McIntire Company v. Trent, Co. et al. (2014)

MEMORANDUM OF DECISION RE MOTION FOR AWARD OF PUNITIVE DAMAGES AND MOTION FOR ATTORNEYS FEES

After a court trial, the court found in favor of the plaintiff, McIntire Company (McIntire), on three counts:  breach of contract, violation of Connecticut Uniform Trade Practices Act (CUTPA) and tortious interference with business expectancies.   Because the court found in favor of McIntire on the CUTPA count, the court found it was entitled to punitive damages, attorneys fees and costs.

On December 2, 2013, McIntire filed a motion for award of punitive damages, seeking $112,152.57 in punitive damages—the same amount the court awarded in compensatory damages.   On December 12, 2013, the defendants, Trent Co., and Gary D. Trent (collectively, Trent Co. or the defendant), filed an objection to an award of punitive damages, arguing that the actual damage award has a sufficient deterrent effect given the defendant's financial condition, and the conduct does not rise to the level required for an award of punitive damages.

At the hearing on the motion for award, the court noted that no request for attorneys fees had been filed, and asked the plaintiff whether it would seek such an award.   The plaintiff responded that it would seek an award following the court's determination of the award for punitive damages.   The court allowed the plaintiff time to file its request, as well as time for the defendant to file an objection so that the court could consider both issues at the same time.¹

DISCUSSION

A. Punitive Damages

The plaintiff seeks a punitive damage award of $112,152.57 under the CUTPA claim, which is the amount awarded in compensatory damages.   McIntire argues that the court noted in its decision in its favor that based upon the testimony of its principal, William Rotenberry, a determination of the amount of damages for business that may have been siphoned away from McIntire due to Trent's promoting competitors or any damages done with McIntire's customers going forward could not be made.   Therefore, it was entitled to punitive damages in an amount equal to the compensatory damages.   However, in its memorandum in support of an award, McIntire correctly states that punitive damages under CUTPA are focused on deterrence rather than mere compensation, citing Lenz v. CAN Assurance Co., 42 Conn.Sup. 514, 630 A.2d 1082 (1993).

Under CUTPA, General Statutes § 42–110g(a) provides in relevant part that “[t]he court may, in its discretion, award punitive damages ․” Under CUTPA, the award and the amount of punitive damages are discretionary with the court.  Gargano v. Heyman, 203 Conn. 616, 622, 525 A.2d 1343 (1987).  “In order to award punitive or exemplary damages evidence must reveal a reckless indifference to the rights of others or an intentional or wanton violation of those right ․ In fact, the flavor of the basic requirement to justify an award of punitive damage is described in terms of wanton and malicious injury, evil motive and violence.”  Id., 622.  “The legislature departed from the narrow scope of common law punitive damages, however, when it adopted § 42–110g(a) of CUTPA, which provides that the court may, in its discretion, award punitive damages ․ as it deems necessary or proper.   See Bailey Employment System, Inc. v. Hahn, 545 F.Sup. 62, 72 (D.Conn.1982).   This statutory provision allows for punitive damages based on a theory of deterrence, whereas the common law premise of such an award is compensation.”  (Internal quotations omitted.)  Lenz v. CNA Assurance Company, supra, 42 Conn.Sup. 515.   Although the law is not well developed as to damages under CUTPA, a basic criterion for such an award is evidence revealing “a reckless indifference to the rights of others or an intentional and wanton violation of those rights.”  Whitaker v. Taylor, 99 Conn.App. 719, 733, 916 A.2d 834 (2007).

The defendant argues that because the focus of punitive damages under CUTPA is based upon deterrence rather than compensation, the financial condition of the defendant is relevant and material.   The evidence provided to the court at trial indicated that the financial condition of the Trent Co. was not good, requiring Gary Trent to loan personal funds to the company in order to meet payroll and maintain operations.   The defendant further argues that the conduct of the defendant could not be considered wanton or malicious.

The court agrees with the defendant.   An award of punitive damages would serve no deterrent purpose in this case.   Furthermore, the court cannot find that the conduct of the defendant rises to the level of wanton and malicious conduct or was performed with a reckless indifference to the rights of others.   In light of the reasons set forth, the court will not award any punitive damages for the CUTPA claim.

B. Attorneys Fees

Attorneys fees and costs may be awarded to the prevailing plaintiff in a CUTPA case subject to the sound discretion of the court.   See, MedValUSA Health Programs, Inc. v. MemberWorks, Inc., 109 Conn.App. 308, 315–16, 951 A.2d 26 (2008);  Gargano v. Heyman, supra, 203 Conn. 622 (“[a]warding punitive damages and attorneys fees under CUTPA is discretionary”).  “The plaintiff who establishes CUTPA liability has access to a remedy far more comprehensive than the simple damages recoverable under common law.   The ability to recover both attorneys fees;  General Statutes § 42–101g(d);  and punitive damages;  General Statutes § 42–101g(a);  enriches the private CUTPA remedy and serves to encourage private CUTPA litigation.”  Hinchliffe v. American Motors Corp., 184 Conn. 607, 614, 440 A.2d 810 (1981).   The “entitlement to recover attorneys fees stands on a different footing” than the availability of punitive damages in a CUTPA case.  New England Custom Concrete, LLC v. Carbone, 102 Conn.App. 652, 667, 927 A.2d 333 (2007) (request for punitive damages in connection with a CUTPA claim denied because the wrongful conduct fell short of the standard but case remanded to the trial court for a hearing on the appropriateness of awarding attorneys fees).

“General Statutes § 42–110g(d) provides in relevant part that, in any action in which a person alleges damages resulting from an unfair trade practice prohibited by § 42–110b of CUTPA, the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of the recovery ․” Smith v. Snyder, 267 Conn. 456, 470, 839 A.2d 589 (2004).  “It is well established that a trial court calculating a reasonable attorneys fee makes its determination while considering the factors set forth under rule 1.5(a) of the Rules of Professional Conduct ․ A court utilizing the factors of rule 1.5(a) considers, inter alia, the time and labor spent by the attorneys, the novelty and complexity of the legal issues, fees customarily charged in the same locality for similar services, the lawyer's experience and ability, relevant time limitations, the magnitude of the case and the results obtained, the nature and length of the lawyer-client relationship, and whether the fee is fixed or contingent.”  (Citations omitted;  internal quotation marks omitted.)  Schoonmaker v. Lawrence Brunoli, Inc., 265 Conn. 210, 259, 828 A.2d 64 (2003).

The plaintiff has moved for an award of attorneys fees and costs for the work performed in this matter.   In support of the motion, the plaintiff's counsel has submitted an affidavit of attorneys fees and copies of invoices detailing a description of services rendered and costs.   McIntire seeks an award of fees for approximately 201 hours at the rate of $250 per hour for an award of $51,325, plus costs and expenses of $5,513.98, for a total award of $56,838.98.

The defendant objects to such an award, arguing that the nature of the misconduct was not so egregious to qualify for a punitive or punishment type of an award beyond the actual damages.   He also makes the same argument that was made in the objection to an award of punitive damages;  that is, Gary Trent is not wealthy or in possession of substantial assets.

Although the court has determined that the conduct falls short of the standard which would permit an award of punitive damages, the court finds that an award of attorneys fees is appropriate under the circumstances.

CONCLUSION

For the reasons set forth, the motion for award of punitive damages is denied.   The motion for attorneys fees is granted.   In addition to the award for compensatory damages, the court awards attorneys fees in the amount of $51,325 plus costs in the amount of $5,513.98 for a total additional award of $56,838.98.

Swienton, J.

FOOTNOTES

FN1. The court indicated in its order that in addition to allowing the defendant time to file its objection, the defendant should indicate whether he would be requesting a hearing on the matter.   The defendant filed an objection to the motion for attorneys fees and costs, but did not request a hearing, and in fact indicated that “the amount and nature of fees and costs requested by [the plaintiff's counsel], generally speaking, does not appear to be unreasonable.”  (Objection to motion for order re attorney fees.).  FN1. The court indicated in its order that in addition to allowing the defendant time to file its objection, the defendant should indicate whether he would be requesting a hearing on the matter.   The defendant filed an objection to the motion for attorneys fees and costs, but did not request a hearing, and in fact indicated that “the amount and nature of fees and costs requested by [the plaintiff's counsel], generally speaking, does not appear to be unreasonable.”  (Objection to motion for order re attorney fees.)

Swienton, Cynthia K., J.