2003 Ct. Sup. 7034-v, 34 CLR 723
No. CV 02-0816344Connecticut Superior Court, Judicial District of Hartford at Hartford
May 30, 2003
MEMORANDUM OF DECISION ON MOTION TO STRIKE
The plaintiff, 1049 Asylum Limited Partnership (Asylum), filed a thirteen-count amended complaint on October 8, 2002, against the defendants, Kinney Pike Insurance, Inc. (Kinney Pike), Peerless Insurance Co., (Peerless) and The Boyden Co. (Boyden). The complaint alleges that on or about July 28, 2000, Asylum sought insurance coverage for an office building (the building) in Hartford, Connecticut, from Kinney Pike. Asylum claims that it wanted an insurance policy for the building that did not include a depreciation factor. Asylum alleges that Kinney Pike, through one of its agents, assured Asylum’s general partner that the building would be insured to cover Asylum’s investment and any improvements through a “Builder’s Risk” policy.
Asylum further alleges that, based on the information given, it requested that the policy be written in the amount of $2,500,000. Asylum thereafter received an insurance binder from Kinney Pike and closed on the building on July 31, 2000. On or about December 28, 2000, basement flooding occurred from a burst water pipe causing substantial damage to the building. Asylum subsequently learned that the insurance coverage obtained for the building was inadequate to fully compensate Asylum’s losses.
Count one alleges a claim of negligence against Kinney Pike. Count two alleges a claim of breach of contract against Kinney Pike. Count three alleges a claim of negligent misrepresentation against Kinney Pike. Count four alleges a claim of breach of a fiduciary duty against Kinney Pike. Count five alleges a claim of breach of the duty of good faith and fair dealing against Kinney Pike. Count six alleges a claim of negligent misrepresentation against Peerless. Count seven alleges a claim of breach of contract against Peerless. Count eight alleges a claim of breach of good faith and fair dealing against Peerless. Count nine alleges a claim of unfair insurance practice (CUIPA) in violation of General Statutes CT Page 7034-w §§ 38a-815 and 38a-816 (1) (a) against Kinney Pike and Peerless. Count ten alleges a claim of unfair trade practice (CUTPA) in violation of General Statutes § 42-110a et seq. against Kinney Pike and Peerless. Count eleven alleges a claim of negligence against Boyden. Count twelve alleges a claim of breach of fiduciary duty against Boyden. Count thirteen alleges a claim of breach of contract against Boyden. Asylum, by way of prayer for relief as to counts one through thirteen requests money damages, interest pursuant to General Statutes § 37-3a, punitive damages, costs, attorney fees and any other just relief.
On November 5, 2002, Kinney Pike filed a motion to strike counts four, five, nine and ten of Asylum’s amended complaint and the corresponding prayers for relief. The motion was accompanied by a supporting memorandum of law. On November 21, 2002, Asylum filed a memorandum in opposition to Kinney Pike’s motion to strike.
“The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaints . . . to state a claim upon which relief can be granted.” (Internal quotation marks omitted.)Peter-Michael, Inc. v. Sea Shell Associates, 244 Conn. 269, 270, 709 A.2d 558 (1998). “It 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.” (Internal quotation marks omitted.)Gazo v. Stamford, 255 Conn. 245, 260, 765 A.2d 505 (2001). The role of the trial court in ruling on a motion to strike is “to examine the [complaint], construed in favor of the plaintiffs, to determine whether the [pleading party has] stated a legally sufficient cause of action.” (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997). “[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied.” (Internal quotation marks omitted.) Macomber v. Travelers Property and Casualty Corp., 261 Conn. 620, 629, 804 A.2d 180 (2002). “Practice Book . . . § 10-39, allows for a claim for relief to be stricken only if the relief sought could not be legally awarded.” Pamela B. v. Ment, 244 Conn. 296, 325, 709 A.2d 1089 (1998).
Kinney Pike argues that count four of Asylum’s amended complaint should be stricken because Asylum does not allege a breach of a fiduciary duty, but rather reiterates the claims of professional negligence (count one), breach of contract (count two) and negligent misrepresentation (count CT Page 7034-x three). Kinney Pike asserts that a claim for breach of fiduciary duty must allege facts demonstrating morally repugnant conduct between parties in a fiduciary relationship. Asylum argues that count four of its amended complaint is legally sufficient because it has alleged that Kinney Pike owed a duty of loyalty to Asylum as an insurer negotiating an insurance policy.
“[A] fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other . . . The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him.” (Internal quotation marks omitted.)Murphy v. Wakelee, 247 Conn. 396, 400, 721 A.2d 1181 (1998).
In the present case, Asylum cites to the Supreme Court case of Ursini v. Goldman, 118 Conn. 554, 559, 173 A. 789 (1934), holding that a duty is owed to an insured in effecting an insurance policy and that an insurer is liable for any negligence or breach of duty for the resulting loss. Asylum’s reliance on this case is misplaced. Simply alleging that a breach of a duty which was created by the issuance of a policy is insufficient to create a fiduciary relationship. Rather, Asylum must allege sufficient facts to show that a “unique degree of trust and confidence” existed between Asylum and Kinney Pike to constitute a fiduciary duty. See Charter Oak Fire Ins. v. Blue Sky Partnership, Superior Court, judicial district of Hartford, Docket No. CV 00 0596646 (August 30, 2001, Berger, J.).
Moreover, “[b]ecause the insurer/insured relationship is contractually based, both parties have a duty to protect their own interests . . . The insurer has a right to protect its own interests along with those of the insured, and these interests run parallel to each other, neither being superior. Traditionally, the relationship between insurer and insured has been one based solely upon contract. While there are circumstances, particularly when dealing with third-party claims, in which fiduciary-like duties may be placed on the insurer to benefit the insured, such situations do not arise in first-party disputes between insurer and insured.” (Citations omitted; internal quotation marks omitted.) Id., quoting Grazynski v. Hartford Ins. Co., Superior Court, judicial district of Bridgeport, Docket No. CV 96 0337594 (July 11, 1997, Melville, J.) (20 Conn.L.Rptr. 200, 201). The motion to strike count four of Asylum’s amended complaint is granted.
Good Faith and Fair Dealing CT Page 7034-y
Kinney Pike argues that except for incorporating the various allegations of negligence (count one), breach of contract (count two) and negligent misrepresentation (count three), count five of Asylum’s amended complaint fails to allege sufficient facts to establish any bad faith or conscious deception on the part of Kinney Pike as required to set forth a claim for breach of the implied covenant of good faith and fair dealing. Asylum asserts that Kinney Pike misrepresented the terms and coverage of the policy to Asylum and that Asylum relied on Kinney Pike’s misrepresentations in procuring the insurance policy.
It is well settled that “[e]very contract carries an implied covenant of good faith and fair dealing requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement.” (Internal quotation marks omitted.) Gupta v. New Britain General Hospital, 239 Conn. 574, 598, 687 A.2d 111 (1996). In order to establish a claim for breach of the implied covenant of good faith and fair dealing, Asylum must show bad faith. See Ormsby v. Nationwide Mutual Fire Ins., Co., Superior Court, judicial district of New Haven, Docket No. CV 01 0429984 (December 21, 2001, Blue, J.). “Bad faith means more than mere negligence; it involves a dishonest purpose.” (Internal quotation marks omitted.) Id. Bad faith implies “a design to mislead or to 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 . . . [I]t [also] implies the conscious doing of a wrong because of dishonest purpose or moral obliquity . . . it contemplates a state of mind affirmatively operating with furtive design or ill will.” (Internal quotation marks omitted.) Buckman v. People Express, Inc., 205 Conn. 166, 171, 530 A.2d 596 (1987).
In the present case, Asylum fails to allege sufficient facts to show that Kinney Pike’s conduct was motivated by a dishonest purpose. Simply alleging that a misrepresentation occurred does not amount to conscious deception by Kinney Pike to mislead Asylum. Kinney Pike’s motion to strike count five of Asylum’s amended complaint is granted.
Kinney Pike moves to strike count nine on the ground that a private cause of action under CUIPA is not recognized by the Connecticut appellate courts. A majority of the Superior Court judges have held that a private cause of action does not exist. Asylum argues that this court should follow the Superior Court decisions holding that a private cause of action does exist under CUIPA.
“The Connecticut Supreme Court has expressly reserved decision on CT Page 7034-z whether CUIPA authorizes a private cause of action . . . The judges of the Superior Court are divided on the issue, but the majority do not recognize such a private cause of action because it is not expressly provided for by CUIPA, General Statutes § 38a-815, et seq., as it is by CUTPA, General Statutes § 42-110g. These judges maintain that a comparison of the language in CUIPA and CUTPA strongly indicates a private cause of action under CUIPA does not exist.” (Citations omitted.)Gold v. American Economy Insurance, Superior Court, judicial district of New Haven, Docket No. CV 95 0380475 (Jun. 23, 1998, Moran, J.) (22 Conn.L.Rptr. 349, 350).
This court has previously agreed with the majority of decisions which have held that a private cause of action does not exist under CUIPA. Se Thompson Peck v. Reliance Ins. Co., Superior Court, judicial district of New Haven at Meriden, Docket No. CV 99 0267591 (August 29, 2001, Booth, J.). The court has no reason to depart from its earlier holding on this issue. Because CUIPA does not provide a private cause of action, Kinney Pike’s motion to strike count five should be granted.
Kinney Pike moves to strike count ten on the ground that Asylum fails to set forth a claim of unfairness or deception that rises to the level of being intentional or unscrupulous to support a claim under CUTPA. Asylum counters that it has alleged a CUTPA claim based on a violation of CUIPA.
“A claim under CUTPA must be plead with particularity to allow evaluation of the legal theory upon which the claim is based.” (Internal quotation marks omitted.) S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan King, P.C., 32 Conn. App. 786, 797, 631 A.2d 340
(1993), cert. denied, 228 Conn. 903, 634 A.2d 296 (1993). The Supreme Court in Mead v. Burns, 199 Conn. 651, 655, 509 A.2d 11 (1986), addressed the scope of liability imposed by CUIPA and CUTPA on the insurance industry. There, the court held that a plaintiff may not bring a private cause of action under CUTPA based on conduct which does not also violate CUIPA where the alleged misconduct is related to the insurance industry. See Mead v. Burns, supra, 199 Conn. 663-66; Finkeldey v. Newcomb, Superior Court, judicial district of Middlesex, Docket No: CV 98 0084847 (September 21, 1999, Gordon, J.).
In the present case, Asylum asserts that Kinney Pike violated CUIPA without alleging any specific facts to demonstrate in what manner Kinney Pike engaged in “unfair methods” or “deceptive acts” as defined under CUIPA. CT Page 7034-aa
Additionally, Kinney Pike claims that Asylum has not set forth a CUTPA claim because the allegations in count ten amount to professional negligence. In determining CUTPA issues, our Supreme Court has declined to hold that “every provision of CUTPA permits regulation of every aspect of the practice of law . . .” (Internal quotation marks omitted.)Suffield Development Associates Ltd. Partnership v. National Loan Investors L.P., 260 Conn. 766, 781, 802 A.2d 44 (2002). The court, however, has stated that “only the entrepreneurial aspects of the practice of law are covered by CUTPA.” (Internal quotation marks omitted.)Id. Appellate authority has limited this principle to the medical and legal malpractice contexts. See Beverly Hills Concepts, Inc. v. Schatz Schatz, Ribicoff Kotkin, 247 Conn. 48, 79, 717 A.2d 724
(1998) (a CUTPA claim will not lie for professional malpractice); Haynes v. Yale-New Haven Hospital, 243 Conn. 17, 34, 699 A.2d 964 (1997) (CUTPA does not lie in a professional negligence claim involving medical malpractice); Rumbin v. Baez, 52 Conn. App. 487, 490, 727 A.2d 744
(1999). Trial courts have applied the reasoning to other professional negligence. In Krassner v. CPM Insurance Services Inc., Superior Court, judicial district of New Haven, Docket No. CV 01 0456362 (August 8, 2002, Booth, J.), 32 Conn.L.Rptr. 701, this court noted that a number of Superior Court judges have held that the CUTPA exclusion for professional negligence extends to professions other than law and medicine. I Krassner, this court held that a professional malpractice claim against an independent insurance agent may not support a CUTPA claim. Id.
Likewise, the court in Finkelday v. Newcomb, supra, Superior Court, Docket No. CV 98 0084847, held that a professional malpractice claim against insurance agents does not give rise to a CUTPA claim. In the present case, Asylum fails to plead sufficient facts to show that Kinney Pike’s conduct was anything other than professional malpractice. Kinney Pike’s motion to strike count ten is granted on this alternative ground as well.
Based on the foregoing reasons, Kinney Pike’s motion to strike is granted as to courts four, five, nine and ten and the corresponding prayers for relief contained in the amended complaint.
BY THE COURT
Kevin E. Booth, J. CT Page 7034-ab