Krausman v. Liberty Mutual Insurance Co.

Donna Krausman v. Liberty Mutual Insurance Co.

No. FSTCV176030945S

Superior Court of Connecticut, Judicial District of Stamford-Norwalk, Stamford

September 11, 2019

UNPUBLISHED OPINION

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Krumeich, Edward T., J.

MEMORANDUM OF DECISION

KRUMEICH, J.

Defendant Liberty Mutual Insurance Company ("Liberty") has moved for summary judgment to dismiss Counts II and III of the complaint on the grounds that there is no private right of action for violation of the Connecticut Unfair Insurance Practices Act ("CUIPA") and plaintiff has not alleged specific facts that show Liberty engaged in a general business practice of improper settlement practices in violation of CUIPA required to prove a violation of the Connecticut Unfair Trade Practices Act ("CUTPA"). For the reasons stated below, the motion is granted in part and denied in part.

The Standards for Deciding a Motion for Summary Judgment

"The standards ... [for] review of a ... motion for summary judgment are well established. Practice Book [§ 17-49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ... In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party ... The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact ... A material fact ... [is] a fact which will make a difference in the result of the case ..." DiPietro v. Farmington Sports Arena, LLC, 306 Conn. 107, 115-16 (2012), quoting H.O.R.S.E. of Connecticut, Inc. v. Washington, 258 Conn. 553, 558-60 (2001). (Citations omitted.)

Once the movant for summary judgment has satisfied the initial burden of showing the absence of a material issue of fact the burden shifts to the opponent to establish that there is a genuine issue of material fact: "it is then ‘incumbent upon the party opposing summary judgment to establish a factual predicate from which it can be determined, as a matter of law, that a genuine issue of material fact exists.’ " Iacurci v. Sax, 313 Conn. 786, 799 (2014) quoting Connell v. Colwell, 214 Conn. 242, 251 (1990).

There is No Private Right of Action Under CUIPA

In Artie’s Auto Body, Inc. v. Hartford Fire Ins. Co., 317 Conn. 602, 623 (2015), the Supreme Court observed: "CUIPA, which specifically prohibits unfair business practices in the insurance industry and defines what constitutes such practices in that industry; see General Statutes § 38a-816; does not authorize a private right of action but, instead, empowers the commissioner to enforce its provisions through administrative action. See General Statutes § § 38a-817 and 38a-818." This dictum recognizes that the CUIPA statute does not contain an express private right of action unlike CUTPA, see C.G.S. § 42-110g(a).

A leading authority has opined that the Supreme Court in Artie’s resolved the issue left open in previous appellate cases and found there was no private right of action under CUIPA:

An additional question is whether there is a private cause of action under CUIPA. In Macomber v. Travelers Property and Casualty Corp., [ 261 Conn. 620, 645 (2002)], the Supreme Court avoided the issue by treating a claim apparently premised on CUIPA as a CUTPA claim drawing on CUIPA. Lower court authority had been divided on the issue, with most courts holdings that there was no private cause of action under CUIPA. In 2015, however, the Supreme Court found in Artie’s Auto Body, Inc. v. Hartford Fire Ins. Co. that there is no private cause of action provided by CUIPA, but that CUIPA violations, as described in Mead [v. Burns, 199 Conn. 651, 657 n.5 (1986)], can form the basis of a CUTPA claim. Because any conduct that violates CUIPA is likely to violate CUTPA, the effect of the decision in Artie’s, that there is no private cause of action, is likely to be limited. 12 Conn.Prac., Unfair Trade Practices § 3.13 Insurance.

Although the Court agrees that the above statement in Artie’s was dictum, and thus not binding on the Court,^[1] the Court agrees with the majority of courts which have concluded there is no private right of action under CUIPA for the reasons summarized in Judge Tobin’s opinion in Mendoza v. Allstate Ins. Co., 2012 WL 1139136 *3 (2012). Accord, VP Elec., Inc. v. Graphic Arts Mut. Ins. Co., 2013 WL 4737327 *7 (D.Conn. 2013) (Hall, J.).

Summary judgment is granted to dismiss the CUIPA claim in Count II.

There are Genuine Issues of Material Fact Concerning the CUTPA Claim

" ‘In order to sustain a CUIPA cause of action under CUTPA, a plaintiff must allege conduct that is proscribed by CUIPA.’ Thus, ... ‘if a plaintiff brings a claim pursuant to CUIPA alleging an unfair insurance practice, and the plaintiff further claims that the CUIPA violation constituted a CUTPA violation, the failure of the CUIPA claim is fatal to the CUTPA claim.’ " Artie’s Auto Body, Inc., 317 Conn. at 623-24. "... [C]laims of unfair settlement practices under CUIPA require a showing of more than a single act of insurance misconduct." Mead v. Burns, 199 Conn 651, 659 (1986).

Defendant argues that Liberty is entitled to summary judgment on the CUTPA claim alleged in Count III because the complaint fails to allege specific facts to support the conclusory allegation of a general business practice of unfair settlement practices.^[2] Both cases cited by Liberty concerned the granting of a motion to strike a CUTPA claim based on CUIPA violations for failure to allege specific facts that establish a pattern and practice of unfair settlement practices by the defendant. See e.g., Family Garage, Inc. v. Liberty Mut. Fire Ins. Co., 2017 WL 5202841 *5 (Conn.Super. 2017) (Truglia, J.); Wood v. Club, LLC, 2013 WL 2383642 *5 (Conn.Super. 2013) (Adams, J.).

Liberty contends that the only facts at issue a court may consider on a motion for summary judgment are those alleged in the pleadings citing DeCorso v. Calderaro, 118 Conn.App. 617, 622 (2009). According to Liberty, evidence submitted in opposition to the motion may not be considered because the facts asserted were not plead in the complaint. Defendant argues the complaint fails to allege sufficient facts to support violations of CUIPA and CUTPA so the court must grant summary judgment citing Lees v. Middlesex Ins. Co., 229 Conn. 842, 849 (1994).

Liberty confuses the burden on plaintiff to show that the facts alleged in the complaint sufficiently state a viable claim in opposing a motion to strike under Practice Book Section 10-40 and defendant’s "burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ..." under Practice Book Section 17-49. DiPietro, 306 Conn. at 115-16.

There may be certain cases where Liberty’s strategy of attacking the sufficiency of the CUIPA claim in a complaint might prevail, such as in Lees, 229 Conn. at 848, where "plaintiff has not alleged unfair settlement practices by the defendant in its handling of any other insurance claim or claims ..."^[3] However, here the complaint does not allege a singular mishandling of plaintiff’s claim alone, but also alleges specific practices in the handling of other claims similar to the approach taken to plaintiff’s claim and cites similar settlement practices in five other cases involving underinsured motorist claims that were not properly evaluated, were undervalued and where the insured was forced to litigate to recover monies rightfully owed under the policies; these allegations would allow plaintiff to introduce evidence of the type of "general business practice" that would violate CUIPA and be actionable under CUTPA. See Mead v. Burns, 199 Conn. 651, 666 (1986).^[4] The material facts alleged in the complaint if proven would raise an inference that the settlement practices that plaintiff experienced to her detriment were a "general business practice" of Liberty. In Karas v. Liberty Mutual, 33 F.Supp.3d 110, (2014) (Underhill, J.), Judge Underhill concluded that three similar instances of alleged improper settlement practices sufficed to support a general business practice in violation of CUIPA and state a claim actionable under CUTPA.

The burden was on defendant to submit proof that Liberty had not engaged in the general businesses practices alleged, which, in turn, would require plaintiff to submit evidence in support of its claim. See Zielinski v. Kotsoris, 279 Conn. 312, 318 (2006).^[5] Aside from attacking the sufficiency of plaintiff’s pleading, Liberty has presented no evidence that would demonstrate the absence of genuine issues of material fact as to its business practices. Without such proof, plaintiff need not submit any evidence in opposition to the summary judgment motion. Id.

Nevertheless, plaintiff has submitted evidence in support of the allegations that the settlement practices followed in her’ case, that dishonored her underinsured motorist claim without justification after the tortfeasor’s liability carrier tendered its policy limits, forced her to commence litigation and to prevail in arbitration to recover $19,500 under her underinsured motorist policy with Liberty, was part of its general settlement practices designed to force insureds to accept unreasonable settlements at less than the...