Opinion
NNHCV186079208S
05-31-2019
The LAW OFFICE OF George H. ROMANIA v. The LAW OFFICE OF Theodore A. PARISI, Jr., P.C.
UNPUBLISHED OPINION
OPINION
Sybil V. Richards, Judge
The defendants, Law Offices of Theodore A. Parisi, Jr., P.C. and Theodore A. Parisi, Jr., move to dismiss this present action as to the plaintiff, George H. Romania (Attorney Romania), individually, because Attorney Romania lacks standing to pursue the claims asserted in this action. Attorney Romania objects on the grounds that (1) the defendants’ motion does not acknowledge or apply the correct legal standard, (2) the defendants’ motion fails to establish a lack of standing to pursue contract claims, and (3) the motion to dismiss must be denied in its entirety because it fails to individually address each of the remaining claims asserted in the eight counts pleaded in the plaintiffs’ complaint, whose legal elements and/or facts bear on the question of standing to assert such claims. The issue presented is whether the court should grant the defendants’ motion to dismiss this present action as to the plaintiff, Attorney Romania, on the ground that Attorney Romania lacks standing to pursue the claims asserted in this action. The court grants the defendants’ motion to dismiss the complaint for lack of standing as to the plaintiff, Attorney Romania, in his individual capacity.
FACTS
On March 28, 2018, the plaintiffs, The Law Office of George H. Romania, LLC (Romania, LLC) and George H. Romania (Attorney Romania), filed this action against the defendants, Law Offices of Theodore A. Parisi, Jr., P.C. (Parisi Law Office) and Theodore A. Parisi, Jr. (Attorney Parisi), alleging the following facts. On February 8, 2015, Derek Chicarilli (client) was injured in a skiing accident at a skiing location in Vermont. Shortly thereafter, the client consulted with Attorney Romania in Connecticut concerning a potential claim against the parties responsible for his injuries. On February 12, 2015, the client executed a written contingency fee agreement with Romania, LLC (Romania Fee Agreement). Pursuant to the terms of the Romania Fee Agreement, the client retained Romania, LLC and Attorney Romania to represent him in pursuing a claim for damages against the persons or entities who may be liable for the injuries suffered in the February 8, 2015 skiing accident. Upon the client’s retention of Attorney Romania and Romania, LLC in Connecticut, a charging lien arose in their favor for fees, services, and disbursements upon all proceeds of any settlement or judgment obtained by the client.
In February of 2015, after being retained by the client, Attorney Romania contacted Attorney Parisi, a longtime family friend and attorney in Vermont, to inquire about whether Attorney Parisi would accept a referral to assist Attorney Romania in pursuing the client’s claims. Attorney Parisi accepted the referral and forwarded Attorney Romania a blank form of Attorney Parisi’s standard contingency fee agreement (Parisi Fee Agreement). Attorney Romania provided the Parisi Fee Agreement to the client and explained that Attorney Parisi would be working with Attorney Romania in pursuing the client’s claims. Romania, LLC also had the client execute the Parisi Fee Agreement.
From February 2015 through August 2017, Attorney Romania and his staff continued to work on behalf of the client to investigate, support, and pursue the client’s claims. Throughout this period, Attorney Romania and his staff had numerous communications by telephone and by e-mail with Attorney Parisi and his staff for the purpose of supporting and advancing the client’s claims. Attorney Romania and his staff also obtained authorizations from the client for the release of the client’s medical records and followed up on requests for medical and billing records relating to the client’s treatment for his injuries and medical transport, and advanced costs to obtain copies of medical records and bills to support the client’s case. Attorney Romania and his staff provided copies of all medical records and bills that they obtained to Attorney Parisi and his staff. Attorney Romania and his staff communicated with the client with regard to the investigation of his claims. Attorney Romania advised and counseled the client with regard to the client’s claims, the value of the client’s claims, case strategy, the potential settlement of the client’s claims, and assisted in preparing the client for his deposition.
On August 30, 2017, Attorney Romania’s paralegal, at Attorney Romania’s request, sent an e-mail to Attorney Parisi’s office inquiring about the status of the client’s case. On August 30, 2017, Attorney Parisi responded by e-mail stating that the case had proceeded to mediation the preceding day and that the case had settled for $475,000. Attorney Parisi advised that he was working on the fee calculations and stated that he was not quite sure how the fee was going to work just yet, but promised to send Attorney Romania’s office a copy of the calculations. On August 31, 2017, Attorney Romania’s paralegal provided Attorney Parisi with a list of the costs advanced by Attorney Romania’s office in connection with the client’s case. Attorney Parisi did not provide Attorney Romania’s office with a copy of his proposed fee calculations as promised. Attorney Parisi and his enlisted co-counsel, an attorney in Vermont, agreed upon a division of the entire fee only between themselves and disbursed all of the settlement funds, paying themselves and reimbursing their costs, and distributing the balance to the client without consulting Attorney Romania, and without distributing any legal fees or cost reimbursement to Attorney Romania.
On March 28, 2018, the plaintiffs filed an eight-count complaint alleging conversion, civil theft, breach of contract, enforcement of lien rights, unjust enrichment, breach of fiduciary duty, fraud, and unfair trade practices (CUTPA). The plaintiffs attached a contingency fee agreement between the client and Romania, LLC to the complaint. On November 19, 2018, the defendants filed a motion to dismiss for lack of standing as to Attorney Romania, individually, on the ground that Attorney Romania is neither a party, nor a third-party beneficiary of, the alleged retention agreement, which the defendants argue is the subject of this action. On January 8, 2019, Attorney Romania filed an objection to the defendants’ motion to dismiss. On March 11, 2019, the court heard the parties’ arguments at short calendar.
"A complaint includes all exhibits attached thereto." (Internal quotation marks omitted.) Tracy v. New Milford Public Schools, 101 Conn.App. 560, 566, 922 A.2d 280, cert. denied, 284 Conn . 910, 931 A.2d 935 (2007).
DISCUSSION
"A motion to dismiss ... properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court ... A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Beecher v. Mohegan Tribe of Indians of Connecticut, 282 Conn. 130, 134, 918 A.2d 880 (2007). "When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, it must consider the allegations of the complaint in their most favorable light ... In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Columbia Air Services, Inc. v. Dept. of Transportation, 293 Conn. 342, 347, 977 A.2d 636 (2009).
"[B]ecause the issue of standing implicates subject matter jurisdiction, it may be a proper basis for granting a motion to dismiss." Electrical Contractors, Inc. v. Dept. of Education, 303 Conn. 402, 413, 35 A.3d 188 (2012). "If ... the plaintiff’s standing does not adequately appear from all materials of record, the complaint must be dismissed." (Internal quotation marks omitted.) Burton v. Dominion Nuclear Connecticut, Inc., 300 Conn. 542, 550, 23 A.3d 1176 (2011). "Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy ... Standing requires no more than a colorable claim of injury; a [party] ordinarily establishes ... standing by allegations of injury ... Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved." (Internal quotation marks omitted.) Ferri v. Powell-Ferri, 326 Conn. 438, 447-48, 165 A.3d 1137 (2017). "The fundamental test for determining [classical] aggrievement encompasses a well-settled twofold determination: [F]irst, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in [the challenged action], as distinguished from a general interest, such as is the concern of all members of the community as a whole. Second, the party claiming aggrievement must successfully establish that this specific personal and legal interest has been specially and injuriously affected by the [challenged action] ... Aggrievement is established if there is a possibility, as distinguished from a certainty, that some legally protected interest ... has been adversely affected." (Internal quotation marks omitted.) Chiulli v. Zola, 97 Conn.App. 699, 704-05, 905 A.2d 1236 (2006).
"The requirement of directness between the injuries claimed by the plaintiff and the conduct of the defendant also is expressed, in our standing jurisprudence, by the focus on whether the plaintiff is the proper party to assert the claim at issue ... Thus, to state these basic propositions another way, if the injuries claimed by the plaintiff are remote, indirect or derivative with respect to the defendant’s conduct, the plaintiff is not the proper party to assert them and lacks standing to do so. [When], for example, the harms asserted to have been suffered directly by a plaintiff are in reality derivative of injuries to a third party, the injuries are not direct but are indirect, and the plaintiff has no standing to assert them." Padawer v. Yur, 142 Conn.App. 812, 817, 66 A.3d 931, cert. denied, 310 Conn. 927, 78 A.3d 145 (2013).
"[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor ... clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute." May v. Coffey, 291 Conn. 106, 113, 967 A.2d 495 (2009). "It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Internal quotation marks omitted.) New England Pipe Corp. v. Northeast Corridor Foundation, 271 Conn. 329, 335, 857 A.2d 348 (2004).
In their motion to dismiss, the defendants argue that Attorney Romania lacks standing to prosecute this action in his individual capacity because Attorney Romania is neither a party to, nor a third-party beneficiary of, the alleged retention agreement that is the subject of this action. The defendants claim further that Attorney Romania lacks standing, in his individual capacity, to assert derivative claims in the complaint because the claims allege wrongdoing that stems from obligations allegedly owed under the Romania Fee Agreement and services allegedly performed by Romania, LLC, not by Attorney Romania. In opposition, the plaintiff argues that (1) the defendants’ motion neither acknowledges nor applies the correct legal standard; (2) the motion fails to establish a lack of standing to pursue contract claims; and (3) the defendants’ memorandum of law fails to individually address each of the remaining claims asserted in the eight counts pleaded in the complaint, whose legal elements and/or facts bear on the question of standing to assert such claims. The defendants’ arguments and each challenged count will be addressed, in light of the above-referenced standards and legal authority, to determine whether Attorney Romania, in his individual capacity, has standing to pursue the claim in each of the challenged counts.
I
In the defendants’ memorandum in support of their motion to dismiss, the defendants argue that Attorney Romania lacks standing in his individual capacity because Attorney Romania has simply asserted claims based upon losses allegedly incurred by Romania, LLC as a result of the defendants’ alleged wrongdoing. "[Our Appellate Court] has repeatedly held that damages suffered by a limited liability company cannot be recovered by a member of the limited liability company bringing the case in an individual capacity." Bongiorno v. Capone, 185 Conn.App. 176, 200, 196 A.3d 1212, cert. denied, 330 Conn. 943, 195 A.3d 1134 (2018). "A member or manager ... may not sue in an individual capacity to recover for an injury based on a wrong to the limited liability company ... [A] member or manager of a limited liability company is not a proper party to a proceeding by or against a limited liability company solely by reason of being a member or manager of the limited liability company, except where the object of the proceeding is to enforce a member’s or manager’s right against or liability to the limited liability company or as otherwise provided in an operating agreement ..." Id., 199-200.
A
Counts One and Two: Conversion and Civil Theft
The plaintiffs allege conversion and civil theft in counts one and two of the complaint. The plaintiffs allege that the client entered into a retainer agreement with the plaintiffs in Connecticut and provided services, upon which a valid charging lien arose in Connecticut upon the proceeds of any recovery by the client. The plaintiffs allege further that the defendants received the proceeds of the client’s settlement as trustee for the client’s benefit and for the benefit of those who had a lien upon or an interest in the proceeds, which includes the plaintiffs, and Attorney Parisi unlawfully converted the funds and disbursed all of the funds to himself, his co-counsel, and the client. "To establish a prima facie case of conversion, the plaintiff had to demonstrate that (1) the material at issue belonged to the plaintiff, (2) that [the defendant] deprived the plaintiff of that material for an indefinite period of time, (3) that [the defendant’s] conduct was unauthorized and (4) that [the defendant’s] conduct harmed the plaintiff." Coster v. Duquette, 119 Conn.App. 827, 832, 990 A.2d 362 (2010).
Taking the alleged facts in the complaint, including those facts necessarily implied from the allegations, and construing them in a manner most favorable to the pleaders, the plaintiffs fail to sufficiently allege that the funds at issue belonged to Attorney Romania, in his individual capacity. In their complaint, the plaintiffs allege that the client executed a written contingency agreement, the Romania Fee Agreement, with Romania, LLC and allege further that "pursuant to the terms of the Romania Fee Agreement, the [c]lient retained [Attorney Romania] and Romania, LLC as his attorneys to represent him in pursuing a claim for damages against those persons or entities who may be liable for the injuries [the client] suffered on February 8, 2015." The plaintiffs then allege that "[t]he Romania Fee Agreement provides that Romania, LLC is entitled to receive as fees for legal services a percentage of the gross amount of all proceeds recovered as a result of such claim, whether by suit, settlement, judgment, or otherwise ..." On the basis of the plaintiffs’ allegations, Attorney Romania fails to establish standing in his individual capacity with respect to the conversion claim as the plaintiffs themselves allege that the property at issue belonged to Romania, LLC. See Bongiorno v. Capone, supra, 185 Conn.App., 201-02 ("Under these allegations, the only injuries resulting from the defendant’s conduct, as stated in the plaintiff’s statutory theft count, were suffered by the company, not by the plaintiff personally. The company is a limited liability company and is, therefore, a distinct legal entity from the plaintiff, who is simply a member of that entity. Even after the plaintiff became the sole member of the company, the company remained a distinct legal entity. Because a member of a limited liability company cannot recover for an injury allegedly suffered by the limited liability company, we conclude that the plaintiff lacked standing to pursue a claim of statutory theft in this case.").
Paragraph 8 of the complaint alleges: "On or about February 12th 2015, the [c]lient executed a written contingency fee agreement with Romania, LLC (hereinafter the "Romania Fee Agreement"). A true copy of the Romania Fee Contingency is attached hereto as Exhibit A." (Emphasis omitted.) Compl. ¶8. Paragraph 10 of the complaint alleges: "The Romania Fee Agreement provides that Romania, LLC is entitled to receive as fees for legal services as percentage of the gross amount of all proceeds recovered as a result of such claim, whether by suit, settlement, judgment, or otherwise. The Romania Fee Agreement provides further that the amount of any costs or expenses incurred in pursuing the [c]lient’s claim will be deducted from any proceeds remaining after the attorneys fees have been deducted from the gross amount of any recovery. Compl. ¶10.
The plaintiffs make similar, if not identical, arguments with regard to their claim for conversion as they do to the claim for civil theft. Count two of the plaintiffs’ complaint alleges civil theft against the defendants and, in the plaintiffs’ prayer for relief, seeks treble damages pursuant to General Statutes § 52-564. The plaintiffs repeat and reallege the allegations contained in count one, the conversion count, and also allege that "[w]hen the defendants wrongfully converted the settlement funds, they took, obtained and withheld property rightfully belonging to the plaintiffs with the intent to deprive the plaintiffs of their property or rights in such property or to appropriate the funds to themselves and a third person."
"The elements of civil theft are also largely the same as the elements to prove the tort of conversion, but theft requires a plaintiff to prove the additional element of intent over and above what he or she must demonstrate to prove conversion." (Internal quotation marks omitted.) Sullivan v. Delisa, 101 Conn.App. 605, 620, 923 A.2d 760, cert. denied, 283 Conn. 908, 928 A.2d 540 (2007). Therefore, for the same reasons set forth in part one with regard to the plaintiffs’ claim for conversion, Attorney Romania, in his individual capacity, lacks standing to assert a claim of civil theft.
B
Count Three: Breach of Contract
Count three of the complaint alleges breach of contract. In count three, the plaintiffs allege that "[w]hen the defendants accepted a referral of the [c]lient from the plaintiffs, there arose an agreement to share in the proceeds of any recovery obtained as a result of their efforts in pursuing the [c]lient’s claims." The plaintiffs allege that the agreement was breached by the defendants’ distribution of all of the proceeds of the client’s claims without sharing any such proceeds with the plaintiffs and without discharging the client’s obligations to pay fees and costs. The plaintiffs allege further that the "[p]laintiffs suffered damages as a result of the defendants’ breaches" of the agreement between the plaintiffs and the defendants. In his objection to the defendants’ motion to dismiss, Attorney Romania argues "[t]he claim for damages is predicated on the fact that Attorney Romania and his law firm worked diligently on the matter for two and one-half years prior to the time that a settlement was achieved and the fact that Attorney Parisi caused his law firm to disburse all of the settlement proceeds without recognizing the plaintiffs’ just claims."
"The elements of a breach of contract claim are the formation of an agreement, performance by one party, breach of the agreement by the other party, and damages ... For a plaintiff to have standing to bring an action seeking damages for breach of contract, he must allege and prove that he was a party to the contract and, thus, was entitled to enforce the contract for his own benefit, and that the other party’s breach of the contract caused him to suffer damages in his individual capacity." Bongiorno v. Capone, supra, 185 Conn.App. 196.
"[A]s a general rule, a plaintiff lacks standing unless the harm alleged is direct rather than derivative or indirect ... [I]f the injuries claimed by the plaintiff are remote, indirect or derivative with respect to the defendant’s conduct, the plaintiff is not the proper party to assert them and lacks standing to do so." (Citation omitted; internal quotation marks omitted.) Wiederman v. Halpert, 178 Conn.App. 783, 795, 176 A.3d 1242 (2017), cert. granted, 328 Conn. 906, 177 A.3d 1161 (2018). Construing the complaint in a manner most favorable to the plaintiffs, the plaintiffs fail to allege that Attorney Romania suffered damages that are not unique and specific to Attorney Romania in his individual capacity. The complaint does not contain allegations that Attorney Romania, in his individual capacity, suffered direct damages as a result of the alleged breach of the agreement that arose when the defendants accepted a referral of the client from the plaintiffs. Nor does the complaint contain allegations that the alleged harm to Attorney Romania is separate and distinct from the alleged injury to Romania, LLC as a result of the alleged breach. As such, Attorney Romania lacks standing in his individual capacity to assert a breach of contract claim.
C
Count Four: Enforcement of Lien Rights
In count four of the complaint, the plaintiffs seek enforcement of the plaintiffs’ lien rights. The plaintiffs allege that "[t]he plaintiffs’ lien, which applies to any money recovered or fund due at the conclusion of the lawsuit, continues to exist until the fees have been paid." Compl., Count 4, ¶37. The plaintiffs repeat and reallege paragraphs 1 through 36 of count one, in which the plaintiffs allege that "[w]hen the [c]lient retained Attorney Romania and the Romania, LLC law firm in Connecticut to pursue his claims, a charging lien arose in their favor for fees, services, and disbursements upon all proceeds of any settlement or judgment obtained by the [c]lient ... The plaintiffs’ lien continues to exist for so long as it has not been paid and satisfied."
Connecticut recognizes an attorney’s common-law charging lien. See D’Urso v. Lyons, 97 Conn.App. 253, 256, 903 A.2d 697, cert. denied, 280 Conn. 928, 909 A.2d 523 (2006). An attorney’s charging lien is "a lien placed upon any money recovery or fund due the client at the conclusion of suit." Marsh, Day & Calhoun v. Solomon, 204 Conn. 639, 643, 529 A.2d 702 (1987). It is applicable whether there is a contingency fee or an hourly fee agreement. See D’Urso v. Lyons, supra, 97 Conn.App., 257-58. Such a lien would be a valid unliquidated claim if proven. See Disciplinary Counsel v. Smigelski, 124 Conn.App. 81, 95, 4 A.3d 336 (2010), cert. denied, 300 Conn. 906, 12 A.3d 1004, cert. denied, 565 U.S. 818, 132 S.Ct. 101, 181 L.Ed.2d 28 (2011). "Underlying any charging lien must be an express or implied contract for fees entered into by the attorney and client ... Such a lien may also be created by a contingency fee agreement in which the parties contract that the attorneys fees will come from the judgment recovered." (Citation omitted; internal quotation marks omitted.) Gordon v. Ignal, Superior Court, judicial district of Fairfield, Docket No. CV-96-339700-S (March 9, 2001, Rush, J.). "In general, no notice is needed to effectuate a common law charging lien ... A valid and enforceable fee agreement, however, is required for the lien to be created." (Citation omitted; internal quotation marks omitted.) Intercity Development, LLC v. Rose, Superior Court, judicial district of Waterbury, Docket No. CV-084016602-S (February 11, 2010, Gallagher, J.).
The plaintiffs allege that the plaintiffs’ lien arose pursuant to the terms of the Romania Fee Agreement, which provides that Romania, LLC is entitled to receive as fees for legal services a percentage of the gross amount of all proceeds recovered as a result of such claim. Considering the allegations of the complaint in their most favorable light, the alleged injury is based on a wrong to Romania, LLC, and thus, Attorney Romania, in his individual capacity, does not have standing to pursue a claim of the enforcement of the plaintiffs’ lien rights.
D
Count Five: Unjust Enrichment
In count five of the complaint, the plaintiffs allege that the defendants violated the plaintiffs’ lien rights in the settlement fund, secured an unjust benefit, and that the defendants were unjustly enriched. The plaintiffs further allege that the defendants must be required to disgorge and deliver to the plaintiffs the funds to which they are rightly entitled from the settlement proceeds.
"Unjust enrichment applies wherever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract ..." (Internal quotation marks omitted.) Vertex, Inc. v. Waterbury, 278 Conn. 557, 573, 898 A.2d 178 (2006). The plaintiffs allege that the defendants violated the plaintiffs’ lien rights in the settlement fund, secured an unjust benefit, and that the defendants were unjustly enriched. The plaintiffs further allege that the defendants must be required to disgorge and deliver to the plaintiffs the funds to which they are rightly entitled from the settlement proceeds. When construing the facts alleged in the complaint, including those facts necessarily implied from the allegations, in a manner most favorable to the pleader, the complaint alleges that Romania, LLC, not Attorney Romania in his individual capacity, was entitled to the funds from the settlement proceeds. Because Attorney Romania did not suffer a direct injury in his individual capacity, Attorney Romania lacks standing to claim unjust enrichment.
E
Count Six: Breach of Fiduciary Duty
In count six of the complaint, the plaintiffs allege that the defendants breached their fiduciary duties by "distributing the funds [Attorney Parisi] held without accounting for and recognizing the plaintiffs’ interests and without applying the funds so as to discharge the [c]lient’s obligations ..." Compl., Count 6, ¶54. The plaintiffs allege that the defendants held the settlement funds as trustee for the client and Attorney Romania, "each of whom had an interest in such funds." Compl., Count 6, ¶50. The plaintiffs repeat and reallege the paragraphs setting forth a cause of action for civil theft, which include allegations that the settlement funds rightfully belonged to the plaintiffs and that the plaintiffs suffered damages.
"It is axiomatic that a party cannot breach a fiduciary duty to another party unless a fiduciary relationship exists between them." Biller Associates v. Peterken, 269 Conn. 716, 723, 849 A.2d 847 (2004). "It [is] the plaintiffs’ burden to establish the existence of a fiduciary duty." (Internal quotation marks omitted.) Local 84, Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, AFL-CIO, CLC v. Francis, 138 Conn.App. 77, 86, 51 A.3d 401 (2012). A plaintiff who fails to establish the existence of fiduciary relationship lacks standing to assert a claim for breach of fiduciary duty. Id., 87.
In the present case, upon construing the plaintiffs’ allegations in a manner most favorable to the plaintiff, the plaintiffs’ allegations in count six allege harms that are derivative of the injuries to Romania, LLC. The plaintiffs allege that the defendants breached their fiduciary duties by distributing the funds that Attorney Parisi held without accounting for and recognizing the plaintiffs’ interest and without applying the funds so as to discharge the client’s obligations. As stated previously in the memorandum, the plaintiffs themselves allege that Romania, LLC is entitled to the funds at issue. Hence, the plaintiffs do not allege injuries to Attorney Romania in his individual capacity that are separate and distinct to the injuries to Romania, LLC, and thus, Attorney Romania, in his individual capacity lacks standing to pursue a claim for breach of fiduciary duty in his individual capacity.
F
Count Seven: Fraud
In count seven of the complaint, the plaintiffs allege that Attorney Parisi made false statements to Romania, LLC and Attorney Romania, which the plaintiffs relied on to their detriment as their funds were disbursed to other parties without their knowledge. The plaintiffs allege that the false representations were made so that the plaintiffs would not take action to enforce their rights prior to Attorney Parisi’s disbursement of the settlement proceeds.
A favorable reading of the allegations of the complaint in a fashion favorable to a finding of jurisdiction fails to allege a direct injury to Attorney Romania, in his individual capacity, that is not in reality derivative of the injuries to Romania, LLC. The plaintiffs allege that the defendants "fraudulently assumed the rights of an owner over property that rightfully belonged to the plaintiffs." Because the plaintiffs’ allege in the complaint that the property at issue belonged to Romania, LLC, the harm caused by the defendants’ alleged fraud is to Romania LLC and not to Attorney Romania in his individual capacity. Therefore, Attorney Romania in his individual capacity lacks standing to pursue a claim of fraud under count seven.
G
Count Eight: CUTPA
In count eight of the complaint, the plaintiffs allege that the defendants engaged in unfair and deceptive acts and practices in the course of their trade or business in the following ways: (1) [the defendants] constituted an unlawful conversion of property; (2) [the defendants] constituted a theft of property; (3) [the defendants] constituted a breach of contract with aggravating circumstances; (4) [the defendants] engaged in fraud and misrepresentation; (5) [the defendants] violated the plaintiffs’ lien rights; (6) [the defendants] breached their fiduciary duties to the [c]lient and to the plaintiffs; (7) and [the defendants] violated their ethical obligations as attorneys. The plaintiffs allege that they suffered an ascertainable loss as a result of the defendants’ unfair trade practices.
"We employ a three part policy analysis ... [in applying] the general principle that plaintiffs with indirect injuries lack standing to sue ... First, the more indirect an injury is, the more difficult it becomes to determine the amount of [the] plaintiff’s damages attributable to the wrongdoing as opposed to other, independent factors. Second, recognizing claims by the indirectly injured would require courts to adopt complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts, in order to avoid the risk of multiple recoveries. Third, struggling with the first two problems is unnecessary [when] there are directly injured parties who can remedy the harm without these attendant problems." (Internal quotation marks omitted.) Connecticut Podiatric Medical Assn. v. Health Net of Connecticut, Inc., 302 Conn. 464, 469-70, 28 A.3d 958 (2011).
As set forth previously in this memorandum, the alleged harm from the defendants’ unfair trade practices are either derivative of the alleged injuries to Romania, LLC or the allegations of harm do not indicate direct alleged injuries that are separate and distinct from the alleged harm to Romania, LLC.
CONCLUSION
The court grants the defendants’ motion to dismiss the complaint for lack of standing as to the plaintiff, Attorney Romania, in his individual capacity.