New Haven Drywall v. LLC (2014)

Memorandum of Decision re motion to strike, No. 101

The defendant has filed a motion to strike all five counts of the complaint.   The defendant avers that the plaintiff has failed to plead sufficient facts to support claims of conversion, breach of contract, negligent misrepresentation, “unfair banking practice,” and violation of the Connecticut Unfair Trade Practices Act. For the reasons set forth below, the motion is granted.

FACTS

The plaintiff, New Haven Drywall, LLC, commenced this action by service of process on the defendant, Wells Fargo Home Mortgage, Inc., on May 21, 2013.   The plaintiff filed a five-count complaint against the defendant on June 5, 2013 alleging the following facts.   On November 10, 2011, the plaintiff entered into a contract with Azaela Keith to perform construction work on the property that Keith owned at 238 Clinton Avenue in New Haven, Connecticut, which had sustained damage.   The defendant is the holder of funds from the settlement of an insurance claim for the damage to the property, and is therefore obligated to pay any contractor hired by Keith to repair the damage.   The City of New Haven and the defendant approved the repairs in accordance with the contract between the plaintiff and Keith.   After completing the repairs, the plaintiff requested that the defendant release the insurance funds as payment for the work it performed.   The defendant refused to do so, claiming that it needed proof of an agreement from the property owner authorizing the release of the funds.   On April 15, 2013, the plaintiff provided the defendant with a signed, witnessed, and notarized agreement wherein the property owner authorized the release of the funds, but the defendant still refused to tender payment to the plaintiff.   As a result, the plaintiff has suffered financial harm and brings claims against the defendant for conversion, breach of contract, negligent misrepresentation, “unfair banking practice,” and violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110 et seq.

On July 18, 2013, the defendant filed a motion to strike all counts of the plaintiff's complaint on the ground that the plaintiff fails to allege sufficient facts to support any of the claims it raises.   The plaintiff filed an objection to the defendant's motion and accompanying memorandum of law on October 4, 2013.   The parties appeared in court for argument at short calendar on or about October 7, 2013.   Thereafter, the defendant filed a reply to the plaintiff's objection on October 16, 2013, to which the plaintiff filed a reply memorandum on October 25, 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).  “The role of the trial court in ruling on a motion to strike is to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [pleading party 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).  “In ruling on a motion to strike, the court is limited to the facts alleged in the complaint.”  (Internal quotation marks omitted.)  Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997).  “If facts provable in the complaint would support a cause of action, the motion to strike must be denied ․ 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.)  Santorso v. Bristol Hospital, 308 Conn. 338, 349, 63 A.3d 940 (2013).

“Practice Book § 10–41 requires that a motion to strike raising a claim of insufficiency ‘shall separately set forth each such claim of insufficiency and shall distinctly specify the reason or reasons for each such claimed insufficiency.’  “ Stuart v. Freiberg, 102 Conn.App. 857, 861, 927 A.2d 343 (2007).  “Simply stating that all of the counts ‘are legally insufficient’ and that they ‘fail to allege any facts that would indicate [that the] defendant is liable to [the] plaintiffs' cannot be considered [in] compliance with Practice Book § 10–41.”  Id., 862.  “Insofar as [a] motion to strike is directed [to] the entire complaint, it must ․ fail if any of the plaintiff's claims are legally sufficient.”  (Internal quotation marks omitted.)   Manka v. Allstate Ins. Co., Superior Court, judicial district of New Britain, Docket No. CV 11 6012325 (May 30, 2013, Wiese, J.).

The defendant moves to strike count one on the ground that the plaintiff does not plead sufficient facts to show that it has a legal right or possessory interest in the funds that the defendant holds, which is an essential element of a conversion claim.   The plaintiff counters that it alleges that the defendant is obligated to pay the plaintiff pursuant the terms of the plaintiff's contract with the property owner, and that it wrongfully converted the insurance funds for its own use.   As to count two, the defendant argues that the plaintiff's breach of contract claim fails because the complaint does not allege a contractual agreement between the parties.   The plaintiff contends, however, that the complaint alleges sufficient facts to support the finding of an implied contract.   As to the negligent misrepresentation claim, the defendant argues that the plaintiff fails to plead sufficient facts to show that the defendant made a false representation that it knew or should have known was false, and which caused the plaintiff to suffer damages.   The plaintiff counters that the defendant's request for proof of its agreement with the property owner and subsequent refusal to release the funds after the plaintiff provided such proof constitute sufficient evidence of a negligent misrepresentation.   As to count four, the defendant argues that plaintiff's claim of “unfair banking practice” is unsupported by an allegation that the defendant has violated any state or federal banking statutes or regulations.   The plaintiff does not object to the motion to strike count four in its objection or its reply brief.   Finally, the defendant moves to strike count five, violation of CUTPA, on the ground that the complaint does not allege sufficient facts to show that the defendant's actions were unfair or deceptive in the context of trade or commerce.   The plaintiff objects, arguing that the defendant's refusal to release the funds to the plaintiff, after implying that it would do so, constitutes sufficient evidence of an unfair and deceptive practice in violation of CUTPA.

In compliance with Practice Book § 10–41, the defendant's motion to strike separately sets forth its claims of insufficiency with regard to each count.   This memorandum will address each argument in the defendant's motion in turn.

I

Count One:  Conversion

“The tort of [c]onversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner's rights ․ Thus, [c]onversion is some unauthorized act which deprives another of his property permanently or for an indefinite time;  some unauthorized assumption and exercise of the powers of the owner to his harm.   The essence of the wrong is that the property rights of the plaintiff have been dealt with in a manner adverse to him, inconsistent with his right of dominion and to his harm ․ The word owner is one of flexible meaning, and it varies from an absolute proprietary interest to a mere possessory right ․ It is not a technical term and, thus, is not confined to a person who has the absolute right in a chattel, but also applies to a person who has possession and control thereof.”  (Citations omitted;  internal quotation marks omitted.)  Deming v. Nationwide Mutual Ins. Co., 279 Conn. 745, 770–71, 905 A.2d 623 (2006).

“Generally, [a] plaintiff must establish legal ownership or right to possession in the particular thing, the specifically identifiable moneys, that the defendant is alleged to have converted ․ [A]n action for conversion of funds may not be maintained to satisfy a mere obligation to pay money ․ It must be shown that the money claimed, or its equivalent, at all times belonged to the plaintiff and that the defendant converted it to his own use.”   (Citations omitted;  emphasis in original;  internal quotation marks omitted.)  Macomber v. Travelers Property and Casualty Corp., 261 Conn. 620, 650, 804 A.2d 180 (2002).  “Consistent with this rule, in our case law sustaining a cause of action wherein money was the subject of the conversion or theft, the plaintiffs in those cases at one time had possession of, or legal title to, the money.”  Deming v. Nationwide Mutual Ins. Co., supra, 279 Conn. 772.   Moreover, the Supreme Court has reasoned that “an action in tort is inappropriate where the basis of the suit is a contract, either express or implied.”  (Internal quotation marks omitted.)  Macomber v. Travelers Property and Casualty Corp., supra, 261 Conn. 650.

In the present case, the plaintiff brings an action for conversion based on the defendant's failure to release insurance funds that the plaintiff claims were designated to serve as payment for the repairs it performed on the owner's property.   The defendant argues that the complaint lacks sufficient facts to support an essential element of the conversion claim, that the plaintiff has a legal right to or possessory interest in the funds.   The plaintiff alleges in the complaint that the defendant “was at all times obligated to pay the plaintiff for the work it performed ․ in connection with the contract entered into by the property owner with the plaintiff.”   The defendant argues that, even assuming that the plaintiff has pled sufficient facts to show that it is entitled to payment for the services it rendered, it has not demonstrated that the specific funds held by the defendant at all times “belonged” to it or that the defendant converted them to its own use.

The Supreme Court has ruled that a claim for conversion must fail where a plaintiff cannot point to specific, identifiable money and allege that it has legal title to or possession of that money.   See Deming v. Nationwide Mutual Ins. Co, supra, 279 Conn. 772, n.22;  see also Macomber v. Travelers Property and Casualty Corp., supra, 261 Conn. 651.   Here, the plaintiff has not alleged, nor does it contend in its objection, that it ever possessed or owned legal title to the funds held by the defendant.   At best, the plaintiff simply alleges that the defendant is obligated to pay the plaintiff for services rendered, which the Supreme Court has ruled is an insufficient ground for a conversion claim.  Deming v. Nationwide Mutual Ins. Co., supra, 279 Conn. 773.   Moreover, the plaintiff's action for conversion is a tort claim, which the Supreme Court has stated is inappropriate where the basis of the suit is a contract, either express or implied, as is the case here.  Id., 772.

Based on the foregoing, this court concludes that the plaintiff fails to provide sufficient facts to support that it has a legal right to or possession of the funds held by the defendant, which is an essential element of a conversion claim.   Therefore, the motion to strike count one is granted.

II

Count Two:  Breach of Contract

“The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages.”  (Internal quotation marks omitted.)  Sullivan v. Thorndike, 104 Conn.App. 297, 303, 934 A.2d 827 (2007).  “[T]he existence and terms of a contract are to be determined from the intent of the parties ․ The parties' intentions manifested by their acts and words are essential to the court's determination of whether a contract was entered into and what its terms were.”  (Internal quotation marks omitted.)  Auto Glass Express v. Hanover Ins. Co., 293 Conn. 218, 225, 975 A.2d 1266 (2009).  “In order for an enforceable contract to exist, the court must find that the parties' minds had truly met ․ If there has been a misunderstanding between the parties, or a misapprehension by one or both so that their minds have never met, no contract has been entered into by them and the court will not make for them a contract which they themselves did not make.”  (Internal quotation marks omitted.)   Milford Bank v. Phoenix Contracting Group, Inc., 143 Conn.App. 519, 527–28, 72 A.3d 55 (2013).

“Whether [a] contract is styled express or implied involves no difference in legal effect, but lies merely in the mode of manifesting assent ․ A true implied [in fact] contract can only exist [however] where there is no express one.   It is one which is inferred from the conduct of the parties though not expressed in words.   Such a contract arises where a plaintiff, without being requested to do so, renders services under circumstances indicating that he expects to be paid therefor, and the defendant, knowing such circumstances, avails himself of the benefit of those services ․ Although both express contracts and contracts implied in fact depend on actual agreement ․ [i]t is not fatal to a finding of an implied contract that there were no express manifestations of mutual assent if the parties, by their conduct, recognized the existence of contractual obligations.”  (Citations omitted;  internal quotation marks omitted.)  Janusauskas v. Fichman, 264 Conn. 796, 804–05, 826 A.2d 1066 (2003).

In the present case, the plaintiff brings a breach of contract action based on the defendant's failure to release the insurance funds as payment for the repairs performed by the plaintiff.   The plaintiff alleges that the defendant's conduct “constitutes a breach of agreement the plaintiff had with the bank wherein the defendant agreed to pay the plaintiff for work performed in accordance with his contract with the property owner.”   The defendant moves to strike the claim on the ground that the plaintiff does not allege that it entered into an agreement with the defendant but with the property owner.   The plaintiff counters that, although it does not allege that the parties executed a written contract establishing the defendant's obligation, it alleges that it performed the repairs in reliance that it would be paid with the funds held by the defendant, which established an implied contract between the parties.

As the defendant notes in its reply, however, an implied contract depends upon actual agreement between the parties, which must be evidenced by express manifestations of mutual assent or by conduct implying such assent.   The defendant argues that the complaint is devoid of allegations from which its assent to tender payment to the plaintiff can be inferred.   In response, the plaintiff counters that its allegations that the defendant approved the repairs and requested proof of the plaintiff's agreement with the property owner authorizing release of the funds constitute sufficient evidence for the finding of an implied contract.   This argument is unpersuasive, however, because the complaint contains no allegations that the defendant, either by express assent or by its conduct, recognized that these acts constituted a contractual obligation to tender payment for the repairs.   In fact, as the defendant points out, the complaint does not allege that the defendant communicated with the plaintiff in any fashion prior to its work on the property.   There is therefore no support in the complaint for the finding of an implied contract between the parties wherein the defendant agreed to release the funds as payment for the plaintiff's work on the property.

The lack of evidence of an express or implied contractual agreement between the parties persuades this court to grant the motion to strike as to count two.

III

Count Three:  Negligent Misrepresentation

“The governing principles [of negligent misrepresentation] are set forth ․ 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, [w]e have 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.”   (Citations omitted;  internal quotation marks omitted.)  Sturm v. Harb Development, LLC, 298 Conn. 124, 143–44, 2 A.3d 859 (2010).  “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.”  (Internal quotation marks omitted.)  Coppola Construction Co. v. Hoffman Enterprises Ltd. Partnership, 134 Conn.App. 203, 208, 38 A.3d 215 (2012).

In the present case, the plaintiff attempts to allege a claim of negligent misrepresentation based on the defendant's representations that it would release the insurance funds as payment for the repairs the plaintiff performed.   The plaintiff alleges in the complaint that the defendant's conduct constitutes a negligent misrepresentation because the plaintiff relied on these representations to its detriment.   The defendant argues that the plaintiff's reliance is only one element of a negligent misrepresentation claim, and that count three must be stricken because there are insufficient facts to support the other three elements:  (1) that the defendant made a false representation to the plaintiff (2) that it knew or should have known was false, and (3) that the plaintiff suffered damages.   In its objection, the plaintiff argues that its allegations that the defendant requested proof of its agreement with the property owner and that the defendant refused to release the funds after it provided such proof constitute sufficient evidence of a false representation.   The defendant counters that, even assuming that these allegations provide sufficient support for the first element of negligent misrepresentation, the plaintiff does not allege that the defendant knew that the representation was false at the time it was made or that the plaintiff has suffered any damages from relying on it.   The plaintiff does not address either of these arguments in its objection or in its reply brief.

Viewing the evidence in the light most favorable to the plaintiff, the allegations in the complaint support, at most, only two of the four required elements for a claim of negligent misrepresentation.   Hence, the motion to strike count three is granted on the basis of legal insufficiency.

IV

Count Four:  “Unfair Banking Practice”

As discussed above, “[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.)  Santorso v. Bristol Hospital, supra, 308 Conn. 349.  “When any claim made in a complaint ․ is grounded on a statute, the statute shall be specifically identified by its number ․” Practice Book § 10–3.

In the present case, the plaintiff alleges in count four that, “[t]he actions and conduct by the defendant bank constitutes an unfair banking practice for which the plaintiff seeks damages.”   The defendant moves to strike this count on the ground that the plaintiff fails to allege that it violated any state or federal banking statutes or regulations, and the complaint is devoid of any further facts supporting the alleged “unfair banking practice” claim.   Because the plaintiff does not identify any statute by name or by number, the complaint does not comply with the requirements for alleging a statutory violation provided in Practice Book § 10–3.   Additionally, the court is unaware of any common-law claim of “unfair banking practice.”   Therefore, even in the light most favorable to the plaintiff, the allegation constitutes a mere conclusion of law that is unsupported by the facts alleged.

It is also noted that the plaintiff does not address the defendant's motion to strike count four in its objection or in its reply brief.   With respect to unopposed motions to strike, “Practice Book § 155, now § 10–42, previously provided that a party who failed to file ․ a memorandum [in opposition to a motion to strike] ‘shall be deemed by the court to have consented to the granting of the motion.’  ․ That language was subsequently removed from Practice Book § 10–42.”  (Citations omitted;  emphasis added.)  Doe v. Board of Education, 76 Conn.App. 296, 298 n.5, 819 A.2d 289 (2003).   Since then, “a majority of decisions have concluded that the failure to file a timely opposing memorandum will not necessarily be fatal and that the court, in its discretion, may address the merits of the motion to strike.”  (Internal quotation marks omitted.).   McDuffie v. Schaffer Associates, LLC, Superior Court, judicial district of New Haven, Docket No. CV–08–5024230 (May 27, 2010, Wilson, J.).

While its failure to object to the motion to strike count four does not indicate that the plaintiff has consented to the court's granting of the motion, on its face, count four fails to allege a legally sufficient cause of action for the reasons stated above.   Therefore, the motion to strike is granted as to count four.

V

Count Five:  CUTPA

General Statutes § 42–110b(a) provides:  “No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”  “It is well settled that in determining whether a practice violates CUTPA we have 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, [competitors or other businesspersons] ․ All three criteria do not need to be satisfied to support a finding of unfairness.   A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three.”  (Internal quotation marks omitted.)  Harris v. Bradley Memorial Hospital and Health Center, Inc., 296 Conn. 315, 350–51, 994 A.2d 153 (2010).  “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 ․ In order to enforce this prohibition, CUTPA provides a private cause of action to [a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice ․” (Internal quotation marks omitted.)   Id., 351.

“A claim under CUTPA must be pleaded with particularity to allow evaluation of the legal theory upon which the claim is based.”  (Internal quotation marks omitted.)  Keller v. Beckenstein, 117 Conn.App. 550, 569 n.7, 979 A.2d 1055, cert. denied, 294 Conn. 913, 983 A.2d 274 (2009).   With respect to misrepresentation claims, “[t]he act proscribes a broader range of conduct than did the common-law action for innocent misrepresentation.”  Hinchliffe v. American Motors Corp., 184 Conn. 607, 617, 440 A.2d 810 (1981).  “[However,] [t]o describe the ambit of proscribed conduct as being broader than simple misrepresentation is not to suggest that every misrepresentation, however insignificant, necessarily falls into the category of an unfair or deceptive act or practice actionable under CUTPA.”   Id., 617 n.7.

In the present case, the plaintiff claims that the alleged actions and conduct by the defendant constitute a violation of CUTPA, for which it is entitled to damages.   The defendant moves to strike the claim on the ground that the plaintiff does not plead sufficient facts to demonstrate that its conduct offends public policy or constitutes immoral, unethical, oppressive, or unscrupulous behavior.   In its objection, the plaintiff counters that its allegation that the defendant represented to the plaintiff that it would release the insurance funds as payment for the repairs, and its subsequent failure to do so, amounts to a violation of CUTPA.

Although the conduct proscribed by CUTPA is broader than necessary to support a misrepresentation claim;  see Hinchliffe v. American Motors Corp., supra, 184 Conn. 617;  the plaintiff is still required to plead with particularity how the defendant's alleged misrepresentations rise to the level of a CUTPA violation.  Keller v. Beckenstein, supra, 117 Conn.App. 569 n.7. Instead, the plaintiff in the present case simply incorporates the same facts on which it relies for its negligent misrepresentation claim (and, indeed, for all of the claims it brings) into count five, and concludes that the defendant engaged in deceptive and unfair practices in violation of CUTPA.   The plaintiff thus does not allege any additional facts that show how the defendant's conduct offends public policy or constitutes immoral, unethical, oppressive, or unscrupulous behavior in accordance with General Statutes § 42–110b(a).   The motion to strike the fifth count is therefore granted.

CONCLUSION

For the foregoing reasons, the defendant's motion to strike is granted in its entirety.

By the Court,

Nazzaro, J.

Nazzaro, John J., J.