Summary
failing to find extreme and outrageous behavior for allegations that misrepresentations made by the defendant during the course of a real estate purchase and subsequent construction lead to emotional and financial strain to maintain the mortgages
Summary of this case from Lavoie v. U.S.Opinion
No. CV07-6000489 S
October 10, 2008
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO STRIKE (#111)
FACTS
On July 3, 2007, the plaintiff, Martin Orellana, served a five-count complaint on the defendant, Domenico Chiera, which was subsequently revised on June 10, 2008. The complaint alleged claims for: (1) negligent misrepresentation, (2) duress, (3) relief under the Connecticut Unfair Trade Practices Act (CUTPA), (4) negligent infliction of emotional distress, and (5) intentional infliction of emotional distress. The revised complaint alleges the following the facts. During the summer of 2003, the plaintiff became interested in relocating his family to the Danbury, Connecticut area. Around that time he met the defendant, who represented himself to be a real estate broker. The plaintiff told the defendant that he was interested in purchasing a two-to three-family home in Danbury with the intent of housing his family in a portion of the house while renting out the excess space. Following this conversation, the defendant told the plaintiff that there was an opportunity to purchase a one-family home at 20 Virginia Avenue in Danbury, and that the property had sufficient space to build two housing units at a cost of $80,000 each, which could be sold quickly for a profit. Despite some apparent misgivings about entering into the transaction, the plaintiff agreed to purchase the property on November 26, 2003 for $260,000, with an understanding that the defendant would finance the construction costs and supervise the building of the housing units as the general contractor. Later, the plaintiff learned that the defendant was not licensed as a contractor. The defendant further represented to the plaintiff that the defendant would not make any profit on the construction work other than a real estate broker's commission.
The plaintiff alleges that throughout the construction process the defendant continually asked him for money for various building activities. While the plaintiff agreed to advance some money to the defendant, the defendant failed to give the plaintiff a written contract memorializing their agreement and refused to provide the plaintiff with any receipts justifying the expenses. In February 2006, the defendant informed the plaintiff for the first time that the cost of the two housing units would now be $127,000 each, not the $80,000 a price he had previously represented. In March 2006, the defendant asked the plaintiff to attend a meeting with the defendant's attorney to sign documents that would serve as a receipt for the construction costs. At this meeting, the plaintiff, who does not speak or read English, was asked, without explanation, to sign documents entitled a "fixed rate note" and "mortgage deed — statutory form" that established a $450,000 mortgage in favor of the defendant. The plaintiff further alleges that the defendant represented he was actively marketing the newly constructed housing units when in fact they were not listed on the multiple listing service and could not be actively marketed for sale due to the town of Danbury having revoked the original certificate of occupancy for the units. Moreover, the plaintiff contends that in December 2006 the defendant asked the plaintiff for $2,500 to pay the defendant's attorney for legal work completed to obtain a variance from the zoning regulations on the subject property when in fact the attorney only charged $1,500 for this service. Finally, the plaintiff indicates that the defendant pressured him to sell the entire property for $365,000, although the defendant had previously represented that only the original house was being sold at that price.
On June 30, 2008, the defendant filed a motion to strike and memorandum of law in support of the motion arguing that: (1) the plaintiff's entire action is barred by the statute of limitations; (2) in the alternative, count three of the plaintiff's revised complaint should be stricken for failure to allege sufficient aggravating factors to substantiate a CUTPA claim; and (3) count five regarding intentional infliction of emotional distress should be stricken for failure to sufficiently plead extreme and outrageous conduct. The plaintiff filed a memorandum of law in opposition on July 16, 2008. The matter was heard at short calendar on September 2, 2008.
DISCUSSION
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). Consequently, "[t]he proper method to challenge the legal sufficiency of a complaint is to make a motion to strike prior to trial." Gutlack v. Gutlack, 30 Conn.App. 305, 309, 620 A.2d 181 (1993). In a motion to strike, "the moving party admits all facts well pleaded." RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 383 n. 2, 650 A.2d 153 (1994). Therefore, "[i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Batte-Homgren v. Commissioner of Public Health, 281 Conn. 277, 294, 914 A.2d 996 (2007). Finally, the court must "construe the complaint in the manner most favorable to sustaining its legal sufficiency." (Internal quotation marks omitted.) Sullivan v. Lake Compounce Theme Park, Inc., 277 Conn. 113, 117, 889 A.2d 810 (2006).
I STATUTE OF LIMITATIONS
Count one (negligent misrepresentation), count two (duress), count four (negligent infliction of emotional distress), and count five (intentional infliction of emotional distress) of the revised complaint are all tort-based theories. Consequently, the applicable statute of limitations is found in General Statutes § 52-577, which provides: "No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of." Count three is regulated by the CUTPA statute of limitations, which provides in relevant part: "An action under this section may not be brought more than three years after the occurrence of a violation of this chapter." General Statutes § 42-110g(f). Since the plaintiff commenced this action by service of process on July 3, 2007, any acts mentioned in the plaintiff's revised complaint that occurred on or after July 3, 2004 would fall within the limitations period.
At issue, however, are a series of alleged incidents that occurred prior to July 3, 2004; most notably the plaintiff's purchase of the subject premises on November 26, 2003. In order to bring these events within the limitations period, the plaintiff points to the continuing course of conduct doctrine. Under Connecticut law, "[w]hen the wrong sued upon consists of a continuing course of conduct, the statute does not begin to run until that course of conduct is completed." (Internal quotation marks omitted.) Giuleitti v. Giulietti, 65 Conn.App. 813, 833, 784 A.2d 905, cert. denied, 258 Conn. 946, 788 A.2d 95 (2001), quoting Handler v. Remington Arms Co., 144 Conn. 316, 321, 130 A.2d 793 (1957). "Where [our Supreme Court has] upheld a finding that a duty continued to exist after the cessation of the act or omission relied upon, there has been evidence of either a special relationship between the parties giving rise to such a continuing duty or some later wrongful conduct of a defendant related to the prior act . . . In sum, a precondition for the operation of the continuing course of conduct doctrine is that the defendant must have committed an initial wrong upon the plaintiff . . . Second, there must be evidence of the breach of a duty that remained in existence after commission of the original wrong related thereto . . . [C]ontinuing wrongful conduct may include acts of omission as well as affirmative acts of misconduct . . ." (Citations omitted; internal quotation marks omitted.) Giuleitti v. Giuleitti, supra, 834-35, see also Vanliner Ins. Co. v. Fay, 98 Conn.App. 125, 140, 907 A.2d 1220 (2006).
"As [the Supreme Court] previously ha[s] recognized, the determination that any of these elements exists is conspicuously fact-bound." (Internal quotation marks omitted.) Grey v. Stamford Health System, Inc., 282 Conn. 745, 755, 924 A.2d 831 (2007). "The doctrine of continuing course of conduct as used to toll the statute of limitations . . . [can be utilized in] claims where the situation keeps evolving after the act complained of is complete . . ." Sanborn v. Greenwald, 39 Conn.App. 289, 297-98, 664 A.2d 803 (1995). In addition to ordinary tort based cases, the Supreme Court has indicated that the continuing course of conduct doctrine would apply to CUTPA claims under the right factual circumstances. See Fichera v. Mine Hill Corp., 207 Conn. 204, 209-13, 541 A.2d 472 (1988).
While the complaint does not allege a special relationship between the two parties in this matter, it does allege wrongful conduct on the part of the defendant in 2003, and then subsequent malfeasances from thereon through 2006 that were related to the original wrongs. Specifically, the plaintiff's revised complaint states, among other similar allegations, that the defendant indicated he would finance and adequately supervise the construction of the two housing units and that the newly constructed units would sell quickly for a profit. The plaintiff relied on these misrepresentations when deciding to purchase the subject premises in 2003. In 2005 the defendant refused to provide the plaintiff with documentation or information regarding the construction costs. The plaintiff alleges that in 2006 the defendant told him for the first time that the housing units were going to cost $127,000 as opposed to $80,000, and the plaintiff was induced into signing documents that created a mortgage in favor of the defendant. As alleged, the events of 2003 through 2006 are interrelated as they all involve the defendant's attempt to perpetuate a line of misconduct that began in 2003 through the purchase of the property based on defendant's representation that plaintiff could further develop the property through the defendant's funds, oversight and direct involvement.
When hearing a motion to strike, the court must accept the validity of all facts in the plaintiff's complaint. For this reason, a challenge based on the statute of limitations should ordinarily be pleaded as a special defense. The only exception to this general rule that is applicable here is when "[t]he parties agree that the complaint sets forth all the facts pertinent to the question [of] whether the action is barred by the [s]tatute of [l]imitations . . . it is proper to raise that question by [a motion to strike] instead of by answer . . ." (Internal quotation marks omitted.) Forbes v. Ballaro, 31 Conn.App. 235, 239, 624 A.2d 389 (1993). Viewed in a light most favorable to the non-moving party, it is evident that the plaintiff has alleged a sufficient nexus between the various incidents that occurred inside and outside of the statute of limitations period. In this instance a motion to strike is an inappropriate procedural vehicle to challenge the complaint. See, e.g., Talnose v. Wolcott, Superior Court, judicial district of Waterbury, Docket No. CV 07 5003539 (November 9, 2007, Agati, J.) (motion to strike inappropriate in a case where the plaintiff alleged that continuing course of conduct tolled the statute of limitations because the complaint does not contain all the relevant facts). Whether in a motion to strike or as a special defense, the plaintiff's complaint has alleged sufficient facts that could operate to toll the statute of limitations. Accordingly, the motion to strike the entire complaint on this ground is denied.
II CUTPA
In the alternative, the defendant has moved to strike count three of the revised complaint on the grounds that the plaintiff has failed to allege any aggravating factors that would elevate the negligent misrepresentation claim into a CUTPA cause of action. CUTPA provides that "[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or trade practices in the conduct of any trade or commerce." General Statutes § 42-110b(a). When determining what type of conduct violates this statute, the Supreme Court has adopted the following test:
(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 — 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)]. (Internal citations omitted.)
A-C Foods, Inc. v. Pepperidge Farm, Inc., 216 Conn. 200, 215, 579 A.2d 69 (1990).
All three criteria need not be established in order to state a CUTPA claim. In effect, it is a balancing test where a strong showing on one factor can compensate for a weak showing on another. Toshiba American Medical Systems, Inc. v. Mobile Medical Systems, Inc., 53 Conn.App. 484, 491 n. 3, 730 A.2d 1219, cert. denied, 249 Conn. 930, 733 A.2d 1219 (1999).
Under certain situations, "the same facts that establish a breach of contract claim may be sufficient to establish a CUTPA violation . . ." Lester v. Resort Camplands International, Inc., 27 Conn.App. 59, 71, 605 A.2d 550 (1992). Nevertheless, "[w]hen the superior courts have permitted a CUTPA cause of action based on a breach of contract, there generally has been some type of fraudulent behavior accompanying the breach or aggravating circumstances." Cormier v. Ulster Savings Bank, Superior Court, judicial district of New Britain, Docket No. CV 97 483639 (November 8, 2000, Shapiro, J.). A CUTPA based complaint will withstand a motion to strike if it pleads sufficient aggravating factors that would establish that the case is more than an ordinary breach of contract matter. Pollock v. Panjabi, 47 Conn.Sup. 179, 198, 781 A.2d 518 (2000).
The plaintiff's revised complaint alleges a litany of potential aggravating factors in this matter. For instance, the plaintiff avers, among other contentions, that the defendant induced the plaintiff into signing a mortgage deed and note in favor of the defendant although he could not read English and the documents were not explained to him. Moreover, the defendant actively concealed from the plaintiff the actual cost of the housing construction project, represented himself as a general contractor when he was not licensed by the state, and told the plaintiff to pay him $2,500 for legal expenses in connection with the construction when the defendant's attorney had only charged $1,500. If proven at trial, these allegations could constitute unfair, unscrupulous, immoral, offensive and deceptive trade practices that caused financial injury to the plaintiff. In that the court is required to construe all of the complaint's allegations in favor of the non-moving party, the court is of the opinion that the plaintiff has pleaded sufficient facts to establish a CUTPA cause of action. The motion to strike the third count is denied.
III INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
The defendant also moves to strike count five of the plaintiff's complaint regarding intentional infliction of emotional distress.
In order for the plaintiff to prevail in a case for liability under . . . [intentional infliction of emotional distress], four elements must be established. It must be shown: (1) that the actor intended to inflict emotional distress or that he knew or should have known that emotional distress was the likely result of his conduct; (2) that the conduct was extreme and outrageous; (3) that the defendant's conduct was the cause of the plaintiff's distress; and (4) that the emotional distress sustained by the plaintiff was severe. (Internal quotation marks omitted.)
Carrol v. Allstate Ins. Co., 262 Conn. 433, 442-43, 815 A.2d 119 (2003). In order to survive a motion to strike, the plaintiff must plead all four elements. Muniz v. Kravis, 59 Conn.App. 704, 708-09, 757 A.2d 1207 (2000). The extreme and outrageous element is only satisfied "where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society." (Internal quotation marks omitted.) Carrol v. Allstate Ins. Co., supra, 443. Determining "[w]hether a defendant's conduct is sufficient to satisfy the requirement that it be extreme and outrageous is initially a question for the court to determine . . . Only where reasonable minds disagree does it become an issue for the jury . . . Therefore, in assessing a claim for intentional infliction of emotional distress, the court performs a gatekeeping function. In this capacity, the role of the court is to determine whether the allegations of the complaint . . . set forth behaviors that a reasonable fact finder could find to be extreme or outrageous." (Citations omitted.) Hartmann v. Gulf View Estates Homeowners Ass'n., Inc., 88 Conn.App. 290, 295, 869 A.2d 275 (2005).
Under our case law, the plaintiff has not pleaded sufficient facts to establish the extreme and outrageous element. The essential allegation of this count is that the plaintiff suffered "emotional and financial strain to maintain the mortgages" as a result of misrepresentations made by the defendant during the course of the real estate purchase and subsequent construction activity. Such allegations do not rise to the level of behavior that is utterly intolerable in a civilized society. See, e.g., New Milford Savings Bank v. Zandy, Superior Court, judicial district of Litchfield, Docket No. CV 99 0078766 (January 11, 2001, DiPentima, J.) (motion to strike intentional infliction of emotional distress claim granted when defendant made misrepresentations regarding value of property); Deutsche Bank Trust Co. v. Walters, Superior Court, judicial district of New London, Docket No. CV 02 0562858 (April 28, 2004, Martin, J.) (motion to strike intentional infliction of emotional distress claim granted when plaintiff alleged that defendant made misrepresentations that caused plaintiff to enter into a mortgage contract). Accordingly, the motion to strike the fifth count is granted.
CONCLUSION
For the above stated reasons, the defendant's motion to strike the entire revised complaint on the basis of statute of limitations is denied. The motion to strike count three of the revised complaint (CUTPA) is denied. The motion to strike count five of the revised complaint (intentional infliction of emotional distress) is granted.