Plaintiff Must Prove General Business Practice to Get Bad Faith Damages

Описание: Accepting Claim but Argue Amount Not Bad Faith

In Paul Harrigan v. Fidelity National Title Insurance Company, No. AC 44424, Court of Appeals of Connecticut (September 6, 2022) the dispute was resolved after a lengthy and detailed examination of the facts and law digested below.
FACTS

Paul Harrigan, appealed from the judgment of the trial court, following a bench trial, rendered in part in favor of the defendant, Fidelity National Title Insurance Company, in connection with a title insurance policy (title policy) issued by the defendant to the plaintiff. Harrigan challenges the judgment in favor of the defendant only with respect to count two of the operative complaint, the third revised complaint, which alleges that the defendant’s conduct in handling an insurance claim filed by the plaintiff pursuant to the title policy violated the Connecticut Unfair Insurance Practices Act (CUIPA); General Statutes § 38a-815 et seq.; and that such unfair and deceptive acts or practices of the defendant thereby violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. Harrigan claims on appeal that:

the court applied an incorrect standard in its analysis of whether the defendant violated CUIPA by requiring a finding of common-law bad faith by the defendant for the plaintiff to establish a violation of CUIPA,
when the proper standard is applied, the record sufficiently demonstrates that the defendant violated the relevant provisions of CUIPA, and
the evidence submitted by Harrigan establishes that the defendant’s unfair practices were part of a general business practice, as required under General Statutes § 38a-816 (6).

The court found that sometime in the late fall of 2011, Harrigan conclusively learned that he did not, in fact, hold title to the disputed area. By letter to the defendant Harrigan made a claim upon his title insurance policy regarding the disputed area. By letter to Harrigan the defendant acknowledged receipt of his claim and the defendant essentially accepted his claim. The issue between the parties always involved the claim’s value.

In a third revised complaint, the plaintiff alleged four counts against the defendant. The second count, which alleges a violation of CUTPA, is the only count at issue in this appeal. In count two, the Harrigan alleged that the defendant was involved in the trade or commerce of providing title insurance coverage to individuals and entities who hold title to real property and that the defendant engaged in unfair and deceptive acts or practices in its administration of the title policy and handling of the plaintiff’s claim in violation of CUIPA.

The matter was tried to the court, which rendered judgment in part in favor of the defendant with respect to counts two, three and four of the third revised complaint.
ANALYSIS

In order to sustain a CUIPA cause of action under CUTPA, a plaintiff must allege conduct that is proscribed by CUIPA. A plaintiff cannot bring a CUTPA claim alleging an unfair insurance practice unless the practice violates CUIPA.


The plaintiff, having failed to establish a general business practice of the defendant, has failed to set forth a valid CUIPA claim, which is fatal to his CUTPA claim in count two. The court, therefore, properly rendered judgment in favor of the defendant with respect to the CUTPA claim in count two.

ZALMA OPINION

Delay in resolving a claim due to actions of the insured and the insurer – whether less than competent claims handling – is not evidence of bad faith or violation of the state statutes requiring insurers to treat the insured fairly and in good faith. The trial court and the appellate court decided there was no evidence of a general business practice to act in bad faith and the claim of Harrigan that the insurer acted in bad faith failed after a lengthy and detailed opinion.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE is available at http://www.zalma.com and [email protected].

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