Michael Hellberg v. Travelers Home & Marine Ins. Co. et al. (2010)

MEMORANDUM OF DECISION RE MOTION TO STRIKE

In count four of his revised complaint,¹ the plaintiff, Michael Hellberg (“Hellberg”), sues the defendant Liberty Mutual Insurance Company (“Liberty Mutual”), for violations of General Statutes §§ 42-110b, 38a-815, 816, the Connecticut Unfair Trade Practices Act (“CUTPA”) and the Connecticut Unfair Insurance Practices Act (“CUIPA”), respectively.²  The revised complaint alleges the following facts.   On September 29, 2006, the plaintiff was operating a van insured by the defendant, driving westbound on interstate 84 near exit 48 in the city of Hartford, Connecticut.   At approximately 12:14 p.m., the plaintiff collided with a vehicle operated by Stacey Downing (“Downing”), allegedly as a result of Downing's negligent operation of her vehicle.   As a consequence of Downing's alleged negligence, the plaintiff sustained serious injuries, some of which will be permanent.   As a result of Downing's negligence, the plaintiff has sustained serious economic losses including an inability to work, present and future medical costs, and also a general loss of enjoyment of life.   In May 2009, the plaintiff received a settlement of his liability claim in the amount of $25,000 from Downing's insurer.   This figure is insufficient to compensate his injuries and losses.   At the time of the collision, the plaintiff was employed by the Stanadyne Corporation, and through that company was insured under a policy issued by Liberty Mutual.   This policy provides underinsured motorist coverage.   The plaintiff states that he has established all the necessary requirements for this insurance including exhausting all other applicable coverage.   Despite making numerous requests and demands for this policy, the defendant Liberty Mutual has failed and refused to pay.

In count four of the revised complaint, the plaintiff alleges that the defendant's failure to pay him in accordance with the terms of its policy constitutes an unfair claim settlement practice, and therefore, is a violation of both CUTPA and CUIPA.   Specifically, the plaintiff asserts that the defendant violated CUIPA when it (I) violated § 38a-816(1)(f) by failing to surrender copies of all applicable insurance policies;  (ii) violated 38a-816(6)(b) by failing to acknowledge and act with reasonable promptness with respect to the plaintiff's claim;  (iii) failed to implement reasonable standards for claim investigation;  (iv) refused to pay claims, due to the defendant's own failure to conduct an investigation;  (v) failed to attempt in good faith a prompt settlement of the plaintiff's claim;  (vi) misrepresented the benefits of an insurance policy;  and (vii) failed to conform to the statutory requirements of § 38a-816(6).   The plaintiff also alleges that by virtue of the defendant's violations of CUIPA, the defendant has engaged in unfair and/or deceptive practices in violation of CUTPA.   The plaintiff further alleges that these violations are part of a “pattern or frequency of similar unfair trade practices” engaged in by the defendant.

On March 10, 2010, the defendant filed a motion to strike count four on the ground that the plaintiff has not pleaded facts supporting his claim that the defendant violated either § 38a-816(1)(f) or § 38a-816(6) CUIPA, and that without sufficient allegations of a CUIPA violation, the plaintiff cannot sustain a cause of action against the defendant on the basis of CUTPA.   In particular, the defendant contends that while the plaintiff has alleged that the defendant failed to settle the plaintiff's claim in timely fashion, the plaintiff has failed to allege facts regarding the defendant's handling of any other claim.   The defendant further contends that the plaintiff's failure to allege these facts renders the plaintiff's allegations that the defendant has engaged in a “pattern or frequency of unfair trade practices ․ to the detriment of its insureds,” conclusory and without the presence of facts establishing a pattern of unfair trade practices, the plaintiff cannot sufficiently allege a CUTPA or CUIPA violation.   Finally, the defendant argues that the revised complaint suffers from the same defect as the original count four and count five stricken as insufficient by Judge Wagner.   Therefore, count four of the plaintiff's revised complaint should also be stricken on the basis of the law of the case doctrine.

“[A] party may challenge the legal sufficiency of an adverse party's claim by filing a motion to strike.”  Vertex v. Waterbury, 278 Conn. 557, 564, 898 A.2d 178 (2006).  “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, 262 Conn. 480, 498, 815 A.2d 1188 (2003).

In ruling on a motion to strike, “[t]he role of the trial court [is] to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [plaintiff has] stated a legally sufficient cause of action.”   (Internal quotation marks omitted.)  Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997).  “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).  “[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied ․ Moreover ․ [w]hat is necessarily implied [in an allegation] need not be expressly alleged ․ 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 ․ Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically.”  (Internal quotation marks omitted.)  Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006).

I

In support of its motion to strike, the defendant argues essentially that none of the alleged CUIPA violations are factually sufficient.

A

The defendant first argues that based on the allegations of the revised complaint, the plaintiff cannot establish a CUIPA violation.  General Statutes § 38a-816(6), holds that unfair claim settlement practices constitute an unfair and deceptive practice in insurance.   The Court has held, however, that a “claim under CUIPA predicated upon alleged unfair claim settlement practices in violation of § 38a-816(6) requires proof that the unfair settlement practices were committed or performed with such frequency as to indicate a general business practice.”  (Internal quotation marks omitted.)   Lees v. Middlesex Ins. Co., 229 Conn. 842, 847-48, 643 A.2d 1282 (1940).   In Lees v. Middlesex Ins. Co., the court stated that “[i]n requiring proof that the insurer has engaged in unfair claim settlement practices with such frequency as to indicate a general business practice, the legislature has manifested a clear intent to exempt from coverage under CUIPA isolated instances of insurer misconduct.”  (Internal quotation marks omitted.)  Lees v. Middlesex Ins. Co., supra, 229 Conn. 849.   In that case, the court stated that “the defendant's alleged 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 as required by § 38a-816(6).”  (Internal quotation marks omitted).  Id., 849.   Additionally, in Mead v. Burns, 199 Conn. 651, 509 A.2d 11 (1986), the Connecticut Supreme Court held that a motion to strike was properly granted because the plaintiff failed to allege more than one act of insurance misconduct in a CUIPA claim based on unfair settlement practices.   The court concluded “we believe that claims of unfair settlement practices under CUIPA [ultimately] require a showing of more than a single act of insurance misconduct.”  Mead v. Burns, supra, 199 Conn. 659.

While the plaintiff argues that he has, in fact, alleged that the defendant's conduct represents a pattern or practice of unfair trade practices, the defendant has countered that although the plaintiff makes this allegation, he has not alleged any specific facts that would support such a claim.   A recent Superior Court decision examined the level of detail required in § 38a-816(6) claims holding that:  “[a] close examination of the plaintiff's allegations ․ reveals that there are no specific factual references to the defendant's action towards other insureds ․ As all of the factual allegations in [the count at issue] involve only the settlement negotiations between the plaintiff and the defendant and fail to reference other insureds, the plaintiff has not alleged a general business practice.”   Finocchio v. Atlantic Mutual Ins. Co., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 09 5009607 (April 22, 2009, Adams, J.) (47 Conn. L. Rptr. 624).   In that case, the court held that allegations that the defendant “has in the past engaged, and continues to engage in unfair and deceptive acts and/or practices” were insufficient for the purpose of § 38a-816(6).  Id.

The language cited by the court in Finocchi o as a failure of the plaintiff to allege a pattern or practice of unfair trade practice is notably similar to that in the present case, where the plaintiffs alleges only that “[the] unfair trade practices engaged in by the defendant represent part of a pattern or frequency of similar unfair trade practices the defendant has engaged in as a general business practice to the detriment of its insureds.   On more than one occasion, the defendant refused, despite requests from its insured and in breach of the subject personal liability insurance policy, to effectuate a prompt, fair and equitable settlement of the claim in which liability is clear.”   Under § 38a-816(6), unfair settlement practices claims require allegations of a general business practice.   Therefore, factual allegations of a singular act of misconduct do not constitute a general business practice.   The revised count four is devoid of any factual allegations of misconduct by the defendant in the processing of any claim other than that of the plaintiff.   Plural terms such as “unfair trade practices” or citing unnamed “similar unfair trade practices” do not constitute specific factual references to the defendant's actions toward other insureds.   Accordingly, the plaintiff has failed to allege a general business practice of unfair claim settlement practices.

B

The defendant next argues that the plaintiff cannot establish a violation of § 38a-816(1)(f) ³ based on an allegation that the defendant failed to “surrender copies of all applicable insurance policies.”   Although the Superior Court decision in Heyman Associates No. 1 v. Insurance Co. of Penn., Superior Court, judicial district of Hartford, Docket No. 91-0397087 (February 24, 1993, Dunn, J.) (8 Conn L. Rptr. 440), relied on by the defendant, is not determinative of the defendant's argument that the failure to produce an insurance policy “does not constitute a misrepresentation or false advertisement,” the Supreme Court opinion in that case is instructive in the proper application of § 38a-816(1)(f).  There the Court held that “[although] the plaintiff emphasizes that § 38a-816(1)(f) prohibits misrepresentations inducing or tending to induce a lapse in insurance coverage, it ignores the fact that the subsection actually prohibits misrepresentations ‘for the purpose of inducing or tending to induce ․ [a lapse in coverage.]’  ․ As a result, regardless of whether there is a misrepresentation that induces or tends to induce a lapse in coverage, the plain language of the statute permits recovery only if an insured establishes that its insurer made a purposeful misrepresentation.   To show such a purposeful misrepresentation, an insured must necessarily produce evidence that the insurer acted intentionally.”  (Emphasis original.)  Heyman Associates No. 1 v. Insurance Co. of Penn., 231 Conn. 756, 795, 653 A.2d 122 (1995).   Thus, the Supreme Court is clear that § 38a-816(1)(f) prohibits misrepresentations that purposefully induce or tend to induce the actions noted in that provision.   Nowhere in the plaintiff's complaint is such an allegation made;  rather, the plaintiff merely states that the defendant violated § 38a-816(1)(f) when it failed to produce the copies of the plaintiff's insurance policy.   Because the plaintiff claims a violation of § 38a-816(1)(f) but fails to allege any facts indicating that the defendant made misrepresentation for the purpose of inducing or tending to induce “the purchase, lapse, forfeiture, exchange, conversion or surrender of any insurance policy,” the plaintiff has failed to state a claim under § 38a-816(1)(f).

C

Pursuant to § 42-110b(a), “[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”  “In Mead v. Burns ․ we concluded that a CUTPA claim based on an alleged unfair claim settlement practice prohibited by § 38a-816(6) required proof, as under CUIPA, that the unfair settlement practice had been committed or performed by the defendant with such frequency as to indicate a general business practice.”  (Citations omitted.)  Lees v. Middlesex Ins. Co., supra, 229 Conn. 850.  “[I]ndividuals may bring an action under CUTPA for violations of CUIPA.   In order to sustain a CUIPA cause of action under CUTPA, a plaintiff must allege conduct that is proscribed by CUIPA.”  Nazami v. Patrons Mutual Ins. Co., 280 Conn. 619, 625, 910 A.2d 209 (2006).   Accordingly, if the pleadings fail to allege an unfair or deceptive method of competition, act, or practice in the business of insurance, there can be no CUTPA claim.

In count four of his complaint, the plaintiff alleges that the defendant violated one or more provisions of CUTPA without stating a factual basis for the claimed violations as the foundation for his CUTPA claim.   The plaintiff states that the claim is based on the defendant's “unfair and/or deceptive acts and practices prohibited by Section 42-110b of the Connecticut General Statutes, in that [the defendant] ․ [violated] the Connecticut Unfair Insurance Practices Act ․” Since the plaintiff makes only conclusory statements alleged to constitute violations of CUIPA, he has failed to sufficiently allege a factual basis to sufficiently state a CUTPA claim.

II

In further support of its motion to strike, the defendant also argues that the law of the case doctrine bars the plaintiff from recovering under count four due to the ruling of Judge Wagner granting the defendant's previous motion to strike.  “When a matter has previously been ruled upon interlocutorily, the court in a subsequent proceeding in the case may treat that decision as the law of the case, if it is of the opinion that the issue was correctly decided, in the absence of some new or overriding circumstance.”  Breen v. Phelps, 186 Conn. 86, 99, 439 A.2d 1066 (1982).

“A judge is not bound to follow the decisions of another judge made at an earlier stage of the proceedings, and if the same point is again raised he has the same right to reconsider the question as if he had himself made the original decision ․ This principle has been frequently applied to an earlier ruling during the pleading stage of a case such as that upon the motion to strike before us.”  (Citation omitted;  internal quotation marks omitted.)   Id., at 98, 439 A.2d 1066.  “New pleadings intended to raise again a question of law which has been already presented on the record and determined adversely to the pleader are not to be favored ․ But a determination so made is not necessarily to be treated as an infallible guide to the court in dealing with all matters subsequently arising in the cause.”  Id., at 99, 439 A.2d 1066.  “In the context of a motion to strike, the doctrine applies when the motion is directed to an amended complaint that is substantially the same as a previous version thereof which was already stricken.  S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan and King, P.C., 32 Conn.App. 786, 798, 631 A.2d 340, cert. denied, 228 Conn. 903, 634 A.2d 296 (1993).”   Gandolfo v. Barker, Superior Court, judicial district of Hartford, Docket No. CV 06 5003862 (March 11, 2008, Dubay, J.).

The defendant argues that the plaintiff has failed to offer any new factual allegations in his revised complaint, and that as the plaintiff's revised complaint is “based upon the same factual underpinnings which [Judge Wagner] determined to be insufficient [to maintain a CUTPA or CUIPA claim],” the law of the case holds that this court should grant the motion to strike.   The plaintiff disagrees.

For the court to determine whether the revised complaint is “substantially” the same as the previous, stricken version, it is necessary to compare the two.   In count four of the original complaint, the plaintiff alleged a CUTPA violation on the part of the defendant, citing the defendant's failure to produce the plaintiff's insurance policy as an example of bad faith.   Count four described these actions as constituting “unfair and deceptive” acts under General Statutes § 42-110(a) et seq.   Count five of the original complaint alleged that the defendant's inefficiencies in handling the plaintiff's insurance claim violated § 38a-816(1)(f), § 38a-816(6)(b) and § 38a-816(6)(f), of CUIPA, and that these violations amounted to a CUTPA violation under § 42-110(a) et seq.   Judge Wagner granted the motion to strike count four for the reason that the insurance policy had in fact been produced by the defendant.   He granted the motion as to count five based on his determination that the plaintiff's complaint centered around the defendant's settlement procedures in the plaintiff's own, singular case, and therefore, did not allege a violation of CUIPA or multiple business practices under § 38a-816(c).

Both the original and revised complaints also alleged a CUTPA violation by way of CUIPA.   In the revised count four, the plaintiff alleges that the defendant is prohibited from engaging in any unfair claim settlement practice under General Statutes § 38a-815 et seq., and that the defendant's conduct has violated multiple provisions of CUIPA.   Specifically, the plaintiff claims violations of § 38a-816(1)(f), § 38a-816(6)(b) and § 38a-816(6)(f), further stating that these violations constitute a violation of CUTPA under § 42-110b.   These revised allegations are virtually identical to those in the original complaint except for the fact that they are contained in a single count as opposed to being separated into two.   The only major addition is paragraph 29, which alleges that “[the] unfair trade practices engaged in by the defendant represent part of a pattern or frequency of similar unfair trade practices the defendant has engaged in as a general business practice to the detriment of its insureds.   On more than one occasion, the defendant refused, despite requests from its insured and in breach of the subject personal liability insurance policy, to effectuate a prompt, fair and equitable settlement of the claim in which liability is clear.”   Despite the plaintiff's assertions otherwise, even this portion of the fourth count appears to allege only that the defendant improperly handled the plaintiff's individual claim, as evidenced by the phrase “the defendant refused, despite requests from its insured and in breach of the subject personal liability insurance policy ․” Accordingly, the court finds that count four of the revised complaint is substantially similar to the fourth and fifth counts of the original complaint which were the subject of a motion to strike granted by Judge Wagner.   Therefore, aside from the other deficiencies of the complaint, the law of the case mandates that the motion to strike count four be granted based on the doctrine of the law of the case.

CONCLUSION

For all the foregoing reasons, the motion to strike count four of the plaintiff's revised complaint is hereby granted.

Peck, J.

FOOTNOTES

FN1. The complaint was originally set forth in five counts.   On February 24, 2010, the court (Wagner, J.), granted a motion to strike counts four and five both of which set forth CUTPA claims based on CUIPA violations.   The revised complaint, filed March 3, 2010, restates those two counts in a single count (four)..  FN1. The complaint was originally set forth in five counts.   On February 24, 2010, the court (Wagner, J.), granted a motion to strike counts four and five both of which set forth CUTPA claims based on CUIPA violations.   The revised complaint, filed March 3, 2010, restates those two counts in a single count (four).

FN2. The first and third counts of the complaint, alleging breach of contract and bad faith, respectively, are directed against the defendant Liberty Mutual.   The second count of the plaintiff's complaint, alleging breach of contract, names the Travelers Home & Marine Insurance Company as an additional defendant.   Only the fourth count is subject to the pending motion to strike..  FN2. The first and third counts of the complaint, alleging breach of contract and bad faith, respectively, are directed against the defendant Liberty Mutual.   The second count of the plaintiff's complaint, alleging breach of contract, names the Travelers Home & Marine Insurance Company as an additional defendant.   Only the fourth count is subject to the pending motion to strike.

FN3. Pursuant to § 38a-816(1), ‘[t]he following are defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:  (1) misrepresentations and false advertising of insurance policies.   Making, issuing or circulating, or causing to be made, issued or circulated, any estimate, illustration, circular or statement, sales presentation, omission or comparison which:  (a) Misrepresents the benefits, advantages, conditions or terms of any insurance policy;  (b) misrepresents the dividends or share of the surplus to be received, on any insurance policy;  (c) makes any false or misleading statements as to the dividends or share of surplus previously paid on any insurance policy;  (d) is misleading or is a misrepresentation as to the financial condition of any person, or as to the legal reserve system upon which any life insurer operates;  (e) uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof, (f) is a misrepresentation, including but not limited to, an intentional misquote of a premium rate, for the purpose of inducing or tending to induce to the purchase, lapse, forfeiture, exchange, conversion or surrender of any insurance policy;  (g) is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan against any insurance policy;  or (h) misrepresents any insurance policy as being shares of stock.”.  FN3. Pursuant to § 38a-816(1), ‘[t]he following are defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:  (1) misrepresentations and false advertising of insurance policies.   Making, issuing or circulating, or causing to be made, issued or circulated, any estimate, illustration, circular or statement, sales presentation, omission or comparison which:  (a) Misrepresents the benefits, advantages, conditions or terms of any insurance policy;  (b) misrepresents the dividends or share of the surplus to be received, on any insurance policy;  (c) makes any false or misleading statements as to the dividends or share of surplus previously paid on any insurance policy;  (d) is misleading or is a misrepresentation as to the financial condition of any person, or as to the legal reserve system upon which any life insurer operates;  (e) uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof, (f) is a misrepresentation, including but not limited to, an intentional misquote of a premium rate, for the purpose of inducing or tending to induce to the purchase, lapse, forfeiture, exchange, conversion or surrender of any insurance policy;  (g) is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan against any insurance policy;  or (h) misrepresents any insurance policy as being shares of stock.”

Peck, A. Susan, J.