Opinion
No. CV 09 5032894S
June 2, 2011
MEMORANDUM OF DECISION
On November 24, 2009, the plaintiff, Export Development Canada, filed a summons and complaint against the defendant, T. Keefe Son, LLC, alleging that, based on an assignment of a debt originally owed to Metal Perrault, Inc., the defendant owed the plaintiff-assignee $189,500.00 for goods that were sold and delivered to the defendant. The defendant filed an answer, special defenses and a counterclaim on August 9, 2010.
On September 9, 2010, the plaintiff filed a motion to strike, with a supporting memorandum of law, the defendant's answer as to the plaintiff's amount in demand as well as the counterclaim. It seeks to strike the response to the amount in demand on the grounds that: 1) the reply is outside of the scope of an answer pursuant to Practice Book §§ 10-46 through 10-48 and 2) should the court construe the response as a special defense of set-off, it is not proper as against the plaintiff who is a mere assignee to a debt owed. The plaintiff seeks to strike the counterclaim of breach of contract on the grounds that: 3) the defendant cannot assert claims against the assignee of a debt for the actions of the assignor; 4) the counterclaim fails to comply with Practice Book §§ 10-1 and 10-2 in that it contains conclusory statements without the support of plain and concise material facts sufficient to apprise the plaintiff of what the defendant intends to prove and 5) the defendant failed to comply with Practice Book § 10-20 by failing to provide a demand for relief. The matter was heard at short calendar on March 14, 2011.
DISCUSSION
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any [pleading] . . . 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). "Whenever a party wishes to contest . . . the legal sufficiency of the allegations of any complaint, counterclaim or cross complaint to state a claim upon which relief can be granted, or . . . the legal sufficiency of any answer to any complaint . . . or any part of that answer including any special defense contained therein, that party may do so by filing a motion to strike the contested . . . part thereof." Practice Book § 10-39. "In . . . ruling on the . . . motion to strike, the trial court recognize[s] its obligation to take the facts to be those alleged in the [pleading] and to construe [it] in the manner most favorable to sustaining [its] legal sufficiency." Connecticut National Bank v. Douglas, 221 Conn. 530, 536, 606 A.2d 684 (1992).
I Answer to the Amount in Demand
First, the plaintiff argues that the answer to the demand for relief should be stricken because it does not comply with Practice Book §§ 10-46 through 10-48. Those sections require that the answer to a complaint address the allegations of the complaint and must either admit, deny or plead insufficient information as to each paragraph or specific portion of a paragraph. Any response to the allegations must not be argumentative, hypothetical or in the alternative. Practice Book § 10-48. Moreover, a defendant should not deny or respond to a demand for relief. Fogil v. Boody, 76 Conn. 194, 195, 56 A. 526 (1903).
Practice Book § 10-46 provides that: "The defendant in the answer shall specially deny such allegations of the complaint as the defendant who intends to controvert, admitting the truth of the other allegations, unless the defendant intends in good faith to controvert all the allegations, in which case he or she may deny them generally."
Practice Book § 10-47 provides that: "Denials must fairly meet the substance of the allegations denied. Thus, when the payment of a certain sum is alleged, and in fact a lesser sum was paid, the defendant cannot simply deny the payment generally, but must set forth how much was paid to the defendant; and where any matter of fact is alleged with diverse circumstances, some of which are untruly stated, it shall not be sufficient to deny it as alleged, but so much as is true and material should be stated or admitted, and the rest only denied."
Practice Book § 10-48: "Express admissions and denials must be direct, precise and specific, and not argumentative, hypothetical or in the alternative. Accordingly, any pleader wishing expressly to admit or deny a portion only of a paragraph must recite that portion; except that where a recited portion of a paragraph has been either admitted or denied, the remainder of the paragraph may be denied or admitted without recital. Admissions or denials of allegations identified only by a summary or generalization thereof, or by describing the facts alleged as "consistent" or "inconsistent" with other facts recited or referred to, are improper."
In the present case, in addition to responding to the allegations of the plaintiff's complaint, the defendant also has responded to the demand for relief. In the response, the defendant neither admits, denies nor pleads insufficient information. In fact, the answer raises the new argument of set off. Thus, the court construes the defendant's answer to the amount in demand to be argumentative. It is submitted that the motion to strike on this ground should be granted.
Alternatively, the plaintiff argues that the answer to the amount in demand should be stricken because it constitutes an improper special defense that is not properly asserted against an assignee of a debt. Set off can be pleaded either as a special defense or as a counterclaim 225 Associates v. Connecticut Housing Finance Authority, 65 Conn.App. 112, 121, 782 A.2d 189 (2001). "Traditionally, the distinction between a [special defense] of set off and a counterclaim centers around whether the claim arises from the same transaction described in the complaint. If the claim involves a debt which is mutual and liquidated, even though it arises from separate transactions, it is characterized as a set off. See General Statutes § 52-139. If the claim arises out of the same transaction described in the complaint, it is characterized as a counterclaim . . . The title of the pleading is not controlling. The issue is, rather, whether sufficient facts are pleaded that would allow recovery either as a setoff or as a counterclaim." (Citation omitted; internal quotation marks omitted.) Id. Moreover, § 52-139(b) further defines when a special defense of set off may be brought against an assignee of a debt. Section 52-139(b) provides in relevant part: "No debt claimed by assignment may be set off unless the plaintiff had notice, at the commencement of the action, that the debt was due the defendant."
Because the title of the pleading is not controlling, the court must first determine if the response is a set off or counterclaim. The defendant alleges that it is entitled to set off for mutual debts that arise from the debt claimed by the plaintiff. It alleges that the set off results from the fact that the defendant was required to contract for replacement materials and services to replace those manufactured by the plaintiff. Since the allegations do not arise from the same transaction described in the complaint, the answer to the demand for relief is properly characterized as a special defense. The special defense, however, does not allege facts sufficient to satisfy § 52-139(b), namely, alleging that "the plaintiff had notice, at the commencement of the action, that the debt was due the defendant." As the defendant has not satisfied the requirements of § 52-139(b), it is submitted that the motion should be granted.
II Defendant's Counterclaim
The plaintiff seeks to strike the defendant's counterclaim for breach of contract on the grounds that: 1) the defendant cannot assert claims against the assignee of a debt for the actions of the assignor; 2) the defendant failed to comply with Practice Book § 10-20 in that it failed to provide a demand for relief and 3) the counterclaim fails to comply with Practice Book §§ 10-1 and 10-2 in that it contains conclusory statements without the support of plain and concise material facts sufficient to apprise the plaintiff of what the defendant intends to prove.
First, the plaintiff maintains that the defendant's counterclaim seeks to attribute liability against the plaintiff for the actions of the assignor in the performance of the contract between the assignor and the defendant. There is a split of authority in Connecticut Superior Courts as to whether an assignee is liable for the conduct of an assignor. One line of cases has held that "to be liable for the assignor's nonperformance of duties under a contract, the assignee must have expressly assumed liability for the prior breaches . . . Moreover, [i]n the absence of an express provision, an assignee is not required to assume the original responsibilities of the assignor . . . This is true both for claims of breach of contract . . . and for claims that the assignor committed fraud, or misrepresentation . . ." Deutsche Bank Nat'l Trust Co. v. Medina, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 08 5006907 (January 10, 2011, Mintz, J.) [ 51 CLR. 270].
The second line of cases is based on the principle that "[o]rdinarily an assignee of a contract takes it subject to all defenses which might have been asserted against the assignor . . . [A]n assignee has no greater rights or immunities than the assignor would have had if there had been no assignment." (Citations omitted; internal quotation marks omitted.) Id. These cases have found that "[a]lthough many of the facts alleged concern the acts or omissions of the [assignor], the defenses and a counterclaim can be asserted against the plaintiff despite the fact that the plaintiff is an assignee . . . because the plaintiff stands in the shoes of the assignor . . ." Id.
In the present case, the court must take all well-pleaded facts as admitted. See Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 253, 990 A.2d 206 (2010). "Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Id. Looking at the counterclaim in the light most favorable to the defendant, the defendant is alleging that the plaintiff was a party to the contract and that the plaintiff subsequently breached the contract causing the defendant to sustain damages. The defendant does not allege that the plaintiff was an assignee to a debt. Accordingly, assignee liability analysis does not apply and it is submitted that the motion should be denied on this ground.
The plaintiff also argues that the counterclaim should be stricken because it fails to comply with Practice Book §§ 10-1 and 10-2 in that it contains conclusory statements without the support of plain and concise material facts sufficient to apprise the plaintiff of what the defendant intends to prove. Practice Book § 10-1 provides in relevant part: "Each pleading shall contain a plain and concise statement of the material facts on which the pleader relies, but not of the evidence by which they are to be proved, such statement to be divided into paragraphs numbered consecutively, each containing as nearly as may be a separate allegation." Practice Book § 10-2 provides in relevant part: "Acts and contracts may be stated according to their legal effect, but in so doing the pleading should be such as fairly to apprise the adverse party of the state of facts which it is intended to prove."
The elements of common-law breach of contract are "the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." Rosato v. Mascardo, 82 Conn.App. 396, 411, 844 A.2d 893 (2004). Breach of contract actions involving the sale of goods are governed by Article II of the Uniform Commercial Code (UCC), Bead Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266, 270, 439 A.2d 314 (1981), and require the parties to plead and prove additional facts. The buyer asserting a breach under the UCC must allege that he notified the seller of the rejection of the goods, held the goods with reasonable care to permit the seller an opportunity to remove them and stored or shipped the goods back to the seller after a reasonable amount of time. Kelly Container, Inc. v. Wellington Best Foods Inc., Superior Court, judicial district of Hartford, Docket No. CV 05 4015964 (January 3, 2007, Hale, J.T.R.).
In the present case, the defendant has pleaded sufficient facts to support the elements of common-law breach of contract. It alleges that there was an agreement between the plaintiff and the defendant, that the defendant performed its obligations under the agreement, that the plaintiff breached the agreement by providing materials that were not timely and of poor quality, and that the defendant was damaged by the breach.
The defendant has not, however, pleaded sufficient facts to support the elements for a breach of contract under the UCC. There are no facts in the counterclaim that the defendant notified the plaintiff of its rejection of the goods, that it held the goods with reasonable care to permit the plaintiff an opportunity to remove them or that it stored or shipped the goods back to the plaintiff after a reasonable amount of time. Since the allegations in the defendant's counterclaim fail to satisfy all of the elements of breach of contract of goods, the motion on this ground should be granted.
Since the court has concluded that the counterclaim should be stricken, it will not consider the plaintiff's argument that the counterclaim fails to provide a demand for relief. For the foregoing reasons, the motion to strike the defendant's answer to the plaintiff's amount in demand and counterclaim is granted.
It should be noted, however, that the court need not necessarily strike the counterclaim on this ground. Practice Book § 10-20 requires a complaint to include a demand for relief while Practice Book § 10-54 requires that a counterclaim be pleaded the same as a complaint. Accordingly, a counterclaim must contain facts sufficient to support a cause of action and a demand for relief. "Although the failure to include the demand for relief is not fatal to the counterclaims, the plaintiff, as well as the court, should be informed of the nature of the request for relief." SNET Information Services, Inc. v. Giacomini, Superior Court, judicial district of New Haven, Docket No. CV 04 4004811 (December 20, 2005, Lopez, J.). Thus, the court has discretion to direct the defendant to file a claim for relief pursuant to Practice Book § 10-1. See id.