Opinion
No. LLI CV 09 5007086S
February 19, 2010
MEMORANDUM OF DECISION
ISSUE
The issue is whether the court should grant the defendant's motion to strike counts one and two of the plaintiffs' complaint on the ground that both counts are legally insufficient to state the causes of action that the plaintiffs allege.
FACTS
On November 6, 2009, the plaintiffs, the Dino Corporation and Paul Nanni, filed a two-count complaint against the defendant, Alma Nanni. In count one, the plaintiffs allege the following facts: On or about June 22, 2007, the plaintiffs entered into an oral contract with the defendant, who was acting in both her individual capacity and as administratrix of the estate of Alfredo J. Nanni when the oral contract was made. The oral contract provided, inter alia, that the defendant would "indemnify the plaintiffs against any environmental liens with respect to properties deeded to her under the agreement and . . . settle a prior lawsuit in which the Dino Corporation, Paul Nanni and Alma R. Nanni, as administratrix of the estate of Alfredo J. Nanni, were parties." The plaintiffs allege that the defendant, in her individual capacity, has "failed and refused to comply with the settlement agreement despite a demand that she do so," and even though the plaintiffs are ready, willing and able to proceed with the agreement. Thus, the plaintiffs allege, the defendant has breached the settlement agreement. The plaintiffs contend that this court previously upheld the settlement agreement at issue here as "clear, unambiguous and enforceable" and that the Appellate Court concurred with this conclusion. See Nanni v. Dino Corp., 117 Conn.App. 61, 978 A.2d 531 (2009). The plaintiffs also allege that the Appellate Court concluded that the defendant was a party to the settlement agreement in her individual capacity and that she is bound by that agreement in her individual capacity. In count two, the plaintiffs reiterate count one's allegations and claim that the defendant's breach of the settlement agreement is in bad faith. As a result, the plaintiffs seek a summary enforcement of the settlement agreement, including an order of specific performance, damages and costs.
On November 20, 2009, the defendant filed a motion to strike both counts of the plaintiffs' complaint along with a memorandum of law. On December 11, 2009, the plaintiffs filed an objection to the defendant's motion to strike and the matter was heard at the short calendar on January 11, 2010.
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). "The motion admits all facts that are well pleaded . . . but does not admit legal conclusions or the truth or accuracy of opinions . . . On a motion to strike, the trial court's inquiry is to ascertain whether the allegations in each count, if proven, would state a claim on which relief could be granted." (Internal quotation marks omitted.) Keller v. Beckenstein, 117 Conn.App. 550, 562, 974 A.2d 1055 (2009). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . [On the other hand] [a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Citation omitted; internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 498. The court must "construe the complaint in the manner most favorable to sustaining its legal sufficiency." (Internal quotation marks omitted.) American Progressive Life Health Ins. Co. of New York v. Better Benefits, LLC, 292 Conn. 111, 120, 971 A.2d 17 (2009).
In her motion to strike and in her supporting memorandum of law, the defendant alleges that count one fails to state a claim upon which relief may be granted because the plaintiffs plead a claim that is "patently unenforceable pursuant to General Statutes § 52-550," the statute of frauds. Specifically, the defendant alleges, the plaintiffs have pleaded an unenforceable contract because: 1) they allege an oral contract; 2) the oral contract charges the defendant, in her role as administratrix, "with a special promise to answer damages out of her own property;" 3) the alleged contract's indemnification provision constitutes "a special promise to answer for the debt, default or miscarriage of another;" and 4) finally, the alleged contract addresses an interest concerning real property. As to count two, the defendant alleges that the plaintiffs have failed to plead a legally sufficient cause of action for breach of the implied covenant of good faith and fair dealing, or bad faith, because they have asserted only "bare legal conclusions." Specifically, the defendant alleges, the plaintiffs have not pleaded that the defendant acted with the requisite state of mind for a bad faith claim.
In their objection to the defendant's motion to strike, the plaintiffs respond that count one is legally sufficient because the defendant's claims with regard to the unenforceability of the oral settlement agreement have been rejected by both the Superior and Appellate Courts in Nanni v. Dino Corporation, supra, 117 Conn.App. 61. Moreover, the plaintiffs allege, § 52-550 does not prohibit the enforcement of oral settlement agreements. As to count two, the plaintiffs allege that they have sufficiently pleaded bad faith because, when construing the complaint in a light most favorable to the plaintiffs, the "case at bar adequately alleges facts from which a breach of the duty of good faith can be inferred." Specifically, the plaintiffs suggest, because the Superior and Appellate Courts have recognized the settlement agreement as "clear, ambiguous and enforceable, and that the defendant, in her individual capacity, was a party to the agreement and is bound by it," the court can infer bad faith from the defendant's refusal to comply with the settlement agreement.
The issues before the Appellate Court in Nanni v. Dino Corp., 117 Conn.App. 61, 978 A.2d 531 (2009) were: (1) whether the trial court improperly enforced the settlement agreement that the plaintiffs in the present matter claim has been breached; and (2) whether the trial court rendered a judgment that binds Alma R. Nanni, the defendant in the present matter, as both an individual and as an administratrix. Id., 63. As to the first issue, the court affirmed the trial court's conclusion that the terms of the settlement agreement were both clear and unambiguous and that the parties were bound by the agreement even though it was not in writing. Id., 68. After noting that a trial court "has the inherent power to enforce summarily a settlement agreement as a matter of law [only] when the terms of the agreement are clear and unambiguous . . . and when the parties do not dispute the terms of the agreement," the court reasoned: "It is undisputed that there was an oral agreement between the parties. The plaintiff acknowledges that an oral outline of the terms of the settlement agreement was reached. The plaintiff, however, argues that because the oral outline was not reduced to a writing, the terms of the agreement are unclear and ambiguous. The court found the oral agreement between the parties clear and unambiguous. The memorandum of decision indicates that the court based its conclusion on the uncontroverted testimony of Paul Nanni and [Nancy] Frank . . .
The plaintiff was Alma R. Nanni as administratrix for the estate of Alfredo J. Nanni. In the present matter, Alma Nanni is named as a defendant in her individual capacity.
"The . . . assertion that the settlement agreement could not be enforced because it was not in writing is unfounded. Whether the parties intended to be bound without signing a formal written document is an inference of fact for the trial court that we will not review unless we find that its conclusion is unreasonable . . . The court, as the trier of fact, reasonably could have found that the parties intended to be bound by the oral outline of the terms of the settlement agreement . . . In addition, the fact that the settlement agreement was not reduced to writing or signed by the parties does not preclude it from binding the parties. See Aquarion Water Co. of Connecticut v. Beck Law Products Forms, LLC, [ 98 Conn.App. 234, 239, 907 A.2d 1274 (2006)]." (Citations omitted; emphasis in original; internal quotation marks omitted.) Nanni v. Dino Corporation, supra, 117 Conn.App. 61, 65-67. Thus, the Appellate Court affirmed the trial court's decision to enforce the oral settlement agreement.
As to the second issue before the Appellate Court, whether the trial court rendered a judgment that binds Alma R. Nanni as both an individual and as administratrix, the court held that although Alma R. Nanni could not be bound in her individual capacity by the trial court's judgment, she was a party to the oral settlement agreement in her individual capacity and was bound by it. The court reasoned: "We have already concluded that the court properly found that all of the parties to the settlement agreement had reached a clear, unambiguous and undisputed oral agreement and that the oral agreement was enforceable. We have rejected the estate's claim that, to be enforceable, the agreement had to be reduced to writing . . . Accordingly, we conclude that the court properly found that the plaintiff, in her individual capacity, was a party to the agreement and was bound by it.
"We must, however, distinguish between the court's findings of fact concerning the applicability of the settlement agreement and its judgment enforcing such agreement. We have concluded that the court properly found the facts set forth in its memorandum of decision. The court's findings of facts concerning the plaintiff in her individual capacity, however, did not afford the court a basis of law on which to bind her in its judgment because she was not a party to the action . . . Thus, although the settlement agreement may be enforceable against the plaintiff in her individual capacity, the same cannot be said of the judgment. Accordingly, to the extent that the court, in its judgment, bound the plaintiff in her individual capacity, we reverse that portion of the judgment." (Citations omitted; emphasis added.) Id., 71-72.
See footnote 1.
Despite the Appellate Court's conclusion that Alma R. Nanni, the defendant in the present matter, was not bound by the trial court's judgment in the underlying case because she was not named as an individual party, the court also concluded that Alma R. Nanni was a party to the settlement agreement at issue and is bound by it in her individual capacity. Moreover, the court concluded that there was sufficient evidence of an agreement, despite the fact that the agreement was not in writing. As a result, the Appellate Court's decision is controlling. Therefore, the court finds that count one does state a claim upon which relief may be granted, and the court denies the motion to strike count one.
Regarding bad faith, the Connecticut Supreme Court has stated: "[E]very contract carries an implied duty requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement . . . The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term. To constitute a breach of [the implied covenant of good faith and fair dealing], 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." (Internal quotation marks omitted.) Renaissance Management Co. v. Connecticut Housing Finance Authority, 281 Conn. 227, 240, 915 A.2d 290 (2007). "[G]ood faith and fair dealing means an attitude or state of mind denoting honesty of purpose, freedom from intention to defraud and generally speaking means faithful to one's duty or obligation . . . an honest intention not to take an unconscientious . . . advantage of another . . . [B]ad faith is defined as the opposite of good faith, generally implying a design to mislead or to 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 . . . [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 . . . it contemplates a state of mind affirmatively operating with furtive design or ill will." (Internal quotations omitted.) Buckman v. People Express, Inc., 205 Conn. 166, 171, 530 A.2d 596 (1987).
"[T]here is a split of authority among Superior Courts as to what factual allegations are sufficient to constitute a finding of bad faith. Chapman v. Georgine Realty, Superior Court, judicial district of New Haven, Docket No. CV 05 5001346 (August 29, 2008, Bellis, J.). Some courts have required that allegations establishing a dishonest purpose or malice be specifically [pleaded]. See Grant v. Colonial Penn Ins. Co., Superior Court, judicial district of Fairfield, Docket No. CV 95 0321277 (January 16, 1996, Hauser, J.) ( 16 Conn. L. Rptr. 49); Crespan v. State Farm Mutual Automobile Ins. Co., Superior Court, judicial district of Litchfield, Docket No. CV 05 4002121 (January 13, 2006, Pickard, J.). Other courts have ruled that a plaintiff need only allege sufficient facts or allegations from which a reasonable inference of sinister motive can be made. See McGill v. Mutual of Omaha Ins. Co., Superior Court, complex litigation docket at Middletown, Docket No. X04 CV 04 0104343 (September 28, 2004, Quinn, J.). For instance, bad faith may be inferred by repetitive, knowing or deliberate conduct as such allegations are unlikely to be attributable to an honest mistake or mere negligence. Algiere v. Utica National Ins. Co., Superior Court, judicial district of New London, Docket No. CV 04 0569670 (February 7, 2005, Jones, J.), see also Morin v. Tracy, Driscoll Co., Superior Court, judicial district of Hartford, Docket No. CV 03 0823241 (May 26, 2004, Sheldon, J.)." (Internal quotation marks omitted.) Razor's Auto Body Services, LLC v. Travelers Indemnity Co., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 09 5010129 (August 11, 2009, Pavia, J.). Even in a case like Algiere, however, where the court adopted the less stringent, "inference" approach, the plaintiff alleged that "the defendant . . . knowingly, willfully, deliberately and repeatedly ignored the workers' compensation commission orders." Algiere v. Utica National Ins. Co., supra, Superior Court, Docket No. CV 04 0569670.
In the present matter, the plaintiffs reiterate the allegations of count one in count two. Specifically, the plaintiffs allege, the defendant has failed and refused to comply with the settlement agreement even though the Appellate Court has ruled that the settlement agreement is enforceable and the defendant is bound by the agreement in her individual capacity. Then the plaintiffs add: "The defendant's breach of the settlement agreement has been in bad faith." The plaintiffs make no further allegations. The court finds that even under the less stringent approach, the plaintiffs have not alleged sufficient facts from which a sinister motive can be inferred. The plaintiffs have not alleged that the defendant knowingly, willfully or deliberately refused to comply with the settlement agreement. Moreover, even though the Appellate Court concluded that defendant was bound by the settlement agreement in her individual capacity, the court also held that she was not bound by the judgment, which, arguably, could have created confusion as to her obligation to act. Even construing the claim in a light most favorable to sustaining its sufficiency, it cannot be said that the plaintiffs have pleaded bad faith. As a result, the court grants the motion to strike count two.
CONCLUSION
For the foregoing reasons, the court denies the motion to strike as to count one, but grants the motion to strike as to count two.