This was an interlocutory appeal to the Connecticut Supreme Court (“Supreme Court”) of the Connecticut Superior Court’s certification of a nationwide class action. The gravamen of the plaintiff’s complaint is her claim that the defendant liability insurer, Travelers Property and Casualty Corporation (“Travelers”), paid less than it had represented for the annuity it purchased to fund her structured settlement of a claim arising from an automobile accident. Specifically, the plaintiff alleged that, unbeknownst to her, because Travelers used a captive annuity company, it received a rebate on the commission it otherwise would have had to pay when it bought the annuity. After the Superior Court dismissed the complaint on the ground that, even if what she alleged were true, the plaintiff had not been damaged by Travelers’ conduct since she had received the settlement she bargained for, the plaintiff appealed. The Supreme Court reinstated her claim and remanded the matter, finding that there were theories under which she might be able to recover (e.g., if she had known that Travelers was going to receive a rebate, she might have bargained for a higher settlement or, because Travelers paid slightly less for the annuity, she might have overpaid her contingency legal fee). In reversing the dismissal, the Supreme Court held that Travelers had no affirmative duty to disclose what it would be paying for the annuity and that, in order to prove her case, plaintiff (and anyone else in her position) would have to prove exactly what type of representation was made to her by Travelers, whether her reliance was reasonable, and how she had been damaged by it. Upon remand, the Superior Court certified the case as a nationwide class action, despite the Supreme Court’s clear language that individualized proof would be required for each plaintiff. The Superior Court also did not consider that class certification might be unwarranted because different legal standards and statutes of limitation would likely apply to claims based on settlements signed in various states.
In compliance with Connecticut procedure, Travelers appealed the Superior Court’s decision to the Supreme Court. NELF joined with the Connecticut Business and Industry Association and the American Insurance Association in filing an amicus brief in support of Travelers, arguing that the Superior Court ignored the Supreme Court’s clear holding that individualized proof is essential and also failed to consider the choice of law issues that alone appear sufficient to preclude class certification.
On April 4, 2006, the Supreme Court reversed the class action certification and remanded the matter to the Superior Court. Although the Supreme Court agreed with the amici that the plaintiff had failed to establish the common factual and legal elements that would support a class action, it refused to rule definitively that the case was inappropriate for class certification. The Court noted that the trial court’s decision in favor of class certification had been based on its review of only thirty of Travelers’ voluminous structured settlement files. The Court expressly disapproved of the trial court having based its decision on such a small sample of the potentially relevant files. For this reason, it did not preclude the plaintiff from trying on remand to create a better record in support of class action certification.