Opinion
No. KNL-CV-08-5006746S
April 7, 2009
MEMORANDUM OF DECISION RE MOTION TO STRIKE #106
FACTS
On May 12, 2008, the plaintiff, Randee Smith, filed a four-count complaint for underinsured motorist benefits, bad faith, violation of the Connecticut Unfair Insurance Practices Act (CUIPA), General Statutes § 38a-315 et seq., and violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110b, against the defendant, Geico General Insurance Company. In her complaint, the plaintiff alleges the following facts. On November 11, 2006, the plaintiff suffered permanent injuries when she was struck by a negligent motor vehicle driver while operating her bicycle on Route 12 in Groton, Connecticut. At the time of the accident, the plaintiff had an insurance policy in effect with the defendant that provided uninsured/underinsured motorist coverage for $50,000 per person. The plaintiff accepted a settlement offer from the third-party tortfeasor's insurance company for his full policy limit of $25,000. The plaintiff then brought a claim for underinsured motorist benefits pursuant to the provisions of her policy with the defendant on March 13, 2008. On April 9, 2008, the defendant informed the plaintiff that it was unwilling to offer her the remaining $25,000 of available coverage in settlement.
On September 2, 2008, the defendant filed a motion to strike counts three and four of the plaintiff's complaint. The defendant submitted a memorandum of law in support of the motion. The plaintiff filed a memorandum of law in opposition on November 6, 2008. On November 26, 2008, the defendant filed a reply memorandum of law in further support of its motion.
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.) CT Page 6230 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.) Batte-Holmgren v. Commissioner of Public Health, 281 Conn. 217, 294, 914 A.2d 996 (2007). "In ruling on a motion to strike, the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). "It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006). "A motion to strike admits all facts well pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Emphasis in original; internal quotation marks omitted.) Faulkner v. United Technologies Corp., supra, 240 Conn. 588.
I Count Three — CUIPA
The defendant argues that count three of the plaintiff's complaint fails to state a claim for which relief can be granted because CUIPA does not provide for a private cause of action. The defendant further argues that even if the court were to allow a private cause of action under CUIPA, the plaintiff failed to plead sufficient facts to satisfy the statute's general business practice requirement. The plaintiff, noting a split of authority among the Superior Courts, counters that the line of cases permitting a private cause of action under CUIPA is the more persuasive view.
"The process for determining whether a private right of action is created under a statute is set forth in Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, 250 (1996), cert. denied, 520 U.S. 1103 (1997), overruled on other grounds by Batte-Holmgren v. Comm. of Public Health, 281 Conn. 277 (2007). In Napoletano, the court held that when a statute does not expressly create a private right of action, it will be presumed that the legislature did not intend to create one. In order to overcome that presumption, the party asserting the existence of the private cause of action must demonstrate that his claims satisfy a three-part test. Under the Napoletano test the court must examine: `First, is the plaintiff one of the class for whose . . . benefit the statute was enacted . . .? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? . . . Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff?' . . . Rollins v. People's Bank Corp., 983 Conn. 136, 142 (2007); see also [ Asylum Hill Problem Solving Revitalization Ass'n. v. King, 277 Conn. 238, 247]. In order to overcome the presumption that no private right is implied, it must be demonstrated that `no factor weighs against affording an implied right of action and the balance of factors weighs in [the plaintiff's] favor.' . . . Rollins v. People's Bank Corp., supra, 283 Conn. 142. `In examining these three factors, each is not necessarily entitled to equal weight. Clearly, these factors overlap to some extent with each other, in that the ultimate question is whether there is sufficient evidence that the legislature intended to authorize [the plaintiff] to bring a private cause of action despite having failed expressly to provide for one' . . . Id." Palmieri v. Nationwide Mutual Ins. Co., Superior Court, judicial district of Fairfield, Docket No. CV 07 5012326 (January 28, 2009, Tobin, J.).
Our appellate courts have not ruled on whether a private right of action exists under CUIPA. H L Chevrolet, Inc. v. Berkley Ins. Co., 110 Conn.App. 428, 441 n. 7, 955 A.2d 565 (2008). "While the Superior Courts which have considered the question are divided, a majority have determined that no private right of action exists." Union Street Furniture Carpet, Inc. v. The Hartford Financial Services Group, Inc., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 04 4002621 (April 12, 2006, Tobin, J.). "The consensus of these courts may be summarized as follows: 1) there is no express authority under CUIPA for private causes of action; 2) CUIPA is not ambiguous; 3) the regulatory scheme under CUIPA contemplates investigation and enforcement actions to be taken by the insurance commissioner; and 4) consequently there is no private cause of action under CUTPA." Tomonto v. Progressive Northern Ins. Co., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 04 4001543 (March 8, 2005, Tobin, J.). See Palmieri v. Nationwide Mutual Ins. Co., supra, Docket No. CV 07 5012326 (January 28, 2009, Tobin, J.); Szlachetka v. Mullen, Superior Court, judicial district of New Britain, Docket No. CV 02 0513409 (February 25, 2003, Dunnell, J.) (both cataloguing Superior Court decisions declining to recognize a private right of action under CUIPA).
"A number of Superior Courts have taken particular note of the express private right of action provided under CUTPA and the absence of similar provisions under CUIPA." Palmieri v. Nationwide Mutual Ins. Co., supra, Docket No. CV 07 5012326. Additionally, "[a] person who feels that he or she has been harmed by a CUIPA violation is not without remedy, but that remedy needs to be pursued as a CUTPA [claim]." (Internal quotation marks omitted.) Baroni v. Western Reserve Life Assurance Co. of Ohio, Superior Court, judicial district of Middlesex, Docket No. CV 99 0087965 (September 29, 1999, Gordon, J.). As a result, this court joins the majority of Superior Courts in holding that CUIPA does not provide a private right of action.
Moreover, the plaintiff has not alleged sufficient facts in count three indicating that the defendant has engaged in unfair settlement practices in violation of CUIPA. As our Supreme Court has stated, "of the sixteen categories of unfair insurance practices proscribed by General Statutes § 38a-816, only subsection (6) expressly requires proof that the unfair claim settlement practices enumerated therein were committed or performed `with such frequency as to indicate a general business practice.'" Lees v. Middlesex Ins. Co., 299 Conn. 842, 845 n. 5, 643 A.2d 1282 (1994), citing Mead v. Burns, 199 Conn. 651, 509 A.2d 11 (1986). "[C]laims of unfair settlement practices under CUIPA require a showing of more than a single act of insurance misconduct." Mead v. Burns, supra, 199 Conn. 659. 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." (Internal quotation marks omitted.) Lees v. Middlesex Ins. Co., supra, 229 Conn. 849.
In the present case, the plaintiff's allegations in count three state that the defendant's failure to offer the available underinsured motorist coverage in settlement of the plaintiff's claim does not constitute a fair and reasonable claims settlement practice. The plaintiff has not, however, alleged any facts constituting improper conduct in the handling of any other insurance claims, and without evidence of such misconduct by the defendant, the plaintiff's allegations do not rise to the level of a "general business practice" as required by § 38a-816(6).
Accordingly, the defendant's motion to strike count three of the plaintiff's complaint is granted.
II Count Four — CUTPA
The defendant argues that count four of the plaintiff's complaint should be stricken on the ground that the plaintiff failed to allege that the defendant engaged in unfair practices with such frequency as to establish a general business practice for purposes of a CUTPA claim. The plaintiff counters that her allegation of a general business practice is sufficient to properly plead the cause of action.
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. Hills Concepts, Inc. v. Schatz, Schatz, Ribicoff Kotkin, 247 Conn. 48, 78-79 (1998); Reader v. Cassarino, 51 Conn.App. 292, 298-99 (1998)." Ingels v. Saldana, Superior Court, judicial district of Fairfield, Docket No. CV 040041529 (April 18, 2006, Radcliffe, J.).
"In determining whether a practice violates CUTPA, Connecticut has adopted the three-fold test known as the `cigarette rule': 1) does the practice offend public policy within a common law, statutory or other concept of fairness, 2) is it immoral, unethical, oppressive or unscrupulous, and 3) does it cause substantial injury to consumers. Hartford Electric Supply Co., v. Allen-Bradley Co., 250 Conn. 334, 367-68 (1999)." Gonzalez v. Allstate Ins. Co., Superior Court, judicial district of Fairfield, Docket No. CV 06 5004078 (February 1, 2007, Radcliffe, J.).
Our Supreme Court has held that a "private cause of action [exists] under CUTPA to enforce alleged CUIPA violations." Mead v. Burns, supra, 199 Conn. 663. "Superior Courts have also held . . . that as long as the allegations under CUTPA are sufficient, the CUTPA count may stand, even if the CUIPA count is stricken." Palmieri v. Nationwide Mutual Ins. Co., supra, Docket No. CV 07 5012326. "By the enactment of the two statutes with their similar prohibitions, the General Assembly manifested an intention to subject insurance practices to the regulatory schemes of both . . . Subsequently it was made clear that when a CUTPA claim is based on a public policy governing insurance practices, as enunciated in CUIPA, it is the CUIPA allegation that forms the essence of a plaintiff's claim rather than the more generalized CUTPA language . . . Put another way, it is the CUIPA violation that is the equivalent of CUTPA's `cigarette rule.'" (Citations omitted.) Engelman v. Connecticut General Life Ins. Co., Superior Court, judicial district of New Haven, Docket No. CV 92 0337028 (August 12, 1997, Barnen, J.) (20 Conn. L. Rptr. 331, 335).
"[A] CUTPA claim based on the public policy embodied in CUIPA must be consistent with the regulatory principles established therein, and . . .'[t]he definition of unacceptable insurer conduct in [§ 38a-816(6)] reflects the legislative determination that isolated instances of unfair insurance settlement practices are not so violative of the public policy of this state as to warrant statutory intervention.'" Lees v. Middlesex Ins. Co., supra, 229 Conn. 850-51. Therefore, "[f]or a CUTPA/CUIIPA claim to survive a motion to strike . . . the majority of superior court decisions have construed `[t]he frequently cited cases of Mead and Lees . . . [to] require that claims of unfair settlement practices under CUIPA [show] . . . more than a single act of insurer misconduct . . . [and] that there must be evidence of misconduct by the insurer in the processing of other policyholders' claims in order to rise to the level of a general business practice.' Southridge Capital Management, LLC v. Twin City Fire Ins. Co., Superior Court, complex litigation docket at Middletown, Docket No. X04 CV 02 103527 (June 3, 2005, Quinn, J.) (39 Conn. L. Rptr. 634)." Starview Ventures, LLC v. Acadia Ins., Superior Court, judicial district of New Haven, Docket No. CV 06 5003463S (October, 17, 2006, Skolnick, J.T.R.).
Despite the foregoing authority, the plaintiff argues that a general allegation of a general business practice should be sufficient, citing Powell v. Infinity Ins. Co., 982 Conn. 594, 922 A.2d 1073 (2007) as support for her proposition. In Powell, our Supreme Court held that CUIPA and CUTPA claims must be pursued at the same time as underlying breach of contract actions against insurance companies in underinsured motorist claims. This court is not persuaded that, by this decision, our Supreme Court intended to eradicate the requirement to evidence insurer misconduct in the processing of other claims in CUIPA/CUTPA actions. Moreover, numerous Superior Court cases have continued to uphold the requirement pursuant to such claims. See, e.g., Fowler v. Allstate Property Casualty Ins. Co., Superior Court, judicial district of Fairfield, Docket No. CV 08 5016911 (January 7, 2009, Bellis, J.); Heinrichs v. Danbury Ins. Co., Superior Court, judicial district of Waterbury, Docket No. CV 05 4017531 (January 7, 2009, Scholl, J.); Edible Arrangements v. Keh/L.H. Brenner, Inc., Superior Court, judicial district of New Haven, Docket No. CV 08 5019963 (December 29, 2008, Corradino, J.) Ambrose v. Golden Rule Ins. Co., Superior Court, judicial district of Danbury, Docket No. CV 07 5003730 (July 28, 2008, Shaban, J.); Michalek v. Allstate Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV 07 5008280 (January 18, 2008, Elgo, J.).
In the present case, the plaintiff's allegations of the defendant's misconduct reference only her particular claim. While the plaintiff alleges that the defendant's conduct was "immoral, unethical, oppressive, unscrupulous, offended public policy and caused substantial injury to consumers including the plaintiff and were done with reckless indifference to the rights of the plaintiff," such allegations are merely legal conclusions that do not state a cause of action upon which relief may be granted, and therefore, do not withstand a motion to strike. Further, the plaintiff appears to concede that she is presently unable to make the necessary factual allegations by indicating in her memorandum of law in opposition that she intends to conduct discovery into the defendant's conduct in the handling of other unrelated claims to establish the existence of a general business practice. Therefore, the plaintiff has not sufficiently pleaded a general business practice on the part of the defendant for purposes of a CUIPA/CUTPA claim.
Accordingly, the defendant's motion to strike count four of the plaintiff's complaint is granted.
CONCLUSION
Based on the foregoing, the court hereby grants the defendant's motion to strike counts three and four of the plaintiff's complaint.