Union Street Furniture & Carpet, Inc. v. Peerless Indemnity Insurance Co.,

2010 Conn. Super. LEXIS 1848 (Conn. Super. Ct. July 15, 2010)

In Union Street Furniture & Carpet, Inc. v. Peerless Indemnity Insurance Co., 2010 Conn. Super. LEXIS 1848 (Conn. Super. Ct. July 15, 2010), the insured brought action against its insurer after the insurer declined coverage for a loss resulting from a leaking roof and water damage. Id. at *1. In asserting its claim that the insurer violated the Connecticut Unfair Insurance Practices Act (“CUIPA”), the insured alleged that it had been the standard policy of the insurer to “deny these types of claims and/or claim there is far less coverage than there really is with complete disregard of the terms of its contracts … as is clear from as far back as 2002,” and the insured cited a case in which other policyholders brought a similar action against the insurer (the “Collins case”). Id. at *2-*3. The insurer moved to strike the CUIPA count on the grounds that the insured failed to allege a general business practice as is required under CUIPA. Id. at *3.

The insurer raised several arguments in support of its motion to strike. First, the insurer claimed that the handling of one other insurance claim -- i.e., concerning the Collins case -- did not sufficiently allege a general business practice. Id. at *5. The court disagreed, finding that the insured’s allegations were sufficient to “provide a factual predicate for the [insured’s] assertion that the [insurer] has previously committed similar malfeasances to those alleged in the present case.” Id. at *13. Next, the insurer argued that the Collins case could not support the insured’s claim because in Collins, the court granted summary judgment in favor of the insurer. Id. at *6. The court could not consider this argument on a motion to strike, as the amended complaint did not allege the result of the Collins case. Id. at *16. Finally, the insurer argued that it would be contrary to public policy to allow a policyholder to allege a general business practice simply by “searching the judicial website for a case in which the insurer is a defendant” because such would open the door to discovery concerning prior cases. Id. at *6. The court opined that “[a]lthough the [insurer’s] concerns regarding the public policy of allowing a plaintiff to allege a general business practice by simply locating a past case against the same defendant may be correct, when ruling on a motion to strike, the court is limited to the allegations of the complaint.” Id. at *17-*18. In sum, the court denied the insurer’s motion to strike the CUIPA count. Id. at *21.