Opinion
No. FSTCV08-5006833S
July 7, 2011
Memorandum of Decision on Motion to Strike (No. 111)
PROCEDURAL AND FACTUAL BACKGROUND
The plaintiff, Alfred Saturno, in his capacity as the administrator of the estate of his deceased wife Lore Saturno, commenced this action against the defendant, Steven Saturno, on March 19, 2008. The complaint alleges that in 1997, the defendant granted Lore Saturno, his sister-in-law, separate options to purchase real property at 440 and 444 Courtland Avenue ("the properties") in Stamford, with both options expiring on September 1, 2007. Lore Saturno died in July 1999, and the Stamford Probate Court appointed the plaintiff the administrator of her estate in November 2000, according to the complaint. The plaintiff further alleges that he exercised the options in April 2006 after complying with all of the necessary prerequisites set forth in the option agreement, but the defendant refused to convey the properties. The complaint is brought in two counts. Count one seeks specific performance of the options, while count two is a claim for breach of the options to purchase.
On December 24, 2009, the defendant filed his answer and eight special defenses. In his answer, the defendant claims that the option agreements were not properly executed, that the plaintiff was not the duly appointed administrator of Lore Saturno's estate and that the plaintiff did not comply with all of the prerequisites for exercising the options and did not exercise the options in a timely fashion. On August 11, 2010, the plaintiff replied to the special defenses, denying all of their allegations. On September 16, 2010, the defendant filed his ninth special defense, which states as follows: "Should the defendant be found liable for any monetary damages pursuant to the plaintiff's claim, the plaintiff is entitled to set off the award by the expenses the defendant has incurred as a result of the maintenance, tax payments, mortgage payments, insurance payments, and all other costs associated with" the properties. On October 6, 2010, the plaintiff moved to strike the ninth special defense on the grounds of failure to "allege a debt that is presently due and owing" and failure to "allege a debt that is a liquidated sum." A memorandum is attached to the motion to strike. The defendant did not file a memorandum in opposition. The court heard oral argument at short calendar on March 14, 2011. The defendant did not appear at short calendar to argue against the motion.
These eight special defenses are not implicated in this motion to strike. They are: (1) "[t]he alleged option agreements did not inure to the benefit of heirs and assigns"; (2) "[t]he plaintiff was in breach of the alleged option agreements at the time the plaintiff attempted to exercise the options"; (3) "[t]he plaintiff . . . failed to properly exercise the options"; (4) "[a]t the time the plaintiff . . . allegedly exercised the options pursuant to the alleged option agreements, the plaintiff was not legally entitled to do so"; (5) "[t]here is no provision allowing assignment in the alleged option agreements"; (6) "[b]y its terms, the alleged option agreements expired prior to their proper exercise"; (7) lack of standing; and (8) "[t]he alleged option agreements were not properly executed."
STANDARD OF DECISION
"A party wanting to contest the legal sufficiency of a special defense may do so by filing a motion to strike. The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action . . . In ruling on a motion to strike, the court must accept as true the facts alleged in the special defenses and construe them in the manner most favorable to sustaining their legal sufficiency." (Citation omitted; internal quotation marks omitted.) Barasso v. Rear Still Hill Road, LLC, 64 Conn.App. 9, 13, 779 A.2d 198 (2001); see also Practice Book § 10-39(a)(5). "In addressing the legal sufficiency of a special defense, those facts well pleaded may include factual allegations of the count(s) of the complaint to which the special defense is directed as well as factual allegations of the special defense itself." East Greyrock, LLC v. OBC Associates, Inc., Superior Court, complex litigation docket at Stamford, Docket No. X08 CV 04 4002173 (June 6, 2008, Jennings, J.) ( 45 Conn. L. Rptr. 753, 754). "The legal conclusions or opinions stated in the special defense are not deemed admitted, but rather must flow from the subordinate facts provided." County Federal Savings Loan Assn. v. Eastern Associates, 3 Conn.App. 582, 586, 491 A.2d 401 (1985). "The burden of alleging recognizable special defenses rests on the defendant." Bridgeport v. C.R. Klewin Northeast, LLC, 51 Conn.Sup. 1, 4, 971 A.2d 864 (2007). "If the allegations in the challenged pleading support any legally sufficient defense, the motion to strike must be denied." Krasnow v. Christensen, 40 Conn.Sup. 287, 288, 492 A.2d 850 (1985).
DISCUSSION
The defendant moves to strike the ninth special defense, which is in the nature of a setoff. Pursuant to General Statutes § 52-139(a), "[i]n any action brought for the recovery of a debt, if there are mutual debts between the plaintiff or plaintiffs, or any of them, and the defendant or defendants, or any of them, one debt may be set off against the other." "Setoff is the right to cancel or offset mutual debts or cross demands . . . The concept of setoff allows [parties] that owe each other money to apply their mutual debts against each other, thus avoiding the absurdity of making A pay B when B in fact owes A . . . A set-off is made where the defendant has a debt against the plaintiff arising out of a transaction independent of the contract on which the plaintiff sues, and desires to avail himself of that debt, in the existing suit, either to reduce the plaintiff's recovery, or to defeat it altogether, and, as the case may be, to recover a judgment in his own favor for a balance." (Citation omitted; internal quotation marks omitted.) Mariculture Products Ltd. v. Certain Underwriters at Lloyd's of London, 84 Conn.App. 688, 703, 854 A.2d 1100, cert. denied, 272 Conn. 905, 863 A.2d 698 (2004).
Thus, "[a] condition precedent to the application of § 52-139 is that the defendant's claim arise from a debt due by the plaintiff." (Internal quotation marks omitted.) Hope's Architectural Products, Inc. v. Fox Steel Co., 44 Conn.App. 759, 762, 692 A.2d 829, cert. denied, 241 Conn. 915, 696 A.2d 985 (1997). "Where there are no equitable considerations involved, a defendant . . . can set off debts only where they are presently due to him." Bridgeport-City Trust Co. v. Niles-Bement-Pond Co., 128 Conn. 4, 10, 20 A.2d 91 (1941). "A proper setoff alleges a debt that is presently due and arising from a contract or liquidated claim . . . The debt must be a mutual one . . . Mutual debts are cross debts in the same capacity and right and of the same kind and quality: they must exist between the parties in their own right and they must be clearly ascertained and liquidated." (Citations omitted.) Armatino v. Romano, Superior Court, judicial district of New Haven, Docket No. 283687 (November 28, 1989, Cretella, J.) ( 1 Conn. L. Rptr. 60, 61). "A liquidated debt is one whose amount has been determined by agreement of the parties or by operation of law." Newman v. Seymour, Superior Court, judicial district of Litchfield, Docket No. CV 02 0088133 (February 11, 2003, Pickard, J.) ( 34 Conn. L. Rptr. 98, 99).
The plaintiff argues that because the ninth special defense asks for a setoff only if the defendant is found liable for monetary damages, this special defense is not for a debt presently due to the defendant and is not a liquidated sum. In support of his argument, the defendant cites Heimbrock v. Heimbrock, Superior Court, Judicial District of Litchfield, Docket No. CV 08 5004975 (May 18, 2009, Roche, J.), where a special defense of setoff was invoked in a quiet title action. The court granted the motion to strike the setoff, noting that the defendants "fail[ed] to allege that, at the time this action was brought, the plaintiff had a legal obligation to pay any money to the defendants, for mortgage payments or for `services, materials and monies provided for, on behalf of, or in connection with the premises.'" Furthermore, in Heimbrock, the defendants had "only requested money damages for such value" and had "not alleged the existence of an agreement, for example, that unconditionally guarantees payment of all obligations owed." Id. The Heimbrock defendants did not "allege a specific dollar amount for mortgage payments and the cost of improvements made to the premises over the period of time they occupied the premises. Even if they did allege a sum certain . . . the debt would not be liquidated because such an amount was not alleged by agreement of the parties or by operation of law." Id. The court struck the special defense because the debt was not affirmatively alleged to be presently due and owing. Id.
See also GMAC Mortgage Corp. v. Nieves, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 98 0164925 (January 29, 1999, Tobin, J.) ("strik[ing] the defendants' setoff claims because they are legally insufficient to make out a claim for a setoff as they do not assert debts which are presently due the defendants"); National Grange Mutual Ins. Co. v. Berkshire Builders, Inc., Superior Court, judicial district of Hartford-New Britain at New Britain, Docket No. CV 93 0459497 (August 9, 1994, Goldberg, S.J.) (striking a setoff claim that is "contingent, disputed and unliquidated").
The facts and reasoning of the Heimbrock decision are relevant in the resolution of the present motion to strike. Just as in Heimbrock, the defendant in this action has not alleged that the plaintiff owed him a legal obligation at the time the action was commenced, and it is apparent from the language of the special defense that the alleged debt is contingent and unliquidated. The defendant claims the right to a setoff only in the event that he is found liable to the plaintiff in this action. No allegation is made of a presently due debt. Taking into account both the allegations of the complaint and the special defense, this court concludes that the plaintiff has not properly alleged a legal setoff.
The plaintiff also argues that if the defendant instead intended to plead an equitable setoff, the ninth special defense is nevertheless legally insufficient. "In Connecticut, a setoff may be legal or equitable in nature . . . When the statutes governing legal setoff do not apply, a party may be entitled to equitable setoff, nonetheless, only to enforce the simple but clear natural equity in a given case." (Internal quotation marks omitted.) Croall v. Kohler, 106 Conn.App. 788, 791, 943 A.2d 1112 (2008). "Equitable setoff applies to cases where, because of the nature of the claim or the situation of the parties, justice cannot be obtained by a separate action." (Internal quotation marks omitted.) Housing Development Fund, Inc. v. 130 Main Street Development, LLC, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 08 5007937 (March 26, 2009, Mintz, J.)
The plaintiff argues that the defendant has not properly pled a special defense of equitable setoff because "there is no reason whatsoever that this claim cannot be the subject of a separate action." The court agrees that the defendant has not pled an equitable setoff, and this is a further reason to grant the motion to strike. See, e.g., Shoreline Bank Trust Co. v. Leninski, Superior Court, judicial district of New Haven, Docket No. CV 92 0335561 (March 19, 1993, Celotto, J.) ( 8 Conn. L. Rptr. 522, 523) (striking a setoff claim where the defendants did not plead that the plaintiff was indebted to them and did not argue that justice could not be obtained by a separate action); First Constitution Bank v. Veldhuis, Superior Court, Judicial District of Stamford-Norwalk at Stamford, Docket No. CV 89 0099107 (March 18, 1991, Katz, J.) ( 3 Conn. L. Rptr. 795, 796) (striking an equitable setoff where "[t]he defendants have failed to allege facts that their `setoff' claim falls within the limits of recognized equitable principles").
Thus, the court determines that the ninth special defense fails to plead sufficient facts for a legal or equitable setoff.
ORDER
For the foregoing reasons, the motion to strike the ninth special defense is granted.