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Rams II, LLC v. Massachusetts Bay Insurance Co.

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

May 23, 2016

RAMS II, LLC
v.
Massachusetts Bay Insurance Company Opinion No. 133757

          Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Wilson, Robin L., J.

          MEMORANDUM OF DECISION OBJECTION TO REQUEST TO REVISE (#141)

          Wilson, J.

         The plaintiff, RAMS, LLC (plaintiff) commenced this action against the defendant, Massachusetts Bay Insurance Company (defendant), by service of writ, summons and complaint. The substituted complaint which is the operative complaint alleges four counts. Count one alleges that plaintiff suffered a loss by virtue of water damage and that defendant breached the insurance contract because it has not paid plaintiff fully for its loss. Count two alleges negligence. Count three alleges bad faith insurance practices and count four alleges a claim of violation of the Connecticut Unfair Trade Practices Act (CUTPA) and Connecticut Unfair Insurance Practices Act (CUIPA). On May 11, 2015, the court (Vitale, J.) granted the defendant's motion to strike the CUTPA/CUIPA count of the revised complaint, on the grounds that the plaintiff failed to properly plead a general business practice of insurer misconduct because the plaintiff failed to plead specific examples of cases in which the decision maker had made a finding of a violation of CUIPA. RAMS II, LLC v. Massachusetts Bay Insurance Co., Superior Court, judicial district of New Haven, Docket No. CV-13-6043177-S (May 11, 2015, (Vitale, J.). The plaintiff file a substituted complaint on July 13, 2015. On December 24, 2015, the defendant filed a request to revise ¶ 16 of count four of the substituted complaint, claiming that said paragraph does not comply with Judge Vitale's ruling, which is the law of the case. Defendant further argues that ¶ 16 is conclusory, vague and unclear in that it does not allege facts sufficient to demonstrate an express finding by a court or an administrative body of a violation of CUIPA on the part of the defendant. The plaintiff has objected to defendant's request to revise count four and the matter was scheduled on this court's April 25, 2016 non-arguable short calendar as take papers.

         DISCUSSION

         Practice Book § 10-35 permits any party to file a timely request to revise in order " to obtain (1) a more complete or particular statement of the allegations of an adverse party's pleading, or (2) the deletion of any unnecessary, repetitious, scandalous, impertinent, immaterial or otherwise improper allegations in one complaint when they are improperly combined in one count, or the separation of two or more grounds of defense improperly combined in one defense, or (4) any other appropriate correction in an adverse party's pleading, the party desiring any such amendment in an adverse party's pleading may file a timely request to revise that pleading."

         " The primary test with regard to the propriety of a request to revise is whether the pleadings disclose the material facts that constitute the cause of action. Kileen v. General Motors Corp., 36 Conn.Supp. 347, 348, 421 A.2d 874 (1980). The complaint, however, need only contain a " plain and concise statement of the material facts on which the pleader relies, but not of the evidence by which they are to be proved . . . " Practice Book § 10-1. A request to revise is also appropriate to cure any confusion about what is being pleaded. (Emphasis added.) Rowe v. Godou, 209 Conn. 273, 279, 550 A.2d 1073 (1988).

         " The issue presented here is whether the plaintiff has adequately alleged a general business practice in violation of § 38a-816(6) or merely alleged an isolated instance of insurer misconduct. '[Section] 38a-816(6) requires that a plaintiff allege and prove that the relevant conduct was a part of a general business practice.' Capstone Building Corp. v. American Motorist Ins. Co., 308 Conn. 760, 802 n.41, 67 A.3d 961 (2013). Our Supreme Court has explicitly stated, however, that '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 § 38a-816(6).' (Citation omitted.) Lees v. Middlesex Ins. Co., 229 Conn. 842, 849, 643 A.2d 1282 (1994). '[C]laims of unfair settlement practices under CUIPA require a showing of more than a single act of insurance misconduct . . . The definition of unacceptable insurer conduct in [General Statutes] § 38-61 [now § 38a-816] reflects the legislative determination that isolated instances of unfair insurance settlement practices are not so violative of the public policy of this state as to warrant statutory intervention.' Mead v. Burns, supra, 199 Conn. 659-66.

         " 'A split of authority exists regarding the degree of specificity required when pleading a general business practice under CUIPA to survive a motion to strike. One line of cases . . . requires that the plaintiff plead specific facts to demonstrate acts of insurer misconduct that go beyond the plaintiff's immediate claim . . . The other line of cases ha[s] held, essentially, that as long as the plaintiff alleges that the insurer misconduct involves other insureds, pleading specific instances of such misconduct is not required.' (Citation omitted; internal quotation marks omitted.) Afifi v. Standard Fire Ins. Co., Superior Court, judicial district of New Haven, Docket No. CV-11-6017083-S (October 21, 2011, Zoarski, J.T.R.). 'The fact that there is a split among Superior Courts on this issue is not surprising: it is a thorny one. On the one hand, there is the burden upon the plaintiff's lawyer, without access to the insurance company's records, to discover somehow the existence of other instances of the same conduct in sufficient quantity to represent the company's " general business practice." On the other hand, [there is the issue of] whether a plaintiff should be able to invoke the panoply of pretrial discovery techniques to rummage around in the company's books and records simply by alleging that he has " knowledge and belief' that it has engaged in the same allegedly unlawful acts with others as it has with the plaintiff, without at least alleging that he has personal knowledge of other cases in which this conduct has occurred.' Active Ventilation Products, Inc. v. Property and Casualty Ins. Co. of Hartford, Superior Court, judicial district of Hartford, Complex Litigation Docket, Docket No. X09-CV-08-5023757-S (July 15, 2009, Shortall, J.).

         " The better reasoned rule is that a plaintiff 'need not plead specific instances of insurer misconduct other than those instances specific to the plaintiff so long as the misconduct alleged involves other insureds. This is so because '[u]ntil discovery has been completed . . . the plaintiff is entitled to the opportunity to gather information supporting its claim that the defendants' alleged wrongful conduct has been committed with such frequency as to indicate a general business practice. After discovery a motion for summary judgment would be the appropriate vehicle to test whether the plaintiff can show a general business practice of insurance misconduct.' (Internal quotation marks omitted.) Savanella v. Kemper Independence Ins. Co., Superior Court, supra, 53 Conn. L. Rptr. 219; O'Leary Ltd. v. Travelers Property Casualty Co., Superior Court, judicial district of New London at Norwich, Complex Litigation Docket, Docket No. X04-CV-99-0121281-S, (May 5, 2001, Koletsky, J.)." O'Connor v. QBE, Superior Court, judicial district of New Haven, Docket No. CV12-6032396-S (June 26, 2014, Wilson, J.).

         " Courts adhering to this more lenient view have reasoned that [g]iven the remedial nature of CUIPA and given that it is to be liberally construed to give effect to the legislature's intent . . . the allegation of a general business practice in the plaintiff's complaint is sufficient to withstand a motion to strike." (Citations omitted; internal quotation marks omitted.) Labonne v. Hingham Mutual Fire Ins. Co., Superior Court, judicial district of New London, Docket No. CV 126014737S (March 7, 2014, Devine, J.) (57 Conn. L. Rptr. 794, 797). In Labonne, Judge Devine " proposes and adopts a compromise position that more reasonably balances the equities of both parties, while also remaining most faithful to the standard of review on a motion to strike. In this court's view, a plaintiff can satisfy the 'general business practice' requirement in one of two ways: (1) the plaintiff can comply with the strict line of cases by citing multiple specific instances of the insurance company engaging in similar misconduct with other claimants, or (2) the plaintiff can allege facts related only to his or her isolated claim if a reasonable inference can be drawn therefrom that the insurer's conduct toward the plaintiff was part of its general business practices-in other words, the court must be able to reasonably infer that if the insurance company committed this misconduct against the plaintiff, they [will] likely commit it regularly against other claimants as well.[1] Therefore, even if a plaintiff cannot plead specific instances of similar prior misconduct by the insurer, circumstantial evidence of a general business practice derived from the insurer's handling of the plaintiff's isolated claim is sufficient to withstand a motion to strike." Id.

         " There is also an absence of appellate authority on whether it is sufficient for a party to cite other cases involving a CUIPA action against the defendant in order to plead a general business practice, and Superior Court decisions are split concerning this issue. Compare Nationwide Mutual Ins. Co. v. Pasiak, Superior Court, judicial district of Stamford-Norwalk, Complex Litigation Docket, Docket No. X08 CV 08 4015401S (November 30, 2011, Brazzel-Massaro, J.) (finding a CUIPA/CUTPA cause of action sufficiently pleaded where the complaint cited other cases finding CUIPA violations by the defendant), with Ferrante v. Allstate Property & Casualty Ins. Co., Superior Court, judicial district of New London, Docket No. CV10 6003787S (July 21, 2011, Cosgrove, J.) (52 Conn. L. Rptr. 334, 335) (" The plaintiff's string citation merely stands for the proposition that the defendant has been sued for unfair settlement practices. Without more, this represents only a legal conclusion and does not constitute proper fact pleading . . ."). In comparing these two lines of reasoning, a distinction can be made between complaints citing to cases where a plaintiff simply alleged a CUIPA violation-which the court in Ferrante v. Allstate Property & Casualty Ins. Co., supra, at 335 found insufficient-and complaints citing to cases where the court or administrative body actually found a CUIPA violation, which the court in Nationwide Mutual Ins. Co. v. Pasiak, supra, found sufficient. This is a logical distinction under the standard of review on a motion to strike, which requires provable factual allegations that support a cause of action. Santorso v. Bristol Hospital, supra, 308 Conn. at 349." RAMS II, LLC v. Massachusetts Bay Insurance Co., supra, Docket No. CV-13-6043177-S.

         The plaintiffs here, have alleged conduct defined as unfair claim settlement practices that were frequently committed and a general practice of the defendants. Specifically, the plaintiffs allege in paragraph 16 of count four, that " [t]he defendant's general business practice of insurance misconduct is further seen in the actions and lawsuits filed against the Defendant, its assignees, subsidiaries, successors and holding companies, including Linn v. Hanover Ins. Co., 2007 WL 2081444, at *1 (Conn. Super. Ct. July 2, 2007) (insured alleged insurer acted in violation of Connecticut General Statutes § 38a-815 et seq. by committing unfair, unscrupulous and deceptive business practices by failing to conduct a reasonable investigation into the claim and failing to communicate with insured thereby committing unfair settlement practices in violation of CUIPA) and by numerous complaints on file with the State of Connecticut and the State of Massachusetts Insurance Departments concerning the Defendant, its assignees, subsidiaries, successors and holding companies including findings of unfair insurance practices by said Departments, including File Number 205720 (Connecticut Insurance Department found a complaint against Defendant by insured for violation of Connecticut General Statute § 38a-816(6)(f) was justified and insured was paid additional money after Connecticut Insurance Department's finding that Defendant 'should have paid' claim from the start for damage to a pool), File Number 105566 (Connecticut Insurance Department found a complaint against Defendant by insured for violation of Connecticut General Statute § 38a-816(6)(f) was justified and insured was paid additional money after insurer's damage appraisal was found to be 'way too low' by the Connecticut Insurance Department), File Number 203923 (Connecticut Insurance Department found a complaint against Defendant by insured for violation of Connecticut General Statute § 38a-816(6)(b), (d), (e), (n) was justified and corrective action was taken after insured delayed communication with insured and delayed settling insured's claim." Pl. Subst. Compl. Count 4 ¶ 16. Pursuant to the line of cases which require less specificity in pleading a general business practice under § 38a-816(6), these allegations more than sufficiently state improper conduct in the handling of more than one insurance claim so as to adequately allege a general business practice in violation of § 38a-816(6). Even under Judge Devine's third test, which this court has read and considers persuasive, the plaintiff's allegations of a general business practice are sufficient.

         This court is mindful of Judge Vitale's ruling granting the defendant's motion to strike count four of the plaintiff's revised complaint. Judge Vitale's ruling seems to suggest that in order to plead a legally sufficient " general business practice" to establish an unfair insurance practice under CUIPA, the plaintiff must allege specific examples of cases in which the decision maker had made a finding of a violation of CUIPA. In his decision he states: " Pleading the fact that other parties have filed suit against the same defendant speaks to the behavior of these other parties and not to the behavior of the defendant. However, pleading the fact that other courts or administrative bodies have actually found the same defendant guilty of violating CUIPA is a fact that, if provable, speaks to the behavior of the defendant itself and would demonstrate that the defendant has a general business practice in violation of CUIPA. Thus, citations to other cases in a cause of action attempting to plead a general business practice in violation of CUIPA are proper only if the decision maker in those cases found the defendant to be in violation of CUIPA. (Emphasis added.) Rams II, LLC, supra, Docket No. CV13-6043177S.

         This court's research has not found any cases which makes such allegation a requirement for adequately pleading a general business practice. The seminal cases of Mead and Lees set forth what is required to plead and prove a general business practice in violation of CUIPA. As Judge Devine discussed in Labonne, " [i]n Lees, the Supreme Court held-in the context of a motion for summary judgment-that '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.' Lees v.Middlesex Ins. Co.,supra, at 849, 643 A.2d 1282. As required on a summary judgment motion, the Lees court expected the plaintiff to support his claim with evidence, which he failed to do. Moreover, even if Lees were applied in the context of a motion to strike, ...


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