Injured CT nurse can sue Liberty Mutual over litigation misconduct allegations, Appellate Court says

Aug. 22—A West Hartford woman claims that her insurance company temporarily obstructed her collection of underinsured motorist benefits for a crash that its own investigation showed was 100 percent the other driver's fault, by withholding the investigation results from its lawyers, who falsely denied allegations in a lawsuit she filed.

In a decision published in this week's Connecticut Law Journal, a three-judge panel of the state Appellate Court ruled 2-1 that the woman, Tamara Dorfman, can continue a lawsuit she has filed against the insurance company, Liberty Mutual Fire Insurance Co., accusing it of vexatious litigation.

The decision is the first in which a Connecticut appeals court has ruled on whether a vexatious litigation claim can be based on allegations that a party falsely denied allegations in a previous lawsuit, Judge Hope C. Seeley wrote in the majority opinion.

Asked for comment on the decision, Liberty Mutual spokesman Richard Angevine replied via email, "Liberty Mutual Insurance does not publicly discuss matters in litigation."

Liberty Mutual can ask the state Supreme Court to review the decision. If the case does not end up before the Supreme Court, the next step would be for it to go back to Superior Court in Hartford for a possible trial.

Either way, there will be a continuation of the more than seven years of litigation over the allegation by Dorfman's lawyers that the company "used intentional misstatements, intentional misrepresentations, intentionally deceptive answers, and violated established rules of conduct in litigation."

The lawyers also have charged that Liberty Mutual "knowingly and intentionally engaged in dishonest and sinister litigation practices by taking legal positions that were without factual support" to try to prevent Dorfman from receiving the benefits she was due under her insurance contract, according to the Appellate Court decision.

Lawyer Leonard Isaac, who has represented Dorfman throughout the case, said Thursday that what was she found especially upsetting was that "this was essentially her own insurance company betraying her."

'There is truth'

Isaac said the idea underlying the vexatious litigation case is that "there is a truth. You have to admit what's true."

The case stems from a crash on Sept. 27, 2014, when Dorfman was driving east on Elmfield Street in West Hartford and Joscelyn M. Smith, who was going south on Somerset Street, ran a stop sign and collided with her vehicle, she has alleged in court papers.

Dorfman, a nurse, suffered spinal injuries in her neck, a right forearm injury, headaches and permanent partial disability, among other things, she alleged.

She sued Smith, who ultimately settled the case for the $50,000 limit of his insurance policy. But Dorfman maintained that was insufficient to compensate her for her injuries, so she also sued Liberty Mutual under the underinsured motorist provision of her policy.

Liberty Mutual had done a yearlong investigation of the crash, which included not only getting the police report and Dorfman's recorded statement but also getting a recorded statement from a witness not listed in the police report. All agreed that Smith had run the stop sign, according to Dorfman's allegations recited in the Appellate Court decision.

Two Liberty Mutual claims specialists agreed that Smith was 100 percent responsible for the collision, Dorfman alleges. She also says Liberty Mutual deliberately withheld the results of its investigation from the lawyers it hired to represent it in the case, even though it knew the lawyers needed this information to give accurate answers to her complaint and discovery requests.

Among the false responses she alleges is that Liberty Mutual said it did not know of any witnesses other than those listed in the police report.

In addition to denying some allegations in Dorfman's complaint and saying it had insufficient information to answer others, Liberty Mutual had filed a "special defense" alleging that she was partly responsible for the crash, the Appellate Court decision says.

'No basis in fact'

But Liberty Mutual's "corporate designee" acknowledged in a deposition, or out-of-court testimony, that "there was no basis in fact" for the company's accusation that Dorfman was "in any way responsible for causing the accident," she alleges.

She also quotes the corporate designee as testifying that the company did not single her out "for special or unique treatment" when it responded falsely to her discovery requests.

Dorfman's case against Liberty Mutual went to a trial where the company admitted its liability, contesting only the amount of compensation she sought, the Appellate Court decision says. The jury awarded her almost $170,000, which was reduced by the $50,000 Smith's insurance company had paid her, according to the decision.

The case has followed a twisting path since then.

Dorfman's initial attempts to win damages for Liberty Mutual's conduct during the case failed when the state Supreme Court ruled that the legal theories she initially asserted were blocked by the "litigation privilege."

Meanwhile, she had started the new lawsuit alleging vexatious litigation, in which Judge Cesar Noble ruled against her in state Superior Court in Hartford. That led to her appeal to the Appellate Court.

If Dorfman wins the vexatious litigation case at a trial, she could collect up to three times the amount she lost in legal fees, costs and interest due to what she alleges were the company's improper litigation tactics.

Joining Seeley in the Appellate Court decision was Judge Bethany J. Alvord. Judge Nina F. Elgo wrote a separate opinion disagreeing with the majority on key points but joining its conclusions on some issues.

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