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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of legal services; they incur proportionately lower litiga-
tion costs than their policyholders, and can reuse work
product from case to case.’’ J. Ellison & T. Law, supra,
*270; see id., *264 (‘‘[l]itigation is the bread and butter of
liability insurance companies and they are comfortable
with it’’). In 2005, ‘‘[t]he insurance industry . . . admit-
ted that it [spent] one billion dollars a year in so-called
‘coverage litigation’ ’’ in the property and casualty field
alone. Id., *265 and n.32. Even with these enormous
expenditures, insurance companies can profit by engag-
ing in dilatory litigation tactics because ‘‘insurance com-
panies earn investment income—a profit— during an
insurance coverage dispute with a policyholder. This
is done by continuing to invest the policyholder’s premi-
ums and the reserves for the duration of the dispute.’’
Id., *270. ‘‘If its investments have been good, it may even
have made enough to cover any prejudgment interest,
costs, or consequential damage[s] award, or counsel
fees collected by the policyholder.’’ (Internal quotation
marks omitted.) Id., *272. This systemic imbalance
‘‘allow[s] insurance companies to wage wars of attrition
against individual policyholders who litigate an insur-
ance dispute once in a lifetime.’’23 Id., *270. Even if
and is subject to its disciplinary oversight. Fourth and finally, insurance
companies are in the business of litigation, whereas insureds are not, which
I believe is one of the primary reasons that the law imposes a common-law
and statutory duty of good faith in connection with, among other things,
an insurance company’s litigation related conduct. At least when the system
is working properly and each side is represented by counsel, no comparable
imbalance exists with respect to litigation attorneys, because each party
has one. At the very least, even an unrepresented party knows that it is not
‘‘in good hands’’ when relying on opposing counsel.
23
As the court in Poling v. Motorists Mutual Ins. Co., supra, 192 W. Va.
46, stated, ‘‘[o]ften in lawsuits, there is a disparity of bargaining power
between the plaintiff and [the] defendant. In most cases, the defendant has
a resource advantage over the plaintiff and is able to draw out a trial
into a prolonged blizzard of mindless motions, countless continuances, and
dreadful delay.
‘‘The mere fact that after months of delay and hassle the insurance com-
pany deigns to speak to the injured party and settles the case for the policy
limits after realizing that the plaintiff is not going to accept some outlandish
Page 120 CONNECTICUT LAW JOURNAL March 29, 2022

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