Trans-Clean Corporation v. Evanston Insurance Company et al. (2010)

MEMORANDUM OF DECISION

The plaintiff in this action is the defendant in negligence litigation brought in Bronx County, New York by Luis Santana.   The defendants are Evanston Insurance Company (“Evanston”), Market Underwriting Managers, Inc. (“Market”), State Farm Mutual Insurance Company (“State Farm”) and Merit Insurance Company (“Merit”).   Presently before the count is State Farm's motion to strike the third count and eleventh counts of the plaintiff's second revised complaint. (# 118.00.) The plaintiff has filed an opposition to the motion to strike. (# 120.00.)

In its third count, the plaintiff seeks a declaratory judgment that, pursuant to insurance policies issued by Evanston and State Farm, it is entitled to defense of the Santana litigation and indemnification for any judgment up to the policy limits.   The eleventh count claims that State Farm acted in bad faith in rejecting the plaintiff's notice of claim.

In support of its motion to strike the third count State Farm argues that Luis Santana, the injured party seeking damages in Bronx County, is an indispensable party who must be joined as a party before the court can consider acting on the application for a declaratory judgment.   In support of motion to strike the eleventh count, State Farm argues that the plaintiff has failed to allege sufficient facts to support is claim of “bad faith.”

FACTS

In its complaint, the plaintiff alleges the following facts regarding defendant State Farm. “Prior to and as of March 6, 2007 [the plaintiff] purchased primary automobile liability insurance coverage from State Farm, paid all premiums due and owing and said policy was in full force and effect as of March 6, 2007.”   On or about August 6, 2007, Luis Santana commenced a lawsuit in Bronx County New York claiming “that he had sustained personal injuries as the result of the negligence of the plaintiff, its agents, servants and/or employees in the course of the plaintiff's business operations.”   Plaintiff notified State Farm of the lawsuit and requested defense and indemnification.   On November 29, 2007 State Farm notified plaintiff that it was denying coverage since it did not receive timely notice of the Santana claim.¹  The court heard argument on the motion to strike on April 26, 2010.

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.)  Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498 (2003).  “As set forth in [Practice Book § ]10-39, the exclusive remedy for nonjoinder of parties is by motion to strike.”  Practice Book § 11-3.  “This exclusive remedy applies to nonjoinder of indispensable parties.”  George v. St. Ann's Church, 182 Conn. 322, 325 (1980).   In a motion to strike, “the moving party admits all facts well pleaded.”  RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 383 n.2 (1994).   Therefore, “[i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied.”  (Internal quotation marks omitted.)  Batte-Homgren v. Commissioner of Public Health, 281 Conn. 277, 294 (2007).   Nevertheless, “[a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. Alves, supra, 498.   When ruling on a motion to strike, the court must “construe the complaint in the manner most favorable to sustaining its legal sufficiency.”  (Internal quotation marks omitted.)  Sullivan v. Lake Compounce Theme Park, Inc., 277 Conn. 113, 117 (2006).

FAILURE TO JOIN A NECESSARY AND INDISPENSABLE PARTY

In its memorandum of law, the State Farm argues that the third count must be stricken because the plaintiff fails to join all necessary and indispensable parties.   Specifically, the defendant argues that Santana is a necessary and indispensable party because he is the plaintiff in the Bronx County action giving rise the plaintiff's demands for defense and indemnity.   In response, the plaintiff argues that Santana is neither a necessary nor indispensable party because Santana is not a party to the contract between the plaintiff and State Farm.

General Statutes § 52-107 provides:  “The court may determine the controversy as between the parties before it, if it can do so without prejudice to the rights of others;  but if a complete determination cannot be had without the presence of other parties, the court may direct that such other parties be brought in.   If a person not a party has an interest or title which the judgment shall affect, the court, on his application, shall direct him to be made a party.”   See also Practice Book § 9-18.   As further provided by General Statutes § 52-108:  “An action shall not be defeated by the nonjoinder or misjoinder of parties.   New parties may be added and summoned in, and parties misjoined may be dropped, by order of the court, at any stage of the action, as the court deems the interests of justice require.”   See also Practice Book § 9-19.

In order to effectuate the mandates of General Statutes § 52-107 and § 52-108, our rules of practice and the courts have developed the law regarding necessary and indispensable parties.  “Necessary parties ․ are those [p]ersons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete justice, by adjusting all the rights involved in it ․ [B]ut if their interests are separable from those of the parties before the court, so that the court can proceed to a decree, and do complete and final justice, without affecting other persons not before the court, the latter are not indispensable parties.”  (Internal quotation marks omitted.)  In re Devon B., 264 Conn. 572, 579-80 (2003).   When explaining the distinction between necessary and indispensable parties, Judge Burke notes the following:  “Parties have been characterized as ‘indispensable’ when they not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such condition that its final termination may be wholly inconsistent with equity and good conscience ․ Necessary parties, however, have been described as persons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy ․” (Internal quotation marks omitted.)   Lukaskik v. Banknorth, National Ass'n., Superior Court, judicial district of New Britain, Docket No. CV 04 4001336 (April 26, 2005, Burke, J.).   In contrast to necessary parties, “[j]oinder of indispensable parties is mandated because due process principles make it essential that [such parties] be given notice and opportunity to protect [their] interests by making [them] a party to the [action].”  (Internal quotation marks omitted.)  Hilton v. New Haven, 233 Conn. 701, 722-23 (1995).

Consequently, when determining if Santana needs to be joined as party in this case, the court must first determine if Santana is an indispensable party, and, therefore, must be joined.   If Santana is not an indispensable party, then the court will consider whether Santana is a necessary party, that should be joined in the interests of justice.

Each of the plaintiff's claims against State Farm are based on a contract between the parties-the automobile liability policy issued by State Farm. “Connecticut courts have held that a necessary party to a contract action is one who has, at the least, signed as a party to the contract.”   Blois v. Chevrier, Superior Court, judicial district of New Haven, Docket No. CV 96 0388974 (December 11, 1997, Hartmere, J.);   Racantiello v. Darien, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 99 0168570 (March 11, 1999, Hickey, J.) (24 Conn. L. Rptr. 266) (same);  Ed Bartelli, Inc. v. Medical Structures Mfg. Corp., Superior Court, judicial district of New London, Docket No. CV 08 5006605 (October 22, 2008, Martin, J.) (“case law dictates that in order to be deemed necessary or indispensable, one must be a party to a contract”).   Accordingly, as Santana is not a party to the contract between the plaintiff and the defendant, the court finds that Santana is not an indispensable party.

Having determined that Santana is not an indispensable party, the court will next consider whether Santana is a necessary party and whether it must be cited into the case for the interests of justice.   While Santana has a potential interest in this matter because there is a possibility that he may obtain a judgment against the plaintiff which he will be unable to collect, this does not mean that the court cannot adjudicate the questions presented in this case without Santana's presence.   The issues to be determined in this case are whether the State Farm policy was in effect and breached its contract with the plaintiff.   A trier of fact can decide both of these questions without the participation of Santana.   Under federal practice, one of the main considerations in deciding if a party is necessary is a determination of whether it is “feasible” to bring it into the case.   See Fed.R.Civ.P. 19(a).   Joinder is not feasible if the court cannot exercise personal jurisdiction over the absentee party.   4 J. Moore, Federal Practice (3d Ed.1997), p. 19-19.²  Attached to the plaintiff's memorandum of law is a copy of the complaint in Santana's New York lawsuit which states that he resides in Bronx County, New York. Accordingly, there is a strong possibility that the plaintiff could not obtain personal jurisdiction over Santana because he resides out of state and ostensibly has no contacts with Connecticut.   Given this consideration, joinder of Santana does not appear to be feasible.   After reviewing all relevant considerations, the court finds that the interests of justice will not be served by considering Santana a necessary party.   Accordingly, the court rejects the claim of non-joinder of a necessary party asserted in the defendant's motion to strike the third count.

BAD FAITH

In paragraph 111 of its eleventh count the plaintiff realleges each and every allegation of the preceding one hundred ten paragraphs and goes on to claim that State Farm acted in bad faith in denying plaintiff coverage under the policy issued by State Farm. In its motion to strike the eleventh count State Farm claims that the plaintiff fails to allege sufficient facts to constitute bad faith.   The court has carefully examined the complaint and finds that the allegations are insufficient to support any cause of action against State Farm.

The complaint alleges the date on which Santana commenced his lawsuit in Bronx County, New York, but does not state the date of the injury.   Even though there are allegations that the policy was in full force and effect on March 6, 2007, the significance of that date is not alleged in the complaint.   The plaintiff alleges that State Farm issued an automobile liability policy to the plaintiff.   However, the complaint does not allege facts from which it could be determined that Santana's injuries were the result of any motor vehicle accident.   Finally, although the complaint alleges that State Farm rejected coverage because of late notice, the complaint fails to state the date and manner in which notice of Santana's injuries and claims was given to State Farm. In the absence of these allegations, the court does not reach and cannot determine whether the plaintiff's claims of bad faith are adequately pled.   The plaintiff's failure to adequately allege there underlying facts is also fatal to its demand for a declaratory judgment under the third count.

The court finds that the allegations of the third and eleventh counts fail to state any causes of action against State Farm and accordingly grants State Farm's motion to strike those counts.³

David R. Tobin, J.

FOOTNOTES

FN1. In its memorandum of law filed in opposition to State Farm's motion to strike, the plaintiff claims that Santana was injured on March 6, 2007 when he was an employee of American Transit, Inc., that the plaintiff provides bus washing services to American Transit, Inc. by means of washing trucks, and that Santana was injured when he was struck by a bus which alleged skidded on ice which the plaintiff's employees allowed to accumulate in the area where the buses were being washed.   None of these facts are alleged in the complaint..  FN1. In its memorandum of law filed in opposition to State Farm's motion to strike, the plaintiff claims that Santana was injured on March 6, 2007 when he was an employee of American Transit, Inc., that the plaintiff provides bus washing services to American Transit, Inc. by means of washing trucks, and that Santana was injured when he was struck by a bus which alleged skidded on ice which the plaintiff's employees allowed to accumulate in the area where the buses were being washed.   None of these facts are alleged in the complaint.

FN2. Our Supreme Court has affirmatively cited both the Federal Rules of Civil Procedure and Moore's Federal Practice when analyzing Connecticut law on necessary and indispensable parties.   See, e.g., Sturman v. Socha, 191 Conn. 1, 6 (1983)..  FN2. Our Supreme Court has affirmatively cited both the Federal Rules of Civil Procedure and Moore's Federal Practice when analyzing Connecticut law on necessary and indispensable parties.   See, e.g., Sturman v. Socha, 191 Conn. 1, 6 (1983).

FN3. The pleading deficiencies noted with respect to the third and eleventh counts are also present in the remaining count brought against State Farm-the sixth count alleging State Farm's breach of contract.   However, since State Farm's motion to strike was not addressed to that count, the court takes no action regarding those deficiencies..  FN3. The pleading deficiencies noted with respect to the third and eleventh counts are also present in the remaining count brought against State Farm-the sixth count alleging State Farm's breach of contract.   However, since State Farm's motion to strike was not addressed to that count, the court takes no action regarding those deficiencies.

Tobin, David R., J.