Opinion
No. CV 02-0080039
May 9, 2003
MEMORANDUM OF DECISION RE MOTION TO STRIKE (102)
This is an action in three counts seeking uninsured motorist coverage. The Plaintiff claims that she was involved in a motor vehicle accident caused by the negligence of a third party and that the third party's insurer has paid her the limits of his policy. The Plaintiff claims that her insurer, the Defendant, Allstate Insurance Company, has not made a reasonable offer or paid any amounts under the uninsured provision of her policy even though her injuries are permanent and severe. In the First Count the Plaintiff makes a legal claim for the limit of the uninsured coverage under her policy. The Second Count claims that the Defendant's conduct constitutes unfair acts or practices in the business of insurance as defined in General Statutes § 38-61 (1), (6) and (15). The Third Count claims that the Defendant's conduct constitutes unfair trade practices as defined in General Statutes § 41-110b. Allstate has moved to strike the Second and Third Counts of the complaint on the grounds that they fail to state a claim upon which relief may be granted.
"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.) Faulkner v. United Technologies Corp.,240 Conn. 576, 580, 693 A.2d 293 (1997); see Practice Book § 10-39. "A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court . . . We take the facts to be those alleged in the complaint . . . and we construe 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." (Citations omitted; internal quotation marks omitted.) Vacco v. Microsoft Corp., 260 Conn. 59, 64-65, 793 A.2d 1048 (2002). "A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." Novametrix Medical Systems, Inc. v. BOC Group, Inc., 224 Conn. 210, 215, 618 A.2d 25 (1992).
Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498 (2003).
The Defendant claims that in the Second Count the Plaintiff attempts to assert a claim under the Connecticut Unfair Insurance Practices Act (CUIPA). The Defendant claims that this count should be stricken because CUIPA does not allow for a private cause of action and, in any event, the allegations of the complaint do not support such a claim.
The Plaintiff claims that there is no controlling authority on this issue and the lower courts are split as to whether a Plaintiff has a private cause of action under CUIPA.
This court agrees with the decisions which hold that there is no private right of action under CUIPA for the reasons set forth by the court in Szlachetka v. Mullen, Superior Court, judicial district of New Britain at New Britain, Docket No. CV02-05 13409S (February 25, 2003). There the court stated:
. . . this court is in accord with those cases holding that there is no private cause of action under CUIPA. See, e.g., Conway v. Travelers Casualty, Superior Court, judicial district of New Haven at New Haven, Docket No. 588119 (Dec. 15, 2000); Perrelli v. Strathmore Farms, Superior Court, judicial district of New Haven at New Haven, Docket No. 428988 (March 2, 2000 Levin, J.); Baroni v. Western Reserve Life Assurance Co., Superior Court, judicial district of Middlesex at Middletown, Docket No. 087965 (September 29, 1999, Gordon, J.); Garber v. Nationwide Ins. Co., Superior Court, judicial district of New Britain, Docket No. 488913 (Mar. 25, 1999, Robinson, J.); Colon v. Geico Casualty Company, Superior Court, judicial district of New Haven at New Haven, Docket No. 419197 (July 28, 1999, Moran, J.); Rowlands v. Commodore Commons Condominium Assn., Superior Court, judicial district of Ansonia-Milford at Milford, Docket No. 063281 (January 13, 1999, Curran, J.); Gold v. American Economy Insurance, Superior Court, judicial district of New Haven at New Haven, Docket No. 380475 (June 23, 1998, Moran, J.) ( 22 Conn.L.Rptr. 349); Stabile v. Southern Connecticut Hospital Systems, Superior Court, judicial district of Fairfield, Docket No. 326120 (Oct. 31, 1996, Levin, J.) ( 18 Conn.L.Rptr. 157); Gonzalez v. Lewis Services, Inc., Superior Court, judicial district of New Haven at Meriden, Docket No. 245151, (March 31, 1995, Silbert, J.). "[T]here is no express authority under CUIPA for a private cause of action . . . CUIPA is not ambiguous; by its express terms, CUIPA is a regulatory act, authorizing the insurance commissioner to investigate alleged unfair insurance practices. Even if the provisions of CUIPA are ambiguous as to a private right of action, the existence of such a right should not be recognized. This is because CUIPA authorizes the imposition of criminal penalties for the commission of conduct it proscribes . . . [and] ambiguity in penal statutes requires a construction limiting rather than expanding civil liability." (Citations omitted; internal quotation marks omitted.) Garber v. Nationwide Ins. Co., supra, Superior Court, Docket No. 488913. In addition, "[a] person who feels that he or she has been harmed by a CUIPA violation is not without remedy, but that remedy needs to be pursued as a CUTPA [claim]." (Internal quotation marks omitted.) Baroni v. Western Reserve Life Assurance Co., supra, Superior Court, Docket No. 087965.
A review of the statute on which the Plaintiff relies for her CUIPA claim, General Statutes § 38-61 (1), (6) and (15) which is now General Statutes § 38a-816 (1), (6) and (15), and the scheme for its enforcement, supports the determination that there is no private right of action under CUIPA. The statute cited by the Plaintiff defines unfair methods of competition and unfair and deceptive acts or practices in the business of insurance. Subsection (1) refers to "misrepresentation and false advertising of insurance policies." Subsection (6) refers to "unfair claim settlement practices." Subsection (15) refers to the failure by an insurer to pay a health care provider. General Statutes § 38a-817 provides that the Commissioner of Insurance may conduct hearings into violations of these provisions and order the person charged to cease and desist as well as to pay a monetary penalty. The Commissioner may also suspend or revoke such a person's license and order that restitution be paid. The purpose for the adoption of CUIPA was to ensure state supervision, and not federal preemption, of the business of insurance. Mead v. Burns, 199 Conn. 651, 659 (1986). The purpose was not to establish a private cause of action nor to allow direct enforcement of its provisions by anyone other than the Insurance Commissioner. A review of its provisions bears this out.
The Defendant also claims that the Second Count should be stricken because, in any event, the allegations of the complaint do not support a CUIPA claim. The court agrees. There are no facts alleged in the complaint that would support a violation of Subsection (1) of General Statutes § 38a-816 which refers to "misrepresentation and false advertising of insurance policies." Nor does the complaint contain a required element of a claim under Subsection (15) which refers to the failure by an insurer to pay a health care provider, which is, that the Insurance Commissioner has not determined that a "legitimate dispute exists as to coverage." Vesco v. Utica Mutual, Superior Court, judicial district of Tolland, Docket No. CV 0175294S (July 18, 2001). The allegations of the complaint also do not support a claim under Subsection (6) which refers to "unfair claim settlement practices." That subsection defines a CUIPA violation as a number of different practices which a person is "committing or performing with such frequency as to indicate a general business practice." In Lees v. Middlesex Ins. Co., 229 Conn. 842 (1994), the Court reiterated that "[i]n requiring proof that the insurer has engaged in unfair claim settlement practices `with such frequency as to indicate a general business practice,' (footnote omitted) the legislature has manifested a clear intent to exempt from coverage under CUIPA isolated instances of insurer misconduct. Mead v. Burns, supra, 199 Conn. 666." The Plaintiff's complaint here simply alleges that the "Defendant Allstate has not made a reasonable offer or pay (sic) any amounts under the uninsured provision of the policy, even though the Plaintiff's injuries are permanent and severe." No where in the complaint does the Plaintiff allege that this is a result of a general business practice of the Defendant. Therefore the Motion to Strike the Second Count is granted.
The Defendant claims that the Third Count must also be stricken because one cannot maintain a CUTPA action against an insurer absent an underlying CUIPA claim. The Plaintiff asserts that the allegations of the complaint are sufficient to support a CUTPA claim pursuant to CUTPA alone. Her Third Count does not reference CUIPA but General Statutes § 42-110b. That statute provides that: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." In determining whether a practice is unfair, our Supreme Court has adopted the "cigarette rule" set by the Federal Trade Commission. Under that rule the establishment of an unfair trade practice depends upon proof of: "(1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — whether, in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers [(competitors or other businessmen) 3." A-G Foods, Inc. v. Pepperidge Farm, Inc., 216 Conn. 200, 215 (1990) (internal quotations and citations omitted). In addition, "[a] claim under CUTPA must be pleaded with particularity to allow evaluation of the legal theory upon which the claim is based. Sorisio v. Lenox, Inc., 701 F. Sup. 950, 962 (D. Conn.), aff'd., 863 F.2d 195 (2d Cir. 1988)." S.M.S. Textile Mills, Inc. v. Brown. Jacobson, Tillinghast, Lahan and King, 32 Conn. App. 786, 797 (1993).
Here the Plaintiff simply alleges that the Defendant has not settled her claim for underinsured motorist coverage. Even assuming that a CUTPA claim can be made against an insurer absent allegations of a violation of CUIPA, the allegations of the Third Count are insufficient to support the elements of the "cigarette rule" necessary to support a CUTPA claim. Absent such allegations the CUTPA claim must fail.
The Motion to Strike is granted as to both Counts.
Jane S. Scholl, J.