DOCKET NO.: FST-CV-22-6055288-S__
`SUPERIOR COURT
`
`SUPERIOR-COURFT
`
`KRM REALTY,LLCand
`
`:JUDICIALDISFRIETOF
`KD INTERNATIONAL GROUP,INC.
`STAMFORDANORWAELK
`JUDICIAL DISTRICT OF
`AFSFAMFORD.
`
`:
`STAMFORD/NORWALK
`CC APRIL 48,262210, 2024
`:
`AT STAMFORD
`
`SELECTIVE INSURANCE COMPANY OF
`
`
`SOUTH CAROLINAand TWIN CITY FIRE
`
`INSURANCE COMPANY
`
`

`

`AMENDED COMPLAINT
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`NATURE OF THE ACTION
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`1.
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`In
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`this
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`action,
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`plaintiffS KRM REALTY, LLC @4(“‘KRM‘%”)
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`and KD
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`INTERNATIONAL GROUP,INC. ¢(“KDI” and together with KRM,““Plaintiffs)”) seek recovery
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`of insurance amounts due and owingto each of them in connection with losses suffered by Plaintiffs
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`arising out of an accident occurring on February 6, 2020. Although Defendants have madepartial
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`payment of Plaintiffs'Plaintiffs’
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`losses, substantial amounts remain due and owing under the
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`insurancepolicies at issue.
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`De
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`Plaintiffs seek further recovery of consequential and statutory damages based upon
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`Defendants'Defendants’ failure to timely pay claims and bad faith claims handling practices_and
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`tortious interference with contractual relations, as further set forth below.
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`PARTIES
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`3.
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`Plaintiff KRM is a domestic limited liability company with a principal place of
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`business in Spring Valley, New York. KRM is the ownerofreal property located at 121 E. Putnam
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`Avenue, Greenwich, Connecticut (the “““Property-”).
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`4.
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`Plaintiff KDI is a domestic corporation with a principal place of business in
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`Greenwich, Connecticut. Prior to the accident, KDI operated a businessat the Property and was doing
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`business under the name Chocoylatte Gourmet.
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`5.
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`Defendant Selective Insurance Company of South Carolina ((“‘Selective)”) is a
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`corporation formed under the laws of the State of Indiana, with a principal place of business in
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`Indianapolis, Indiana. Selective is registered and authorized to do business in Connecticut.
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`

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`6.
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`Defendant Twin City Fire Insurance Company €(“Twin City“y’) is_a corporation
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`formed under the laws of the State of Indiana, with a principal place of business in Hartford,
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`Connecticut. Twin City is registered and authorized to do business in Connecticut.
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`THE INSURANCE POLICIES
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`The KRM/Selective Policy
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`7.
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`Selective sold KRM a Business Ownersinsurancepolicy, policy number 2397131 (the
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`““KRM/Selective Policy’) with a policy period of January 28, 2020, to January 28, 2021. A copy
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`of the KRM/Selective Policy, the terms of which are incorporated herein by reference, will be filed
`and served as Exhibit A to the complaint in accordance with Connecticut Practice Book Section 10-
`
`8.
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`Among other things, the KRM/Selective Policy provides insurance coverage ofall
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`“direct physical loss of or damage to Covered Property at the premises described in the Declarations
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`caused byor resulting from any Covered Cause of Loss.”
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`9.
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`The Business Owners Coverage Declarations page in the KRM/Selective Policy
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`provides that the Description of Premises covered shall be in accordance with the Schedule of
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`Locations. The Schedule of Locationslists the Property as the Covered Property.
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`10.
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`The KRM/Selective Policy further provides that Covered Property ““includes
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`Buildings——...meaning the buildings and structures at the premises described in the Declarations,
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`including: (1) Completed additions;
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`[and] (2) Fixtures, including outdoor fixtures—....”_ The
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`KRM/Selective Policy covers additional property and losses at the covered premises, as further set
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`forth by the terms and conditions of the KRM/Selective Policy.
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`11.
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`The KRM/Selective Policy further provides that, “f“‘[i]n the event of damage by a
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`Covered Causeof Lossto a building that is Covered Property, [Selective] will pay the increased costs
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`

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`12.
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`By Endorsement, the KRM/Selective Policy further insures KRM against ““the actual
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`loss of Business Income [KRM] sustain[s] due to the necessary suspensionof[.
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`a="KRM’s] ‘operations’....” The Selective Policy defines Business Incometo include “““Net Income
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`...that would have been earned or incurred if no direct physical loss or physical damaged had
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`occurred” plus “Continuing normal operating expenses incurred, including payroll.”
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`13.
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`The KRM/Selective Policy also provides coverage for an ““Extended Period of
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`Indemnity.” That
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`coverage
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`states
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`that
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`“f{“[i]Jf
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`the
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`necessary
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`suspension of your
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`‘eperations' operations’ produces a Business Incomeloss payable underthis policy, we will pay for
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`the actual loss of Business Income you incur during the period that:
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`(a) Begins on the date property
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`except finished stock is actually repaired, rebuilt or replaced and ‘eperatiens'‘operations’ are
`
`mee
`resumed” and endson the earlier of either the date on which KRM couldrestore its ““operations
`
`199
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`to the condition existing prior to the loss or 60 days after the date the property is ““‘actually repaired*”
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`1199
`and ““‘operations”” are resumed.
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`14.
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`The KRM/Selective Policy also provides insurance coverage for ““Extra Expense
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`[KRM] incur[s]_...that [KRM] would not have incurred if there had been no direct physical loss or
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`physical damage to property at the described premises.”_ Among other things, Extra Expense
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`includes costs incurred “f“[t]o repair or replace any property.”
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`15.
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`|The KRM/Selective Policy defines Covered Causes of Lossas “f*‘[d]irect physical loss
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`unless the loss is excluded” or otherwise limited under the Selective Policy.
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`16.
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`No exclusion or other limitation applies to KRM'sKRM’s claim for insurance
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`coverage under the KRM/Selective Policy other than the Limit of Insurance contained in the
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`KRM/Selective Policy. The Limit of Insurance is $800,000. The Business Income and Extra Expense
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`Coverage does not have a monetary limit ofliability.
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`

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`17.
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`Twin City sold KDI a Spectrum Business Owner'sOwner’s Policy insurance policy,
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`policy number 31 SBA AB9O129AB0129 DW(the ““KDI/Twin City Policy“)’’) with a policy period
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`of January 31, 2020, to January 31, 2021. A copy of the KDI/Twin City Policy, the terms of which
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`are incorporated herein by reference, will be filed and served as Exhibit B to the complaint in
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`accordance with Connecticut Practice Book Section 10-29.
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`18.
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`Amongother things, the KDI/Twin City Policy provides insurance coverage ofall
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`““direct physical loss of or damage to Covered Property at the premises described in the Declarations
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`=... caused by or resulting from any Covered Cause of Loss.”
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`19.
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`The KDI/Twin City Policy Declarations page lists the Property as the Covered
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`Property insured. The KDI/Twin City Policy describes the business located at the Covered Property
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`as "Bakery“Bakery Store with Cooking.”
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`20.
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`The KDI/Twin City Policy covers “““Business Personal Property” thatis located in or
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`within 1,000 feet of the covered premises.
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`21.
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`The KDI/Twin City Policy defines Covered Causes of Loss as “RISKS OF DIRECT
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`PHYSICAL LOSS” unless such loss is excluded or otherwise limited under the KDI/Twin City
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`Policy.
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`4.——The KDI/TwinCity Policy further insures KDI against “the actual loss of
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`Business Income [KDI] sustain[s] due to the necessary suspension of [KDFsKDI’s]
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`
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`operations
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`

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`22.
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`....’ The KDI/Twin City Policy defines Business Incometo include ““‘Net Income
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`=z... that would have been earned or incurred if no direct physical loss or physical damaged had
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`occurred” plus ““‘Continuing normal operating expenses incurred, including payroll.”
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`2a
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`199
`The KDI/Twin City Policy also provides “Extended Business Income”” coverage.
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`That coveragestates that “{“[i]f the necessary suspension of your ‘eperatiens"‘ operations’ produced a
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`Business Income loss payable under this policy, we will pay for the actual loss of Business Income
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`you incur during the period that:
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`(a) Begins on the date property is actually repaired, rebuilt or
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`replaced and ‘eperatiens' operations’ are resumed” and endson theearlierof either the date on which
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`KDI could restore its ““operations””to the condition existing prior to the loss or a specified number
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`of days after the date the property is “actually repaired” and ““‘
`”
`““operations“” are resumed. An
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`endorsement to the KDI/Twin City Policy sets sixty (60) days as the specified numberofdays.
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`24.
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`The KDI/Twin City Policy also provides insurance coverage for ““Extra Expense
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`[KDI] incur[s] =... that [KDI] would not have incurred if there had been no direct physical loss or
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`physical damage.....”. Among other things, Extra Expense includes costs incurred “f“[t]o repair
`mo99
`or replace any property.”
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`25.
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`The KDI/Twin City Policy also provides insurance coverage for “TEMPERATURE
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`CHANGE?”for “direct physical loss of or physical damage to ‘perishable stock’” at KDI’s business
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`“caused by or resulting from: ...
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`al change in temperature of humidi
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`
`
` resulting from: ...
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`or partial failure of electrical power” on the premises due to conditions beyond KDI’s control.
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`26.
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`The KDI/Twin City Policy also includes insurance coverage for “Business Personal
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`property Limit — Seasonal Increase” which provides that the limit of KDI’s Business Personal
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`Property coverage under the KDI/Twin City Policy will automatically increase by 25% for seasonal
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`variations under certain conditions. The KDI/Twin City Policy also provides Restaurant Stretch
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`

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`insurance coverage, which provides for additional coverage for certain losses,
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`including claim
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`expenses and temperature change.
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`25.27. No exclusionor other limitation applies to KDEsKDI’s claim for insurance coverage
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`under the KDI/Twin City Policy other than the Limits effasuranceof Insurance contained in the
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`KDI/Twin City Policy. The Limits of Insurance for Business Personal Property is $470,300 in
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`Replacement Costs. The Business Income and Extra Expense Coverage does not have a monetary
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`limit of liability. The limits of insurance for Temperature Change coverage for loss or physical
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`damageto perishable stock is $60,000.
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`26.28.Additionally, both the KRM/Selective Policy and the KDI/Twin City Policy provide
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`coverage for claim expenses incurred in investigating the Plaintiffs'Plaintiffs’ loss, including with
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`respect to taking inventory and auditing business records in order to provide information to Selective
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`and Twin City.
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`THE ACCIDENT AND CLAIMS
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`27.29.On February 6, 2020, at approximately 10:10 p.m., an automobile operated by a third-
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`party struck and damagedthe building and premises located at the Property (the ““‘Accident')-”).
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`KRM is the ownerof the building at the Property. KDI had leased the building since 2017, and prior
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`to the accident it used the premises to operate a bakery and cafecafé business under the name
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`Chocoylatte Gourmet.
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`In 2020, prior to the accident, KRM purchased the premises and assumed
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`KDEsKDI’s lease from the prior owner.
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`28.30.Chocoylatte Gourmet had converted and renovated the building into a 1,350 square
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`foot European Style GafeCafé and Bakery. The building space was split approximately 50/50
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`between a full commercial kitchen with a restaurant capacity license and a space foraretail area.
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`Chocoylatte Gourmet had been in operation since July 2019. The business sold various bakery
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`

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`29.31.The accident caused considerable and substantial structural damage to the building.
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`The damage wasso extensive that the building was condemned by the town of Greenwich, requiring
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`extensive coordination with the town in conjunction with rebuilding efforts. According to police
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`reports, the automobile wastraveling in excess of 80 miles per hour whenit crashed into the building.
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`The crash destroyed the exterior fa9adefacade of the building, including knocking downportions of
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`the exterior walls. The interior of the building was in shambles, with the furnishings and inventory
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`ruined and rendered unusable. The accident caused a complete and total cessation of KDEsKDI’s
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`business.
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`30.32.Plaintiffs timely notified Selective and Twin City about the accident and loss and
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`sought coverage under the KRM/Selective Policy and the KDI/Twin City Policy.
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`31,33.Upon information and belief, Selective and Twin City each assigned a claims
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`professionalto investigate Plaintiffs'Plaintiffs’ claims. The Plaintiffs retained a public adjuster, Sabel
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`Adjusters LLC €(“‘Sabel",”),
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`to assist in the calculation and presentation of loss amountsto Selective
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`and Twin City.
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`Selective'sSelective’s Partial Payment of Claims and Refusal to Make Full Payment
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`32.34.In May 2020, Selective wrote to KRM acknowledging that the KRM/Selective Policy
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`provided insurance coverage for the necessary repairs to the building on a ““Replacement Cost
`
`Value” basis. Selective took the position that KRM'sKRM’s loss, less the amount of a deductible
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`and depreciation, was $126,958.18. This amount was far less than an even theinitial estimate that
`had been provided to Selective over a month earlier of over $225,000. |
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`33.35.Selective based its position on a report issued by an engineer hired by Selective. That
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`report failed to includeall work necessary to repair and rebuild the property. In that report, Selective!
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`sSelective’s engineer misrepresented that an engineer hired by Plaintiffs was present during the
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`

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`34.36.Nevertheless, despite admitting that it owed at least $126,958.18 and despite sending
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`correspondence acknowledgingthat obligation, Selective did not send any payment to KRM atthat
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`35.37.Upon information and belief, at some point in time thereafter, Selective sent a check
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`directly to Sabel in the amount of $126,958.18. Despite previous correspondence with KRM,
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`Selective did not give KRM anynotice that it was paying any portion efKRM'sof KRM’s claim or
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`that it was sending any amounts to Sabel instead of to KRM.
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`36-38.Selective made certain monthly payments to KRM for lost business income to cover
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`KRM'sKRM’s mortgage following the accident, and, one year later, also made partial payments
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`towards KRM'sKRM’s tax liability. But, Selective refused to continue making those payments after
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`twelve months, wrongfully contending that KRM'sKRM’s business income coverage had run out
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`despite the fact that the premises werewas not rebuilt. The delay in rebuilding the premises was
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`caused by Selective'sSelective’s wrongful withholding of insurance proceeds, underpayment of
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`claimedloss, alteration or amendmentof property damage estimates in an effort to reduce Selective’s
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`liability without any notice or explanation to KRM and delays in payment of covered claims.
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`Selective refused to honor its Extended Period of Indemnity coverage.
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`Twin GitsCity’s Partial Payment of Claims and Refusal to Make Full Payment
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`3739. Twin City madecertain partial payments to KDI for insurance coverage under the
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`Twin City Policy as follows:
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`Date
`2/24/2020
`4/2/2020
`7/10/2020
`9/24/2020
`3/16/21
`5/7/2021
`5/7/2021
`
`Check No.
`114143152
`114215519
`114360510
`114482897
`114743446
`114823613
`114823610
`
`Amount
`$75,000.00
`$70,833.18
`$25,000.00
`$100,000.00
`$138,640.55
`$123,910.99
`$13,500.00
`
`

`

`8/19/2021
`8/19/2021
`8/19/2021
`8/19/2021
`8/19/2021
`
`114975849
`114975850
`114975852
`114975851
`114975853
`
`$20,000.00
`$10,000.00
`$13,767.88
`$1,500.00
`$1.000.00
`$899,395.70
`
`38.40.In addition, upon information andbelief, Twin City claims to have made
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`payments to Sabel Adjusters LLC in the amount of $15,515.61 on 6/22/2021 and payments
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`to Crystal Restoration Services,Inc. in the total amount of $32,631.79 on 6/19/2020,
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`12/3/2020, and 4/30/2021.
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`39-41. The payments to KDI from Twin City were madelargely over one yearafter the
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`Incident, with only 4 payments made in 2020. On February 24, 2020, Twin City advanced $75,000
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`to KDI against KDEsKDI’s claim for insurance coverage of Finished Goods. On April 2, 2020, Twin
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`City made another payment of $70,833.18 as an advance of amounts owed for both Finished Goods
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`and Raw Materials/Stock. Later, in July and September of 2020, Twin City made small advances to
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`KDIforits business interruption losses. However, Twin City refused to cover KDFsKDI’s full loss
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`of business property, including equipment, furnishings, and inventory, andit failed to cover the full
`
`amount efKDEsof KDI’s business income and extra expense losses. Twin City also altered or
`
`amended damage estimates in an effort to reduce Twin City’s liability under the KDI/Twin City
`
`Policy without any notice or explanation to KDI. Twin City refused to honor its Extended Business
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`Income-ceverage, Temperature Change and Seasonal Change coverages.
`
`
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`42.|However, Twin City refused to cover KDI's full loss of business property,
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`including equipment, furnishings, and inventory, andit failed to cover the full amount of KDI's
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`business income and extra expense losses. Twin City refused to honor its Extended Business
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`

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`40.43.Upon information and belief, at some point during the summer of 2020, Twin City
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`sent a payment due to KDIto Sabel. Despite previous correspondence with KDI, Twin City did not
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`give KDI anynotice that it was paying any portion efKDE'sof KDI’s claim or that it was sending any
`
`amounts to Sabel instead efteofto KDI.
`
`COUNT ONE
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`(Breach of Contract by KRM against Selective)
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`1-41.43.Plaintiff KRM repeats and realleges introductory paragraphs 1 through 4443 asif
`
`fully set forth herein.
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`41.44.Pursuant to the terms of the KRM/Selective Policy, Selective agreed that KRM would
`
`be reimbursedforall ““‘direct physical loss of or damage to Covered Property =... resulting from any
`
`Covered Cause of Loss” as provided fortherein.
`
`42.45.Pursuant to the terms of the Endorsement to the KRM/Selective Policy, Selective
`
`agreed that KRM would bepaidall ““‘actual loss of Business Incomesustain[ed] due to the necessary
`
`suspension of [KRM'sKRM’s] Operations”” as provided for therein.
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`43.46.The Accident was a Covered Cause of Loss under the KRM/Selective Policy and
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`Endorsement which caused considerable damage to the Covered Property and KRM'sKRM’s
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`businessoperations.
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`44.47.Selective has failed to pay KRM thefull value of its covered lossesas a result of the
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`Accident under the terms of the KRM/Selective Policy.
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`45.48.As of the date of filing, KRM has suffered loss arising out of the accident that is
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`covered under the terms of the KRM/Selective Policy and has been demanded from Selective.
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`Despite demandofall amounts due and owing, Selective has failed to meetits contractual obligations
`
`and has refused to pay all amounts due and owing. Upon information andbelief, Selective and Twin
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`

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`City improperly reached agreements as to partial payments to Plaintiffs resulting in Twin City
`
`improperly paying portions of loss covered by Selective.
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`4649.There is presently due and owing to KRM unpaid amounts that are owed pursuant to
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`the terms of the KRM/Selective Policy for structural damage, building repair and replacement, and
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`business interruption loss in an amountto be provenat trial, but not less than $600,000. Among other
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`things, Selective has failed to pay all costs associated with the repair and rebuilding of the premises,
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`plumbing andelectrical expenses, claims expenses incurred in the adjustment of the claim, and
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`improvements and betterments associated with the premises.
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`4750.Selective has further refused to pay KRM'sKRM’s ongoing business interruption loss
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`and damages suffered as a consequence of Selective'sSelective’s failure to make timely payments.
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`KRM has lost
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`the profitable use of the premises and lost business advantage because of
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`Selective'sSelective’s underpayments and delays.
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`48-51.Selective'sSelective’s delay in paying claims and failure to remit payments directly to
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`KRM caused substantial delay in the repair and rebuilding efforts. Selective's_Selective’s wrongful
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`withholding of funds that were due and owing prevented KRM from beingable to retain architects,
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`engineers, and other construction professionals and caused KRM considerable hardship in securing
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`materials and equipmentnecessary for repairs. Selective'sSelective’s delay caused further damageas
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`the cost of construction and construction materials increased considerably during the COVID-19
`
`pandemic, and by creating a window during which copycat competitors took advantage of
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`Chocoylatte Geurment'sGourmet’s closure.
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`49.52.KRM fully performedits obligations under the KRM/Selective Policy.
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`50-53.As a result of Selective'sSelective’s failure to pay and other breaches of contract,
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`including failure to timely pay claims, KRM hassuffered additional, foreseeable, consequential
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`

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`COUNT TWO
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`(Breach of Contract by KDI against Twin City)
`
`1-41.—Plaineficbi4s3.
`
`Plaintiff KDI repeats and realleges introductory paragraphs 1
`
`through 4443 asif fully set forth herein.
`
`$454.Pursuant to the terms of the KDI/Twin City Policy, Twin City agreed that KDI would
`
`be reimbursed for all ““‘direct physical loss of or damage to Covered Property =... caused by or
`
`resulting from any Covered Cause of Loss” as providedfortherein.
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`$2.55.Further, pursuant to the terms efDtofKDI/Twin City Policy, Twin City agreed that
`
`KDI would be paid all ““‘actual loss of Business Income sustain[ed] due to the necessary suspension
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`of [KBEsKDI’s] operations” as provided for therein.
`
`53.56.The Accident was a Covered Cause of Loss under the KDI/Twin City Policy which
`
`caused considerable damage to the Covered Property and KBHsKDI’s business operations.
`
`$4.57.Twin City has failed to pay KDIthe full value of its covered losses as a result of the
`
`Accident under the terms of the KDI/Twin City Policy.
`
`55.58.As of the date of filing, KDI has suffered loss arising out of the Accident that is
`
`covered under the terms of the KDI/Twin City Policy and has been demanded from Twin City.
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`Despite demandofall amounts due and owing, Twin City has failed to meetits contractual obligations
`
`and has refused to pay all amounts due and owing.
`
`56-59.Twin Gity'sCity’s delay in paying claimsand failure to remit payments directly to KDI
`
`caused substantial delay to KDI reestablishing its business. Twin GityCity’s wrongful withholding
`
`of funds that were due and owing prevented KDI from being able to reopenits business in a timely
`
`way. Upon information and belief, Selective and Twin City improperly reached agreements as to
`
`partial payments to Plaintiffs resulting in Twin City improperly paying portions of loss covered by
`
`

`

`inventory, and furnishings, among other things,
`
`increased considerably during the COVID-19
`
`pandemic, and by creating a window during which copycat competitors took advantage of
`
`Chocoylatte Gourmet'sGourmet’s closure.
`
`57.60.There is presently due and owing to KDI unpaid amounts that are owed pursuant to
`
`the terms of the KDI/Twin City Policy in an amountto be provenattrial, but not less than $500,000.
`
`Amongother things, Twin City has failed to pay amounts owed for the equipment and KDIproperty
`
`destroyed or otherwise rendered unusable in the premises. Twin City also has failed to pay for
`
`KDFsKDI’s full loss of business income and extra expenses incurred following the accident.
`
`58.61.KDI fully performedits obligations under the KDI/Twin City Policy.
`
`59.62.Asa result of Twin Gity'sCity’s failure to pay and other breachesof contract, including
`
`failure to timely pay claims, KDI has suffered additional, foreseeable, consequential damages.
`
`COUNT THREE
`
`(Bad Faith by KRM against Selective)
`
`1-54.—_PleintiffKRM53. Plaintiff KRM repeats and realleges paragraphs | through 5453 of
`
`Count Oneasif fully set forth herein.
`
`60.63.The KRM/Selective Policy is a valid, binding and enforceable contract for insurance
`
`between KRM onthe one hand andSelective on the other hand.
`
`6164.Selective sold the KRM/Selective Policy to KRM as a risk managementsolution to
`
`provide an all-in-one solution for a small business ownerto protect against loss from casualty.
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`Uponinformation and belief, Selective markets its Business Owners insurance productbytelling its
`
`prospective customers that ““‘your business is your life, passion andlivelihood, and you needto take
`
`stepsto protect it from loss. If the worst case scenario becomesreality, your business owners
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`

`

`https:/://www.selective.com/for-businesses/businesses-insurance-coverage/business-owners-policy.]
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`Uponinformation and belief, Selective promotes and markets is Business Owners insurance product
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`as providing peace of mind to small business owners.
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`62.65.Implied in every contract is a duty of good faith and fair dealing.
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`63.66.Selective failed to conduct a fair and reasonable investigation into KRM'sKRM’s
`
`claims.
`
`64.67.Selective deliberately and wrongfully breached its contractual and statutory duties to
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`KRM by, amongother things: (i) refusing to make timely payment of covered claim amounts,(1i)
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`failing to pay amounts admittedly due and owing directly to its policyholder, (111) delaying payment
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`of covered claim amounts for pretextual reasons, (iv) altering or amending property damage estimates
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`in an effort to reduceits liabilitywithout any notice or explanation to KRM: (v) denying insurance
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`coverage for physical damage and G¥loss to Covered Property contrary to the clear termsof thepolicy
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`in an effort to reduceits liability to KRM:and (vi) attempting to coerce compromise on covered claim
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`amounts by withholding payment.
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`65-68. Selective'sSelective’s refusal
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`to honor
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`their contractual obligations under
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`the
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`insurance policies and at law wasfrivolous, unfounded, and contrary to law.
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`

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`66-69.Selective'sSelective’s refusal to honor their statutory and contractual obligations is a
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`breach of the covenant of good faith and fair dealing.
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`In refusing to pay KRM'sKRM’s full losses,
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`and in delaying payment of portions of those loss, Selective failed to use good faith and honest
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`judgmentandfailed to use a level of care and diligence that a person of ordinary prudence would
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`exercise in the managementofhis or her own business.
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`6470.KRM madeSelective aware of the factual and legal reasons why Selective erred in
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`denying coverage from the outstanding amounts due and owing.
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`68-71.Selective has no reasonable basis for denying insurance coverage to KRM,and by
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`repeatedly doingso in the face of contrary evidence, Selective knowingly and wrongfully disregarded
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`this lack of reasonable basis and KRM'sKRM’s rights.
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`69.72.Seleetive'sSelective’s deliberate and repeated refusals to provide coverage has been
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`oppressive and undertaken in complete disregard of and in reckless indifference to the rights and
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`interests of KRM for the dishonest purpose of preventing KRM from receiving the full benefits of
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`their insurance policies. In denying coverage, Selective failed to give KRM'sKRM’s interests equal
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`consideration with their own interests. As such, Selective has acted in bad faith and breached the
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`covenantof good faith and fair dealing inherent in the insurancepolicies.
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`79.73.As a result of Selective'sSelective’s bad faith denial of coverage, KRM has been
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`unable to rebuild or repair the premises or resume business operations. Additionally, KRM have been
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`forced to incur undue expenses and payfor the services of attorneys.
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`744.74.KRM is entitled to receive compensation for the substantial damages,
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`including
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`litigation costs and atterne;sattorney’s fees that it incurred as a result of Selective'sSelective’s bad
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`faith denials of coverage. KRM is further entitled to compensatory and punitive damages in an
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`amountto be establishedattrial, as well as such other and further relief as the Court deemsjust and
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`

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`i——COUNTFOER
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`COUNT FOUR
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`(Bad Faith by KDI against Twin City)
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`1-50.—62.Plaintiff KDI repeats and realleges paragraphs 1 through $062 of Count Two as
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`if fully set forth herein.
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`72.75.The KDI/Twin City Policy is a valid, binding and enforceable contract for insurance
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`between KDI on the one hand and Twin City on the other hand.
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`73.76.Twin City sold the KDI/Twin City Policy to KDI to protect KDI from all loss of
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`business property and business incomeresulting from a covered casualty.
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`474.77.Implied in every contract is a duty of good faith and fair dealing.
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`75-78.Twin City failed to conduct a fair and reasonable investigation into KDEsKDI’s
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`claims. For example, Twin City sent a restaurant equipment specialist to the premises in March of
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`2020, purportedly to quantify KDEsKDI’s damages with respect to business personal property,
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`including equipment and contents. Nevertheless, Twin City did not make any payment for these
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`losses during 2020.
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`46-79.Twin City deliberately and wrongfully breachedits contractual and statutory duties to
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`KDI by, amongother things: (i) refusing to make timely payment of covered claim amounts,(11)
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`failing to pay amounts admittedly due and owingdirectly to its policyholder, (iii) delaying payment
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`of covered claim amounts for pretextual reasons,(iv) altering or amending property damageestimates
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`in an effort to reduce its liability without any notice or explanation to KDI, (v) agreeing to pay
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`amounts known to be due under the KRM/Selective Policy without any factual or legal basis and
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`G¥leaving KDI underinsured for business personal property coverage, (vi), overlooking and not
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`considering additional coverages and limits available to its insured, and (vii) attempting to coerce
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`

`

`7780.Twin GitsCity’s refusal to honor its contractual obligations under the insurance
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`policies and at law wasfrivolous, unfounded, and contrary to law.
`
`78-81.Twin Gity'sCity’s refusal to honor their statutory and contractual obligations is a
`
`breach of the covenant of good faith and fair dealing. In refusing to pay KDEsKDI’s full losses, and
`
`in delaying paymentof portions of those loss, Twin City failed to use good faith and honest judgment
`
`and failed to use a level of care and diligence that a person of ordinary prudence would exercise in
`
`the managementofhis or her own business.
`
`79.82.KDI repeatedly made Twin City aware of the factual and legal reasons why Twin City
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`erred in denying coverage from the outstanding amounts due and owing.
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`80-83.Twin City has no reasonable basis for denying insurance coverage to KDI, and by
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`repeatedly doing so in the face of contrary evidence, Twin City knowingly and wrongfully
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`disregarded this lack of reasonable basis and KDEsKDI’s rights.
`
`84.84.Twin Gity'sCity’s deliberate and repeated refusals to provide coverage has been
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`oppressive and undertaken in complete disregard of and in reckless indifference to the rights and
`
`interests of KDI for the dishonest purpose of preventing KDI from receiving the full benefits of its
`
`insurance policies.
`
`In denying coverage, Twin City failed to give KDEsKDI’s interests equal
`
`consideration with their own interests. As such, Twin City has acted in bad faith and breached the
`
`covenant of good faith and fair dealing inherent in the insurancepolicies.
`
`82.85.As a result of Twin Git}'sCity’s bad faith denial of coverage, KDI has been unable to
`
`rebuild or repair the premises or resume business operations. Additionally, KDI has been forced to
`
`incur undue expenses andpayfor the services of attorneys.
`
`83.86.KDI is entitled to receive compensation for the substantial damages,
`
`including
`
`litigation costs and atterney'sattorney’s fees that it incurred as a result of Twin Git}'sCity’s bad faith
`
`

`

`denials of coverage. KDIis further entitled to compensatory and punitive damages in an amountto
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`be established attrial, as well as such other and further relief as the Court deemsjust and proper.
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`COUNTFIVE
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`(Unfair Trade Practices by KRM against Selective)
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`1-63.—_PlaintiffKRM+epeats74.
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`Plaintiffs repeat and reaHegesreallege paragraphs 1
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`through 6374 of Count Threeasif fully set forth herein.
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`84.87.Upon information and belief, Selective is an insurance company licensed to do
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`business in the State of Connecticut, and Selective sells insurance regularly throughout the State of
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`Connecticut.
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`85-88.Selective sold the KRM/Selective Policy to KRM asanall-in-one protection for KRM
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`from loss, including loss of business income, caused by unforeseen casualty.
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`86-89.Selective regularly markets its Business Owners insurance product to businesses in the
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`State of Connecticut as all-in-one protection against loss, including loss of business income, caused
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`by unforeseen casualty.
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`87.90.Selective'sSelective’s advertising of its Business Owners insurance coverage is
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`untrue,
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`immoral, oppressive, unethical, unscrupulous, deceptive and/or misleading.
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`Upon
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`information and belief, Selective routinely misrepresents the benefits, advantages, conditions and
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`terms of its Business Ownersinsurancepolicies.
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`88-91.Upon information and belief, Selective has a general business practice and pattern of
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`misrepresenting the provisions of insurance policies that it sells that relate to coverages at issue in
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`claims presented to them.
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`$9.92.Upon information and belief, Selective and Selective-affiliated companies have faced
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`multiple lawsuits alleging bad faith practices in connecti