Opinion
No. CV06 5003255 S
September 20, 2007
MEMORANDUM OF DECISION DEFENDANTS' MOTION TO STRIKE #108
The defendants, collectively, pursuant to Practice Book §§ 10-39 and 10-42 have filed a motion to strike Counts One, Three, Four and Five of the plaintiff's amended complaint in their entirety and Count Two, as to the defendant Tarshis only. Count One alleges fraud in the inducement as to all defendants. Count Two alleges a breach of fiduciary duties as to all defendants. Count Three alleges unjust enrichment as to both Sweedler defendants and the defendant Tarshis. Count Four alleges a breach of contract as to both Sweedler defendants. Count Five alleges conversion as to both Sweedler defendants. The subject action was commenced in June 2006. On October 10, 2006 the court (Radcliffe, J.) Sustained twelve of fourteen objections that the plaintiff made in response to a Request to Revise filed by the defendants. The amended complaint, which is the subject of this Motion to Strike was flied thereafter.
The amended complaint is dated December 6, 2006.
I Legal Standard: 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.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). In ruling on a motion to strike, the trial court construes the facts in the complaint in the manner most favorable to sustaining its legal sufficiency. Id. "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Thus, [the court] assume[s] the truth of both the specific factual allegations and any facts fairly provable thereunder. In doing so, moreover, [the court] read[s] the allegations broadly, rather than narrowly." (Citation omitted; internal quotation marks omitted.) Craig v. Driscoll, 262 Conn. 312, 321, 813 A.2d 1003 (2003). Furthermore, "[i]n ruling on a motion to strike, the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997).
II The Complaint
Prior to discussing the claims of the defendants as contained in their motion to strike, it is helpful to summarize the factual claims of the plaintiff, as the court is limited to the facts alleged in the complaint Faulkner v. United Technologies Corp., supra, 240 Conn. 580.
The complaint alleges that the companies who are defendants in this action were affiliated business entities involved in the design, sale and distribution of clothing apparel for men and women. The defendants J. Sweedler and W. Sweedler were majority interest holders in the companies and in the control and management of the companies. The defendant Tarshis, an attorney, served as the Senior Vice President and General Counsel of the companies and also provided legal advice to the Sweedlers. From 2001 to 2004 the plaintiff invested an aggregate of $2,500,000 in one or more of the companies. In exchange for this investment the plaintiff became a 10% shareholder in each of the companies. In or about 2001, Windsong Allegiance Group (WAG) through a wholly-owned subsidiary named JBC Holding, LLC, acquired ownership of the following companies: Joe Boxer Company, LLC, Joe Boxer Licensing, LLC, and JBC Canada Holdings, LLC. These companies, along with JB Canada, are collectively referred to as the "Joe Boxer Group." In pertinent part, the Joe Boxer Group owned, and during the relevant period, possessed all rights associated with the Joe Boxer group of trade names and trade marks.
In 2002, WAG, either directly or through one or more entities within the Joe Boxer Group, entered into a licensing agreement granting "Kmart Stores" the exclusive right to sell Joe Boxer brand apparel. The royalties generated from that agreement became the principal source of income for WAG. From 2001 through June 2005, the only sums of money that the plaintiff received from any of the companies were in the form of member distributions, salary for a limited time and principal, plus agreed-upon interest in repayment of certain loans that the plaintiff made to one or more of the companies. At various times from 2001 through 2006, the plaintiff complained that his membership distributions from the companies were below that which had been promised to him by Sweedler at the time of the plaintiff's initial investments. The plaintiff requested access to, or copies of the books, records and financial statements of the companies. These requests were denied by J. Sweedler based upon purported grounds that it was the policies of the companies to deny access to these materials to members.
In 2005, the defendants J. Sweedler and W. Sweedler began negotiating with the Iconix Brand Group, Inc. (Iconix), for the acquisition by Iconix of the rights to the Joe Boxer group of trade names and trade marks, together with all other assets of the Joe Boxer Group. The negotiations culminated in an asset purchase transaction referred to by the plaintiff as the "Iconix Acquisition." Pursuant to the Iconix Acquisition, Iconix acquired the hereinbefore assets and rights by paying to WAG either directly or through entities in the Joe Boxer Group, the sum of $40,000,000. Iconix also transferred to WAG 4,350,000 shares of Iconix stock, and Iconix assumed certain liabilities of the Joe Boxer Group.
Prior to the closing date for the Iconix Acquisition, the Sweedler defendants and the defendant Tarshis, "acting in concert with one another, created the false impression to the plaintiff that the plaintiff's written consent to the transaction was needed on an emergency basis." To induce the plaintiff to consent to the Iconix Acquisition, the plaintiff alleges in his amended complaint that the Sweedlers and Tarshis, individually and on behalf of the companies, made the following representations to the plaintiff:
a. Allegiance apparel and JB Canada had assets of negligible value;
b. WAG's only viable asset was the rights to the Joe Boxer group of trade names, trade marks and all related contracts, particularly the licensing agreement with the Kmart stores;
c. Plaintiff's capital accounts in each of the companies had been depleted;
d. As a result of the foregoing, the closing of the Iconix Acquisition and the payment of his fair share of the proceeds, thereof, would have the effect of plaintiff's redeeming his membership interests in WAG for the fair and reasonable value thereof.
e. Following the closing of the Iconix Acquisition, plaintiff would receive a lump sum payment of cash and a certain amount of Iconix stock, which would have an aggregate value equivalent to 10% of the proceeds of the Iconix Acquistion, which value would be the functional equivalent of the fair and reasonable value of the plaintiff's membership interest in WAG.
f. The Sweedlers and Tarshis had, since the plaintiff joined the companies, kept the corporate and financial books and records of the companies in accordance with generally accepted accounting principles, and consistent with their responsibilities to the plaintiff.
On July 22, 2005, the plaintiff was called into the companies' offices on an emergency basis by J. Sweedler, who informed the plaintiff to meet with Tarshis to sign necessary "closing documents." Tarshis allegedly informed the plaintiff that the numerous pages of documents were "innocuous in nature," but necessary for the plaintiff to receive the amount he was entitled to as a result of the pending Iconix Acquisition and, by extension, the fair and reasonable value of the plaintiff's membership interests in the companies. At Tarshis' request the plaintiff looked only at the signature pages of the documents and then signed the documents. The last document the plaintiff was requested to sign was a two-page letter dated July 15, 2005 is referred to as the "Redemption Letter," pursuant to which (a) plaintiff's interest in WAG and Allegiance Apparel Group (AAG) purported to be redeemed by those companies out of the proceeds of the Iconix Acquistion, with the plaintiff to receive $1,402,357 plus 412,250 shares of restricted stock in Iconix, and (b) the plaintiff's receipt thereof, purported to be "in full and complete satisfaction of [plaintiff's] entire membership interests" in WAG and AAG.
The plaintiff claims that all substantive provisions of the Redemption Letter were set forth on its first page, and only after the plaintiff signed the second page, was he permitted by Tarshis to view the first page. In all of the many documents signed by the plaintiff at this meeting with Tarshis, this first page of the Redemption Letter was the only place where the amount of money and stock to be furnished to the plaintiff, as a result of the Iconix Acquistion, appeared. When the plaintiff viewed the first page he objected and these amounts were significantly less than what he had been promised as a result of the Iconix Acquisition. When the plaintiff objected Tarshis took the Redemption Letter from the plaintiff and referred the plaintiff to J. Sweedler. The plaintiff complained to J. Sweedler that he had been coerced into signing the document under false pretenses and duress, to which J. Sweedler advised the plaintiff to "get a lawyer."
The amended complaint alleges that following the Iconix Acquisition, the Sweedler defendants received cash distributions from the companies and Iconix stock with an aggregate value that was disproportionately large compared to the Sweedlers' ownership interest in the companies, at the plaintiff's expense. Additionally, as a result of the closing of the Iconix Acquisition, W. Sweedler gained a lucrative position at Iconix of Executive Vice President and Tarshis gained a lucrative position at Iconix as Senior Vice President for Business Affairs, Associate Counsel and General Counsel of what became that company's Joe Boxer division.
By way of his claims for relief, the plaintiff is seeking to have the Redemption Letter deemed null and void to the extent that it purports to constitute a full satisfaction of the plaintiff's interest in the companies or a waiver of the plaintiff's claim for a full accounting of the financial records and dealings of the companies. The plaintiff also seeks an accounting of all financial records and dealings of each of the companies from 2001 to the present. Finally, the plaintiff seeks actual and consequential damages.
A. Fraud in the Inducement
The plaintiff alleges that at the time the Sweedlers and Tarshis made the representations to the plaintiff, as set forth herein, they knew that they were false. The plaintiff alleges these defendants had throughout the course of plaintiff's ownership interests in the companies (a) used assets of the companies for personal, family and other non-business reasons; (b) had commingled the subject companies' funds with the funds of other companies in which the plaintiff had no interests, and in doing so, the defendants applied these funds to cover losses by the other entities, resulting in the artificial suppression of the plaintiff's capital account; and (c) they kept the companies' books and records in an inaccurate manner to improperly reduce the Sweedlers' tax liabilities. The plaintiff also alleges that the amount paid to the plaintiff in connection with the transaction that purported to be set forth in the Redemption Letter did not constitute a 10% share of the Iconix Acquisition, inasmuch as the Sweedlers failed to account for the plaintiff's 10% interest in JB Canada. Additionally, the Sweedlers improperly deducted from those proceeds various other items. The plaintiff claims that the Sweedlers and Tarshis, on their own behalf and on behalf of the companies made representations to the plaintiff with the intent of deceiving the plaintiff and inducing the plaintiff to consent to the Iconix Acquisition and to sign the Redemption letter. The plaintiff without knowledge of the falsity of the representations and in reliance upon them, did consent to the Iconix Acquisition and did sign the Redemption Letter, all to his financial loss.
The elements of fraudulent misrepresentation are as follows: (1) a false representation must be made as to a statement of fact; (2) the statement was untrue and known by the defendant to be untrue; (3) the statement was made to induce the plaintiff to act; and (4) the plaintiff acted on the false representation to her detriment. Wellington Systems, Inc. v. Redding Group, Inc., 49 Conn.App. 152, 164-65, 714 A.2d 21 (1998); Dorsey v. Mancuso, 23 Conn.App. 629, 633, 583 A.2d 646 (1990), cert. denied, 217 Conn. 809, 585 A.2d 1234; Kavarco v. T.J.E., Inc., 2 Conn.App. 294, 295-96, 478 A.2d 257 (1984). In response to the defendants argument that certain alleged misrepresentations in the amended complaint are insufficient as they relate to "future" conduct, the court directs the defendants to Paiva v. Vanech Heights Construction Co., 159 Conn. 512, 515, 271 A.2d 69 (1970). "Although the general rule is that a misrepresentation must relate to an existing or past fact, there are exceptions to this rule, one of which is that a promise to do an act in the future, when coupled with a present intent not to fulfil the promise, is a false representation." (Citations omitted.) Id. A review of the amended complaint leads the court to conclude that the plaintiff has sufficiently pleaded an action for fraudulent inducement. The motion to strike Count One is denied.
B. Breach of Fiduciary Duty
Count Two alleges a breach of fiduciary duty. Plaintiff alleges that as principals and/or officers of the companies, the Sweedlers and Tarshis owed an elevated, fiduciary duty to act in the plaintiff's best interests. By engaging in the acts recited earlier herein, the Sweedlers and Tarshis breached their fiduciary duties to the plaintiff.
"[A] prerequisite to finding a fiduciary duty is the existence of a fiduciary relationship . . . Our Supreme Court has chosen to maintain an imprecise definition of what constitutes a fiduciary relationship in order to ensure that the concept remains adaptable to new situations . . . Consequently, under Connecticut law, a fiduciary or confidential relationship is broadly defined as a relationship that is "characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other. The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him." (Internal citations omitted, internal quotation marks omitted.) Ahern v. Kappalumakkel, 97 Conn.App. 189, 194, 903 A.2d 266 (2006).
Whether Tarshis or the Sweedlers were actually in a fiduciary relationship with the plaintiff is a question of fact, and if so, whether these defendants breached a fiduciary relationship is also a question of fact. However, in deciding the merits of a motion to strike, the court is not determining issues of fact. "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." Mingachos v. CBS, Inc., 196 Conn. 91, 108, 491 A.2d 368 (1985). Upon deciding a motion to strike, the trial court must construe the "plaintiff's complaint in [a] manner most favorable to sustaining its legal sufficiency." Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991).
The plaintiff has pleaded that Tarshis is an attorney and that the plaintiff was directed to Tarshis by J. Sweedler so that Tarshis could instruct the plaintiff as to what documents the plaintiff needed to sign in order that the Iconix Acquisition go forward. This was a multi-million dollar business transaction. The defendant Tarshis, an attorney, served as the Senior Vice President and General Counsel of the companies and also provided legal advice to the Sweedlers. The plaintiff has pleaded that upon the instructions and in reliance on the advice of Tarshis, he signed the Redemption Letter prior to reading the contents of the first page. This resulted in alleged financial detriment to the plaintiff and in enhanced financial benefits for Tarshis. An officer of a corporation occupies fiduciary relationship both to the business entity and to the entity's owners and is bound to use the utmost good faith and fair dealing with the entity and its owners. See, e.g. Katz Corporation v. T.H. Canty Co., 168 Conn. 201, 207, 362 A.2d 975 (1975); Osborne v. Locke Steel Chain Co., 153 Conn. 527, 534, 218 A.2d 526 (1965). The plaintiff has sufficiently pleaded a cause of action for breach of fiduciary duty. The motion to strike Count Two is denied.
C.
Count Three alleges unjust enrichment in that the plaintiff was "unjustly and unfairly deprived" of the fair and reasonable value of his membership interests in the companies by the actions of the defendants, who "unjustly and unfairly benefitted" from their actions. Unjust enrichment is a common-law principle of restitution that is a noncontractual means of recovery without a valid contract. Sidney v. DeVries, 215 Conn. 350, 351 n. 1, 575 A.2d 228 (1990). Consistent with the principles of equity, unjust enrichment is a broad and flexible remedy. Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 283, 649 A.2d 518 (1994). "A plaintiff seeking recovery for unjust enrichment must prove (1) that the defendants were benefitted, (2) that the defendants unjustly did not pay the [plaintiff] for the benefits, and (3) that the failure of payment was to the [plaintiff's] detriment."(Internal citations omitted; internal quotation marks omitted.) Marlin Broadcasting v. Law Office of Kent Avery, 101 Conn.App. 638, 648-49, 922 A.2d 1131 (2007).
"Unjust enrichment is a legal doctrine to be applied when no remedy is available pursuant to a contract . . . Recovery is proper if the defendant was benefitted, the defendant did not pay for the benefit and the failure of payment operated to the detriment of the plaintiff." (Internal quotation marks omitted.) Russell v. Russell, 91 Conn.App. 619, 637-38, 882 A.2d 98, cert. denied, 276 Conn. 924, 888 A.2d 92, cert. denied, 276 Conn. 925, 888 A.2d 92 (2005); see 26 S. Williston, Contracts (4th Ed. 2003) § 68:5, p. 58. "[A] right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another." (Internal quotation marks omitted.) Gagne v. Vaccaro, 255 Conn. 390, 408, 766 A.2d 41 (2001).
"Determining whether the equitable doctrines of quantum meruit and unjust enrichment are applicable in any case requires a factual examination of the particular circumstances and conduct of the parties. Somers v. Bush, 283 Conn. 396, 407 (2007); See also, Vertex v. Waterbury, 278 Conn. 557, 573, 898 A.2d 178 (2006) (describing standard for unjust enrichment). "[T]he trial court's determination of whether unjust enrichment is available as a means of recovery requires a factual examination, and the trial court's determination of the exact amount of recovery under the doctrine, namely, the value of benefit derived from the plaintiff's actions, is a question of fact." Somers v. Bush, supra 283 Conn. 409.
The defendants argue that the plaintiff's claim for unjust enrichment is not "viable" because the plaintiff's entire action rests on the terms of an express contract. The defendants' argument fails. "Parties routinely plead alternative counts alleging breach of contract and unjust enrichment, although in doing so, they are entitled only to a single measure of damages arising out of these alternative claims. Under this typical belt and suspenders approach, the equitable claim is brought in an alternative count to ensure that the plaintiff receives some recovery in the event that the contract claim fails." Nora Stein v. Horton, 99 Conn.App. 477, 485, 914 A.2d 606 (2007). Accordingly, the motion to strike Count Three alleging unjust enrichment is denied.
D. Breach of Contract
In Count Four the plaintiff alleges a breach of contract. The plaintiff claims as consideration for the redemption of his membership interests in the subject companies, he was promised 10% of the proceeds of the Iconix Acquisition. The plaintiff claims as a result of the breach of that promise he was given a sum that was significantly less than 10% of said proceeds.
The defendants move to strike this count, first, because it is allegedly contrary to the terms of the integrated Redemption Letter and the parol evidence rule bars the use of extrinsic evidence to vary or contradict the terms of an integrated, written contract. The defendants claim that the plaintiff's breach of contract claim is predicated upon an alleged oral "promise" to redeem plaintiff's interests for an amount that is different from the amount specified in the Redemption Letter.
Second, the defendants claim the breach of contract count fails because the plaintiff does not allege the identity of the parties to the alleged agreement. The plaintiff must allege the formation of an agreement and that necessarily includes the identity of the parties to the agreement. The defendants state that the plaintiff's complaint does not identify who made the alleged oral promise to redeem his shares for 10% of the proceeds of the sale of the companies' assets.
Third, the defendants argue that the plaintiff's acceptance of the sums detailed in the Redemption Letter satisfied any and all obligations the defendants may have had under any prior oral agreements. Thus, the "plaintiff agreed to accord and satisfaction, or substitute agreement, modifying the price that the defendants were to pay for the plaintiff's membership interests."
The defendants, in their Memorandum of Law state that the plaintiff received a cash payment of $1,402,357.00 and 412,250 shares of Iconix stock, without protest, in exchange for his interests in the companies. A review of the amended complaint and the plaintiff's memorandum of law reveals no reference or mention of an amount of cash and/or stock received by the plaintiff, or that, if the plaintiff did at some time receive cash and stock, that its receipt was "without protest."
Accord and satisfaction is a special defense. See Practice Book § 10-50, which reads in relevant part as follows:
No facts may be proved under either a general or special denial except such as show that the plaintiff's statements of fact are untrue. Facts which are consistent with such statements but show, notwithstanding, that the plaintiff has no cause of action, must be specially alleged. Thus, accord and satisfaction, . . . must be specially pleaded.
For a useful discussion of the doctrine of accord and satisfaction see the decision in Tolland Enterprises v. Scan-Code, Inc., 239 Conn. 326, 684 A.2d 1150 (1996).
The plaintiff, in opposition, argues that the amended complaint plainly identifies that "the Redemption" of the plaintiff's membership interests as the nature of the transaction that forms the basis of Count Four. The plaintiff does not claim a contractual obligation between himself and any of the individual defendants. The plaintiff states that Count Four is based upon the plaintiffs having been promised by the Sweedler defendants, on behalf of the companies, that the plaintiff would be paid an amount equal to 10% of the proceeds of the Iconix Acquisition, as consideration for the plaintiff's membership interest in Windsong Allegiance, Alliance Apparel and JB Canada. In breach of that promise, which was not reduced to writing, the plaintiff received an amount that was less than 10% of the proceeds. Further, the Redemption Letter was never meant to memorialize the oral contract of the parties, and, in fact, no mention was made in the Redemption Letter of JB Canada.
The parol evidence rule is "premised upon the idea that when the parties have deliberately put their engagements into writing, in such terms as import a legal obligation, without any uncertainty as to the object or extent of such engagement, it is conclusively presumed, that the whole engagement of the parties, and the extent and manner of their understanding, was reduced to writing. After this, to permit oral testimony, or prior or contemporaneous conversations, or usages [etc.], in order to learn what was intended, or to contradict what is written, would be dangerous and unjust in the extreme . . ."
Colliers, Dow Condon, Inc. v. Schwartz, 77 Conn.App. 462, 466-67, 823 A.2d 438 (2003).
The parol evidence rule does not of itself, therefore, forbid the presentation of parol evidence, that is, evidence outside the four corners of the contract concerning matters covered by an integrated contract, but forbids only the use of such evidence to vary or contradict the terms of such a contract. Parol evidence offered solely to vary or contradict the written terms of an integrated contract is, therefore, legally irrelevant. When offered for that purpose, it is inadmissible not because it is parol evidence, but because it is irrelevant. By implication, such evidence may still be admissible if relevant . . . to show mistake or fraud . . . [This] recognized [exception is], of course, only [an example] of [a situation] where the evidence . . . tends to show that the contract should be defeated or altered on the equitable ground that relief can be had against any deed or contract in writing founded in mistake or fraud.
(Citations omitted; internal quotation marks omitted.) Id.
The plaintiff has alleged elements of fraud and mistake in this matter. Whether or not parol evidence regarding alleged facts surrounding any contract in this matter will be allowed at trial, is not an issue to be determined by this court on a motion to strike. Additionally, Count Four, numbering fifty-three paragraph sufficiently states and advises the defendants of the parties to the both the Redemption Letter and the oral "promise," to allow Count Four to survive a motion to strike. The motion to strike Count Four is denied.
E. Conversion
The conversion count alleged by the plaintiff is brought against the two Sweedler defendants and relates only to the proceeds of the plaintiff's 10% interest in JB Canada. The plaintiff claims he was the rightful owner of that membership interest, and the membership interest was liquidated by these defendants without the plaintiff's authorization. The plaintiff further claims that these defendants took and kept the cash plus Iconix stock for which the plaintiff's interest was sold. The property that is the subject of this claim is not the membership interest of the plaintiff. It is the cash and stock proceeds of the Sweedlers' sale of that interest. The plaintiff argues that the cash and stock are tangible property.
The tort of [c]onversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner's rights. Thus, [c]onversion is some unauthorized act which deprives another of his property permanently or for an indefinite time; some unauthorized assumption and exercise of the powers of the owner to his harm. The essence of the wrong is that the property rights of the plaintiff have been dealt with in a manner adverse to him, inconsistent with his right of dominion and to his harm . . . The term owner is one of general application and includes one having an interest other than the full legal and beneficial title . . . The word owner is one of flexible meaning, and it varies from an absolute proprietary interest to a mere possessory right . . . It is not a technical term and, thus, is not confined to a person who has the absolute right in a chattel, but also applies to a person who has possession and control thereof.
(Internal citations omitted; internal quotation marks omitted.) Deming v. Nationwide Mutual Insurance Co., 279 Conn. 745, 770-71, 905 A.2d 623 (2006). "Under our case law, money can clearly be subject to conversion." Id., 771. "The plaintiffs must establish, however, legal ownership or right to possession of specifically identifiable moneys." Id., 772; see also, Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 650, 804 A.2d 180 (2002). "Conversion may arise subsequent to an initial rightful possession." Suarez-Negrete v. Trotta, 47 Conn.App. 517, 521, 705 A.2d 215 (1998); Maroun v. Tarro, 35 Conn.App. 391, 396, 646 A.2d 251, cert. denied, 231 Conn. 926, 648 A.2d 164 (1994).
However, an action for conversion of funds may not be maintained to satisfy a mere obligation to pay money. "It must be shown that the money claimed, or its equivalent, at all times belonged to the plaintiff and that the defendant converted it to his own use." (Emphasis added.) Deming v. Nationwide Mutual Ins. Co., supra, 279 Conn. 772. "[T]he requirement that the money be identified as a specific chattel does not permit as a subject of conversion an indebtedness which may be discharged by the payment of money generally . . . A mere obligation to pay money may not be enforced by a conversion action . . . and an action in tort is inappropriate where the basis of the suit is a contract, either express or implied." (Citations omitted.) Id. "Consistent with this rule, in our case law sustaining a cause of action wherein money was the subject of the conversion or theft, the plaintiffs in those cases at one time had possession of, or legal title to, the money." Id.
In the present case, the plaintiff never had possession of the money or the stock in question. The monies and stock claimed were proceeds of the sale of the plaintiff's 10% interest in JB Canada. This is a claim that the Sweedlers were obligated to pay money and the stock to the plaintiff. The stock in this matter is the equivalent of money. See Id., 772. The plaintiff's claim of conversion is a claim that the Sweedlers were obligated to pay him money and that they failed to do so. It is not the proper subject of a conversion claim. Accordingly, the motion to strike Count Five is granted.
Summary
The motion to strike is denied as to Counts One, Two, Three and Four. It is granted as to Count Five.