Opinion
No. CV 03 0521186 S
June 22, 2004
MEMORANDUM OF DECISION ON DEFENDANTS' MOTION TO STRIKE
The defendants, Salvatore V. Vitrano, and Vitrano, Preleski Winne, L.L.C., pursuant to Practice Book § 10-42, have moved to strike the first, third, fourth, sixth, seventh, ninth, tenth, twelfth, thirteenth and fourteenth counts of the plaintiff's amended complaint.
The first and fourth counts allege breach of fiduciary duty against the defendant, Salvatore Vitrano, in his capacity as a registered agent and attorney for the plaintiff.
The third and sixth counts allege breach of implied contract against Mr. Vitrano in his capacity as a registered agent and as an attorney.
The thirteenth count alleges breach of expressed contract by registered agent.
The seventh, ninth, tenth, twelfth and fourteenth counts are derivative claims against the defendants Vitrano, Preleski Winne, L.L.C. (law firm).
The plaintiff's amended complaint of November 4, 2003 sets forth fourteen counts alleging claims of breach of fiduciary duty, negligence and breach of implied contract against defendant Salvatore Vitrano's registered agent (counts first through third). The same claims of breach of fiduciary negligence and breach of implied contract against him as an attorney (fourth through sixth counts).
The thirteenth count contains a breach of express contract claim against him in his capacity as a registered agent.
The plaintiff has also included derivative claims against the defendant Vitrano's law firm for its liability arising from the claims against Vitrano as a registered agent (seventh through ninth and fourteenth counts) and as an attorney (tenth through twelfth counts). CT Page 9515-t
The plaintiff asserts the first and fourth counts alleging breach of fiduciary duty against Attorney Vitrano are legally insufficient, because the plaintiff does not allege fraud, self-dealing, conflict of interest, or any other act that would implicate the defendant's morality. The defendants assert that the third and sixth count, breach of implied contract claims against Mr. Vitrano, as well as the thirteenth count alleging breach of expressed contract, do no sufficiently allege claims based upon breach of contract, but rather allege negligence claims. The defendants assert the deficiencies noted above also require the striking of the derivative claims against the law firm (counts seventh, ninth, tenth, twelfth and fourteenth).
The purpose of a motion to strike is to challenge the legal sufficiency of the allegations of a complaint for failure to state a claim on which relief can be granted . . . 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 . . . A motion to strike is properly granted if the complaint alleges mere conclusions of law that are not supported by the facts alleged." (Citations omitted.)
Bennett v. Connecticut Hospice, Inc., 56 Conn.App. 134, 136-37, 741 A.2d 349 (1999), cert. denied, 252 Conn. 938, 747 A.2d 2 (2000).
"It is fundamental that in determining the sufficiency of the complaint challenged by the defendant's motion to strike, all well-pleaded facts and those necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Doe v. Board of Education, 76 Conn.App. 296, 299-300 (2003). The role of the trial court on 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. Dodd v. Middlesex Mutual Assurance Co., 242, 375, 378, 698 A.2d 859 (1997).
The facts alleged and admitted for purposes of consideration of this motion are essentially as follows.
On or about January 1992 the defendant, Salvatore Vitrano, was engaged by James Dagata, Thomas White and/or Steven Martino to, among other tasks, form and incorporate J.S.T. Development Corporation (JST) as a Connecticut corporation. Plaintiff alleges that Dagata and Martino formed JST for investment purposes only, with the intended goal of developing a CT Page 9515-u piece of property located in Bristol, Connecticut (property) for uses ancillary to Bristol Hospital. On January 24, 1992, Martino appointed Vitrano as JST's statutory agent for service and Vitrano allegedly accepted such appointment, as evidenced by his signature on the appointment form. It is further alleged that Vitrano subsequently served as JST's registered agent from January 4, 1992 up through and including May 15, 2002. On January 29, 1992, JST acquired the property located in Bristol, Connecticut, with Vitrano's assistance. The plaintiff asserts that on or about May 7, 2001, Vitrano was served as JST's registered agent on behalf of the City of Bristol with a Lis Pendens in favor of the city, regarding the city's commencement of a tax foreclosure action on the party. (The plaintiff further alleges that at all times relevant thereto, Vitrano was a licensed attorney with the law firm of Vitrano, Preleski Winne, L.L.C., which is also a named defendant).
The plaintiff further alleges that on May 8, 2001, Vitrano was served with pleadings and/or notices for the foreclosure action, but did not call a JST representative, or otherwise insure that JST received notice and was made aware of the foreclosure action. On February 22, 2002, more than ten months after the service of the Lis Pendens and foreclosure complaint, JST received notice of the foreclosure action when Dagata read about it in the Bristol Press. At such time, the foreclosure action had been concluded and the title of the property had vested in the City of Bristol. When the City of Bristol took the title through foreclosure on September 12, 2002, it is alleged that the property had a fair market value substantially in excess of the sums due the City of Bristol for property tax. JST contacted Vitrano and learned that he had accepted service of the complaint. Vitrano allegedly claimed that he mailed the documents relating to the foreclosure action to JST's former address and upon JST's request enclosed copies of certain correspondence.
The plaintiff maintains it never received any of the correspondence, pleading and/or notices. The plaintiff alleges that subsequent pleadings were not mailed by Vitrano to JST. JST unsuccessfully sought to open the judgment entered in the foreclosure action.
In count one of the complaint, the plaintiff alleges that Vitrano breached his fiduciary duty as an agent to JST through one or more of the following ways: (a) Vitrano never sent copies of the unmailed pleadings to JST after said pleadings were served upon him; (b) Vitrano never sent copies of the unmailed pleadings to JST, despite the fact that as an attorney, Vitrano knew or should have known the importance and significance of notifying JST of the foreclosure action; (c) the defendant did not verify the plaintiff's address prior to mailing the pleadings to the plaintiff, (d) the defendant did not verify the CT Page 9515-v plaintiff's address and re-send the pleadings to the plaintiff after the pleadings were returned to him as "undeliverable"; (e) the defendant did not send the pleadings to the plaintiff by facsimile, certified mail, overnight delivery, or such other manner by which the plaintiff's receipt could be confirmed; (f) the defendant did not send the pleadings to the plaintiff by facsimile, certified mail, or overnight delivery, or such other manner by which the plaintiff's receipt could be confirmed, despite the fact that the pleadings were returned to the defendant as undeliverable; (g) the defendant did not call the plaintiff to inform it that he had been served with the Lis Pendens, complaint, and/or subsequent pleadings upon, or shortly after, each applicable service date; (h) the defendant did not call the plaintiff to ensure the plaintiff received the pleadings after he mailed them, despite the fact that the pleadings were returned as undeliverable; (i) the defendant failed to take the necessary action to ensure that the plaintiff received notice of the foreclosure action, despite the fact that, as an attorney, he knew or should have known of the importance and significance of a foreclosure action; (j) the defendant did not ensure that the plaintiff received notice of the foreclosure action despite, as the plaintiff's attorney in underlying real estate action, he knew or should have known of the plaintiff's significant investment in the property; (k) the defendant mailed the pleadings to the wrong address, even though he knew or should have known that the plaintiff had moved in 1997; (l) the defendant failed to exercise the skill, care and/or diligence required of a registered agent; (m) the defendant failed to exercise the skill, care and/or diligence required of him as an attorney licensed in the State of Connecticut.
Our Supreme Court in Beverly Hills Concepts, Inc. v. Schatz Schatz, Ribicoff Kotkin, 247 Conn. 48 (1998) addressed the distinction between professional negligence and breach of a fiduciary duty claim.
Professional negligence alone . . . does not give rise automatically to a claim for breach of fiduciary duty. Although an attorney-client relationship imposes a fiduciary duty on the attorney . . . not every instance of professional negligence results in a breach of that fiduciary duty. A fiduciary confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other . . . Professional negligence implicates the duty of care while breach of fiduciary duty implicates a duty of loyalty and honesty. (Citations omitted, internal quotation marks omitted.)
Beverly Hills Concepts, Inc. v. Schatz Schatz, 247 Conn. 56-57. CT Page 9515-w
The Beverly Hills Concepts case involved a client seeking to establish a business to franchise fitness clubs. A partner and junior associate in the firm was sued for professional negligence and breach of fiduciary duty. The defendant attorneys failed to register the plaintiff's company pursuant to the Connecticut Business Inventory Opportunity Act (General Statutes § 36-503 et seq., and as a result the banking commissioner issued a cease and desist order, notice of intent to fine Beverly Hills Inc. and a finding of violations of the act. The company alleged that this failure led to its demise. The trial court found the partner and junior associate essentially liable for negligent misrepresentation and breach of fiduciary duty. On appeal the Supreme Court reversed in part, holding it is improper to find a junior associate liable for breach of fiduciary duty. The defendant partner was potentially liable for breach of fiduciary duty as he represented that the firm possessed the necessary franchising experience to handle these affairs.
Subsequent superior court decisions have also addressed this issue of a breach of fiduciary claim in conjunction with allegations of legal malpractice. In Nosik v. Bowman, Superior Court, judicial district of Fairfield, Docket No. CV-00-0379089 (July 12, 2002 Doherty, J.), the court found the plaintiff had adequately alleged the existence of a fiduciary relationship, but failed to allege conduct by the defendant attorney that implicates his honesty, loyalty, or morality. The court found "to survive a motion to strike framed as a breach of fiduciary duty, a pleader must allege facts which implicate the morality of counsel's conduct." The Nosik decision noted: "Although our Supreme Court has not expressly limited the application of these traditional principals of fiduciary duty in cases involving only fraud, self-dealing or conflict of interest, the cases in which `the court has' invoked them have involved such deviations."
In Gurski v. Rosenblum Filan, L.L.C., Superior Court, judicial district of Stamford, Docket No. CV-00-0179063 S (February 23, 2001 D'Andrea, J.) ( 28 Conn.L.Rptr. 717), the facts were somewhat similar to those in the instant case. In Gurski, the plaintiff alleged that the defendants made no attempt for three weeks to inform the plaintiff of a default, judgment, or to attempt to reopen the default judgment, despite still being the plaintiff's attorneys of record. In granting the defendant's motion to strike, the court in Gurski reasoned that the plaintiff's allegations did not support a claim for breach of fiduciary duty where the plaintiff did not allege any instance of fraud, self-dealing, or conflict of interest which traditionally are associated with that cause of action. The court reasoned that:
the fiduciary duty comprises two prongs: a duty of care, and a duty of CT Page 9515-x loyalty . . . while the duty of care requires that the . . . fiduciaries exercise their best care and judgment . . . the duty of loyalty derives from the prohibition against self-dealing that inheres in the fiduciary relationship. Professional language implicates the duty of care while breach of fiduciary duty implicates a duty of loyalty and honesty.
In this case, in paragraphs a through m of the first count, the plaintiff alleges that Vitrano failed to exercise appropriate skilled care and competence as a registered agent and as an attorney. Nothing in the allegation implicates the defendant's loyalty, honesty, or morality. The plaintiff asserts that it engaged the defendant Vitrano's services because it trusted and had confidence that he would use superior knowledge, skill and expertise; there, however, remain no allegations, which assert dishonesty, disloyalty, or immorality. The allegations of plaintiff's complaint are not sufficient to state a cause of action of breach of fiduciary duty against either defendant. Counts one, four, seven and ten are stricken.
The defendants assert that the third and sixth counts alleging breach of implied contract against Vitrano as a registered agent and attorney and the thirteenth count alleging breach of express contract by registered agent do not sufficiently allege claims based on breach of contract, but rather attempt to cloak negligence claims in contract garb. The plaintiff contends that although JST has alleged claims based upon Vitrano's breaches of duty, those claims grow out of the contractual relationship between the parties.
Our Supreme Court has held that "putting a contract tag on a tort claim will not change its essential character. An action in contract is for the breach of a duty arising out of a contract; an action in tort is for breach of duty imposed by law." Gazo v. Stamford, 255 Conn. 245, 263 (2001).
The determination of whether the plaintiff's claims are based in contract or tort is further guided by the Appellate Court's decision in Caffery v. Stillman, 79 Conn.App. 192 (2003). In Stillman, the plaintiff brought an action against his former attorney for legal malpractice and breach of contract on the basis of alleged deficient representation. In affirming the trial court's granting of summary judgment in favor of the defendant as to the breach of contract claim, the Appellate Court considered the issue of what construction to put on a pleading that purports to sound in contract, yet contains allegations rooted in negligence. The court held while "one may bring against an attorney an action sounding in both negligence and contract . . . (one cannot) bring CT Page 9515-y an action in both negligence and contract merely by couching a claim that one has breached the standard of care in the language of contract." (Citation omitted; internal quotation marks omitted.) Caffrey v. Stillman, supra, 79 Conn.App. 197. The Appellate Court followed its decision in Caffrey most recently in the matter of Alexandru v. Strong, 81 Conn.App. 68, cert. denied, 268 Conn. 906 (2004). In Alexandru, the plaintiff alleged legal malpractice and breach of contract in separate counts, both based on the defendant attorney's failure to assert a negligent infliction of emotional distress claim in a timely manner. The emotional distress claim had not survived a summary judgment motion. The plaintiff contended that in failing to file a claim against her employer within a two-year Statute of Limitations, the defendant attorney breached the terms of the party's retainer agreement. In affirming the lower court's judgment, the Appellate Court agreed with the trial court's observation that "the factual allegations give rise to the claim for breach of contract essentially mirror those outlined in a malpractice claim." 81 Conn.App. at 78. The court held
that the pleading at issue was no more than a negligence claim cloaked in contractual language. Notwithstanding that embedded in the language of the plaintiff's claims as a contractual rudiments of promise and breach, where the plaintiff alleged that the defendant negligently performed legal services and failed to use due diligence the complaint sounds in negligence, even though he also alleges that he retained him or engaged his services.
In the instant case the implied and expressed breach of contract claims merely restate the allegations set forth in the negligence claim and there is no dispute that Vitrano's duties as JST's registered agent were derived from law. Thus, the contract-based claims are nothing more than a negligence claim cloaked in contract garb.
The defendant's motion to strike the counts sounding implied and expressed contract in counts third, sixth and thirteenth are granted.
CONCLUSION
The defendant's motion to strike is granted as to the first, third, fourth, sixth, seventh, tenth, thirteenth and fourteenth counts.
McWeeny, J. CT Page 9515-z
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