Opinion
No. FST-CV-07-5004412S
August 4, 2009
MEMORANDUM OF DECISION RE MOTION TO STRIKE #137 FACTUAL BACKGROUND
The named plaintiffs, Colin Ambrose and Clara Ambrose, commenced this action against the defendants, Stuart Ross and Stephanie Ross. The complaint contains four counts alleging fraud/fraudulent misrepresentation (First Count), breach of contract (Second Count), CUTPA violation (Third Count), and unjust enrichment (Fourth Count). The plaintiffs allege that they purchased a home at Two Pier Way Landing in Westport, Connecticut (the "property") from the defendants by way of a Purchase and Sale Agreement dated August 10, 2005. Part of the agreement included a "Residential Property Disclosure." Prior to the sale, the defendants had owned or lived at the property for approximately twenty-seven years. The sale was completed on or about October 7, 2005. The plaintiffs allege that the defendants failed to disclose certain conditions regarding the property that resulted in flooding in the basement, home, driveway and yard. The plaintiffs claim that the failure to disclose resulted in damages for which they seek relief in accordance with the four-count complaint.
On June 24, 2009, the defendants filed a motion to strike the Third and Fourth Counts of the complaint on the grounds that the allegations do not set forth a claim pursuant to General Statute Section 42-110(a), known as the Connecticut Unfair Trade Practices Act (CUTPA), and that the claim for unjust enrichment is not applicable because there is a count for breach of contract. On July 16, 2009, the plaintiffs filed an objection to the motion to strike claiming that the CUTPA count is legally sufficient and the unjust enrichment is permitted as pleading in the alternative.
LEGAL 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.) CT Page 13205 Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). Pursuant to Practice Book Section 10-39(a)(1), when a party seeks to contest the "legal sufficiency of the allegations of any complaint, counterclaim, or cross claim, or of any one or more counts thereof, 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." A motion to strike admits all well-pleaded facts. Alarm Applications Co. v. Simsbury Volunteer Fire Co., 179 Conn. 541, 545, 427 A.2d 822 (1980).
The motion to strike addresses two separate counts of the complaint and will be addressed separately. The defendants contend that the Third Count alleging a CUTPA violation does not apply to the sale of the residential property by a homeowner like the defendants. In particular, the defendants rely upon the language in the statute that the conduct is that of "any trade or commerce" to support their position. The second argument relates to the claim for breach of contract and unjust enrichment. The defendants contend that because an unjust enrichment claim applies only when there is no contract or ability to collect under the contract, there is no legal basis for both claims under the law.
"Whether the defendants are subject to CUTPA is a question of law, not fact." (Internal quotation marks omitted). Muniz v. Kravis, 59 Conn.App. 704, 712, 757 A.2d 1207 (2000), quoting Connelly v. Housing Authority, 213 Conn. 354, 364-65, 567 A.2d 1212 (1990). CUTPA provides that "no person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." General Statutes Section 42-110b. The test used in determining whether a defendant's action constitutes an unfair or deceptive trade practice is the three-part criteria known as the "cigarette rule." McLaughlin v. Ford Motor Co., 192 Conn. 558, 567-68, 473 A.2d 1185 (1984). The three criteria are: "(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 — whether, 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 businessmen]." (Internal quotation marks omitted.) Journal Publishing Co. v. Hartford Courant Co., 261 Conn. 673, 695, 804 A.2d 823 (2002).
In viewing this criteria and considering the argument of counsel for the defendants and the objection of the plaintiffs, the court agrees that based upon the facts in the instant matter, it is clear that the plaintiffs have failed to allege legally sufficient facts to support a CUTPA claim. Viewing the three criteria to support a violation of CUTPA in conjunction with the facts set forth in this claim gives credence to following the position of a number of courts that a one-time real estate sale by the owner of a property would not satisfy the statutory language of "trade or commerce." In determining this issue, a number of cases provide some guidance as to what is "trade or commerce." One of the more compelling aspects of the defendant's argument which leads the court to its conclusion is the complete lack of any business purpose or impact on any other individual as a result of the sale of their residence of twenty-seven years to the plaintiffs. The third criteria refers to such competition or business. The instant complaint offers nothing more than the fact that there was a sale of their life time residence by homeowners and not business people. There is no competition nor is there a business of any kind for these defendants, homeowners.
Although there has been a split of authority on this issue, it appears the weightier and more recent decisions support the defendants' position based upon these facts. In the cases cited for each argument and issue there have been recent decisions that clearly support the defendants' position as to the CUTPA claim. In McCain Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 890 A.2d 140, cert. denied 277 Conn. 928, 895 A.2d. 798 (2006), the court outlined a test to determine the applicability of the trade or commerce language pursuant to a CUTPA claim. The court stated that it: "must arise out of the offender's primary trade or business, not out of an incidental matter." Id., 521. In McCain, there was actually a business entity but the court concluded that the particular activity was not the primary activity and thus did not rise to the level of a CUTPA violation. Other than the sale of their house and general language that the defendants failed to disclose problems with the property, there is nothing to show behavior or a status, either business or competitor, that would support a CUTPA claim. The McCain court and many other decisions distinguished the applicability of the party based upon their contact, finding even an incidental connection was not enough. The opinion in Kaplan v. Nuzzo, Superior Court, judicial district of New Haven, Docket No. CV 05 401335 (November 9, 2005, Silbert, J.) [ 40 Conn. L. Rptr. 246], contains the legal analysis that applies to the facts and argument similar to this matter. In Kaplan, the court compared the one-time solitary sale to the operation or management of a continuing enterprise as distinguishing which bodies should be evaluated for CUTPA violations. The facts in this complaint are no different than the one-time application in Kaplan and many other superior court cases thus supporting the granting of the motion to strike Count Three of the complaint.
The court does not adopt this position because of the greater number of cases in support of the defendants' position but the facts of the cases in support follow more closely the facts of this claim. The facts of the instant motion are instrumental in the finding that a CUTPA violation is legally insufficient.
The motion to strike Count Four of the complaint challenges the legality of filing separate claims for a breach of contract and unjust enrichment. The defendants' motion in this regard must be denied because as the plaintiffs' objection indicates this pleading is in the alternative. In accordance with Practice Book Section 10-25, "the plaintiff may claim alternative relief, based upon an alternative construction of the cause of action." Unlike the CUTPA count, the plaintiff has alleged sufficient facts to maintain a cause of action for unjust enrichment in Count Four.
CONCLUSION
Therefore, the motion to strike Count Three is granted and the motion to strike Count Four is denied.