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Watrous v. Peerless Ins. Co.

Superior Court of Connecticut, Judicial District of New Haven, New Haven

October 20, 2015

David Watrous
v.
Peerless Insurance Company

MEMORANDUM OF DECISION RE MOTION TO STRIKE (#130) AND MODIFICATION OF COURT'S DISCOVERY ORDER (#128.10)

Robin L. Wilson, J.

FACTS

The plaintiff, David Watrous (plaintiff) commenced this action by service of writ, summons and complaint against the defendant, Peerless Insurance Company (defendant). The amended complaint dated April 10, 2015, and which is the operative complaint is in two counts. Count one sets forth a cause of action for underinsured motorist benefits. The second count alleges extra-contractual relief for bad faith/breach of the covenant of good faith and fair dealing. The defendant has moved to strike count two of the amended complaint on grounds that the plaintiff has failed to allege sufficient facts to sustain a cause of action for bad faith. The plaintiff filed an objection to the motion to strike and the motion was heard at short calendar on October 13, 2015.

DISCUSSION

" [A] party may challenge the legal sufficiency of an adverse party's claim by filing a motion to strike." Vertex, Inc. v. Waterbury, 278 Conn. 557, 564, 898 A.2d 178 (2006). " 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.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003).

" [I]t is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted . . . The role of the trial court in ruling on a motion to strike is to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [pleading party has] stated a legally sufficient cause of action." (Citation omitted; internal quotation marks omitted.) Coe v. Board of Education, 301 Conn. 112, 116-17, 19 A.3d 640 (2011). " [P]leadings are to be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Downs v. Trias, 306 Conn. 81, 92, 49 A.3d 180 (2012). A motion to strike " does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Emphasis omitted; internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997)." If any facts provable under the express and implied allegations in the plaintiff's complaint support a cause of action . . . the complaint is not vulnerable to a motion to strike." Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991).

Count two of the plaintiff's amended complaint incorporates paragraphs 1-14 of count one and alleges bad faith against the defendant Peerless Insurance. Count two further alleges that " [a]s part of the insurance contract between the plaintiff and defendant, there existed an implied covenant to act in good faith. The defendant breached the implied covenants of good faith and fair dealing arising out of said insurance agreement, acted with dishonest purpose, sinister motive fraud or otherwise acted wrongfully and unreasonably in one or more of the following ways respects: (a) In that it has not attempted in good faith to effectuate a prompt, fair and equitable settlement of the plaintiff's claim; (b) In that it forced the plaintiff to institute litigation to recover amounts due him under said insurance policy; and (c) In that it has not cooperated in discovery compliance, prejudicing the plaintiff's right to litigate his case." Amended Compl., 4/10/2015.

Peerless argues that the plaintiff has failed to allege facts sufficient to sustain a claim for bad faith. The plaintiff in his opposition argues that he has alleged sufficient facts to sustain a claim of bad faith against the defendant.

" 'An implied covenant of good faith and fair dealing has been applied by [our Supreme Court] in a variety of contractual relationships, including . . . insurance contracts.' (Internal quotation marks omitted.) Carford v. Empire Fire & Marine Ins. Co., 94 Conn.App. 41, 45, 891 A.2d 55 (2006). 'To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith . . . Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive.' (Internal quotation marks omitted.) Landmark Investment Group, LLC v. Chung Family Realty Partnership, LLC, 125 Conn.App. 678, 693, 10 A.3d 61 (2010), cert. denied, 300 Conn. 914, 13 A.3d 1100 (2011). 'The lynchpin of a bad faith claim is a state of mind characterized by an intent to mislead or deceive or defraud . . . In order to make [such a claim] the plaintiff must allege that the defendant did more than simply deny the plaintiff's claim for benefits.' (Internal quotation marks omitted.) Edwards v. Progressive Casualty Ins. Co., Superior Court, judicial district of New London, Docket No. CV 10 6006128, 2011 Conn. Super. LEXIS 1544 (June 24, 2011, Martin, J.).

[T]here is a split of authority among Superior Courts as to what factual allegations are sufficient to constitute the element of bad faith . . . The first line of cases requires specific allegations establishing a dishonest purpose or malice. In alleging a breach of the covenant of good faith and fair dealing, courts have stressed that such a claim must be alleged in terms of wanton and malicious injury [and] evil motive . . . The second line of cases generally holds parties to a less stringent standard requiring that a plaintiff need only allege sufficient facts or allegations from which a reasonable inference of sinister motive can be made . . . Even where courts have used an inference analysis, however, they have looked to allegations that the conduct at issue was engaged in purposefully.' (Internal quotation marks omitted.) Blayman v. Allstate Ins. Co., Superior Court, judicial district of New London, Docket No. CV 10 6005268, 2011 Conn. Super. LEXIS 55 (January 6, 2011, Cosgrove, J.)." Jello-Pitkin v. Geico Indemnity Co., No. CV 09 5012395 (Aug. 16, 2011, Cosgrove, J.) [52 Conn. L. Rptr. 453, 2011 Conn. Super. LEXIS 2079].

In Jello-Pitkin, the plaintiff alleged that the defendant " stalled, delayed and refused to diligently process the plaintiff Jello-Pitkin's claim or to properly negotiate settlement of the claim, all in order to profit from the Plaintiff's vulnerable position and thus acted with a sinister intent, an intent of wanton or malicious injury and/or evil motive, exhibiting a reckless indifference of the interests of others, in particularly the Plaintiff; such defiant behavior is unlikely to be attributable to an honest mistake or mere negligence. Further, the plaintiff allege[d] that the defendant knowingly, willfully, and deliberately ignored the Plaintiff's demand for the payment of a reasonable settlement amount behaving in a way evidencing dishonest purpose, malice or evil motive." Id. The court in Jello-Pitkin, concluded that, these allegations, coupled " with those in the first count, which allege that the underinsured motorist was clearly negligent and at fault for the accident, and, taking the allegations as true, for the purposes of a motion to strike, [are] sufficient facts to support a claim for bad faith."

In the present case, as previously noted, count two of the plaintiff's complaint alleges that the defendant, " in breach of the implied covenants of good faith and fair dealing arising out of said insurance agreement, acted with dishonest purpose, sinister motive, fraud or otherwise acted wrongfully and unreasonably in one or more of the following respects: (a) In that it has not attempted in good faith to effectuate a prompt, fair and equitable settlement of the plaintiff's claim; (b) In that it forced the plaintiff to institute litigation to recover amounts due him under said insurance policy; and (c) In that it has not cooperated in discovery compliance, prejudicing the plaintiff's right to litigate his case." Amended Compl. These allegations, coupled with the allegations set forth in count one, which allege that the underinsured motorist was clearly negligent and at fault for the accident, and, taking the allegations as true, for the purposes of a motion to strike, contain sufficient facts to support a claim for bad faith.

Similarly in Furlong v. American Commerce Insurance Co., Superior Court, judicial district of Litchfield, Docket No. CV-11-6005516 (December 28, 2011, Pickard, J.) [53 Conn. L. Rptr. 220, 2011 Conn. Super. LEXIS 3267], the plaintiff alleged that " the defendant acted unreasonably and in bad faith and/or in violation of general business practices in refusing to pay fair, just and reasonable benefits, in failing to perform an appropriate analysis of the plaintiff's claim and in neglecting to communicate any basis for its decision in neglecting to pay benefits to the plaintiff." Id. In denying the motion to strike, the court noted that " [i]n deciding whether the claims of the plaintiff amount to bad faith, the court must treat the claims as true. It is true that the plaintiff has not alleged much more than that the defendant failed to pay the claim. But, although thin, the plaintiff's allegations are sufficient to permit him to conduct discovery and attempt to prove his claims. At the completion of discovery, a motion for summary judgment would be an appropriate method to raise the issue of insufficient proof of bad faith. It is important to remember that by virtue of Powell v. Infinity Insurance Co., 282 Conn. 594, 922 A.2d 1073 (2007), the plaintiff is forced to bring a bad faith action along with a UM/UIM claim in order to avoid a defense of res judicata." Id.

Here, as in Jello-Pitkin and Furlong, the defendant had a contractual relationship with the plaintiff and a contractual duty to act in good faith and to deal fairly with the plaintiff. Although the plaintiff's allegations are thin, albeit she has alleged more than alleged in Furlong, she has alleged sufficient facts to ...


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