Tina Perkins, Administratrix of Estate of Tyrell Harris and Jerome Brantley v. Hermitage Insurance Company (2012)

MEMORANDUM OF DECISION

MOTION TO STRIKE

The defendant, Hermitage Insurance Company, has filed a motion to strike the Second, Third, Fifth and Sixth counts of the plaintiffs' revised complaint, dated August 5, 2011.   Specifically, the defendant argues that the Second and Fifth Counts fail to allege the breach of the covenant of good faith and fair dealing in terms of wanton and malicious injury with dishonest purpose and moral obliquity.   The defendant states that the plaintiffs have simply alleged in a conclusory manner that the defendant acted in bad faith.   As to the Third and Sixth Counts, the defendant argues that the plaintiffs have failed to allege facts that support the allegation that the defendant engaged in a general business practice of refusing to settle claims in violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) and the Connecticut Unfair Insurance Practices Act (“CUIPA”).   Additionally the defendant states that these counts should be stricken because the allegations contained in these counts do not meet the requirements of the CUTPA “cigarette rule.”

Lastly, the defendant also requests that the court strike the corresponding prayers for relief that seek punitive damages, exemplary damages, attorneys fees and costs.

I

The Revised Complaint

The revised complaint is brought in six counts.   The first three counts are brought by the plaintiff Perkins.   In the First Count, the plaintiff alleges that the defendant is liable to her for a breach of contract pursuant to the Connecticut Direct Action Statute, General Statutes § 38a–321.¹  The Second and Third Counts contain claims for bad faith and a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”)and the Connecticut Unfair Insurance Practices Act (“CUIPA”), respectively.   Counts Four through Six are brought by the plaintiff Brantley.   In the Fourth Count, Brantley also alleges breach of contract and that the defendant is liable to him pursuant to General Statutes § 38a–321, as well.   The Fifth and Sixth Counts contain claims for bad faith and a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) and the Connecticut Unfair Insurance Practices Act (“CUIPA”), respectively.

The plaintiffs' allegations result from injuries sustained by the plaintiffs while they were business invitees and patrons at Kangaroo's Nite Klub, a business owned by 302 Corporation, an insured of the defendant, Hermitage.   The plaintiffs allege that Tyrell Harris sustained fatal injuries and Brantley sustained serious physical injuries, as a result of a shooting, which occurred on the insured's premises on December 27, 2003.   These injuries allegedly were caused by the negligence and carelessness of the insured, Kangaroo's, in that it failed to keep and maintain the premises in a reasonably safe manner.

The plaintiffs allege the insured, 302 Corporation, hired legal counsel to defend it in an underlying action, and in doing so, the insurer, the defendant Hermitage, denied liability for the death of Harris and the injuries sustained by Brantley.   Subsequently, a stipulated judgment was entered against the insured, 302 Corporation in favor of the plaintiff Perkins, in the amount of $300,000 on September 27, 2007.²  A stipulated judgment in favor of the plaintiff Brantley was also entered against the insured for an identical amount of $300,000.   As a result of these two stipulated judgments, the insured corporation assigned its rights against its insurer, Hermitage, to the plaintiffs, which has resulted in the present action against the corporation's insurer, the defendant Hermitage.

In the First and Fourth Counts, sounding in breach of contract, the plaintiffs allege that Hermitage breached its contractual obligations to the insured by failing to defend and indemnify its insured in the underlying action.   The plaintiffs allege the insurance policy, issued to the insured by Hermitage, was in full force and effect on the date of the shooting, and that the insured did all things required of it, in accordance with the terms of the policy.   The plaintiffs allege that under Section 1–Coverages 1. Insuring Agreement, subsection a., Hermitage agreed to “pay those sums the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies,” and Hermitage further agreed that it had a “right and duty to defend the insured against any ‘suit’ seeking those damages.”   In addition, the plaintiffs allege that the policy applies if the (1) the “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage territory.”   The plaintiffs allege that “bodily injury” is defined in the subject insurance policy as “bodily injury ․ sustained by a person, including death resulting from any of these acts,” while an “occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same harmful conditions.”

Pursuant to the terms of the policy, the plaintiffs allege that the insurer Hermitage received timely notice of the underlying claims and had an opportunity to investigate the claims and to take whatever action it deemed necessary to defend the claims in court.   The plaintiffs allege that Hermitage denied its duty to defend and indemnify its insured in writing on July 31, 2009.   The plaintiffs allege that Hermitage breached the terms of the insurance policy with its insured, in that it failed to provide its insured with a legal defense, and it failed to indemnify its insured in response to the judgment that was entered against it.

In the Second and Fifth Counts, the plaintiffs allege that Hermitage “engage [d] in bad faith by wrongly refusing to honor claims presented against it, and by failing to defend and/or indemnify its insureds for claims made against them as a regular business practice.”   As a result of this pattern of misconduct, the plaintiffs allege “the defendant wrongfully refused to provide the insured with a legal defense or indemnification in connection with the Underlying Action, thereby injuring the insured by forcing it to pay for legal fees and expenses associated with the defense of the claim, to sustain emotional distress, and incur a judgment against it.”   The plaintiffs then claim that Hermitage has breached the implied covenant of good faith and fair dealing, contrary to its obligation to deal with its insured in a reasonable and fair manner.

Lastly in the Third and Sixth Counts, the plaintiffs allege Hermitage violated CUTPA and CUIPA by failing to reasonably and promptly settle the plaintiffs' claims.   Specifically, the plaintiffs allege the defendant violated General Statutes § 38a–816(6) in that it failed to provide its insured, Kangaroo's, with a defense;  failed to satisfy a judgment entered against its insured;  failed to fully and fairly investigate the claims against its insured;  failed to acknowledge and act with reasonable promptness upon communications with respect to claims arising under insurance policies;  and compelled the plaintiffs to institute litigation to recover sums due under an insurance policy.³  The plaintiffs claim that Hermitage “regularly engages in unfair insurance practices by wrongly refusing to honor claims presented against it, and by failing to defend and/or indemnify its insureds for claims made against them as a regular business practice, thereby gaining an unfair advantage over its competitors in violation of Conn. Gen.Stat. § 38a–816(6).”

The plaintiffs also allege that in so acting, Hermitage committed violations of CUTPA, General Statutes §§ 42–110b et seq. and such unfair and deceptive conduct has caused the insured to suffer financial loss and damage.   The plaintiffs claim that Hermitage's conduct has been committed with such frequency as to constitute a general business practice.   As a result of the foregoing allegations, in their prayer for relief, the plaintiffs seek money damages, damages pursuant to CUTPA, and double/treble damages.

II

Standard of Law

“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, 815 A.2d 1188 (2003).  “[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 challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court.”  (Internal quotation marks omitted.)  Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 771, 802 A.2d 44 (2002).  “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.”   (Emphasis in original;  internal quotation marks omitted.)  Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997).   The role of the trial court in ruling on a motion to strike is “to 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, 698 A.2d 859 (1997).  “Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied ․ It is fundamental that in determining the sufficiency of a complaint [or a count in 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.”  Doe v. Board of Education, 76 Conn.App. 296, 299–300, 819 A.2d 289 (2003).  “Practice Book ․ § 10–39, allows for a claim for relief to be stricken only if the relief sought could not be legally awarded.”  Pamela B. v. Ment, 244 Conn. 296, 325, 709 A.2d 1089 (1998).

III

DiscussionA.Second Count and Fifth Count

The defendant argues that the Second and Fifth Counts fail to allege legally sufficient causes of action for bad faith.   Specifically, the defendant contends that the plaintiffs have alleged in a conclusory manner that Hermitage breached its obligation to act in good faith and acted in bad faith toward its insured, but have failed to allege a breach of the covenant of good faith and fair dealing in terms of wanton and malicious injury with a dishonest purpose and moral obliquity.   See Buckman v. People Express, Inc., 205 Conn. 166, 171, 530 A.2d 596 (1987).   The defendant concludes by arguing that these counts, as pleaded, amount to nothing more than a reiteration of the breach of contract claims asserted in Counts One and Four of the Revised Complaint, dated August 5, 2011.

“[I]t is axiomatic that the ․ duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship.   In other words, every contract carries an implied duty requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement.   The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term.”  (Internal quotation marks omitted.)  (Internal citations and quotation marks omitted.)  De La Concha of Hartford v. Aetna Life Ins., 269 Conn. 424, 442–43, 849 A.2d 382 (2004).   The implied covenant of good faith and fair dealing is applicable to contracts of insurance.  Verrastro v. Middlesex Ins. Co., 207 Conn. 179, 190, 540 A.2d 693 (1988);  Magnan v. Anaconda Industries, Inc., 193 Conn. 558, 566, 479 A.2d 781 (1984);  Hoyt v. Factory Mutual Liberty Ins. Co., 120 Conn. 156, 159, 179 A. 842 (1935).

“To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith.”  Id.;  Alexandru v. Strong, 81 Conn.App. 68, 80–81, 837 A.2d 875, cert. denied, 268 Conn. 906, 845 A.2d 406 (2004), citing Gupta v. New Britain General Hospital, 239 Conn. 574, 598, 687 A.2d 111 (1996).  “Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive ․ Bad faith means more than mere negligence;  it involves a dishonest purpose.”  (Citation omitted.)  19 Perry Street, LLC v. Unionville Water Company, 294 Conn. 611, 637, 987 A.2d 1009 (2010).

“Though the weight of authority seems to be on the side of recognizing a duty of good faith, there is no consensus about what that duty requires.”  PSE Consulting, Inc. v. Frank Mercede and Sons, Inc., 267 Conn. 279, 302, 838 A.2d 135 (2004).  “The majority of courts agree that the principal must establish something more than mere negligence to prove bad faith.”  Id., 302–03.   “[W]e join those jurisdictions that define bad faith as requiring an “improper motive” or “dishonest purpose ․” Id., 304–05.  “Whether a party has acted in bad faith is a question of fact ․” Renaissance Mgt. Co. v. Connecticut Hous. Fin. Auth., 281 Conn. 227, 240, 915 A.2d 290 (2007).   The court is also aware that when a good faith controversy exists, an insurer's withholding of the policy proceeds cannot be found to be in bad faith, even if the insurer's position is ultimately found to be erroneous.   See, McCauley Ent. v. New Hampshire Ins., 716 F.Sup. 718, 723 (D.Conn.1989).

The plaintiffs, in objecting to the motion to strike, argue they have made sufficient allegations that, if proven, establish a cognizable claim of bad faith conduct.   The plaintiffs have alleged that the defendant acted in bad faith.   The court has previously summarized those allegations, earlier herein.

“In order to prevail on a claim of bad faith, it is necessary for the complaint to allege a specific act that was performed purposefully, with a sinister intent ․ Even if it was found that there was a breach of contract, not all contracts are breached with a sinister intent.”   Namoury v. Tibbetts, United States District Court for the District of Connecticut, Docket No. 3:04 CV 599 (January 11, 2005).  “Neglect or refusal to fulfill a contractual obligation can be bad faith only if prompted by an interested or sinister motive.”  Feinberg v. Berglewicz, 32 Conn.App. 857, 862, 632 A.2d 709 (1993).  “The lynchpin of a bad faith claim is a state of mind characterized by an intent to mislead or deceive or defraud.”   Ravski v. Connecticut State Medical Society, Superior Court, complex litigation docket at Waterbury, Docket No. X01 CV 04 4000582 (January 26, 2005, Sheedy, J.).  “In order to make [such a claim] the plaintiff must allege that the defendant did more than simply deny the plaintiff's claim for benefits.”  (Internal quotation marks omitted.)   Bernard v. Buendia, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 04 4003054 (July 20, 2005, Doherty, J.).

There is a split of authority in the Superior Courts “as to what factual allegations are sufficient to constitute the element of bad faith.   The first line of cases requires specific allegations establishing a dishonest purpose or malice ․ The second line of cases holds the plaintiff to a less stringent standard ․ [where] the plaintiffs need only allege sufficient facts or allegations from which it may reasonably be inferred that the defendant breached the implied covenant of good faith and fair dealing.”  (Internal quotation marks omitted.)   Algiere v. Utica National Ins., Co., Superior Court, judicial district of New London, Docket No. CV 04 0569670 (February 7, 2005, Jones, J.) (“Although the plaintiff [had] not alleged that the defendant acted in bad faith or with a sinister motive she [had] alleged facts sufficient to reasonably infer that an improper motive or reckless indifference of the interest of others existed”).

“The appellate courts of this state have not addressed the ․ issue ․ [of] where an insurer denies or limits coverage under an insurance policy, what allegations are required to allege bad faith as opposed to breach of contract ․ [A] majority of trial courts have held [however] that plaintiffs must plead facts that go beyond a simple breach of contract claim and enter into a realm of tortious conduct which is motivated by a dishonest or sinister purpose.”  (Internal quotation marks omitted.)   Lynch v. Covenant Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV 09 5027821 (August 11, 2009, Aurigemma, J.).

Tarabek v. Hartford Ins. Co., Superior Court, judicial district of New London, Docket No. 51153 (August 26, 2002, Hurley, J.) articulates the elements required for a claim of the breach of the covenant of good faith and fair dealing, specifically, a sinister motive or dishonest purpose.   See Crespan v. State Farm Mutual Auto Insurance Co., Superior Court, judicial district of Litchfield at Litchfield No. LLI–CV–05–4002121S (Jan. 13, 2006, Pickard, J.).   Allegations which give rise to an inference that the defendant has acted purposefully are sufficient.   See Shiff v. Van Wyk, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 08 5008214 (July 6, 2009, Pavia, J.).

“In Panamsat Corp. v. Millennium Television Network, the court found that the plaintiff's allegations which stated “that the defendants acted in bad faith, and intentionally, willfully and/or in reckless disregard and in derogation of the plaintiff's rights under the payment bond ․ [and] that [the defendants] [had] acted in concert to reject valid claims under the [payment bond] by vendors,” were sufficient to allege a bad faith claim, and therefore denied the defendant's motion to strike.   Panamsat Corp. v. Millennium Television Network, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 01 0181722 (July 20, 2001, D'Andrea, J.).”   Crespan v. State Farm Mutual Auto Insurance Co., Superior Court, judicial district of Litchfield at Litchfield No. LLI–CV–05–4002121S (Jan. 13, 2006, Pickard, J.).

“Conversely, in another 2001 case, the plaintiff's mere “legal conclusion that the failure to defend and indemnify amounts to a violation of the duty of good faith and fair dealing” was insufficient and did not properly state a claim of bad faith and, therefore, the court granted the defendant's motion to strike that count.   O & G Industries, Inc. v. Travelers Property Casualty Corp., Superior Court, judicial district of Litchfield, Docket No. CV 01 0084433 (September 7, 2001, Cremins, J.).”  Id. “In Quality Restoration & Roofing, Inc. v. United States Liability Ins. Group, Superior Court, complex litigation docket at Waterbury, Docket No. CV 02 0175383 (June 15, 2004, Sheedy, J.), the court applied the heightened standard, noting that “[m]ere conclusory allegations as to the legal status of the insurer's acts, without specific allegation of conduct which demonstrates a dishonest purpose, malice or bad faith do not state a claim for bad faith.”   After reviewing the allegations, the court denied the motion to strike the bad faith claim, finding “there is a specific allegation as indicia of malice or dishonest purpose.  [The] [p]laintiff has alleged ․ that [the defendant] did not promptly adjust, investigate, indemnify, negotiate or settle claims for the sole reason of avoiding payment of a claim that defendant knew it had an obligation to pay.”   Id.;  see also, Afifi v. Standard Fire Ins. Co., Superior Court, judicial district of New Haven at New Haven (Oct. 21, 2011, Zoarski, J.)

Looking to the allegations for bad faith, the plaintiffs allege that the defendant failed to provide a defense to its insured, 302 Corporation;  failed to indemnify its insured;  failed to conduct a full and fair investigation of the complaint against its insured;  and refused to satisfy the judgment against its insured.   Those allegations are all included in the plaintiffs' counts for breach of contract and are incorporated in the bad faith claims.   The plaintiffs then allege that the defendant regularly engages in bad faith by wrongly refusing to honor claims presented against it and fail to indemnify and defend its insureds as a regular business practice.   These alleged practices force the insureds to pay legal fees;  causes them emotional distress;  and causes them to incur judgments against them.   The plaintiffs allege this course of conduct was done with a “dishonest purpose” when the defendant knew or should have known based on the information the defendant had, that its insured's liability was clear and probable.”   While the plaintiffs have not specifically alleged that the defendant had an intent to mislead or deceive or defraud its insureds, they have alleged a “dishonest purpose” and other additional allegations, including specific insurance policy provisions, sufficient to imply bad faith.   Accordingly, the motion to strike the Second and Fifth Counts is denied.

B.

Third Count and Sixth Count

The defendant also moves to strike the Third and Sixth Counts of the Revised Complaint arguing the plaintiffs have failed to allege facts that support the allegations that the defendant Hermitage engaged in a general business practice of refusing to settle claims.   Additionally the defendant claims that the plaintiffs' allegations do not meet the requirements of the “cigarette rule.”

In the Third and Sixth Counts, the plaintiffs have incorporated the allegations from the Second and Fifth Counts of their Revised Complaint.   They additionally allege that the defendant, by its failure to pay the plaintiffs for their losses, as was its duty under the insurance contract with the 302 Corporation, knew or should have known that they would create an unreasonable risk of injury to its insured.   The plaintiffs have alleged that the defendant has violated General Statutes § 38a–816(c) of the Connecticut Unfair Insurance Practices Act (“CUIPA”).⁴  The plaintiffs additionally allege that by wrongly refusing to honor claims presented against it and by failing to defend and indemnify its insureds, the defendants have gained an unfair business advantage over its competitors.   Lastly the plaintiffs have alleged that as the defendant has engaged in unfair or deceptive business practices in violation of General Statutes § 42–110b et seq.  (“CUTPA”), so as to give rise to private causes of action by the plaintiffs.

The legal standard for CUTPA claims has been set forth as follows:  “Connecticut courts, when determining whether a practice violates CUTPA, will consider (1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise—whether, in other words, it is within at least the penumbra of some common-law, statutory, or other established concept of unfairness;  (2) whether it is immoral, unethical, oppressive, or unscrupulous;  (3) whether it causes substantial injury to consumers (or competitors or other businessmen) ․ Thus, a violation of CUTPA may be established by showing either an actual deceptive practice ․ or a practice amounting to a violation of public policy.”  (Citation omitted.)  Ancona v. Manafort Bros., Inc., 56 Conn.App. 701, 714, 746 A.2d 184 (2000);  see also, Keller v. Beckenstein, 117 Conn.App., 565–66, cert. denied, 294 Conn. 913 (2009).   All three criteria do not need to be satisfied to support a finding of a violation of CUTPA.  Hartford Electric Supply Co. v. Allen Bradley Co., 250 Conn. 334, 367–68, 736 A.2d 824 (1999).  “A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three.”  Toshiba America Med. Sys. v. Mobile Med. Sys., 53 Conn.App. 484, 730 A.2d 1219 (1999).

“In a CUTPA or CUIPA claim, the insurer's liability is ordinarily based on its conduct in settling or failing to settle the insured's claim and on its claims settlement policies in general.   The factual inquiry focuses, not on the nature of the loss and the terms of the insurance contract, but on the conduct of the insurer ․ In a CUIPA and CUTPA claim, the insurer's duty stems not from the private insurance agreement but from a duty imposed by statute.”  (Citations omitted;  internal quotation marks omitted.)  Heyman Associates No. 1 v. Ins. Co. of Pennsylvania, 231 Conn. 756, 790, 653 A.2d 122 (1995).

“Although the CUIPA violations alleged by the plaintiff cannot stand on their own, CUTPA authorizes private causes of action to enforce claims derived from CUIPA.”   Fedora v. Worcester Ins. Co., Superior Court, judicial district of New Haven, Docket No. CV 03 0285288 (September 28, 2004, Tanzer, J.).  “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 (1994).  “In 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 ․ [Therefore] 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 [CUTPA].”  (Citation omitted;  internal quotation marks omitted.)  Id., 849.

The court has examined the level of detail required in § 38a–816(6) claims and determined that a review of the plaintiffs' allegations reveals that there are no specific factual references to the defendant's action towards other insureds.   All of the factual allegations involved only the settlement negotiations between the insured, 302 Corporation, and the defendant and fail to reference other insureds.   The plaintiffs have not sufficiently alleged a general business practice.   See 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).

The plaintiffs' allegations that the defendant has engaged in similar conduct with other insureds and with such frequency as to indicate a general business practice are legally insufficient.   Asmus Electric, Inc. v. G.M.K. Contractors, Inc., Superior Court, judicial district of New Haven, Docket No. CV 04 0489527 (February 25, 2005, Lopez, J.);   Currie v. Aetna Casualty & Surety Co., Superior Court, judicial district of Hartford, Docket No. CV 96 0558900 (August 12, 1999, Mulchay, J.).  “The Asmus and Currie decisions are indicative of a general trend among Superior Court judges to grant a motion to strike a CUTPA claim when the plaintiff has inserted the magic words of other acts of insurance misconduct by the defendant, although not stat[ed] the factual basis for that claim ․ [O]n a motion to strike, legal conclusions are not admitted ․ and the bald statement that the defendant has, as a matter of business policy, failed to settle workers' compensation claims of other persons is a legal conclusion, particularly since the other claimants are not identified.”(Citation omitted.)  (Internal quotation marks omitted.)   Seven Oaks v. Vigilant Ins., Superior Court, Judicial District of Stamford–Norwalk at Stamford No. FST CV 09 5012672 S (Jul. 7, 2010, Adams, J.);   see also, Finocchio v. Atlantic Mutual Ins. Co., supra, 47 Conn. L. Rptr. 625–26.

In the present case, the malfeasances allegedly committed by the defendant are unfair claim settlement practices as prohibited by § 38a–816(6).   Most of the plaintiffs' specific factual allegations involve the settlement of the claim that is at issue in this matter.   The plaintiffs then allege that the actions of the defendant Hermitage are a general business practice and are designed to cause the plaintiffs financial loss and damage.

With their blanket allegations that the actions of the defendant are conducted on a regular basis and constitute a general business practice, the plaintiffs merely allege a legal conclusion, which is insufficient to withstand a motion to strike.   There are no explicit factual references to unfair settlement practices in handling of other claims.   As all of the specific factual allegations in count two involve only the settlement negotiations between the plaintiff and the defendant, and the plaintiff fails specifically to reference other claims where the defendant has committed malfeasance, the plaintiff does not allege a general business practice.   Thus, the plaintiffs fail to state a claim under CUTPA for alleged violations of CUIPA.   See Seven Oaks v. Vigilant Ins., supra, Superior Court, Judicial District of Stamford–Norwalk at Stamford No. FST CV 09 5012672 S (Jul. 7, 2010, Adams, J.).   Additionally, while the plaintiffs' allegations could demonstrate an intentional breach of contract on the part of the defendant, absent allegations of additional aggravating factors or egregious conduct, the plaintiffs' allegations are also insufficient to state a claim for CUTPA under the cigarette rule.  Id.

In summary, under § 38a–816(6), unfair settlement practices claims require allegations of a general business practice.   Factual allegations of a singular act of misconduct do not constitute a general business practice.   There are no factual allegations of misconduct by the defendant in the processing of any claim other than the plaintiff's claim, and plural terms such as “unfair” or “deceptive” practices are not specific factual references to the defendant's actions toward other insureds.   Accordingly, the plaintiff failed to allege a general business practice of unfair claim settlement practices.

C.

Prayer for Relief

“Practice Book ․ § 10–39, allows for a claim for relief to be stricken only if the relief sought could not be legally awarded.”  Pamela B. v. Ment, 244 Conn. 296, 325, 709 A.2d (1998).   The plaintiffs, in their prayer for relief, seek “money damages”;  “double and/or treble damages pursuant to Counts Two, Three, Five and Six”;  and “damages pursuant to Connecticut General Sections § 42–110b, et seq.”   Having determined that Third Count and the Sixth Count of the plaintiffs' Revised Complaint alleging CUTPA/CUIPA claims are legally insufficient, the court also strikes the plaintiffs' prayers for relief, which request statutory punitive damages and counsel fees pursuant to General Statutes § 42–110g(a) and (d).

The court also strikes the plaintiffs' claims for “Double and/or treble damages” pursuant to the Second and Fifth Counts alleging bad faith and a breach of covenant of good faith and fair dealing.   The plaintiffs have not cited any authority including statutory authority justifying an award of “double/treble damages” for the plaintiffs' remaining claims as to breach of contract and breach of the covenant of good faith and fair dealing.   The plaintiffs have not requested an award of punitive damages, exemplary damages or attorneys fees other than those, which might have been allowed under the CUTPA/CUIPA claims, which the court has ordered stricken.⁵

Summary

For the reasons set forth herein, the court grants the defendant's motion to strike the Third and Sixth Counts of the plaintiffs' Revised Complaint and denies the motion to strike the Second and Fifth Counts.   The court additionally grants the motion to strike the plaintiff's claims for relief seeking double/treble damages for Counts Two, Three, Five and Six and damages pursuant to General Statutes § 42–110b et seq.

Judge Richard E. Arnold

FOOTNOTES

FN1. Sec. 38a–321.  (Formerly Sec. 38–175.)   Liability of insurer under liability policy.“Each insurance company which issues a policy to any person, firm or corporation, insuring against loss or damage on account of the bodily injury or death by accident of any person, or damage to the property of any person, for which loss or damage such person, firm or corporation is legally responsible, shall, whenever a loss occurs under such policy, become absolutely liable, and the payment of such loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss, damage or death occasioned by such casualty.   No such contract of insurance shall be cancelled or annulled by any agreement between the insurance company and the assured after the assured has become responsible for such loss or damage, and any such cancellation or annulment shall be void.   Upon the recovery of a final judgment against any person, firm or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury or death or damage to property, if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment.”.  FN1. Sec. 38a–321.  (Formerly Sec. 38–175.)   Liability of insurer under liability policy.“Each insurance company which issues a policy to any person, firm or corporation, insuring against loss or damage on account of the bodily injury or death by accident of any person, or damage to the property of any person, for which loss or damage such person, firm or corporation is legally responsible, shall, whenever a loss occurs under such policy, become absolutely liable, and the payment of such loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss, damage or death occasioned by such casualty.   No such contract of insurance shall be cancelled or annulled by any agreement between the insurance company and the assured after the assured has become responsible for such loss or damage, and any such cancellation or annulment shall be void.   Upon the recovery of a final judgment against any person, firm or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury or death or damage to property, if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment.”

FN2. On September 27, 2010, judgment was entered in favor of each plaintiff as against the defendant-insured pursuant to written stipulations of the parties.   Said stipulations provided that the President of the defendant corporation sign an Assignment of Rights and Claims, which would assign Tort and Contract Rights to the plaintiffs, to allow the plaintiffs to litigate the present action against Hermitage.   See Tina Perkins, Adminstratrix Estate of Harris et al. v. N.D.W., LLC d/b/a Kangaroo's Nite Klub et al., Superior Court, judicial district Ansonia–Milford at Milford, Docket No. AAN CV 05 5000340 (Sept. 27, 2010, Radcliffe, J.)..  FN2. On September 27, 2010, judgment was entered in favor of each plaintiff as against the defendant-insured pursuant to written stipulations of the parties.   Said stipulations provided that the President of the defendant corporation sign an Assignment of Rights and Claims, which would assign Tort and Contract Rights to the plaintiffs, to allow the plaintiffs to litigate the present action against Hermitage.   See Tina Perkins, Adminstratrix Estate of Harris et al. v. N.D.W., LLC d/b/a Kangaroo's Nite Klub et al., Superior Court, judicial district Ansonia–Milford at Milford, Docket No. AAN CV 05 5000340 (Sept. 27, 2010, Radcliffe, J.).

FN3. General Statutes § 38a–816(6) reads as follows:“(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) reads as follows:“(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. See n.3..  FN4. See n.3.

FN5. “Punitive damages are not ordinarily recoverable for breach of contract ․ This is so because ․ punitive or exemplary damages are assessed by way of punishment, and the motivating basis does not usually arise as a result of the ordinary private contract relationship.   The few classes of cases in which such damages have been allowed contain elements which bring them within the field of tort.”  (Citation omitted.)   Triangle Sheet Metal Works, Inc. v. Silver, 154 Conn. 116, 127, 222 A.2d 220 (1966).  “The flavor of the basic requirement to justify an award of punitive or exemplary damages has been repeatedly described in terms of wanton and malicious injury, evil motive and violence.   The Restatement declares that punitive damages may be awarded only for ‘outrageous conduct, that is, for acts done with a bad motive or with a reckless indifference to the interests of others.’   Restatement, 4 Torts § 908, comment (b).”  Id., 128;  see also L.F. Pace & Sons, Inc. v. Travelers Indemnity Co., 9 Conn.App. 30, 47–48, 514 A.2d 766, cert. denied, 201 Conn. 811, 516 A.2d 886 (1986).The remedy of punitive damages is only available if the plaintiff alleges facts sufficient to show that the defendant engaged in conduct that was wanton, maliciously injurious, outrageous and done with evil motive and violence.  Triangle Sheet Metal Works, Inc. v. Silver, supra, 154 Conn. 128.   Malicious conduct is conduct that is done with “a motivating intent or design, actual or constructive, on the part of the defendants to harm the plaintiff by their conduct.”  Id.“The general rule of law known as the American rule is that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception ․ Connecticut adheres to the American rule ․ There are few exceptions.   For example, a specific contractual term may provide for the recovery of attorneys fees and costs ․ or a statute may confer such rights ․ [The Supreme Court] also has recognized a bad faith exception to the American rule, which permits a court to award attorneys fees to the prevailing party on the basis of bad faith conduct of the other party or the other party's attorney.”  (Citations omitted;  internal quotation marks omitted.)   ACMAT Corp. v. Greater New York Mutual Ins. Co., 282 Conn. 576, 582–83, 923 A.2d 697 (2007).   In ACMAT, the court concluded that, “even without an authorizing contractual or statutory provision, a trial court may award attorneys fees to [an insurance] policyholder that has prevailed in a declaratory judgment action against its insurance company only if the policyholder can prove that the insurer has engaged in bad faith conduct prior to or in the course of the litigation.”  Id. 592;  Lincoln General Ins. Co. v. Rodriguez, Superior Court, judicial district of New Britain at New Britain (Nov. 17, 2010, Sweinton, J.)..  FN5. “Punitive damages are not ordinarily recoverable for breach of contract ․ This is so because ․ punitive or exemplary damages are assessed by way of punishment, and the motivating basis does not usually arise as a result of the ordinary private contract relationship.   The few classes of cases in which such damages have been allowed contain elements which bring them within the field of tort.”  (Citation omitted.)   Triangle Sheet Metal Works, Inc. v. Silver, 154 Conn. 116, 127, 222 A.2d 220 (1966).  “The flavor of the basic requirement to justify an award of punitive or exemplary damages has been repeatedly described in terms of wanton and malicious injury, evil motive and violence.   The Restatement declares that punitive damages may be awarded only for ‘outrageous conduct, that is, for acts done with a bad motive or with a reckless indifference to the interests of others.’   Restatement, 4 Torts § 908, comment (b).”  Id., 128;  see also L.F. Pace & Sons, Inc. v. Travelers Indemnity Co., 9 Conn.App. 30, 47–48, 514 A.2d 766, cert. denied, 201 Conn. 811, 516 A.2d 886 (1986).The remedy of punitive damages is only available if the plaintiff alleges facts sufficient to show that the defendant engaged in conduct that was wanton, maliciously injurious, outrageous and done with evil motive and violence.  Triangle Sheet Metal Works, Inc. v. Silver, supra, 154 Conn. 128.   Malicious conduct is conduct that is done with “a motivating intent or design, actual or constructive, on the part of the defendants to harm the plaintiff by their conduct.”  Id.“The general rule of law known as the American rule is that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception ․ Connecticut adheres to the American rule ․ There are few exceptions.   For example, a specific contractual term may provide for the recovery of attorneys fees and costs ․ or a statute may confer such rights ․ [The Supreme Court] also has recognized a bad faith exception to the American rule, which permits a court to award attorneys fees to the prevailing party on the basis of bad faith conduct of the other party or the other party's attorney.”  (Citations omitted;  internal quotation marks omitted.)   ACMAT Corp. v. Greater New York Mutual Ins. Co., 282 Conn. 576, 582–83, 923 A.2d 697 (2007).   In ACMAT, the court concluded that, “even without an authorizing contractual or statutory provision, a trial court may award attorneys fees to [an insurance] policyholder that has prevailed in a declaratory judgment action against its insurance company only if the policyholder can prove that the insurer has engaged in bad faith conduct prior to or in the course of the litigation.”  Id. 592;  Lincoln General Ins. Co. v. Rodriguez, Superior Court, judicial district of New Britain at New Britain (Nov. 17, 2010, Sweinton, J.).

Arnold, Richard E., J.