Opinion
FBTCV146041948S
06-29-2016
Joseph Demattia v. Bank of America, N.A. et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE THE DEFENDANTS' MOTION TO STRIKE (No. 131)
William J. Wenzel, Judge of the Superior Court.
This action comes before the court on the defendants' motion to strike (#131), filed on April 7, 2016. This dispute arises from an original loan agreement between the plaintiff and the defendant Bank of America, N.A. (BANA), a subsequent agreement or promise between the same parties to temporarily modify payment terms, and the transfer of loan servicing obligations from BANA to the defendant Nationstar Mortgage, LLC (Nationstar). In his revised complaint, the plaintiff generally alleges that BANA agreed to reduce his monthly mortgage installments for a period of twelve months. Upon expiration of that time period, BANA would return his payments to their original amount. Although the plaintiff was current with all payments due under the original and modified agreements, months into the reduced payment schedule, BANA notified the plaintiff that he was past due on payments.
Subsequently, but still within the twelve-month period, Nationstar took over the servicing of the plaintiff's loan and requested documents, which the plaintiff provided, relating to the plaintiff's obligations to BANA. Although the plaintiff allegedly submitted timely payments to Nationstar, Nationstar notified the plaintiff--still within the twelve-month period--that it considered the plaintiff to be in default. Twice within that timeframe, Nationstar claimed delinquencies. Following the expiration of the reduced payment schedule, the plaintiff submitted the amount due under the original agreement to Nationstar. Nationstar again provided the plaintiff with a notice of default and claimed an even greater delinquency. The plaintiff attempted to make a second regular monthly payment, but Nationstar refused to accept this tender.
In the present motion, the defendants assert that the thirty-six-count revised complaint, in its entirety, is legally insufficient and fails to state a cognizable claim. The defendants also put forth specific challenges to the legal sufficiency of each cause of action, which are discussed below.
DISCUSSION
Standard of Review
" [A] motion to strike challenges the legal sufficiency of a pleading . . ." (Internal quotation marks omitted.) Coppola Construction Co. v. Hoffman Enterprises Ltd. Partnership, 309 Conn. 342, 350, 71 A.3d 480 (2013). " In ruling on a motion to strike the trial court is limited to considering the grounds specified in the motion." Meredith v. Police Commission, 182 Conn. 138, 140, 438 A.2d 27 (1980).
" [The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency . . . [and takes] all well-pleaded facts and those facts necessarily implied from the allegations . . . as admitted . . . Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Coppola Construction Co. v. Hoffman Enterprises Ltd. Partnership, supra, 309 Conn. 350. The court can only consider that which is alleged " within the confines of the pleadings and not external documents . . ." Zirinsky v. Zirinsky, 87 Conn.App. 257, 268 n.9, 865 A.2d 488, cert. denied, 273 Conn. 916, 871 A.2d 372 (2005); see also Rowe v. Godou, 209 Conn. 273, 278, 550 A.2d 1073 (1988) (in ruling on motion to strike, court cannot resort to information outside of complaint).
" 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). " [I]nsofar as [a] motion to strike is directed [to] the entire complaint, it must . . . fail if any of the plaintiff's claims are legally sufficient." (Internal quotation marks omitted.) McDermott Road, LLC v. Hammonasset Construction, LLC, Superior Court, judicial district of New Haven, Docket No. CV-13-6035719-S, (March 28, 2014, Fischer, B., J.); accord Whelan v. Whelan, 41 Conn.Supp. 519, 520, 588 A.2d 251 (1991) (motion denied where directed at entire complaint rather than selected portions). Finally, " [w]here the legal grounds for . . . a motion [to strike] are dependent upon underlying facts not alleged in the plaintiff's pleadings, the defendant must await the evidence which may be adduced at trial, and the motion should be denied." (Internal quotation marks omitted.) Comm'r of Labor v. C.J.M. Servs., 268 Conn. 283, 293, 842 A.2d 1124 (2004). On the other hand, " [a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 349, 63 A.3d 940 (2013).
The Complaint in its Entirety
The defendants move to strike the revised complaint in its entirety because it is legally insufficient and fails to state a cognizable claim. As is stated above, when " [a] motion to strike is directed [to] the entire complaint, it must . . . fail if any of the plaintiff's claims are legally sufficient" (Internal quotation marks omitted.) McDermott Road, LLC v. Hammonasset Construction, LLC, supra, Superior Court, Docket No. CV-13-6035719-S, . As is discussed subsequently, the court finds that more than one of the plaintiff's claims is legally sufficient. Therefore, the motion to strike the complaint in its entirety is denied.
Counts One and Nineteen: Breach of Contract
The defendants move to strike the plaintiff's breach of contract claims on the ground that the plaintiff has failed to allege that the defendants engaged in any conduct which violated the terms of the modification agreement. The defendants argue that the plaintiff's loan was delinquent for the entire reduced payment period and that they notified the plaintiff of the same. In addition, the defendants contend that the plaintiff has failed to allege that he suffered any actual damage as a result of the alleged breach. They aver that the plaintiff has made conclusory allegations that he suffered damages.
" The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." (Internal quotation marks omitted.) Keller v. Beckenstein, 117 Conn.App. 550, 558, 979 A.2d 1055, cert. denied, 294 Conn. 913, 983 A.2d 274 (2009). " Whether the terms of the contract support [an] allegation is a factual question to be determined by the fact finder and, therefore, is not at issue when the trial court considers a motion to strike." Commissioner of Labor v. C.J.M. Services, Inc., supra, 268 Conn. 293.
In counts one and nineteen, the plaintiff incorporates his general allegations and additionally alleges: (1) that the defendants and the plaintiff entered into a contract or contracts for the repayment of debt; (2) that the plaintiff has performed all of his obligations; (3) that the defendants breached the contract or contracts because they wrongfully filed notices of default alleging delinquencies and failed to keep an accurate accounting of payments due and made; and (4) that, as a result, the plaintiff has incurred damages. As to BANA, the plaintiff also alleges that its failure to inform Nationstar of the modified payment terms constitutes a breach. As to Nationstar, the plaintiff also alleges that the refusal to accept payment constitutes a breach.
The problem with defendants' challenge to these counts is that the arguments rest on claims as to the actual terms of the original note and mortgage agreements as well as the modification agreement. None of these agreements are before the court for the purpose of this motion. What is before the court are the allegations of the Complaint that plaintiff performed his obligations under these agreements and defendants did not. The court finds that, based on these assertions, the plaintiff has alleged that the defendants violated the relevant contract or contracts. As this is a motion to strike, the court cannot consider terms of agreements not yet before the court. Additionally, the court finds that, although not stated explicitly, these allegations necessarily imply that the plaintiff was injured. For these reasons, the defendants' motion to strike counts one and nineteen is denied.
Counts Two and Twenty: Promissory Estoppel
The defendants put forth two arguments in support of their motion to strike the plaintiff's promissory estoppel claims: (1) the claims cannot survive because they rest on the existence of a contract and (2) the plaintiff has not alleged that the defendants made a promise which they could reasonably have expected to induce reliance.
Although the defendants did not raise this second argument in their motion, the plaintiff has not objected to their raising it in their memorandum of law. Therefore, the court will consider it. See Bouchard v. People's Bank, supra, 219 Conn. 468 n.4.
Promissory estoppel and breach of contract are inconsistent and alternative legal theories; " [p]romissory estoppel is asserted when there is an absence of consideration to support a contract." Glazer v. Dress Barn, Inc., 274 Conn. 33, 88, 873 A.2d 929 (2005). " In its general application, [the Appellate Court] ha[s] recognized that [t]here 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." (Internal quotation marks omitted.) Blackwell v. Mahmood, 120 Conn.App. 690, 695, 992 A.2d 1219 (2010).
As to the defendants' first argument, in his revised complaint, the plaintiff alleges breach of contract in counts one and nineteen and promissory estoppel in counts two and twenty. Whereas in counts one and nineteen the plaintiff alleges that the parties entered into and breached a contract or contracts, in counts two and twenty the plaintiff alleges that the defendants made certain clear and unambiguous promises to the plaintiff which the plaintiff relied upon to his detriment. Despite the defendants' contentions, the causes of action rely on separate allegations; the plaintiff has not " allege[d] promissory estoppel within the same count that alleges a binding contract for which there was consideration paid." (Emphasis in original.) Pourmaleki v. Eskierski, Superior Court, judicial district of New Britain, Docket No. CV-07-5004715-S, (March 28, 2008, Pittman, J.). Accordingly, because " alternative and even inconsistent theories of liability against one or more defendants [may be set forth] in a single complaint"; Dreier v. Upjohn Co., 196 Conn. 242, 245, 492 A.2d 164 (1985); because the presence of a contract is not pleaded in the plaintiff's promissory estoppel counts, and because the facts alleged in the breach of contract counts are not incorporated by reference into the alternative legal theory asserted in counts two and twenty, the promissory estoppel claims survive this aspect of the analysis.
As to the defendants' second argument, the plaintiff alleges that the defendants promised: (1) to temporarily reduce his monthly payments; (2) to subsequently increase his monthly payments to their original amount; and (3) that no balloon payments would be due. Accordingly, the plaintiff has alleged clear and definite promises. The plaintiff also alleges that the defendants could reasonably have expected the plaintiff to change his financial positions and to change the amount of money that he paid to the defendants each month based upon these promises. Accordingly, regardless of the plaintiff's failure to allege that either of the defendants promised to forgive any amount owed, the court finds that the plaintiff has sufficiently alleged a claim for promissory estoppel. The motion to strike counts two and twenty is denied.
Counts Three and Twenty-One: Negligent Misrepresentation
The defendants move to strike the plaintiff's claims of negligent misrepresentation on the ground that the plaintiff has not alleged how the defendants made any misrepresentations. In their memorandum of law, the defendants expand upon this ground and contend that the plaintiff has failed to plead facts which show a misrepresentation by the defendants that the defendants knew to be false. The representations to which the plaintiff cites, the defendants continue, were not false. In addition, the defendants aver that the plaintiff has not alleged how he was damaged; the plaintiff's home has not been foreclosed and the plaintiff has not alleged that foreclosure proceedings have commenced.
" [The Supreme Court] has long recognized liability for negligent misrepresentation . . . [The court has] held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth . . . Traditionally, an action for negligent misrepresentation requires the plaintiff to establish (1) that the defendant made a misrepresentation of fact (2) that the defendant knew or should have known was false, and (3) that the plaintiff reasonably relied on the misrepresentation, and (4) suffered pecuniary harm as a result." (Citations omitted; internal quotation marks omitted.) Coppola Construction Co. v. Hoffman Enterprises Limited Partnership, supra, 309 Conn. 351-52.
In his negligent misrepresentation counts, the plaintiff incorporates all of his general allegations. In addition, the plaintiff alleges that the defendants falsely represented that they were temporarily reducing the plaintiff's installment payments, that the plaintiff's payments would return to their original amount, that the plaintiff was current with all payment obligations, and that no balloon payments would be due in connection with the modified payment schedule. The plaintiff also claims that the defendants knew or should have known that their representations were false at the time they were made and that the plaintiff suffered a loss in relying on the representations. The court finds that the plaintiff has sufficiently alleged that the defendants misrepresented facts that they knew or should have known to be false. The court also finds that these allegations necessarily imply pecuniary loss. Therefore, the motion to strike counts three and twenty-one is denied.
Counts Four and Twenty-Two: Fraudulent Misrepresentation
The defendants move to strike the plaintiff's fraudulent misrepresentation claims on the ground that the plaintiff has failed to meet the heightened pleading standard that a cause of action sounding in fraud demands. In addition, the defendants argue that the plaintiff has not shown how the defendants made any misrepresentations or how he suffered any damages as a result.
" The essential elements of an action in common-law fraud . . . are that: (1) a false representation was made as a statement of fact; (2) it was untrue and known to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon that false representation to his injury." (Internal quotation marks omitted.) Sturm v. Harb Development, LLC, 298 Conn. 124, 142, 2 A.3d 859 (2010). " [T]he mere allegation that a fraud has been perpetrated is insufficient"; Chase Manhattan Mortgage Corp. v. Machado, 83 Conn.App. 183, 188, 850 A.2d 260 (2004); instead, " specific acts must be pleaded . . ." Id.
In the present case, in addition to incorporating his general allegations, the plaintiff has alleged the following in his fraudulent misrepresentation claims: The defendants falsely represented, as statements of fact, that: (1) they were reducing the plaintiff's monthly payments for a period of twelve months; (2) that the monthly payments would revert to their original amount; and (3) that no balloon payments would be due. These representations were made to induce the plaintiff to change his monthly mortgage payment. The plaintiff acted upon these representations by submitting reduced payments and changing his financial position in other ways. As such, the plaintiff has suffered a loss.
The court finds that the plaintiff has not merely alleged that a fraud has been perpetrated. He specifically alleged conduct on the part of the defendants that was done to induce him to change his mortgage payments. Contra Chase Manhattan Mortgage Corp. v. Machado, supra, 83 Conn.App. 188. This alleged conduct includes misrepresentations which the plaintiff allegedly relied on to his detriment. These allegations necessarily imply financial damage. For these reasons, the defendants' motion to strike counts four and twenty-two is denied.
Counts Five and Twenty-Three: Negligent Infliction of Emotional Distress
In their motion, the defendants move to strike the plaintiff's negligent infliction of emotional distress claims on the following grounds: (1) the plaintiff fails to allege that the defendants owed the plaintiff a legal duty; (2) the plaintiff fails to allege that the defendants knew of the type of injury that the plaintiff would suffer as a result of their alleged wrongful conduct; and (3) the plaintiff fails to allege that he actually suffered any injury as a result of the alleged wrongful conduct.
In their memorandum in support of their motion, the defendants put forth additional arguments. Although the court is limited to considering grounds raised in the motion, the court will entertain these arguments because the plaintiff has not objected on this basis. See Bouchard v. People's Bank, supra, 219 Conn. 468 n.4. The defendants contend that Connecticut courts have only allowed negligent infliction of emotional distress claims stemming from breach of contract in especially egregious situations. Finally, the defendants argue that, even if the plaintiff alleges sufficient underlying facts, his claims still fail as a matter of law because the economic loss doctrine bars recovery; the plaintiff's claim is for monetary damages arising out of an alleged breach of contract.
" Connecticut recognizes a cause of action for negligent infliction of emotional distress . . . In general, to prevail on such a claim, a plaintiff must prove that the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress, the plaintiff's distress was foreseeable, the emotional distress was severe enough that it might result in illness or bodily harm, and, finally, that the defendant's conduct was the cause of the plaintiff's distress." (Citation omitted.) Olson v. Bristol-Burlington Health District, 87 Conn.App. 1, 5, 863 A.2d 748, cert. granted, 273 Conn. 914, 870 A.2d 1083 (2005) (appeal withdrawn May 25, 2005). " [I]n order to prevail on a claim of negligent infliction of emotional distress, the plaintiff must prove that the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm . . . This . . . test essentially requires that the fear or distress experienced by the plaintiffs be reasonable in light of the conduct of the defendants. If such [distress] were reasonable in light of the defendants' conduct, the defendants should have realized that their conduct created an unreasonable risk of causing distress, and they, therefore, properly would be held liable. Conversely, if the [distress] were unreasonable in light of the defendants' conduct, the defendants would not have recognized that their conduct could cause this distress and, therefore, they would not be liable." (Internal quotation marks omitted.) Larobina v. McDonald, 274 Conn. 394, 410, 876 A.2d 522 (2005).
In the context of contractual breaches, appellate authority has recognized negligent infliction of emotional distress claims when " [a] contract . . . creates a rigorous expectation for contractual performance." Murphy v. Lord Thompson Manor, Inc., 105 Conn.App. 546, 554, 938 A.2d 1269, cert. denied, 286 Conn. 914, 945 A.2d 976 (2008). Except for in the context of termination of an at-will employee, there is no " requirement that the conduct in question . . . be unreasonable, egregious or outrageous . . ." Id. Absent this employment exception, as is stated in the preceding paragraph, to sufficiently plead a negligent infliction of emotional distress claim a plaintiff need only allege " that the defendant's conduct created an unreasonable risk of causing the plaintiff's emotional distress and that the plaintiff's distress was foreseeable." (Internal quotation marks omitted.) Id., 555.
The court agrees with the defendants that the existence of a duty is key component of a negligent infliction of emotional distress claim. See Browne v. Kommel, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV-08-5006167 (July 14, 2009, Pavia, J.) (48 Conn.L.Rptr. 248, 250, ) (" A claim of negligent infliction of emotional distress requires that the duty between the parties must be direct in order for it to be viable . . . In order to press a negligent infliction of emotional distress claim, a plaintiff must allege facts showing that the defendant negligently breached a duty owed to the plaintiff . . ." (Citation omitted; internal quotation marks omitted.)); see also Di Teresi v. Stamford Health System, Inc., 142 Conn.App. 72, 63 A.3d 1011 (2013) (discussing the relationship between the duty and foreseeability elements of a negligent infliction of emotional distress claim and affirming the trial court's grant of the defendant's motion for summary judgment on the plaintiff's negligent infliction of emotional distress claim on the ground that the defendant did not owe the plaintiff a duty). " A duty to use care may arise from a contract . . . or from circumstances under which a reasonable person, knowing what he knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result from his act or failure to act." Coburn v. Lenox Homes, Inc., 186 Conn. 370, 375, 441 A.2d 620 (1982); see also Gazo v. Stamford, 255 Conn. 245, 251, 765 A.2d 505 (2001).
In the present case, the plaintiff has alleged the existence of an agreement or agreements between himself, BANA, and Nationstar. The plaintiff has also alleged that the defendants were aware that he had just lost employment, that he had medical issues, and that they were threatening to take away his only home. Construing the complaint in the manner most likely to maintain its legal sufficiency, the court finds that the plaintiff has adequately alleged facts which support the existence of a duty. Contra, Sunset Mortgage v. Agolio, Superior Court, judicial district of New London, Docket No. CV-05-69833, (May 14, 2005, Jones, J.) (striking negligent infliction of emotional distress count because it lacked allegation as to " why the plaintiff would have known that its conduct in attempting to enforce [a] note and/or mortgage may result in distress to defendant" and therefore did not establish duty); Leach v. Collect America, Superior Court, judicial district of New Haven, Docket No. CV-01-0455786-S, (August 9, 2004, Skolnick, J.) (striking negligent infliction of emotional distress claim because, beyond a generalized statement, the plaintiff did not provide any " facts indicating why the defendant would have known that its conduct may result in distress to the plaintiff [and therefore did not allege] facts from which it could be found that a legal duty was owed . . .").
Furthermore, the court finds that the plaintiff's allegations that the defendants knew of his employment situation and his medical issues satisfy the narrow foreseeability requirement that a negligent infliction of emotional distress claim demands. Contra, Topolski v. Bank of America, Superior Court, judicial district of Tolland, Docket No. CV-13-5005789, (May 16, 2014, Sferrazza, S.J.) (striking a negligent infliction of emotional distress count because it lacked " any allegation that the defendant possessed information pertaining to either plaintiffs' physical health or condition which satisfies the narrow for[e]seeability component of a cause of action for negligent infliction of emotional distress."). As " [t]he ultimate test for the existence of the legal duty to use care is found in the foreseeability that harm may result if it is not exercised"; Ruiz v. Victory Properties, LLC, 315 Conn. 320, 328, 107 A.3d 381 (2015), the existence of foreseeability supports the existence of a legal duty. For these reasons, the court finds that the plaintiff's negligent infliction of emotional distress claims survive this part of the analysis.
The defendants' alternative argument rests on the economic loss doctrine. The economic loss doctrine " is a judicially created principle which prohibits recovery in tort where the basis for that tort claim arises from violation of a contract and damages are limited to purely economic losses as opposed to personal injury or property damage." Dobco, Inc. v. Williams Development Co., Superior Court, judicial district of Tolland, Complex Litigation Docket, Docket No X07-CV-99-0072152 (May 17, 2002, Sferrazza, J.) (32 Conn.L.Rptr. 214, ). There is a split of authority regarding whether the economic loss doctrine is recognized in Connecticut and, if so, whether the doctrine may only be applied in the products liability context. See New Canaan v. Brooks Laboratories, Inc., Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-05-4006797-S (November 7, 2007, Tobin, J.) (44 Conn.L.Rptr. 501, ) (thoroughly analyzing the status of the economic loss doctrine in Connecticut). Where " claims for emotional distress damages are not limited to economic loss, " the doctrine does not apply. Hoydic v. B& E Juices, Inc., Superior Court, judicial district of Stamford-Norwalk, Complex Litigation Docket, Docket No. X08-CV-03-4010104-S, (February 27, 2008, Jennings, J.). Construing the allegations in a manner most likely to maintaining legal sufficiency, the court finds that the motion to strike cannot be granted on this ground. See New Canaan v. Brooks Laboratories, Inc., supra, Superior Court, Docket No. CV-05-4006797-S, .
Counts Six and Twenty-Four: Breach of the Covenant of Good Faith and Fair Dealing
The defendants move to strike the plaintiff's breach of the covenant of good faith and fair dealing claims on the grounds that the plaintiff has failed to allege that the defendants acted in bad faith or breached any terms of the agreement. The defendants also aver that the plaintiff has failed to allege that he suffered any actual injury.
" [I]t is axiomatic that the . . . duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship . . . 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 has been defined in our jurisprudence in various ways. 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 . . . [B]ad faith may be overt or may consist of inaction, and it may include evasion of the spirit of the bargain." (Citation omitted; internal quotation marks omitted.) Keller v. Beckenstein, supra, 117 Conn.App. 563-64. " Subterfuges and evasions violate the obligation of good faith in performance even though the actor believes his conduct to be justified . . . A complete catalogue of types of bad faith is impossible, but the following types are among those which have been recognized in judicial decisions: . . . lack of diligence and slacking off, willful rendering of imperfect performance . . . and interference with or failure to cooperate in the other party's performance." (Internal quotation marks omitted.) Elm St. Builders, Inc. v. Enter. Park Condo. Ass'n, 63 Conn.App. 657, 667, 778 A.2d 237 (2001).
In his claims for breach of the covenant of good faith and fair dealing, the plaintiff incorporates his breach of contract allegations. He also alleges that BANA refused to keep accurate records of payments and amounts due and failed to inform Nationstar of the modified terms of the contract or contracts. The court finds that these allegations, which consist of inaction, amount to neglect, a lack of diligence, and slacking off. The plaintiff further alleges that BANA intentionally and wilfully held the plaintiff in default. The court finds that this allegation constitutes willful rendering of imperfect performance. In addition to refusing to keep accurate records and intentionally and wilfully holding the plaintiff in default, the plaintiff alleges that Nationstar failed to accept payments when properly made. This allegation amounts to the failure to cooperate with the plaintiff's performance. For these reasons, the court finds that the plaintiff's claims survive this part of the analysis.
As is stated above, the court finds that the allegations necessarily imply that the defendants breached the agreement and caused the plaintiff injury. Accordingly, the defendants' motion to strike counts six and twenty-four is denied.
Counts Seven and Twenty-Five: Violation of the Creditors' Collection Practices Act (CCPA)
The defendants erroneously refer to this as the Connecticut Consumer Protection Act.
The defendants move to strike the plaintiff's CCPA claims on the grounds that the plaintiff has not alleged that the defendants acted in a manner that constitutes a violation of the statute; that the plaintiff has merely recited the elements of a CCPA claim, and that the plaintiff has failed to allege that he suffered any actual damage.
" [General Statutes] § 36a-646 . . . prohibits a creditor from using any abusive, harassing, fraudulent, deceptive or misleading representation, device or practice to collect or attempt to collect any debt . . ." (Internal quotation marks omitted.) Davis v. Hunt Leibert Jacobson, P.C., United States District Court, Docket No. 3:12CV1102 (JBA), (D.Conn. November 7, 2014), reconsideration denied sub nom. Davis v. Jacobson, United States District Court, Docket No. 3:12CV1102 (JBA), (D.Conn. January 20, 2015).
The commissioner of banking has adopted regulations to specify a nonexhaustive list of acts which are deemed to be in violation of § 36a-646. As to representations, devices, and practices, § 36a-647-6 of the Regulations of Connecticut State Agencies states, in relevant part: " A creditor shall not use any fraudulent, deceptive or misleading representation, device or practice in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section . . . (2) The false representation of: (A) The character, amount or legal status of any debt . . . (11) The use of any other false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer debtor or consumer debtor agent . . ." Regs., Conn. State Agencies § 36a-647-6.
The plaintiff alleges that BANA wrongfully filed a notice of default, alleged a false delinquency, and threatened foreclosure of the plaintiff's home, despite the plaintiff being current on his payments. Also, BANA allegedly failed to keep an accurate accounting of payments due and made, failed to provide Nationstar with an accurate accounting, and wrongfully misapplied payments on the debt to wrongfully hold the plaintiff in default. In addition to alleging that Nationstar engaged in similar wrongful conduct, the plaintiff alleges that Nationstar failed to accept payments timely made and continues to do so. The court finds that the plaintiff has sufficiently alleged statutory violations.
Although the court agrees with the defendants that a plaintiff may not merely plead conclusions of law without sufficient alleged facts to support them, in the present case the court finds that the allegations discussed above satisfy this standard. They also necessarily imply financial injury. For these reasons, the motion to strike counts seven and twenty-five is denied.
Counts Eight and Twenty-Six: Violation of the Fair Debt Collection Practices Act (FDCPA)
The defendants move to strike the plaintiff's FDCPA claims on the ground that the defendants are not debt collectors as defined by the statute.
Pursuant to the FDCPA, " [t]he term 'debt collector' means any person [1] who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or [2] who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another . . . [T]he term [also] includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of [a specific section], such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests . . ." 15 U.S.C. § 1692a(6).
The FDCPA specifically lists certain persons who are not considered " debt collectors" within the meaning of the statute. For example, the term does not include " any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was originated by such person . . . [or] concerns a debt which was not in default at the time it was obtained by such person . . ." 15 U.S.C. 1692a(6)(F).
In this context, the term " 'person' includes artificial entities and indeed as a practical matter refers primarily to them" and courts " routinely apply [these provisions] to corporations." Anarion Investments, LLC v. Carrington Mortgage Services, LLC, 794 F.3d 568, 569 (6th Cir. 2015).
The plaintiff alleges that BANA is a national bank and that BANA loaned money to the plaintiff under a note which created a debt owed by the plaintiff to BANA. The plaintiff additionally alleges that although BANA assigned ownership of the debt, BANA continued to collect the debt on behalf of the assignee. Therefore, according to the pleadings, BANA qualifies as a " debt collector" as defined under 15 U.S.C. § 1692a(6) because it was collecting debts for another. The plaintiff has overlooked the exception to the statute which clearly excludes " any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was originated by such person . . ." 15 U.S.C. § 1692a(6)(F). Pursuant to this exception, taking the allegations as truth, the court finds that BANA does not qualify as a debt collector under the statute because, although it was attempting to collect the debts of the assignee on behalf of the assignee, BANA originated the debt.
At oral argument on May 23, 2016, counsel for the plaintiff essentially conceded this point.
As to Nationstar, the plaintiff alleges the following. Nationstar is a limited liability company, BANA loaned money to the plaintiff under a promissory note, the note created a debt owed by the plaintiff to BANA, and the debt was subsequently transferred by BANA to Nationstar. The plaintiff additionally alleges that Nationstar did not own the debt, but collected it on behalf of the holder of debt. Based on the allegations contained in count twenty-six, the court finds that Nationstar does not qualify as a " debt collector" because nowhere in count twenty-six does the plaintiff allege that the debt was in default at the time that Nationstar took it over. Therefore, Nationstar falls within the exception for a " person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was not in default at the time it was obtained by such person . . ." 15 U.S.C. § 1692a(6)(F).
For these reasons, the defendants' motion to strike counts eight and twenty-six is granted.
Counts Nine through Eighteen and Twenty-Seven through Thirty-Six: Violations of the Connecticut Unfair Trade Practices Act (CUTPA)
The defendants move to strike the plaintiff's claims arising under CUTPA because the plaintiff has failed to allege that the defendants engaged in unfair and deceptive acts as required and fails to allege that he suffered any actual damage.
Pursuant to CUTPA, " no person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." General Statutes § 42-110b(a). " Any person who suffers an 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 [S]ection 42-110b, may bring an action . . . to recover actual damages." § 42-110g(a). " CUTPA has come to embrace a much broader range of business conduct than does the common-law tort action . . . Moreover, [b]ecause CUTPA is a self-avowed 'remedial' measure, General Statutes § 42-110b(d), it is construed liberally in an effort to effectuate its public policy goals . . . Indeed, there is no . . . unfair method of competition, or unfair [or] deceptive act or practice that cannot be reached [under CUTPA]." (Citations omitted; internal quotation marks omitted.) Associated Investment Co. Ltd. Partnership v. Williams Associates IV, 230 Conn. 148, 157-58, 645 A.2d 505 (1994).
" CUTPA claims can be based on either an actual deceptive practice or an unfair practice--that is, a practice amounting to a violation of public policy." (Internal quotation marks omitted.) Langan v. Johnson & Johnson Consumer Companies, Inc., 95 F.Supp.3d 284, 288 (D.Conn. 2015) (citing Ulbrich v. Groth, 310 Conn. 375, 409, 78 A.3d 76 (2013)). " An act or practice is actually deceptive under CUTPA when there is: (1) a representation, omission, or other practice likely to mislead consumers; (2) the consumer interpret[s] the message reasonably under the circumstances; and (3) the misleading representation, omission, or practice [is] material--that is, likely to affect consumer decisions or conduct." (Internal quotation marks omitted.) Id. (citing Smithfield Associates, LLC v. Tolland Bank, 86 Conn.App. 14, 28, 860 A.2d 738 (2004), 273 Conn. 901, 867 A.2d 839 (2005)). " To determine whether an act or practice is unfair under CUTPA, Connecticut courts look to the following factors: (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]." Id. (citing Ulbrich v. Groth, supra, 310 Conn. 409).
" [N]ot every contractual breach rises to the level of a CUTPA violation." (Internal quotation marks omitted.) Naples v. Keystone Building & Development Corp., 295 Conn. 214, 228, 990 A.2d 326 (2010). " [A]n allegation of breach of contract can make a legally sufficient CUTPA claim as long as there are substantial aggravating circumstances . . . [S]ubstantial aggravating circumstances sufficient to support CUTPA claims [include] fraudulent representations, fraudulent concealment, false claims . . . and multiple breaches of contract . . . [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 . . . [Even an] innocent misrepresentation can amount to a CUTPA violation . . ." Jolen, Inc. v. Brodie & Stone, PLC, Superior Court, judicial district of Fairfield, Docket No. CV-15-6053151 (May 13, 2016, Kamp, J.) [62 Conn.L.Rptr. 343, ] .
Although the revised complaint contains twenty CUTPA causes of action, essentially, the plaintiff has alleged two CUTPA causes of action. The first, against BANA, rests on the allegations asserted in the plaintiff's general allegations, fraudulent misrepresentation, breach of the covenant of good faith and fair dealing, CCPA, and FDCPA claims. The second, against Nationstar, rests on the same underlying causes of action, only directed toward Nationstar. Because the defendants have addressed the CUTPA allegations as one, the court will as well.
The factual basis for the CUTPA violations, as alleged in the underlying counts, is as follows. Each defendant refused to keep accurate records and wrongfully held the plaintiff in default. BANA failed to inform Nationstar of the modified terms of the agreement and Nationstar failed to accept payment when properly made. The defendants also held the plaintiff responsible for balloon payments, which they had promised he would not incur. In general, the plaintiff has alleged what amounts to multiple breaches of agreements and/or promises, which constitute violations of CUTPA. Specifically, the plaintiff has alleged fraudulent misrepresentations, bad faith, violations of the CCPA, and violations of the FDCPA. The factual allegations underlying these causes of action have been found to constitute legally sufficient violations of CUTPA. See Tanpiengco v. Tasto, 72 Conn.App. 817, 821, 806 A.2d 1080 (2002) (deliberate misrepresentation constitutes CUTPA violation); Tillquist v. Ford Motor Credit Co., 714 F.Supp. 607, 615, 616 (D.Conn. 1989) (violation of banking regulations, including CCPA, constitutes violation of CUTPA); Harley v. Indian Spring Land Co., 123 Conn.App. 800, 833-37, 3 A.3d 992 (2010) (conduct which violated CUTPA also breached the implied duty of good faith and fair dealing); Ellis v. General Revenue Corp., 274 F.R.D. 53, 61 (D.Conn. 2011) (validity of FDCPA and CUTPA claims relies on a common factual issue); Machado v. Southern New England Telephone, Superior Court, judicial district of New Haven, Docket No. CV-04-4000577-S, (December 22, 2004, Martin, J.) (factual allegations contained in stricken FDCPA count constitute legally sufficient CUTPA violation). Finally, the court finds that the plaintiff has alleged an ascertainable loss, which is all that is required of a plaintiff who is pursuing a CUTPA violation. See Marinos v. Poirot, 308 Conn. 706, 717, 66 A.3d 860 (2013).
Accordingly, the plaintiff has sufficiently alleged CUTPA violations and the motion to strike counts nine through eighteen and twenty-seven through thirty-six is denied.
CONCLUSION
The motion to strike counts eight and twenty-six is granted. As to all other counts, the motion to strike is denied.