Wolf Colorprint, Inc. v. Michael Marino et al. (2011)

MEMORANDUM OF DECISION ON DEFENDANTS' MOTION TO STRIKE # 122

This action arises out of the attempts by the plaintiff, Wolf Colorprint, Inc., a printing company, to purchase a printing press.   The defendants are MKM Importers, Inc. (MKM), which buys and sells printing equipment, and Michael Marino and Mark Marino, who are the officers and owners of MKM.

The following procedural history is relevant to the present motion.   In the revised complaint, which it filed on April 16, 2010, the plaintiff alleges the following facts.   In 2009, the plaintiff and the defendants entered into discussions regarding the plaintiff's possible purchase of a particular printing press that was owned by a third party, Pentagraphix Offset Printing, Inc. (Pentagraphix).  Ultimately, the plaintiff offered to purchase the press directly from Pentagraphix, signed a contact to do so and sent Pentagraphix a check for a deposit on the purchase.   The defendants subsequently engaged in conduct which caused Pentagraphix to decide not to sell the press to the plaintiff.   The defendants knew or should have known that their conduct would cause Pentagraphix to breach its contract to sell the press to the plaintiff and that this would harm the plaintiff's business, which it did.

The plaintiff also alleges that Bill Woodford, who is the president of another third party, C & S Press, had previously told Glenn Basale, the plaintiff's vice president, that his company was interested in installing the press for the plaintiff.   A short time later, Woodford told Balsale that the defendants had engaged in conduct that led C & S Press to decide that it would no longer submit bids to do installation and repair work for the plaintiff.   The defendants knew or should have known that this conduct would harm the plaintiff's business, which it did.

The plaintiff alleges the following causes of action;  in counts one through three, a claim against each defendant for tortious interference with a business expectancy as to its contract with Pentagraphix;  in counts four through six, claims against each defendant for tortious interference with its business relationship with Pentagraphix;  in counts seven through nine, claims against each defendant for tortious interference with its business relationship with C & S Press;  in counts ten through twelve, a claim against each defendant for violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq.;   in counts thirteen through fifteen, a claim against each defendant for defamation;  and in counts sixteen through eighteen, a claim against each defendant for intentional infliction of emotional distress.

The defendants filed a motion to strike this version of the complaint on April 10, 2010.   In its ruling on that motion, the court denied the defendants' motion as to counts one through fifteen and granted the motion as to counts sixteen through eighteen.   In doing so, the court declined to consider several particular arguments that the defendants raised therein, one as to counts one through nine, and another as to counts ten through twelve, because the defendants had not raised these arguments in a previous motion to strike, although they could have done so, or because the arguments were inadequately briefed.   See Wolf Colorprint, Inc. v. Marino, Superior Court, judicial district of Hartford, Docket No. CCV 09 6005913 (August 2, 2010, Domnarski, J.).   The defendants filed a motion for reconsideration in which they argued that the court should not have declined to consider these additional grounds.   This court granted the defendants' motion and stated:  “Defendant is to file any memorandum it wishes to be considered at Reargument by October 25, 2010.”

On October 25, 2010, the defendants filed the present motion to strike in which they move to strike counts four through six and counts ten through twelve on grounds that the court declined to consider in its previous decision.   The plaintiff filed an objection to the motion on December 7, 2010.   The matter appeared on the short calendar on January 18, 2011.

DISCUSSION

“The function of a motion to strike is to test the legal sufficiency of a pleading;  it admits all facts well pleaded ․ The role of the trial court [is] to examine the [complaint], construed in favor of the plaintiffs, to determine whether the plaintiffs have stated a legally sufficient cause of action.”  Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, 232–33, 680 A.2d 127 (1996), cert. denied, 520 U.S. 1103 117 S.Ct. 1106, 137 L.Ed.2d 308 (1997).  “[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.”  (Citation omitted;  internal quotation marks omitted.)  Commissioner of Labor v. C.J.M Services, Inc., 268 Conn. 283, 292–93, 842 A.2d 1124 (2004).

On the other hand, “[for the purpose of ruling upon a motion to strike ․ the legal conclusions [a complaint] may contain, are [not] deemed to be admitted.”  (Internal quotation marks omitted.)  Murillo v. Seymour Ambulance Assn., Inc., 264 Conn. 474, 476, 823 A.2d 1202 (2003).   Accordingly, “[a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003).

The defendants contend that the court should strike counts four, five and six because they duplicate the claims that the plaintiff alleges in counts one, two and three.   The plaintiff counters that each of these counts allege distinct causes of action, as counts one, two and three are claims for interference with business relationships, and counts four, five and six are claims for interference with business expectancies.

Although these two causes of action are related, they are distinct.   As the Supreme Court has explained, “[t]he common law has long countenanced a cause of action sounding in tort for interference with another's business practices and opportunities.   Originally the cause of action was recognized in suits where a defendant was alleged to have interfered with the plaintiff's advantageous contractual relations.   Prosser, Torts (4th Ed.) § 129, p.927. Gradually, perhaps in recognition of an increasingly competitive business climate, the law came to recognize that a merchant might have protectable interests even in business expectations that had not been confirmed by contract.   Dean Prosser identifies the decision in Temperton v. Russell, 1 Q.B. 715 (1893), as the generating force behind this evolution.   There, ‘the Court of Queen's Bench declared that the principles of liability for interference with contract extended beyond existing contractual relations, and that a similar action would lie for interference with relations which were merely prospective or potential.’   Prosser, supra, § 130, p. 949.

“This trend developed rapidly in American jurisprudence and has become an established tort in Connecticut.   We, in this state, recognize that a cause of action does exist for unlawful interference with business and that it is not essential to that cause of action that it appear that the tort has resulted in a breach of contract to the detriment of the plaintiff ․ The law does not ․ restrict its protection to rights resting on completed contracts, but it also forbids unjustifiable interferences with any man's right to pursue his lawful business or occupation and to secure to himself the earnings of his industry.”  (Citations omitted;  internal quotation marks omitted.)   Sportsmen's Boating Corp. v. Hensley, 192 Conn. 747, 753–54, 474 A.2d 780 (1984).

Here, in counts one through three, respectively, the plaintiff alleges that Michael Marino, Mark Marino and MKM interfered with the business expectancy that it had with Pentagraphix by preventing the plaintiff from purchasing the press from that company.   In counts four, five and six, respectively, the plaintiff alleges that Michael Marino, Mark Marino and MKM interfered with the business relationship that it had with Pentagraphix.   Because our Supreme Court has recognized that these causes of action are distinct, the defendants' motion to strike is denied as to counts four through six.

The defendants argue that the court should strike counts ten through twelve, in which the plaintiff alleges causes of action against them for violating CUTPA on the ground that the plaintiff fails to allege that it sustained an ascertainable loss in that its only allegation is that the defendants interfered with “a planned expenditure,” and the plaintiff “does not identify a single contract or account that the Plaintiff lost due to the Defendants' alleged conduct.”  (Defendants' Memorandum, p. 3.) The plaintiff counters that, by incorporating the allegations of the prior paragraphs of the complaint into counts ten through twelve, it has alleged adequate facts to support the ascertainable loss element of its CUTPA claims.

“Section 42–110b(a) prohibits persons from engaging in ‘unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.’   Section 42–110g(a) affords a cause of action to ‘[a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by section 42–110b ․’ [T]he ascertainable loss requirement is a threshold barrier which limits the class of persons who may bring a CUTPA action seeking either damages or equitable relief.”  (Internal quotation marks omitted.)  Service Road Corp. v. Quinn, 241 Conn. 630, 638 A.2d 258 (1997).

In the context of CUTPA, “[a]n ascertainable loss is a deprivation, detriment [or] injury that is capable of being discovered, observed or established ․ [A] loss is ascertainable if it is measurable even though the precise amount of the loss is not known ․ Under CUTPA, there is no need to allege or prove the amount of the ascertainable loss ․ A plaintiff need not prove a specific amount of actual damages in order to make out a prima facie case [under CUTPA].”  (Citations omitted;  internal quotation marks omitted.)  Id., 639–40.   Nevertheless, “[t]his fact does not ․ negate the requirement that, for a CUTPA claim to be viable, at least some ascertainable loss must be alleged.”   Criscuolo v. Shaheen, 46 Conn.Sup. 53, 62, 736 A.2d 947 [24 Conn. L. Rptr. 307] (1999).

In counts ten through twelve, the plaintiff, by incorporating the factual allegations of its introductory paragraphs, alleges that, as a result of the defendants' conduct, the plaintiff “was unable to obtain additional work and was prevented from increasing its profitability by improving its efficiencies.”  (Revised Complaint, ¶¶ 68, 74, 81.)   It also alleges that, as a result of the defendants' conduct in relation to C & S Press, the plaintiff's repair and installation expenses will increase, and its profitability will decrease.  (Id., ¶¶ 100, 103.)   Further, the plaintiff alleges that the defendants, by impeding its purchase of the press, caused the plaintiff to incur additional labor costs, are preventing it from improving its efficiency and from soliciting additional business, and are reducing its pricing flexibility, and thus its competitiveness in the marketplace.  (Id.,¶¶ 112, 113, 114.)

In Service Road Corp. v. Quinn, supra, 241 Conn. 644, the Supreme Court implied that these are the types of losses that meet the ascertainable loss element of CUTPA.   Specifically, the court stated:  “We have never addressed the meaning of the phrase ‘ascertainable loss' in a similar context, in which one business owner claims that another has engaged in an intentional unfair trade practice that has caused the first business to lose potential customers.   Nevertheless, we conclude that, in the business context, a plaintiff asserting a CUTPA claim may satisfy the ascertainable loss requirement of § 42–110g by establishing, through a reasonable inference, or otherwise, that the defendant's unfair trade practice has caused the plaintiff to lose potential customers.   A loss of prospective customers constitutes a ‘deprivation, detriment [or] injury’ that is ‘capable of being discovered, observed or established.’  ․ Such a loss appears to be precisely the type of business injury for which the legislature intended to provide redress when it enacted CUTPA.”  Id., 643–44.

Pursuant to this authority, the plaintiff has alleged sufficient facts to satisfy the ascertainable loss element of its CUTPA claims.   Therefore the defendants' motion to strike is denied as to counts ten through twelve.

To summarize, the court denies the defendants' motion to strike.

Domnarski, J.

Domnarski, Edward S., J.