Opinion
No. X06 CV 04 0184523 S
February 16, 2006
MEMORANDUM OF DECISION
The plaintiff Bridgeport Harbour Place I, LLC (BHP) in this action has filed an eleven-count complaint against sixteen defendants alleging that those defendants acted through bribes, extortion and fraud to illegally prevent the plaintiff from exercising its contractual rights to develop a parcel of property, known as Steel Point, in the city of Bridgeport. Various defendants have filed motions to strike certain counts of the plaintiff's complaint. I will address in turn each of the claims of the defendants.
First, it is necessary to briefly reiterate the well-established law governing the court's consideration of a motion to strike. "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. In ruling on a motion to strike, the court is limited to the facts alleged in the complaint. The court must construe the facts in the complaint most favorably to the plaintiff." (Citations and internal quotation marks omitted.) Novametrix Medical Systems v. BOC Group, Inc., 224 Conn. 210, 214 (1992). "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." Suffield Devel. Assoc. L.P. v. National Loan Inv., 64 Conn.App. 192, 197 (2001). "The role of the trial court is to examine the complaint, construed in favor of the plaintiffs, to determine whether the pleading party has stated a legally sufficient cause of action." Dodd v. Middlesex Mutual Assurance Company, 242 Conn. 375, 378 (1997).
I Count One: Tortious Interference
The plaintiff asserts in count one of its complaint a claim of tortious interference against the defendants Charles J. Willinger, Jr., an attorney, and Willinger, Willinger Bucci, his law firm, (collectively referred to as the Willinger defendants). The plaintiff alleges the following facts. On October 9, 1997, the plaintiff was chosen by the city of Bridgeport as the developer of a deteriorated section of waterfront property, known as Steel Point. The Willinger defendants were subsequently hired by Bridgeport to represent Bridgeport in the Steel Point project. The defendant Joseph P. Ganim, the mayor of Bridgeport, was involved in a massive conspiracy to illegally profit from city contracts through the payment of kickbacks, bribes and illegal payments. Ganim hired the Willinger defendants to interfere with the plaintiff's development rights by imposing unreasonable conditions and requirements on the plaintiff's development plans in order to facilitate the award of the development rights to persons or entities who would make illegal payments to Ganim. The Willinger defendants knowingly participated in Ganim's plan to obstruct the plaintiff's development plan for illegal gain. The Willinger defendants subsequently took steps to block the plaintiff's ability to develop Steel Point by imposing unreasonable and improper conditions and demands and refusing to cooperate on the project's development.
The Willinger defendants have moved to strike count one on the grounds that, as agents for Bridgeport, which was a party to the development contract, they cannot be held liable for tortious interference with the development contract. The plaintiff responds that it has alleged sufficient facts to establish tortious interference because it has alleged that the Willinger defendants were acting outside the scope of their authority. I agree with the plaintiff.
The general rule is that an agent may not be charged with having interfered with a contract of the agent's principal. Selby v. Pelletier, 1 Conn.App. 320, 327 n. 4 (1984). An agent can however be held liable for tortious interference "if he did not act legitimately within his scope of duty but used the corporate power improperly for personal gain." (Citations omitted; internal quotation marks omitted.) Wellington Systems, Inc. v. Redding Group, Inc., 49 Conn.App. 152, 168 (1988). The plaintiff has alleged facts which, if proven, establish that the Willinger defendants acted outside of their authority as agents for the city of Bridgeport in the actions they took to interfere with the plaintiff's contract to develop Steel Point. The plaintiff alleges that the Willinger defendants knowingly participated in a conspiracy with Ganim to block the plaintiff's plan to develop Steel Point in order to steer the development to the defendants Alfred Lenoci, Sr. and Alfred Lenoci, Jr. who had agreed to make illegal payments to Ganim. The plaintiff further alleges that the Willinger defendants took steps to obstruct the plaintiff's development plans in order to further its lucrative relationship with Ganim. These allegations place the actions of the Willinger defendants outside the scope of their authority as attorneys for the city of Bridgeport as it cannot reasonably be claimed that Bridgeport authorized the defendants to act in concert with its mayor to obstruct the development in order to facilitate the receipt by the mayor of illegal payments Accordingly, the motion to strike count one is denied.
II Count Two: Breach of Duty of Good Faith and Fair Dealing
In count two of its complaint, the plaintiff asserts that "the defendant Charles Willinger, acting on behalf of the defendant Willinger, Willinger and Bucci, negligently and carelessly breached his duty to act in good faith and to deal fairly with the plaintiff." In count six, the plaintiff asserts that the defendant Ganim breached the implied covenant of good faith and fair dealing contained in the contract between the plaintiff and Bridgeport. The Willinger defendants and Ganim have moved to strike these claims on the ground that the plaintiff has failed to properly allege that they owe a duty to the plaintiff. I agree.
In its complaint, the plaintiff has alleged a contract with the city of Bridgeport. It has not alleged that it had any contract with the Willinger defendants or with Ganim. The failure to allege a contract between the parties is fatal. "[T]he existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing." Hoskins v. Titan Value Equities Group, Inc., 252 Conn. 789, 793 (2000).
To the extent the plaintiff is alleging that the Willinger defendants in their capacities as attorneys negligently breached a duty of care to the plaintiff, that claim also fails. "As a general rule, attorneys are not liable to persons other than their clients for the negligent rendering of services." Krawczyk v. Stingle, 208 Conn. 239, 244 (1988). Although an exception applies where the primary or direct purpose of the transaction was to benefit the plaintiff as a third party, id., 245, the plaintiff has made no such allegation here. The claims of breach of the duty of good faith and fair dealing against the Willinger defendants and Ganim are hereby stricken.
III Count Seven: Negligence
The defendant city of Bridgeport has filed a motion to strike count seven which asserts a claim of negligence against it. Bridgeport asserts that its conduct as alleged in the complaint involves discretionary acts for which it has governmental immunity. The plaintiff contends that the acts and failures to act which it ascribes to Bridgeport in its complaint constitute ministerial acts which are not cloaked with immunity. The plaintiff further maintains that, to the extent Bridgeport's acts involve discretion, the city is without immunity because the plaintiff was an identifiable victim of imminent harm.
Bridgeport's motion also sought to strike claims of quantum meruit (count eight) and fraudulent misrepresentation (count nine). At oral argument, Bridgeport agreed to withdraw its request to strike the quantum meruit claim and the plaintiff agreed to withdraw its claim of fraudulent misrepresentation against Bridgeport.
Our Supreme Court in Spears v. Garcia, 263 Conn. 22, 29 (2003), held that General Statutes § 52-557n abrogates a municipality's common-law immunity from liability for its tortious acts. General Statutes § 52-557n(a)(1) provides in relevant part: "Except as otherwise provided by law, a political subdivision of the state shall be liable for damages to person or property caused by: (A) The negligent acts or omissions of such political subdivision or any employee, officer or agent thereof acting within the scope of his employment or official duties . . ." Subdivision (2) of § 52-557n(a) lists two exceptions to the statutory abrogation of governmental immunity. The exception relevant here provides: "Except as otherwise provided by law, a political subdivision of the state shall not be liable for damages to person or property caused by . . . (B) negligent acts or omissions which require the exercise of judgment or discretion as an official function of the authority expressly or impliedly granted by law." § 52-557n(a)(2)(B). In their argument to this court, the parties have assumed that the immunity provided by § 52-557n(a)(2)(B) is identical to a municipal employee's qualified immunity for discretionary acts at common law. Accordingly, I will likewise assume, without deciding, that § 52-557n(a)(2)(B) codifies the common law. See Martel v. Metropolitan District Commission, 275 Conn. 38, 48 (2005).
"The [common-law] doctrines that determine the tort liability of municipal employees are well established . . . Generally, a municipal employee is liable for the misperformance of ministerial acts, but has a qualified immunity in the performance of governmental acts . . . Governmental acts are performed wholly for the direct benefit of the public and are supervisory or discretionary in nature. The hallmark of a discretionary act is that it requires the exercise of judgment. In contrast, [m]inisterial refers to a duty which is to be performed in a prescribed manner without the exercise of judgment or discretion." (Citations omitted; internal quotation marks omitted.) Id., 48-49.
The determination of whether official acts or omissions are ministerial or discretionary is normally a question of fact for the fact finder. There are cases however where it is apparent from the complaint that governmental acts involve the exercise of discretion. Lombard v. Edward J. Peters, Jr., P.C., 252 Conn. 623, 628, 749 A.2d 630 (2000). See also Violano v. Fernandez, 88 Conn.App. 1, 10 n. 9 (2005) ("Although the general rule is that a determination as to whether the actions or omissions of a municipality are discretionary or ministerial is a question of fact for the jury, there are cases where it is apparent from the complaint.") This is not one of those cases. Based solely on the allegations of the plaintiff's complaint, it is not clear whether the acts and omissions complained of are discretionary or ministerial.
In count seven, the plaintiff alleges, in part, that Bridgeport negligently caused injury to the plaintiff's property rights "by failing to follow statutory, and regulatory requirements concerning the awarding and payment of city awarded contracts" and by failing to prohibit the conflicts of interests of agents, employees, outside contractors and elected officials of the city of Bridgeport. Without knowing the precise statutory, regulatory and ethical requirements at issue, it is impossible to determine whether the duties imposed by those rules are discretionary or ministerial. A motion to strike is therefore not the appropriate vehicle for resolving Bridgeport's claim that its acts and omissions are immune from suit.
IV Count Nine: Fraudulent Misrepresentation
The defendant Ganim has moved to strike count nine which asserts a claim of fraudulent misrepresentation. Ganim maintains that the claim of fraud should be stricken because the plaintiff has failed to allege with sufficient specificity the acts allegedly constituting fraud and failed to allege reliance upon any misrepresentation. The plaintiff argues that the facts contained in count nine are adequate to support a claim of fraud. I agree with the plaintiff.
"Fraud involves deception practiced in order to induce another to act to her detriment, and which causes that detrimental action . . . The four essential elements of fraud are (1) that a false representation of fact was made; (2) that the party making the representation knew it to be false; (3) that the representation was made to induce action by the other party; and (4) that the other party did so act to her detriment." (Internal quotation marks omitted.) Carr v. Fleet Bank, 73 Conn.App. 593 (2002). "Where a claim for damages is based upon fraud, the mere allegation that a fraud has been perpetrated is insufficient; the specific acts relied upon must be set forth in the complaint." Maruca v. Phillips, 139 Conn. 79, 81 (1952).
In count nine of its complaint, the plaintiff alleges that Ganim made "false representations of fact concerning the status of the Steel Point Project, the requirements to be fulfilled by the plaintiff, the manner in which the project money was expended, time periods relating to demolition, destruction and land acquisition and other components of the development project." The plaintiff further alleges that Ganim made "false representations that Bridgeport was actively engaged in completing the project including written agreements, knowing that the project would never be completed until the plaintiff was eliminated from the development in accordance with the corrupt agreement . . ." Ganim contends that these allegations are insufficient because they fail to identify the precise content and date of the alleged statements. The defendant cites no authority for such specificity and I am aware of none. Such detail is a matter more appropriately pursued in discovery. It is sufficient for purposes of stating a claim of fraud that the plaintiff has described with particularity the maker and subject matter of the allegedly false representations. Moreover, the plaintiff has identified the content of at least one of the allegedly false representations by alleging that Ganim falsely represented that Bridgeport planned to complete the project.
Ganim also claimed at oral argument that the plaintiff failed to identify the maker of the false statements. Although count nine includes the allegation that Ganim caused other representatives of Bridgeport to make false representations, it also alleges that Ganim himself made the false representations. Such an allegation is sufficient to withstand a motion to strike filed by the named party.
Ganim further asserts that the plaintiff has failed to allege that it relied upon the alleged misrepresentations because any actions that the plaintiff took towards completion of the development project were required by its contract with Bridgeport. Ganim's argument however misunderstands the thrust of the plaintiff's claim. The plaintiff alleges that it was misled by Ganim into believing that the Steel Point development project was moving forward with the plaintiff as the developer when, in fact, Ganim was steering the project to another developer who would make illegal payments to him as a result. The plaintiff relied on Ganim's statements by continuing to invest time and money in an "unknowingly doomed" project. Such allegations are sufficient to establish that the plaintiff relied on the alleged misrepresentations to its detriment.
V Count Ten: Violation of CUTPA
The defendants Ganim, Kasper and Willinger have moved to strike count ten which asserts that the defendants violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. The defendants Ganim and Kasper first assert that the plaintiff has failed to allege that it was a consumer entitled to the protections afforded by CUTPA. This claim merits little discussion as our Supreme Court has stated in "no uncertain terms that CUTPA imposes no requirement of a consumer relationship." Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 496 (1995).
The defendants next argue that count ten fails to state a CUTPA violation because the alleged acts of the defendants are merely incidental to their primary business and such acts are not covered by CUTPA. I do not agree.
I have previously addressed this issue. See Metcoff v. NCT Group, Inc., Superior Court, judicial district of Waterbury, Complex Litigation Docket, Docket No. X04-CV04-0184701S (January 10, 2005, Alander, J.). I find persuasive that line of Superior Court cases which hold that, to constitute a viable CUTPA claim, a transaction need not take place in the defendant's ordinary course of business so long as it takes place in a "business context." See, e.g., Duncan v. Peh I, L.P, judicial district of Hartford at Hartford, No. CV02-0817088S (Apr. 1, 2003, Booth, J.) ( 34 Conn. L. Rptr. 572); Telesis Mergers and Acquisitions, Inc. v. Health Resources, Superior Court, judicial district of Middletown, Docket No. CV00 0597260 (February 28, 2001, Gilardi, J.); Feen v. Benefit Plan Administrators, Inc., Superior Court, judicial district of New Haven, Docket No. CV 0406726 (September 7, 2000, Levin, J.) ( 28 Conn. L. Rptr. 137); and Kay v. Seiden, Superior Court, judicial district of Ansonia-Milford, Docket No. CV94 648587 (July 30, 1999, Corradino, J.) ( 25 Conn. L. Rptr. 192). Here, the plaintiff has sufficiently alleged a business context in that it claims that the defendants engaged in unfair and deceptive practices in connection with the plaintiff's efforts to complete a real estate development project.
The defendant Kasper also contends that the CUTPA claim against him should be stricken because the allegations contained in count ten essentially embody a claim of professional negligence which is not within the scope of CUTPA. The plaintiff responds that count ten does not allege professional negligence, but intentional acts of bribery which constitute a CUTPA violation. I agree with the plaintiff.
Count ten alleges that Kasper with others solicited, accepted and paid bribes in order to interfere with and deny the plaintiff's contractual right to develop the property at Steel Point. Such allegations cannot fairly be read as comprising a claim of professional negligence or malpractice which is defined "as the failure of one rendering professional services to exercise that degree of skill and learning commonly applied under all the circumstances in the community by the average prudent reputable member of the profession with the result of injury, loss, or damage to the recipient of those services." Santopietro v. New Haven, 239 Conn. 207, 226 (1996). The intentional misconduct alleged in the plaintiff's complaint is sufficient to state a cause of action for a violation of CUTPA.
Finally, the Willinger defendants have moved to strike the CUTPA claim asserted against them on the grounds that CUTPA does not apply to the provision of legal representation by an attorney to his client. The plaintiff counters that CUTPA does cover its claims against the Willinger defendants because the defendants' actions, although nominally conducted in the defendants' capacity as the attorneys for Bridgeport, were motivated by the defendants' own illegal financial interests. I agree with the Willinger defendants that CUTPA does not apply to the plaintiff's allegations.
The plaintiff alleges in count ten of its complaint that the Willinger defendants were retained by Bridgeport as its attorneys in connection with the city's contract with the plaintiff to develop Steel Point. The plaintiff further alleges that Ganim hired the Willinger defendants to delay and obstruct the plaintiff's development rights in order to facilitate the award of the development rights to others who would, in return, pay kickbacks and bribes to Ganim. The plaintiff alleges that the Willinger defendants knowingly participated in Ganim's plan and took steps to block the plaintiff's development of Steel Point by placing unreasonable conditions and requirements on the project in its capacity as attorney for Bridgeport. The plaintiff argues that it has alleged intentional illegal acts on the part of the Willinger defendants taken, not in furtherance of its legal representation of Bridgeport, but in furtherance of its own conspiracy to profit from a scheme of bribery and kickbacks, and that such acts are within the reach of CUTPA. The defendants contend that, since the alleged acts performed by them were undertaken in their capacity as attorneys for a client adverse to the plaintiff, such acts do not constitute a violation of CUTPA. I conclude that the plaintiff's claim is governed by our Supreme Court's decision in Suffield Development Assoc. v. National Loan Investors, 260 Conn. 766 (2002), which held that a claim of intentional misconduct by an attorney in connection with the representation of a client by that client's adversary was not within the ambit of CUTPA.
In Suffield Development Assoc., the plaintiff asserted that the defendant attorney and law firm had violated CUTPA by intentionally seeking and obtaining an excessive execution to coerce the plaintiff into paying money it did not owe and to personally profit from their actions. The Supreme Court held that the plaintiff failed to allege sufficient facts to support a claim that the defendant attorney and law firm violated CUTPA. Id., 780-82. The court reiterated that, while in general CUTPA applies to the conduct of attorneys, "only the entrepreneurial aspects of the practice of law are covered by CUTPA." Id., 781. The court stated 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." Id. Applying this distinction to the case before it, the Supreme Court concluded that the plaintiff's allegations did not support a CUTPA claim because obtaining an execution on a judgment relates to the representation by the attorney and law firm of their client and not to the entrepreneurial aspect of practicing law. The Supreme Court further rejected the plaintiff's arguments that CUTPA liability should attach to intentional misconduct by an attorney and to conduct from which an attorney intends to profit. Id., 782-83. The court emphasized that exempting from CUTPA the conduct which an attorney engages in pursuant to his legal representation of a client was necessary to protect a lawyer's duty of robust representation of his client. Id., 783-84. Similarly, here, the plaintiff seeks to apply CUTPA to alleged intentional misconduct by the defendant attorney and law firm which was motivated by their desire for financial gain. As in Suffield Development Assoc. v. National Loan Investors, supra, 260 Conn. 781, the plaintiff's allegations are insufficient to make CUTPA applicable to the conduct of the Willinger defendants because the alleged actions were performed in connection with the defendants' legal representation of their client and not part of the entrepreneurial aspect of practicing law. The motion to strike the CUTPA claim filed by the Willinger defendants is hereby granted.
VI Count Eleven: Statutory Theft
In count eleven of its complaint, the plaintiff claims that the defendants committed civil theft in violation of General Statutes § 52-564 by stealing the plaintiff's contractual right to develop the property at Steel Point. The defendants Bridgeport, Ganim, Willinger and Kasper assert that count eleven should be stricken because intangible contract rights do not constitute property under § 52-564. I am not persuaded.
Section 52-564 provides that "Any person who steals any property of another, or knowingly receives and conceals stolen property, shall pay the owner treble his damages." Our Supreme Court has held that statutory theft under § 52-564 is synonymous with larceny under General Statutes § 53a-119. Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 44 (2000). In Hi-Ho Tower, Inc., the Supreme Court expressly left unresolved the issue of whether statutory theft under § 52-564 includes intangible property rights. Id., 44. It did recognize that the tort of conversion applies to intangible property rights evidenced in a document. Id.
Pursuant to § 53a-119, "a person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or withholds such property from an owner."
The Restatement (Second) of Torts similarly imposes liability for the intentional invasion of intangible rights customarily merged in a document. Restatement (Second) of Torts, § 242(2). ("One who effectively prevents the exercise of intangible rights of the kind customarily merged in a document is subject to a liability similar to that for conversion, even though the document is not itself converted.")
Section 52-564 has a broad reach as it imposes liability for the theft of "any property." The statute however does not define the term "property." "Where a statute does not define a term, it is appropriate to look to the common understanding of the term as expressed in a dictionary." State v. Kalman, 93 Conn.App. 129, 136 (2006). "Black's Law Dictionary (6th Ed. 1990) defines property as the term commonly used to denote everything which is the subject of ownership, corporeal or incorporeal, tangible or intangible, visible or invisible, real or personal; everything that has an exchangeable value or which goes to make up wealth or estate." Bender v. Bender, 258 Conn. 733, 742 (2001). It has also been defined as "Something tangible or intangible to which its owner has legal title." The American Heritage Dictionary (Second College Edition 1985). Given the breadth of the statute's reach and because the common understanding of the term "property" includes intangible items, the ambit of § 52-564 should be interpreted to include intangible items which are evidenced by a document.
The result would not differ should the definition of property for purposes of § 53a-119 be used. For purposes of § 53a-119, property is defined as "any money, personal property, real property, thing in action, evidence of debt or contract, or article of value of any kind." (Emphasis supplied.) § 53a-118(1).
The defendants cite three trial court decisions in support of their position that intangible rights are not property for purposes of § 52-564. Robinson v. Van Dyck Printing Company, judicial district of New Haven at New Haven, Docket No. CV 94-0360526S (Apr. 25, 2000, Devlin, J.), Delta Capital Group, LLC v. Smith, Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV97 0571407 (March 31, 1998, Hale, J.) and New Horizon Fin. Servs., L.L.C. v. First Fin. Equities, Inc., 175 F.Sup.2d 348 (D.Conn. 2001). The holding of these decisions is inapplicable to the situation here. The courts in the cited cases rejected a claim that the failure to pay money due under a contract constituted theft for purposes of § 52-564. Their decisions stand for the unremarkable proposition that "no Connecticut case holds that money owed by a debtor is the property of the creditor and allows for a cause of action in statutory theft when the debt is not paid." The plaintiff here is not claiming that the defendants intentionally failed to pay money owed by them under a contract. Rather, the plaintiff asserts that the defendants appropriated for another the plaintiff's contractual right to develop property. Such an intangible right which has been memorialized in a document is included within the definition of property for purposes of § 52-564.
The defendant Bridgeport asserts an additional basis upon which it seeks to strike the plaintiff's statutory theft claim under § 52-564. Bridgeport contends that it is immune by virtue of the provisions of § 52-557n(a)(2)(A) from suit on such a claim. I agree.
Section § 52-557n provides in pertinent part that "Except as otherwise provided by law, a political subdivision of the state shall not be liable for damages to person or property caused by: (A) Acts or omissions of any employee, officer or agent which constitute criminal conduct, fraud, actual malice or wilful misconduct." § 52-557n(a)(2)(A). As noted previously, statutory theft under § 52-564 is synonymous with larceny under General Statutes § 53a-119. Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 44 (2000). Pursuant to § 53a-119, "a person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or withholds such property from an owner." (Emphasis supplied.) Acts which constitute theft under § 52-564 are therefore both criminal conduct and intentional misconduct for which a municipality is immune from suit. Accordingly, the claim of statutory theft pursuant to § 52-564 is hereby stricken as to the defendant Bridgeport.
VII
In summary, the claim of breach of the duty of good faith and fair dealing contained in count two is stricken as to the Willinger defendants and Ganim. The claim of violations of CUTPA asserted in count ten is stricken as to the Willinger defendants. Count eleven which asserts a statutory theft claim under § 52-564 is stricken as to Bridgeport. In all other respects the motions to strike of the defendants are denied.