Victor Reyes dba v. LLC (2011)

MEMORANDUM OF DECISION

The plaintiff, Victor Reyes, moves to strike the fifth count of the counterclaims filed by the defendant, Vertical Retail Solutions, LLC, which counterclaim asserts a cause of action under the Connecticut Unfair Trade Practices Act (CUTPA).   The basis for this motion is that the counterclaim alleges an insufficient nexus with Connecticut for purposes of CUTPA.

A motion to strike “admits all the facts well pleaded;  it does not admit conclusions or the truth or accuracy of opinions stated in the pleadings.”   Mingachos v. CBS, Inc., 196 Conn. 91, 108 (1985).

In the fifth counterclaim, the defendant avers that it had an oral agreement which obligated the plaintiff to refurbish two shoe stores located in North and South Carolina, respectively;  that the defendant paid sums toward these projects;  and that the plaintiff abandoned the projects when a dispute arose regarding reimbursement for transportation, meals, and lodging.

General Statutes § 42–110g(a) creates a private cause of action to recover monetary damages for violations of General Statutes § 42–110b.  Section 42–110b(a) prohibits engaging in unfair or deceptive acts or practices “in the conduct of any trade or commerce.”  “Trade” and “commerce” are defined by General Statutes § 42–110a(4) to mean “the advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property ․ in this state.”  (Emphasis added.)

The parties' and the court's research discloses no appellate level decision construing the phrase “in this state” as used in § 42–110a(4).   The federal district courts in Connecticut have analyzed this territorial requirement and held that a valid cause of action under CUTPA may exist even though the purported unfair or deceptive acts or practices occurred outside of Connecticut, see Uniroyal Chemical Company, Inc. v. Drexel Chemical Company, 931 F.Sup. 132, 140 (D.Conn.1996).   The district courts have employed various tests for determining the territorial extent of CUTPA, including state choice-of-law analysis and whether the alleged violation is “intimately associated” with Connecticut.  Id.

The provisions of CUTPA are deemed remedial and are to be construed liberally, § 42–110b(d);  Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 492 (1995).   However, CUTPA is not so elastic as to encompass every extraterritorial activity, no matter how slim the contact with our state.   The mere fact that one party to a contract resides or is located in Connecticut is insufficient to satisfy the definition of trade or commerce within this state.   Connecticut v. Liberty Mutual Holding Company, Inc., Superior Court, J.D. Hartford, d.n. X09–CV06–4023 087, Shortall, J. (March 20, 2009).

The allegations of the counterclaim are bereft of any connection to Connecticut except that the defendant is a Connecticut limited liability company.   The work that was abandoned was to be done in North and South Carolina.   The plaintiff is an Illinois resident.   No act or practice purportedly happened in Connecticut.   The alleged transgressions have no impact on Connecticut whatsoever except that the counterclaimant is located here.   Any losses were incurred at the defendant's out-of-state shoe stores.   Such a thin nexus to Connecticut fails to encompass trade or commerce “in this state.”

The motion to strike the fifth counterclaim is granted.

Sferrazza

Sferrazza, Samuel J., J.