Opinion
No. CV01-0276707-S
March 19, 2002
MEMORANDUM OF DECISION RE: MOTION TO DISMISS #113
On April 26, 2001, the plaintiff, John Hunter, filed a two count complaint against the defendants, Robert Olschelski (Olschelski) and "GEICO Direct" (GEICO). Count one alleges that Olschelski negligently moved or backed his car into the plaintiff's car, resulting in injuries to the plaintiff. Count two alleges that GEICO breached its duty of good faith and fair dealing to the plaintiff concerning the plaintiff's claims against Olschelski's policy. Specifically, the plaintiff alleges that GEICO failed to negotiate in good faith with the plaintiff, and failed to fully and fairly investigate the plaintiff's claim. The plaintiff also alleges that this breach constituted reckless indifference to the plaintiff, was wanton and malicious, and was in violation of the Connecticut Unfair Insurance Practice Act, General Statutes § 38a-816 (6).
In his complaint, the plaintiff had improperly named the defendant GEICO General Insurance Company as "GEICO Direct."
This provision of the Connecticut Unfair Insurance Practices Act lists fifteen ways in which one could commit unfair claim settlement practices. While the plaintiff has not alleged violations of specific provisions of this section, some of the examples listed include: "[m]isrepresenting pertinent facts or insurance policy provisions relating to coverages at issue. . . . failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies . . . 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 . . . attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured . . . failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement. . . ."
On July 3, 2001, GEICO filed a motion to dismiss count two of the complaint on the ground that the court lacks subject matter jurisdiction to hear the case. The motion is supported by a memorandum of law. On August 20, 2001, the plaintiff filed a memorandum in opposition to GEICO's motion to dismiss.
"A motion to dismiss may be used to assert . . . lack of jurisdiction over the subject matter. . . ." Practice Book § 10-31. "A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Emphasis in original; internal quotation marks omitted.) Gurliacci v. Mayer, 218 Conn. 531, 544, 590 A.2d 914 (1991). "A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." Upson v. State, 190 Conn. 622, 624, 461 A.2d 991 (1983).
Count two of the complaint alleges that GEICO has breached its duty of good faith and fair dealing to the plaintiff concerning the plaintiff's claims against the insured's policy. GEICO moves the court to dismiss this count on the ground that the court lacks subject matter jurisdiction. Specifically, GEICO argues that the plaintiff has no standing to bring the suit because he is neither a party to, nor a third party beneficiary of, the insurance policy issued to the alleged tortfeasor, Olschelski. Additionally, GEICO argues that the plaintiff has misconstrued the identity of the defendant.
The defendant argues that "GEICO Direct" is merely a registered service mark, not a legal entity, and therefore can not be sued since the plaintiff had filed its complaint against "GEICO Direct." On August 13, 2001, the plaintiff issued an amended complaint correcting his mistake by suing "GEICO Insurance Company," a legal entity, instead of "GEICO Direct." This memorandum will not address this misconstruction of identity issue because the standing issue is dispositive of the motion to dismiss.
In opposition to GEICO's motion to dismiss, the plaintiff argues that he has standing to bring the claim as a third party beneficiary because (1) GEICO is obligated to make a good faith effort when negotiating with injured plaintiffs, (2) Olschelski was the direct cause of the plaintiff's injuries, and (3) General Statutes § 38a-321 mandates that each insurance company that issues a policy to any person is legally responsible and absolutely liable whenever a loss occurs under the policy.
Standing implicates a court's subject matter jurisdiction. Stamford Hospital v. Vega, 236 Conn. 646, 656, 674 A.2d 821 (1996). "Where a plaintiff lacks standing to sue, the court is without subject matter jurisdiction." (Internal quotation marks omitted.) Steeneck v. University of Bridgeport, 235 Conn. 572, 579, 668 A.2d 688 (1995). "Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy. (Internal quotation marks omitted.) Williams v. Commission on Human Rights Opportunities, 257 Conn. 258, 264-65, ___ A.2d ___ (2001). "Standing focuses on whether a party is the proper party to request adjudication of the issues. . . ." Nye v. Marcus, 198 Conn. 138, 141, 502 A.2d 869 (1985).
"[T]he implied covenant of good faith and fair dealing has been applied by this court in a variety of contractual relationships, including . . . insurance contracts. . . ." Verrastro v. Middlesex Ins. Co., 207 Conn. 179, 190, 540 A.2d 693 (1988). "The concept of good faith and fair dealing is essentially . . . a rule of construction designed to fulfill the reasonable expectations of the contracting parties as they presumably intended." (Internal quotation marks omitted.) Id.
The plaintiff does not dispute the fact that he is not a party to the insurance policy between GEICO and Olschelski, but asserts that he is a third party beneficiary of the policy. "[T]he ultimate test to be applied [in determining whether a person has a right of action as a third party beneficiary] is whether the intent of the parties to the contract was that the promisor should assume a direct obligation to the third party [beneficiary] and . . . that intent is to be determined from the terms of the contract read in the light of the circumstances attending its making, including the motives and purposes of the parties. . . ." (Brackets in original.) Gazo v. Stamford, 255 Conn. 245, 261, 765 A.2d 505 (2001). The plaintiff, however, has not alleged any facts to support his assertion that he is a third party beneficiary under the policy. Instead, he relies on Gruenberg v. Aetna Ins. Co., 9 Cal.3d 566 (1973), cited with approval in Grand Sheet Metal Products Co. v. Protection Mutual Ins. Co., 34 Conn. Sup. 46, 375 A.2d 428 (1977), to support his claim that GEICO has a duty to deal with him in good faith.
The portion of Gruenberg that the plaintiff relies upon states: "It is manifest that a common legal principle underlies all of the foregoing decisions; namely, that in every insurance contract there is an implied covenant of good faith and fair dealing. The duty to so act is immanent in the contract whether the company is attending to the claims of third persons against the insured or the claims of the insured itself. Accordingly, when the insurer unreasonably and in bad faith withholds payment of the claim of its insured, it is subject to liability in tort."Gruenberg v. Aetna Ins. Co., supra, 9 Cal.3d 573.
The plaintiff's reliance on Gruenberg is misplaced. The holding ofGruenberg imposes the duty of good faith and fair dealing on an insurer only with reference to its insured. The duty, arising out of the contractual relationship between the insurer and the insured, "[attends] to the claims of third persons against the insured or the claims of the insured itself" Id. The court does not hold that the duty of the insurer extends to a third person who is not a party to the policy between the insurer and the insured. Because the plaintiff has not alleged any fact to show the existence of a contractual relationship between him and GEICO in the form of an automobile insurance policy between the parties, he has failed to show that GEICO owed him a duty to deal with him in good faith and fairly, pursuant to provisions of the policy. Because there is no showing of a duty, there is no breach of the duty as a matter of law.
The plaintiff also argues that he has statutory standing to sue GEICO because under § 38a-321, each insurance company that issues a policy to any person is legally responsible and absolutely liable whenever a loss occurs under the policy. He argues that GEICO is automatically responsible to the plaintiff for all direct and indirect injuries arising out of the motor vehicle collision. In response, GEICO argues that § 38a-321 does not allow an insurer to indemnify the insured under the insurance policy before a non-insured third party claimant has proved his or her case against the insured and obtained a judgment against the insured.
General Statutes § 38a-321 provides in relevant part: "Each insurance company which issues a policy to any person, firm or corporation. insuring against loss or damage on account of the bodily injury or death by accident of any person. or damage to the property of any person, for which loss or damage such person, firm or corporation is legally responsible, shall, whenever a loss occurs under such policy, become absolutely liable, and the payment of such loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss, damage or death occasioned by such casualty. No such contract of insurance shall be cancelled or annulled by any agreement between the insurance company and the assured after the assured has become responsible for such loss or damage, and any such cancellation or annulment shall be void. Upon the recovery of a final judgment against any person, firm or corporation by any person . . . for loss or damage on account of bodily injury . . . if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment."
"Under § 38a-321, the plaintiff is required to obtain a judgment against [the tortfeasor] before seeking recovery against [his insurance carrier.]" Lightowler v. Continental Ins. Co., 255 Conn. 639, 646 n. 15, ___ A.2d ___ (2001); see also Century Indemnity Co. v. Kofsky, 115 Conn. 193, 197-98, 161 A.2d 101 (1932). Thus, in this case, a judgment against Olschelski is a prerequisite to recovering against [his] insurer." Lightowler v. Continental Ins. Co., supra, 255 Conn. 645-46. Because there is no showing that the plaintiff has obtained a final judgment against Olschelski over count one of the complaint, the plaintiff fails to show that he has a cause of action against GEICO under § 38a-321.
The plaintiff also alleges that GEICO was recklessly indifferent to the plaintiff because of its failure to deal with him in good faith. The plaintiff further alleges that the failure was wanton and malicious, and was in violation of General Statutes § 38a-816 (6). The court need not address these claims because they are mere conclusions of law that are not supported by facts. See Novametrix Medical Systems v. BOC Group, Inc., 224 Conn. 210, 618 A.2d 25 (1992).
Accordingly, the defendant's motion to dismiss as to count two as against Geico of the complaint is granted as the court lacks subject matter jurisdiction with respect to said count.
BY THE COURT
Skolnick, J.