Opinion
No. CV05 4002816S
November 25, 2005
MEMORANDUM OF DECISION RE MOTION TO STRIKE
I. Background
The defendant, Annette Coppola ("Coppola") has filed a Motion to Strike seeking to strike Counts One, Two and Three of the Revised Complaint of the plaintiffs Amy Rodia ("Rodia") and Isinglass Woods, LLC ("Isinglass") (collectively "Plaintiffs").
Plaintiffs' Revised Complaint seeks damages for detrimental reliance, specific performance of a real estate conveyance contract, and damages for violation of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a ("CUTPA"). Coppola has moved to strike each of the three counts of plaintiffs' Complaint.
As to Count One (Detrimental Reliance), defendant claims it should be stricken as a matter of law because a claim for "detrimental reliance" may not be asserted where plaintiffs also assert a valid contract exists.
As to Count Two (Specific Performance), defendant claims it should be stricken because plaintiffs have failed to plead they performed all necessary obligations that would trigger their right to purchase the subject property and have failed to plead the occurrence of a condition precedent to the performance of the contract.
As to Count Three (CUTPA), defendant claims it should be stricken because plaintiffs' have failed to plead the requisite factual predicate to a claim of a violation of CUTPA.
II. Standard of Review
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. Faulkner v. United Technologies Corp., 240 Conn. 576, 577 (1997); Connecticut Practice Book, Sec. 10-39. A motion to strike requires no factual findings by the trial court. The Court takes the facts to be those alleged in the complaint and construes the complaint in the manner most favorable to sustaining its legal sufficiency. Thus, if facts provable in the complaint would support a cause of action, the motion to strike must be denied. Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498 (2003) "In determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted. Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Citations omitted.) Commissioner of Labor v. C.J.M. Services, Inc., 268 Conn. 283, 292 (2004).
III. Count One: Detrimental Reliance
Although defendant claims Connecticut does not recognize a cause of action for "detrimental reliance", there is at least one unpublished decision which has sustained an action alleging detrimental reliance. In Sorrentino v. Weber, No. CV-03-0481077S New Haven Superior Court (July 19, 2004, Arnold, J.) ( 37 Conn. L. Rptr. 498) the plaintiff chiropractor alleged that he relied upon the representations of the defendant attorneys to his detriment. The plaintiff alleged that he would not have rendered services and treatment to a client but for the representations of the defendants that his bill would be paid. In addition, the plaintiff claimed that he continued to forgo collections efforts against the client based on the defendants' representations, written and oral, that they would protect his bill. After reciting the foregoing, the Court concluded that: "the plaintiff has sufficiently pleaded a cause of action for detrimental reliance to defeat a motion to strike".
Further, defendant does concede that Connecticut courts clearly recognize a cause of action for promissory estoppel. See D'ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206 (1987). Section 90 of the Restatement of Contracts Second states that under the doctrine of promissory estoppel: "[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise." An action for promissory estoppel generally lies when there is no written contract or the contract cannot be enforced for one reason or another.
The plaintiffs have alleged that the defendant promised to loan them money to bail out a foreclosure action against their property, which promise was memorialized in writing. In Count One, they further allege that they relied on that promise to their detriment by not seeking other means of financing as the law day approached. The defendant clearly expected the plaintiffs to rely on her promise to loan them the money as it was necessary for the plaintiffs to save the property from foreclosure. As a result of the plaintiffs' forbearance from seeking alternative financing, plaintiffs allege they were forced to accept the defendants' demand on the eve of the foreclosure law day that they transfer title to her with a lease/option to repurchase or lose the property.
Defendant asserts that a claim of promissory estoppel is not available where a valid contract is alleged. However, Count One claims damages or loss due to reliance on an agreement to lend money. The contract plaintiffs are seeking to enforce in Count Two, the option to repurchase, is separate and apart from, or alternative to, the promise to loan money alleged in Count One. Accordingly, defendant's argument is to no avail as to the First Count, which does state a good cause of action.
IV. Count Two: Specific Performance
Plaintiff's second count seeks specific performance of the provisions of the lease purchase agreement between the parties which was executed. Plaintiffs allege Rodia paid all rent due under the lease and exercised her option to repurchase and was ready, willing and able to fulfill her obligations under the agreement, and that the defendant refused to reconvey the property. The plaintiffs submit that, as such, they have alleged sufficient facts to support a cause of action for specific performance. Defendant argues that plaintiffs have failed to allege compliance with other terms of the contract which required plaintiffs to seek to subdivide the property as a condition precedent to any right to repurchase. In paragraph 17 of the Revised Complaint, plaintiffs allege Rodia was "at all times ready, willing and able to fulfill her obligations" under the contract. Defendant's claims to the contrary raise issues of fact which cannot be decided by motion to strike.
V. Count Three: CUTPA
Defendant next claims that Count Three should be stricken because the plaintiffs have failed to plead all requisite facts to maintain an action under CUTPA. The Connecticut Unfair Trade Practices Act, General Statutes Sec. 42-110b, provides "that no person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." In determining whether a practice violates CUTPA, the Connecticut Supreme Court has adopted the following criteria set out by the Federal Trade Commission for determining when a practice is unfair: "(1) Whether 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 business persons." Willow Springs Condo Ass'n. v. Seventh BRT Dev Corp., 245 Conn. 1, 43 (1998). 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.
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. Kenney v. Healey Ford-Lincoln-Mercury, Inc., 53 Conn.App. 327, 330 (1999). "An act or practice is deceptive if three conditions are met. First, there must be a representation, omission, or other practice likely to mislead consumers. Second, the consumers must interpret the message reasonably under the circumstances. Third, the misleading representation, omission or practice must be material, that is, likely to affect consumer decisions or conduct." Southington Savings Bank v. Rodgers, 40 Conn.App. 23, 28 (1995), cert. denied, 236 Conn. 908 (1996). Whether a practice is unfair and thus violates CUTPA is an issue of fact.
Defendant argues that a simple breach of contract does not amount to a CUTPA violation. However, plaintiffs have alleged an unfair and deceptive business practice, not just a simple breach of contract. Plaintiffs allege that defendant intentionally misled them and coerced them into transferring her title to their property rather than just securing a loan by a mortgage. Whether or not plaintiffs can prove these allegations is for the trier of fact. But, as alleged, this conduct is both deceptive and oppressive.
In Miller v. Guimaraes, 78 Conn.App. 760 (2003), the Appellate Court upheld a trial Court's finding that a breach of contract and failure to disclose a material fact in the context of a single real estate transaction was deceptive and constituted a CUTPA violation.
Here, plaintiffs have alleged substantial aggravating circumstances attendant to the alleged breach of agreement to reconvey. "CUTPA is remedial in character . . . and must be liberally construed in favor of those whom the legislature intended to benefit." Service Road Corp. v. Quinn, 241 Conn. 630, 637 (1997). Construing the allegations of the complaint in the light most favorable to plaintiffs, defendant's motion to strike Count Three must fail since the alleged conduct, if proven, may constitute conduct which falls within the wide range of conduct prohibited by CUTPA. See Derrig v. TRD Co., Inc., 1999 Conn. Super. LEXIS 1658, Superior Court, J.D. Hartford-New Britain, CV98-583545, (June 22, 1999) (Peck, J.) and cases cited therein.
Accordingly, defendant's Motion to Strike Counts One, Two and Three of the Revised Complaint is denied.