Nazami v. Patrons Mut. Ins. Co.

• Decision Date: 05 December 2006
• Docket Number: No. 17539.,No. 17537.,17537.,17539.
• Citation: 280 Conn. 619,910 A.2d 209
• Court: Connecticut Supreme Court
• Parties: Shahnaz NAZAMI v. PATRONS MUTUAL INSURANCE COMPANY et. al.

Page 209

910 A.2d 209

280 Conn. 619

Shahnaz NAZAMI v. PATRONS MUTUAL INSURANCE COMPANY et. al.

No. 17537.

No. 17539.

Supreme Court of Connecticut.

Argued September 7, 2006.

Decided December 5, 2006.

Zenas Zelotes, for the appellant (plaintiff).

Michael P. Del Sole, New Haven, for the appellee (defendant Fallon Insurance Agency, Inc.).

Jack G. Steigelfest, Hartford, for the appellee (named defendant).

BORDEN, KATZ, PALMER, VERTEFEUILLE and ZARELLA, Js.

ZARELLA, J.

The plaintiff, Shahnaz Nazami, appeals from the judgment of the trial court rendered in favor of the named defendant, Patrons Mutual Insurance Company (Patrons) and its agent, the defendant Fallon Insurance Agency, Inc. (Fallon). The plaintiff claims that the trial court improperly struck the second and fifth counts of her complaint because she sufficiently had alleged: (1) a cause of action against Fallon under the Connecticut Unfair Insurance Practices Act (CUIPA), General Statutes § 38a-815 et seq., and the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., as well as an action in common-law fraud and negligent misrepresentation; and (2) a cause of action against Fallon and Patrons in common-law negligence. Specifically, the plaintiff contends that the trial court improperly determined that Fallon's issuance of a certificate of liability insurance outlining the insurance coverage of the plaintiff's home improvement contractor and Patrons' subsequent cancellation of the policy without notice to the plaintiff were insufficient to support such causes of action. We disagree and, accordingly, affirm the judgment of the trial court.

The following facts and procedural history are relevant to our resolution of this appeal. On or about May 15, 2001, Virgil Gifford, a local home improvement contractor, obtained a general liability insurance policy from Patrons, through Fallon, for his home improvement business in Norwich. On June 7, 2001, Fallon issued a certificate of liability insurance (certificate) to Gifford naming the plaintiff as the "certificate holder." The certificate, which was issued, according to its terms, "as a matter of information only," outlined the liability limits, term and specific disclaimers of liability of the policy as of June 7, 2001. The certificate specifically noted that the policy had taken effect on May 15, 2001, and would expire on May 15, 2002. The certificate further provided that the "issuing insurer" would "endeavor to mail" ten days written notice to the plaintiff should the policy be cancelled before the expiration date. The certificate, however, disclaimed liability therein in the event that notice was not mailed. In addition, the certificate provided that it "confer[red] no rights upon" the plaintiff, did not constitute a contract between Patrons, Fallon and the plaintiff, and was subject to "all the terms, exclusions and conditions" of the policy.

On November 23, 2001, almost six months following the issuance of the certificate, and after the insurance policy had been cancelled without the plaintiff's knowledge, the plaintiff signed a contract with Gifford to renovate her home. Shortly after signing the home improvement contract, Gifford commenced work on the plaintiff's home. In the course of his work, Gifford left uncovered portions of the exterior walls of the plaintiff's home during a winter storm, which ultimately led to water damage within the home. The plaintiff subsequently filed a claim for damages and was informed that Gifford's policy had been cancelled due to nonpayment of premiums.

Thereafter, the plaintiff brought an action against Gifford, Patrons and Fallon to recover for the damage to her home. The operative complaint contained five counts.¹ The plaintiff alleged in count two that she had signed the home improvement contract with Gifford in reliance on the certificate and that Fallon "knew, or should have known, that the [c]ertificate, as drafted, might lead [the plaintiff] to believe that . . . Gifford's insurance coverage was guaranteed until the policy expiration date." The plaintiff alleged that this conduct constituted common-law fraud, negligent misrepresentation, and violations of CUIPA² and CUTPA.³ The plaintiff alleged in count five of her complaint that the failure of Fallon or Patrons to notify the plaintiff of the cancellation of the policy constituted common-law negligence.

Fallon and Patrons filed motions to strike, inter alia, counts two and five of the plaintiff's complaint,⁴ which the trial court granted. The court concluded that the plaintiff had failed to state claims under CUIPA and CUTPA in count two because she did not have a first party relationship with Patrons or Fallon. The trial court further concluded that the plaintiff had failed to state a cause of action for common-law fraud or negligent misrepresentation. With respect to the fifth count, the court concluded that neither Patrons nor Fallon owed the plaintiff a duty to inform her of the cancellation of Gifford's policy under a theory of negligence. The trial court thereafter granted Patrons' and Fallon's motions for judgment and rendered judgment thereon for Patrons and Fallon, from which the plaintiff appealed⁵ to the Appellate Court. We transferred the appeal to this court pursuant to General Statutes § 51-199(c) and Practice Book § 65-1.

I

The plaintiff first claims that the trial court improperly struck the second count of her complaint. Fallon and Patrons respond that the plaintiff failed to allege facts that would support a claim under CUIPA or CUTPA, or a cause of action for common-law fraud or negligent misrepresentation. We agree with Fallon and Patrons.

We begin with the applicable standard of review. "A motion to strike challenges the legal sufficiency of a pleading . . . and, consequently, requires no factual findings by the trial court." (Internal quotation marks omitted.) Greco v. United Technologies Corp., 277 Conn. 337, 347, 890 A.2d 1269 (2006). Therefore, our review of the court's rulings on Fallon's and Patrons' motions to strike is plenary. E.g., id. "We take the facts to be those alleged in the complaint that has been stricken and we construe the complaint in the manner most favorable to sustaining its legal sufficiency. . . . [I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied. . . . Thus, we assume the truth of both the specific factual allegations and any facts fairly provable thereunder. In doing so, moreover, we read the allegations broadly . . . rather than narrowly." (Internal quotation marks omitted.) Id.

A

We first examine whether the plaintiff alleged facts sufficient to support a cause of action under CUIPA or CUTPA. In order to resolve this issue, we must determine whether the conduct alleged in count two constitutes a violation of General Statutes § 38a-816 (1)(a).⁶

It is well established that CUTPA affords a private cause of action to individuals. E.g., Fink v. Golenbock, 238 Conn. 183, 212, 680 A.2d 1243 (1996) ("CUTPA provides a private cause of action to `[a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice'"), quoting General Statutes § 42-110g (a). In Mead v. Burns, 199 Conn. 651, 663, 509 A.2d 11 (1986), this court determined that individuals may bring an action under CUTPA for violations of CUIPA. In order to sustain a CUIPA cause of action under CUTPA, a plaintiff must allege conduct that is proscribed by CUIPA.

Even if we assume, without deciding, that a certificate of insurance is an "estimate, illustration, circular or statement, sales presentation, omission or comparison" within the meaning of § 38a-816 (1), the plaintiff has failed to allege facts that constitute a misrepresentation under that statute. "Section 38a-816 (1) prohibits misrepresentations and false advertising of insurance policies." Heyman Associates No. 1 v. Ins. Co. of Pennsylvania, 231 Conn. 756, 794, 653 A.2d 122 (1995). Traditionally, an action for negligent misrepresentation requires the plaintiff to establish (1) that the defendant made a misrepresentation of fact (2) that the defendant knew or should have known was false, and (3) that the plaintiff reasonably relied on the misrepresentation, and (4) suffered pecuniary harm as a result. Glazer v. Dress Barn, Inc., 274 Conn. 33, 73, 873 A.2d 929 (2005).

In order to determine whether the plaintiff sufficiently alleged misrepresentations within the meaning of § 38a-816 (1)(a), we must examine each allegation made in count two of the plaintiff's complaint. The plaintiff first alleged in count two that Fallon "knew, or should have known, that the [c]ertificate, as drafted, might lead the [plaintiff] to believe that . . . Gifford's insurance coverage was guaranteed until the policy expiration date." The plaintiff also alleged that the certificate "led [her] to believe that . . . Gifford's insurance was guaranteed until the policy expiration date" and that "the [c]ertificate was deceptive insofar as the policy effective date and policy expiration date, when read together, would likely lead the least reasonable person to misconstrue the [c]ertificate as representing that Gifford had secured insurance coverage for a full year." (Internal quotation marks omitted.) The plaintiff further alleged in count two that Fallon knew, or should have known, that the plaintiff "might suffer a detriment" due to her reliance on the certificate. The allegations in count two did not refer to any representations other than those contained in the certificate.

We conclude that the foregoing allegations are in direct conflict with the language of the certificate, which was attached to the complaint and incorporated by reference therein. For example, it is clear that the policy expiration date and the possibility of cancellation are two distinct events...