Vermont Mutual Insurance Co. v. Natiello et al

Filing 70

ORDER. As set forth in the attached, the Counterclaim Plaintiffs have failed to produce evidence from which a reasonable jury could conclude that the alleged misconduct constituted a general business practice. Because this is a necessary element of an unfair settlement practice claim under CUIPA--and, in the present context, a CUTPA claim--Counterclaim Defendant's motion for partial summary judgment (ECF No. 67 ) as to Counts III and IV of the Counterclaims filed by each of the three Counterclaim Plaintiffs is GRANTED.Signed by Judge Michael P. Shea on 3/26/2020. (Karpman, Michael)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
VERMONT MUTUAL INSURANCE CO.,
Plaintiff,

No. 3:17-cv-2050 (MPS)

v.
DEBORAH NATIELLO; TIMOTHY SUTERA; and
NATHANIEL SUTERA,
Defendants.
RULING ON MOTION FOR PARTIAL SUMMARY JUDGMENT
I.

INTRODUCTION
Counterclaim Plaintiffs Nathaniel Sutera, Timothy Sutera, and Deborah Natiello allege

that Vermont Mutual Insurance Co. violated the Connecticut Unfair Insurance Practices Act
(CUIPA) which is enforceable through the Connecticut Unfair Trade Practices Act (CUTPA).
One of the necessary elements of the CUIPA violation alleged in this case is that the insurer
committed the unfair insurance practice “with such frequency as to indicate a general business
practice.” Conn. Gen. Stat. § 38a–816(6). For the reasons set forth below, I find that the
Counterclaim Plaintiffs have failed to produce sufficient evidence from which a reasonable jury
could conclude that Vermont Mutual committed the alleged unfair practice “with such frequency
as to indicate a general business practice.” Vermont Mutual’s motion for partial summary
judgment is therefore GRANTED.
II.

BACKGROUND
The following facts are undisputed. In late September of 2012, Defendants and

Counterclaim Plaintiffs Nathaniel Sutera and Timothy Sutera were in the process of installing
aluminum soffet material on a rental property owned by Timothy Sutera’s wife, Defendant and
Counterclaim Plaintiff Deborah Natiello. ECF No. 67-2 at 38; ECF No. 1 at ¶¶ 9-11. The rental
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property was insured by Plaintiff and Counterclaim Defendant Vermont Mutual Insurance Co.
(“Vermont Mutual”). ECF No. 1 at ¶¶ 8-9. On September 24, Nathaniel Sutera was on top of
the scaffolding when it fell, causing him very serious physical injuries. ECF No. 67-2 at 38-39;
ECF No. 1 at ¶ 12. Nathaniel Sutera initiated a personal injury action against Deborah Natiello
and Timothy Sutera in the Connecticut Superior Court in New London. ECF No. 1 at ¶ 14. The
case did not settle, despite demands by Nathaniel Sutera that were within the policy limit of
$1,000,000. ECF No. 67-2 at 39-40. On March 9, 2017, after a full trial, the jury returned a
verdict of $7,208,534.68, which was reduced to $3,604,267.34. Id. at 40. On December 7, 2017,
Vermont Mutual filed this action seeking a declaratory judgment that the policy is void due to
alleged misrepresentations of material facts by Timothy Sutera. ECF No. 1 at 4. Counterclaim
Plaintiffs Deborah Natiello, Timothy Sutera, and Nathaniel Sutera have filed counterclaims
alleging, inter alia, violations of the Connecticut Unfair Trade Practices Act (CUTPA) and the
Connecticut Unfair Insurance Practices Act (CUIPA). ECF Nos. 10, 13, 57. Vermont Mutual
has moved for summary judgment as to these claims. ECF No. 67.
III.

LEGAL STANDARD
“Summary judgment is appropriate only if the movant shows that there is no genuine

issue as to any material fact and the movant is entitled to judgment as a matter of law.” Tolan v.
Cotton, 134 S. Ct. 1861, 1866 (2014) (internal quotation marks and citations omitted). “A
genuine dispute of material fact exists for summary judgment purposes where the evidence,
viewed in the light most favorable to the nonmoving party, is such that a reasonable jury could
decide in that party's favor.” Zann Kwan v. Andalex Grp. LLC, 737 F.3d 834, 843 (2d Cir.
2013). The moving party bears the burden of demonstrating that no genuine issue exists as to
any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). If the moving party
carries its burden, “the opposing party must come forward with specific evidence demonstrating
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the existence of a genuine dispute of material fact.” Brown v. Eli Lilly & Co., 654 F.3d 347, 358
(2d Cir. 2011).
In reviewing the summary judgment record, a court must “construe the facts in the light
most favorable to the nonmoving party and must resolve all ambiguities and draw all reasonable
inferences against the movant.” Caronia v. Phillip Morris USA, Inc., 715 F.3d 417, 427 (2d Cir.
2013).
IV.

DISCUSSION
Vermont Mutual has moved for summary judgment as to Counterclaim Plaintiffs’

CUTPA/CUIPA claims on the sole ground that Counterclaim Plaintiffs have failed to produce
sufficient evidence from which a reasonable jury could conclude that the alleged violations of
CUIPA amounted to a general business practice. I agree with Vermont Mutual.
For an insured to prevail on a claim under CUTPA against an insurer, the insured must
establish a violation of CUIPA. See State v. Acordia, Inc., 310 Conn. 1, 37 (2013); Karas v.
Liberty Ins. Corp., 33 F. Supp. 3d 110, 117 (D. Conn. 2014). The CUIPA violation that
Counterclaim Plaintiffs allege here is that Vermont Mutual violated a provision of CUIPA
prohibiting “[u]nfair claim settlement practices,” Conn. Gen. Stat. § 38a–816(6). ECF Nos. 10 at
5-6, 56 at 9-10, 61-2 at 5-6. One of the elements of that CUIPA provision is that the insurer
committed the unfair practice “with such frequency as to indicate a general business practice.”
Conn. Gen. Stat. § 3e8a–816(6); see also Karas, 33 F.Supp.3d at 117; Bacewicz v. NGM Ins.
Co., No. 3:08cv1530 (JCH), 2009 WL 1929098, at *3 (D. Conn. June 30, 2009); Quimby v.
Kimberly Clark Corp., 28 Conn. App. 660, 672, 613 A.2d 838 (1992)); Mead v. Burns, 199
Conn. 651, 657-60 (1986). Thus, the sole question on summary judgment is whether a
reasonable jury could find that Vermont Mutual engaged in the alleged unfair claim settlement

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practices “with such frequency as to indicate a general business practice.” Conn. Gen. Stat. §
38a–816(6)).
To show that an alleged unfair practice was a general business practice under CUIPA,
“[t]he plaintiff must show more than a single act of insurance misconduct; isolated instances of
unfair settlement practices are not sufficient to establish a claim.” Karas v. Liberty Ins. Corp.,
33 F. Supp. 3d 110, 117 (D. Conn. July 21, 2014) (citing cases). There is, however, no “magic
number” of instances a plaintiff must produce to create a genuine dispute. See Belz v. Peerless
Ins. Co., 46 F. Supp. 3d 157, 167 (D. Conn. 2014) (no “magic number” of other instances to
plead a claim under CUIPA). Rather, the evidence must be considered in its totality. Relevant
factors a court may consider in deciding whether the insurer has engaged in the accused practice
“with such frequency as to indicate a general business practice” include, for example:
the degree of similarity between the alleged unfair practices in other instances and the
practice allegedly harming the plaintiff; the degree of similarity between the insurance
policy held by the plaintiff and the policies held by other alleged victims of the
defendant's practices; [and] the degree of similarity between claims made under the
plaintiff's policy and those made by other alleged victims under their respective policies;
....
Belz, 46 F. Supp. 3d at 166 (citing Karas, 33 F. Supp. 3d at 117).
Counterclaim Plaintiffs argue that the testimony of Susan Wood—the Vermont Mutual
insurance adjustor who was deposed in this case—indicating that she had been deposed in
another case against Vermont Mutual involving “a claim of bad faith on Vermont Mutual’s part
for failing to settle within its primary limits” provides evidence of a general business practice.
ECF No. 68 at 9, 62-63.
A reasonable jury could not conclude from this evidence alone, however, that the alleged
unfair practice occurred “with such frequency as to indicate a general business practice.” Conn.
Gen. Stat § 3e8a–816(6). The testimony provided by Ms. Wood refers only to a single claim of
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bad faith against Vermont Mutual, one that was ultimately resolved on unspecified terms. ECF
No. 68-7 at 8-9. Counterclaim plaintiffs do not point to any evidence that that claim or any other
resulted in a finding or admission that Vermont Mutual had engaged in unfair settlement
practices, let alone practices similar to those allegedly perpetrated against the Counterclaim
Plaintiffs in this case. See Tucker v. American International Group, Inc., 179 F. Supp. 3d 224,
246 (D. Conn. 2016) (denying summary judgment on CUIPA claim because there was genuine
dispute about “general business practice issue” where court concluded that “at least four cases
presented offer . . . evidence of an adjudicated wrongful business practice by Defendants that
resembles the allegedly wrongful practices in this case.” (emphasis added)). Further, there is no
indication in the record of how recently the earlier allegations against Vermont Mutual about
which Ms. Wood testified were made—an important consideration given the statute’s focus on
“frequency.” Conn. Gen. Stat. § 38a–816(6).
It is also worth noting that, while there is no “magic number” of instances required, the
cases in which this Court has found sufficient evidence to survive a motion for summary
judgment or, alternatively, sufficient allegations to survive a motion to dismiss, have all involved
at least three other instances. See Tucker, 179 F. Supp. 3d at 246 (evidence of four adjudicated
cases); Belz, 46 F. Supp. 3d at 167 (the three alleged other instance of unfair settlement practices
were sufficient to state a CUIPA claim because of the degree of similarity between them and the
plaintiffs’ case); Karas, 33 F. Supp. 3d at 117 (allegations of “at least three separate instances
involving other homeowners experiencing the same damages caused by the same mechanism and
involving policy language identical to that in the [plaintiffs’] policy” were sufficient to state a
CUIPA claim).

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Moreover, in both Belz and Karas, the Court noted the evident similarity between the
instances of misconduct. By contrast, the evidence of similarity is much weaker in this case.
While Counterclaim Plaintiffs describe both the misconduct alleged by the Counterclaim
Plaintiffs and the alleged misconduct mentioned by Ms. Wood in her deposition as involving
“bad faith in failing to settle within policy limits,” ECF No. 68-2 at 4, that description is too
broad to allow for the sort of comparison of specific, allegedly unfair claims settlement practices
needed to make a determination of similarity. Indeed, such a description could encompass some,
all, or none of the specific, unfair claim settlement practices set forth in the long list found in the
statute, Conn. Gen. Stat. § 38a–816(6)(A)-(O). Such a broad characterization tells us little about
whether the claim settlement practices alleged in this case were similar to those in the earlier
case. In addition, what little detail that can be gleaned from Ms. Wood’s deposition testimony
suggests that the earlier dispute was dissimilar to this one, in that it involved a dispute between
Vermont Mutual and another carrier, and not a dispute between Vermont Mutual and an insured.
See ECF No. 68 at 63.
In short, viewing all the evidence in the record as a whole, and drawing all reasonable
inferences and resolving all ambiguities in the non-movant’s favor, I find that no reasonable jury
could conclude that the alleged unfair practice occurred “with such frequency as to indicate a
general business practice.”
V.

CONCLUSION
For the reasons set forth above, the Counterclaim Plaintiffs have failed to produce

evidence from which a reasonable jury could conclude that the alleged misconduct constituted a
“general business practice.” Because this is a necessary element of an unfair settlement practice
claim under CUIPA—and, in the present context, a CUTPA claim—Counterclaim Defendant’s

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motion for partial summary judgment (ECF No. 67) as to Counts III and IV of the Counterclaims
filed by each of the three Counterclaim Plaintiffs is GRANTED.
.
IT IS SO ORDERED.

/s/
Michael P. Shea, U.S.D.J.
Dated:

Hartford, Connecticut
March 26, 2020

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