Opinion
CV166060392S
09-06-2016
Cap Maintenance Solutions, LLC v. Wallingford Autopark, Inc.
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION TO STRIKE (#102)
Robin L. Wilson, J.
FACTS
On February 10, 2016, the plaintiff, Cap Maintenance Solutions, LLC, commenced this action by service of process of its five-count complaint on the defendant, Wallingford Autopark, Inc., wherein the plaintiff asserts claims for breach of contract (count one), quantum meruit (count two), unjust enrichment (count three), violations of CUTPA (count four), and breach of the implied covenant of good faith and fair dealing (count five). In support of its claims, the plaintiff alleges the following facts. The plaintiff and the defendant were parties to an agreement, executed June 28, 2014, whereby the plaintiff was to provide car detailing services to the defendant car dealership. The terms of this agreement establish set prices for certain services rendered by the plaintiff, while the prices for other services are set as negotiable between the parties. Despite the plaintiff's full performance of its obligations under the agreement, the defendant failed to pay the full amount due to the plaintiff, notwithstanding the plaintiff's numerous demands for the defendant to do so. By withholding payment from the plaintiff, the defendant has retained the benefit of the plaintiff's performance without performing its obligations in full. Further, the defendant's multiple breaches of the agreement were accompanied by repeated promises to pay the plaintiff in full for services rendered in the future, despite the fact that, on information and belief, the defendant made these promises knowing they were false, and with the intent to induce the plaintiff's reliance on these promises. The plaintiff seeks compensatory damages, punitive damages, attorneys fees, costs, and interest from the defendant.
On March 7, 2016, the defendant filed a motion to strike counts four and five of the plaintiff's complaint. The defendant moves to strike count four on the grounds that the plaintiff has not alleged that the defendant was engaged in trade or commerce with the plaintiff such that the plaintiff can seek CUTPA relief, and further, that the plaintiff seeks relief for a disputed contractual amount and, as such, has not alleged sufficient aggravating circumstances that would give rise to a CUTPA claim. The defendant seeks to strike count five on the ground that the plaintiff has failed to allege that the defendant acted with bad faith, dishonest purpose, or a sinister motive when it allegedly breached the agreement with the plaintiff. The defendant's motion is accompanied by a memorandum of law. The plaintiff filed an objection to the defendant's motion on April 5, 2016, and the defendant replied to the plaintiff's objection on April 15, 2016. Oral argument was heard on the motion by the court at short calendar on May 31, 2016.
The defendant's motion also indicates that the defendant seeks to strike count three, however, the defendant's memorandum does not address count three, and at oral argument, the defendant confirmed that count three was named as the result of a scrivener's error. The court further notes that the defendant's motion fails to comport with Practice Book § 10-39(b), which requires that the specific grounds for the defendant's motion to strike appear on the face of the motion itself rather than within the memorandum of law. See Horse Tavern Builders, LLC v. Pizzino, judicial district of Fairfield, Docket No. CV-15-6049934-S, (August 8, 2016, Kamp, J.); Stuart v. Freiberg, 102 Conn.App. 857, 861, 927 A.2d 343 (2007). Because the plaintiff has not raised this issue in its objection, however, the court will consider the defendant's motion to strike. See, e.g., Bouchard v. People's Bank, 219 Conn. 465, 468 n.4, 594 A.2d 1 (1991).
DISCUSSION
" 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 can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). " A motion to strike challenges the legal sufficiency of a pleading, and consequently, requires no factual findings by the trial court." (Internal quotation marks omitted.) JP Morgan Chase Bank, N.A. v. Winthrop Properties, LLC, 312 Conn. 662, 670, 94 A.3d 622 (2014). " [The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency . . . Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Moreover, [the court notes] that [w]hat is necessarily implied [in an allegation] need not be expressly alleged . . . It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted . . . Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Coppola Construction Co. v. Hoffman Enterprises Ltd. Partnership, 309 Conn. 342, 350, 71 A.3d 480 (2013). " In ruling on a motion to strike the trial court is limited to considering the grounds specified in the motion." Meredith v. Police Commission, 182 Conn. 138, 140, 438 A.2d 27 (1980).
I. The Sufficiency of the Plaintiff's CUTPA Claim in Count Four
The defendant advances two theories in support of its motion to strike the plaintiff's CUTPA claim. The defendant first argues that the plaintiff has failed to allege that the defendant's conduct occurred within the ambit of trade or commerce actionable under CUTPA. In the alternative, the defendant more generally contends that the plaintiff's claim amounts to nothing more than a claim for breach of contract. The court will address the merits of the parties' arguments in relation to each of the defendant's grounds, in turn.
a. Whether the Plaintiff has Alleged That the Defendant's Conduct Occurred Within the Scope of Trade or Commerce Under CUTPA
The defendant argues that while the plaintiff has alleged that the plaintiff and the defendant were two separate entities engaged in a business relationship, the plaintiff's allegations demonstrate that any harm caused to the plaintiff by the defendant occurred after the agreement between the parties was executed. Thus, the defendant contends, the relationship between the plaintiff and the defendant is more akin to one between an employer and an employee, and that such a relationship precludes the plaintiff from asserting a CUTPA claim against the defendant. The defendant cites Quimby v. Kimberly Clark Corp., 28 Conn.App. 660, 670, 613 A.2d 838 (1992), for the proposition that the employment relationship between an employer and employee is not considered " trade or commerce" for the purposes of CUTPA. In response, the plaintiff argues that per the terms of the agreement between the parties, the plaintiff was hired by the defendant as an independent contractor and not as an employee, and that the issue for this court to decide is merely whether an independent contractor may assert a CUTPA claim against a company for which the contractor has provided services. The plaintiff argues that the answer to this question is a resounding yes, citing Johnson Electric Co. v. Salce Contracting Associates, Inc., 72 Conn.App. 342, 348-52, 805 A.2d 735, cert. denied 262 Conn. 922, 812 A.2d 864 (2002), as well as several Superior Court decisions.
" CUTPA provides that '[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce' . . . The purpose of CUTPA is to protect the public from unfair practices in the conduct of any trade or commerce . . ." (Citations omitted; internal quotation marks omitted.) Sovereign Bank v. Licata, 116 Conn.App. 483, 493, 977 A.2d 228 (2009), cert. dismissed 303 Conn. 721, 36 A.3d 662 (2012). " CUTPA, by its own terms, applies to a broad spectrum of commercial activity . . . Trade or commerce [under CUTPA] is broadly defined as 'the advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value in this state' . . . The entire act is remedial in character . . . and must be liberally construed in favor of those whom the legislature intended to benefit." (Citations omitted; internal quotation marks omitted.) Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 492, 656 A.2d 1009 (1995). " [Our Supreme Court] previously [has] stated in no uncertain terms that CUTPA imposes no requirement of a consumer relationship . . . [A] competitor or other business person can maintain a CUTPA cause of action without showing consumer injury." (Citation omitted; internal quotation marks omitted.) Id., 496.
While the scope of trade or commerce protected by CUTPA is broad, it is not all encompassing. Conduct that arises from the employer-employee relationship is not considered trade or commerce for the purposes of CUTPA. See Quimby v. Kimberly Clark Corp., supra, 28 Conn.App. 670. Further, " in reliance on [Quimby], numerous Superior Court judges have stricken CUTPA claims when the allegations arise out of or are closely related to an employer-employee relationship." Reynolds, Pearson & Co. v. Miglietta, Superior Court, judicial district of Hartford, Docket No. CV00-0801247-S (March 27, 2001, Berger, J.) (29 Conn.L.Rptr. 481, 485, ) (compiling cases). Superior Courts that have so held have done so in reliance on a pair of decisions from our Supreme Court, Larsen Chelsey Realty Co. v. Larsen, supra, 232 Conn. 491-92, and Fink v. Golenbock, 238 Conn. 183, 214, 680 A.2d 1243 (1996), wherein the court emphasized that it is conduct of the defendant, and not the relationship between the parties, that controls whether the defendant's actions towards the plaintiff occurred in trade or commerce for the purposes of a CUTPA claim.
In Larsen, our Supreme Court reviewed a trial court's decision to set aside a jury verdict that had awarded an employer plaintiff CUTPA damages against a defendant employee, in reliance on the holding in Quimby that an employer-employee relationship does not fall within trade or commerce for the purposes of CUTPA. The Larsen defendant, a former president and employee of the plaintiff real estate company, had diverted business away from the plaintiff to a competitor while still employed by the plaintiff, in anticipation of taking a position with the competitor. The Larsen court reversed the trial court's decision that had held CUTPA inapplicable, in part, because " the trial court [had] failed to consider [the defendant employee's] activities, rather than his relationship to the plaintiff . . ." Larsen Chelsey Realty Co. v. Larsen, supra, 232 Conn. 492. Specifically, the Supreme Court explained that " [u]nlike the situation in Quimby, this case presents a fact pattern that involves a potentially viable cause of action under CUTPA because [the defendant's] allegedly tortious conduct was outside the scope of his employment relationship with the plaintiff . . . [The defendant] accepted a job with a competing real estate broker and then, acting as a competitor [while still employed by the plaintiff], took actions that harmed the plaintiff." Id., 493-94.
Later, our Supreme Court reaffirmed Larsen 's holding that it is the defendant's conduct, and not the relationship between the parties, that determines the availability of remedies under CUTPA to the plaintiff. Fink v. Golenbock, supra, 238 Conn. 214. In Fink, the plaintiff and defendant were physicians engaged in the practice of medicine with the same professional corporation. The defendant made various threats towards the plaintiff, which forced the plaintiff to first leave the corporation, and then to leave town entirely, at which point he was unable to practice medicine. See id. Subsequently, the defendant formed a new corporation and took over the client base of the existing corporation that he shared with the plaintiff, informing those clients that the old practice no longer existed and that they should pay their bills to his new practice. Id. The court observed that " [b]ecause the original corporation had neither been dissolved . . . nor extinguished . . . these acts amounted to competitive moves designed to co-opt all of the corporation's operations"; id., 214; and held " that [the defendant's] actions fell within the purview of CUTPA." Id., 215.
The language employed by our Supreme Court in both Larsen and Fink strongly suggests that in the absence of a consumer injury, the plaintiff must demonstrate some type of unfair competitive conduct on the part of the defendant in order for the plaintiff to assert a valid CUTPA claim. The Connecticut District Court has used a similar lens to evaluate the sufficiency of an independent contractor's CUTPA claim. See Ariztegui v. Sikorsky Aircraft Corp., United States District Court, Docket No. 3:10CV672 (JBA), (D.Conn. March 28, 2011) (discussing various authorities requiring allegations of competitive behavior in Connecticut, and holding plaintiff's allegations could implicate competition between the parties such that plaintiff independent contractor could assert CUTPA claim against defendant). Further, in reliance on Larsen and Fink, a line of decisions from our Superior Courts have looked for the presence of unfair competitive or anticompetitive activity when the plaintiff has sought CUTPA relief for conduct outside of a consumer relationship with the defendant. See, e.g., Lockwood v. Carta, Jr., LLC, Superior Court, judicial district of Middlesex, Docket No. CV-10-6001656-S, (September 20, 2011, Abrams, J.) (holding plaintiff nurse serving as independent contractor to defendant attorney unable to assert CUTPA claim because plaintiff not harmed by either customer relationship or competitor relationship with defendant); Kelly v. Noble Environment Power, LLC, Superior Court, judicial district of Middlesex, Docket No. CV-08-5005444-S, (September 2, 2009, Jones, J.) (observing that " the primary focus of [the] court's analysis must be on whether, in the activities alleged, the defendant was acting as a competitor and took actions that harmed the plaintiff [contractor], " and striking plaintiff's CUTPA claim for lack of relevant allegations); Reynolds, Pearson & Co. v. Miglietta, supra, 29 Conn.L.Rptr. 485-86, (plaintiff officer unable to assert CUTPA claim against corporation that had employed plaintiff, and subsequent to plaintiff's employment, breached settlement agreement with plaintiff, due to dissimilarity of plaintiff's allegations to actionable anticompetitive activity in Larsen and Fink ); Messler v. Barnes Group, Inc., Superior Court, judicial district of Hartford, Docket No. CV-96-0560004-S, (February 1, 1999, Teller, J.) (holding while conduct alleged was dispute between independent contractor and principal similar to that between employee and employer, complaint alleged defendant engaged in sufficient activity as plaintiff's competitor to bring claim within ambit of trade or commerce under CUTPA).
The court finds the foregoing authority persuasive, and agrees with the defendant that the plaintiff has failed to allege that the defendant's conduct towards the plaintiff occurred in trade or commerce for the purposes of the plaintiff's CUTPA claim, because the plaintiff has not alleged anticompetitive or consumer injury such that the plaintiff's relationship to the defendant is distinguishable from that of an employee to his or her employer. The plaintiff has alleged that the defendant failed to pay the plaintiff the full amount of sums due for services rendered by the plaintiff. Absent from the plaintiff's allegations is any allegation that the defendant acted in a manner to harm the plaintiff's business competitively, or that the plaintiff was engaged in a consumer relationship with the defendant. Although the plaintiff has alleged that it had a contractual relationship with the defendant, and the plaintiff argues that this fact should allow its CUTPA claim to stand, it is the underlying conduct of the defendant, and not the relationship between the parties, that controls whether a defendant's conduct is actionable under CUTPA. The plaintiff's allegations more closely align with a situation in which an employer has mistreated an employee, rather than a business that has harmed another business through unfair trade practices in trade or commerce. Accordingly, the plaintiff's CUTPA claim in count four is legally insufficient and the motion to strike on this ground is therefore granted.
b. Whether the Plaintiff's has Alleged Aggravating Circumstances to Elevate its Breach of Contract Claim to a CUTPA Claim
Despite the finding by this court that the plaintiff's CUTPA claim in count four is insufficiently pleaded based on the first ground advanced by the defendant, the court will address the merits of the alternate ground advanced by the defendant because it offers an additional basis upon which the plaintiff's CUTPA claim must be stricken. The defendant further contends that the plaintiff's allegations demonstrate nothing more than a " bona fide dispute" over the amount owed under the terms of a contract between the parties, and are thus insufficient to maintain a CUTPA claim as a matter of law. In response, the plaintiff asserts that a motion to strike is limited to the facts alleged in the pleadings, and that the defendant cannot allege or argue its own facts outside of the pleadings in support of its motion to strike. In reply to the plaintiff's objection, the defendant clarifies that in arguing that a bona fide dispute exists between the parties, the defendant meant to highlight that the plaintiff's action is " a simple collection action" that cannot constitute a CUTPA claim. The court interprets the defendant's challenge as contending that the plaintiff has not alleged sufficient aggravating circumstances to convert a breach of contract claim into a claim for CUTPA relief.
The court acknowledges that at oral argument, the plaintiff contended that the defendant's briefing was not premised on the plaintiff's failure to allege aggravating circumstances, and that as a result, this court could not consider the merits of the defendant's motion to strike on this basis. The court does not take the plaintiff's contention lightly and recognizes that the defendant's briefing on this matter was thin, nevertheless, the court disagrees with the plaintiff. In its briefing, the defendant argues that the plaintiff's allegations in count four " do not amount to a CUTPA violation, " and that the plaintiff's action is " nothing more than a simple action over a disputed amount." Although the defendant has not used the term " aggravating circumstances, " the defendant has made the same argument in substance such that this court may address the merits of this ground.
This court recently set forth the relevant pleading requirements that a plaintiff must satisfy in order to sufficiently plead a CUTPA claim against a defendant when the underlying allegations of the plaintiff's complaint against the defendant sound in breach of contract. " It is well settled that a CUTPA cause of action may arise from a breach of contract, however not every contractual breach rises to the level of a CUTPA violation . . . Our Supreme Court, in Lydall v. Ruschmeyer, 282 Conn. 209, 247-48, 919 A.2d 421 (2007), in reversing a trial court's finding of a CUTPA violation based upon a breach of an employment agreement, cited approvingly of the general rule that absent substantial aggravating circumstances, [a] simple breach of contract is insufficient to establish [a] claim under CUTPA . . . Consequently, in order to sufficiently allege aggravating factors to bring a breach of contract claim into the auspices of CUTPA, the aggravating factors alleged must constitute more than a failure to deliver on a promise . . .
" [N]ot every contractual breach rises to the level of a CUTPA violation . . . [N]ot every misrepresentation rises to [the] level of [a] CUTPA violation . . . There must be some nexus with a public interest, some violation of a concept of what is fair, some immoral, unethical, oppressive or unscrupulous business practice or some practice that offends public policy . . . In the absence of allegations arising to such a level of conduct, the plaintiffs have failed to properly plead a cause of action under CUTPA . . ." (Citations omitted; emphasis added; internal quotation marks omitted.) Metromedia Energy Inc. v. 21st Century Management, Inc., Superior Court, judicial district of New Haven, Docket No. CV-13-6043097-S, (October 2, 2014, Wilson, J.).
It has been held that a CUTPA claim may lie in the case of a defendant's multiple breaches of contract, however, in such cases the plaintiff generally has set forth the specifics underlying the defendant's breaches in order to meet the aggravating circumstances requirement applicable to this type of a CUTPA claim. See, e.g., Darsan Technologies, Inc. v. Golden Compass, Inc., Superior Court, judicial district of New Haven, Docket No. CV-13-6043132-S, (October 29, 2014, Nazzaro, J.). " Numerous breaches of contract may sufficiently aggravate a defendant's course of conduct so as to bring it within the ambit of CUTPA . . . For example, the plaintiff pleaded sufficient facts to maintain a CUTPA count based on breach of contract in Metropolitan Trucking v. Rand-Whitney Containerboard, LP, Superior Court, judicial district of New London, Docket No. CV-09-5013770-S (March 31, 2010, Cosgrove, J.) (49 Conn.L.Rptr. 584, 587, ), where it alleged that the defendant had failed to pay under numerous bills of lading. Each alleged failure to pay was a separate and distinct breach giving rise to a course of conduct which adequately alleged a CUTPA violation even if each breach, standing alone, would not have." (Citation omitted.) Id.
In Darsan, the court considered a defendant's motion to strike a plaintiff's CUTPA claim premised on the defendant's multiple breaches of a service agreement between the parties. The Darsan court held that the plaintiff's allegations were sufficient to sustain a CUTPA claim, because the plaintiff had pleaded details regarding the defendant's repeated promises and failures to pay the plaintiff. Id. These details included an explanation of each breach committed by the defendant, details of telephone conversations between the defendant and the plaintiff regarding payment, and promises made by the defendant to pay " every penny owed" to the plaintiff. Id. In light of these allegations, the court concluded that " [m]ultiple breaches of this nature are considered aggravating circumstances when analyzing CUTPA claims based on breach of contract." Id.
The allegations of the plaintiff's complaint in this action stand in sharp contrast to those before the court in Darsan. While the plaintiff has pleaded that the defendant committed multiple breaches of contract, the plaintiff has not alleged the circumstances of the defendant's conduct in any detail. Tellingly, the plaintiff's allegations pertaining to its CUTPA claim in count four refer to the defendant's multiple " breaches described in count one, " but in count one, the plaintiff simply alleges that the defendant failed to pay the plaintiff the full amount due for work performed under the agreement between the parties. Without additional allegations that demonstrate the immoral, unscrupulous, or oppressive nature of the defendant's conduct, the plaintiff's allegations fail to allege more than the defendant's failure to deliver on a promise to pay. While these allegations certainly may sustain a claim for breach of contract, they do not demonstrate the aggravating circumstances that must be shown to sustain a CUTPA violation in this context. Thus, the plaintiff's CUTPA claim in count four is legally insufficient for failure to allege sufficient aggravating circumstances.
III. The Sufficiency of the Plaintiff's Claim for Breach of the Covenant of Good Faith and Fair Dealing in Count Five
The defendant next argues that the plaintiff has not sufficiently alleged that the defendant acted in bad faith, or with a dishonest purpose or sinister motive, to sustain its claim for breach of the covenant of good faith and fair dealing. In reply, the plaintiff argues that allegations of multiple promises to pay, followed by continued nonpayment and multiple breaches of contract, sufficiently demonstrate the defendant's bad faith to support the plaintiff's claim.
" [E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement . . . To constitute a breach of [that duty], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith . . . Bad faith means more than mere negligence; it involves a dishonest purpose." (Citation omitted; internal quotation marks omitted.) Collins v. Anthem Health Plans, Inc., 275 Conn. 309, 333-34, 880 A.2d 106 (2005). " Bad faith in general implies both actual and constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive . . . [B]ad faith is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity . . . [I]t contemplates a state of mind affirmatively operating with furtive design or ill will . . . Absent allegations and evidence of a dishonest purpose or sinister motive, a claim for breach of the implied covenant of good faith and fair dealing is legally insufficient." (Citations omitted; internal quotation marks omitted.) Marder v. Nationwide Insurance Co., Superior Court, judicial district of New Haven, Docket No. CV-13-6038355-S (November 12, 2015, Wilson, J.) (61 Conn.L.Rptr. 269, 271, ).
Just as the plaintiff has failed to allege aggravating circumstances to support its CUTPA claim, the plaintiff has similarly failed to allege any circumstances of bad faith, dishonest purpose, or sinister motive on the part of the defendant to support its claim in count five. The plaintiff's bare allegations of multiple breaches of contract, without allegations tending to show how the contract between the parties was breached, or from which the defendant's sinister motive or intent can be inferred, does not constitute a sufficiently pleaded claim for breach of the covenant of good faith and fair dealing. Therefore, the court grants the defendant's motion to strike count five.
CONCLUSION
Accordingly, for the foregoing reasons, the court grants the defendant's motion to strike count four of the plaintiff's complaint, alleging CUTPA, on the grounds that the plaintiff has neither alleged aggravating circumstances nor that the defendant's conduct occurred in trade or commerce, and grants the defendant's motion to strike count five of the plaintiff's complaint, alleging breach of the covenant of good faith and fair dealing, on the ground that the plaintiff has not alleged circumstances of bad faith.