Rebecca Merrill v. NRT (2013)

MEMORANDUM OF DECISION IN RE MOTION TO STRIKE # 122

The defendants, NRT New England, Inc. doing business as Coldwell Banker Residential Brokerage, NRT New England, LLC doing business as Coldwell Banker Residential Brokerage, Karen A. Godfrey, and V. Holly Hoyt move to strike the Fourth, Fifth, and Sixth counts of the revised complaint dated August 12, 2008.   The defendants claim that the Forth and Fifth counts fail to state a claim upon which relief can be granted, and that the Sixth count does not state a cause of action under the Unfair Trade Practices Act.

The plaintiff filed an objection to the motion to strike.   The matter was heard at short calendar on September 23, 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]f facts provable in the complaint would support a cause of action, the motion to strike must be denied.”  (Internal quotation marks omitted.)  American Progressive Life & Health Ins. Co. Of New York v. Better Benefits, LLC, 292 Conn. 111, 120, 971 A.2d 17 (2009).  “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.)  Fort Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 498.   The court must “construe the complaint in the manner most favorable to sustaining its legal sufficiency.”  (Internal quotation marks omitted.)  American Progressive Life & Health Ins. Co. of New York v. Better Benefits, LLC, supra, 292 Conn. 120.

I. Negligent Misrepresentation by Nondisclosure (Count Four)

“[Our Supreme Court] has long recognized liability for negligent misrepresentation ․ The governing principles [of negligent misrepresentation] are set forth in similar terms in § 552 of the Restatement (Second) of Torts (1977):  One who, in the course of his business, profession or employment ․ supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information ․ As a result, [the court has] held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth.”  (Citation omitted;  internal quotation marks omitted.)  Sturm v. Harb Development, LLC, 298 Conn. 124, 143–44, 2 A.3d 859 (2010).  “The tort of innocent misrepresentation is grounded in the theory that the defendant is chargeable with deceit when he makes an unqualified assertion of a fact that is susceptible of knowledge, and the assertion turns out to be untrue.”  (Internal quotation marks omitted.)   Bassetti v. East Haven Board of Education, Superior Court, judicial district of New Haven, Docket Nos. CV–410872, CV–410873, CV–410874 (June 19, 2001, Blue, J.) (30 Conn. L. Rptr. 69, 72).

“Traditionally, an action for negligent misrepresentation requires the plaintiff to establish (1) that the defendant made a misrepresentation of fact (2) that the defendant knew or should have known was false, and (3) that the plaintiff reasonably relied on the misrepresentation, and (4) suffered pecuniary harm as a result.”  Nazami v. Patrons Mutual Insurance Co., 280 Conn. 619, 626, 910 A.2d 209 (2006).  “It must be established that there was a false representation in order for a plaintiff to prevail on a negligent misrepresentation claim ․ A plaintiff also is required to show that he reasonably relied on the misrepresentation.”  (Citation omitted.)  Biro v. Matz, 132 Conn.App. 272, 284–85, 33 A.3d 742 (2011).

“Liability for negligent misrepresentation may be placed on an individual when there has been a failure to disclose known facts and, in addition thereto, a request or an occasion or a circumstance when imposes a duty to speak.”   (Internal quotation marks omitted.)  Johnnycake Mountain Associates v. Ochs, 104 Conn.App. 194, 206, 932 A.2d 472 (2007), cert. denied, 286 Conn. 906, 944 A.2d 978 (2008).   Thus, “[n]ondisclosure can form the basis of a negligent misrepresentation claim.”   Weingarden v. Milford Anesthesia Associates, P.C., Superior Court, judicial district of New Haven, Docket No. CV–11–6016353–S (May 30, 2013, Wilson, J.).

The court concludes that the plaintiff has sufficiently alleged the elements required for negligent misrepresentation by nondisclosure.   Especially, the plaintiff alleges (1) that the defendants made a misrepresentation of fact by failing to disclose material information and furnishing a title affidavit indicating that the property had no encroachment issues;  (2) that the defendants knew or should have known of the existence of the strip and the encroachments within it because the defendants received a letter from the previous landowner's son informing them that the property does not front or have access to Sky Top Drive and did not disclose it in a timely manner;  (3) That the plaintiff reasonably relied on the advertising, disclosure, and affidavit furnished to her by entering into a contract and closing on the purchase of the property, and (4) as a result, the plaintiff suffered damages after being informed that she could not erect a fence along the street line of Sky Top Drive.   Additionally, the plaintiff alleges that the defendants owed the plaintiff a duty of care with respect to the description and presentation of the property and that the defendants breached their duties by failing to disclose the existence of the strip and the encroachments used by Noyes.

II. Intentional Misrepresentation by Nondisclosure (Count Five)

“Intentional misrepresentation is synonymous with fraudulent misrepresentation.”  (Internal quotation marks omitted.)   Heller v. LaPorte & Associates, Superior Court, judicial district of Tolland at Rockville, Docket No. CV–02–0079784–S (November 10, 2003, Scholl, J.).  “The essential elements of a cause of action in [fraudulent misrepresentation] are:  (1) a false representation was made as a statement of fact;  (2) it was untrue and known to be untrue by the party making it;  (3) it was made to induce the other party to act upon it;  and (4) the other party did so act upon the false representation to his injury.”  (Internal quotation marks omitted.)   Centimark Corp. v. Village Manor Associates Ltd. Partnership, 113 Conn.App. 509, 522, 967 A.2d 550, cert. denied, 292 Conn. 907, 973 A.2d 103 (2009).   “Fraud involves deception practiced in order to induce another to act to her detriment, and which causes that detrimental action ․ Because specific acts must be pleaded, the mere allegation that a fraud has been perpetrated is insufficient.”  (Citation omitted;  internal quotation marks omitted.)   Chiulli v. Zola, 97 Conn.App. 699, 709, 905 A.2d 1236 (2006).  “In an action based on fraudulent non disclosure the plaintiff must prove not only the nondisclosure but this reliance on it.”  Creelman v. Rogowski, 152 Conn. 382, 385, 207 A.2d 272 (1965).

“Fraud by nondisclosure expands on the first three of [the] four elements [of fraud and] involves the failure to make a full and fair disclosure of known facts connected with a matter about which a party has assumed to speak ․ To constitute [fraud by non disclosure], there must be a failure to disclose known facts and, in addition thereto, a request or an occasion or a circumstance which imposes a duty to speak ․ The duty to disclose known facts is imposed on a party insofar as he voluntarily makes disclosure.   A party who assumes to speak must make a full and fair disclosure as to the matters about which he assumes to speak.”  (Citations omitted;  emphasis in original;  internal quotation marks omitted.)  Statewide Grievance Committee v. Egbarin, 61 Conn.App. 445, 454–55, 767 A.2d 732, cert.   Denied, 255 Conn. 949, 769 A.2d 64 (2001).   In other words, “[a] failure to disclose can be deceptive only if, in light of all the circumstances, there is a duty to disclose.”  (Internal quotation marks omitted.)  Olson v. Accessory Controls & Equipment Corp., 254 Conn. 145, 180, 757 A.2d 14 (2000).

The court concludes that the plaintiff has sufficiently alleged the required elements for intentional misrepresentation.   Specifically the plaintiff alleges in the complaint that (1) the defendant, Noyes, knowingly furnished a false affidavit and the other defendants allowed it to be furnished to the plaintiff;  (2) the defendants knew of the existence of the strip and its actual ownership but concealed their knowledge and did not disclose the information to the plaintiff in a timely manner;  and (3) the plaintiff has been damaged as a result of the defendants' concealment and knowing misrepresentation.   Although not expressly alleged, the court may infer the third of the four elements—misrepresentation to induce the other party to act upon it—based on the facts in the plaintiff's complaint.   See Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 252, 990 A.2d 206 (2010).   Additionally, the plaintiff alleges that the defendants breached their duty to the plaintiff by failing to disclose the known existence of the strip and the encroachments used by the defendant, Noyes.

III. Connecticut Unfair Trade Practices Act (Count Six)

The Connecticut Unfair Trade Practices Act (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 plaintiffs 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;  footnote omitted.)  Neighborhood Builders, Inc. v. Madison, 294 Conn. 651, 657, 986 A.2d 278 (2010).  “Moreover, a CUTPA violation may not be alleged for activities that are incidental to an entity's primary trade or commerce.”  (Internal quotation marks omitted.)  Landmark Investment Group, LLC v. Chung Family Partnership, LLC, 125 Conn.App. 678, 700, 10 A.3d 61 (2010), cert. denied, 300 Conn. 914, 13 A.3d 1100 (2011).

“It is well settled that in determining whether a practice violates CUTPA, [our Supreme Court has] 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 ․ All three criteria do not need to be satisfied to support a finding of unfairness ․ 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.”  (Internal quotation marks omitted.)  Harris v. Bradley Memorial Hospital & Health Center, Inc., 296 Conn. 315, 350–51, 994 A.2d 153 (2010).

A subset of unfair practices, recognized by our Supreme Court, is deceptive practices.  Daddona v. Liberty Mobile Home Sales, Inc., 209 Conn. 243, 254, 550 A.2d 1061 (1988) (“a violation of CUTPA may be established by showing either an actual deceptive practice ․ or a practice amounting to a violation of public policy” [citation omitted;  internal quotation marks omitted] ).   “[A]n act or practice is deceptive if three requirements are met.   First, there must be a representation, omission, or other practice likely to mislead consumers.   Second, the consumers must interpret the message reasonably under the circumstances.   Third, the misleading representation, omission, or practice must be material—that is, likely to affect consumer decisions or conduct.”   (Footnote omitted;  internal quotation marks omitted.)  Caldor, Inc. v. Heslin, 215 Conn. 590, 597, 577 A.2d 1009 (1990), cert. denied, 498 U.S. 1088, 111 S.Ct. 966, 112 L.Ed.2d 1053 (1991).

The plaintiff's sixth count for unfair trade practices against Godfrey Hoyt and Coldwell Banker alleges the same facts in count five, plus an additional allegation that the “acts complained of herein constitute unfair trade practices.”   This additional allegation is merely a conclusion of law that is unsupported by the facts.   See Santorso v. Bristol Hospital, 308 Conn. 338, 349, 63 A.3d 940 (2013).   Moreover, nowhere in the complaint does the plaintiff allege that the practice was unfair.   More particularly, the plaintiff does not allege that the practice was unlawful, offends public policy, immoral, unethical, oppressive, or unscrupulous.   Additionally, the plaintiff does not allege that the defendants' conduct was performed as part of their trade or business.   Therefore, the plaintiff has not sufficiently alleged the required elements for a CUTPA claim.

For the foregoing reasons, the motion to strike is denied as to Counts Four and Five, and is granted as to Count Six.

Vitale, J.

Vitale, Elpedio N., J.