Jeffrey Johnson v. XSE (2013)

MEMORANDUM OF DECISION ON MOTION TO STRIKE

The defendants, XSE Group, Inc. (“XSE”) and Gerald Crean III (“Crean”), have moved to strike Counts Three, Four, Five and Eight of the Revised Complaint of January 9, 2013.

Allegations of the Complaint

The Revised Complaint of January 9, 2013, contains fifteen counts.   Count One alleges the breach of an express contract which entitled the plaintiff to certain bonus payments.   The following seven counts advance various theories against one or both defendants based on the same alleged entitlement to bonus payments.

In Count Nine the plaintiff asserts a breach of an express contract by which he was to receive ten percent ownership of “XSE and affiliated entities.”   Counts Ten through Fifteen advance alternate theories against one or both defendants for the same relief.

Discussion of the Law and Ruling

The function of a motion to strike is to test the legal sufficiency of a pleading.  Practice Book § 10–39;  Ferryman v. Groton, 212 Conn. 138, 142, 561 A.2d 432 (1989);  Mingachos v. CBS, Inc., 196 Conn. 91, 108, 491 A.2d 368 (1985).   In deciding a motion to strike the trial court must consider as true the factual allegations, but not the legal conclusions set forth in the complaint.  Liljedahl Bros., Inc. v. Grigsby, 215 Conn. 345, 348, 576 A.2d 149 (1990);  Blancato v. Feldspar Corp., 203 Conn. 34, 36, 522 A.2d 1235 (1987).

The court should view the facts in a broad fashion, not strictly limited to the allegations, but also including the facts necessarily implied by and fairly provable under them.  Dennison v. Klotz, 12 Conn.App. 570, 577, 532 A.2d 1311 (1987).   In ruling on a motion to strike, the court must take as admitted all well-pled facts, and those necessarily implied thereby, and construe them in the manner most favorable to the pleader.  Norwich v. Silverberg, 200 Conn. 367, 370, 511 A.2d 336 (1986).

“It is incumbent on a Plaintiff to allege some recognizable cause of action” in the complaint and it is not the burden of the defendant to attempt to correct the deficiency.  Brill v. Ulrey, 159 Conn. 371, 374, 269 A.2d 262 (1970).   A motion to strike is an appropriate means of presenting to the court legal issues at the outset of litigation.  Gordon v. Bridgeport Housing Authority, 208 Conn. 161, 170, 544 A.2d 1185 (1988).  “Whenever a party wishes to contest ․ the legal sufficiency of any such complaint ․ or any count thereof, because of the absence of any necessary party ․ that party may do so by filing a motion to strike the contested pleadings or part thereof.”   George v. St. Ann's Church, 182 Conn. 322, 325, 438 A.2d 97 (1980).

Counts Three and Four of the Revised Complaint incorporate the allegations in paragraphs 1–7 of the First Count.   Those paragraphs allege that the plaintiff's employment with XSE began in 1991 and ended on February 13, 2012 and that as part of his employment the plaintiff “was entitled to certain bonus payments based upon a specific formula that had been agreed upon between plaintiff and defendants,” and that the defendants had acknowledged owing the bonuses but had failed to pay them.   Count Three alleges unjust enrichment in that the defendants have benefitted from the plaintiff's work but have failed to pay him bonuses.   Count Four alleges that the defendant, XSE, acting through the defendant, Crean, made a clear and unambiguous promise to the plaintiff concerning the bonus formula and that by “said promises” XSE reasonably expected to induce the plaintiff to continue working for it.

The defendants move to strike Count Three and Four on the grounds that they are, essentially, inconsistent with the allegation of the existence of a contract contained in Count One. Connecticut law generally permits a plaintiff “to advance alternative and even inconsistent theories of liability against one or more defendants in a single complaint.”  Dreier v. Upjohn Co., 196 Conn. 242, 245 (1985).   The motion to strike Counts Three and Four is denied.

Count Five alleges that XSE breached a contract implied in fact because “Plaintiff and XSE agreed, by the pattern of their conduct and payment of bonuses in the past, to pay Plaintiff a bonus ․ and the conduct and the acts of the plaintiff and the Defendant XSE show an Agreement to pay the Plaintiff said bonuses.”   Count Five ¶ 8.   The defendants argue that Count Five fails to state a cause of action because the custom of paying a bonus does not establish a contractual obligation to do so in the future.   See Christensen v. Bic Corporation, 18 Conn.App. 451, 455 (1989).   The plaintiff has cited no authority to counter the defendant's argument.   The motion to strike Count Five is granted.

Count Eight alleges that the defendants' failure to pay bonuses allegedly due to the plaintiff violated Connecticut General Statutes § 31–72.   That statute provides a cause of action to any employee where the employer fails to pay “wages” as defined in § 31–71.   Section 31–91(a)(3) defines “wages” as “compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation.”

The classification of a compensation provision as wages under § 31–71a(3) requires the satisfaction of 3 factors:  (1) the award of compensation must be non-discretionary, (2) the amount of the compensation must be non-discretionary, and (3) the amount of the bonus must be dependent on the employee's performance.

Ditto Inc. v. Braband, 856 F.Sup.2d 354, 371–72 (D.Conn.2012) (Citing Weems v. Citigroup, Inc., 289 Conn. 769 (2008), Ziotas v. Reardon Law Firm, P.C., 296 Conn. 579 (2010), and Association Resources, Inc. v. Wall, 298 Conn. 145 (2010)).   Emphasis added.

Although the plaintiff alleges that both the award and the amount of the bonuses at issue were non-discretionary, he further alleges:

Defendants have violated the statute by failing to pay the plaintiff [bonuses] in accordance with said non-discretionary formula which was based primarily on the performance and profitability of XSE Group.

Revised Complaint, Count Eight, ¶ 10.

Count Eight thus alleges a bonus “figure determined by success or lack of success of all members of the [Company], with no relation to any actual services performed by the plaintiff.”  Ziotas, supra, at 585.   As such it alleges a bonus that is not considered to be wages under § 31–72.   The motion to strike Count Eight is granted.

By the Court,

Aurigemma, J.

Aurigemma, Julia L., J.