Opinion
CV166056972
07-12-2017
Tracey Mason v. Liberty Mutual Insurance Company et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION TO STRIKE #117
Michael P. Kamp, J.
The motion before the court is the defendants' motion to strike counts two and four of the plaintiff's revised complaint on the grounds that (1) the plaintiff fails to allege that the defendants issued, or were parties to, or breached, the subject insurance contract; (2) the plaintiff fails to allege any attorney-client relationship with the defendants; and (3) the provisions of § 38a-321 are inapplicable to both causes of action. For the reasons cited herein, the defendants' motion to strike counts two and four is granted.
FACTS
On January 4, 2017, the plaintiff, Tracey Mason, filed a four-count revised complaint against seven defendants: (1) Liberty Mutual Insurance Company (Liberty); (2) the law offices of Loccisano, Turret & Rosenbaum; (3) the law offices of Meehan, Turret & Rosenbaum; (4) Denise Drews; (5) Mary Ann McCluskey; (6) Shari Pearlman; and (7) Vincent di Palma. In count one of the revised complaint, the plaintiff alleges the following facts. The defendant law offices consist of a group of attorneys, namely, the defendant attorneys, " who are employees of Liberty Mutual Group, Inc., " and the defendant Liberty operates as a subsidiary of that corporation. Specifically, the plaintiff alleges that the defendant law offices " were an in house or captive law office and its employees, including [the defendant attorneys] were agents, servants and/or employees of [the defendant Liberty]."
The law offices of Loccisano, Turret & Rosenbaum and the law offices of Meehan, Turret & Rosenbaum, although named as two separate defendants in the present action, refer to the same group of attorneys alleged to be employed by the Liberty Mutual Group, Inc., and the defendant Liberty as a subsidiary of that corporation. Accordingly, for sake of clarity, both offices will collectively be referred to herein as the defendant law offices. In addition, the defendants Drews, McCluskey, Pearlman, and di Palma, alleged to be the attorneys working within those law offices, will collectively be referred to herein as the defendant attorneys.
In 2013, the plaintiff brought an action against the defendant Liberty's insureds, Wendell Wilson and Hyshema Barnes, as a result of injuries sustained from a car accident. The defendant law offices and the defendant attorneys legally represented Wilson in the aforementioned action by the plaintiff. While the action was pending, the plaintiff filed an offer of compromise within the limits of the subject policy that was subsequently rejected. Thereafter, the plaintiff recovered a final judgment against the defendant Liberty's insured, Wilson, in the sum of $155, 122.92 in damages and $42, 012.40 in costs and interest for a total of $197, 135.32. The plaintiff alleges that the defendant Liberty, " through itself and through [the defendant law offices] and [the defendant attorneys], failed to act fairly and in good faith with regards to the interest of its insured, Wendell Wilson, " and, as a result, Wilson has been damaged in the amount of the total unpaid balance of $197, 135.32. Specifically, the plaintiff alleges that the defendant Liberty, through itself and through its agents, the defendant law offices and the defendant attorneys: failed to accept in a timely manner the offer of compromise; rejected the offer of compromise without filing a motion for extension of time to respond; failed to timely, reasonably and properly investigate the plaintiff's claim; failed to communicate with Wilson about the risks of judgment entering in excess of the policy; failed to advise Wilson to seek outside counsel; failed and refused to reasonably settle the case; allowed a default to enter against Wilson; failed to file notice of defenses on behalf of Wilson; failed to protect the legal right of Wilson to present a valid liability defense; failed to defend Wilson fairly and in breach of the implied covenant of good faith inherent in the insurance contract; and breached the covenant of good faith and fair dealing by not settling the case within the policy limits.
Accordingly, in counts one and three of the revised complaint, the plaintiff asserts causes of action, pursuant to General Statutes § 38a-321, for breach of the implied covenant of good faith and fair dealing and legal malpractice, respectively, against the defendant Liberty. In count two, the plaintiff puts forth the same allegations from count one and also, asserts the same cause of action, pursuant to § 38a-321, of breach of the implied covenant of good faith and fair dealing against the defendant law offices and the defendant attorneys. In count four, the plaintiff asserts a cause of action for legal malpractice against the defendant law offices and the defendant attorneys, pursuant to § 38a-321, and further alleges that the damages sustained by Wilson were caused by their negligent acts and/or omissions in the following ways: failure to act with reasonable diligence and promptness in representing Wilson; failure to zealously represent the interests of Wilson; allowing the court to enter a default against Wilson; failure to open the default entered against Wilson; failure to file notices of defenses on behalf of Wilson; and failure to promptly notify Wilson and " [concealing] the fact that the [c]ourt entered a default against him and the legal ramifications of said default."
On February 3, 2017, the defendants filed the present motion to strike counts two and four of the plaintiff's revised complaint on the grounds that (1) the plaintiff fails to allege that the defendants issued, or were parties to, or breached, the subject insurance contract; (2) the plaintiff fails to allege any attorney-client relationship with the defendants; and (3) the provisions of § 38a-321 are inapplicable to both of the plaintiff's causes of action. The defendants also filed a memorandum of law in support of their motion to strike. On March 15, 2017, the plaintiff filed an objection and memorandum of law in opposition to the present motion to strike. The court heard oral argument at short calendar on March 20, 2017.
The present motion to strike involves only the defendant law offices and the defendant attorneys. Thus, they will collectively be referred to herein as the defendants.
DISCUSSION
" 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). " [The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency . . . Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Moreover, [the court notes] that [w]hat is necessarily implied [in an allegation] need not be expressly alleged . . . 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. Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Geysen v. Securitas Security Services USA, Inc., 322 Conn. 385, 398, 142 A.3d 227 (2016).
In their memorandum of law in support of the motion to strike, the defendants argue that counts two and four of the plaintiff's revised complaint must be stricken. Specifically, the defendants maintain that count two must be stricken because the plaintiff fails to allege that the defendants issued, or were parties to, or breached, the subject insurance policy and therefore, there is no legal basis for a cause of action for breach of the implied covenant of good faith and fair dealing. As to count four, the defendants argue that the plaintiff fails to allege any attorney-client relationship with the defendants and therefore, the legal malpractice claim cannot prevail. The defendants further contend that the right to bring a legal malpractice claim is a fundamentally personal right that cannot be assigned to an adversary and, as a result, the plaintiff cannot bring the claim as subrogor pursuant to § 38a-321. Finally, the defendants argue that § 38a-321 applies only to an " insurance company which issues a policy, " and because the plaintiff does not, and cannot, allege that the defendants are an " insurance company" that issued a policy within the purview of the statute, both counts two and four must be stricken on that basis.
In response, in her memorandum of law in opposition to the motion to strike, the plaintiff argues that her theory of responsibility against the defendant Liberty is partly grounded in the doctrine of vicarious liability with respect to the actions of the defendant Liberty's employees, namely, the defendants. In addition, the plaintiff maintains that her legal malpractice claim is brought as a statutory right, pursuant to § 38a-321, rather than as an assignment. At oral argument, the plaintiff reiterated that because the defendants are agents and/or servants of the defendant Liberty, the malpractice claim may properly be imputed.
I
BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING
In count two of the revised complaint, the plaintiff asserts a cause of action for breach of the implied covenant of good faith and fair dealing against the defendants. " Connecticut courts repeatedly have held that the existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing . . . [N]o claim of breach of the duty of good faith and fair dealing will lie for conduct that is outside of a contractual relationship." (Citations omitted; emphasis omitted; internal quotation marks omitted.) Carford v. Empire Fire & Marine Ins. Co., 94 Conn.App. 41, 45-46, 891 A.2d 55 (2006).
Here, because the plaintiff does not allege that she was insured by the defendant Liberty, she brings her cause of action for breach of the implied covenant of good faith and fair dealing pursuant to § 38a-321 " in that the Plaintiff is subrogated to all the rights of the insured, Wendell Wilson, and has a right of action against the Defendants to the same extent that the insured, Wendell Wilson, has to enforce his claim against the Defendants had he paid the full judgment to the Plaintiff." In support of that claim, the plaintiff argues that the defendants, as employees and/or agents of the insurer, the defendant Liberty, are also " insurers" under the statute. In response, the defendants argue that the allegations in the revised complaint do not refer to the handling of Wilson's insurance claim. Rather, the defendants maintain that the allegations only pertain to acts committed by attorneys in the course of the insured's legal representation, and not to acts committed by agents of an " insurer" in the course of handling an insurance claim. As a result, the defendants contend that their alleged actions do not bring them within the meaning of " insurer" as used in the direct action statute.
" When construing a statute, [the court's] fundamental objective is to ascertain and give effect to the apparent intent of the legislature . . . In seeking to determine that meaning, General Statutes § 1-2z directs [the court] first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered . . . The test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation." (Internal quotation marks omitted.) State v. Agron, 323 Conn. 629, 633-34, 148 A.3d 1052 (2016).
Section 38a-321 provides, in relevant part: " Each insurance company which issues a policy to any person . . . insuring against loss or damage on account of the bodily injury . . . by accident of any person, or damage to the property of any person, for which loss or damage such person . . . is legally responsible; shall, whenever a loss occurs under such policy, become absolutely liable . . . Upon the recovery of a final judgment against any person . . . by any person . . . for loss or damage on account of bodily injury . . . or damage to property, if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment." (Emphasis added.) In turn, General Statutes § 38a-1(12) defines " insurer" or " insurance company" as " any person or combination of persons doing any kind or form of insurance business other than a fraternal benefit society, and shall include a receiver of any insurer when the context reasonably permits."
Effective July 1, 2017, P.A. 17-125 moved the definition of " insurer" or " insurance company" from subdivision (11) to subdivision (12). The substantive language remains the same.
From its plain and unambiguous terms, § 38a-1(12) requires that, to qualify as an " insurer, " a person must be doing " any kind or form of insurance business." Here, the plaintiff alleges that the defendants are licensed attorneys who legally represented Wilson in the underlying suit brought by the plaintiff. Although the plaintiff contends that, by virtue of the defendants' collective status as a " captive law firm" for the defendant Liberty, the defendants and the insurer, the defendant Liberty, are one in the same for purposes of § 38a-321, the court does not find support for that argument contained within the plain meaning of the statute. Pursuant to § 38a-1(11)(E), an " unauthorized insurer" or " nonadmitted insurer" is defined as " an insurer that has not been granted a certificate of authority by the commissioner to transact the business of insurance in this state or an insurer transacting business not authorized by a valid certificate." (Emphasis added.) Read in conjunction with § 38a-1(12), the role of " insurer" requires transacting the business of insurance. Although § 38a-1 does not explicitly define " the business of insurance, " generally, § 38a-1(14) provides that " [t]he business of life insurance includes granting endowment benefits, granting additional benefits in the event of death by accident or accidental means, granting additional benefits in the event of the total and permanent disability of the insured, and providing optional methods of settlement of proceeds."
Effective July 1, 2017, P.A. 17-125 moved the definition of " life insurance" from subdivision (13) to subdivision (14). The substantive language remains the same.
In the present case, the defendants are not alleged to have issued the policy in question. There are also no allegations that the defendants granted any benefits pursuant to the policy, or that they even had the ability to do so. Rather, the defendants are alleged to have dealt with the underlying suit, as related to Wilson's insurance policy, only in their capacities as lawyers. Acts or duties performed by a lawyer, in her capacity as a lawyer, during the course of the legal representation of an insured, such as the failure to accept an offer of compromise; the failure to properly investigate the insured's claim; the failure to communicate the risks of judgment entering in excess of the policy to the insured; the failure to advise the insured to seek outside counsel; the failure to settle the case; the failure to stop the court from entering a default judgment; the failure to file notice of defenses on behalf of the insured; and the failure to protect the legal right of the insured to present a valid liability defense, do not constitute transacting the business of insurance. Accordingly, because the defendants are not " insurers" pursuant to § 38a-1(12), § 38a-321 is inapplicable to the plaintiff's cause of action for breach of the implied covenant of good faith and fair dealing and therefore, the court grants the defendants' motion to strike as to count two.
II
LEGAL MALPRACTICE
In count four of the revised complaint, the plaintiff asserts a legal malpractice claim against the defendants. " In general, the plaintiff in an attorney malpractice action must establish: (1) the existence of an attorney-client relationship; (2) the attorney's wrongful act or omission; (3) causation; and (4) damages." (Internal quotation marks omitted.) Lee v. Harlow, Adams & Friedman, P.C., 116 Conn.App. 289, 297, 975 A.2d 715 (2009). Here, the plaintiff does not allege that she was involved in an attorney-client relationship with the defendants. Rather, just as with count two, the plaintiff brings her cause of action for legal malpractice pursuant to § 38a-321. As discussed in Section I, supra, the defendants are not " insurers" pursuant to § 38a-1(12) and therefore, § 38a-321 is inapplicable to the plaintiff's cause of action for legal malpractice on that basis.
Nonetheless, even if the court were to determine that the defendants are " insurers" within the purview of § 38a-321, the plaintiff's present legal malpractice claim would not necessarily be permissible. In that instance, in order for the plaintiff to prevail, the court would need to construe the direct action statute to allow for a judgment creditor to bring a legal malpractice claim against an insurer on behalf of the insured third party.
With respect to § 38a-321, the Supreme Court has repeatedly stated that " the intention of the [statute] is to give to the [judgment creditor] the same rights under the policy as the assured . . ." (Emphasis in original; internal quotation marks omitted.) Home Ins. Co. v. Aetna Life & Casualty Co., 235 Conn. 185, 198, 663 A.2d 1001 (1995); Guerin v. Indemnity Ins. Co., 107 Conn. 649, 653, 142 A. 268 (1928); see also Brown v. Employer's Reinsurance Corp., 206 Conn. 668, 672, 539 A.2d 138 (1988) (" [t]he legislature's purpose in enacting the 'direct action' statute was to remedy '[ t ] he unfairness to the assured of contracts of insurance ' with provisions that the insurer should be liable only in cases where the assured had actually paid a judgment obtained against him" [emphasis added; internal quotation marks omitted]).
In Home Ins. Co. v. Aetna Life & Casualty Co., supra, 235 Conn. 187, Barry Schuss (Schuss) started a fire that caused extensive damage to a West Hartford synagogue. After obtaining a judgment against Schuss for the damages sustained by the fire, the plaintiff, the synagogue's insurer, brought a subrogation action against the defendant, the insurer of Schuss' parents, to recover the amount of the judgment. Id., 189. During the course of that litigation, the plaintiff filed an application for an order, pursuant to General Statutes § 52-146f, for the release of Schuss' confidential psychiatric records on the ground that the defendant had made Schuss' mental condition an issue in the case. Id., 190. The trial court denied the application and concluded " that under the principles of subrogation [the plaintiff] held the contractual rights of Schuss but not his personal rights such as the privilege of confidentiality." Id. After the appellate court reversed the trial court's judgment, and on appeal to the Supreme Court, the plaintiff argued that it was entitled to access of Schuss' psychiatric records because, as the subrogee of Schuss' rights under the defendant's insurance policy, pursuant to § 38a-321, it was empowered to waive confidentiality. Id., 193.
Stating that the plaintiff's argument " misperceives the reach of our subrogation statute, " the Supreme Court rejected the claim, and found that Schuss' right to maintain the confidentiality of his psychiatric records arose under § 52-146f, and not under his insurance contract with the defendant. Id., 197-98. The Supreme Court further noted that " [t]he statutory construction urged by [the plaintiff] would remove . . . control from the patient-subrogor by permitting the subrogee to waive the patient's privilege without regard to the patient's desire to maintain the confidentiality of his or her psychiatric communications and records, " thereby frustrating one of the primary purposes underlying § 52-146f. Id., 200.
In the present case, the plaintiff's argument that a judgment creditor may bring a legal malpractice claim against an insurer on behalf of the insured third party similarly misperceives the reach of § 38a-321. Although the right to bring a legal malpractice claim is distinguishable from the right to maintain the confidentiality of psychiatric records, the reasoning articulated in Home Ins. Co. v. Aetna Life & Casualty Co., supra, is still applicable here. The relationship between an attorney and client, like the one between a psychiatrist and patient, is " unique and personal, " thereby eliciting a " need to preserve the sanctity of that relationship." Gurski v. Rosenblum & Filan, LLC, 276 Conn. 257, 268-69, 885 A.2d 163 (2005). In addition, the duty of loyalty and confidentiality owed by an attorney to a client is also akin to the duty of confidentiality owed by a psychiatrist to her patient. Id., 270. Moreover, the court in Home Ins. Co. v. Aetna Life & Casualty Co., supra, cited the removal of control from the patient-subrogor, with respect to the waiver of confidentiality, as further support for rejecting the plaintiff's proposed application of § 38a-321. Here, pursuant to the plaintiff's argument, there would be a similar involuntary relinquishment of Wilson's right to bring a legal malpractice claim. Thus, the court does not read § 38a-321 to allow for the involuntary relinquishment of such an inherently personal right.
Furthermore, the plaintiff's right to bring a legal malpractice claim, sounding in negligence, does not arise under Wilson's insurance policy. In count four of the revised complaint, the plaintiff alleges that the damages sustained by Wilson were " caused by the negligent acts and/or omissions" of the defendants. See Pelletier v. Galske, 105 Conn.App. 77, 83, 936 A.2d 689 (2007), cert. denied, 285 Conn. 921, 943 A.2d 1100 (2008) (" [n]otwithstanding that embedded in the language of the plaintiff's claim are the contractual rudiments of promise and breach, [w]here the plaintiff alleges that the defendant negligently performed legal services . . . the complaint sounds in negligence, even though [she] also alleges that [she] retained him or engaged his services" [internal quotation marks omitted]). Although the negligent acts and/or omissions alleged in the complaint derive from the legal representation of Wilson during the plaintiff's underlying suit, and therefore are associated to some extent with his insurance policy, Wilson's right to bring a malpractice action arises independently of said policy.
Finally, although the plaintiff argues that the public policy considerations promulgated in Gurski v. Rosenblum & Filan, LLC, supra, 276 Conn. 257, are inapplicable to the present case because the legal malpractice claim is brought as a statutory right, and not as a voluntary assignment, the court is not persuaded. In Gurski v. Rosenblum & Filan, LLC, supra, 268, the Supreme Court addressed, as a matter of first impression, whether a legal malpractice claim may be assigned. In discussing the considerations raised in other jurisdictions, the court explicitly noted " the unique and personal nature of the relationship between attorney and client and the need to preserve the sanctity of that relationship, " and " the incompatibility of the assignment and the attorney's duty of loyalty and confidentiality, " as support for prohibiting such assignment. Id., 268-70. Ultimately, in declining to permit the assignment of a legal malpractice claim to an adverse party in the underlying action, the court relied upon a myriad of public policy considerations. Specifically, the court held that allowing such assignments would " convert a legal malpractice action into a commodity; undermine the sanctity of the attorney-client relationship; result in decreasing the availability of legal services to insolvent clients; impact negatively on the duty of confidentiality and further the commercialization of malpractice claims that in turn would spawn an increase in unwarranted malpractice actions . . ." Id., 280.
Here, although the plaintiff is bringing her claim as a statutory right, and not as a voluntary assignment, many of the same public policy considerations are implicated. In particular, permitting a judgment creditor to bring a legal malpractice claim on behalf of the insured third party would equally threaten the sanctity of the " unique and personal" attorney-client relationship. In addition, an attorney's duty of loyalty and confidentiality would be similarly incompatible with this type of claim as brought by a judgment creditor, rather than the insured third party privy to the attorney-client relationship. The inherently personal nature of a legal malpractice claim is still present, whether brought as a statutory right or as a voluntary assignment. Thus, in accordance with the reasoning set forth in both Home Ins. Co. v. Aetna Life & Casualty Co., supra, and Gurski v. Rosenblum & Filan, LLC, supra, the plaintiff cannot bring a legal malpractice claim on behalf of the insured, Wendall Wilson, pursuant to the direct action statute, § 38a-321, against the defendants. Accordingly, the court grants the defendants' motion to strike as to count four.
CONCLUSION
In light of the foregoing, the defendants' motion to strike counts two and four of the plaintiff's revised complaint is granted.