Opinion
No. CV09-6000710 S
July 11, 2011
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO STRIKE #108
The plaintiff KITO Group, Ltd.'s complaint alleges the following facts. The plaintiff and defendant RF International, Ltd. (hereinafter "RFI"), entered into a shipping agreement whereby RFI would ship goods from China to Vancouver, British Columbia. Upon successful shipment of the goods, the plaintiff would pay RFI all the shipping costs. Upon shipment of the goods to Vancouver, however, RFI refused to deliver them to the agreed recipient and instead stored them in a warehouse because it believed that the plaintiff owed it money from an unrelated transaction. As to RFI, the plaintiff alleges conversion, civil theft, tortious interference with contract, violations of the Connecticut Unfair Trade Practices Act (CUTPA), and requests an accounting. Those allegations represent counts one through five, respectively.
The plaintiff also entered into a shipping agreement with defendant Ocean World Lines, Inc. (hereinafter "OWL"). That agreement provided that OWL would deliver goods from China to Smithfield, Utah. The plaintiff would then pay all shipping costs directly to OWL when OWL delivered the goods to the plaintiff's customer. After shipping the goods to Utah, however, OWL refused to deliver them to the plaintiff's customer and instead stored them in their own facility because the plaintiff owes OWL a debt on an unrelated transaction. As to OWL, the plaintiff alleges conversion, civil theft, tortious interference with contract, violations of CUTPA, and requests an accounting. Those allegations represent counts six through ten, respectively.
On August 31, 2009, the defendants filed a petition for removal to the Federal District Court. On July 31, 2010, the District Court remanded the case to this court. On November 12, 2010, the defendants moved to strike counts one, two, three, five, six, seven, eight, and ten of the plaintiff's complaint. "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, CT Page 15067 498, 815 A.2d 1188 (2003). "We take the facts to be those alleged in the complaint that has been stricken and we construe the complaint in the manner most favorable to sustaining its legal sufficiency . . . Thus [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Moreover, we note that [w]hat is necessarily implied [in an allegation] need not be expressly alleged . . . 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 . . . Indeed, pleadings 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, 252-53, 990 A.2d 206 (2010).
The defendants argue that the plaintiff's tort claims, counts one, two, three, six, seven and eight, are legally insufficient because the relationship between the plaintiff and defendant is governed by a contract. The defendants argue that under Mystic Color Lab, Inc. v. Auctions Worldwide LLC; 284 Conn. 408, 421, 934 A.2d 227 (2007); if the relationship between a plaintiff and defendant is governed by contract, then tort claims as between those parties are barred. As to the claims for an accounting, the defendants argue that the plaintiff's complaint fails to allege the required elements and is therefore legally insufficient.
The plaintiff counters, as to the tort claims, that the case cited by the defendants, Mystic Color Lab, is inapplicable to this case. The plaintiff further argues that it has pled sufficient facts to support a cause of action for conversion and statutory theft requiring the court to deny the motion to strike those counts. As to the accounting claim, the plaintiff argues that the fraud allegations of its complaint are a sufficient ground for the court to invoke its equitable jurisdiction and order an accounting. The plaintiff argues that its failure to plead the technical requirements of an accounting claim should not bar it from seeking an accounting.
A Tort and Contract Claims
The defendants' reliance on Mystic Color Lab is misplaced. In that case, the plaintiff contracted with the defendant, an auctioneer, to sell certain photo processing equipment. Mystic Color Lab, Inc. v. Auctions Worldwide, LLC, supra, 284 Conn. 411. The auctioneer, after selling the equipment, refused to turn over the proceeds to the plaintiff and instead used the funds to pay its general business expenses. Id., 413. The plaintiff sued and alleged conversion, statutory theft and violations of CUPTA. Id. The trial court found for the plaintiff on its conversion and statutory theft claims, and the defendant appealed. Id., 414. The Connecticut Supreme Court ruled that the defendants could not be liable for conversion or statutory theft where the relationship between the plaintiff and defendant is that of a debtor and a creditor, rather than a bailor and a bailee. Id., 417. The defendant in that case was under a contractual duty to remit the proceeds of the sale to the plaintiff, but the money owed was a debt, not an identifiable good that the defendant was holding for the plaintiff. Id., 427.
The allegations of the plaintiff's complaint in this case are distinguishable. In this case, the plaintiff alleges that the defendants were entrusted to transport specific, identifiable goods from China to two points in North America. Instead of delivering those goods, the defendant kept the goods for their own use. In Mystic Color Lab, the Supreme Court ruled that an action for conversion and statutory theft would not lie where the allegedly converted goods are a mere obligation to pay money. There, the defendant did not keep anything that belonged to the plaintiff, but rather simply failed to pay in accordance with the contract. In this case, the plaintiff alleges that the defendants did more than simply fail to pay a debt. Instead, the plaintiff alleges that it entrusted certain goods to the defendants and that the defendants took them for their own use.
The defendants do not cite any additional authority to support their position that the plaintiff's tort claims are barred by the fact that the plaintiff and defendant had a contract. The defendants' motion to strike is denied as to the first, second, third, sixth, seventh and eighth count.
B Accounting Claims
"An `accounting' is defined as an adjustment of the accounts of the parties and a rendering of a judgment for the balance ascertained to be due. An action for an accounting usually invokes the equity powers of the court, and the remedy that is most frequently resorted to . . . is by way of a suit in equity . . . An accounting is not available in an action where the amount due is readily ascertainable. Equity will ordinarily take jurisdiction to settle the account if the facts create a reasonable doubt whether adequate relief may be obtained at law . . . To support an action of accounting, one of several conditions must exist. There must be a fiduciary relationship, or the existence of a mutual and/or complicated accounts, or a need of discovery, or some other special ground of equitable jurisdiction such as fraud . . .
"Courts of equity have original jurisdiction to state and settle accounts, or to compel an accounting, where a fiduciary relationship exists between the parties and the defendant has a duty to render an account. The right to compel an account in equity exists not only in the case of those relationships which are traditionally regarded as those of trust and confidence, but also in those informal relations which exist whenever one person trusts in and relies upon another. The relationship between . . . parties to a business agreement . . . [has] . . . been deemed to involve such confidence and trust so as to entitle one of the parties to an accounting in equity." (Citations omitted; emphasis in original; internal quotation marks omitted.) Mankert v. Elmatco Products, Inc., 84 Conn.App. 456, 460-61, 854 A.2d 766, cert. denied 271 Conn. 925, 859 A.2d 580 (2004).
In this case, the plaintiff's complaint does not allege that a fiduciary duty existed between the parties, that there were mutual or complicated accounts, that discovery is required, or that the defendants committed fraud. As the Appeals Court made clear in Mankert, however, the plaintiff in this case is entitled to an accounting because it alleged that it and the defendants were parties to a business agreement. See id.; see also C S Research Corp. v. Holton Co., 36 Conn.Sup. 619, 621-22, 422 A.2d 331 (1980) (discussing various cases in which a business relationship was deemed sufficient to confer the right of an accounting). The plaintiff's complaint, read in the manner most favorable to sustaining its legal sufficiency, pleads sufficient facts to state a claim for an accounting. The defendants' motion to strike counts five and ten is denied.
Accordingly, the defendants' motion to strike is denied.
SO ORDERED.