Timothy Presmarita v. CUNA (2012)

MEMORANDUM OF DECISION RE MOTION TO STRIKE (# 142)

FACTS

This action arises out of a dispute pertaining to insurance coverage between the plaintiff;  Timothy Presmarita, and the defendant, CUNA Mutual Insurance Society.¹  Count one sounds in breach of contract and counts two and three allege a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq.   The following facts are alleged in the operative complaint, the sixth amended complaint, which was filed on November 23, 2010.²  The defendant is an Iowa company which, as part of its business, sells insurance for loans that credit unions such as the Connecticut State Employees Credit Union, Inc. (CSE Credit Union) provide.   The plaintiff, a former state of Connecticut employee, is a member of CSE Credit Union.   The plaintiff borrowed money from CSE Credit Union in February of 2001, to consolidate his bills.   In connection with this loan, the plaintiff bought a policy for credit protection insurance that was later assigned to the defendant.   The plaintiff paid the insurance premiums in connection with the insurance policy and complied with the insurance contract requirements.

The defendant's contract has a specific definition of the term “disability,” and on January 22, 2011, the plaintiff became disabled “within the meaning of the CUNA insurance contract” from injuries sustained in a car accident.   Following the injury, the plaintiff applied for benefits under his policy.   During the application process, the defendant reviewed the plaintiff's medical records and determined that he was entitled to insurance benefits and paid them “for a period of time.”

Unknown to the plaintiff, “CUNA had a general business practice of using secret internal claims denial procedures that it made up to stop paying its policyholders benefits due under credit loan disability insurance policies, including the contract it had with [the plaintiff].”   In May 2003, the defendant breached the contract it had with the plaintiff by ceasing to pay him the benefits to which he was contractually entitled.   The defendant used “made-up claims denial procedures” in order to cease paying benefits to the plaintiff even though these procedures were not in the contract.   As part of this claims denial procedure, the defendant made up a different definition of the term “disability” than the one utilized in the contract, using the “ ‘twenty-hour work week denial’ rule.”

The defendant also used an invented rule called “time filing denial,” which was not in the insurance contract, in order to deny payment of benefits to the plaintiff.   The defendant applies this rule and denies the claim when it “has not heard from a policyholder for an arbitrarily selected period of time” no matter the reason for there being no communication or how disabled the claimant is.

The defendant's utilization of these rules to cease paying benefits that were due to the plaintiff were part of the defendant's general business practice.   “CUNA had many cases of disabled people whose benefits were denied or terminated as a result of CUNA's arbitrary and capricious use of its made-up rules and definitions that were not part of CUNA's insurance contract.”

The plaintiff makes the following allegations in count two of the operative complaint, which incorporates count one.   Although the plaintiff's insurance policy with the defendant required him “to provide [the defendant] with ongoing proof of his disability ‘from time to time,’ “ the policy failed to specify the required format of these reports, whether they had to be in writing or whether they had to be from a physician.   Nevertheless, the defendant's business practice was to require the plaintiff to submit monthly written statements from a physician stating that the plaintiff remained disabled, which “was burdensome, oppressive and unfair” in light of the policy language that this proof would be requested only “from time to time” and did not provide specifics about this requirement.   Once the plaintiff could no longer have his physician provide these monthly statements, the defendant stopped paying the plaintiff's benefits.

The defendant represented to the plaintiff that it would resume coverage as per the policy and make any required retroactive payments once he provided “CUNA with the Social Security Administration's determination of his disability” upon his receipt of it.   Nevertheless, the defendant did not resume making payments when the plaintiff submitted the Social Security decision to the defendant.

Cancelling disability insurance policy coverage, like the defendant did with the plaintiff, for failure to file monthly disability statements “was ․ burdensome, oppressive and unfair ․” The defendant's monthly statement requirement also placed a burden on the plaintiff to demand that his busy doctors complete the monthly reports.   Cancelling coverage for failure to comply with this monthly statement requirement “caused [the plaintiff] to sustain an ascertainable loss” as he had to repay the loan himself even though the policy did not provide that insurance would cease for failure to provide the disability statements with such frequency.

The defendant's actions “constitute a general business practice that violates the Connecticut Unfair Insurance Practices Act (‘CUIPA’), [General Statutes] § 38a–815 et seq.”   The defendant's interpretation of its “time to time” requirement “constitute[s] misrepresentations of benefits, [advantages, conditions] or terms of its insurance policies in violation of ․ [General Statutes] § 38a–816(1)(a).”   The defendant's denial of coverage resulting from the insured's failure to submit regularly “proof of disability from a physician constitutes a refusal to pay claims without conducting a reasonable investigation based upon all available information in violation of ․ § 38a–816(6)(d).”  The defendant's allowing its representatives to make misrepresentations to insureds like the plaintiff that they could submit an alternative proof of disability such as a Social Security Administration decision, and then denying a claim despite receiving this information “constitutes a failure to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies in violation of ․ § 38a–816(6)(c).”

The plaintiff is aware of other cases where insureds of the defendant, who at around the same time as he had his claim with the defendant, were also required to submit multiple statements regarding proof of disability from either doctors, from the insured themselves or from other sources, and the plaintiff cites to various United States District Court cases and another case brought in the Connecticut Superior Court and has reason to believe that there are numerous other cases against the defendant brought in state courts around the United States.   The existence of many other actions against the defendant alleging similar violations as the plaintiff alleges supports his claim that the defendant's conduct pertaining to its requirements regarding proof of disability is a general business practice.   The defendant's unfair insurance practices are violations of CUTPA.

In count three, which incorporates all of count one and most of count two, the plaintiff alleges the following.   The defendant had knowledge that under Connecticut law, in order to plead a cognizable CUTPA claim, a plaintiff would need to plead a CUIPA violation and that evidence of multiple instances of misconduct “could be an exacerbating factor in litigation.”   In order to remedy its conduct in handling the plaintiff's claim and to compensate him for the harm that he suffered as a result of this conduct, the defendant made an offer conditioned on the plaintiff and his counsel agreeing not to disclose to anyone “the claims or allegations contained in or relating to this matter or any of the statements, offers, or counteroffers made during the settlement of the claims or the terms of settlement, for the improper purpose of preventing other victims and members of the public and regulatory entities from learning about this misconduct.”

The defendant's attempts at requiring confidentiality of the proposed settlement agreement's terms on the part of the plaintiff and his counsel violate public policy, and thus CUTPA, as it is an unfair act or practice.   The defendant's conduct regarding the proposed settlement agreement, inter alia, “was designed to frustrate public policy favoring free speech and open access to the courts.”   As a result of the CUTPA violations, the plaintiff suffered “an ascertainable loss ․ in that he was deprived of the opportunity to negotiate an otherwise fair settlement agreement because the defendant sought to impose conditions that violated public policy, and the defendant sought to make [the plaintiff] complicit in that conduct which could potentially subject him to additional costs of litigation.”

The plaintiff filed the sixth amended complaint, the operative complaint in this matter, on November 23, 2010.   The defendant filed a motion to strike count three with a memorandum of law in support thereof on February 17, 2011.   One ground the defendant asserts in its motion is that the plaintiff fails to allege a legally sufficient CUTPA claim as he fails to specify which CUIPA section that the defendant allegedly violated.   An alternative ground for the motion to strike is that the plaintiff does not allege sufficient facts required “to prove the existence of a general business practice” pursuant to CUIPA, necessary to maintain a CUTPA private cause of action.   The plaintiff filed a memorandum in opposition to the motion to strike on September 6, 2011.   Oral arguments were heard on the short calendar on September 19, 2011.

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, 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.)   Lestorti v. DeLeo, 298 Conn. 466, 472, 4 A.3d 269 (2010).  “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.)   Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 252–53, 990 A.2d 206 (2010).   This court takes “the facts to be those alleged in the complaint ․ and ․ construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency ․ Moreover [the court notes] that [w]hat is necessarily implied [in an allegation] need not be expressly alleged.”   (Internal quotation marks omitted.)  Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, supra, 252.   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.”  (Internal quotation marks omitted.)  Doe v. Yale University, 252 Conn. 641, 694, 748 A.2d 834 (2000).

In its memorandum in support of its motion to strike, the defendant argues that the plaintiff fails to assert a legally sufficient CUTPA claim in count three.   According to the defendant, while the plaintiff makes a general reference to CUIPA, he fails to specify which CUIPA section the defendant is alleged to have violated.   The defendant maintains that in Connecticut, for insurance-related conduct to be a CUTPA violation, said conduct must also be a CUIPA violation.   The defendant contends that “[w]hen a CUTPA claim is based upon public policy governing insurance-related practices as set forth in CUIPA, it is the CUIPA allegation rather than the generalized CUTPA language that forms the basis of the claim.”   The defendant argues because of this, a plaintiff cannot prevail on a CUTPA claim without a viable CUIPA claim.   The defendant contends that the plaintiff's claims pertain entirely to the defendant's “handling and settlement practices as relating to his claim for insurance coverage.”

The defendant also argues that the plaintiff fails to sufficiently allege a general business practice on the part of the defendant.   In support of this argument, the defendant states that it assumes that the allegations in count three must fall under the purview of § 38a–816(6) of CUIPA, which pertains to unfair claim settlement practices and has a general business practice requirement.   The defendant asserts that “[i]n order to constitute a violation of CUIPA under ․ § 38a–816(6), the plaintiff must allege and produce evidence of misconduct in the handling of more than one insurance claim.”   Therefore, according to the defendant, allegations of misconduct pertaining to the handling of one claim does not constitute a general business practice under CUIPA.   Furthermore, the defendant maintains that “as Connecticut is a fact-pleading state, in order to survive a motion to strike, the allegation of a ‘general business practice’ must consist of more than just conclusory statements.”   The defendant argues that in this action, the plaintiff does not allege any facts to demonstrate that the defendant has a general business practice “of requiring its insured to sign confidentiality agreements as part of the settlement of claims.”

In his memorandum in opposition to the motion to strike, the plaintiff argues that count three should stand because a CUTPA claim against an insurer does not solely rely on the existence of a CUIPA violation.   According to the plaintiff, such a CUTPA claim could still be viable if it is alleged that an insurer engaged in conduct in violation of public policy and that conduct is not regulated by CUIPA.   The plaintiff contends that he alleges that “CUNA's efforts to conceal evidence of its misconduct, and to require [the plaintiff] to participate in this effort, is a violation of public policy and an unfair act or practice in violation of [CUTPA].”   The plaintiff asserts that his allegations involve the defendant's violations of public policy in numerous ways, but that he does not allege that these actions are part of the defendant's practice in handling claim.   The plaintiff maintains that he does not allege that the defendant's conduct outlined in count three is a CUIPA violation.

The plaintiff argues that the defendant is mistaken in its belief that an insurer cannot be in violation of CUTPA unless it is also in violation of CUIPA.   The plaintiff asserts that “a CUTPA claim must be consistent with the regulatory principles established by the underlying statutes and that, therefore, if a CUTPA violation is based upon a violation of public policy as established by CUIPA, then a CUIPA violation must be shown for the CUTPA claim to proceed.”   It is the plaintiff's position that only if his allegations in count three are based on a violation of CUIPA does he need “to prove a CUIPA violation to proceed with his CUTPA claim.”   The plaintiff contends that an insurer can be in violation of CUTPA even if it is not engaged in conduct regulated and forbidden under CUIPA.   The plaintiff argues that “a number of courts have held that an insurer can be liable for an unfair trade practice without violating CUIPA.”   The plaintiff urges this court to use traditional CUTPA analyses to determine if the conduct alleged meets the criteria needed to allege a violation of CUTPA.

General Statutes § 42–110b, of CUTPA, provides in relevant part:  “(a) No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”

General Statutes § 38a–815, which is part of CUIPA, provides in relevant part:  “No person shall engage in this state in any trade practice which is defined in section 38a–816 as, or determined pursuant to sections 38a–817 and 38a–818 to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance, nor shall any domestic insurance company engage outside of this state in any act or practice defined in subsections (1) to (12), inclusive, of section 38a–816.³  The commissioner shall have power to examine the affairs of every person engaged in the business of insurance in this state in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by sections 38a–815 to 38a–819, inclusive ․”

In Mead v. Burns, 199 Conn. 651, 509 A.2d 11 (1986), our Supreme Court examined the interplay between CUTPA and CUIPA in connection with an insurance company's “alleged failure to conduct a reasonable investigation of a property damage claim against its insured.”  Mead v. Burns, supra, 652.   In Mead, “[t]he plaintiff alleged that the defendant insurer had knowingly and in bad faith refused to pay the plaintiff's claim without conducting a reasonable investigation based upon all the available information.”  Mead v. Burns, supra, 653.   The plaintiff alleged that this conduct violated what was then General Statutes §§ 38–60 ⁴ and 38–61(6)(d) ⁵ of CUIPA in one count and CUTPA in another count, and the trial court granted the motion to strike these two counts.  Mead v. Burns, supra, 653–55.  “In the plaintiff's amended complaint, he alleged that the defendant insurer had knowingly and in bad faith refused to pay his claim against the insured, but he did not allege that the insurer's conduct constituted a general practice of refusal to pay claims without a reasonable investigation.”  (Emphasis in original.)  Id., 655.

In Mead, on appeal, the plaintiff argued that “the trial court erred (1) in construing CUIPA to require a litigant to prove more than a single violation of § 38–61(6)(d);  and (2) in construing CUTPA to require a litigant to prove a violation of CUIPA.”  Mead v. Burns, supra, 199 Conn. 656.   In Mead, the plaintiff relied on § 38–61(6)(d), which pertained to unfair claim settlement practices, and argued that it was applicable to his case despite his failure to allege that the defendant insurer's conduct constituted a general business pattern.  Mead v. Burns, supra, 657.   Our Supreme Court rejected the Mead plaintiff's arguments and determined “that claims of unfair settlement practices under CUIPA require a showing of more than a single act of insurance misconduct.”  Mead v. Burns, supra, 659.

Once our Supreme Court determined that the plaintiff's allegations were not sufficient to allege a CUIPA violation due to unfair claim settlement practices, it examined the following question:  “if the insurance industry is not exempt from CUTPA regulation, may conduct that does not violate CUIPA constitute an unfair act or practice under CUTPA?”  Mead v. Burns, supra, 199 Conn. 661.   The plaintiff argued on appeal that he could allege a violation of CUTPA “for a singular failure to investigate.”  Mead v. Burns, supra, 664.   The Supreme Court disagreed with the plaintiff's position.  Id. The Mead plaintiff argued that earlier Supreme Court precedent supported “his argument that conduct not specifically prohibited by CUIPA may nonetheless offend the public policy of that statute and therefore may be actionable under CUTPA.”  Mead v. Burns, supra, 664.   The Mead plaintiff argued that he could “rely on a general public policy against unfair insurance practices that transcends the specific prohibitions of § 38–61(6)(d).”  Mead v. Burns, supra, 665.   The Mead plaintiff further contended “that CUIPA's list of unfair settlement practices in § 38–61(6) embodies a ‘concept of fairness' for insurance settlements that is enforceable under CUTPA, whether or not such acts or practices occur as part of a general business practice.”  Mead v. Burns, supra, 665.   It was the Mead plaintiff's position that because “the requirement of establishing a general business practice relates only to the issue of a technical violation of CUIPA, the underlying public policy established by CUIPA will be affirmed by permitting a CUTPA cause of action even when there is no violation of CUIPA.”  Mead v. Burns, supra, 665.

Our Supreme Court in Mead held that the plaintiff misinterpreted earlier precedent because while an earlier case stands for the proposition “that CUTPA may authorize a cause of action that builds upon the public policy embodied in specific statutory provisions, such a CUTPA claim must be consistent with the regulatory principles established by the underlying statutes.”  Mead v. Burns, supra, 199 Conn. 665.   The Mead court held that earlier precedent entitled a litigant who complained of insurance practices that were unfair to bring a CUTPA action for allegations of unfair trade practices that met the definition contained in § 38–61.  Mead v. Burns, supra, 665–66.   The Mead court stated that what is defined as unacceptable insurer conduct in § 38–61 reflects the legislature's conclusion that single instances of unfair insurance settlement practices do not violate state public policy to the extent necessary to merit statutory intervention.  Mead v. Burns, supra, 666.   The Mead court held that under CUTPA, a litigant is bound by the legislature's determination just as he or she is under CUIPA.  Mead v. Burns, supra, 666.

In Lees v. Middlesex Ins. Co., 229 Conn. 842, 643 A.2d 1282 (1994), our Supreme Court once again dealt with whether a case involving allegations pertaining to the manner in which an insurance company handled a claim was sufficient to meet the requirements of CUIPA and CUTPA.   In Lees, the plaintiff challenged the trial court's determination on summary judgment that his allegations pertaining to the manner in which the defendant insurer handled his claim did not constitute, as a matter of law, a practice proscribed by CUIPA or CUTPA.  Lees v. Middlesex Ins. Co., supra, 846–47.

The Lees court first determined that in order to meet the general business practice requirements of § 38a–816(6), a plaintiff had to plead misconduct related to the handling of multiple claims, not just multiple acts of misconduct pertaining to the handling of one claim.  Lees v. Middlesex Ins. Co., 229 Conn. 848–49.   The Lees plaintiff asserted that the trial court erred in holding that a CUTPA count premised on the same allegations of unfair settlement practices as a CUIPA count required proof of a general business practice.  Lees v. Middlesex Ins. Co., supra, 850.   The Lees plaintiff also asserted, but failed to elaborate or substantiate, that her CUTPA claim was not based exclusively on the defendant's alleged violations of CUIPA, but this assertion was not supported by the complaint or her response to the request to revise.  Lees v. Middlesex Ins. Co., supra, 850 n.10. The Lees court reiterated the holding in Mead that a CUTPA claim premised on a violation of § 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.’  “ Lees v. Middlesex Ins. Co., supra, 850.   The Lees court determined that because the plaintiff's evidence was not sufficient to meet the general business practice requirement of CUIPA, then her CUTPA claim must necessarily fail.  Lees v. Middlesex Ins. Co., supra, 851.

Our Supreme Court has established through its holdings in Mead and Lees that if a count alleging a violation of CUTPA is predicated on conduct that is allegedly in violation of § 38a–816(6) of CUIPA, then the count must meet the requirements of § 38a–816(6) in order for it to be a viable CUTPA cause of action.⁶  Therefore, in the present case, this court must first determine if the conduct alleged in count three of the operative complaint falls under the purview of § 38a–816(6).   In count three, the plaintiff alleges that the defendant offered to settle with the plaintiff providing the plaintiff and his counsel agreed to a nondisclosure agreement.   It is submitted that such alleged conduct falls under General Statutes § 38a–816(6)(f) which provides:  “not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear” because the plaintiff alleges that the defendant's attempt to impose conditions in violation of public policy on the plaintiff in connection with a settlement agreement deprived the plaintiff “of the opportunity to negotiate an otherwise fair settlement agreement ․” (Emphasis added.)   While counsel for the plaintiff argued at a short calendar that the conduct alleged in count three is not governed by CUIPA as it involves conduct that occurred after litigation against the insurer already commenced, his counsel does not provide any support for the proposition that settlement activities that occur after litigation has already commenced removes that conduct from the domain of CUIPA, or more specifically, § 38a–816(6).

As the allegations of count three fall under the purview of § 38a–816(6)(f), in following the holdings of Mead and Lees, this court must next determine whether the plaintiff alleges that the defendant engaged in entering settlement agreements with other insureds on the condition that the insureds agree to nondisclosure agreements “with such frequency as to indicate a general business practice.”  General Statutes § 38a–816(6).   The plaintiff does not allege that the defendant engaged in this type of conduct with any other insureds.   In fact, in the plaintiff's memorandum in opposition to the motion to strike, he states that he is not claiming that the allegations contained in count three are part of the defendant's practice in handling claims.   While, in count two, much of which is incorporated by reference into count three, the plaintiff does allege that the defendant engaged in certain conduct when dealing with other insureds, that conduct relates to the defendant allegedly requiring submission of multiple proofs of disability, not to the defendant requiring other insureds to sign confidentiality agreements as a condition of settling their claims.   Therefore, it is submitted that the plaintiff does not sufficiently allege in count three that the defendant required insureds to enter nondisclosure agreements when settling their claims with the defendant “with such frequency as to indicate a general business practice.”  General Statutes § 38a–816(6).   Accordingly, as the plaintiff fails to assert a viable claim pursuant to § 38a–816 of CUIPA, his CUTPA claim, which is dependent on a viable CUIPA claim, must fail.   While the defendant asserts as another ground for count three to be stricken is that the plaintiff fails to specify which part of CUIPA upon which he relies, given that it has been determined that the motion to strike should be granted on an alternative ground, the court need not consider this ground.

The plaintiff cites to cases to support his argument that he does not need to assert a viable CUIPA claim in order for count three to be a legally sufficient CUTPA count.   In DSM, Inc. v. Sentry Select Ins. Co., Superior Court, judicial district of Litchfield, Docket No. CV 01 0085405 (March 22, 2002, DiPentima, J.) [31 Conn. L. Rptr. 650], the court found that the plaintiff could base its CUTPA action on a violation of General Statutes § 49–41;  therefore, the facts of DSM, Inc. are distinguishable from the facts of the present case because in DSM, Inc., the plaintiff based its CUTPA claim on violation of another statute.   In Preston v. Chartkoff, Superior Court, judicial district of Ansonia–Milford at Derby, Docket No. CV 00 0071112 (July 5, 2001, Nadeau, J.), a plaintiff homeowner brought an action against the defendant, his contractor's insurance agent.   At issue was a motion to strike a CUTPA count, and while the court stated that it was not necessary for a CUTPA action to arise out of a CUIPA violation;  Preston v. Chartkoff supra, Superior Court, Docket No. CV 00 0071112;  it is unclear from the memorandum of decision the exact nature of the CUTPA count, and therefore, this court is unable to determine if the allegations in the CUTPA count in Preston are analogous to the facts alleged in the CUTPA count in the present case.⁷  In CUSA, LLC v. Travelers, Co., Inc., United States District Court, Docket No. 3:07–cv–00968 (D.Conn., October 15, 2007), in ruling on a motion to remand the case to state court, the court examined a CUTPA claim the plaintiff asserted against one of the defendants, Discover Re Managers, Inc. (DRE).  The defendants argued that the CUIPA claim could not succeed against DRE because any misrepresentation made by DRE did not concern an actual insurance policy, just an agreement relating to insurance.  CUSA, LLC v. Travelers, Co., Inc., supra, United States District Court, Docket No. 3:07–cv–00968.   The defendants in CUSA, LLC further argued that if the CUIPA claim failed, then the CUTPA claim must necessarily fail as well.  CUSA, LLC v. Travelers, Co., Inc., supra, United States District Court, Docket No. 3:07–cv–00968.   The court in CUSA, LLC stated that because the plaintiff's CUIPA claim allegedly fails because DRE's misrepresentations did not concern an insurance contract, that created enough uncertainty about the defendants' arguments about the CUTPA claims which should be resolved in favor of the plaintiff.  CUSA, LLC v. Travelers, Co., Inc., supra, United States District Court, Docket No. 3:07–cv–00968.   The circumstances of CUSA, LLC are distinguishable from the circumstances of the present case because in CUSA, LLC, the alleged conduct by DRE did not concern an insurance contract and thus did not implicate CUIPA, while the present case concerns an alleged insurance contract between the plaintiff and the defendant.

Therefore, in light of the fact that the cases that the plaintiff cites are factually distinguishable from the circumstances of the present case, this court is not persuaded by those cases and will follow the precedent set forth in Mead and Lees, which is that a CUTPA count based on alleged conduct under the purview of CUIPA will fail if said alleged conduct does not meet the requirements to sustain a CUIPA count.   Therefore, the motion to strike count three is granted.

CONCLUSION

The motion to strike count three of the sixth amended complaint is granted.

Woods, J.

FOOTNOTES

FN1. The original action was commenced by service of process on another defendant on February 27, 2008.   The current defendant was later cited into the case, and the action against the original defendant was withdrawn.   In this memorandum, when the court refers to “the defendant,” it is referring only to CUNA Mutual Insurance Society..  FN1. The original action was commenced by service of process on another defendant on February 27, 2008.   The current defendant was later cited into the case, and the action against the original defendant was withdrawn.   In this memorandum, when the court refers to “the defendant,” it is referring only to CUNA Mutual Insurance Society.

FN2. While an objection was filed to the request for leave to amend the complaint, the court overruled this objection on February 7, 2011..  FN2. While an objection was filed to the request for leave to amend the complaint, the court overruled this objection on February 7, 2011.

FN3. General Statutes § 38a–816(6) provides:  “(6) Unfair claim settlement practices.   Committing or performing with such frequency as to indicate a general business practice any of the following:  (a) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;  (b) failing to acknowledge and act with reasonable promptness upon communications with respect to claims arising under insurance policies;  (c) failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;  (d) refusing to pay claims without conducting a reasonable investigation based upon all available information;  (e) failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;  (f) not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;  (g) compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds;  (h) attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;  (i) attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured;  (j) making claims payments to insureds or beneficiaries not accompanied by statements setting forth the coverage under which the payments are being made;  (k) making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;  (l) delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;  (m) failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage;  (n) failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement;  (o) using as a basis for cash settlement with a first party automobile insurance claimant an amount which is less than the amount which the insurer would pay if repairs were made unless such amount is agreed to by the insured or provided for by the insurance policy.”.  FN3. General Statutes § 38a–816(6) provides:  “(6) Unfair claim settlement practices.   Committing or performing with such frequency as to indicate a general business practice any of the following:  (a) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;  (b) failing to acknowledge and act with reasonable promptness upon communications with respect to claims arising under insurance policies;  (c) failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;  (d) refusing to pay claims without conducting a reasonable investigation based upon all available information;  (e) failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;  (f) not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;  (g) compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds;  (h) attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;  (i) attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured;  (j) making claims payments to insureds or beneficiaries not accompanied by statements setting forth the coverage under which the payments are being made;  (k) making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;  (l) delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;  (m) failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage;  (n) failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement;  (o) using as a basis for cash settlement with a first party automobile insurance claimant an amount which is less than the amount which the insurer would pay if repairs were made unless such amount is agreed to by the insured or provided for by the insurance policy.”

FN4. Section 38–60 has since been recodified and is now § 38a–815..  FN4. Section 38–60 has since been recodified and is now § 38a–815.

FN5. Section § 38–61(6)(d) has since been recodified and is now § 38a–816 and the language of § 38–61(6)(d) is identical to the language of § 38a–816(6)(d)..  FN5. Section § 38–61(6)(d) has since been recodified and is now § 38a–816 and the language of § 38–61(6)(d) is identical to the language of § 38a–816(6)(d).

FN6. The Connecticut Practice Series states:  “One means of attempting to avoid the limitations of CUIPA is to allege that there has been a CUTPA violation in the relationship between the parties but make no reference to CUIPA.   There is some authority allowing such claims, even where the allegedly wrongful conduct was within the coverage of CUIPA, a result which seems contrary to the reasoning of Mead.” R. Langer, J. Morgan & D. Belt, 12 Connecticut Practice Series:  Unfair Trade Practices (2010) § 3.13, p. 226–27.   One such case that the Connecticut Practice Series cites as an example of a Superior Court case that did not require the pleading of a viable CUIPA claim in order for there to be a viable CUTPA claim is Pusztay v. Allstate Ins. Co., Superior Court, judicial district of Stamford–Norwalk, Docket No. CV 06 5002425 (June 30, 2009, Pavia, J.).   R. Langer, J. Morgan & D. Belt, supra, 12 Connecticut Practice Series:  Unfair Trade Practices p. 226 n.36. Notwithstanding the Superior Court cases that stand for the proposition that one, in a case involving insurance, can allege a violation of CUTPA without meeting the criteria for alleging a violation of CUIPA if the alleged conduct is governed by CUIPA as long as the plaintiff meets the criteria to allege a violation of CUTPA, it is submitted that these cases run contrary to the Supreme Court authority of Mead and Lees..  FN6. The Connecticut Practice Series states:  “One means of attempting to avoid the limitations of CUIPA is to allege that there has been a CUTPA violation in the relationship between the parties but make no reference to CUIPA.   There is some authority allowing such claims, even where the allegedly wrongful conduct was within the coverage of CUIPA, a result which seems contrary to the reasoning of Mead.” R. Langer, J. Morgan & D. Belt, 12 Connecticut Practice Series:  Unfair Trade Practices (2010) § 3.13, p. 226–27.   One such case that the Connecticut Practice Series cites as an example of a Superior Court case that did not require the pleading of a viable CUIPA claim in order for there to be a viable CUTPA claim is Pusztay v. Allstate Ins. Co., Superior Court, judicial district of Stamford–Norwalk, Docket No. CV 06 5002425 (June 30, 2009, Pavia, J.).   R. Langer, J. Morgan & D. Belt, supra, 12 Connecticut Practice Series:  Unfair Trade Practices p. 226 n.36. Notwithstanding the Superior Court cases that stand for the proposition that one, in a case involving insurance, can allege a violation of CUTPA without meeting the criteria for alleging a violation of CUIPA if the alleged conduct is governed by CUIPA as long as the plaintiff meets the criteria to allege a violation of CUTPA, it is submitted that these cases run contrary to the Supreme Court authority of Mead and Lees.

FN7. Further, with regard to the Superior Court cases, “[t]rial court cases do not establish binding precedent.  J.M. Lynne Co. v. Geraghty, 204 Conn. 361, 369, 528 A.2d 786 (1987).”  McDonald v. Rowe, 43 Conn.App. 39, 43, 682 A.2d 542 (1996)..  FN7. Further, with regard to the Superior Court cases, “[t]rial court cases do not establish binding precedent.  J.M. Lynne Co. v. Geraghty, 204 Conn. 361, 369, 528 A.2d 786 (1987).”  McDonald v. Rowe, 43 Conn.App. 39, 43, 682 A.2d 542 (1996).

Woods, Glenn A., J.