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Tucker v. Am. Int'l Grp., Inc. - 745 F. Supp. 2d 53 (D. Conn. 2010)

Rule:

The Connecticut legislature provides injured parties a direct cause of action against the responsible party's insurer by statute under set circumstances. Connecticut's Direct Action Statute, Conn. Gen. Stat. Ann. § 38a-321, dictates that once a final judgment is rendered against an insured for loss or damage covered by an insurance policy and the judgment remains unsatisfied for more than 30 days, the injured party is subrogated to the rights of the insured defendant and may proceed with an action against the insurer to the same extent that the defendant could have enforced his claim against that insurer.

Facts:

Plaintiff Teri Tucker brought an action to recover damages from her former employer’s insurers, defendants International Group, Inc. (AIG) and National Union Fire Insurance Company of Pittsburgh, PA (National Union), arising from her unlawful discharge in 2003. In this action, she sought to collect from the defendant insurers the $4 million judgment rendered in her favor in Tucker v. Journal Register East, Doc. # 3:06-CV-307 (SRU) (Tucker I), the prior action against her employer, Journal Register East. Pending before the Court were the Defendants' Motion to Dismiss the action pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendants contended that Plaintiff has no standing to bring her action against them as insurers under Connecticut’s Direct Action Statute, Conn. Gen. Stat. § 38a-321, because she has not obtained a "final judgment" against the insured, as required by the terms of that statute. Furthermore, Defendants argued that Plaintiff’s action failed to state a valid claim against them because that action was outside the scope of Bankruptcy Judge’s ruling when he granted a modification of the bankruptcy stay. The Defendants also contended that the Complaint should be dismissed against AIG because AIG was not a proper party to the action. According to the Defendants, Plaintiff has failed to set forth sufficient factual allegations to justify the piercing of AIG’s corporate veil as the parent company of National Union.

Issue:

Should the federal district court grant defendant insurers' motion to dismiss?

Answer:

No.

Conclusion:

The court held that the issue of whether the plaintiff has obtained a “final judgment” against Journal Register East in Tucker I, which was a prerequisite for her action under Connecticut's Direct Action Statute, Conn. Gen. Stat. § 38a-321, was not ripe for adjudication at this time. Second, the court held that Defendant’s motion to dismiss the action as outside the scope of the Bankruptcy Judge’s ruling to lift the automatic stay was denied, as the judge clearly contemplated that Plaintiff would proceed against the insurers for the purpose of determining insurance coverage of her damages. Moreover, Defendants' motion to dismiss on the grounds that AIG was not a proper action to the action was denied. Although AIG was not an insurer on the EPL Policy by its terms, Plaintiff has alleged sufficient facts at the pleading stage to make a plausible claim that AIG should be included in this action under the instrumentality test for piercing the corporate veil. Specifically, she has alleged that AIG had control of the business practices relating to the EPL Policy at issue: AIG and National Union both sold the EPL Policy to the Journal Register Company.

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