Court Opinion

ID: 2822150
Source: CourtListenerOpinion
Date Created: 2015-07-30 21:11:40.264092+00
Date Added: 2024-06-11T11:31:05.398920
License: Public Domain

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            ARTIE’S AUTO BODY, INC., ET
             AL. v. THE HARTFORD FIRE
               INSURANCE COMPANY
                      (SC 19219)
       Rogers, C. J., and Palmer, Zarella, Eveleigh, McDonald,
                      Espinosa and Robinson, Js.
        Argued January 13—officially released July 21, 2015

  Jonathan M. Freiman, with whom were Aaron S.
Bayer and Benjamin M. Daniels, and, on the brief,
Robert M. Langer and Carolina D. Ventura, for the
appellant (defendant).
  David A. Slossberg, with whom were David L. Belt
and, on the brief, Nicole H. Najam, Alan Neigher and
Ronald J. Aranoff, pro hac vice, for the appellees
(plaintiffs).
   George Jepsen, attorney general, Gregory T. D’Auria,
solicitor general, and Jane R. Rosenberg, Phillip Rosa-
rio, Brendan T. Flynn and Jonathan J. Blake, assistant
attorneys general, filed a brief for the state of Connecti-
cut as amicus curiae.
  Michael D. Shumsky filed a brief for Timothy J. Muris
and J. Howard Beales as amici curiae.
                          Opinion

   PALMER, J. The plaintiffs, Artie’s Auto Body, Inc.,
A & R Body Specialty, Skrip’s Auto Body, and the Auto
Body Association of Connecticut (association),1
brought this class action against the defendant, The
Hartford Fire Insurance Company, on behalf of more
than 1000 independent automobile (auto) body repair
shops in Connecticut. They principally claimed that the
defendant had violated the Connecticut Unfair Trade
Practices Act (CUTPA), General Statutes § 42-110a et
seq., by requiring its staff motor vehicle physical dam-
age appraisers (appraisers), who must be licensed in
accordance with General Statutes § 38a-790 (a),2 to use
the hourly labor rates agreed on by the defendant and
the plaintiff auto body shops, instead of rates that more
accurately reflect the actual value of those services,
when appraising auto body damage sustained by the
defendant’s insureds. According to the plaintiffs, the
defendant’s conduct constituted an unfair trade prac-
tice because it offended the public policy found in § 38a-
790-8 of the Regulations of Connecticut State Agencies,3
which requires appraisers to ‘‘approach the appraisal
of damaged property without prejudice against, or
favoritism toward, any party involved in order to make
fair and impartial appraisals . . . .’’ Regs., Conn. State
Agencies § 38a-790-8 (2). Following a trial, the jury
found in favor of the plaintiffs and awarded them
$14,765,556.27 in compensatory damages.4 Thereafter,
the trial court awarded the plaintiffs $20,000,000 in puni-
tive damages and rendered judgment for the plaintiffs
in the total amount of $34,765,556.27. On appeal,5 the
defendant claims, inter alia, that the trial court improp-
erly denied its motion for a directed verdict and its
motion to set aside the verdict and for judgment not-
withstanding the verdict because § 38a-790-8 does not
prohibit the insurance practices at issue in this case.
We agree and, accordingly, reverse the judgment of the
trial court.
   The following facts, which the jury reasonably could
have found, and procedural history are relevant to our
resolution of this appeal. The plaintiffs commenced this
action in 2003, claiming, inter alia, that the defendant
had engaged in an unfair trade practice by requiring
its appraisers to use artificially low labor rates when
estimating the cost of auto body repairs. The evidence
presented at trial established that the appraisers, when
negotiating with independent auto body repair shops
on behalf of the defendant, used the hourly labor rate
that the defendant paid to shops that were part of the
defendant’s direct repair program (DRP). Under this
program, in return for a steady stream of customer
referrals, auto body repair shops contractually agreed
to perform repairs at an hourly labor rate set by the
defendant. In 2000, that rate was approximately $41 per
hour. In 2009, at the time of trial, the rate had increased
to approximately $46 per hour. The DRP hourly labor
rate was significantly lower than the hourly labor rates
that were posted in the plaintiff auto body shops6 but
were equal to the rates that other insurance companies
in Connecticut paid for auto body repair services. At
the time of trial, the plaintiffs’ posted labor rates were
in the range of $65 to $78 per hour. It also is undisputed
that, with respect to the auto body repair services pur-
chased in this state, almost all of those services are
purchased by insurance companies.7 Thus, as the plain-
tiff auto body shops conceded at trial, because virtually
all of their business is insurance related, it is exceed-
ingly rare for them to be paid their posted hourly labor
rates. For example, one shop owner testified that he
could recall only one customer ever paying him the
posted hourly rate. The plaintiff auto body shops
adduced testimony that their posted rates nevertheless
reflect the true value of their labor, and what they would
receive if the defendant and other insurance companies
were not, by virtue of their market power, suppressing
the hourly labor rate. Testimony presented by the plain-
tiff auto body shops also established that they agree to
work for the DRP rate because they know that, if they
do not, their competitors will, and they cannot afford
to lose the business. As one shop owner put it, ‘‘[i]f I
said, I’m not going to do it, that car would just go down
the street . . . .’’ Another owner testified that, if he
started demanding that customers pay him the posted
rate, he ‘‘[would] have an empty shop.’’
   The evidence at trial further established that the
hourly labor rate for auto mechanical service work in
Connecticut, the vast majority of which is purchased
by consumers rather than by insurance companies, is
almost twice that of auto body repair work, even though
both types of repairs require comparable training, skills
and equipment. Mike O’Mara, a licensed appraiser who
worked for the defendant for twenty years, testified
that, if the defendant had allowed him to do so, he
would have used a higher hourly labor rate when esti-
mating the cost of auto body repairs because he
believed the prevailing rate was too low, a state of
affairs that he attributed to the ability of the insurance
companies to effectively dictate that rate. O’Mara testi-
fied that, if he and an auto body repair shop could not
agree on a labor rate, he would call his supervisor, who
would either authorize an increase or tell the shop that
the insured would have the repair done elsewhere.
   In 2002, O’Mara and three of his colleagues wrote a
letter to the attorney general, expressing concern that
they could be exposing themselves to liability by using
the prevailing labor rate in their negotiations with inde-
pendent auto body repair shops because, in their view,
§ 38a-790-8 required them to write estimates that were
fair and reasonable, and they did not believe that the
prevailing rate was fair and reasonable.8 O’Mara subse-
quently met with representatives of the state Insurance
Department (department), which assured him that he
could continue using the prevailing rate when negotiat-
ing on behalf of the defendant. At the time of trial,
O’Mara, who by then was working as an appraiser for
one of the plaintiff auto body shops, testified that,
although he no longer worked for the defendant, he
still used DRP labor rates when estimating the cost of
auto body repairs and did not believe that he was vio-
lating § 38a-790-8 in doing so.
   At the close of evidence, the trial court instructed the
jury that, to prevail on their CUTPA claim, the plaintiffs
were required to prove that the defendant’s practices
violated at least one prong of the so-called ‘‘cigarette
rule,’’ which is the test that this court has adopted for
determining liability under CUTPA.9 Specifically, the
court stated: ‘‘Certain guidelines have been established
as to what constitutes an unfair trade practice under
CUTPA. The plaintiffs must establish that one or more
of the defendant’s alleged practices [meet] at least one
of the three following criteria: (1) it offends public pol-
icy, as it has been established by statutes, the common
law or other established concept of unfairness; or (2)
it is immoral, unethical, oppressive or unscrupulous;
or (3) it causes substantial injury to consumers, compet-
itors or other business persons. . . . All three criteria
do not need to be satisfied to support a finding of
unfairness. A practice may be unfair because of the
degree to which it meets one of the criteria or to a
lesser extent it meets all three.’’
   With respect to the first criterion, the court explained
that the plaintiffs were relying on three indicia of public
policy to support their claim that the defendant’s labor
rate practices violated CUTPA. The first such policy,
the court explained, is found in General Statutes § 38a-
816, a provision of the Connecticut Unfair Insurance
Practices Act (CUIPA), General Statutes § 38a-815 et
seq., that includes within the scope of unfair insurance
claim settlement practices, ‘‘not attempting in good
faith to effectuate prompt, fair and equitable settle-
ments of claims in which liability has become reason-
ably clear . . . .’’ General Statutes § 38a-816 (6) (F).
The second policy, the court stated, is found in § 38a-
790-8, the code of ethics for motor vehicle physical
damage appraisers, which requires an appraiser to
‘‘approach the appraisal of damaged property without
prejudice against, or favoritism toward, any party
involved in order to make fair and impartial appraisals,’’
to ‘‘disregard any efforts on the part of others to influ-
ence his judgment in the interest of the parties
involved,’’ and to ‘‘prepare an independent appraisal of
damage.’’ Regs., Conn. State Agencies § 38a-790-8 (2)
through (4). The third policy, the court stated, is found
in certain guidelines that the department has issued to
assist insurance companies in determining appropriate
hourly labor rates to pay independent auto body repair
shops. See Insurance Department, Insurance Depart-
ment Guidelines Concerning Labor Rates (January 29,
2007), available at http://www.ct.gov/cid/lib/cid/
GuidelinesJan292007.pdf (last visited July 8, 2015). The
court also explained, however, that the introduction to
those guidelines, entitled ‘‘Scope and Methodology,’’
provides: ‘‘ ‘To be clear, the [d]epartment has no statu-
tory or regulatory authority to regulate [l]abor [r]ates.
These guidelines are being issued in response to
requests to advise insurers and auto body repair shops
on what the [d]epartment considers to be the ‘‘best
practices’’ with regard to the setting of [l]abor [r]ates.’ ’’
The court further explained that the guidelines then
identify specific factors that the department ‘‘encour-
ages’’ insurance companies to consider when negotiat-
ing hourly labor rates, including, inter alia, the cost of
doing business in the geographic area where a shop is
located, whether the shop is an independent auto body
repair shop or a DRP shop, and the prevailing labor
rates in the geographic area where the shop is located.
   In the course of its deliberations, the jury submitted
two questions to the court concerning § 38a-790-8. First,
the jury inquired whether § 38a-790-8 governs an
appraiser’s determination of hourly labor rates because
the regulation provides that an appraiser must approach
the appraisal of damaged property without prejudice
against, or favoritism toward, any party, but does not
say anything about labor rates. Second, the jury asked
whether the words ‘‘party involved’’ and ‘‘parties,’’ as
used in the regulation, refer to insureds and insurers
only, or to auto body repair shops, as well. In response
to these questions, the trial court instructed the jury in
relevant part as follows: ‘‘Section 38a-790-8 is a regula-
tion of the [department] promulgated by the [Insurance
Commissioner (commissioner)]. All administrative reg-
ulations must be authorized by enabling legislation. In
this case, the legislat[ure] has required that any person
acting as an appraiser for motor vehicle physical dam-
age claims on behalf of any insurance company or firm
or corporation engaged in the adjustment or appraisal
of motor vehicle claims must be licensed every two
years by the . . . commissioner. That statute, which
is § 38a-790 . . . then provides [that] the commissioner
may adopt reasonable regulations concerning standards
for qualifications, suspension or revocation of such
licenses and the methods by which licensees shall con-
duct their business. . . .
   ‘‘The regulation you have asked about, § 38a-790-8,
is part of a series of regulations entitled ‘Conduct of
Motor Vehicle Physical Damage Appraisers.’ And § 38a-
790-8 is the code of ethics, which specifies certain
requirements for the conduct of appraisers. . . . It is
not a code of conduct for insurance companies gener-
ally [or] for auto body repair shops. . . .
  ‘‘It is, therefore, the conduct of the licensed appraiser
that is regulated. This regulation expresses a public
policy that licensed appraisers must conduct fair and
honorable dealings without prejudice against or favorit-
ism toward any party involved in the appraisal process
and must disregard any efforts on the part of others to
influence [their] judgment. . . .
  ‘‘My answer [to your first question] is an appraiser’s
responsibility to appraise is not limited solely to dam-
aged property. He or she must assess the extent of
physical damage and also appraise the cost of repairing
that damage, which necessarily involves estimating the
cost of replacement of parts, the number of hours
needed to complete the repairs, and a reasonable hourly
rate to be applied to those hours.
    ‘‘Now, you have . . . a separate exhibit from the one
you asked about, a statement from the commissioner
. . . [in which] he says, to be clear, ‘the department
has no statutory or regulatory authority to regulate
labor rates.’ An insurance company such as [the defen-
dant], therefore, has a right to state a labor rate [that]
it is willing to pay to repair damage to the automobile[s]
of its insureds or other claimants. The issue you must
determine is whether or not, or to what extent, the
public policy of the regulation . . . is offended by [the
defendant’s appraisers] . . . . In that regard, you can
consider whether or not any conduct of [the defendant]
has interfered with the independence of the . . .
appraisers or has caused prejudice against or favoritism
toward any party involved in the appraisal procedure,
or whether or not any . . . appraiser has disregarded
any efforts on the part of others, which . . . could
include the efforts of an insurance company such as
[the defendant], to influence his or her judgment in the
interest of the parties involved.
  ‘‘If you . . . do find that appraiser independence has
been interfered with or has caused favoritism toward or
prejudice against any party involved or that an appraiser
has disregarded any efforts by any party such as but
not limited to an insurance company to influence his
or her judgment, then you may find on that basis that
the public policy of . . . § 38a-790-8 has been offended.
   ‘‘Now, I just made reference several times . . . to
the term ‘parties involved,’ which brings me to your
[next question, regarding the meaning of that term].
. . . My answer is [as] follows. The regulatory scheme
of [§§ 38a-790-1 through 38a-790-8 of the Regulations
of Connecticut State Agencies]—not just § [38a-790-8]
. . . but the whole regulatory scheme—is broad. It
implicates the appraisers’ dealings with insureds, with
other drivers or claimants involved in accidents with
the insureds, insurance companies and repair shops.
All [of] the foregoing would be included within the
ambit of the term ‘parties involved.’ ’’
  The defendant took exception to the trial court’s
instruction that § 38a-790-8 applies to an appraiser’s
determination of hourly labor rates and that the term
‘‘party,’’ as used in the regulation, encompasses auto
body repair shops. The defendant contended that the
regulation was not concerned with the determination
of labor rates because the agency that promulgated it
has no statutory or regulatory authority with respect
to such rates. The defendant further maintained that,
for purposes of applying § 38a-790-8, the term ‘‘parties
involved’’ can refer only to the insurer and the insured
because an appraiser could not possibly owe a duty of
impartiality or reasonableness to the very shops with
whom he is negotiating on behalf of an employer.
   The jury returned a verdict in favor of the plaintiffs,
stating in a response to interrogatories that the plaintiffs
had proven by a preponderance of the evidence that
the defendant’s hourly labor rate practices offend the
public policy embodied in § 38a-790-8. The jury, how-
ever, expressly rejected the plaintiffs’ claim that the
defendant’s conduct offended the public policy embod-
ied in CUIPA or the department’s guidelines for
determining hourly labor rates. The jury also rejected
the plaintiffs’ claim that the defendant’s labor rate prac-
tices satisfied the second and third prongs of the ciga-
rette rule. Specifically, the jury found that the defen-
dant’s hourly rate practices were not immoral, unethi-
cal, unscrupulous or oppressive, and did not cause sub-
stantial injury to the plaintiffs that was not outweighed
by the countervailing benefits to consumers and compe-
tition.
   Thereafter, the defendant filed a motion to set aside
the verdict and for judgment notwithstanding the ver-
dict, arguing, inter alia, that liability under CUTPA may
not be predicated on a public policy reflected in a regu-
lation or in the regulation’s penumbra that does not
apply to insurance companies and does not proscribe
the conduct at issue. The defendant also asserted that
the plaintiffs had failed to meet their burden under the
cigarette rule because, under that test, a trade practice
is deemed to be unfair based on the degree to which
it meets one prong of the rule or because, to a lesser
extent, it meets all three, and the plaintiffs in the present
case had failed to establish that the defendant’s conduct
violated any prong of the test.10 The trial court rejected
these arguments and thus denied the defendant’s
motion.
   The defendant subsequently filed a motion for recon-
sideration and for sanctions based on the plaintiffs’
failure to disclose two letters that the commissioner
previously had written to the attorney general,
explaining the scope and meaning of § 38a-790-8. The
defendant argued that the letters expressly addressed
the pivotal issue in this case, as reflected in the jury’s
two questions during deliberations, and made clear that,
as a matter of law, § 38a-790-8 does not support the
plaintiffs’ CUTPA claim.
   With respect to the two letters, the record reveals
that, while this case was pending in the trial court, the
association contacted the attorney general and asked
him to bring a parallel CUTPA enforcement action
against the defendant based on the defendant’s pur-
ported violation of § 38a-790-8. See General Statutes
§ 42-110m (providing for CUTPA enforcement actions
by attorney general). The attorney general, in turn,
wrote to the commissioner, requesting authorization to
commence legal action against the defendant and any
other insurers ‘‘whose appraisers have [a] . . . bias
when determining the cost of repairs’’ and who ‘‘are
failing to negotiate reasonable and fair prices for [such]
repairs.’’ Letter from Richard Blumenthal, Attorney
General, to Thomas R. Sullivan, Insurance Commis-
sioner (August 27, 2007) p. 1. By letter dated September
27, 2007, the commissioner declined the attorney gener-
al’s request, explaining that § 38a-790-8, and its enabling
statute, § 38a-790, did not support such an action. Spe-
cifically, the commissioner stated: ‘‘In order to construe
the statute and the regulation together, one must be
cognizant of the scope of the motor vehicle physical
damage appraiser’s license. The appraiser does not have
any authority, pursuant to his license, to establish a
labor rate for auto body repair work. Appraisers do not
have particular expertise in the economics and develop-
ment of labor rates, and those matters are not part of
their licensing qualification. Their expertise is limited
to an assessment of the auto parts in need of repair
and the number of hours to do the auto body repair
job. The rate at which a body shop is to be paid is
handled by negotiation between the insurer and the
body shop. The [c]ode of [e]thics as described . . .
must be analyzed consistent with the work the motor
vehicle physical damage appraiser is licensed to per-
form and consistent with its enabling legislation that
specifically contemplates an appraiser operating on
behalf of an insurance company.’’ Letter from Thomas
R. Sullivan, Insurance Commissioner, to Richard
Blumenthal, Attorney General (September 27, 2007)
p. 5.
  On February 25, 2008, the commissioner sent a sec-
ond letter to the attorney general, in which he stated
in relevant part: ‘‘Please accept the following in
response to your request for additional information on
the manner in which steering complaints are investi-
gated and the role of the appraiser in disputes concern-
ing auto body physical damage. . . .
                           ***
   ‘‘As the [d]epartment has said in the past, it does not
have any authority or expertise to determine the rate
at which insurance companies (or the appraisers
employed by them) should be paying auto body shops.
. . . We are not and should not be the ultimate arbiter
of what a ‘fair’ labor rate should be in a specific
instance. . . .
  ‘‘The rate an auto body shop is paid by an insurer
can be determined in two ways: (1) through negotiation
between the appraiser (who is lawfully allowed to work
for an insurer pursuant to . . . § 38a-790 and [the]
accompanying regulations) and the body shop, and (2)
by contract entered into by an insurer and an auto body
shop, commonly referred to as a direct repair program
or DRP. Determining the appropriate labor rate to be
paid under a contractual arrangement can be done with
relative ease. On the other hand, the negotiated labor
rate, by its very nature, tends to be more contentious.
As you know, a negotiation does not necessarily mean
that an appraiser and an auto body shop split the differ-
ence between the shop’s posted rate and the rate offered
by the insurer.
   ‘‘When appraisers are determining the labor rate they
will offer to the auto body shop during a negotiation,
it is my understanding that they consider the labor rate
paid in the marketplace in general, including those paid
to DRPs with whom the insurer has a contractual rela-
tionship. This would appear to explain why the labor
rate is relatively consistent [statewide].
   ‘‘I would also like to point out at this time that the
[d]epartment does not believe there is anything
improper about DRP contracts. We believe that they
are legally permitted based on the informal opinion we
received from your office related to auto glass repair
networks and case law throughout the nation . . . . In
fact, courts have sanctioned [DRP] shop contractual
agreements as being [procompetitive] and not [in viola-
tion] of antitrust laws. Such [DRP] agreements have
the [procompetitive] effect of keeping auto repair costs
as low as possible for consumers because insurers can
charge . . . lower insurance rates and premiums than
they might otherwise be allowed to charge if they were
required to pay the shop’s posted labor rate. I do not
believe that it is prudent policy to sacrifice the interests
of the general public in Connecticut, which benefits
from one of the healthiest auto insurance markets
nationwide, for the interests of a handful of auto body
shops [that] are finding it difficult to compete with
DRPs, particularly when some have made their own
business decision to not become a DRP.’’ Letter from
Thomas R. Sullivan, Insurance Commissioner, to Rich-
ard Blumenthal, Attorney General (February 25, 2008)
pp. 1–2.
  The commissioner further observed that, in his opin-
ion, ‘‘a small, but vocal, number of auto body repair
shop owners are trying to apply pressure to insurers
to pay their posted labor rate, much to the detriment
of [the insurers’] policyholders. Requiring companies
to pay a body shop’s posted labor rate would not only
be outside the [d]epartment’s jurisdiction and bad for
consumers, but could also implicate the [antitrust] stat-
utes, including the prohibitions on price fixing. . . .
   ‘‘The [association] has also pointed to the [d]epart-
ment’s regulation governing the code of conduct for
[appraisers] as justification for the payment of a higher
labor rate by insurers. It is the [d]epartment’s position
that this regulation is intended to protect consumers
from unscrupulous appraisers seeking to charge them
more for auto body repair work than is economically
justified in an arms-length transaction. A handful of
auto body repair shop owners, however, have sought
to use this regulation to demand that insurers pay [their]
posted labor rate[s]. In effect, these few auto body
shops would like the [d]epartment to use this regulation
as a ‘sword’ to protect their own economic interests in
a competitive industry rather than as a ‘shield’ for the
protection of insureds. We do not believe that taking
such action would be in the best interest of the insur-
ance buying public and decline to enforce it in the
manner suggested by [the association].’’ (Emphasis
omitted.) Id., pp. 2–3.
   In its memorandum of decision on the defendant’s
motion for reconsideration and for sanctions, the trial
court concluded that the plaintiffs had committed a
discovery violation by virtue of their failure to disclose
the commissioner’s September 27, 2007 letter (2007 let-
ter). With respect to that violation, the court found that
the plaintiffs had knowledge of the 2007 letter but not
the commissioner’s February 25, 2008 letter, and that
they had violated their continuing duty of disclosure
by failing to bring the 2007 letter to the defendant’s
attention. With respect to the motion for reconsidera-
tion, the court treated it as a petition for a new trial
based on newly discovered evidence. The court
explained that, in order to prevail on such a petition,
the defendant must prove that the 2007 letter (1) could
not have been discovered sooner in the exercise of due
diligence, (2) was material to the issues at trial, (3) was
not cumulative of other evidence, and (4) was likely to
produce a different result in the event of a new trial.
The court then concluded that the defendant could not
satisfy the first and fourth prongs of this test. In particu-
lar, the court determined that the 2007 letter was not
newly discovered because the defendant could have
obtained it in the exercise of due diligence by filing a
Freedom of Information Act request with the depart-
ment or the Office of the Attorney General, requesting
the disclosure of any documents relating to § 38a-790-8.
  The court also concluded that the 2007 letter would
not have led to a different result at trial because there
was nothing in it that would have caused the court to
instruct the jury any differently with respect to the law.
The court explained: ‘‘The jury was well aware that the
[d]epartment . . . has no statutory or regulatory
authority to regulate hourly labor rates at body
shops. . . .
   ‘‘It must be [noted] that this is not a regulatory pro-
ceeding [in which] someone is accused of violating the
regulation. If that were the case, [the defendant] could
not be the respondent. The regulation does not directly
control the conduct of an insurance company. It regu-
lates the conduct of licensed appraisers. . . . This case
is a claim of an unfair trade practice by an insurance
company, which is the employer of licensed appraisers.
By established case law—the cigarette rule—an unfair
trade practice can be found when conduct of the defen-
dant offends—not necessarily violates—the public pol-
icy expressed [in] a statute or regulation or other
established concept of unfairness. An offense merely
to the penumbra of that public policy can be sufficient.
The public policy or the penumbra of the public policy
of the code of ethics regulation is deeply rooted in the
appraiser’s independence from outside influence—even
from the company that employs the appraiser. He or
she must approach the appraisal of damaged property
without . . . favoritism toward any party involved
. . . and disregard any efforts on the part of others to
influence his [or her] judgment in the interest of the
parties involved. In this larger sense of offense to the
public policy or its penumbra, any party who interferes
with the appraiser’s independence could be committing
an unfair trade practice in violation of CUTPA. In that
sense, labor rates are involved, and body shops with
whom appraisers negotiate labor rates are interested
parties. Despite what [the commissioner] says in his
letter, appraisers have to determine labor rates. There
is no other way the appraiser could get to the bottom
line dollar amount of the appraisal. If the [2007] letter
means to say that appraisers have nothing at all to do
with labor rates, the court would have disregarded the
letter on that point. . . .
   ‘‘So, even though the [d]epartment . . . cannot regu-
late labor rates in the sense that it cannot take action
against an appraiser based on the amount of the labor
rate [that] he has determined to use, it is undisputed
that the appraiser must make that determination of a
labor rate [that] reflects the cost of repairing the car,
and, in making that determination, [t]he code of ethics
requires him to do so fairly and honestly without outside
influence from anyone. That policy is offended by any-
one who interferes or attempts to interfere with that
independence. The court therefore feels that there was
no error in the answers given to the jury questions and
would stay with those answers in any future proceeding,
and would not change its ruling [on the motion to set
aside the verdict and for judgment notwithstanding
the verdict].’’11
  Thereafter, the trial court granted the plaintiffs’
motion for a permanent injunction, precluding the
defendant from interfering with the independent judg-
ment of the defendant’s appraisers and from taking
or threatening to take any adverse employment action
against them on the basis of their determination of
hourly labor rates.12 The trial court also declined to
modify the jury award of $14,765,556.27 in compensa-
tory damages or the award of punitive damages in the
amount of $20,000,000.
   On appeal, the defendant claims that the trial court
improperly failed to acknowledge that CUTPA liability
for insurance related business practices may not be
predicated on conduct that does not violate CUIPA, as
this court recently confirmed in State v. Acordia, Inc.,
310 Conn. 1, 33–35, 37–38, 73 A.3d 711 (2013) (Acordia).
The defendant further claims that, even if Acordia does
not bar the plaintiffs’ CUTPA claim as a matter of law,
that claim still must fail because the defendant’s labor
rate practices do not violate § 38a-790-8. To the con-
trary, the defendant argues, the statutory and regulatory
scheme of which § 38a-790-8 is a part contemplates and
condones the defendant’s labor rate practices, and that
scheme consistently has been interpreted by the agency
charged with its enforcement, namely, the department,
as permitting those practices.13 The plaintiffs contend
that, although the conduct at issue does not violate
CUIPA, Acordia held out the possibility that insurance
related conduct that does not violate CUIPA may still
violate CUTPA if it offends some other law regulating
the insurance industry, and the trial court properly
determined that § 38a-790-8 is such a provision. We
agree with the defendant that neither its conduct nor
the conduct of its appraisers offends § 38a-790-8 or any
other public policy of this state.
   The following legal principles guide our analysis of
the defendant’s claim. ‘‘CUTPA is, on its face, a remedial
statute that broadly prohibits unfair methods of compe-
tition and unfair or deceptive acts or practices in the
conduct of any trade or commerce. . . . [CUTPA] pro-
vides for more robust remedies than those available
under analogous common-law causes of action, includ-
ing punitive damages . . . and attorney’s fees and
costs, and, in addition to damages or in lieu of damages,
injunctive or other equitable relief. . . . To give effect
to its provisions, [General Statutes] § 42-110g (a) of
[CUTPA] establishes a private cause of action, available
to [a]ny person who suffers any ascertainable loss of
money or property, real or personal, as a result of the
use or employment of a method, act or practice prohib-
ited by [General Statutes §] 42-110b . . . .’’ (Citations
omitted; footnote omitted; internal quotation marks
omitted.) Marinos v. Poirot, 308 Conn. 706, 712-13, 66
A.3d 860 (2013). CUIPA, which specifically prohibits
unfair business practices in the insurance industry and
defines what constitutes such practices in that industry;
see General Statutes § 38a-816; does not authorize a
private right of action but, instead, empowers the com-
missioner to enforce its provisions through administra-
tive action. See General Statutes §§ 38a-817 and 38a-
818. ‘‘In Mead v. Burns, 199 Conn. 651, 663, 509 A.2d 11
(1986), [however] this court determined that individuals
may bring an action under CUTPA for violations of
CUIPA. In order to sustain a CUIPA cause of action
under CUTPA, a plaintiff must allege conduct that is
proscribed by CUIPA.’’ Nazami v. Patrons Mutual Ins.
Co., 280 Conn. 619, 625, 910 A.2d 209 (2006). Thus,
under Mead, ‘‘if a plaintiff brings a claim pursuant to
CUIPA alleging an unfair insurance practice, and the
plaintiff further claims that the CUIPA violation consti-
tuted a CUTPA violation, the failure of the CUIPA claim
is fatal to the CUTPA claim.’’ State v. Acordia, Inc.,
supra, 310 Conn. 31.
   In Acordia, after observing that Mead had ‘‘strongly
suggested’’ but not expressly resolved whether the ‘‘leg-
islative determinations as to unfair insurance practices
embodied in CUIPA are the exclusive and comprehen-
sive source of public policy in this area’’; id., 35; we
concluded that, as a general rule, a plaintiff cannot
bring a CUTPA claim alleging an unfair insurance prac-
tice unless the practice violates CUIPA.14 Id., 31, 35–37.
‘‘Because CUIPA provides the exclusive and compre-
hensive source of public policy with respect to general
insurance practices, we conclude[d] that, unless an
insurance related practice violates CUIPA or, arguably,
some other statute regulating a specific type of insur-
ance related conduct, it cannot be found to violate any
public policy and, therefore, it cannot be found to vio-
late CUTPA.’’ Id. 37.
   On appeal, the plaintiffs contend that, even though
the defendant’s labor rate practices are not prohibited
by CUIPA, § 38a-790-8 provides a proper basis for liabil-
ity under CUTPA. More specifically, the plaintiffs argue
that the holding in Acordia ‘‘should be extended to
reach the conduct complained of [in the present case],
which reflects a clear violation of the deeply-rooted
public policy mandating fair and unbiased appraisals
by physical damage appraisers.’’
    Although § 38a-790-8 reasonably may be character-
ized as regulating insurance related conduct insofar as
it prescribes a standard of conduct for appraisers who
estimate the cost to insurers of auto body repairs, we
fully agree with the defendant that that provision simply
does not purport to regulate the conduct at issue in the
present case. Cf. Mead v. Burns, supra, 199 Conn. 665
(‘‘[a]lthough . . . CUTPA may authorize a cause of
action that builds [on] the public policy embodied in
specific statutory provisions, such a CUTPA claim must
be consistent with the regulatory principles established
by the underlying statutes’’). To the contrary, as the
trial court instructed the jury, insurance companies in
this state have the right to negotiate the hourly labor
rate that they are willing to pay for auto body repairs
and to refuse to give their business to an auto body
repair shop with which they are unable to agree on
such a rate. They also are entitled, under § 38a-790 (a);
see footnote 2 of this opinion; and its accompanying
regulations, to employ appraisers to negotiate the labor
rate for such repairs on their behalf. Notably, the plain-
tiffs do not claim otherwise. In such circumstances, it
would be an anomalous result, to say the least, if we
were to endorse the position of the plaintiffs that every
time an insurance company exercises its right to negoti-
ate with an auto body repair shop for an hourly labor
rate, and then proceeds to have its appraisers estimate
the cost of repairing its insureds’ vehicles on the basis
of that agreed on rate, it is somehow committing an
unfair trade practice under CUTPA. As the commis-
sioner cogently explained in his 2007 and 2008 letters to
the attorney general on the subject, there is a perfectly
logical and reasonable way to reconcile the defendant’s
right to negotiate labor costs with the appraiser’s ethical
duty to ‘‘disregard any efforts on the part of others to
influence his judgment in the interest of the parties
involved’’; Regs., Conn. State Agencies § 38a-790-8 (3);
and that is to recognize that the appraiser’s role is
limited to an assessment of the auto parts in need of
repair and the number of hours to complete the auto
body repair job, whereas the rate that an auto body
repair shop is to be paid is the subject of negotiation
between the insurer and the shop, with the appraiser
sometimes acting as a negotiator on behalf of his or
her employer, the insurer. There is nothing about this
division of authority that is suspect or unfair, or that
otherwise contravenes the requirement of § 38a-790-8
that appraisers conduct themselves in an upstanding
and independent manner.
   The plaintiffs make no effort to defend the trial
court’s contrary understanding of the relevant regula-
tory scheme—a primary focus of which is to protect
the consumer of auto body repair services—except to
assert, in conclusory fashion, that the court’s instruc-
tions to the jury—in particular, the instructions sug-
gesting that it may be unfair or unreasonable for an
appraiser to use a predetermined or negotiated hourly
rate in arriving at an estimate of the cost of auto body
repairs—represent ‘‘the [o]nly [r]easonable [i]nterpre-
tation’’ of that scheme. In support of their contention,
the plaintiffs also assert that the trial court properly
concluded that the opinions expressed in the commis-
sioner’s letters were entitled to no deference because
they were not promulgated in accordance with the
appropriate rule-making procedures, they bear no indi-
cation of being an official agency interpretation of § 38a-
790-8, and they have never been subject to judicial
review. The plaintiffs, however, do not explain why,
even if the opinions that the commissioner espouses
in those letters are not entitled to any deference by this
court, the interpretation of § 38a-790-8 set forth therein
is in any way unreasonable, unworkable or unjust. For
the reasons outlined in the commissioner’s letters, and
as we previously have indicated, quite the opposite is
true: it would be patently unreasonable, and result in
an inherently contradictory regulatory scheme, for us
to conclude both that the defendant is lawfully permit-
ted to determine the hourly labor rate that it is willing
to pay for auto body repairs and that the defendant’s
appraisers are ethically required to disregard that deter-
mination when negotiating on the defendant’s behalf.
See, e.g., Barrett v. Montesano, 269 Conn. 787, 797, 849
A.2d 839 (2004) (‘‘we interpret statutes to avoid bizarre
or nonsensical results’’ [internal quotation marks omit-
ted]). Indeed, we are unable to discern why appraisers,
when negotiating for the cost of auto repairs on behalf
of their employers, would ever owe a duty of impartial-
ity to the auto body repair shops with whom they are
negotiating. Under our regulatory provisions, those
businesses are deemed to be capable of representing
their own interests, and certainly are under no obliga-
tion to accept insurance related work that is not suffi-
ciently remunerative. We therefore agree with the
defendant that the trial court incorrectly concluded that
§ 38a-790-8 supports the plaintiffs’ CUTPA claim alleg-
ing unfair labor rate practices.15 In light of that conclu-
sion, the plaintiffs’ CUTPA claim cannot stand, and the
defendant is therefore entitled to judgment as a matter
of law.16
  The judgment is reversed and the case is remanded
with direction to render judgment for the defendant.
      In this opinion the other justices concurred.
  1
     Artie’s Auto Body, Inc., A & R Body Specialty, and Skrip’s Auto Body
are businesses licensed to perform auto body repairs in Connecticut. We
refer to these plaintiffs collectively as the plaintiff auto body shops. The
association is a not-for-profit association comprised of more than 100 auto-
mobile body repair shops in Connecticut dedicated to the advancement of
the automobile body repair industry.
   2
     General Statutes § 38a-790 (a) provides in relevant part: ‘‘No person shall
act as an appraiser for motor vehicle physical damage claims on behalf of
any insurance company or firm or corporation engaged in the adjustment
or appraisal of motor vehicle claims unless such person has first secured
a license from the Insurance Commissioner. . . . The commissioner may
adopt reasonable regulations concerning standards for qualification, suspen-
sion or revocation of such licenses and the methods by which licensees
shall conduct their business.’’
   3
     Section 38a-790-8 of the Regulations of Connecticut State Agencies pro-
vides: ‘‘Every appraiser shall: (1) Conduct himself in such a manner as to
inspire public confidence by fair and honorable dealings; (2) approach the
appraisal of damaged property without prejudice against, or favoritism
toward, any party involved in order to make fair and impartial appraisals;
(3) disregard any efforts on the part of others to influence his judgment in
the interest of the parties involved; (4) prepare an independent appraisal
of damage. No appraiser shall: (A) Receive directly or indirectly any gratuity
or other consideration in connection with his appraisal services from any
person except his employer or, if self-employed, his customer; (B) traffic
in automobile salvage if such salvage is obtained in any way as a result of
appraisal services rendered by him.’’
   4
     The plaintiffs also alleged that the defendant improperly had steered its
insureds to a preferred provider network of auto body repair shops that
charged labor rates well below reasonable market value, in violation of
General Statutes § 38a-354 (b) (1), which prohibits insurance companies
from ‘‘requir[ing] any insured to use a specific person for the provision of
automobile physical damage repairs . . . .’’ The jury found in favor of the
defendant on this claim, and the plaintiffs have not challenged that finding
on appeal.
   5
     The defendant appealed to the Appellate Court, and we transferred the
appeal to this court pursuant to General Statutes § 51-199 (c) and Practice
Book § 65-1.
   6
     Auto body repair shops in Connecticut are required by law to post their
hourly labor rate in a visible location on their premises. See General Statutes
§ 14-65i (b).
   7
     Robert Skrip, the owner of Skrip’s Auto Body, acknowledged at trial
that ‘‘almost all of [his] business comes from insurance companies . . . .’’
Harold Platz, the owner of Artie’s Auto Body, Inc., testified that his business
is ‘‘99 percent insurance.’’ Michael Walsh, the owner of T & J Auto Body
of East Hartford, also testified that ‘‘99 percent of [his] work, maybe more,
is . . . insurance work.’’
   8
     The letter provided in relevant part: ‘‘Considering the widening gap
between [auto body] repair rates and mechanical service rates, we [cannot]
honestly say that we believe the current prevailing rate of [$40 to $42 per]
hour is fair. In fact, we believe that [it] is very low due to [i]nsurer influence,
and not due to market influence.
   ‘‘The problem is obvious. If we were to write estimates at a rate we believe
to be fair and reasonable, as we believe the law mandates, we would be
terminated.’’ (Internal quotation marks omitted.) Letter from Timothy Davis
et al. to Richard Blumenthal, Attorney General (February 12, 2002) p. 1.
   9
     General Statutes § 42-110b (a) provides: ‘‘No person shall engage in unfair
methods of competition and unfair or deceptive acts or practices in the
conduct of any trade or commerce.’’
   ‘‘[I]n determining whether a practice violates CUTPA we have adopted
the criteria set out in the cigarette rule by the [F]ederal [T]rade [C]omission
for determining when a practice is unfair: (1) [W]hether the practice, without
necessarily having been previously considered unlawful, offends public pol-
icy as it has been established by statutes, the common law, or otherwise—
in other words, it is within at least the penumbra of some common law,
statutory, or other established concept of unfairness; (2) whether it is
immoral, unethical, oppressive, or unscrupulous; (3) whether it causes sub-
stantial injury to consumers, [competitors or other businesspersons]. . . .
All three criteria do not need to be satisfied to support a finding of unfairness.
A practice may be unfair because of the degree to which it meets one of
the criteria or because to a lesser extent it meets all three.’’ (Internal quota-
tion marks omitted.) Harris v. Bradley Memorial Hospital & Health Center,
Inc., 296 Conn. 315, 350–51, 994 A.2d 153 (2010).
   10
      In addition, the defendant maintained that the undisputed evidence also
demonstrated that its labor rate practices, which keep such rates relatively
low, actually benefited consumers because they make it possible for it and
other insurance companies to charge lower premiums.
   11
      As a sanction for failing to disclose the 2007 letter, the trial court ordered
the association to reimburse the defendant for one half of its reasonable
attorney’s fees and costs incurred in connection with the filing and presenta-
tion of its motion for reconsideration and for sanctions.
   12
      The trial court subsequently granted the defendant’s motion for a stay
of the permanent injunction.
   13
      On appeal, the defendant also claims that it was improper for the trial
court to instruct the jury that the cigarette rule is the proper standard for
determining whether conduct violates CUTPA because the federal courts
have abandoned that rule in favor of a more stringent test known as the
substantial unjustified injury test. See 15 U.S.C. § 45 (n) (2012). Under that
standard, an act or practice is unfair if it causes substantial injury, it is not
outweighed by countervailing benefits to consumers or competition, and
consumers themselves could not reasonably have avoided it. See 15 U.S.C.
§ 45 (n) (2012). Approximately ten years ago, in Glazer v. Dress Barn, Inc.,
274 Conn. 33, 873 A.2d 929 (2005), this court observed that, ‘‘[a]lthough we
consistently have followed the cigarette rule in CUTPA cases . . . when
interpreting ‘unfairness’ under CUTPA, our decisions are to be guided by
the interpretations of the Federal Trade Act by the Federal Trade Commis-
sion and the federal courts. See General Statutes § 42-110b [b]. Review of
those authorities indicates that a serious question exists as to whether the
cigarette rule remains the guiding rule utilized under federal law.’’ Id., 82
n.34. Recently, in Ulbrich v. Groth, 310 Conn. 375, 422–29, 78 A.3d 76 (2013),
we declined to review a claim that we should abandon the cigarette rule in
favor of the substantial unjustified injury test because the claim was not
preserved. Since Glazer, the legislature has given no indication that it disap-
proves of our continued use of the cigarette rule as the standard for determin-
ing unfairness under CUTPA, notwithstanding the federal courts’ aban-
donment of that rule in favor of the substantial unjustified injury test and
the legislative directive in § 42-110b (b) that we are to be guided by federal
law when construing CUTPA. In light of our conclusion in the present case
that the plaintiffs’ CUTPA claim fails even under the more lenient cigarette
rule, it is unnecessary for us to decide whether that rule should be abandoned
in favor of the federal test. Because of the likelihood that this court will be
required to address this issue in a future case, however, the legislature may
wish to clarify its position with respect to the proper test.
   14
      In reaching that determination in Acordia, we explained that ‘‘the legisla-
tive history of CUIPA reveals that the legislature intended to set out specifi-
cally the types of actions that constitute unfair insurance practices in a highly
detailed manner . . . [and] viewed accomplishing that task as essential to
the underlying purpose of CUIPA: enabling the commissioner to better
protect consumers. The many subsequent amendments incorporating addi-
tional practices as violative of CUIPA demonstrate an ongoing legislative
effort to keep the list of prohibited practices as current as possible and
provide further evidence of the legislature’s intent to provide in CUIPA a
comprehensive list of unfair insurance practices. . . . The legislative his-
tory of CUIPA, therefore, demonstrates that the legislature intended to
occupy the field of defining unfair insurance practices, thereby precluding
courts from incorporating common-law principles as a basis for finding an
unfair insurance practice.’’ (Emphasis omitted; internal quotation marks
omitted.) State v. Acordia, Inc., supra, 310 Conn. 36.
   15
      Because we conclude that § 38a-790-8 does not support the plaintiffs’
CUTPA claim, it is unnecessary to address the defendant’s contention that
the trial court abused its discretion in awarding punitive damages and in
granting the plaintiffs’ motion for a permanent injunction.
   16
      The plaintiffs argue that, in the event that the defendant is successful
on appeal, this court should order a new trial rather than direct the trial
court to render judgment in favor of the defendant because the plaintiffs
were unfairly prejudiced by the trial court’s exclusion of certain evidence
that they sought to introduce in support of their labor rate claim under
CUTPA. Even if we were to assume, arguendo, that the trial court had
abused its discretion in excluding this evidence, that error is immaterial in
light of our determination that the defendant’s labor rate practices do not
violate public policy.