Opinion
No. FBT-CV-09-4028802-S
September 23, 2010
MEMORANDUM OF DECISION, MTN #129, DEFENDANT STATE FARM'S MOTION TO STRIKE COUNT 11 OF THE THIRD REVISED COMPLAINT
This action, brought by Trans-Clean Corporation (Trans-Clean") against, among others, State Farm Mutual Automobile Insurance Company ("State Farm") seeks a declaratory judgment and claims both a breach of contract as well as a breach of the implied covenant of good faith and fair dealing. The action arises out of State Farm's denial of coverage and indemnification for an underlying suit brought against the plaintiff by Jose Santana ("the Santana litigation"), which alleges personal injuries caused by the plaintiff's employee.
Trans Clean provides cleaning services to its customers by having its personnel go to the customer and clean the customers' vehicles. Trans-Clean had both liability insurance for its business as well as insurance for its vehicles. Defendant State Farm was the insurer of the vehicles.
For the reasons set forth below, the motion to strike is GRANTED.
Discussion
The role of the trial court in ruling on a motion to strike is test the legal sufficiency of a pleading. RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 384 (1994). The court must "examine the [complaint] construed in favor of the [plaintiff] to determine whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378 (1997). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Moreover, [w]hat is reasonably implied [in an allegation] need not be expressly alleged." (Citation omitted; internal quotation marks omitted.) Lombard v. Edward J. Peters, Jr., P.C., 252 Conn. 623, 626 (2000).
The court is limited "to a consideration of the facts alleged in the complaint. A speaking motion to strike (one imparting facts outside the pleadings) will not be granted." Doe v. Marseille, 38 Conn.App. 360, 364 (1995), rev'd on other grounds, 236 Conn. 845 (1996).
Plaintiff's opposition to the motion to strike includes appended exhibits, from which the plaintiff advances various arguments. Those exhibits and the arguments premised upon their content cannot and will not be considered by the Court in deciding a motion to strike. See, Doe v. Marseille, supra.
For purposes of the motion to strike, the moving party admits all facts well pleaded. RK Constructors, Inc. supra at 383 n. 2. The same is not so of legal conclusions and a motion to strike may be granted if the complaint alleges "mere conclusions of law that are unsupported by the facts alleged." Novametrix Medical Systems, Inc. v. BOC Group, Inc., 224 Conn. 210, 215 (1992).
Discussion
State Farm filed a motion to strike Count Eleven of the third revised complaint, which purports to allege a breach of the implied covenant of good faith and fair dealing, on the basis that the pleading is insufficient as a matter of law.
In Connecticut, an implied duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship. Hoskins v. Titan Value Equities Group, Inc., 252 Conn. 789, 793 (2000). It exists and has been recognized to apply to the contractual relationship between an insured and an insurer. Hoyt v. Factory Liberty Mutual Ins. Co., 120 Conn. 156, 159 (1935); Verrastro v. Middlesex Insurance Co., 207 Conn. 179, 190 (1988).
The elements of a cause of action which alleges a breach of the implied duty of good faith and fair dealing are as follows: (1) the plaintiff and the defendant were parties to a contract under which the plaintiff reasonably expected to receive certain benefits; (2) that the defendant engaged in conduct that injured the plaintiff's right to receive some or all of those benefits; and (3) that when committing the acts by which it injured the plaintiff's right to receive benefits he reasonably expected to receive under the contract, the defendant was acting in bad faith. Franco v. Yale University, 238 F.Sup.2d. 449, 454-55 (D.Conn. 2002), citing, Fairfield Financial Mortgage Group, Inc. v. Salzar, No. CV000339752S, 2002 WL 1009809 at *3 (Conn.Super. Apr. 23, 2002).
Here, the motion to strike challenges the sufficiency of the complaint as to this third element. Our Supreme Court has described "bad faith" as "the opposite of good faith, generally implying a design to mislead or to deceive another." Buckman v. People Express, Inc., 205 Conn. 166, 171 (1987). "Bad faith is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity . . . it contemplates a state of mind affirmatively operating with furtive design or ill will." Id. See also, Habetz v. Condon, 224 Conn. 231, 237 (1992).
Whether bad faith is adequately pled must be determined on a case-by-case basis. See, e.g. Uberti v. Lincoln National Life Ins. Co., 144 F.Sup.2d 90, 104 (D.Conn. 2001); Verrastro v. Middlesex Ins. Co., supra at 190. However, pleadings that disclose or allege a "mere coverage dispute or mere negligence in an investigation will not demonstrate a breach of good faith and fair dealing." Id.
The question presented is whether the "facts provable in the complaint would support" this cause of action. Waters v. Autuori, 236 Conn. 820, 826 (1996). A number of Superior Court decisions have analyzed similar cases. The majority have held that a plaintiff is required to plead factual specificity as to how the defendant's actions were done in bad faith and in what manner the conduct was done with ill purpose, an intent to defraud or deceive, bad motive or violence. See, e.g. Martin v. Am Equity Insurance Company, 185 F.Sup.2d 162 (D.Conn. 2002) (mere conclusory allegations are an inadequate basis for an inference of bad faith); Brouillard v. United Illuminating Co., Superior Court for the Judicial District of New Haven, Dkt. No. 98-0418595 (June 1, 1999) (Silbert, J.) (allegation that defendant omitted to include its credit reporting policies in service agreement coupled with conclusory allegation that information provided to credit reporting agency was adverse and fraudulent was inadequate); Crespan v. State Farm Mutual Auto Insurance Co., Judicial District of Litchfield, Dkt. No. 05-4002121 (January 13, 2006) (Pickard, J.) (Despite multiple allegations of improper conduct by the insurer, the complaint did not rise to the level necessary to sustain a claim of bad faith as it lacked any allegation of "some interested or sinister motive or dishonest purpose"); Liquor v. Assurance Co. of America, Judicial District of New London, Dkt. No. 01-0124151 (March 19, 2002) (McLachlan, J.) (allegations that the insured failed to act promptly, failed to cover a claim and failed to defend and indemnify were insufficient as to a claim of bad faith).
The primary thrust of the plaintiff's opposition is that the motion to strike is premature as discovery has not been completed. He misconstrues the purpose and scope of a motion to strike, which does not investigate the weight of the evidence, but merely whether sufficient allegations have been pled. Indeed, the plaintiff acknowledges that at present "it cannot set forth herein the specific facts and circumstances which constitute the elements of the State Farm's bad faith." Plaintiff's opposition at p. 4. Notwithstanding this acknowledgment, plaintiff maintains that Count Eleven sets forth "sufficient facts and allegations from which a reasonable inference" of bad faith can be drawn.
Some courts have taken a slightly more permissive approach, accepting as sufficient factual allegations from which bad faith might reasonably be inferred, even if not spelled out. See, CT Page 18937 Algiere v. Utica National Insurance Co., Judicial District of New London, Dkt. No. CV 04-0569670 (Jones, J. February 7, 2005) (allegation that the defendant's actions were repeated, willful and deliberate; that the defendant repeatedly failed to pay agreed upon or commission ordered benefits in a timely manner; that the defendant withheld medical treatment for an injury previously concluded by the Commissioner to be work-related and that the defendant knowingly and repeatedly ignored the workers' compensation commission orders, were adequate to permit an inference of bad faith); Morin v. Tracy, Driscoll and Co., Inc., Superior Court for the Judicial District of Hartford, Dkt. No. CV 03 0823241 (May 26, 2004, Sheldon, J.) (allegation that the defendant knowingly omitted material information from the application for disability insurance was adequate to permit an inference of bad faith).
Here, Count Eleven incorporates the allegations that State Farm had a contractual insurer/insured relationship with the plaintiff. It incorporates the allegations regarding State Farm's denial of coverage with respect to the Santana litigation. It sets forth the procedural posture of the Santana litigation at the time coverage was (and continues to be) denied. These latter allegations are averred in support of the further allegation that State Farm was not prejudiced by any untimely notice it may have received regarding the Santana litigation. Essentially, the plaintiff alleges that the denial of coverage under the circumstances alleged was an act of bad faith by State Farm.
Under either of the pleading standards discussed above, Count Eleven of the third revised complaint fails to adequately allege a breach of the implied covenant of good faith and fair dealing. There can be no question that specific allegations as to how and in what manner State Farm acted with ill purpose, bad motive or an intent to deceive or defraud, are absent. Further, this court disagrees, as argued by plaintiff, that the allegation that State Farm was not prejudiced by the untimely notice, is a sufficient basis for an inference of bad faith. Unlike the Morin case or the Algiere case, taken as true, there is no basis upon which an inference of bad faith could be drawn. The allegations here simply set forth the history of the claim denial and attach a bad faith "label" thereto. This is a "mere coverage dispute." Uberti v. Lincoln National Life Ins. Co., 144 F.Sup.2d at 104. The motion to strike Count Eleven is GRANTED.
SO ORDERED