Opinion
KNLCV136017866S
11-18-2015
Margaret J. Ackley v. City of New London et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION ON MOTION TO STRIKE (#131)
Leeland J. Cole-Chu, J.
In this suit, the plaintiff, Margaret J. Ackley, Chief of Police of the defendant City of New London (the city), seeks damages on grounds including breach of contract, and several equitable theories. On February 4, 2014, the city filed the present motion to strike counts four (breach of the implied covenant of good faith and fair dealing), five (promissory estoppel), six (unjust enrichment), and seven (restitution in quantum meruit) of the plaintiff's second revised complaint (the complaint). On March 25, 2014, the plaintiff filed an opposing brief to which the city replied on August 13, 2014. The motion was argued on August 18, 2014. Since that argument, this motion was deferred for mediation (see December 15, 2014, stipulation and waiver #149) then submitted for decision on June 16, 2015.
Other defendants are Brian Estep, attorney for the city when the contract on which the plaintiff sues was allegedly formed, and Daryl J. Finizio, who signed the contract as Mayor of the city. Finizio filed a separate motion to strike on November 6, 2013, in which Estep joined two days later, and which motion has never been claimed for argument or ruling.
The city first moved on October 10, 2013, to strike certain counts in the plaintiff's revised complaint dated September 27, 2013. That motion is deemed withdrawn because the complaint was further revised by plaintiff's " Motion to Revise Complaint" complaint on January 6, 2014. On February 19, 2014, seemingly concerned about protocol, the plaintiff withdrew her second revised complaint filed on January 6, 2014, and refiled that same complaint with a " Motion for Leave to Amend Complaint."
The first sentence of the motion to strike states that the motion also challenges counts eight, nine, and sixteen. However, the plaintiff's second amended complaint, dated January 6, 2014, is a fourteen-count complaint and the only counts directed at the city of New London are counts one through seven. Aside from the first sentence, the motion limits the argument to counts four, five, six and seven and the court will, therefore, consider the motion as to those four counts alone.
FACTS
In ruling on a motion to strike, the court takes the facts to be those alleged in the complaint, construed in favor of its legal sufficiency. New London County Mutual Ins. Co. v. Nantes, 303 Conn. 737, 747, 36 A.3d 224 (2012). However, a motion to strike does not admit legal conclusions or the correctness of opinions. Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997). Viewing the allegations of the complaint in this light, the essential facts are as follows.
After working as a New London police officer for more than twenty years, the plaintiff has, since 2009, served as the city's Chief of Police. In December of 2011, the plaintiff announced her intention to retire. Mayor Daryl J. Finizio requested that the plaintiff postpone her retirement until the end of 2015. As consideration for her agreement to continue in active employment, the defendants--the city, Finizio and defendant Estep, an attorney for the city--promised the plaintiff that she would continue to serve as Chief of Police until December 31, 2015; that she would be paid at least $110,725 annually and would be eligible for raises; that she would be awarded unspecified enhanced retirement benefits for life; and that she would be paid, as wages, at her regular rate of pay, the equivalent of 1196 hours of additional work. The agreement was reduced to writing and signed by the plaintiff and by Mayor Finizio on January 6, 2012, effective as of January 1, 2012 (" the agreement"). The agreement included an additional $25,000 wage payment which the defendants promised the plaintiff in further consideration of the plaintiff not retiring, and as consideration for her not pursuing a pre-existing claim against the city. (See count two, which is incorporated in each of the counts attacked by the present motion.) Before the plaintiff signed the agreement and acted in reliance on it, Finizio and Estep represented to the plaintiff that the agreement was negotiated properly, that they were authorized to negotiate it, that similar agreements had been negotiated before and were legally binding on the city and that the agreement was binding on the city. Finizio represented to the plaintiff that " the City of New London has caused this agreement to be signed and executed on its behalf by its Mayor." The City Clerk witnessed Finizio's signature.
By necessary implication, the compensation for 1196 hours was in addition to the plaintiff's regular salary as Chief of Police. The interpretation of pleadings is a question of law for the court. Boone v. William W. Backus Hospital, 272 Conn. 551, 559, 864 A.2d 1 (2005).
In reliance on the agreement and Finizio's and Estep's representations, the plaintiff changed important life plans and stayed on as Chief of Police.
In February of 2013, the city breached the part of the agreement under which the plaintiff was to receive 1196 hours of additional pay. The city also breached the part of the agreement providing for an additional $25,000 payment to the plaintiff.
DISCUSSION
" Whenever any party wishes to contest: (1) the legal sufficiency of the allegations of any complaint, counterclaim or cross claim . . . that party may do so by filing a motion to strike the contested pleading or part thereof." Practice Book § 10-39(a). The purpose of a motion to strike is to challenge the legal sufficiency of the allegations of a complaint or count to state a claim upon which relief can be granted. Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). If any facts provable under the stated and implied allegations support a cause of action, the motion must be denied. Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991).
The city claims that count four, for breach of the covenant of good faith and fair dealing implied in the January 6, 2012, agreement, is barred by governmental immunity. Both parties begin by disputing whether or not a cause of action for breach of the covenant of good faith and fair dealing is an intentional tort as to which the city has immunity under General Statutes § 52-557n. In its reply to the plaintiff's brief, the city also argues that the statute is not limited to tort actions. The court agrees.
The tort liability of Connecticut municipalities is codified in General Statutes § 52-557n. Faulkner v. Daddona, 142 Conn.App. 113, 120, 63 A.3d 993 (2013). Section 52-557n(a)(2) provides, in relevant part, " Except as otherwise provided by law, a political subdivision of the state shall not be liable for damages to person or property caused by: (A) Acts or omissions of any employee, officer or agent which constitute criminal conduct, fraud, actual malice or wilful misconduct . . ." Section 52-557n(a)(2); see O'Connor v. Board of Education, 90 Conn.App. 59, 64, 877 A.2d 860, cert. denied, 275 Conn. 912, 882 A.2d 675 (2005). Although § 52-557n(a)(2) clearly grants municipalities immunity from liability for their agents' torts " that constitute fraud, malice or wilful misconduct; " Avoletta v. Torrington, 133 Conn.App. 215, 225, 34 A.3d 445 (2012); the statute does not mention the word " tort."
Returning, reasonably, to the essence of the cause of action of breach of the implied covenant of good faith and fair dealing, the city argues that that cause of action involves some, if not all, of the " [a]cts or omissions of any employee, officer or agent which constitute criminal conduct, fraud, actual malice or wilful misconduct." As true as that may be in general, in the present case there is a more fundamental problem: even incorporating thirty-one preceding paragraphs, and construed most favorably toward sustaining its legal sufficiency; see Santorso v. Bristol Hospital, 308 Conn. 338, 349, 63 A.3d 940 (2013); count four does not allege what act(s) or omission(s) of which city employee, officer or agent constitute breach of the covenant of good faith and fair dealing implied in the agreement. This court is well aware that grounds for attacking the legal sufficiency of a claim which are not specified by the moving party may not be considered. Gazo v. Stamford, 255 Conn. 245, 259, 765 A.2d 505 (2001). Treating the plaintiff's references in count four to " the defendant" to mean the target of counts one through four--" the city" --what she does allege is that " [i]n February 2013, the defendant breached the contract by reneging on the promise to pay the remainder of the 1196 hours-worth of wages." (Italics added.) Count one, P15. The plaintiff also alleges, that the " defendant breached the contract for payment of $25,000 as wages. The plaintiff was not paid." Count two, P14. What the plaintiff does allege in count four, at paragraphs 32 and 33, is that the defendant " acted in bad faith to impede the plaintiff's right to receive the benefits of both contracts" and " [t]he defendant's actions . . . were perpetuated dishonestly and with a sinister purpose . . ." Presuming that the alleged actions were by some human agent, the plaintiff's failure to give a plain and concise statement of the material facts does not obscure the essential allegation of count four that some agent of the defendant acted in a way which constituted fraud or wilful misconduct, or was done with actual malice--claims barred by § 52-557n(a)(2)(A). See Collins v. Anthem Health Plans Inc., 275 Conn. 309, 334, 880 A.2d 106 (2005) (bad faith involves a dishonest purpose).
The covenant of good faith and fair dealing implied in a contract cannot come into being until the contract is made. Therefore, acts claimed to breach that covenant cannot occur until the contract--in this case, the January 6, 2013, agreement--came into being. All of the actions of the city's co-defendants alleged in count four--and here taken as true--took place before the agreement was signed or at the time of signing. There are no actions or omissions by either codefendant which are alleged in count four to have occurred after the signing of the agreement.
II. Quasi-Contract Claims against Municipalities Under Fennell and its Progeny
The sole ground of the present motion as to counts five (promissory estoppel), six (unjust enrichment), and seven (" restitution in quantum meruit"), is that Fennell v. Hartford, 238 Conn. 809, 681 A.2d 934 (1996), and its progeny prohibit such equitable, quasi-contractual claims against municipalities. The plaintiff argues that the Fennell doctrine does not bar these counts because the complaint alleges that the city's charter gave the mayor actual authority to contract. Alternatively, the plaintiff argues that the mayor had apparent authority to enter into the agreement.
Counts five, six and seven add few facts to those incorporated from count four--and none necessary to this decision. Count five alleges that the city had reason to expect that the plaintiff would rely on " the promises, " that the plaintiff did so rely, and that she suffered damages as a result of such reliance. Count six adds only conclusions of law, which are not deemed true. Faulkner v. United Technologies Corp., supra, 240 Conn. 588. Count seven adds no new facts--only that the city " knowingly accepted the plaintiff's services while representing to her that she would be compensated for those services."
In Fennell, a group of retired police officers sued the city of Hartford for its failure to pay certain pension and retirement benefits. Id., 811. The plaintiffs argued that the city had created an implied contract by stating, in a pension manual, that earned sick time would be credited to the pension of " non-bargaining unit employees" --a group which included the plaintiffs. Id., 812-13. The manual was issued by the city's pension commission. Id., 812. The Supreme Court began by recognizing that " [g]enerally, no officer or board, other than the common council, has power to bind the municipal corporation by contract, unless duly empowered by statute, the charter, or authority conferred by the common council, where the latter may so delegate its powers . . . It follows that agents of a city, including its commissions, have no source of authority beyond the charter." (Citation omitted; internal quotation marks omitted.) Id., 813-14.
The court first determined that the Hartford city charter did not provide for the pension payments that the plaintiffs claimed and also specified that the city council was vested with the sole authority to adopt pension ordinances. Id., 816-17. The plaintiffs conceded that the city council had never authorized the subject pension calculations. Id., 817. The court emphasized that " implied contract claims in the public sector, based upon pension or employee manuals, would only invite endless litigation over both real and imagined claims of misinformation . . . imposing an unpredictable drain on the public fisc." (Internal quotation marks omitted.) Id., 816. The court affirmed the trial court's setting aside the jury's verdict on the implied contract claims. Id., 812. While Fennell, by its own language, only held that implied contractual obligations could not arise from pension or employee manuals, its principles have been extended to other circumstances.
In 2008, the Appellate Court elaborated on Fennell in deciding the appeal of a municipal employee who sued his employer town for failing to pay a salary that he was allegedly promised by the town's water and sewer authority. Biello v. Watertown, 109 Conn.App. 572, 573-77, 953 A.2d 656, cert. denied, 289 Conn. 934, 958 A.2d 1244 (2008). The plaintiff sued the town in quasi-contract based on the water and sewer authority's recommendation that the plaintiff be paid a certain salary, a recommendation which was ultimately declined by the town council. Id., 574-75. Finding Fennell dispositive, the Appellate Court stressed that " [t]he water and sewer authority lacked the authority to set the plaintiff's salary . . ." and " because the town council did not approve the suggested salary . . ." Id., 584-83. The court determined that Fennell applied to unjust enrichment and quantum meruit claims as well as to implied contract claims. Id., 584.
In 2011, the Appellate Court further extended Fennell to apply to quasi-contract claims based on representations made by municipal agents. Ferrucci v. Middlebury, 131 Conn.App. 289, 25 A.3d 728, cert. denied, 302 Conn. 944, 31 A.3d 382 (2011). The plaintiff in Ferrucci, a former police officer, sued the town for promissory estoppel after he was misinformed by the town's finance director regarding his retirement benefit package. Id., 292-93. The plaintiff made investment and retirement plans based on the director's representation that he would begin to receive $700 per month payments beginning in 2004 when, in fact, those payments did not begin until ten years later. Id. The Appellate Court affirmed the trial court's entry of summary judgment in favor of the town because its charter vested authority to modify the terms of the town's retirement plan in the board of selectman, not the finance director. Id., 303.
The plaintiff here contends that these cases are inapposite because " [t]he New London City Charter specifically instructs that the mayor has the authority to sign all contracts on behalf of the municipality." The plaintiff argues that, this being a motion to strike, the court must take that allegation as true. The court disagrees because that allegation is essentially a conclusion of law to which the presumption of truth does not apply. Faulkner v. United Technologies Corp., supra, 240 Conn. 588. The plaintiff's extrapolation of that charter provision--her claim that the charter provision authorizing the mayor to sign contracts implicitly gives him sole authority to negotiate and enter into the agreement in this case--is also a legal conclusion, the correctness of which the court need not, and cannot, assume. Just as the court may examine statutes, cases, and constitutional provisions on a motion to strike, the court may examine a city charter to determine its legal significance. See Bateson v. Weddle, 306 Conn. 1, 14, 48 A.3d 652 (2012). " When construing a [city] charter, the court must determine the intent of the legislative body that promulgated the rules . . . To determine the intent of the charter, [t]he enactment must be examined in its entirety and its parts reconciled and made operative so far as possible . . . Intent is to be ascertained from the language used, if it is plain and unambiguous; or, if it is not, by considering the legislation in the light of all of its provisions, the object which it seeks to accomplish, the pre-existing legislation upon the same subject matter, and all other relevant circumstances." (Internal quotation marks omitted.) Alexander v. Retirement Board, 57 Conn.App. 751, 759, 750 A.2d 1139, cert. denied, 254 Conn. 902, 755 A.2d 217 (2000).
Even if the plaintiff's allegation that " [t]he New London City Charter specifically instructs that the mayor has the authority to sign all contracts on behalf of [the city]" is deemed an allegation of fact and, so, taken as true, the mayor's authority to sign contracts is not the same as the authority to bind the city without city council approval of expenditures.
Article VI, section 39a, of the New London city charter, titled " Powers of the mayor, " sets forth a list of mayoral powers. That section specifies that " [t]he mayor shall have the power to . . . negotiate contracts for the city, subject to council approval, sign all contracts, bonds or other instruments requiring the consent of the municipality . . ." (Emphasis added.) The charter clearly gives the mayor power to serve as the city's negotiating agent as well as the power to sign contracts on behalf of the city, but in between the negotiating and the signing, the charter makes clear that the substance of the contract must be approved by city council. Furthermore, Article VIII, section 59 states that " [n]o liability shall be enforceable against the city upon any contract not supported by a previous appropriation." The New London charter is clear that not even the mayor, let alone the city's attorneys, have the authority to bind the city to a contractual obligation which has not been approved by the city council. The plaintiff does not allege that the New London city council approved the agreement or agreements which are at the heart of this case.
In its entirety, the section reads as follows: " The mayor shall have the power to: approve or veto any ordinance in whole or in part adopted by council; appoint officers and employees, with the approval of the council, except as otherwise provided in this charter; exercise within the limits of the city all the emergency powers given to the chief executive officer of a municipality under the general statutes; call special meetings of the council when required by public necessity; supervise and administer all phases of the budgetary process; examine at any time all data and property of the city in the possession of any officer, agency, department, commission, board, authority, employee or any other member of the municipal government; negotiate contracts for the city, subject to council approval; sign all contracts, bonds or other instruments requiring the consent of the municipality; exercise such other powers and perform such other duties as may be prescribed by this charter, ordinances, resolutions and applicable laws: shall be an ex-officio member of the board of education and all other boards, agencies, committees, authorities, and commissions without vote."
Although count two clearly alleges that the agreement for $25,000 was included in the signed agreement of January 6, 2012, the plaintiff refers to " agreements." Whether there are one or two agreements is immaterial to this decision.
The plaintiff further argues that the mayor had apparent authority to bind the city in light of the alleged representations made to the plaintiff by the mayor and attorney Estep. The elements of apparent authority are well-settled: " [o]ne is that the principal must have held the agent out to the public as possessing the requisite authority, and the other that the one dealing with the agent and knowing of the facts, must have believed in good faith and upon reasonable grounds, that the agent had the necessary authority." Zazzaro v. Universal Motors, Inc., 124 Conn. 105, 110-11, 197 A. 884 (1938). The plaintiff's apparent authority argument fails on both elements. First, the complaint sets forth no facts showing that the principal--the city of New London--did anything to hold Mayor Finizio or attorney Estep out to the general public or to her as having authority to create contractual commitments not approved by the city council. Second, that Finizio and Estep held themselves out as having the authority to negotiate and create such contracts is, as a matter of law, no substitute for their actually having such authority.
Second, apparent authority requires that the one dealing with the agent have reasonably believed that authority existed. One who enters into a contract with a municipal officer does so at peril of the officer's authority. See Fennell v. Hartford, supra, 238 Conn. 814. " [A]ll who contract with a municipal corporation are charged with notice of the extent of . . . the powers of municipal officers and agents with whom they contract . . ." (Internal quotation marks omitted.) Biello v. Watertown, supra, 109 Conn.App. 581. " Generally, no officer or board, other than the common council, has power to bind the municipal corporation by contract . . ." (Internal quotation marks omitted.) Fennell v. Hartford, supra, 238 Conn. 813. " If the transaction is of a type that typically requires the approval of the organization's governing body, " --as the New London charter provides--" a third party would not be reasonable in believing that the agent has complete authority to bind the organization." 1 Restatement (Third), Agency § 3.03, comment (c), p. 179 (2006). Any reliance by the plaintiff on the mayor's or Estep's representations was not reasonable as a matter of law.
The Restatement (Third) of Agency provides the following example: " [A] dean in a university, attempting to recruit a prospective faculty member, may assure the faculty prospect that compliance with the university's written procedures for granting tenure is but a formality. If the faculty prospect knows that the rules repose discretion in persons other than the dean--in the university's trustees, president, or provost--the prospect's belief in the dean's unilateral authority is not reasonable; conduct by the dean's organizational superiors would be necessary to make reasonable a belief that the university organization has conferred on the dean an unusual degree of unilateral authority over a matter fraught with enduring consequences for the institution." 1 Restatement (Third), Agency § 3.03, comment (c), p. 180 (2006).
In her opposition memorandum, the plaintiff cites Rossetti v. Middlefield, Superior Court, judicial district of New Haven, Docket No. CV-01-0452129-S (May 11, 2004) , in support of her apparent authority argument. In Rossetti, the town's first selectman had contracted with the plaintiff for the plaintiff to become the town's building official and promised to transfer three years of pension time from his previous employment to the town's pension plan. Id. After the plaintiff began his work, he was informed that the pension time could not be transferred. The plaintiff sued the town for breach of contract. Id. In Rossetti, the town's charter gave the first selectman sole authority to hire the building official but the authority to set salary and benefit terms was vested with the entire board of selectmen. The court concluded that there was sufficient evidence that the first selectman had apparent authority to bind the board of selectmen (of which he was one of three members) and, thereby, to bind the town in light of a letter from the first selectman to the plaintiff which made numerous references to the decision being made by the entire board. In the present case, Mayor Finizio's authority to negotiate with the plaintiff was entirely subject to city council approval and the mayor is not a member of the city council. Accordingly, despite the assurances made by Finizio and Estep in negotiating the agreement with the plaintiff, the clear separation of authority between the mayor and the city council render Rossetti inapposite.
Finally, even if the elements of apparent authority had been satisfied, it is entirely unclear whether apparent authority would require denying the defendant's motion. " After Fennell, it appears clear that a municipality cannot be contractually bound by a representation made by its agent unless the agent had actual authority to make the representation pursuant to the General Statutes, the municipal charter or another valid delegation of authority." (Emphasis added.) Singhaviroj v. Fairfield, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV-05-4007480-S (March 9, 2011). The defendant's motion to strike counts five, six, and seven alleging promissory estoppel, unjust enrichment, and quantum meruit respectively is granted.
For the foregoing reasons, the defendant's motion to strike is granted as to counts four, five, six, and seven.