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In Paul Harrigan v. Fidelity National Title Insurance CompanyNo. AC 44424, Court of Appeals of Connecticut (Sept. 6, 2022), the dispute was resolved after a lengthy and detailed examination of the facts and law summarized below.
Paul Harrigan, appealed the district court’s judgment, after a bench trial, in favor of the defendant, Fidelity National Title Insurance Company, in part, 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 two of the operative complaint, the third amended complaint, alleging that the defendant̵7;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 statute § 38a-815 et seq.; and that such unfair and deceptive acts or practices by the defendant thereby violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. Harrigan argues on appeal that:
- the court applied an incorrect standard in its analysis of whether the defendant violated CUIPA by requiring the defendant to establish that the defendant was guilty of common law bad faith in order for the plaintiff to establish a violation of CUIPA;
- when the proper standard is applied, the record sufficiently shows that the defendant violated the relevant provisions of CUIPA, and
- the evidence presented by Harrigan shows that the defendant’s unfair practices were part of a general business practice, as required by General Statutes § 38a-816 (6).
The court found that sometime in the late fall of 2011, Harrigan finally learned that he did not actually have title to the disputed area. By letter to the defendant, Harrigan made a claim on his owner’s insurance in respect of the disputed area. By letter to Harrigan, defendant acknowledged receipt of his claim and defendant essentially accepted his claim. The issue between the parties was always about the value of the claim.
In a third amended complaint, plaintiff asserted four counts against defendant. The second count, alleging a violation of CUTPA, is the only count at issue in this appeal. In count two, Harrigan alleged that the defendant was engaged in the trade or commerce of providing title insurance coverage to individuals and entities holding 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 claims in violation of CUIPA.
The matter was tried to the trial court, which entered judgment in part in favor of the defendant as to counts two, three, and four of the third revised complaint.
To maintain a CUIPA case under CUTPA, a plaintiff must allege conduct prohibited by CUIPA. A plaintiff cannot bring a CUTPA claim alleging an unfair insurance practice unless the practice violates CUIPA.
If the factual basis for a district court’s decision is questioned, the clearly incorrect standard of review applies. A court’s judgment is clearly erroneous only in cases where the record contains no evidence to support it, or in cases where there is evidence, but the reviewing court is left with the definite and firm belief that a mistake has been committed. However, the trial court’s legal conclusions will stand only if they are legally and logically correct and consistent with the facts of the case.
There was no evidence to support a finding that the defendant violated the statute. Indeed, the district court specifically found that the primary issue in the case was the value of the plaintiffs’ claim, not its legitimacy, that at no time did the defendant indicate any unwillingness to pay the claim, and that the defendant never denied the claim and, in fact, essentially accepted the plaintiffs’ claim not long after receiving his letter of demand.
The evidence presented by Harrigan showing that the parties disagreed on various issues such as the date of the loss, the relocation of the septic system, and the value of the plaintiffs’ claim, simply does not show any misrepresentation by the defendant, and neither did the court. find someone. Indeed, the court specifically found that at no time during the claims settlement process did the defendant’s personnel act in bad faith or come close to doing so.
Additionally, the evidence presented shows numerous communications between plaintiff and representatives of defendant regarding the status of plaintiff’s claim and why its resolution had been delayed for more than five years, which could support a finding of a violation of subdivisions (B) and (F) of § 38a-816 (6), both of which relate to delays in communication and settlement of the claim.
At trial, the plaintiff sought to admit exhibit 44, which consisted of the consumer complaints
The Court of Appeal then established general principles for its resolution of this question. The Supreme Court has concluded “that claims of unfair settlement practices under CUIPA require a showing of more than a single act of underwriting failure.” [Mead v. Burns, 199 Conn. 651, 659, 509 A.2d 11 (1986)]
In the present case, the court specifically found that the defendant’s actions in this case clearly did not represent shining examples of good claims management practices, and that the issues that arose and the delay that resulted in this case were due, in no small part, to Harrigan’s unrealistic expectations clashing with the defendant’s insane business inefficiency. Furthermore, a large part of the delay in the present case was attributable to the issue raised by the plaintiff about the septic system, which the court found to be irrelevant to the reduction in value. The delays in the present case were therefore caused by both the plaintiff and the defendant and were partly due to the inefficiency of the companies and the mismanagement of the defendant. The evidence in the present case does not support a finding that the defendant ignored notices from the plaintiff
Plaintiff, having failed to establish defendant’s general business practices, has failed to state a valid CUIPA claim, which is fatal to his CUTPA claim in Count Two. The court therefore properly entered judgment in favor of the defendant with respect to the CUTPA claim in count two.
Delays in settling a claim due to acts of the insured and the insurer—whether less than competent claims handling—are not evidence of bad faith or a violation of state statutes requiring insurers to treat the insured fairly and in good faith. The trial court and appellate court ruled that there was no evidence of a general business practice of acting in bad faith and Harrigan’s claim that the insurer acted in bad faith failed after a lengthy and detailed deposition.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and email@example.com.
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