Opinion
No. 05-5000295
October 2, 2006
MEMORANDUM OF DECISION
The plaintiff, Darnell Williams, brings this action to recover damages he allegedly sustained in connection with the purchase of a condominium located in Ledyard, Connecticut from the defendant, Matthew Feely. The defendant Browning and Browning Real Estate, LLC (Browning), a real estate agency, represented Feely during this transaction.
The plaintiff has alleged the following facts in his amended complaint. On June 27, 2005, the plaintiff purchased a condominium from Feely. Feely made representations to the plaintiff, including some in a residential property condition disclosure report, concerning the condition of the property. Such representations, namely that there were no problems with the property, were not true. Alter purchasing the condominium, the plaintiff learned that the condominium had previously flooded, causing damage to certain portions of the property. Though attempts were made to repair the problems prior to the sale of the condominium, such work was done improperly, and will require additional repairs. Feely and Browning knew the problems existed, but withheld from the plaintiff information regarding their existence. The defendants' false representations induced the plaintiff into purchasing the condominium, and, consequently, the plaintiff suffered damages based on his reliance.
On April 26, 2006, the plaintiff filed an amended complaint of six counts against Feely and Browning. In counts one through three, the plaintiff alleges fraudulent, intentional, and negligent misrepresentation, respectively, against both defendants. In count four, the plaintiff alleges a breach of contract against Feely. In count five, the plaintiff alleges that both defendants violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110b et seq. In count six, the plaintiff alleges negligent infliction of emotional distress against both defendants.
On May 11, 2006, Browning filed a motion to strike counts five and six on the grounds that the CUTPA claim is legally insufficient and time barred, and that no cause of action exists in Connecticut for negligent infliction of emotional distress based solely on property damage. With the motion, Browning submitted a memorandum of law. On May 23, 2006, the plaintiff submitted a memorandum of law in opposition.
Browning is the only defendant who has filed a motion to strike the plaintiff's amended complaint.
DISCUSSION
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "For the purpose of ruling upon a motion to strike, the facts alleged in a complaint, though not the legal conclusions it may contain, are deemed to be admitted." (Internal quotation marks omitted.) Murillo v. Seymour Ambulance Ass'n., Inc., 264 Conn. 474, 476, 823 A.2d 1202 (2003). Moreover, "[t]he court must construe the facts in the complaint most favorably to the plaintiff." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Greco v. United Technologies Corp., 277 Conn. 337, 347, 890 A.2d 1289 (2006).
I CUTPA
The defendant may not have timely filed its motion to strike count five of the amended complaint. Practice Book § 10-61 states, in relevant part, "[w]hen any pleading is amended the adverse party may plead thereto within the time provided by Section 10-8 or, if the adverse party has already pleaded, alter the pleading, if desired, within ten days after such amendment . . ." (Emphasis added.) "This clearly means that after an amended complaint is filed, a defendant has the right to file any pleading permitted under [Practice Book] § 10-6, even if the pleadings were closed before the complaint was amended." American Networks International v. Federowicz, Superior Court, judicial district of Hartford, Docket No. CV 04 4001997 (July 13, 2005, Miller, J.).
In the present case, the court's file indicates that on February 28, 2006, Browning filed an answer to the plaintiff's revised complaint dated January 30, 2006, containing the CUTPA count. Thereafter, on April 26, 2006, the plaintiff filed an amended complaint containing the identical CUTPA count, which Browning had previously answered. Under § 10-61, Browning had ten days from April 26, 2006 in which to file additional pleadings, including a motion to strike. Browning filed the motion to strike on May 11, 2006, thereby surpassing the ten-day limitation imposed by § 10-61. The plaintiff, however, has not objected to the timeliness of the motion to strike, so it is properly before the court.
In its memorandum of law in support of the motion to strike, Browning argues that the plaintiff's CUTPA claim is legally insufficient because CUTPA does not provide remedies for entirely private wrongs such as alleged by the plaintiff since the purpose of CUTPA is to deter practices that injure the general public. Browning also argues that the plaintiff's allegations that the condominium suffered water damage at some time prior to his purchasing it and that the defendants did not reveal any of these facts on the disclosure form is not a course of conduct or general business practice to bring count five within CUTPA. The plaintiff counters that, because CUTPA by its very language applies to real estate transactions, and that because a single act can, in and of itself, violate CUTPA if committed in the course of a business transaction, the CUTPA claim is legally sufficient.
While Browning also asserted that the CUTPA claim is time barred, it did not provide substantive analysis of this contention. Though the plaintiff did not specify the date of the alleged CUTPA violations in his amended complaint, he did file with the complaint a copy of the residential property condition disclosure report, which is the subject of some of the alleged misrepresentations. This report was signed by Feely, and dated May 16, 2005. The statute of limitations for filing a CUTPA claim is "three years after the occurrence of" the violation. General Statutes § 42-110g(f). This claim is not time barred.
CUTPA provides that "[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." General Statutes § 42-110b(a). "It is well settled that in determining whether a practice violates CUTPA [the court] [has] adopted the criteria set out in the cigarette rule by the [F]ederal [T]rade [C]ommission 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 — in other words, is it within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons] . . . All three criteria do not need to be satisfied to support a finding of unfairness. 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." (Internal quotation marks omitted.) Edmands v. CUNO, Inc., 277 Conn. 425, 450 n. 16, 892 A.2d 938 (2006). CUTPA "is remedial in character . . . and must be liberally construed in favor of those whom the legislature intended to benefit." (Internal quotation marks omitted.) Eder Bros., Inc. v. Wine Merchants of Connecticut, Inc., 275 Conn. 363, 379, 880 A.2d 138 (2005). "CUTPA was designed to provide protection to businesses as well as to consumers." Id. CUTPA expressly applies to "the sale or rent . . . of . . . any property . . ." General Statutes § 42-110a(4).
The CUTPA claim in count five arises from Browning's alleged misrepresentations and nondisclosures concerning the condition of the property the plaintiff purchased. "Usually, mere nondisclosure does not amount to fraud . . . Nondisclosure may, however, amount to fraud when there is a failure to disclose known facts under circumstances that impose a duty to speak . . . In addition, once a vendor undertakes to speak on a subject, the vendor must then make a full and fair disclosure as to that subject." (Internal quotation marks omitted.) Dockter v. Slowik, 91 Conn.App. 448, 458, 881 A.2d 479, cert. denied, 276 Conn. 919, 888 A.2d 87 (2005). Because the State of Connecticut regulates the conduct of real estate agencies and agents; Regs., Conn. State Agencies § 20-328-1a et seq.; analysis of the plaintiff's CUTPA complaint and Browning's alleged nondisclosures must be made within the context of the Connecticut statutes governing duties and responsibilities of real estate agents. Section 20-328-5a(a) of the Regulations of Connecticut State Agencies provides that "[a] [real estate broker or real estate salesman] shall not misrepresent or conceal any material facts in any transaction." These regulations also mandate that real estate agents, regardless of the party they are representing, must treat all parties "honestly and fairly." Regs., Conn. State Agencies § 20-325d-2.
In the present case, the plaintiff has alleged that the defendants knew about the problems with the property, and intentionally withheld information regarding the existence of the problems. The plaintiff additionally alleged that the nondisclosure was intended to cause a mistaken impression on the part of the plaintiff to exist or continue regarding the condition of the property. Further, the plaintiff alleged that the representations were made to induce reliance, that the plaintiff did in fact rely on the representations, and has consequently suffered money damages. The defendants' actions, the plaintiff alleged, were unethical, unfair, and in contravention of public policy, thereby violating CUTPA.
The allegations in count five present claims and injuries arising from deceptive behavior by Browning in the sale of real property, in violation of both public policy and a statutory duty. Despite the fact that Browning was a fiduciary of Feely, Browning owed a statutory duty to the plaintiff to refrain from misrepresentation, concealment, and deceptive practices. See Regs., Conn. State Agencies § 20-328-5a. "[A] violation of CUTPA may be established by showing either an actual deceptive practice . . . or a practice amounting to a violation of public policy . . . Whether a practice is unfair and thus violates CUTPA is an issue of fact." (Internal quotation marks omitted.) De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424, 434, 849 A.2d 382 (2004). The plaintiff has properly alleged that Browning knew of the property condition, but failed to disclose the information.
The defendant further argues in support of its motion to strike that the plaintiff's claim is legally insufficient because the plaintiff failed to allege that Browning engaged in a course of conduct or general business practice of failing to disclose property damages to prospective property purchasers. This argument is without merit. "[A] single act of misconduct may constitute a violation of CUTPA." Hart v. Carruthers, 77 Conn.App. 610, 619, 823 A.2d 1284 (2003). See Daddona v. Liberty Mobile Home Sales, Inc., 209 Conn. 243, 550 A.2d 1061 (1988) (Supreme Court held that the defendant's single act of dismantling the plaintiff's mobile home constituted a CUTPA violation).
There is a split of authority in the Superior Courts regarding whether CUTPA applies to single transactions entered into by those who are "not in the business of making such transactions." (Internal quotation marks omitted.) Brown v. Esposito, Superior Court, judicial district of Windham, Docket No. CV 03 0071650 (October 12, 2005, Riley, J.). This is not, however, an issue in the present case. "[U]sually, . . . when CUTPA is held to apply to a single transaction the defendant is an entity or individual engaged in a business activity which is at the heart of the complaint and the alleged violation . . ." Id.
In the present case, Browning, a real estate agency, is a commercial actor. "They are a real estate agency holding themselves out for hire to the public for assistance in real estate purchases and sales. They are not individuals selling a single residence in a limited nonrepetitive transaction. Their activities are commercial in nature and are ongoing by their nature." Kane v. Neveleff, Superior Court, judicial district of New Haven, Docket No. CV 00 0439308 (July 11, 2002, Arnold, J.). In real estate cases substantially similar to the present case, commercial actors have been held liable under CUTPA for single instances of misrepresentations or nondisclosures. Moreover, the Superior Courts have regularly denied motions to strike similar CUTPA claims against real estate agents for nondisclosure or misrepresentation.
See, e.g., Tanpiengco v. Tasto, 72 Conn.App. 817, 806 A.2d 1080 (2002) (upholding CUTPA verdict against seller and real estate agency for fraudulent nondisclosure in failing to disclose that the subject residential property abutted a former landfill owned by the municipality); Ciarlo v. Harlamon, Superior Court, judicial district of Waterbury, Docket No. CV 04 0184235 (August 11, 2005, Gormley, J.T.R.) (awarding CUTPA verdict for home buyer against professional builder who failed to disclose and misrepresented the condition of the home's septic system).
See, e.g., Kane v. Neveleff, supra, Superior Court, Docket No. CV 00 0439308; Schur v. David Ogilvy and Associates, Inc., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 99 0175461 (April 27, 2000, D'Andrea, J.) ( 27 Conn. L. Rptr. 103); Correll v. Edgecomb, Superior Court, judicial district of New London, Docket No. CV 526915 (December 13, 1994, Hurley, J.).
Construing the facts most favorably for the plaintiff, count five satisfies the "cigarette rule" of the CUTPA analysis, and presents issues which CUTPA was intended to remedy. See Edmands v. CUNO, Inc., supra, 277 Conn. 450 n. 16. Based on the commercial character of Browning's conduct, and the nature of the harm alleged in the plaintiff's complaint, this court finds that the allegations against Browning in count five are legally sufficient to state a claim under CUTPA. Therefore, the motion to strike count five is denied.
II NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS
Browning next argues that the failure to disclose damage and subsequent repairs to the condominium, which allegedly caused the plaintiff to suffer emotional distress, is not a cognizable claim in Connecticut. Browning argues that there is no precedent in Connecticut for finding it reasonably foreseeable that failure to disclose damage and repairs to property might result in emotional distress. While the plaintiff concedes that there is no such precedent, the plaintiff counters that emotional distress due to misrepresentation is foreseeable, and, as such, may support a claim for negligent infliction of emotional distress.
"[I]n order to prevail on a claim of negligent infliction of emotional distress, the plaintiff must prove that the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm . . . This . . . test essentially requires that the fear or distress experienced by the plaintiffs be reasonable in light of the conduct of the defendants. If such [distress] were reasonable in light of the defendants' conduct, the defendants should have realized that their conduct created an unreasonable risk of causing distress, and they, therefore, properly would be held liable. Conversely, if the [distress] were unreasonable in light of the defendants' conduct, the defendants would not have recognized that their conduct could cause this distress and, therefore, they would not be liable." (Internal quotation marks omitted.) Larobina v. McDonald, 274 Conn. 394, 410, 876 A.2d 522 (2005). Additionally, "[i]n negligent infliction of emotional distress claims, unlike general negligence claims, the foreseeability of the precise nature of the harm to be anticipated [is] a prerequisite to recovery even where a breach of duty might otherwise be found . . ." (Internal quotation marks omitted.) Perodeau v. Hartford, 259 Conn. 729, 754, 792 A.2d 752 (2002).
While there is no direct appellate authority relating to a claim for negligent infliction of emotional distress based solely on damage to residential or real property, our Appellate Court recently noted that "[o]ur common law has never recognized a right to sue an individual for intentional or negligent infliction of emotional distress resulting from injury to such property as a pet." (Emphasis added.) Myers v. Hartford, 84 Conn.App. 395, 402, 853 A.2d 621, cert. denied, 271 Conn. 927, 859 A.2d 582 (2004). The court reasoned that "[b]ecause our common law has not extended the right to sue for damages for the [loss of a child or spouse] when the plaintiff has not witnessed the fatal injury, it would be incongruous to extend it to emotional distress resulting to a person from the loss of a pet." Id., 403. The court's rationale in Myers indicated that sentimental or emotional attachment to property cannot be the basis of a claim for negligent infliction of emotional distress when solely the property is damaged or destroyed. See Blue v. Renassance Alliance, Superior Court, judicial district of New Haven at Meriden, Docket No. CV 05 4001949 (May 12, 2006, Shluger, J.); see also Spaziani v. Overhead Door of Norwich, Inc., Superior Court, judicial district of New London, Docket No. CV 4001712 (March 24, 2006, Hurley, J.T.R.).
"Every [S]uperior [C]ourt case that has addressed [negligent infliction of emotional distress claims where the only damage was to property] . . . has held that Connecticut courts do not recognize a cause of action for negligent infliction of emotional distress based solely on damage to property." Blue v. Renassance Alliance, supra, Superior Court, Docket No. CV 05 4001949. These courts have reasoned that "[w]here the injury alleged is solely to property, it is not foreseeable to the defendant that its conduct could have caused emotional distress and that distress, if it were caused, might result in illness or bodily harm." Kelly v. Rope Ferry Commons, Superior Court, judicial district of New London, Docket No. CV 05 5000095 (April 19, 2006, Hurley, J.T.R.).
See also, e.g., Early v. Derby Neck Library, Superior Court, judicial district of Ansonia/Milford at Derby, Docket No. CV 00 0072405 (September 27, 2001, Nadeau, J.) ( 30 Conn. L. Rptr. 450) (motion to strike negligent infliction of emotional distress claim granted because damage to the plaintiff's retaining wall and driveway is not a foreseeable cause of emotional distress); Hixon v. Eilers, Superior Court, judicial district of Hartford, Docket No. CV 99 0592937 (February 14, 2001, Fineberg, J.) ( 29 Conn. L. Rptr. 254) (motion to strike negligent infliction of emotional distress claim granted because the defendant's actions of cutting down the plaintiff's trees and shrubbery only caused property damage).
In the present case, the plaintiff alleges in count six that the repairs made prior to his purchase of the condominium were performed improperly, that Browning misrepresented that there were no problems with the property, and that such actions caused the plaintiff to suffer "severe emotional distress." While the plaintiff argues that the emotional distress arose not only from the damage to the property, but also from Browning's misrepresentations, the two are inextricably linked: as alleged, Browning's misrepresentations relate directly and only to the condition of the property the plaintiff purchased. The plaintiff did not allege that he was physically present when his property experienced the problems, that he was ever placed in any physical danger as a result of the misrepresentations or inadequate repairs, and did not allege any description of the substantive emotional distress suffered. Further, the plaintiff has not offered any case law from this or any other jurisdiction in support of his contention that emotional distress is a foreseeable result of misrepresentations in the context of a real estate transaction. Consequently, this court does not find the alleged emotional distress foreseeable from either the damage to the plaintiff's property, or from Browning's alleged misrepresentations, and declines the invitation to depart from settled law. Even construing count six most favorably for the plaintiff, giving all reasonable inferences to sustain its legal sufficiency, this court finds that the plaintiff fails to state a cause of action for negligent infliction of emotional distress. Therefore, the motion to strike count six is granted.
CONCLUSION
For all the foregoing reasons, the motion to strike count five is denied, and the motion to strike count six is granted.