Kathleen Waters et al v. Liberty Mutual Group et al (2010)

MEMORANDUM OF DECISION

The defendants, Liberty Mutual Group, Inc. and Peerless Insurance Company, object to the plaintiffs' request for leave to amend their complaint by adding a CUIPA violation count and a claim for unlawful retention of money.

The original complaint, dated July 26, 2006, contains only one count which is for breach of a contract of homeowner's insurance.   The alleged breach is based on a wrongful denial of coverage based on a denial of coverage.   The pleadings are closed, and a trial list claim was filed by the plaintiffs on January 28, 2010.

On May 12, 2010, the plaintiffs sought permission to add a CUIPA violation count and a claim for prejudgment interest under General Statutes § 37-3a.   In their brief in support of this request, the plaintiffs contend that the counts “sought to be added sound on the same facts and require significantly the same preparation for trial as contained in the original complaint.”   The plaintiffs argue that, because no trial date has been set and discovery is ongoing, no prejudice nor delay will be suffered.

Contrary to this assertion, however, this case has been assigned for a five-day, court trial commencing on November 30, 2010.   Also, the court foresees that allowing such an amendment will, in fact, result in new and complicated legal and evidentiary issues likely to cause prejudice and delay.

First, a private cause of action under CUIPA is of dubious validity, see e.g. Baroni v. Western Reserve Life Assurance Co., Superior Court, Middlesex J.D., d.n. CV 99-87965 (September 29, 1999), Gordon, J. The Appellate Court has expressly left this issue undecided.  Carford v. Empire Fire, 94 Conn.App. 41, 52-53 (2006).

Second, even if such a private claim under CUIPA is viable, it must be pleaded and proven by more than an isolated instance of refusal to a a legitimate claim.  Lees v. Middlesex Ins. Co., 229 Conn. 842, 846-47 (1994);  Mead v. Burns, 199 Conn. 651, 659 (1986).   In order to establish a CUIPA violation, the conduct under scrutiny must occur “with such frequency as to indicate a general business practice.”  Lees v. Middlesex Ins. Co., supra.   Precisely what must be pleaded and proven to make out a claim of a “general business practice” may involve much litigation and the examination of evidence involving insurance claims of other insureds and other insurance companies.

Third, an issue arising from the appropriate statute of limitation may also arise.   Clearly, the CUIPA count is a separate and distinct claim, arising from a different set of facts, compared to a single breach of contract count.   If an amendment alleges a new cause of action, the relation back doctrine is inapplicable.  Giglio v. Connecticut Light and Power Co., 180 Conn. 230, 239 (1980).

Thus, to allow a CUIPA claim at this late date in this litigation will throw the entire discovery schedule into chaos, raise the spectre of protracted hearings to resolve these new legal issues, and cause the defendants to revamp their defense strategy to defend against the CUIPA claim.

Practice Book § 10-60(b) vests the court with the authority to “restrain such amendments so far as may be necessary to compel the parties to join issues in a reasonable time for trial.”   To open the pleadings and expose this case to the delays described above will jeopardize the trial date and prejudice the defendants.   For these reasons, the request to amend the complaint to add the CUIPA count is denied.   The plaintiffs may, however, amend their prayer for relief to request § 37-3a prejudgment interest.

Sferrazza, J.

Sferrazza, Samuel J., J.