Opinion
CV176012016S
09-18-2018
MULLEN & MAHON, INC. v. Fred TOUCHETTE aka Alfred Touchette
UNPUBLISHED OPINION
OPINION
Farley, J.
On March 2, 2017, the plaintiff, Mullen & Mahon, Inc., filed an eight-count complaint against the original defendant, Fred Touchette, also known as Alfred Touchette (Touchette). On February 13, 2018, the court granted the plaintiff’s January 30, 2018 motion to cite in Roland Dumont Agency, Inc. (RDA) as an additional defendant. The plaintiff filed a first amended complaint on March 8, 2018 that alleges five causes of action against RDA in counts nine through thirteen. RDA has moved to strike all five counts against it. As explained below, the motion is granted as to count nine and denied as to the remaining counts.
The operative complaint is the "corrected" first amended complaint filed on March 8, 2018.
ALLEGATIONS AGAINST RDA
In its first amended complaint, the plaintiff alleges the following facts, which are incorporated into all five counts against RDA. The plaintiff is an insurance brokerage firm who hired Touchette on February 1, 2006. Touchette signed an employment agreement, which was amended on December 29, 2006. In the amended employment agreement, Touchette agreed that any confidential business information he was entrusted with belonged exclusively to the plaintiff. The confidential business information is referred to by the parties as "agency account information." The plaintiff alleges that the agency account information includes matters relating to insurance coverage, policy expiration dates, customer risk characteristics, premium rates, commission rates, insurance loss data, business and personal financial statements, investment data, and employee census data and health information. Touchette agreed that all agency account information and all rights to receive commissions and fees from agency accounts were the property of the plaintiff. Touchette further agreed that, upon his termination of employment with the plaintiff, he would return all records relating to the agency accounts, would not disclose any agency account information to any other person, and would not solicit insurance or related business from any person or organization that was an agency account for two years immediately following the termination of his employment. On January 6, 2017, Touchette resigned his employment with the plaintiff, copied agency account information, failed to return such information, and solicited business from said accounts.
In count nine of its complaint, alleging tortious interference with the plaintiff’s employment agreement with Touchette, the plaintiff alleges that RDA is an insurance brokerage firm and a competitor of the plaintiff. While Touchette was employed by the plaintiff, RDA, on a number of occasions, discussed a potential future business relationship with Touchette and extended an offer of employment to him as an insurance agent in an effort to gain access to the plaintiff’s agency accounts. During such discussions, RDA was aware that Touchette was subject to post-termination restrictive covenants. RDA offered financial incentives and administrative support to Touchette in an effort to entice him to leave the plaintiff’s employ and solicit the agency accounts. Within days of Touchette’s resignation from his employment with the plaintiff, he began working for RDA and began soliciting the plaintiff’s agency accounts with the assistance of RDA. Counsel for the plaintiff sent written correspondence to RDA informing it that Touchette was violating the post-termination restrictive covenants. RDA nevertheless continued to assist Touchette in soliciting the plaintiff’s agency accounts, causing damages to the plaintiff.
In count ten, the plaintiff adds to the allegations of count nine a claim that RDA has, through its business relationship with Touchette, interfered with advantageous business relationships between the plaintiff and its customers. The plaintiff alleges that RDA has done so by actively participating in efforts to solicit agency account business "using confidential information and trade secrets that belong to [the plaintiff]."
In count eleven, claiming a misappropriation of trade secrets in violation of the Connecticut Uniform Trade Secrets Act ("CUTSA"), the plaintiff alleges the following facts in addition to its allegations that RDA knowingly extended an offer of employment to Touchette despite the restrictive covenants and then assisted Touchette’s solicitation of the plaintiff’s customers. The plaintiff alleges that its agency account information constitutes trade secret information that "is not generally known and is not readily ascertainable by proper means." The plaintiff alleges that it gains an advantage over its rivals by maintaining the secrecy of this information with non-disclosure and non-solicitation provisions in its employment agreements and by means of computer password protections. RDA, without the plaintiff’s consent, allegedly exploited the plaintiff’s trade secret information for the purpose of diverting business from the plaintiff to itself, not only by allowing Touchette to use the improperly acquired information, but also by actively participating in the use of that information.
In count twelve, the plaintiff re-alleges all of the foregoing facts and alleges further that RDA’s conduct violates the Connecticut Unfair Trade Practices Act (CUTPA).
In count thirteen, a claim for unjust enrichment, the plaintiff seeks restitution of the insurance premiums and commissions RDA has allegedly received from former customers of the plaintiff. The plaintiff alleges that because RDA knowingly assisted with Touchette’s improper solicitation of the plaintiff’s customers and, as a consequence, enjoyed financial gains that rightfully belong to the plaintiff, it is entitled to restitution of those amounts.
On April 2, 2018, RDA filed a motion to strike counts nine through thirteen from the plaintiff’s first amended complaint on the ground that the facts alleged in each count are legally insufficient. RDA filed a memorandum of law in support of its motion. On May 2, 2018, the plaintiff filed a memorandum of law in opposition to RDA’s motion to strike. The court heard the parties’ oral arguments on May 21, 2018.
DISCUSSION
"A motion to strike shall be used [w]henever any party wishes to contest: (1) the legal sufficiency of the allegations of any complaint ..." Practice Book § 10-39(a). "[A] motion to strike ... requires no factual findings by the trial court ... [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 ... [P]leadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Geysen v. Securitas Security Services USA, Inc., 322 Conn. 385, 398, 142 A.3d 227 (2016).
I. COUNT NINE- TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS
RDA moves to strike count nine of the plaintiff’s complaint, arguing that the plaintiff fails to allege facts sufficient to support a conclusion that RDA’s interference with Touchette’s employment agreement was tortious. The mere awareness of the post-termination restrictive covenants and encouragement to violate them is not enough, according to RDA, to constitute malicious conduct. RDA also claims that the plaintiff has failed to sufficiently plead facts demonstrating that it suffered an actual loss. In response, the plaintiff argues that it alleges more than RDA’s mere knowledge of the employment agreement and encouragement to violate it. The plaintiff also argues that its alleged loss of insurance fees and commissions is a sufficient and measurable actual loss.
"A claim for intentional interference with contractual relations requires the plaintiff to establish: (1) the existence of a contractual or beneficial relationship; (2) the defendant’s knowledge of that relationship; (3) the defendant’s intent to interfere with the relationship; (4) that the interference was tortious; and (5) a loss suffered by the plaintiff that was caused by the defendant’s tortious conduct." (Internal quotation marks omitted.) Simms v. Seaman, 308 Conn. 523, 543, 69 A.3d 880 (2013). "[N]ot every act that disturbs a contract ... is actionable ... For a plaintiff successfully to prosecute such an action it must prove that the defendant’s conduct was in fact tortious. This element may be satisfied by proof that the defendant was guilty of fraud, misrepresentation, intimidation or molestation ... or that the defendant acted maliciously ... [A]n action for intentional interference ... requires the plaintiff to plead ... at least some improper motive or improper means ... [A] claim is made out [only] when interference resulting in injury to another is wrongful by some measure beyond the fact of the interference itself." (Internal quotation marks omitted.) Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. 525, 535-36, 546 A.2d 216 (1988).
In Wiederlight, the court held that merely alleging a defendant hired an employee it knew to be bound by restrictive covenants, and encouraging that employee to violate the restrictions in order to acquire new business for the defendant, was insufficient to state a cause of action for tortious interference with a contract. Here, the plaintiff seeks to distinguish Wiederlight by alleging affirmative conduct on the part of RDA that the court found lacking in that case. Id., 208 Conn. 537, n.6. Specifically, RDA is alleged to have engaged in discussions with Touchette while he was still employed by the plaintiff. In Wiederlight, the plaintiff had terminated the employee prior to his recruitment by the defendant. The court does not find this allegation materially distinguishes the reasoning underlying the court’s holding in Wiederlight . Interference with the employment agreement is not actionable unless it is "wrongful by some measure beyond the fact of the interference itself." Id., 536. Merely alleging that the alleged interference began before Touchette’s employment with the plaintiff terminated does not change the nature of the conduct into something more than mere interference. Nor do the allegations that RDA offered Touchette financial incentives and administrative support in order to entice him to leave the plaintiff’s employ and solicit the plaintiff’s agency accounts. These allegations are not substantively different than the "encouragement" found to be insufficient in Wiederlight .
The court distinguishes between a claim that RDA interfered with the plaintiff’s employment contract with Touchette, as set forth in count nine, and a claim of tortious interference with business expectancies involving the plaintiff’s clients, as set forth in count ten and discussed below. RDA’s interference with the employment agreement is not tortious. The plaintiff’s allegations in this count do not support an inference of maliciousness, which is required to maintain the cause of action, but rather are consistent with a motivation to recruit valuable employees and attract new business. See Advanced Copy Technologies, Inc. v. Wiegman, Superior Court, judicial district of Middlesex, Docket No. CV-15-6013794-S (October 19, 2016, Vitale, J.) ; Webster Financial Corp. v. McDonald, Superior Court, judicial district of Waterbury, Docket No. CV-08-4016026-S (January 28, 2009, Brunetti, J.); Prezio Health, Inc. v. Schenk, United States District Court, Docket No. 3:13-cv-01463 (WWE) (D.Conn. April 6, 2016); Southern Home Care Services, Inc. v. Visiting Nurse Services, Inc. of Southern Connecticut, United States District Court, Docket No. 3:13-cv-01463 (WWE) (D.Conn. April 6, 2016). RDA’s motion to strike count nine is granted.
RDA also argues that count nine is devoid of facts that show the plaintiff suffered an actual loss. The court does not reach this issue.
II. COUNT ELEVEN- MISAPPROPRIATION OF TRADE SECRETS
RDA moves to strike count eleven on the ground that the information the plaintiff claims is a trade secret is merely a "customer list" that is comprised of generally known information, and therefore, cannot constitute a trade secret. RDA further contends that the plaintiff has pleaded insufficient facts to allege a "misappropriation" of trade secrets action because the plaintiff prefaces one of its critical allegations with the qualifying language of "[u]pon information and belief." The plaintiff responds that whether the information in question is a "trade secret" is a factual question that cannot be resolved on a motion to strike and that the allegations of the complaint sufficiently raise that factual issue. The plaintiff also contests RDA’s assertion that that qualifying language such as "on information and belief" renders the allegation that follows legally insufficient. The court agrees with the plaintiff.
The plaintiff’s claim is brought pursuant to the Connecticut Uniform Trade Secrets Act ("CUTSA"), General Statutes § 35-50 et seq. General Statutes § 35-53 provides in relevant part: "[A] complainant may recover damages for the actual loss caused by misappropriation [of trade secrets]." General Statutes § 35-51 sets forth several definitions that govern the resolution of RDA’s claim of insufficiency.
RDA argues that the information claimed to constitute a trade secret is not within the scope of the statutory definition. § 35-51(d) defines a "trade secret" as: "information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data or customer list that: (1) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." The plaintiff’s allegations track this statutory language and claim it applies to its agency account information referenced in count eleven, including the "compilation of client contact information, customer risk characteristics and requirements, customer financial data, payrolls, customer property lists, policy expiration dates, policy terms and requirements and specialized insurance requirements." The plaintiff alleges that the non-disclosure and non-solicitation provisions of its employment agreements, as well as its computer privacy protections constitute reasonable measures to maintain the secrecy of this information so as to qualify them as trade secrets.
"Although it is not essential that the proprietor have exclusive possession of the information [alleged to be a trade secret], a substantial element of secrecy must exist, to the extent that there would be difficulty in acquiring the information except by the use of improper means." Robert S. Weiss and Associates, Inc. v. Wiederlight, supra, 208 Conn. 538. "Depending on the nature of the business, a customer list may be a trade secret, and an employee may be restrained from using the list if he acquired it in confidence from his employer." Id. Relevant factors in determining whether information is a trade secret include: "(1) the extent to which the information is known outside the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the employer to guard the secrecy of the information; (4) the value of the information to the employer and to his competitors; (5) the amount of effort or money expended by the employer in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Town & Country House & Homes Service, Inc. v. Evans, 150 Conn. 314, 319, 189 A.2d 390 (1963). This inquiry is, by nature, "a highly fact-specific inquiry." Elm City Cheese Co., Inc. v. Federico, 251 Conn. 59, 80, 752 A.2d 1037 (1999). Consequently, "[t]he question of whether information sought to be protected by the trade secrets act rises to the level of a trade secret is one of fact ..." (Citation and internal quotation omitted.) Id. at 68.
It is beyond dispute that a customer list can constitute a trade secret. § 35-51(d). Further, the information described in the complaint extends far beyond the mere identity of the plaintiff’s customers. Nevertheless, RDA relies upon several cases where courts have concluded that a customer list does not constitute a trade secret. Nationwide Mutual Ins. Co. v. Stenger, 695 F.Supp. 688, 690 (D.Conn. 1988) (ruling on plaintiff’s motion for preliminary injunction); Wildowsky v. Dudek, 30 Conn.Supp. 288, 289-90, 310 A.2d 766 (1972) (list of customers could be obtained by consulting the yellow pages); Transam, Inc. v. Zhawred, Superior Court, judicial district of Tolland, Docket No. 43332 (May 29, 1990, Mack, J.) (evidence showed that the identity of the customers could be discovered by referencing the yellow pages or local trade directories and the plaintiff expended no unusual amount of effort, time, or money in cultivating its clients). Each of these courts, however, reached their conclusion after the introduction of evidence and resolution of factual issues. Likewise, this court cannot apply the relevant factors and reach a legal conclusion concerning the plaintiff’s claim without evidence. The plaintiff alleges that its compilation of information includes customer risk characteristics and requirements and other potentially non-public information about its clients. Construing the allegations in the light most favorable to sustaining their legal sufficiency, the court cannot, as a matter of law, hold that this type of confidential information is not a trade secret. See Milso Industries Corp. v. Nazzaro, United States District Court, Docket No. 3:08-cv-1026 (AWT) (D.Conn., August 30, 2012).
RDA also challenges the sufficiency of the plaintiff’s allegation that it misappropriated any trade secrets of the plaintiff. "Misappropriation" is defined by the statute, in relevant part, as follows: "(1) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (2) disclosure or use of a trade secret of another without express or implied consent by a person who ... (B) at the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was (i) derived from or through a person who had utilized improper means to acquire it ... or (iii) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use ..." § 35-51(b). "Improper means," as used in this definition "includes theft ... [or] breach or inducement of a breach of duty to maintain secrecy ..." § 35-51(a). The first amended complaint alleges facts that satisfy these definitions, including an allegation that RDA "used" and "actively participated" in the use of the protected information and "exploited" the information to solicit business from the plaintiff’s customers.
Despite these allegations of misappropriation, RDA maintains that count eleven is legally insufficient because those allegations are made "[u]pon information and belief." RDA relies upon the proposition that "a motion to strike can be granted on the ground that an allegation [is] based upon information and belief, [which] is conclusory." (Internal quotation marks omitted.) Mashantucket Pequot Tribal Nation v. Tucker Co., Superior Court, judicial district of New London at Norwich, Docket No. 119750 (December 11, 2000, Martin, J.); see also First Federal Savings & Loan Assn. v. Chappell, Superior Court, judicial district of Tolland, Docket No. 61212-S (April 21, 1997, Rittenband, J.). The court, however, is required to consider all of the allegations of a count when deciding a motion to strike. See Bouchard v. People’s Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991) ("If any facts provable under the express and implied allegations in the plaintiff’s complaint support a cause of action ... the complaint is not vulnerable to a motion to strike"). The other allegations of the complaint themselves are sufficient to imply that RDA made use of the alleged protected information. Paragraph 42, directly alleging misappropriation by RDA, is the only paragraph of the forty-five paragraph count eleven that begins with the qualifying language. "[P]leadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Geysen v. Securitas Security Services USA, Inc., supra, 322 Conn., 398. The use of the phrase "upon information and belief," while it may suggest a potential dearth of admissible evidence to support the factual assertion that follows it, does not entirely negate that factual assertion. Only one such qualification is made in this case and it regards a subject matter that lies primarily within the knowledge of RDA. The allegation is made in the context of the other, unqualified allegations suggesting RDA’s active involvement in the use of trade secrets. The allegations are sufficient to state a claim that is more appropriately tested on a motion for summary judgment than by a motion to strike.
RDA’s motion to strike count eleven is denied.
III. COUNT TEN- TORTIOUS INTERFERENCE WITH BUSINESS EXPECTANCIES
RDA moves to strike count ten on the same grounds as count nine. The plaintiff, in turn, primarily relies on its arguments in support of the sufficiency of count nine to support the sufficiency of count ten. While the allegations supporting these two causes of action overlap, there is a substantive distinction between them because they involve alleged interference in two qualitatively different relationships. Count nine concerns the employment contract between Touchette and the plaintiff, whereas count ten involves the relationship between the plaintiff and its customers. These different relationships require different analyses. Milso Industries Corp. v. Nazzaro, supra . The question raised by count ten is whether RDA employed tortious or improper means to interfere in the plaintiff’s relationships with its customers.
"It is well established that the elements of a claim for tortious interference with business expectancies are: (1) a business relationship between the plaintiff and another party; (2) the defendant’s intentional interference with the business relationship while knowing of the relationship; and (3) as a result of the interference, the plaintiff suffers actual loss." (Internal quotation marks omitted.) American Diamond Exchange, Inc. v. Alpert, 302 Conn. 494, 510, 28 A.3d 976 (2011). Competitors, however, are expected to interfere in each other’s business relationships. See Kopperl v. Bain, 23 F.Supp.3d 97, 110 (D.Conn. 2014). "[N]ot every act that disturbs a contract or business expectancy is actionable ... A defendant is guilty of tortious interference if he has engaged in improper conduct ... [T]he plaintiff [is required] to plead and prove at least some improper motive or improper means ... Stated simply, to substantiate a claim of tortious interference with a business expectancy, there must be evidence that the interference resulted from the defendant’s commission of a tort." (Citations omitted, internal quotations omitted.) Biro v. Hirsch, 62 Conn.App. 11, 771 A.2d 129 (2001).
In this case, the plaintiff alleges that RDA "used" and "actively participated" in the use of its protected information and "exploited" the information to disrupt the plaintiff’s relationships with its customers and divert them to RDA. The court has already concluded that the plaintiff has stated a claim that RDA misappropriated trade secrets. The requirement that RDA’s interference in these relationships be tortious, therefore, has been met.
In Northeast Double Disc Grind, LLC v. Pietrowicz, Superior Court, judicial district of New Britain, Docket No. CV-12-6018053-S (May 7, 2014, Abrams, J.), the court concluded that the plaintiff’s allegations that the defendants’ wrongful acts of "misappropriating and misusing confidential customer information of the [p]laintiff ... soliciting customers of the [p]laintiff who were subject of the ... known restrictive covenants" were sufficient to support a claim for intentional interference with business expectancy. In Milso Industries Corp. v. Nazzaro, supra, the court entered summary judgment on a former employer’s claim against a new employer for tortious interference with the employment contract, but the court denied summary judgment on the claim of tortious interference with business expectancies based on evidence that the new employer used trade secrets to solicit the plaintiff’s customers.
In this case, the plaintiff alleges that its relationship with its customers and clients, as represented by its agency accounts, constituted advantageous business relationships that the plaintiff spent much time and expense in developing. RDA is alleged to have had knowledge of these relationships and hired Touchette as part of an effort to acquire the plaintiff’s agency accounts for itself. RDA not only recruited Touchette and encouraged him to violate the restrictive covenants in his contract with the plaintiff, however; RDA itself actively participated in the use of the plaintiff’s trade secrets to lure the plaintiff’s customers away. These allegations are sufficient to state a claim that RDA tortiously interfered with the plaintiff’s business expectancies, provided the complaint also sufficiently alleges actual loss.
"Unlike other torts in which liability gives rise to nominal damages even in the absence of proof of actual loss ... it is an essential element of the tort of unlawful interference with business relations that the plaintiff suffered actual loss." (Citation omitted. Internal quotation marks omitted.) Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 33, 761 A.2d 1268 (2000). Thus, it must "appear that, except for the tortious interference of the defendant, there was a reasonable probability that the plaintiff would have entered into a contract or made a profit." Goldman v. Feinberg, 130 Conn. 671, 675, 37 A.2d 355 (1944). This ordinarily presents a question of fact. American Diamond Exchange, Inc. v. Alpert, 101 Conn.App. 83, 97, 920 A.2d 357 (2007). "If the question is whether the plaintiff would have succeeded in attaining a prospective business transaction in the absence of [the] defendant’s interference, the court may, in determining whether the proof meets the requirement of reasonable certainty, give due weight to the fact that the question was made hypothetical by the very wrong of the defendant." (Internal quotation marks omitted.) Hi-Ho Tower, Inc. v. Com-Tronics, Inc., supra, 255 Conn. at 34. Here, the plaintiff alleges that RDA has diverted business from the plaintiff, impaired the business relationship between the plaintiff and one or more of its customers, and that the plaintiff has lost insurance premiums and commissions. These allegations are sufficient to allege an actual loss.
RDA’s motion to strike count ten is denied.
IV. COUNT TWELVE- CUTPA
RDA moves to strike count twelve on the grounds that the plaintiff is merely re-alleging its tortious interference claims as a CUTPA violation, the plaintiff has failed to sufficiently describe how RDA’s actions are unfair or offensive, and that the plaintiff has failed to plead facts establishing an ascertainable loss. In response, the plaintiff contends that its factual allegations in support of its interference and trade secret claims are sufficient to support a valid CUTPA claim, because those facts describe unfair or offensive and immoral conduct, and sufficiently allege an ascertainable loss.
General Statutes § 42-110b(a) 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." "[I]n determining whether a practice violates CUTPA ... [courts look to]: (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 ... Because CUTPA is a ...‘remedial’ measure ... it is construed liberally ..." (Citations omitted, internal quotation marks omitted.) Landmark Investment Group, LLC v. CALCO Construction & Development Co., 318 Conn. 847, 880-81, 124 A.3d 847 (2015).
The plaintiff alleges that RDA sought to hire Touchette so he would move the plaintiff’s agency accounts to RDA and RDA provided Touchette with financial incentives and administrative support to do so. The plaintiff further alleges that RDA used the plaintiff’s confidential agency account information without authorization from the plaintiff to divert business from the plaintiff, a competitor of RDA, which resulted in the loss of premiums and commissions. "[T]he essential difference between a tort claim for interference with business expectancies and a claim under CUTPA is the standard by which the alleged acts are measured. While liability in tort is imposed only if the defendant maliciously or deliberately interfered with a competitor’s business expectancies, CUTPA liability is premised on a finding that the defendant engaged in unfair competition and unfair or deceptive trade practices." Sportsmen’s Boating Corp. v. Hensley, 192 Conn. 747, 755, 474 A.2d 780 (1984). "[I]mproper conduct that does not rise to the level of tortious interference may, nonetheless, constitute a CUTPA violation." PAR Painting, Inc. v. Greenhorne & O’Mara, Inc., 61 Conn.App. 317, 328, 763 A.2d 1078, cert. denied, 255 Conn. 951, 770 A.2d 31 (2001). Some courts have recognized a cause of action under CUTPA under facts similar to those this court has found insufficient in count nine. Desrosier of Greenwich v. Shumway Capital Partners, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-05-4004621 (May 30, 2006, Lewis, J.T.R.) (encouraging a competitor’s employee to breach his post-termination restrictive covenant was a legally sufficient CUTPA claim). Here, the plaintiff alleges facts that go beyond merely encouraging Touchette to violate his employment agreement. RDA is also alleged to have misappropriated trade secrets and used them to divert business away from the plaintiff. These allegations are sufficient to warrant a factual determination as to whether they rise to the level of immoral, unethical, oppressive, or unscrupulous misconduct. Our Supreme Court "has recognized that, although ‘[c]onduct that might be actionable under CUTPA may not rise to a level sufficient to invoke tort liability ... [t]he reverse of that proposition ... is seldom true ...’ Indeed, we have noted that ‘it is difficult to conceive of a situation where tortious interference would be found but a CUTPA violation would not ...’ Moreover, ‘[w]hether a practice is unfair and thus violates CUTPA is an issue of fact,’ to which we must afford our traditional deference." (Citations omitted). Landmark Investment Group, LLC v. CALCO Construction & Development Co., supra, 318 Conn. 881. Other courts have come to similar conclusions. Milso Industries Corp. v. Nazzaro, supra .
Finally, RDA argues that the plaintiff has failed to sufficiently plead facts demonstrating an ascertainable loss, focusing on paragraph 47 of count twelve, in which the plaintiff alleges that it "has suffered and continues to suffer ascertainable loss, entitling the plaintiff to punitive damages and attorneys fees under [CUTPA]." While this allegation is conclusory, it is supported by the plaintiff’s specific allegations elsewhere in count twelve that it lost insurance premiums and commissions derived from its agency accounts due to RDA’s misconduct. This is sufficient to allege an ascertainable loss. Landmark Investment Group, LLC v. CALCO Construction & Development Co., supra, 318 Conn. 882-83.
RDA’s motion to strike count twelve is denied.
V. COUNT THIRTEEN- UNJUST ENRICHMENT
RDA moves to strike count thirteen as being legally insufficient because the plaintiff failed to plead facts that show RDA profited from the plaintiff’s entitlement or that the plaintiff and RDA had a contractual relationship. The plaintiff contends that it alleges facts that show RDA profited from the plaintiff’s entitlement to the insurance fees and premiums derived from the agency accounts. Furthermore, the plaintiff argues that a contractual relationship is not a prerequisite to maintaining a claim of unjust enrichment.
The plaintiff is not required to allege facts showing it had a contractual relationship with RDA to state a claim for unjust enrichment. The Connecticut Supreme Court recently clarified this while distinguishing between the doctrines of quantum meruit and unjust enrichment. "Quantum meruit is a theory of recovery permitting restitution in the context of an otherwise unenforceable contract. In contrast, recovery under a theory of unjust enrichment applies in the absence of a quasi-contractual relationship." Walpole Woodworkers, Inc. v. Manning, 307 Conn. 582, 587 n.9, 57 A.3d 730, 733 (2012); Schirmer v. Souza, 126 Conn.App. 759, 764-67, 12 A.3d 1048 (2011) (unjust enrichment is grounded in the theory of restitution, not contract theory).
"Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefitted, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs’ detriment." New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451-52, 970 A.2d 592 (2009). "It is well established that ‘[u]njust 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 ... 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.’ " (Citations omitted.) National Waste Associates, LLC v. Scharf, 183 Conn.App. 734, 741 (2018), quoting Gagne v. Vaccaro, 255 Conn. 390, 409, 766 A.2d 416 (2001). "With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard." Cecio Bros., Inc. v. Town of Greenwich, 156 Conn. 561, 564-65, 244 A.2d 404 (1968).
The plaintiff alleges that Touchette, in the employment agreement he signed, agreed that "all rights to receive commissions and fees from the Agency Accounts would be the exclusive property of [the plaintiff] ..." The plaintiff further alleges that RDA was aware of the post-termination restrictive covenants. In spite of such knowledge, RDA is alleged to have actively participated in soliciting the agency accounts, resulting in the accrual of insurance commissions, fees and premiums that benefitted RDA. The complaint alleges that RDA benefitted from the improper use of confidential information, diverting business away from the plaintiff. The plaintiff alleges facts that may, in equity, warrant restitution. That conclusion can only be reached based on a consideration of the facts and circumstances established by the evidence. RDA’s motion to strike count thirteen is denied.
CONCLUSION
For the foregoing reasons, RDA’s motion to strike count nine of the first amended complaint is granted and its motion to strike counts ten, eleven, twelve, and thirteen is denied.