Opinion
No. FST CV 07 5004413 S
March 1, 2010
MEMORANDUM OF DECISION ON MOTION FOR SUMMARY JUDGMENT FILED BY HOMESITE INSURANCE CO. DATED MARCH 10, 2009 ( #167.10)
The defendant, Homesite Insurance Company, has moved for summary judgment on a fire insurance claim made by the plaintiffs on a number of grounds including that a portion of the plaintiffs' additional living expense claim was fraudulent in violation of the policy's concealment or fraud provisions and therefore the entire insurance claim is forfeited.
The defendant's Motion for Summary Judgments states: "Homesite is entitled to summary judgment because there is no genuine issue of material fact that the plaintiffs have violated the concealment or fraud provision of their homeowner's insurance policy by submitting knowingly false documents to Homesite in connection with their proof of loss."
The Motion for Summary Judgment dated March 10, 2009 (#167.10) addresses plaintiff's June 26, 2007 original Complaint, not the plaintiff's Amended Complaint dated August 26, 2008 (#142.00). The June 26, 2007 complaint is in four counts: breach of contract, negligence, negligent infliction of emotional distress and CUTPA. These four counts were addressed to either the insurance defendant or adjusting company defendant. The instant summary judgment motion is addressed to a complaint containing more than four counts. The court assumes that the instant March 10, 2009 Motion for Summary Judgment filed by Homesite (#167.10) is addressed to the August 26, 2008 Amended Complaint (#142.00).
Homesite's Motion for Summary Judgment dated March 10, 2009 (#167.10) claims that it is addressed to the June 26, 2007 original four-count complaint. The court has located a pleading entitled Request for Leave to File Amended Complaint dated August 26, 2008 (#142.00). Attached to that Request to Amend is document labeled "Amended Complaint" dated August 26, 2008. That August 26, 2008 document contains twelve counts variously addressed to the two defendants. That August 26, 2008 Amended Complaint was not separately filed and does not contain its own computer number. The court has located a document labeled "Revised Complaint" dated August 25, 2008. That August 25, 2008 document contains eight counts variously addressed to the two defendants. That August 25, 2008 Revised Complaint was separately filed and does contain its own computer number, (#143.00).
The Motion for Summary Judgment is addressed to the Fifth Count alleging bad faith claims adjusting. There is no Fifth Count in the original June 26, 2007 complaint. The Fifth Count of both the August 26, 2008 and August 25, 2008 document is for negligent infliction of emotional distress by Homesite. The August 25, 2008 document does contain two counts labeled "bad faith claims adjusting"; the Ninth Count against Homesite and the Tenth Count against Eagle.
Homesite's Motion also addresses all counts of the plaintiffs' complaint. The court cannot locate any document or complaint in the file that is solely addressed to Homesite. The court cannot locate a complaint in compliance with the Memorandum of Decision on the Motion to Strike dated July 6, 2009 (#171.00) [ 48 Conn. L. Rptr. 160]. The court cannot determine what effect the Notice of Intention to Appeal (#173.10) has on the complaint now before the court.
The plaintiffs were the owners and residents of a house at 38 Circle Drive, Greenwich, Connecticut. On July 6, 2006 a fire occurred at that residence destroying the plaintiff's personal property and rendering their home uninhabitable. On July 6, 2006 the plaintiffs were insured by a homeowners policy issued by the defendant, Homesite Insurance Company, (Homesite), for both the personal and real property. The policy contained provisions for additional living expenses. None of the monetary limits of coverage of the policy appear at issue in this lawsuit.
The operative complaint is the Amended Complaint August 26, 2008 (#142.00). The First Count is against Homesite for breach of contract and breach of the covenant of good faith and fair dealing. Although the complaint indicates that the replacement value of the property damaged and destroyed was $192,342.84, it appears from other documents in the file that the total fire damage claim already paid by Homesite was well in excess of $200,000. Homesite retained the services of the defendant, Eagle Adjusting Services, Inc., (Eagle), a property and casualty adjusting service, to investigate the plaintiffs' claims, assess the damages to personal and real property and the claim for additional living expenses. On June 2, 2007 Homesite issued a letter stating "all future requests for insurance proceeds will be denied in their entirety." A previous April 9, 2007 letter from Eagle to the plaintiffs noted their claim for additional living expenses in the amount $3,420 incurred by the plaintiffs when they stayed in the home of Steven Batkin and Annette Batkin at 39 Skylark Drive, Greenwich, Connecticut. The April 9, 2007 letter was labeled
Reservation of Rights Letter and stated:
Please note that loss-of-use coverage is only available if the additional expenses are actually incurred. We must point out to you that our ongoing investigation reveals that the "Batkin Bed Breakfast" is not a lodging facility that would qualify under Coverage D. It is therefore unclear whether you actually incurred additional living expenses while staying at the Batkin Residence from 7/16/06-8/4/06.
In a report letter to Homesite on January 4, 2007 Eagle as to the $3,420 claim stated: "We recommend that an allowance be made for this time period, but not at $180.00/day as invoiced."
The plaintiffs' complaint alleges that Homesite was "using the Batkin invoice as a pretext to falsely assert that plaintiffs engaged in fraud." The Second Count is against Eagle for breach of contract and breach of the covenant of good faith and fair dealing. The remaining ten counts allege separately as to Homesite and Eagle: negligence, negligent infliction of emotional distress, unfair trade practices, bad faith claims adjusting and intentional infliction of emotional distress. It may be that this action may no longer be pending against Eagle since the plaintiff may have withdrawn the Second, Fourth and Tenth Counts and the Motion to Strike the Sixth, Eighth and Twelfth Counts was granted (#171.00).
To this twelve-count Amended Complaint Homesite filed an answer and three special defenses dated February 24, 2009 (#164.00). Those special defenses are: (1) "the plaintiff's claim for coverage are subject to all the terms, conditions, exclusions and limitations under any policies issued by the undersigned defendant." (2) "to the extent the plaintiff is entitled to a recovery, which is herein expressly denied, any recovery is limited to the amount of the applicable coverage less than any setoff to which the defendant is entitled." (3) "the plaintiff has failed to comply with the terms of the policy, specifically, SPECIAL PROVISIONS — CONNECTICUT, SECTIONS I AND II — CONDITIONS, ¶ 2, — Concealment or Fraud, which states in pertinent part: The entire policy will be void if, either before or after a loss, an insured has intentionally: a. Concealed or misrepresented any material fact or circumstance; b. Engaged in fraudulent conduct; or c. Made false statements; relating to insurance." The plaintiffs entered a general denial of these special defenses on February 25, 2009 (#165.10).
Homesite's Motion for Summary Judgment was supported by a Memorandum of Law dated March 10, 2009 (#167.10), along with 26 tabbed exhibits that took up almost the entirety of file folder four; consisting of one affidavit from the insurance adjustor, the first page of the April 9, 2007 Reservation of Rights letter, the June 12, 2007 denial letter, four depositions, the Batkin invoice, the plaintiffs' spreadsheet of additional living expenses, the entire insurance policy and court decisions.
The plaintiff also filed a Memorandum of Law in Opposition to Motion for Summary Judgment dated July 16, 2009 (#174.00) attaching three affidavits, the Batkin invoice, the June 12, 2007 denial letter, the January 4, 2007 Eagle to Homesite letter, the April 9, 2007 Reservation of Rights letter, redacted e-mails and one e-mail to the court on discovery matters. The plaintiffs also requested additional time to conduct discovery on the issues raised. The plaintiffs filed a Supplemental Memorandum of Law dated September 11, 2009 (#191.00). The defendants then filed a Supplemental Brief dated November 30, 2009 (#198.00). The final submission was the plaintiffs' Supplemental Memorandum of Law in Opposition to Motion for Summary Judgment on December 11, 2009 (#205.00).
In the plaintiffs' Supplemental Memorandum of Law dated September 11, 2009 on page 1. the plaintiffs state: "The sole issue being advanced by the Defendant Homesite is the question of whether an invoice for additional living expenses submitted by Plaintiffs was false and thus voided the policy." The above quote is Homesite counsel's statement before this court in a preliminary argument on this instant Motion for Summary Judgment on July 20, 2009 in pleading #191.00.
"All that is at issue in my motion for summary judgment is a receipt for $3,420 for a stay at a Batkin Bed Breakfast false when there is no Batkin Bed Breakfast? There is no such thing as a Batkin Bed Breakfast. These people were friends of the Grossmans and they stayed at their house and then the Grossmans said well we will pay you some money for the stay. So the question is when they submitted a receipt that said Batkin Bed and Breakfast and then submitted a spreadsheet indicating that they stayed at a Batkin Bed Breakfast rather than staying at friends' house, was that a false receipt? Was that a fraud or concealment under the terms of the policy? That is the narrow issue on this motion for summary judgment." Transcript July 20, 2009, pages 10-11.
The only factual affidavit submitted in support by Homesite is Exhibit 2, the affidavit of Cara Murphy, the adjuster for this matter and a Senior Liability Adjuster in the Claims Department of Homesite. The Cara Murphy affidavit states:
7. During the adjustment of the claim, the plaintiffs stayed initially at area hotels before moving to the residence of their family friends, Steven and Annette Batkin, with whom they stayed for a period of approximately three weeks (from July 16, 2006 until August 3 or 4, (2006).
8. Homesite paid for additional living expenses under Coverage D — Loss of Use of the policy.
9. Pursuant to the policy, additional living expenses are paid only if the insured actually incurs the expenses and only if the expenses are in addition to normal living expenses.
10. On August 4, 2006, the plaintiffs faxed a document to Homesite, via public adjuster, Don Levy, which represents to be an invoice (hereinafter "Batkin Invoice") seeking the payment of $3,420.00, for the plaintiffs' stay at the Batkin Bed Breakfast, located at 39 Skylark Drive, Greenwich, Connecticut.
11. In addition, the plaintiff submitted, or caused to be submitted, an ALE spreadsheet representing the Batkin Bed Breakfast stay as an additional living expense.
12. Homesite's investigation of this claim, which included the Examination Under Oath of Jane Grossman, revealed that (1) the Batkin Bed Breakfast does not exist; (2) the Batkin Bed Breakfast is not a licensed bed and breakfast facility, nor has it ever operated as a licensed bed and breakfast facility and (3) Mrs. Grossman never thought that the Batkin residence was a licensed bed and breakfast.
13. On the basis of Homesite's investigation and pursuant to the Concealment or Fraud provision of the policy, Homesite issued a denial letter to the plaintiffs on June 12, 2007, denying all future insurance coverage and appraisals requests for this claim.
The spreadsheet attached as Exhibit 5 in Homesite's Memorandum shows a total Additional Living Expenses claim of just over $38,000. Some documents on file show Homesite paid over $29,000 of this claim. Some were disallowed such as Fed. Ex. package to camp to contact daughter $22.33. The Batkin's $3,420 invoice was included in the $38,000. See February 2, 2007 letter.
The court is applying the well known standards in the consideration of motions for summary judgment without reciting that authority in detail in this Memorandum of Decision. Farrell v. Twenty-First Century Insurance Company, 118 Conn.App. 757, 759-60 (2010); Washington v. Blackmore, 119 Conn.App. 218, 220-21 (2010).
The interpretation of language in an insurance policy is a question of law suitable for summary judgment. The terms of an insurance policy "should be construed from the perspective of a reasonable layperson in the position of the purchaser of the policy." Community Action for Greater Middlesex County, Inc. v. American Alliance Ins. Co., 254 Conn. 387, 400 (2000). "The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity . . . Moreover, the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous." Smithfield Associates, LLC v. Tolland Bank, 86 Conn.App. 14, 19 (2004), cert. denied, 273 Conn. 901 (2005); National Waste Associates, LLC v. Travelers Casualty Surety Co. of America, 51 Conn.Sup. 369, 373 (2010) [ 45 Conn. L. Rptr. 709].
The standard of review of the terms of an insurance contract is also well settled. "Under our law, the terms of an insurance policy are to be construed according to the general rules of contract construction. See, e.g., Weingarten v. Allstate Ins. Co., 169 Conn. 502, 509-10, 363 A.2d 1055 [(1975), overruled in part on other grounds, Streitweiser v. Middlesex Mutual Assurance Co., 219 Conn. 371, 593 A.2d 498 (1991)]; A.M Larson Co. v. Lawlor Ins. Agency, Inc., 153 Conn. 618, 622, 220 A.2d 32 [1966]. The determinative question is the intent of the parties, that is, what coverage the . . . [plaintiff] expected to receive and what the defendant was to provide, as disclosed by the provisions of the policy. Marcolini v. Allstate Ins. Co., 160 Conn. 280, 283, 278 A.2d 796 [1971]. If the terms of the policy are clear and unambiguous, then the language, from which the intention of the parties is to be deduced, must be accorded its natural and ordinary meaning. Weingarten v. Allstate Ins. Co., supra, 509. However, [w]hen the words of an insurance contract are, without violence, susceptible of two [equally responsible] interpretations, that which will sustain the claim and cover the loss must, in preference, be adopted. Raffel v. Travelers Indemnity Co., 141 Conn. 389, 392, 106 A.2d 716 [1954]; see also 4 [S.] Williston, Contracts (3d Ed. [1961]) § 621 . . . Griswold v. Union Labor Life Ins. Co., 186 Conn. 507, 512-13, 442 A.2d 920 (1982); see Hammer v. Lumberman's Mutual Casualty Co., 214 Conn. 573, 583-84, 573 A.2d 699 (1990)." (Internal quotation marks omitted.) Heyman Associates No. 1 v. Ins. Co. of Pennsylvania, 231 Conn. 756, 769, 653 A.2d 122 (1995).
Hertz Corporation v. Federal Insurance Company, 245 Conn. 374, 381-82 (1998).
Homesite's Special Defense dated February 24, 2009 (#164.00) allege that the plaintiffs failed to comply with the concealment or fraud provision of the homeowner's policy. Although the Special Defense does not allege the $3,420 Batkin Bed and Breakfast additional living expense, that is the principal basis for this motion for summary judgment. There is no issue that the Grossmans did stay at the Batkin's house at Skylark Drive in Greenwich, Connecticut for the period of time set forth in the $3,420 invoice. Homesite claims that since Steven Batkin and Annette Batkin did not operate a licensed Bed and Breakfast, no such Bed and Breakfast existed and therefore the Grossmans are guilty of concealment and/or misrepresentation by failing to notify Homesite of these facts.
Initially this court considered that was an issue of fraudulent intent. "Fraudulent intent must be proved, if at all, by clear, precise and unequivocal evidence." Tyers v. Coma, 214 Conn. 8, 11 (1990). "Where, however, the inferences which the parties seek to have drawn deal with the questions of motive, intent and subjective feelings, summary judgment procedure is particularly inappropriate." Town Bank and Trust Co. v. Benson, 176 Conn. 304, 308 (1978). "Summary judgment is not appropriate in cases involving mixed questions of law and fact, such as negligence actions . . . Summary judgment should not be used in cases that are complex; . . . in cases that concern important public issues or questions of inference as to motive or intent . . . or in ones that involve subjective feelings and reactions . . . Although there may be instances where complex litigation may be resolved by means of summary judgment, the teachings of our Supreme Court instruct us that summary judgment is generally disfavored in complex cases. Because these appeals concern complicated financial transactions, the interpretation of various documents, the intent and motives of the parties as well as an issue of public policy, the trial court should not have resolved the dispute by means of summary judgment." Gould v. Mellick Sexton, 66 Conn.App. 542, 556-57 (2001). "A question of intent raises an issue of material fact, which cannot be decided on a motion for summary judgment." Picataggio v. Romeo, 36 Conn.App. 791, 794 (1995); Suarez v. Dickmont Plastics Corp., 229 Conn. 99, 111 (1994).
This lawsuit is a civil case related to the insurance company's defense of concealment and/or misrepresentation. The law on the burden of proof for the special defense of concealment or misrepresentation is that the proponent must prove that the insured wilfully concealed or misrepresented a material fact with the intention of deceiving the insurer. Chauser v. Niagara Fire Insurance Company, 123 Conn. 413, 423 (1937). "Unlike a party asserting a cause of action for common law fraud, an insurer who raises the special defense of concealment or misrepresentation does not have to prove that the insurer actually relied on the concealment or misrepresentation or that the insurer suffered injury." Rego v. Connecticut Insurance Placement Facility, 219 Conn. 339, 346-47 (1991). "Finally, we note that in the case of an insurance contract, the consequence of the alleged concealment or misrepresentation is the forfeiture of a contractual benefit, and therefore the burden of proof normally applicable to contractual claims, the preponderance of the evidence standard, should control." Id., 347. The court is therefore applying the above precepts. Id., 346-47.
In this case Homesite argued that the plaintiffs made a material false statement when it submitted an invoice that was titled "Batkin Bed and Breakfast" along with a spreadsheet of claims containing the invoice. Homesite argues that the invoice for $3,420 was attached to a spreadsheet submitted by Mrs. Grossman but that the Batkin Bed and Breakfast did not exist nor was it licensed. Homesite was not informed of these facts by the plaintiffs. This is the invoice.
BATKIN BED BREAKFAST
39 Skylark Drive Greenwich, Connecticut August 4th, 2006 JANE AND EZRA GROSSMAN JULY 16th to AUGUST 4th 19 nights 3 BEDROOMS /3 BATHS 2 meals $180.00 PER NIGHT TOTAL DUE — $3,420.00 THANK YOU!
The homeowners insurance policy in question is attached to Homesite's Memorandum without objection from the plaintiffs. On page 3 of 18 is the following:
HOMEOWNERS 3, SPECIAL FORM; SECTION I — PROPERTY COVERAGES COVERAGE D — Loss of Use
The limit of liability for Coverage D is the total limit for all coverages that follow.
1. If a loss covered under this Section makes that part of the "residence premises" where you reside not fit to live in, we cover, at your choice, either of the following. However, if the "residence premises" is not your principal place of residence, we will not provide the option under paragraph b. below.
a. Additional Living Expense, meaning any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living; or
b. Fair Rental Value, meaning the fair rental value of that part of the "residence premises" where you reside less any expenses that do not continue while the premises is not fit to live in.
Payment under a. or b. will be for the shortest time required to repair or replace the damage or, if you permanently relocate, the shortest time required for your household to settle elsewhere.
Homesite is relying on the following section of the policy on page 17 of 18 to support its declaration that the insurance coverage has been forfeited due to concealment and/or misrepresentation.
CT Page 6005
SECTIONS I and II — CONDITIONS, ¶ 2, Concealment or Fraud.
2. The entire policy will be void if, whether before or after a loss, an "insured" has:
a. Intentionally concealed or misrepresented any material fact or circumstance;
b. Engaged in fraudulent conduct; or
c. Made false statements;
relating to this insurance.
The spreadsheet attached as Exhibits to Homesite's Memorandum in Support of its Motion for Summary Judgment outlines the plaintiffs' monetary claims for Additional Living Expenses. On the night of the fire, July 6, 2006, the Grossmans stayed at the Fairfield Inn, (a.k.a. Fairmont Inn), an area hotel, and incurred an expense of $178.00 for that one night. Thereafter, the plaintiffs stayed at the Marriott Hotel in Stamford from July 7, 2006 through and including July 15, 2006 and incurred an expense of $2,889.60 for those nine nights. The plaintiffs have two daughters. The 15-year-old daughter was away at summer camp when the fire occurred. The 21-year-old daughter was living at 38 Circle Drive, having just returned from a study year abroad a few days before the fire. The Marriott Hotel stay was two hotel rooms, each hotel room at an average cost of approximately $160.00 per night, without food; $320.00 per night for the family in two rooms.
During the stay at the Marriott Hotel, the plaintiffs were looking for a short-term rental home. They were able to locate a single-family house for rent at 24 Vernona Drive, Greenwich, Connecticut with a monthly rent of $4,200. The lease was signed and the Grossman family moved into 24 Vernona Drive during the first week of August 2006. They stayed in the Vernona Drive rental until the end of December 2006. The average daily cost for the Verona Drive house rental was $140.00 per night without food.
The Batkins were personal friends of the plaintiffs. Mr. Steven Batkin assisted the plaintiffs in hiring a public insurance adjustor, Don Levy, who represented the plaintiffs' interests in this insurance claim. Mrs. Annette Batkin was a real estate broker and assisted the plaintiffs in finding the Vernona Drive rental. At her October 28, 2008 deposition on page 39 on file as Exhibit 3 in Homesite submission Jane Grossman stated: "Annette had asked us to stay there after the fire, and I said no, directly after the fire, because I don't . . . its my own personal philosophy I don't like to stay anywhere with anybody. I don't want to be a burden of any sort." Mrs. Grossman then testified that it was stressful staying at the Marriott Hotel and continued: "So when it looked like it could be another month before we found a rental house with the way things were going, I mean, it was stressful staying there, so Annette again offered, and I said there is no, no way unless the insurance company will pay you for your expenses. I just went to that. So I consulted with Don, and Don said he didn't see any problem with that." When the plaintiffs moved in to the Batkin house, there was no discussion of the daily rate for the stay. Mrs. Grossman testified in her October 28, 2008 deposition on page 40:
Q: Was there any discussion at all as to what would happen if the insurance company did not pay?
A: That we would pay them.
Q: Personally?
A: Personally, we would pay them.
Q: Did they indicate to you that they were going to hold you to that obligation?
A: I held myself to that obligation.
Homesite has offered no evidence to refute these facts.
Annette Batkin prepared the $3,420 invoice, Exhibit 1. Mrs. Grossman's October 28, 2008 deposition testimony continued on page 46:
Q: The Batkins, aside from this document, Exhibit 1, have they ever asked you to pay $3,420?
A: The Batkins said that they handed us the bill, and they would accept the payment from . . . when we got reimbursed by the insurance company. Q: Aside from when they handed you this document, have they ever asked you to pay $3,420?
A: No.
Q: Its my understanding they would have let you stay at their residence without paying any money.
A: I'm sure they would have.
Mrs. Grossman's October 28, 2008 deposition then continued on page 48.
Q: Have you paid them?
A: Yes.
Q: You paid them $3,420?
A: Yes, I have.
Q: And that was out of your own funds?
A: Out of our own funds.
Q: When was that done?
A: After we sold our house.
Q: When was that?
A: In April of this year.
Q: Did they offer to return the $3,420 to you?
A: No.
The spreadsheet itemizing the Additional Living Expenses claims totals $38,429.15. Deleting the $4,200, for the 24 Vernona Drive security deposit and the disputed $3,420 Batkin Bed and Breakfast claim, the net claim is $30,809.15. It appears that additional home rental expenses may have been paid by Homesite after December 2006. The Homesite denial letter of June 12, 2007 indicates that Homesite had paid $37,800 on the Additional Living Expense claim as well as $117,491.11 for dwelling damage; $79,267.88 for personal property loss, for a total payment of $234,558.99. The Eagle to Don Levy letter dated February 2, 2007 contains some of the spreadsheet claims for additional living expenses that were not paid by Homesite.
From the various documents submitted to this court it appears that a number of facts are not at issue. These facts are: the Grossmans suffered a devastating fire on July 6, 2006, which rendered their home at 38 Circle Drive in Greenwich uninhabitable. The Grossmans had to live elsewhere. The insurance policy provided for additional living expenses in Coverage D. The Grossmans submitted claims for additional living expenses at area hotels, bills which were paid for by Homesite. The Grossmans submitted claims for additional living expenses for home rental which were paid by Homesite. Homesite paid for the Grossmans' additional living expenses, both before and after the July 11, 2006 to August 4, 2006 stay at the Batkin house. Steven and Annette Batkin owned the home at 39 Skylark Drive in Greenwich, Connecticut. Mr. Mrs. Grossman and their daughter stayed at the Batkin residence for the period of time set forth in the $3,420 invoice. The plaintiffs stayed at the Batkin from July 16, 2006 to August 4, 2006. The Batkin stay was for 19 nights commencing only 10 days after the fire. Mr. Mrs. Grossman and their daughter received meals during that stay. The plaintiffs paid the Batkin the $3,420 from the plaintiffs' own funds in April 2008 when the Circle Drive home was sold. Homesite did not offer any evidence refuting these facts. "If the insured stayed and made payments to an actual lodging facility during that time period, they would have been reimbursed for that expense" was admitted by Mark Zaccarino, Homesite Insurance Company's agent and representative in his August 27, 2009 deposition on page 33. On January 4, 2007 Eagle wrote a letter to Homesite stating as follows:
Additional Living Expenses:
The insured remains at a temporary residence location until repairs are completed at this risk location. Attached find the public adjuster's submitted ALE loss and our ALE adjustment. The public adjuster conceded that Batkin Bed Breakfast is not an actual bed breakfast but in fact the insured's close friend and the broker in this case. We recommend that an allowance be made for this time period, but not at $180.00/day as invoiced. Your office is in the process of forwarding an additional payment of $4,200.00 toward this additional living expense loss for a total of $29,400.00 to date.
Homesite had admitted that as to Coverage D for Additional Living Expenses: "These expenses were to be paid only if the insured actually incurred the expenses and only if the living expenses were in addition to normal living expenses." Pleading #167.10, page 7. See also June 12, 2007 Denial Letter on page 2.
What appears to be in factual dispute is whether there are any state or federal regulations that requires Steven Batkin and Annette Batkin to be licensed as an owner of a Bed and Breakfast charging monies for a lodging and food, and whether there was any health, zoning or other municipal regulations imposed by the Town of Greenwich on the operation of a Bed and Breakfast. Although these facts may be at issue they are not material facts. In addition there is no proof that the claimed misrepresentation made by the plaintiffs were known by the plaintiffs to be false when they were made. The material fact is whether or not the Grossmans stayed at the Batkins and paid the Batkins $3,420 at the rate of $180 per day for three rooms and food for the period of July 16 through August 4, 2006. Those facts are not at issue and none of the documents submitted demonstrate that these facts are at issue. Middlesex Mutual Assurance Company v. Walsh, 218 Conn. 681, 692 (1991).
Homesite claims that bed and breakfasts must be licensed when the Chairman of the Greenwich Planning and Zoning Board of Appeals states in a submitted affidavit states that bed and breakfasts do not have to be licensed or subject to municipal approval in Greenwich. Homesite offered no facts to counter that affidavit. Homesite is voiding a policy for a disputed $3,420, less than two percent of the entire claim of over $200,000. Homesite is voiding a policy on a claim of $3,420, which amounts to $180 per day, as an expenditure for additional living expense for three rooms including meals for three people during the entire 19-night stay, when Homesite's own files shows expenditures actually incurred and paid for by Homesite for the period of July 6th — July 16, 2006 at more than $180 per day. Homesite is inferring that the claim of $180 per day charge for three adults living in Greenwich, Connecticut in 2006 on $60 per day is unreasonable.
Coverage D does not contain any language requiring compliance with statutory or regulatory requirements by the persons or entity providing the alternative residence. Homesite has provided no legal authority for that proposition nor could they. If the language of Coverage D were such, the homeowers would then be required to prove that if they stayed at the Hyatt Regency Hotel in Greenwich, that the Hyatt was in compliance with all of the conditions of the site plan approval issued by the Greenwich Planning and Zoning Commission. If they rented an apartment, the homeowners would be required to show that the apartment complied with all of the conditions in the zone it was located. If they rented a room, they would have to prove that it complied with the ceiling height requirements of the municipal health code. If they rented a unit in a multifamily building, they would have to prove that the entire building satisfied the alternate means of egress requirements of the fire code.
A homeowner suffering a devastating house fire may not have sufficient cash to pay in advance repair and alternative living expenses. It would appear that many homeowners would only be able to pay these expenses when the insurance company paid these claims. Many homeowners turn to friends in time of need. If these friends were contractors who were repairing the fire damaged home and the homeowners had insufficient funds of their own, why would friends not agree — "pay me when you get the insurance proceeds." This appears to be the scenario of this case. Homesite has advanced no authority that the reliance on friends is a fraudulent act. Homesite has furnished no legal authority for its claim that Batkin Bed and Breakfast is "unlicensed" in the form of municipal rules and regulations and Connecticut Statutes and regulations that require any licensing whatsoever for a private homeowner to charge guests to stay in their home. Yet Homesite claims that the plaintiffs committed fraud by failing to notify it of this unlicensed status of the Batkin home. The services for which the additional living expenses claim is made were performed at a reasonable rate and paid for by the homeowners from their own funds.
The court finds that there are no material issues of fact. Based on these conclusions, Homesite's Motion for Summary Judgment (#167.10) as to the First Count is denied.
Homesite addresses its Motion for Summary Judgment to the Fifth Count. "In addition Homesite asserts it is entitled to summary judgment on Count Five as the claim for bad faith claims adjusting is not recognized as a cause of action in Connecticut." The court concludes that this portion of Homesite's Motion was addressed to the Ninth Count and the reference to the "Count Five" is a typographical error. P.B. § 10-39(a) provides: "Whenever any party wishes to contest (1) the legal sufficiency of the allegations of any complaint . . . or any of one or more counts thereof, . . . that party may do so by filing a motion to strike the contested pleading or part thereof." Homesite did not file a motion to strike. Had Homesite filed a motion to strike the Ninth Count on the basis that bad faith claims adjusting is not recognized as a cause of action in Connecticut, the plaintiff would have had the ability to plead over. P.B. § 10-44. The use of a motion for summary judgment to challenge the legal sufficiency of a complaint does not permit the plaintiff to plead over.
We conclude that the use of a motion for summary judgment to challenge the legal sufficiency of a complaint is appropriate when the complaint fails to set forth a cause of action and the defendant can establish that the defect could not be cured by repleading. See Boucher Agency, Inc. v. Zimmer, supra, 160 Conn. 410. If it is clear on the face of the complaint that it is legally insufficient and that an opportunity to amend it would not help the plaintiff, we can perceive no reason why the defendant should be prohibited from claiming that he is entitled to judgment as a matter of law and from invoking the only available procedure for raising such a claim after the pleadings are closed.
Larobina v. McDonald, 274 Conn. 394, 401-02 (2005).
In this case Homesite filed an Answer on February 24, 2009 (#164.00) and therefore has waived its right to file a motion to strike. P.B. §§ 10-6(4) and (5), 10-7. Homesite has failed to establish that the alleged defect could not be cured by repleading. Larobina v. McDonald, supra, 274 Conn. 401. Homesite's Motion for Summary Judgment dated March 10, 2009 (#167.00) addressed to the Ninth Count is denied.
Homesite addresses its Motion for Summary Judgment to the First, Fifth, Ninth and Eleventh counts: "Furthermore, Homesite asserts that it is entitled to summary judgment on Counts One, Five, Nine and Eleven because Plaintiffs have failed to provide any evidence to support claims for breach of the covenant of good faith and fair dealing, bad faith claims adjusting, negligent infliction of emotional distress, and intentional infliction of emotional distress." Homesite's claim fails to take into consideration two policies governing motions for summary judgment: "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." Miller v. United Technologies Corp., 233 Conn. 732, 745 (1995) and the "party seeking summary judgment has the burden of showing the non existence of any issue of material facts . . ." Id., 745.
The essential allegations of the entire plaintiffs' complaint center around the failure of the defendants to settle the plaintiffs' insurance claims because of the Batkin Bed and Breakfast issue. Each count centers on those facts. Those facts are contained in the first section of this Memorandum of Decision and therefore are sufficient for this court to deny the defendants' motions as to Count One (breach of contract and breach of covenant of good faith and fair dealing.) Homesite's Motion for Summary Judgment (#167.10) as to the First Count is hereby denied.
Homesite also moves for Summary Judgment as to the Eleventh Count, intentional infliction of emotional distress.
To state a claim for intentional infliction of emotional distress, a plaintiff must establish four elements: "(1) that the actor intended to inflict emotional distress or that he knew or should have known that emotional distress was the likely result of his conduct; (2) that the conduct was extreme and outrageous; (3) that the defendant's conduct was the cause of the plaintiff's distress; and (4) that the emotional distress sustained by the plaintiff was severe . . . Whether a defendant's conduct is sufficient to satisfy the requirement that it be extreme and outrageous is initially a question for the court to determine . . . Only where reasonable minds disagree does it become an issue for the jury . . . Liability for intentional infliction of emotional distress requires conduct that exceeds all bounds usually tolerated by decent society . . . (Citations omitted; internal quotation marks omitted.) Appleton v. Board of Education, 254 Conn. 205, 210-11, 757 A.2d 1059 (2000). "Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, Outrageous! . . . Conduct on the part of the defendant that is merely insulting or displays bad manners or results in hurt feelings is insufficient to form the basis for an action based upon intentional infliction of emotional distress." (Citations omitted; internal quotation marks omitted.)
Carrol v. Allstate Ins. Co., 262 Conn. 442-43 (2003).
The plaintiff's Amended Complaint dated August 26, 2008 (#142.00) fails to adequately allege elements (2) and (4). If presented with a motion to strike, this court would grant that motion thus giving the plaintiff the right to replead. Unless the plaintiffs have more facts, the intentional infliction of emotional distress count against Homesite will not survive. The court has no authority to order the plaintiffs to plead sufficient facts to comply with the required elements of intentional infliction of emotional distress. The court also has insufficient information to determine if the plaintiffs could have alleged sufficient facts by pleading over. Larobina v. McDonald, supra, 274 Conn. 401-02. Since Homesite waived the filing of a motion to strike and it is not clear that the defect cannot be amended, the court denies Homesite's Motion for Summary Judgment (#167.10) addressed to the Eleventh Count.
The Motion for Summary Judgment is addressed to the negligent infliction of emotional distress count in the Fifth Count.
To establish a claim of negligent infliction of emotional distress, a plaintiff must prove the following elements: (1) the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress; (2) the plaintiff's distress was foreseeable; (3) the emotional distress was severe enough that it might result in illness or bodily harm; and (4) the defendant's conduct was the cause of the plaintiff's distress. Carrol v. Allstate Ins. Co., 262 Conn. 433, 444, 815 A.2d 119 (2003). Our Supreme Court continually [has] held that in order to prevail on a claim of negligent infliction of emotional distress, the plaintiff must prove that the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that distress, if it were caused, might result in illness or bodily harm . . . Id., 446. Further, it has reasoned that a successful claim of negligent infliction of emotional distress essentially requires that the fear or distress experienced by the plaintiffs be reasonable in light of the conduct of the defendants. If such a fear were reasonable in light of the defendants' conduct, the defendants should have realized that their conduct created an unreasonable risk of causing distress, and they, therefore, properly would be held liable. Conversely, if the fear were unreasonable in light of the defendants' conduct, the defendants would not have recognized that their conduct could cause this distress and, therefore, they would not be liable . . . Id., 447." (Internal quotation marks omitted.) Murphy v. Lord Thompson Manor, Inc., 105 Conn.App. 546, 552-53, cert. Denied, 286 Conn. 914, 945 A.2d 976 (2008).
Brown v. Guinan, Superior Court, judicial district of Hartford at Hartford, Docket Number CV 05-4012679 (January 14, 2009, Langenbach, J.T.R.) [ 47 Conn. L. Rptr. 85].
Homesite argues that there is no cause of action for negligent infliction of emotional distress arising out of damage to property citing Connecticut trial court cases. The plaintiffs should be granted the right to plead over any deficiencies in their negligent infliction of emotional distress claim. Larobina v. McDonald, supra, 274 Conn. 401-02. The Motion for Summary Judgment addressed to the Fifth Count is denied.
The defendant's Motion for Summary Judgment filed by Homesite Insurance Company dated March 10, 2009 (#167.00) addressed to the First, Fifth, Ninth and Eleventh Count is hereby denied.