Summary
noting that "some courts have held that a vexatious lawsuit or an abuse of process can constitute an unfair trade practice sufficient to state a CUTPA claim"
Summary of this case from Leary v. ManstanOpinion
No. CV 10 6004007
December 8, 2010
MEMORANDUM OF DECISION RE MOTION TO STRIKE, No. 106
FACTS
On April 19, 2010, the plaintiff, Guy Mangs, filed a two-count complaint against the defendant, Peter Cowell, alleging claims for conversion and replevin arising from the loss of certain items of personal property. After this court denied the defendant's motion to strike count two of the plaintiff's complaint on September 2, 2010, the defendant filed an answer and a two-count counterclaim against the plaintiff on September 15, 2010 alleging the following facts. For a period of years, the defendant has stored property belonging to the plaintiff pursuant to an alleged agreement by which the plaintiff would pay to the defendant the reasonable value of the costs associated with storing the property. Despite demand, the plaintiff has refused to pay the defendant. In addition, according to the second count of the defendant's counterclaim, the plaintiff has acted in an unscrupulous, immoral and deceitful manner in violation of the Connecticut Unfair Trade Practices Act (CUTPA) by refusing to pay the defendant for the costs associated with storing his property and by instituting litigation in spite of his refusal to reimburse the costs incurred by the defendant.
On October 4, 2010, the plaintiff filed a motion to strike count two of the defendant's counterclaim on the ground that the CUTPA violation claim is legally insufficient. The motion is accompanied by a memorandum of law. On October 21, 2010, the defendant filed an objection to the plaintiff's motion to strike and a memorandum of law in support of the objection.
DISCUSSION
"[A] counterclaim is a cause of action existing in favor of the defendant against the plaintiff and on which the defendant might have secured affirmative relief had he sued the plaintiff in a separate action . . . A motion to strike tests the legal sufficiency of a cause of action and may properly be used to challenge the sufficiency of a counterclaim." (Internal quotation marks omitted.) JP Morgan Chase Bank, Trustee v. Rodrigues, 109 Conn.App. 125, 131, 952 A.2d 56 (2008). "It is fundamental that in determining the sufficiency of a [pleading] challenged by a [moving party'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.) Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 252-53, 990 A.2d 293 (2010). "A motion to strike is properly granted if the [pleading] alleges mere conclusions of law that are unsupported by the facts alleged." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 815 A.2d 1188 (2003).
The plaintiff argues that count two of the defendant's counterclaim should be stricken on the ground that the defendant has failed to meet the requirements for asserting a legally sufficient claim for a violation of CUTPA. Specifically, the plaintiff contends that the defendant has failed to allege that the plaintiff was acting in the course of trade or commerce and also has failed to allege conduct that satisfies the criteria needed to trigger the applicability of CUTPA. The defendant counters that CUTPA is a remedial statute and should be construed liberally to include conduct alleged in the counterclaim amounting to abuse of process.
General Statutes § 42-110b(a), which states the basic prohibition of CUTPA, provides: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." "Trade" and "commerce" are defined with respect to CUTPA 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." General Statutes § 42-110a(4).
"It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons] . . . All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three . . . Thus a violation of CUTPA may be established by showing either an actual deceptive practice . . . or a practice amounting to a violation of public policy . . . In order to enforce this prohibition, CUTPA provides a private cause of action to [a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice." (Internal quotation marks omitted.) Harris v. Bradley Memorial Hospital Health Center, Inc., 296 Conn. 315, 350-51, 994 A.2d 153 (2010).
In his memorandum in opposition to the motion to strike, the defendant argues that he has alleged an abuse of process by the plaintiff, which can constitute a violation of CUTPA. Although the defendant cites no case law or other authority for this proposition, it is true that some courts have held that a vexatious lawsuit or an abuse of process can constitute an unfair trade practice sufficient to state a CUTPA claim. See Raymond Road Associates, LLC v. Taubman Centers, Inc., Superior Court, complex litigation docket at Waterbury, Docket No. X02 CV 07 5007877 (March 5, 2009, Eveleigh, J.) [ 47 Conn. L. Rptr. 313]; Olympia Sales, Inc. v. Roberts Enters., Inc., Superior Court, judicial district of Hartford, Docket No. CV 05 4017724 (May 2, 2006, Tanzer, J.); Bender Plumbing Supplies, Inc. v. S S Services, Superior Court, judicial district of New Haven at Meriden, Docket No. CV 04 0287111 (December 14, 2004, Tanzer, J.); Shea v. Chase Manhattan Bank, N.A., Superior Court, judicial district of Stamford-Norwalk, Docket No. CV 96 0149647 (July 27, 2000, Tierney, J.) ( 27 Conn. L. Rptr. 579), aff'd, 64 Conn.App. 624, 781 A.2d 352 (2001); TCW Realty Fund II v. Pearle Vision, Superior Court, judicial district of Hartford-New Britain Housing Session, Docket No. CV H-4490 HD, HA 1094 (October 29, 1996, Beach, J.).
In reviewing the relevant case law, there is an important, dispositive distinction between CUTPA claims brought separately after an allegedly vexatious lawsuit or as a counterclaim to the current, allegedly groundless litigation.
"In suits for vexatious litigation, it is recognized to be sound policy to require the plaintiff to allege that prior litigation terminated in his favor. This requirement serves to discourage unfounded litigation without impairing the presentation of honest but uncertain causes of action to the courts." Zeller v. Consolini, 235 Conn. 417, 424, 667 A.2d 64 (1995). "[U]nder Connecticut law, a counterclaim alleging vexatious litigation may not be brought in the same action as that which the defendant claims is vexatious." Somers v. Chan, 110 Conn.App. 511, 542 (2008).
There appears to be a split of authority among the Superior Courts when faced with CUTPA claims based on abuse of process and vexatious litigation. In the present case, the defendant's CUTPA claim is a counterclaim to the pending litigation. Three of the previously cited cases permitting such claims dealt with separate lawsuits based on the filing of prior vexatious litigation and are therefore distinguishable from the present case. See Raymond Road Associates, LLC v. Taubman Centers, Inc., supra, Superior Court, Docket No. X02 CV 07 5007877; Olympia Sales, Inc. v. Roberts Enters., Inc., supra, Superior Court, Docket No. CV 05 4017724; Shea v. Chase Manhattan Bank, N.A., supra, Superior Court, Docket No. CV 96 0149647. The better reasoned Superior Court cases have not allowed a defendant to bring a counterclaim for groundless litigation based on a violation of CUTPA when the "unfair trade practice" complained of is the plaintiff's pending complaint. See Wes-Garde Components Group, Inc. v. Carling Technologies, Inc., Superior Court, judicial district of Hartford, Docket No. CV 09 5028121 (March 10, 2010, Sheldon, J.) ( 49 Conn. L. Rptr. 671); Gilbert v. Beaver Dam Assn. of Stratford, Inc., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 00 374905 (July 24, 2001, Rush, J.); Scinto v. Mariner Health Care, Inc., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 93 0302182 (September 21, 1993, Fuller, J.).
In the recent case of Wes-Garde Components Group, Inc. v. Carling Technologies, Inc., supra, 49 Conn. L. Rptr. 671, the defendant brought a CUTPA counterclaim based on vexatious litigation and abuse of process. The court conducted a careful analysis of the relevant case law, including the Supreme Court case Larobina v. McDonald, 274 Conn. 394, 407, 876 A.2d 522 (2005), which denied an abuse of process claim to move forward because the underlying action in which such abuses of process were allegedly committed was still pending, and thus the abuse of process claims were "premature." The Wes-Garde Components Group court, in applying this precedent to a CUTPA claim premised on an abuse of process, concluded: "The upshot of Larobina, for present purposes, is that whenever a legal claim is based upon an allegation that one's opponent has engaged in litigation misconduct — whether by wrongfully bringing a claim or lawsuit or by abusing legal process in so doing — the claim is `premature,' and must therefore be stricken." Wes-Garde Components Group, Inc. v. Carling Technologies, Inc., supra, 49 Conn. L. Rptr. 671, 674.
The court in Wes-Garde Components Group ultimately held: "In light of these [Supreme Court] cases, and mindful in particular of the obvious willingness of our Supreme Court, as expressed in them, to limit the broad scope of CUTPA in order to enforce the strong public policy of ensuring that litigants have the loyal and vigorous assistance of their lawyers when prosecuting their legal claims in court, this Court concludes that CUTPA claims based upon the alleged bringing of groundless litigation . . . must not be brought until the underlying litigation in which misconduct allegedly occurred is terminated favorably to the CUTPA claimant. The bringing of such a CUTPA claim as a counterclaim in the same litigation whose prosecution is claimed to [be] groundless undermine[s] the ability of counsel to communicate effectively with his client because it exposes their communications to disclosure due to the relevance of such communications . . . to any defense of good-faith reliance upon the advice of counsel which the client might interpose." Id., 677.
In the present case, after a thorough review of the relevant case law, the court concludes that the defendant has failed to allege conduct that would trigger a violation of CUTPA, and therefore the second count of the counterclaim is legally insufficient as a matter of law. The defendant may not validly file a counterclaim alleging a violation of CUTPA by asserting that the plaintiff's institution of the current, pending action is an abuse of process and thus an unfair trade practice.
CONCLUSION
Based on the foregoing, the court hereby grants the plaintiff's motion to strike count two of the defendant's counterclaim.