute complaint. On February 25, 2002, the plaintiff bought a residential property located in Ansonia, Connecticut. In conjunction with this purchase, the plaintiff also purchased a casualty liability insurance policy from the defendant, Assurance Company of America, to insure the property for losses. On March 8, 2002, the property was extensively damaged by a fire. The plaintiff subsequently retained a licensed insurance adjuster, who submitted a proof loss to the defendant and attempted to adjust the claim on the plaintiff's behalf.
In a letter dated December 2, 2003, the defendant provided notice to the plaintiff of its decision to reject the plaintiff's claim. This letter states that "[the defendant's] investigation leads us to conclude that [the plaintiff] intentionally set the fire and [has] submitted this claim in an attempt to defraud [the defendant]. Additionally, [the defendant has] further determined that the plaintiff has] committed fraud . . . Therefore, the loss is not covered under the policy issued by [the defendant]."
On August 27, 2004, the plaintiff filed a three-count substitute complaint against the defendant. The first two counts allege breach of contract and breach of the implied covenant of good faith and fair dealing. The third count asserts a claim under the Connecticut Unfair Trade Practices Act ("CUTPA") (General Statutes § 42-110a, et seq.) for a violation of the Connecticut Unfair Insurance Practice Act ("CUIPA") (General Statutes § 38a-815, et seq.) The plaintiff denies that he committed arson and asserts that he was never the subject of a police investigation for arson in this or any other matter. The plaintiff alleges that the defendant rejected his claim without good cause, and ignored pertinent facts that would weigh in favor of the claim.
General Statutes § 42-110b(a) provides that "[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce."
General Statutes § 38a-816(6) provides in relevant part: "The following are defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance . . ." (6) . . . Committing or performing with such frequency as to indicate a general business practice any of the following . . . refusing to pay claims without conducting a reasonable investigation based upon all available information . . . not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear . . ."
On October 8, 2004, the defendant filed a motion to strike count three of the substitute complaint. As stated previously, under the third count, the plaintiff seeks damages under CUTPA based on the defendant's alleged violation of CUIPA. The plaintiff filed an objection to the motion, arguing that sufficient facts have been pleaded to support this count of the complaint.
DISCUSSION
The law is established that "[t]he 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 challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court." (Internal quotation marks omitted.) Broadnax v. New Haven, 270 Conn. 133, 173, 851 A.2d 1113 (2004). "For the purpose of ruling on a motion to strike, the facts alleged in a complaint, though not the legal conclusions it may contain, are deemed to be admitted." (Internal quotation marks omitted.) Murillo v. Seymour Ambulance Assn., Inc., 264 Conn. 474, 476, 823 A.2d 1202 (2003). "The court must construe the facts in the complaint most favorably to the plaintiff." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Vacco v. Microsoft Corp., 260 Conn. 59, 65, 79 A.2d 1048 (2002).
In count three, the plaintiff alleges that the defendant's dealings with plaintiff involved a pattern of wrongful conduct as to constitute a general business practice in violation of CUIPA, General Statutes § 38a-816(6). The plaintiff relies on the defendant's conduct in denying his claim as well as five other instances in which the defendant allegedly adjusted claims in a dilatory manner or without proper investigation.
In count three, paragraph 25 of his complaint, the plaintiff alleges that:
Unfair settlement practices were committed or performed with such frequency by Defendant as to indicate a general business practice by the defendant, including, but not limited to, instances in which the Defendant engaged in bad faith settlement practices such as Willimantic Car Wash, Inc. v. Assurance Company of America, Superior Court, judicial district of Windham at Putnam, Docket No. CV 01 080763, in which the [p]laintiff alleged that the [d]efendant failed to make payment on a policy of insurance claim notwithstanding repeated demands that it do so; Show Piece Homes Corp. v. Assurance Company of America, 38 P.3d 47, 31 Colo. Law. No. 2215 (2001), in which [p]laintiff alleged defendant failed to properly investigate and promptly settle claims made; Spina v. Assurance Company of America, Superior Court, judicial district of New Haven, Docket No. CV 03 0475219, which alleges [d]efendant's failure or refusal to properly investigate after repeated demands; and failure to properly investigate and promptly settle claims made; [Kenny] v. Assurance Company of America, 325 Ill.App.3d 904, 757 N.E.2d 596 (2001), in which the [d]efendant failed or otherwise refused to pay on claim made and/or investigate the claim and/or engaged in bad/faith claim adjustment practices; Staples v. Assurance Company of America (Court-of-Common Pleas of Philadelphia County, First Judicial District of Pennsylvania, Civil Trial Division, No 1088, Control No. 050178), in which it is alleged that the [d]efendant engaged in bad faith settlement practices and violation of the Pennsylvania Unfair Insurance Practices Act when it unnecessarily delayed paying the insured for a covered theft loss.
The defendant argues that the third count should be stricken because the plaintiff has failed to plead that the defendant committed any acts with such sufficient frequency and similarity as to constitute a general business practice, as required by § 38a-816(6). According to the defendant, the plaintiff's specific reference to other instances in which it has failed to settle insurance claims is legally insufficient to plead a CUTPA claim for a violation of CUIPA because the plaintiff does not allege that these other claims involved fire losses or that the defendant denied such claims on the basis of arson or misrepresentations by the claimants. The court rejects the defendant's position.
The defendant also argues that the plaintiff bears a heavy burden to plead a CUTPA claim with, particularity, relying on SMS Textile Mills v. Brown, Jacobson, Tillinghast, Lahan King, P.C., 32 Conn.App. 786, 797, 631 A.2d 340, cert. denied, 228 Conn. 903, 634 A.2d 296 (1993) (CUTPA claim must be pleaded with particularity to allow court to evaluate the legal theory upon which claim is based). The court rejects this argument that a CUTPA claim requires some heightened pleading requirement. As stated by the Supreme Court in Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 644, 804 A.2d 180 (2002), "We are unpersuaded that there is any special requirement of pleading particularity connected with a CUTPA claim, over and above any other claim."
"[A] CUTPA claim based on an alleged unfair claim settlement practice prohibited by § 38a-816(6) require[s] proof, as under CUIPA, that the unfair settlement practice has been committed or performed by the defendant with such frequency as to indicate a general business practice." (Internal quotation marks omitted.) Lees v. Middlesex Ins. Co., 229 Conn. 842, 850, 643 A.2d 1282 (1994). "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." (Citations omitted.) Id., 849 n. 8. As explained by the Connecticut Supreme Court, "claims of unfair settlement practices under CUTPA require a showing of more than a single act of insurance misconduct." Mead v. Burns, 199 Conn. 651, 659, 509 A.2d 11 (1986). "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." Lees v. Middlesex Ins. Co., supra, 229 Conn. 849.
Under the holding of Lees v. Middlesex, supra, 229 Conn. 850, in order to state a claim under § 38a-816(6), the plaintiff is only required to allege facts that show that the defendant has engaged in unfair settlement practices with such frequency as to indicate a general business practice. Section 38a-816(6) does not require, as the defendant suggests, that the types of claims must be similar or that the defendant must reject the other claims for the exact same reasons the claim was rejected in the present case. The crux of the plaintiff's claim here is that these numerous cases as alleged in the complaint are evidence that rather than investigating claims fairly and paying them reasonably, the defendant engages in a pattern of wrongful, bad faith conduct in which claims are neither fairly investigated, nor timely paid. Construing the allegations of the complaint most favorably to the plaintiff, the plaintiff has sufficiently pleaded that the defendant has committed unfair settlement practices with such frequency as to indicate a general business practice under § 38a-816(6). At this juncture in the case, the court need not examine the validity or merits of the other claims of misconduct relied on by the plaintiff to support the CUTPA count. See generally, O'Leary Limited Partnership v. Travelers Property Casualty Co., Superior Court, complex litigation docket of New London at Norwich, Docket No. X04 CV 99 0121281 (April 5, 2001, Koletsky, J.) ( 29 Conn. L. Rptr. 520) (court denies the defendant's motion to strike stating "until discovery has been completed . . . the plaintiff is entitled to gather information supporting its claim that the defendant's alleged wrongful conduct has been committed with such frequency as to indicate a general business practice").
In support of its contention that the plaintiff's allegations are insufficient, the defendant relies on Travelers Property Casualty Insurance Co. v. Troyer, Superior Court, judicial district of Hartford, Docket No. CV 98 0580328 (September 8, 2000, Fineberg, J.) ( 28 Conn. L. Rptr. 68). In Troyer, the court denied the defendant's motion to strike stating that "[t]he addition of allegations regarding the denial of fire claims as to two other insureds under circumstances similiar to the denial of [defendant's] claim is sufficient to state a claim upon which relief can be granted." (Emphasis added) Id., 69. The defendant also cites to Nuzzo v. Nationwide Mutual Insurance Co., Superior Court, judicial district of New Haven, Docket No. CV 96 0394015 (July 1, 1998, Silbert, J.), and Ferriolo v. Nationwide Mutual Insurance Co., Superior Court, judicial district of New Haven, Docket No. CV 97 0403133 (March 11, 1998, Hartmere, J.).
In these cases, the trial courts found that allegations of similar claims of at least two other unrelated claimants were sufficient to support a general business practice. The defendant does not, however, cite to any appellate court case in which the court specifically holds that allegations that the defendant engaged in similar conduct regarding different types of insurance policies are insufficient to support a CUTPA/CUIPA cause of action. Nor does the defendant cite to any cases in which the appellate courts state that the plaintiff is required to allege that the defendant rejected other claims on the same basis or for the same reasons that it rejected his claim. As discussed by the court in Kupersmith v. Executive Risk Specialty Ins. Co., Superior Court, complex litigation docket at Waterbury, Docket No. X01 CV 00 0160077 (January 26, 2001, Hodgson, J.), the cases on which the defendant relies "rest on the logic that where unrelated insureds are subjected to the same allegedly improper treatment in connection with separate and discrete policies, a general practice is alleged." (Emphasis added.). The conduct of a defendant engaged in a pattern of bad faith or unethical business practices may be expressed in innumerable ways, and the procedural requirements to plead such acts as a violation of CUTPA are not as narrow as the defendant contends.
CONCLUSION
Therefore, for the foregoing reasons, the defendant's motion to strike count three of the plaintiff's substitute complaint is hereby denied.
So ordered.
STEVENS, J.