Opinion
X08FSTCV156027843S
06-27-2017
James Callahan et al. v. Jill Callahan
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO STRIKE (#184)
Robert L. Genuario, J.
I. Introduction
In their second amended complaint (#178) the plaintiffs allege that the plaintiff James Callahan (James) and the defendant Jill Callahan (Jill) were married in 1987. In 2009 Jill commenced divorce proceedings and, following a trial in 2012, the court rendered judgment dissolving their marriage and imposing certain financial orders. According to the allegations the complaint in 1995 Jim formed the defendants Pentalpha Group, LLC, Pentalpha Funding, LLC and Pentalpha Capital, LLC collectively called Pentalpha or the companies. Under the companies' operating agreement Jill is a 51% member; Jim is a 49% member. The family court determined that the companies had a fair market value of $11,747,660 and the family court financial orders compelled Jill to transfer her entire membership interest in the companies to Jim within sixty days; Jim in turn was to pay Jill $6,000,000 either in cash or by way of purchase money note payable at the rate of $1,000,000 a year for six years. The complaint alleges that both the family court and the parties expected that Jim would sell all or a portion of his membership interest in the companies to fund the $6,000,000 obligation. Jim appealed the divorce judgment and the financial orders were automatically stayed. The complaint alleges that Jill maliciously engaged in a multi-year series of tortious acts designed to 1) harm the companies by damaging their value or rendering them unsaleable at any price, 2) erode Jim's control over the companies, 3) raise the risk that the companies could have difficulty meeting the obligations found in the regulatory or client control reviews and 4) make it difficult for Jim to make representations and warranties to potential purchasers related to Jill's unauthorized activities. The complaint provides some detail with regard to these more general allegations.
The plaintiffs bring this action in five counts. The first count by the companies alleges Jill's breach of fiduciary duty to the companies. The second count by Jim alleges tortious interference with a business expectancy. The third count by Jim alleges that the family court's financial orders imposed a duty of good faith and fair dealing on the parties that neither would do anything that would deprive the other of the benefits of those orders or hinder them in receiving those benefits other than instituting appropriate legal challenges such as appeals. In the third count Jim further alleges that Jill's conduct constitutes a breach of those duties of good faith and fair dealing. The fourth count by Jim alleges that Jill breached her fiduciary duty she allegedly owed to him. The fifth count by Jim alleges that Jill willfully and wantonly breached that fiduciary duty. The defendant has moved to strike the second and third counts.
II. Standards Governing a Motion to Strike
" The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of a complaint . . . to state a claim upon which relief could be granted." Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003) (Internal quotation marks omitted.) The proper method to challenge the legal sufficiency of a complaint is to make a motion to strike prior to trial. Gulack v. Gulack, 30 Conn.App. 305, 309, 620 A.2d 181 (1993).
" 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." Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006). (Internal quotation marks omitted.) " A motion to strike admits all facts well-pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997). (Emphasis in original; internal quotation marks omitted.)
III. The Motion to Strike the Second Count
The second count brought by Jim alleges that Jill by her conduct tortiously interfered with his " legally cognizable expectancy and the ability of the companies to be sold for $11,000,000 plus." The defendant moves to strike this count because Jim has failed to plead an actual or specific business relationship and because Jim has failed to plead that Jill had knowledge of a specific business relationship.
It is well established that the elements of a claim for tortious interference with business expectancies are: (1) a business relationship between the plaintiff and another party; (2) the defendant's intentional interference with the business relationship while knowing of the relationship; and (3) as a result of the interference, the plaintiff suffers actual loss. Hi Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 27, 761 A.2d 1268 (2000).
The case of Norden Systems, Inc. v. General Dynamics Corp., 2 Conn.L.Rptr. 766, 190 WL 264084 (Cioffi, J. 1990) is instructive. In 1990 in Norden Systems the court wrote:
Connecticut decisions remain unclear on the issue of whether a plaintiff must plead interference with a business expectancy with a specific third party to state a valid cause of action . . . Count three of the plaintiffs' complaint alleges that it expected to enjoy further economic advantages [in multiple ways and forms]. This allegation fails to specifically identify the third party or parties with whom Norden would enter into such subcontract programs. This court finds that, in order to satisfy the elements of tortious interference with perspective economic advantage, such specific identification of a third party is required. Because count three fails to make such specific identification it is legally insufficient.
More recently another Superior Court case citing Norden Systems came to the same conclusion. Deutsch v. Backus Corp., 51 Conn.L.Rptr. 337, 211 WL 522849 (Cosgrove, J. 2011) The Deutsche court held that the plaintiff did not allege a cognizable claim of interference with a business expectancy because the plaintiff did not identify a third party with whom the defendant interfered. The holding of these cases is consistent with the elements enumerated in appellate court decisions as necessary to establish a cause of action for tortious interference with a business expectancy. See e.g., Hi Ho . Of course if there is not specific relationship with a third party alleged, there also can be no allegation that the defendant, while knowing of that business relationship, intentionally interfered with that relationship. While the plaintiffs have alleged tortious conduct and have alleged that they had a reasonable expectation of selling the companies for $11,000,000 plus, the plaintiffs have not alleged a specific business relationship between the plaintiffs and a third party for the sale of the business and the defendant's intentional interference with that specific business relationship. Simply put, the plaintiffs cannot establish a claim for tortious interference with a business expectancy with a third party that they cannot identify. The plaintiffs argue that the Superior Court case, Precision Computer Services, Inc. v. Zones, Inc., 2013 WL 1867052 (Sommer, J. 2013), stands for the proposition that specific identified business relationships do not have to be alleged as an element of the tort. The court does not read Precision Computer Services as standing for that proposition. In Precision Computer Services the plaintiff alleged that the defendant interfered with his current clients and his employees. Thus, the Precision Computer Services plaintiff did allege specific identifiable relationships with which the defendant therein allegedly interfered. Such an allegation is missing in the complaint in the case at bar.
IV. Motion to Strike the Third Count
In the third count the plaintiff alleges that the defendant had a duty of good faith and fair dealing with regard to the orders that the family court entered as a part of the dissolution of marriage and particularly with regard to its financial orders.
The established cause of action for a breach of duty of good faith and fair dealing in Connecticut (and in New York) arises out of contractual relationships. In this case the parties did not enter into any contractual relationship, rather, after a contested trial the court issued multiple orders. The case at bar does not provide an appropriate occasion for defining the parameters of a party's duty to respond to court orders, because recognizing such a duty is different than establishing a civil cause of action for breach of a duty of good faith and fair dealing arising out of court orders.
The plaintiffs have cited no case, appellate or otherwise, in which such a cause of action has been recognized. It does not appear that such a cause of action has been recognized in Connecticut. Nor does it strike this court as wise to do so. If a family court has issued an order and a party has failed to comply with it, the appropriate remedy is to go back to the court that issued the order and seek compliance through that court or if necessary clarification of the court order.
If a party could bring a civil action and presumably claim a jury trial every time they felt that a family court order was not being complied with in good faith, the civil dockets would be burdened with litigation claims that are more properly handled by the family court that issued the order in the first place. The court will not recognize this novel cause of action alleged by the plaintiff.
V. Conclusion
For all these reasons the defendant's motion to strike count two and count three of the complaint is granted.