Annette Cappellino v. People's United Bank et al. (2010)

MEMORANDUM OF DECISION ON MOTION TO STRIKE

The plaintiff Annette Cappellino and the defendant Peter Cappellino, Jr., were formerly co-executors of the estate of their late mother Sue Ann Cappellino.   Pursuant to an order of the Probate Court of Southington, the defendant Peter Cappellino opened a restricted account for estate funds at Peoples United Bank. The terms of the account were that no funds were to be withdrawn without an order of the probate court approving the withdrawal of funds.   Unbeknownst to the plaintiff, her brother the defendant began to withdraw funds from the account without probate court approval until all of the funds in the account were depleted.   He thereafter resigned as co-executor leaving the plaintiff as the sole executrix of her mother's estate.

The plaintiff brings this civil action against the defendant Peter Cappellino to recover the missing funds under counts that allege breach of fiduciary duty, fraudulent misrepresentation, and common-law conversion of funds.   She also seeks treble damages from the defendant for theft under Conn. Gen.Stat. § 52-564.

The plaintiff also brings this civil action against Peoples United Bank (“bank”) alleging breach of contract, breach of fiduciary duty, negligence, negligent misrepresentation, breach of the duty of good faith and fair dealing, and violation of the Connecticut Unfair Trade Practices Act (Conn.Gen.Stat. § 42-110a-”CUTPA”).   Amended Complaint dated January 26, 2010, # 122.   The defendant bank moves to strike Count Two-Breach of Fiduciary Duty;  Count Five-Breach of the Duty of Good Faith and Fair Dealing;  and Count Six-Violation of CUTPA, on the grounds that the facts alleged do not support these causes of action against the bank.   The plaintiff opposes the Motion to Strike.

STANDARDS FOR A MOTION TO STRIKE

In deciding a motion to strike, the court must read the allegations in the contested pleading in the light most favorable to the pleader.  Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997).   The purpose of a motion to strike is to contest the legal sufficiency of the allegations in the complaint and to challenge whether they state a claim upon which relief can be granted.  Peter-Michael, Inc. v. Sea Shell Associates, 244 Conn. 269, 270, 709 A.2d 558 (1998).

COUNT TWO-BREACH OF FIDUCIARY DUTY

Connecticut law recognizes a cause of action for breach of fiduciary duty.   Fiduciary duty is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill, or expertise and is under a duty to represent the interests of the other.  Biller Associates v. Peterken, 269 Conn. 716, 723, 849 A.2d 847 (2004).   While negligence implicates a duty of care, fiduciary duty implicates a duty of loyalty and honesty.  Beverly Hills Concepts, Inc. v. Schatz & Schatz, Ribicoff & Kotkin, 247 Conn. 48, 56-57, 717 A.2d 724 (1998).   The cases in which Connecticut courts have found a breach of fiduciary duty involve fraud, self-dealing or conflict of interest.   See Murphy v. Wakelee, 247 Conn. 396, 400, 721 A.2d 1181 (1998).   No such allegations exist in the present fact pattern.   For example, the bank is not alleged to have done anything to enrich itself, rather the bank is alleged to have failed in its duty to adhere to the deposit contract that required the bank to ascertain whether there was probate court approval before allowing a withdrawal from the account.   Such a breach of duty involves an ordinary standard of care, not a heightened standard of loyalty.   The plaintiff points to no persuasive authority that such a standard of care exists in a depositer/bank relationship, even when the account contains restrictions on withdrawals.   This count must be stricken.

COUNT FIVE-BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING

The defendant bank moves to strike this count on the grounds that a breach of the implied duty of good faith and fair dealing is simply another form of breach of contract which is already the subject of Count One of the amended complaint.   However Connecticut law recognizes that a breach of this duty can involve conduct that is different from a simple breach of contract.  Froom Development Corp. v. Developers Realty, Inc., 114 Conn.App. 618, 627-29 (2009).   The additional required element of a breach of the duty of good faith and fair dealing with respect to a contract is that “the acts by which a defendant allegedly impedes the plaintiffs' right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith.”  Carford v. Empire Fire & Marine Insurance Co., 94 Conn.App. 41, 45, 891 A.2d 55 (2006).

In Count Five, in addition to pleading a simple breach of contract, the plaintiff has alleged that the bank failed to take steps to stop the unlawful withdrawals and failed to notify the probate court or law enforcement personnel of Peter Cappellino's actions.   But there is no allegation that the bank was engaged in any bad faith in its failures;  and even reading the allegations in the light most favorable to the pleader, the court can infer no bad faith, as opposed to negligence or to an ordinary failure to honor the contract, from the facts as pleaded.

Without some allegation from which it can be inferred that the bank acted in bad faith, that is, “the conscious doing of a wrong because of a dishonest purpose,” see Froom, supra at 628, the count alleging a breach of the covenant of good faith and fair dealing must be stricken.

COUNT SIX-VIOLATION OF CUTPA

The deficiencies of Count Five are identical in Count Six, which alleges a violation of Conn. Gen.Stat. § 42-110a, the Connecticut Unfair Trade Practices Act.¹ While the plaintiff has properly alleged that the bank is engaged in trade or commerce and that the plaintiff suffered an ascertainable loss as a result of the bank's conduct, the plaintiff has failed to allege facts from which one can infer that the bank's conduct, rather than amounting to simple negligence or breach of contract, was an unfair or deceptive practice in the conduct of the bank's business.

Neither a breach of contract nor an act of negligence constitutes a violation of CUTPA unless there are additional facts from which one can infer that the defendant's conduct was also characterized by actions that were unethical, unscrupulous, wilful or reckless.   See Tessman v. Tiger Lee Construction Co., 228 Conn. 42, 55, 634 A.2d 870 (1993).   Without some factual allegation from which it can be inferred that this element of unfairness or deception was present, this count must be stricken.

CLAIMS FOR RELIEF

The statutory claims for attorney fees must he stricken as well.   Without a viable CUTPA count, no attorney fees can be awarded under Conn. Gen.Stat. § 42-110a.   The bank is not a creditor of the plaintiff in this situation so that attorney fees are not available under Conn. Gen.Stat. § 42-150bb.

CONCLUSION

The Motion to Strike Counts Two, Five and Six and the prayers for relief for statutory attorney fees is granted.

Patty Jenkins Pittman, Judge

FOOTNOTES

FN1. CUTPA provides, “No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”  Conn. Gen.Stat. § 42-110b(a).It is well settled that in determining whether a practice violates CUTPA, the criteria are (1) whether 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, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness;  (2) whether it is immoral, unethical, oppressive, or unscrupulous;  (3) whether it causes substantial injury to consumers.   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.   See Votto v. American Car Rental, Inc., 273 Conn. 478, 484, 871 A.2d 981 (2005)..  FN1. CUTPA provides, “No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”  Conn. Gen.Stat. § 42-110b(a).It is well settled that in determining whether a practice violates CUTPA, the criteria are (1) whether 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, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness;  (2) whether it is immoral, unethical, oppressive, or unscrupulous;  (3) whether it causes substantial injury to consumers.   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.   See Votto v. American Car Rental, Inc., 273 Conn. 478, 484, 871 A.2d 981 (2005).

Pittman, Patty Jenkins, J.