Opinion
No. CV 084009109
February 23, 2010
MEMORANDUM OF DECISION RE MOTION TO STRIKE #107
FACTS
On December 5, 2008, the plaintiff, Ralph Durante, filed the five-count complaint against the defendants, Michael Martinez, Patricia Comard, Alliance Five, Inc., Victoria Stable, LLC, Jorgensen Joiner, LLC, and Tony Jorgensen. Count one claims breach of contract against Alliance Five, Inc., and Martinez, count two claims intentional or negligent misrepresentation and fraud against all defendants and unjust enrichment against Martinez and Comard, count three claims negligence against Martinez, and counts four and five claim, respectively, negligence and breach of the duty of good faith and fair dealing against Jorgensen Joiner, LLC, and Jorgensen.
Each count of the complaint is labeled with a heading setting forth the cause of action alleged in each count. While the claim for unjust enrichment is not set forth in the heading of count two, the parties have agreed, implicitly by discussion in the pleadings and at the short calendar on November 2, 2009, that a separate cause of action for unjust enrichment was set forth in the last paragraph of count two.
On July 16, 2009, Comard filed a motion to strike those portions of count two directed against her on the ground that the plaintiff has not alleged any acts of misconduct by Comard sufficient to support causes of action for intentional or negligent misrepresentation, fraud or unjust enrichment against her. The motion is accompanied by a memorandum of law. The plaintiff filed a memorandum in opposition on October 30, 2009. The matter was heard at the short calendar on November 2, 2009, at which time the plaintiff agreed to amend the complaint to allege the unjust enrichment cause of action in a separate count.
Count two alleges the following pertinent facts. On January 12, 2005, Alliance Five, Inc. (Alliance), acting by and through Martinez, purchased a vacant building lot in East Lyme (the property) to which Alliance and Martinez each took title. Thereafter, the plaintiff, for investment purposes, made a series of loans totaling $142,000 to Martinez to fund construction of a single-family home by Martinez on the property.
The plaintiff alleges that both Alliance and Victoria Stable, LLC, while entities existing under the laws of Delaware and Connecticut, respectively, are "but the alter ego" of Martinez. Neither defendant has filed an appearance in this action.
The complaint further alleges that Alliance later conveyed title to the property to Victoria Stable, LLC.
In May 2006, Martinez made several representations to the plaintiff related to the property, including that third-party lenders of Martinez were about to foreclose on the property and that he had no source of funds to pay the third-party lenders or the plaintiff. Between May 2006, and August 23, 2006, Martinez and his wife Comard negotiated and sold their homestead property in East Lyme (the homestead) for approximately $1.4 million. Martinez and Comard were represented by Jorgensen Joiner, LLC, and Jorgensen (collectively, the Jorgensen defendants) in the negotiation and closing of these sales. The Jorgensen defendants handled various real estate matters for all of the defendants during this time.
On July 13, 2006, Martinez and the Jorgensen defendants represented to the plaintiff that he risked losing his investment in the property if he did not buy out Martinez's third-party debt on the property because there was no other means of paying any portion of the debt on the property or any sums owed to the plaintiff. This representation was false and material to the plaintiff's decision, on that same day, to buy out the property by entering into a mortgage obligation to a third party in the amount of $350,000. The plaintiff retained the Jorgensen defendants to handle the buy-out and mortgage loan.
Martinez and the Jorgensen defendants did not inform the plaintiff that some of the debt he paid off encumbered both the property and another project in East Haddam, and failed to disclose that Martinez and Comard were receiving the proceeds from the sale of the homestead. As a result, the plaintiff was fraudulently induced to pay Martinez the $350,000, leading to the plaintiff's paying down the overall debt of Martinez and Comard and increasing the funds available to them from the homestead sale. Additionally, while acting jointly and as agents of Comard, Martinez and the Jorgensen defendants intentionally failed to disclose the fact of the homestead sale with the intent to deceive and defraud the plaintiff and to induce reliance on the nondisclosure.
The plaintiff relied on the defendants' representations and nondisclosures, and, as a result, sustained substantial pecuniary injury by overpaying for the property, foregoing the opportunity to be paid on prior loans made to Martinez and paying debts of Martinez and Comard.
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 admits all facts well pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Emphasis in original; internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997). "In ruling on a motion to strike, the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Id., 580. The court should "construe the complaint in the manner most favorable to sustaining its legal sufficiency." (Internal quotation marks omitted.) American Progressive Life Health Ins. Co. of New York v. Better Benefits, LLC, 292 Conn. 111, 120, 971 A.2d 17 (2009). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006).
Comard argues that the second count of the complaint is legally insufficient to state a claim for intentional or negligent misrepresentation, fraud or unjust enrichment against her. Comard argues that the intentional or negligent misrepresentation and fraud claims are insufficient because the plaintiff has failed to plead any facts showing that she made any representation or false statement to the plaintiff. The plaintiff counters that Comard perpetrated a fraud on him when Jorgensen, acting as her agent, induced the plaintiff to pay Martinez $350,000, which benefitted Comard by reducing Comard and Martinez's overall debt, and allowing her to enter into subsequent real estate transactions. Comard further argues that the unjust enrichment claim is insufficient because the plaintiff has failed to plead any facts showing that a relationship or obligation existed between Comard and the plaintiff. The plaintiff counters that Comard benefitted from a fraud she perpetrated through her agent, that she has not compensated the plaintiff for this benefit, and this refusal to compensate has been to the plaintiff's detriment.
Count two of the complaint, titled "intentional or negligent misrepresentation and fraud," intermixes three causes of action. "[A]t common law, fraudulent misrepresentation and intentional misrepresentation are the same tort." Kramer v. Petisi, 285 Conn. 674, 684 n. 9, 940 A.2d 800 (2008). "[A] claim of fraudulent misrepresentation, [is] a separate and distinct tort from the tort of negligent misrepresentation." Kramer v. Petisi, supra, 684. In addition to alleging claims for the separate torts of negligent misrepresentation and fraudulent misrepresentation, paragraph fifty-eight of the complaint also alleges a claim of unjust enrichment. "[T]he plaintiff failed to conform to Practice Book § 10-26, which provides that, when `separate and distinct causes of action, as distinguished from separate and distinct claims for relief founded on the same cause of action or transaction, are joined, the statement of the second shall be prefaced by the words Second Count, and so on for the others; and the several paragraphs of each count shall be numbered separately beginning in each count with the number one.'" Nazami v. Patrons Mutual Ins. Co., 280 Conn. 619, 629 n. 8, 910 A.2d 209 (2006). Nevertheless, "grounds other than those specified should not be considered by the trial court in passing upon a motion to strike . . ." (Internal quotations marks omitted.) Gazo v. Stamford, 255 Conn. 245, 259, 765 A.2d 505 (2001); see also DeGregorio v. Glenrock Condominium Assn., Inc., Superior Court, judicial district of Ansonia-Milford at Derby, Docket No. CV 07 5002796S (October 13, 2009, Bellis, J.) ("a request to revise is the proper procedural vehicle used when the plaintiff has pleaded multiple causes of action in the same count"). Further, "[w]henever [the] language [of the pleadings] fails to define clearly the issues in dispute, the court will put upon it such reasonable construction as will give effect to the pleadings in conformity with the general theory which it was intended to follow, and do substantial justice between the parties." (Emphasis in original; internal quotation marks omitted.) Petitte v. DSL.net, Inc., 102 Conn.App. 363, 374-75, 925 A.2d 457 (2007). Under the authority stated above, and because the plaintiff already agreed to amend the complaint and allege the unjust enrichment claim in a separate count, the three intermixed causes of action will be treated as though they were separately pleaded and addressed individually by the court.
I NEGLIGENT MISREPRESENTATION
"[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. The governing principles [of negligent misrepresentation] are set forth in similar terms in § 552 of the Restatement (Second) of Torts (1977): One who, in the course of his business, profession or employment . . . supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information." (Internal quotation marks omitted.) Kramer v. Petisi, supra, 285 Conn. 681.
"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." Nazami v. Patrons Mutual Ins. Co., supra, 280 Conn. 626. "Since the rule of liability . . . is based upon negligence, the [defendant] is subject to liability if, but only if, he has failed to exercise the care or competence of a reasonable man in obtaining or communicating the information." (Internal quotations marks omitted.) Johnnycake Mountain Associates v. Ochs, 104 Conn.App. 194, 201, 932 A.2d 472 (2007), cert. denied, 286 Conn. 906, 944 A.2d 978 (2008).
"There must be a justifiable reliance on the misrepresentation for a plaintiff to recover damages . . . The basic element of a claim for misrepresentation, however, is whether there was a misstatement . . . Without a misrepresentation, there can be no justifiable reliance." (Citations omitted.) Citino v. Redevelopment Agency, 51 Conn.App. 262, 273, 721 A.2d 1197 (1998). In the present case, while the plaintiff has alleged that Martinez and the Jorgensen defendants made misrepresentations of fact on which he relied, he has not alleged that Comard made any misrepresentations. Nevertheless, the plaintiff alleges that not only did he reasonably rely on the defendants' representations, but also nondisclosures.
"Liability for negligent misrepresentation may be placed on an individual when there has been a failure to disclose known facts and, in addition thereto, a request or an occasion or a circumstance which imposes a duty to speak." (Internal quotation marks omitted.) Johnnycake Mountain Associates v. Ochs, supra, 104 Conn.App. 206. The plaintiff's only allegation of a nondisclosure by Comard is in paragraph fifty-three, which states: "Defendant Martinez and the Jorgensen defendants, acting jointly, and as agents of defendant Comard . . . intentionally failed to disclose the fact of the homestead sale with the intent to deceive and defraud the plaintiff and to induce the plaintiff's reliance on such nondisclosure." Therefore, the relevant inquiry is whether Comard, or Martinez and the Jorgensen defendants, acting as her agents, had a duty to speak.
"[A] failure to disclose can be deceptive only if, in light of all the circumstances, there is a duty to disclose." (Internal quotations marks omitted.) Olson v. Accessory Controls Equipment Corp., 254 Conn. 145, 180, 757 A.2d 14 (2000). "Such a duty is imposed on a party insofar as he voluntarily makes disclosure. A party who assumes to speak must make full and fair disclosure as to the matters about which he assumes to speak." (Internal quotation marks omitted.) Johnnycake Mountain Associates v. Ochs, supra, 104 Conn.App. 206.
The plaintiff argues in his opposition to Comard's motion to strike that he alleged that Comard had a duty to speak in paragraphs 43, 44 and 53 of the complaint. He contends that the allegations of those paragraphs establish that Attorney Jorgensen acted as agent for Comard's fraud on the plaintiff and that Comard had a business relationship with the plaintiff. Despite the plaintiff's argument that his allegations are sufficient, he has failed to allege that Comard, or anyone in an agency capacity, made any affirmative representations or disclosures that would impose on her a duty to speak.
While paragraph forty-three alleges that Martinez and the Jorgensen defendants made certain representations to the plaintiff, neither paragraph forty-three nor forty-four make any reference to an agency relationship between the Jorgensen defendants and Comard or to Comard individually. Instead, those paragraphs refer only to Martinez and the Jorgensen defendants individually. Further, paragraph fifty-three is the only paragraph of the forty-one paragraphs in count two in which the plaintiff alleges that either Martinez or the Jorgensen defendants were acting as agents of Comard, but it too fails to allege that Comard had a duty to speak. While it is alleged in paragraph fifty-three that the Jorgensen defendants were acting on behalf of Comard, the plaintiff does not allege that the Jorgensen defendants made any affirmative representations while acting on behalf of Comard that would impose on her a duty to speak. Instead, paragraph fifty-three alleges only that Martinez and the Jorgensen defendants " failed to disclose the fact of the homestead sale." (Emphasis added.)
"[T]he interpretation of pleadings is always a question of law for the court . . . We have pointed out that [t]he burden [is] upon the pleaders to make such averments that the material facts should appear with reasonable certainty." (Citations omitted; internal quotation marks omitted.) Cahill v. Board of Education, 198 Conn. 229, 236, 502 A.2d 410 (1985). "[U]nder modern rules of pleading, slight linguistic ambiguity should not be fatal to a cause of action . . . pleadings should be read broadly and realistically, rather than narrowly and technically . . . [But] [t]hat does not mean . . . that the trial court is obligated to read into pleadings factual allegations that simply are not there or to substitute a cognizable legal theory that the facts, as pleaded, might conceivably support for the noncognizable theory that was actually pleaded." (Citations omitted; internal quotation marks omitted.) Pane v. Danbury, 267 Conn. 669, 677, 841 A.2d 684 (2004). "[E]ssential allegations may not be supplied by conjecture or remote implication." (Internal quotation marks omitted.) Cahill v. Board of Education, supra, 236.
To read into the complaint that certain defendants were not only acting individually, but also as agents of another defendant, at a time not alleged, would be to supply essential allegations by conjecture or remote implication. To infer that the Jorgensen defendants were acting on behalf of Comard in making the alleged representation contained in paragraph forty-three, simply because the Jorgensen defendants are alleged to have acted as agents of Comard in other parts of the complaint, would be impermissible since it is alleged that the Jorgensen defendants were, at one time or another, agents of Martinez, Comard and the plaintiff. Since neither Comard nor anyone acting as her agent made any representations that would impose a duty to speak on Comard, allegations of Comard's nondisclosure are legally insufficient to support a claim for negligent misrepresentation.
II. FRAUDULENT MISREPRESENTATION
"In contrast to a negligent representation, [a] fraudulent representation . . . is one that is knowingly untrue, or made without belief in its truth, or recklessly made and for the purpose of inducing action upon it." (Internal quotations mark omitted.) Kramer v. Petisi, supra, 285 Conn. 684 n. 9. "The essential elements of a cause of action in fraud are: (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 the false representation to his injury . . . All of these ingredients must be found to exist; and the absence of any one of them is fatal to a recovery . . . Although a cause of action for fraudulent misrepresentation differs from an action for negligent misrepresentation, a plaintiff asserting a claim under either theory must first prove a false statement or false representation on the part of the defendant." (Citations omitted; internal quotations marks omitted.) Citino v. Redevelopment Agency, supra, 275-76.
"Usually, mere nondisclosure does not amount to fraud . . . Nondisclosure may, however, amount to fraud when there is a failure to disclose known facts under circumstances that impose a duty to speak . . . In addition, once a [defendant] undertakes to speak on a subject, the [defendant] must then make a full and fair disclosure as to that subject." (Internal quotations marks omitted.) Dockter v. Slowik, 91 Conn.App. 448, 458, 881 A.2d 479, cert. denied, 276 Conn. 919, 888 A.2d 87 (2005).
Under the same reasoning as set forth in part I, since neither Comard nor anyone acting as her agent made any representations that would impose a duty to speak, allegations of Comard's nondisclosure are legally insufficient to support a claim for fraudulent misrepresentation.
III UNJUST ENRICHMENT
"A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another . . . With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard . . . Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy . . . Plaintiffs seeking recovery for unjust enrichment must prove (1) that the [defendant was] benefited, (2) that the [defendant] unjustly did not pay the [plaintiff] for the [benefit], and (3) that the failure of payment was to the [plaintiff's] detriment." (Internal quotation marks omitted.) Vertex, Inc. v. Waterbury, 278 Conn. 557, 573, 898 A.2d 178 (2006).
In the present case, the plaintiff has failed to meet two of the three requirements for pleading a cause of action for unjust enrichment. While the plaintiff arguably has alleged, in paragraph fifty, that Comard was benefited when he was "unknowingly caused to pay obligations . . . with the net result of paying down overall debt of defendants Martinez and Comard, and increasing the funds available to Martinez and Comard from the $1.4 million sale," there are no allegations that Comard unjustly did not pay the plaintiff for any benefit she received, and also no allegations that such a failure of payment was to the plaintiff's detriment. Therefore, count two of the plaintiff's complaint is legally insufficient to state a claim for unjust enrichment.
CONCLUSION
For the foregoing reasons, the court hereby grants Comard's motion to strike those portions of count two of the plaintiff's complaint directed against her alleging negligent misrepresentation, fraudulent misrepresentation and unjust enrichment.