LLC v. Steven Pietrowicz et al. (2013)

MEMORANDUM OF DECISION RE MOTION TO STRIKE # 173

PROCEDURAL HISTORY

On October 16, 2012, the plaintiff, Northeast Double Disc Grind, LLC, filed a seven-count complaint against the defendants Steven Pietrowicz and Integrity Manufacturing, LLC (Integrity).   The defendants Integrity and Pietrowicz filed answers to the complaint on December 6 and 19, 2012, respectively.   On May 13, 2013, the plaintiff filed a motion to cite in an additional defendant, James Gadoury.   The plaintiff's motion was granted on May 28, 2013.   Thereafter, on June 10, 2013, the plaintiff filed a request to amend the complaint and an amended twelve-count complaint.   Following a request to revise the amended complaint filed by the defendants Integrity and Gadoury, the plaintiff filed a second amended complaint on August 28, 2013, which alleges the following facts:

Between February 2008 and September 2012, the defendant Pietrowicz held the position of a member and senior sales associate of the plaintiff.   During that time, the defendant Pietrowicz had access to the plaintiff's confidential information and trade secrets, including marketing information and strategies, sales volumes, pricing and cost information, and the identity of the plaintiff's customers.   The defendant Pietrowicz also had access to the plaintiff's “central data management information systems.”   The plaintiff took several steps to guard its confidential information, including employing various security measures and requiring the defendant Pietrowicz to sign an Operating Agreement (agreement) limiting his ability to compete with the company for eighteen months after his employment with the plaintiff was terminated.   As a senior sales associate, the defendant Pietrowicz had access to the plaintiff's checking and banking accounts and participated in executive meetings of the plaintiff's managers.

The complaint further alleges that prior to resigning on September 28, 2012, the defendant Pietrowicz removed files containing sensitive and confidential information, including contract and pricing information, from the plaintiff's sales office.   In addition, he contacted the plaintiff's clients and told them that the plaintiff was “ ‘closing its doors,’ and/or ‘out of business' in an unlawful attempt to divert business to the Defendant Integrity.”   The defendant Pietrowicz then resigned without notice, unlawfully removed money totaling $23,705.40 from the plaintiff's accounts, and immediately began working for the defendant Integrity using the plaintiff's confidential information in his role as a sales associate for the defendant Integrity.   The defendant Integrity “had knowledge of Defendant Pietrowicz's use of confidential and proprietary information and actively encouraged and participated with Defendant Pietrowicz to use it to damage Plaintiff.”

In count six of the operative complaint, labeled “Tortious Interference with Business Relations as to Defendant Integrity,” the plaintiff incorporated these allegations and further alleged that the plaintiff's clients were diverted to the defendant Integrity as a result of the defendant Pietrowicz's breach of his obligations.   Furthermore, the plaintiff claimed that the defendant Integrity “had full knowledge and participation in the overt actions of Defendant Pietrowicz, including the improper use of confidential and proprietary information, as well as misrepresentations made by Defendant Pietrowicz to divert accounts to Defendant Integrity” and that the defendant Integrity “knew that Defendant Pietrowicz was wrongfully diverting funds of the Plaintiff to it in an attempt to divert business to Defendant Integrity while he was still a member and employee of the Plaintiff.”

In count seven, labeled “Tortious Interference with Contractual Relations as to Defendant James Gadoury,” the plaintiff incorporated the previous allegations and additionally alleged that the defendant Gadoury undertook a course of conduct to induce the defendant Pietrowicz to breach the terms of his agreement with the plaintiff.   According to the plaintiff, the defendant Gadoury, therefore, “intentionally, tortiously and unjustly interfered” with the terms of the plaintiff's agreement with the defendant Pietrowicz.

In count eight, labeled “Tortious Interference with Business Relations as to Defendant James Gadoury,” the plaintiff incorporated the previous allegations and further alleged that the defendant Gadoury “had full knowledge and participation of the overt actions of Defendant Pietrowicz, including the improper use of confidential and proprietary information as well as misrepresentations made by Defendant Pietrowicz to divert accounts to Defendant Integrity.”   The plaintiff also alleged that defendant Gadoury knew that the defendant Pietrowicz was wrongfully diverting the plaintiff's funds while he was still a member of the plaintiff in an attempt to divert business to the defendant Integrity.

In count eleven, labeled “Violation of the Connecticut Unfair Trade Practices Act as to Defendant James Gadoury,” the plaintiff incorporated the previous allegations and further alleged that the plaintiff is a person within the meaning of General Statutes §§ 42–110a(3) and 42–110g(a) entitled to bring an action under the Connecticut Unfair Trade Practices Act (CUTPA), and that the defendant Gadoury was a person conducting trade or commerce within the meaning of the statute.   The plaintiff claimed that the defendant Gadoury's actions constitute unfair and deceptive acts in the conduct of trade or commerce that are unethical, unscrupulous, and otherwise to public policy and show calculated, deceitful, and reckless indifference to the plaintiff's rights.

In count twelve, labeled “Violation of the Connecticut Unfair Trade Practices Act as to Defendant Integrity,” the plaintiff incorporated the previous allegations and additionally alleged that the defendant Integrity was an entity conducting trade or commerce within the meaning of CUTPA.   The plaintiff alleged that the defendant Integrity's actions constitute unfair and deceptive acts in the conduct of trade or commerce that are unethical, unscrupulous, and otherwise to public policy, and show calculated, deceitful, and reckless indifference to the plaintiff's rights.

On September 18, 2013, the defendants Integrity and Gadoury (the defendants) filed a motion to strike counts six, seven, eight, eleven, and twelve of the operative complaint and a memorandum of law in support of their motion.   In response, on October 11, 2013, the plaintiff filed a memorandum of law in opposition.   The matter was heard at the short calendar on October 15, 2013.

DISCUSSION

“Whenever any party wishes to contest (1) the legal sufficiency of the allegations of any complaint, counterclaim or cross claim, or of any one or more counts thereof, to state a claim upon which relief can be granted ․ that party may do so by filing a motion to strike the contested pleading or part thereof.”  Practice Book § 10–39(a).   A motion to strike “admits all facts well pleaded;  it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings.”  (Emphasis omitted;  internal quotation marks omitted.)  Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997).  “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 trial court is limited to considering the grounds specified in the motion.”   Meredith v. Police Commission, 182 Conn. 138, 140, 438 A.2d 27 (1980).   “[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied.”  (Internal quotation marks omitted.)   Greco v. United Technologies Corp., 277 Conn. 337, 347, 890 A.2d, 1289 (2006).

With respect to counts six, seven, and eight, the defendants argue that the plaintiff has failed to allege any facts that show that the defendants' conduct rises to the level of tortious behavior.   With respect to counts eleven and twelve, the defendants argue that the plaintiff has failed to allege any particular actions on the part of the defendants that rise to the level of being unethical, unscrupulous, or against public policy, and has simply regurgitated the language of the CUTPA statute.   The plaintiff argues that the defendant Integrity waived its right to move to strike counts six and twelve because it filed an answer to the original complaint, and that it has sufficiently alleged tortious interference with contractual and business relations and CUTPA claims.

As to the threshold issue, although some courts have found that a defendant has waived his right to move to strike counts he has previously answered, the Connecticut Appellate Court has recognized that the court has discretion to allow pleadings to be filed out of order.  “[G]enerally, pleadings are not to be filed out of the order specified in [Practice Book § 10–6], and the filing of a pleading listed later in the order set out by [§ 10–6] waives the right to be heard on a pleading that appears earlier on the list.   The very words of [Practice Book § 10–7], ‘when the court does not otherwise order’ indicate, however, that the court has discretion to allow the filing of pleadings out of order.  [Section 1–8] of the Practice Book supports this view by allowing for the liberal interpretation of the rules where ‘strict adherence to them will work surprise or injustice’ because the very design of the rules is ‘to facilitate business and advance justice.’  “ Sabino v. Ruffolo, 19 Conn.App. 402, 404, 562 A.2d 1134 (1989).

In the present case, the plaintiff argues that the defendant Integrity waived its right to move to strike counts six and twelve in the second amended complaint because it answered those counts in the original complaint, but does not argue that consideration of the motion to strike would cause an injustice or unfair surprise.   Instead, plaintiff argues merely that Practice Book §§ 10–6 & 10–7 prohibit the filing of pleadings out of order.   The court cannot, on its own, discern how a consideration of the motion to strike on the merits would cause an injustice or an unfair surprise to the plaintiff.   The allegations in counts six and twelve as to Integrity are nearly identical to the allegations in counts eight and eleven to Gadoury, who never filed an answer.   Accordingly, it would neither facilitate business nor advance justice to deny Integrity's motion on a procedural ground, while considering the merits of same issues as to Gadoury.

“A successful action for tortious interference with business expectancies requires the satisfaction of three elements:  (1) a business relationship between the plaintiff and another party;  (2) the defendant's intentional interference with the business relationship while knowing of the relationship;  and (3) as a result of the interference, the plaintiff suffers actual loss.”   (Internal quotation marks omitted.)  American Diamond Exchange, Inc. v. Alpert, 101 Conn.App. 83, 90, 920 A.2d 357, cert. denied, 284 Conn. 901, 931 A.2d 261 (2007).   Further, “the plaintiff must plead and prove at least some improper motive or improper means ․ [F]or a plaintiff successfully to prosecute such an action it must prove that ․ the defendant was guilty of fraud, misrepresentation, intimidation or molestation ․ or that the defendant acted maliciously ․ In the context of a tortious interference claim, the term malice is meant not in the sense of ill will, but intentional interference without justification ․ In other words, the [plaintiff] bears the burden of alleging and proving lack of justification on the part of the [defendant].”  (Citations omitted;  internal quotation marks omitted.)  Id.

“The [Connecticut Supreme Court] has long recognized a cause of action for tortious interference with contract rights or other business relations ․ Nevertheless, not every act that disturbs a contract or business expectancy is actionable ․ [F]or a plaintiff successfully to prosecute such an action it must prove that the defendant's conduct was in fact tortious.   This element may be satisfied by proof that the defendant was guilty of fraud, misrepresentation, intimidation or molestation ․ or that the defendant acted maliciously ․ [A]n action for intentional interference with business relations ․ requires the plaintiff to plead and prove at least some improper motive or improper means.”  (Citations omitted;  internal quotation marks omitted.)  Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. 525, 535–36, 546 A.2d 216 (1988).   In Robert S. Weiss & Associates, Inc. v. Wiederlight, supra, 208 Conn. 536, our Supreme Court held that “[t]he assertion that [the defendant employer] encouraged [the defendant former employee of the plaintiff and current employee of the defendant] to sell commercial insurance in the restricted area when it knew or should have known of the covenant's terms does not fairly imply that [the defendant employer] acted with fraud, misrepresentation, intimidation or molestation or that it acted with malice.” ¹  (Emphasis added;  internal quotation marks omitted.)

In the present case, in count six the plaintiff alleges that “[u]pon information and belief, Integrity had full knowledge and participation in the overt actions of the Defendant Pietrowicz,” but has not alleged a single fact in support.   Similarly, count seven alleges that “[u]pon information and belief, the Defendant James Gadoury has undertaken a course of conduct to induce the defendant Pietrowicz to breach the terms of the Operating Agreement with plaintiff,” without any facts in support.   In count eight, the plaintiff alleges “[u]pon information and belief, the Defendant Gadoury had full knowledge and participation in the overt actions of the Defendant Pietrowicz,” again without alleging any facts in support.   The defendants point to the broad language of these allegations as analogous to the broad language of the allegation that the defendants “encouraged” conduct that our Supreme Court determined to be legally insufficient in Robert S. Weiss & Associates, Inc. v. Wiederlight, supra, 208 Conn 536, arguing that these blanket allegations are likewise insufficient to show that the defendants acted with fraud, misrepresentation, intimidation, or molestation, or that the defendants acted maliciously.

“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).   See Kaithamattam v. Walnut Hill, Inc., Superior Court, judicial district of Hartford, Docket No. CV 11 6022262 (October 19, 2012, Sheridan, J.) [54 Conn. L. Rptr. 890] (“[The tortious interference with a business expectancy count] does not specifically allege facts showing fraud, misrepresentation, intimidation or that the defendant acted maliciously.   Conclusory allegations that the defendants' acts and omissions in this case were done with intent ‘to deceive, intimidate and otherwise ․ fraudulently and with malice’ are insufficient.”).

Moreover, “[a] motion to strike can be granted on the ground that an allegation based ‘upon information and belief’ is conclusory.”   Mashantucket Pequot Tribal Nation v. Tucker Co., Superior Court, judicial district of New London at Norwich, Docket No. 119750 (December 11, 2000, Martin, J.).   Accord Tomonto v. Progressive Northern Ins. Co., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 04 4001543 (July 7, 2006, Lewis, J.T.R.) (noting narrow exception recognized by our Appellate Court in context of motion to dismiss for lack of subject matter jurisdiction);  see also First Federal Savings & Loan v. Chappell, Superior Court, judicial district of Tolland at Rockville, Docket No. 61212 S (April 21, 1997, Rittenband, J.) (“[T]he phrase ‘on information and belief’ is hardly a definite statement of facts.   Someone pleading with those words as a predicate should first ascertain as to whether he is pleading a provable fact, and if it is, leave out the predicate;  if it is not, it shouldn't be pleaded”).

In the present case, the plaintiff's amended complaint fails to state a cause of action for tortious interference or intentional interference with contractual relations because it did not allege any facts that support its theory that these defendants tortiously interfered with the plaintiff's contracts or business expectancies.   The plaintiff simply asserts legal conclusions that these defendants' unspecified actions so interfered.   Accordingly, the motion to strike counts six, seven and eight is granted, as these counts fail to state a claim on which relief can be granted.

General Statutes § 42–110b(a) states “[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.”   In Connecticut, “[i]t is well settled that in determining whether a practice violates CUTPA [the courts] 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—whether, 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 businessmen].”  (Internal quotation marks omitted.)  Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80, 105–06, 612 A.2d 1130 (1992).  “[T]he essential difference between a tort claim for interference with business expectancies and a claim under CUTPA is the standard by which the alleged acts are measured.   While liability in tort is imposed only if the defendant maliciously or deliberately interfered with a competitor's business expectancies, CUTPA liability is premised on a finding that the defendant engaged in unfair competition and unfair or deceptive trade practices.”  Sportsmen's Boating Corp. v. Hensley, 192 Conn. 747, 755, 474 A.2d 780 (1984).  “[I]mproper conduct that does not rise to the level of tortious interference may, nonetheless, constitute a CUTPA violation.”  PAR Painting, Inc. v. Greenhorne & O'Mara, Inc., 61 Conn.App. 317, 328, 763 A.2d 1078, cert. denied, 255 Conn. 951, 770 A.2d 31 (2001).

“In order to withstand a motion to strike for legal insufficiency, the plaintiff must allege practices or methods of trade by the defendant that can be described as immoral, unethical, oppressive, unscrupulous or offensive to public policy.”   Michaud v. St. Paul's Housing Corp., Superior Court, judicial district of New Britain, Docket No. CV 02 0516320 (March 12, 2003, Bryant, J.).  “If a claim does not set forth how or in what respect the [defendant's] alleged activities are either immoral, unethical, unscrupulous or offensive to public policy ․ [a] motion to strike is granted, because a CUTPA claim requires those allegations.”  (Internal quotation marks omitted.)   Onorato v. McDonalds Restaurants of Connecticut, Inc., Superior Court, judicial district of New London, Docket No. CV 10 6002673 (January 4, 2012, Cosgrove, J.).

“At least one Superior Court has determined that hiring an employee in spite of covenant not to compete does not necessarily constitute an unscrupulous, unfair or deceptive act ․ Further, one Superior Court has concluded that merely soliciting business in spite of having knowledge of an existing contract is insufficient to support a CUTPA claim.”  (Citations omitted;  internal quotation marks omitted.)  Webster Financial Corp. v. McDonald, Superior Court, judicial district of Waterbury, Docket No. CV–084016026–S (January 28, 2009, Brunetti, J).  In Webster Financial Corp., the court found that the allegations that the defendant new employer engaged in unfair practices by hiring the defendant former employee of the plaintiff and soliciting business from the plaintiff despite the non-compete agreement “merely restate their claims for tortious interference and do not violate CUTPA.”  Id. The court, however, also found that the plaintiff's additional specific allegation that the defendant new employer assisted or advised the defendant employee to spread false rumors about the plaintiff “if true, could support a claim under CUTPA.”  Id. Additionally, in Baer v. New England Home Delivery Services, LLC, Superior Court, judicial district of New Haven, Docket No. CV–064021976–S (October 18, 2007, Lopez, J.), the court held that allegations of usurpation and diversion of business are legally insufficient to maintain a cause of action under CUTPA, reasoning that “[t]he plaintiffs have not explained how the defendant's alleged diversion of profits was unfair, nor have they described the offensive actions that the defendant engaged in that resulted in its alleged usurpation of their corporate opportunities.”   (Emphasis added.)

In the present case, the plaintiff merely incorporated its allegations from the tortious interference claims and restated the language of the CUTPA statute in counts eleven and twelve.   These counts allege, upon information and belief, that the defendants Integrity and Gadoury knew about, encouraged, and participated in the defendant Pietrowicz's actions,² but do not include any facts in support.   Unlike the plaintiff in Webster Financial Corp. v. McDonald, supra, Superior Court, Docket No. CV–084016026–S, who included specific detail as to how the defendant new employer participated in the defendant employee's wrongful conduct, the plaintiff in this case merely broadly alleged that the defendants “had full knowledge and participation of the overt actions of Defendant Pietrowicz.”   Similar to the allegations in Baer v. New England Home Delivery Services, LLC, supra, Superior Court, Docket No. CV–064021976–S, the allegations in this case are void of any detail as to how the defendants participated in the conduct.  “A conclusory statement ․ without further elaboration ․ is not sufficient to fashion a CUTPA claim.”  (Internal quotation marks omitted.)   Princeton Capital Finance Co., LLC v. Webster Bank, Superior Court, judicial district of Hartford, Docket No. CV 99 0590676 (February 4, 2002, Peck, J.) (31 Conn. L. Rptr. 360, 362).   Moreover, as more particularly addressed above, a motion to strike can be granted on the ground that an allegation based ‘upon information and belief’ is conclusory.

As the plaintiff has failed to allege sufficient specific actions on the part of these defendants that were unethical, unscrupulous, and contrary to public policy, the defendants' motion to strike counts eleven and twelve is granted.

CONCLUSION

For all of the foregoing reasons, the defendants' motion to strike counts six, seven, eight, eleven, and twelve of the second amended complaint is granted.

BY THE COURT

Gleeson, J.

FOOTNOTES

FN1. Courts have applied the reasoning in Robert S. Weiss & Associates, Inc. v. Wiederlight, supra, 208 Conn. 525, to both tortious interference with contractual relation and tortious interference with business relation claims.   See Webster Financial Corp. v. McDonald, Superior Court, judicial district of Waterbury, Docket No. CV–084016026–S (January 28, 2009, Brunetti, J.).  (“The same basic proof requirements apply to a claim of tortious interference with business relations as tortious interference with contractual relations, except the former requires proof of a business relationship, whereas the latter requires proof of a contractual relationship.”).  FN1. Courts have applied the reasoning in Robert S. Weiss & Associates, Inc. v. Wiederlight, supra, 208 Conn. 525, to both tortious interference with contractual relation and tortious interference with business relation claims.   See Webster Financial Corp. v. McDonald, Superior Court, judicial district of Waterbury, Docket No. CV–084016026–S (January 28, 2009, Brunetti, J.).  (“The same basic proof requirements apply to a claim of tortious interference with business relations as tortious interference with contractual relations, except the former requires proof of a business relationship, whereas the latter requires proof of a contractual relationship.”)

FN2. Many of the underlying allegations against Pietrowicz are likewise pleaded “upon information and belief.”.  FN2. Many of the underlying allegations against Pietrowicz are likewise pleaded “upon information and belief.”

Gleeson, Marcia J., J.