Opinion
CV136042888S
05-16-2016
Cofrancesco Chiropractic & Healing Arts v. Elizabeth Maciejewski dba Gold Star Medical Business Service
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION TO STRIKE (#113)
Robin L. Wilson, J.
STATEMENT OF CASE AND PROCEDURAL HISTORY
The plaintiff, Cofrancesco Chiropractic & Healing Arts, (plaintiff) commenced the present action by service of process on the defendant, Elizabeth Maciejewski d/b/a Gold Star Medical Business Service (defendant), on October 25, 2013. The plaintiff filed a two count complaint, alleging breach of contract and a violation of the Connecticut Unfair Trade Practices Act (CUTPA), on November 7, 2013. The complaint alleges the following facts.
The plaintiff is a provider of chiropractic care in Woodbridge, Connecticut. The defendant was a sole proprietor doing business in Tom Green County, Texas. The plaintiff entered into a contract with the defendant on March 11, 2008, which was extended on September 30, 2009, for the performance of medical billing and processing, as well as account receivable collection services. The plaintiff alleges that the defendant breached the contract by, inter alia, failing to maintain adequate records, failing to prepare and issue routine statements to the plaintiff's patients, failing to file all insurance claims, failing to work reasonable and necessary hours, failing to compile routine reports, and failing to properly communicate with the plaintiff and the plaintiff's patients. A copy of the contract and the extension are attached to the complaint. On December 30, 2013, the defendant filed a motion to dismiss the complaint on the grounds of res judicata, lack of personal jurisdiction, and improper venue.
On September 4, 2014, the court denied the motion to dismiss on grounds of res judicata, collateral estoppel and improper venue. On October 27, 2014, the court held an evidentiary hearing on the issue of personal jurisdiction to determine whether the defendant fell within the jurisdictional requirements of § 52-59b, this state's longarm statute, and whether the defendant had minimum contacts with this state in order to satisfy due process. On October 27, 2014, the court ruled from the bench, and issued its written decision on November 3, 2014, and found that it had personal jurisdiction over the defendant. The court therefore denied the motion to dismiss.
Presently before the court is the defendant's motion to strike count two of the plaintiff's complaint which alleges a violation of CUTPA, based on its breach of contract claim. The defendant argues that this is a simple breach of contract action and the plaintiff has failed to allege sufficient aggravating circumstances to satisfy the " well-known and established 'cigarette rule' under CUTPA." Def. Mem. The defendant further argues that count two should be stricken on the ground that there is a choice of law provision contained in the contract, and any claims or disputes arising out of the contract are governed by Texas law, and the CUTPA claim is an unavailable tort claim to a plaintiff under Texas Law.
The plaintiff argues that a " Motion for Default for Failure to Plead was granted by [this court] on January 8, 2014, and as such, the only allowable pleading to be filed by the defendant is its answer. The plaintiff is incorrect. A motion for default for failure to plead was filed by the plaintiff on December 22, 2014. On December 23, 2014, prior to the motion for default being granted by the clerk on December 30, 2014, the defendant filed an extension of time to plead, which was not acted on until this court granted the motion on January 8, 2015. Thus, since the defendant filed an extension of time prior to the granting of the default, the court will address the merits of the motion to strike.
As to the merits of the motion to strike, the plaintiff argues that although this is a breach of contract action, sufficient aggravating factors have been alleged in count two to withstand a motion to strike the CUTPA claim. Oral argument was heard on the motion on April 25, 2016.
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). " If any facts provable under the express and implied allegations in the plaintiff's complaint support a cause of action . . . the complaint is not vulnerable to a motion to strike." Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991). On the other hand, " [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).
" [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). " [P]leadings must be construed broadly and realistically, rather than narrowly and technically." (Internal quotation marks omitted.) Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 253, 990 A.2d 206 (2010). " Moreover, [the court] note[s] that [w]hat is necessarily implied [in an allegation] need not be expressly alleged." (Internal quotation marks omitted.) Id., at 252. " [The court] take[s] the facts to be those alleged in the [complaint] . . . and . . . construe[s] the [complaint] in the manner most favorable to sustaining its legal sufficiency." (Internal quotation marks omitted.) New London County Mutual Ins. Co. v. Nantes, 303 Conn. 737, 747, 36 A.3d 224 (2012).
" In ruling on a motion to strike the trial court is limited to considering the grounds specified in the motion." Meredith v. Police Commission, 182 Conn. 138, 140, 438 A.2d 27 (1980). " In ruling on a motion to strike, the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). A party, however, can submit a document as an exhibit with the complaint, and a court may considered such a document in evaluating a motion to strike. See Tracy v. New Milford Public Schools, 101 Conn.App. 560, 566, 922 A.2d 280, cert. denied, 284 Conn. 910, 931 A.2d 935 (2007).
I
CUTPA
The defendant argues that count two of the plaintiff's complaint fails to allege the existence of aggravating factors necessary for a breach of contract claim to constitute a violation of CUTPA. The defendant argues that the allegations of count two do not allege any action on the part of the defendant which would be significantly more than a simple breach of contract, nor any action sufficient enough to satisfy the well-known and established " cigarette rule."
The plaintiff argues that the allegations of count two, when viewed in a light most favorable to the plaintiff, assert more than a mere contract violation. The plaintiff further argues that the testimony of the plaintiff's witnesses at the evidentiary hearing on jurisdiction should be taken into account in ruling on the motion. As this court previously noted, although the court is limited to allegations contained in the complaint when ruling on a motion to strike, a party, however, can submit a document as an exhibit with the complaint, and a court may consider such a document in evaluating a motion to strike. However, here, the plaintiff failed to attach a copy of the transcript to its complaint as an exhibit or to its motion to strike. Neither did the plaintiff request this court to take judicial notice of said proceedings. Accordingly, this court will not consider the testimony from the October 27, 2014 evidentiary hearing in ruling on the present motion to strike.
[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 well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission 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].' . . . Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 18-19, 938 A.2d 576 (2008). '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.' . . . Willow Springs Condominium Ass'n, Inc. v. Seventh BRT Development Corp., 245 Conn. 1, 43, 717 A.2d 77 (1998)." IN Energy Solutions, Inc. v. Realgy, LLC, 114 Conn.App. 262, 273-74, 969 A.2d 807 (2009).
In the present case, the plaintiff bases its CUTPA claim on the same set of alleged facts it asserts for its breach of contract claim and alleges the following in count two. " The defendant breached said contract in one or more of the following ways: a. In that it failed to keep and maintain or adequately keep and maintain appropriate records to facilitate medical billing and/or electronic billing for the plaintiff, including claims, charges, bills, payments, and correspondence necessary and appropriate in connection with the collection of Accounts Recievables for the professional chiropractic services rendered by the plaintiff. All such records, reports, claims and correspondence were to belong to the plaintiff; b. In that it failed to prepare and issue routine statements to patients of the plaintiff, as well as posting all payments to accounts; c. In that it failed to file all patient insurance claims, and it further failed to follow up on all unpaid or incorrectly paid claims in any manner possible to facilitate payment of said claims; d. In that it failed to work reasonable and necessary hours as to maintain adequate patient billing on a daily, weekly and monthly basis; e. In that it failed to compile routine reports on a daily, weekly and monthly basis to adequately communicate billing activity to the plaintiff; f. In that it failed to engage in routine correspondence via email and telephone to keep the plaintiff apprised of details needed to properly facilitate claims, nor did it engage in any follow-up; and g. In that it failed to communicate with patients regarding their accounts, insurance claims status, and monies due to the plaintiff. 6. Said actions are a violation of Connecticut General Statutes Section 42-110a, Connecticut's Unfair Trade Practices Act." Pl. Compl. Count 2, ¶ ¶ 5(a)-(g) and 6. In paragraph 7 of count two, the plaintiff incorporates paragraph 6 of count one and alleges that " [a]s a result of [the] breach, the plaintiff has been damaged." Id., Count 2, ¶ 7. It is well settled that a CUTPA cause of action may arise from a breach of contract, however " not every contractual breach rises to the level of a CUTPA violation. " Naples v. Keystone Building & Development Corp., 295 Conn. 214, 228, 990 A.2d 326 (2010). " Our Supreme Court, in Lydall v. Ruschmeyer, 282 Conn. 209, 247-48, 919 A.2d 421 (2007), in reversing a trial court's finding of a CUTPA violation based upon a breach of an employment agreement, cited approvingly of the general rule that 'absent substantial aggravating circumstances, [a] simple breach of contract is insufficient to establish [a] claim under CUTPA.' Id., 248, citing Lawrence v. Richman Group Capital Corp., 358 F.Supp.2d 29, 42 (D.Conn. 2005). Consequently, in order to sufficiently allege aggravating factors to bring a breach of contract claim into the auspices of CUTPA, the aggravating factors alleged must 'constitute more than a failure to deliver on a promise.' Greene v. Orsini, 50 Conn.Supp. 312, 315, 926 A.2d 708 (2007)." Metromedia Energy, Inc. v. 21st Century Management, Inc., Superior Court, judicial district of New Haven, Docket No. CV136043097S, (Oct. 2, 2014, Wilson, J.).
Although it is well settled that a CUTPA cause of action may arise from a breach of contract " 'not every contractual breach rises to the level of a CUTPA violation.' . . . Naples v. Keystone Building & Development Corp., 295 Conn. 214, 228, 990 A.2d 326 (2010). '[N]ot every misrepresentation rises to [the] level of [a] CUTPA violation.' Hudson United Bank v. Cinnamon Ridge Corp., 81 Conn.App. 557, 571, 845 A.2d 417 (2004). 'There must be some nexus with a public interest, some violation of a concept of what is fair, some immoral, unethical, oppressive or unscrupulous business practice or some practice that offends public policy.' Muniz v. Kravis, 59 Conn.App. 704, 715, 757 A.2d 1207 (2000). In the absence of allegations arising to such a level of conduct, the plaintiffs have failed to properly plead a cause of action under CUTPA. See id. Gaynor v. Hi-Tech Homes, 149 Conn.App. 267, 276, 89 A.3d 373 (2014).
" Connecticut case law demonstrates that the aggravating factors present must involve bad faith conduct or violation of some concept of fairness in order to sufficiently plead a CUTPA claim by way of breach of contract. Compare Landmark Investment Group, LLC v. Chung Family Realty Partnership, LLC, 125 Conn.App. 678, 708, 10 A.3d 61 (2010), cert. denied, 300 Conn. 914, 13 A.3d 1100 (2011) (upholding finding of aggravating factors sufficient to prove a violation of CUTPA where, in addition to a breach of an employment contract, the defendant engaged in multiple false misrepresentations and other acts exhibiting 'a pattern of bad faith conduct, seeking to escape its contractual obligations unfairly while negotiating a more favorable offer with . . . a third party'); with Naples v. Keystone Building & Development Corp., supra, 295 Conn. 227-29 (upholding finding of no aggravating factors where defendant performed unworkmanlike construction per the contract, but its conduct 'lacked the unethical behavior' necessary for a CUTPA claim since the defendant attempted to remedy problem and '[i]n the absence of aggravating unscrupulous conduct, mere incompetence does not by itself mandate a trial court to find a CUTPA violation'); and IN Energy Solutions, Inc. v. Realgy, LLC, supra, 114 Conn.App. 274-75 (upholding finding that no aggravating factors accompanied breach of contract so as to constitute CUTPA violation where plaintiff failed to show that the defendant's 'conduct in failing to pay commissions [pursuant to the contract] was unethical, unscrupulous, wilful or reckless')." Metromedia Energy, Inc., supra .
Thus, the issue for the court here, is whether the plaintiff has alleged substantial aggravating circumstances demonstrating bad faith or unethical conduct which accompanied the breach of contract so as to set forth a cognizable claim for violation of CUTPA. In the present case, the plaintiff has not met its burden to plead sufficient facts to show that the defendant's alleged conduct in breaching the contract was accompanied by substantial aggravating factors.
Article 1 of the contract between the parties sets forth " Contractor Duties" which include but are not limited to the following: " 1. Keeping and maintaining, or causing to be kept and maintained, appropriate records to facilitate medical billing for CLINIC, including claims, charges, bills, payments, and correspondence necessary and appropriate in connection with collection of accounts receivable for the professional services rendered by CLINIC under this Agreement. All of such records, reports, claims and correspondence shall belong to CLINIC; 2. Preparing and issuing routine statements to patients of CLINIC, as well as posting all payments to accounts; 3. Filing all patient insurance claims, and following up on all unpaid or incorrectly paid claims in any ethical manner possible to facilitate payment of said claims; 4. Engaging in ethical, moral and proper conduct with both patients and office staff of CLINIC; 5. The CONTRACTOR shall work reasonable and necessary hours as to maintain adequately patient billing on a daily, weekly and monthly basis; 6. Compiling routine reports on a daily, weekly and monthly basis to adequately communicate billing activity to DOCTOR and CLINIC; 7. Engaging in routine correspondence via email and telephone to keep DOCTOR apprised of details needed to properly facilitate claims; 8. Communicating with Patients regarding their accounts, insurance claims status, and monies due to clinic; 9. Maintaining strictest confidentiality of patient records and accounts in accordance with HIPAA regulations." Pl. Comp., Ex. A. The allegations contained in count two mirror the duties contained in the contract and allege that the defendant breached its duties contained in paragraphs 1-3, and 5-8 set forth in Article 1 of the contract. The plaintiff has simply alleged that the defendant breached the terms of the contract, and nothing more. The plaintiff does not allege that the defendant engaged in bad faith or a deceptive or unethical business practice. This case more appropriately fits into the line of cases where it has been found that the conduct was a simple breach of contract, rather than a tortious act of bad faith or unethical business practice which would violate CUTPA. The allegations in count two merely allege what the defendant failed to do under the terms of the contract. The plaintiff has therefore failed to plead a sufficient CUTPA claim in count two of its complaint.
II
APPLICABILITY OF TEXAS LAW
The defendant argues that the plaintiff's claims are governed by Texas law in light of the choice of law provision in the contract, and that under Texas law the plaintiff's CUTPA claim is not a claim for which relief can be granted. The choice of law provision specifies that, " This agreement shall be interpreted, construed and governed according to the laws of the State of Texas."
" Connecticut indubitably favors enforcement of contractual choice of law provisions. Reichhold Chemicals, Inc. v. Hartford Accident & Indemnity Co., 252 Conn. 774, 788, 750 A.2d 1051 (2000). 'A broadly worded choice-of-law provision in a contract may govern not only interpretation of the contract in which it is contained, but also tort claims arising out of or relating to the contract.' Travel Services Network, Inc. v. Presidential Financial Corp., 959 F.Supp. 135, 146 (D.Conn. 1997). 'But what the cases actually hold is that such a provision will not be construed to govern tort as well as contract disputes unless it is clear that this is what the parties intended.' Kuehn v. Childrens Hospital, 119 F.3d 1296, 1302 (7th Cir. 1997)." (Internal quotation marks omitted.) Blakeslee Arpaia Chapman, Inc. v. Helmsman Management Services, Inc., Superior Court, judicial district of New Haven, Docket No. 443753 (January 9, 2002, Blue, J.) [31 Conn. L. Rptr. 214, 215].
In Blakeslee, Judge Blue determined that a Massachusetts choice of law provision, almost identical to the one in the present case, was narrowly worded and did not govern tort as well as contract disputes. He noted, " [r]ather than stating for example, that Massachusetts law shall govern any controversy 'arising out of or relating to' the contract; see Turtur v. Rothschild Registry International, Inc., 26 F.3d 304, 309-10 (2d Cir. 1994); the provision in question states that 'this Agreement shall be construed under and governed by' Massachusetts law. (Emphasis added.) This language is not sufficiently broad to apply to tort claims arising out of the contract. Krock v. Lipsay, 97 F.3d 640, 645 (2d Cir.1996).
" It is necessary to distinguish between claims involving simple breaches of contract and claims involving of wrongdoing that goes beyond simple breach of contract. Under the parties' choice of law provision, claims involving simple breaches of contract--that is, acts that are wrongful only because they violate the written contract--are governed by Massachusetts law. CUTPA and CUIPA claims have to involve more than 'simple contract breaches' in any event; Boulevard Associates v. Sovereign Hotels, Inc., supra, 72 F.3d at 1039; and Connecticut law claims of 'simple contract breach' are plainly pre-empted by the choice of law provision here. But acts by the defendant that violate the CUTPA and CUIPA statutes because they involve additional wrongdoing are not covered by the choice of law provision here." Blakeslee, supra, Superior Court, Docket No. 443753. Judge Blue determined that because " BAC's complaint allege[d] several instances of wrongdoing that transcend a simple breach of contract, " its CUTPA and CUIPA claims were sufficient under Connecticut law. Id.
Here, this court has determined that the plaintiff's allegations in count two allege no more than a simple breach of contract claim, in which case, under the parties' choice of law provision, claims involving simple breaches of contract--that is, acts that are wrongful only because they violate the written contract--are governed by Texas law. Accordingly, as the court has already determined that the plaintiff's claims are insufficient under Connecticut law, the defendant's motion to strike the CUTPA count is granted.
This court, in addressing the defendant's improper venue claim in its Memorandum of Decision on defendant's motion to dismiss, dated September 4, 2014, stated that, " [w]here the parties have unequivocally provided in their contract that the law of a particular state will apply, that court will proceed under the law of the chosen state . . . Connecticut courts regularly and competently apply the law of other jurisdictions" Memorandum of Decision, 9/4/2014, pp. 9-10. The parties, in the present motion to strike, have construed this language to mean that the court had decided that Texas law unequivocally applied to issues arising in the present motion. However, this court considers this language dicta since this court's discussion of the applicability of Texas law was not necessary to the court's holding in its decision. The issues before the court related to whether the court lacked personal jurisdiction, res judicata, collateral estoppel and improper venue. The motion to dismiss did not involve the legal sufficiency of the plaintiff's CUTPA claim and the applicability of Texas law in determining the legal sufficiency of that claim. " [A] court's discussion of matters necessary to its holding is not mere dictum . . . Dictum includes those discussions that are merely passing commentary . . . those that go beyond the facts at issue . . . and those that are unnecessary to the holding in the case . . . [I]t is not dictum [however] when a court . . . intentionally takes up, discusses, and decides a question germane to, though not necessarily decisive of, the controversy . . . Rather, such action constitutes an act of the court [that] it will thereafter recognize as a binding decision . . ." (Citations omitted; internal quotation marks omitted.) Cruz v. Montanez, 294 Conn. 357, 376-77, 984 A.2d 705 (2009). In determining the applicability of a choice of law provision contained in a contract this court follows the analysis set forth in Blakeslee Arpaia Chapman, Inc. v. Helmsman Management Services, Inc., supra, Superior Court, Docket No. 443753, that " [a] broadly worded choice-of-law provision in a contract may govern not only interpretation of the contract in which it is contained, but also tort claims arising out of or relating to the contract . . . [and] [s]uch a provision will not be construed to govern tort as well as contract disputes unless it is clear that this is what the parties intended . . ."
Even under Texas law, count two falls short of alleging a legally sufficient claim under the Texas Deceptive Trade Practices Act. The Texas Deceptive Trade Practices Act (DTPA) V.T.C.A., Bus. & C. § 17.46 provides in relevant part: " (a) False, misleading, or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful and are subject to action by the consumer protection division under Sections 17.47, 17.58, 17.60, and 17.61 of this code. Section 17.46(b) provides a laundry list of the types of " false, misleading, or deceptive acts or practices" under DTPA.
Section 17.46(b) of the Texas Deceptive Trade Practices Act V.T.C.A., Bus. & C., provides:
In reviewing the plaintiff's allegations in count two in the light most favorable to sustaining its legal sufficiency, the plaintiff does not allege any of the enumerated acts which constitute false, misleading, or deceptive acts or practices as set forth in the laundry list of specifically prohibited acts in § 17.46(b). Again, as this court previously noted, plaintiff's allegations merely allege the defendant's failure to perform its duties as set forth in Article 1 of the contract.
To recover under the Texas DTPA, a plaintiff must establish that: " (1) [it] is a consumer [of the defendant's goods or services]; (2) the defendant engaged in false, misleading, or deceptive acts in connection with the lease or sale of goods or services; and (3) these acts were a producing cause of economic damages to the plaintiff." Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995); see also Taylor v. Ocwen Loan Servicing, LLC, (citing Doe v. Boys Clubs of Greater Dallas, Inc. ) United States District Court, Docket No. H-12-2929 (D.Tex. July 3, 2013).
There is no dispute that the plaintiff was a consumer of the defendant's medical billing and processing, including accounts receivable, collection services. In addition, the plaintiff has alleged that it was damaged as result of the defendant's actions it claims is in violation of the DTPA. The question for the court, however, is whether the plaintiff has alleged sufficient facts to establish the third element, namely, that the defendant engaged in false, misleading, or deceptive acts in connection with the sale of its services to the plaintiff.
" An allegation of a mere breach of contract, without more, does not constitute a 'false, misleading or deceptive act' in violation of the DTPA." Id. at 935. See also Helms v. Southwestern Bell Tel. Co., 794 F.2d 188, 191 (5th Cir.1986) (dismissing a DTPA claim arising out of errors in a published yellow pages advertisement because '[t]he " misrepresentation" alleged by the Helmses was nothing more than Southwestern Bell's failure to perform its promise to correctly print the ad'); Dura-Wood Treating Co. v. Century Forest Indus., Inc., 675 F.2d 745, 756 (5th Cir.), cert. denied, 459 U.S. 865, 103 S.Ct. 144, 74 L.Ed.2d 122 (1982) (" Dura-Wood argues it is deceptive to enter into a contract and later breach that contract, since Dura-Wood entered the contract believing Century Forest actually would perform. However, an allegation of breach of contract--without more--does not constitute a false, misleading, or deceptive action such as would violate Section 17.46 of the DTPA"); Farina v. Southwestern Bell Media, Inc., 658 F.Supp. 826, 828 (S.D.Tex. 1987) (holding that the plaintiff could recover only on his contract, and not under the DTPA in a suit involving the failure to publish a listing in the yellow pages); Holloway v. Dannenmaier, 581 S.W.2d 765, 767 (Tex.Civ.App.--Fort Worth 1979, writ dism'd) (noting that " mere failure to later perform a promise does not constitute misrepresentation" within the meaning of the DTPA)." Crawford v. Ace Sign, Inc., 917 S.W.2d 12, 14, 39 Tex.Sup.Ct.J. 296 (1996).
" Texas courts will give the DTPA 'its most comprehensive application possible without doing any violence to its terms.' Cameron v. Terrell & Garrett, 618 S.W.2d 535, 541 (Tex. 1981); see also DTPA § 17.44. Nevertheless, this Court has held that the DTPA, however far-reaching it may be, has not completely supplanted the Texas common law of contracts. [A] simple breach of contract is not contemplated as a deceptive trade practice under the Texas DTPA . . ." Dura-Wood Treating Co. v. Century Forest Industries, Inc., 675 F.2d 745, 756 (5th Cir. Tex.), cert. denied, 459 U.S. 865, 103 S.Ct. 144, 74 L.Ed.2d 122 (1982). " [A]n allegation of breach of contract--without more--does not constitute a false, misleading, or deceptive action such as would violate section 17.46 of the DTPA." Id. Although the Dura-Wood defendant had " acted unconscionably in breaching the contract, " the DTPA did not apply. Id. at 755-56.
The Dura-Wood panel directly based its holdings on two Texas intermediate court opinions. See Coleman v. Hughes Blanton, Inc., 599 S.W.2d 643, 646 (Tex.Civ.App.--Texarkana 1980, no writ); Holloway v. Dannenmaier, 581 S.W.2d 765, 767 (Tex.Civ.App.--Fort Worth 1979, writ ref'd n.r.e.). As the Holloway court observed, " [u]sually mere failure to later perform a promise does not constitute misrepresentation." Id. (citation omitted). The Texas Supreme Court has now adopted the rule of Dura-Wood and the lower Texas courts, that " a mere breach of contract, without more, does not constitute a 'false, misleading or deceptive act' in violation of the DTPA." Ashford Development, Inc. v. USLife Real Estate Services Corp., 661 S.W.2d 933, 935 (Tex. 1983) (citing Dura-Wood and Coleman ) . . .
" The 'more' that is required to change a breach of contract action into a DTPA claim is not settled by Texas case law. In Martin v. Lou Poliquin Enterprises, Inc., 696 S.W.2d 180 (Tex.App.--Houston [14th Dist] 1985, writ ref'd n.r.e.), evidence indicated that a defendant which solicited Yellow Pages advertising contracted with the plaintiff to submit the plaintiff's ad to the telephone company but failed to do so. The defendant then assured the plaintiff that the ad had been submitted, and the plaintiff took no further action until the Yellow Pages were published without the ad. On these facts, the Martin court affirmed the plaintiff's DTPA award. Similarly, in White v. Southwestern Bell Telephone Co., Inc., 651 S.W.2d 260, 262 (Tex. 1983), Southwestern Bell misprinted the plaintiff's telephone number and then assured him that an intercept service would be provided. The plaintiff testified that an effective intercept was not provided, and the White court reversed the trial court's grant of an instructed verdict for Southwestern Bell on his DTPA claim. See also Reuben H. Donnelley Corp. v. McKinnon, 688 S.W.2d 612, 614 (Tex.App.--Corpus Christi 1985, writ ref'd n.r.e.) (plaintiff reassured several times that Yellow Pages advertising had been procured, but ad did not appear); Southwestern Bell Telephone Co. v. Nash, 586 S.W.2d 647, 648 (Tex.Civ.App.--Austin 1979, no writ) (Southwestern Bell assured plaintiff that intercept service would be provided).
In the present case, as already discussed by this court, the allegations contained in count two simply allege that the defendant failed to perform the duties it was obligated to perform under the contract. The allegations contained in count two, do not allege any assurances or misrepresentations made by the defendant relating to its duties under the contract. The plaintiff contracted with the defendant to perform certain duties under the contract as set out in Article 1, and the plaintiff has alleged that the defendant failed to perform those duties. This amounts to nothing more than a simple breach of contract. Accordingly, even under Texas law, the plaintiff has failed to allege sufficient facts to raise its breach of contract claim to a violation of the DTPA. The motion to strike is therefore granted under Texas' law.
CONCLUSION
For the foregoing reasons, the defendant's motion to strike count two is granted.
(b) Except as provided in Subsection (d) of this section, the term " false, misleading, or deceptive acts or practices" includes, but is not limited to, the following acts: (1) passing off goods or services as those of another; (2) causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services; (3) causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another; (4) using deceptive representations or designations of geographic origin in connection with goods or services; (5) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which the person does not; (6) representing that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, or secondhand; (7) representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another; (8) disparaging the goods, services, or business of another by false or misleading representation of facts; (9) advertising goods or services with intent not to sell them as advertised; (10) advertising goods or services with intent not to supply a reasonable expectable public demand, unless the advertisements disclosed a limitation of quantity; (11) making false or misleading statements of fact concerning the reasons for, existence of, or amount of price reductions; (12) representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law; (13) knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service; (14) misrepresenting the authority of a salesman, representative or agent to negotiate the final terms of a consumer transaction; (15) basing a charge for the repair of any item in whole or in part on a guaranty or warranty instead of on the value of the actual repairs made or work to be performed on the item without stating separately the charges for the work and the charge for the warranty or guaranty, if any; (16) disconnecting, turning back, or resetting the odometer of any motor vehicle so as to reduce the number of miles indicated on the odometer gauge; (17) advertising of any sale by fraudulently representing that a person is going out of business; (18) advertising, selling, or distributing a card which purports to be a prescription drug identification card issued under Section 4151.152, Insurance Code, in accordance with rules adopted by the commissioner of insurance, which offers a discount on the purchase of health care goods or services from a third-party provider, and which is not evidence of insurance coverage, unless: (A) the discount is authorized under an agreement between the seller of the card and the provider of those goods and services or the discount or card is offered to members of the seller; (B) the seller does not represent that the card provides insurance coverage of any kind; and (C) the discount is not false, misleading, or deceptive; (19) using or employing a chain referral sales plan in connection with the sale or offer to sell of goods, merchandise, or anything of value, which uses the sales technique, plan, arrangement, or agreement in which the buyer or prospective buyer is offered the opportunity to purchase merchandise or goods and in connection with the purchase receives the seller's promise or representation that the buyer shall have the right to receive compensation or consideration in any form for furnishing to the seller the names of other prospective buyers if receipt of the compensation or consideration is contingent upon the occurrence of an event subsequent to the time the buyer purchases the merchandise or goods; (20) representing that a guaranty or warranty confers or involves rights or remedies which it does not have or involve, provided, however, that nothing in this subchapter shall be construed to expand the implied warranty of merchantability as defined in Sections 2.314 through 2.318 and Sections 2A.212 through 2A.216 to involve obligations in excess of those which are appropriate to the goods; (21) promoting a pyramid promotional scheme, as defined by Section 17.461; (22) representing that work or services have been performed on, or parts replaced in, goods when the work or services were not performed or the parts replaced; (23) filing suit founded upon a written contractual obligation of and signed by the defendant to pay money arising out of or based on a consumer transaction for goods, services, loans, or extensions of credit intended primarily for personal, family, household, or agricultural use in any county other than in the county in which the defendant resides at the time of the commencement of the action or in the county in which the defendant in fact signed the contract; provided, however, that a violation of this subsection shall not occur where it is shown by the person filing such suit that the person neither knew or had reason to know that the county in which such suit was filed was neither the county in which the defendant resides at the commencement of the suit nor the county in which the defendant in fact signed the contract; (24) failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed; (25) using the term " corporation, " " incorporated, " or an abbreviation of either of those terms in the name of a business entity that is not incorporated under the laws of this state or another jurisdiction; (26) selling, offering to sell, or illegally promoting an annuity contract under Chapter 22, Acts of the 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil Statutes), with the intent that the annuity contract will be the subject of a salary reduction agreement, as defined by that Act, if the annuity contract is not an eligible qualified investment under that Act or is not registered with the Teacher Retirement System of Texas as required by Section 8A of that Act; (27) taking advantage of a disaster declared by the governor under Chapter 418, Government Code, by: (A) selling or leasing fuel, food, medicine, or another necessity at an exorbitant or excessive price; or (B) demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine, or another necessity; < Text of(b)(28), as added by Acts 2015, 84th Leg., ch. 1023 (H.B. 1265), § 1> (28) delivering or distributing a solicitation in connection with a good or service that: (A) represents that the solicitation is sent on behalf of a governmental entity when it is not; or (B) resembles a governmental notice or form that represents or implies that a criminal penalty may be imposed if the recipient does not remit payment for the good or service; < Text of (b)(28), as added by Acts 2015, 84th Leg., ch. 1080 (H.B. 2573), § 1> (29) using the translation into a foreign language of a title or other word, including " attorney, " " lawyer, " " licensed, " " notary, " and " notary public, " in any written or electronic material, including an advertisement, a business card, a letterhead, stationery, a website, or an online video, in reference to a person who is not an attorney in order to imply that the person is authorized to practice law in the United States. (30) delivering or distributing a solicitation in connection with a good or service that resembles a check or other negotiable instrument or invoice, unless the portion of the solicitation that resembles a check or other negotiable instrument or invoice includes the following notice, clearly and conspicuously printed in at least 18-point type: " SPECIMEN-NON-NEGOTIABLE"; (31) in the production, sale, distribution, or promotion of a synthetic substance that produces and is intended to produce an effect when consumed or ingested similar to, or in excess of, the effect of a controlled substance or controlled substance analogue, as those terms are defined by Section 481.002, Health and Safety Code: (A) making a deceptive representation or designation about the synthetic substance; or (B) causing confusion or misunderstanding as to the effects the synthetic substance causes when consumed or ingested; or (32) a licensed public insurance adjuster directly or indirectly soliciting employment, as defined by Section 38.01, Penal Code, for an attorney, or a licensed public insurance adjuster entering into a contract with an insured for the primary purpose of referring the insured to an attorney without the intent to actually perform the services customarily provided by a licensed public insurance adjuster, provided that this subdivision may not be construed to prohibit a licensed public insurance adjuster from recommending a particular attorney to an insured. (c)(1) It is the intent of the legislature that in construing Subsection (a) of this section in suits brought under Section 17.47 of this subchapter the courts to the extent possible will be guided by Subsection (b) of this section and the interpretations given by the Federal Trade Commission and federal courts to Section 5(a)(1) of the Federal Trade Commission Act [15 U.S.C.A. § 45(a)(1)]. (2) In construing this subchapter the court shall not be prohibited from considering relevant and pertinent decisions of courts in other jurisdictions. (d) For the purposes of the relief authorized in Subdivision (1) of Subsection (a) of Section 17.50 of this subchapter, the term " false, misleading, or deceptive acts or practices" is limited to the acts enumerated in specific subdivisions of Subsection (b) of this section.