Citibank, N.A. v. Grace K. Pemberton (2012)

MEMORANDUM OF DECISION MOTION TO STRIKE (# 113)

I

FACTS

The plaintiff, Citibank (South Dakota) N.A., a national banking association, commenced this debt collection action against the defendant, Grace K. Pemberton, by service of process on November 12, 2009.   The plaintiff alleges the following facts.   The plaintiff extended credit to the defendant pursuant to a credit installment agreement, but the defendant failed to make payments for such credit and owes a total balance of $24,790.17.   Under a heading entitled “AS FOR A SECOND CAUSE OF ACTION,” the plaintiff also claims that it rendered “monthly, full and true accounts” of the defendant's indebtedness resulting from the extended credit in the amount set forth above, such account statements were delivered to the defendant and resulted “in an account stated for the amount set forth above.”   The plaintiff seeks money damages in the amount of $24,790.17, costs and disbursements.   On February 28, 2011, the defendant filed her answer, three special defenses and a three-count counterclaim.¹

The plaintiff filed a motion to strike the defendant's special defenses and counterclaims on September 30, 2011, and the defendant filed a memorandum in opposition on November 29, 2011.   On May 10, 2012, the plaintiff filed its reply to the defendant's opposition.   The matter was argued before the court at short calendar on June 18, 2012.

II

DISCUSSION

“The purpose of a motion to strike is to contest ․ the legal sufficiency of the allegations of [a pleading] ․ to state a claim upon which relief can be granted.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003).   Because “[a] motion to strike challenges the legal sufficiency of a pleading ․ [it] requires no factual findings by the trial court.”  (Internal quotation marks omitted.)   New London County Mutual Ins. Co. v. Nantes, 303 Conn. 737, 747, 36 A.3d 224 (2012).  “The role of the trial court in ruling on a motion to strike is to examine the [pleading], construed in favor of the [nonmovant], to determine whether the [nonmovant has] stated a legally sufficient cause of action.”   (Internal quotation marks omitted.)  Coe v. Board of Education, 301 Conn. 112, 117, 19 A.3d 640 (2011).

A

Motion to Strike Special Defenses

“[A] plaintiff can [move to strike] a special defense ․” Nowak v. Nowak, 175 Conn. 112, 116, 394 A.2d 716 (1978).  “[T]he purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action.”   (Internal quotation marks omitted.)  Braffman v. Bank of America Corp., 297 Conn. 501, 519, 998 A.2d 1169 (2010).

1

First Special Defense

The defendant's first special defense asserts that the alleged agreement with the plaintiff is void ab initio because the plaintiff charged an interest rate in excess of the rate provided in the agreement.   The plaintiff moves to strike this special defense on the ground that it is not one of the defenses enumerated in Practice Book § 10–50.   It argues that § 10–50 sets forth recognized defenses, the defendant's first special defense, “illegal interest,” is not listed, therefore, it is invalid.   The defendant counters that her special defense is legally sufficient because it falls within the category of “fraud,” which is a defense contained in § 10–50.   The plaintiff's reply memorandum does not respond further to this issue.

This court is aware that “grounds other than those specified should not be considered by the trial court in passing upon a motion to strike.”  (Internal quotation marks omitted;  emphasis added.)  Gazo v. Stamford, 255 Conn. 245, 259, 765 A.2d 505 (2001).   The defendant's special defense asserts that the plaintiff charged excessive interests rates, thereby voiding the alleged agreement and the plaintiff moves to strike solely on the ground that this special defense is not expressly listed in § 10–50.   Case law provides, however, that “the list of special defenses in § 10–50, is illustrative rather than exhaustive.”  (Emphasis added.)  Kosinski v. Carr, 112 Conn.App. 203, 209 n.6, 962 A.2d 836 (2009).  “Practice Book ․ [§ 10–50] lists some of the defenses which must be specially pleaded and proved.”  (Internal quotation marks omitted.)  Id. Therefore, the court, restricted to the ground stated on the face of the plaintiff's motion, denies the motion to strike the defendant's first special defense because case law provides that the special defenses listed in § 10–50 ² are not exhaustive.³

2

Second Special Defense

The second special defense claims that the plaintiff prevented the defendant from asserting her right to resolve the dispute through binding arbitration, and the plaintiff moves to strike this defense on the identical basis upon which it moved to strike the first special defense.   Accordingly, for the same reasons set forth above, the court denies the plaintiff's motion to strike the second special defense.

3

Third Special Defense

The third special defense asserts that the defendant tendered a $2,000 payment to the plaintiff, which was accepted by the plaintiff as an accord and satisfaction pursuant to General Statutes § 42a–3–311, and, therefore, the debt is extinguished.   The plaintiff fails to state a ground on the face of its motion to strike as to the third special defense.   In its memorandum in support, however, it argues that the defendant has not pleaded the elements of accord and satisfaction because she has not pleaded the existence of a good faith dispute, that the check was knowingly accepted by the plaintiff and there is no allegation of a new consideration promised.   The defendant emphasizes that “the plaintiff never raised, in its Motion to Strike, any issue as to the legal sufficiency of this defense but nonetheless moved the court to strike all the defenses.”   She further argues that her defense is viable under Practice Book § 10–50 and is legally sufficient.   In its reply memorandum, the plaintiff responds that the defendant has not pleaded accord and satisfaction properly.

“Motions to strike that do not specify the grounds of insufficiency are fatally defective and, absent a waiver by the party opposing the motion, should not be granted.”  (Emphasis added;  internal quotation marks omitted.)   Stuart v. Freiberg, 102 Conn.App. 857, 861, 927 A.2d 343 (2007).  “Our Supreme Court has stated that ․ Practice Book [§ 10–42], which requires a motion to strike to be accompanied by an appropriate memorandum of law citing the legal authorities upon which the motion relies, does not dispense with the requirement of [Practice Book § 10–41] that the reasons for the claimed pleading deficiency be specified in the motion itself.”  (Internal quotation marks omitted.)  Id. Here, the defendant has objected to the form of the plaintiff's motion to strike with respect to the third special defense, which fails to comply with the requirements of Practice Book § 10–41.   Accordingly, the motion to strike the third special defense is denied.

B

Motion to Strike the Counterclaim

“[A] plaintiff can [move to strike] ․ [a] counterclaim.”  Nowak v. Nowak, supra, 175 Conn. 116.  “[A] counterclaim is a cause of action existing in favor of the defendant against the plaintiff and on which the defendant might have secured affirmative relief had he sued the plaintiff in a separate action.”   (Internal quotation marks omitted.)  Ameriquest Mortgage Co. v. Lax, 113 Conn.App. 646, 649, 969 A.2d 177, cert. denied, 292 Conn. 907, 973 A.2d 102 (2009).

The defendant's second counterclaim alleges that the plaintiff's collection practices were in violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq, because such practices were unfair, unlawful, immoral, oppressive and caused substantial injury to the defendant.   She also alleges that CUTPA was meant to protect consumers from the type of unfair and deceptive practices engaged in by the plaintiff, i.e., the plaintiff's continued demand for payment of an extinguished debt.

The plaintiff moves to strike this counterclaim on the ground that the defendant has failed to allege any facts giving rise to a claim against it, nor has the defendant alleged an ascertainable loss.   The plaintiff argues that collecting on a debt, deemed valid by a creditor, is not an unfair practice.   It observes that “[t]he Defendant merely states that Defendant tendered a payment with an endorsement stating it constitutes settlement of the debt.   Whether or not this is a valid accord and satisfaction is a legal conclusion.”   The plaintiff further maintains that the defendant cannot claim that the plaintiff's actions were the proximate cause of her injury, or that she sustained a substantial injury or an ascertainable loss.

The defendant counters that there exists a valid accord and satisfaction between the parties, after which the plaintiff continued its collection efforts.   The defendant insists that these collections were likely to mislead the defendant, affected her decisions and/or conduct and would have a chilling effect on commerce within Connecticut.   She concludes that such actions constitute a CUTPA violation.   In its reply memorandum, the plaintiff reiterates that the plaintiff's second counterclaim is not cognizable under CUTPA because the underlying accord and satisfaction claim is not valid.

The Connecticut Unfair Trade Practices Act, General Statutes § 42–110 et seq., governs unfair trade practices in this state.   Section § 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.”   In addition, § 42–110g(a) provides that “[a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of ․ a method, act or practice prohibited by section 42–110b ․ may bring an action ․ to recover actual damages.”   The defendant's second counterclaim asserts a CUTPA violation based upon an alleged accord and satisfaction that extinguished the defendant's debt.  “An accord is a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor's existing duty.   Upon acceptance of the offer of accord, the creditor's receipt of the promised payment discharges the underlying debt and bars any further claim relating thereto, if the contract is supported by consideration ․ Accord and satisfaction is a method of discharging a claim whereby the parties agree to give and accept something other than what is due in settlement of the claim and to perform the agreement ․ Indeed a validly executed accord and satisfaction precludes a party from pursuing any action involving the original, underlying claim.”  (Internal quotation marks omitted.)  Association Resources, Inc. v. Wall, 298 Conn. 145, 187, 2 A.3d 873 (2010).

Further, when pleading a claim under CUTPA, a party must establish that it has “suffered an ascertainable loss due to a CUTPA violation.”  (Internal quotation marks omitted.)  Artie's Auto Body, Inc. v. Hartford Fire Ins. Co., 287 Conn. 208, 218, 947 A.2d 320 (2008).  “An ascertainable loss is a loss that is capable of being discovered, observed or established ․ The term loss necessarily encompasses a broader meaning than the term damage, and has been held synonymous with deprivation, detriment and injury ․ A loss is ascertainable if it is measurable even though the precise amount of the loss is not known.”  (Citations omitted;  internal quotation marks omitted.)  Id., 218.

Here, the defendant alleges that the defendant's continued attempts to collect upon the debt were unfair, unlawful, immoral, oppressive and caused substantial injury to the defendant because the debt had already been extinguished.   The foundation of the defendant's CUTPA counterclaim is that a valid accord and satisfaction extinguished the debt.   Her claims, however, amount to mere legal conclusions.   The defendant has failed to set forth the elements of, or facts to support, either an accord and satisfaction or an ascertainable loss.   Accordingly, the court grants the plaintiff's motion to strike the defendant's second counterclaim.

III

CONCLUSION

For the foregoing reasons, the plaintiff's motion to strike the defendant's first and second special defenses is denied based upon the grounds stated on the face of the plaintiff's motion, i.e., that the special defenses of excessive interest rates and prevention of arbitration are not contained in the Practice Book. The motion to strike the third special defense is also denied on the basis that the plaintiff failed to state any ground on the face of the motion, and the defendant objected thereto.   Finally, the plaintiff's motion to strike the defendant's second counterclaim, asserting a claim under the Connecticut Unfair Trade Practices Act, is granted on the ground that the defendant failed to allege the elements of, or supporting facts, to buttress its underlying claim of accord and satisfaction and ascertainable loss.

Wilson, J.

FOOTNOTES

FN1. At oral argument, the defendant conceded that the first count of the counterclaim, alleging a claim under the Fair Collection Debt Practices Act and the third count of the counterclaim, alleging a claim of extortion, were inapplicable.   Accordingly, the only count of the counterclaim at issue is count two, which alleges a violation of the Connecticut Unfair Trade Practices Act..  FN1. At oral argument, the defendant conceded that the first count of the counterclaim, alleging a claim under the Fair Collection Debt Practices Act and the third count of the counterclaim, alleging a claim of extortion, were inapplicable.   Accordingly, the only count of the counterclaim at issue is count two, which alleges a violation of the Connecticut Unfair Trade Practices Act.

FN2. The special defenses listed in Practice Book § 10–50 are “accord and satisfaction, arbitration and award, coverture, duress, fraud, illegality not apparent on the face of the pleadings, infancy, that the defendant was non compos mentis, payment ․ release, the statute of limitations and res judicata. .”.  FN2. The special defenses listed in Practice Book § 10–50 are “accord and satisfaction, arbitration and award, coverture, duress, fraud, illegality not apparent on the face of the pleadings, infancy, that the defendant was non compos mentis, payment ․ release, the statute of limitations and res judicata. .”

FN3. The court could also deny the plaintiff's motion to strike the first and second special defenses on the alternate basis that the plaintiff raises the issues solely by way of conclusory assertions without the benefit of any supporting legal authority.   The Supreme Court has emphasized that “[w]e are not obligated to consider issues that are not adequately briefed ․ When an issue is merely mentioned, but not briefed beyond a bare assertion of the claim, it is deemed to have been waived ․ In addition, mere conclusory assertions regarding a claim, with no mention of relevant authority ․ will not suffice.”  (Internal quotation marks omitted.)  Connecticut Coalition Against Millstone v. Connecticut Siting Council, 286 Conn. 57, 87, 942 A.2d 345 (2008)..  FN3. The court could also deny the plaintiff's motion to strike the first and second special defenses on the alternate basis that the plaintiff raises the issues solely by way of conclusory assertions without the benefit of any supporting legal authority.   The Supreme Court has emphasized that “[w]e are not obligated to consider issues that are not adequately briefed ․ When an issue is merely mentioned, but not briefed beyond a bare assertion of the claim, it is deemed to have been waived ․ In addition, mere conclusory assertions regarding a claim, with no mention of relevant authority ․ will not suffice.”  (Internal quotation marks omitted.)  Connecticut Coalition Against Millstone v. Connecticut Siting Council, 286 Conn. 57, 87, 942 A.2d 345 (2008).

Wilson, Robin L., J.