Opinion
CV084023893S.
12-04-2012
ABB, INC. v. TATE & RENNER.
Seeley & Berglass, New Haven, for ABB, Inc. Bai Pollock Blueweiss & Mulcahey PC, Shelton, for Tate & Renner.
UNPUBLISHED OPINION
Seeley & Berglass, New Haven, for ABB, Inc.
Bai Pollock Blueweiss & Mulcahey PC, Shelton, for Tate & Renner.
GILARDI, J.T.R.
The issue presented is whether the court should grant the defendant's motion to strike the plaintiff's amended complaint, filed September 22, 2008, stating claims for abuse of process and a violation of General Statutes § 42-110a et seq., the Connecticut Unfair Trade Practices Act (CUTPA). The defendant moves to strike count one, alleging abuse of process, on the grounds that the plaintiff has not pleaded facts alleging specific misconduct of a type that would show that the defendant brought a claim against the plaintiff primarily for a purpose for which the claim was not designed, and the plaintiff has not pleaded facts alleging that the defendant used a judicial process because a cause of action for abuse of process may not arise from administrative proceedings.
The defendant moves to strike count two, alleging a violation of CUTPA, on the grounds that the plaintiff cannot maintain a CUTPA claim against a lawyer who represents an adverse party and the plaintiff cannot maintain a CUTPA claim against a lawyer unless the claim involves the entrepreneurial aspects of the legal profession, which the plaintiff's claim does not.
The present motion concerns the plaintiff, ABB, Inc.'s, two-count amended complaint, which the plaintiff filed on September 22, 2008 after the court struck the plaintiff's first complaint on September 8, 2008 pursuant to the defendant, Tate & Renner's first motion to strike [ 46 Conn. L. Rptr. 345]. In the present complaint, which states claims for abuse of process and a violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. (CUTPA).
The defendant's motion to strike refers to the plaintiff's CUTPA claim as count five. The court notes, however, that the complaint contains only two counts, with the second being the CUTPA claim. Therefore the court will construe all of the defendant's references to " count five" as references to " count two."
The plaintiff alleges the following facts:
The plaintiff is a Delaware corporation with its principal place of business in Connecticut. The defendant is a law firm which represented a third-party client, Suresh Ahluwalia, in his claim against ABB Transmission & Distribution Ltd. of Dubai, United Arab Emirates (ABB Dubai), a corporation headquartered in the United Arab Emirates. On its website, taterenner.com, the defendant represents itself as an expert in claims brought under the Sarbanes-Oxley Act, 18 U.S.C. 1514A et seq. The website also contains numerous examples of claims it has filed against major corporations in order to promote and procure new business.
18 U.S.C. 1514A et seq. provides protection for so-called " whistleblowers" by making it unlawful for any publically traded company to discharge, or otherwise harass an employee, for, inter alia, that employee's act of notifying a federal agency of the company's unlawful actions.
Ahluwalia was employed by ABB Dubai in the U.A.E., pursuant to a contract executed under U.A.E. law. Ahluwalia was not an employee of the plaintiff, and the plaintiff had no knowledge of, or relationship to, the plaintiff. Ahulwalia's contract with ABB Dubai required that any claims brought by him against ABB Dubai be brought under the law of the U.A.E. and in a U.A.E. forum.
The defendant brought a claim on behalf of Ahluwalia against ABB Dubai " under United States law and in the United States judicial system" by filing a complaint on February 15, 2007 (the February complaint), stating a cause of action for a violation of the Sarbanes-Oxley Act and utilizing " appropriate judicial process." The plaintiff was not named in the February complaint. The relevant proceedings pursuant to Sarbanes-Oxley require the filing of a complaint with the United States Occupational Safety and Health Administration (OSHA).
The plaintiff does not plead in which United States jurisdiction (whether federal or state court or some administrative agency) the February 15, 2007 complaint was brought.
The February complaint was dismissed on April 4, 2007, because the complaint involved employment that was wholly outside the United States, and thus the Sarbanes-Oxley Act did not provide jurisdiction. Instead of appealing that dismissal, the defendant filed a second complaint on May 2, 2007 (the May complaint), which was substantially similar to the February complaint and which for the first time added claims against the plaintiff. In response to a second motion to dismiss, the defendant filed a third complaint on July 2, 2007 (the July complaint), which again included claims against the plaintiff. The July complaint was ultimately dismissed by the order of Judge Thomas M. Burke on September 24, 2007, on the ground that no jurisdiction existed because the claims pertained to employment wholly outside the United States. The defendant was aware of the Sarbanes-Oxley Act's requirement that any complained-of conduct must occur within the United States, but filed claims, which were wholly related Ahluwalia's employment in Dubai, in a United States jurisdiction nonetheless.
The plaintiff claims that had the plaintiff been an appropriate party the defendant, which held itself out as an expert in Sarbanes-Oxley litigation, would have included the plaintiff as a defendant in the February complaint. The fact the defendant did not name the plaintiff as a defendant in the February complaint exhibits that the subsequent May and July proceedings were improper. The defendant's attempt to add the plaintiff as a defendant in the May and July complaints was pretextual, constituting an abuse of process. The defendant's decision not to appeal the dismissal of the February complaint, and to instead file the May and July complaints, was an abuse of process by involving the plaintiff in an attempt to circumvent the dismissal of the February complaint.
In the alternative, based upon the forgoing, the defendant utilized proceedings to accomplish a purpose for which they were not designed in order to gain a collateral extraneous advantage, namely the surrender of information via discovery, which was wholly unrelated to Ahluwalia's claims.
The plaintiff further alleges that the defendant engaged in the conduct of trade or commerce within the meaning of CUTPA, § 42-110a et seq. The defendant engaged in unfair, deceptive or misleading acts based upon the foregoing conduct. The plaintiff has suffered damages. In the alternative, the plaintiff does not have an attorney-client relationship with the defendant, and, therefore, the harm suffered by the plaintiff is a consequence of conduct by the defendant that was entrepreneurial in nature because it was conduct between two business entities: the plaintiff and the defendant. The defendant advertises that it is an expert in Sarbanes-Oxley litigation by listing various high-profile corporations against which the defendant has brought claims. The defendant abused judicial process in an improper attempt to procure information from the plaintiff via the discovery process relating to aspects of the plaintiff's corporate structure that had nothing to do with Ahluwalia's claims against ABB Dubai. The defendant's conduct interfered with the plaintiff's business relations.
Count one states a claim for abuse of process. Count two states a claim for a violation of CUTPA. The defendant filed its motion to strike both counts of the complaint on the grounds that the plaintiff does not allege facts which show that the defendant brought claims primarily for a purpose for which they were not designed, the plaintiff has not alleged facts showing that the defendant utilized a " judicial process" because the underlying action was an administrative proceeding, a CUTPA claim cannot be made against a lawyer representing an adverse party, and a CUTPA claim cannot be made against a lawyer unless it concerns the entrepreneurial aspects of legal practice.
" Whenever any party wishes to contest ... the legal sufficiency of the allegations of any complaint ... to state a claim upon which relief can be granted ... that party may do so by filing a motion to strike the contested pleading or part thereof." Practice Book § 10-39. " 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). " [I]t 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.) Coe v. Board of Education, 301 Conn. 112, 116-17, 19 A.3d 640 (2011). A motion to strike " does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997). " A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Internal quotation marks omitted.) Bridgeport Harbour Place I, LLC v. Ganim, 303 Conn. 205, 213, 32 A.3d 296 (2011).
In its memorandum in support of its motion to strike, the defendant argues as follows: All of the plaintiff's allegations are conclusory. The abuse of process claim fails because the plaintiff does not plead facts in the complaint alleging specific misconduct designed to cause a specific injury. Such allegations are required to establish that a claim was brought primarily for a purpose for which the claim was not designed. The plaintiff's allegations do not allege injury to the plaintiff which is outside the normal course of litigation. Permitting an abuse of process claim to proceed upon such bare allegations, like those in the plaintiff's complaint, runs the risk of creating a chilling and inhibitory effect on litigants with viable claims. The abuse of process claim also fails because the plaintiff cannot state a claim for abuse of process arising out of an administrative proceeding, and because the plaintiff has not otherwise established that the defendant brought claims against the plaintiff in a judicial proceeding.
The CUTPA claim fails because the plaintiff cannot bring a CUTPA claim against an attorney representing an adverse party. The CUTPA claim also fails because all of the complained of conduct refers to the defendant's conduct as an attorney and not to the entrepreneurial aspects of legal practice.
In its memorandum in opposition, the plaintiff argues as follows:
The defendant's memorandum asks the court to consider facts which are outside of the complaint, and which cannot properly be considered on a motion to strike. Administrative proceedings do constitute an appropriate basis for an abuse of process claim. The plaintiff has alleged sufficiently facts which state a claim for abuse of process by showing the use of a judicial proceeding. A CUTPA claim is appropriate in this case in accordance with the Supreme Court's holding in Web Press Services Corp. v. New London Motors, Inc., 203 Conn. 342, 525 A.2d 57 (1987), because the plaintiff has alleged facts which are more extensive than those required to state a claim under CUPTA.
As a threshold matter, the court addresses the plaintiff's argument that the defendant's motion is not properly submitted as a motion to strike. Specifically, the plaintiff argues that the defendant's motion requires the court to consider facts which are outside of the complaint and, therefore, the court must reject the defendant's arguments. Much of the plaintiff's argument on this point focuses on the defendant's contention that the underlying claims were all administrative proceedings, which the plaintiff asserts is not based upon facts contained in the amended complaint. The court disagrees.
In addition to the foregoing, on page three of its memorandum in opposition the plaintiff also " incorporates" its Motion and Memorandum for Continuance of Defendant's Motion Entitled Motion to Strike (# 138), filed on July 15, 2010, and which argues that the defendant's motion to strike is, apparently, a motion for summary judgment, and that disposition of the defendant's motion as a motion to strike is, therefore, improper. To the extent that the plaintiff has requested disposition of its motion (# 138), the court declines to address that motion at this time.
First, although the defendant's papers do refer to facts which are found exclusively in the plaintiff's previous complaint, including that the underlying claims occurred in an administrative proceeding, the defendant only makes these references when setting out the procedural history of this case, a proper subject of discussion in a memorandum of law. The defendant bases all of its substantive arguments on facts found in the amended complaint. Thus, the defendant never requests that the court look outside the facts pleaded in amended complaint.
Second, although the allegations in the plaintiff's amended complaint do not explicitly plead that the claims brought by the defendant were part of an administrative proceeding, the reasonable inferences drawn from the allegations that are in the amended complaint, like the text scraped away from a palimpsest, do. For example, the plaintiff pleads that the underlying proceedings were terminated by the order of " Judge Thomas M. Burke." On page three of its complaint, the plaintiff notes that the defendant's claims required the filing of an OSHA complaint and on page twenty of its memorandum in opposition the plaintiff refers to Judge Burke as an " Administrative Law Judge." Pursuant to Code of Evidence § 2-1(c), the court takes judicial notice of the fact that Judge Burke is an Administrative Law Judge of the United States Department of Labor and that OSHA refers to the Occupational Safety and Health Administration of the federal government.
Finally, the court is permitted to take judicial notice of the prior pleadings in this action, see, e.g., Lind-Larsen v. Bank of America, N.A., Superior Court, judicial district of Danbury, Docket No. DDB CV 06 4005275 (October 24, 2008, Shaban, J.) (taking judicial notice of the prior pleadings of the parties), wherein the plaintiff's first complaint pleaded that the underlying claims were brought in OSHA and the United States Department of Labor.
Accordingly, the court finds that it may properly consider the defendant's motion for what it is, a motion to strike.
ABUSE OF PROCESS
" An action for abuse of process lies against any person using a legal process against another in an improper manner or to accomplish a purpose for which it was not designed ... Because the tort arises out of the accomplishment of a result that could not be achieved by the proper and successful use of process, the Restatement Second (1997) of Torts, § 682, emphasizes that the graveman of the action for abuse of process is the use of a legal process ... against another primarily to accomplish a purpose for which it is not designed ... Comment b to § 682 explains that the addition of primarily is meant to exclude liability when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant." (Citations omitted; emphasis in original; internal quotation marks omitted.) Laborina v. McDonald, 274 Conn. 394, 403-04, 876 A.2d 522 (2005). " The distinction between malicious prosecution or vexatious suit and abuse of process as tort actions is that in the former the wrongful act is the commencement of an action without legal justification, and in the latter it is in the subsequent proceedings, not in the issue of process but in its abuse." (Internal quotation marks omitted.) QSP, Inc. v. Aetna Casualty & Surety Co., 256 Conn. 343, 360-61 n. 16, 773 A.2d 906 (2001).
In reviewing a claim for abuse of process against an attorney, the court is guided by Mozzochi v. Beck, 204 Conn. 490, 494, 529 A.2d 171 (1987), wherein the court noted that the cause of action for abuse of process " must be reconciled with our responsibility to assure unfettered access to our courts." The court continued, " [a]ccordingly, we conclude that an attorney may be sued for misconduct by those who have sustained a special injury because of an unauthorized use of legal process. In permitting such a cause of action, we must, however, take care not to adopt rules which will have a chilling and inhibitory effect on would-be litigants of judiciable issues." (Internal quotation marks omitted.) Id., at 495, 529 A.2d 171. In addition, " although attorneys have a duty to their clients and to the judicial system not to pursue litigation that is utterly groundless, that duty does not give rise to a third party action for abuse of process unless the third party can point to specific misconduct intended to cause specific injury outside of the normal contemplation of private litigation. Any other rule would ineluctably interfere with the attorney's primary duty of robust representation of the interests of his or her client." Id., at 497, 529 A.2d 171.
In Mozzochi v. Beck, supra, 204 Conn. at 490, 529 A.2d 171, the court concluded that the plaintiff did not state a cause of action for abuse of process even though the plaintiff alleged that the defendant brought a claim the defendant knew was without merit. According to the court, the plaintiff's allegation that the goal of the defendant was to inflict injury upon the plaintiff and to enrich the defendant and its client " in no way distinguishes between the costs and benefits ordinarily associated with the pursuit of litigation and the burdens that the defendants in this case allegedly improperly inflicted upon the plaintiff." Id., at 497-98, 529 A.2d 171.
In the present matter, the defendant relies upon Mozzochi v. Beck, supra, 204 Conn. at 490, 529 A.2d 171, arguing that the abuse of process claim must be stricken because the plaintiff fails to allege specific misconduct showing that the primary purpose of the claim was to cause injury to the plaintiff outside the normal course of litigation, and that any specific misconduct which the plaintiff does attempt to allege amounts to no more than a conclusory statement. In the alternative, the defendant argues that the plaintiff has not alleged that the defendant used a judicial process because the underlying claims were part of an administrative proceeding, and abuse of process claims cannot arise from such proceedings.
The plaintiff responds that the allegations which are pleaded in the complaint do establish that the defendant brought claims against the plaintiff for a purpose other than that for which the claims were designed because the plaintiff pleads that defendant did not add the plaintiff until after the February complaint had been dismissed, the defendant chose to add the plaintiff instead of appealing, that defendant's claims were " under pretext" in attempt to gain information relating to the corporate structure of the plaintiff, and that the " specific conduct of [the] defendant constitutes abuse of process, causing harm and damage to the instant plaintiff." In addition, in accordance with Varga v. Pareles, 137 Conn. 663, 81, A.2d 112 (1951), the plaintiff is not required to plead an ulterior motive. The plaintiff further argues, relying upon the law of states other than Connecticut, that an administrative proceeding is an appropriate basis for an abuse of process claim.
The facts pleaded by the plaintiff taken in their best light show no more than that the defendant brought claims against the plaintiff with knowledge that the claims had no merit. In Mozzochi v. Beck, supra, 204 Conn. at 490, 529 A.2d 171, the court upheld the granting of a motion to strike even though the complaint alleged that the defendant lawyer brought claims which the defendant knew had no merit because the complaint did not allege that the plaintiff suffered any injury outside the normal course of litigation. The plaintiff's conclusory allegations that it has suffered " damages" and that the claims were brought " under pretext" do not, without more, allege sufficiently a cause of action for abuse of process. The court disagrees with the plaintiff that Varga v. Pareles, supra, 137 Conn. at 663, 81 A.2d 112, requires a different result because that case, which stands for the general proposition that an ulterior motive is not required for abuse of process, cannot override the later, more specific holding of Mozzochi v. Beck, supra, 204 Conn. at 490, 529 A.2d 171, which sets out specific rules for an abuse of process claim against an attorney. The plaintiff, therefore, has not pleaded facts showing specific misconduct which caused an injury outside the normal course of litigation. Because the court has decided that the plaintiff fails to allege sufficiently an injury outside the normal course of litigation, the court need not address the parties' other arguments concerning whether a claim for abuse of process may be grounded in an administrative proceeding.
Based on the foregoing, the court grants the defendant's motion to strike with respect to count one of the complaint, alleging abuse of process.
CUTPA
Section 42-110g(a) provides: " Any person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by section 42-110b, may bring an action ... to recover actual damages." Section 42-110b(a) further 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." " [A] claimant under CUTPA must possess at least some type of consumer relationship with the party who allegedly caused harm to him or to her." Jackson v. R.G. Whipple, Inc., 225 Conn. 705, 727 627 A.2d 374 (1993). This is partly because " it strains credulity to conclude that CUTPA is so formless as to provide redress to any person, for any ascertainable harm, caused by any person in the conduct of any ‘ trade’ or ‘ commerce.’ " Id., at 725-26, 627 A.2d 374. " [P]rofessional malpractice does not give rise to a cause of action under CUTPA." Beverly Hills Concepts, Inc. v. Schatz and Schatz, Ribicoff and Kotkin, 247 Conn. 48, 79, 717 A.2d 724 (1998).
" [I]mportant policy considerations inform the potential liability of an attorney to an adversary. These considerations transcend CUTPA and its remedial intent." Jackson v. R.G. Whipple, Inc., supra, 225 Conn. at 727, 627 A.2d 374. " Providing a private cause of action under CUTPA to a supposedly aggrieved party for the actions of his or her opponent's attorney would stand the attorney-client relationship on its head and would compromise an attorney's duty of undivided loyalty to his or her client and thwart the exercise of the attorney's independent professional judgment on his or her client's behalf." Id. Courts have therefore " sought to avoid any rule that would interfere with the attorney's primary duty of robust representation of the interests of his or her client, " because " [a] central dimension of the attorney-client relationship is the attorney's duty of [e]ntire devotion to the interests of the client." (Internal quotation marks omitted.) Id., at 728, 627 A.2d 374. Accordingly, a CUTPA claim does not lie against an adversary's attorney. Jackson v. R.G. Whipple, Inc., supra, 225 Conn. at 729, 627 A.2d 374.
Outside the context of a claim brought against an adversary's attorney, a CUTPA claim may be brought against an attorney for entrepreneurial acts. " Our CUTPA cases illustrate that the most significant question in considering a CUTPA claim against an attorney is whether the allegedly improper conduct is part of the attorney's professional representation of a client or is part of the entrepreneurial aspect of practicing law." Suffield Development Associates Ltd. Partnership v. National Loan Investor, L.P., 260 Conn. 766, 781, 802 A.2d 44 (2002). " [A]lthough all lawyers are subject to CUTPA, most of the practice of law is not. The entrepreneurial ‘ exception’ is just that, a specific exception from CUTPA immunity for a well-defined set of activities-advertising and bill collection, for example." Id., at 782, 802 A.2d 44. " [CUTPA] is not a catch-all provision intended to subject any arguably improper attorney conduct to CUTPA liability." Id. " Many decisions made by attorneys eventually involve personal profit as a factor, but are not considered part of the entrepreneurial aspect of practicing law." Id., at 783, 802 A.2d 44. " [An] attorney's financial considerations do not place all of these actions into the category of entrepreneurial aspects of practicing law. Using an attorney's financial considerations as a screening mechanism for separating professional actions from entrepreneurial ones would dissolve the distinction between the two, subjecting attorneys to CUTPA claims for any decision in which profit conceivably could have been a factor." Id.
The defendant argues that the CUTPA claim must be stricken because a CUTPA claim cannot be maintained against an adversary's attorney. In addition, the entrepreneurial exception does not apply to the facts alleged here because the plaintiff's allegations relate solely to the defendant's capacity as legal counsel in the context of bringing a legal claim on behalf of its client. The plaintiff responds that it has pleaded facts sufficient to state a claim in accordance with the Supreme Court's holding in Web Press Services Corp. v. New London Motors, Inc., supra, 203 Conn. at 342, 525 A.2d 57, because the plaintiff has alleged facts which are more extensive than those required by that case.
In the alternative, the plaintiff continues, the complaint pleads facts related to the defendant in its entrepreneurial capacity because it alleges that the defendant did not have an attorney-client relationship with the plaintiff, the defendant advertised that it was an expert in Sarbanes-Oxley litigation based upon claims it has brought, and because the defendant attempted to gain information about the plaintiff so that it could continue to advertise that it is an expert and successful Sarbanes-Oxley litigator. Specifically " [t]he information sought by [the] defendant would appear to benefit and assist [the] defendant ..., in prosecution of [the] defendant's trade or commerce for the purpose of entrepreneurial, commercial and other benefits having no relation to defendant's representation of its client ... Ahluwalia."
The plaintiff's reliance on Web Press Services Corp. v. New London Motors, Inc., supra, 203 Conn. at 342, 525 A.2d 57, is misplaced because that case, which set out the basic rules regarding a CUTPA claim, does not address more specific rules relating to CUTPA claims brought against attorneys. The core allegations of the plaintiff's complaint are that the defendant improperly brought a claim against the plaintiff and that such action amounts to an unfair trade practice. The law is clear that no CUTPA claim may be brought against an adversary's attorney under such a theory. Similarly, the complaint does not state a CUTPA claim under the entrepreneurial exception. Although the plaintiff does allege that the defendant advertises that it is an expert in Sarbanes-Oxley litigation, the plaintiff does not allege that these advertisements are false, deceptive or unfair. Instead, the complaint primarily references the defendant's advertisements as support for its abuse of process claim by showing that the defendant should have known that its claims against the plaintiff were improper. The plaintiff's allegation that the " information sought by [the] defendant would appear to benefit and assist [the] defendant" does not transform any of the defendant's actions in bringing a claim on behalf of its client into entrepreneurial acts because the mere fact that an attorney might profit from the prosecution of a case is insufficient to make an act entrepreneurial. Suffield Development Associates Limited Partnership v. National Loan Investor, L.P., supra, 260 Conn. at 783, 802 A.2d 44. Finally, the plaintiff does not survive on the basis of its allegation that, because the plaintiff does not have an attorney-client relationship with the defendant, the defendant's acts must have been entrepreneurial. Under the present facts, that line of reasoning ignores the basic rule that a CUTPA claim cannot be maintained against an adversary's attorney.
Accordingly, the court grants the defendant's motion to strike with respect to count two of the complaint, alleging a violation of CUTPA.
For the foregoing reasons, the motion to strike is granted.