Mustafa Akl v. Trumbull Insurance Company (2014)

MEMORANDUM OF DECISION ON MOTION TO STRIKE (# 111)

The defendant, Trumbull Insurance Company, has moved to strike Counts Two and Three of the Complaint, dated July 23, 2013, on the grounds that they fail to state valid causes of action.

Allegations of the Complaint

Count One of the Complaint alleges:

1. On or about July 14, 2012, at approximately 9:30 a.m., the plaintiff, Mustafa Akl, (hereinafter the “plaintiff”), was the operator of a motor vehicle stopped for a red traffic light at the intersection of Flatbush Avenue and the I–84 Westbound Exit 45 off-ramp in Hartford, Connecticut.

2. At the same time and place, an unknown motorist (hereinafter the “uninsured motorist”) was the operator of a motor vehicle traveling directly behind the plaintiff on the I–84 Westbound Exit 45 off-ramp in Hartford, Connecticut.

3. At the same time and place, the uninsured motorist attempted to maneuver from the right-most lane into the center lane, and in doing so, suddenly and without warning, struck the left rear corner of the plaintiff's vehicle (hereinafter the “collision”).

4. This collision, and the resulting injuries and losses suffered by the plaintiff, were due to the negligence and carelessness of the uninsured motorist.

Count One further alleges that as a result of the collision, the plaintiff suffered a cervical strain, left shoulder neuropathy, ulnar neuropathy and carpal tunnel syndrome of the left hand.   It further alleges that at the time of the collision, the plaintiff was insured by the defendant and that policy included an uninsured motorist endorsement.

Count Two of the Complaint, alleges that the defendant breached its duty of good faith and fair dealing “in its contractual obligations with the plaintiff” in one or more of the following ways:

a. it forced and compelled the plaintiff to institute and pursue litigation in order to recover the amount that the plaintiff was clearly due under the insurance policy, in violation of Connecticut General Statutes § 38a–816;

b. it refused to consider certain injuries caused by the collision without offering any explanation for its refusal to consider those injuries, and without any medical basis to do so, thereby depriving the plaintiff of his opportunity to fairly settle his claim in violation of Connecticut General Statutes § 38a–816;

c. it failed to effectuate prompt and fair settlement of the plaintiff's claim in good faith, in violation of Connecticut General Statutes § 38a–816;

d. it failed to promptly provide a reasonable explanation for its basis of its denial to consider certain injuries that were medically related to the collision, in violation of Connecticut General Statutes § 38a–816;

e. it compelled the plaintiff to institute litigation to recover amounts due by offering substantially less than the amounts ultimately recovered in similar actions, in violation of Connecticut General Statutes § 38a–816;

f. intentionally made a minimal offer to settle the plaintiff's case, with full knowledge that similar cases have a value well in excess of the amount offered, in violation of Connecticut General Statutes § 38a–816;

g. it engaged in a deliberate policy of inaction, uncooperation, delay, and/or avoidance in connection with the plaintiff's claim under the policy.

Count Two further alleges that “all of the aforementioned actions of the defendant were engaged in purposefully and deliberately with the dishonest and sinister intent to frustrate intimidate, coerce, pressure or otherwise manipulate the plaintiff into accepting less than the amount fairly and justly due him under the insurance policy.”

In Count Three the plaintiff alleges “Negligent Failure to Settle” against the defendant.   He pleads the same conduct in paragraphs 14a-g of Count Two set forth above.   The plaintiff then alleges that “[h]ad the defendant reasonably acted in the course of processing the plaintiff's claim, the plaintiff's claim would have settled without the need for litigation.”

In the Prayer for Relief, the plaintiff seeks monetary punitive damages for Counts Two and Three.

Discussion of the Law and Ruling

“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).  “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).   The court construes “the complaint in the manner most favorable to sustaining its legal sufficiency ․ Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied ․ Moreover, [the court notes] that [w]hat is necessarily implied in an allegation] need not be expressly alleged ․ 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).   Nevertheless, “[a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged.”  (Internal quotation marks omitted.)  For Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 498.

The defendant argues that Count Two lacks factual allegations supporting the claim that Trumbull acted with a dishonest and sinister purpose and, therefore, fails to state a cause of action for bad faith.   Every contract contains an implied covenant of good faith and fair dealing.  Renaissance Management Co. v. Connecticut Housing Finance Authority, 281 Conn. 227, 240, 915 A.2d 290 (2007).  “To constitute a breach of [the implied covenant] 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. Bad faith implies “a design to mislead or to deceive another ․ [B]ad faith is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ․ it contemplates a state of mind affirmatively operating with furtive design or ill will.”  Buckman v. People's Express, Inc., 205 Conn. 166, 171, 530 A.2d 596 (1987);  De La Concha of Hartford, Inc. v. Aetna Life Ins. Co, 269 Conn. 424, 433, 849 A.2d 382 (2004).

Proof of bad faith in the insurance coverage context requires proof that the insurer has denied coverage without a reasonable basis and has acted with a “dishonest purpose.”  De La Concha of Hartford, Inc., supra, at 433.   The appellate courts of this state have not addressed the precise issue here:  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.   However, a majority of trial courts have held 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.”  Ferriolo v. Nationwide Insurance, 1998 Ct.Sup. 2563 (March 11, 1998, Hartmere, J.).   See also Chestnut Investment, LLC v. Nautilus Ins. Co., 2012 WL 310761 at *4 (Jan. 6,2012, Wilson, J.);  McCullough v. Encompass Indem.   Co., 2009 WL 5342506 (Dec. 10, 2009, Swienton, J.) (alleged misrepresentations of the amount of coverage, applicable policy provisions, change in position of the amount due and payable, failure to act with reasonable promptness and failure to timely and accurately handle claim are simply claims that insurer did not property handle claim for benefits under policy not evidence of intentionally dishonest or morally oblique or sinister conduct);  Crespan v. State Farm Mutual Automobile Ins. Co., 2006 Ct.Sup. 994 (Jan. 13, 2006, Pickard, J.);  Bernard v. Buendia, 2005 Ct.Sup. 11369 (July 20, 2005, Doherty, J.) (In order to make a bad faith claim the plaintiff must allege that the defendant did more than simply deny the plaintiff's claim for benefits);  O & G Industries, Inc. v. Travelers Property Casualty Corporation, 2001 Ct.Sup. 12601, (September 7, 2001, Cremins, J.) (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);  Grant v. Colonial Penn Insurance Company, 1996 Ct.Sup. 482 (Jan. 16, 1996, Hauser, J.) [16 Conn. L. Rptr. 49] (Bad faith claim must be alleged in terms of wanton and malicious injury and evil intent).

Count Two incorporate the allegations of Count One, including the allegation that the alleged uninsured motorist was “unknown.”   With such a factual matrix, the conclusory language that the defendant's conduct was “dishonest with a sinister intent” does not provide a sufficient factual basis for the bad faith count.  “By nomenclature alone the plaintiffs cannot transform their conclusory allegations into a cause of action for bad faith without specific allegations to support it.”  McCrea v. Louis Dreyfus Corporation, 1994 Ct.Sup. 9888 (Sept. 28, 1994, Stodolink, J.) [12 Conn. L. Rptr. 493].

For the foregoing reasons Count Two is ordered stricken.

In Count Three the plaintiff alleges negligent failure to settle.  “The economic loss doctrine, a judicially created principle, prohibits recovery in tort where the relationship between the parties is contractual in nature and the only losses alleged are purely economic.”  First American Title Ins. Co. v. 273 Water Street, LLC, 2010 WL 6496185 at *5 (Aug. 30, 2010, Peck, J.).

The Connecticut Supreme Court first applied the economic loss doctrine in Flagg Energy Development Corp. v. General Motors Corp., 244 Conn. 126, 709 A.2d 1075 (1988).   In 2013 the Supreme Court released its decision in Ulbrich v. Groth, 310 Conn. 375 (2013), clarifying that its decision in Flagg Energy Development Corp. was not limited only to sales covered by Article 2 of the UCC. Id. at 405.

The court in First American Title Ins. Co., supra, explained the economic loss doctrine as it applies in the insurance context:

The most persuasive argument in support of extending the economic loss doctrine lies in the Superior Court cases analyzing torts arising out of insurance agreements and considering the public policy associated with such an extension.  “Insurance companies ․ in order to be able to make a reasonable profit have to rationally allocate risks.”   Without the ability to limit risk within liability policies, insurers could not operate, or premiums would be exorbitant.   Insurance industry depends on its right to allocate risk and limit potential liability by contract terms.

First American Title Ins. Co., supra, at *6.

The economic loss doctrine bars the negligence claim arising out of this breach of contract case.   Count Three, therefore, is ordered stricken.   The portion of the Prayer for Relief which seeks punitive damages is also ordered stricken.

By the court,

Aurigemma, J.

Aurigemma, Julia L., J.