Blumberg Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc.
132 Conn. App. 85
Conn. App. Ct.2011Background
- On July 19, 2006, Blumberg Associates Worldwide, Inc. (plaintiff) contracted with Brown & Brown of Connecticut, Inc. (defendant) under the Subway Program Agreement for introducing and facilitating insurance services to Subway franchisees in exchange for commissions.
- Plaintiff facilitated Brown & Brown’s designation as a gold standard insurer for Subway, enabling Brown & Brown to offer services to Subway franchisees in exchange for a percentage of commissions and fees.
- By February 26, 2008, Brown & Brown terminated the contract for cause under § 4(b)(i)(B), citing the plaintiff’s Connecticut license being canceled on January 31, 2006 and not cured within 90 days.
- Plaintiff alleged multiple contract breaches: failure to pay commissions, failure to provide financial statements, and breach based on alleged improper handling of the plaintiff’s license and related notices.
- Brown & Brown moved for summary judgment on counts one, two, three and five; the court granted the motion and denied the plaintiff’s later motion to amend to add an implied covenant claim.
- The plaintiff argued, inter alia, that (a) Brown & Brown’s conduct could constitute prevention of performance, and (b) there was a waiver of the contract’s writing requirement for amendments or waivers; the trial court rejected these arguments and the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Brown & Brown’s conduct prevented performance and excused license maintenance | Plaintiff contends facts show prevention of performance by address changes and mail forwarding failures. | Defendants argue the alleged conduct occurred before the contract and could not constitute prevention; license status was public, not caused by defendants. | Prevention claim fails as a matter of law; conduct before formation cannot support prevention. |
| Whether there was a waiver of the contract’s writing requirement for amendments or waivers | Plaintiff argues waiver could be implied despite lack of written instrument. | Court correctly declined to review given lack of trial court ruling on this issue. | Issue not reviewed on appeal; no waiver finding. |
| Whether the complaint sufficiently alleged bad faith or implied covenant breach | Counts alleging breach of contract may imply breaches of the implied covenant; the complaint alleged bad faith in termination. | Implied covenant requires pled facts showing bad faith; mere allegation of contract breach is insufficient. | Count one failed to allege bad faith; dismissal of implied covenant claim proper on this basis. |
| Whether the trial court abused discretion in denying amendment after summary judgment | Plaintiff sought to open judgment to amend, arguing related claims were overlooked. | Amendment after summary judgment is disfavored and within court's discretion to deny. | Court did not abuse its discretion; denial affirmed. |
Key Cases Cited
- Rafalko v. University of New Haven, 129 Conn.App. 44 (2011) (bad faith requisite for implied covenant breach; preclusion when no bad faith pled)
- Landry v. Spitz, 102 Conn.App. 34 (2007) (implied covenant requires bad faith; mere contract breach insufficient)
- De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424 (2004) (implied covenant and purpose of contract; bad faith standard)
- Miller v. Guimaraes, 78 Conn.App. 760 (2003) (bad faith pleading requirement for implied covenant breach)
- Keller v. Beckenstein, 117 Conn.App. 550 (2009) (pleading bad faith required for implied covenant claim)
- Fidelity Bank v. Krenisky, 72 Conn.App. 700 (2002) (breach of implied covenant requires factual allegations of bad faith)
- DeCorso v. Calderaro, 118 Conn.App. 617 (2009) (pleading standards for material facts on summary judgment)
- Macomber v. Travelers Property & Casualty Corp., 261 Conn. 620 (2002) (no claim for bad faith breach based on preformation conduct)