Opinion
No. CV 04-4001336S
April 26, 2005
MEMORANDUM OF DECISION MOTION TO STRIKE #104
The defendant moves to strike the plaintiff's entire complaint for failure to include a necessary party, or, in the alternative, the defendant moves to strike count one sounding in breach of fiduciary duty and count two sounding in breach of contract.
NONJOINDER OF A NECESSARY PARTY
In its memorandum of law in support of the motion to strike, the defendant argues that the plaintiff's husband is a necessary party because the plaintiff and her husband are joint owners of the account and, therefore, he has an interest in the controversy that the court cannot adjudicate without him being a party to the cause of action. In her memorandum in opposition to the defendant's motion to strike, the plaintiff counters that, at best, the defendant's argument provides grounds for citing in the plaintiff's husband because, although he may be considered a necessary party, the plaintiff's husband is not an indispensible party.
1. Standard for failing to include a necessary party.
"Practice Book § 10-39(a) provides in relevant part: Whenever any party wishes to contest . . . (3) the legal sufficiency of any such complaint, counterclaim or cross complaint, or any count thereof, because of the absence of any necessary party or, pursuant to Section 17-56(b), the failure to join or give notice to any interested person . . . that party may do so by filing a motion to strike the contested pleading or part thereof." (Internal quotation marks omitted.) 37 Huntington Street, H, LLC v. Hartford, 62 Conn.App. 586, 591 n. 8, 772 A.2d 633, cert. denied, 256 Conn. 914, 772 A.2d 1127 (2001). "Practice Book § 9-18 provides: The judicial authority may determine the controversy as between the parties before it, if it can do so without prejudice to the rights of others; but, if a complete determination cannot be had without the presence of other parties, the judicial authority may direct that they be brought in. If a person not a party has an interest or title which the judgment will affect, the judicial authority, on its motion, shall direct that person to be made a party." (Internal quotation marks omitted.) Pathways, Inc. v. Planning Zoning Commission, 259 Conn. 619, 622 n. 5, 793 A.2d 222 (2002). "Practice Book § 9-19 provides: Except as provided in Sections 10-44 and 11-3 no action shall be defeated by the nonjoinder or misjoinder of parties. New parties may be added and summoned in, and parties misjoined may be dropped, by order of the judicial authority, at any stage of the cause, as it deems the interests of justice require." (Internal quotation marks omitted.) Id., 622 n. 6.
"Necessary parties . . . are those [p]ersons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete justice, by adjusting all the rights involved in it . . . [B]ut if their interests are separable from those of the parties before the court, so that the court can proceed to a decree, and do complete and final justice, without affecting other persons not before the court, the latter are not indispensable parties . . . A party is deemed necessary if its presence is absolutely required in order to assure a fair and equitable trial . . ." (Citations omitted; internal quotation marks omitted.) In Re Devon B., 264 Conn. 572, 579-80, 825 A.2d 127 (2003). "[W]ithout the presence of [a] necessary party the court [cannot] fully adjudicate the matter before it . . . In these circumstances, the trial court should . . . [afford] the plaintiff a reasonable opportunity to cite in the necessary party." Meredith v. Police Commission, 182 Conn. 138, 141, 438 A.2d 27 (1980).
2. Distinction between a necessary party and an indispensible party.
"While courts and commentators have sometimes blurred or questioned the distinction between `indispensable' and `necessary' parties, the rules of practice, as elucidated by our Supreme Court, specify when a court must or may strike a complaint for failing to [include] certain parties as defendants. Under Practice Book § 9-18, a court `may determine the controversy as between the parties before it, if it can do so without prejudice to the rights of others.' Hence, if determining the case would prejudice the rights of non-parties, the court cannot hear the matter and must grant a proper motion to strike for failure to join them as parties. Such parties are sometimes referred to as `indispensable,' terminology the rule itself wisely omits." Torringford Farms Assn., Inc. v. Torrington, Superior Court, judicial district of Litchfield, Docket No. CV 99 0081120 (September 22, 2000, Frazzini, J.) (28 Conn. L. Rtpr. 199, 201).
"Joinder of indispensable parties is mandated because due process principles make it essential that [such parties] be given notice and an opportunity to protect [their] interests by making [them] a party to the [action]." (Internal quotation marks omitted.) Hilton v. New Haven, 233 Conn. 701, 722-23, 661 A.2d 973 (1995), citing Fong v. Planning Zoning Board of Appeals, 212 Conn. 628, 634, 563 A.2d 293 (1989) (successful applicant to a zoning board of appeals is an indispensable party because a special interest equivalent to a `right' was created and an appeal could possibly extinguish that `right').
"The rules of practice also describe another category of party which the court `may direct, . . . be brought in' — those without whom `a complete determination [of the pending matter] cannot be had.' Practice Book § 9-18. "In Sturman v. Socha, 191 Conn. 1, 6-7, 463 A.2d 527 (1983), the court distinguished between those `indispensable' parties without which a case could not proceed (because their rights would be prejudiced) and this other category of optional party, sometimes referred to as a `necessary' (but not indispensable) party: Parties have been characterized as `indispensable' when they not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such condition that its final termination may be wholly inconsistent with equity and good conscience . . . Necessary parties, however, have been described as persons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete justice, by adjusting all the rights involved in it . . . But if their interests are separable from those of the parties before the court, so that the court can proceed to a decree, and do complete and final justice, without affecting other persons not before the court, the latter are not indispensable parties . . .
"The distinction between the `mandatory-indispensable' party whose absence requires the court to strike the complaint and the so-called `necessary' party is whether the action will prejudice that party's rights. If so, they are indispensable; if not, then not. The optional category of `other parties without whom a complete determination cannot be had' are those who have an interest in the case and whose presence is necessary to `do complete justice by adjusting all the rights involved,' but who are not indispensable because their absence will not prejudice their rights." (Citations omitted; internal quotation marks omitted.) Torringford Farms Assn., Inc. v. Torrington, supra, 28 Conn. L. Rtpr. 201-02.
The plaintiff's husband does have an interest in the controversy and ought to be made a party to this action. In this case, however, the court can move forward without his presence and complete and final justice, because joint owners of a bank account share equal rights to the funds in the account "and any part or all of the balance of such account . . . may be paid to any of such persons . . ." (Emphasis in original; internal quotations marks omitted.) Fleet Bank Connecticut, N.A. v. Carrillo, 240 Conn. 343, 349-50, 691 A.2d 1068 (1997). The court denies the defendant's motion to strike the entire complaint for failure to include a necessary party because, although the plaintiff's husband is a necessary party that ought to be joined, he is not an indispensable party.
BREACH OF FIDUCIARY DUTY
The defendant argues that count one of the plaintiff's complaint should be stricken because the plaintiff failed to plead legally sufficient facts to support the existence of a fiduciary relationship between the bank and its depositor, and that no special relationship or a special duty exists between them. The plaintiff counters that the defendant was in a position of trust and confidence to the plaintiff possessing superior knowledge, skill and expertise with regards to the management of funds, and owed a duty to the plaintiff to advise her of its financial interest in referring customers to other financial institutions with which they have a business relationship.
"Banks and their depositors are bound by a special relationship. Because of this relationship, banks owe a duty of ordinary care to their depositors." (Emphasis added.) Champaigne v. Scarso, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 97 0348470 (January 27, 1999, Melville, J.) (24 Conn. L. Rptt. 138, 143). "[A]s a general proposition, creditor-debtor relationships rarely give rise to a fiduciary duty inasmuch as their respective positions are essentially adversarial." (Internal quotations marks omitted.) Citicorp Vendor Finance, Inc. v. Sonnelitter, Superior Court, judicial district of Danbury, Docket No. CV 03 0350572 (January 28, 2005, Frankel, J.). "No per se fiduciary relationship exists by virtue of the borrower-lender relationship between a bank and a customer . . . without exceptional circumstances that would establish the existence of a confidential relationship . . . A fiduciary relationship may arise where there is a long history of dealings between the plaintiff and the bank, and where the bank acts as the plaintiff's financial advisor . . . or where the bank gains the confidence of the borrower and purports to act or advise with the borrower's interest in mind." (Citations omitted; internal quotations marks omitted.) Dime Savings Bank v. Lombardi, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 95 0145967 (May 7, 1996, Ryan, J.). "Generally, there exists no fiduciary relationship merely by virtue of a borrower lender relationship between a bank and its customer . . . Usually, a bank does not owe its depositors a fiduciary duty. The fact that a bank is indebted to its account holders for the amount of the funds that they have deposited imposes no special duty of care for the safe keeping of the funds on deposit." (Citation omitted; internal quotations marks omitted.) Greenwoods Scholarship Foundation, Inc. v. Northwest Community Bank, Superior Court, judicial district of Hartford, Docket No. CV 96 0558956 (June 4, 1999, Teller, J.).
The court denies the defendant's motion to strike count one of the plaintiff's complaint because the plaintiff has pleaded sufficient facts to show that exceptional circumstances exist between the plaintiff and the defendant because of the dealings they have had, including the bank advising the plaintiff. Therefore the plaintiff can maintain a cause of action for breach of fiduciary duty.
BREACH OF CONTRACT
In its memorandum of law in support of the motion to strike, the defendant argues that the plaintiff has failed to plead sufficient facts to assert either a claim for breach of an express contract with the defendant or, alternatively, an alleged breach of the implied covenant of good faith and fair dealing. The plaintiff counters that she is only required to sufficiently plead facts showing the elements of a breach of contract: formation of an agreement, performance by one party, breach of the agreement by the other party, and damages.
"[T]he key elements of a breach of contract action considered by the court are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." Bouchard v. Sundberg, 80 Conn.App. 180, 189, 834 A.2d 744 (2003). Our Supreme Court has stated that "[a] signature card is essential to the creation of a bank account . . ." Frigon v. Enfield Savings Loan Assn., 195 Conn. 82, 87, 486 A.2d 630 (1985). "Whether a joint account has been established, however, depends solely on the deposit contract governing the account." Grass v. Grass, 47 Conn.App. 657, 661, 706 A.2d 1369 (1998). "[W]hen an account is created in the names of two or more people, such account is deemed a joint account, and any part or all of the balance of such account, including any and all subsequent deposits or additions made thereto, may be paid to any of such persons during the lifetime of all of them . . . [A] bank is authorized to release up to the entire balance of a joint account to each and any coholder who so demands." (Citation omitted; emphasis in original; internal quotation marks omitted.) Fleet Bank Connecticut, N.A. v. Carrillo, supra, 240 Conn. 349-50.
"[E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement carries an implied duty of good faith and fair dealing . . . In other words, every contract carries an implied duty requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement . . . The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term . . .
"To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith . . . Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive . . . Bad faith means more than mere negligence; it involves a dishonest purpose." (Citations omitted; internal quotations marks omitted.) De La Concha of Hartford, Inc. v. Aetna Life Ins., 269 Conn. 424, 432-33, 849 A.2d 382 (2004).
The court denies the defendant's motion to strike count two of the complaint because the plaintiff has sufficiently pleaded facts stating the necessary elements to maintain a cause of action sounding in breach of contract.
Therefore, for the foregoing reasons, the motion to strike is denied.
Richard E. Burke, J.