Opinion
No. CV-09-5027821S
August 11, 2009
MEMORANDUM OF DECISION ON MOTION TO STRIKE
The defendant, Covenant Insurance Company, has moved to strike the Third Count of the Complaint, which alleges bad faith by the defendant, on the ground that that count fails to state a cognizable cause of action.
Facts
The First Count of the complaint alleges a breach of the insurance policy contract between William Lynch, the plaintiff's decedent ("Lynch"), and Covenant Insurance Company ("Covenant"). The insurance policy covered residential real estate owned by Lynch in West Suffield, Connecticut and covered liability for personal injury and property damage to others. The limit of liability set forth in the policy was $300,000 per occurrence. The complaint further alleges:
7. The Policy provides, in Section H-Liability Coverages-Coverage E — Personal Liability, "[i] a claim is made or a suit is brought against an `insured' for damages because of `bodily injury' or `property damage' caused by an `occurrence' to which this coverage applies, we will: 1. Pay up to our limit of liability for the damages for which the `insured' is legally liable . . . 2 . . . [w]e may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when the amount we pay for damages resulting from the `occurrence' equals our limit of liability."
8. The Policy further provides in Section II-Additional Coverages "[w]e cover the following in addition to the limits of liability: 1. Claim Expenses. We pay: a. Expenses we incur and costs taxed against an `insured' in any suit we defend."
The Complaint also alleges that in July 2005, the Nilsons were the owners of residential real property adjacent to the Lynch property and notified Lynch that environmental testing conducted on the Nilson Property revealed the presence of petroleum in the groundwater, which had allegedly contaminated the water supply on the Nilson property. The Nilsons claimed that the environmental testing concluded that the source of the petroleum on the Nilson property was a leaking fuel line attached to an above-ground oil tank on the Lynch Property and that Lynch was liable to the Nilson for the damages caused by the contamination.
Lynch duly and timely report the Nilsons' claim to Covenant and shortly thereafter, Covenant notified Lynch that the Policy limit had been nearly exhausted by the expenses Covenant has incurred for site investigation at the Nilson Property.
Because of Covenant's failure to settle with the Nilsons, the Nilsons served Lynch with an Application for Prejudgment Remedy and started suit against Lynch based on the alleged contamination. On December 1, 2006 this court, Satter J., granted a prejudgment attachment of Lynch's assets in the amount of $115,000. Despite demand, Covenant refused to settle the Nilson's claim for $115,000, although the Nilsons would have accepted $115,000 in full settlement of their claim.
The plaintiff estate decided to contribute to the settlement of the Nilson claim in order to mitigate its damages and entered into an agreement with the Nilsons and Covenant under the terms of which the plaintiff estate agreed to pay $38,655.51 to the Nilsons. That amount was the difference between $115,000 and the $76,344.49 that Covenant claimed remained available pursuant to the Policy. The Complaint further alleges the Covenant's actions in failing and refusing to honor its contractual obligations pursuant to the Policy, including, but not limited to its failure to pay the entire $115,000 of the settlement to the Nilsons, constituted a breach of its contract with Lynch.
The Second Count of the Complaint seeks a declaratory judgment. It incorporates the allegations of the First Count and further alleges that "a dispute exists between the parties that involves actual and substantial questions of law requiring the Court to eliminate the uncertainty concerning their rights."
The Third Count for Bad Faith, which is the subject of the present motion, incorporates the allegations of the First Count described above, and adds that "the actions of Covenant, as set forth above, were willful, malicious, and undertaken in bad faith."
Discussion of the Law and Ruling
The function of a motion to strike is to test the legal sufficiency of a pleading. Practice Book § 10-39; Ferryman v. Groton, 212 Conn. 138, 142, 561 A.2d 432 (1989); Mingachos v. CBS, Inc. 196 Conn. 91, 108, 491 A.2d 368 (1985). In deciding a motion to strike the trial court must consider as true the factual allegations, but not the legal conclusions set forth in the complaint. Liljedah Bros., Inc. v. Grigsby, 215 Conn. 345, 348, 576 A.2d 149 (1990); Blancato v. Feldspar Corp., 203 Conn. 34, 36, 522 A.2d 1235 (1987).
The court should view the facts in a broad fashion, not strictly limited to the allegations, but also including the facts necessarily implied by and fairly provable under them. Dennison v. Klotz, 12 Conn.App. 570, 577, 532 A.2d 1311 (1987). In ruling on a motion to strike, the court must take as admitted all well-pled facts, and those necessarily implied thereby, and construe them in the manner most favorable to the pleader. Norwich v. Silverberg, 200 Conn. 367, 370, 511 A.2d 330 (1986).
"It is incumbent on a Plaintiff to allege some recognizable cause of action" in the complaint and it is not the burden of the defendant to attempt to correct the deficiency. Brill v. Ulrey, 159 Conn. 371, 374, 269 A.2d 262 (1970). A motion to strike is an appropriate means of presenting to the court legal issues at the outset of litigation. Gordon v. Bridgeport Housing Authority, 208 Conn. 161, 170, 544 A.2d 1185 (1988). "Whenever a party wishes to contest . . . the legal sufficiency of any such complaint . . . or any count thereof, because of the absence of any necessary party . . . that party may do so by filing a motion to strike the contested pleadings or part thereof." George v. St. Ann's Church, 182 Conn. 322, 325, 438 A.2d 97 (1980).
The appellate courts of this state have not addressed the precise issue here: where an insurer denies or limits coverage under an insurance policy, what allegations are required to allege bad faith as opposed to breach of contract. However, a majority of trial courts have held that "plaintiffs must plead facts that go beyond a simple breach of contract claim and enter into a realm of tortious conduct which is motivated by a dishonest or sinister purpose." Ferriolo v. Nationwide Insurance, 1998 Ct.Sup. 2563 (March 11, 1998, Hartmere, J.). See also Crespan v. State Farm Mutual Automobile Ins. Co., 2006 Ct.Sup. 994 (Jan. 13, 2006, Pickard, J.); Bernard v. Buendia, 2005 Ct.Sup. 11369 (July 20, 2005, Doherty, J.) (In order to make a bad faith claim the plaintiff must allege that the defendant did more than simply deny the plaintiff's claim for benefits); OG Industries, Inc. v. Travelers Property Casualty Corporation, 2001 Ct.Sup. 12601, (September 7, 2001, Cremins, J.) (plaintiff's mere legal conclusion that the failure to defend and indemnify amounts to a violation of the duty of good faith and fair dealing was insufficient and did not properly state a claim of bad faith); Grant v. Colonial Penn Insurance Company, 1996 Ct.Sup. 482 (Jan. 16, 1996, Hauser, J.) [ 16 Conn. L. Rptr. 49] (Bad faith claim must be alleged in terms of wanton and malicious injury and evil intent).
The Third Count incorporates the allegations of the First Count but adds no new factual allegations whatsoever. Instead, it merely adds the conclusory language that the defendant's conduct was "willful, malicious and in bad faith." "By nomenclature alone the plaintiffs cannot transform their conclusory allegations into a cause of action for bad faith without specific allegations to support it." McCrea v. Louis Dreyfus Corporation, 1994 Ct.Sup. 9888 (Sept. 28, 1994, Stodolink, J.) [ 12 Conn. L. Rptr. 493].
The Third Count fails to state a cause of action for Bad Faith by the defendant and is ordered stricken.