Opinion
No. X06 CV 08 4016022 S
March 22, 2011
MEMORANDUM OF DECISION ON ATTORNEY FEES AND PUNITIVE DAMAGES
STATEMENT OF THE CASE
This case was tried to a jury on the sixth amended complaint filed by the plaintiffs Frederick Ulbrich ("Ulbrich") and Ulbrich Properties, LLC ("Ulbrich Properties"), against the defendants TD Banknorth and Tranzon Auction Properties. Four counts of the complaint were presented to the jury for determination. In count seven against Banknorth and in count nine against Tranzon, the plaintiffs alleged negligent misrepresentation. In count twelve, Ulbrich alleged breach of warranty of title against Banknorth. In count fifteen, Ulbrich alleged that Banknorth violated the Connecticut Unfair Trade Practices Act, General Statutes §§ 42-110a, et seq. ("CUTPA"). The case was tried over a six-week period and involved fifteen witnesses, approximately thirteen days of evidence and argument, and one full day of jury deliberation. The jury's verdict was in favor of the plaintiffs on all four counts. In light of the jury's finding that Banknorth violated CUTPA, the court on October 8, 2010 held supplemental evidentiary proceedings on Ulbrich's claims for attorney fees and punitive damages. After reviewing the evidence admitted at these proceedings and the parties' written submissions, the court scheduled a hearing for further evidentiary proceedings and oral argument. This additional hearing was held on January 28, 2011. The parties completed the filing of supplemental memoranda on February 10, 2011.
In a memorandum of decision filed on October 26, 2010, the court issued rulings on the defendants' post-trial motions. Familiarity with that decision is assumed and a full discussion of the facts will not be repeated here. In that decision, the court summarized Ulbrich's CUTPA claims as follows:
In count fifteen of the complaint, Ulbrich alleges that Banknorth's conduct involved unfair or deceptive acts or practices in violation of CUTPA. The fifteenth count incorporated the substantive allegations of the previous counts claiming negligence and breach of warranty. Thus, the plaintiffs alleged that the bank was "negligent and careless" not to ascertain or investigate the true ownership status of the personal property subject to the auction and in "causing personalty to be sold, although not part of its security." Sixth Amended Complaint, Count 15, ¶ 33. The plaintiffs further alleged that the bank knew the following: that the buyers would rely on the description of the property being sold at the auction; that there were conflicting claims to this property; and that it did not have a "definite list of personal property." Id. Despite being aware of these facts, Banknorth "caused an auction to be held knowing that plaintiffs would rely" on the property description provided by the bank or its agents. Id. At no time did the bank disclaim ownership of the property purportedly sold as part of the auction and conveyed by the bills of sale. Complaint, Count 15, ¶ 34. Finally, the CUTPA count makes the following additional allegation not explicitly alleged elsewhere in the complaint: "[t]he defendant bank was aware that the plaintiffs believed and had reason to believe that they were buying a fully operational facility, completely equipped with personal property to carry on said business. At no time between the auction and the closing did the defendant bank reveal that there were conflicting claims to the tangible and intangible personal property." Complaint, Count 15, ¶ 37.
As previously stated, the jury found in favor of Ulbrich and against Banknorth on Ulbrich's CUTPA claim. At the defendant's request, the jury was asked, "Did the plaintiff prove by a fair preponderance of the evidence that defendant TD Banknorth engaged in conduct that was an unfair or deceptive act or practice?" The jury answered this question affirmatively.
Ulbrich v. Groth, Superior Court, Complex Litigation Docket, Judicial District of Waterbury, Docket No. CV X06 08 4016022 S, Memorandum of Decision on the Defendants' Motions for Judgment Notwithstanding the Verdict, to Set Aside Verdict and for Remittitur (October 26, 2010; Stevens, J.) [ 50 Conn. L. Rptr. 822].
DISCUSSION I ATTORNEY FEES AND COSTS A
"General Statutes § 42-110g(d) provides that `[i]n any action brought by a person under [CUTPA], the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery.' `The cases interpreting the attorneys fees provisions of CUTPA also indicate that the awarding of attorneys fees is within the discretion of the trial court.' Staehle v. Michael's Garage, Inc., 35 Conn.App. 455, 460, 646 A.2d 888 (1994). `The statute contains no standard by which a court is to award attorneys fees, thus leaving it to the sole discretion of the trial court to determine if attorneys fees should be awarded and the amount of such award.' Id., 461. The court's discretionary decision to award attorney fees should be premised on reasonable determinations and tenable grounds. See Thames River Recycling, Inc. v. Gallo, 50 Conn.App. 767, 800, 720 A.2d 242 (1998). `A court has few duties of a more delicate nature than that of fixing counsel fees.' Laudano v. New Haven, 58 Conn.App. 819, 822, 755 A.2d 907 (2000)." Bridgeport Harbour Place I, LLC v. Ganim, Superior Court, Complex Litigation Docket, Judicial District of Waterbury, Docket No. CV X06 04 0184523 S, Memorandum of Decision on the Plaintiff's Claims for Attorney Fees and Punitive Damages (October 31, 2008; Stevens, J.)
A proper and recognized method for determining an award of attorney fees is to consider a "lodestar calculation" (multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate) and to evaluate this calculation by the criteria set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 414 (5th Cir. 1974)). The Appellate Court in Steiger v. J.S. Builders, 39 Conn.App. 32, 39, 663 A.2d 432 (1995), explicitly held that the guidelines delineated in Johnson v. Georgia Highway Express, Inc., supra, 488 F.2d 414 are applicable in determining reasonable attorney fees under CUTPA. Those factors are as follows: "(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee for similar work in the community; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation and ability of the attorneys; (10) the `undesirability' of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Johnson v. Georgia Highway Express, Inc., supra, 488 F.2d 717-19. The trial court is required to consider and not necessarily explicitly address all of the factors articulated in the Johnson case. See Riggio v. Orkin Exterminating Co., 58 Conn.App. 309, 318-19, 753 A.2d 423, cert. denied, 254 Conn. 917, 759 A.2d 507 (2000) (the trial court "was not required to consider each of the twelve factors individually, but instead was required to consider the full panoply of factors and not base its decision solely on one of the elements").
Ulbrich claims that the total legal fees incurred for the representation of the plaintiffs in this controversy are approximately $448,747. Ulbrich concedes that reductions should be made to this total amount to determine the amount of his attorney fee claim against Banknorth. As part of the damages alleged against the defendants, the plaintiffs sought approximately $49,000 in legal fees defending their ownership claims of the property purportedly transferred to Ulbrich by Banknorth. There is no dispute that the jury's verdict included an award of $49,000 based on this claim and that this amount should be deducted to determine the attorney fee claim. Ulbrich also concedes that the total amount of the fees should be reduced to reflect work provided on claims against other parties that were unrelated to the CUTPA claim. Ulbrich offered evidence indicating that the fees for this unrelated work are approximately $27,125. Lastly, Ulbrich concedes that a reduction is warranted for claims against Banknorth that were unsuccessful and unrelated to the CUTPA claim. Ulbrich offered evidence indicating that the fees associated with these claims are approximately $12,919. In summary, after a reduction of these amounts, Ulbrich asserts an attorney fee claim against Banknorth in the amount of $359,703. This claim is based on the hourly rates charged by three attorneys and a paralegal of the law firm Weinstein Wisser: $500 for Attorney Richard Weinstein, $400 for Attorney Kerry Wisser, $285 for Attorney Nathan Schatz, and $110 for paralegal services. These hourly rates represent a blended rate of approximately $324 an hour. On the basis of this blended hourly rate, the attorney fee claim of $359,703 represents approximately 1,110 hours of time.
The plaintiffs executed two settlement agreements with parties who had been defendants in this case. The first settlement agreement released the defendants Kelly Groth, James D. Groth, Estate of James A. Groth, Groth Family Limited Partnership, Festivals, Inc., JAG Associates, Picnic Basket, LLC, and Mountainside Corporation. The second settlement agreement released the defendant Bruno Morasutti, Guy DeFrancis and Luby Olson, P.C. The complaint was withdrawn against Whitten, Horton Gibney on 3/11/09 without costs or attorney fees. The court also entered summary judgment on the plaintiffs' claim against the defendant Reid and Riege, P.C.
Count thirteen alleged that Banknorth "misappropriated" insurance proceeds received by Banknorth under collateral assignments of insurance policies used by the bank to satisfy a deficiency judgment held by it. The court granted Banknorth's motion for summary judgment on count thirteen. In count fourteen of the complaint, Ulbrich asserted a breach of contract claim against Banknorth, claiming that he was entitled to these insurance proceeds under the terms of a bill of sale executed by the parties. After the close of the evidence, the court granted Banknorth's motion for a directed verdict on count fourteen.
B
Banknorth asserts a litany of arguments why Ulbrich's attorney fee claim should be substantially reduced or denied entirely. Banknorth agrees with Ulbrich that his attorney fee claim should be reduced by $49,000 for the amount already included as part of the verdict and by $40,044 for amounts based on unrelated and unsuccessful claims. Banknorth insists, however, that this $40,044 reduction is insufficient. As will be discussed, the court agrees with Banknorth that the plaintiff appears to have understated the amount of time associated with these unrelated or unsuccessful claims, particularly in regard to the services provided before the filing of the CUTPA claim. The court will apply a reduction of the fee request for these reasons.
Banknorth makes a broader argument that no attorney fees should be awarded because Ulbrich's CUTPA claim was solely supported by negligence and because the jury's compensatory award was excessive and without a reasonable basis. The substance of these arguments was raised in Banknorth's post-trial motions contesting the verdict and were rejected by the court's rulings on these motions. Banknorth has not raised anything new on these issues warranting any further review or discussion of them.
Banknorth also argues that no attorney fees should be awarded because Ulbrich has not offered any evidence about the specific terms of a fee agreement between Ulbrich and his counsel. The terms of a plaintiff's retainer agreement may be relevant to the recovery of attorney fees under CUTPA. However, Banknorth has not cited, and the court has not located, any authority indicating that evidence about the specifics of the retainer agreement is a prerequisite to the recovery of attorney fees under CUTPA. Although neither party offered information about the exact terms of Ulbrich's retainer agreement with his counsel, the evidence establishes that as to the compensation arrangement, the plaintiffs were billed at the law firm's hourly rates and the bills were paid on this basis. There is no evidence that the compensation agreement involved a contingency fee arrangement.
Banknorth next argues that Ulbrich's request for attorney fees should be rejected because he has not presented a sufficient evidentiary record to support an attorney fee award, particularly in light of the unspecific, generic nature of counsel's billing records. Many of the billing record entries provide descriptions that are so general that the work cannot be associated with any specific claim or defendant. The court finds that the deficiencies of the billing records are relevant to a determination of the amount of the fee award and concludes that the attorney fee claim should reflect an appropriate reduction for this reason. The court, however, rejects the defendant's position that these problems are so severe that they preclude the recovery of any award whatsoever. The court also notes that the largest percentage of legal services was performed during the period of the trial proceedings, after the claims against other defendants had been withdrawn. Consequently, although the descriptions of the work are unspecific, virtually all of the work done during this particular time period was directed to the claims against Banknorth or its agent, Tranzon.
"The public policy underlying CUTPA is to encourage litigants to act as private attorneys general and to engage in bringing actions that have as their basis unfair or deceptive trade practices. In order to encourage attorneys to accept and litigate CUTPA cases, the legislature has provided for the award of attorney fees and costs." (Citation omitted; internal quotation marks omitted.) Thames River Recycling, Inc. v. Gallo, supra, 50 Conn.App. 794-95. The jury found that Banknorth committed an unfair and deceptive trade practice based on evidence indicating that Banknorth engaged in an auction without knowing exactly what items it had a right to sell, with information that third parties claimed interests in the property, and without disclosing these circumstances to prospective bidders. An award of attorney fees in this case supports the purpose of CUTPA to encourage private parties to engage in litigation in order to prove and discourage such unscrupulous conduct. See generally Hinchliffe v. American Motors Corp., 184 Conn. 607, 617-18, 440 A.2d 810 (1981) ("The legislative history . . . demonstrates that CUTPA seeks to create a climate in which private litigants help to enforce the ban on unfair or deceptive trade practices or acts").
An exact or precise calculation of these reductions is difficult, in part, because of the unspecific descriptions of the work provided in counsel's billing statements. "Nevertheless, exactitude is not a requisite for an award of damages when the record is sufficient to allow a reasonable estimate of the recovery, and the court is satisfied that a fair estimation of the attorney fee award may be accomplished by an appropriate reduction of the total services documented. The law is established that when dealing with hours that are excessive, unreasonable or otherwise unrecoverable `the court has discretion simply to deduct a reasonable percentage of the number of hours claimed as a practical means of trimming fat from a fee application.' (Citations omitted; internal quotation marks omitted.) Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998)." Metcoff v. NCT Group, Inc., Superior Court, Waterbury Superior Court, Complex Litigation Docket, Docket No. X06 CV 04 0184701 (Stevens, J., February 17, 2011).
Alternatively, Banknorth contends that if the deficiencies of the billing records do not preclude an attorney fee award entirely, then these inadequacies require a reduction of the fee request. The court agrees. As previously indicated, the descriptions of much of the work provided in the time records are very general and unspecific. For example, many of the entries are described as "file work," "telephone call" or "review documents" without further specification about the subject matter or topic of the task. Indeed, the plaintiff's counsel testified that as a matter of policy or practice his firm avoids detail in the firm's billing records in order to avoid a possible breach of the attorney-client privilege. It is unclear how an identification of the topic of a task or conversation would invade the attorney-client privilege or would prevent appropriate redactions to address any invasion concerns, but in any event, the use of this practice exposes the party to a rejection or reduction of his attorney fee claims. In many cases "[m]uch of counsel's time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis." Hensley v. Eckerhart, 461 U.S. 424, 435 (1983). Nevertheless, when a plaintiff asserts a claim seeking attorney fees, it is particularly incumbent upon the plaintiff's counsel to "exercise `billing judgment' with respect to hours worked, . . . and should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims." Id., 437. "Plaintiff's counsel, of course, is not required to record in great detail how each minute of his time was expended. But at least counsel should identify the general subject matter of his time expenditures." (Citation omitted.) Id., n. 12.
More particularly, Banknorth contests Ulbrich's attorney fee claim to the extent it seeks compensation for the legal services provided to Ulbrich before the actual filing of the CUTPA claim. The record indicates that the initial complaint was filed in December 2007 and a CUTPA claim against Banknorth was first asserted in the second amended complaint filed in January 2009. The defendant, however, cannot candidly contend that none of the services during this time period are related to the CUTPA claim or that none of the services related to the CUTPA claim are reflected in the time records. Thus, the issue again is controlled by whether, on the basis of the evidence and the record, a fair and reasonable determination can be made to estimate the time related to the CUTPA claim.
Banknorth appears to argue that there exists (or should exist) a blanket rule prohibiting recovery of attorney fees prior to the filing of a CUTPA claim. The court rejects such a position because such a rule would preclude a recovery for the services performed as part of the investigation and research of the CUTPA claim. The controlling question is the extent to which any of the services prior to the filing of the CUTPA claim are related or unrelated to the CUTPA claim. This court has described the law controlling this consideration as follows:
CUTPA authorizes the recovery of attorney fees "solely to claims related to the prosecution of a CUTPA claim and not to all claims. In the absence of abuse of discretion, the court can award attorneys fees under CUTPA only for expenses that [are] related to the prosecution of a CUTPA claim." Jacques All Trades Corp. v. Brown, 57 Conn.App. 189, 200, 752 A.2d 1098 (2000). In exercising its discretion under CUTPA, a court may include as part of the attorney fee award expenses that are associated with non-CUTPA or unsuccessful claims when all of these claims are related, meaning that they are premised on essentially the same transactions or when their facts are inextricably connected or intertwined. See Heller v. D.W. Fish Realty Co., 93 Conn.App. 727, 735-36, 890 A.2d 113 (2006).
Bridgeport Harbour Place I, LLC v. Ganim, supra.
As previously stated, the initial complaint of this action was filed in December 2007 and the CUTPA claim was asserted in the second amended complaint filed in January 2009. The billing records indicated that prior to the filing of the CUTPA complaint the attorney fees totaled approximately $70,000. See Summary of Attorney Fees dated January 20, 2011. The initial complaint asserted a negligence claim against Banknorth based on its careless failure to investigate or ascertain the true ownership of the auctioned property. This complaint contained ten counts against sixteen defendants. The complaint was amended in July 2008 and again in August 2008. Both of these amended complaints alleged negligence against the bank. The second amended complaint filed in January 2009 reasserted the negligence claim against Banknorth and added two counts alleging breach of implied warranty of title and violation of CUTPA. The substantive factual allegations of the negligence and warranty counts were incorporated into the CUTPA count. These three claims were contained in the sixth amended complaint that was presented to the jury, and the jury rendered a verdict in favor of Ulbrich and against Banknorth on all of them. Thus, there is no dispute that the negligence claim was asserted in the initial complaint against Banknorth. Furthermore, there can be no dispute that the investigation and formulation of this claim formed a basis of the CUTPA claim that was subsequently filed. Although the court appreciates the interconnected nature of this work, the court rejects the plaintiff's position that the majority of this work, involving multiple claims against other parties, was related to the CUTPA claim and should be charged against Banknorth for payment. Based on the court's review of the evidence and the record, the court concludes that approximately forty percent of the services rendered during the time period before the filing of the CUTPA claim were related to the allegations against Banknorth.
C
Banknorth next contests the reasonableness of the hourly rates charged by Attorneys Weinstein and Schatz, but only articulates this objection against the $500 rate charged by Attorney Weinstein. Except for the rate of Attorney Weinstein, the court finds that the hourly rates being asserted are reasonable.The plaintiff substantially relies on Attorney Weinstein's testimony to support the reasonableness of his hourly rate. He testified that the hourly rates of similarly experienced attorneys in commercial foreclosure cases, particularly in Hartford, range from $500 to $675 an hour. There is no dispute about the extensiveness of Attorney Weinstein's forty years of legal experience or the impressiveness of his advocacy skills or trial abilities. Nevertheless, based on both officially and unofficially reported cases, as well as the court's own extensive familiarity with attorney fee awards, the court cannot accept this range as being reflective of attorney fee rates generally accepted or awarded in foreclosure cases, even in commercial foreclosure cases. See generally Stokes v. Norwich Taxi, 289 Conn. 465, 495, 958 A.2d 1195 (2008) (a trial court may properly rely "on its own knowledge and experience in determining the applicable hourly rate"); see also Connecticut Practice Series, Connecticut Unfair Trade Practices, Vol. 12, § 6.11, pp. 98-99 n. 64.
Courts often refer to the factors of the Rules of Professional Conduct for guidance in determining a reasonable hourly rate. "Rule 1.5(a) of the Rules of Professional Conduct lists the factors that ordinarily determine the reasonableness of an attorneys fee. These factors include the time and labor required, the novelty and difficulty of the questions involved, and the fee customarily charged in the locality for similar legal services." Sorrentino v. All Seasons Services, Inc., 245 Conn. 756, 775, 717 A.2d 150 (1998).
Based on these factors and the following considerations, the court concludes that a higher than average or typical rate is warranted for Attorney Weinstein's services, but not $500 an hour. This action was not typical commercial litigation. This action was a complex, time intensive matter involving complicated legal issues against multiple parties. The case was aggressively defended through pre-trial, trial and post-trial proceedings. Numerous novel and difficult legal issues were presented and some of them involved issues of first impression, including two that were raised on the instant claims: whether paralegal fees are recoverable under CUTPA and whether legal fees paid by a third party are recoverable under CUTPA. See also Memorandum of Decision on the Defendants' Motions for Judgment Notwithstanding the Verdict, to Set Aside the Verdict and for Remittitur, filed October 26, 2010; Memorandum of Decision on Plaintiff Motion to Set Aside Directed Verdict and New Trial as to Count Fourteen, filed October 26, 2010. Furthermore, although two counts of the complaint against Banknorth were adjudicated against the plaintiffs in pre-trial rulings, the plaintiffs prevailed on all the counts presented to the jury and the jury's verdict awarded all the damages requested. This favorable result evidences the quality of expertise applied to the prosecution of this case. An additional consideration is that counsel's acceptance of this case affected his ability to accept other employment as evidenced by Attorney Weinstein's testimony that he spent over 500 hours of time prosecuting and trying the CUTPA claim. Based on these reasons, the court finds that an hourly rate of $450 is appropriate for Attorney Weinstein's services. Cf. Serricchio v. Wachovia Securities, LLC, 706 F.Sup.2d 237 (D.Conn. 2010) (awarding $465 per hour for senior partner and $410 to a junior partner in a complex case under the Uniformed Services Employment and Re-employment Rights Act, 38 U.S.C. §§ 4301 et seq.). The court further finds that based on this hourly rate reduction and the evidence indicating that Attorney Weinstein's services involved approximately 591.5 hours, it is reasonable to reduce the plaintiff's attorney fee claim by $29,575.
D
Banknorth also contests Ulbrich's request to recover fees for paralegal services, arguing that such fees are not recoverable under CUTPA. Approximately $58,000 or fourteen percent of the legal fees claimed by Ulbrich represent time billed by a paralegal. Although there are unofficially reported trial court decisions allowing the recovery of paralegal fees as part of an award of attorney fees under CUTPA, these cases do not squarely consider the merits of such a claim. See generally Jones v. Ippolitti, 52 Conn.App. 199, 208 n. 13, 727 A.2d 713 (1999) ("This matter does not require us to determine whether fees for services performed by paralegals may be claimed as attorneys fees [under CUTPA]"). Thus, the disposition of this question presents an issue of first impression and involves the task of statutory interpretation. "When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature . . . [General Statutes] § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extra-textual evidence of the meaning of the statute shall not be considered." (Internal quotation marks omitted.) Hartford/Windsor Healthcare Properties, LLC v. Hartford, 298 Conn. 191, 197, 3 A.3d 56 (2010).
As previously stated, CUTPA states the following regarding the recovery of attorney fees and costs: "In any action brought by a person under this section, the court may award to the plaintiff in addition to the relief provided in this section, costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery . . ." General Statutes § 42-110g(d). Banknorth argues that this provision of CUTPA can only be read to preclude the recovery of fees for paralegal services because the language clearly and unambiguously states that only work "performed by an attorney" is recoverable under CUTPA. The defendant further argues that even if there were some ambiguity in the language of the statute, the recovery of fees for paralegal services would be inconsistent with the intent or design of CUTPA. The court is unpersuaded.
A cursory or superficial reading of the statute appears to support Banknorth's position that the language limits the recovery of attorney fees to work performed solely by an attorney. However, when read more closely and accurately, it is apparent that the phrase indicating that a recovery of "costs and reasonable attorneys fees" must be based on "work reasonably performed by an attorney" and not on "the amount of the recovery" is not actually defining or describing the work of an attorney as Banknorth contends. This language explains that the recovery of attorney fees is determined by the "reasonableness" of the work performed and not by the "amount" of the recovery. This provision means that a small attorney fee may be recovered when there has been a substantial monetary recovery, or that large attorney fee may be recovered when there has been a small monetary recovery or even when there has been no monetary recovery at all. In other words, the language of this provision is not focusing on how the attorney achieved the work, but is emphasizing that the attorney fee is governed by the "reasonableness" of the work performed. An attorney's work may be achieved through the assistance of innumerable individuals, such as associates, student interns, paralegals, investigators or secretaries, but the question at issue is what aspects of this work may be reasonably allowed as a separate element of the fee award. The statute does not expressly address this question and its resolution is left to the appropriate exercise of the court's discretion.
On one hand, it appears appropriate to preclude the recovery of paralegal services that are essentially secretarial or clerical in nature. "[P]urely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of who performs them." Missouri v. Jenkins, 491 U.S. 274, 288 n. 10 (1989). On the other hand, a blanket prohibition against the recovery of any paralegal services would essentially require an attorney to do work that could be more efficiently or economically performed by a paralegal. "To the extent that fee applicants . . . are not permitted to bill for the work of paralegals at market rates, it would not be surprising to see a greater amount of such work performed by attorneys themselves, thus increasing the overall cost of litigation." Id. Although the opinion is not controlling because it concerns the appropriate standard for determining the amount of paralegal fees recoverable under federal statute ( 42 U.S.C. § 1988), the Supreme Court's decision in Missouri v. Jenkins, supra, 491 U.S. 274, provides insights relevant to the question presented here:
"It has frequently been recognized in the lower courts that paralegals are capable of carrying out many tasks, under the supervision of an attorney, that might otherwise be performed by a lawyer and billed at a higher rate. Such work might include, for example, factual investigation, including locating and interviewing witnesses; assistance with depositions, interrogatories, and document production; compilation of statistical and financial data; checking legal citations; and drafting correspondence. Much such work lies in a gray area of tasks that might appropriately be performed either by an attorney or a paralegal." Missouri v. Jenkins, 491 U.S. 274, 288 n. 10 (1989).
Clearly, a `reasonable attorneys fee' cannot have been meant to compensate only work performed personally by members of the bar. Rather, the term must refer to a reasonable fee for the work product of an attorney. Thus, the fee must take into account the work not only of attorneys, but also of secretaries, messengers, librarians, janitors, and others whose labor contributes to the work product for which an attorney bills her client; and it must also take account of other expenses and profit. The parties have suggested no reason why the work of paralegals should not be similarly compensated, nor can we think of any. We thus take as our starting point the self-evident proposition that the `reasonable attorneys fee' provided for by statute should compensate the work of paralegals, as well as that of attorneys . . .
If an attorneys fee awarded under § 1988 is to yield the same level of compensation that would be available from the market, the increasingly widespread custom of separately billing for the services of paralegals and law students who serve as clerks, must be taken into account.
(Citation omitted; internal quotation marks omitted.) Id.
The court also rejects Banknorth's position that the recovery of paralegal fees is contrary to the legislative intent of CUTPA. The recovery of fees for the services of a paralegal is consistent with the policy and design of CUTPA "to encourage litigants to act as private attorneys general and to engage in bringing actions that have as their basis unfair or deceptive trade practices." (Citation omitted; internal quotation marks omitted.) Thames River Recycling, Inc. v. Gallo, supra, 50 Conn.App. 794-95. As recognized by the Supreme Court in Jenkins, separately billing for the services of a paralegal has become a widespread practice or custom in the legal community. A blanket prohibition against the recovery of paralegal services as part of an attorney fee award under CUTPA would place attorneys representing prevailing CUTPA plaintiffs in a qualitatively more limited or restrictive position than similarly situated attorneys representing plaintiffs in the marketplace. Contrary to Banknorth's position, such a situation is neither required by the language of CUTPA, nor consistent with the legislative purpose of the attorney fee provision.
Alternatively, Banknorth contends that none of the evidence indicates that the work performed by the paralegal in this case involved "legal work that otherwise would have been performed by an attorney at a higher rate." The court agrees with Ulbrich that this contention is undermined by the time entries indicating that the paralegal performed work on pleadings, pretrial motions and objections, discovery, trial preparation and trial proceedings, and communications with the client, opposing counsel, and court personnel. On the other hand, Banknorth is correct that because of the generic or general nature of many of the time entries, it is difficult to determine whether all of the work claimed for paralegal services involve compensable technical or professional services, rather than non-compensable clerical or secretarial services. Thus, the court will apply a reduction of the fees sought by the plaintiff for this reason.
E
In summary, the plaintiff's attorney fee claim of $359,703 should be reduced on the basis of the following: a $29,575 reduction should be made based on the decrease in Attorney Weinstein's hourly rate; a $42,000 reduction should be made for the time incurred prior to the filing of the CUTPA claim; and an additional $15,000 reduction should be made for other services unrelated to the CUTPA claim and for the deficiencies in the descriptions contained in the billing records generally.
As stated previously, under the provisions of CUTPA, a prevailing plaintiff does not have an unqualified right to the recovery of attorney fees and the determination of the amount of an attorney fee award is left in the sole discretion of the trial court. Staehle v. Michael's Garage, Inc., supra, 35 Conn.App. 461. This discretionary decision "should be premised on reasonable determinations and tenable grounds." Bridgeport Harbour Place I, LLC v. Ganim, supra. In exercising its discretion to award attorney fees, the court's ultimate task is to proceed "in conformity with the spirit of the law and in a manner to serve and not to impede or defeat the ends of substantial justice." (Citation omitted.) Thames River Recycling, Inc. v. Gallo, supra, 50 Conn.App. 800. An appropriate compensatory award has been described as one that falls within the necessarily uncertain limits of fair and just compensation. For the reasons discussed, and based on the totality of the evidence as well as the court's familiarity with the record, the court finds that an award between $300,000 and $250,000 represents a fair and just range for an attorney fee award in this case, and the court further concludes that an attorney fee award of $273,128 is reasonable, premised on tenable grounds, and consistent with CUTPA's statutory policy and purposes.
The court notes one remaining argument asserted by Banknorth that is not addressed by the court. Banknorth argues that there should a reduction of any attorney fee award to reflect that Ulbrich did not pay all of these fees because some of them were paid by Ulbrich Properties. The additional facts relevant to this argument are as follows. The CUTPA claim as alleged in count fifteen of the complaint names both Ulbrich and Ulbrich Properties as plaintiffs. Pursuant to a pre-trial ruling granting the defendant's motion to dismiss (#215), the court dismissed the CUTPA claim asserted by Ulbrich Properties. The evidence of the post-trial proceedings before the court indicates that $291,920.36 of the invoices submitted by Weinstein Wisser were paid by Ulbrich personally. (See plaintiff's (post-trial) exhibits 60, 61, 62, 82, 83, 84, 85, and 105.) Because the evidence indicates that the payments personally made by Ulbrich exceed the $273,128 in attorney fees being awarded by the court, the court declines to address Banknorth's arguments contesting any of the fees that may have been paid by Ulbrich Properties.
The evidence also indicates that Ulbrich issued a $168,969.46 check payable to Ulbrich Properties to reimburse the company for attorney fees and expenses paid by it. See plaintiff's (post-trial) exhibit 86.
F
Ulbrich also seeks an award against Banknorth for $36,320.11 in costs. This claim includes "non-taxable" costs, meaning expenses that are not recoverable by statute as taxable costs. Banknorth objects on the ground that such "non-taxable" costs are not recoverable under CUTPA. This court, relying on Taylor v. King, 121 Conn.App. 105, 994 A.2d 330 (2010), recently resolved this issue in favor of the defendant's position.
"In Taylor, the Appellate Court held that expert witness fees are not recoverable under the provisions of CUTPA and are recoverable only as taxable costs authorized under the provisions of General Statutes § 52-260. Accord Centimark Corp. v. Village Manor Associates Ltd. Partnership, 113 Conn.App. 509, 967 A.2d 550, cert. denied, 292 Conn. 907, 983 A.2d 103 (2009); Miller v. Guimaraes, 78 Conn.App. 760, 829 A.2d 422 (2003).
"Numerous trial courts have questioned the reasoning of this opinion expressed in Taylor. As explained by Judge Gordon, recovery of non-taxable costs under CUTPA appears to be consistent and logical with the "intent of CUTPA, which [is] to empower consumers and to encourage them to bring actions to enforce the law. In an era of complex litigation, the teeth would be taken out of the act if the cost associated with diverse and necessary expert witnesses is not recoverable." Duerr v. Dicesare, Superior Court, judicial district of New London, Docket No. 566915 (Oct. 1, 2004; Gordon, J.) [ 37 Conn. L. Rptr. 909]; see also Gerner v. Applied Industrial Materials, Superior Court, Complex Litigation Docket, Judicial District of Stamford, Docket No. X08 CV 02 0192069 S (Jun. 30, 2005; Adams, J.) ("To limit the definition of `costs' in § 42-110g(d) to taxable costs would make it redundant of those statutes, including § 52-260, allowing taxable costs to a prevailing party. It would also be inconsistent with the legislative purpose of CUTPA to encourage private litigants to act on their own initiative to enforce provisions of the statute").
"The provisions of CUTPA are to be broadly construed consistent with the statute's remedial purposes. General Statutes 42-110b(d). Under common law, "non-taxable" costs are recoverable as part of a punitive damages award for fraudulent conduct, and an intent to deceive, a necessary element of such a claim, is not an element of a CUPTA claim. See Prishwalko v. Bob Thomas Ford, Inc., 33 Conn.App. 575, 583, CT Page 7874 525 A.2d 57 (1987) ("It is not a prerequisite of a CUTPA violation to prove that a car dealer intended to deceive when an odometer reading is not accurate"); see also Web Press Services Corp. v. New London Motors, 203 Conn. 342, 361, 525 A.2d 57 (1987) ("It is now well established that CUTPA proscribes a broader range of conduct than did the common law action for innocent misrepresentation"). Morever, if costs under CUTPA are limited to the costs available under other statutes, then the express language of Section 42-110g(d) that provides for the recovery of costs is essentially superfluous. Nevertheless, the court cannot find a reasoned basis to distinguish Taylor from this case and the court is inexorably bound to follow the appellate authority of this state. See Potvin v. Lincoln Service and Equipment Co., 298 Conn. 620, 650, 6 A.3d 60 (2010) ("A trial court is required to follow the prior decisions of an appellate court to the extent that they are applicable to facts and issues in the case before it, and the trial court may not overturn or disregard binding precedent"); Metcoff v. NCT Group, Inc., supra.
As noted by the plaintiffs, in Bridgeport Harbour Place v. Ganim, supra, this court relied on Bristol Technology, Inc. v. Microsoft Corp., 127 F.Sup.2d 46, 82-84 (D.Conn. 2000), to state that "[t]he costs recoverable under CUTPA are not controlled or limited by statutory, taxable costs." The defendants in Bridgeport Harbour Place, however, did not contest the plaintiff's claim for non-taxable costs. See Bridgeport Harbour Place v. Ganim, supra n. 7. Consequently, this statement in Bridgeport Harbour Place is obiter dicta.
II PUNITIVE DAMAGES A
General Statutes § 42-110g(a) provides in relevant part that "[t]he court may, in its discretion, award punitive damages . . ." Whereas Connecticut common law adopts a compensatory purpose for punitive damages based on the costs of litigation, punitive damages are imposed under CUPTA for "punishment, deterrence and profit disgorgement." Bridgeport Harbour Place I, LLC v. Ganim, supra; accord, Lenz v. CNA Assurance Co., 42 Conn.Sup. 514, 516, 630A.2d 1082 [ 9 Conn. L. Rptr. 87] (1993) (CUTPA "allows for punitive damages based on a theory of deterrence"). A plaintiff must prove punitive damages by a preponderance of the evidence. Whitaker v. Taylor, 99 Conn.App. 719, 735, 916 A.2d 834 (2007). The award and the amount of punitive damages under CUTPA are discretionary with the court. Gargano v. Heyman, 203 Conn. 616, 622, 525 A.2d 1343 (1987).
"Although the law is not well developed as to how the court's discretion should be guided in determining punitive damages under CUTPA, a basic criterion for such an award is evidence revealing `a reckless indifference to the rights of others or an intentional and wanton violation of those rights.' Id. `In fact, the flavor of the basic requirement to justify an award of punitive damages is described in terms of wanton and malicious injury, evil motive and violence.' Id. `Recklessness' has been described as `more than negligence, more than gross negligence.' Dubay v. Irish, 207 Conn. 518, 533, 542 A.2d 711 (1988). `Wanton misconduct is reckless misconduct . . . It is such conduct as indicates a reckless disregard of the just rights or safety of others or of the consequences of the action . . . [W]ilful, wanton or reckless conduct tends to take on the aspect of highly unreasonable conduct, involving an extreme departure from ordinary care . . .' (Citations omitted; internal quotation marks omitted.) Id. 532-33." Bridgeport Harbour Place I, LLC v. Ganim, supra.
The court rejects Banknorth's insinuation that punitive damages are available only for conduct that may be characterized as intentional. Punitive damages are not only available for acts and consequences that are committed intentionally, but also for acts that evince a wanton or reckless indifference or disregard for the rights of another. As explained in Gargano v. Heyman, supra, 203 Conn. 616, in order to award punitive damages under CUTPA "evidence must reveal a reckless indifference to the rights of others or an intentional and wanton violation of those rights." (Emphasis added); see generally Dubay v. Irish, supra, 207 Conn. 532-33.
The plaintiff argues that punitive damages should be awarded because Banknorth engaged in deceptive conduct that was either intentional or reckless. In response, Banknorth insists that no punitive damages are warranted in this case. The court agrees with the plaintiff.
The defendant first argues that the plaintiff has neither alleged nor proven any intentional or reckless conduct on its part and that the plaintiff's CUTPA claim is based solely on negligent conduct. These arguments are meritless.
Banknorth makes the argument that Ulbrich's CUTPA claim only asserts negligence by emphasizing the name or label of the seventh count of the complaint (alleging negligence) and de-emphasizing the specifics of this count's factual allegations, as well as the factual allegations of the other counts incorporated into the fifteenth count asserting the CUTPA violation. A complaint may assert a CUTPA claim and seek punitive damages without containing other counts claiming fraud or recklessness. Moreover, "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).
The allegations of the complaint clearly assert that the bank's actions included deliberate and wilful behavior. There is no dispute that Banknorth initiated foreclosure proceedings to liquidate property securing a debt that was under default. The plaintiff was the successful bidder at the foreclosure auction. According to the complaint, the bank did not have a "definite list of the personal property." Sixth Amended Complaint, Count 15, ¶ 33. The bank knew that a description of the property purportedly being sold at the auction would be provided to prospective bidders and that these bidders would rely on this description. Additionally, the bank knew that there were conflicting claims or interests to the personal property. The bank, however, failed to ascertain or investigate the true ownership status of the personal property subject to the auction. With this knowledge and under these circumstances, Banknorth "caused an auction to be held knowing that plaintiffs would rely" on the property description provided by the bank through its agents and caused personalty to be sold that was not part of its security. Id. At no time did the bank disclaim ownership of the property purportedly sold as part of the auction and conveyed by the bills of sale. At no time between the auction and the closing did the bank reveal that there were conflicting claims to the tangible and intangible personal property.
While these factual allegations of the complaint certainly support a negligence claim, they also implicate conduct that was committed knowingly and wilfully. At the trial, Banknorth offered evidence contesting the allegations of the complaint. For example, the bank claimed at trial that it was unaware of any conflicting claims or leasehold interests in the property. Nevertheless, in denying Banknorth's motion to vacate the verdict, the court concluded that the bank's position did not square with the evidence viewed in its entirety and rejected Banknorth's contention that Ulbrich's CUTPA claim merely involved a breach of a standard of care. The court explained this conclusion as follows:
The evidence fairly supports the allegations of count fifteen of the complaint. Banknorth decided to conduct the auction of the personal property appreciating and understanding that it did not know exactly what items of personal property were covered by its security interest. Moreover, the bank's agents or representatives knew that there was information indicating the existence of conflicts about the debtors' ownership of all the personal property on the site. The bank did not disclose these issues to the foreclosure court or to the prospective bidders. The bank was uninterested in postponing the auction to address or resolve these issues because it wanted to avoid the time and cost of any delay and it wanted an expeditious liquidation of the secured property. The bank's very cavalier attitude toward the transaction appears to have been that the bidders "should beware" to do their own due diligence to determine what personal property was being sold (even though the bank itself had no idea what exactly was being sold). The bank sought to cover or protect itself by a notice of secured party sale indicating that the bank was only selling whatever interests that the debtors had in the property, although the bank did not know and decided to make no effort to determine what those interests were. The bank also sought to cover or protect itself by its general disclaimer that the property was being sold "as is" and "where is." The bank's view of the transaction was that the successful bidder and the debtors could sort out the ownership issues themselves after the sale and closing, which they ultimately were required to do through protracted and expensive litigation. The evidence supports the conclusion that Banknorth's conduct was consciously or deliberately deceptive and unscrupulous satisfying the second prong of the "cigarette rule.
Memorandum of Decision on the Defendants' Motions for Judgment Notwithstanding the Verdict, to Set Aside the Verdict and for Remittitur, dated October 26, 2010. For these reasons, the court further concludes that Banknorth's actions as alleged and proven indicate "a reckless disregard of the just rights or safety of others or of the consequences of the action[s]" sufficient to warrant the imposition of punitive damages. See generally Dubay v. Irish, supra, 207 Conn. 532-33.
The bank also claims that punitive damages should not be awarded because it conducted the auction in compliance with Article 9 of the Uniform Commercial Code and Connecticut foreclosure law. These arguments are misplaced because the controlling issue is not whether Banknorth complied with the law in these respects, but whether any such compliance was done in such a deceptive or reckless manner that punitive damages should be imposed. Compliance with Article 9 and foreclosure law does not operate to shield or exempt a party from the imposition of punitive damages for intentional or reckless behavior violating CUTPA. CUTPA claims have arisen in foreclosure proceedings. See, e.g., Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80, 612 A.2d 1130 (1992); Monetary Funding Group, Inc. v. Pluchino, 87 Conn.App. 401, 867 A.2d 841 (2005). Moreover, as to Banknorth's argument based on Article 9, both the general rule and the law of the case hold that Article 9 does not displace other remedies, including relief under CUTPA. See generally Jacobs v. Healey Ford-Subaru, Inc., 231 Conn. 707, 722-24, 652 A.2d 496 (1995) (alternative remedies are not displaced by the UCC absent express mandate or clear conflict); Ulbrich v. Groth, supra, Memorandum of Decision on the Defendants' Motions for Judgment Notwithstanding the Verdict, to Set Aside the Verdict and for Remittitur (Article 9 does not displace common-law or CUTPA claims).
Banknorth's remaining arguments why punitive damages should not be awarded require little discussion. Banknorth suggests that punitive damages are unavailable because the jury did not make a finding that its conduct was intentional or reckless. This position is curious (and meritless) for two reasons. First, no interrogatory was presented to the jury to ascertain the jury's position on this issue. Second, because CUTPA charges the court to determine the recoverability of punitive damages, the court and not the jury must find whether the facts are sufficient to support such an award. See General Statutes § 42-110g(a) ("[t]he court may, in its discretion, award punitive damages . . ."
Additionally, Banknorth maintains that punitive damages are inappropriate because the debtors requested that the personal property be sold as part of the foreclosure and the bank merely sold this property as an "accommodation" to them. The credibility of this claim is disputed. Nevertheless, assuming the truth of this contention, the fact nevertheless remains that an effort to maximize the bids by including the business property as part of the auction was beneficial to the bank's interests. More important, this contention is irrelevant because the crux of the problem does not lie in the decision to auction the personal property, but in the manner in which the auction was conducted.
Similarly, Banknorth argues that the preparation of an inventory listing the personal property was impractical or cost-prohibitive because it would have involved an interruption of the debtors' business. This is the business, however, that was being closed permanently by the bank's liquidation of its collateral. An interruption of the debtors' business to inventory the property covered by the bank's security interest would appear to be an appropriate precursor to a permanent closing. Furthermore, even if such an interruption justified a failure to acquire an inventory, such a situation would not have prevented Banknorth from advising bidders through its agents that it did not have an inventory list, did not know what personal property was covered by its security interest and did not know what personal property was actually part of the auction.
In summary, the court notes the following as to all of Banknorth's objections to a punitive damages award. As addressed further below, a particularly crucial factor here is that the bank did not know exactly what items of personal property of the debtors' business were covered by its security interests. Without expressly disclosing this fact, the bank nevertheless proceeded with the auction and the closing because it did not believe that it needed to know and did not believe that it needed to take any action to know. Such conduct implicates recklessness and engenders a recipe for disastrous consequences. Furthermore, although the court agrees with the plaintiff that evidence existed indicating Banknorth's receipt of information about conflicting interests in the ownership of the property, even the facts on this issue as emphasized by the bank evidence wilful ignorance. The court, therefore, concludes that the totality of the circumstances supports the imposition of punitive damages.
B
As previously stated, CUTPA does not expressly delineate the criteria to be utilized in measuring the amount of a punitive damages award, and the issue has not definitively been addressed by our appellate courts. See Perkins v. Colonial Cemeteries, Inc., 53 Conn.App. 646, 649, 734 A.2d 1010 (1999) ("[t]he CUTPA statutes do not provide a method for determining punitive damages"). Certainly, the nature of a defendant's conduct, the actual harm to the plaintiff and the harm a defendant intended to inflict are considerations that may be relevant. Because punitive damages under CUTPA are focused on deterrence, rather than compensation, the defendant's financial condition is a relevant consideration. Lenz v. CNA Assurance Co., supra, 42 Conn.Sup. 516 ("Once deterrence rather than compensation becomes the focus of CUTPA punitive damages . . . then the financial standing of the party against whom damages are sought becomes relevant and material"); Boulevard Associates v. Sovereign Hotels, 861 F.Sup. 1132 (D.Conn. 1994) (same). Consideration of a defendant's financial condition becomes relevant because in order to accomplish the purposes of punitive damages, a larger amount may be warranted against "one of larger means than it would upon one of ordinary means, granting the same malignant spirit was possessed by each." (Citation omitted.) Leach v. Biscayne, 169 W. Va. 624, 628 (1982). The defendant's financial condition may also be a relevant consideration because punitive damages should not constitute such a large percentage of a defendant's net worth so "as to result in the financial ruin of the defendant." Vasbinder v. Scott, 976 F.2d 118, 121 (2nd Cir, 1992). Moreover, "[b]ecause neither compensation nor enrichment is a valid purpose of punitive damages, an award should not be so large as to constitute a windfall to the individual litigant." Id.
The Restatement (Second) of Torts § 908(2) (1979) states that "[i]n assessing punitive damages, the trier of fact can properly consider the character of the defendant's act, the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause and the wealth of the defendant." See generally Connecticut Practice Series, Connecticut Unfair Trade Practices, Vol. 12, § 6.11.
The court rejects Banknorth's argument that these authorities holding that a defendant's net worth may be considered in determining the amount of punitive damages under CUTPA are wrongly decided. By relying on common-law principals to support this argument, Banknorth fails to appreciate that in enacting § 42-110g(a), the legislature departed from the narrow scope of common-law punitive damages and authorized the recovery of punitive damages based on a theory of deterrence, rather than mere compensation. "The plaintiff who establishes CUTPA liability has access to a remedy far more comprehensive than the simple damages recoverable under common law." Hinchliffe v. American Motors Corporation, 184 Conn. 607, 617, 440 A.2d 810 (1981). The court also rejects Banknorth's contention that "it would vitiate notions of due process to consider [Banknorth's] net worth in arriving at some number as to punitive damages." Defendant TD Bank, N.A.'s Objection to Plaintiff's Memorandum In Support of Its claim For Award of CUTPA Punitive Damages And Attorneys Fees And Costs (filed November 24, 2010), p. 21 n. 7. The defendant fails to cite any authority to support this due process claim and the applicable case law indicates that the mere consideration of a defendant's net worth in determining the amount of punitive damages does not infringe upon due process rights. See, e.g., Jordan v. Clayton Brokerage Co. of St. Louis, 975 F.2d 539 (9th Cir. 1992).
The Appellate Court has observed that awarding an amount equal to the plaintiff's actual damages "is a recognized method for determining punitive damages under CUTPA . . . It is not an abuse of discretion to award punitive damages based on a multiple of actual damages." (Citations omitted.) Staehl v. Michael's Garage, Inc., 35 Conn.App. 455, 463, 646 A.2d 888 (1994). "[C]ourts generally award punitive damages in amounts equal to actual damages or multiples of the actual damages." Perkins v. Colonial Cemeteries, Inc., supra, 53 Conn.App. 649. Indeed, this court has observed that in terms of consistency or frequency, punitive damages awards under CUTPA are generally equal to or twice the amount of the compensatory award. See generally Connecticut Practice Series, Connecticut Unfair Trade Practices, Vol. 12, § 6.11, pp. 490-91 n. 92 and n. 93. Furthermore, this court has concluded that in determining the amount of punitive damages, it is reasonable for the court to consider that the normative range of punitive damages awards is equal to or twice the amount of the compensatory award and for the court to identify articulable, aggravating factors supporting an award exceeding this range. Bridgeport Harbour Place I, LLC v. Ganim, supra.
As previously discussed, the defendant's position is that no punitive damages should be awarded. The court rejects this position. The plaintiff argues that a punitive damage award of at least $2,500,000, "and as much as $5,000,000," is warranted in this case. The plaintiff explains that an award of $2,500,000 is an amount that is approximately five times the amount of the jury award. While the court disagrees with the calculation advanced by the plaintiff, the court agrees with the plaintiff that the facts of this case mitigate against a low punitive award.
Contrary to Banknorth's position, the tasks of identifying what property was covered by its security interest, determining how much of the property was either leased or owned by third parties, or giving potential bidders information about these issues to the extent they remained unresolved involved relatively minuscule rather than insurmountable endeavors. Indeed, if the resolution of these issues was as difficult as Banknorth maintains, then the bank could have foreclosed on the real property without an Article 9 sale of the personal property. However, a sale including the debtors' business assets enhanced the attractiveness of the auction.
Banknorth's position is that as the foreclosing creditor of the auction all that it was required to do under the circumstances was provide disclaimers indicating that it was only selling whatever interests the debtors had in the personal property and that the sale was being conducted without any express representations and on an "as is" or "where is" basis. According to the bank, it was not required to know exactly what personal property was being sold as part of the auction, and it owed no duty or responsibility to prospective bidders to know or make an effort to know what was being sold. Similarly, the bank did not inform prospective bidders that it was unsure about what personal property would be included as part of the sale. Again, according to the bank, it had no duty or responsibility to inform bidders that it did not know exactly what was being sold. The court disagrees with Banknorth that these positions adequately reflect fair or non-deceptive business practices consistent with the designs of CUTPA. Furthermore, as previously discussed, despite the disputed evidence on the issue of Banknorth's actual knowledge about the conflicting claims concerning the property's ownership, the best characterization of the bank's conduct on this issue is that it proceeded with reckless or wilful ignorance and indifference.
A seller at a public auction who does not know what it is selling cannot possibly know whether it can deliver what it purports to sell, and as a consequence, not only misleads bidders but also threatens public confidence in the auction process. The sale here occurred in the context of a foreclosure action — a public sale occurring under the direction and auspices of the Superior Court. Banknorth moved for court permission to conduct the auction of the personal property as part of the foreclosure proceedings of the real property. As part of this request, the court was not advised by Banknorth that the bank did not know exactly what personal property would be auctioned, would not advise potential bidders of this fact and would leave it up to the bidders to figure out the answer to this question. If presented with this information, the foreclosure court would have been better positioned to evaluate the bank's motion, ensure a fair disclosure to bidders and protect the integrity of the judicial process.
In short, the manner in which this auction was conducted was inherently deceptive to bidders and threatening to public confidence in the foreclosure process. The policy and purpose of CUTPA are to deter and punish such unfair and deceptive business practices. Additionally, the court notes that Banknorth is a very large and profitable banking corporation both within and outside the state. For example, the evidence indicates that annual profits from its United States operations exceed $300,000,000 in 2006 and 2007, and its book value exceeded $24,700,000,000 as of June 2010. See file document #337.75.
The articulable, aggravating factors that collectively justify a high punitive award in this case are the seriousness of the conduct evidenced by the cavalier and reckless indifference to the consequences of the business behavior; the threat to public confidence in public auctions held under the auspices and directions of the Superior Court; and the very high net worth of the defendant. On the other hand, the court agrees with two factors emphasized by the defendant in its support. First, the jury's compensatory award was not small in comparison to the plaintiff's claims. The verdict of $462,000 represented the total amount of compensatory damages sought by the plaintiffs based on the evidence presented to the jury. Second, Banknorth's actions did not involve conduct of a criminal nature. The court also re-emphasizes that punitive damages under CUTPA serve deterrent and not compensatory purposes, and therefore, a punitive award "should not be so large as to constitute a windfall to the individual litigant." Vasbinder v. Scott, supra, 976 F.2d 121. The court also notes that attorney fees have been separately awarded.
After evaluating and balancing the relevant considerations, the court orders a punitive damages award, of $1,251,000, equaling three times the amount of the compensatory award based on the remittitur ordered by the court.
CONCLUSION
In conclusion, the court awards in favor of the plaintiff Frederick Ulbrich and against the defendant TD Banknorth, N.A., attorney fees in the amount of $273,128 and punitive damages in the amount of $1,251,000.
So ordered this 22nd day of March 2011.