Opinion
No. CV06-5001840S
May 18, 2007
MEMORANDUM OF DECISION RE MOTION TO STRIKE #109
FACTS
On February 26, 2007, the plaintiff, Nancy Forino, filed a revised ten-count complaint against the defendants, Rocco Forino (defendant) and Forino Barbieri, LLC (Forino Barbieri). In her complaint, the plaintiff alleges the following. On August 30, 2002, Forino Painting Corporation (the corporation) was established. Its main business was painting commercial buildings. At that time, the plaintiff was the president of the corporation and the defendant was the secretary. The defendant organized Forino Barbieri, whose business was also the painting of commercial buildings. The plaintiff, in her individual capacity, invited the defendant, in an individual capacity, to participate in the profits of the corporation. This invitation was based upon an "agreement and partnership" that the plaintiff and defendant would be partners, and that all profits of the corporation would be evenly divided between them. Under this agreement, the plaintiff's job was to manage the office, and the defendant's job was to bring in new business.
After entering into the partnership with the plaintiff, the defendant converted the income and assets of the corporation for his personal use, denied the plaintiff access to the corporate premises, denied the plaintiff's repeated requests to examine the corporation's records, solicited customers of the corporation with the purpose of moving their business to Forino Barbieri, failed to distribute profits to the plaintiff, dissolved the corporation, and sold corporate assets without accounting to the plaintiff for the proceeds.
In the first count of the complaint, the plaintiff alleges that these actions constituted a breach of the partnership agreement between the plaintiff and the defendant. In counts two through ten, the plaintiff incorporates the facts as above and alleges that: she is entitled to an accounting of the affairs of the corporation; the defendant's actions constituted a breach of fiduciary duty owed to the plaintiff; the defendant's actions constituted conversion; the defendant's action constituted theft under General Statutes § 52-564; the defendant was unjustly enriched; the defendant engaged in intentional misrepresentations; the defendant's conduct constituted tortuous interference with contractual rights; the defendant's actions constituted tortuous interference with business expectations; and the defendant violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq.
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). "The role of the trial court [is] to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotations marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997). "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." (Internal quotation marks omitted.) Asylum Hill Problem Solving Revitalization Ass'n. v. King, 277 Conn. 238, 246, 890 A.2d 522 (2006). "If a motion to strike is directed to the entire complaint, the motion must fail if any of the plaintiff's claims is legally sufficient." Kovacs v. Kasper, 41 Conn.Sup. 225, 226, 565 A.2d 18 (1989).
The defendant moves to strike the entire complaint on the ground that the complaint does not adequately plead facts that are "sufficiently definite or certain" as to the terms of the alleged partnership agreement. According to the defendant, the complaint is legally insufficient because it does not allege how the "profits" of the corporation were to be determined, and it does not allege any facts, which, if proven, would show that either the plaintiff or the defendant were entitled to receive payments of the corporation's profits as individuals, and not as officers or shareholders.
The plaintiff's allegations in count one are based on the alleged partnership agreement between her and the defendant. The defendant essentially argues that because the terms and conditions of the alleged partnership were not adequately pleaded in the first count, and that count is incorporated into all of the other counts, the entire complaint is legally insufficient. To form a valid and binding contract in Connecticut, there must be a mutual understanding between the parties of the essential terms that are definite and certain. See Ubysz v. DiPietro, 185 Conn. 47, 51, 440 A.2d 830 (1981). "Whether an oral partnership agreement has been entered is a question of fact." Jacobs v. Thomas, 18 Conn.App. 218, 222, 557 A.2d 145, cert. denied, 212 Conn. 806, 563 A.2d 1355 (1989). A partnership agreement does not have to be in writing. See Peterson v. Woldeyohannes, Superior Court, judicial district of Hartford, Docket No. CV 04 0834966 (October 3, 2006, Wagner, J.). While an oral agreement may be proved to have been reached even if some of the terms are not agreed to immediately, numerous Connecticut cases require definite agreement on the essential terms of an enforceable agreement, and whether such an agreement was reached is to be determined "on the particular circumstances of each case." Willow Funding Co., L.P. v. Grencom Associates, 63 Conn.App. 832, 843-45, 779 A.2d 174 (2001).
The only issue before the court is whether the plaintiff has sufficiently pleaded her causes of action with regard to the alleged partnership and the defendant's conduct regarding corporate assets. Here, the plaintiff sufficiently alleged the existence of an oral partnership contract because her allegations contain the essential terms of the partnership agreement. The plaintiff's complaint alleges in sufficiently definitive terms how the partnership was to divide its income and what specific labor each partner was to contribute. The plaintiff and defendant were to "evenly" split the profits of the corporation, and the plaintiff was to manage the office, while the defendant brought in new business. The cases that have held that no partnership agreement existed did so because no terms regarding the division of profits or labor were provided. See Patel v. Barot, complex litigation docket at Waterbury, Docket No. X01 CV 96 0158463 (November 30, 2001, Hodgson, J.). For the purposes of the present motion to strike, it does not matter that a definition for the term "profit" is not provided in the complaint. "[I]f the parties so intend, they may reach a binding agreement even if some of the terms of that agreement are still indefinite. See Meaney v. Connecticut Hospital Ass'n., Inc., 250 Conn. 500, 521, 735 A.2d 813 (1999); O'Sullivan v. Bergenty, 214 Conn. 641, 651-52, 573 A.2d 729 (1990)." Willow Funding Co., L.P. v. Grencom Associates, supra, 63 Conn.App. 844.
"[W]hat is necessarily implied [in an allegation] need not be expressly alleged." (Internal quotations marks omitted.) Asylum Hill Problem Solving Revitalization Ass'n. v. King, supra, 246; see also Practice Book § 10-4 ("It is unnecessary to allege any promise or duty which the law implies from the facts pleaded"). Therefore, because the plaintiff adequately pleaded the existence of a partnership between the plaintiff and the defendant, the plaintiff is not required to specifically plead each duty owed under the partnership.
Also, although counts two through ten incorporate the allegations regarding the partnership, those counts allege legally sufficient individual allegations regarding what the defendant did with corporate assets. "Generally, individual stockholders cannot sue the officers at law for damages on the theory that they are entitled to damages because mismanagement has rendered their stock of less value, since the injury is generally not to the shareholder individually, but to the corporation — to the shareholders collectively . . . In this regard, it is axiomatic that a claim of injury, the basis of which is a wrong to the corporation, must be brought in derivative suit, with the plaintiff proceeding `secondarily,' deriving his rights from the corporation which is alleged to have been wronged . . . It is, however, well settled that if the injury is one to the plaintiff as a stockholder, and to him individually, and not to the corporation, as where an alleged fraud perpetrated by the corporation has affected the plaintiff directly, the cause of action is personal and individual." (Citations omitted.) Yanow v. Teal Industries, Inc., 178 Conn. 262, 281-82, 422 A.2d 311 (1979)
At oral argument, both parties agreed that this was not a derivative action. The defendant does not challenge the legal sufficiency of each alleged cause of action. Instead, he argues that the complaint is legally insufficient because it does not allege that either the plaintiff or the defendant were entitled to profits from the corporation. Taking the pleaded facts, and those facts necessarily implied from the allegations, as true, as the court is required to do on a motion to strike, the plaintiff has sufficiently pleaded a cause of action. The plaintiff alleged that she and the defendant were officers of the corporation, and that she entered into an agreement to share the profits of the corporation with the defendant. Although not stating so, by alleging that she could enter into an agreement to split the corporation's profits "evenly," the plaintiff alleged that she was the only person, or one of a very few people, entitled to receive profits from the corporation. The plaintiff alleges that the defendant acted fraudulently and misappropriated corporate resources, thus harming the corporation to such an extent, that she could get nothing out of her assets. These claims are for direct damages, and they constitute valid individual claims under Yanow v. Teal Industries, Inc., supra, 178 Conn. 281-82.
CONCLUSION
For the foregoing reasons, the defendant's motion to strike is denied.