Opinion
No. CV08-5006202S
February 19, 2009
RULINGS ON DEFENDANTS' MOTION TO STRIKE #104
On July 9, 2008, the plaintiff, Deena Vasilakos, filed a nine-count complaint against the defendants, Laurie Ford, Joie Papagoda, Progressive Direct Insurance (Progressive) and Michael Mathis, the claims adjustor and agent for Progressive. On July 23, 2008, the plaintiff filed an amended complaint. Therein, she alleges the following facts. On or about April 26, 2006, the plaintiff was driving on Interstate 95 when she was struck from behind by a vehicle driven by Ford, forcing the plaintiff to hit another vehicle. As a result, the plaintiff suffered injuries to her person and her car. Ford was uninsured at the time. The plaintiff was insured through Progressive and complied with all the terms of her policy. Progressive did not pay the claim on the plaintiff's policy.
The plaintiff claims that (1) Progressive and Mathis, in counts four and six respectively, failed to comply with, and thus violated the Connecticut Unfair Insurance Practices Act (CUIPA), General Statutes §§ 38a-816(6)(b), (c), (d), (f) and (h); (2) Progressive and Mathis, in counts five and seven respectively, failed to comply with the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes §§ 42-110b and 42-110g and; (3) Mathis, in count eight, breached the covenant of good faith and fair dealing with the plaintiff by discounting the value of the insurance policy and acting beyond accepted standards of the insurance industry.
On August 7, 2008, the defendants filed a motion to strike counts four, five, six, seven and eight of the plaintiff's amended complaint.
The moving parties are Progressive and Mathis, hereinafter the defendants. The first, second and third counts are directed against other defendants who are alleged to have operated or owned the motor vehicle that caused the plaintiff's injuries and damages.
Counts Four and Six
The defendants argue that the plaintiff's CUIPA claims in counts four and six are legally insufficient because CUIPA does not create a private cause of action, and a "vast majority of Connecticut trial courts have specifically declined to recognize a private right of action based upon CUIPA." In response, the plaintiff counters that CUIPA allows a private cause of action, that Connecticut's Supreme and Appellate Courts have never affirmatively found that a private right of action does not exist under CUIPA, and that several trial courts and other states support this position.
In Mead v. Burns, 199 Conn. 651, 509 A.2d 11 (1986), the Connecticut Supreme Court "held that insurance practices are the subject of two regulatory acts, CUIPA and CUTPA and that a private cause of action exists under CUTPA to enforce CUIPA violations." Id., 663.
"In light of the existing remedy to redress a CUIPA violation, and the unlikelihood that the Legislature intended two statutory causes of action to redress the same conduct, there is no private cause of action under CUIPA." Lee v. Scottsdale Ins. Co., Superior Court, judicial district of Fairfield, Docket No. CV 98 0350438 (February 8, 1999, Nadeau, J.). As noted in Gianetti, "CUIPA does not expressly provide for a private cause of action in contrast to CUTPA and the court cannot find in the language of the statute any implication that a private cause of action exists." (Internal quotation marks omitted.) Gianetti v. Greater Bridgeport Individual Practice Ass'n., supra, Docket No. CV 02 0396581. This court follows the majority of the Superior Court and concludes that CUIPA does not provide a private cause of action for alleged unfair settlement practices as enumerated in § 38a-816(6). The defendants' motion to strike counts four and six is granted; however, the factual allegations as incorporated into subsequent counts five and seven are not stricken.
Counts Five and Seven
The defendants claim that counts five and seven should be stricken because the plaintiff has not successfully pleaded CUIPA violations within the two CUTPA counts. The defendants further argue that the plaintiff fails to allege that Mathis' general business practice violated CUTPA, as required under CUIPA. The plaintiff argues that this court should find that a separate CUIPA claim can act as a vehicle for a CUTPA claim and that she sufficiently alleges multiple general business practice violations by the defendants, conduct that is proscribed by CUIPA.
As noted previously, "[i]t is well established that CUTPA affords a private cause of action to individuals . . . [Our Supreme Court has] determined that individuals may bring an action under CUTPA for violations of CUIPA. In order to sustain a CUIPA cause of action under CUTPA, a plaintiff must allege conduct that is proscribed by CUIPA." (Citations omitted.) Nazami v. Patrons Mutual Ins. Co., 280 Conn. 619, 625, 910 A.2d 209 (2006). "[A] CUTPA claim [that is] based on an alleged unfair claim settlement practice prohibited by § 38a-816(6) [requires] proof, as under CUIPA, that the unfair settlement practice [has] been committed or performed by the defendant[s] with such frequency as to indicate a general business practice." (Internal quotation marks omitted.) A.A. Homes, LLC v. Nationwide Mutual Fire Ins. Co., Superior Court, judicial district of New Haven at Meriden, Docket No. CV 05 4002025 (December 12, 2005, Wiese, J.).
In her amended complaint, the plaintiff incorporates counts four and six, the CUIPA claims, by reference into the two CUTPA claims, counts five and seven, respectively. Even though counts four and six are stricken, our Supreme Court, in Macomber v. Travelers Property and Casualty Corp., supra, 261 Conn. 644-45, reinforced the idea that "[General Statutes] § 42-110g(a) of CUTPA affords a cause of action to [a]ny person who suffers any ascertainable loss of money or property . . . as a result of the use or employment of a method, act or practice prohibited by section 42-110b . . . including a violation of [CUIPA]." (Internal quotation marks removed). In Macomber, "the plaintiffs pleaded their CUIPA allegation as a stand alone claim." Id., 645. The court stated that the stand alone CUIPA claim could be used to "assert a CUTPA violation based on CUIPA." Id. Pursuant to the court's rationale in Macomber, the factual CUIPA allegation of counts four and six in the present case can be used to assert the plaintiff's CUTPA claims in counts five and seven based on CUIPA.
Next, as to whether the plaintiff sufficiently alleges in count seven that Mathis' general business practice violated CUTPA, as set forth in § 38a-816(6) of CUIPA, the law requires "proof . . . that the unfair practice ha[s] been committed or performed . . . with such frequency as to indicate a general business practice." Lees v. Middlesex Ins. Co., 229 Conn. 842, 850-51, 643 A.2d 1282 (1994). Section 38a-816(6) mandates that general business practice claims be supported by "more than a single act of insurer misconduct." (Internal quotation marks omitted.) Michalek v. Allstate Ins. Co., Superior Court, judicial district of Hartford, Docket No. CV 07 5008280 (January 18, 2008, Elgo, J.).
In counts five and seven, the plaintiff alleges by incorporation from counts four and six a number of practices in which the defendant engaged in unreasonable conduct in the handling of claims. Viewing the facts of the case in a light most beneficial to the plaintiff, the plaintiff alleges that both Progressive and Mathis have previously committed acts similar to those claimed in the complaint. These allegations sufficiently establish a general business practice under § 38a-816(6). The defendants' motion to strike counts five and seven of the amended complaint is denied.
Count Eight
Lastly, the defendants argue that there is no actual contract or privity of contract between the plaintiff and Mathis, and, thus, there can be no covenant of good faith and fair dealing between them. The defendants further argue that the tern "each party to the agreement" specifically limits the covenant of good faith and fair dealing to the actual contracting parties, of which Mathis was not, and that Connecticut does not recognize that third parties can be liable for breach of duties of a contract to which they are not a party.
"Although Connecticut recognizes a common law duty of an insurer to act in good faith in the settlement of claims of its insured, a cause of action for breach of that duty may be asserted only against an insurer." Scribner v. AIU Ins. Co., 43 Conn.Sup. 147, 151-2, 647 A.2d 48 (1994) [ 11 Conn. L. Rptr. 304]. "No Connecticut courts have extended such a duty to parties who have not entered into a contractual relationship." Peterson v. Allstate Ins. Co., Superior Court, judicial district of Hartford-New Britain at New Britain, Docket No. CV 90 9387142 (September 17, 1992, Hennessey, J.) [7 Conn. L. 376].
In the present case, the plaintiff's insurance contract is between Progressive and the plaintiff; Mathis is not a party to it. The defendants' motion to strike count eight of the plaintiff's amended complaint is granted.
In conclusion, the defendants' motion to strike counts four, six, and eight is granted, and the defendants' motion to strike counts five and seven is denied.