Opinion
No. CV 09 6001697
July 13, 2010
MEMORANDUM OF DECISION
Facts and Procedural History
The plaintiff, Bank of America National Association, brings this foreclosure action against the defendants, Groton Estates, LLC and Constance Belfonti, executrix of the estate of Richard Belfonti. In its March 29, 2010 revised complaint, the plaintiff alleges that on August 5, 2004, Groton Estates purchased the property that is the subject of this foreclosure action. In order to finance the purchase of the property, Groton Estates gave a promissory note and mortgage to Archon Financial, L.P., which was ultimately assigned to the plaintiff. At the end of May 2009, Groton Estates informed the master servicer of the loan that it would no longer be able to service the loan as of June 1, 2009. As a result, Groton Estates made no mortgage payments in June through September of 2009. Additional facts will be set forth as needed.
The city of Groton is also a named defendant in this action.
The defendants filed an answer to the revised complaint on April 9, 2010, in which they assert nine special defenses and four counterclaims based upon the plaintiff's alleged refusal to negotiate a loan modification and its decision to proceed with this foreclosure action. On April 28, 2010, the plaintiff filed a motion to strike special defenses two through nine, all four counterclaims and prayers for relief two through four. The defendants filed their memorandum in opposition on May 24, 2010. The plaintiff filed its reply brief on May 28, 2010.
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). "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.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006). "If any facts provable under the express and implied allegations in the plaintiff's complaint support a cause of action the complaint is not vulnerable to a motion to strike." Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991).
The plaintiff argues that the gravamen of the defendants' special defenses and counterclaims is that a lender has an obligation to negotiate and execute a loan modification following a borrower's default, waiving the lender's right to foreclose under the mortgage contract. As a result, the plaintiff argues that the defendants' special defenses and counterclaims fail as a matter of law because they do not go to the making, validity or enforcement of the note or the mortgage. The defendants counter that they have alleged that the plaintiff and/or its agents took affirmative steps to ensure Groton Estates' inability to fully service the debt and make necessary repairs and in fact, engaged in a pattern of retribution against them. The court will first address the plaintiff's motion to strike the defendants' special defenses two though nine, then consider the defendants' counterclaims and finally, address the prayers for relief.
Special Defenses Making, Validity and Enforcement Limitation on Special Defenses
There is no dispute that the defendants' special defenses relate to the plaintiff's conduct after execution of the note and mortgage. This court, Devine, J., previously addressed the plaintiff's argument that a valid special defense in a foreclosure action may not rely on behavior or conduct of the mortgagee occurring after execution of the note and mortgage. See Liberty Bank v. New London Limited Partnership, Superior Court, judicial district of New London, Docket No. 4005236 (May 1, 2007, Devine, J.) ( 43 Conn. L. Rptr. 326, 327). In Liberty Bank, the plaintiff lender moved for summary judgment as to the defendants' liability. The plaintiff further contended that the defendants' special defenses of waiver and equitable estoppel were not valid because they do not relate to the "making, validity or enforcement" of the note or mortgage.
This court stated: "Historically, defenses to a foreclosure action have been limited to payment, discharge, release or satisfaction . . . or, if there had never been a valid lien . . . The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action . . . A valid special defense at law to a foreclosure proceeding must be legally sufficient and address the making, validity or enforcement of the mortgage, the note or both . . . Where the plaintiff's conduct is inequitable, a court may withhold foreclosure on equitable considerations and principles . . . [O]ur courts have permitted several equitable defenses to a foreclosure action." (Internal quotation marks omitted.) Id.
Furthermore, this court "highlighted, however, that while this construction of making, validity or enforcement has been utilized by Superior Court judges for well over a decade it has not been adopted by our Supreme Court or Appellate Court. It is also noted that some Superior Court judges have rejected a construction of making, validity or enforcement that prevents a court from considering post-execution conduct of the mortgagee . . . It appears to this court that, notwithstanding the language used by some Superior Court decisions, a court may consider the mortgagee's conduct throughout the course of the parties' relationship. The basis of this conclusion is three-fold. First, due consideration must be given to the broad equitable powers of the trial court . . . Second, by definition, some recognized special defenses necessarily involve post-execution behavior of the mortgagee . . . Third, our Supreme Court and Appellate Court have clearly taken into consideration post-execution conduct of the parties when evaluating defenses to a foreclosure action." (Citations omitted; internal quotation marks omitted.) Id., 328.
Finally, this court concluded that: "Simply stated, allowing a defendant to craft a defense that is based on facts associated with the mortgagee's post-execution behavior is not inimical to the requirement that a special defense in a foreclosure action relate to the making, validity or enforcement of the note or mortgage. Such behavior of the mortgagee throughout the course of the relationship may be directly related to the enforcement of the note or mortgage. That is, given an appropriate factual predicate, the court may conclude that it would be inequitable to allow enforcement in light of the mortgagee's behavior." Id. In this light, the court will proceed to examine the legal sufficiency of the defendants' special defenses to this foreclosure action.
Second Special Defense: TARP
The defendants' second special defense is that the subject debt has been paid by reason of plaintiff's efforts to receive funds from the Troubled Assets Relief Program ("TARP"). The defendants characterize this special defense as "payment," which is a well established defense to a foreclosure action. There is no Connecticut law addressing TARP and significantly, federal and out of state law do not support the use of TARP as a special defense to a foreclosure action. See Pantoja v. Countrywide Home Loans, Inc., 640 F.Sup.2d 1177, 1185 (N.D.Cal. 2009) (holding that there is no implied private right to sue fund recipients under TARP); Henry Builders, Inc. v. U.S., United States District Court, Docket No. 1:09-cv-0288-ENV-JMA (E.D.N.Y. January 26, 2009) (New York corporations and resident homeowners did not having standing to sue government because they did not and could not plead that they were in any way particularly harmed by TARP or affected in any way more concretely by it, than any American); Bayview Loan Services, LLC v. Avery Enterprises, Inc., Supreme Court of New York, 2010 NY Slip Op 50336 (U) (N.Y.Sup.Ct. March 8, 2010) (granting summary judgment in favor of lender, rejecting defendants' affirmative defense, which alleged they "have been left to hold the ashes left from this international economic tragedy" and that lender is the "beneficiary of an unconstitutional Act of Congress, [TARP]"). As a result, the court strikes the defendants' second special defense.
Third Special Defense: Equitable Estoppel
The defendants' third special defense asserts the doctrine of equitable estoppel. "`The standards governing the application of equitable estoppel are well established. There are two essential elements to an estoppel — the party must do or say something that is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief and the other party, influenced thereby, must actually change his position or do some act to his injury which he otherwise would not have done.' (Emphasis added; internal quotation marks omitted.) O'Connor v. Waterbury, 286 Conn. 732, 757, 945 A.2d 936 (2008). `As a general rule . . . a representation or assurance, in order to furnish the basis of an estoppel, must relate to some present or past fact or state of things, as distinguished from mere promises or statements as to the future. The misrepresentation must be one of fact and not of intention to support equitable estoppel.' 28 Am.Jur.2d 479, Estoppel and Waiver § 51 (1999)." Banknorth, N.A. v. Blackrock Realty, Superior Court, judicial district of Fairfield, Docket No. CV 09 6002566 (April 14, 2010, Hartmere, J.).
In Liberty Bank v. New London Limited Partnership, supra, 43 Conn. L. Rptr. 328-29, this court found that there was a genuine issue of material fact in regard to the defendant's equitable estoppel defense. "The plaintiff's consistent pattern of accepting late payments without protest, combined with the surrounding circumstances, provided evidence of conduct that may have induced the defendants to believe in the existence of certain facts, i.e., that the plaintiff would continue its collection of the debt in accordance with established past practice. In other words, based on the course of the relationship, the defendants may have reasonably been led to believe that, absent some type of notice to the contrary, the plaintiff would continue to be satisfied with accepting a late payment along with a late fee." Id., 329.
Here, the defendants assert that the plaintiff's agent, CW Capital, "misrepresented that a work-out of the outstanding debt service could be attained and advised Groton Estates to hold funds until further instructions, which were never given." These allegations are clearly distinguishable from those before this court in Liberty Bank, where lender engaged in a pattern of behavior, acceptance of late payments, upon which the defendants reasonably relied to their detriment. At best, the defendants here allege that the plaintiff made a future promise to work out the outstanding debt with them. This allegation is legally insufficient as it constitutes a mere promise regarding the plaintiff's actions at a future time, which is an insufficient basis for an equitable estoppel defense. Accordingly, because the defendants have not alleged that the plaintiff intended or calculated to induce them to believe in certain facts, the court will grant the plaintiff's motion to strike the third special defense.
Fourth Special Defense: Violation of CUTPA
The defendants' fourth special defense asserts: "Plaintiff's claims are barred for violation of CUTPA as set forth more fully below in the revised counterclaims, which are incorporated herein." There appears to be a split of authority amongst Superior Court decisions as to whether a violation of CUTPA provides a legally sufficient special defense to a foreclosure action. This court, however, agrees with the line of Superior Court decisions holding that an alleged violation of CUTPA is properly brought as a counterclaim to foreclosure actions, rather than as a special defense. See LaSalle Bank National Association v. Bardales, Superior Court, judicial district of New London, Docket No. CV 08 5007137 (April 14, 2009, Devine, J.) (addressing plaintiff's alleged violation of CUTPA as a counterclaim); Wells Fargo Bank NA. v. Skoglund, Superior Court, judicial district of New London, Docket No. 4004580 (April 13, 2006, Devine, J.) (same).
"[S]ince CUTPA claims by their very nature constitute claims for damages, they are properly brought as counterclaims rather than special defenses . . . CUTPA is a sword rather than a shield." (Internal quotation marks omitted.) U.S. Bank National Association v. Ascenzia, Superior Court, judicial district of New Haven, Docket No. CV 08 5022527 (July 30, 2009, Abrams, J.) ( 48 Conn. L. Rptr. 345, 347). Therefore, the court strikes the defendants' fourth special defense. Whether the defendants' allegations as to the plaintiff's violation of CUTPA are legally sufficient as a counterclaim to this foreclosure action will be addressed later in this decision.
Fifth Sixth Special Defenses/Second Third Counterclaims: Breach of Fiduciary Duty Breach of the Duty Good Faith and Fair Dealing
In their fifth and sixth special defenses, the defendants assert the following: "Plaintiff's claims are barred by reason of its breach of its fiduciary duties owed to Defendants as set forth more fully below in the revised counterclaims, which are incorporated herein . . . Plaintiff's claims are barred by reason of its breach of the covenant of good faith and fair dealing owed to the Defendants as set forth more fully below in the revised counterclaims, which are incorporated herein." In their second and third counterclaims, the defendants specifically allege, in relevant part, that the plaintiff breached these duties by: "(a) refusing to timely respond to the good faith letter sent on [May 26, 2009] with instructions as to how to allocated funds between debt service and repairs; (b) instructing Mr. Belfonti to hold funds until there was further instructions, which were not given; (c) refusing to negotiate in good faith as it pertains to the contents of the proposal provided by Mr. Belfonti thereby ensuring that the foreclosure would continue to the detriment of Mr. Belfonti . . . (e) permitting CW Capital to further its retaliation by proceeding with foreclosure instead of attempting to negotiate and (f) seeking the removal of MCR Property Management, Inc . . . as property manger despite there being no claim that MCR has mismanaged subject property."
The defendants also allege that the plaintiff breached these duties by "(d) seeking to foreclose on subject property despite having received government bailouts funds . . ." The plaintiff's receipt of TARP funds was previously addressed in this court's discussion of the defendants' second special defense.
The Appellate Court held that special defenses to a foreclosure action, including breach of fiduciary duty and breach of implied covenant of good faith and fair dealing, cannot be upheld unless they attack the making, validity or enforcement of the note or mortgage. See Southbridge Associates v. Garofalo, 53 Conn.App. 11, 17-19, 728 A.2d 1114, cert. denied, 249 Conn. 919, 733 A.2d 229 (1999); see also Fidelity Bank v. Kremsky, 72 Conn.App. 700, 705-06, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002). Moreover, counterclaims to a foreclosure action must relate to the making, validity or enforcement of a mortgage note in order properly to be joined to the complaint. See J.P. Morgan Chase Bank Trustee v. Rodrigues, 109 Conn.App. 125, 133, 952 A.2d 56 (2008); New Haven Savings Bank v. LaPlace, 66 Conn.App. 1, 9, 783 A.2d 1174, cert. denied, 258 Conn. 942, 786 A.2d 426 (2001).
In Ulster Savings Bank v. 28 Brynwood Lane, Ltd., Superior Court, complex litigation docket at Stamford, Docket No. X08 CV 054007323 (January 11, 2010, Jennings, J.T.R.), the court noted that: "There have been many and varied interpretations of the `making, validity and enforcement' requirement by Connecticut Superior Court decisions." There is a line of cases which interprets the phrase very strictly to mean the execution and delivery of an enforceable instrument, and not the occurrences that may arise between the parties during the course of their loan relationship." Id.; see Federal National Mortgage v. Mallozzi, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. 165698 (February 10, 1999, Hickey, J.); Ocwen Federal Bank FSB v. Weinberg, Superior Court, Judicial District of New London, Docket No. 547629 (August 11, 1999, Mihalakos, J.). A second line of cases, however, interprets the "making, validity, and enforcement" requirement less rigidly. See Liberty Bank v. New London Limited Partnership, supra, 43 Conn. L. Rptr. 326; Ocwen Federal Bank FSB, v. Rivas, Superior Court, judicial district of Fairfield, Docket No CV 99 90268135 (February 21, 2002, Stevens, J.). "This court does not subscribe to the literal, chronological test of making, validity and enforcement . . . Like Judge Devine in Liberty Bank, supra, I believe that post-execution actions or positions of a lender can relate to the enforcement of a note and mortgage. Each counterclaim or special defense therefore requires a case-by-case analysis, by the court acting as a court of equity, to assess the extent to which the facts alleged relate to the original transaction and not to any different or subsequent transaction." Ulster Savings Bank v. 28 Brynwood Lane, Ltd., supra, Superior Court, Docket No. X08 CV 05 4007323.
Although this court subscribes to the line of cases that interpret the making, validity and enforcement limitation less rigidly, in the present case, the defendants' allegations as to breach of fiduciary duty and breach of the duty of good faith and fair dealing are legally insufficient. The plaintiff's refusal to respond to the defendants' letter and its refusal to negotiate a loan modification with the defendants and instead, proceed with this foreclosure action, does not rise to the level of breach of these duties. In Southbridge Associates v. Garofalo, supra, 53 Conn.App. 16-17, the Appellate Court affirmed the trial court's granting of summary judgment as to the defendants' special defense of breach of the implied covenant of good faith and fair dealing. In doing so, the court stated: "The implied covenant of good faith and fair dealing requires faithfulness to an agreed common purpose and consistency with the justified expectation of the other party in the performance of every contract . . . Essentially, it is a rule of construction designed to fulfill the reasonable expectations of the contracting parties as they presumably intended. The principle, therefore, cannot be applied to achieve a result contrary to the clearly expressed terms of a contract, unless, possibly, those terms are contrary to public policy . . . The loan documents do not contain a provision requiring a holder of the notes and mortgages to negotiate with or sell the notes to [the defendants] prior to enforcing its foreclosure rights. Moreover, the defendants do not cite nor can we find any authority requiring a holder of a note and mortgage to sell them at a discount to the mortgagor under an implied covenant of good faith and fair dealing when the mortgagor defaults." (Citations omitted; internal quotation marks omitted.) Id.
Additionally, the Appellate Court affirmed the trial court's granting of summary judgment as to the defendants' special defense of breach of fiduciary duty. "Connecticut courts have specifically refused to define a fiduciary relationship in precise detail and in such a manner as to exclude new situations . . . Instead, a fiduciary relationship exists where there is a justifiable trust confided on one side and a resulting superiority and influence on the other . . . A fiduciary relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interest of the other . . . The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him . . . A bank, as a mortgagee lender, may be the fiduciary of the mortgagor borrower when the bank becomes the borrower's financial advisor." (Citations omitted; internal quotation marks omitted.) Id., 18.
In the present case, the defendants allege that the plaintiff's refusal to negotiate with them forms the sole basis of their special defenses/counterclaims for breach of the duty of good faith and fair dealing and breach of fiduciary duty. Moreover, the defendants do not allege that the plaintiff served as their financial advisor. "It is not a breach of the implied covenant of good faith and fair dealing, nor is it unconscionable, for a plaintiff to insist upon a legal or equitable remedy by resorting to the judicial process . . . In the absence of a restructure agreement in the loan documents, a failure by the defendant to attempt to negotiate or restructure the terms of the loan after default, and then seeking foreclosure, does not constitute a breach of the implied covenant of good faith and fair dealing." (Citation omitted.) Great Country Bank v. Kiely, Superior Court, judicial district of Ansonia/Milford, Docket No. CV 94 047460 (January 19, 1995, Curran, J.); see also Equicredit Corp. of America v. Pelizari, Superior Court, judicial district of Tolland, Docket No. CV 02 0077555 (April 4, 2003, Scholl, J.) (striking special defenses/counterclaims because defendant did not allege that there was any provisions in the loan documents which require that plaintiff attempt to cure defendant's arrearage and reinstate the loan instead of proceeding with a foreclosure action); Security Pacific National Trust Co. v. Rolny, Superior Court, judicial district of Litchfield, Docket No. CV 94 0065267 (July 28, 1995, Pickett, J.) (striking defenses concerning defendant's attempts to refinance their mortgage and reach a workout agreement reasoning that these special defenses concerned the business judgment of plaintiff and are not proper special defenses in a foreclosure action).
Therefore, despite this court's lenient application of the making, validity and enforcement limitation, the defendants' special defenses/counterclaims alleging breach of the duty of good faith and fair dealing and breach of fiduciary duty must be stricken.
Additionally, the court finds that the plaintiff's appointment of a receiver is a legally insufficient basis for these special defenses/counterclaims because it is expressly allowed in the mortgage agreement.
Seventh Special Defense Counterclaim One: Vicarious Liability
The defendants' seventh special defense asserts: "Plaintiff's claims are barred as a result of its vicarious liability for the actions of its agent, CW Capital, whose conduct caused, in significant part, the very default it alleges supposedly warrants a foreclosure of the subject property and/or any claimed damages." The allegations against CW Capital include, as previously mentioned in this decision, its refusal to respond to the May 26, 2009 letter and its refusal to negotiate a loan modification with the defendants. The court strikes this special defense and counterclaim. As previously discussed, the alleged conduct of the plaintiff and its agent, CW Capital, is legally insufficient to support any of the special defenses and counterclaims asserted against the plaintiff. As a result, there defendants' vicarious liability claim similarly fails as it is not an independent cause of action and must be predicated on an actionable claim. See Alvarez v. New Haven Register, Inc., 249 Conn. 709, 720-21, 735 A.2d 306 (1999) (discussing principles of vicarious liability).
Eighth Special Defense: Failure to Mitigate Damages
The defendants' eighth special defense asserts: "Plaintiff's recovery is barred in whole, or in part, by its failure to mitigate its damages." In First Trust National Association v. Hatt, 36 Conn.App. 171, 173 n. 2, 649 A.2d 798 (1994), mitigation of damages was included in the list of the defendant's special defenses to a mortgage foreclosure action. Although, mitigation of damages may be considered as a special defense as a matter of law, it is not applicable to the present case. "[T]he concept of mitigation of damages is inapplicable to a mortgage foreclosure action where the damages consist of a sum certain, the repayment of which has been agreed to by the defendant maker of a promissory note." Fleet Bank, N.A. v. Barlas, Superior Court, judicial district of Hartford, Docket No. CV 92 0518205 (June 28, 1994, Aurigemma, J.) [ 12 Conn. L. Rptr. 32]. Here, the plaintiff mitigated its damages by promptly starting a foreclosure action and proceeding in a reasonably expeditious fashion after the defendants' default. See Tuthill Finance v. Greenlaw, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 91 0115439 (May 4, 1998, Lewis, J.), rev'd on other grounds, 61 Conn.App. 1, 762 A.2d 494 (2000). As such, this special defense is also stricken.
Ninth Special Defense: Unclean Hands
The defendants' ninth special defense asserts: "Plaintiff's recovery is barred by the doctrine of unclean hands as plaintiff, through its agent, CW Capital . . . caused, in significant part, the very default it alleges supposedly warrants a foreclosure of the subject property and/or any claimed damages." This court in LaSalle Bank National Association v. Bardales, supra, Superior Court, Docket No. CV 08 5007137, recognized unclean hands as a valid special defense in mortgage foreclosure actions.
"It is a fundamental principle of equity jurisprudence that for a complainant to show that he is entitled to the benefit of equity he must establish that he comes into court with clean hands . . . The clean hands doctrine is applied not for the protection of the parties but for the protection of the court . . . It is applied not by way of punishment but on considerations that make for the advancement of right and justice . . . The doctrine of unclean hands expresses the principle that where a plaintiff seeks equitable relief, he must show that his conduct has been fair, equitable and honest as to the particular controversy in issue . . . Unless the plaintiff's conduct is of such a character as to be condemned and pronounced wrongful by honest and fair-minded people, the doctrine of unclean hands does not apply . . . [A] defense of unclean hands is proper in a mortgage case when the plaintiff . . . require[s] the aid of the illegal transaction to make out his case . . . In other words, the unclean hands defense is proper if the plaintiff would not be able to bring the action but for its improper conduct." (Citations omitted; internal quotation marks omitted.) Id., quoting Thompson v. Orcutt, 257 Conn. 301, 310, 777 A.2d 670 (2001).
The court strikes the defendants' special defense of unclean hands. As previously discussed, the plaintiff has no duty to negotiate a loan modification with the defendants. As a result, this foreclosure action is properly before this court without the aid of any improper conduct on behalf of the plaintiff. Defendants' Remaining Counterclaim: Violation of CUTPA
"In a foreclosure action, a counterclaim must relate to the making, validity or enforcement of the mortgage note in order to be joined with the complaint." JP Morgan Chase Bank, Trustee v. Rodrigues, supra, 109 Conn.App. 133. "This requirement . . . is nothing more than an application of Practice Book § 10-10 . . . [Section] 10-10 provides that [i]n any action for legal or equitable relief, any defendant may file counterclaims against any plaintiff . . . provided that each such counterclaim . . . arises out of the transaction or one of the transactions which is the subject of the plaintiff's complaint . . . In a foreclosure action, the relevant factors for a court to consider in determining whether the [aforementioned] `transaction test' has been met by the counterclaim includes: (1) whether the counterclaim is based on factors outside of the note or mortgage; (2) whether different issues of fact and law are presented by the complaint and counterclaim; and (3) whether separate trials would involve a substantial duplication of effort." (Citations omitted; internal quotation marks omitted.) Eastern Federal Bank v. Krondes, Superior Court, judicial district of New London, Docket No. CV 07 5007447 (September 23, 2008, Martin, J.).
Furthermore, "[i]t is well settled that in determining whether a practice violates CUTPA we 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] . . . 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 . . . Furthermore, a party need not prove an intent to deceive to prevail under CUTPA." (Internal quotation marks omitted.) Eller v. Beckenstein, 117 Conn.App. 550, 565-66, 979 A.2d 1055, cert. denied, 294 Conn. 913, 983 A.2d 274 (2009).
Here, the defendant's allegations are legally insufficient to state a claim for violation of CUTPA. This court has previously recognized that violation of CUTPA may be a proper counterclaim to a foreclosure action. See LaSalle Bank National Association v. Bardales, supra, Superior Court, Docket No. CV 08 5007137; Mortgage Electronics Registration Systems, Inc. v. Venditto, Superior Court, judicial district of New London, Docket No. 4002228 (October 28, 2005, Devine, J.) ( 40 Conn. L. Rptr. 209). Here, the plaintiff's conduct, in refusing to negotiate with the defendants and proceeding to foreclosure, simply does not rise to the level of a violation of CUTPA.
Prayers for Relief
The court also strikes paragraphs two through four of the defendants' prayer for relief. Paragraph two seeks "[c]ommon law punitive damages." The rules in this state regarding the award of common-law punitive damages are well established. "Punitive damages are awarded when the evidence shows a reckless indifference to the rights of others or an intentional and wanton violation of those rights." (Internal quotation marks omitted.) Alaimo v. Royer, 188 Conn. 36, 42, 448 A.2d 207 (1982). Therefore, the court strikes paragraph two.
Paragraphs three and four seek punitive damages and attorneys fees pursuant to CUTPA. Given that the court strikes the defendants' counterclaim alleging violation of CUTPA, it also strikes these corresponding prayers for relief
Conclusion
For all of the foregoing reasons, the plaintiff's motion to strike is granted in its entirety.