J.E. Robert Company et al. v. LLC (2010)

MEMORANDUM OF DECISION ON MOTIONS TO STRIKE AND FOR NONSUIT

The court heard argument on September 20, 2010 concerning the plaintiff Shaw's New London, LLC's (SNL) motions to strike the defendants' substituted and amended counterclaims and for the entry of a judgment of nonsuit thereon.¹  After considering the parties' arguments, the court issues this memorandum of decision.   For the reasons set forth below, the motions are granted.

I Background

This matter, which was filed in court in August 2007, concerns a note, a mortgage of commercial property located in New London, Connecticut, a guaranty, and related instruments.   On April 13, 2005, defendant Signature Properties, LLC (Signature) agreed, pursuant to a Fixed Rate Note, to pay to JP Morgan Chase Bank, N.A. (JP Morgan) the principal sum of $8,800,000.00, with interest (Note).   To secure the Note, Signature executed a Mortgage And Security Agreement (Mortgage), with respect to commercial property known as 6 Shaw's Cove, New London, Connecticut, a three-story office building.   On July 29, 2005, the Note, Mortgage, and Guaranty were assigned by JP Morgan to LaSalle National Bank Association, as Trustee, which, in October 2007, assigned them to SNL.

In a previous memorandum of decision, dated February 3, 2010 (# 349) (February 2010 decision), the court granted SNL's motion for partial summary judgment as to liability, concerning counts one through four of its first amended complaint, dated March 4, 2008 (# 116).   In summary, the court found that Signature defaulted in its payment obligations;  that Signature breached Sections 4.3 and 8.2 of the Mortgage;  that the nonrecourse provisions of Section 10(a) of the Note are null and void, the Note is a full recourse obligation of Signature, SNL is not limited to the security interests granted by Signature, Signature is fully liable for any deficiency judgment which SNL may obtain;  and that the Guarantor defendants (Maureen Julian, Andrew J. Julian, Michael Murray, and Stephanie Lord Drake) are jointly and severally liable for Signature's full recourse obligation under the Note and Mortgage, including any deficiency judgment.

Pursuant to the court's (Shortall, J.) February 2, 2009 scheduling order (# 199), the defendants were required to file any counterclaims by no later than April 1, 2009.

The defendants' original counterclaims were filed in March and April 2009.   In September 2009, revised counterclaims were filed.   In their revised counterclaims, which are the subject of the court's March 1, 2010 memorandum of decision (# 367) (motion to strike decision), they alleged that part of the office building was leased to Electric Boat Corporation (Electric Boat), pursuant to which Electric Boat could terminate its lease, and that Electric Boat did so, effective on December 31, 2006.   They also alleged that, in April 2005, Signature entered into a Parking License Agreement (Parking Agreement), which granted Signature a license for parking rights on a parcel of land adjacent to 6 Shaw's Cove, which was to end on December 31, 2008, unless otherwise terminated by operation of its terms.   The court discussed this agreement in its February 2010 decision.

The defendants alleged that, after the termination of Electric Boat's lease, the loan went into default, and this action was begun.   In their revised counterclaims, the defendants alleged that SNL and/or its predecessors were negligent in making the loan and in investigating environmental conditions at 6 Shaw's Cove;  breached the Mortgage's implied covenant of good faith and fair dealing, by failing to take possession of the collateral and allowing interest to accrue, asserting claims seeking recourse against them, and asserting claims of breach of an Environmental Indemnity Agreement;  and that such conduct violated the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq.  (CUTPA).  In the motion to strike decision, the court granted the motion to strike the revised counterclaims.

Subsequently, substantially the same allegations are reiterated by the defendants in their substituted and amended counterclaims (# # 369, 372-74), which are discussed below (for ease of reference, the court refers to these as the “counterclaims”).²  Like their former counterclaims, the defendants include in the counterclaims counts for alleged breach of the implied covenant of good faith and fair dealing, and alleged violations of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq.  (CUTPA).  While the alleged facts are substantially the same as previously alleged, new legal theories are presented, in counts for breach of contract and equitable recoupment.

Signature filed no opposition to the motion to strike its counterclaims.   Trial in this matter was scheduled to commence on July 6, 2010, but was postponed, in part because the pleadings were not closed.   Additional references to the background are set forth below.

II Standard of Review

The standard of review on a motion to strike is well established.  “[A] motion to strike challenges the legal sufficiency of a pleading and, consequently, requires no factual findings by the trial court ․ We take the facts to be those alleged in the complaint ․ and we construe the complaint in the manner most favorable to sustaining its legal sufficiency ․ Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied ․ Moreover ․ [w]hat is necessarily implied [in an allegation] need not be expressly alleged ․ 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 ․ Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically.”  (Internal quotation marks omitted.)   Coalition for Justice In Education Funding, Inc. v. Rell, 295 Conn. 240, 252-53, 990 A.2d 206 (2010).   Legal conclusions in a complaint are not deemed to be admitted.   See Murillo v. Seymour Ambulance Association, Inc., 264 Conn. 474, 476, 823 A.2d 1202 (2003).

A motion to strike may be utilized to “trigger the trial court's determination of a dispositive question of law.”  Vertex v. Waterbury, 278 Conn. 557, 564, 898 A.2d 178 (2006).   Whether a plaintiff properly has alleged the elements of a claim is a question of law that should be resolved by a motion to strike.   See Marr v. WMX Technologies, Inc., 244 Conn. 676, 681, 711 A.2d 700 (1998).

The standard of review necessarily must be applied along with the law of the case doctrine, discussed below, where applicable.   See S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan & King, P.C., 32 Conn.App. 786, 797-98, 631 A.2d 340, cert. denied, 228 Conn. 903, 634 A.2d 296 (1993) (on second motion to strike, trial court properly determined that previous order granting first motion was the law of the case;  amended complaint was substantively the same as the previous one).

III Discussion

A. Compliance With Practice Book § 10-60

SNL argues that, with the exception of Maureen Julian, who filed a request to amend her counterclaims, the defendants failed to seek permission to plead new legal theories (breach of contract and equitable recoupment) in their substituted and amended counterclaims.   SNL contends that permission was required under Practice Book § 10-60 ³ and that the assertion of new counts under Practice Book § 10-44 ⁴ is improper.

SNL also argues that the defendants have simply rehashed and rearranged the same general claims from the previous counterclaims.  “Practice Book § 10-44 allows a party whose pleading has been stricken to file a new pleading within fifteen days of the granting of a motion to strike.  Practice Book § 10-60 allows a party to amend a pleading by order of the court, by written consent of the adverse party, or by filing a request for leave to file an amendment.   The context of § 10-44 is limited to providing a plaintiff with the opportunity to replead those portions of the complaint that have been stricken as insufficient ․ The court does not construe Practice Book § 10-44 as providing a plaintiff with the opportunity to assert new causes of action without a court order, consent of the parties or leave of the court as required by Practice Book § 10-60.”  (Citation omitted.)   State v. Ten Companies, Inc., Superior Court, judicial district of Hartford, Complex Litigation Docket at Hartford, Docket No. X03 CV 07 5008921 (February 6, 2008, Langenbach, J.) (45 Conn. L. Rptr. 40).

However, “changes in legal theories do not create different causes of action.”  Grimes v. Housing Authority, 242 Conn. 236, 248, 698 A.2d 302 (1997).   As discussed below, the new legal theories advanced by the defendants are based substantially on their previous allegations, and do not present new causes of action.

B. Breach Of Contract

In the first count of the counterclaims, the defendants allege that SNL breached the loan documents by failing to take possession of the premises and by failing to maintain, renew or exercise an option to maintain or extend the Parking Agreement.   See Counterclaims, ¶ 53.⁵  In so doing they merely have restyled prior allegations under a new legal theory and ignored this court's prior decisions concerning them.

Pursuant to the law of the case doctrine, where, as here, the court already has issued adverse rulings, as a matter of law, concerning these allegations, they may not be re-litigated.  “The law of the case is not written in stone but is a flexible principle of many facets adaptable to the exigencies of the different situations in which it may be invoked ․ In essence it expresses the practice of judges generally to refuse to reopen what has been decided and is not a limitation on their power ․ New pleadings intended to raise again a question of law which has been already presented on the record and determined adversely to the pleader are not to be favored.”  (Citations omitted.)   Breen v. Phelps, 186 Conn. 86, 99, 439 A.2d 1066 (1982).

The law of the case is applicable at any stage of the proceedings, including concerning a second motion to strike.   See S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan & King, P.C., supra, 32 Conn.App. 797-98.   “Where a matter has previously been ruled upon interlocutorily, the court in a subsequent proceeding in the case may treat that decision as the law of the case, if it is of the opinion that the issue was correctly decided, in the absence of some new or overriding circumstance ․” (Internal quotation marks omitted.)  Brown & Brown, Inc. v. Blumenthal, 288 Conn. 646, 656, 954 A.2d 816 (2008).   See Wasko v. Minella, 87 Conn.App. 390, 393-94, 396, 865 A.2d 1223 (2003) (evidentiary ruling at trial;  court reasonably could have relied on its prior determination, on summary judgment, regarding scope of insurance coverage, as the law of the case).⁶

There are no new or overriding circumstances here.   In its motion to strike decision, page 12, the court stated, “First, the defendants allege that SNL took no action, upon default, to take possession of the premises, as was its remedy under a non-recourse loan agreement, even after having been offered the premises by Signature.   The allegation that taking possession of the premises was SNL's remedy is a legal conclusion, which is not deemed to be admitted, and is unsupported by and contradicted by the terms of the Mortgage.   Article 10 of the Mortgage (a copy of which was annexed to and incorporated by reference in the counterclaims), page 30, expressly provides that, upon default, the lender ‘may take such action ․ as it deems advisable to protect and enforce its rights against [Signature] and in and to the Property, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Lender may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Lender ․’ Included among the several enumerated remedies are the rights to possession and to acceleration of the debt to declare the entire unpaid balance due and payable.   See Mortgage, Section 10, pp. 30-36.   The remedies are specified as cumulative and concurrent, and may be pursued ‘separately, successively, or concurrently,’ in the lender's sole discretion.   See Mortgage, Section 10(l), p. 35.”

Thus, the court already concluded, as a matter of law that SNL's remedies are specified as cumulative and concurrent and may be separately pursued.   SNL was not contractually obligated to accept a deed in lieu of foreclosure as its sole remedy.   In addition, in its February 2010 decision on partial summary judgment, pages 24-26, the court held that the nonrecourse provisions of Section 10(a) of the Note are null and void, and that the debt is a full recourse obligation of Signature.   Thus, SNL was not obligated to seek recovery only from the property.⁷

The court's prior decisions on the motion to strike and on summary judgment are the law of the case.   The defendants' reiteration of their claims that SNL breached by refusing to accept a deed to the property and by asserting their full recourse claims fails as a matter of law.

In addition, the claim that SNL breached by not maintaining, renewing, or exercising an option to extend the Parking Agreement again raises a claim which already has been adjudicated in the summary judgment proceedings.   In the February 2010 decision, pages 13-14, the court found, based on unambiguous documentation, that Signature had agreed to terminate the Parking Agreement as of December 31, 2006:  “Signature's termination of the Parking Agreement, as of December 31, 2006, prior to the expiration of the initial seven year term, disposed of its asset, its contractual rights therein.   In advance of the termination, Signature possessed the right to have tenants of 6 Shaw's Cove use 280 Atlantic's parking lot for twelve more years.   After terminating the Parking Agreement, it no longer had that right.   By agreeing to the early termination of the Parking Agreement, it effectively transferred or conveyed its rights under the Parking Agreement back to 280 Atlantic.   It is undisputed that the lender did not consent to the termination.”  (Footnote omitted.)

Also, in the February 2010 decision, the court found, based on undisputed facts, that SNL learned of the termination of the Parking Lot Agreement in the spring or summer of 2007.   The court stated, at page 21, “By then, 280 Atlantic no longer even owned a significant portion of the parking lot, on which the Walgreens building was built.   The termination of the Parking Agreement was not immaterial;  rather, it was part of a series of events by which, to the detriment of 6 Shaw's Cove, the Julians traded the right to use the parking spaces for a new deal with Walgreens.   The defendants' arguments that the termination of the Parking Agreement was of no force and effect as to SNL and SNL took no action to renew the Parking Agreement or to pay the license fee, are tantamount to saying that SNL had the obligation to ‘lock ․ the barn door after the proverbial horse has taken its exit.’   Falconi v. Falconi, Superior Court, judicial district of New London at Norwich, Docket KNO FA 03 0128833 (January 13, 2009, Boland, J.) (47 Conn. L. Rptr. 91).”

These determinations by the court, as a matter of law, are also the law of the case.   The motion to strike the first count is granted.

C. Equitable Recoupment

The defendants' second count is premised on equitable recoupment.   “Recoupment ․ refers to the defendant's right, in the same action, to cut down the plaintiff's demand, either because the plaintiff has not complied with some cross obligation of the contract on which he or she sues or because the plaintiff has violated some legal duty in the making or performance of that contract ․ The practice serves to avoid needless delay and unnecessary litigation by permitting a court to examine all aspects of the transaction that is the subject of the action.”  (Internal quotation marks omitted.)  Fadner v. Commissioner of Revenue Services, 281 Conn. 719, 730-31, 917 A.2d 540 (2007).   The claim for recoupment must arise from the same transaction which is the subject of the plaintiff's complaint.   See id., 740.

“[B]ecause a mortgage foreclosure action is an equitable proceeding, the trial court may consider all relevant circumstances to ensure that complete justice is done.”  (Emphasis in original;  internal quotation marks omitted.)   Morgera v. Chiappardi, 74 Conn.App. 442, 457, 813 A.2d 89 (2003).  “Equity always attempts to get at the substance of things, and to ascertain, uphold, and enforce rights and duties which spring from the real relations of parties.   It will never suffer the mere appearance and external form to conceal the true purposes, objects, and consequences of a transaction.”  (Citation omitted;  emphasis in original;  internal quotation marks omitted.)  Id., 458.   Nevertheless, in an equitable action, as in one at law, the rules of pleading apply and motions to strike are appropriately filed.   See id., 454 n.14.

The second count incorporates and reiterates the allegations of the first count, concerning SNL's alleged contractual obligations to take possession of the premises and about the Parking Agreement, which are addressed above.   In addition, allegations are set forth concerning negligence in inducing the Guarantor defendants to enter into the loan, about the lender's knowledge of the terms of the lease which Signature had with Electric Boat, which permitted Electric Boat to terminate its tenancy at the premises, which would materially impact the rental revenue stream and Signature's ability to meet its monthly mortgage payment obligations under the Note. See Counterclaims, ¶ 58.   The defendants allege that they were negligently or fraudulently induced into taking certain actions.   See Counterclaims, ¶ 57.⁸

The claim for equitable recoupment also fails as a matter of law, since the Guarantor defendants' underlying contractual, negligence, and fraud claims are each deficient.   First, for the reasons stated above, the contractual claims fail.

Second, the other claims fail since the required elements of the underlying claims are not present.   An essential element of a negligence claim is that the defendant breached a duty owed to the plaintiff.  “The essential elements of a cause of action in negligence are well established:  duty, breach of that duty;  causation;  and actual injury.”  (Internal quotation marks omitted.)   Sturm v. Harb Development, LLC, 298 Conn. 124, 139, 2 A.3d 859 (2010).

Without alleging facts, the guarantor defendants allege in conclusory fashion that SNL, and/or its predecessors in interest, induced them to enter into the loan even though the lender failed to recognize that Electric Boat could terminate its tenancy at the property.   In the motion to strike decision, pages 10-11, the court expressly found that such a duty to protect the borrower/lessor, whose repayment obligation was guaranteed by the Guarantor defendants, was expressly disclaimed in the Mortgage:  “Section 6.1, page 22, states, ‘[t]he relationship between [Signature] and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship with [Signature], and no term or condition of any of the Note, this Security Instrument and the other Loan Documents shall be construed so as to deem the relationship between [Signature] and Lender to be other than that of debtor and creditor.’   Similarly, Section 6.2, page 22, provides that ‘[t]he partners, members, principals and ․ beneficial owners of [Signature] are experienced in the ownership and operation of properties similar to the Property, and [Signature] and Lender are relying solely upon such expertise and business plan in connection with the ownership and operation of the Property.  [Signature] is not relying on Lender's expertise, business acumen or advice in connection with the Property.’ “

In addition, where, as here, the plaintiff is an assignee of the Note, it is not responsible for the alleged wrongful conduct of the lender.   See Deutsche Bank v. Gregory-Boutot, Superior Court, judicial district of Windham at Willimantic, Docket No. CV 08 5003138 (July 15, 2009, Potter, J.T.R.).

Third, as to fraud, the Guarantor defendants merely allege, in conclusory fashion, that SNL and/or its predecessors, engaged in conduct to “fraudulently induce Signature and/or the Guarantor Defendants into taking certain actions.”   See Counterclaims, second count, ¶ 57.   They have not alleged the well-established elements of such a claim.  “The essential elements of an action in common law fraud ․ are that:  (1) a false representation was made as a statement of fact;  (2) it was untrue and known to be untrue by the party making it;  (3) it was made to induce the other party to act upon it;  and (4) the other party did so act upon that false representation to his injury ․ Under a fraud claim of this type, the party to whom the false representation was made claims to have relied on that representation and to have suffered harm as a result of the reliance.”  (Internal quotation marks omitted.)  Sturm v. Harb Development, LLC, supra, 298 Conn. 142.

There is no allegation of a false representation as a statement of fact, or that such a statement was untrue and known to be untrue, or that such statement was made with intent to induce action, or that reliance thereon occurred which resulted in harm.   Thus, to the extent that the equitable recoupment claim is founded on fraud, it fails as a matter of law for these reasons as well.⁹

D. Good Faith and Fair Dealing

In the third count, the Guarantor defendants, except for Maureen Julian, allege that SNL breached the duty of good faith and fair dealing.   In its motion to strike decision, the court struck three previous good faith and fair dealing counts.   See motion to strike decision, pp. 15-19.

In the current counterclaims, the Guarantor defendants premise their claims of breach of the duty of good faith and fair dealing on SNL's assertion of its now withdrawn environmental claims and its claims for full recourse against Signature and the Guarantor defendants.   These claims essentially repeat previously stricken claims concerning good faith and fair dealing in their first revised counterclaim.

The court need not reiterate all of the appellate decisional law which it cited on this subject in its motion to strike decision.  “[B]ad faith is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ․ it contemplates a state of mind affirmatively operating with furtive design or ill will.”   (Internal quotation marks omitted.)  PSE Consulting, Inc. v. Frank Mercede and Sons, Inc., 267 Conn. 279, 305, 838 A.2d 135 (2004).  “Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive.”  (Internal quotation marks omitted.)   Habetz v. Condon, 224 Conn. 231, 237, 618 A.2d 501 (1992).

Review of paragraphs 60-66 of the third count shows that, like the previously stricken counts, it does not include factual allegations amounting to bad faith.   Using the words “bad faith” or “good faith” are not enough.   Instead, for example, these allegations are premised on negligence and/or mistakes (see paragraph 63) and failure to do proper research (see paragraph 64).   Conspicuously absent are factual allegations of conscious wrongdoing because of dishonest purpose or moral obliquity, or furtive design or ill will, or some interested or sinister motive.

In addition, these claims previously have been found to be deficient as a matter of law by the court.   In the motion to strike decision, pages 14-15, the court stated, concerning the Environmental Indemnity Agreement, “In Article 2, beginning on page 3, Signature made representations and warranties based on written report(s) resulting from environmental assessment of the Property (collectively referred to as the Environmental Report), and on ‘information that [Signature] knows or reasonably should have known ․’ In Section 2.9, page 5, Signature stated that it had ‘taken all reasonable steps necessary to determine, and has determined, that no Hazardous Substances are or have been generated, treated, stored, used, disposed of or released on, under, from, or about the Property, except in compliance with applicable Environmental Laws or except as defined in the Environmental Report.’   Further, in Section 12.1, page 10, Signature acknowledged that the terms of the Environmental Indemnity Agreement were ‘for the sole and exclusive protection and use of [the lender and other indemnified parties].’   The terms of the Environmental Indemnity Agreement contradict the defendants' argument that the lender's selection of EBI to provide an environmental assessment created a special relationship, as contemplated by the continuing course of conduct doctrine, under which SNL or its predecessors owed a duty of inquiry concerning environmental conditions at 6 Shaw's Cove.” The claims of breach of the implied covenant of good faith premised on alleged negligence or mistakes or failure to do proper research related to these issues fail as a matter of law.

Of note also is the Guarantor defendants' continued reliance on Hudson United Bank v. Cinnamon Ridge Corp., 81 Conn.App. 557, 845 A.2d 417 (2004), cited in defendants Andrew J. Julian's and Michael Murray's brief, pages 26-27.   In the motion to strike decision, page 18, the court stated, “In Hudson United Bank v. Cinnamon Ridge Corp., 81 Conn.App. 557, 569, 845 A.2d 417 (2004), cited by Signature, the court considered a motion to set aside a jury verdict after trial, not a motion to strike.   See id., 576-78.   It did not address the legal sufficiency of the allegations concerning the covenant of good faith and fair dealing.”

Also, in the February 2010 decision on partial summary judgment, pages 30-35, the court found, as a matter of law, against the defense of breach of the duty of good faith and fair dealing as it pertained to the full recourse claims.   Similarly unavailing is the Guarantor defendants' reference to Section 10(a)(ii) of the Note as limiting SNL's remedy to the property only.   As the court explained in the February 2010 decision, page 2, “Section 10(a)(i) of the Note provides that its obligations are non-recourse as to Signature, limiting SNL's remedy in the event of default to the security interests granted by Signature, with certain exceptions.   Section 10(a)(i)(B) states that ‘in the event ․ of a breach or default under Sections 4.3 or 8.2 of the [Mortgage] ․ the limitations on recourse set forth in this Subsection 10(a) will be null and void and completely inapplicable, and this Note shall be with full recourse to [Signature].’  (Emphasis in original.)”

Finally, the Guarantor defendants argue that SNL's failure to accept a deed as the sole remedy may violate the duty of good faith and fair dealing.   As explained above, and previously, this argument is contradicted by the terms of the Mortgage.   Accordingly, the claims in the third count are stricken.

E. CUTPA

As with the third count, the Guarantor defendants' fourth count also raises CUTPA claims which the court previously adjudicated.¹⁰  The fourth count of the counterclaims incorporates the allegations of the previous counts.   It is premised on claimed CUTPA violations.   In the motion to strike decision, pages 19-20, the court struck the prior CUTPA claims as being time-barred.

The CUTPA claims are again based on allegations which the court previously has addressed.   In paragraph 74, it is alleged that it is immoral and oppressive for SNL to claim breach when its predecessor failed to properly disclose a copy of the EBI environmental assessment prior to the closing of the loan, when SNL knew or should have known about the coal gasification plant prior to acceptance of assignment of the loan.   In paragraphs 75-76, it is alleged that SNL acted immorally and oppressively:  by failing to disclose the EBI assessment in a timely manner;  failing to renew, extend or maintain the Parking Agreement;  seeking to declare the loan to be recourse;  and attempting to enforce the Environmental Indemnity Agreement when they knew or should have known that information concerning the nonexistence of a coal gasification plant was available in the public records.   In addition, the Guarantor defendants reiterate their allegations concerning the Electric Boat lease and the expiration of the Parking Agreement, which are discussed above.   They do not explain how SNL was supposed to learn, prior to 2007, that the Parking Agreement “expired” as of December 31, 2006.

The court previously determined, in the motion to strike decision, that the claim of failure to disclose the EBI assessment is time-barred.   There, at page 20, the court stated, “These allegations are based on conduct which occurred no later than when the loan was made, April 2005.   The counterclaims were not brought until more than three years later, in 2009.”   Thus, this aspect of the claim is time-barred by General Statutes § 42-110g(f), which governs CUTPA claims, and which provides:  “[a]n action under this section may not be brought more than three years after the occurrence of a violation of this chapter.”   The court addressed above the allegations concerning alleged failure to renew, extend or maintain the Parking Agreement and found them to be legally deficient.

As to assertion of the full recourse claims, as discussed above, the court already has granted summary judgment as to liability concerning them.   As discussed in the motion to strike decision, the filing of a non-sham lawsuit cannot give rise to a CUTPA claim.   See Zeller v. Consolini, 59 Conn.App. 545, 553, 758 A.2d 376 (2000) (act of filing a non-sham lawsuit not a CUTPA violation).

Concerning attempting to enforce the Environmental Indemnity Agreement, again, the filing of a non-sham lawsuit does not violate CUTPA.   The Guarantor defendants do not claim that the filing of SNL's claim was a sham.

Moreover, as stated above, the court previously determined, in the motion to strike decision, pages 14-15, that, under the Environmental Indemnity Agreement, the lender was not under a duty to inquire into the environmental condition of 6 Shaw's Cove;  that it was Signature, not the lender, which made representations and warranties;  and that the terms thereof were for the sole and exclusive protection and use of the lender.

Finally, the Guarantor defendants argue that a fair reading of the allegations shows that multiple acts and omissions amount to violations of CUTPA.   As discussed above, the components of the CUTPA claims fail as a matter of law.   Accordingly, the CUTPA claims are stricken.

F. Nonsuit

SNL seeks a judgment of nonsuit, claiming that the defendants' new counterclaims did not cure the defects which led the court to strike the previous counterclaims.   They assert that the defendants simply have rehashed and rearranged the same core allegations previously asserted and previously stricken.   As authority, SNL cites Practice book §§ 10-44, 17-31 and 10-8.  Practice Book § 17-31 provides that “[w]here either party is in default by reason of failure to comply with Sections 10-8 ․ the adverse party may file a written motion for a nonsuit ․” Practice Book § 10-8 requires the pleadings to “advance at least one step within each successive period of fifteen days from the preceding pleading or the filing of the decision of the judicial authority ․”

“When the trial court has correctly ordered the entire substitute complaint to be deleted for the reason that it is identical in substance to a prior demurrable complaint there is no revision which the plaintiff may make.   To require, in such circumstances, that fifteen days must elapse before judgment may be rendered would be productive of nothing but delay.”  Royce v. Westport, 183 Conn. 177, 181, 439 A.2d 298 (1981).¹¹  In such circumstances, judgment is “predicated not on the [defendants'] failure to plead further but rather on [their] failure to plead differently.”  Id., 182.

Thus, “[i]n meeting the requirements [under § 10-44] to file a new pleading, the failure to provide new factual allegations that address previously identified defects in the complaint, warrants the deletion of the entire substitute complaint and the rendering of judgment thereon in favor of the defendant.”   Caltabiano v. L & L Real Estate Holdings II, LLC, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 07 4019729 (March 20, 2009, Arnold, J.) In Caltabiano, the court concluded that slightly different wording in a substitute complaint did not amount to additional facts which rendered the allegations “sufficiently different” from the prior, stricken complaint.  Id. Instead, “[t]he plaintiffs have basically restated the prior allegations.”  Id. In entering judgment in favor of the defendants, the court explained that “[t]he basis of the judgment as to each count is the plaintiffs' failure to plead differently.”

Here, similarly, as discussed above, the new counterclaims amount to a re-working of the previously pleaded claims without significant differences.   Review of the pleadings shows that the first count of the counterclaims essentially repeats the allegations of the former second count;  the second count reprises the negligence allegations of the former first count;  the third count largely restates allegations from counts of the previous counterclaims which were premised on breach of the duty of good faith and fair dealing, and the fourth, CUTPA count, largely restates the former sixth count.

As outlined above, the Guarantor defendants have ignored the court's rulings in its previous decisions.   Instead of presenting allegations which are legally sufficient, “the defendants are doing nothing more than attempting to place a different legal gloss on the same factual allegations which have already been stricken by the court ․ The defendants' continued efforts to seek to amend their counterclaims ․ constitute unconscionable delay in the proceedings.”   Bristol Savings Bank v. EFA Acceptance Corp., Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV 91 0515249 (June 1, 1993, Aurigemma, J.).

As noted above, Judge Shortall's previous scheduling order directed the defendants to file their counterclaims by April 1, 2009, more than eighteen months ago.   The defendants have had several opportunities to plead legally sufficient counterclaims and failed to do so.   Due in part to the pendency of the counterclaims, the previous July 2010 trial date was postponed, because the pleadings were not closed.   By this juncture, it is clear that a judgment of nonsuit is warranted as to the counterclaims.

CONCLUSION

Based on the foregoing reasons, SNL's motions to strike the defendants' amended and substituted counterclaims and for the entry of a judgment of nonsuit thereon are granted.

It is so ordered.

BY THE COURT

Robert B. Shapiro

JUDGE OF THE SUPERIOR COURT

FOOTNOTES

FN1. The defendants/counterclaimants are Signature Properties, LLC, Stephanie Lord Drake, Andrew J. Julian, Maureen Julian, and Michael Murray..  FN1. The defendants/counterclaimants are Signature Properties, LLC, Stephanie Lord Drake, Andrew J. Julian, Maureen Julian, and Michael Murray.

FN2. The counterclaims filed by the defendants are not identical to one another.   As noted below, defendant Maureen Julian's counterclaims differ somewhat from those of the other defendants..  FN2. The counterclaims filed by the defendants are not identical to one another.   As noted below, defendant Maureen Julian's counterclaims differ somewhat from those of the other defendants.

FN3. Practice Book § 10-60(a) provides, in relevant part, “Except as provided in Section 10-66 [pertaining to amendment of amount in demand], a party may amend his or her pleadings or other parts of the record or proceedings at any time subsequent to that stated in the preceding section in the following manner:  (1) By order of judicial authority;  or (2) By written consent of the adverse party;  or (3) By filing a request for leave to file such amendment, with the amendment appended[.]”.  FN3. Practice Book § 10-60(a) provides, in relevant part, “Except as provided in Section 10-66 [pertaining to amendment of amount in demand], a party may amend his or her pleadings or other parts of the record or proceedings at any time subsequent to that stated in the preceding section in the following manner:  (1) By order of judicial authority;  or (2) By written consent of the adverse party;  or (3) By filing a request for leave to file such amendment, with the amendment appended[.]”

FN4. Section 10-44 provides, in relevant part, “Within fifteen days after the granting of any motion to strike, the party whose pleading has been stricken may file a new pleading;  provided that in those instances where an entire complaint, counterclaim or cross complaint, or any count in a complaint, counterclaim or cross complaint has been stricken, and the party whose pleading or a count thereof has been so stricken fails to file a new pleading within that fifteen day period, the judicial authority may, upon motion, enter judgment against said party on said stricken complaint, counterclaim or cross complaint, or count thereof.”.  FN4. Section 10-44 provides, in relevant part, “Within fifteen days after the granting of any motion to strike, the party whose pleading has been stricken may file a new pleading;  provided that in those instances where an entire complaint, counterclaim or cross complaint, or any count in a complaint, counterclaim or cross complaint has been stricken, and the party whose pleading or a count thereof has been so stricken fails to file a new pleading within that fifteen day period, the judicial authority may, upon motion, enter judgment against said party on said stricken complaint, counterclaim or cross complaint, or count thereof.”

FN5. Only Maureen Julian has not alleged breach of contract based on alleged failure to maintain, renew or exercise an option to maintain or extend the Parking License Agreement.   See Maureen Julian's substituted and amended counterclaim, first count, ¶ 37..  FN5. Only Maureen Julian has not alleged breach of contract based on alleged failure to maintain, renew or exercise an option to maintain or extend the Parking License Agreement.   See Maureen Julian's substituted and amended counterclaim, first count, ¶ 37.

FN6. Contrary to Maureen Julian's argument, in partially overruling SNL's objection to her request to amend (# 392), the court did not consider whether her counterclaims (breach of contract, equitable recoupment, and CUTPA) were futile..  FN6. Contrary to Maureen Julian's argument, in partially overruling SNL's objection to her request to amend (# 392), the court did not consider whether her counterclaims (breach of contract, equitable recoupment, and CUTPA) were futile.

FN7. In addition, the defendants Andrew J. Julian and Michael Murray sought reargument concerning the court's decision on summary judgment, as to which the court issued its April 21, 2010 memorandum of decision (# 390), denying the motion to reargue..  FN7. In addition, the defendants Andrew J. Julian and Michael Murray sought reargument concerning the court's decision on summary judgment, as to which the court issued its April 21, 2010 memorandum of decision (# 390), denying the motion to reargue.

FN8. Only defendant Maureen Julian does not appear to base her recoupment claim on fraud..  FN8. Only defendant Maureen Julian does not appear to base her recoupment claim on fraud.

FN9. In view of the court's determination concerning the second count, the court need not consider whether an equitable recoupment claim is subject to the statute of limitations.   See Fadner v. Commissioner of Revenue Services, supra, 281 Conn. 732..  FN9. In view of the court's determination concerning the second count, the court need not consider whether an equitable recoupment claim is subject to the statute of limitations.   See Fadner v. Commissioner of Revenue Services, supra, 281 Conn. 732.

FN10. In Maureen Julian's counterclaim, this claim is in the third count, based on the allegation that SNL's assertion of its environmental claims violated CUTPA..  FN10. In Maureen Julian's counterclaim, this claim is in the third count, based on the allegation that SNL's assertion of its environmental claims violated CUTPA.

FN11. “The purpose and scope of a motion to strike are identical to those of a demurrer under the old rules of practice.”  (Internal quotation marks omitted.)  Nine State Street, LLC v. Planning & Zoning Commission, 270 Conn. 42, 49 n.6, 850 A.2d 1032 (2004)..  FN11. “The purpose and scope of a motion to strike are identical to those of a demurrer under the old rules of practice.”  (Internal quotation marks omitted.)  Nine State Street, LLC v. Planning & Zoning Commission, 270 Conn. 42, 49 n.6, 850 A.2d 1032 (2004).

Shapiro, Robert B., J.