Opinion
No. CV 06 5004852
April 18, 2008
MEMORANDUM OF DECISION RE MOTION TO STRIKE #122
The question presented by the defendant's motion to strike is whether the plaintiff has alleged the facts necessary to ground either a claim of breach of good faith and fair dealing or a violation of the Connecticut Unfair Trade Practices Act (CUTPA) predicated upon violations of the Connecticut Unfair Insurance Practices Act (CUIPA). Prior to reaching these issues, however, the court will inquire whether the plaintiff has standing to bring her suit in the first instance. Because the court determines that the plaintiff lacks standing for the reasons stated below, the court dismisses this case for want of jurisdiction.
Although neither party has raised the issue of standing, the court does so sua sponte because that concept implicates this court's subject matter jurisdiction and, therefore, must be addressed. See Webster Bank v. Zak, 259 Conn. 766, 774, 792 A.2d 66 (2002) ("the question of subject matter jurisdiction, because it addresses the basic competency of the court, can be raised by any of the parties, or by the court sua sponte, at any time"); see also Daly v. DelPonte, 27 Conn.App. 495, 608 A.2d 93, cert. denied, 223 Conn. 903, 610 A.2d 177 (1992); Planning Zoning Commission v. Gaal, 9 Conn.App. 538, 520 A.2d 246, cert. denied, 203 Conn. 803, 522 A.2d 294 (1987).
FACTS
The plaintiffs, Linda Gates and the estate of her husband, William Gates, filed suit against Jason Fillion in March 2005 alleging that Jason Fillion negligently caused the death of William Gates in a motor vehicle accident. Mr. Fillion was driving a car owned by his parents, Mary and Thomas Fillion ( Gates v. Fillion, Superior Court, judicial district of New Haven, Docket No. CV 05400788). The defendant Jason Fillion accepted an Offer of Compromise filed by the plaintiffs in this first action ( Gates I) and a judgment was entered on March 20, 2006. A satisfaction of the judgment in Gates I was filed with the clerks office on December 5, 2006. In the interim between the entry of the judgment in Gates I and the filing of a satisfaction of that judgment this lawsuit ( Gates II) was filed. In Gates II the plaintiffs, Linda Gates and the estate of her husband, William Gates, filed a revised complaint on May 29, 2007, alleging various claims against the defendants, Jason Fillion, Mary and Thomas Fillion (his parents), and their insurer, Government Employees Insurance Company (Geico), for their respective roles in a motor vehicle accident that claimed the life of the plaintiff's husband. Subsequently, the plaintiffs filed a second revised complaint on September 10, 2007, alleging that (1) Geico violated its implied covenant of good faith and fair dealing and (2) Geico engaged in unfair claim settlement practices in violation of CUIPA and CUTPA. Both claims are predicated on Geico's alleged failure to properly tender payment for the judgment entered against its insured as a result of the underlying car accident. Geico filed this motion to strike on June 5, 2007, which was supported by a memorandum of law. The plaintiffs filed a memorandum in opposition on August 27, 2007.
On October 1, 2007, the court awarded summary judgment in favor of Jason Fillion with respect to those counts directed at him. Moreover, although Mary and Thomas Fillion remain defendants in this suit, they are not a party to this motion to strike, which is focused exclusively on the two counts against Geico.
Although the second revised complaint was filed while this motion was still pending, this motion to strike is nevertheless properly directed at the relevant counts of the second revised complaint. See Practice Book § 10-61 ("pleadings already filed by the adverse party shall be regarded as applicable so far as possible to the amended pleading"); see also Bailey v. West Hartford, 100 Conn.App. 805, 808 n. 4, 921 A.2d 611 (2007) (motion to strike directed at relevant counts of revised complaint that was filed while motion to strike was pending).
With respect to the third count of the plaintiffs' revised complaint, alleging bad faith, the defendant argues that it is legally insufficient both because the duty of good faith and fair dealing does not apply to third parties and because the facts asserted by the plaintiff do not support conduct that rises to the level of bad faith. The plaintiffs respond by arguing that they have a legal interest in the insurance policy because they are subrogated to the rights of the insured by virtue of the judgment in the underlying case and that the facts asserted in their second revised complaint describe the type of malicious intent necessary to ground a bad faith claim. Similarly, with regard to the fourth count, alleging violations of CUIPA through CUTPA, the defendant avers the claim to be legally insufficient both because third parties do not have a cause of action against a tortfeasor's insurer under CUTPA and because the plaintiffs failed to allege facts to support a general business practice of misconduct. The plaintiffs reply by again arguing that they stand in the shoes of the insured by virtue of the judgment entered in the underlying case and suggest that a broad reading of their complaint confirms that a general business practice of misconduct has been alleged. Nevertheless, the court does not reach these arguments because the threshold question of standing is resolved in the negative, depriving the court of subject matter jurisdiction.
DISCUSSION
The court begins by observing some well settled principles regarding standing and its aggrievement component. "Standing is the legal right to set the judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy." (Internal quotation marks omitted.) Unisys Corp. v. Department of Labor, 220 Conn. 689, 693, 600 A.2d 1019 (1991). Indeed, "[w]hen standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue . . . Standing requires no more than a colorable claim of injury; a [party] ordinarily establishes . . . standing by allegations of injury. Similarly, standing exists to attempt to vindicate arguably protected interests . . . Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved." (Internal quotation marks omitted.) Guarnieri v. Guarnieri, 104 Conn.App. 810, 818, 936 A.2d 254 (2007). Significantly, "[i]f a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause." Windels v. Environmental Protection Commission, 284 Conn. 268, 287-89, 933 A.2d 256 (2007).
It is noted, however, that "[s]tanding is not a technical rule intended to keep aggrieved parties out of court; nor is it a test of substantive rights. Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented . . . These two objectives are ordinarily held to have been met when a complainant makes a colorable claim of direct injury he has suffered or is likely to suffer, in an individual or representative capacity. Such a personal stake in the outcome of the controversy . . . provides the requisite assurance of concrete adverseness and diligent advocacy . . . The requirement of directness between the injuries claimed by the plaintiff and the conduct of the defendant also is expressed, in our standing jurisprudence, by the focus on whether the plaintiff is the proper party to assert the claim at issue." (Internal quotation marks omitted.) Andross v. West Hartford, 285 Conn. 309, 322, 939 A.2d 1146 (2008), quoting Windels v. Environmental Protection Commission, supra, 284 Conn. 287-89.
In an effort to distill these principled considerations into useful analytical guideposts, courts have reviewed the question of standing through the lens of aggrievement. Indeed, "[t]he concept of standing as presented . . . by the question of aggrievement is a practical and functional one designed to assure that only those with a genuine and legitimate interest can [pursue] an [action in court]." (Internal quotation marks omitted.) Gillon v. Bysiewicz, 105 Conn.App. 654, 659, 939 A.2d 605 (2008). "Two broad yet distinct categories of aggrievement exist, classical and statutory . . . Classical aggrievement requires a two part showing. First, a party must demonstrate a specific, personal and legal interest in the subject matter of the [controversy], as opposed to a general interest that all members of the community share . . . Second, the party must also show that the [alleged conduct] has specially and injuriously affected that specific personal or legal interest. (Internal quotation marks omitted.) Andross v. West Hartford, supra, 285 Conn. 322, quoting Windels v. Environmental Protection Commission, supra, 284 Conn. 287-89.
Although aggrievement analysis is most commonly associated with determining a court's jurisdiction to hear an administrative appeal, this approach is also employed to determine the question of standing in other statutory and common-law contexts. See, e.g., Blumenthal v. Barnes, 261 Conn. 434, 441-42, 804 A.2d 152 (2002) (aggrievement analysis used to determine state attorney general's standing to bring common-law action against non-profit corporation); Guarnieri v. Guarnieri, supra, 104 Conn.App. 818, (aggrievement analysis used to determine shareholder standing to bring derivative suit against company).
By contrast, "[s]tatutory aggrievement exists by legislative fiat, not by judicial analysis of the particular facts of the case. In other words, in cases of statutory aggrievement, particular legislation grants standing to those who claim injury to an interest protected by that legislation. Furthermore, [i]t is settled that the existence of statutory standing [also] depends on whether the interest sought to be protected by the [plaintiffs] is arguably within the zone of interests to be protected or regulated by the statute . . ." (Citations omitted; internal quotation marks omitted.) Gillon v. Bysiewicz, supra, 105 Conn.App. 660. Accordingly, the court must now inquire whether the plaintiff has been either classically or statutorily aggrieved such that standing has been conferred.
Turning first to the question of classical aggrievement, the court begins by identifying the plaintiffs' legal interest in the contractual relationship between Geico and its insured that would ground a claim of breach of good faith and fair dealing. With respect to this count, it is noted that "the existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing." (Emphasis added.) Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 638, 804 A.2d 180 (2002). Indeed, while "[i]t is axiomatic that the . . . duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship"; see Magnan v. Anaconda Industries, Inc., 193 Conn. 558, 566, 479 A.2d 781 (1984); "[t]he 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." (Emphasis added; internal quotation marks omitted.) Carford v. Empire Fire and Marine Ins. Co., 94 Conn.App. 41, 45, 891 A.2d 55 (2006). In this case, the parties agree that neither plaintiff stands in privity of contract with Geico, which leads to the conclusion that the plaintiffs do not have a legal interest in the insurance contract between Geico and its insured.
Although the parties focus their analysis in count three on the contractual relationship stemming from the insurance policy between Geico and its insured, a fair reading of the plaintiffs' complaint suggests the potential for a latent cause of action to be predicated on the settlement negotiations that took place prior to the entry of judgment in the underlying case. In such a case, the plaintiffs would have standing because they would have alleged a personal legal interest that was directly harmed by Geico. To the extent that is the case, however, the court strikes that claim as legally insufficient both because "no claim for breach of the duty of good faith and fair dealing will lie for conduct occurring prior to, or during, the formation of a contract;" Macomber v. Travelers Property Casualty Corp., supra, 261 Conn. 638; and because, in the context of settling claims, an insurer owes no fiduciary duty to a third party claimant. See id., 642 (explaining that "such a duty would interfere with the insurer's ability to act primarily for the benefit of its insured"). Thus, even if the court had jurisdiction to hear a claim related to Geico's conduct prior to the settlement agreement in the underlying case, it would nevertheless be struck as legally insufficient.
Although the plaintiffs argue that they are subrogated to the rights of the insured, and are therefore entitled to bring an action against his insurance company, this claim is predicated on statutory standing afforded under General Statute § 38a-321, which is discussed below. Neither party argues that there is any common-law support for the proposition that the mere existence of a judgment against an insured creates privity of contract between the judgment creditor and the insured's insurance company without the aid of § 38a-321.
Moreover, even if the plaintiffs did enjoy a legal interest in the contract between the insured and Geico, they have not asserted a colorable claim of injury stemming from the enforcement of that contract. See Guarnieri v. Guarnieri, supra, 104 Conn.App. 818 (standing requires "colorable claim of injury"); see also Baskin's Appeal from Probate, 194 Conn. 635, 637-38, 484 A.2d 934 (1984) ("[t]he existence of aggrievement depends upon whether there is a possibility, as distinguished from a certainty, that some legally protected interest . . . has been adversely affected") (emphasis added). Indeed, the court takes judicial notice of the satisfaction of judgment entered in the underlying case on December 5, 2006, which was signed by the plaintiffs' counsel and certifies that the judgment in that case was fully satisfied. See Gates v. Fillion, Superior Court, judicial district of New Haven, Docket No. CV 05 4007788 (December 5, 2006). The satisfaction of judgment serves as acknowledgment that the Fillions, through their insurer have paid the money judgment entered in Gates I. Accordingly, because Geico paid to the plaintiffs the full judgment amount owed by Fillion for his liability in the death of William Gates, there is no contractual injury to the plaintiffs that would support a claim of classical aggrievement.
This court may take judicial notice of court files in another suit between the same parties, "especially when the relevance of that litigation was expressly made an issue at this trial." McCarthy v. Warden, 213 Conn. 289, 293, 567 A.2d 1187 (1989), cert. denied, 496 U.S. 939, 111 S. Ct. 1737, 110 L.Ed.2d 667 (1991); accord Hryniewicz v. Wilson, 51 Conn.App. 440, 444, 722 A.2d 288 (1999).
It is both because the plaintiffs do not have a common-law legal interest in the insurance contract between Geico and its insured, and because the plaintiffs cannot establish a colorable claim of injury arising out of that contract, that the court concludes the plaintiffs to be without standing under the rubric of classical aggrievement.
Having decided that the plaintiffs are unable to avail themselves of classical aggrievement in connection with their common-law contractual claim, the court is next obliged to consider whether they have standing under the principals of statutory aggrievement. In this respect, the court is compelled to inquire whether the plaintiffs can bring a private cause of action for CUIPA violations through CUTPA, as well as whether General Statute § 38a-321 affords standing to a third party to bring either a contract or statutory claim.
General Statute § 38a-321 reads in pertinent part: "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."
Although our Supreme Court has affirmed "the existence of a private cause of action under CUTPA to enforce alleged CUIPA violations"; Mead v. Burns, 199 Conn. 651, 663, 509 A.2d 11 (1986); "the right to assert a private cause of action for CUIPA violations through CUTPA does not extend to third parties absent subrogation or a judicial determination of the insured's liability." Carford v. Empire Fire and Marine Ins. Co., supra, 94 Conn.App. 53. In this case, there was a judgment in the underlying case determining that Geico's insured was liable for the death of William Gates. The court's analysis, however, does not cease there. Indeed, "[i]t is settled that the existence of statutory standing [also] depends on whether the interest sought to be protected by the [plaintiffs] is arguably within the zone of interests to be protected or regulated by the statute." Gillon v. Bysiewicz, supra, 105 Conn.App. 660. In the case of CUTPA, there is no textual or jurisprudential suggestion that it affords standing to a party that has not been injured. To the contrary, a CUTPA claim may be brought in the Superior Court by "[a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by section 42-110b . . ." General Statute § 42-110g(a) (emphasis added); see also Vacco v. Microsoft Corp., 260 Conn. 59, 88, 793 A.2d 1048 (2002) (explaining that, the remedial nature of CUTPA to one side, "it strains credulity to conclude that CUTPA is so formless as to provide redress to any person, for any ascertainable harm, caused by any person in the conduct of any trade or commerce"). In this case, the plaintiffs are incapable of asserting any injury because the judgment in the underlying case has already been satisfied, which forecloses the use of CUTPA by the plaintiffs to gain standing.
As with the potential for a latent cause of action arising out of Geico's conduct during the settlement of the underlying action, any CUIPA violation asserted through CUTPA for this conduct is likewise stricken as legally insufficient because "the right to assert a private cause of action for CUIPA violations through CUTPA does not extend to third parties absent subrogation or a judicial determination of the insured's liability." Carford v. Empire Fire and Marine Ins. Co., supra, 94 Conn.App. 53. Ergo, because any latent cause of action would be predicated upon Geico's conduct before a judgment had been entered and the plaintiffs are subrogated, it is legally insufficient.
Finally, the court considers whether General Statute § 38a-321 offers the plaintiffs a sufficient jurisdictional hook. "Connecticut's direct action statute, C.G.S.A. § 38a-321 (formerly § 38-175), provides that once a final judgment is rendered against an insured for loss or damage covered by a policy of insurance and the judgment remains unsatisfied for more than 30 days, the `judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against such 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.'" Peck v. Public Service Mutual Ins. Co., 114 F.Sup.2d 51, 54 (D.Conn. 2000), rev'd on other grounds, 326 F.3d 330 (2d Cir. 2002), cert. denied, 540 U.S. 1005, 124 S.Ct. 540, 157 L.Ed.2d 410 (2003). Thus, "the three requisites of a cause of action under this statute are (1) that the plaintiff has recovered a final judgment; (2) that the judgment is against a person who was insured by the defendant against liability on it; and (3) that the judgment remains unsatisfied." Skut v. Hartford Accident Indemnity Co., 142 Conn. 388, 393, 114 A.2d 681 (1955).
It is noteworthy that the direct action statute does not merely enumerate the elements of a cause of action, but provides the basis on which standing is conferred. See Lightowler v. Continental Ins. Co., 255 Conn. 639, 646 n. 15, 769 A.2d 49 (2001) ("Under § 38a-321, the plaintiff is required to obtain a judgment against Brayton before seeking to recover against Continental") (emphasis added); see also Bepko v. St. Paul Fire and Marine Insurance Co., United States District Court, Docket No. 3:04CV01996 (D.Conn. 2005) (§ 38a-321 "provides the footing on which Plaintiff proceeds"); Peck v. Public Service Mutual Ins. Co., supra, 114 F.Sup.2d 54-55 (plaintiff had standing via § 38a-321 against tortfeasor's insurer for claims of a breach of the implied covenant of good faith and fair dealing and CUIPA/CUTPA violations); Michaud v. Countryside Farms, Superior Court, judicial district of Windham at Putnam, Docket No. CV 03 0071517 (November 15, 2005, Martin, J.) (dismissing case for lack of subject matter jurisdiction for failure to satisfy statutory elements of § 38a-321); Mendez v. ITT Hartford, Superior Court, judicial district of New Britain, Docket No. CV 97 0480336 (October 5, 2001, Wiese, J.) (denying motion to dismiss because plaintiff satisfied all jurisdictional elements of § 38a-321).
In this case, the plaintiffs have recovered a final judgment and the judgment was against a person who was insured by the insurance company against liability; however, the judgment does not remain unsatisfied. As noted previously, Geico paid to the plaintiffs the money judgment amount owed to Fillion for his liability in the death of William Gates, which the plaintiffs certified as having satisfied the terms of the judgment. Consequently, the plaintiffs are unable to meet the third element of the direct action statute, and are, therefore, without standing to bring their suit against Geico.
In view of this analysis, the court concludes that the plaintiffs are not statutorily aggrieved. Although there was a final judgment entered in the underlying case, the plaintiffs do not have standing to bring a CUTPA action because there is not an injury that can be attributed to Geico. Similarly, § 38a-321 does not confer standing on the plaintiffs to bring their contract or CUTPA claims because the underlying judgment has been satisfied. Accordingly, the plaintiffs are not statutorily aggrieved and do not have standing.
CONCLUSION
For the reasons set forth above, the court dismisses the plaintiffs' claim against Geico alleging breach of good faith and fair dealing, as well as their claim against Geico alleging CUIPA violations through CUTPA. Because the plaintiffs are not classically or statutorily aggrieved, they do not have standing, and this court is, therefore, without jurisdiction to hear these claims.