LLC v. Putnam Savings Bank (2013)

MEMORANDUM (Defendants' Motion # 109.00 to Strike Counts One through Six)

This action arises out of the legal representation of the plaintiffs, Connecticut Home Properties, LLC, and Valerie Law, by the defendant, Attorney Thomas A. Borner, a member of the law firm, Borner, Aleman & Davis, LLC. On August 28, 2012, the plaintiffs filed a twelve-count complaint against Putnam Savings Bank, Thomas A. Borner, Borner, Aleman & Davis, LLC and Windham North Properties, LLC. Only counts one through six against Thomas Borner and Borner, Aleman & Davis, LLC, (collectively “the defendants”) are at issue in the present motion.

In counts one through five, the plaintiffs generally allege that the defendants failed to adequately represent their interests after drafting a business termination contract between the plaintiffs and other parties.   Specifically, the contract stated that in exchange for relinquishing their interests in various real estate holdings, the plaintiffs were to receive as consideration the ownership to certain stone products, processed or unprocessed, located on those properties.   Despite the grant of such rights, the defendants neglected to file deeds of conveyance upon the land records so that when the properties were subsequently sold, the plaintiffs' interests were unsecured.   In count six, the plaintiffs allege that the failure to adequately represent their interests was a violation of the Connecticut Unfair Trade Practice Act, General Statutes § 42–110a et seq.  (“CUTPA”).

On December 24, 2012, the defendants moved to strike the breach of contract claims contained within counts one through five and the CUTPA cause of action in count six.   On January 11, 2013, the plaintiffs filed their objection along with a memorandum of law in support.   On February 7, 2013, the defendants filed their reply.   The court heard oral argument on March 11, 2013.

DISCUSSION

“The purpose of a motion to strike is to contest ․ the legal sufficiency of the allegations of any complaint ․ 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).  “[I]t 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.”  (Internal quotation marks omitted.)  Coe v. Board of Education, 301 Conn. 112, 116–17, 19 A.3d 640 (2011).   Nevertheless, “[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.)  Bridgeport Harbour Place I, LLC v. Ganim, 303 Conn. 205, 213, 32 A.3d 296 (2011).

I

COUNTS ONE THROUGH FIVE

The defendants state that “in addition to alleging negligence in [c]ounts [o]ne through [f]ive, plaintiffs also allege breach of contract claims in each of those counts.   The defendants move to strike those breach of contract allegations.”  (Def.'s Memo., p. 3–4.)   The defendants argue that a tort claim cloaked in terms of contractual language must be stricken because it is legally insufficient.   In response, the plaintiffs argue that counts one through five are not tort claims because they allege that the defendants breached an agreement to obtain a specific result—namely, to effect the transfer of certain stone products pursuant to a business termination agreement that the defendants drafted.

As a threshold matter, the court must address the propriety of the defendants' request to strike only portions of the complaint rather than entire counts or specific individual paragraphs.  “[A]lthough there is a split of authority, most trial courts follow the rule that a single paragraph of a pleading is subject to a motion to strike only when it attempts to set forth all of the essential allegations of a cause of action or defense ․ Arguably under the present rules, a motion to strike may properly lie with respect to an individual paragraph in a count ․ However, the weight of authority in the Superior Court is that the motion does not lie, except possibly where the subject paragraph attempts to state a cause of action ․ [O]nly an entire count ․ can be subject to a motion to strike, unless the individual paragraph embodies an entire cause of action or defense.”  (Internal quotation marks omitted.)   MacLean v. Perry, Superior Court, judicial district of New London, Docket No. CV 11 6009597 (February 16, 2012, Martin, J.) (53 Conn. L. Rptr. 497, 498).   A cause of action is defined as “that single group of facts which is claimed to have brought about an unlawful injury to the plaintiff and which entitles the plaintiff to relief.”  (Internal quotation marks omitted.)   Wagner v. Clark Equipment Co., 259 Conn. 114, 129, 788 A.2d 83 (2002).

In the present case, the court is left to speculate as to which specific portions of the complaint the defendants wish to strike.   The court has not been directed to any individual paragraphs or phrases that embody an entire cause of action.   A motion to strike is an improper vehicle to untangle allegedly tangled claims.   Consequently, the court denies the motion to strike only those portions of counts one through five that allegedly sound in breach of contract.¹

II

COUNT SIX

The defendants argue that count six is legally insufficient because the allegations are not directed to the entrepreneurial aspects of the practice of law and, therefore, do not support a CUTPA cause of action.   In response, the plaintiffs maintain that “[a]ttorney Borner had a monetary interest in representing Andrew Scott [ (a non-party) ] in multiple mortgage transactions upon the subject properties, which transactions involved millions of dollars, but also had a monetary interest in closing at least one of those mortgage loans with Putnam Bank, of which [a]ttorney Borner was the CEO. The financial benefit to the defendants in these transactions, to the detriment of the [p]laintiff's interests, is the basis of the CUTPA claim.”  (Pl.'s Memo., p. 5.)

CUTPA provides, in relevant part, 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.”  General Statutes § 42–110b(a).  “[T]o prevail on a CUTPA claim, the [plaintiff] must prove that (1) the defendant engaged in unfair or deceptive acts or practices in the conduct of any trade or commerce ․ and (2) each class member claiming entitlement to relief under CUTPA has suffered an ascertainable loss of money or property as a result of the defendant's acts or practices.”  (Citation omitted.)  Neighborhood Builders, Inc. v. Madison, 294 Conn. 651, 657, 986 A.2d 278 (2010).

“In general, CUTPA applies to attorney conduct, but only as to the entrepreneurial aspects of legal practice.”  (Internal quotation marks omitted.)  Kosiorek v. Smigelski, 138 Conn.App. 695, 712, 54 A.3d 564 (2012), cert. denied, 308 Conn. 901, 60 A.3d 287 (2013).  “The entrepreneurial exception is just that, a specific exception from CUTPA immunity for a well-defined set of activities—advertising and bill collection, for example.   See Haynes v. Yale–New Haven Hospital, 243 Conn. 17, 34–38, 699 A.2d 964 (1997) (reasoning that practice of law and medicine may give rise to CUTPA claims only for entrepreneurial aspects, such as solicitation of business and billing, and not for claims involving issues of competence and strategy).   It is not a catch-all provision intended to subject any arguably improper attorney conduct to CUTPA liability.   Therefore, the mere fact that the actions of the attorney and the law firm might have deviated from the standards of their profession does not necessarily make the actions entrepreneurial in nature.”  (Internal quotation marks omitted.)  Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 782, 802 A.2d 44 (2002) (affirming the granting of a motion to strike a CUTPA claim against an attorney).

“Our CUTPA cases illustrate that the most significant question in considering a CUTPA claim against an attorney is whether the allegedly improper conduct is part of the attorney's professional representation of a client or is part of the entrepreneurial aspect of practicing law.”  Id., 781.

“Many decisions made by attorneys eventually involve personal profit as a factor, but are not considered part of the entrepreneurial aspect of practicing law ․ Using an attorney's financial considerations as a screening mechanism for separating professional actions from entrepreneurial ones would dissolve the distinction between the two, subjecting attorneys to CUTPA claims for any decision in which profit conceivably could have been a factor.   Accordingly, we reject such an interpretation.”  Id., 783.  “By shielding attorneys from CUTPA liability for professional conduct, we do not intend to protect intentional malpractice, just as we never have intended to protect negligent malpractice.   Rather, protecting professional conduct from CUTPA liability ensures that no attorney is discouraged from intentional and aggressive actions, believed to be in the interest of a client, by fear of being held liable under CUTPA in the event that the action is later deemed to have been an intentional deviation from the standards of professional conduct.”  Id., 784.

In the present case, the allegation that the defendants received profits from various real estate transactions, despite their failure to secure the plaintiffs' interests to stone on those properties, is not a sufficient basis for a CUTPA claim.   Specifically, the plaintiffs allege that the defendants were hired to, but “neglected to file deeds of conveyance [regarding the stone on these properties] from the various ․ holding companies ․ to the [plaintiffs] ․” (Id., Count One ¶ 15.)   Furthermore, it is alleged that “the suppression of the [plaintiffs'] ․ rights in and to the various parcels of property ․ was in furtherance of the competing interests of the defendant [s] ․ in obtaining fees for performing mortgage closings ․ [and] in furtherance of the competing interests of ․ [a]ttorney Borner, acting as the [c]hairman and CEO of ․ Putnam Savings Bank ․” (Complaint, Count Six ¶¶ 31, 32.)   At base, these allegations implicate the defendants' competence in their professional representation of the plaintiffs.   As alleged, the factual predicate for the suppression of the plaintiffs' rights flows from the failure to file the deeds of conveyance.   The allegation that the defendants profited, despite the improper suppression of the plaintiffs' rights to the stone, does not change the fact that this alleged conflict of interest relates to the defendants' professional representation of the plaintiffs and is not an entrepreneurial aspect of practicing law, such as billing or solicitation.

Consequently, the motion to strike count six is granted.

CONCLUSION

For the foregoing reasons, the defendants' motion to strike counts one through five is denied and the motion to strike count six is granted.

THE COURT

CALMAR, J.

FOOTNOTES

FN1. The defendants rely on Pelletier v. Galske, 105 Conn.App. 77, 936 A.2d 689 (2007), cert. denied, 285 Conn. 921, 943 A.2d 1100 (2008), for the proposition that a court may “pierce the pleading veil” in order to ensure that a tort claim is not converted into a contract claim “merely by talismanically invoking contract language ․” Id., 81.   However, unlike Galske, the present case does not yet involve a statute of limitations issue.   See id., 80.   Should a statute of limitations special defense be raised, the court may then consider “piercing the pleading veil” in a future motion for summary judgment..  FN1. The defendants rely on Pelletier v. Galske, 105 Conn.App. 77, 936 A.2d 689 (2007), cert. denied, 285 Conn. 921, 943 A.2d 1100 (2008), for the proposition that a court may “pierce the pleading veil” in order to ensure that a tort claim is not converted into a contract claim “merely by talismanically invoking contract language ․” Id., 81.   However, unlike Galske, the present case does not yet involve a statute of limitations issue.   See id., 80.   Should a statute of limitations special defense be raised, the court may then consider “piercing the pleading veil” in a future motion for summary judgment.

Calmar, Harry E., J.