Erik's Design Build Associates, Inc. v. John A. Caterino D/B/A Catarino Casale Insurance Associates (2010)

MEMORANDUM OF DECISION RE Motion to Strike # 116

On March 12, 2010, Catarino filed a motion to strike Erik's Design's amended complaint.¹  Catarino's motion is accompanied by a memorandum of law.   On March 25, 2010, Erik's Design filed an objection to the motion to strike and a memorandum of law in support thereof.   Catarino filed a reply on March 26, 2010.   The matter was heard at the short calendar on April 12, 2010.   For reasons state below, the court finds that each of the claims asserted by the plaintiff as against the defendant Catarino were not filed in a timely fashion and thus require the granting of this motion to strike.

FACTS

The present action was commenced on December 9, 2008, when a state marshal served the defendants Catarino Casale Godoy Insurance Associates, Inc. (Godoy) and John M. Catarino d/b/a Catarino Casale Insurance Associates (Catarino).   The plaintiff, Erik's Design-Build Associates, Inc. (Erik's Design), subsequently filed a three-count complaint on December 19, 2008.   On April 21, 2009, Godoy and Catarino filed a request to revise the complaint.   Erik's Design voluntarily withdrew its claims as against Godoy on September 25, 2009.   Thereafter, on October 13, 2009, Godoy and Catarino, filed a motion to strike.   Erik's Design objected to the motion to strike and filed a separate motion to cite in an additional defendant, Cooke Building & Remodeling (Cooke), on November 25, 2009.   Godoy and Catarino replied to Erik's Design's objection to the motion to strike on November 30, 2009.   On December 14, 2009, this court, Cosgrove, J., granted the motion to cite in an additional party and thereafter, on January 22, 2010, denied Godoy and Catarino's motion to strike without prejudice.

On March 11, 2010, Erik's Design filed an amended five-count complaint pursuant to Judge Cosgrove's order of January 22, 2010, requiring that it replead the complaint against the proper defendants and specify its allegations as to each defendant.   The amended complaint, as against Catarino and Cooke, alleges the following facts.²  In the first count, Erik's Design alleges negligence against Catarino.   Erik's Design states that it hired Cooke to perform work on a job site.   On or about August 26, 2002, Catarino issued a certificate of liability insurance to Cooke.   Thereafter, one of Cooke's independent contractors or employees suffered an injury at the job site.   At that time, Cooke discovered that the certificate issued by Catarino was invalid.   The injured worker subsequently filed a claim against Erik's Design and its insurer.   Erik's Design later discovered that as a result of the worker's claims against it, as well as Catarino's alleged negligence, its workers' compensation liability policy rate would increase for the three-year period of July 14, 2004 through July 14, 2007.

In the second count of the amended complaint, Erik's Design alleges malpractice against Catarino.   In particular, Erik's Design alleges that Catarino deviated from the professional standard applicable to insurance agents in Connecticut through his issuance of the erroneous certificate.   In the amended complaint's third count, Erik's Design alleges that Catarino breached the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110, et seq., through its aforementioned conduct.   Counts four and five of the amended complaint allege negligence and breach of contract, respectively, against Cooke.

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).  “It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted.”  (Internal quotation marks omitted.)  Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006).   “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).

Catarino moves to strike the amended complaint in its entirety ³ on the ground that there is no privity between Erik's Design and Catarino with regard to the procurement of insurance coverage for Cooke, as Erik's Design was not an insured under any of the policies set forth in the certificate issued by Catarino.   In particular, Catarino argues that the amended complaint makes no allegation that Catarino made any assurances to Erik's Design and that Erik's Design was never an intended beneficiary of any of the agreements between Cooke and Catarino.

Furthermore, Catarino seeks an order striking the amended complaint in its entirety on the ground that the claims set forth by Erik's Design are barred by the applicable statutes of limitations.   Catarino argues that General Statutes §§ 52-577 and 42-110g(f) create three-year limitations periods for the filing of tort and CUTPA claims, respectively.   Catarino argues that the act or omission complained of, namely the issuance of the insurance certificate on August 26, 2002, occurred more than six years before the present action was commenced by service of process on December 9, 2008.

Catarino moves, in the alternative, to strike count two of the amended complaint on the ground that the claims of malpractice alleged in such count are redundant as to claims for negligence under the first count of the amended complaint and, furthermore, that Connecticut does not recognize such malpractice actions against an insurance agent.   Catarino likewise moves to strike count three of the amended complaint on the ground that the allegations of such count do not state a valid claim under CUTPA.   In particular, Catarino argues that the amended complaint only cites to a single transaction, as opposed to a standard practice on the part of Catarino as necessary to state a valid CUTPA claim.

Erik's Design argues, in opposition, that its amended complaint states cognizable claims of negligence, malpractice and CUTPA violations against Catarino.   In particular, Erik's Design argues that count one of the amended complaint clearly alleges that Catarino owed a duty to Cooke and Erik's Design, as general contractor, to issue valid certificates of insurance, that Catarino knew or should have known that the certificate issued was invalid, that Catarino knew or should have known that Cooke would provide the certificate to Erik's Design and that Erik's Design would likely rely on the representations contained in the certificate to its detriment, and that but for the issuance of the certificate, Erik's Design would not have suffered damages.

Erik's Design also argues that the second count of the amended complaint states an independent cause of action.   Erik's Design argues that the second count of its amended complaint alleges that Catarino's conduct “deviated from the average standard of similar companies,” resulting in injury to Erik's Design and, thus, falls within the historic definition of malpractice.   Additionally, Erik's Design argues that the third count of its amended complaint properly alleges facts sufficient to state a cognizable CUTPA claim.   In particular, Erik's Design argues that the amended complaint alleges Catarino was in the practice of issuing false certificates that were likely to mislead consumers, that Erik's Design interpreted the subject certificate to be a representation that Cooke held a valid insurance policy and that Erik's Design relied on the certificate in selecting Cooke as a subcontractor.

Catarino replies that it owes no duty to Erik's Design for its alleged increase in workers' compensation premiums and reiterates its argument that there is no privity between Catarino and Erik's Design.   Catarino further argues that there is neither a statutory nor common law right of action for professional malpractice against an insurance agent.   Finally, Catarino replies that case law cited by Erik's Design in opposition is clearly distinguishable from the present facts.

A.

“[O]rdinarily, [a] claim that an action is barred by the lapse of the statute of limitations must be pleaded as a special defense, not raised by a motion to strike.”  (Internal quotation marks omitted.)  Greco v. United Technologies Corp., 277 Conn. 337, 344 n.12, 890 A.2d 1269 (2006).  “Exceptions to this general rule have been recognized, including where the movant raises the statute of limitations issue and ․ no respondent has raised opposition to the court's consideration of the issue.”   J.E. Robert Co. v. Signature Properties, LLC, Superior Court, complex litigation docket at Hartford, No. X04 CV 07 5026084 (March 1, 2010, Shapiro, J.).

“The purpose of [a] statute of limitation or of repose is ․ to (1) prevent the unexpected enforcement of stale and fraudulent claims by allowing persons after the lapse of a reasonable time, to plan their affairs with a reasonable degree of certainty, free from the disruptive burden of protracted and unknown potential liability, and (2) to aid in the search for truth that may be impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents or otherwise.”   (Internal quotation marks omitted.)  Neuhaus v. DeCholnoky, 280 Conn. 190, 206-07, 905 A.2d 1135 (2006).

Section 52-577 provides:  “No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of.”   “Section 52-577 is a statute of repose in that it sets a fixed limit after which the tortfeasor will not be held liable and in some cases will serve to bar an action before it accrues.”  (Internal quotation marks omitted.)   Rosenfield v. Rogin, Nassau, Caplan, Lassman, & Hirtle, LLC, 69 Conn.App. 151, 159, 795 A.2d 572 (2002).  “[T]he three-year limitation of § 52-577 is applicable to all actions founded upon a tort which do not fall within those causes of action carved out of § 52-577 and enumerated in § 52-584 or another section.”  (Internal quotation marks omitted.)  Travelers Indemnity Co. v. Rubin, 209 Conn. 437, 441, 551 A.2d 1220 (1988).⁴

“In construing our general tort statute of limitations [, § 52-577,] ․ we have concluded that the history of that legislative choice of language precludes any construction thereof delaying the start of the limitation period until the cause of action has accrued or the injury has occurred ․ The date of the act or omission complained of is the date when the ․ conduct of the defendant occurs ․ [Section] 52-577 is an occurrence statute and ․ its limitation period does not begin when the plaintiff first discovers an injury ․” (Citations omitted;  internal quotation marks omitted.)  Certain Underwriters at Lloyd's, London v. Cooperman, 289 Conn. 383, 408, 957 A.2d 836 (2008).

The first count of the complaint sounds in negligence and is related to an insurance transaction between Cooke and Catarino that allegedly injured Erik's Design.   In particular, Erik's Design claims that it was forced to pay increased insurance premiums as a direct result of Catarino's negligence in providing an invalid insurance certificate to Cooke.   Thus, the date of the act complained of, namely the issuance of the certificate to Cooke, is August 26, 2002.

Erik's Design commenced the present action by service of writ, summons and complaint on December 9, 2008.   Based on the August 26, 2002 issuance, Erik's Design had until August 26, 2005 by which to file a timely claim for negligence.   As the 2008 filing date of the present action is outside of the applicable limitations period, the first count of the complaint, sounding in negligence, is untimely.

The second count of the complaint alleges malpractice against Catarino in the procurement and provision of the invalid insurance certificate.   Claims for professional malpractice outside of the medical context are generally governed by the tort limitations period of § 52-577.   See Pelletier v. Galske, 105 Conn.App. 77, 936 A.2d 689 (2007) (three-year limitations period of § 52-577 applicable to legal malpractice claim);  Seeman v. Arthur Andersen & Co., 896 F.Sup. 250 (D.Conn.1995) (accountant malpractice claim subject to three-year limitations period of § 52-577).

Count two of the amended complaint alleges that Catarino deviated from the ordinary standard of care applicable to those in the insurance industry when it “issued the erroneous [c]ertificate.”   The operative date for the running of the limitations period as to the second count is the date of the issuance of the certificate.   The same limitations analysis applicable to the amended complaint's first count is applicable to its second count and, therefore, the second count is likewise untimely under § 52-577.

Turning to the third count of the amended complaint, Erik's Design alleges that Catarino's conduct in the issuance of the subject certificate violated CUTPA.  Section 42-110g(f) concerning CUTPA violations, provides:  “An action under this section may not be brought more than three years after the occurrence of a violation of this chapter.”  “Pursuant to the clear and unambiguous language of § 42-110g(f), no cause of action can be maintained under CUTPA if brought more than three years after the unfair practice occurs.  Bellemare v. Wachovia Mortgage Corp., 94 Conn.App. 593, 606 n.6, 894 A.2d 335 (2006), aff'd on other grounds, 284 Conn. 193, 931 A.2d 916 (2007).

The unfair practice presently complained of is the issuance of the insurance certificate to Cooke.   Thus, the operative date for measuring the limitations period applicable to the CUTPA claim is August 26, 2002.   Pursuant to § 42-110g(f), Erik's Design had until August 26, 2005 to file a timely CUTPA action.   The present action was commenced on December 9, 2008, more than three years after the certificate was issued.   Therefore, the CUTPA claim is invalid as a matter of law.

Because the court finds these grounds dispositive of the motion, the court will not consider the other grounds raised by the defendant in support of this motion.

CONCLUSION

For the foregoing reasons, the defendant's motion to strike the amended complaint is granted as to counts one, two and three.

THE COURT

Cosgrove, J.

FOOTNOTES

FN1. Cooke has not joined in the motion to strike and has not filed an appearance in the present matter..  FN1. Cooke has not joined in the motion to strike and has not filed an appearance in the present matter.

FN2. The amended complaint filed on March 11, 2010 is the operative complaint in the present matter..  FN2. The amended complaint filed on March 11, 2010 is the operative complaint in the present matter.

FN3. Although Catarino states that it is moving to strike the amended complaint in its entirety, the text of Catarino's memorandum in support establishes that it moves to strike only the counts of the amended complaint directed toward its conduct.   Thus, references in the present motion to striking the complaint “in its entirety” shall be construed as requests to strike all counts of the complaint as against Catarino.   The relevant counts for consideration are, therefore, counts one, two and three of the amended complaint..  FN3. Although Catarino states that it is moving to strike the amended complaint in its entirety, the text of Catarino's memorandum in support establishes that it moves to strike only the counts of the amended complaint directed toward its conduct.   Thus, references in the present motion to striking the complaint “in its entirety” shall be construed as requests to strike all counts of the complaint as against Catarino.   The relevant counts for consideration are, therefore, counts one, two and three of the amended complaint.

FN4. Although § 52-584 provides a limitations period for actions sounding in negligence, misconduct or malpractice, such section does not apply to the present facts.   Section 52-584 provides, in relevant part:  “No action to recover damages for injury to the person, or to real or personal property ․ shall be brought but within two years from the date when the injury is first sustained or discovered ․” The present action does not concern damages to the person, or to the real or personal property of Erik's Design.   The first count, although sounding in negligence, is related to economic losses sustained as a result of an insurance transaction.   Thus, § 52-577 is applicable to the present facts.   See J.E. Robert Co. v. Signature Properties, LLC, Superior Court, complex litigation docket at Hartford, No. X04 CV 07 5026084 (March 1, 2010, Shapiro, J.) (negligence claims resulting in economic losses related to commercial transaction analyzed under § 52-577)..  FN4. Although § 52-584 provides a limitations period for actions sounding in negligence, misconduct or malpractice, such section does not apply to the present facts.   Section 52-584 provides, in relevant part:  “No action to recover damages for injury to the person, or to real or personal property ․ shall be brought but within two years from the date when the injury is first sustained or discovered ․” The present action does not concern damages to the person, or to the real or personal property of Erik's Design.   The first count, although sounding in negligence, is related to economic losses sustained as a result of an insurance transaction.   Thus, § 52-577 is applicable to the present facts.   See J.E. Robert Co. v. Signature Properties, LLC, Superior Court, complex litigation docket at Hartford, No. X04 CV 07 5026084 (March 1, 2010, Shapiro, J.) (negligence claims resulting in economic losses related to commercial transaction analyzed under § 52-577).

Cosgrove, Emmet L., J.