LLC v. Pro Search, Inc. et al. (2013)

MEMORANDUM OF DECISION ON PLAINTIFFS' MOTION TO STRIKE DATED MAY 10, 2013 (# 153.00)

This court is required to issue a written Memorandum of Decision on this Motion to Strike since “more than one ground of decision is set up therein.”   P.B. § 10–43.   The parties did not appear at the assigned Law Arguable short calendar.   Instead they marked the motion, Take Papers.   This deprived this court of the opportunity to have the parties attempt to resolve the matter by amending the wording of the pleadings involved.   On many occasions, too numerous to record, a court's Memorandum of Decision on a Motion to Strike and the hours of research and drafting are for naught, because the party “whose pleading has been stricken” repleads.  P.B. § 10–44.

The plaintiffs first seek to strike the defendants' single Special Defense.   “No facts may be proved under either a general or special denial except such as show that the plaintiff's statements of fact are untrue.   Facts which are consistent with such statements but show, notwithstanding, that the plaintiff has no cause of action, must be specially alleged.”  P.B. § 10–50.  “No facts may be proved under either a general or special denial except such as show that the plaintiff's statements of fact are untrue.   Facts which are consistent with such statements but show, notwithstanding, that the plaintiff has no cause of action, must be specially alleged.”  Ed Lally and Associates, Inc. v. DS NBC, Inc., 145 Conn.App. 718, 729 (2013).  “The fundamental purpose of a special defense, like other pleadings, is to apprise the court and opposing counsel of the issues to be tried, so that basic issues are not concealed until the trial is underway.”  Bennett v. Automobile Insurance Co. of Hartford, 230 Conn. 795, 802 (1994).

Most special defenses fail on the basis of the procedural ground that insufficient facts are contained in the special defense.  “Each pleading shall contain a plain and concise statement of the material facts on which the pleader relies, but not of the evidence by which they are to be proved ․” P.B. § 10–1;  East Greyrock, LLC et al. v. OBC Associates, Inc. et al., Superior Court, judicial district of Stamford–Norwalk, Complex Litigation Docket Number X08–CV04–4002173 S (June 6, 2008, Jennings, J.) [45 Conn. L. Rptr. 753].

The second most common reason for a special defense to fail is its legal sufficiency.  “Whenever any party wishes to contest ․ (5) the legal sufficiency of any answer to any complaint, counterclaim or cross complaint, or any part of that answer including any special defense contained therein, that party may do so by filing a motion to strike the contested pleading or part thereof.”  P.B. 10–39(a);  Ameriquest Mortgage Company v. Lax, 113 Conn.App. 646, 649–50 (2009);  Bender v. Bender, 292 Conn. 696, 722, fn. 23 (2009).

The plaintiffs also seek to strike the defendants' one-count Counterclaim.   “Our rules of practice and case law make clear that, although counterclaims arise only in response to an action initiated by the other party, they are essentially independent actions brought by the defendant against the plaintiff, which courts entertain concurrently simply in the interest of judicial economy.”  Chief Information Officer v. Computers Plus Center, Inc., 310 Conn. 60, 94 (2013);  Home Oil Co. v. Todd, 195 Conn. 333, 341 (1985).   P.B. §§ 10–10, 10–54, 10–55.   The counter claim must arise “out of the transaction or one of the transactions which is the subject of the plaintiff's complaint.”  P.B. § 10–10.

In ruling on any motion to strike the court has the obligation to take the facts as alleged and to construe the defenses in the manner most favorable to sustaining their legal sufficiency.  Connecticut National Bank v. Douglas, 221 Conn. 530, 536 (1992);  Mingachos v. CBS, Inc., 196 Conn. 91, 108–09 (1985).

The operative complaint is the Amended Complaint dated July 24, 2007 (# 111.10).   Two of the plaintiffs are a Connecticut lawyer and his LLC law firm.   The third plaintiff is Pro Search of Connecticut, LLC. There are two defendants;  a corporation and the individual defendant, who is the sole shareholder and president of the corporation.   The Amended Complaint is in eleven counts;  breach of contract, breach of fiduciary duty, misrepresentation or fraud, misinterpretation or fraud, tortious interference with business expectancies, statutory theft, CUTPA, defamation, unjust enrichment, accounting, and conversion.   The lawsuit has been pending for over six years.   It was returnable March 6, 2007.   An interim appeal only delayed this case for 15 months.   Of the 7,235 civil cases pending in the judicial district at Stamford/Norwalk, only 92 civil cases are older.   To the operative complaint, the defendants have filed an Amended Answer dated November 2012 with one Special Defense and a one-count Counterclaim (# 149.00).   This Motion to Strike is addressed to three portions of the November 21, 2012 Answer:  the Special Defense, the one-count Counterclaim, and Prayer for Relief on the one-count Counterclaim (# 149.00).

The Special Defense contains the label of “Unclean Hands.”   This single Special Defense outlines its factual allegations in four numbered paragraphs.   The Special Defense essentially alleges wrongdoing by the individual plaintiff, a licensed Connecticut attorney.   It is alleged that he acted as attorney for both parties in a transaction.   Unclean hands is an equitable defense.   Emigrant Mortgage Co. v. D'Agostino, 94 Conn.App. 293, 804 (2006).   It is applicable to the plaintiff's equitable causes of action, of which there are a number.  Miller v. McNamara, 135 Conn. 489, 495 (1949);  Gagne v. Vaccaro, 255 Conn. 390, 409 (2001).  “The doctrine of unclean hands expresses the principle that where a party seeks equitable relief, he must show that his conduct has been fair, equitable and honest as to the particular controversy issue ․ The party seeking to invoke the clean hands doctrine to bar equitable relief must show that his opponent engaged in wilful misconduct with regard to the matter in litigation ․” Curtis v. Curtis, 134 Conn.App. 833, 846 (2012).   The “application of the doctrine of unclean hands rests within the sound discretion of the trial court.”  Thompson v. Orcutt, 257 Conn. 301, 308 (2001);  Bruno v. Bruno, 146 Conn.App. 214, 225 (2013).   Unclean hands is raised by a special defense.  Emigrant Mortgage Co. v. D'Agostino, supra, 94 Conn.App. 804.

The court finds that the defendants' Special Defense raises the issue that the plaintiff attorney engaged in misconduct.   The defendants have supported that claim of unclean hands with sufficient facts.   The Motion to Strike the November 21, 2012 Special Defense is denied.

The one-count Counterclaim dated November 21, 2012 is in two paragraphs.   It alleges that as part of their business relationship the defendant loaned the plaintiff $10,000.   The counterclaim does not identify which of the two defendants made the loan.   The counterclaim does not identify which of the three plaintiffs received the loan.   The counterclaim seeks money damages for the plaintiff's failure to repay that loan.   The defendant's lawsuit on the $10,000 loan arises out of the parties' same business relationship as alleged in the Amended Complaint (# 110.10).   The plaintiffs seek to strike the Counterclaim because it alleges that the note was backdated.   A Motion to Strike must construe the defendants' Counterclaim in a manner most favorable to sustaining its legal sufficiency.   Backdating may affect the validity of the note at trial but that claim does not prevent the defendant from suing on the $10,000 note.

The plaintiff also claims that the $10,000 note cannot be a valid counterclaim or set off to an action in tort, citing Gen.Stat. § 52–141.   The underlying lawsuit contains actions at law, actions on contract, tortious claims, and equitable claims.   The $10,000 Counterclaim does not violate Gen.Stat. § 52–141.   This statutory prohibition relates only to a set off.   The defendants have not plead a set off.   Grieco v. Dalipovski, Superior Court, judicial district of New Britain at New Britain, Docket Number CV 00–0502295 S (May 10, 2002, Berger, J.) [32 Conn. L. Rptr. 131].   The Motion to Strike the one-count Counterclaim must be denied.

The plaintiffs move to strike all the Prayers for Relief;  “1. Money damages, 2. Common Law Punitive damages, 3. Interest, 4. Attorneys fees, 5. Any other relief as is law or equity may appertain.”   The plaintiffs fail to specify the reason or reasons for striking all five of these five Prayers for Relief other than stating that if the Motion to Strike the Counterclaim is granted, the Prayers for Relief must be granted.  Stuart v. Freiberg, 102 Conn. 857, 861 (2007);  Barasso v. Rear Still Hill Road, LLC, 64 Conn.App. 9, 13–14 (2001).   The failure to specify the reason or reasons for a motion to strike is a sufficient reason to deny this Motion to Strike as to the Prayers for Relief.

The Counterclaim is a suit on a note and therefore the Prayer for Relief claiming money damages is proper.  Investment Associates v. Summit Associates, Inc., 309 Conn. 840, 844 (2013).   The court cannot fathom any reason for seeking “Common Law Punitive damages” but leaves that to further pleadings.  Berry v. Loiseau, 223 Conn. 786, 823–27 (1992).

Interest can be awarded in the court's discretion.  Gen.Stat. § 37–3a;  DiLieto v. County Obstetrics & Gynecology Group, P.C., 310 Conn. 38, 43–44 (2013).

The court does not have the promissory note before it.   The note may provide that attorney fees may be awarded.   Otherwise the American rule would bar the claim for attorney fees.   There is no statutory authority to award attorney fees in a suit on a promissory note.  Aaron Manor, Inc. v. Irving, 307 Conn. 608, 616–17 (2013).

Prayer for Relief 5 states, “Any other relief as in law or equity may pertain.”   The Motion to Strike does not specifically challenge this fifth Prayer for Relief.   A suit on a note is not an equitable claim.  T.D. Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 322, 327, 331 (2013).   It appears that the portion of the Prayer for Relief 5. claiming equitable relief may not be appropriate.   The other Prayer for Relief “as in law” could be authority for the award of court costs, either taxable costs or non-taxable costs.   The court will not strike a portion of a pleading.   Sheehy v. Big Y Foods, Inc., Superior Court, judicial district of Waterbury at Waterbury, Complex Litigation Docket Number X06–CV 12–6014260 S (October 31, 2012, Agati, J.) [54 Conn. L. Rptr. 887].

The court therefore denies the Motion to Strike as to all of the Prayers for Relief without prejudice.

The defendants should be able to replead more carefully their Prayer for Relief without the need for further court orders.   This last sentence is not a court order that the defendants are required to replead.   It is merely an admonishment for the parties to confer on the status of the pleadings in order to avoid further judicial intervention on this issue.

The plaintiffs may file a new Motion to Strike addressed to the Prayers for Relief.  State v. Smith, 289 Conn. 598, 612 (2008).

The court enters the following orders on the Plaintiffs' May 10, 2013 Motion to Strike (# 153.00):

1. Special Defense—Motion to Strike is denied

2. Counterclaim—Motion to Strike is denied

3. Prayers for Relief—Motion to Strike is denied without prejudice.

BY THE COURT

Hon. Kevin Tierney

Judge Trial Referee

Tierney, Kevin, J.T.R.