Opinion
No. CV075007327
July 14, 2010
MEMORANDUM OF DECISION MOTION TO STRIKE #149
FACTS
In this action, the plaintiffs, Thirteen Sixty Eight Wing Development Corporation, Linda Li and Feng Rong Li, allege that they purchased a parcel of land that they understood to include a building and a parking lot. The plaintiffs allege that they were told that the property they purchased, located at 47-53 Franklin Street in Norwich, Connecticut, included both a building and an adjacent parking lot. The plaintiffs allege that they discovered after closing that the parking lot is actually located at 39-41 Franklin Street, which was not listed in the closing documents or the deed that concerned the real estate transaction. The plaintiffs filed suit against five defendants: Paulus Chan, Lott Realty, LLC (Lott Realty), Frank Busch, Man-Burch, LLC (Man-Burch) and Brian H. Burchman. The plaintiffs allege that Chan was the attorney who represented them at the closing on the property, that Man-Burch and Burchman owned the real property at issue and that Lott Realty and Busch were the plaintiffs' realtor.
The court notes that Frank Busch is also referred to as "Frank Bush" in several instances throughout the pleadings. The court will use the former spelling, as that is the spelling that appears on the summons.
On December 1, 2008, Man-Burch and Burchman filed an amended cross claim against Lott Realty and Busch. The cross claim contains five counts: misrepresentation, bad faith, breach of fiduciary duty, breach of contract and violation of the Connecticut Unfair Trade Practices Act (CUTPA). On December 18, 2008, Lott Realty and Busch filed this motion to strike count five of the cross claim, which alleges the cause of action for violation of CUTPA. On January 20, 2009, Burchman and Man-Burch filed an objection to the motion to strike.
Man-Burch and Burchman allege the following facts in count five of the cross claim. On or about December 4, 2003, Burchman and Man-Burch signed an exclusive listing agreement with Lott Realty and Busch, which contained all the elements of a contract. The agreement did not indicate that the property included the parking lot located at 39-41 Franklin Street, but when listing the property for sale to the public, Busch wrongfully included the parking lot. Busch advertised the parking lot in his capacity as a business person, knowing that he did not have the authority to do so. Busch listed the parking lot without the knowledge or approval of Burchman and Man-Burch, and did so in bad faith.
LAW OF MOTION TO STRIKE
"Whenever any party wishes to contest . . . the legal sufficiency of the allegations of any complaint, counterclaim or cross claim, or of any one or more counts thereof, to state a claim upon which relief can be granted . . . that party may do so by filing a motion to strike the contested pleading or part thereof." Practice Book § 10-39(a). "[F]or the purpose of 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). Accordingly, "[i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) American Progressive Life Health Ins. Co. of New York v. Better Benefits, LLC, 292 Conn. 111, 120, 971 A.2d 17 (2009).
DISCUSSION
Busch and Lott Realty argue that count five should be stricken because Man-Burch and Burchman failed to serve the attorney general, as required by General Statutes § 42-110g. Further, they argue that count five is based on allegations of professional malpractice, which do not give rise to a cause of action under CUTPA. Finally, Busch and Lott Realty assert that Man-Burch and Burchman are not consumers, competitors or "other businessmen," which precludes them from alleging a violation of CUTPA.
In response, Burchman and Man-Burch argue that the failure to properly serve the attorney general is not a jurisdictional requirement under CUTPA. Additionally, they argue that the professional negligence/malpractice exception to CUTPA does not apply to real estate agencies and brokers who have made misrepresentations. Finally, Burchman and Man-Burch argue that they have standing to bring a CUTPA claim because they claim that Busch and Lott Realty engaged in deceptive business practices and, further, because they qualify as consumers.
I
Section 42-110g(c) provides: "Upon commencement of any action brought under subsection (a) of this section, the plaintiff shall mail a copy of the complaint to the Attorney General and the Commissioner of Consumer Protection and, upon entry of any judgment or decree in the action, shall mail a copy of such judgment or decree to the Attorney General and the Commissioner of Consumer Protection."
Section 42-110g(a) provides, in relevant part: "Any person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by Section 42-110b, may bring an action in the judicial district in which the plaintiff or defendant resides or has his principal place of business or is doing business, to recover actual damages."
In Cookes' Equipmnent Co. v. Stack, Superior Court, judicial district of New Haven, Docket No. 295539 (October 12, 1990, Hadden, J.) ( 2 Conn.L.Rptr. 648), the defendants made an identical argument with respect to service upon the attorney general. The court, Hadden, J., determined that "[t]he purpose of notice to the Attorney General is for that office to keep track of CUTPA claims and to act as an amicus curiae in private matters . . . Failure to forward a copy of the complaint to the Attorney General upon commencement of an action pursuant to 42-110g(c) is a curable jurisdictional defect . . . The court in [ Cole v. Metropolitan Property Liability Ins. Co., United States District Court, Docket No. B-83-208 (D.Conn. June 13, 1984) (10 Conn.L.Trib., No. 45, p. 7)] noted that: `the Attorney General's office for whose benefit 42-110g(c) was written [who appeared as amicas curiae] takes the position that failure to comply with the subsection . . . does not constitute a jurisdictional defect. Moreover, the subsection provides no specific time period in which plaintiffs must notify the Attorney General.'" (Citations omitted.) Cookes' Equipment Co. v. Stack, supra, 2 Conn.L.Rptr. 650. Lott Realty and Busch have not cited any authority, other than the text of the statute itself, to support their argument. Further, the court can find no authority to support the proposition that failure to serve the attorney general is a ground for striking a CUTPA claim. To the contrary, several judges of the Superior Court have rejected this argument. See, e.g., Radosavljevic v. 175 Realty, LLC, Superior Court, judicial district of Fairfield, Docket No. CV 06 5001303 (October 3, 2006, Owens, JTR.); Peterson v. Parillo, Superior Court, judicial district of New Haven, Docket No. CV 03 0477200 (July 21, 2004, Arnold, J.). Accordingly, count five cannot be stricken on this ground.
II
"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 — 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] . . .
"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 . . . Furthermore, a party need not prove an intent to deceive to prevail under CUTPA." (Internal quotation marks omitted.) Journal Publishing Co. v. Hartford Courant Co., 261 Conn. 673, 695-96, 804 A.2d 823 (2002).
In Haynes v. Yale-New Haven Hospital, 243 Conn. 17, 34, 699 A.2d 964 (1997), the Connecticut Supreme Court concluded that professional negligence claims do not fall under the protection of CUTPA. In Haynes, the plaintiff alleged that "Yale-New Haven [Hospital] held itself out to be a major trauma center even though it allegedly did not meet those standards." Id., 32. Concluding that the allegations did not support a CUTPA claim, the Supreme Court concluded "that the touchstone for a legally sufficient CUTPA claim against a health care provider is an allegation that an entrepreneurial or business aspect of the provision of services aside from medical competence is implicated, or aside from medical malpractice based on the adequacy of staffing, training, equipment or support personnel. Medical malpractice claims recast as CUTPA claims cannot form the basis for a CUTPA violation. To hold otherwise would transform every claim for medical malpractice into a CUTPA claim." Id., 38.
"The question of how far the professional negligence exclusion extends has created a split in the Superior Courts. A number of courts have held that the CUTPA exclusion extends beyond the medical and legal fields to exempt other types of professional malpractice . . . Conversely, [o]ther Superior Courts have reasoned that a CUTPA count based on negligence in professions other than law or medicine should survive a motion to strike because the appellate courts have not expressly extended the professional negligence exception . . .
"Neither the Superior Court nor the appellate courts of Connecticut have extended the professional negligence limitation on CUTPA liability to real estate agents, and the Superior Court has routinely upheld CUTPA claims against real estate agents for misrepresentations involved in the sale of property." (Citation omitted; internal quotation marks omitted.) Mauriello v. ACJC, LLC, Superior Court, judicial district of Waterbury, Docket No. CV 07 5003345 (November 7, 2007, Upson, J.) ( 44 Conn. L. Rptr. 499, 500). The court also notes that in Tanpiengco v. Tasto, 72 Conn.App. 817, 820, 806 A.2d 1080 (2002), the Appellate Court upheld a judgment of the trial court that found a violation of CUTPA where a listing agent made "representations . . . to [the plaintiffs that] were material and deceptive." (Internal quotation marks omitted.)
In the present case, Burchman and Man-Burch allege in count five that their exclusive listing agreement with Lott Realty and Busch did not include the parking lot located at 39-41 Franklin Street. Burchman and Man-Burch allege that Busch wrongfully included the parking lot in the property listing with the knowledge that he did not have the authority to do so and without the knowledge or approval of Burchman and Man-Burch. Man-Burch and Burchman allege that Busch improperly listed the parking lot in bad faith.
The court finds that Burchman and Man-Burch have sufficiently alleged that Busch and Lott Realty engaged in actual deceptive practices. The court also finds that the allegations in count five of the cross claim do not fall within the "professional negligence" exception to CUTPA. The court notes that other judges of the Superior Court have arrived at the same conclusion with respect to deceptive statements and practices related to the sale of real estate. See, e.g., Mauriello v. ACJC, LLC, supra, 44 Conn. L. Rptr. 499; Kane v. Neveleff, Superior Court, judicial district of New Haven, Docket No. CV 00 0439308 (July 11, 2002, Arnold, J.). Whether Busch and Lott Realty's actions actually constitute a violation of CUTPA is ultimately a determination for a fact-finder.
III
Consumers, competitors and "other business persons" can all maintain causes of action under CUTPA. Eder Brothers, Inc. v. Wine Merchants of Connecticut, Inc., 275 Conn. 363, 379-80, 880 A.2d 138 (2005). In the present case, Burchman and Man-Burch argue that they qualify as consumers to the real estate transaction at issue. Lott Realty and Busch argue that the parties were engaged in a joint venture to sell the property, and that the majority of judges of the Superior Court do not apply CUTPA to intra-business affairs.
"[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Moreover . . . [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 . . . Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006). In the present case, Burchman and Man-Burch allege that they entered into an exclusive listing agreement with Busch, which contains all the elements of a contract, as defined by Connecticut law. Man-Burch and Burchman allege that Busch advertised the parking lot in his capacity as a business person, knowing that he did not have the authority to do so. Construing the express and implied allegations broadly, Man-Burch and Burchman have alleged that the act of deception took place while they were "consumers" of Busch's services. Accordingly, count five cannot be stricken on this ground.
CONCLUSION
For the foregoing, reasons, the motion to strike is denied.