Opinion
No. X04-CV04-0184701S
January 10, 2005
MEMORANDUM OF DECISION
The defendants have moved to strike, in whole or in part, twelve of the twenty-three counts of the amended complaint filed in this matter. The underlying dispute arises out of a merger of two corporations that has soured. The plaintiffs, Jerrold M. Metcoff and David B. Wilson, together owned a majority of the stock in Midcore Software Incorporated (Midcore Software). Wilson was also President of the company. On August 29, 2000, Wilson and Metcoff executed an "Agreement and Plan of Merger" (Agreement) which merged Midcore Software with and into the defendant NCT Midcore, Inc. (NCT Midcore), which is a wholly owned subsidiary of the defendant NCT Group, Inc. (NCT Group). NCT Midcore was the surviving corporation after the merger. The defendant Artera Group, Inc. (Artera) is also a wholly owned subsidiary of NCT Group. The defendant Michael J. Parella is the Chief Executive Officer and Chairman of NCT Midcore, NCT Group and Artera. The plaintiffs allege that NCT Midcore and NCT Group breached the Agreement in various ways, including by failing to pay them royalties and NCT Group stock in accordance with the Agreement and that NCT Midcore, NCT Group and Parella made negligent and intentional misrepresentations to the plaintiffs. The plaintiffs further allege that NCT Midcore, NCT Group, Artera and Parella engaged in a civil conspiracy to defraud the plaintiffs and committed unfair and deceptive acts against them in violation of the Connecticut Unfair Trade Practices Act (CUTPA). The plaintiffs also claim that the defendants engaged in the fraudulent transfer of assets of NCT Midcore, including transfers to the defendant Carole Salkind. Additional claims of the plaintiffs will be described as necessary to resolve issues raised by the defendants' motion to strike.
The defendants NCT Group, NCT Midcore, Artera, and Parella have filed the subject motion to strike. I will henceforth refer to these parties as the defendants. The defendant Salkind was added to this action after the initial complaint was filed and has not yet filed a responsive pleading.
The law governing the court's consideration of a motion to strike is well established. "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. In ruling on a motion to strike, the court is limited to the facts alleged in the complaint. The court must construe the facts in the complaint most favorably to the plaintiff." (Citations and internal quotation marks omitted.) Novametrix Medical Systems v. BOC Group, Inc., 224 Conn. 210, 214 (1992). "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." Suffield Devel. Assoc. L.P. v. National Loan Inv., 64 Conn.App. 192, 197 (2001). "The role of the trial court is to examine the complaint, construed in favor of the plaintiffs, to determine whether the pleading party has stated a legally sufficient cause of action." Dodd v. Middlesex Mutual Assurance Company, 242 Conn. 375, 378 (1997).
I
The defendants first assert that the plaintiffs' claims of negligent misrepresentation (tenth and twelfth counts), intentional misrepresentation (eleventh and thirteenth counts), tortious interference (fourteenth count), civil conspiracy (sixteenth count), unjust enrichment (eighteenth count) and violation of CUTPA (twenty-second count) are time-barred. They maintain that each of these counts is governed by a three-year statute of limitations which was not met in this case. The plaintiffs contend that the defendants' claim that these causes of action are time-barred must be specially pleaded and may not be raised by a motion to strike. The plaintiffs also argue that they have pled a continuing course of conduct and a fraudulent concealment of the causes of action which extend the time in which they are entitled to bring their tort and CUTPA claims. I agree with the plaintiffs that the defendants may not properly raise through a motion to strike their contention that the plaintiffs' claims are time-barred.
The tenth, eleventh, twelfth, thirteenth, fourteenth, sixteenth and eighteenth counts of the plaintiffs' complaint assert tort claims and are governed by General Statutes § 52-577. Section 52-577 provides, that "No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of." "Section 52-577 is a statute of repose in that it sets a fixed limit after which the tortfeasor will not be held liable and in some cases will serve to bar an action before it accrues." (Internal quotation marks and citations omitted.) Farnsworth v. O'Doherty, 85 Conn.App. 145, 148-49 (2004).
As a general rule, a claim that an action is barred by statutes of limitations and statutes of repose, such as § 52-577, may not be raised by a motion to strike. Forbes v. Ballaro, 31 Conn.App. 235, 239 (1993). Two limited exceptions to this ban do exist. Id. "The first is when the parties agree that the complaint sets forth all the facts pertinent to the question whether the action is barred by the Statute of Limitations and that, therefore, it is proper to raise that question by a motion to strike instead of by answer. The second is where a statute gives a right of action which did not exist at common law, and fixes the time within which the right must be enforced, the time fixed is a limitation or condition attached to the right — it is a limitation of the liability itself as created, and not of the remedy alone." Id., 239-40. Neither of these circumscribed situations applies to the plaintiffs' tort claims. The plaintiffs' assertions that the defendants have engaged in a continuing course of conduct and that they have fraudulently concealed the plaintiffs' causes of action belie any finding that the parties agree as to the pertinent facts. The tort claims also do not involve statutory causes of action. Accordingly, the defendants' motion to strike the plaintiffs' tort claims on the grounds that they are time-barred is denied.
The defendants also assert that their time-bar claim against the CUTPA count of the plaintiffs' complaint falls within the recognized exception for statutory time limitations. They contend that the twenty-second count which asserts a claim, of a violation of CUTPA is barred by General Statutes § 42-110g(f). Section 42-110g(f) states that: "An action [for damages under CUTPA] may not be brought more than three years after the occurrence of a violation of this chapter." The defendants maintain that the statutory time limitation contained in § 42-110g(f) is a limitation on the right itself and may be raised by a motion to strike. I agree that a claim that a CUTPA cause of action is barred by § 42-110g(f) may be advanced by a motion to strike. I do not agree that the plaintiffs' CUTPA count should be stricken.
The right of action authorized by CUTPA did not exist at common law and our Appellate Court has held that § 42-110g(f) is a limitation on the right itself. Avon Meadow Condo. Assn., Inc. v. Bk., Boston Ct., 50 Conn.App. 688, 700 (1998). Accordingly, a failure to comply with the time limitations of § 42-110g(f) falls within the second exception recognized in Forbes v. Ballaro, supra, 31 Conn.App. 235.
While the defendants may appropriately raise the time-bar of § 42-110g(f) in a motion to strike, it is not appropriate to strike the CUTPA count of plaintiffs' complaint. The defendants assert that, since the Agreement was signed on August 29, 2000 and the complaint was not served until August 19, 2004, the CUTPA claim was brought more than three years after the occurrence of a violation in contravention of § 42-110g(f). However, the twenty-second count contains factual allegations that the defendants engaged in a continuing course of wrongful conduct after the signing of the Agreement such as by licensing and transferring intellectual property rights acquired from Midcore Software and diluting the value of the NCT Group stock by increasing the number of authorized shares. Since the continuous course of conduct doctrine tolls the statute of limitations and is "conspicuously fact-bound," Blanchette v. Barret, 229 Conn. 256, 275-76 (1994), it is not appropriate to strike the twenty-second count.
II
The defendants also seek to strike the twenty-second count on the grounds that it fails to state a cause of action under CUTPA. The defendants assert that the count is defective because (1) it alleges a mere breach of contract which is insufficient to establish a violation of CUTPA; (2) it fails to allege conduct that constitutes the primary business of the defendants; and (3) it fails to allege that the plaintiffs are consumers or business competitors of the defendants. I am not persuaded.
The twenty-second count of the plaintiffs' amended complaint is not a model of clarity. The plaintiffs have literally dumped the allegations of the eighth, ninth, eleventh, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, seventeenth, and eighteenth counts into the twenty-second count and added an allegation that the conduct alleged in those ten counts constitute unfair and deceptive practices in the conduct of trade or commerce in violation of CUTPA. This tactic transgresses the mandate that the complaint "shall contain a concise statement of the facts constituting the cause of action." (Emphasis supplied.) Practice Book § 10-20.
Not every contractual breach rises to the level of a CUTPA violation. Hudson United Bank v. Cinnamon Ridge Corporation, 81 Conn.App. 557, 571 (2004). To establish a violation of CUTPA, the plaintiffs must prove that the defendants engaged in an unfair or deceptive act or practice. General Statutes § 42-110b(a). The pivotal question therefore is whether the plaintiffs have alleged in their complaint the substantial aggravating circumstances attending the breach of contract necessary to establish a CUTPA violation, that is, whether the plaintiffs have alleged in their complaint any acts or practices that arguably meet the tests of unfairness set forth in the so-called cigarette rule or that could be construed to constitute deceptive acts or practices which violate CUTPA. Here, the plaintiffs have alleged that the defendants made numerous false representations in connection with the merger agreement including that NCT Midcore had adopted a business plan to sell approximately $35 million worth of products developed by Midcore Software, that NCT Midcore would raise money specifically to market these products and that NCT Midcore intended to maintain a dedicated sales staff to market these products. The plaintiffs also allege that NCT Group transferred stock and other property with the actual intent to defraud the plaintiffs. These allegations constitute more than a mere breach of contract and are sufficient to withstand a motion to strike for failure to state a CUTPA violation.
The cigarette rule was first established by the federal trade commission and has been adopted by the Connecticut Supreme Court as the criteria for establishing whether a particular act or practice is unfair under CUTPA. The criteria of the cigarette rule are as follows: (1) Whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — whether, 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 businessmen. Jacobs v. Healey Ford-Subaru, Inc., 231 Conn. 707, 725 (1995). See also Conaway v. Prestia, 191 Conn. 484, 492-93 (1983).
In Caldor, Inc. v. Heslin, 215 Conn. 590 (1990), the Connecticut Supreme Court established that three requirements must be met in order to find that an act or practice is deceptive under CUTPA: first, there must be a representation, omission, or other practice likely to mislead consumers; second, the consumers must interpret the message reasonably under the circumstances; third, the misleading representation, omission, or practice must be material — that is, likely to affect consumer decisions or conduct. Caldor, Inc. v. Heslin, supra, 215 Conn. 597.
The defendants also argue that the twenty-second count fails to state a CUTPA violation because the alleged acts of the defendants are merely incidental to their primary business and such acts are not covered by CUTPA. Our appellate courts have not addressed this precise issue and the decisions of the Superior Court are of two minds. One line of cases finds that conduct which is incidental to a defendant's primary trade or business cannot constitute a violation of CUTPA. See, e.g., Russo v. Danziger Homes, Inc., Superior Court, judicial district of Danbury, Docket No. CV99 033 63 16 S (Feb. 23, 2001, Hiller, J.); Barnes v. General Electric Co., Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. 529354 (July 25, 1995, Hennessey, J.) ( 14 Conn. L. Rptr. 455); Abely Waste Oil v. Ravenswood Development, Superior Court, judicial district of New Haven at New Haven, Docket No. 369487 (September 15, 1995, Hartmere, J.) ( 15 Conn. L. Rptr. 562). Another holds that, to constitute a viable CUTPA claim, a transaction need not take place in the defendant's ordinary course of business so long as it takes place in a "business context." See, e.g., Duncan v. Peh I, LP, judicial district of Hartford at Hartford, No. CV02-0817088S (Apr. 1, 2003, Booth, J.) ( 34 Conn. L. Rptr. 572); Telesis Mergers and Acquisitions, Inc. v. Health Resources, Superior Court, judicial district of Middletown, Docket No. CV00 0597260 (February 28, 2001, Gilardi, J.); Feen v. Benefit Plan Administrators, Inc., Superior Court, judicial district of New Haven, Docket No. CV 0406726 (September 7, 2000, Levin, J.) ( 28 Conn. L. Rptr. 137); and Kay v. Seiden, Superior Court, judicial district of Ansonia-Milford, Docket No. CV94 648587 (July 30, 1999, Corradino, J.) ( 25 Conn. L. Rptr. 195).
I find persuasive the latter line of cases for the following reasons. The CUTPA statute by its terms is not limited to acts or practices conducted in a defendant's principal business. It is also remedial in character and must be liberally construed in favor of those whom the legislature intended to benefit. Willow Springs Condominium Assn., Inc. v. 7th BRT Development Corp., 245 Conn. 1, 42 (1998). It is significant that CUTPA expressly excludes certain commercial transactions from its coverage, yet fails to exempt incidental business activities. Finally, our Supreme Court has repeatedly relied on the decisions of the Supreme Judicial Court of Massachusetts with regard to the scope of CUTPA because the Massachusetts statute is virtually identical to our own, Normand Josef Enterprises v. Connecticut National Bank, 230 Conn. 486, 510 (1994), and that court has ruled its unfair trade practices statute does not require that a transaction take place in the defendant's ordinary course of business provided it takes place in a business context. Begelfer v. Najarian, 381 Mass. 177, 190-91 (1980).
I am also not persuaded by the defendants' contention that the CUTPA does not apply to the transaction at issue here because it does not involve consumers or business competitors. The language of CUTPA does not support such a limitation on its reach. Section 42-110b(a) provides that "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." (Emphasis supplied.) "`Trade' and `commerce' means 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." § 42-110a(4). "[W]here the Legislature employed the terms `persons engaged in the conduct of any trade or commerce,' it intended to refer specifically to individuals acting in a business context." Begelfer v. Najarian, supra, 381 Mass. 190. Whether a party is acting "in a business context" depends on particular circumstances such as "the nature of the transaction, the character of the parties involved, and [their] activities . . . and whether the transaction [was] motivated by business or personal reasons." Boston Hous. Auth. v. Howard, 427 Mass. 537, 538 (1998). The parties here were acting in a business context. The plaintiffs were shareholders of a corporation and the defendants are corporations and an individual acting on behalf of various corporations. The transaction at issue involved the transfer of stock and assets and the payment of royalties in connection with the merger of two corporations. CUTPA applies to that type of business transaction. Cf. Lynn v. Nashawaty, 12 Mass.App.Ct. 310, 423 N.E.2d 1052 (1981) (unfair trade practices statutes applies to sale of business assets from one party to another); and Rio Vita, Ltd. v. Rausch, 759 F.Sup. 33 (D.Mass. 1991) (unfair trade practices statute applies to sale of licensing rights to investment group).
III
The defendants next contend that the plaintiffs' claims of negligent misrepresentation (tenth and twelfth counts), intentional misrepresentation (eleventh and thirteenth counts) and civil conspiracy (sixteenth count) are barred by the economic loss doctrine. In the defendants' view, "the economic loss doctrine holds that in a commercial context, in the absence of injury to the plaintiff's person or property, the plaintiff is precluded from recovering in tort for purely economic losses." The defendants maintain that the plaintiffs may not recover in tort when the relationship between the parties is contractual in nature and the plaintiffs have suffered only economic losses. The defendants' expansive view of the economic loss doctrine is not supported by the relevant appellate decisions of this state.
Again, the trial courts of this state are split on this issue. Numerous cases recognize an economic loss doctrine "which bars recovery in tort where the relationships between the parties is a contractual one and the only losses alleged are economic." Morganti National, Inc. v. Greenwich Hospital Assn., Superior Court, judicial district of Waterbury. Docket No. X06 CV 99 0160125 (September 27, 2001, McWeeny, J.). See also Worldwide Preservation Services, LLC v. IVth Shea, LLC, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. CV 98 0167154 (February 1, 2001, Tierney, J.) ( 29 Conn. L. Rptr. 1). Others have limited the rule to prohibit an action in tort to recover purely economic losses due to defective performance of a contract for the sale of goods governed by the Uniform Commercial Code. Reynolds, Pearson Co. v. Miglietta, Superior Court, judicial district of Hartford at Hartford, Docket No. CV 00-0801247 (Mar. 27, 2001, Berger, J.) ( 29 Conn. L. Rptr. 481). See also Darien Asphalt Paving, Inc. v. Newtown, Superior Court, judicial district of New Britain at New Britain, Docket No. 4878 (December 7, 1998, Nadeau, J.), in which the court declined to adopt a broad economic loss rule.
The broad proposition that tort claims, such as negligent misrepresentation, seeking purely economic losses may not be brought in situations involving commercial parties to a contract has been rejected by our Supreme Court. Williams Ford, Inc. v. Hartford Courant Co, 232 Conn. 559 (1995). In Williams Ford, the plaintiff automobile dealership groups sought to recover from the defendant newspaper for, inter alia, negligent misrepresentation and violation of CUTPA in connection with the plaintiffs' purchase of advertising space. The court spurned the defendant's claim that "where the controversy concerns purely economic losses allegedly caused by statements made during the course of a contractual relationship between businesses, it is contract law, rather than tort law, that should apply." Williams Ford, Inc. v. Hartford Courant Co., supra, 232 Conn. 579. The court held that a remedy on the contract is independent of a remedy for negligent misrepresentation and the defendants were not barred from pursuing a negligence claim solely because they also might have had a breach of contract claim. Id.
The only other instance our Supreme Court has addressed the economic loss rule fails to provide any support for the defendants' position. In Flagg Energy Development Corp. v. General Motors Corp., 244 Conn. 126 (1998), the plaintiff corporation, which had purchased gas turbine engines manufactured by the defendant, alleged that the engines were defective and sought damages for, inter alia, breach of implied and express warranties under its contract. The complaint also included a count for breach of contract, and two counts charging the defendant with misrepresentation and breach of CUTPA. The Supreme Court agreed "with the holdings of cases in other jurisdictions that commercial losses arising out of the defective performance of contracts for the sale of goods cannot be combined with negligent misrepresentation." Id., 153. Flagg stands for the proposition that, where a claim for damages arises out of the commercial sale of goods governed by the Uniform Commercial Code and the losses are purely economic, a plaintiff's remedies are limited to those available under the Code. See Santoro v. A.H. Harris Sons, Inc., Superior Court, judicial district of Hartford at Hartford, Docket No. CV03-08280395, (September 23, 2004, Sheldon, J.) ( 38 Conn. L. Rptr. 4) ("Under close examination, [ Flagg] cannot reasonably be read to create a general rule barring all tort claims based in whole or in part upon alleged breaches of contract or alleged breaches of warranties of fitness and/or merchantability. Instead, it can only be read to bar such claims in the particular circumstances there at issue, to wit: where both the plaintiff and the defendant are sophisticated commercial parties, and their dispute arises from the defendant's allegedly defective performance under a contract for the sale of goods.") Such a limited construction is necessary in light of the language of Williams Ford, Inc. v. Hartford Courant Co., supra, rejecting a broader doctrine. It is also consistent with holdings in other states. See, e.g., Neibarger v. Universal Coops., 486 N.W.2d 612, 618 (Mich., 1992) ("[W]e hold that where a plaintiff seeks to recover for economic loss caused by a defective product purchased for commercial purposes, the exclusive remedy is provided by the UCC, including its statute of limitations.") and Trinity Indus. v. McKinnon Bridge Co., 77 S.W.3d 159, 171 (Tenn.Ct.App., 2001) ("In a contract for the sale of goods where the only damages alleged come under the heading of economic losses, the rights and obligations of the buyer and seller are governed exclusively by the contract.") The economic loss doctrine, properly defined, does not bar the plaintiffs' tort claims as this case does not involve a breach of contract for the sale of goods which is governed by the UCC.
The rationale for such a rule has been cogently expressed by the Michigan Supreme Court. "The code represents a carefully considered approach to governing the economic relations between suppliers and consumers of goods. If a commercial purchaser were allowed to sue in tort to recover economic loss, the UCC provisions designed to govern such disputes, which allow limitation or elimination of warranties and consequential damages, require notice to the seller, and limit the time in which such a suit must be filed, could be entirely avoided." Neibarger v. Universal Coops., 486 N.W.2d 612, 618 (Mich., 1992).
IV
The defendants further maintain that the second count fails to state a cognizable breach of contract claim against NCT Midcore. In the second count, the plaintiffs allege that they elected to receive a certain amount of NCT Group stock in lieu of the royalties due them and that NCT Group and NCT Midcore breached the parties' Agreement by failing to deliver to the plaintiffs the requisite number of shares of NCT Group stock. The defendants argue that, pursuant to the Agreement, only NCT Group had the obligation and the ability to issue NCT Group stock to the plaintiffs. The plaintiffs contend that they have sufficiently alleged a breach of contract claim against NCT Midcore because NCT Midcore remained obligated under the Agreement to pay royalties to the plaintiffs when no NCT Group stock was delivered to the plaintiffs. I agree with the defendants.
The Agreement provides in section 6(a) that the plaintiffs are entitled to receive certain royalties from NCT Midcore in connection with the merger. Section 6(a) further provides that, should the plaintiffs not receive payment in full of the appropriate royalties, each plaintiff "shall be entitled to elect, in his discretion, upon notice to [NCT Group] . . . to . . . receive the unpaid balance of such Founding Shareholder's pro-rata share of the Maximum Royalties in the form of [NCT Group] Shares . . ." Both NCT Group and NCT Midcore were parties to the Agreement. In the second count of their amended complaint, the plaintiffs allege that they so elected to receive the unpaid balance of the royalties due them in the form of NCT Group shares and that both NCT Group and NCT Midcore breached the Agreement by not delivering those shares to them. The Agreement by its terms however places no obligation on NCT Midcore to deliver NCT Group shares to the plaintiffs should the plaintiffs elect to receive such shares in lieu of royalties and the plaintiff's complaint fails to allege that NCT Midcore had the authority or ability to make any such delivery. The Agreement requires notice of the plaintiffs' election to NCT Group so that NCT Group could satisfy the contractual obligation to deliver shares of its stock to the plaintiffs. The plaintiffs' contention that their election of their right to receive NCT Group stock did not relieve NCT Midcore of its obligation to pay royalties is beside the point as the second count does not allege that NCT Midcore breached the contract by failing to pay royalties. The only stated claim is that NCT Midcore breached the Agreement by failing to deliver NCT Group stock. Accordingly, as drafted, the second count fails to state a claim of breach of contract against NCT Midcore.
V
The defendants also move to strike the eighteenth count of the plaintiffs' amended complaint which asserts a claim of unjust enrichment against Artera. The defendants assert that the plaintiffs have failed to properly plead a claim of unjust enrichment because the eighteenth count alleges that NCT Midcore, rather than the plaintiffs themselves, conferred a benefit upon Artera. The plaintiffs respond that a claim of unjust enrichment does not require that the plaintiffs directly conferred a benefit upon the defendant; that it is sufficient to allege that the Artera was unjustly enriched at the plaintiffs' expense. I agree with the plaintiffs that they have sufficiently pled a claim of unjust enrichment against Artera.
In the eighteenth count, the plaintiffs allege the following facts. Artera is a wholly owned subsidiary of NCT Group and Parella was chief executive officer and chairman of both NCT Group and Artera. Artera entered into an agreement with NCT Group and NCT Midcore whereby it obtained certain property rights to intellectual property and products acquired by NCT Group and NCT Midcore from Midcore Software pursuant to the merger. Artera acquired the property rights in order to relieve NCT Midcore of its obligations to pay royalties to the plaintiffs and to frustrate the plaintiffs' attempts to enforce their rights to royalty payments. Artera has not paid NCT Midcore or the plaintiffs the royalties owed on its acquisition of the property rights and did not provide NCT Midcore with "reasonably equivalent value" in exchange for the transfer of the property rights. Artera has benefitted from and the plaintiffs have been damaged by Artera's acquisition of the property rights from NCT Midcore.
"Unjust enrichment is a very broad and flexible equitable doctrine that has as its basis the principle that it is contrary to equity and good conscience for a defendant to retain a benefit that has come to him at the expense of the plaintiff. National CSS, Inc. v. Stamford, supra, 195 Conn. 597. The doctrine's three basic requirements are that (1) the defendant was benefitted, (2) the defendant unjustly failed to pay the plaintiff for the benefits, and (3) the failure of payment was to the plaintiff's detriment. Bolmer v. Kocet, 6 Conn.App. 595, 612-13, 507 A.2d 129 (1986). All the facts of each case must be examined to determine whether the circumstances render it just or unjust, equitable or inequitable, conscionable or unconscionable, to apply the doctrine." Gagne v. Vaccaro, 255 Conn. 390, 409 (2001).
The defendants contend that the eighteenth count fails to properly state a claim of unjust enrichment because it fails to allege that the plaintiffs themselves conferred a benefit on Artera. The defendants assert that any benefit that was conferred on Artera through the transfer of the property rights was conferred by NCT Group or NCT Midcore. The defendants' view of the equitable doctrine of unjust enrichment is too restrictive. Equity does not require that the benefit be directly conferred upon Artera by the plaintiffs. See Fitzpatrick v. Scalzi, 72 Conn.App. 779, 785-87 (2002) in which the court ruled that a claim of unjust enrichment was proper where the defendant landlord failed to return to the plaintiff tenants a security deposit which had been initially paid by a third party. Here, the plaintiffs have sufficiently alleged a claim of unjust enrichment against Artera by alleging that Parella, as a corporate officer of NCT Midcore with a fiduciary obligation to the plaintiffs as shareholders, conspired with Artera to breach his duties to the plaintiffs and confer a benefit on Artera to the plaintiffs' detriment. "A third person who has colluded with a fiduciary in committing a breach of duty, and who obtained a benefit therefrom, is under a duty of restitution to the beneficiary." Restatement (First), Restitution, § 138 (1937). See also Restatement (First), Restitution, § 201(1) (1937) ("Where a fiduciary in violation of his duty to the beneficiary transfers property or causes property to be transferred to a third person, the third person, if he gave no value or if he had notice of the violation of duty, holds the property upon a constructive trust for the beneficiary.")
VI
The remaining claims of the defendants merit little discussion. The defendants contend that the plaintiffs may not join in their complaint the twenty-first and twenty-second counts of the amended complaint which assert claims that NCT Group fraudulently transferred properly to Salkind. This assertion is wholly without merit. It has long been established that a plaintiff may combine in a single complaint its claims for damages with its claim that property has been fraudulently transferred to avoid those claims. Veits v. Hartford, 134 Conn. 428, 432 (1948) ("So we have held that in a single action a plaintiff may recover damages against one defendant and have a fraudulent conveyance made to another defendant set aside.") See also Murphy v. Dantowitz, 142 Conn. 320, 325 (1955), overruled on other grounds, Standard Tallow Corporation v. Jowdy, 190 Conn. 48, 54 n. 6 (1923) (A plaintiff may "incorporate in a single complaint a claim for damages in tort and a petition that a fraudulent conveyance made to defeat her claim be set aside.")
The defendants further assert that the claims against Parella for intentional and negligent misrepresentation, tortious interference, conspiracy and fraudulent transfer must be stricken because the plaintiffs fail to allege that Parella was acting other than in an official capacity as an officer of the corporate defendants. The defendants contend that Parella may not be held personally liable in tort for acts committed in his capacity as an officer of the corporate defendants. The amended complaint however alleges that Parella acted individually as well as on behalf of the corporate defendants. Moreover, the amended complaint alleges that Parella actively participated in the commission of the alleged torts. An officer of a corporation may be found personally liable for torts that he commits or participates in. See Scribner v. O'Brien, Inc., 169 Conn. 389, 404 (1975) ("Where . . . an agent or officer commits or participates in the commission of a tort, whether or not he acts on behalf of his principal or corporation, he is liable to third persons injured thereby.")
Finally, the defendants argue that the plaintiffs' claims of tortious interference with contract (fourteenth count) and civil conspiracy (sixteenth count) must be stricken as to Parella. The defendants assert that a corporate officer acting on behalf of the corporation cannot tortiously interfere with a contract in which the corporation is a party, Wellington Systems, Inc. v. Redding Group, Inc., 49 Conn.App. 152, 168, cert. denied, 247 Conn. 905 (1998), or conspire with the officer's own corporation, Harp v. King, 266 Conn. 747, 781 (2003). The defendants contend that the plaintiffs' complaint runs afoul of these principles because it alleges that Parella while acting on behalf of NCT Group and NCT Midcore tortiously interfered with the corporations' Agreement with the plaintiffs and conspired with NCT Group and NCT Midcore to defraud the plaintiffs. The defendants misconstrue the allegations of the fourteenth and sixteenth counts of the plaintiffs' complaint as they relate to Parella. In each of these counts, the plaintiffs allege that Parella in his capacity as chief executive officer and chairman of Artera conspired with NCT Group and NCT Midcore to tortiously interfere with the plaintiffs' Agreement with those corporations and to defraud the plaintiffs. Although Parella also held officer positions with NCT Group and NCT Midcore, it is not in his capacity as an officer of those corporations that the tortious interference and conspiracy claims are asserted against him.
For the foregoing reasons, the second count of the plaintiffs' amended complaint is stricken as to NCT Midcore. In all other respects, the defendants' motion to strike is denied.
BY THE COURT
Jon M. Alander Judge of the Superior Court