Opinion
No. X08-CV03-4010104 S
February 27, 2008
Memorandum of Decision on Defendants' Motion for Summary Judgment (No. 150)
Procedural and Factual background
The following undisputed facts are summarized from the pleadings and from the affidavits and documents and memoranda presented by the parties in connection with the motion for summary judgment now before the court.
In 1995, plaintiff James Hoydic purchased from Shawn Peters for the sum of $180,000 an exclusive route to sell Snapple and other soft drinks within a certain geographical area in Fairfield County, Connecticut. Shortly after purchasing the route, Mr. Hoydic entered into an agreement (the "Agreement") on April 6, 1995 with defendant BE Juices, Inc. ("BE"), an authorized Snapple products distributor, to be the exclusive distributor of Snapple and other BE drink products within the geographical area encompassed by the route he purchased from Shawn Peters, who had worked under a similar distribution agreement with BE before selling his route to plaintiff. The Agreement was for a term of one year subject to annual renewals for subsequent one-year terms to coincide with annual renewals of BE's May 1, 1991 distributorship agreement with Unadulterated Food Products, Inc. (The "Distributorship Agreement"). Although the Agreement was expressly made subject to the terms and conditions of the Distributorship Agreement, plaintiff James Hoydic was not provided with a copy of that agreement, nor was he at any time advised of the provisions of the Distributorship Agreement. For instance, ¶ 5 of the Agreement obligated Mr. Hoydic to sell certain minimum quantities of products, and to achieve "minimum percentage of penetration" as provided for each year in the Distributorship Agreement. The plaintiff was not at any time made aware of those sales quotas or minimum percentages of penetration from the Distributorship Agreement, although ¶ 8 of his Agreement with BE required BE to provide those quotas and percentages each year at the time of contract renewal.
The April 6, 1995 Agreement between Hoydic and BE was renewed as of May 1 of each year through and including the year commencing May 1, 2002.
The Agreement in ¶ 8(a) obligates Hoydic to ". . . work and develop the territory as a market for Snapple products diligently . . ." and in ¶ 8(d) to "aggressively solicit, sell, deliver, and merchandise all products distributed by the Distributor [BE] in a manner that maximum sales will be obtained."
The Agreement does provide in ¶ 5 that if Hoydic sells or is deemed by BE to be capable of selling 80,000 or more cases of product in any contract year, BE can require Hoydic to sell a portion of his route to a third party acceptable to BE on terms and conditions agreed upon by Hoydic and the purchaser. Otherwise, it is an event of default under § 14(b) for Hoydic to sell all or any part of his business without the express written consent of BE.
The Agreement does recognize Mr. Hoydic's right to sell his route to a purchaser reasonably acceptable to BE during the term of the Agreement (¶ 19) and in the event of contract termination for certain specified reasons, such as discontinuance without good cause of [Hoydic's] business for a period of more than 15 days (¶ 14(c)) or the death of Hoydic (¶ 16). Paragraph 23 provides that in the event of termination the unpaid balance of a promissory note from Assignee [Hoydic] to Distributor [BE] shall be forgiven (but there is no evidence before the court that such a note ever existed). Termination of the Agreement otherwise results in termination of Hoydic's right to sell Snapple products and gives BE the right to sell such products within the territory (¶ 18). Paragraph 14(a) of the Agreement provides that the Agreement may be terminated by the Distributor [BE] in the event of "[t]he failure of Assignee [Hoydic] to perform or comply with any one or more of the terms or conditions of this Agreement." Paragraph 15, provides that:
[I]n the event that, in the reasonable opinion of Distributor, [BE] the Assignee [Hoydic] has failed to vigorously pursue the sale of Snapple products or to secure full coverage for same in any segment of the territory, in such event, the Distributor shall call to the attention of the Assignee such failure by written notice to the Assignee specifying the segment of the territory involved and the remedial steps recommended for same. If, in the reasonable opinion of the Distributor such failure shall not have been corrected within one month after the giving of such written notice, the Distributor shall thereupon have the right, upon written notice to the Assignee to that effect, to remove such segment from the territory covered by this appointment and to deal with said segment as Distributor sees fit without necessarily canceling or terminating this appointment and without thereby prejudicing the Distributor's other rights and remedies hereunder.
The Agreement provides in ¶ 21 that all notices to either party under the Agreement shall be in writing, sent by certified mail to the address of the notified party. And ¶ 15 specially provides that any notice given under that paragraph removing any segment of the route owner's territory shall be by written notice.
On October 9, 2000, Hoydic and seven other owners of routes within BE's territory commenced an action against BE Juices and Snapple Beverages, Inc., entitled Kevin McGovern et al v. BE Juices, Inc. et al (CV00-0180545S) (The "Transshipment Action"). That action alleged that BE Juices and Snapple had improperly allowed outside distributors to "transship" Snapple products into the exclusive territory of the plaintiffs. While the Transshipment Action was pending, BE Vice President Mitchell Clyne verbally terminated the Agreement with Hoydic on or about September 13, 2002. The process culminating in termination began on June 11, 2002 when defendant Mitchell Clyne and Jim Fisher of BE met with plaintiff and advised him of a "new directive" from the Snapple Beverage Group, setting certain performance goals including goals for sales, equipment placements, manpower, and p.o.s. (point of service) marketing materials (signs and stickers). Hoydic was told that his June sales to date, lack of new accounts, resets, equipment and p.o.s. placements in relation to his peers required him to be the first of some BE route owners to be talked to about the "new directive." For the stated reason of improving communication between Hoydic and his accounts his "exit time" (for leaving the warehouse to go out on his route) each day was moved to 6 a.m. giving him time after finishing his route at about 3 p.m. to place new equipment, initiate cooler resets, prospect new accounts and place p.o.s. materials. Hoydic was told that immediate improvement in all the areas noted was expected and mandatory. A memorandum summarizing the June 11, 2002 meeting was signed by Mitchell Clyne and James Hoydic on June 14, 2002. Five days later, on June 19, 2002, Attorney Eric J. Dale of the Stamford office of Robinson and Cole representing BE sent Hoydic a certified letter putting him on notice that his "failures" as discussed at the June 11 meeting and summarized in the June 14 memorandum were deemed by BE to be material breaches of the Agreement, citing ¶¶ 14(a) and 15, quoted above. The letter recited that the June 14 memorandum "set forth specific remedial steps recommended by the Company to address these failures." and gave Hoydic a period of 30 days from June 19 to ". . . achieve results which are, in the reasonable opinion of the company, satisfactory" or else face termination of the Agreement. The letter did not ask for a response from Hoydic. Prior to the expiration of that 30-day period, on July 11, 2002 Atty. Dale caused a letter to be hand delivered to Hoydic summarizing the June 19 letter and noting that "[w]e have not received a response from you." The July 11 letter then continued:
Materials filed in connection with an earlier motion for summary judgment (No. 139) confirm that the Transshipment Action was settled in 2004 with the eight plaintiffs collectively receiving $20,000 from BE.
Please be advised that while the Company intends to strictly construe and enforce the expressed terms and conditions of the Agreement, the Company hereby notifies you of its intention to forbear from such enforcement until September 15, 2002, provided that (i) there is no continued and/or further breach of the Agreement by you, and (ii) you make a good faith effort to sell the Route (as such term is defined in the Agreement) subject to and pursuant to the terms of the Agreement. In the event that you fail to sell the Route by September 15, 2002, or in the event that you otherwise fail to comply with the terms hereof, the Company shall discontinue its forbearance.
By another hand-delivered letter of August 12, 2002 to Mr. Hoydic Attorney Dale summarized his previous two letters and noted that Mr. Hoydic had not responded to either the June 19 letter or the July 11 letter or had not otherwise corresponded to Atty. Dale.
On September 13, 2002 Atty. Andrew Gale of the Law Offices of Peter W. Shafran, representing James Hoydic, faxed a letter to Atty. Dale. Atty Gale stated the position that Mr. Hoydic had followed and attained every condition requested at the June 11 meeting as summarized in the June 14 memorandum. Specifically, Atty. Gale stated that Mr. Hoydic's sales had increased all summer, that he had opened several new accounts and aggressively markets Snapple products whenever a new business opens within his territory, that he resets his accounts on a daily basis, that he maintains a Snapple cooler in almost every store he services, and that all coolers on his route have ample signs, stickers, or other kinds of marketing tools. Atty. Gale's letter concluded:
[Mr. Hoydic] has met all his obligations and has taken all steps required by BE Juices, Inc. Any conclusion made by BE Juices to the contrary is unfounded. If, however, BE Juices enforces its September 15, 2002 deadline, please be advised that our client will take any and all legal action necessary to protect his livelihood.
On or about September 13, 2002 Mitchell Clyne bought Mr. Hoydic upstairs to his office at BE and told Hoydic he was "done" and that BE would no longer load his truck or sell him any product and told Hoydic to get himself and his truck off the BE property. Hoydic complied with Clyne's demand. Since that date BE has serviced Hoydic's former route selling Snapple and other BE products to Hoydic's former customers, using records formerly maintained by Hoydic. At no time was Hoydic provided with a written notice of termination of the April 6, 1995 Agreement, and at no time has he received from BE any compensation for the route he had purchased from Shawn Peters.
On August 21, 2003 Hoydic through his attorney Michael Beebe commenced this action against BE Juices, seeking recovery for alleged breach of the Agreement by wrongful termination, conversion of his route, breach of the implied covenant of good faith and fair dealing, tortious interference with business expectancy, violation of the Connecticut Unfair Trade Practices Act "CUTPA," breach of fiduciary duty, negligent infliction of emotional distress, intentional infliction of emotional distress and equitable estoppel. Mitchell Clyne is also sued in his personal capacity. The plaintiff's claims against Clyne personally sound in conversion, tortious interference with business expectancy, CUTPA, breach of fiduciary duty, negligent infliction of emotional distress and intentional infliction of emotional distress. Now before the court is Defendants' Motion for Summary Judgment dated July 31, 2007 directed to all nine counts against BE Juices and all six counts against Mitchell Clyne as pleaded in the amended complaint of February 24, 2006. The court heard oral argument on October 30, 2007 following the submission of memoranda of law.
Discussion Legal Standard on a Motion for Summary Judgment
Summary Judgment "shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Practice Book § 17-49. "The Motion for Summary judgment is designed to eliminate the delay and expense of litigating an issue where there is no real issue to be tried." Wilson v. New Haven, 213 Conn. 277, 279 (1989). "In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist . . . If a genuine issue exists, it must be left to a later determination after a full hearing." (Citations omitted.) Siudyla v. ChemExec Relocation Systems, Inc., 23 Conn.App. 180, 184 (1990).
"A genuine issue has been variously described as a triable, substantial or real issue of fact; . . . and has been defined as one which can be maintained by substantial evidence." (Internal quotation marks omitted.) United Oil Co. v. Urban Redevelopment Commission, 158 Conn. 364, 378 (1969). "A `material' fact has been defined adequately and simply as a fact which will make a difference in the result of the case . . . `Issue of Fact' encompasses not only evidentiary facts in issue but also questions as to how the trial would characterize such evidentiary facts and what inferences and conclusions it would draw from them." (Internal quotation marks omitted.) Id. at 379.
In seeking summary judgment, the movant has the burden of showing the nonexistence of any issue of fact. Allstate Ins. Co. v. Barron, 269 Conn. 394, 405 (2004). Once that burden is met, however, "the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . It is not enough . . . for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore cannot refute evidence properly presented to the court." Id. at 405. A motion for summary judgment "is properly granted if it raises at least one legally sufficient defense that would bar the plaintiff's claim and involves no triable issue of fact." Beebe v. East Haddam, 48 Conn.App. 60, 64 (1998). Affidavits supporting or opposing a motion for summary judgment must be made on personal knowledge, setting forth such facts as may be admissible in evidence. Practice Book § 17-46.
In this regard, the defendants moved to strike certain paragraphs of plaintiff Janes Hoydic's affidavit of October 12, 2007 and certain other materials submitted in opposition to this motion for summary judgment. Part of the motion to strike (No. 161) was granted by agreement and two paragraphs of the Hoydic affidavit were stricken following oral argument. The stricken materials have not been considered by the court in deciding this motion for summary judgment.
The Economic Loss Doctrine
Defendants initially ask for summary judgment on all tort counts (all counts other than the breach of contract claim against BE as set forth in Count One) under a doctrine known as the "economic loss doctrine" which "is a judicially created principle which prohibits recovery in tort where the basis for that tort claim arises from violation of a contract and damages are limited to purely economic losses as opposed to personal injury or property damage." Dobco, Inc. v. Williams Development Co., Docket No X07-CV99-0072152, Superior Court, complex litigation docket at Tolland (May 17, 2002, Sferrazza, J.) 32 Conn. L. Rptr. 214. There is an issue whether or not the doctrine has been adopted in Connecticut. Without labeling the concept as the "economic loss doctrine" the Supreme Court has twice declined to apply the concept to claims of negligent misrepresentation arising out of breach of contract claims. D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 218-19 (1977) and Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 579 (1995). But in Flagg Energy Development Corp. v. General Motors Corp., 244 Conn. 126, 153 (1998), without mentioning either D'Ulisse-Cupo or Williams Ford, the court, with reference to the "economic loss rule," affirmed the striking of negligent misrepresentation and CUTPA counts in the context of a claim for breach of contract and breach of warranty damages relating to allegedly defective gas turbine generator units manufactured by the defendant. The court accepted the defendant's position that the plaintiff in that context was limited to its remedies under the Uniform Commercial Code ("UCC"), and that the misrepresentation and CUTPA claims were inconsistent with the UCC and therefore displaced by §§ 42a-1-103 and 42a-2-721 of the Connecticut UCC.
Defendants rely on our Supreme Court's quotation from a Florida case in Deming v. Nationwide Mutual Insurance Co., 279 Conn. 745, 772 (2006) for the proposition that the economic loss rule applies generally in Connecticut. In Deming, the Supreme Court held that a mere contract right to payment of money cannot be the subject of a conversion action because it must be shown in an action for conversion of money that the money claimed at all times belonged to the plaintiff as a specific chattel. Citing Macomber v. Travelers Property and Casualty Corp., 261 Conn. 620, 650 (2002), the Deming court said that the conversion plaintiffs must establish legal ownership or right to possession of specifically identifiable monies, and not just the right to an indebtedness which may be discharged by the payment of money generally. In so holding the Deming court, without citing D'Ulisse-Cupo, Williams Ford, or Flagg Energy, quoted from Belford Trucking Co. v. Zagar, 243 So.2d 646, 648 (Fla.App. 1970) including the statement: ". . . A mere obligation to pay money may not be enforced by a conversion action . . . and a action in tort is inappropriate where the basis of the suit is contract, express or implied." (Emphasis added.) (quoted at 279 Conn. at 772.) The quote was included in support of the narrow holding of the Supreme Court as to the requirements of a cause of action for conversion of money, and the Deming court did not thereby adopt or enlarge the scope of the economic loss doctrine.
"[A] split has emerged among the superior courts as to whether the ruling in Flagg bars tort claims for economic loss in non-product liability cases . . . Several superior courts have found that the holding in Flagg amounts to a recognition of the doctrine and warrants an extension of the doctrine well beyond product liability cases." (Citation omitted; internal quotation marks omitted.) Dunleavey v. Paris Ceramics USA, Inc., Superior court, judicial district of Fairfield, Docket No. CV 02 0395709 (April 20, 2005, Richards, J.). "There is also a line of cases that refuses to adopt the economic loss doctrine or adopts the doctrine in limited circumstances." Paliwoda v. Mathews, Superior Court, judicial district of Fairfield, Docket No. CV 02 0398249 (October 16, 2006, Gilardi, J.). The split of authority essentially revolves around the issue whether or not Flagg Energy overruled sub silento D'Ulisse-Cupo and Williams Ford.
See American Pro. v. Better Benefits, Superior Court, complex litigation docket at Waterbury, Docket No. X10 CV 02 401221 (Jan. 4, 2007, Munro, J.) [ 42 Conn. L. Rptr. 618]; Greater New Haven Transit District v. Nafis Young Engineers, Inc., Superior Court, judicial district of New Haven, Docket No. CV 02 0469107 (July 1, 2003, Arnold, J.) ( 35 Conn. L. Rptr. 100); Morganti National, Inc. v. Greenwich Hospital Assn., Superior Court, complex litigation docket at Waterbury, Docket No. X06 CV 99 0160125 (September 27, 2001, McWeeny, J.); Worldwide Preservation Services, LLC v. The IVth Shea, LLC, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 98 0167154 (February 1, 2001, Tierney, J.) ( 29 Conn. L. Rptr. 1); Amity Regional School District #5 v. Atlas Construction Co., Superior Court, complex litigation docket at Waterbury, Docket No. X06 CV 99 0153388 (July 26, 2000, McWeeny, J.) ( 27 Conn. L. Rptr. 605).
See United Steel v. Spiegel, Zamecnik, Superior Court, complex litigation docket at Hartford, Docket No. X09 CV 06 5001846 (Mar. 27, 2007, Shortall, J.) [ 43 Conn. L. Rptr. 813]; Paliwoda v. Mathews, Superior Court, judicial district of Fairfield, Docket No. CV 02 0398249 (October 16, 2006, Gilardi, J.); Diversified Technology v. Sentinel Eq., Superior Court, judicial district of New Haven, Docket No. CV 05 4012681 (August 11, 2006, Silbert, J.) [ 41 Conn. L. Rptr. 813]; Riggs-Brewer Industries, Inc. v. Shelton Senior Housing, Inc., Superior Court, judicial district of New Haven at Meriden, Docket No. CV 04 4000365 (June 6, 2006, Taylor, J.) [ 41 Conn. L. Rptr. 471]; Imperial Co. v. Encon Construction, Inc., Superior Court, judicial district of Hartford, Docket No. CV 04 4006172 (June 9, 2005, Miller, J.); Dunleavey v. Paris Ceramics USA, Inc., supra, Superior Court, Docket No. CV 02 0395709; Metcoff v. NCT Group, Inc., Superior Court, complex litigation docket at Waterbury, Docket No. X04 CV 04 0184701 (January 10, 2005, Alander, J.); Brandt v. Walker Digital, LLC, Superior Court, complex litigation docket at Stamford-Norwalk at Stamford, Docket No. X08 CV 03 0194566 (November 1, 2004, Adams, J.) ( 38 Conn. L. Rptr. 182); Santoro, Inc. v. A.H Harris Sons, Inc., Superior Court, judicial district of Hartford, Docket No. CV 03 0828039 (September 23, 2004, Sheldon, J.) ( 38 Conn. L. Rptr. 4); Smith Craft Real Estate Corp. v. Handex of Connecticut, Inc., Superior Court, judicial district of Ansonia-Milford, Docket No. CV 03 0082188 (June 25, 2004, Ronan, J.T.R.) ( 37 Conn. L. Rptr. 272); Milltex Properties v. Johnson, Superior Court, judicial district of New London, Docket No. CV 03 0565866 (March 15, 2004, Hurley, J.T.R.) ( 36 Conn. L. Rptr. 780); Reynserson Co., LLC v. Miglietta, Superior Court, judicial district of Hartford, Docket No. CV 00 0801247 (March 27, 2001, Berger, J.) ( 29 Conn. L. Rptr. 481); Carolina Casualty v. 60 Gregory Boulevard, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 98 0169383 (March 20, 2000, Hickey, J.) (26 Conn. L. Rprt. 685); Scap Motors, Inc. v. Pevco Systems International, Inc., Superior Court, judicial district of Fairfield, Docket No. CV 97 0348461 (August 12, 1999, Melville, J.) (25 Conn. L. Rprt. 283); Darien Asphalt Paving, Inc. v. Newtown, Superior Court, judicial district of New Britain, Docket No. CV 98 0004878 (December 7, 1998, Nadeau, J.) ( 23 Conn. L. Rptr. 495).
This court adopts the position which harmonizes D'Ulisse-Cupo and Williams Ford with Flagg Energy by limiting the application of the Connecticut economic loss doctrine to cases involving claims arising in the context of sales of goods governed by Article 2 of the UCC, such as the misrepresentation and CUTPA claims at issue in Flagg Energy. In those situations the tort remedies would be inconsistent with the UCC and displaced under the provisions of Conn. Gen. Stat. §§ 42a-1-103 and 42a-2-721. See Judge Tobin's excellent analysis of this position in Town of New Canaan v. Brooks Laboratories, Inc., Docket No. CV05-4006797S, Superior Court, Judicial District of Stamford/Norwalk at Stamford (November 7, 2007, Tobin, J.), 2007 Ct.Sup. 18994, 44 CLR 501, with which this court concurs.
Since the tort claims in this case arise out a claim of breach of a contract for distribution and sales services, and not a sale of goods transaction under the UCC, the economic loss doctrine does not bar the plaintiff's tort claims. In any event the claims for negligent and intentional infliction of emotional distress would not be barred by the economic loss doctrine because the plaintiff's claims for emotional distress damages are not limited to economic loss.
Count One — Breach of Contract (as to BE Juices)
The defendants conceded at oral argument that there are issues of fact to be tried with respect to the breach of contract count. The court concurs, and finds that there are several triable issues presented such as what performance standards were applicable to the plaintiff in the spring and summer of 2002, whether or not the plaintiff breached the Agreement by failure to meet the applicable standards, and contract interpretation issues as to whether or not BE followed the proper termination procedures or was obligated to compensate plaintiff in whole or in part for the value of his investment in the route under the Agreement.
The motion for summary judgment is denied as to Count One.
Count Two — Conversion (as to BE Juices)
Conversion is the "unauthorized assumption and exercise of the right of ownership over goods belonging to another, to the exclusion of the owner's rights." (Internal quotation marks omitted.) Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 649, 804 A.2d 180 (2002). It 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." (Internal quotation marks omitted.) Deming v. Nationwide Mutual Ins. Co., 279 Conn. 745, 770, 905 A.2d 623 (2006).
"Generally, [a] plaintiff must establish legal ownership or right to possession in the particular thing, the specifically identifiable [monies], that the defendant is alleged to have converted." (Internal quotation marks omitted.) Macomber v. Travelers Property Casualty Corp., supra, 261 Conn. 650. "The term owner is one of general application and includes one having an interest other than the full legal and beneficial title." (Internal quotation marks omitted.) Deming v. Nationwide Mutual Ins. Co., supra, 279 Conn. 770. "In Connecticut, intangible property interests have not traditionally been subject to the tort of conversion, except for those intangible property rights evidenced in a document. See, e.g., Aetna Life Casualty Co. v. Union Trust Co., 230 Conn. 779, 790 n. 6, 646 A.2d 799 (1994) (conversion of trust account); Devitt v. Manulik, 176 Conn. 657, 662-63, 410 A.2d 465 (1979) (conversion applicable to account passbook)." Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 44, 761 A.2d 1268 (2000).
See also Comment (e) to § 242 of the Restatement (Second) of Torts stating that "there may be "conversion" of such an intangible right, of a kind customarily identified with and merged in a document, even though the document is not itself converted."
"To make out a prima facie case in conversion, a plaintiff must allege that 1) the property at issue rightfully belongs to him, 2) the defendant deprived him of the use of this property for a period of time, 3) . . . the defendant's conduct was unauthorized, and 4) . . . the defendant's conduct harmed him." Pianin v. Thru-Way Shopping, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 01 0186828 (August 24, 2005, Lewis, J.T.R.). In the present case, there remain issues of material fact as to the elements of the tort of conversion, because the alleged breach of the April 6, 1995 Agreement presents material issues of fact, as the defendants have conceded with respect to Count One. Although the defendants claim that the plaintiff has admitted to being in breach of the Agreement by signing the June 14, 2002 memorandum, that document is very unspecific, and Hoydic claims that he was coerced into signing it by Mr. Mitchells's threat that BE's lawyers would get involved if Hoydic did not sign. (Hoydic affidavit ¶ 15). If the plaintiff did not breach the Agreement, then the defendants unjustifiably converted the plaintiff's property, because a distribution route, as an intangible property right evidenced in a document — the Agreement — is subject to conversion. Hi-Ho Tower, Inc. v. Com-Tronics, Inc., supra, 255 Conn. 44. The motion for summary judgment is denied as to Count Two.
Count Three — Breach of Implied Covenant of Good faith and Fair Dealing (as to BE Juices)
"[I]t is axiomatic that the . . . duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship . . . In other words, every contract carries an implied duty requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement . . . The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term." Renaissance Management Co. v. Connecticut Housing Finance Authority, 281 Conn. 227, 240, 915 A.2d 290 (2007). "Essentially, it is a rule of construction designed to fulfill the reasonable expectations of the contracting parties as they presumably intended. The principle, therefore, cannot be applied to achieve a result contrary to the clearly expressed terms of a contract, unless, possibly, those terms are contrary to public policy." (Internal quotation marks omitted.) LaSalle National Bank v. Freshfield Meadows, LLC, 69 Conn.App. 824, 834, 798 A.2d 445 (2002).
"To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith." (Internal quotation marks omitted.) Renaissance Management Co. v. Connecticut Housing Finance Authority, supra, 281 Conn. 240. Bad faith involves "actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive." (Internal quotation marks omitted.) New England Custom Concrete, LLC v. Carbone, 102 Conn.App. 652, 661, 927 A.2d 333 (2007). "Bad faith means more than mere negligence; it involves a dishonest purpose." (Internal quotation marks omitted.) Collins v. Anthem Health Plans, Inc., 275 Conn. 309, 334, 880 A.2d 106 (2005).
"[A]n action for breach of the covenant of good faith and fair dealing requires proof of three essential elements, which the plaintiff must duly plead: first, that the plaintiff and the defendant were parties to a contract under which the plaintiff reasonably expected to receive certain benefits; second, that the defendant engaged in conduct that injured the plaintiff's right to receive some or all of those benefits; and third, that when committing the acts by which it injured the plaintiff's right to receive benefits it reasonably expected to receive under the contract, the defendant was acting in bad faith." (Internal quotation marks omitted.) Homes of Westport, LLC v. Wilton Bank, Superior Court, judicial district of Fairfield, Docket No. CV 06 0403842 (October 2, 2007, Maiocco, J.T.R.).
In the present case, the plaintiff and the defendant BE Juices are parties to the Agreement. Whether the defendants' conduct injured the plaintiff's rights under the contract depends upon whether the plaintiff breached the Agreement and termination was lawful, which presents a genuine issue of material fact. The third element, that the defendants' conduct was in bad faith and violated rights that the plaintiff reasonably expected, addresses the defendants' behavior that lead to the taking of the route which presents issues of fact. The defendants claim that there was a new directive from Snapple in place. (Clyne Affidavit, ¶ 14.) The plaintiff, however, disputes the existence of the new directive and alleges that this amounts to misrepresentation. (Hoydic Affidavit, ¶ 15.) Furthermore, the defendants, although carefully documenting the notice process beginning on June 14, 2002 as to the underperformance of the plaintiff; (Clyne Affidavit, ¶¶ 14-17); never explain how the plaintiff is in breach of his duties. In fact, the plaintiff alleges that he was never notified of any problems with his performance prior to June 14, 2002; (Hoydic Affidavit, ¶ 9); and had just renewed the Agreement pursuant to the automatic renewal provision in paragraph 5.
An additional factual issue is presented by the fact that the Distribution Agreement referenced in paragraph 5 of the Agreement, which allegedly describes the quota requirements, is not in evidence and was allegedly never provided to the plaintiff. (Hoydic Affidavit, ¶ 11.) Finally, the plaintiff alleges that the defendants acted in retaliation for the Transshipping case. (Hoydic Affidavit, ¶ 22.) Although the Clyne affidavit does not address that allegation, the plaintiff's facts are circumstantial. Whether these facts amount to bad faith is a determination to be made by the trier of fact.
The plaintiff claims that the Transshipping Case was brought on October 9, 2000 (Hoydic Affidavit, ¶ 13), that "after" the filing the plaintiff was threatened to have his route taken away if he did not drop the suit (Hoydic Affidavit, ¶ 14) and that on June 11, 2002 the defendants met with the plaintiff regarding the new directive and he signed the memorandum on June 14, 2002 (Hoydic Affidavit, ¶ 15). Note that almost two years lapsed between the commencement of the transshipping case and the defendants' letter claiming underperformance by the plaintiff.
The motion for summary judgment is denied as to Count Three.
Count Four — Tortious Interference with Business Expectancies (As to BE Juices)
"A successful action for tortious interference with business expectancies requires the satisfaction of three elements: (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." (Internal quotation marks omitted.) American Diamond Exchange, Inc. v. Alpert, 101 Conn.App. 83, 90, 920 A.2d 357, cert. d enied 284 Conn. 901, 931 A.2d 261 (2007), quoting Hi-Ho Tower, Inc. v. Com-Tronics, Inc., supra, 255 Conn. 27.
"[F]or a plaintiff to successfully prosecute . . . an action [of tortions interference with business relations] it must prove that the defendant's conduct was in fact tortious. This element may be satisfied by proof that the defendant was guilty of fraud, misrepresentation, intimidation or molestation . . . or that the defendant acted maliciously . . . [An] action for intentional interference with business relations . . . requires the plaintiff to plead and prove at least some improper motive or improper means . . . [A] claim is made out [only] when interference resulting in injury to another is wrongful by some measure beyond the fact of the interference itself." (Internal quotation marks omitted.) Downes-Patterson Corp. v. First National Supermarkets, Inc., 64 Conn.App. 417, 429, 780 A.2d 967, cert. granted 258 Conn. 917, 782 A.2d 1242 (2007). Further, "privity of contract [is not required] to sustain a claim for . . . intentional interference with business relations." Robinson v. Robinson, 103 Conn.App. 69, 75, 927 A.2d 364 (2007).
In the present case, whether there was an interference of business relations depends upon the existence of valid business relationships between the plaintiff and his customers on the route. This, in turn, depends upon whether or not there was a breach of the Agreement, which implicates several issues of material fact, as previously discussed.
The parties are also in dispute as to the existence of particular business relationships with particular customers. The plaintiff alleges that the defendants had the customer list and knew of the customers. (Amended Complaint, ¶ 21; Hoydic's Affidavit, ¶ 21.) The defendants, on the other hand, argue that they did not interfere with any business relationships because the Agreement was validly terminated (Clyne Affidavit, ¶ 24; memorandum in support of the defendant's motion for summary judgment, p. 20) and "[t]he plaintiff does not identify what business relationships he had with specific customers on the Route." But Hoydic has set forth facts about the relationship he had and the services he performed for his 135 customers. Hoydic affidavit ¶ 23. Whether or not there was a business relationship between Hoydic and his customers is a question of fact left to the determination of the trier of fact.
The motion for summary judgment is denied as to Count Four.
Count Five — CUTPA (as to BE Juices)
"CUTPA provides that [n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce . . . In order to enforce this prohibition, CUTPA provides a private cause of action to [a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice . . . Thus, in order to prevail in a CUTPA action, a plaintiff must establish both that the defendant has engaged in a prohibited act and that, as a result of this act, the plaintiff suffered an injury." (Citations omitted; emphasis in original; internal quotation marks omitted.) Stevenson Lumber Co.-Suffield, Inc. v. Chase Associates, Inc., 284 Conn. 205, 213-14, 932 A.2d 401 (2007).
Connecticut Unfair Practices Act, General Statutes § 42-110 et seq.
"It is well settled that in determining whether a practice violates CUTPA [the Connecticut Supreme Court has] 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 quotation marks omitted.) Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 155, 881 A.2d 937 (2005), cert. denied, 547 U.S. 1111, 126 S.Ct. 1913, 164 L.Ed.2d 664 (2006).
"A claim under CUTPA must be pleaded with particularity to allow evaluation of the legal theory upon which the claim is based." (Internal quotation marks omitted.) S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan King, P.C., 32 Conn.App. 786, 797, 631 A.2d 340, cert. denied, 228 Conn. 903, 634 A.2d 296 (1993). Further, in addition to establishing that "the conduct at issue constitutes an unfair or deceptive trade practice," the plaintiff "must present evidence providing the court with a basis for a reasonable estimate of the damages suffered." A. Secondino Son, Inc. v. LoRicco, 215 Conn. 336, 343, 576 A.2d 464 (1990). Although "the same facts that establish a breach of contract claim may be sufficient to establish a CUTPA violation;" Greene v. Orsini, 50 Conn.Sup. 312, 315, 926 A.2d 708 (2007); "[a] breach of contract claim can make out a legally sufficient CUTPA claim [only] as long as there are substantial aggravating circumstances." (Internal quotation marks omitted.) Alliance Food Management v. Gems Sensors, Superior Court, judicial district of Waterbury, Docket No. CV 06-5002996S (Jun. 12, 2007, Gallagher, J.).
"Although there is a split of authority in the Superior Courts regarding what is necessary to establish a CUTPA claim for breach of contract, the vast majority of Superior Court decisions [conclude] that, absent allegations of sufficient aggravating circumstances, [a] simple breach of contract, even if intentional, does not amount to a violation of [CUTPA]." (Internal quotation marks omitted.) Centimark Corp. v. Village Manor Associates, Superior Court, judicial district of Windham, Docket No. CV 03 0070166 (June 21, 2007, Martin, J.).
"It has been held that a misrepresentation can constitute an aggravating circumstance that would allow a simple breach of contract claim to be treated as a CUTPA violation; it would in effect be a deceptive act . . . CUTPA liability should not be imposed, however, when a defendant merely has not delivered on a promise unless the defendant made a representation as to a future act coupled with a present intent not to fulfill the promise." (Internal quotation marks omitted.) Centimark Corp. v. Village Manor Associates, Superior Court, judicial district of Windham, Docket No. CV 03 0070166 (June 21, 2007, Martin, J.). But it is has also been held that "[even an] innocent misrepresentation can amount to a CUTPA violation." Friedlander Limited Partnership v. Cohen, Superior Court, judicial district of Bridgeport, Docket No. CV 04 0412571 (April 15, 2005, Skolnick, J.). "Where . . . a defendant made a misrepresentation during the course of the defendant's business practice, with or without the intent to deceive or fraud, and that misrepresentation led a plaintiff to lose money or property, that plaintiff has alleged a cause of action under CUTPA . . . Negligent misrepresentation suffices as a basis for a CUTPA claim and as an aggravating factor making a breach of contract action also the basis of a CUTPA claim." Id.
In Centimark, the court found that the plaintiff had met its burden by a preponderance of the evidence that there was a misrepresentation. The defendants represented to the plaintiff that a particular contractor would be performing work when they already knew that he would subcontract the work out. The court, however, also found additional actions to be aggravating circumstances such as failing to obtain a building permit and not correcting deficiencies with the workmanship of the roof. In fact, both experts agreed that most of the complaints were valid and the court therefore held there to be sufficient facts to amount to aggravating circumstances.
In contrast, in Raffone v. Home Depot U.S.A., Inc., Superior Court, judicial district of New Haven, Docket No. CV 02 0465471 (June 23, 2003, Harper, J.) [ 34 Conn. L. Rptr. 747] the parties entered into an agreement for the purchase of a specially ordered window unit, which was nonconforming. The defendants, however, did not remedy the problem upon being notified, arguing that the plaintiff's specifications were impossible to satisfy, a statement which was contradicted by the representative from the window company. The court in Raffone granted the defendant's motion to strike the plaintiff's CUTPA claim explaining that "[t]he plaintiff does not allege . . . that the defendant entered into the agreement with a present intent not to fulfill the promise . . . Construed in favor of the plaintiff, the court finds that the manager's statement is not a deceptive act, thus, it fails to give rise to a substantial aggravating circumstance to transform the breach of contract into a CUTPA violation." (Citation omitted; internal quotation marks omitted.) Id.
The Raffone reasoning was held inapplicable in Milltex Properties v. Johnson, Superior Court, judicial district of New London, Docket No. CV 03 565866 (March 15, 2004, Hurley, J.T.R.) [ 36 Conn. L. Rptr. 780], where the court denied a motion to strike because "[t]he plaintiff . . . is not merely alleging an inability to perform, it is alleging that the defendants knowingly misrepresented their ability to perform the contract in order to induce the plaintiff into entering into the contract."
In the present case, because a breach of contract is not dispositive of a CUTPA violation, the plaintiff alleges intentional misrepresentation to prove that the defendants' actions were deceptive, immoral, unethical, oppressive and/or unscrupulous (Amended Complaint, ¶ 21). As already discussed, the existence of the alleged new directive from Snapple presents an issue of fact. If, as plaintiff claims, there never was such a directive (Hoydic affidavit ¶ 15) that would be indicative of a deliberate knowing misrepresentation which would be an aggravating circumstance. As to the plaintiff's performance under the Agreement, neither party provides compelling evidence. If BE had no 2002 performance criteria from the Distributorship Agreement, and falsely claimed that Hoydic was underperforming in order to make a case for contract termination, that would also be an aggravating circumstance. Further, the defendants' promise to forbear was contingent upon the plaintiff performing by discontinuing further breach and making a good faith effort to sell the route (Hoydic Affidavit, Exhibit F, Letter July 11, 2002) and with neither party providing sufficient evidence as to the plaintiff's performance, this creates an issue of fact.
The plaintiff alleges intentional misrepresentation as to the new directive, the plaintiff's performance under the Agreement, the plaintiff's ability to cure within one month, the defendants' intention to forbear until September 15, 2002 and the fraudulent use of the Transshipping Release claim.
Plaintiff provides a basis for a reasonable estimate of the damages suffered from losing his route by stating in ¶ 23 of his affidavit that:
I suffered an ascertainable loss because I had averaged approximately 50,000 cases sold per year since I bought the route and I made a gross profit of $2.75 per case, which amounted to a gross profit for the route of approximately $137,500. My expenses for the route related to truck, insurance, and cooler rentals. I estimate that my net profits from the route would be in the range of $100,000 per year.
The motion for summary judgment is denied as to Count Five.
Count Six — Breach of Fiduciary Duty (As to BE Juices)
To assert a claim for breach of a fiduciary duty, the plaintiff must prove the existence of a fiduciary relationship. See Murphy v. Wakelee, 247 Conn. 396, 400, 721 A.2d 1181 (1998). "[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.2d 847 (2004). "[E]quity has carefully refrained from defining a fiduciary relationship in precise detail and in such a manner as to exclude new situations . . . Simply classifying a party as a fiduciary inadequately characterizes the nature of the relationship." (Citation omitted; internal quotation marks omitted.) Konover Development Corp. v. Zeller, 228 Conn. 206, 222-23, 635 A.2d 798 (1994); see also Alaimo v. Royer, 188 Conn. 36, 41, 448 A.2d 207 (1982). "The law will imply [fiduciary responsibilities] only where one party to a relationship is unable to fully protect its interests [or where one party has a high degree of control over the property or subject matter of another] and the unprotected party has placed its trust and confidence in the other." (Internal quotation marks omitted.) Hi-Ho Tower, Inc. v. Com-Tronics, Inc., supra, 255 Conn. 41.
"The Connecticut Supreme Court has specifically refused to define a fiduciary relationship in precise detail and in such a manner as to exclude new situations, choosing to leave the bars down for situations in which there is a justifiable trust confided on one side and a resulting superiority and influence on the other . . . The Connecticut Supreme Court has also recognized that not all business relationships implicate the duty of a fiduciary." (Citations omitted; internal quotation marks omitted.) New Hartford v. Connecticut Resources Recovery, Superior Court, complex litigation docket at Waterbury, Docket No. UWY CV 04 0185580 (June 19, 2005, Eveleigh, J.). "[U]nder 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." (Citations omitted; internal quotation marks omitted.) Ahern v. Kappalumakkel, 97 Conn.App. 189, 194, 903 A.2d 266 (2006).
"In the seminal cases in which this court has recognized the existence of a fiduciary relationship, the fiduciary was either in a dominant position, thereby creating a relationship of dependency, or was under a specific duty to act for the benefit of another." Hi-Ho Tower, Inc. v. Com-Tronics, Inc., supra, 255 Conn. 41. In Hi-Ho Tower, Inc., "the Court noted that in cases in which the Court had, as a matter of law, refused to recognize a fiduciary relationship, the parties were either dealing at arm's length, thereby lacking a relationship of dominance and dependence, or the parties were not engaged in a relationship of special trust and confidence. The court did not find a fiduciary relationship where the parties were business entities that engaged in arm's length transaction, and there was no evidence that the plaintiff was unable to protect its interests . . . The fact that one business person trusts another and relies on [the person] to perform [its obligations] does not rise to the level of a confidential relationship for purposes of establishing a fiduciary duty." Id. Superior skill and knowledge alone do not create a fiduciary duty among parties involved in a business transaction. Id., 42. See, also, the recent case of Mystic Color Lab, Inc. v. Auctions Worldwide, Inc. LLC, 284 Conn. 408, 415-16 (2007).
In the case before the court, there is a bargained-for relationship, the contours of which are defined by the terms of the Agreement. The Agreement sets forth the obligations of each party independent of one party's expectations regarding the services to be performed or the obligations imposed. "A relationship wherein each party freely enters and that culminates in an agreement that expressly states the rights and responsibilities of each is not historically considered one built upon a unique degree of trust and confidence." Quality Restoration Roofing, Inc. v. United States Liability Ins. Group, Superior Court, complex litigation docket at Waterbury, Docket No. X01 CV 02 0275383 (June 15, 2004, Sheedy, J.).
Integral to the existence of a fiduciary relationship is that the superior position of one party is the keystone of the trust and confidence placed in that party by the other. The amended complaint alleges that the plaintiff enjoyed a contractual relationship with the defendants and that the defendants failed to perform an obligation under the contract. The plaintiff further alleges that the relationship is characterized by a "unique degree of trust and confidence between the parties" because the defendants were in "exclusive" possession of the performance standards and quotas and because the defendants had superior knowledge of what Snapple required, causing the plaintiff to trust and rely on defendants. The fact that the plaintiff may have trusted the defendants and relied on them to perform their obligations under the contract, does not mark the relationship with the "unique degree of trust and confidence" typically characteristic of a fiduciary relationship. See Macomber v. Travelers Property and Casualty Corp., supra 261 Conn. 640-41 (there, the parties were business entities that engaged in an arm's length transaction and the court found no evidence the plaintiff was unable to protect its interests).
Similar to Macomber, here, the parties engaged in an arm's length transaction, and there is no evidence that the plaintiff was unable to protect his interests or that BE was under a duty to protect plaintiff's interests. There is further no evidence that the plaintiff took steps to protect his interests, but could not do so because of the "high degree of control" over the performance standards or quotas. Although the performance standards were set by Unadultered Food Products, Inc. and supposedly given to BE Juices for distribution to the plaintiff there is no evidence that the plaintiff demanded but could not obtain the performance quotas from BE Juices or from Unadultered Food Products.
The facts before the court fail to demonstrate the existence of a triable issue of fact as to the existence of a fiduciary relationship between the parties. The motion for summary judgment is therefore granted as to Count Six.
Count Seven — Negligent Infliction of Emotional Distress (As to BE Juices)
"[I]n order to prevail on a claim of negligent infliction of emotional distress, the plaintiff must prove that the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm . . . This . . . test essentially requires that the fear or distress experienced by the plaintiffs be reasonable in light of the conduct of the defendants. If such [distress] were reasonable in light of the defendants' conduct, the defendants should have realized that their conduct created an unreasonable risk of causing distress, and they, therefore, properly would be held liable. Conversely, if the [distress] were unreasonable in light of the defendants' conduct, the defendants would not have recognized that their conduct could cause this distress and, therefore, they would not be liable." (Citation omitted; internal quotation marks omitted.) Larobina v. McDonald, 274 Conn. 394, 410, 876 A.2d 522 (2005).
"In general, to prevail on [a cause of action for negligent infliction of emotional distress] a plaintiff must prove that the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress, the plaintiff's distress was foreseeable, the emotional distress was severe enough that it might result in illness or bodily harm, and, finally, that the defendant's conduct was the cause of the plaintiff's distress . . . The foreseeability requirement in a negligent infliction of emotional distress claim is more specific than the standard negligence requirement . . . In order to state a claim for negligent infliction of emotional distress, the plaintiff must plead that the actor should have foreseen that her behavior would likely cause harm of a specific nature, i.e., emotional distress likely to lead to illness or bodily harm . . ." (Citations omitted; internal quotation marks omitted.) Olson v. Bristol-Burlington Health District, 87 Conn.App. 1, 5, 863 A.2d. 748, cert granted, 273 Conn. 914, 870 A.2d 1083 (appeal withdrawn May 25, 2005).
"Such a claim in the employment context arises only where it is based upon unreasonable conduct of the defendant in the termination process rather than in an ongoing employment relationship . . . Finally, to prevail on a claim of negligent infliction of emotional distress arising in the employment setting, a plaintiff need not plead or prove that the discharge, itself, was wrongful, but only that the defendant's conduct in the termination process created an unreasonable risk of emotional distress." Id. In the case of negligent infliction of emotional distress, the conduct must transcend merely insulting behavior and, only where reasonable minds can disagree, does it become a question for the jury. Madero v. People's Bank, Superior Court, complex litigation docket at Waterbury, Docket No. X01 CV 03 0185488 (February 25, 2002, Sheedy, J.).
The plaintiff alleges negligent infliction of emotional distress as a result of threats by Jim Fischer, VP Sales at BE Juices, that accounts would be removed from his route if the plaintiff and other route owners did not drop the Transshipping lawsuit against BE Juices (Hoydic affidavit § 14) and future dealings in bad faith with respect to the termination of the Agreement between the parties. The plaintiff also states in his affidavit that on September 13, 2002, Mitchell Clyne "shoved [him] up the stairs, almost making [him] fall" in front of defendants' employees and this humiliated the plaintiff.
The dispositive issue is whether the defendants' conduct was sufficiently wrongful that the defendants should have realized that their conduct involved an unreasonable risk of causing emotional distress and that the distress, if it were caused, might result in illness or bodily harm. Although the plaintiff is an independent contractor, analysis of the facts is helpful when viewed in the light of an employer-employee relationship because the mere act of firing an employee, even if wrongfully motivated, does not transgress the bounds of socially tolerable behavior. See defendant's memorandum in support, n. 3, pp 29-30.
The plaintiff sufficiently alleges injury as the amended complaint alleges that his depression was caused by the termination of the Agreement with BE Juices.
When viewing the facts in the light most favorable to the plaintiff, the facts must show that the defendants should have realized that its conduct involved an unreasonable risk of causing emotional distress and the plaintiff's distress be reasonable in light of the defendant's conduct. In the present case, the court finds that Mr. Hoydic's claim that on the day he was terminated Mitchell Clyne "told me to get up to his office and then shoved me up the stairs almost making me fall" in view of other employees in the warehouse (a claim not addressed at all in the Clyne affidavit) creates an issue of fact in support of a cause of action for negligent infliction of emotional distress. The finder of fact, if it credits this evidence, could find that defendants' conduct did transcend merely insulting behavior and that defendants should have foreseen that their alleged conduct in the manner of terminating the Agreement would likely cause emotional distress.
The motion for summary judgment is denied as to Count Seven.
Count Eight — Intentional Infliction of Emotional Distress As to BE Juices
"In order for the plaintiff to prevail in a case for liability under . . . [intentional infliction of emotional distress], four elements must be established. It must be shown: (1) that the actor intended to inflict emotional [distress] or that he knew or should have known that emotional distress was [the] likely result of his conduct; (2) that the conduct was extreme and outrageous; (3) that the defendant's conduct was the cause of the plaintiff's distress; and (4) that the emotional distress sustained by the plaintiff was severe." (Internal quotation marks omitted.) Petyan v. Ellis, 200 Conn. 243, 253, 510 A.2d 1337 (1986). "Whether a defendant's conduct is sufficient to satisfy the requirement that it be extreme and outrageous is initially a question for the court to determine . . . Only where reasonable minds disagree does it become an issue for the jury." (Internal quotation marks omitted.) Gagnon v. Housatonic Valley Tourism District Commission, 92 Conn.App. 835, 846, 888 A.2d 104 (2006)."[I]n assessing a claim for intentional infliction of emotional distress, the court performs a gate keeping function. In this capacity, the role of the court is to determine whether the allegations of a complaint . . . set forth behaviors that a reasonable fact finder could find to be extreme or outrageous. In exercising this responsibility, the court is not fact finding, but rather it is making an assessment whether, as a matter of law, the alleged behavior fits the criteria required to establish a claim premised on intentional infliction of emotional distress." (Internal quotation marks omitted.) Huchthausen v. Sanchez, Superior Court, judicial district of Windham, Docket No. CV 06 5000427 (July 5, 2007, Martin, J.).
"Only the most egregious conduct has been held to meet the extreme and outrageous element." (Internal quotation marks omitted). Wilk v. Abbot Terrace Health Center, Inc., Superior Court, judicial district of Waterbury, Docket No. CV 06 5001328 (August 15, 2007, Upson, J.). "Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, Outrageous! . . . Conduct on the part of the defendant that is merely insulting or displays bad manners or results in hurt feelings is insufficient to form the basis for an action based upon intentional infliction of emotional distress." (Internal quotation marks omitted.) Valentine v. LaBow, 95 Conn.App. 436, 448-49, 897 A.2d 624, cert. denied, 280 Conn. 933, 909 A.2d 963 (2006).
The plaintiff's amended complaint alleges the same facts for negligent infliction of emotional distress and intentional infliction of emotional distress.
In support of defendants' motion for summary judgment, the defendants argue and cite authority for the proposition that the plaintiff's claim for intentional infliction of emotional distress fails as a matter of law because the plaintiff is unable to show that the conduct of the defendants was extreme and outrageous. See, e.g. Dollar v. Board of Education, 63 Conn.App. 550, 554 (2001) (plaintiff's claim of concerted plan to force plaintiff to resign or to become so distraught as to have reason to terminate does not rise to intentional infliction of emotional distress claim); Appleton v. Board of Education, 254 Conn. 205, 210-11 (2000) (finding allegations that school officials made derogatory comments concerning plaintiff's work performance and his ability to read, in front of other employees, contacted plaintiff's daughter to recommend that plaintiff take some time off because he was acting erratically, and arranged to have him escorted by police off school property sufficiently extreme or outrageous to state a cause of action). The plaintiff does not cite any case law precedent supporting his claim that the alleged conduct was extreme and outrageous.
Even if the Agreement was not lawfully terminated, the [Connecticut] Supreme Court has said that "[t]he mere act of firing an employee, even if wrongfully motivated, does not transgress the bounds of socially tolerable behavior." (Internal quotation marks omitted.) Perodeau v. Hartford, 259 Conn. 729, 750, (2002).
There is no evidentiary support for finding any triable issue of fact that the defendants' conduct goes beyond all possible bounds tolerated by a decent society and is extreme and outrageous.
Therefore the court grants the motion for summary judgment as to Count Eight.
Count Nine — Equitable Estoppel (As to BE Juices)
"Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, . . . as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse." (Internal quotation marks omitted.) Emerick v. Emerick, 28 Conn.App. 794, 802, 613 A.2d 1351, cert. denied, 224 Conn. 915, 617 A.2d 171 (1992). "Equitable estoppel requires misleading conduct by a party that causes another to act based on that conduct." (Internal quotation marks omitted.) SKW Real Estate Ltd. Partnership v. Mitsubishi Motor Sales of America, Inc., 56 Conn.App. 1, 8, 741 A.2d 4 (1999), cert. denied, CT Page 3592 252 Conn. 931, 746 A.2d 793 (2000).
"As the doctrine of equitable estoppel has developed, [Connecticut] appellate courts have emphasized that [t]here are two essential elements to an estoppel — the party must do or say something that is intended or calculated to induce another to believe in the existence of certain acts and to act upon that belief, and the other party, influenced thereby, must actually change his position or do some act to his injury which he otherwise would not have done . . . Further, [i]t is the burden of the person claiming the estoppel to show that he exercised due diligence to ascertain the truth and that he not only lacked knowledge of the true state of things but had no convenient means of acquiring that knowledge . . . There must generally be some intended deception in the conduct or declarations of the party to be estopped, or such gross negligence on his part as amounts to constructive fraud, by which another has been misled to his injury . . . The modern estoppel in parts is of equitable origin, though of equal application in courts . . . Its office is . . . to show what equity and good conscience require, under the particular circumstances of the case . . ." (Citations omitted; internal quotation marks omitted.) Green v. Connecticut Disposal Service, Inc., 62 Conn.App. 83, 91-92, 771 A.2d 137, cert. denied, 256 Conn. 912, 772 A.2d 1124 (2001).
The plaintiff alleges that by renewing the Agreement between 1995 and 2002, the defendants induced the plaintiff to believe that he was meeting his obligations under the Agreement and that his business practices were acceptable and in compliance with the Agreement. In believing that he was satisfactorily performing under the Agreement, the plaintiff alleges that he "maintained the same business practices and course of dealings with his customers" and failed to change his behavior, to his injury. The amended complaint asks the court to estop the defendants from "pleading or proving the existence of facts contrary to the representations" that the plaintiff was acting in accordance with the Agreement from April 6, 1995 until April 6, 2002.
There is no evidence showing that Hoydic failed to meet his quotas relating to quantity and percentage of penetration for any years in which the contract was automatically renewed.
Although the plaintiff alleges that he failed to change his behavior which resulted in his injury, the defendants did not terminate the Agreement based on the plaintiff's failure to meet annual quotas between 1995 and 2002 or based upon the plaintiff's business practices between 1995 and 2002. The defendants renewed the Agreement in 2002 based on the plaintiff satisfactorily meeting his quotas in 2001. The defendants subsequently terminated the Agreement based on the plaintiff's failure to comply with the performance goals discussed at the June 11, 2002 meeting. In the June 14th memo, the plaintiff acknowledged that he was being asked to change his business practices in order to meet the new expectations.
On June 11, 2002, two months after the April 6, 2002 contract renewal, Mitchell Clyne and Jim Fischer met with the plaintiff to discuss the "new directive." At the meeting the parties discussed the plaintiff's performance and the plaintiff signed a letter acknowledging that "immediate improvement" was "expected and mandatory" in a group of performance categories, including the plaintiff's "June sales to date, lack of new accounts, resets, equipment and p.o.s. in relation to [his] peers." The parties did not determine a time period for improvement, but the plaintiff was put on notice that "immediate improvement in all above segments is expected and mandatory."
On June 19, 2002, the plaintiff received the letter from the defendants' lawyer advising the plaintiff that he was in material breach of the Agreement and notifying the plaintiff that he had thirty days from the date of the letter to "achieve results which are, in the reasonable opinion of the Company, satisfactory." The defendant's lawyer sent two additional letters (July 11th August 12th) warning the plaintiff that he was in material breach of the Agreement and if he did not cure the Agreement would be terminated. The fact that, as a result of the contract renewal from 1995 to 2002, the plaintiff assumed that he was in compliance with the parties' agreement, is not relevant to the present count because the plaintiff's injury was not a result of his behavior between 1995 and 2002. The plaintiff's injury resulted from his alleged failure to change his business practices and show improvements in the categories outlined at the June 11th meeting.
Therefore, it appears that the plaintiff's alleged injury (the termination of the Agreement) did not result from his reliance on the representations of the defendants in renewing the Agreement between 1995 and 2002, but resulted from the plaintiff's alleged failure to cure alleged breaches of the Agreement outlined at the June 11th meeting and in the June 14th memo. The motion for summary judgment is therefore granted as to Count Nine.
Count Ten — Conversion (As to Mitchell Clyne) Count Eleven — Tortious Interference With Business Expectancy (As to Mitchell Clyne) Count Fourteen — Negligent Infliction of Emotional Distress (As to Mitchell Clyne)The defendant argues that summary judgment should be granted as to these counts against the individual defendant Mitchell Clyne, vice president of defendant BE Juices, Inc. because the plaintiff has failed to allege a unity of interest and ownership or an "alter ego" relationship between Clyne and BE sufficient to invoke the doctrine of "piercing the corporate veil." But plaintiff is not proceeding against Mr. Clyne on a theory of piercing the corporate veil. In each of these counts the plaintiff seeks to hold Mr. Clyne liable for his alleged personal tortious conduct by "giving substantial assistance and encouragement to BE Juices" in the tortious acts. It is well established that ". . . an officer of a corporation does not incur personal liability for its torts merely because of his official position. Where, however, an agent or officer commits or participates in the commission of a tort, whether or not he acts on behalf of his principal or corporation, he is liable to third persons injured thereby." Scriber v. O'Brien, Inc., 169 Conn. 389, 404 (1975); see also Kilduff v. Adams, Inc., 219 Conn. 314, 331-32 (1991). ("[i]t is black letter law that an officer of a corporation who commits a tort is personally liable to the victim regardless of whether the corporation itself is liable"). "Thus, a director or officer who commits the tort or directs the tortious act done, or participates or operates therein, is liable to third persons injured thereby, even though liability may also attach to the corporation for the tort." Ventres v. Goodspeed Airport, 275 Conn. 105, 142 (2005) cert. denied 547 U.S. 1111 (2006).
In the foregoing discussions of the Second, Fourth, and Seventh Counts against BE for the same torts alleged against Mitchell Clyne in these Tenth, Eleventh, and Fourteenth Counts, it is evident there is at least a triable genuine issue of fact as to whether or not Mr. Clyne's personal conduct and involvement in the commission of those alleged torts would subject him to personal liability under the foregoing principle.
The motion for summary judgment is therefore denied as to the Tenth, Eleventh, and Fourteenth Counts.
Count Twelve — CUTPA (As to Mitchell Clyne)
This count purports to allege a CUTPA claim against defendant Clyne in his capacity as an officer of defendant BE Juices, Inc. by incorporating all of the allegations of the CUTPA claim against BE (Count Five) and adding an allegation that Clyne "gave substantial assistance and encouragement to BE Juices to engage in such violation of CUTPA." (Amended Complaint, Count Twelve ¶ 25.) The basic prohibition of CUTPA is that "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." (Emphasis added.) § 42-110b, Conn. Gen. Stat. Against that background, it has recently been held by a superior court decision that:
Certainly there are circumstances where the individual acts of a corporate officer or employee may form the basis of a CUTPA violation, but the actions of an officer, director or employee taken on behalf of a corporation and within the context of his corporate responsibilities are ordinarily outside of CUTPA's application. This point follows from the fact that an officer, director, or employee of a corporation primarily provides services to the corporation and is not engaged "in the conduct of any trade or commerce" within the meaning of CUTPA. Thus, it follows in turn that CUTPA does not apply to intra-corporate affairs . . . or employer employee relations. Quimby v. Kimberly Clark Corp. 28 Conn.App. 660, 670, 613 A.2d 838 (1992). The corporation itself may be engaging in a trade or business in commerce, but not the individual who is merely working for or on behalf of the corporation. In other words, CUTPA is typically directed to businesses and self-employed people, but not to everyone who may be employed or engaged by such individuals . . . In short, as a general rule, an individual who is merely functioning as an employee, officer or director of a corporation is not involved in conduct that constitutes a trade or commerce within the contemplation of CUTPA.
Metcoff v. Lebovics, Superior Court, judicial district of Waterbury, Complex Litigation Docket, No. X06 CV05500521 (August 16, 2007, Stevens, J.) [ 44 Conn. L. Rptr. 107].
See, also, to the same effect, Bridgeport Harbor Place I, LLC v. Joseph P. Ganim et al, Superior Court, judicial district of Waterbury, Complex Litigation Docket, No. X04-0184523S (September 21, 2007, Stevens, J.); 2007 Ct.Sup. 15933, 44 CLR 204.
Based on the foregoing Superior Court authority, the motion for summary judgment is granted as to Count Twelve.
Count Thirteen — Breach of Fiduciary Duty (As to Mitchell Clyne)
The motion for summary judgment is granted as to Count Thirteen for the same reason that the court has granted the motion for summary judgment as to Count Six.
Count Fifteen — Intentional Affliction of Emotional Distress (As to Mitchell Clyne)
The motion for summary judgment is granted as to Count Fifteen for the same reason that the court has granted the motion for summary judgment as to Count Eight.
Order
For the foregoing reasons, the Defendants' Motion for Summary Judgment is:
Denied as to Counts One, Two, Three, Four, Five, Seven, Ten, Eleven, and Fourteen; and Granted as to Counts Six, Eight, Nine, Twelve, Thirteen, and Fifteen.
So ordered.