Opinion
No. X08 CV 03 0196820
March 16, 2005
MEMORANDUM OF DECISION RE MOTION TO STRIKE (116.00)
Priceline.com, Inc. (Priceline) has served a ten-count complaint against Daniel Mayes and TranDigital, LLC. It is alleged that Mayes, while an employee of Walker Digital Corporation (Walker Digital) performed services for Priceline pursuant to an Intercompany Services Agreement by which Walker Digital, a large stockholder of Priceline, provided Priceline with personnel to perform legal, technical, consulting and other services for Priceline. It is alleged that Mayes, while employed by Walker Digital, "knowingly performed work for Priceline pursuant to the Intercompany Services Agreement" and was "Priceline's agent and owed Priceline a fiduciary duty, including the duties of loyalty and care."
The complaint further alleges that Mayes performed some work for Priceline in connection with Priceline's attempt to establish a commercial credit arrangement for Priceline. Specifically, it is alleged that "Mayes was involved in the initial research and contact with Wright Express Financial Services Corporation" (Wright Express) and Wright Express agreed to provide Priceline with a commercial line of credit. During this period it is alleged that Mayes formed TranDigital and he and TranDigital approached Wright Express and sought a brokerage commission for bringing Wright Express and Priceline "together for the deal." It is alleged that Wright Express paid over $2.6 million as a commission to Mayes and TranDigital, and as a result, Priceline had to pay higher fees to Wright Express under their agreement.
Finally, it is alleged that Priceline never authorized the defendants to seek a brokerage commission and was not informed of the brokerage agreement or that it was paying higher fees as a result. Priceline seeks disgorgement of the fee from the defendants. The complaint alleges the following causes of action: breach of fiduciary duty, civil conspiracy, breach of contract, unjust enrichment, breach of the implied covenant of good faith and fair dealing, conversion, statutory theft, violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a, constructive trust and accounting.
The defendants have moved to strike all ten counts and certain prayers for relief. As an initial matter Priceline seeks to have the motion to strike denied in its entirety on the ground that it is the defendants' second such motion.
The record reveals that the defendants moved to strike all counts of the complaint on May 25, 2004. Docket Entry No. 112.00. Their motion stated that each count should be stricken "for failure to state a claim upon which relief may be granted for the reasons set forth in the accompanying memorandum of law." Practice Book § 10-41 requires that each motion to strike "shall distinctly specify the reason or reasons for each claimed insufficiency." The plaintiff in its opposition to the motion to strike noted that the motion was deficient by not stating the reasons in the body of the motion itself. Thereafter, the defendants withdrew their motion and filed another motion which fully stated the claimed deficiencies "to replace" the original motion. The accompanying memorandum was identical to the original memorandum.
The Connecticut Supreme Court has stated on more than one occasion that failure to comply with Practice Book § 10-41 renders a motion to strike "fatally defective." See e.g. Morris v. Hartford Courant Co., 200 Conn. 676, 683 n. 5 (1986).
Priceline contends that the pending motion to strike, which has been given docket entry no. 116.00, is the defendants' second motion to strike and that, as such, it is not authorized by the Practice Book. The court agrees that two motions to strike are not permitted since Practice Book § 10-39 allows a motion to strike to be directed at any and all parts of a pleading which are claimed to be legally insufficient. See Hartt v. Schwartz, Superior Court, judicial district of New Haven at New Haven, CV 92-0331912 (March 15, 1994, Hodgson, J.) ( 11 Conn. L. Rptr. 203). However, the court concludes that what is presently before it, substantively, is defendants' amended initial motion to strike. The motion has been amended to conform with the Practice Book requirement that the grounds for the motion be stated distinctly in the motion itself. The required memorandum of law has not been changed from that which was filed in May 2004. No legal arguments have been added, deleted or changed.
Priceline relies on Barasso v. Rear Still Hill Road, LLC, Superior Court, judicial district of New Haven at New Haven, CV 98-0417927 (October 18, 2001, Jones, J.) ( 30 Conn. L. Rptr. 546), which denied a revised motion to strike. In that case a trial court had granted plaintiff's motion to strike special defenses in 1999. The defendant appealed on the ground that the motion had not articulated the specific reasons for the claimed insufficiency, and the Appellate Court reversed and remanded the case with instructions to deny the motion to strike. The trial court did so, and finding no authority for the refiling of prior pleadings denied the plaintiff's revised motion to strike which had been filed after the remand.
While there are some similarities between Barasso and this case, there are also some distinct differences. First, there has been no waste of judicial time on this matter; only one hearing was held on the motion and, of course, no appellate proceedings have ensued. Second, there is no Appellate Court order in this case. Third, there has been no prejudice to the plaintiff who concededly filed essentially the same memorandum in opposition to both motions. Fourth, there should be no delay in the resolution of this case because a case management order is in effect with a trial exposure date established.
Given the above considerations and the court's determination that in effect the "replacement" motion is an amended motion the court will not deny the motion on procedural grounds.
Standards for 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. (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997); see Practice Book § 10-39. A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court . . . We take the facts to be those alleged in the complaint . . . 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. (Citations omitted; internal quotation marks omitted.) Vacco v. Microsoft Corp., 280 Conn. 59, 64-65, 793 A.2d 1048 (2002). `A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged. Novametrix Medial Systems, Inc. v. BOC Group, Inc., 224 Conn. 210, 215, 618 A.2d 25 (1992).'
Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498 (2003).
Discussion A. First Count; Breach of Fiduciary Duty.
The defendants offer several arguments to the effect that Priceline's allegations are insufficient to establish a fiduciary relationship between Mayes and Priceline. For instance, they contend that the allegations do not establish a principal-agent relationship between Priceline and Mayes nor do they establish that Mayes' activities in obtaining a commission were within the scope of that relationship. However, the court finds sufficient facts alleged to support an agency relationship of some nature between Priceline and Mayes, and construing the allegations most favorably toward sustaining the claim, the court concludes sufficient facts have been pleaded to support, at this stage, a claim that a fiduciary relationship could have existed which was breached by Mayes. While the court notes that fiduciary duties do not extend to all elements of an agency relationship, the existence or not of a fiduciary relationship depends almost entirely on the facts of each case and there must be a complete absence of any fact allegations supporting a fiduciary responsibility before a motion to strike such a claim can be granted. The motion to strike the First Count is denied.
B. Second Count; Civil Conspiracy.
Priceline alleges that Mayes and TranDigital conspired secretly to obtain a commission from Wright Express which they knew would cost Priceline money. The Connecticut Supreme Court has stated the elements of a civil action for conspiracy as: (1) a combination between two or more persons, (2) to do a criminal or wrongful act or a lawful act by criminal or unlawful means, (3) an act done by one or more of the conspirators pursuant to the scheme and in furtherance of the object, (4) which act results in damages to the plaintiff. Williams v. Maislen, 116 Conn. 433, 437 (1933); see also Marshak v. Marshak, 226 Conn. 652, 665 (1993); overruled on other grounds, State v. Vakilzaden, 251 Conn. 656, 660 (1999). Thus, the action is for damages caused by an act in furtherance of a conspiracy not by the conspiracy itself. Cole v. Associated Construction Co., 141 Conn. 49, 54 (1954). A claim of civil conspiracy is insufficient unless it is based on some underlying cause of action. Litchfield Asset Management v. Howell, 70 Conn.App. 133, 140, cert. denied, 261 Conn. 911 (2002).
The defendants argue that an employee of a corporation and the corporation cannot conspire between themselves because a corporation can only act through its employees and therefore the corporation cannot conspire with itself. See Harp v. King, 266 Conn. 747, 781 (2003).
Priceline contends that Mayes was not acting solely for TranDigital but also for himself when he negotiated the commission. On this subject the allegations of the complaint are vague and murky. While there are references to a commission to be paid to Mayes and TranDigital there are specific references that Mayes "formed TranDigital" and that "Wright Express agreed to pay TranDigital a commission" and that the brokerage agreement "provided that Wright Express would pay TranDigital a portion of Wright Express' profits." These more specific references give no inference that Mayes had any separate interest in the commission apart from TranDigital's interest or that he was acting outside the scope of his employment with TranDigital.
The motion to strike the Second Count is granted.
C. Third Count; Breach of Contract.
The defendants contend that no contract existed or has been alleged between Mayes and Priceline and therefore no breach of contract claim can be pursued by Priceline. Priceline counters that it has alleged that Mayes knew he was working for Priceline and acting as its agent in connection with the financing arrangements with Wright Express. The only contract specifically set out in the complaint is the Intercompany Services Agreement between Walker Digital and Priceline and it is alleged that while Priceline paid Walker Digital for Mayes' services, Mayes was actually paid by Walker Digital. Count Three, ¶ 35. Mayes points out that he was not a party to this agreement, which is true. However, the allegation that he was Priceline's agent in connection with his "negotiation" of the credit agreement with Wright Express is sufficient to allege a contractual agreement with Priceline and sufficient to defeat the motion to strike the Third Count.
D. Fourth Count; Unjust Enrichment.
The cause of action for unjust enrichment requires the defendants to be benefitted, to have unjustly failed to pay for that benefit and that the plaintiff be injured as a result thereof. See Hartford Whalers Hockey v. Uniroyal Goodrich Tire, 231 Conn. 276, 283 (1994). In Hartford Whalers the Connecticut Supreme Court quoted Williston on Contracts to the effect that unjust enrichment applied whenever justice requires compensation for services or property rendered and no contract remedy is available. Id. 282. The same case made reference to a somewhat broader concept of unjust enrichment articulating that it is available when it is contrary to equity and good conscience for one to retain a benefit which has come at the expense of another, citing Franks v. Lockwood, 146 Conn. 273 (1959) and other cases. Id. In Franks the Connecticut Supreme Court upheld a jury verdict for money damages against a residential developer who stripped top soil off property the developer had previously sold to the plaintiff in order to spread it around the homes he had sold to other people with a promise to grade their property. The Connecticut Supreme Court held this was a benefit to the defendant who had been unjustly enriched. Thus, while in most cases the doctrine of unjust enrichment entails the provision of services or products, it may be used where something of value to a party was unknowingly taken by another without appropriate compensation. This seems to be the allegations of this case, and the motion to strike the Fourth Count is denied.
E. Fifth Count; Breach of Covenant of Good Faith and Fair Dealing.
The defendants essentially contend that since no contract existed between Mayes and Priceline the duty of good faith and fair dealing, which can only arise out of the existence of a contract, is not present here. This argument fails because the court has found the existence of a contract.
F. Sixth Count; Conversion.
In its conversion count Priceline contends that neither Mayes nor TranDigital were authorized by it to receive a commission, that they wrongfully possessed the funds representing the commission, that the funds have been converted and Priceline is entitled to them. The defendants argue that a claim of conversion must be premised on the alleged property converted being owned by the plaintiff. In Macomber v. Travelers Property Casualty Corp., 261 Conn. 620 (2002) the Connecticut Supreme Court defined conversion as "some unauthorized act which deprives another of his property . . . some unauthorized assumption and exercise of the powers of the owner to his [the owner's] harm." Id. 649. There is no allegation, nor could there be in this court's view, that the money paid to the defendants belonged to Priceline. Indeed Priceline has alleged that the agreement between the defendants and Wright Express "provided that Wright Express would pay TranDigital a portion of Wright Express' profits" (emphasis added) from the financing agreement with Priceline. Complaint, Count Six, ¶ 17. To be sure, pursuant to the allegations of the complaint one might trace a source of Wright Express' profits back to some or part of Priceline's payments as converted property, but there is no basis for alleging or concluding that what was paid as commission was Priceline's property. The motion to strike the Sixth Count is granted.
G. Seventh Count; Violation of General Statutes § 52-564.
Section 52-564 authorizes triple damages against "[a]ny person who steals the property of another." A violation of Section 52-564, which is often referred to as statutory theft, is "synonymous with larceny." Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 44 (2000). To establish statutory theft a plaintiff must prove the additional element of intent to deprive over and above the elements required to establish conversion. Suarez-Negrete v. Trotta, 47 Conn.App. 513, 520 (1998). In other words, a violation of § 52-564 is an intentional conversion. See generally News America Marketing In Store, Inc. v. Marquis, 86 Conn.App. 527, 544 (2004) cert. granted 273 Conn. 905 (2005). Having found that Priceline has not alleged a proper cause of action in conversion it follows that they have also failed to allege a claim under Section 52-564.
H. Eighth Count; Violation of CUTPA. CT Page 4735
The defendants argue that no facts are alleged showing a breach of fiduciary duty and therefore no basis for showing that the defendants' actions were unfair or deceptive. The court disagrees. The complaint's allegations construed broadly and taken as true are sufficient to establish deceitful and unscrupulous conduct. The motion as to the Eighth Count is denied.I. Ninth and Tenth Counts; Seeking a Constructive Trust and an Accounting.
In its Ninth and Tenth Counts Priceline seeks the imposition of a constructive trust and an accounting respectively. A constructive trust and an accounting are remedies, usually but not always, associated with equitable causes of action. They are not specific or separate causes of action. Macomber v. Travelers Property Casualty Corp., supra, 261 Conn. 623 n. 3. These counts are ordered stricken with the proviso that they may be sought in prayers for relief associated with appropriate causes of action.
J. Prayers for Relief.
The defendants move to strike any of the complaint's prayers for relief which cannot be legally granted except on a cause of action which the court has ordered stricken. The court has the authority to this. Practice Book § 10-39(a)(2); Pamela B. v. Ment, 244 Conn. 296, 325 (1998). The only cause of action pleaded permitting an award of triple damages is Count Six which has been stricken; therefore, the prayer for that relief is likewise ordered stricken. Defendants also seek to strike a prayer for prejudgment interest. There are a limited number of claims for which prejudgment interest may be sought. However, whether there is such a claim in this case is not properly before the court presently because, while the parties have briefed the issue of whether prejudgment interest is available, the complaint only seeks "interest" without specifying whether it is pre-or postjudgment interest. Thus, the court will leave for another day whether plaintiff is seeking, or entitled to, prejudgment interest.
Conclusion
The motion to strike is granted to the extent discussed above and otherwise denied.
TAGGART D. ADAMS SUPERIOR COURT JUDGE