936 F. Supp. 2d 1
D. Conn.2013Background
- Plaintiff Tucker sues insurers AIG and National Union for coverage-related damages arising from Tucker I’s underlying judgment against Journal Register East (JRE).
- Tucker seeks to recover the $4 million Tucker I judgment from the insurers under Connecticut EPL policy coverage and direct action rights.
- Tucker I judgment was entered in 2008 and later settled in bankruptcy, with Tucker receiving $109,457 and an assignment of JRE’s rights under the EPL policy.
- Stipulation 1/5/2011 reduced JRE’s unsecured claim to $3 million but preserved Tucker’s rights to pursue the $4 million judgment against the insurers.
- Court previously found Tucker had a final Tucker I judgment and that Tucker could pursue a direct action under Conn. Gen. Stat. § 38a-321 against the insurers for unsatisfied portions.
- The operative Amended Complaint includes Count Three (direct action under § 38a-321), Count Four (CUIPA/CUTPA), and other claims; defendants move to dismiss Count Three and strike certain allegations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a stipulated judgment can support a direct action under § 38a-321 | Tucker retained rights against insurers; settlement did not fully satisfy Tucker I judgment | Stipulated settlement fully settled the underlying judgment, leaving no unsatisfied judgment to support § 38a-321 | Count Three may proceed; settlement did not fully satisfy the Tucker I judgment under Connecticut law |
| Whether paragraph 61 and related allegations are relevant to CUIPA/CUTPA claims | CUIPA/CUTPA claims may rely on alleged general business practices; paragraphs describe relevant conduct | Paragraph 61 and other items are irrelevant or prejudicial to the action and should be struck | Paragraph 61 stricken; some CUIPA/CUTPA-related paragraphs may remain with cautions |
| Whether paragraphs 54, 55, 57, 59 contain admissible evidence of unfair claim practices | These paragraphs show general business practices and are potentially admissible under CUIPA/CUTPA | Many references rely on unrelated cases, hearsay, or nonfinal judgments and should be struck or limited | Paragraph 54 limited; paragraphs 55, 57, 59 allowed with cautions; six remaining cases denied without prejudice pending verification |
| Whether the court should sanction defendants for discovery noncompliance | Defendants failed to revise discovery responses after order and should be sanctioned | General objections were withdrawn and revised responses were later provided; sanctions unnecessary | Motion for sanctions denied; no willful noncompliance found; admonition to cooperate |
| Whether Tucker’s CUIPA and CUTPA claims require proof of a general business practice | CUIPA violations may be pled with specific instances showing a pattern | CUIPA claims require a showing of a general business practice; discovery may develop this | Claims may proceed with development; must show frequency or general practice at trial |
Key Cases Cited
- Black v. Connecticut Ins. Co., 239 Conn. 144 (1996) (direct action and assignment under § 38a-321; insurer liability independent of policy form)
- Steinhoff v. Travelers Indemnity Co. of Illinois, 2002 WL 1573353 (Conn.Super.) (stated that a stipulated judgment can form the basis for a direct action against insurer under § 38a-321)
- Gates v. Government Employees Ins. Co., 2008 WL 1971337 (Conn.Super.) (standing under § 38a-321 requires unsatisfied judgment; distinguishable where insurer paid full judgment)
- Lipsky v. Commonwealth United Corp., 551 F.2d 887 (2d Cir. 1976) (motion to strike standard; strong burden to show no admissible evidence)
- Lees v. Middlesex Ins. Co., 229 Conn. 842 (1994) (CUIPA and CUTPA frequency requirement for general business practice)
- Mead v. Burns, 199 Conn. 651 (1986) (CUTPA/ CUIPA backdrop for unfair insurance practices)
- Western World Ins. Co. v. Architectural Builders of Westport, LLC, 520 F. Supp. 2d 408 (D. Conn. 2007) (CUIPA-CUTPA linkage and propriety of CUIPA claims as a basis for CUTPA)
- Royal Indem. Co., 532 F. Supp. 2d 404 (D. Conn. 2008) (CUIPA general business practice requirement and discovery relevance)