Opinion
No. CV06-5007278S
May 27, 2008
MEMORANDUM OF DECISION RE MOTION TO STRIKE, #105
The defendants, David Hawes and W.T. Beazley Company, filed a motion to strike counts one, two and five of the plaintiffs' amended complaint on the ground that the counts fail to allege sufficient facts to state a claim for breach of contract, negligent misrepresentation, or a CUTPA violation, respectively. For reasons more fully set forth herein, this court grants the motion to strike counts one and five (breach of contract and CUTPA) and denies the motion to strike count two (negligent misrepresentation).
FACTS
On February 16, 2007, the plaintiffs, Michael and Stacy Wuchek, filed a five-count amended complaint against the defendants, Estate of Joanne G. Colatosti, David Hawes, The W.T. Beazley Company, Prudential Connecticut Realty, Beth A. Beehan, Cathi R. Alea and John A. Gauthier. Therein, the plaintiffs allege that on June 11, 2005, they entered into a written contract to purchase a single-family residence. The plaintiffs claim that they entered into the contract in reliance on a Multiple Listing Service advertisement, which represented that the premises were connected to the public sewers. The premises had been listed for sale by Hawes, who was employed by The W.T. Beazley Company and/or Prudential Connecticut Realty. The premises had been owned by Joanne G. Colatosti, who died on May 13, 2005. Joanne G. Colatosti devised her interest in the premises to her children, defendants Beehan and Alea, and to David J. Colatosti, who is not a party to this suit. The contract of sale of the premises to the plaintiffs was signed by Alea, who purported to be acting as power of attorney for the executor of the estate, Gauthier. At the time of the signing of the contract, Alea also prepared and signed a residential property condition disclosure form, in which she failed to report any of the required information about the type and condition of the sewer or septic system that serviced the premises.
The plaintiffs further allege that they purchased the premises on July 11, 2005, and took possession immediately thereafter. Ten months later, on May 11, 2006, the plaintiffs claim that they discovered that the premises were and are serviced by an on-site septic system and were and are not connected to the public sewers. Due to the fixed life of on-site septic systems, the plaintiffs claim they will eventually have to connect to the public sewers, which will entail removal and replacement of a wooden deck that is attached to the premises. The plaintiffs allege that they would not have purchased the property or that they would have negotiated a different price if they had known that the premises were not connected to the public sewers.
On March 19, 2007, along with a Memorandum in Support, defendants Hawes and The W.T. Beazley Company filed a motion to strike counts one, two and five of the plaintiffs' amended complaint on the ground that the plaintiffs failed to allege sufficient facts to support their claims for breach of contract by each of the defendants, negligent misrepresentation by Hawes, and a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., by Hawes. On April 9, 2007, the plaintiffs filed a memorandum of law in opposition. The matter was heard by this court (Robinson, J.) on the short calendar on April 21, 2008.
Count five also alleges a CUTPA violation by Alea and Gauthier.
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). "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.) Asylum Hill Problem Solving Revitalization Ass'n. v. King, 277 Conn. 238, 246, 890 A.2d 522 (2006). The court must "construe the complaint in the manner most favorable to sustaining its legal sufficiency." (Internal quotation marks omitted.) Greco v. United Technologies Corp., 277 Conn. 337, 347, 890 A.2d 1269 (2006).
With regard to the breach of contract claim contained in count one, the defendants contend that they are neither parties to the contract nor are they in privity of interest with the Estate of Joanne G. Colatosti. With respect to the negligent misrepresentation claim contained in count two, the defendants maintain that the plaintiffs have failed to allege reasonable reliance on any statements made by them. Finally, as for the CUTPA violation claim contained in count five, the defendants assert that the plaintiffs have failed to allege reasonable reliance, and, even if they had, the allegations of a single instance of claimed negligence is insufficient to warrant a CUTPA action. In addition, the defendants argue that the plaintiffs' CUTPA claim is insufficient under the so-called "cigarette rule."
The plaintiffs counter that the allegations contained in each of the challenged counts sufficiently state a cause of action. The plaintiffs argue that the allegations of the complaint in Count One, and the facts necessarily implied therefrom, supply the required elements of a breach of contract cause of action, namely, formation, performance, breach and damages. The plaintiffs maintain that the defendants breached an implied contract "arising from the holding out and offering of the [p]remises for sale in the condition in which it was advertised." The plaintiffs also argue that as third-party beneficiaries of the listing agreement between Hawes, The W.T. Beazley Company and the defendant sellers, the plaintiffs are entitled to enforce the contract. With respect to the false representation claim, the plaintiffs contend that the allegations state a claim for either negligent or intentional misrepresentation. They assert that there is no case that holds that a plaintiff must allege that his reliance on a false statement is justifiable or even reasonable. Finally, the plaintiffs argue that they have sufficiently alleged that the practice is unfair in violation of CUTPA.
I.
"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.) Whitaker v. Taylor, 99 Conn.App. 719, 728, 916 A.2d 834 (2007). "It is a basic principle of contract law that in order to form a binding contract there must be an offer and acceptance based on a mutual understanding by the parties." Cavallo v. Lewis, 1 Conn.App. 519, 520, 473 A.2d 338 (1984). "Statements that urge members of the general public to take some action in response thereto usually are characterized as advertisements. Advertisements invite offers rather than acceptances." 111 Whitney Avenue, Inc. v. Commissioner of Mental Retardation, 70 Conn.App. 692, 701, 802 A.2d 117 (2002).
In count one of the complaint, the plaintiffs allege that Hawes and The W.T. Beazley Company listed the premises for sale and advertised the premises on the Multiple Listing Service as being connected to the public sewers. The advertisement, however, does not indicate an offer by Hawes and The W.T. Beazley Company which the plaintiffs could accept. Rather, such real estate listings merely encourage members of the general public to enter into discussions and negotiations with sellers of property. The plaintiffs have failed to sufficiently allege the formation of an agreement between themselves, Hawes and The W.T. Beazley Company, which is a necessary element of their claim for breach of implied contract.
As for the plaintiffs' argument that they are third-party beneficiaries, the law "regarding the creation of contract rights in third parties in Connecticut is . . . well settled. [T]he ultimate test to be applied [in determining whether a person has a right of action as a third party beneficiary] is whether the intent of the parties to the contract was that the promisor should assume a direct obligation to the third party [beneficiary] and . . . that intent is to be determined from the terms of the contract read in the light of the circumstances attending its making, including the motives and purposes of the parties . . . Although . . . it is not in all instances necessary that there be express language in the contract creating a direct obligation to the claimed third party beneficiary . . . the only way a contract could create a direct obligation between a promisor and a third party beneficiary would have to be because the parties to the contract so intended." (Citations omitted; internal quotation marks omitted.) Dow Condon, Inc. v. Brookfield Development Corp., 266 Conn. 572, 580-81, 833 A.2d 908 (2003).
Although the plaintiffs do not specifically allege in the complaint that the defendant sellers entered into a listing agreement with Hawes and The W.T. Beazley Company to sell the premises, it is necessarily implied from the allegations. Nevertheless, the plaintiffs have failed to allege that Hawes, The W.T. Beazley Company and the defendant sellers intended to assume a direct obligation to them upon entering into the listing agreement. At most, the plaintiffs have alleged that it was foreseeable that they would purchase the premises based on the representations of Hawes and The W.T. Beazley Company, which were made pursuant to the listing agreement with the defendant sellers. "[F]oreseeability alone is insufficient to create third party beneficiary rights." Pelletier v. Sordoni/Skanska Construction Co., 264 Conn. 509, 532, 825 A.2d 72 (2003). "[F]oreseeability is a tort concept, and the fact that a person is a foreseeable beneficiary of a contract is not sufficient for him to claim rights as a third party beneficiary. To import the concept of foreseeability into the law governing contracts, which is premised on the concept that mutual obligations entered into voluntarily should be enforced, would significantly reduce contracting parties' ability to control, through the negotiated exchange of promises and consideration, the scope of their contractual duties and obligations." (Internal quotation marks omitted.) Gazo v. Stamford, CT Page 8819 255 Conn. 245, 267, 765 A.2d 505 (2001). The plaintiffs have failed to sufficiently allege in count one that they were either parties to the contract with the defendants; or were third-party beneficiaries to the listing agreement between Hawes, The W.T. Beazley Company and the defendant sellers. Therefore, Count One fails to sufficiently allege a breach of contract cause of action and is ordered stricken.
II.
In order to plead a cause of action for fraud, "a plaintiff must allege that: (1) a false representation was made [by the defendant] as a statement of fact; (2) the statement was untrue and known to be so by [the defendant]; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment." (Internal quotation marks omitted.) Nazami v. Patrons Mutual Ins. Co., 280 Conn. 619, 628, 910 A.2d 209 (2006). By comparison, an action for negligent misrepresentation traditionally 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." Id. at 626. The courts have "long recognized liability for negligent misrepresentation . . . 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." (Emphasis in original; internal quotation marks omitted.) Petitte v. DSL.net, Inc., 102 Conn.App. 363, 372, 925 A.2d 457 (2007).
In count two of the complaint, the plaintiffs allege that "[a]t the time that the defendant, David Hawes, represented that [p]remises were connected to public sewers, such representation was false, he either knew that representation was false or had no reasonable basis for believing in the truth of that representation and the plaintiffs relied on the false representation to their detriment." Although the plaintiffs argue that this count "alleges in the alternative either an intentional misrepresentation or a negligent one," this court construes the allegations as asserting a claim for negligent misrepresentation given the plaintiffs' claim that Hawes knew that the representation was false or had no reasonable basis for believing in the truth of the representation.
The plaintiffs have "failed to allege the distinct torts as separate causes of action" in their complaint, as required by our rules of practice [Practice Book § 10-26]." Petitte v. DSL.net, Inc., supra, 102 Conn.App. 376 n. 3. "Whenever [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.) Id., 374-75.
As for the sufficiency of the allegations contained in count two, the plaintiffs allege that Hawes made a misrepresentation of fact when he advertised in the Multiple Listing Service that the property was connected to the public sewers. The plaintiffs further allege that Hawes knew or should have known that these representations were false. In addition, the plaintiffs allege that they "relied on the false representation to their detriment" and "have suffered money damages as a direct result of the false representation . . ." Specifically, they allege that they will eventually have to connect to the public sewers and that they would not have purchased the property or would have negotiated a different price if they had known that the premises were not connected to the public sewers.
The Supreme Court's analysis in D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 520 A.2d 217 (1987), is instructive in determining whether the plaintiffs' allegations of negligent misrepresentation are sufficient to withstand a motion to strike. In D'Ulisse-Cupo, the plaintiff had alleged that "[t]he defendants negligently misrepresented the facts to the plaintiff, causing her damages as pled." (Internal quotation marks omitted.) Id. at 217. The complaint alleged generally that the "plaintiff relied to her detriment on these representations and [it did] not specifically describe the nature of the plaintiff's detrimental reliance." Id. at 218 n. 5. The court held that "[a]lthough the complaint could have alleged the nature of the defendants' negligence more precisely, the lack of linguistic specificity does not warrant striking the second count . . . [U]nder the rules of practice governing pleading, a party may plead legal effect as long as the pleading fairly [apprises] the adverse party of the state of facts which it is intended to prove." (Internal quotation marks omitted.) Id. at 220.
In the present case, the facts alleged by the plaintiffs have fairly apprised the defendants of their intent to pursue a claim for negligent misrepresentation. If the defendants "were in doubt as to the nature of [the] claim or the legal theory underlying it, they could have sought a more particular description of the negligence charged by filing a request to revise." (Internal quotation marks omitted.) D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, supra, 202 Conn. 220. Contrary to the defendants' contention, the complaint need not specifically describe the nature of the reliance to sufficiently allege negligent misrepresentation. Therefore, this court denies the defendants' motion to strike the second count.
III.
With regard to the plaintiffs' claim of a CUTPA violation contained in count five, General Statutes § 42-110b(a) provides: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." Our appellate courts have advised that "[i]n determining whether a practice violates CUTPA, [the courts] are [to be] guided by the criteria set out in the Federal Trade Commission's so-called cigarette rule: (1) whether 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." (Citations omitted; internal quotation marks omitted.) Angillo v. Buckmiller, 102 Conn.App. 697, 709, 927 A.2d 312, cert. denied, 284 Conn. 927, 934 A.2d 243 (2007).
It is true that there is generally no "special requirement of pleading particularity connected with a CUTPA claim." Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 644, 804 A.2d 180 (2002). However, the Supreme Court has indicated that the "first prong [of the cigarette rule] standing alone, is insufficient to support a CUTPA violation, at least when the underlying claim is grounded solely in negligence." (Internal quotation marks omitted.) Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 593, 657 A.2d 212 (1995).
In the present case the allegations contained in count five are taken verbatim from count two (the negligent misrepresentation count) with the mere addition of one paragraph: "The defendant's misrepresentation constitutes an unfair and deceptive trade practice in violation of the Connecticut Unfair Trade Practices Act, C.G.S. 42-110b(a) as provided for by C.G.S. 20-417g." At most, the plaintiffs have only alleged that the practices offend public policy, the first prong, but not the other required elements. Accordingly, the plaintiffs have failed to sufficiently allege a CUTPA violation because CUTPA liability "does not exist for mere negligence when, as here, the sole CUTPA claim is that the defendant's negligence offends public policy." Martinez v. Yale-New Haven Hospital, Superior Court, complex litigation docket at Waterbury. Docket No. X02 CV 0404001227 (September 1, 2005, Schuman, J.).
IV.
In conclusion, the court grants the defendants' motion to strike counts one and five, but denies the defendants' motion to strike count two.