Opinion
CV176069396S
11-27-2017
UROLOGY GROUP, P.C. et al. v. KISSEL, KNEALE & TOBIN, INC.
UNPUBLISHED OPINION
OPINION
Wilson, J.
STATEMENT OF CASE AND PROCEDURAL HISTORY
The plaintiffs, Urology Group, P.C., Urology Group, P.C. Profit Sharing Plan, Joseph Camilleri, Jr. and Marianne Passerelli (plaintiffs) commenced this action by way of writ, summons and complaint dated March 1, 2017, against the defendant, Kissel, Kneale & Tobin, Inc., (defendant) in connection with the defendant’s administration of the plaintiffs’ 401(k) Profit Sharing Plan (the plan). The plaintiffs, Joseph Camilleri, Jr. and Marianne Passerelli are the trustees of the plan. Pursuant to this court’s ruling on plaintiffs’ objection to defendant’s request to revise, the plaintiffs filed a revised complaint which is the operative complaint. Count one sounds in negligence and alleges the following facts. The plaintiffs entered into an agreement with the defendant to act as a Third-Party Administrator (" TPA") to administer Urology Group, P.C.’s profit-sharing plan, including reconciliation of plan assets and account balances, for the benefit of the plan and its trustees. Beginning in 2006 and continuing up through 2016, the defendant failed to properly administer the plan, failed to reconcile plan assets and overstated the plan’s value by double reporting account values thereby resulting in damages and financial losses. As a result, the plaintiffs claim they sustained damages and losses due to the negligence of the defendant in a number of ways. Specifically, the plaintiffs allege that as a result of the carelessness and/or negligence of the defendant in failing to meet the requisite professional standard of care, they suffered financial loss from overpayments between the years 2008 and 2015, sustained a loss of additional value of potential changes in plan value, and incurred fees, costs and damages as a result of rectifying these problems.
The second count, sounding in breach of contract, incorporates the allegations of paragraphs 1, 2, 3, 5, 6 and 7 and further alleges that the actions of the defendant in failing to administer the Plan in accordance with the agreement between the parties constituted a breach of the agreement resulting in damages and losses. Other than the damages alleged in paragraphs 5 through 7 of the first count, no additional damages allegations are set forth in the second count. A copy of the alleged contractual agreement is not attached to either the original complaint or the revised complaint.
On August 28, 2017, the defendant filed a motion to strike count two of the plaintiff’s revised complaint and a memorandum in support. The plaintiff filed a memorandum in opposition to the motion on October 19, 2017. The court heard oral argument on the motion on November 20, 2017. The plaintiff did not appear for oral argument.
DISCUSSION
" A motion to strike shall be used whenever any party wishes to contest: (1) the legal sufficiency of the allegations of any complaint ... or (2) the legal sufficiency of any prayer for relief in any such complaint ..." Practice Book § 10-39(a). " 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). " The proper method to challenge the legal sufficiency of a complaint is to make a motion to strike prior to trial." Gulack v. Gulack, 30 Conn.App. 305, 309, 620 A.2d 181 (1993). " The role of the trial court in ruling on a motion to strike is to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Coe v. Board of Education, 301 Conn. 112, 117, 19 A.3d 640 (2011). " [T]he court is limited [however] to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). " A motion to strike admits all facts well pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Emphasis in original; internal quotation marks omitted.) Id., at 588. " If any facts provable under the express and implied allegations in the plaintiff’s complaint support a cause of action ... the complaint is not vulnerable to a motion to strike." Bouchard v. People ’s Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991).
With respect to the second count sounding in breach of contract, the defendant argues that the plaintiffs incorporate wholesale the allegations of negligence asserted in the first count, a claim of professional negligence, and recasts their tort claim as one for breach of contract without alleging any specific actions or undertakings, or any failure to undertake specific actions by the defendant beyond a general duty of care imposed upon the defendant. The defendant further argues that the allegations contained in count two, are based upon the identical factual circumstances as the allegations contained in count one sounding in negligence.
The plaintiffs argue in their opposition that they are entitled to plead alternative causes of action, the first and second counts set forth " separate causes of action that are neither repetitive nor unnecessary" and they " have stated sufficient facts to substantiate a cause of action [for] breach of contract." Pl. Mem. Opp., 10/19/2017.
As this court recently held in Burns v. Grudberg, Superior Court, judicial district of New Haven, Docket No. CV156051882S (August 20, 2015, Wilson, J.): " ‘[A]lthough one may bring against an attorney an action sounding in both negligence and contract ... one [cannot] bring an action in both negligence and contract merely by couching a claim that one has breached a standard of care in the language of contract.’ (Internal quotation marks omitted.) Alexandru v. Strong, 81 Conn.App. 68, 79, 837 A.2d 875, cert. denied, 268 Conn. 906, 845 A.2d 406 (2004). ‘To ensure that plaintiffs do not attempt to convert negligence claims into breach of contract claims by " talismanically invoking contract language in [the] complaint"; Gazo v. Stamford, 255 Conn. 245, 262, 765 A.2d 505 (2001); reviewing courts may " pierce the pleading veil" by looking beyond the language used in the complaint to determine the true basis of the claim. Id., at 262-63.’ Meyers v. Livingston, Adler, Fulda, Meiklejohn & Kelly, P.C., 311 Conn. 282, 291, 87 A.3d 534 (2014).
" ‘Whether [a] plaintiff’s cause of action is one for malpractice [or contract] depends upon the definition of [those terms] and the allegations of the complaint ... Malpractice is commonly defined as the failure of one rendering professional services to exercise that degree of skill and learning commonly applied under all the circumstances in the community by the average prudent reputable member of the profession with the result of injury, loss, or damages to the recipient of those services ... The elements of a breach of contract claim are the formation of an agreement, performance by one party, breach of the agreement by the other party, and damages ... In other words, ‘[a]n action in contract is for the breach of duty arising out of a contract ... [whereas] an action in tort is for a breach of duty imposed by law.’ (Citations omitted; internal quotation marks omitted.) Meyers v. Livingston, Adler, Fulda, Meiklejohn & Kelly, P.C., supra, 311 Conn. at 291; see also Law Office of Norman Voog, LLC v. Stevens, Superior Court, judicial district of Danbury, Docket No. CV-02-0347140-S (December 17, 2004, Shay, J.) (38 Conn.L.Rptr. 433) (‘While it is clear that a plaintiff may assert a claim for negligence and breach of contract in the same complaint, the alleged breach of contract must not arise from the negligent acts of the defendant, ‘but rather, it must arise out of a breach of the terms of the contract itself.’).
" ‘[A] claim that a defendant promised to work diligently or in accordance with professional standards is not made a contract claim simply because it is couched in the contract language of promise and breach.’ Caffery v. Stillman, 79 Conn.App. 192, 197, 829 A.2d 881 (2003). As the Appellate Court explained, ‘[n]otwithstanding that embedded in the language of the plaintiff’s claim are the contractual rudiments of promise and breach, [w]here the plaintiff alleges that the defendant negligently performed legal services and failed to use due diligence the complaint sounds in negligence, even though he also alleges that he retained ... or engaged [the attorney’s] services.’ (Internal quotation marks omitted.) Alexandru v. Strong, supra, 81 Conn.App. at 79-80.
" In Meyers v. Livingston, Adler, Fulda, Meiklejohn & Kelly, P.C., supra, 311 Conn. at 292, ‘the court acknowledged that ‘the issue of whether a claim of attorney misconduct sounds in breach of contract or in tort appears to be one of first impression for this court.’ To analyze this issue, the court first, cited to cases and provided parenthetical explanations as to when an attorney breaches a duty arising out of a contract; id., at 292-93; and second, cited to cases as to when an attorney performs the tasks in a deficient manner such that the cause of action sounds in tort. Id., at 294-95. Following a review of all of these cases, the court concluded that ‘the plaintiff’s allegations in the present case [did] not sound in breach of contract.’ Id., at 295. The court examined the complaint stating that it ‘alleges that the defendant breached its contractual duties to the plaintiff when (a) it pursued the interests of ... [another client who had similar claims against the same parties] in derogation of the interests, wishes and instructions of the plaintiff in bringing about a settlement of the lawsuit; and/or, (b) it failed and/or refused to follow the express wishes and instructions of the plaintiff to reject the settlement offer in the lawsuit and to continue to prosecute the lawsuit. Neither allegation, however, refers to the violation of a specific contractual provision. The only substantive provision in the contract unrelated to compensation states: " I, [the plaintiff], do hereby retain the [defendant] law firm ... to represent me in connection with my claims against Hontek Corporation, Shek Hong and Joanne Hong in litigation in Connecticut Superior Court." (Footnote omitted; internal quotation marks omitted.) Id., at 295-96.
" The court then pointed out that the plaintiff’s claim ‘that her complaint alleges breach of contract simply because the defendant did not represent her interests and wishes ... has no legal support. Although we recognize that: [t]he modern trend, which is followed in Connecticut, is to construe pleadings broadly and realistically, rather than narrowly and technically ... no Connecticut court has deemed an allegation of this general nature sufficient to constitute a breach of contract claim unless accompanied by specific allegations that the defendant attorney failed to take action normally expected of an attorney in furtherance of the agreed on purpose for which the attorney was hired, such as failing to prosecute, defend, or take an essential step in litigating a cause of action.’ (Citation omitted; internal quotation marks omitted.) Meyers v. Livingston, Adler, Pulda, Meiklejohn & Kelly, P.C., supra, 311 Conn. at 297. The court emphasized that ‘the complaint contain[ed] no allegations that the defendant breached any specific contract provisions [and] relie[d] in part on language typically used in negligence cases ... This language and the remedy of damages is identical to the language and remedy of damages sought in connection with causes of action for negligence ... Thus, the plaintiff’s claim that the parties’ dispute is only a " simple fee dispute" is belied not only by the lack of allegations concerning the breach of any contract provisions, but by the language used and the relief requested in the complaint.’ Id., at 298-99." (Emphasis added.) Burns v. Grudberg, supra, Superior Court, Docket No. CV156051882S.
Accordingly, the question to be determined in the present case is whether the allegations of the second count alleging a breach of contract set forth a claim in contract or are an attempt to convert the negligence claim in count one into a breach of contract claim. Count one alleges in relevant part that: " 2. At all times mentioned herein, the plaintiff, Urology Group, P.C. (hereinafter " Urology Group"), had in place an agreement with the defendant Kissel, Kneale & Tobin, Inc. to act as a Third-Party Administrator (" TPA") to administer the company’s profit-sharing plan, including reconciliation of plan assets and account balances, for the benefit of the Urology Group, P.C. 401(k) Profit Sharing Plan (the " Plan") and its trustees, the plaintiffs Joseph Camilleri, Jr. and Marianne Passarelli. 3. Beginning in 2006 and continuing through 2016, the defendant failed to properly administer said plan, including reconciliation of plan assets, overstating the plan’s value due to double reporting of account values, resulting in damages and losses hereinafter set forth. 4. The plaintiffs’ losses were due to the carelessness and/or negligence of the defendant, its agents, servants and/or employees, in failing to meet the requisite professional standard of care, in one or more of the following ways: (a) IN THAT they provided inaccurate account balances; (b) IN THAT they did not accurately reflect assets that were participant directed amounts at Ascensus versus accounts at Merrill Lynch; (c) IN THAT they double-reported funds from Ascensus and Merrill Lynch; (d) IN THAT they overstated assets of the plan starting in 2006 and continuing to 2015; (e) IN THAT they caused and/or permitted overpayments to be made to several participants; (f) IN THAT they did not operate in accordance with the terms of the plan document; (g) IN THAT they failed to properly maintain and communicate the financial records and information regarding the subject profit-sharing plan; (h) IN THAT they failed to adequately inspect the records of the plan in a way that would have revealed the double reporting error; (i) IN THAT they knew or should have known of the error through reasonable and prudent record-keeping; (j) IN THAT they failed to perform proper annual plan testing to gauge compliance and effectiveness; (k) IN THAT they failed to properly calculate vested percentages for participants of the plan; (l) IN THAT said miscalculation was present for a long period of time and yet no measures were taken to correct the error; (m) IN THAT they failed to properly train employees to maintain and inspect said financial records or to calculate the subject assets and payments; and (n) IN THAT they failed to correctly file the required Form 5500 for each affected year. 5. As a result of the carelessness and/or negligence of the defendant, the plaintiffs suffered financial loss from overpayments between the years of 2008 and 2015. 6. As a further result of the carelessness and/or negligence of the defendant, the plaintiffs were caused to lose the additional value of potential changes in plan value. 7. As a further result of the carelessness and/or negligence of the defendant, the plaintiffs were caused to incur fees, costs, and damages as a result of rectifying said problems.
Count two, sounding in breach of contract, incorporates the allegations of paragraphs 1, 2, 3, 5, 6 and 7 and further alleges that " 4. [t]he actions of the defendant in failing to administer said plan in accordance with the agreement between the parties constituted a breach of said agreement, resulting in the damages and losses hereinafter set forth." The plaintiffs do not attach a copy of the plan agreement to either the original complaint or the revised complaint, nor does count two contain allegations that the defendant breached any specific contract provisions of the plan agreement. Moreover, other than the damages alleged in paragraphs five through seven of count one, no additional damages allegations are set forth in count two.
Paragraph one of count one alleges that " At all times mentioned herein, the defendant, Kissel, Kneale & Tobin, was and is a corporation duly licensed to transact business in the State of Connecticut with a principal place of business at 2415 Boston Post Rd. Ste. 11, Guilford, CT 06437."
The allegations of the first and second counts of the revised complaint, negligence and contract claims respectively, sound very similar if not largely identical. The plaintiffs’ allegations in their breach of contract claim are based on similar if not identical circumstances contained in the negligence count. Both the negligence and breach of contract counts essentially allege that the defendant failed to use reasonable care, skill and diligence in providing third-party administration of the plan by failing to properly administer the plan, reconcile plan assets and by overstating the plan’s value due to double reporting of account values.
In count two, the plaintiffs have attempted to create a contractual obligation by referencing an agreement, whereby the defendant agreed to act as a third-party administrator to administer Urology Group’s 401(k) profit sharing plan, which included the reconciliation of plan assets and account balances, and that the defendant failed to administer the plan in accordance with the agreement. The plaintiff’s use of this " contractual language" does not, however, make count two different from count one. The gravamen of the plaintiffs’ claim remains the same, namely, that the defendant failed to provide competent third-party administration of the 401(k) Profit Sharing Plan.
The allegations contained in count two, the plaintiffs’ reference to a breach of the agreement, all relate to the defendant’s judgment, skill and knowledge, in the administration of the plan, and the appropriate standard of care to be followed, and that the defendant breached that standard of care applicable to such professionals. The plaintiffs’ use of the terms " breach of said agreement" do not transform their negligence claim into a breach of contract claim. Moreover, the plaintiffs’ attempt to cloak their negligence claim by the use of contractual language in count two is belied by the lack of any allegations concerning the breach of any specific contract provisions of the agreement, and by the relief requested. " [T]ort claims cloaked in contractual language are, as a matter of law, not breach of contract claims." Weiner v. Clinton, 106 Conn.App. 379, 383, 942 A.2d 469 (2008). As previously noted, a copy of the agreement was not attached to the complaint, and the claimed losses and damages are identical to those claimed in the negligence count. See Winter v. D’Andrea, Superior Court, judicial district of Litchfield, Docket No. LLICV065001360 (January 28, 2008, Sheldon, J.) (court rejected a plaintiff’s attempt to frame a malpractice action as a breach of contract claim, noting that " the plaintiff expressly seeks the same tort remedies- compensatory damages and costs of the action- as he has sought in his first count for legal malpractice. Plainly, then, even as the plaintiff sees it, the wrong allegedly done to him was tortious, not contractual"); Lee v. Brenner, Saltzman and Wallman, Superior Court, judicial district of Ansonia-Milford at Derby, Docket No. CV 06 5000728 (May 24, 2007, Esposito, J.) (43 Conn.L.Rptr. 462) (breach of contract claim against attorneys stricken where plaintiff sought traditional tort damages, as opposed to contract damages such as the value of the contract).
In addition, " [a] claim that a defendant promised to work diligently or in accordance with professional standards is not made a contract claim simply because it is couched in the contract language of promise and breach. [T]hat case is distinguishable from a true contract claim in which a plaintiff asserts that a defendant who is a professional breached an agreement to obtain a specific result ." (Emphasis added.) Caffery v. Stillman, 79 Conn.App. 192, 197, 829 A.2d 881 (2003) (holding allegations that attorney breached agreement " to pursue vigorously all legal rights and remedies available to the plaintiff for damages sustained as a result of ... work-related injuries and to diligently represent, protect and defend the plaintiff’s rights to a full and fair economic recovery, and to provide the plaintiff with competent and accurate advice concerning his legal rights and remedies in connection therewith" sounded in tort [internal quotation marks omitted]); see also Pelletier v. Galske, 105 Conn.App. 77, 79, 83, 936 A.2d 689 (2007) (holding allegations that attorney breached agreement to represent plaintiff in purchase of condominium unit by failing to inform her condominium was classified as affordable housing subject to resale price limitations sounded in tort), cert. denied, 284 Conn. 921, 943 A.2d 1100 (2008); Compare Zilkha v. Pattis, Superior Court, judicial district of New Haven, Docket No, CV136034888 (August 20, 2015, Wilson, J.) (court denied motion to strike count that alleged that there was an agreement for representation which involved commencing an arbitration action and that the defendant failed to commence this action. Court concluded that " these allegations assert more than a mere failure ‘to work diligently or in accordance with professional standards’ which would only suffice to state a claim for legal malpractice").
Here, the allegations, if proven, do not demonstrate that there was an agreement by the defendant that assured or warranted a specific result. The allegations at best, reiterate the professional standard by which the defendant would conduct its work, which does not rise to the level of promising a specific result.
Finally, the plaintiffs also argue in opposition to the motion, that they are permitted to plead in the alternative. " Practice Book § 10-25 provides: ‘ The plaintiff may claim alternative relief, based upon an alternative construction of the cause of action.’ Under our pleading practice, a plaintiff is permitted to advance alternative and even inconsistent theories of liability against one or more defendants in a single complaint.’ Dreier v. Upjohn Co., 196 Conn. 242, 245, 492 A.2d 164 (1985). An alternative cause of action, however, does not allow for an invalid alternative but must be one fully and properly pleaded. J & N Electric, Inc. v. Notkins, Superior Court, judicial district of New Haven, Docket No. CV-08-5020144 (May 20, 2009, Keegan, J.) (47 Conn.L.Rptr. 804). One may not bring an action in both negligence and contract merely by couching a claim that one has breached a standard of care in the language of contract. Caffery v. Stillman, supra, 79 Conn.App. at 197." Burns v. Grudberg, supra, Superior Court, Docket No. CV156051882S. In the present case, the contract action alleged in count two is not for the breach of a duty arising out of a contract but instead is for an alleged breach of duty imposed by law, which is a tort claim. Gazo v. Stamford, supra, 255 Conn. at 262. Construing the language of the second count in the light most favorable to sustaining its legal sufficiency, the allegations are insufficient to support a contract claim. Accordingly, the motion to strike this count is granted.
CONCLUSION
For the foregoing reasons, the motion to strike count two is granted.