Opinion
No. CV 06-5002693-S
October 27, 2006
MEMORANDUM OF DECISION RE MOTION TO STRIKE (#116)
Before the court is the Plaintiff Rockville Bank's motion to strike the Defendants' Counterclaim to Amended Complaint. The Amended Complaint alleges that the Defendants have fraudulently received assets, property and/or moneys from a person or entity who is liable to the Bank on two defaulted notes given to the Bank. On March 1, 2006, the Plaintiff obtained an ex parte prejudgment remedy in the amount of $550,000 against the Defendants' real and personal property. The Defendants have filed an answer, special defenses, and counterclaim. The three-count counterclaim alleges tortious interference with contractual and beneficial relations, violation of CUTPA and conversion. The essence of these claims is that the ex parte prejudgment remedy, which the Plaintiff obtained and enforced, was based on misrepresentations and misleading allegations. Although the Defendants did move to dissolve or modify the ex parte prejudgment remedy, that motion has not been pursued.
"A motion to strike challenges the legal sufficiency of a pleading . . . and, consequently, requires no factual findings by the trial court . . . We take the facts to be those alleged in the complaint that has been stricken and we construe the complaint in the manner most favorable to sustaining its legal sufficiency . . . [I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Thus, we assume the truth of both the specific factual allegations and any facts fairly provable thereunder. In doing so, moreover, we read the allegations broadly . . . rather than narrowly." (Citation omitted; internal quotation marks omitted.) Greco v. United Technologies Corporation, 277 Conn. 337, 347 (2006).
In the First Count of the Counterclaim the Defendants allege tortious interference with contractual and beneficial relations. The Plaintiff argues that this Count should be stricken because it contains no allegations of any contract interfered with or any tort committed by the Plaintiff. Contrary to the Plaintiffs claim, this Count is not deficient in that it does not allege the existence of a contract that was breached. As the Court stated in Sportsmen's Boating Corporation v. Hensley, 192 Conn. 747, 754 (1984): "We, in this state, recognize that a cause of action does exist for unlawful interference with business and that it is not essential to that cause of action that it appear that the tort has resulted in a breach of contract to the detriment of the plaintiff . . . The law does not . . . restrict its protection to rights resting upon completed contracts, but it also forbids unjustifiable interferences with any man's right to pursue his lawful business or occupation and to secure to himself the earnings of his industry. Full, fair and free competition is necessary to the economic life of a community, but under its guise, no man can by unlawful means prevent another from obtaining the fruits of his labor." (Emphasis added; internal quotation marks and citations omitted.) The allegations of the First Count of the Defendants' Counterclaim are deficient, however, in that they state that the Plaintiff interfered with the Defendants' business relationships by "seeking, obtaining and enforcing an Ex Parte attachment." These allegations cannot meet the test of "unlawful" or "unjustifiable means," as referenced in Hensley, since enforcement of a valid court order cannot be characterized as such. Even assuming, as the Defendants allege, the ex parte attachment order was "based on misrepresentations and misleading allegations," the fact remains that a review of the court file indicates that the order is still in effect and valid, and the factual bases on which it was entered have not been challenged. Unless the court finds that the attachment was improperly granted, the lawful attachment of the Defendants' property violates no right of the Defendants. See, Hiers v. Cohen, 31 Conn.Sup. 305, 312 (1973); White v. Leary, 6 Conn.Sup. 37, 38 (1938).
As to the Second Count of the Counterclaim, alleging a violation of the Connecticut Unfair Trade Practices Act, the Defendants claim that the Plaintiff knew it lacked probable cause and made misrepresentations in support of its application for a prejudgment remedy and is using the ex parte attachment to force the Defendants to pay the loans. The Plaintiff moves to strike this Count because it alleges no unfair, illegal or oppressive conduct as defined by Connecticut General Statutes § 42-110g or related case law. Our Supreme Court has stated: "[I]n determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons] . . . All three criteria do not need to be satisfied to support a finding of [a violation of CUTPA]." (Emphasis added; internal quotation marks and citations omitted.) Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 644 (2002). Neither the making of allegations, which at this point have not been found to be without merit, in support of an application for a prejudgment attachment, nor the execution of a valid court-ordered attachment can be a basis for a claim that such actions offend public policy or are immoral or unethical such as to establish a violation of CUTPA.
As to the Third Count of the Counterclaim alleging conversion, the Defendants claim that "Rockville Bank obtained its Ex Parte Attachment against Defendants based on misrepresentations and has attached and taken property to which it is not entitled." As to this Count the Plaintiff claims that it should be stricken since it does not allege actions by the Plaintiff constituting ownership over the Defendants' property. "Conversion is usually defined to be an unauthorized assumption and exercise of the right of ownership over goods belonging to another, to the exclusion of the owner's rights . . . It is some unauthorized act which deprives another of his property permanently or for an indefinite time; some unauthorized assumption and exercise of the powers of the owner to his harm. The essence of the wrong is that the property rights of the plaintiff have been dealt with in a manner adverse to him, inconsistent with his right of dominion and to his harm." (Emphasis added; internal quotation marks and citations omitted.) Falker v. Samperi, 190 Conn. 412, 419-20 (1983). It is clear that the execution of a court-ordered attachment cannot be an "unauthorized" act such as to constitute a conversion and, as the Plaintiff claims, the purpose of a prejudgment remedy attachment is security for the satisfaction of the Plaintiff's judgment, if one should be obtained, and does not give the attaching party ownership of the property. See, Cahaly v. Benistar Property Exchange Trust Co., 73 Conn.App. 267, 274 (2002).
The Defendants' claims as set forth in the Counterclaim can be characterized as ones based on wrongful attachment. This court questions whether such claims are the appropriate subject of a counterclaim. Although an action for wrongful attachment is a recognized cause of action, it is "in the nature of one for malicious prosecution or malicious abuse of discretion and is governed by essentially the same rules." 7 C.J.S., Attachment § 553 (2004). "The action of malicious prosecution lies where a civil or criminal action has been instituted with malice and without probable cause, and has terminated unsuccessfully. The plaintiff must allege and prove that the original action, whether civil or criminal, was instituted without probable cause, with malice, and that it terminated in his favor." (Internal quotation marks and citations omitted.) Norse Systems, Inc. v. Tingley Systems, Inc., 49 Conn.App. 582, 600 (1998). Although some courts have allowed such actions as a counterclaim in the same suit, others have not. See 7 C.J.S., Attachment § 563 (2004). For example, a majority of Connecticut courts have stricken vexatious litigation counterclaims when they are asserted within the same case that the Defendant claims to be vexatious, while some Connecticut courts have not, as noted by the court in Royal Insurance v. Prudential Residential Services, L.P., Superior Court, judicial district of Stamford-Norwalk at Stamford, DN CV 01 0185458 (Adams, J., Feb. 13, 2003) ( 34 Conn. L. Rptr. 59). Judicial economy may be one reason to permit such counterclaims (see, Sonitrol Security Systems of Hartford, Inc. v. Department of Administrative Services, Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. 702181 (Schaller, J., Nov. 10, 1992)), but to allow the Counterclaim here to proceed would permit the Defendants to contest the granting of the prejudgment remedy and pursue their claim that they are being harmed by its execution in the context of a counterclaim, while at the same time they decline to pursue the statutory remedies available to obtain the same relief. The statutes permit the Defendants to move to dissolve or modify the attachment or seek a posting of a bond by the Plaintiff to protect them from the harm they claim to have suffered, and likely will continue to suffer, as a result of the granting of the prejudgment remedy. If the court allows the Counterclaim to proceed, it will allow the Defendants to ignore the statutory remedies provided to them to protect the very rights they claim are being violated. In addition, the court will be precluded from determining, in an expeditious fashion, whether, in obtaining the ex parte prejudgment remedy order, as the Defendants' allegations suggest, the Plaintiff, in essence, perpetrated a fraud on the court.
General Statutes § 52-278k provides, in part: "The court may, upon motion and after hearing, at any time modify or vacate any prejudgment remedy granted or issued under this chapter upon the presentation of evidence which would have justified such court in modifying or denying such prejudgment remedy under the standards applicable at an initial hearing."
General Statutes § 52-278d(d) provides: "At any hearing on an application for prejudgment remedy held pursuant to this section or upon motion of the defendant at any time after the granting of such application, the defendant may request that the plaintiff post a bond, with surety, in an amount determined by the court to be sufficient to reasonably protect the defendant's interest in the property that is subject to the prejudgment remedy against damages that may be caused by the prejudgment remedy. If the court grants the defendant's request, the bond shall provide that if judgment in the matter is rendered for the defendant or if the prejudgment remedy is dismissed or dissolved, the plaintiff will pay to the defendant damages directly caused by the prejudgment remedy."
Therefore the motion to strike is granted in its entirety.