Opinion
No. CV 044003913
December 8, 2005
MEMORANDUM OF DECISION
I. FACTS
On April 1, 2005, the plaintiff, Anne A. Anderson filed an eleven-count revised complaint against the defendants James K. O'Brien, Mauriane S. O'Brien and Peter K. Manko. According to the allegations of the revised complaint, the plaintiff is an elderly, childless widow that was living alone in her home located in a desirable neighborhood of Guilford. Sometime in the year 2002, the O'Brien defendants (who are husband and wife) befriended her with the purpose of convincing her to sell them her home. The plaintiff had no desire to sell her home, as she had previously turned down offers to purchase her home by developers interested in developing a subdivision located to the west of the plaintiff's home. Her lack of desire to sell is evidenced by the fact that she never listed the property for sale.
The O'Briens continued in their efforts to buy the plaintiff's home and eventually included in their offer to purchase, an offer to build a cottage for the plaintiff on the property where she could live out her life and be treated as part of the family. The O'Briens agreed to assume all responsibility for the construction of the cottage. The O'Briens also arranged for their lawyer, the defendant Peter I. Manko, to represent the plaintiff in the real estate transaction.
On May 28, 2003, the plaintiff signed a real estate contract in which she agreed to sell the property to the O'Brien defendants. The contract called for a closing date of August 1, 2003. The contract was drafted by the defendant Manko, and is attached to the plaintiff's original complaint as Exhibit A. On July 3, 2003, the O'Briens came to the plaintiff's home and told her they were picking her up to take her to the closing, which was scheduled for 5:00 that afternoon in Manko's office. The plaintiff was ill on that day and was not expecting to attend a closing.
When she arrived at Manko's office she inquired of both Manko and the O'Briens as to whether she should have her own attorney and she was reassured that Manko was a good lawyer and that he would take care of all of the parties, including the lender. According to the plaintiff, she did not read any of the closing documents that were placed before her, nor were they read to her. Notwithstanding her concerns, she signed the documents. Although the contract contained a clause making reference to the plaintiff's right to remain on the property residing in the cottage, none of the closing documents referred to the plaintiff's life estate in the property.
The plaintiff further alleges that after the closing, the O'Briens changed their treatment of her. They were rude and cruel and kept all details of the construction of her cottage from her. She was constantly reminded that the property did not belong to her anymore but rather to the O'Briens. Although a structure was built for her, it was not a cottage, but rather a small barn like structure that could not accommodate her furnishings.
The plaintiff's revised complaint contains eleven counts. Counts one through six are against the O'Brien defendants and allege fraudulent representation, breach of contract and intentional or negligent infliction of emotional distress.
Counts seven through eleven are against the defendant Peter I. Manko. Count seven alleges legal malpractice, count eight alleges recklessness, count nine alleges fraudulent representation, count ten alleges that Manko violated CUTPA and count eleven alleges a breach of fiduciary duty by Manko.
On June 7, 2005, Manko filed a motion to strike counts eight, ten and eleven of the plaintiff's revised complaint. Manko also filed a memorandum of law in support of the motion to strike. On July 6, 2005, the plaintiff filed a memorandum of law in opposition to the motion to strike. On August 26, Manko filed a reply to the plaintiff's memorandum. On August 29, 2005, the matter was heard on short calendar.
At the short calendar hearing, the plaintiff requested permission to file a supplemental memorandum of law in response to the one filed by Manko on August 26, 2005. The court granted the request and the plaintiff filed a memorandum of law on August 30, 2005. On September 6, 2005, counsel for the plaintiff filed a supplemental memorandum of law which was followed by a memorandum filed by Manko on September 7, 2005.
II. ISSUES IN DISPUTE
Manko moves to strike the eighth count, recklessness, asserting that the plaintiff has not alleged facts sufficient to state a cause of action. In support of this position, Manko states that the plaintiff is relying on the allegations contained within the negligence count and has not pled sufficient facts to establish a recklessness count.
In response, the plaintiff maintains that the facts contained within her negligence count "spell out a more serious cause" than just negligence. Therefore, it is not necessary for the plaintiff to assert any additional facts, since the facts alleged in the negligence count clearly establish the elements of a recklessness count.
Manko also moves to strike the tenth count, CUTPA, asserting that the count is not premised on the commercial or entrepreneurial aspects of Manko's law practice. Moreover, Manko argues that even if the court should permit a CUTPA claim against him, the plaintiff has failed to allege with particularity the necessary elements of such a claim.
The plaintiff responds to this argument by stating that Manko's willingness to represent the buyer, the bank and the seller in a real estate closing clearly implicates the commercial aspects of the practice of law. After all, this conduct establishes that Manko "was motivated by being able to triple-dip."
Finally, Manko moves to strike the eleventh count, breach of a fiduciary duty, asserting that the plaintiff has not asserted any facts implicating Manko's morality, honesty and or loyalty, but instead is relying on the allegations contained within the negligence count. Manko argues that the facts as alleged fail to state a cause of action for breach of a fiduciary duty.
The plaintiff counters by stating that once an attorney undertakes the representation of a client, a fiduciary duty is imposed upon the attorney. That duty, however, is not automatically breached because the attorney may have committed an act of professional negligence. According to the plaintiff, the facts alleged in the negligence count clearly establish that Manko's fiduciary duty to the plaintiff was breached.
III. STANDARD OF' REVIEW
"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). The role of the trial court in ruling on a motion to strike is "to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997). "It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Commissioner of Labor v. C.J.M. Services, Inc., 268 Conn. 283, 292, 842 A.2d 1124 (2004). Although "[a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged"; (Internal quotation marks omitted). Fort Trumbull Conservancy, LLC v. Alves, supra, 498. "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Commissioner of Labor v. C.J.M. Services, Inc., supra, 268 Conn. 292 . . . "[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 . . . [I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Thus, we assume the truth of both the specific factual allegations and any facts fairly provable thereunder. In doing so, moreover, we read the allegations broadly, rather than narrowly." Larobina v. McDonald, 274 Conn. 394, 876 A.2d 522 (2005) citing Craig v. Driscoll, 262 Conn. 312, 321, 813 A.2d 1003(2003).
IV DISCUSSION A. The Eighth Count: Recklessness CT Page 15796
In the eighth count of the complaint, entitled "Recklessness by the defendant Manko," the plaintiff restates the allegations contained in the seventh count, which is entitled "Legal Malpractice by defendant Manko." According to the allegations of the seventh and eighth counts, the defendant Manko prepared a contract for the sale of the plaintiff's property to the O'Brien defendants. He prepared the contract on behalf of both the plaintiff and the O'Brien defendants. According to the allegations in the complaint, the representation of the plaintiff in this transaction created an attorney-client relationship between Manko and the plaintiff. As a result, Manko owed the plaintiff the duty to represent her with reasonable care and diligence.
The plaintiff also alleges, in this count, that Manko knew, or should have known, that the plaintiff, who was ill on the day of the closing, inquired about whether she should have separate counsel and was reassured that Manko could represent all of the parties. The closing of the sale of the plaintiff's property took place in Manko's office at about 5:00 in the afternoon, at least one month before the date specified in the contract. As a result, the plaintiff alleges that she was rushed into the closing.
Furthermore, the plaintiff alleges that Manko failed to inform the lender of her life estate thereby allowing the lender to have an interest in the property superior to hers. In addition, he did not prepare a deed subject to the plaintiff's life estate. As a result, the plaintiff's life estate was not recorded on the land records.
The plaintiff alleges that these facts state a claim for recklessness. Manko objects stating that the facts as alleged merely support a claim for malpractice.
"While [courts] have attempted to draw definitional [distinctions] between the terms wilful, wanton or reckless, in practice the three terms have been treated as meaning the same thing . . . Wilful misconduct has been defined as intentional conduct . . . legal concepts of wanton, reckless, wilful, intentional and malicious conduct . . . A wilful act is one done intentionally or with reckless disregard of the consequences of one's conduct." (Internal citations omitted, internal quotations omitted.) Pane v. City of Danbury, 267 Conn. 669, 685 (Conn. 2004.)
After examining the alleged facts, and construing these facts in a light most favorable to the plaintiff, the court concludes that the plaintiff has pled a cause of action sounding in recklessness. The facts demonstrate that not only did Manko fail to exercise due care in the preparation of the legal documents on behalf of the plaintiff, but he also disregarded the consequences of his actions, as well as the rights of the plaintiff.
The allegations of the complaint go beyond asserting that an attorney's conduct fell below that of a reasonable attorney under the same circumstances. Here, the plaintiff, an elderly widow, was picked up at her home on the day of the closing by the buyers, who are clients of Manko. She did not know that the closing was to take place on that particular day since it was one month before the closing date that was designated in the contract. She was ill and it was late in the afternoon on the day of the closing. She questioned the appropriateness of proceeding with only one lawyer. The documents were not read to her before she signed them.
If these facts are proven at trial, they will establish something more than a failure to use the degree of care and skill which the ordinarily prudent attorney would use under similar circumstances. It will establish that this conduct took on the "aspect of highly unreasonable conduct, involving an extreme departure from ordinary care, in a situation where a high degree of danger is apparent . . . It is at least clear . . . that such aggravated negligence must be more than any mere mistake resulting from inexperience, excitement, or confusion, and more than mere thoughtlessness or inadvertence, or simply inattention . . . (internal citations omitted) Dubay v. Irish, 207 Conn. 518.
B. The Tenth Count: CUTPA
In the tenth count, the plaintiff alleges the same facts as those alleged in counts seven and eight. In addition, in paragraph thirty of the tenth count, the plaintiff asserts that the "representation of seller, purchaser and mortgagee in the same real estate sales transaction impacts upon the entrepreneurial aspects of the practice of law."
As a result, Manko's conduct allegedly violates CUTPA/Connecticut Unfair Trade Practices Act, General Statutes § CT Page 15798 42-110a et seq.) in that it is (1) "unlawful, offends public policy as it has been established by . . . Rules of Professional Conduct, (2) immoral, unethical, oppressive or unscrupulous, or (3) causes substantial injury to consumers of legal services."
Count Ten of Plaintiff's Amended Complaint, Paragraph 31.
In the recent case of Anderson v. Shoehorn, 89 Conn.App. 666, 674 (2005) 872 A.2d 928 the Appellate court stated: "In general, CUTPA applies to attorney conduct, but only as to the entrepreneurial aspects of legal practice . . . Professional negligence, or malpractice, does not fall under CUTPA . . . Although [m]any decisions made by attorneys eventually involve personal profit as a factor, but are not considered part of the entrepreneurial aspect of practicing law . . . the conduct of a law firm in obtaining businessand negotiating fee contracts does fall within the ambit of entrepreneurial activities. (Internal quotations omitted, internal citations omitted.)"
The facts in this case establish that the defendant Manko's conduct involves allegations which concern "obtaining business and negotiating fee contracts." This conduct must be tested against the `cigarette rule.'" It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons] . . . All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." (Internal citations omitted, internal quotation marks omitted.) Updike, Kelly Spellacy v. Beckett, 269 Conn. 613, 655 (2004) 850 A.2d 145.
A careful review of the allegations contained in the tenth count in a manner most favorable to the plaintiff leads the court to conclude that the plaintiff has pled sufficient facts to state a cause of action under CUTPA.
If the facts as alleged are proven, the plaintiff will have established that Manko violated Rule 1.7 of the Rules of Professional Conduct. This in turn would satisfy the first prong of the cigarette rule which requires a determination of whether the practice offends public policy. In this court's opinion the Rules of Professional conduct are a judicially conceived public policy because "[s]ince October 1986, the conduct of attorneys has been regulated . . . by the Rules of Professional Conduct, which were approved by the judges of the Superior Court and which superseded the Code of Professional Responsibility." Bergeron v. Mackler, 225 Conn. 391, 397, 623 A.2d 489 (1993).
Rule 1.7. of the Rules of Professional Conduct states in relevant part, "(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client . . ."
Also, the Supreme Court has found clear statements of public policy in the Rules of Professional Conduct in other instances. See MedValUSA Health Programs, Inc., v. Member Works, Inc., 273 Conn. 634, 659-60, 872 A.2d 423 (2005) (stating "[s]tatutes have not been the exclusive source from which we have found clear statements of public policy. We also have looked to city charters and, on one occasion, to the Rules of Professional Conduct.")
Referring to Schoonmaker v. Cummings Lockwood of Connecticut, P.C., 252 Conn. 416, 747 A.2d 1017 (2000).
Regarding the second and third prongs of the cigarette rule, the court concludes that the allegations within the complaint, if proven, will establish that the conduct was unethical, (thereby satisfying the second prong) as well as a practice that caused substantial injury to consumers and to competitors alike.
C. The Eleventh Count: Breach of a Fiduciary Duty
Manko argues that the plaintiff has failed to allege sufficient facts to support a claim of a breach of a fiduciary duty. It is his position that the facts as alleged in the complaint do not implicate his honesty, loyalty or morality, which are the hallmarks of a fiduciary duty.
"Professional negligence alone, however, does not give rise automatically to a claim for breach of fiduciary duty. Although an attorney-client relationship imposes a fiduciary duty on the attorney; . . . not everry instance of professional negligence results in a breach of that 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 . . . Professional negligence implicates a duty of care, while breach of a fiduciary duty implicates a duty of loyalty and honesty." (Internal citations omitted, internal quotations omitted.) Beverly Hills Concepts, Inc. v. Schatz and Schatz, 247 Conn. 48, 56, 717 A.2d 724 (1998).
The commentary to Rule 1.7 of the Rules of Professional Conduct states, in relevant part, that, "Loyalty is an essential element in the lawyer's relationship to a client." Here, the allegations include a claim that an elderly, and ill person was brought to Manko's office to sign a deed to her home. She was uncomfortable enough with the situation that she asked whether she should have her own attorney. Despite the plaintiff's expression of discomfort, Manko continued with the transaction, acting in the capacity of her attorney. He also presumably accepted the proceeds of the sale as her trustee.
As an attorney, Manko possessed a superior skill and expertise to those of the plaintiff. Pursuant to the Rules of Professional Conduct, he was under a duty of loyalty and trust to the plaintiff. The court concludes that the plaintiff has pled sufficient facts, as read in the light most favorable to the plaintiff, to support a claim of breach of a fiduciary duty.
Accordingly, the defendant's motion to strike counts eight, ten, and eleven of the plaintiff's revised complaint dated April 1, 2005, is hereby, denied.