Opinion
NNHCV106013865S.
11-20-2012
IKON OFFICE SOLUTIONS v. C-TECH OF NEW HAVEN CT, INC.
UNPUBLISHED OPINION
WILSON, J.
I
FACTS
The plaintiff, Ikon Office Solutions, Inc., commenced the present action by service of a summons and complaint upon the defendant, C-Tech of New Haven, CT, Inc., on June 29, 2010. The plaintiff filed a three-count revised complaint on October 25, 2010, alleging a breach of a contract, unjust enrichment, and a violation of the Connecticut Unfair Trade Practices Act (CUTPA). The defendant responded with an answer, special defenses and counterclaims on March 2, 2011. The counterclaims sounded in breach of contract, unjust enrichment, breach of the implied covenant of good faith and fair dealing and a violation of CUTPA, respectively. On March 14, 2012, the defendant filed an amended counterclaim, which added a count alleging a violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA).
Count one of the amended counterclaim alleges the following facts. The plaintiff is a full service document management company which sells office equipment and contracts to service such equipment, and the defendant is a Connecticut based, minority owned small business. In early 2006 the parties began to develop a mutually beneficial relationship to cooperate in selling office equipment to state and federal organizations. The parties entered into a subcontractor agreement on April 10, 2006, under which the defendant would act as a subcontractor to supply remanufactured equipment under the plaintiff's contract with the state of Connecticut. Under Connecticut's Minority & Small Contractor's Set Aside Program, 25 percent of all state contracts are assigned exclusively to small businesses, and a quarter of those contracts are offered exclusively to businesses wholly owned by females or minorities. At an unspecified time after the defendant began to fulfill the subcontractor contract, the plaintiff used its own sales force instead of the defendant's sales force to complete the contractual sale and delivery of office equipment. Count two alleges that the subcontractor agreement contained an implied covenant of good faith and fair dealing, which was breached by the plaintiff.
Count three claims unjust enrichment, and further alleges that the parties entered into a Mentor/Proté gé e agreement on August 10, 2007, under the Federal Small Business Administration's Mentor program. Under this program, the plaintiff would assist the defendant in completing contracts, and both companies would be able to enter into joint ventures using the defendant's designation as a " small business" for the purpose of government bidding. Later, the plaintiff used the defendant's small business status to obtain contracts without informing the defendant or delivering any benefits of those contracts to the defendant. The breach of contract claimed in count four asserts that in September 2008, after the defendant was awarded a contract with the Census Bureau, the defendant again agreed to work with the plaintiff. The failure of the plaintiff to satisfy delivery of equipment to the Census Bureau resulted in the termination by the Bureau of its contract with the defendant.
Count four claims a breach of contract and alleges that the plaintiff knew or should have known of its inability to satisfy the contract alleged in count four, and knew that it was fulfilling contracts under the defendant's name without informing the defendant. Count five claims negligent misrepresentation and further alleges that the defendant relied on the misrepresentations of the plaintiff to its detriment. Count six alleges a CUTPA violation, and relies on various factual allegations of the previous counts. Count seven claims a violation of FDUTPA and alleges that the plaintiff entered into contracts in the state of Florida using the defendant's name, of which the defendant was unaware, and for which the defendant has suffered damages.
The defendant then filed a claim to add the case to the jury trial docket on April 9, 2012. The plaintiff filed an objection to the claim on April 18, 2012 and the defendant filed a memorandum in response on May 10, 2012. The court, Silbert, J., sustained the objection on May 14, 2012. The defendant filed a motion to reconsider and a motion for articulation of Judge Silbert's order on June 4, 2012, to which the plaintiff objected on June 12. On July 10, 2012, Judge Silbert vacated his previous order sustaining the objection to the defendant's claim in light of his pending retirement and consequent unavailability to hear the motion for reargument. The matter was heard before the court, Wilson, J., at short calendar on July 30, 2012.
II
DISCUSSION
A
Initially, the court must consider whether the defendant is entitled to a jury trial based upon the claims it has alleged. Neither party has argued that the defendant is not entitled to a jury trial. Because the issue potentially affects a constitutionally protected right, however, the issue bears discussing.
" Article first, § 19 of the constitution of Connecticut, as amended by article four of the amendments, provides in relevant part: The right of trial by jury shall remain inviolate ... The provision guarantees the right to a jury trial in all cases for which such a right existed at the time of the adoption of that constitutional provision in 1818 ... The fundamental right to a jury trial, however, is subject to certain limitations ... One limitation is that the right does not extend to equitable claims." (Citations omitted; internal quotation marks omitted.) Ackerman v. Sobol Family Partnership, LLP, 298 Conn. 495, 532, 4 A.3d 288 (2010). " [W]here the essential right asserted is equitable in its nature and damages are sought in lieu of equitable relief or as supplemental to it in order to make the relief complete, the whole action is one in equity and there is no right to a jury trial ... Such a cause of action is not of right triable by jury, although the court has discretion to submit issues arising in it to a jury." (Internal quotation marks omitted.) Evans v. General Motors Corp., 277 Conn. 496, 517, 893 A.2d 371 (2006), aff'd, 125 F.3d 1448 (Fed.Cir.1997), cert. denied, 522 U.S. 1115, 118 S.Ct. 1050, 140 L.Ed.2d 113 (1998).
" When legal and equitable issues are combined in a single action, [however, ] whether the right to a jury trial attaches depends upon the relative importance of the two types of claims. Where incidental issues of fact are presented in an action essentially equitable, the court may determine them without a jury in the exercise of its equitable powers ... Where, however, the essential basis of the action is such that the issues presented would be properly cognizable in an action of law, either party has a right to have the legal issues tried to the jury, even though equitable relief is asked in order to give full effect to the legal rights claimed ... Because a counterclaim is an independent action ... the question presented is whether the defendants' counterclaim is essentially legal or essentially equitable ... This analysis must be performed in the context of the pleadings when read as a whole ... The form of the relief demanded is not dispositive." (Citations omitted; internal quotation marks omitted .) Northeast Savings, F.A. v. Plymouth Commons Realty Corp., 229 Conn. 634, 641-42, 642 A.2d 1194 (1994). In Northeast Savings, the plaintiff's action was equitable (foreclosure), but the defendants were entitled to a jury trial on their counterclaims for breach of contract, breach of fiduciary duty, and negligence. Id., at 642. Similarly, in Sovereign Bank v. Licata, 116 Conn.App. 483, 508, 977 A.2d 228 (2009), appeal dismissed, 303 Conn. 721, 36 A.3d 662 (2012) (certification improvidently granted), the court held that counterclaims alleging breach of contract, negligent misrepresentation and CUTPA violations were indisputably legal in nature.
The court must therefore examine the defendant's claims in the context of the pleadings as a whole. See Northeast Savings, F.A. v. Plymouth Commons Realty Corp., supra, 229 Conn. at 642. Count one of the defendant's counterclaim alleges breach of contract for the alleged breach of the April 10, 2006 Subcontractor Agreement. Connecticut courts have held the legal remedy of damages to be the proper damages for an action for breach of contract unless damages were for some reason insufficient. Dills v. Doebler, 63 Conn. 366, 368, 26 A. 398 (1892). Since the defendant's counterclaim seeks damages, the court concludes that the breach of contract action in count one is a legal claim.
Count two alleges a breach of the implied covenant of good faith and fair dealing. While research has not revealed clear precedent for treating a claim for a breach of the implied covenant of good faith and fair dealing as an action at law or equity, multiple cases infer that such a claim exists at law. " It is axiomatic that the implied duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship ... [E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement. 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 ... In accordance with these authorities the existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing." (Citations omitted; internal quotation marks omitted.) Hoskins v. Titan Value Equities Group, 252 Conn. 789, 793, 749 A.2d 1144 (2000). Additionally, superior court cases have held that an action for breach of good faith and fair dealing existed at common law. See, e.g., M.B. Financial Bank, N.A. v. Meriden Hotel Partners, LLC, Superior Court, judicial district of New Haven, Docket No. 11 6022600 (August 31, 2012, Zemetis, J.); Longo v. Longo, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. 10 6003946 (May 15, 2012, Genuario, J.); Diaz v. Allstate Fire & Casualty Ins. Co., Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. 11 6010752 (December 29, 2011, Jennings, J.T.R.); Nationwide Mutual Ins. Co. v. Pasiak, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. 08 4015401 (November 30, 2011, Brazzel-Massaro, J.); and Yuasa-Yi v. Spargo Machine Products, Inc ., Superior Court, judicial district of Waterbury, Docket No. 09 5015738 (July 25, 2011, Shaban, J.). The court therefore concludes that a claim for breach of the implied duty of good faith and fair dealing is an action at law, because it is inextricably linked to a legal claim for breach of contract and because it has roots as a common-law action. Count three alleges that the plaintiff was unjustly enriched by the August 10, 2007 Mentor/Proté gé e Agreement. A claim for unjust enrichment has always been seen as an equitable remedy. See, e.g., Local 84 v. Francis, 138 Conn.App. 77, 87-88, 51 A.3d 401 (2012). Count four alleges that the plaintiff breached the September 2008 Census Bureau contract. The court considers the breach of contract actions essentially legal, as discussed above. Count five alleges that the plaintiff negligently misrepresented their ability to satisfy the Census Bureau contract. In Hull v. Fonck, 122 Conn.App. 286, 292-93, 999 A.2d 775 (2010), the court found that plaintiffs are entitled to bring claims for negligent misrepresentation as a matter of law, and thus the court concludes that this count is based in law. Count six alleges a violation of CUTPA for all of the plaintiff's alleged actions. The court in Associated Investment Co. v. Williams Assoc., 230 Conn. 148, 645 A.2d 505 (1994) held that CUTPA claims were essentially equitable because they did not exist at common law and are not analogous to rights protected by law in 1818. The court in Associated Investment Co. v. Williams Assoc., supra, stated: " Our conclusion that CUTPA does not give rise to a legal cause of action grounded in the common law comports with the essentially equitable character of the statutory scheme ... Furthermore, the plaintiff who establishes CUTPA liability has access to a remedy far more comprehensive than simple damages recoverable under common law ... In addition, if a court determines that a practice is unfair or deceptive under CUTPA, it may in its discretion, order, in addition to damages or in lieu of damages, injunctive or other equitable relief ... For these reasons, we conclude that article first, 19, of our state constitution does not give rise to a right to a jury trial for claims brought under CUTPA ..." Associated Investment Co. v. Williams, supra, (Citations omitted; internal quotation marks omitted.) 230 Conn. 159-60, 161. Thus, the court considers the CUTPA claim in count six an equitable claim. Count seven alleges a violation of FDUTPA for the plaintiff making contracts under the defendant's name in Florida without the defendant's consent. Florida courts have found violations of FDUTPA to entitle the victim to both equitable and legal remedies. See Macias v. HBC of Florida, Inc., 694 So.2d 88, 90 (Fla.App. 3 Dist.1997).
Since the majority of the defendant's claims seek legal remedies the court will consider the defendant's claims essentially legal in nature. Further, the defendant's common-law breach of contract and negligent misrepresentation claims are factual predicates for the equitable claims of unjust enrichment, CUTPA and FDUTPA. Accordingly, the court will conclude that the defendant has a right to a jury trial under Article first, § 19 of the Connecticut Constitution. This determination, however, does not end the court's analysis.
B
Although the defendant has the substantive right to a jury trial on its counterclaim, it must comply with the procedural requirements to claim a case for the jury trial docket as mandated by Practice Book § 14-10 and General Statutes § 52-215. Practice Book § 14-10 states: " All claims of cases for the jury shall be made in writing, served on all other parties and filed with the clerk within the time allowed by General Statutes § 52-215. The jury claim fee shall be paid at the time the jury claim is filed." Connecticut courts rarely have invoked this section when analyzing the validity of a claim for a jury trial, instead basing their decisions on an analysis of General Statutes § 52-215 instead of § 14-10. Section 52-215 states in relevant part: " When ... an issue of fact is joined, the case may, within ten days after such issue of fact is joined, be entered in the docket as a jury case upon the request of either party made to the clerk ..." Historically, Connecticut courts have interpreted this section as allowing the renewal of a party's ability to file a claim for a jury trial within ten days of any party filing a pleading which joins a new issue of fact. See Leahey v. Heasley, 127 Conn. 332, 334, 16 A.2d 609 (1940); Atta v. Cutner, 95 Conn. 576, 578, 111 A. 847 (1920); and Rowell v. Ross, 91 Conn. 702, 101 A. 333 (1917). To determine whether a party has properly revived the ten-day window in which to file a claim for a jury trial, therefore, the court must determine whether a new issue of fact was joined in a pleading filed within ten days prior to the claim.
Section 52-215 states that proper windows for filing a claim for jury trial include (1) within thirty days after the return date; (2) within ten days of joining a new issue of fact; and (3) any time upon the written consent of all parties. Additionally, the court has discretion to order a case onto the jury docket. See Falk v. Schuster, 171 Conn. 5, 8, 368 A.2d 40 (1976). Because the plaintiff does not request the court to add the case to the jury docket in its discretion under Falk, the only period discussed herein is the ten-day window which the defendant claims arose upon the filing of its amended counterclaim.
" We ... have recognized that the issue of fact must be formed by the pleadings in writing ... When a case requires this court to determine the nature of a pleading filed by a party, we are not required to accept the label affixed to that pleading by the party." (Citation omitted; internal quotation marks omitted.) Home Oil Co. v. Todd, 195 Conn. 333, 340, 487 A.2d 1095 (1985). " Where responsive pleading is required ... the issue is joined when the responsive pleading is filed." (Internal quotation marks omitted.) Id., at 343.
An amended pleading would not revive the time period for claims under § 52-215, however, if, instead of joining a new issue of fact, " it merely restates in different words the very facts which already had been alleged." Masto v. Board of Education, 200 Conn. 482, 488, 511 A.2d 344 (1986). In Flint v. National Railroad Passenger Corp., 37 Conn.App. 162, 166, 655 A.2d 266 (1995), aff'd, 238 Conn. 282, 679 A.2d 352 (1996), our Supreme Court held that an objection to a claim for jury trial is properly sustained when " [t]he allegations of the original complaint were broad enough to have permitted the plaintiff to offer proof of the [new claim]." There, the plaintiff had alleged that he was injured in the process of using a hydraulic jack, and the plaintiff's " new allegation of negligence was that the operation of the jacks ‘ in unison’ was particularly dangerous, and that his injury resulted from this dangerous procedure." Id., at 165. Further, " [i]n paragraph eight, the plaintiff attempted to enlarge the allegations of his injuries." Id. The court held that " the amendments to the complaint concerning the plaintiff's injuries did not enlarge any existing issues or add any new issues to the case, but merely restated, albeit with more specificity, the plaintiff's original claims of injury." Id., at 166. See also Kuser v. Orkis, 169 Conn. 66, 76, 362 A.2d 943 (1975) (amending complaint to state birth date of child in custody case did not raise new issues or enlarge existing ones). Therefore, a new issue of fact must differ from the facts as previously pleaded, and must not be able to have been brought under a previous claim.
In its claim for a jury trial, the defendant states that the amended counterclaim entitles it to a new ten-day window in which to bring the claim under § 52-215. The plaintiff objects primarily on the basis that the additions to count five (negligent misrepresentation) only offer additional detail, and that count seven (FDUTPA) could have been brought under the defendant's existing breach of contract or CUTPA claim. The plaintiff further argues that the amended counterclaim is, in fact, nothing more than a pretextual tool to circumvent the claim filing deadline because it adds no " novel" allegations. The defendant replies that the amended counterclaim is not a mere pretext, but rather states new facts that were only uncovered during discovery. Further, the defendant argues that the FDUTPA claim is separate and distinct from CUTPA because the allegations took place in the state of Florida. In that regard, the defendant argues that the defendant's location in Connecticut does not constitute a sufficiently intimate link with the allegations to allow the claim to be brought under CUTPA.
The court must determine whether the defendant's newly alleged count seven, claiming a violation of FDUTPA, could have been brought under the defendant's existing CUTPA claim. If so, then § 52-215 would operate to create a new ten-day window in which the defendant could have properly asserted its claim for a jury trial. If, however, the FDUTPA claim could have been brought under the existing CUTPA claim, then no new issue of fact has been joined and no ten-day window opened, rendering the defendant's claim untimely.
" CUTPA, by its own terms, applies to a broad spectrum of commercial activity. The operative provision of the act ... states merely 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. Trade or commerce, in turn, is broadly defined as the advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value in this state ... The entire act is remedial in character ... and must be liberally construed in favor of those whom the legislature intended to benefit." (Internal quotation marks omitted.) Willow Springs Condominium Assn. v. Seventh BRT Development Corp., 245 Conn. 1, 42, 717 A.2d 77 (1998).
General Statutes § 42-110a et seq. codifies CUTPA, and § 42-110b states, in relevant part: " (a) No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. (b) It is the intent of the legislature that in construing subsection (a) of this section, the commissioner and the courts of this state shall be guided by interpretations given by the Federal Trade Commission Act (15 U.S.C. § 45(a)(1)), as from time to time amended." Florida General Statutes § 501.201 et seq. codifies FDUTPA, and § 501.204 states in relevant part: " (1) Unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful. (2) It is the intent of the Legislature that, in construing subsection (1), due consideration and great weight shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to § 5(a)(1) of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1) as of July 1, 2006." Both statutes are designed to protect against unfair and deceptive acts and both are guided by the Federal Trade Commission Act.
In count six of the counterclaim, the defendant claims that the plaintiff violated CUTPA by re-alleging paragraphs 1-25 of count three, the claim for unjust enrichment, and paragraphs 24-31 of the fifth counterclaim, alleging negligent misrepresentation. Count six then alleges: " IKON's aforesaid acts violate ... [CUTPA], in that its conduct was unfair, immoral, oppressive, unethical, unscrupulous and/or deceptive and has caused substantial injury to C-Tech ... As a direct and proximate result of IKON's violation of CUTPA, C-Tech has suffered an ascertainable loss of money and property, and IKON is liable to C-Tech for actual damages, punitive damages, attorneys fees and costs."
In count seven of the counterclaim, the defendant claims that the plaintiff violated FDUTPA. The plaintiff does so by re-alleging that same paragraphs as count six. Count seven then alleges: " Upon information and belief, IKON entered into contracts in Florida, including but not necessarily limited to contracts with state agencies, in and utilizing C-Tech's name. However, IKON never notified or advised C-Tech of such contracts or opportunities that it entered into in C-Tech's name ... IKON's aforesaid acts, including its deceptive use of C-Tech's name to obtain contracts, were for its own financial gain. Such actions and practices in trade and commerce violate ... [FDUTPA] in that they offend public policy and are unethical, oppressive, unscrupulous and has caused injury to consumers, including C-Tech ... As a direct and proximate result of IKON's violation of FDUTPA, C-Tech has suffered damages, and IKON is liable to C-Tech for actual damages, punitive damages, attorneys fees and costs."
The court begins its review by observing that both claims re-allege the same facts from previous counts, and thus share the same predicate factual foundation. The new allegation contained in count seven, that the plaintiff entered into contracts in Florida using the defendant's name, appear to be based on the Mentor/Proté gé e agreement alleged in count three and re-alleged in count six, which enabled the plaintiff to enter into mutually beneficial contracts in the defendant's name. The Mentor/Proté gé e agreement was entered into in Connecticut, and none of the other re-alleged facts are related to Florida or the ability of the plaintiff to contract on behalf of the defendant. Next, that both statutes share identical bases in the Federal Trade Commission Act and are designed to punish similar offenses are underscored by the repetition in counts six and seven that both violations are " unethical, oppressive, [and] unscrupulous ..."
Finally, the defendant's argument for its inability to bring the allegations of count seven within the existing CUTPA claim, namely, that the defendant's physical location as a Connecticut corporation does not intimately associate the allegations of count seven with this state is unpersuasive. General Statutes § 42-110g(a) provides that " any person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by section 42-110b, may bring an action in the judicial district in which the plaintiff or defendant resides or has his principal place of business or is doing business, to recover actual damages ..." Section 42-110g(a) only requires that, to bring a CUTPA claim, a party who has suffered an ascertainable loss file the action in the district where either the plaintiff or the defendant has their principal place of business, and does not require that the allegations of the complaint be intimately associated with Connecticut. In count seven, the defendant alleges that the plaintiff entered into contracts in Florida in the defendant's name and that the defendant has suffered damages as a direct result, requesting, among other types of relief, actual damages. The defendant has thus alleged that it suffered an ascertainable loss and has previously alleged that its principal place of business is in Connecticut. The defendant satisfies the requirements of § 42-110g(a) for bringing a CUTPA claim without needing to show an intimate association between the alleged acts and the state of Connecticut. Therefore the allegations of count seven could have been brought under the existing CUTPA claim, and the amended counterclaim count cannot be said to have joined a new issue of fact.
III
CONCLUSION
Because the allegations of count seven could have been brought under the existing CUTPA claim alleged in count six, the court concludes that the amended counterclaim has not joined a new issue of fact. Without joining a new issue a fact, the defendant cannot claim that a new window for bringing a claim for a jury trial under § 52-215 was revived, and the defendant's claim is therefore considered untimely. Accordingly, the defendant's claim for a jury trial is denied because it was made more than ten days after the last pleading that joined a new issue of fact.