Opinion
No. X01 CV-03 0185488
February 22, 2005
MEMORANDUM OF DECISION RE MOTION TO STRIKE (#122)
Background
The action is brought by a husband and wife who are sole shareholders of two closely held limited liability corporations, El Pueblito Restaurant and Bakery, LLC ("El Pueblito") and Envios, El Pueblito, LLC ("Envios"). The individual plaintiffs are United States citizens of Colombian origin; El Pueblito is a West Haven, Connecticut, restaurant specializing in Colombian cuisine; Envios is a business whose purpose it is to facilitate the wire transfer of funds to Central and South America. During the relevant period, the plaintiffs banked with defendant People's Bank ("People's").
At the heart of the case is People's decision in October of 2002 to close all of the plaintiffs' accounts and therefore to cease doing any business with them. The Second Revised Complaint alleges People's took this action because it erroneously concluded plaintiffs were engaged in criminal activity. It further alleges People's, based on that mistaken belief, disseminated false information about the plaintiffs and defamed them and, in so doing, interfered with a business relationship and caused them substantial damages.
Eight (8) counts are asserted. They allege causes of action for discriminatory credit practices in violation of C.G.S. § 46a-66, slander per se, tortions interference with a prospective business relationship, intentional infliction of emotional distress, negligent infliction of emotional distress, and breach of the covenant of good faith and fair dealing. The defendant has filed an omnibus motion alleging all eight counts are legally insufficient and that, additionally, Counts Two-Eight should be stricken for misjoinder — to all of which the plaintiffs have objected. The appropriate memoranda and supporting documentation have been filed as was the necessary Request for Adjudication on November 2, 2004. The parties have waived oral argument and consented to adjudication of the motion on the papers.
Applicable Law
"A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court." (Citation omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498 (2003). It tests whether the complaint states a claim upon which relief can be granted. Vacco v. Microsoft Corp., 260 Conn. 59, 65 (2002); P.B. § 10-39. The trial court's role is to examine the complaint and construe it in favor of the pleader. Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 772 (2002). Specifically, the court must "assume the truth of both the specific factual allegations and any facts fairly provable thereunder" and "read the allegations broadly, rather than narrowly." Craig v. Driscoll, 262 Conn. 312, 321 (2003). The requirement of favorable construction does not extend, however, to legal opinions or conclusions stated in the complaint but only to factual allegations and the facts "necessarily implied and fairly provable under the allegations." Forbes v. Ballaro, 31 Conn.App. 235, 239 (1993). The motion is to be tested by the allegations of the pleading, which allegations cannot be enlarged by the assumption of any facts not therein alleged. Alarm Applications Co. v. Simsbury Volunteer Fire Co., 179 Conn. 541, 549-50 (1980). The motion is properly granted if the complaint alleges mere conclusions of law unsupported by the facts alleged. Fidelity Bank v. Krenisky, 72 Conn.App. 700, 720 (2002); Donar v. King Associates, Inc., 67 Conn.App. 346, 349 (2001).
First Count (Discriminatory Credit Practices)
The First Count alleges Ledy Madero, as Envios' agent, met with an officer and employee at People's in October of 2001 and the parties then orally agreed that: a) Envios would be permitted to regularly overdraw its account by means of electronic withdrawals by a specific wiring corporation so long as Madero informed People's of the need to do so before the actual withdrawal; b) People's would advance the money necessary to cover the overdraft and certain other uncollected funds in the form of a loan and advise the Maderos of the deadline by which Envios needed to cover the loan; c) Envios would cover the overdrafts as required and pay People's $22.00-$25.00 for each credit advance; and d) this extension of credit would continue so long as the parties complied with the terms and, further, that the agreement would not be terminated without People's providing the plaintiffs reasonable notice so that they might obtain another source of credit. Paragraph 11. That arrangement continued until September of 2002 when, at People's request, Andre Madero met with People's corporate officer (McKernon), as a result of which meeting People's closed all of the business and personal accounts of the plaintiffs knowing Envios' business accounts had checks outstanding which would be dishonored and that previously authorized electronic withdrawals would also be dishonored. Paragraphs 12-15. It is alleged People's actions were the result of the bank having erroneously concluded, based on the nature of Envios' wire transfer business coupled with its principals' Colombian origin, that the plaintiffs were engaged in unlawful drug-related and/or money laundering activities — which the plaintiffs deny. Paragraphs 16-17. They assert the terminating of Envios' credit was discriminatory — and violative of C.G.S. § 46a-66 — in that People's had a stereotyped image of the individual plaintiffs as Colombian nationals who engaged in drug trafficking and money laundering to "clean" cash generated from illegal drug activities without a reasonable basis for so concluding and that the plaintiffs, as persons of Colombian descent who operated a wire transfer business facilitating the transfer of funds from the U.S. to Central and South America, were likely involved in or facilitating criminal activities (Paragraphs 18-19) and that such actions have caused the individual plaintiffs, as Envios' sole shareholders, suffering and damages (Paragraph 20).
Thus, Count One advances a claim for discrimination in a credit transaction under § 46a-66 which in pertinent part reads, "It shall be a discriminatory practice . . . for any creditor to discriminate on the basis of . . . national origin ancestry . . . against any person eighteen years of age or over in any credit transaction." People's moves to strike the count as legally insufficient because, the bank's agreement having been with Envios and for Envios' benefit, Envios does not fall under the protection of the statute (not "a person eighteen years of age or older" or sharing any of the other characteristics the statute was intended to protect). It also argues the Maderos — even as sole shareholders — do not have standing to raise claims based on injury to the corporation. Delio v. Earth Garden Florist, Inc., 28 Conn.App. 73 (1992). The plaintiffs claim they (Ledy and Andre Maderos) assert this claim not as derivative shareholders of Envios or on behalf of Envios as a limited liability corporation but "in their personal capacities for injury to themselves as a result of the Defendant's conduct relative to a credit transaction involving Plaintiff Envios." Opp. memorandum, at 5. People's is dismissive of that claim and points to the plaintiffs' assertions they have been discriminated against as "sole shareholders" of Envios. Paragraphs 18 and 20 of First Count. The inquiry for the court then is whether the complaint alleges the claimed discriminatory practices caused injury to the plaintiffs personally and as individuals or solely as shareholders of Envios since, if the latter, the claim is legally insufficient but, if the former, the cause of action may be maintained. "It is, however, well settled that if the injury is one to the plaintiff as a stockholder and to him individually and not to the corporation as where an alleged fraud perpetrated by the corporation has affected the plaintiff directly, the cause of action is personal and individual." (Citations omitted.) Yanow v. Teal Industries, Inc., 178 Conn. 262, 281-82 (1979). Paragraph 18, while it does in fact refer to the individual plaintiffs as "the sole shareholders of Plaintiff Envios," alleges Ledy and Andre Madero were discriminated against by People's in that: "(a) the defendant adopted a stereotype (sic) image of the plaintiffs Andre Madero and Ledy Ramirez Madero as Colombian nationals who engaged in drug-related illegal activities in the United States including drug trafficking and money laundering to `clean' the cash generated from drug trafficking activity without a reasonable basis for so doing; and/or (b) the defendant erroneously concluded that, because two persons of Colombian descent ran and operated a wire transfer business facilitating the transfer of funds from the United States to Central and South America, such business was likely involved in or facilitating criminal activity." (Emphasis added.). Paragraph 19 asserts the termination of the credit agreement was based upon unfounded "discriminatory stereotypes and assumptions about its sole shareholders" and violated § 46a-66. Broadly construing the allegations of the complaint as the court is bound to do when adjudicating a motion to strike, the court must conclude the phrase "sole shareholders" is used as a descriptor not to identify their status as parties but instead to describe their relationship to Envios. Support for such construction is found in the language of Paragraph 18 (which specifies the alleged discriminatory practices); both sub-paragraphs there assert the basis for terminating the agreement was the belief the individual plaintiffs, as "Colombian nationals" and persons "of Colombian descent engaged in the business of wiring money from the United States to Central and South America" were "likely involved in . . . criminal activity." The "stereotypes" and "assumptions" made about the Maderos, it is alleged in Paragraph 19, arose from their national origin coupled with their conduct of a wire transfer business. To accept the conclusion of the defendant is to ignore the language consistently employed in the complaint. As alleged, the discrimination is directed to the plaintiffs as individuals and the harm asserted is the harm resulting from the claimed stereotyping and discrimination directed to them as persons and is, thus, separate and distinct from the harm to their company. The motion is denied as to this count.
Standing is not appropriately raised by a Motion to Strike but by a Motion to Dismiss because it goes to a court's subject matter jurisdiction. The court instead addresses the defendant's substantive argument as a matter of legal sufficiency and views the claim the individual plaintiffs lack "standing" as an unfortunate word choice.
Second Count (Defamation — Slander Per Se)
The Second Count alleges that, following the closing of the accounts by People's, plaintiff El Pueblito Restaurant, though Ledy and Andre Madero, applied for a term loan and line of credit from the Community Economic Development Fund ("CEDF"). Paragraphs 11-12. It further alleges one of the CEDF's loan committee and board members was then an officer of People's and that an officer, agent, or employee of People's told the CEDF person to whom their application was directed and/or the CEDF's Senior Loan Officer and Vice-President that El Pueblito's application "should not be considered," that CEDF should be "careful" when dealing with the Maderos, that CEDF should "stay away from these people," and, with reference to Andre Madero, that he "was implicated in a drug thing before" and "had previously been arrested on drug charges," and that "criminal activity was going on at the Plaintiff businesses." Paragraph 14. None of those statements was true (Paragraph 15) and the alleged defamatory statements "of dishonestly operating businesses engaged in criminal activity" caused the CEDF to remove the loan package from consideration without formal action as well as to advise a third party to "stay away from" the plaintiffs because of their criminal activities. Paragraph 17. The plaintiffs allege damage to their financial business and to their personal reputations as a result of the slander per se. Paragraph 18.
To establish a defamation claim under Connecticut law, plaintiff must prove the defendant published unprivileged false statements that harmed the plaintiffs. Cweklinsky v. Mobil Chemical Co., 297 F.3d 154, (2d. Circ., 2002); Abrahams v. Young Rubicam, Inc., 793 F.Sup. 404, affirmed in part, reversed in part 79 F.3d 234, cert. denied 519 U.S. 816, certified question answered 240 Conn. 300 (1997). If the false publication is written, it is libel; if it is oral, it is slander. Lizotte v. Welker, 45 Conn.Sup. 217, 219-20 (1996). "Defamation is that which tends to injure reputation in the popular sense; to diminish the esteem, respect, goodwill or confidence in which the plaintiff is held, or to excite adverse, derogatory, or unpleasant feelings or opinions against him." Lega Siciliana Social Club, Inc. v. St. Germaine, 77 Conn.App. 846, 851-52 (2003). To establish a prima facie case of defamation, a plaintiff must establish the defendant's publication of false statements harmed the plaintiff and the defendant was not privileged to do so. Kelley v. Bonney, 221 Conn. 549, 563 (1992). Speech is actionable "per se" when the defamatory meaning of the speech is apparent on the face of the publication. De Vito v. Schwartz, 66 Conn.App. 228, 234 (2001). Defamation is actionable per se when the utterance falsely charges a crime involving moral turpitude or to which an infamous penalty is attached. Battista v. United Illuminating Co., 10 Conn.App. 486, 493 (1987), cert. denied 204 Conn. 802, cert. denied 204 Conn. 803 (1987); Moriarty v. Lippe, 162 Conn. 371, 382 (1972). Whether words are actionable per se is a question of law for the court. Miles v. Perry, 11 Conn.App. 584, 602 (1987); Charles Parker Co. v. Silver City Crystal Co., 142 Conn. 605, 615 (1955). In making that determination, the court should attribute to the words used their common and ordinary meaning. Id., at 603. Relevant perhaps is that, to be defamatory, it is not necessary the communication actually cause harm to one's reputation; its characteristic depends upon its general tendency to have such effect. Abdelsayed v. Narumanchi, 39 Conn.App. 778, 785-86 n. 2, cert. denied 237 Conn. 915, cert. denied 519 U.S. 868; Restatement (Second) of Torts, § 559, comment.
As to Ledy Madero, the plaintiffs' only argument is that she was one of "those people" the committee was urged to "stay away from" and that she was included in the warning the CEDF should be "careful" when dealing with the Maderos. As to the two business plaintiffs, the charge leveled is that "criminal activity was going on at the Plaintiff businesses." Paragraph 14. It needs first be stated that the plaintiffs have alleged slander per se. Spoken words are actionable per se only if they charge a general incompetence or lack of integrity and they are not slanderous per se if they charge no more than specific acts unless those acts are so charged as to amount to an allegation of general incompetence or lack of integrity. Proto v. Bridgeport Herald Corp., 136 Conn. 557, 567 (1950). People's argument the plaintiffs must allege not only a crime but a crime of moral turpitude ignores even People's recognition slander is actionable "if it charges a professional person with general incompetence." Memorandum, at p. 12, citing to Miles v. Perry, 11 Conn.App. 584, 602 (1987). The question for the court then is whether the words in issue amount to an allegation of general incompetence or lack of integrity, the latter being more relevant here. In Proto, supra, the statement was that the plaintiff would have engaged in black market trading and tie-in sales (of meat and groceries) if only he had been able to get the (black market) butter he thought he was going to get; the Court found the charge to be one "of highly improper conduct in the operation of his business." Black's defines "integrity" as synonymous with "probity," "honesty," and "uprightness." Black's Law Dictionary, Fifth Edition, 1979. That charge of lack of integrity must be with regard to "one's business or profession." Moriarty v. Lippe, 162 Conn. 371, 384 (1972). Looking as she must to the allegations of the complaint, the court finds as a matter of law a cause of action sounding in slander per se is stated as to Ledy Madero. Paragraph 16a alleges "the defendant made statements to a third party that wrongfully and untruthfully accused her of dishonestly operating businesses which were engaged in illegal activity." As to the allegation there was "criminal activity" going on at El Pueblito and Envios, that assertion, read broadly, supports a cause of action for slander per se because an assertion of fact that those businesses were being operated in a manner devoid of integrity or sound moral grounding. People's does not challenge the legal sufficiency of this count as to Andre Madero. See fn. 6 on p. 9 of memorandum.
The advantage to be gained in pleading a slander per se is that plaintiffs need not plead or prove damages. Lega Siciliana Social Club, Inc. v. St. Germaine, 77 Conn.App. 846, 852 (2003); De Vito v. Schwartz, 66 Conn.App. 228, 235 (2001). Where what is pleaded is "ordinary" slander, a technical legal injury — an invasion of a legal right but no finding of a compensable injury, the plaintiff may recover general damages for reputational harm only upon proof of special damages for actual pecuniary loss suffered. Proto, supra, 136 Conn., at 564.
It also went on to find the publication of that statement would result in the grocer's losing the patronage of a substantial number of otherwise potential customers. 136 Conn. at 568. That requirement, however, is applicable only to a cause of action for libel per se — not here at issue.
Though the defendant argues privilege as to Count Three, it is as applicable to this count since a conditional or qualified privilege insulates many defamatory statements and shields defendants so privileged. People's claims the privilege set forth in Restatement (Second) of Torts, § 596, which provides the privilege attaches "if the circumstances lend any one of several persons having a common interest in a particular subject matter correctly or reasonably to believe that there is information that another sharing the common interest is entitled to know." While the claim here that statements of a bank's loan officer to other members of the loan committee may impose no liability, the privilege is defeated if the defendant acts with improper motive or if scope or manner of publication exceeds what is reasonably necessary to further its interest. Bleich v. Ortiz, CT Page 3464 196 Conn. 498, 501 (1985). Whether the privilege is defeated is a jury question. Id. The claim of privilege cannot therefore defeat a motion to strike.
The motion to strike Count Two is denied as to all plaintiffs.
Third Count (Tortious Interference With a Prospective Business Relationship)
Count Three iterates the prior allegations of Counts One and Two in their entirety. It then asserts, in Paragraph 13, People's tortiously interfered with El Pueblito's Restaurant business expectancy with CEDF in misrepresenting the Maderos and El Pueblito Restaurant were engaged in or connected to criminal activity, thus causing CEDF to take no action on El Pueblito's loan application. People's moves to strike this count on the grounds: a) plaintiffs have not alleged any facts to show People's committed a tort vis-a-vis El Pueblito; and b) the alleged statements of the People's representative are conditionally protected.
The parties agree this count is asserted only by El Pueblito Restaurant (Opp. Memorandum, at p. 19.) and the court does not therefore consider People's argument(s) as regards the other plaintiffs.
As People's aptly points out, while no person can justify an interference with another's business though fraud or misrepresentation or intimidation, obstruction, or molestation, the interference must result from the commission of a tort. People's concedes this count contains allegations of a prospective business relationship as to El Pueblito (Memorandum, at p. 18) and this court has already concluded El Pueblito is one of the businesses at which the defendant alleged criminal activity was being conducted. People's argues the absence of a "tort" from which the interference must have resulted. The "tort" element is satisfied by the allegation People's misrepresented the truth as to El Pueblito and that misrepresentation resulted in the Committee's failure to consider El Pueblito's loan application. As to People's claim here of the common interest conditional privilege, assuming it is appropriately raised by this motion, it cannot defeat this motion because the privilege can be lost if malice, improper motive or bad faith is shown and it therefore presents as a question of fact for the jury. See e.g., Charles Parker, supra, 142 Conn. 605, 615 (1955). The motion is denied as to Count Three (applicable only to El Pueblito).
Privilege is an affirmative defense in a defamation action and must therefore be specifically pleaded. See generally, Miles, supra, 11 Conn.App., at 589. See also Griffin v. Clemow, 28 Conn.Sup. 109 (Super.Ct. 1968).
Fourth-Seventh Counts (Emotional Distress) CT Page 3465
Counts Four and Five assert causes of action for intentional infliction of emotional distress as to Ledy Madero (Count Four) and Andre Madero (Count Five). Both counts assert prior allegations of the couple's national origin, their fifty percent (50%) ownership interest in both Envios and, El Pueblito Restaurant, McKernon's abrupt termination of the plaintiffs' personal and business accounts at People's, and the CEDF's refusal to consider the loan application of El Pueblito Restaurant at the November 2002, meeting of CEDF's loan committee and board as a result of People's having informed members of that committee or board to be "careful" when dealing with the Maderos, to "stay away from them," that Andre Madero "was implicated in a drug thing before" and had previously been arrested on drug charges, and that "criminal activity" was going on at the Plaintiffs' businesses. CEDF then advised a third party it would not consider the application for reason of allegations by People's to include the allegations of criminal activity. Paragraph 17 of Counts Four and Five allege that in making these allegations, People's "knew or should have known that its conduct would cause Ledy and/or Andre Madero "personally and in [his/her] capacity as 50% shareholder of El Pueblito Restaurant and Envios, emotional distress." Paragraph 18 of Counts Four and Five assert People's conduct was extreme or outrageous in that it was a) discriminatory in violation of Article 1, Section 20 of the Connecticut Constitution; b) recklessly indifferent to the truth by failing to investigate and or inquire whether any of the plaintiffs was or had ever been involved in unlawful activity; and c) recklessly indifferent to the truth by publishing the untruths to third parties — specifically, CEDF loan committee and board members. Paragraph 19 of both counts alleges the individual plaintiffs "suffered and continue to suffer severe emotional distress."
The allegations of Counts Six and Seven replicate the factual assertions of Counts Four and Five. Paragraph 17 of each count asserts People's knew or should have known its conduct would cause each individual plaintiff, personally and in his/her 50% shareholder capacity, emotional distress. It is alleged in each count that People's should have realized its conduct involved an unreasonable risk of causing each plaintiff, in his/her dual capacities, emotional distress "which might result in illness or bodily harm" (Paragraph 18) and that, as a result of the defendant's negligent infliction of emotional distress, each individual plaintiff has suffered and will likely continue to suffer emotional distress (Paragraph 19).
People's has moved to strike all four of these counts on the grounds: a) the plaintiffs fail to meet the elements required for a claim of emotional distress because they fail to allege truly outrageous conduct; and b) the conduct asserted did not occur in the plaintiffs' presence and did not "pertain to them." Motion, at p. 2.
People's states grounds in its memorandum not faithful to its motion. The motion states only that these counts are insufficient because the conduct "did not occur in the plaintiffs' presence, did not pertain to them, and/or was not extreme and outrageous as a matter of law." Motion, at p. 2. The memorandum claims "corporations cannot state a claim for emotional distress and . . . shareholders do not have standing to assert claims for corporate feelings or emotions." Memorandum, at p. 22. The court is obligated to consider only the grounds raised in the motion.
To maintain an action for intentional infliction of emotional distress, the plaintiff must establish four elements: "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 . . . 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 . . . Liability for intentional infliction of emotional distress requires conduct that exceeds all bounds usually tolerated by decent society . . ." Heim v. Calif. Fed. Bank, 78 Conn.App. 351, 365 (2003). To establish a claim of negligent infliction of emotional distress, the plaintiff must prove: "(1) the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress; (2) the plaintiff's distress was foreseeable; (3) the emotional distress was severe enough that it might result in illness or bodily harm; and (4) the defendant's conduct was the cause of the plaintiff's distress." DeCorso v. Watchtower Bible Tract Society of New York, Inc., 78 Conn.App. 865, 875 (2003), citing to Carrol v. Allstate Ins. Co., 262 Conn. 433, 444 (2003). With reference to intentional infliction of emotional distress, "[l]iability 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." (Citation omitted.) Heim, supra, 78 Conn.App., at 365. People's claims intentional and negligent infliction of emotional distress differ as to the state of mind (clearly true) but do not differ "as to the conduct claimed to be extreme and outrageous." Memorandum, at p. 27. It cites to Muniz v. Kravis, 59 Conn.App. 704, 709 (2000). That same Court, however, three (3) years later, cited approvingly Associate Justice Borden's concurring opinion in Carrol, supra, in which, with reference to the conduct alleged and burden of proof he declared, "[W]here the defendant's state of mind is purposefully to inflict emotional distress . . ., the plaintiff may not recover unless the defendant's conduct . . . is also extreme and outrageous; but where the defendant did not have such a malevolent state of mind, but merely was negligent, the plaintiff may recover without having to prove that the conduct engaged in by the defendant was extreme and outrageous." Benton v. Simpson, 78 Conn.App. 746, 757, citing to Carrol, supra, 262 Conn., at 452. "Thus, the more culpable the defendant's state of mind, the more difficult the plaintiff's burden of persuasion will be on the conduct element of the tort, and therefore, the less likely it is that the defendant will be held liable." (Emphasis added.) Id. The conclusion to be drawn appears clearly to be that, in the case of intentional infliction of emotional distress, the alleged conduct must be sufficiently extreme and outrageous as to transcend the bounds of intolerable behavior in a civilized society and poses a question of law for the court; in the case of negligent infliction of emotional distress, the conduct must transcend merely insulting behavior and, only where the court determines reasonable minds can disagree, does it become a question of fact for the jury.
Paragraph 18 of Counts Four and Five allege the extreme and outrageous conduct to consist of (a) discriminatory conduct (as earlier described), (b) reckless indifference to the truth by failure to investigate concerning "criminal activity" at the business, and (c) reckless indifference to the truth by publishing to loan committee members the warnings to "be careful when dealing with the Maderos" and to "stay away from these people," that Andre Madero had previously "been implicated in a drug thing" and "arrested on drug charges," and — again — that there was "criminal activity going on" at the plaintiff businesses. As a matter of law, the court finds (b) and (c) are legally insufficient to support a cause of action for intentional infliction of emotional distress. The failure to investigate could as well be negligent as intentional and the use of the phase "reckless indifference" in both (b) and (c) is a merely conclusory allegation as opposed to a "plain and concise statement of material fact" as required by Practice Book § 10-1. Nor are the words used so abhorrent as to transcend the merely insulting to the intolerable beyond any acceptable bounds of a civilized society. Additionally, as to (c), the use of the phrase "upon information and belief" with reference to the most serious of the verbal assertions claimed, is not a statement of fact but another conclusory allegation. As to (a), however, the court concludes the discriminatory conduct alleged in Paragraph 18 of the First Count (and referenced in Paragraph 18[a] here) is legally sufficient to maintain the cause of action alleged because such conduct, if proven, is clearly abhorrent, extreme, and outrageous. Counts Four and Five are asserted by the individual plaintiffs only and may be maintained only by them and solely with regard to the claimed discriminatory conduct.
Plaintiffs cite to Judge Devlin's decision in Dingle v. Fleet Bank, 2001 WL 282922 (Super.Ct. 2001), as support for their position that racially discriminatory practices can support the cause of action alleged in these counts. Of interest, however, is his rejection of the same phrase ("upon information and belief") to describe conduct alleged to be the factual basis for the tort claimed. Id., at *1.
The individual plaintiffs assert all of the allegations necessary to maintain a cause of action for negligent infliction of emotional distress and it is for a jury to determine whether the defendant, in conducting itself in all of the ways there asserted, created an unreasonable risk of causing the plaintiffs emotional distress, that the distress was foreseeable and sufficiently severe that it might result in illness or bodily harm, and was the cause of the distress of which they complain.
The Motion to Strike Counts Four and Five is denied except as to the allegations of Paragraph 18(b) and (c) of each count; it is denied in its entirety as to Counts Six and Seven.
Eighth Count (Breach of Implied Covenant of Good Faith and Fair Dealing)
Re-asserting all allegations regarding the closing of all of plaintiffs' accounts and the circumstances they allege resulted in CEDF's failure to consider the loan application of El Pueblito Restaurant. plaintiffs here assert that People's conduct breached its covenant of good faith and fair dealing with them — and thereby caused them damages — in one or more of the following ways: a) It discriminated against the individual plaintiffs based on ethnicity; b) It precipitously closed all of their accounts to include Andre Madero's personal credit line and Envios' credit agreement; c) It refused to keep open Envios' business checking accounts for a short period to allow checks and electronic withdrawals to clear; d) It published untruths about them to third parties; e) It interfered with the business expectancies of El Pueblito Restaurant; f) It held stereotyped images of the individual plaintiffs as Colombian nationals who engaged in criminal activities; and g) It erroneously concluded the plaintiffs were then or had been engaged in criminal conduct for reason of its (People's) failure to make reasonable inquiry or to conduct an investigation with regard to the accusations made. Paragraphs 25-26.
People's has moved to strike this count as to the individual plaintiffs and El Pueblito because the only contract alleged is as between People's and Envios.
In the words of our Appellate Court:
It is axiomatic that the . . . 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. Miller v. Guimaraes, 78 Conn.App. 760, 772-73 (2003), citing to Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 639 (2002).
The only contract which might give rise to this cause of action is the contract between People's and Envios. As People's correctly asserts in its reply memorandum, the "contract" between People's and the other plaintiffs (vis-a-vis the claim People's closed all of the business and personal accounts of these plaintiffs) cannot here be considered because it is nowhere alleged People's ever agreed, for example, to honor all checks regardless of the status of these accounts or not to terminate those accounts except on reasonable notice. It follows there is no contractual basis for this claim as asserted by Andre and Ledy Madero or El Pueblito Restaurant. Both parties ignore, however, that in order to recover for breach of the duty of good faith and fair dealing, the plaintiff Envios had to " allege and prove that the defendant(s) engaged in conduct design[ed] to mislead or to deceive . . . or a neglect or refusal to fufill some duty or some contractual obligation not prompted by an honest mistake as to one's rights or duties . . ." (Emphasis in original.) Miller, supra, 78 Conn.App., at 773; citing to Hunte v. Amica Mutual Ins. Co., 68 Conn.App. 534, 544-45 (2002). The absence of such allegations in Count Eight is fatal to Envios' claim. Facts found at trial but not averred in a complaint cannot be made the basis for recovery. Malone v. Steinberg, 138 Conn. 718, 721 (1952).
The motion to strike the Eighth Count as to all plaintiffs is granted.
Misjoinder
People's has moved to strike Counts Two-Eight for misjoinder because the issues presented by each alleged transaction concern separate subject matters, involve different businesses, and are improperly joined under P.B. § 10-21(7) and require resolution of separate legal and factual issues, thus making the joinder of plaintiffs bringing the causes of action based on the September and November of 2002 events improper under C.G.S. § 52-104.
It acknowledges the counts for which misjoinder should be considered is dependent upon the court's ruling re the legal insufficiency of each such count.
P.B. § 10-21(7) provides a plaintiff may include in a complaint both legal and equitable rights and causes of action and demand both legal and equitable remedies but, "if several causes of action are united in the same complaint, they shall all be brought to recover `upon claims, whether in contract or tort or both, arising out of the same transaction or transactions connected with the same transaction or transactions connected with the same subject of action.'" Whenever any party wishes to contest the joining of two or more causes of action which cannot properly be united in one complaint, whether the same be stated in one or more counts, that party may do so by filing a motion to strike." Griffith v. Espada, Docket No. 489998, judicial district of New Britain, Robinson, J. (January 25, 1999); accord Cote v. General Motors Corp., Docket No. 110585, judicial district of New London at Norwich, Booth, J. (February 6, 1997).
It is clearly so that this litigation focuses on two (2) transactions. The First Count is grounded upon the alleged discriminatory closing in October of 2002 of all of the personal and business accounts of the plaintiffs without notice and contrary to the claimed terms of the parties' agreement. The Second-Seventh Counts concern a loan application made by one of the plaintiff businesses in November of 2002 to a CEDF loan committee and board, which application, it is alleged, the committee failed to consider for reason of defamatory statements about the plaintiffs to the committee by a People's representative. While it is also so that some of the second grouping of counts are applicable only to one of the two businesses and some apply only to the individual plaintiffs, the individual plaintiffs are the sole shareholders of both closely held corporations and all of the causes of action asserted in the Second-Seventh Counts incorporate the discriminatory allegations of the First Count. In point of fact, the later counts, as pled, depend in part upon the facts stated in the First Count to establish the tort(s) alleged and the relief sought. Since P.B. § 10-21 permits the court discretion re misjoinder ("[I]f it appears to the judicial authority that they cannot all be conveniently heard together, it may order a separate trial of any such cause of action . . ." [Emphasis added.]) and because the court concludes there is substantial unity based as each count is upon alleged factually erroneous conclusions and conduct by People's, the court rejects the conclusion urged by the defendant for the following reasons:
People's incorrectly states the first transaction involves only the closing of the Envios account. Memorandum, at p. 33.
The Eighth Count has been stricken in its entirety.
1) Contrary to People's claim that these transactions and the causes of action based on them require the resolution of separate legal and factual issues (Memorandum, at p. 34), trial of the Second-Seventh Counts will necessarily require not only the participation of all of the parties required in a trial of the First Count but will also require all of the testimony and evidence required in a trial of the First Count. For trial purposes, they are not severable without necessarily being duplicative for the reason just above referenced. To impanel two (2) juries and conduct two (2) trials under these circumstances would be an indefensible misuse of judicial time, personnel, and effort and an unsupportable inconvenience to the parties and witnesses.
2) C.G.S. § 52-104, upon which the defendant also relies, does not mandate the conclusion urged by People's. Construing a predecessor statute, our Supreme Court has said, "Independent of statutory authority, courts of general jurisdiction have inherent power to consolidate different causes, or order them tried together . . . and unless otherwise provided by statute, questions respecting such procedure are addressed to the discretion of the trial court . . ." (Citation omitted.) Rode v. Adley Express Co., Inc., 130 Conn. 274, 277 (1943). The Court then went on to discuss the public policy reasons (as above here referenced) favoring consolidation. § 52-104 being a remedial statute, it is to be liberally construed. See e.g., Goggins v. Fawcett, 145 Conn. 709, 710 (1958).
The precise language directly cited by plaintiffs (on p. 34 of their memorandum) as attributable to Goggins, supra, not only does not appear on the page cited but does not appear anywhere within that decision. Such inattention to detail not only disserves the court but is an impediment to legal scholarship which renders suspect every other citation in the body of work.
3) Cases on the Complex Litigation Docket are there because the matters are "complex" and often combine various causes of action. Also, the court is struck by the irony of the defendant having requested a transfer of this suit from the regular docket to the Complex Litigation Docket because the case involved four plaintiffs and eight counts (Application of May 10, 2004) and then, once the transfer was effected, moving for misjoinder because the case improperly combined multiple plaintiffs and multiple causes of action. If, as defendant impliedly suggests, only the First Count would be tried on a given date, that would not be the trial of a complex litigation case and there would be no reason for its presence on this docket.
The motion for misjoinder is denied.
ORDER
As to the First, Second, Third, Sixth, and Seventh Counts, the motion is denied;
As to the Fourth and Fifth Counts, the motion is granted as to Envios and El Pueblito Restaurant; it is denied as to Andre and Ledy Madero with regard only to the claimed discriminatory conduct as alleged in Paragraph 18a;
As to the Eighth Count, the motion is granted; and as to the motion for misjoinder, it is denied.
B.J. SHEEDY, J.