Opinion
CV166061820
06-27-2017
River Bank Construction, LLC v. Renaissance City Development Association, Inc. et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE DEFENDANT RENAISSANCE CITY DEVELOPMENT ASSOCIATION, INC.'S MOTION TO STRIKE (NO. 127)
Jon C. Blue, Judge
I. Introduction.
The Motion To Strike now before the court seeks to strike several portions of a multicount complaint involving a failed real estate development project. For reasons explained below, the Motion must be granted in part and denied in part.
The factual allegations at issue are set forth in the Revised Complaint (No. 122) of the plaintiff, River Bank Construction, LLC (" River Bank"). For purposes of this Motion, the allegations will be taken as true.
Both River Bank and the named defendant, Renaissance City Development Association, Inc. (" Renaissance") are Connecticut corporations. River Bank was the selected developer for a residential development known as The Village On The Thames. Renaissance was the designated municipal development agency for the co-defendant, City of New London (" City"). River Bank was selected as the result of a competitive bidding process.
On November 12, 2010, River Bank and Renaissance signed a development agreement (" Contract"), subsequently amended on three occasions. Although portions of the Contract are quoted in the Revised Complaint, the entire Contract is not incorporated by reference in the Revised Complaint, an omission which makes construction of the Contract (apparently sought by both sides) a practical impossibility. River Bank alleges that it has taken several actions required by the Contract, has spent more than $2,000,000 in doing so, and is ready, willing and able to perform all terms and conditions of the Contract. Notwithstanding this, it alleges that Renaissance has failed to convey the real property in question as required by the Contract.
On March 29, 2016, River Bank commenced this action by service of process. The defendants are Renaissance and the City. Because the Motion now before the court has been filed by Renaissance, only the claims against Renaissance will be discussed.
The Revised Complaint consists of seven counts. The First Count (not in question here) seeks specific performance. The Second Count alleges " default for failure to perform contract." The Third Count alleges breach of contract. The Fourth Count alleges breach of the duty of good faith and fair dealing. The Fifth Count alleges " tortious breach." The Sixth Count seeks rescission of the Contract. The Seventh Count alleges a violation of the Connecticut Unfair Trade Practices Act (" CUTPA"), Conn. Gen. Stat. § 42-110a et seq.
On March 31, 2017, Renaissance filed the Motion To Strike now before the court. The Motions seeks to strike the Fourth, Fifth, and Sixth Counts of the Revised Complaint, as well as " allegations of unconscionability" and " prayers for relief requesting money damages in the Second through Sixth Counts." The Motion was argued on June 26, 2017.
The issues presented by the Motion will now be considered in order.
II. Fourth Count
The Fourth Count alleges breach of the duty of good faith and fair dealing. It specifically alleges that, in carrying out the conduct described in the Revised Complaint, Renaissance " was acting in bad faith, with a design to mislead or deceive, or a neglect or refusal to fulfill its obligations under the [Contract], not prompted by an honest mistake but by some interested or sinister motive or dishonest purpose."
Renaissance contends that, " these are mere conclusions which are unsupported by the facts alleged in the Revised Complaint." (Defendant's Brief, at 10.) The Appellate Court has reminded us that, " to state a legally sufficient claim for breach of the implied covenant sounding in contract, the plaintiff must . . . set forth factual allegations that the defendant acted in bad faith." TD Bank, N.A. v. J& M Holdings, LLC, 143 Conn.App. 340, 349, 70 A.3d 156 (2013). (Internal quotation marks and citation omitted.) River Bank has done so in the Fourth Count, using what Renaissance concedes to be legally sufficient language describing bad faith. (Defendant's Brief, at 10.) In the context of the factual allegations incorporated in the Fourth Count by reference (an unexplained refusal to convey real property following an expenditure by River Bank of more than $2,000,000 on the project), the allegation of bad faith cannot be dismissed as implausible. It will, of course, be for the finder of fact to determine whether bad faith in fact exists.
The Motion To Strike the Fourth Count must be denied.
III. Fifth Count
The Fifth Count alleges " tortious breach." This cause of action is " a creature not normally spotted in Connecticut's jurisprudential forests." Aguinaldo v. Warner, 140 Conn.App. 264, 269, 58 A.3d 373 (2013). (Internal quotation marks and citation omitted.) Although the cause of action of " breach of contract founded on tortious conduct" has been recognized in the context of actions involving insurance transactions; L.F. Pace & Sons, Inc. v. Travelers Indemnity Co., 9 Conn.App. 30, 48, 514 A.2d 766, cert. denied, 201 Conn. 811, 516 A.2d 886 (1986); our reviewing courts have not been willing to extend it to other factual contexts. Barry v. Posi-Seal International, Inc., 40 Conn.App. 577, 672 A.2d 514, cert. denied, 237 Conn. 917, 676 A.2d 1373 (1996), is a case in point. Relying on Foley v. Interactive Data Corp., 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373 (Cal. 1988), Barry held that the action of breach of contract founded on tortious conduct cannot be extended to actions involving employment contracts. Instead, Barry reasons, " the financial security sought by an employee from the employer is not so very different from the financial security sought by one who enters into an ordinary commercial contract." 40 Conn.App., at 586. The clear implication of this reasoning is that parties to " an ordinary commercial contract, " such as the Contract in question here, cannot avail themselves of the cause of action asserted in the Fifth Count. The Motion To Strike the Fifth Count must be granted.
IV. Sixth Count
The Sixth Count seeks rescission. It alleges that, " The defendants remain, or are restored as nearly as possible, to their position prior to the execution of the [Contract]." It specifically seeks " rescission of the [Contract] . . . recovery of [River Bank's] expenditures . . . and . . . restoration to its position prior to execution of the [Contract]."
Renaissance contends that the Sixth Count is deficient because River Bank " does not allege a legal or equitable basis for rescinding the [C]ontract, or that [River Bank] restored [Renaissance] to [its] former condition." (Defendant's Brief, at 14.) This argument is unpersuasive.
" Rescission is a remedy, equitable in nature, that allows an aggrieved party to a contract to abrogate totally, or cancel, the contract." Great American Insurance Co. v. General Builders, Inc., 113 Nev. 346, 934 P.2d 257, 262 n.6 (Nev. 1997). The goal of rescission is to " place[] the parties, as nearly as possible, in the same situation as existed just prior to the execution of the contract." Little Mountain Enterprises, Inc. v. Groom, 141 Conn.App. 804, 812, 64 A.3d 781 (2013). (internal quotation marks and citation omitted.) Although it is unquestionably true that, " it is a condition of rescission . . . that the party seeking rescission offer, as nearly as possible, to place the other party in the same situation that existed prior to the execution of the contract"; Ben's Spirit Shop, Inc. v. Ridgway, 215 Conn. 355, 360, 576 A.2d 1267 (1990) (internal quotation marks, brackets, and citations omitted); the Sixth Count essentially alleges this by stating that, " The defendants remain, or are restored as nearly as possible, to their position prior to execution of the [Contract]."
Renaissance's contention that the Sixth Count fails to " allege a legal or equitable basis for rescission" is similarly unpersuasive. The allegations of the Revised Complaint incorporated by reference in the Sixth Count allege, as mentioned, that River Bank has spent over $2,000,000 on the development project in question and that Renaissance has refused to transfer the real property at issue. Although the court must, of course, base its ultimate equitable decision on the totality of circumstances in the case, this bare fact alone is sufficient to make rescission at least a plausible remedy. Under these circumstances, the wisdom of a leading treatise should be heeded. " A claimant should be free to marshal all viable remedial tools, to discover relevant evidence, to develop its proof, and to cumulate the relief necessary to achieve full compensation for the other's breach or misconduct." 13 Sarah Howard Jenkins, Corbin on Contracts § 67.8(8), at 76 (rev. ed. 2003).
The Motion To Strike the Sixth Count must be denied.
V. Allegations of Unconscionability.
The Motion To Strike further moves to strike " allegations of unconscionability." Renaissance's brief states that, " allegations of unconscionability must be stricken from all counts of the Revised Complaint." (Defendant's Brief, at 8.) It reasons that, " unconscionability is not an element of any of the causes of action plead [sic] in the Second through Seventh Counts." (Id.)
" The motion to strike cannot be used to clean up the complaint, such as by eliminating irrelevant or immaterial allegations . . . The proper tool for a party to seek the deletion of irrelevant and immaterial pleadings by his opponent is a request to revise not a motion to strike." 1 Wesley W. Horton & Kimberly A. Knox, Connecticut Practice Series 517 (2016). Such " cleaning up" is exactly what the Motion To Strike seeks to accomplish with respect to " allegations of unconscionability." The Motion To Strike must be denied with respect to this request.
VI. Money Damages
The Motion To Strike finally seeks to strike " prayers for relief requesting money damages in the Second through Sixth Counts." The reasoning of this request turns on a point of construction of the Contract. As recited in the First Count of the Revised Complaint, Sec. 8.05 of the Contract provides that River Bank " specifically agrees that [Renaissance] shall not be liable for monetary damages resulting from any failure to comply with the terms of this [Contract]."
The contractual words just quoted unquestionably give at least minimal plausibility to Renaissance's argument that River Bank is contractually precluded from seeking monetary damages. However, as mentioned, the words just quoted account for only a small (probably very small) portion of the entire Contract. The Contract itself has not been incorporated by reference in the Revised Complaint and cannot be reviewed by the court. The court simply does not know, for example, whether the Contract contains definitional provisions, choice-of-law provisions, or a requirement of arbitration. It would be irresponsible for the court to attempt to construe a contract when the entire contract is not before it. Under these circumstances, construction of the Contract must await a motion for summary judgment in which the Contract is introduced into evidence. The Motion To Strike prayers for relief requesting money damages is denied.
VII. Conclusion
The Motion To Strike is granted as to the Fifth Count. It is otherwise denied.