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INSURANCE LAW: District Court denies motion for summary judgment as to Unfair Insurance Practices Act claim

INSURANCE LAW: District Court Denies Motion For Summary Judgment As To Unfair Insurance Practices Act Claim

A former employee brought an action against an insurer to collect damages under an employment practices liability insurance policy, based on the insurer’s failure to satisfy a judgment against the former employer rising out of a wrongful discharge lawsuit.

In denying the insurer’s motion for summary judgment as to a Connecticut Unfair Insurance Practices Act claim brought pursuant to the Connecticut Unfair Trade Practices Act, the Connecticut District Court finds that a factual issue exists with regard to whether the insurer engaged in unfair general business practices with regard to the investigation and processing of the claim against the insured employer.

The court held that the plaintiff was required to come forward with some proof that the defendant had an actual business practice of engaging in wrongful acts.  The court stated that relevant factors include the degree of similarity between the alleged unfair practices and other instances in the practice allegedly harming the plaintiff, the degree of similarity between the insurance policy held by the plaintiff and the policies held by the other alleged victims, the degree of similarity between the claims made under the plaintiff’s policy and those made by other alleged victims under their respective policies, and the degree to which the defendant is related to other entities engaging in similar practices.

The court states that it reviewed a number of case decisions presented by the plaintiff and that at least four cases presented offered such evidence of an adjudicated wrongful business practice by the defendants that resembled the allegedly wrongful practices in the case before the court.  The court declined to determine whether it was appropriate to rely on the proffered list of “Ten Worst Insurance Companies” produced by the American Association for Justice or the proffered opinion testimony from the plaintiff’s expert witness, Daryll W. Martin, Percipient Resources, Inc.

Tucker v. National Union Fire Ins. Co. of Pittsburgh, 179 F.Sup.3d 244 (D.Conn. 2016)