Opinion
No. CV 01 0450643 S
April 20, 2004
MEMORANDUM OF DECISION
Before the court is the defendants' motion to strike counts one, two, three, four, seven and certain portions of the prayer for relief of the revised complaint.
On December 31, 2002, the plaintiffs, Maureen Alvarez and Manuel Alvarez, filed a revised seven-count complaint against the defendants, Fleet National Bank, Fleet Bank NA, Shawmut Bank NA, and Connecticut National Bank. This action arises out of monetary damages allegedly sustained by the plaintiffs as a result of the defendants' failure to amortize the plaintiffs' payment on an open-end mortgage and equity credit line. The plaintiffs allege that: (1) the defendants engaged in fraud by representing to the plaintiffs that their payments on an open-end mortgage and equity credit line would be applied to both principal and interest when, in fact, the defendants knew that the plaintiffs' payments would not be amortized to reduce their debt (count one); (2) the conduct alleged in count one violates the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. (CUTPA) (count two); (3) the open-end mortgage and equity credit line are void pursuant to General Statutes § 49-31b (count three); (4) the defendants have been unjustly enriched to the detriment of the plaintiffs (count four); (5) the defendants breached and continue to breach the agreement underlying the open-end mortgage and equity credit line in that they failed to apply the plaintiffs' payments to the principal (count five); (6) the defendants breached and continue to breach the implied covenant of good faith and fair dealing owed to the plaintiffs (count six); and (7) the defendants engaged in and continue to engage in the fraudulent concealment of the causes of action alleged in the revised complaint (count seven).
The plaintiffs allege in the revised complaint that the execution of the open-end mortgage and equity credit line occurred between the plaintiffs and Connecticut National Bank. It further alleges that Connecticut National Bank later became Shawmut Bank NA, and that Shawmut Bank NA later became Fleet National Bank, also known as Fleet Bank NA.
On May 8, 2003, the defendants filed a motion to strike counts one, two, three, four and seven of the revised complaint, as well as certain portions of the prayer for relief supported by a memorandum of law. The plaintiffs filed a memorandum of law in opposition to the motion to strike on July 2, 2003. On July 9, 2003, the defendants filed a reply memorandum of law.
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief may be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). The role of the trial court in ruling on a motion to strike is "to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Bhinder v. Sun Co., 263 Conn. 358, 366, 819 A.2d 822 (2003).
Count One: Fraud
The defendants move to strike count one of the plaintiffs' revised complaint on the ground that it is insufficient on its face because there are no specific statements or factual allegations to support a cause of action for fraud. The defendants argue that claims alleging fraud must be pleaded with particularity and that count one contains only generalized allegations amounting to a rote recitation of the required elements. Specifically, the defendants contend that "[a]bsolutely no detail is provided [in count one] regarding what the alleged misrepresentations were, who made them, when they were made, or in what context." The plaintiffs counter that the substance of the alleged fraudulent inducement has been clearly described and that more specific information as to the source of the misrepresentation can be obtained during discovery. In reply, the defendants reiterate that the plaintiffs have not met the heightened pleading requirement for fraud claims and that the generalized allegations underlying count one cloak an attempt on the part of the plaintiffs to void obligations under a contract that the parties entered sixteen years ago. Consequently, the defendants maintain, the plaintiffs have failed to plead a cause of action for fraud.
In an action for fraudulent misrepresentation, the plaintiff must prove the following elements: "(1) a false representation was made as a statement of fact; (2) it was untrue and known to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon that false representation to his injury." Leonard v. Commissioner of Revenue Services, 264 Conn. 286, 296, 823 A.2d 1184 (2003). "Fraud is not to be presumed, but must be strictly proven. The evidence must be clear, precise, and unequivocal." Connell v. Colwell, 214 Conn. 242, 252, 571 A.2d 116 (1990). "Where a claim for damages is based upon fraud, the mere allegation that a fraud has been perpetrated is insufficient; the specific acts relied upon must be set forth in the complaint." Maruca v. Phillips, 139 Conn. 79, 81, 90 A.2d 1959 (1952).
An application of the aforementioned standard is clearly illustrated by this court's decision in Chestnut v. Kent, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 97 0346653 (April 17, 1998, Skolnick, J.) ( 22 Conn. L. Rptr. 29). In Chestnut, the defendant moved to strike the plaintiff's claim for fraud on the ground that the complaint lacked sufficient allegations of fact indicating how the alleged false misrepresentations were made and in what context. Chestnut v. Kent, supra, 22 Conn.L.Rptr. 30. This court noted that the plaintiff's complaint contained only generalized assertions that "the defendant made a false representation of fact that she would perform under the contract; that this representation was known by the defendant to be false; that the representation was made to induce the plaintiff to make substantial repairs to the subject residence; and that the plaintiff relied on the false representation to his detriment and has thereby been damaged." Id., 31. Upon granting the defendant's motion to strike, the court emphasized the absence in the complaint of "any particular facts demonstrating what the representations were or how they were false." Id.
Unlike the plaintiff in Chestnut v. Kent, the plaintiffs in the present matter have pleaded a claim for fraud with sufficient particularity. Rather than simply stating that the defendants made a false representation, the plaintiffs specifically allege that "the defendants represented to the plaintiffs that the payments made by plaintiffs on the equity credit line and the open-end mortgage would be amortized and be applied both to principal and to interest thereby causing the principal amount of the debt to be reduced." Additionally, the plaintiffs describe how the defendants' representation was false by alleging that "[t]he defendants concealed from plaintiffs that the defendants would not apply payments made by plaintiffs to amortize the principal amount of the debt" and that the plaintiffs' payments to the defendants were not amortized but "were applied only to interest and not to principal." Because the plaintiffs in the present matter have detailed the alleged false misrepresentation as well as the exact way in which the representation allegedly was false, the plaintiffs sufficiently have pleaded a cause of action for fraud.
Accordingly, the defendants' motion to strike count one is denied.
Count Two: CUTPA
The defendants move to strike count two of the plaintiffs' revised complaint on the ground that it is insufficient because: (1) the only allegations supporting the plaintiffs' CUTPA claim are the insufficient allegations of fraud in count one; and (2) the remaining allegations of wrongdoing in the complaint support the claim for breach of contract and: (a) have not been incorporated into count two; and (b) cannot give rise to a violation of CUTPA absent substantial aggravating circumstances. The defendants reiterate that the allegations underlying count one do not constitute a claim for fraud, and, therefore, cannot be relied upon to support a cause of action for a violation of CUTPA. They further contend that, even if the breach of contract claim was incorporated into count two, Connecticut courts have held that a simple breach of contract claim does not amount to a CUTPA violation. The plaintiffs counter that the proof of deception required under CUTPA is not as demanding as that needed to plead a claim for common-law fraud and, moreover, that the defendants' characterization of the present matter as a simple breach of contract is incorrect because the fraud and deception alleged in the revised complaint amount to substantial aggravating circumstances.
A plaintiff seeking relief under CUTPA must demonstrate that the "conduct at issue constitutes an unfair or deceptive trade practice." Rizzo Pool Co. v. Del Grosso, 232 Conn. 666, 684 n. 28, 657 A.2d 1087 (1995). To determine whether a trade practice is deceptive, and, thus, in violation of CUTPA, courts must adhere to the "cigarette rule" as enunciated by the Federal Trade Commission. Journal Publishing Co. v. Hartford Courant Co., 261 Conn. 673, 695, 804 A.2d 823 (2002). Specifically, a court must determine: "(1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise whether, in other words, it is within at least the penumbra of some common law, statutory, or other established concept of fairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; or (3) whether it causes substantial injury to consumers [competitors or other businessmen]." Id. "[A] CUTPA violation need not involve fraud on the part of the violator." Miller v. Guimaraes, 78 Conn. App. 760, 776 n. 3, 829 A.2d 422 (2003). In fact a failure to disclose information, by itself may constitute a deceptive practice under CUTPA if there was a duty to disclose on the part of the speaker. Id., 776-77. In Miller v. Guimaraes, supra, 763, the plaintiffs entered into an agreement with the defendants to purchase a lot for the purpose of constructing a residential dwelling. The defendants failed to disclose, however, that they did not own the lot. Id., 776. Without addressing the sufficiency of the plaintiffs' additional claim for fraud, the court found that the defendants had a duty to reveal their lack of ownership and, therefore, that their concealment of this information was deceptive. Id., 776-77 n. 3. Consequently, the court held that the defendants were in violation of CUTPA. Id., 776-77.
In light of the holding in Miller v. Guimaraes, the determination of whether the allegations underlying count one sufficiently state a claim for fraud is immaterial in deciding if the complaint properly alleges a violation under CUTPA. Rather, the holding in Miller requires a plaintiff to allege: (1) That the defendants had a duty to disclose all information relating to the subject transaction; and (2) sufficient facts alleging that the defendants' failure to fulfill this duty constitutes a deceptive act. Miller v. Guimaraes, supra, 78 Conn. App. 776. "A duty to disclose will be imposed . . . on a party insofar as he voluntarily makes disclosure. A party who assumes to speak must make a full and fair disclosure as to the matters about which he assumes to speak." Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 636, 804 A.2d 180 (2002). The court in Miller cited the rule set forth in Macomber v. Travelers Property Casualty Corp., supra, 636, and imposed a duty to disclose on the defendants. In doing so, the court noted that the defendants voluntarily relayed information to the plaintiffs regarding the purchase of the lot. Id. Similarly, the defendant Connecticut National Bank allegedly proposed to the plaintiffs in the present matter how it intended to apply their payments on the open-end mortgage and equity credit line. Because a motion to strike requires the court to take the facts alleged in the complaint as true; Cotto v. United Technologies Corp., 251 Conn. 1, 42, 738 A.2d 623 (1999); the defendants assumed a duty to disclose all other information relating thereto.
Because the plaintiffs have not incorporated the allegations underlying their claim for breach of contract into count two, a discussion regarding the defendants' characterization of the present matter as a simple breach of contract is unnecessary.
Paragraph eight of the plaintiffs' revised complaint alleges that: "(a) [t]he defendants represented to the plaintiffs that the payments made by plaintiffs on the equity credit line and the open end mortgage would be amortized and be applied both to principal and to interest thereby causing the principal amount of the debt to be reduced."
Although the plaintiffs do not expressly assert that the defendants had a duty to disclose, such a duty can be implied from the allegations contained in the plaintiffs' revised complaint. "[I]t is unnecessary to allege any promise or duty which the law implies from the facts pleaded." Dietter v. CT Page 5569 Dietter, 54 Conn. App. 481, 489, 737 A.2d 926, cert. denied, 252 Conn. 906, 743 A.2d 617 (1999), citing Practice Book § 10-4.
Additionally, the plaintiffs in the present matter, like the plaintiffs in Miller v. Guimaraes, sufficiently have alleged that the defendants failed to disclose material information regarding the subject transaction, thereby making the defendants' conduct deceptive. More specifically, paragraph ten of the revised complaint alleges that: "(a) The defendants concealed from plaintiffs that the defendants would not apply payments made by plaintiffs to amortize the principal amount of the debt; [and] (b) [d]efendants' concealment of its intention not to amortize the principal amount of the equity credit line and open end mortgage but rather to apply the plaintiffs' payments only to interest was done by the defendants intending to cause a mistaken belief by plaintiffs to exist for the purpose of inducing plaintiffs to enter into, to sign and to make payments on the equity credit line and open-end mortgage. In order to facilitate concealment from the plaintiffs, the defendants and each of them did conceal the maturity date and the maximum term of the obligations set forth in the equity credit line and open-end mortgage." In as much as the plaintiffs allege that the defendants failed to fulfill their duty of disclosure regarding the application of the plaintiffs' payments on the open-end mortgage and equity credit line, the plaintiffs sufficiently have pleaded a cause of action for a CUTPA violation.
Accordingly, the defendants' motion to strike count two is denied.
Count Three: General Statutes § 49-31b
The defendants move to strike count three of the plaintiffs' revised complaint on the ground that § 49-31b does not provide the plaintiffs with a private cause of action. The defendants argue that the statute does not expressly or impliedly provide for a private right of action for any class of persons. They also contend that § 49-31b is inapplicable to a dispute as to the validity or terms of a mortgage and that the only purpose of § 49-31b is to provide subsequent lien creditors with proper notice. The plaintiffs do not address this argument in their opposing memorandum of law. The defendants maintain in their reply, therefore, that Practice Book § 10-42 requires the court to strike count three.
In light of the amendment in 1989 to Practice Book § 10-42, the plaintiffs' failure to address this argument in their memorandum of law in opposition to the defendants' motion to strike does not indicate that the plaintiffs have consented to the granting of the motion. "Prior to the amendment of . . . Practice Book § [10-42 in 1989], a party who failed to timely file a memorandum of law in opposition to a motion to strike was deemed to have consented to the granting of the motion. With the deletion of the foregoing provision from section [10-42], the failure to timely file an opposing memorandum of law will not necessarily be fatal and the court may therefore address the merits of the motion." Pierce v. Verzillo, Superior Court, judicial district of Ansonia-Milford at Milford, Docket No. CV 03 082001 (February 18, 2004, Bear, J.).
Section 49-31b(a) provides that: "A mortgage deed given to secure payment of a promissory note, which furnishes information from which there can be determined the date, principal amount and maximum term of the note, shall be deemed to give sufficient notice of the nature and amount of the obligation to constitute a valid lien securing payment of all sums owed under the terms of such note." Subsection (b) further states that: "With regard to a mortgage deed given to secure payment of a promissory note which contains a provision expressly providing that the interest rate set forth in the note may vary one or more times during the life of the note and that such changes in rate may cause the term of the note to change, the `maximum term' shall be adequately disclosed if the mortgage deed furnishes information from which can be determined: (1) A statement that the interest rate is subject to variation, (2) the conditions under which such rate may vary, (3) the manner, including changes in payment amounts, number of scheduled periodic payments, or change in the amount due at maturity, in which any increase and decrease in the rate may be effected, and (4) the date, if applicable, by which according to the terms of the note, remaining amounts of principal and interest, if any, shall be due and payable in full, regardless of changes in the interest rate . . ."
Our Supreme Court has interpreted § 49-31b solely as a guideline for explaining which terms are preferred in a mortgage to put subsequent creditors on notice. Connecticut National Bank v. Esposito, 210 Conn. 221, 227-28, 554 A.2d 735 (1989); Dart Boque Co. v. Slosberg, 202 Conn. 566, 572, 522 A.2d 763 (1987). "Section 49-31b(a) is a safe harbor provision setting forth sufficient, but not necessary, conditions for giving notice of a secured obligation to subsequent lien creditors." (Internal quotation marks omitted.) Dart Boque Co. v. Slosberg, supra, 572. "The purpose [for providing] such reasonable notice is to prevent parties that are not privy to the transaction from being defrauded or misled." (Internal quotation marks omitted.) Connecticut National Bank v. Esposito, supra, 227. In fact, it has been expressly noted that actions between private parties concerning the enforceability of a mortgage do not require the court to determine whether the mortgage contains any of the terms specified in § 49-31b. Burt's Spirit Shop, Inc. v. Ridgway, 215 Conn. 355, 366, 576 A.2d 1267 (1990). In Burt's Spirit Shop, Inc. v. Ridgway, supra, 365, the defendants argued that they were not obligated to pay the remaining balance on a mortgage because "it did not contain an express statement of the principal amount secured or the applicable rate of interest." The court rejected this argument and found that "[t]he principal that a mortgage deed must with reasonable certainty set forth the nature and amount of the debt is relevant in determining the validity of the mortgage as against subsequent encumbrances but not as between the parties themselves." (Emphasis added.) Id., 366. Consequently, the court held that the defendants' mortgages were enforceable. Id.
Like the defendants in Burt's Spirit Shop, Inc. v. Ridgway, the plaintiffs in the present matter seek to void their obligation to the defendants because the open-end mortgage and equity credit line do not contain terms required under § 49-31b. Specifically, the plaintiffs allege in their revised complaint that the open-end mortgage and equity credit line are unenforceable because neither one contains a maturity date, maximum term, or exact date upon which the remaining amounts of principal and interest become payable in full. As noted above, however, the absence of similar terms in a mortgage has been addressed only when determining the validity of a mortgage against subsequent liens. In the present matter, both the plaintiffs and defendants are the original private parties to the open-end mortgage and equity credit line. Because the plaintiffs' claim in count three involves private parties and does not concern the rights of a subsequent lien creditor, the plaintiffs' reliance on § 49-31b is improper.
Accordingly, the defendants' motion to strike count three is granted.
Count Four: Unjust Enrichment
The defendants move to strike count four of the plaintiffs' revised complaint on the ground that unjust enrichment cannot be asserted as a matter of law in instances where an express contract was entered into by the parties. The defendants argue that unjust enrichment is not available when there is an enforceable express contract because the lack of a contractual remedy is a prerequisite to this type of recovery. Specifically, the defendants contend that, although parties may plead in the alternative pursuant to Practice Book § 10-25, a count for unjust enrichment that incorporates any allegations regarding an express contract violates § 10-26 and, therefore, is legally insufficient. The defendants point out that the allegations in the present matter referring to the open-end mortgage and equity credit line have been incorporated into count four. In their memorandum of law in opposition to the defendants' motion to strike, the plaintiffs maintain that count four does not allege or incorporate a claim for relief based on an express contract. They contend that the defendants seek to "bootstrap their argument" based on the sole premise that the revised complaint, when read in its entirety, sounds in a cause of action for simple breach of contract. The plaintiffs further argue that Practice Book § 10-26 permits them to assert both a claim for breach of contract and a cause of action for unjust enrichment since they are alleging a separate cause of action for unjust enrichment. In reply, the defendants repeat their aforementioned argument and also claim that unjust enrichment is not an available remedy in the present matter because the plaintiffs failed to allege explicitly in count four that they do not have an adequate remedy in contract.
Section 10-25 provides that: "The plaintiff may claim alternative relief based upon an alternative construction of the cause of action."
Section 10-26 states: "Where separate and distinct causes of action, as distinguished from separate and distinct claims for relief founded on the same cause of action or transaction, are joined, the statement of the second shall be prefaced by the words Second Count, and so on for the others; and the several paragraphs of each count shall be numbered separately beginning in each count with the number one."
"A claim for unjust enrichment is not available in the situation where there is an enforceable express contract between the parties." Berman Sable v. National Loan Investors, LP, Superior Court, judicial district of Waterbury, Docket No. CV 00 0167145 (January 16, 2002, McWeeny, J.), citing H.B. Toms Tree Surgery, Inc. v. Brant, 187 Conn. 343, 347, 446 A.2d 1 (1982). "[L]ack of a remedy under the contract is a precondition for recovery based upon unjust enrichment." Paulsen v. Kronberg, 66 Conn. App. 876, 878, 446 A.2d 1 (2001). While Practice Book § 10-25 permits a plaintiff to pursue a cause of action for both unjust enrichment and breach of an express contract in the same complaint; Dreier v. Upjohn Co., 196 Conn. 242, 245, 492 A.2d 164 (1985); § 10-26 requires these alternative pleadings to be asserted in separate counts. Berman Sable v. National Loan Investors, LP, supra, Superior Court, Docket No. CV 00 0167145. Consequently, several courts have found that a claim for unjust enrichment should be stricken if it asserts allegations referring to an express agreement between the parties. See, e.g., Whitby School, Inc. v. Grenaille, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 03 0195602 (December 29, 2003, Lewis, J.T.R) ( 36 Conn.L.Rptr. 285, 286) (granting the defendants' motion to strike the plaintiff's claim for unjust enrichment because the plaintiff incorporated the allegations from its breach of contract claim in count one into its claim for unjust enrichment in count two); Berman Sable v. National Loan Investors, LP, supra, Superior Court, Docket No. CV 00 0167145 (finding that the plaintiff's claim for unjust enrichment to be legally insufficient because it contained assertions regarding an express contract); Miller v. O.S. Shipping Trading Corp., Superior Court, judicial district of Waterbury, Docket No. CV 01 0166810 (November 7, 2001, McWeeny, J.) (striking the plaintiff's claim for unjust enrichment after finding that it contained allegations of an existing express contract). In Berman Sable v. National Loan Investors, LP, supra, Superior Court, Docket No. CV 00 0167145, the defendant's counterclaim for unjust enrichment alleged that the parties entered into an express contract for legal services. Even though the actual count for breach of contact was pleaded subsequent to the counterclaim for unjust enrichment, the court granted the plaintiff's motion to strike because the count for unjust enrichment also included assertions that there was an express contract. Id.
Like the defendants in Berman Sable v. National Loan Investors, LP, the plaintiffs in the present matter cannot plead a cause of action for unjust enrichment because they incorporated allegations referring to the existence of an express contract. As the defendants state in both their opposing and reply memoranda of law, the plaintiffs' claim for unjust enrichment in count four precedes the breach of contract claim. Count four incorporates, however, all of the allegations from counts one through three in which the plaintiffs describe the execution of the open-end mortgage and equity credit line. Specifically, the plaintiffs incorporate paragraph six of the revised complaint in which they allege that the "defendant Connecticut National Bank did induce the plaintiffs Manuel and Maureen Alvarez to sign an Open-End Mortgage Deed and Equity Credit Line payable to the defendant Connecticut National Bank." The plaintiffs also include paragraph eight alleging, in relevant part, that "the plaintiffs were induced to and did execute the Open End Mortgage and Equity Credit Line." Because the plaintiffs in the present case have incorporated allegations in count four that refer to an express contract, their claim for unjust enrichment is legally insufficient.
Accordingly, the defendants' motion to strike count four is granted.
Count Seven: Fraudulent Concealment of Causes of Action
The defendants move to strike count seven of the plaintiffs' revised complaint on the ground that it is legally insufficient because it does not contain a specific statement or factual allegation to support a claim for fraud. The defendants argue that the revised complaint does not contain allegations regarding particular acts taken by the defendants to conceal any causes of action from the plaintiffs or any reference to who may have taken these actions. Specifically, the defendants contend that "there are no references to any oral statements, written documents, failure on the part of the Defendants to provide properly detailed invoices, reasons why the Plaintiffs may not have read their monthly invoices that they received for 16 years . . ." The plaintiffs counter that they were specific about the manner in which the defendants fraudulently concealed the causes of action from the plaintiffs and that their complaint satisfies all of the required elements of the fraudulent concealment statute, General Statutes § 52-595. In reply, the defendants concede that the plaintiffs have alleged all the required elements. They emphasize, however, that the plaintiffs have ignored the heightened pleading requirement for fraudulent concealment claims by failing to provide details regarding the alleged fraudulent activities. They further contend that the plaintiffs are using count seven to void the obligations of a contract into which they entered sixteen years ago and to toll the statute of limitations for various causes of action. The defendants argue, therefore, that count seven should be stricken.
Section 52-595 provides that: "If any person, liable to an action by another, fraudulently conceals from him the existence of the cause of such action, such cause of action shall be deemed to accrue against such person so liable therefor at the time when the person entitled to sue thereon first discovers its existence." In actions involving allegations of fraudulent concealment, "[t]he question before [the court] is whether the plaintiffs have adduced any credible evidence that any of the defendants fraudulently concealed the existence of the plaintiffs' cause of action. To meet this burden, it [is] not sufficient for the plaintiffs to prove merely that it [is] more likely than not that the defendants [have] concealed the cause of action. Instead, the plaintiffs [must] prove fraudulent concealment by the more exacting standard of clear, precise, and unequivocal evidence . . . Under our case law, to prove fraudulent concealment, the plaintiffs are required to show: (1) a defendant's actual awareness, rather than imputed knowledge, of the facts necessary to establish the plaintiffs' cause of action; (2) that defendant's intentional concealment of these facts from the plaintiffs; and (3) that defendant's concealment of the facts for the purpose of obtaining delay on the plaintiffs' part in filing a complaint on their cause of action." (Citations omitted; emphasis added; internal quotation marks omitted.) Bartone v. Robert L. Day Co., 232 Conn. 527, 532-33, 656 A.2d 221 (1995).
Despite the heightened pleading requirement enunciated in Bartone v. Robert L. Day Co., supra, 232 Conn. 532-33, a number of Superior Courts have either granted or denied a motion to strike based solely on whether the plaintiff has alleged the aforementioned elements. Neuhaus v. Decholnoky, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 96 0153565 (January 20, 2000, Hickey, J.) (denying the defendant's motion to strike because the plaintiff alleged all three of the required elements for a claim of fraudulent concealment of causes of action); Mountaindale Condominium Assn., Inc. v. Zappone, Superior Court, judicial district of Litchfield, Docket No. CV 95 0067279 (September 6, 1995, Pickett, J.) (granting the defendant's motion to strike because "[t]he plaintiff has not sufficiently alleged the necessary elements of fraudulent concealment, including that the defendant's concealment of facts [was] for the purpose of obtaining delay on the plaintiff['s] part in filing a complaint on their cause of action"). In Neuhaus v. Decholnoky, supra, Superior Court, Docket No. CV 96 0153565, the court found that the plaintiff had alleged a valid cause of action for fraudulent concealment even though the complaint contained only general allegations reciting the requisite elements. The plaintiff in Neuhaus alleged that "the defendant fraudulently and intentionally concealed a cause of action for emotional distress in violation of General Statutes § 52-595 . . . that the defendant fraudulently and intentionally concealed facts necessary to establish a cause of action for emotional distress . . . and [that the defendant] did so for the purpose of keeping the plaintiff from investigating and/or bringing legal action." (Internal quotation marks omitted.) Id. Because the plaintiff's complaint contained allegations reciting all three of the elements set forth in Bartone v. Robert L. Day Co., supra, 232 Conn. 532-33, the court denied the defendant's motion to strike. Id.
Like the plaintiff in Neuhaus v. Decholnoky, supra, Superior Court, Docket No. CV 96 0153565, the plaintiffs in the present matter have alleged all of the necessary elements of a cause of action for fraudulent concealment. In addition to incorporating the allegations underlying counts one through six, the plaintiffs allege in count seven that "[a]t all times and continuously from July 1987 through the date of the filing of the Revised Complaint, defendants, and each of them, did fraudulently conceal the causes of action alleged herein from plaintiffs." They further allege that the "[d]efendants were aware that payments made by plaintiffs on the equity credit line and open end mortgage would not be and were not amortized and that representations had been made by defendants' agents, servants and employees that payments would be amortized: the defendants' resulting concealment from plaintiffs was directed to the objective of obtaining delay in the filing of plaintiffs' action . . . As a result thereof, plaintiffs' causes of action were fraudulently concealed from them by the defendants, thereby suspending the running of the statute of limitations applicable to each count of the revised complaint in accordance with section 52-595 of the Connecticut General Statutes." The allegations in the plaintiffs' complaint satisfy the elements set forth in Bartone v. Robert L. Day Co., supra, 232 Conn. 532-33. Therefore, the plaintiffs sufficiently have pleaded a claim for fraudulent concealment of causes of action.
Accordingly, the defendants' motion to strike count seven is denied.
Prayer for Relief A. Attorneys Fees and Punitive Damages
The defendants move to strike certain portions of the prayers for relief on the ground that they are legally insufficient as a matter of law. The defendants argue that the request for attorneys fees in counts one, six and seven should be stricken because the plaintiffs have not pleaded any statutory or contractual authority for such relief. They further contend that the plaintiffs' prayers for relief in counts one, two, six and seven requesting punitive damages also should be stricken because the revised complaint fails to allege any wanton or willful malicious conduct on the part of the defendants that would warrant such an award. In their opposing memorandum of law, the plaintiffs counter that their allegations of fraud illustrate the defendants' reckless indifference to the plaintiffs' rights, thereby warranting an award of both attorneys fees and punitive damages. They also contend that an award of punitive damages under CUTPA is discretionary. The plaintiffs maintain, therefore, that the sufficiency of their request for attorneys fees and punitive damages in their prayer for relief should not be determined on a motion to strike. In reply, the defendants argue that "the allegations in the present case, even assuming they are true . . . simply do not demonstrate that the Defendants independently intended to harm the Plaintiffs, instead of seeking to help themselves [financially]."
The Supreme Court has held that Connecticut follows "[t]he general rule of law known as the `American rule' [whereby] attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent contractual or statutory exception." (Internal quotation marks omitted.) Rizzo Pool Co. v. Del Grosso, 240 Conn. 58, 72-73, 689 A.2d 1097 (1997). It has also has been found, however, that "in a fraud case, attorneys fees are considered an element of punitive or exemplary damages and may be awarded to the prevailing party on that basis." (Emphasis added.) ATI Pharmaceuticals v. Lerner, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 91 0280536 (August 1, 1991, Licari, J.), citing Wedig v. Brinster, 1 Conn. App. 123, 134, 469 A.2d 783 (1983), cert. denied, 192 Conn. 803, 472 A.2d 1284 (1984). "To support an award of punitive damages, the evidence must reveal a reckless indifference to the rights of others or an intentional and wanton violation of those rights." (Internal quotation marks omitted.) Sorrentino v. All Seasons Services, Inc., 245 Conn. 756, 778, 717 A.2d 150 (1998). A malicious and wanton injury justifying an award of punitive damages is one in which both the action producing the injury and the resulting injury were intentional. Markey v. Santangelo, 195 Conn. 76, 77, 485 A.2d 1305 (1985). Absent factual allegations that such intent existed on the part of the defendant, "a request for punitive damages is inappropriate and must be stricken." Nemeth/Martin Consulting, Inc. v. Excel Data Systems, Inc., Superior Court, judicial district of Ansonia/Milford at Milford, Docket No. CV 01 0076178 (January 20, 2003, Alander, J.).
In the present matter, the plaintiffs do not allege any statutory or contractual authority for the award of attorneys fees, or that the defendants possessed the requisite intent set forth in Markey v. Santangelo, supra, 195 Conn. 77-78. The plaintiffs allege in the revised complaint that the "[d]efendants' concealment of its intention not to amortize the principal amount of the equity credit line and open end mortgage but rather to apply plaintiffs' payments only to interest was done by the defendants intending to cause a mistaken belief by plaintiffs to exist and to continue to exist for the purpose of inducing the plaintiffs to enter into, to sign and to make payments . . ." The plaintiffs do not allege, however, that the defendants intended to cause the plaintiffs any resulting financial injury. Rather, the complaint alleges that "[a]s a result of the defendants' fraudulent concealment of its intention not to apply and its continuing course of conduct in not apply payments made by plaintiffs to principal but only to interest, plaintiffs have suffered great financial loss." In as much as the plaintiffs have not alleged: (1) any statutory or contractual authority for an award of attorneys fees; or (2) any factual allegations demonstrating the requisite intentional conduct on the part of the defendants to support an award of punitive damages, the plaintiffs' prayer for relief requesting attorneys fees in counts one, six and seven and punitive damages in counts one, two, six and seven is legally insufficient.
Accordingly, the defendants' motion to strike the portions of the prayers for relief requesting attorneys fees and punitive damages is granted.
The effect of the plaintiffs' failure to allege recklessness on the part of the defendants also applies to their argument that the award of attorneys fees and punitive damages is discretionary under CUTPA "Awarding punitive damages and attorneys fees under CUTPA is discretionary . . . Punitive damages are awarded when the evidence shows a reckless indifference to the rights of others or an intentional and wanton violation of those rights . . . The flavor of the basic requirement to justify an award of punitive damages is described in terms of wanton and malicious injury, evil motive and violence." (Internal quotation marks omitted.) Nielsen v. Wisniewski, 32 Conn. App. 133, 138, 628 A.2d 25 (1993).
B. Restitution
The defendants also move to strike the plaintiffs' request for restitution in counts one through seven on the ground that a remedy is available to the plaintiffs pursuant to a contract. The defendants contend that the plaintiffs' prayers for relief seeking restitution are unfounded for the same reasons that the plaintiffs' claim for unjust enrichment in count four is insufficient. The plaintiffs counter that restitution would be an appropriate remedy if they can prove fraud on the part of the defendants and also reiterate that they have not alleged in the same count both an express contract and a right to restitution.
Because the defendants' motion to strike counts three and four should be stricken, the corresponding requests for restitution in the prayers for relief should also be stricken.
"Unjust enrichment and quantum meruit are forms of the equitable remedy of restitution by which a plaintiff may recover the benefit conferred on a defendant in situations where no express contract has been entered into by the parties." Burns v. Koellmer, 11 Conn. App. 375, 385, 527 A.2d 1210 (1987). "An express contract is one in which the terms of the contract are expressed by the direct words of the parties." Id., 388. "[P]arties who have entered into controlling express contracts are bound by such contracts to the exclusion of inconsistent implied contract obligations." H.B. Toms Tree Surgey, Inc. v. CT Page 5568 Brant, supra, 187 Conn. 347. As noted above, counts one, two, five, six and seven in the present matter incorporate allegations that refer specifically to the open-end mortgage and equity credit line. Consequently, the prayers for relief seeking restitution are legally insufficient.
Therefore, the defendants' motion to strike the plaintiffs' request for restitution in the corresponding prayers for relief is granted.
Based on the foregoing, the court denies the defendants' motion to strike counts one, two and seven and grants the motion as to counts three and four. Furthermore, the court grants the motion to strike the request for attorneys fees in counts one, six and seven, the request for punitive damages in counts one, two, six and seven, and the request for restitution in counts one through seven.
Skolnick, J.