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Ancona & Siegel v. State Farm Fire & Casualty Co.

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

March 31, 2016

Ancona & Siegel
v.
State Farm Fire & Casualty Co Opinion No. 133488

          MEMORANDUM OF DECISION RE MOTION TO STRIKE. #103

          PETER EMMETT WIESE, JUDGE

         I

         PROCEDURAL HISTORY

         On June 9, 2015, the plaintiff, Ancona & Siegel, filed a three-count complaint[1] against the defendant, State Farm Fire and Casualty Company. The first count in the complaint is a claim for breach of an insurance contract, and it alleges the following relevant facts.

         The plaintiff had an insurance policy with the defendant, who is an insurance company authorized to do business in the State of Connecticut. At all relevant times, the plaintiff made timely payments for the insurance policy that covered the plaintiff's property, including any losses associated with freeze and water damage.

         On January 8, 2014, the plaintiff sustained losses due to freeze and water damage to its property. Before considering the plaintiff's losses, the defendant launched an investigation, requiring the plaintiff to submit to questioning and examination. On March 7, 2014, despite being bound by the terms of the insurance policy, the defendant denied coverage for the plaintiff's losses. The defendant's refusal to pay the plaintiff for its losses under the contract constitutes a breach of the insurance contract.

         The second count is a claim for the " Breach of Implied Covenant of Good Faith, " and it incorporates all of the allegations in the first count. In addition, the second count alleges the following relevant facts. The defendant's adjuster, Jory Johnson, stated that he believed the plaintiff ran out of heating oil; however, even when shown that oil easily poured from the oil tank spigot, he rejected the notion that the oil tank was not empty. Johnson was also informed that the plaintiff did not solely rely on oil for heat, and that electric heating was frequently used to heat the premises.

         Furthermore, Johnson requested utility records that showed increased electric consumption as a result of electric heating. Despite requiring the plaintiff to produce these records, Johnson did not agree that the plaintiff used electric heat, and he instead declared that the boiler did not work because there was no oil. Johnson also demanded that the plaintiff obtain and provide water consumption records, even though he knew that water consumption was irrelevant to the adjustment of the claim. The request was solely intended to harass and complicate the claim process.

         On February 21, 2014, Johnson sent the defendant's heating consultant, Sal Ulto, to the premises to determine the cause of the heating loss. At the time of the inspection, Ulto, before entering the building stated, " So, you ran out of oil." Once inside, Ulto repeated the defendant's position that the oil tank was empty. Due to the plaintiff's demands, Ulto opened the spigot to the oil tank. Once opened, oil freely flowed from the tank. At this time, Ulto finally admitted that the tank was not empty. Despite acknowledging that the oil tank was not empty and that the boiler did not fail because of a lack of oil, Ulto and the defendant produced a report which stated that the burner failed from an interruption of oil to the burner. This statement was a complete fabrication.

         Moreover, the defendant has failed to act in good faith because: (1) the defendant knew or should have known that the plaintiff did not run out of oil; (2) the defendant fabricated an investigative report which stated that the burner failed because it was out of oil, when in fact, there was sufficient oil in the tank; (3) the defendant did not consider the fact that the plaintiff had supplemental electrical heat; (4) the defendant had all the information necessary from which the defendant could have made an assessment of the loss, yet the defendant still refused to pay the claim; (5) the defendant refused to negotiate the claim in good faith and instead chose to fabricate reasons to deny the claim; and (6) the defendant provided reasons for denying the claim that were without foundation in fact.

         The third count is a claim based on the Connecticut Unfair Insurance Practices Act (CUIPA), General Statutes § 38a-815 et seq. The third count incorporates all of the allegations in the first and second count, and further alleges that the defendant violated CUIPA by basing a denial of the plaintiff's claim on misstatements of fact, which is indicative of a general practice of refusing to pay claims without reasonable investigation.

         On September 8, 2015, the defendant filed a motion to strike. On October 20, 2015, the plaintiff filed an objection to the motion to strike. The matter was heard at short calendar on February 1, 2016.

         II

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