Opinion
No. CV09 5029078S
August 4, 2011
MEMORANDUM OF DECISION IN RE MOTION FOR RECONSIDERATION/REARGUMENT (#146)
PROCEDURAL HISTORY
The plaintiff, East River Energy, Inc., initiated this action by service of process upon the defendant, Gaylord Hospital, Inc., on May 6, 2009. In the operative complaint, the plaintiff alleges that the defendant is liable for breach of contract, negligent misrepresentation, breach of the covenant of good faith and fair dealing, and fraudulent and intentional misrepresentation. The plaintiff also seeks recovery under the doctrine of promissory estoppel.
On December 15, 2010, the defendant filed a motion for summary judgment (No. 127) on the grounds that (1) the plaintiff's claims for breach of contract and breach of the implied covenant of good faith and fair dealing fail as a matter of law because they are based on an oral contract for the sale of more than $500 worth of goods, which is barred by the statute of frauds in § 2-201 of the Uniform Commercial Code (UCC), General Statutes § 42a-2-201; and (2) the plaintiff's claims for promissory estoppel, negligent misrepresentation and intentional misrepresentation mirror the breach of contract claims and are therefore barred by the UCC's statute of frauds. The defendant filed a memorandum of law in support of its motion. On February 1, 2011, the plaintiff filed an opposition to the motion for summary judgment. On February 18, 2011, the defendant filed a reply brief. On March 21, 2011, the court heard oral argument. The court ordered the parties to submit supplemental memoranda, and on April 4, 2011, the plaintiff submitted its supplemental memorandum in opposition. No timely supplemental memorandum was filed by the defendant.
The defendant filed a supplemental brief after the court's deadline to file. The defendant also submitted a motion for extension of time nunc pro tunc to file its brief late. On April 27, 2011, this court denied the motion for extension of time. The defendant filed a motion to reargue/reconsider on May 4, 2011, which the court denied.
On June 15, 2011, the court issued an order and memorandum of decision granting in part and denying in part the defendant's motion for summary judgment. The court granted the motion as to the breach of contract and breach of the duty of good faith and fair dealing claims on the ground that enforcement of an oral contract was barred by the UCC statute of frauds because the agreement was for the sale of goods for greater than $500 and there was no writing signed by the party to be charged. The court denied the motion as to the claims for promissory estoppel and misrepresentation. In doing so, the court ruled that the right to assert promissory estoppel was not displaced by the UCC statute of frauds, and that the claims of misrepresentation were entitled to independent review and not barred by the statute of frauds. The motion presently before the court is the defendant's July 5, 2011 motion for reconsideration and motion to reargue the court's ruling on the motion for summary judgment on the ground that court's denial of the motion relative to the promissory estoppel and misrepresentation counts is contrary to binding authority. On July 14, 2011, the plaintiff filed an objection to the motion for reconsideration and motion to reargue.
DISCUSSION
"[T]he purpose of a reargument is . . . to demonstrate to the court that there is some decision or some principle of law which would have a controlling effect, and which has been overlooked, or that there has been a misapprehension of facts . . . It also may be used to address . . . claims of law that the [movant] claimed were not addressed by the court . . . [A] motion to reargue [however] is not to be used as an opportunity to have a second bite of the apple." (Internal quotation marks omitted.) Marquand v. Administrator, Unemployment Compensation Act, 124 Conn.App. 75, 80, 3 A.3d 172 (2010), cert. denied, 300 Conn. 923, 15 A.3d 630 (2011). "The granting of a motion for reconsideration . . . is within the sound discretion of the court." (Internal quotation marks omitted.) Mangiante v. Niemiec, 98 Conn.App. 567, 575, 910 A.2d 235 (2006).
In the present case, the defendant bases its motion on two grounds. First, the defendant argues that the court's ruling that General Statutes § 42a-1-103 preserves a party's right to rely on promissory estoppel to overcome the statute of frauds in § 42a-2-201 of the UCC is contrary to Supreme Court precedent. Second, the defendant argues that, because the allegations of negligent and intentional misrepresentation relate to the defendant's alleged failure to perform under the alleged oral contract, those tort claims are also barred by the statute of frauds, and to rule otherwise would be contrary to appellate authority.
The plaintiff, in its opposition, argues that the defendant's motion is merely an attempt to relitigate legal issues that have been previously decided. The plaintiff contends that the court should deny the motion because there are no new or overriding circumstances. The plaintiff further argues that it would be improper to consider the arguments now because they were previously set forth in the defendant's untimely supplemental memorandum that the court did not entertain at the time of the original decision. Finally, the plaintiff argues that the court should hesitate to overturn its decision because the original ruling constitutes the law of the case.
As previously noted, a motion to reargue may be used "to demonstrate to the court that there is some decision or some principle of law which would have a controlling effect, and which has been overlooked . . ." Marquand v. Administrator, Unemployment Compensation Act, supra, 124 Conn.App. 80. Moreover, the law of the case doctrine does not preclude reconsideration of all issues previously decided. "The law of the case doctrine provides that [w]here a matter has previously been ruled upon interlocutorily, the court in a subsequent proceeding in the case may treat that decision as the law of the case, if it is of the opinion that the issue was correctly decided, in the absence of some new or overriding circumstance." (Emphasis added; internal quotation marks omitted.) Total Recycling Services of Connecticut, Inc. v. Connecticut Oil Recycling Services, LLC, 129 Conn.App. 296, 304 (2011). Here, the defendant attempts to demonstrate that the ruling is contrary to controlling authority. Thus, the court will entertain the substantive arguments of the defendant's motion in order to determine whether the motion should be granted.
I Promissory Estoppel
The defendant argues that the common-law rights of action preserved under the UCC at General Statutes § 42a-1-103 are displaced for the purposes of this action by General Statutes § 42a-2-201, the UCC statute of frauds. In deciding the motion for summary judgment, this court ruled that an action for promissory estoppel has not been so displaced, and thus the plaintiff may assert such a claim even if enforcement of the oral contract itself would be barred by § 42a-2-201. The defendant argues that this ruling runs contrary to the Supreme Court's ruling in Flagg Energy Development Corp. v. General Motors Corp., 244 Conn. 126, 709 A.2d 1075 (1998). The defendant argues that because the court in Flagg Energy Development Corp. found that General Statutes § 42a-2-721, which allows for remedies for fraud, displaces the common-law claims for fraud and misrepresentation in connection with warranty claims that would otherwise be preserved under § 42a-1-103, this court should find that § 42a-2-201 has the same effect with regard to the plaintiff's promissory estoppel claim.
Section 42a-1-103 states in relevant part: "(b) Unless displaced by the particular provisions of this title, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or invalidating cause supplement its provisions." (Emphasis added.) Thus, unless these common-law rights of action are displaced by a particular provision elsewhere in the UCC, a party may pursue them.
In Flagg Energy Development Corp., the court discussed whether § 42a-2-721 is a "particular provision" that displaces claims of fraud or misrepresentation based on postacceptence claims for breach of warranty that would otherwise be preserved under § 42a-1-103. Flagg Energy Development Corp. v. General Motors Corp., supra, 244 Conn. 151. The court stated: "Section 42a-1-103 preserves a broad range of common-law actions, including actions for fraud and misrepresentation, unless such actions are `displaced by the particular provisions of this title.' One such `particular provision' is § 42a-2-721. Section 42a-2-721 provides that, in some circumstances, a claim for a remedy for material misrepresentation or fraud may be consistent with other claims arising under article 2 of the Uniform Commercial Code. Such consistency may be found in the event of `rescission or a claim for rescission of the contract for sale [or] rejection or return of the goods . . .' General Statutes § 42a-2-721. The official comment to that section emphasizes that, even in such cases, the circumstances may make the remedies inconsistent . . . By implication the intent of § 42a-2-721 is to make actions for fraud or misrepresentation presumptively inconsistent with postacceptance claims for breach of warranty." (Citation omitted; emphasis in original.) Id., 154-55.
In Flagg Energy Development Corp., the court examined not only the text of § 42a-2-721, but the comments to that text to determine that actions for fraud and misrepresentation based upon postacceptance breach of warranty allegations that would otherwise be preserved by § 42a-1-103 are displaced by § 42a-2-721. Flagg Energy Development Corp. v. General Motors Corp., supra, 244 Conn. 154-55. This demonstrates that the court was merely settling the narrow issue of whether § 42a-2-721 displaces the plaintiff's claims for fraud and misrepresentation or § 42a-1-103 preserves them. The holding in Flagg Energy Development Corp., therefore, is too narrow to support directly the theory put forth by the defendant that because § 42a-2-721 displaces certain common-law remedies that would otherwise be preserved in § 42a-1-103, § 42a-2-201 should be read to similarly displace the plaintiff's promissory estoppel claim.
Further, applying the analysis set forth in Flagg Energy Development Corp. to § 42a-2-201, it is apparent that an action for promissory estoppel is not displaced by § 42a-2-201. In Flagg Energy Development Corp., the court found that § 42a-2-721, which specifically allows certain claims of fraud, displaces other fraud claims that would otherwise be preserved under § 42a-1-103. Contrary to the defendant's argument, § 42a-2-201 does not have a similar effect on claims for promissory estoppel. Section 42a-2-201 pertains specifically to enforcement of contracts and, if it displaces any claims, it displaces only contract claims that do not satisfy its requirements. Unlike § 42a-2-721, which specifically discusses fraud, § 42a-2-201 makes no mention of promissory estoppel, and therefore does not displace claims for promissory estoppel, which are specifically preserved under § 42a-1-103.
General Statutes § 42a-2-201 provides: "(1) Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.
"(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten days after it is received.
"(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable (a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or (b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or (c) with respect to goods for which payment has been made and accepted or which have been received and accepted as provided by section 42a-2-606." (Emphasis added.)
The defendant further argues that because the General Assembly has not adopted purportedly less restrictive language contained in the revised model UCC, the court should find that the current language precludes an action for promissory estoppel. This is unpersuasive. Section 42a-2-201 states that the statute of frauds shall bar enforcement of a contract, "[e]xcept as otherwise provided in this section," while the statute of frauds in the model UCC has since been revised to eliminate those words from the first sentence of the section. See American Law Institute, Uniform Commercial Code (2005) § 2-201. Even the language of § 42a-2-201 only bars enforcement of a contract that does not satisfy the statute of frauds; it does not address actions sounding in promissory estoppel. The comment to § 2-201 of the model UCC notes that the revision was made so as to provide that the statute, "should not be read as limiting under subsection (1) the possibility that a promisor will be estopped to raise the statute of frauds defense in applicable cases." American Law Institute, Uniform Commercial Code (2005) § 2-201, official comment (2). While Connecticut has not adopted this language, this does not change the court's analysis. The language deleted from the model UCC, and the comment thereto, appear merely to clarify, not change the meaning of the terms contained in the section. Further, it would be entirely speculative to conclude that the General Assembly has declined to amend the statute out of a desire to disallow promissory estoppel claims. It is possible that the General Assembly has declined to amend the language because the current language does not require clarification. As previously stated, estoppel claims are specifically preserved under § 42a-1-103, and not mentioned in § 42a-2-201. Accordingly, the court concludes that under either § 42a-2-201 or § 2-201 of the model UCC an action for promissory estoppel is not precluded.
For the reasons stated herein and in the court's memorandum of decision on the motion for summary judgment, § 42a-2-201 is not a "particular provision" that displaces promissory estoppel actions as preserved under § 42a-1-103. Therefore, the motion for reconsideration and to reargue is denied as to the promissory estoppel claim.
II Tort Claims
As to the negligent misrepresentation and fraudulent/intentional misrepresentation claims, the defendant appears to restate the argument put forth in its original memoranda that the plaintiff's claims seek to enforce an otherwise unenforceable contract. The court acknowledges the defendant's argument that Sovereign Bank v. Licata, 116 Conn.App. 483, 977 A.2d 228, cert. granted, 293 Conn. 935, 981 A.2d 1080 (2009), states that a claim for misrepresentation may be barred by the statute of frauds where it merely seeks an alternate avenue to enforce an otherwise unenforceable contract. However, the Appellate Court also held in Sovereign Bank v. Licata that claims of misrepresentation that do not seek to enforce the agreement may be maintained, stating: "[T]he policies of the statute of frauds will not be subverted by affording [plaintiffs] who can prove a claim of negligent misrepresentation the opportunity to do so. A negligent misrepresentation action does not seek to enforce the underlying contract; rather, it seeks damages for reliance on misrepresentations that may have been made in relation to that contract. This critical distinction sets the tort action apart from a contract action and makes the claim worthy of independent review." (Emphasis in original.) Id., 501-02.
See Sovereign Bank v. Licata, 116 Conn.App. 496-97. ("In the case at hand, the defendant has alleged both an oral forbearance agreement as well as conduct by [the substitute plaintiff] during the period of forbearance that, she claims, constituted misrepresentations of fact on which she relied to her detriment. If the claim were based solely on the alleged failure of [the substitute plaintiff] to live up to the terms of an oral forbearance agreement, it would be barred by the statute of frauds.")
In the present case, the plaintiff alleges misrepresentation claims that do not seek to enforce the contract, but rather seek recovery in tort for harm caused by reliance on misrepresentations made by the defendant. For example, the plaintiff alleges that on July 16, 2008, the defendant's authorized representative represented to the plaintiff's agent that the defendant would sign a written confirmation of the agreement to purchase heating oil. The plaintiff alleges that the defendant knew or should have known that this and other representations were false, and that the plaintiff then took actions to its detriment based on those representations. These claims are supported by the affidavit of the plaintiff's employee, Charles Guadagnino, who states: "During this telephone conversation [on July 16, 2008], Mr. Vere also stated that he would sign a written confirmation of the binding Agreement . . . In reliance upon Mr. Vere's promise, acceptance, and instructions, I instructed East River Energy to purchase the fuel from our supplier on the same date, July 16, 2008." (Guadagnino Aff. ¶¶ 13, 15, attached to Pl. Opp. Mem.) The plaintiff's allegations and evidence submitted in support of its claims demonstrate that the plaintiff does not seek to enforce the alleged agreement, but rather seeks recovery in tort for harm caused by the plaintiff's reliance on the defendant's misrepresentations. Thus, for the reasons set forth in this memorandum and in the court's memorandum of decision on the motion for summary judgment, the negligent misrepresentation and fraudulent/intentional misrepresentation claims are worthy of independent review, and the defendant's motion for summary judgment was properly denied as to those counts of the complaint.
CONCLUSION
For the foregoing reasons, the motion for reconsideration and motion to reargue is be denied.