Opinion
No. CV 095013196
November 19, 2010
MEMORANDUM OF DECISION MOTION TO STRIKE [#112]
I
On September 17, 2009, the plaintiff filed a nine-count complaint against the defendants, Royal Financing Services, LLC (RFS) and Maurizio D. Lancia, for damages allegedly sustained pursuant to the plaintiff's purchase of residential real estate. In his complaint, the plaintiff alleges the following facts. RFS is a brokerage company conducting business with various financial institutions to assist prospective borrowers in the application approval of residential home mortgages. RFS offered to provide mortgage brokering services to the plaintiff through Lancia and Jose Guzman, who were agents, servants and/or employees of RFS. The plaintiff was a first home buyer with diminished or limited income, poor credit history, no experience in purchasing a home, and spoke English as a second language. The defendants offered to sell a parcel of real property to the plaintiff located at 14 Hamast Avenue, Waterford, Connecticut (the property). The property contained many defects that the seller attempted to conceal. The defendants were aware of the property's defects, but represented to the plaintiff that the property had undergone extensive renovations. The defendants further represented to the plaintiff that the property had a fair market value of $330,000, which was untrue and known to be untrue by the defendants.
The plaintiff further alleges that the defendants actively targeted the plaintiff with knowledge that the plaintiff's weekly income and credit rating were insufficient to qualify him for the mortgage to purchase the property. RFS completed a residential loan application on behalf of the plaintiff, and knowingly made false representations in order to qualify the plaintiff for a loan to purchase the property. As a result of the defendants' conduct, the plaintiff has sustained monetary loss, foreclosure and loss of financial credit. Counts one, two, three, four and five of the plaintiff's complaint are brought against RFS, alleging claims for fraud, negligent misrepresentation, intentional misrepresentation, violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110b and breach of fiduciary duty, respectively. Counts six, seven and eight of the plaintiff's complaint are brought against Lancia, alleging claims for fraud, intentional misrepresentation and negligent misrepresentation, respectively. Count nine alleges a claim for civil conspiracy against both RFS and Lancia.
On March 15, 2010, the defendants filed a motion to strike all nine counts of the plaintiff's complaint. The defendants filed a memorandum of law in support of their motion. On April 30, 2010, the plaintiff filed an objection to the defendants' motion, accompanied by a memorandum of law.
A
Count One (Fraud against RFS), Count Three (Intentional Misrepresentation against RFS), Count Six (Fraud against Lancia) and Count Seven (Intentional Misrepresentation against Lancia)
The defendants posit that the claims for fraud and intentional misrepresentation should be stricken on the ground that the plaintiff failed to plead sufficient facts in support of his allegations. The plaintiff counters that he has properly pleaded allegations sufficient to maintain claims for fraud and intentional misrepresentation against the defendants.
"[A]t common law, fraudulent misrepresentation and intentional misrepresentation are the same tort." Kramer v. Petisi, 285 Conn. 674, 684 n. 9, 940 A.2d 800 (2008). "The essential elements of an action in [intentional) misrepresentation are (1) a false representation was made as a statement of fact; (2) it was untrue and known, to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon the false representation to his injury." (Internal quotation marks omitted.) Cadle Co. v. Ginsberg, 70 Conn.App. 748, 769, 802 A.2d 137, cert. denied, 262 Conn. 905, 810 A.2d 271 (2002).
In the present case, the plaintiff alleges that the defendants made false representations concerning the fair market value of the property, the plaintiff's monthly and yearly incomes and the property's condition, and that the defendants made said representations knowing they were untrue. The plaintiff further alleges that the representations were made by the defendants to induce the plaintiff to purchase the property, and that the plaintiff did rely upon the defendants' representations to his detriment by purchasing the property, thereby sustaining monetary loss, foreclosure and loss of financial credit. Construing the allegations in the plaintiff's favor, the count finds that the plaintiff has sufficiently pleaded claims for fraud and intentional misrepresentation against both defendants. As a result, the defendants' motion to strike counts one, three, six and seven of the plaintiff's complaint on the ground that the claims were insufficiently pleaded must be denied.
The defendants further contend that the plaintiff's claims for intentional misrepresentation should be stricken on the ground that the actions are repetitive of the plaintiff's claims for fraud. "There is no explicit appellate authority on the issue of the proper vehicle for the elimination of duplicative claims." Sandru v. Boyle, Superior Court, judicial district of New Haven, Docket No. CV 07 5014056 (September 3, 2008, Zoarski, J.T.R.) ( 46 Conn. L. Rptr. 238, 238). "A split of authority exists within the Superior Court regarding how the duplication of claims should be addressed . . . [A] majority of Superior Court cases . . . [have] held that [a] request to revise, and not a motion to strike, is the proper procedural device for deletion of duplicative pleadings." (Internal quotation marks omitted.) Id., 239. Practice Book § 10-35, by its terms, provides that "unnecessary" and "repetitious" allegations should be addressed via a request to revise. As a result, the court adopts the majority view that repetitious and duplicative allegations should be addressed in a request to revise, rather than a motion to strike. Therefore, the defendants' motion to strike counts three and seven of the plaintiff's complaint on the ground that the claims are duplicative of counts one and six must be denied.
B
Count Two (Negligent Misrepresentation against RFS)
The defendants argue that the plaintiff's claim for negligent misrepresentation against RFS should be stricken on the ground that the counts merely repeat the allegations alleged in the plaintiff's claims for intentional misrepresentation. The defendants further argue that the plaintiff failed to plead sufficient facts indicating that the negligent representations were knowingly made and specifically relied upon by the plaintiff, causing him to purchase the property. The plaintiff counters that he has provided sufficient allegations that the defendants either knew or should have known about the property defects and the false representations they made to the plaintiff.
[Our Appellate Court] has long recognized liability for negligent misrepresentation. [The Court has] held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth . . . The governing principles [of negligent misrepresentation] are set forth in . . . § 552 of the Restatement (Second) of Torts (1977): One who, in the course of his business, profession or employment . . . supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. (Internal quotation marks omitted.) Barton v. Bristol, 291 Conn. 84, 102-03, 967 A.2d 482 (2009).
In the present case, the plaintiff alleges in count two of his complaint that RFS made fraudulent misrepresentations concerning the fair market value of the property, the plaintiff's monthly and yearly incomes and the property's condition when it had the means of knowing or should have known that said representations were untrue. The plaintiff further alleges that as a first-time home buyer, the plaintiff reliance on the defendants' representations was reasonable. Construing the allegations in the plaintiff's favor, the count finds that the plaintiff has sufficiently pleaded a claim for negligent misrepresentation against RFS. As a result, the defendants' motion to strike count two on this ground must be denied.
C
Count Four (CUTPA against RFS), Count Five (Breach of Fiduciary Duty against RFS) and Count Nine (Civil Conspiracy against RFS)
The defendants contend that if the court strikes the plaintiff's claims for fraud and intentional misrepresentation, it must also strike the plaintiff's claims for CUTPA, breach of fiduciary duty and civil conspiracy on the ground that the alleged fraudulent conduct serves as the factual basis for said claims. The court denied the defendants' motion to strike the plaintiff's claims for fraud and intentional misrepresentation against both defendants, and therefore, the court must deny the defendants' motion to strike counts four, five and nine.
The defendants further argue that count five of the plaintiff's complaint should be stricken on the ground that the plaintiff failed to plead any facts to support the elements of a claim for breach of fiduciary duty against RFS. The plaintiff responds that he has sufficiently alleged a claim for breach of fiduciary duty.
"[A] fiduciary or confidential relationship 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." (Internal quotation marks omitted.) Biller Associates v. Peterken, 269 Conn. 716, 723, 849 A.2 847 (2004). "[A] mortgage broker has a fiduciary relationship with his client." (Internal quotation marks omitted.) LaSalle Bank National Assn. v. Bardales, Superior Court, judicial district of New London, Docket No. CV 08 5007137 (April 14, 2009, Devine, J.).
In the present case, the plaintiff alleges in count five of his complaint that RFS maintained a fiduciary relationship with the plaintiff as the plaintiff's mortgage broker, and RFS "[w]as under a duty to act in the plaintiff's best interest with regard to ascertaining a proper mortgage free from fraud or deceit," "[r]epresented to the plaintiff it could obtain a money mortgage based on his income and credit history," and "[s]ubmitted a false mortgage application without [the] [p]laintiff's knowledge reflecting improper income, net worth and liabilities." The plaintiff further alleges that the defendants' conduct breached its fiduciary duty to the plaintiff. Construing the allegations in the plaintiff's favor, the count finds that the plaintiff has sufficiently pleaded a claim for a breach of fiduciary duty against RFS. As a result, the defendants' motion to strike count five on this ground must be denied.
D
Count Six (Fraud against Lancia), Count Seven (Intentional Misrepresentation against Lancia) and Count Eight (Negligent Misrepresentation against Lancia)
Lancia further contends "that all of the claims against him should be stricken on the ground that General Statutes § 34-133 precludes liability against members of or managers of an LLC for action taken in their capacity as a member or manager thereof, or the acts of others who are employees [or] agents of the LLC." Dependants' Motion to Strike the Complaint, March 15, 2010, pp. 9-12 [112].
The statute provides in relevant part: "Except as provided in subsection (b) of this section, a person who is a member or manager of a limited liability company is not liable, solely by reason of being a member of manager, under a judgment, decree or order of a court, or in any other manner, for a debt, obligation or liability of the limited liability company, whether arising in contract, tort or otherwise or for the acts and omissions of any other member, manager, agent or employee of the limited liability company." General Statutes § 34-133(a).
Lancia misreads the statute. In the complaint, the wrongs attributed to Lancia are not "solely by reason of [his] being a member or manager" of RFS. The complaint only describes Lancia as an agent, servant and/or employee of RFS. The complaint does not allege that Lancia is/was a member or manager of RFS.
Lancia's reliance on § 34-133(a) also fails because he relies on facts not alleged in the complaint. "It is well established that a motion to strike must be considered within the confines of the pleadings and not external documents . . . We are limited . . . to a consideration of the facts alleged in the complaint. A `speaking' motion to strike [one imparting facts outside the pleadings] will not be granted." Zirinsky v. Zirinsky, 87 Conn.App. 257, 268 n. 9, 865 A.2d 488, cert. denied, 273 Conn. 916, 871 A.2d 372 (2005); see also Rowe v. Godou, 209 Conn. 273, 278, 550 A.2d 1073 (1988). "Where the legal grounds for . . . a motion [to strike] are dependent upon underlying facts not alleged in the plaintiff's pleadings, the defendant must await the evidence which may be adduced at trial, and the motion should be denied." (Internal quotation marks omitted.) Commissioner of Labor v. C.J. M. Services, Inc., 268 Conn. 283, 293, 842 A.2d 1124 (2004).
Definitive Connecticut Supreme Court case law demands that a member or manager of a limited liability company be liable for his tortuous conduct performed on behalf of the limited liability company. Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 140-46, 881 A.2d 937 (2005). The Ventres case specifically rejects Lancia's contention regarding § 34-133 affording an absolution for his conduct alleged herein. Based on the foregoing, the defendants' Motion to Strike counts six, seven and eight are denied.
III
Based on the foregoing, the court hereby denies the defendants' Motion to Strike.