In Vincoli v. Hartford Underwriters Ins. Co., FST-CV-09-5009591-S (Conn.Super. Sept. 24, 2009), a Connecticut Superior Court recently denied an Insurer's motion to strike counts alleging bad faith and violations of CUTPA from a complaint. The Insured was seriously injured when his car struck a tree after he was forced to take evasive action to avoid colliding with a phantom motorist. A police investigation corroborated the Insured's summary of the accident. The Insurer, however, denied the Insured's claim for uninsured motorist coverage for the damages he sustained in the accident because it questioned the liability determination of the police and the existence of the phantom motorist. The Insured brought suit against the Insurer for breach of contract, bad faith and for violation of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110b ("CUTPA"). The Insurer moved to strike the counts alleging bad faith and violations of CUTPA from the complaint.
With respect to the count alleging breach of the covenant of good faith and fair dealing, the court recognized that a split of authority exists among Connecticut courts considering which "factual allegations are sufficient to constitute the element of bad faith." Some courts require specific allegations establishing a dishonest purpose or malice, and stress that such a claim must be alleged "in terms of wanton and malicious injury [and] evil motive." Other courts apply a less stringent standard, requiring allegations from which a "reasonable inference of sinister motive can be made." The complaint alleged that the Insurer "failed to conduct a reasonable investigation, failed to consider evidence, inappropriately accused the plaintiff of negligent conduct and refused to credit information from the plaintiff and the police . . . ." The court concluded that these allegations, if true, were sufficient to allege a claim of bad faith.
Turning to the CUTPA count, the Insurer argued that the Insured's failure to plead a general business practice as required under the Connecticut Unfair Insurance Practices Act, Conn. Gen. Stat. § 38a-815 et seq. ("CUIPA"), rendered the CUTPA claim insufficient. The court held, however, that a CUTPA claim can stand independent of a plaintiff's inability to plead a CUIPA count, provided that the complaint alleges sufficient facts to establish unfair and deceptive trade practices under CUTPA. Since the CUTPA count alleged that the Insurer "refused to pay claims, compelled insureds to institute litigation simply to recover amounts due to them under their existing policies . . . neglected to make good faith settlement of the plaintiff's claims and . . . failed to make settlement under similar circumstances of other policy holders' claims," the court concluded that the Insured plead facts which, if true, were sufficient to support a CUTPA claim. Accordingly, the Insurer's motion to strike was denied.