Dorfman v. Smith, 342 Conn. 582 (2022)

Citation: Dorfman v. Smith, 342 Conn. 582 (2022)
Parent Document: Dorfman v. Smith, 342 Conn. 582 (2022)
Jurisdiction: Connecticut (state)
Effective Date: 2022-03-29
Original Source: https://www.courtlistener.com/opinion/10278647/dorfman-v-smith/ ↗

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not act abusively in litigation. Litigation is not an
unusual or occasional activity external to the defen-
dant’s business operations but, instead, is an integral
and intrinsic part of its commercial activity—automo-
bile liability claims by their very nature are adjusted,
contested and/or paid either in the shadow of litigation
or in actual litigation. This fact distinguishes the defen-
dant from nearly all other litigants who might claim
protection under the litigation privilege. Indeed, Con-
necticut statutory law recognizes that insurance compa-
nies are fundamentally different from other parties
when it comes to litigation with their insureds. See
General Statutes § 38a-816 (6) (G) (listing as prohibited
unfair claim settlement practice ‘‘compelling insureds
to institute litigation to recover amounts due under an
insurance policy by offering substantially less than the
amounts ultimately recovered in actions brought by
such insureds’’) So, too, our common law recognizes
that an insurer owes its insured a duty of good faith
that would prohibit litigation misconduct in a first-party
action seeking payment under a policy.3
Allowing a liability insurer like the defendant to invoke
the privilege in the present case effectively confers an
entire class of commercial enterprises doing business
in Connecticut with immunity from suit by consumers
seeking damages for wrongful and illegal acts under-
3
See 3 L. Russ & T. Segalla, Couch on Insurance (3d Ed. 2011) § 40:7, pp.
40-11 through 40-12 (‘‘The insurer has a duty of good faith and fair dealing
toward the insured. This duty arises out of the special relationship that
exists between the parties because of their unequal bargaining power and
the potential for an insurer to take advantage of an insured’s hardships when
negotiating to settle or resolve a claim. . . . When determining whether to
settle a claim, the insurer must give at least as much consideration to the well-
being of the insured as it does to its own interests.’’ (Footnotes omitted.));
see also Grand Sheet Metal Products Co. v. Protection Mutual Ins. Co., 34
Conn. Supp. 46, 51, 375 A.2d 428 (1977) (concluding that tort action by
insured against insurer for bad faith is justified in light of ‘‘the unequal
bargaining power of the parties, the special nature of the insurance business,
and the disastrous economic effects that a [bad faith] refusal to pay may
cause the insured’’). I discuss this point in part II A of this opinion.
March 29, 2022 CONNECTICUT LAW JOURNAL Page 87

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