Opinion
No. CV 08 5006676
May 20, 2009
MEMORANDUM OF DECISION RE MOTION TO STRIKE [#105]
FACTS
On June 11, 2008, the plaintiff, Saint Bernard School of Montville, Inc., filed an amended six-count complaint against the defendant, Bank of America. In its complaint, the plaintiff alleges the following facts. The plaintiff is a corporation that operates Saint Bernard's High School, a parochial secondary school in Montville, Connecticut. The plaintiff opened a bank account intended for the school's regular business with Fleet Bank named the "St. Bernard High School Operating Fund" (operating fund). On December 1, 2002, Salvatore Licitra, an employee of the plaintiff, opened a bank account with Fleet Bank named the "Saint Bernard's High School Norwich Diocese Camp Sunshine, c/o Sal Licitra" (Camp Sunshine account). Licitra had no authority from the plaintiff to draw on the operating fund, to open any accounts in the plaintiff's name or to use the plaintiff's tax identification number for any purpose. The defendant subsequently acquired Fleet Bank and assumed all of its assets and liabilities. Count six of the complaint seeks recovery pursuant to the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110b, against the defendant for establishing an account in the plaintiff's name or a substantially similar name without the plaintiff's authorization, depositing forged and fraudulently endorsed checks into the unauthorized account and failing to request adequate proof of authorization when establishing the unauthorized account and depositing the forged checks. This conduct by the defendant was "immoral, oppressive, unethical and unscrupulous," and therefore, constitutes a violation of CUTPA.
On December 26, 2008, the defendant filed a motion to strike count six of the plaintiff's complaint on the ground that the plaintiff failed to state a claim upon which relief can be granted because the defendant's alleged conduct is not unfair or deceptive, and therefore, does not constitute a CUTPA violation. The defendant submitted a memorandum of law in support of the motion. The plaintiff filed its objections to the defendant's motion to strike on January 7, 2009.
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). In ruling on a motion to strike, "[t]he role of the trial court [is] to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [plaintiff has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997). "It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006). "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).
The defendant argues that count six of the plaintiff's complaint should be stricken because it fails to allege that the defendant engaged in unfair or deceptive conduct that rises to the level of a CUTPA violation. In response, the plaintiff does not challenge the defendant's attack that the plaintiff fails to allege any act that is deceptive within the meaning of CUTPA. Rather, the plaintiff argues that it has sufficiently alleged that the defendant engaged in unfair practices in violation of an expressed public policy by failing to follow reasonable commercial standards and federal banking regulations in opening the Camp Sunshine account and authorizing the fraudulent check deposits. The plaintiff further argues that the defendant's alleged conduct was unfair because it was oppressive and unethical, and caused substantial injury to the plaintiff.
General Statutes § 42-110b(a) provides that "[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." It is generally acknowledged that "CUTPA provides a private cause of action to `[a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice.'" Spector v. Konover, 57 Conn.App. 121, 133, 747 A.2d 39, cert. denied, 254 Conn. 913, 759 A.2d 507 (2000). "A claim under CUTPA must be pleaded with particularity to allow evaluation of the legal theory upon which the claim is based." (Internal quotation marks omitted.) S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan King, P.C., 32 Conn.App. 786, 797, 631 A.2d 340, cert. denied, 228 Conn. 903, 634 A.2d 296 (1993). "Our Supreme Court has held that the actions of banks fall within the regulatory ambit of CUTPA. Normand Josef Enterprises v. Connecticut National Bank, 230 Conn. 486, 509-10, 646 A.2d 1289 (1994)." Homes of Westport, LLC v. Wilton Bank, Superior Court, judicial district of Fairfield, Docket No. CV 06 0403842S (October 2, 2007, Maiocco, J.T.R.).
"(A) violation of CUTPA may be established by showing either an actual deceptive practice . . . or a practice amounting to a violation of public policy." (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 19, 938 A.2d 576 (2008). "It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the [F]ederal [T]rade [C]ommission 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 unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." (Internal quotation marks omitted.) Edmands v. CUNO, Inc., 277 Conn. 425, 450 n. 16, 892 A.2d 938 (2006).
The plaintiff argues that the defendant's conduct satisfies the first prong of the cigarette rule because it violated reasonable commercial standards and federal banking regulations. "[A] [v]iolation of an identifiable public policy alone may be insufficient under certain circumstances to support a CUTPA violation." Francoline v. Klatt, 26 Conn.App. 203, 211, 600 A.2d 8 (1991), cert. granted, 221 Conn. 913, 603 A.2d 404 (1992). "[W]here a party claims a CUTPA violation based on an alleged violation of a public policy statute, the court's focus should be on the circumstances surrounding the violation of the statute, rather than on a technical violation of the statute itself." Leaksealers, Inc. v. Connecticut National Bank, Superior Court, judicial district of Hartford, Docket No. CV 92 0517952 (June 20, 1995, Hennessey, J.). In CT Page 8603 Leaksealers, Inc. v. Connecticut National Bank, supra, Docket No. CV 92 0517952, the plaintiff alleged that the defendant authorized the payment of fraudulent checks against the plaintiff's bank account and subsequently refused to restore the amount of the improperly withdrawn funds to its account. The court found that based on the plaintiff's allegations, "none of the circumstances surrounding the defendant's alleged conversion of the plaintiff's checks amount[ed] to a deceptive or unfair trade practice, as that term is defined under CUTPA." Id. Similarly, in the present case, none of the circumstances alleged concerning the defendant's conduct amounted to a deceptive or unfair trade practice. Therefore, the plaintiff failed to allege sufficient facts which, if proven, would satisfy the first prong of the cigarette rule.
The plaintiff also argues that the defendant's alleged conduct satisfies the second prong of the cigarette rule because it constituted an oppressive and unethical practice. In Brookes v. New Haven Savings Bank, Superior Court, judicial district of Hartford, Docket No. CV 94 0544390 (January 28, 1997, Hennessey, J.), the plaintiff alleged "nine instances where the plaintiff's endorsement was forged, the defendant paid the forger the amount on the check, and the defendant failed to reimburse the plaintiff for the amount improperly debited." The court found that "[s]uch facts are insufficient to rise to the level of a CUTPA violation [and] [t]he plaintiff's contentions that such actions offend public policy or are unethical are mere legal conclusions, upon which relief cannot be granted." Id. See also Westwood Group, Inc. v. Polis, Superior Court, judicial district of Fairfield, Docket No. CV 90 0274693S (May 17, 1991, Katz, J.) [4 Conn. L. Rptr. 160] (finding plaintiff's allegations of bank's improper conversion of funds insufficient to support CUTPA claim); Dwyer Products Corp. v. Lafayette Bank Trust Co., Superior Court, judicial district of Fairfield, Docket No. CV 89 0263041S (February 6, 1991, Maiocco, J.) [3 Conn. L. Rptr. 283] (finding similar factual allegations constituted mere legal conclusions upon which relief may not be granted). In the present case, the plaintiff alleges that the defendant allowed the opening of an unauthorized account in the plaintiff's name, deposited fraudulently endorsed checks into the unauthorized account and failed to require adequate proof of authorization. The plaintiff's contention that the defendant's conduct constituted an oppressive and unethical practice is a mere legal conclusion upon which relief may not be granted. Therefore, the plaintiff failed to allege sufficient facts which, if proven, would satisfy the second prong of the cigarette rule.
The plaintiff further argues that the defendant's conduct satisfies the third prong of the cigarette rule because it caused substantial injury to the plaintiff. "To justify a finding of unfairness the injury must satisfy three tests. It must be substantial; it must not be outweighed by any countervailing benefits to consumers or competition that the practice produces; and it must be an injury that consumers themselves could not reasonably have avoided." Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 592, 657 A.2d 212 (1995). In Leaksealers, Inc. v. Connecticut National Bank, supra, Docket No. CV 92 0517952, the court found that where the plaintiff's complaint alleged that it suffered a loss in excess of $100,000 due to the defendant's conversion of its funds, it could not "determine from the allegations . . . whether the plaintiff `could not have reasonably avoided' its alleged injury [and therefore] the plaintiff has failed to show that the defendant caused an `unjustified consumer injury,' a necessary predicate for recovery under CUTPA." In the present case, the plaintiff alleged that it suffered "significant losses" as a result of the defendant's conduct. This court cannot determine from the plaintiff's allegations that the defendant caused an unjustified consumer injury. Therefore, the plaintiff failed to allege sufficient facts which, if proven, would satisfy the third prong of the cigarette rule.
As a result, the plaintiff's allegations in count six do not satisfy any of the above-enumerated criteria of the cigarette rule necessary for a finding that the defendant's conduct constituted an unfair practice. Even viewing the complaint in a light most favorable to the plaintiff, this court finds that the plaintiff failed to sufficiently allege that the defendant engaged in unfair or deceptive conduct that rises to the level of a CUTPA violation.
CONCLUSION
Based on the foregoing, the court hereby grants the defendant's motion to strike count six of the plaintiff's complaint.