Opinion
No. CV05 4003365 S
September 12, 2006
MEMORANDUM OF DECISION
FACTS
This case stems from a construction project at the Coginchaug High School in Durham (project). On July 6, 2005, the plaintiff, United Steel, Inc., commenced this action by service of process against the defendants, Haynes Construction Company (Haynes) and United States Fidelity and Guaranty Company (USFG). Haynes filed an answer, special defenses and an amended counterclaim on May 10, 2006.
According to Haynes, the parties formed a commercial relationship; whereby, Haynes was the general contractor, USFG was its surety, and the plaintiff was a subcontractor. Under their agreement, the plaintiff was to provide and install steel for the project and, in exchange, Haynes was to remit $432,500 to the plaintiff. In its counterclaim, Haynes claimed breach of contract, breach of covenant of good faith and violation of the Connecticut Unfair Trade Practices Act (CUTPA) by the plaintiff. Under Haynes' view, the plaintiff breached the subcontract by failing to complete its work according to the required project schedule and Haynes suffered financial damages as a result of the plaintiff's breach. In its CUTPA count, Haynes alleges that the plaintiff breached its duty of good faith and fair dealing by demanding more favorable contract terms and by attempting to force payments in excess of what was owed to the plaintiff by submitting a false claim against Haynes' payment bond. Furthermore, Haynes alleges that the plaintiff unscrupulously threatened the project schedule in an attempt to: (1) force Haynes to release it from the remainder of its obligations; (2) secure more favorable terms; and (3) increase its own profits at the expense of Haynes.
On May 21, 2006, the plaintiff filed a motion to strike Haynes' counterclaim with regard to the CUTPA count and a memorandum of law. The plaintiff's motion is on the ground that Haynes has failed to assert sufficient facts to sustain a claim under CUTPA. Haynes filed an objection to the plaintiff's motion to strike and a memorandum of law on June 8, 2006.
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). "[A] motion to strike . . . requires no factual findings by the trial court." (Internal quotation marks omitted.) Larobina v. McDonald, 274 Conn. 394, 400, 876 A.2d 522 (2005). Rather, "[f]or the purpose of a motion to strike, the moving party admits all facts well pleaded." RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 383 n. 2, 650 A.2d 153 (1994). "It is fundamental that 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." (Internal quotation marks omitted.) Bross v. Hillside Acres, Inc., 92 Conn.App. 773, 781, 887 A.2d 420 (2006). "Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Pamela B. v. Ment, 244 Conn. 296, 307, 709 A.2d 1089 (1998).
The plaintiff argues that the court should grant its motion to strike because Haynes' counterclaim under CUTPA fails to adequately plead with particularity facts that would support such a claim. Under the plaintiff's view, Haynes only pleaded a legal conclusion, specifically, that the plaintiff's actions were unscrupulous. Furthermore, the plaintiff asserts that Haynes' counterclaim under CUTPA fails to state facts that would demonstrate unfairness, which is an essential element of a valid CUTPA claim. Also according to the plaintiff, Haynes alleges no substantial aggravating circumstances nor a pattern of conduct by the plaintiff. Finally, the plaintiff argues that Haynes has failed to allege that the plaintiff was acting within a trade or business when it allegedly violated CUTPA.
Haynes counters that the plaintiff's motion to strike should be denied because Haynes has pleaded that the plaintiff attempted to force payment by submitting false claims against the payment bond of which Haynes was the principle and that this was harmful to Haynes. According to Haynes, this pleading was sufficient because it implied a misrepresentation by the plaintiff that, when combined with the other allegations, exceeds the requirements for a valid CUTPA claim. Furthermore, Haynes argues that the plaintiffs' alleged behavior violated CUTPA in that it went beyond a mere breach of contract. Haynes argues that its allegations necessarily imply an attempt by the plaintiff to threaten completion of the project as leverage to obtain better terms for itself at the expense of Haynes. Finally, Haynes asserts that the allegations involve exaggerating circumstances that go beyond a mere breach of a contract to deliver and install steel. Haynes argues that a reasonable inference from its pleadings is that this behavior by the plaintiff was in the course its doing business with Haynes. Haynes was managing a project which required the acquisition of steel and the plaintiff was engaged for that business purpose.
CUTPA, which is set forth in General Statutes § 42-110a et seq., provides, in relevant part: "Any person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by section 42-110b, may bring an action . . . to recover actual damages . . ." General Statutes § 42-110g(a). General Statutes § 42-110b(a) provides that; "[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." The Connecticut Supreme Court has adopted the following test to determine 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.) Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 155, 881 A.2d 937 (2005).
"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.) S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan King, P.C., 32 Conn.App. 786, 797, 631 A.2d 340, cert. denied, 228 Conn. 903, 634 A.2d 296 (1993). "[T]he same facts that establish a breach of contract claim may be sufficient to establish a CUTPA violation . . . Although there is a split of authority [among the decisions of the Superior Court] regarding what is necessary to establish a CUTPA claim for breach of contract, the vast majority of Superior Court decisions [conclude] that, absent allegations of sufficient aggravating circumstances, [a] simple breach of contract, even if intentional, does not amount to a violation of [CUTPA] . . . When the [Superior Court has] permitted a CUTPA cause of action based on a breach of contract, there generally has been some type of fraudulent behavior accompanying the breach or aggravating circumstances . . . The question therefore becomes whether the plaintiff has alleged in its complaint the substantial aggravating circumstances attending the breach of contract necessary to establish a CUTPA violation . . .
"[A] misrepresentation can constitute an aggravating circumstance that would allow a simple breach of contract claim to be treated as a CUTPA violation; it would in effect be a deceptive act . . . CUTPA liability should not be imposed, however, when a defendant merely has not delivered on a promise unless the defendant made a representation as to a future fact coupled with a present intent not to fulfill promise . . . The court is not aware of a case that holds that a statement predictive of future conduct somehow becomes a misrepresentation for CUTPA purposes simply when the party making the representation cannot deliver on the promise." (Citations omitted; internal quotation marks omitted.). Patrician v. Melanson, Superior Court, judicial district of Middlesex, Docket No. CV 05 4004508 (July 10, 2006, Dubay, J.).
In Patrician v. Melanson, this court granted a motion to strike a claim based on CUTPA where the plaintiff incorporated its breach of contract count in its CUTPA pleading. This court's decision in that case was largely based on the fact that, "the plaintiff [did] not sufficiently allege that the defendants' behavior was fraudulent during the course of their business with him. Nowhere in [the CUTPA counts did] the plaintiff allege either that the defendants had a present intent not to deliver on their representations to him or that those representations were intended to induce him. The plaintiff [had] also failed to allege any other substantial aggravating circumstances surrounding the breach of contract necessary to establish a CUTPA violation." Id.
In Robert J. Reby Co., Inc. v. Byrne, Superior Court for the judicial district of Danbury, Docket No. CV 05 4004259 (July 13, 2006, Schuman, J.) ( 41 Conn. L. Rptr. 649), the court granted the defendants' motion to strike a CUTPA claim finding that, "[the CUTPA counts] merely incorporate the allegations of [breach of contract] and then tack on a boilerplate allegation that these breaches of contract constitute an unfair trade practice in violation of CUTPA."
In this case Haynes pleads, in addition to its breach of contract allegations, that the plaintiff (1) submitted false claims against the payment bond of which Haynes was the principle; and (2) unscrupulously threatened a project over which Haynes was the general contractor in an effort to obtain more favorable terms or dismissal. According to Haynes' allegations these additional actions by the plaintiff were damaging to Haynes beyond a simple breach of contract claim. Accordingly, this case is distinguished from both Patrician v. Melanson and Robert J. Reby Co., Inc. v. Byrne. Here, Haynes has added sufficient facts to its allegations of a CUTPA violation for this count to survive the plaintiff's motion to strike.
For the foregoing reasons, the plaintiff's motion to strike Haynes' CUTPA claim is denied.