Opinion
No. X04-CV 03-103524 S
May 25, 2004
MEMORANDUM OF DECISION RE MOTION TO STRIKE
This is one of seven cases arising out of a fatal motor vehicle accident which occurred in the early morning hours of April 16, 2000. Anthony Sulls, allegedly intoxicated, was driving a motor vehicle in which William Ridgaway, Jr. and Frank Sestito, Jr. were passengers. The automobile veered off Route 12 in Ledyard, and collided with a pole and rock outcropping. Mr. Sulls and Mr. Ridgaway died from their injuries. The seriously injured passenger, Frank Sestito, passed away several years later. Silk, LLC, where Anthony Sulls was served alcohol that evening, commenced the present action against certain insurance agents and brokers who purported to secure basic and excess liquor liability insurance for the bar. The defendants now move to strike the fifth and sixth counts of the complaint, which allege Connecticut Unfair Trade Practice Act violations premised on unfair insurance settlement practices. Because the counts set forth claims for professional negligence, fail to allege specific facts concerning the general business practices of the defendants, and for the reasons set forth in detail below, the court grants the motion to strike these counts.
Connecticut Unfair Trade Practices Act CGS § 42-110b et seq.
I. FACTS
Pending before the court in this case against the agents and brokers is an eight-count complaint, alleging that the plaintiff requested the defendant agents to secure for it the same liquor liability insurance as had existed for the previous establishment at that location. The complaint alleges that coverage confirmations for the various policies to provide liability insurance, including liquor liability, were issued by the brokers and agents. Thereafter, the plaintiff secured financing and payment was begun. Subsequently binders were issued. Nonetheless, when the policies were issued after notice of the accident was provided, the schedule of coverage for the policy providing excess liability coverage specifically excepted liquor liability. Thereafter, liquor liability coverage in excess of $100,000 was declined. The plaintiff claims that the agents and brokers made unilateral changes to the policies to deny it the coverage it had requested and that had existed for the previous establishment at their location. The defendants move to strike counts five and six of the complaint for three reasons: (1) the allegations concern professional negligence; (2) there are not specific factual allegations as to other instances of the defendants' alleged business practices to support a CUTPA claim and; (3) the allegations do not concern conduct which is sufficiently immoral or unscrupulous to support a CUTPA claim.
II DISCUSSION A. Legal Standard
"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.) Peter-Michael, Inc. v. Sea Shell Associates, 244 Conn. 269, 270, 709 A.2d 558 (1998). In ruling on a motion to strike, the trial court examines the complaint "construed in favor of the plaintiffs, 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). When deciding the motion, "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). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . ." (Citation omitted; internal quotation marks omitted.) Lombard v. Edward J. Peters, Jr., P.C., 252 Conn. 623, 626, 749 A.2d 630 (2000).
B. CUTPA/CUIPA Violations
The allegations in counts five and six concern unfair insurance settlement practices under CUIPA, the Connecticut Unfair Insurance Practices Act, CGS § 38a-815, et. seq. as supporting a claim under CUTPA, the Connecticut Unfair Trade Practices Act, CGS § 42-110b et seq. The basic factual allegations set forth above are incorporated into these counts, which then allege that such conduct is a violation of CUIPA. A conclusory paragraph is added that these actions were general business practices of the defendants and were unfair trade practices. The central allegation is contained in Paragraph 26, which is incorporated into count five stating:
As a result of the aforesaid acts, errors and omissions, the defendants Levine Agency and Cowles Connell negligently failed to provide adequate liquor liability insurance coverage in the amount of at least one point one million dollars for the insured . . ."
The allegations in count six are the same with the exception of the reference in it of the reckless serving of alcohol, whereas count five alleges the negligent serving of alcohol.
(1) Professional Negligence
Defendants argue that the counts should be stricken since the conduct alleged sounds in professional negligence, which cannot support a CUTPA claim. Plaintiff counters by stating that our appellate courts have not yet extended this exception to CUTPA claims to insurance agents, as they have to attorneys and doctors. It is correct that there is no such direct extension of the professional conduct exception to insurance agents and brokers by our appellate courts. Nonetheless, the law that does exist is instructive. In Suffield Development Associates Ltd. Partnership v. National Loan Investors L.P., 260 Conn. 766, 781, 802 A.2d 44 (2002), the court found that CUTPA does not permit the regulation of every aspect of the practice of law. It stated "only the entrepreneurial aspects of the practice of law are covered by CUTPA." See Beverly Hills Concepts, Inc. v. Schatz Schatz, Ribicoff Kotkin, 247 Conn. 48, 79, 717 A.2d 724 (1998) (a CUTPA claim will not lie for professional malpractice); Haynes v. Yale-New Haven Hospital, 243 Conn. 17, 34, 699 A.2d 964 (1997) (CUTPA does not lie in a professional negligence claim involving medical malpractice); Rumbin v. Baez, 52 Conn. App. 487, 490, 727 A.2d 744 (1999).
The underlying reason for the exception concerning professional negligence is that negligent conduct, without more, cannot be the basis of a CUTPA claim. See A-G Foods, Inc. v. Pepperidge Farm, Inc., 216 Conn. 200, 217, 579 A.2d 69 (1990). The court held that "the first prong [of the `cigarette rule'], standing alone, is insufficient to support a CUTPA violation, at least when the underlying claim is grounded solely in negligence." And that is so because negligence does not constitute an "immoral, unethical, oppressive or unscrupulous practice." Id., 216-17.
Because the professional negligence exception to CUTPA subsumes the third argument raised by defendants, that the conduct alleged is not unscrupulous, oppressive or immoral, the court will not address this claim further.
Superior Court decisions have applied the reasoning set forth in these cases to the negligence of insurance agents and brokers. In Krassner v. CPM Insurance Services Inc., Superior Court, judicial district of New Haven, Docket No. CV 01 0456362 (August 8, 2002, Booth, J.), 32 Conn. L. Rptr. 701, the court reviewed a number of Superior Court cases that have held that the CUTPA exclusion for professional negligence extends to professions other than law and medicine. In Krassner, the court determined that a professional malpractice claim against an independent insurance agent may not support a CUTPA claim. Likewise, the court so held in 1049 Asylum L.P. v. Kinney Pike Ins., Superior Court, judicial district of Hartford, docket No. CV 02-0816344 (May 30, 2003 Booth, J.) ( 34 Conn. L. Rptr. 723); Fields v. Vincent, Superior Court, judicial district of Hartford, Docket No. CV 97-0569685 S (August 25, 1999, Bishop, J.).
Having reviewed the operative paragraphs of the complaint and the summary paragraph above quoted, the court concludes in this case that counts five and six sound in professional negligence. They do not deal with the entrepreneurial aspects of insurance agencies, but with their negligent failure to provide the insurance that was requested. These allegations, the court concludes, do not support a CUTPA claim. There is no logical reason why the exception established by the appellate courts for professional malpractice as not violative of CUTPA should not also be extended to insurance agents and brokers. And the court so holds.
(2) No Specific Allegations of Business Practices
The second reason advanced to strike counts five and six is that there are no specific facts alleged concerning other instances of CUTPA violations. "An allegation of a violation of CUIPA alone is not enough to maintain a private right of action for unfair insurance practices. CUIPA forbids any person engaged in the business of insurance in the state of Connecticut from engaging in any unfair or deceptive act or practice prohibited by the statute. General Statutes § 38a-815." Lefebvre v. Tracy Driscoll Co., Superior Court, judicial district of New Britain, Docket No. CV 02 0517796 (May 6, 2003, Cohn, J.). "CUTPA authorizes private causes of action to enforce a claim derived from CUIPA . . . Therefore, CUTPA can be used to maintain a private right of action if the allegation incorporates a CUIPA prohibition and meets the standard of a fraudulent practice and intentional misrepresentations." A plaintiff complaining of unfair insurance practices is entitled to maintain a private right of action under CUTPA for alleged unfair trade practices. See Griswold v. Union Labor Life Ins. Co., 186 Conn. 507, 519-21, 442 A.2d 920 (1982); Mead v. Burns, 199 Conn. 651, 663-66, 509 A.2d 11 (1986); see also Lees v. Middlesex Ins. Co., 229 Conn. 842, 850-51, 643 A.2d 1282 (1994).
Mead stands for the proposition that isolated instances of insurer misconduct are exempt from coverage under CUIPA. Defendants argue this is an alternate ground to strike these counts. Proof is required that the insurer has engaged in unfair claim settlement practices with such frequency as to indicate a general business practice. Mead v. Burns, supra, 199 Conn. 672. It bears repeating that the plaintiff must allege facts and not legal conclusions tending to show that the insurer engaged in a pattern of misconduct in order to qualify for coverage under CUIPA, not the case in the allegations under consideration by the court. "A claim under CUTPA must be pleaded with particularity to allow evaluation of the legal theory upon which the claim is based." (Internal quotation marks omitted.) S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan King, P.C., 32 Conn. App. 786, 797, 631 A.2d 340 (1993), cert. denied, 228 Conn. 903, 634 A.2d 296 (1993); Finkeldey v. Newcomb, Superior Court, judicial district of Middlesex, Docket No. CV 98 0084847 (September 21, 1999, Gordon, J.).
In the instant case, the relevant allegations assert first that the defendants' CUIPA violations were "engaged in repeatedly and as a general business practice." (Paragraph 33 of Count Five, also incorporated in Count Six.) Second, Paragraph 34 of count five (also incorporated into count six) asserts that:
In violating the Connecticut Unfair Insurance Practices Act, the said defendants also violated the Connecticut Unfair Trade Practices Act . . . by engaging in the aforesaid unfair acts and practices in the conduct of its business as aforesaid.
These counts contain no factual allegations concerning the defendants' general business practices, which are said to violate both CUIPA and CUTPA other than the facts giving rise to this particular claim. "[T]he defendant's 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 § 38-816(6) . . ." Lees, supra 849. These allegations therefore do not state a cause of action upon which relief may be granted.
III. CONCLUSION
For all the foregoing reasons, the court strikes counts five and six of the complaint and the related portions of the claims for relief.
BY THE COURT
Barbara M. Quinn, Judge