919 F. Supp. 2d 219
D. Conn.2013Background
- Plaintiffs Thomas Lee and Gloria Lee held renewal automobile policies with AIG Casualty.
- A July 22, 2008 notice canceled policy AIG PCG 0007906716 for nonpayment, effective August 2, 2008, while plaintiffs were away from home.
- Plaintiffs discovered the cancellation after the accident on August 3, 2008 and learned coverage would be denied.
- AIG later informed plaintiffs the cancellation remained in effect; a refund check was issued for part of the premium.
- Plaintiffs filed suit alleging improper cancellation notice (failure to comply with § 38a-343(a)) and claims for bad faith, CUIPA, and CUTPA; both sides moved for summary judgment.
- The court held that the policy was not properly cancelled due to untimely notice, and thus the policy remained in effect; several other counts were dismissed or deemed moot or unproven.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether notice of cancellation satisfied § 38a-343(a) | Lee(s) contend notice was defective and untimely | AIG followed § 38a-343(a) and certificate of mailing sufficed | Notice untimely; cancellation invalid; policy enforceable |
| Whether reinstatement claim is justiciable | Reinstatement alleged after invalid cancellation | Remains moot once policy deemed in force | Moot; no breach based on reinstatement |
| Whether punitive damages may be awarded for the cancellation conduct | Recklessness supports punitive damages | No reckless disregard proven | Recklessness not proven; punitive damages denied |
| Whether there was a bad faith/fair dealing violation | Breaches of covenant due to mishandling cancellation | No bad faith; proper process albeit with timing error | No breach of the implied covenant |
| CUIPA/CUTPA violations | CUIPA/CUTPA violated by notice and conduct | No CUIPA/CUTPA violation; actual notice obtained; timing defect | CUIPA through CUTPA not proven; independent CUTPA claims fail |
Key Cases Cited
- Echavarria v. National Grange Mutual Ins. Co., 275 Conn. 408 (2005) (certificates of mailing governed by USPS Domestic Mail Manual; Chevron deference applied)
- Majernicek v. Hartford Casualty Insurance Co., 240 Conn. 86 (1997) (strict compliance with notice requirements required by statute)
- Johnston v. American Employers Ins. Co., 25 Conn. App. 95 (1991) (actual notice suffices under § 38a-343; mailbox rule discussed)
- Travelers Ins. Co. v. Hendrickson, 1 Conn. App. 409 (1984) (note on ten-day nonpayment notice; context in statutory wording)
- State v. Courchesne, 262 Conn. 537 (2003) (adopted plain meaning rule; statutory interpretation framework)