LLC v. Ann Scarano (2011)

MEMORANDUM OF DECISION

Facts and Procedural History

This action arises from a dispute between a landlord and her tenants.   The plaintiffs, Dominican Chimi, LLC and Massiel Echevarria, operated a restaurant on the first floor of 108–110 Poquonnock Road in Groton, Connecticut, which it leased from the defendant, Ann Scarano, the owner of the property.   Several months into the lease, entered into on March 16, 2009, the parties began having disagreements regarding excessive noise coming from and over-crowding in the restaurant.   The defendant commenced a summary process action against the plaintiffs in September 2009.   As a result, the plaintiffs voluntarily stipulated to quit the premises on November 13, 2009.

On December 30, 2009, the plaintiffs filed a complaint against the defendant, which seeks damages for breach of her contractual obligations, defamation, tortious interference with business relations, violation of Connecticut Unfair Trade practice Act (CUTPA), and negligent infliction of emotional distress.   The defendant filed her motion for summary judgment, along with a memorandum and supporting exhibits, on March 29, 2011.   The plaintiffs filed their memorandum in opposition and exhibits on May 6, 2011.   The parties appeared for oral argument at short calendar on June 6, 2011.   Additional facts will be set forth as needed.

Discussion

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Sherman v. Ronco, 294 Conn. 548, 553–54, 985 A.2d 1042 (2010).   The court will address each of the defendant's arguments in support of her motion in turn.

Count One:  Breach of Duty of Good Faith & Fair Dealing

In count one, the plaintiffs allege, in relevant part that:  “On or about March 16, 2009, the parties entered into a written agreement ․ In reliance on such agreement, the plaintiffs ․ entered into possession of the premises and commenced doing business at said location ․ At all pertinent times, the plaintiffs have paid the rent and otherwise performed their duties in accordance with the terms and conditions of the agreement ․ The defendant has on various dates and times made false and/or harassing claims against the plaintiffs ․ Such claims were a violation of the defendant's obligation to act in good faith and fair dealings with the plaintiffs, and as such the defendant breached her contractual obligations with the plaintiffs ․ As a result, the plaintiffs have suffered financial loss and will continue to suffer financial loss.”

“[I]t is axiomatic that the ․ duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship ․ In other words, every contract carries an implied duty requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement ․ The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term ․ To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith ․ 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 ․ Bad faith means more than mere negligence;  it involves a dishonest purpose.  (Internal quotation marks omitted.)  Rafalko v. University of New Haven, 129 Conn.App. 44, 51, 19 A.3d 215 (2011).

In her February 8, 2011 deposition, the defendant testified that she received a noise complaint about the plaintiffs' restaurant as early as March 2009, from her daughter, Patty Ann Fouse, who was the upstairs tenant during that time.   Groton police reports confirm that noise complaints began on April 18, 2009 and lasted through September 20, 2009.   These complaints were made by the defendant, but also by other neighbors.   The defendant testifies that as early as May 2009, she politely told Echevarria to turn down music.   Subsequently, the plaintiffs were sent a letter from the defendant's attorney regarding the music.

In addition to the noise complaints, Groton police responded to fights at the restaurant on July 24, 2009, August 16, 2009, and September 20, 2009.   During the September 20, 2009 altercation, a female patron was hit in the head with a beer bottle and required medical care.   The Groton police report documenting the September 20, 2009 incident indicates that there was a “melee in the bar” on that night.   As a result, the officers that initially responded to the disturbance were severely outnumbered and back-up units were dispatched to the plaintiffs' restaurant.

In her May 5, 2011 affidavit, however, Echevarria attests to the following.   “I had several occasions to see or talk with Pattieann Fouse.   On no occasion did she ever complain to me, or comment to me about the music which was played on evenings and weekends in the bar/restaurant.   She did inform me that she was moving out of the apartment because she wished to purchase a home ․ Subsequently, in part of July or August 2009, the upstairs apartment was rented to two tenants, a man named ‘Frankie’ and a man named ‘Meissel.’  ․ I spoke with both men about whether the noise or music was too loud in the upstair's apartment, both stated to me that it was not too loud ․ By June of 2009 her daughter, Pattieann Fouse, had vacated the second floor apartment and the apartment was vacant.   At no time in June of 2009, or prior thereto did Ann Scarano state to me that she was concerned with the volume of the music being played at the bar/restaurant, nor did she state that her daughter had vacated the apartment due to noise levels, nor did she tell me that she had received complaints from neighbors about the music ․ Sometime in August of 2009 I became aware of City of Groton Police frequently parking near the bar/restaurant or repeatedly driving slowly by the premises.”

“In late August 2009, the First Marshal of the City of Groton came to the bar/restaurant investigating a complaint against my business.   The inspector noted an extension cord on the floor of the restaurant and asked that it be removed (which was done) other than that, no issues were raised or discussed, and no violations were found or cited ․ I later learned that Ann Scarano had made the complaint to the fire authorities ․ In late August 2009, the City of Groton Building Official came to the premises to inspect.   No building code violations were found ․ I later learned that Ann Scarano had made the complaint to the building authorities that there were code violations in the building ․ In later August 2009, the Liquor Control Commission came to investigate the bar/restaurant and no violations were found ․ I later learned that Ann Scarano had made the complaint to the Liquor Control authorities ․ In late August 2009, Lt. Martin of the Groton City Police came to the bar/restaurant to inform me that he had determined that utilizing a ‘DJ’ was considered by him to be ‘live entertainment’ and that my liquor license did not allow for ‘live entertainment’ without an endorsement on the permit, and since I did not have such an endorsement I must cease utilizing a ‘DJ.’ ․ I later learned that Ann Scarano had made the complaint to Lt. Martin and the Groton City Police Chief, and Lt. Martin acted upon this information at the insistence of Ann Scarano ․ To the best of my information and belief the City of Groton Police do not oversee investigate or enforce liquor control regulation, but I did not dare challenge Lt. Martin's claimed authority to speak for the Liquor Control Commissioner.”

“In late August 2009, Ann Scarano complained to the City of Groton Police that there was overcrowding at the bar/restaurant.   The City of Groton Police determined that there was no overcrowding at the bar/restaurant and told her so.   Yet Ann Scarano reported to the Fire Department Marshal that there was overcrowding there and filed a complaint.   The Fire Marshal office made no finding of overcrowding ․ Although the Liquor Control authorities were made aware of the fact that I employed a ‘DJ’ on some weekend evenings, and although a Liquor Control task force came, unannounced, to investigate my operation on a weekend evening (based on the complaint by Ann Scarano), no charges or violations were ever cited against me or my Liquor Permittee as a result of this ‘raid,’ yet my business reputation suffered from the publicity of the raid ․ Because Lt. Martin (not the Liquor Control Commission) told me I could not employ a ‘DJ’ I felt that I could not risk alienating the City of Groton Police department's goodwill, and I discontinued employment of a ‘DJ.’ ․ Because of the persistent presence of a police cruiser at or near the bar/restaurant, in the late summer of 2009, the harassing behavior towards my customers and me by Ann Scarano, the adverse impact and publicity of the aforesaid Liquor control commission ‘raid,’ patronage to my business declined ․ Because the employment of ‘DJ’ was a popular attraction to my business, its discontinuance contributed to the decline of my business.”

In light of this evidence, the court is satisfied that the defendant is not entitled to summary judgment on this count.   The defendant, as the plaintiffs' landlord and the owner of the building, had the right to complain to the police about the plaintiffs' business.   Echevarria's affidavit, however, raises genuine issues of material fact as to whether some of these complaints were made in good faith.   For these reasons, the defendant's motion is denied as to this count.

Counts Two and Three:  Defamation

“A defamatory statement is defined as a communication that tends to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him ․ To establish a prima facie case of defamation, the plaintiff must demonstrate that:  (1) the defendant published a defamatory statement;  (2) the defamatory statement identified the plaintiff to a third person;  (3) the defamatory statement was published to a third person;  and (4) the plaintiff's reputation suffered injury as a result of the statement ․ For a claim of defamation to be actionable, the statement must be false and truth is an affirmative defense.”   (Citations omitted;  internal quotation marks omitted.)  Rafalko v. University of New Haven, supra, 129 Conn.App. 53.

In count two, the plaintiffs allege, in relevant part that:  “On or about March 16, 2009, the plaintiffs commenced the operation of a business ․ and had a good volume of business ․ On various days and dates since then, the defendant falsely and maliciously reported to the Groton City Police that the defendants were making excessive noise and/or otherwise were disturbing her tenants and neighbors.   And, on various days the defendant took photographic pictures of the plaintiffs' customers, without permission of the customers ․ As a result thereof the plaintiff's place of business was investigated by police on numerous occasions and has greatly damaged the reputation of the plaintiffs and their business and credit;  all to the great damage of the plaintiffs.”

As to count two, the court is satisfied that the defendant is entitled to summary judgment.   The court will first address the allegation in count two that the “defendant falsely and maliciously reported to the Groton City Police that the defendants were making excessive noise and/or otherwise were disturbing her tenants and neighbors.”  “Our Supreme Court has held that statements made to the police in connection with a criminal investigation, such as the defendant's statements in the present case, are entitled to protection by a qualified privilege ․ Therefore, for the plaintiffs to prevail on their defamation claim, they must prove that the defendant made her statement with malice ․ [T]he malice required to overcome a qualified privilege in defamation cases is malice in fact or actual malice ․ Actual malice requires that the statement, when made, be made with actual knowledge that it was false or with reckless disregard of whether it was false ․ A negligent misstatement of fact will not suffice;  the evidence must demonstrate a purposeful avoidance of the truth ․ Malice in fact is sufficiently shown by proof that the publications were made with improper and unjustifiable motives.”  (Citations omitted;  internal quotation marks omitted.)  Mara v. Otto, 127 Conn.App. 404, 409, 13 A.3d 1134 (2011).

The evidence presented demonstrates that the defendant's complaints to the police regarding noise and disturbances from the restaurant were within her rights as the plaintiffs' landlord and the owner of the property.   Moreover, other neighbors complained to the police and the police responded to various disturbances at the plaintiffs' business throughout their tenancy, which had nothing to do with the defendant's complaints.   The plaintiffs have not presented sufficient evidence to create a genuine issue of material fact as to whether the defendant's comments to the Groton police were made with malice.   “The plaintiff's opinions and assertions about the motives of the defendants ․ are not sufficient to establish facts as would be admissible in evidence, as required by Practice Book § 17–46.   Once the defendants offered evidence of the absence of malice, it was incumbent on the plaintiff to refute that evidence.”  (Internal quotation marks omitted.)  Mara v. Otto, supra, 127 Conn.App. 410.

Further, the plaintiffs' allegation that “the defendant took photographic pictures of the plaintiffs' customers, without permission of the customers” does not support their defamation claim as there is no published, defamatory statement complained of.   As a result, the defendant is entitled to summary judgment as to count two.

In count three, the plaintiffs allege, in relevant part that:  “Between March 16, 2009 and September 2009 the plaintiffs were engaged in the restaurant business ․ The defendant in the hearing of various persons said concerning the plaintiffs that they were operating their business ‘in violation of their lease’;  that she was ‘afraid of those people’;  that she was taking photographic pictures of customers ‘with the intent to get pictures of people gambling inside the business';  that ‘excessive noise was disturbing her tenant’ ․ Said words were false and malicious ․ The plaintiffs, in consequence of said words, have suffered in their reputation and have lost good will and trade of many people with whom they otherwise would have had profitable business.”

In regard to this count, the court is similarly satisfied that the defendant is entitled to summary judgment.   The court has already found that the plaintiffs' allegations regarding the defendant's complaints about excessive noise and taking pictures of customers do not constitute defamation.   Count three further alleges, however, that the defendant made statements that the plaintiffs were in violation of their lease and that she was afraid of “those people.”

In regard to these allegations, a decision of the Superior Court noted that:  “A general expression of concern—that is, a description of the state of mind of the speaker—falls under the rubric of opinion rather than of fact, for purposes of defamation.   A statement of opinion cannot form the basis of a claim for defamation.  [See e.g., Goodrich v. Waterbury Republican–American, Inc., 188 Conn. 107, 111–12, 448 A.2d 1317 (1982) ].”   Lebby v. Klingberg Family Center, Superior Court, judicial district of New Britain, Docket No. CV 09 5014141 (May 25, 2010, Pittman, J.) (granting summary judgment because alleged statement that expressed concern about the fact that plaintiff had taken a photo of an injury to her daughter did not constitute defamation).

Therefore, in order for a statement to be actionable as defamation it must be one of fact and not opinion.   In other words, “the statement in question must convey an objective fact, as generally, a defendant cannot be held liable for expressing a mere opinion.”  Daley v. Aetna Life & Casualty Co., 249 Conn. 766, 795, 734 A.2d 112 (1999).  “A statement can be defined as factual if it relates to an event or state of affairs that existed in the past or present and is capable of being known ․ In a [defamation] action, such statements of fact usually concern a person's conduct or character ․ An opinion, on the other hand, is a personal comment about another's conduct, qualifications or character that has some basis in fact.”  (Citations omitted) Goodrich v. Waterbury Republican–American, Inc., supra, 188 Conn. 111.

Certainly the defendant's expression of fear constitutes her opinion.   As to her statement that the plaintiffs were in violation of their lease, the court is satisfied that this is not a defamatory statement, as it does not tends to harm the plaintiffs' reputation or to deter third persons from associating or dealing with him.   Indeed, the evidence presented, including Echevarria's deposition testimony, reveals that after the plaintiffs voluntarily left the defendant's premises in November 2009, they did not attempt to open their business at a new location.   As a result, they cannot prove that this statement injured their ability to enter into a new lease.

In sum, the defendant is entitled to summary judgment as to counts two and three.

Count Four:  Tortious Interference With Business Relations

In count four, the plaintiffs incorporate allegations in count one and further allege that:  “The defendant has contrived to create a claim of default against the plaintiffs, and evict the plaintiffs from possession of the place of business ․ As a result thereof the defendant has interfered with the plaintiffs' business expectations and has lost or will lose trade of many people with whom they would otherwise have or have had a profitable business;  and they will lose the funds which they have invested in such business.”

“Connecticut has long recognized a cause of action for tortious interference with business relations ․ The necessary elements of a cause of action in tortious interference with business relations are the existence of a business relationship, an intentional and improper interference with that relationship and a resulting loss of benefits of the relationship ․ [N]ot every act that disturbs a contract or business expectancy is actionable ․ A defendant is guilty of tortious interference if he has engaged in improper conduct ․ [T]he plaintiff [is required] to plead and prove at least some improper motive or improper means.”  (Citations omitted;  emphasis omitted;  internal quotation marks omitted.)  Holler v. Buckley Broadcasting Corp., 47 Conn.App. 764, 768–69, 706 A.2d 1379 (1998).

The court is satisfied that the evidentiary filing in support of and against this motion for summary judgment on count four create issues of fact that are not appropriate for resolution by summary judgment.

Count Five:  CUTPA

In count five, the plaintiffs incorporate allegations in count four and further allege that:  “The foregoing constitutes a violation of ․ CUTPA ․ on the part of the defendant, in that said actions by the defendant was immoral, oppressive and/or unscrupulous, and caused substantial injury to the plaintiffs.”

“[General Statutes § ]42–110b(a) provides that [n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.   It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair:  (1)[W]hether 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, [competitors or other businesspersons] ․ 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 ․ Thus a violation of CUTPA may be established by showing either an actual deceptive practice ․ or a practice amounting to a violation of public policy ․ In order to enforce this prohibition, CUTPA provides a private 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 [prohibited] method, act or practice ․” (Internal quotation marks omitted.)  Harris v. Bradley Memorial Hospital & Health Center, Inc., 296 Conn. 315, 350–51, 994 A.2d 153 (2010).

As previously discussed in the context of count one, the evidence presented raises genuine issues of material fact as to whether some of the defendant's complaints against the plaintiffs' business were made in good faith.   In light of this evidence, the court is satisfied that the defendant is not entitled to summary judgment on this count.

Count Six:  Negligent Infliction of Emotional Distress

Finally, in count six, the plaintiffs incorporate allegations contained in count one and further allege that:  “The time the defendant made false and/or harassing claims against the plaintiffs ․ Massiel Echevarria, was pregnant with child, a fact known to the defendant ․ By reason of making repeated complaints, all of which proved to be unfounded, the defendant's conduct created an unreasonable and foreseeable risk of causing ․ Echevarria, emotional distress, which was severe enough that it might result in illness or bodily harm.   The defendant's complaints and harassment caused Echevarria, to suffer distress.”

“[I]n order to prevail on a claim of negligent infliction of emotional distress, the plaintiff must prove that the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm.”  (Internal quotation marks omitted.)  Larobina v. McDonald, 274 Conn. 394, 410, 876 A.2d 522 (2005).   To prevail on a claim of negligent infliction of emotional distress, a plaintiff must prove the following elements:  “(1) the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress;  (2) the plaintiffs distress was foreseeable;  (3) the emotional distress was severe enough that it might result in illness or bodily harm;  and (4) the defendant's conduct was the cause of the plaintiff's distress.”  Carrol v. Allstate Ins. Co., 262 Conn. 433, 444, 815 A.2d 119 (2003).

As to the first and second elements, they “essentially [require] that the fear or distress experienced by the plaintiffs be reasonable in light of the conduct of the defendants.   If such [distress] were reasonable in light of the defendants' conduct, the defendants should have realized that their conduct created an unreasonable risk of causing distress, and they, therefore, properly would be held liable.   Conversely, if the [distress] were unreasonable in light of the defendants' conduct, the defendants would not have recognized that their conduct could cause this distress and, therefore, they would not be liable.”   (Internal quotation marks omitted.)  Larobina v. McDonald, supra, 274 Conn. 410.  “The foreseeability requirement in a negligent infliction of emotional distress claim is more specific than the standard negligence requirement that an actor should have foreseen that his tortuous conduct was likely to cause harm ․ In order to state a claim for negligent infliction of emotional distress, the plaintiff must plead that the actor should have foreseen that her behavior would likely cause harm of a specific nature, i.e., emotional distress likely to lead to illness or bodily harm.”  (Citation omitted.)  Olson v. Bristol–Burlington Health District, 87 Conn.App. 1, 5, 863 A.2d 748, cert. granted on other grounds, 273 Conn. 914, 870 A.2d 1083 (2005) (appeal withdrawn May 25, 2005).

In the present case, the evidence submitted by both parties does not demonstrate that the distress experienced by Echevarria was reasonable in light of the defendant's conduct.   The plaintiffs were engaged in a commercial dispute throughout the course of their tenancy with the defendant.   While the parties' relationship was acrimonious, there is no evidence that the defendant did anything outside of her rights as the plaintiffs' landlord and the owner of the property in making complaints with the police and ultimately evicting the plaintiffs' business.   Thus, the defendant is entitled to judgment as to this count.

Conclusion

For all of the foregoing reasons the defendant's motion for summary judgment is hereby denied as to counts one, four and five, alleging breach of the duty of good faith and fair dealing and, tortious interference with business relations and violation of CUTPA.   The defendant's motion for summary judgment is hereby granted as to the remaining counts.

Cosgrove, J.

Cosgrove, Emmet L., J.