Opinion
CV156030191
01-21-2016
GDS Contracting Corp. v. Sacred Heart University, Inc
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO STRIKE, #103
Cynthia K. Swienton, J.
FACTS
On August 4, 2015, the plaintiff, GDS Contracting Corp. (GDS), filed a three-count complaint against the defendant, Sacred Heart University, Inc. (Sacred Heart). The plaintiff alleges the following facts. GDS and Sacred Heart entered into a contract to perform construction work on a project, the Chapel at Sacred Heart. GDS completed the work under the contract on September 8, 2009. Under the contract, Sacred Heart holds a retainage in the amount of $51, 423.59 for work performed. In count one of the complaint, GDS alleges that Sacred Heart breached the contract by not paying the retainage amount after GDS fully performed under the contract. Count two asserts a quantum meruit cause of action; Sacred Heart has been unjustly enriched by not fully compensating GDS for the completed construction work. Count three alleges a breach of the covenant of good faith and fair dealing by refusing to pay GDS the retainage amount due.
The defendant filed a motion to strike and memorandum of law in support of the motion. The plaintiff filed a memorandum of law in opposition to the motion, and the defendant filed a reply memorandum. The parties presented oral argument in support of their positions.
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 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 court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997).
In its memoranda, the defendant argues that count one should be stricken because the breach of contract claim is fatally flawed. An essential element in a breach of contract claim is performance. In its complaint, the plaintiff asserted a project completion date of September 8, 2009, whereas the " time is of the essence" clause in the contract provided a completion date of August 15, 2009; therefore, the plaintiff failed to tender performance as required by a breach of contract claim. Count two should be stricken because a quantum meruit claim requires a lack of an express agreement, but the count incorporates the existence of a contract between the parties. Lastly, the defendant argues that the breach of the implied covenant of good faith and fair dealing claim should also be stricken because the plaintiff has not alleged the requirement of bad faith conduct, dishonest purpose, or sinister motive on behalf of the defendant.
In its memorandum in opposition, the plaintiff contends that it has sufficiently alleged the required elements in a breach of contract claim. The plaintiff also asserts that quantum meruit can be pleaded as an alternative theory of liability along with a breach of contract claim, and that it has alleged sufficient facts to maintain a breach of the implied covenant of good faith and fair dealing claim.
Count One--Breach of Contract
" The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." (Internal quotation marks omitted.) Chiulli v. Zola, 97 Conn.App. 699, 706-07, 905 A.2d 1236 (2006). Moreover, " [t]he nonbreaching party may recover only for damages that are direct[ly] and proximate[ly] caused by a defendant's breach of contract, causation is an element--and a crucial one--of the plaintiff's prima facie case." (Internal quotation marks omitted.) McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 504, 890 A.2d 140, cert. denied, 277 Conn. 928, 895 A.2d 798 (2006). " [A] plaintiff could not recover contract damages under the agreement unless he has fully performed his own obligation under it, has tendered performance, or has some legal excuse for not performing." (Internal quotation marks omitted.) David M. Somers & Associates, P.C. v. Busch, 283 Conn. 396, 406, 927 A.2d 832 (2007).
In the present matter, the defendant asserts that the time is of the essence clause in the contract is dispositive in determining that the plaintiff failed to sufficiently allege a breach of contract claim. " Where a time for performance is stated in an agreement, a party's tender of performance within a reasonable time thereafter will be considered substantial performance unless the parties intended that time for performance be of the essence. See J. Calamari & J. Perillo, Contracts (2d.Ed.) § 11-22, pp. 409-10." Mihalyak v. Mihalyak, 11 Conn.App. 610, 616, 529 A.2d 213 (1987). " When it is said that time is of the essence, the proper meaning of the phrase is that the performance by one party at the time specified in the contract or within the period specified in the contract is essential in order to enable him to require performance from the other party . . . Its commonly understood meaning is that insofar as a time for performance is specified in the contract, failure to comply with the time requirement will be considered to be a material breach of the agreement." (Citation omitted; internal quotation marks omitted.) Banks Building Co., LLC v. Malanga Family Real Estate Holding, LLC, 102 Conn.App. 231, 238, 926 A.2d 1 (2007).
Paragraph 17 of the complaint alleges that GDS " completed the services and work contemplated under the contract on or about September 8, 2009." Attached as Exhibit A to the complaint, paragraph 2 of the contract states that " [GDS] agrees that TIME IS OF THE ESSENCE. [GDS] agrees to immediately begin to prosecute the work to be performed under this Agreement upon the consummation hereof and to expeditiously complete the work of this Agreement such that the University can achieve substantial completion of the entire Project on or before August 15, 2009." Construing the facts in the complaint in a manner most favorable to sustaining its legal sufficiency, the plaintiff has asserted factual elements to sustain a breach of contract claim, which includes: formation of an agreement (the contract), performance by the plaintiff, breach of the agreement by the defendant and damages. Despite the defendant's contention that GDS failed to allege performance under a breach of contract claim, the plaintiff has pleaded sufficient factual allegations to support the requirement of performance. The motion to strike count one is denied.
The court acknowledges that issues remain as to whether the alleged completed work by GDS on September 8, 2009, violated the time is of the essence clause (which required substantial completion of the entire Project on or before August 15, 2009), and whether this violation is considered a material breach of the contract. Also remaining at issue is whether there is a difference between " final completion of the work" (paragraph 18 of the contract), and " substantial completion of the entire Project" (paragraph 2 of the contract). Furthermore, a party can implicitly waive the time is of the essence provision in a contract through its conduct. Banks Building Co., LLC v. Malanga Family Real Estate Holding, LLC, supra, 102 Conn.App. 241.
Count Two--Quantum Meruit
" Under our pleading practice, a plaintiff is permitted to advance alternative and even inconsistent theories of liability against one or more defendants in a single complaint." Dreier v. Upjohn Co., 196 Conn. 242, 245, 492 A.2d 164 (1985). " Parties routinely plead alternative counts alleging breach of contract and unjust enrichment, although in doing so, they are entitled only to a single measure of damages arising out of these alternative claims . . . Under this typical belt and suspenders approach, the equitable claim is brought in an alternative count to ensure that the plaintiff receives some recovery in the event that the contract claim fails. See, e.g., United Coastal Industries v. Clearheart Construction Co., 71 Conn.App. 506, 511, 802 A.2d 901 (2002) ('[c]ounts two and three of the complaint, which seek damages for unjust enrichment and quantum meruit are meant to provide an alternative basis for recovery in the event of a failure to prove the breach of contract claim in count one')." (Citations omitted.) Stein v. Horton, 99 Conn.App. 477, 485, 914 A.2d 606 (2007). " [Q]uantum meruit [is a form] 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." (Internal quotation marks omitted.) Schreiber v. Connecticut Surgical Group, P.C., 96 Conn.App. 731, 737, 901 A.2d 1277 (2006). " Quantum meruit is the remedy available to a party when the trier of fact determines that an implied contract for services existed between the parties, and that, therefore, the plaintiff is entitled to the reasonable value of services rendered . . . The pleadings must allege facts to support the theory that the defendant, by knowingly accepting the services of the plaintiff and representing to her that she would be compensated in the future, impliedly promised to pay her for the services she rendered." (Citations omitted.) Id.
Here, the plaintiff has alleged a claim in quantum meruit in count two, but incorporates count one of the complaint. Count one asserts that the plaintiff entered into a contract with the defendant, dated July 16, 2009, and both parties agreed to the terms of the contract. Parties are permitted to plead alternative theories of liability; however, in the present matter, the plaintiff, by asserting a claim in quantum meruit but also simultaneously alleging an express contract with the defendant, rendered count two legally insufficient. The motion to strike count two is granted.
Count Three--Breach of Good Faith and Fair Dealing
" [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).
" Bad faith means more than mere negligence; it involves a dishonest purpose . . . Bad faith in general implies both actual or 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." (Internal quotation marks omitted.) Hudson United Bank v. Cinnamon Ridge Corp., 81 Conn.App. 557, 576-77, 845 A.2d 417 (2004). " [A] plaintiff cannot state a claim for breach of the implied covenant simply by alleging a breach of the contract, in and of itself . . . Instead, to state a legally sufficient claim for breach of the implied covenant sounding in contract, the plaintiff must allege that the defendant acted in bad faith . . . If the plaintiff fails to set forth factual allegations that the defendant acted in bad faith, a claim for breach of the implied covenant will not lie." (Internal quotation marks omitted.) TD Bank, N.A. v. J& M Holdings, LLC, 143 Conn.App. 340, 349, 70 A.3d 156 (2013).
Here, the plaintiff has failed to allege that the defendant acted in bad faith, dishonest purpose, or sinister motive. Even construing the complaint in the manner most favorable to sustaining its legal sufficiency, GDS cannot state a claim for breach of the implied covenant simply by alleging a breach of the contract by Sacred Heart without providing additional factual allegations; thus, the count is legally insufficient. The motion to strike count three is granted.
CONCLUSION
For the foregoing reasons, the court denies the defendant's motion to strike count one, and grants the defendant's motion to strike counts two and three.