Opinion
X08FSTCV156039557S
08-22-2019
Richard O’DONNELL v. AXA EQUITABLE LIFE INSURANCE CO.
UNPUBLISHED OPINION
OPINION
Hon. Charles T. Lee, Judge
Presently before the court are the defendant’s motion to dismiss (#103) and motion to strike (#106) in this action to the purchase of a variable annuity. The plaintiff, Richard O’Donnell, commenced this class action against the defendant, AXA Equitable Life Insurance Company, on August 21, 2015. In his complaint, the plaintiff asserts a single claim for breach of contract against the defendant. On December 27, 2018, the defendant filed both a motion to strike the sole count of the plaintiff’s complaint, and a motion to dismiss the plaintiff’s complaint to the extent that it purports to assert claims on behalf of members of a putative class who are not Connecticut residents. In support of its motion to strike and motion to dismiss, the defendant filed memoranda of law (#107 and #104 respectively). The plaintiff filed memoranda in opposition to the motion to strike and motion to dismiss on March 13, 2019 (119 and #118 respectively). The defendant filed reply memoranda on April 12, 2019 (#120 and #121). The court heard oral argument on the two motions on May 6, 2019. For the reasons more fully set forth below, the defendant’s motion to strike is granted, and the motion to dismiss is denied as moot.
PROCEDURAL HISTORY
The plaintiff commenced this action on August 21, 2015 upon serving the defendant with process, and the defendant removed this action to the District Court for the District of Connecticut on September 10, 2015. The basis for such removal was 28 U.S.C. § § 1441 and 1446, along with the removal provision of the Securities Litigation Uniform Standards Act, 15 U.S.C. § 78bb(f) et seq. ("SLUSA"). The action was later transferred to the District Court for the Southern District of New York. The plaintiff moved to remand this action, and the defendant moved to dismiss it as precluded by SLUSA.
On March 30, 2017, the District Court for the Southern District of New York entered an opinion denying the plaintiff’s motion to remand and granting the defendant’s motion to dismiss. The plaintiff filed an appeal of this decision. On April 10, 2018, the Second Circuit issued an opinion reversing the District Court’s granting of the motion to dismiss, and remanded it back to the District Court with instructions to remand the action to this court. The District Court remanded the case back to this court on December 6, 2018.
ALLEGATIONS OF THE COMPLAINT
The plaintiff alleges the following facts in his complaint: The plaintiff is a resident of the state of Connecticut. The defendant is a corporation organized under New York law with its principal place of business in New York. It is a foreign insurance company that is authorized and licensed to do business in Connecticut. The defendant offers a broad portfolio of life insurance products and a variety of annuity products, including fixed deferred annuities, payout annuities, and variable annuities. A variable annuity, the product at issue in the present action, is a contract between a purchaser and an insurance company whereby the insurance company agrees to make periodic payments to the purchaser. Variable annuity policies generally permit the holders to allocate their premiums towards various investment options, each of which have differing risk-reward characteristics.
In November 2008, the plaintiff purchased a variable annuity from the defendant. The variable annuity policy that the plaintiff and the putative class members purchased permitted the holders to acquire, for an additional premium, a guarantee that certain benefits would increase by a minimum percentage each year. This guarantee, combined with other provisions in the policy, effectively immunized these benefits from the risks attendant to stock market volatility. In addition, the policies provided that: (1) the defendant would comply with all applicable laws, (2) the variable annuity accounts would be established and maintained pursuant to New York law, (3) the defendant would not change the investment policy unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with applicable laws or regulations, and (4) the defendant would make no material change without prior approval of the Superintendent of Insurance.
Sometime between 2009 and 2011, the defendant began implementing a new strategy known as the AXA Tactical Manager Strategy (the "ATM Strategy") in order to reduce its own risks and costs in connection with the variable annuities. The ATM Strategy reduced the defendant’s exposure to market volatility, which was the risk that policyholders of the variable annuities were paying the defendant to assume in purchasing guaranteed benefits. The defendant allegedly did not obtain the requisite permission to make these changes, which materially changed the variable annuity products.
In March 2014, the New York State Department of Financial Services (the "NYDFS") announced that it had entered into a consent order with the defendant, which is attached to the plaintiff’s complaint. The consent order stated that the defendant failed to adequately inform the NYDFS and its predecessor about the significance of the changes that implementation of the ATM Strategy would cause to existing policyholders. Specifically, the consent order indicated that the ATM Strategy effectively changed the nature of the product, and that the defendant did not explain to the NYDFS that it was making such changes to its variable annuity products. The consent order further stated that "[h]ad the Department been aware of the extent of the changes, it may have required that the existing policyholders affirmatively opt in to the ATM Strategy." Complaint, Exhibit A ¶9. The consent order also found that the defendant had violated New York Insurance Law § 4240(e) by filing plans of operation without adequately informing and explaining the significance of the changes to the NYDFS, and imposed a fine of $20,000,000 (twenty million dollars) on the defendant. However, the consent order did not prohibit the defendant from continuing to use the ATM Strategy in the future. Instead, it required the defendant to seek all necessary approvals for future changes to its policies. The plaintiff alleges that the defendant’s failure to seek the requisite approval from the NYDFS prior to implementing the ATM Strategy damaged him and the other class members because policies without the ATM Strategy generated higher returns to policyholders than the ones that utilized the ATM Strategy.
CONTENTIONS OF THE PARTIES
In their memorandum of law in support of the instant motion, the defendant argues that the plaintiff cannot plead a breach of contract action because the NYDFS approved the implementation of the ATM Strategy, and this approval has not been withdrawn or revoked. The defendant also maintains that the plaintiff cannot plead a breach of contract claim because he has represented to several federal courts that his complaint cannot be read to allege that the defendant made any misrepresentations or omissions to the NYDFS. As a result, the plaintiff cannot plead an underlying violation of N.Y. Ins. Law § 4240(e) to support his breach of contract claim. The defendant next contends that the plaintiff’s breach of contract claim fails because he cannot plead with reasonable certainty that he was harmed as a result of any alleged breach. Because the damages element of his claim is speculative, it is insufficiently pleaded as a matter of law. Finally, the defendant argues that, should the plaintiff seek recovery on the theory that the defendant misrepresented or omitted to disclose some fact to him or to the NYDFS, the court should exercise its authority to dismiss this action as precluded by SLUSA.
N.Y. Ins. Law § 4240(e) (McKinney) provides: "No authorized insurer shall make any such agreement in this state providing for the allocation of amounts to a separate account until such insurer has filed with the superintendent a statement as to its methods of operation of such separate account and the superintendent has approved such statement. Subject to the approval of the superintendent, any such statement may apply to one or more groups of separate accounts classified by investment policy, number or kinds of separate account participants, methods of distribution of such agreements or otherwise. In determining whether or not to approve any such statement, the superintendent shall consider, among other things, the history, reputation and financial stability of the insurer and the character, experience, responsibility, competence and general fitness of the officers and directors of the insurer. If the insurer files an amendment of any such statement with the superintendent that does not change the investment policy of a separate account and the superintendent does not approve or disapprove such amendment within a period of thirty days after such filing, such amendment shall be deemed to be approved as of the end of such thirty-day period, except that if the superintendent requests further information on the statement during such period from the insurer, such period shall be extended until thirty days after the day on which the superintendent receives such information. An amendment of any such statement that changes the investment policy of a separate account shall be treated as an original filing."
In response, the plaintiff contends that the defendant’s motion to strike must be denied because the defendant is claiming it does not know precisely what laws the plaintiff alleges that the defendant failed to comply with, and that the proper way to cure this confusion would have been through a request to revise. The plaintiff also argues that he has sufficiently pleaded each of the elements for a breach of contract claim, and that the plaintiff does not need to allege that a misrepresentation or omission was made to allege a breach of contract claim. Moreover, the plaintiff maintains that he has adequately pleaded that the defendant’s breach caused him damages because the complaint alleges that the policies that did not utilize the ATM Strategy generated higher returns to policyholders. The plaintiff also argues that the defendant’s motion to strike improperly relies on evidence outside of the complaint. Finally, the plaintiff contends that the court does not need to revisit the defendant’s SLUSA argument because the Second Circuit has already addressed it and found it to be without merit.
STANDARD OF REVIEW
"The purpose of a motion to strike is to contest ... the legal sufficiency of the allegations of any complaint ... to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498 (2003). "[A] motion to strike challenges the legal sufficiency of a pleading and, consequently, requires no factual findings by the trial court ... [The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency." (Internal quotation marks omitted.) Geysen v. Securitas Security Services USA, Inc., 322 Conn. 385, 398 (2016). "In ruling on a motion to strike, the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580 (1997). "A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 349 (2013).
DISCUSSION
A. Whether the Plaintiff Sufficiently Alleged a Breach of a Contract
"The elements of a breach of contract action are the foundation of an agreement, performance by one party, breach of the agreement by the other party and damages." (Internal quotation marks omitted.) Keller v. Beckenstein, 117 Conn.App. 550, 558, cert. denied, 294 Conn. 913 (2009). The breach of the agreement element is the first portion of the plaintiff’s breach of contract claim that the defendant claims is insufficiently pleaded. The defendant makes several arguments in support of this contention. First, the defendant argues that the plaintiff has not pleaded a legally sufficient breach of contract claim because he does not identify a specific provision in his variable annuity contract that the defendant allegedly violated. Second, even if the plaintiff did point to a specific provision, the defendant maintains that his breach of contract claim is still insufficiently pleaded because the NYDFS approved the changes to the annuities that the defendant made prior to when the ATM Strategy was introduced. Moreover, the NYDFS never withdrew or revoked its approval of the ATM Strategy’s implementation, notwithstanding its criticisms of the defendant’s filings. Third, the defendant also contends that the plaintiff’s breach of contract claim fails because, in order to plead a breach of contract claim predicated on an alleged violation of N.Y. Ins. Law § 4240(e), the plaintiff would need to allege facts sufficient to establish that the defendant misstated or failed to disclose necessary information in its filings with the NYDFS. Because the plaintiff has repeatedly made statements to other federal courts that his complaint should not be read to make such allegations in order to prevent his action from being dismissed pursuant to SLUSA, these representations bind him and foreclose any breach of contract action premised on putative misrepresentations or omissions in the defendant’s filings with the NYDFS.
In response, the plaintiff argues that the defendant’s motion to strike must be denied because it failed to file a request to revise in order to determine with which laws the plaintiff alleges that the defendant failed to comply. The plaintiff also argues that his breach of contract claim is pleaded sufficiently because he has alleged each element of a breach of contract claim, and that he did not need to allege that the defendant made a misstatement or omission to allege an adequate breach of contract claim. Finally, the plaintiff argues that the defendant’s motion to strike relies improperly on evidence outside of the complaint.
Based on the allegations in the plaintiff’s complaint, the court concludes that the plaintiff has sufficiently pleaded that the defendants breached the annuity policy at issue. In his complaint, the plaintiff alleges that the policy states that the defendant "will comply with all applicable laws." Complaint, ¶14. The consent order attached to the complaint expressly states that the defendant violated N.Y. Ins. Law § 4240(e) "by filing the Plans of Operation with the NYSID and DFS without adequately informing and explaining to the Department the significance of the changes to the insurance product" and imposed a $20 million dollar fine on defendant. Complaint, Exhibit A ¶11. These allegations, when construed in the manner most favorable to sustaining their legal sufficiency, sufficiently plead that the defendant breached its contract with the plaintiff. See Geysen v. Securitas Security Services USA, Inc., supra, 322 Conn. 398. The allegation that the defendant "will comply with all applicable laws" clearly states a term contained in the annuity policy, and, when read together with the finding expressed in the consent order that the defendant violated New York insurance law, sufficiently pleads that a contract term was violated.
Contrary to the plaintiff’s argument, the defendant’s motion to strike is procedurally proper and the defendant was not required to file a request to revise. A request to revise is utilized when a party seeks to force its adversary to make corrections to its pleadings to delete defects such as unnecessary, repetitious, scandalous, immaterial or otherwise improper allegations; Practice Book § 10-35; while a motion to strike contests the legal sufficiency of the pleadings. Practice Book § 10-39. In the present action, the defendant is not claiming that it is confused or that the plaintiff’s allegations are somehow improper because it does not know precisely what laws the plaintiff alleges that it violated. Instead, the defendant is arguing that the facts that the plaintiff alleges are insufficient to state a claim upon which relief can be granted. See Def’s Memorandum in Support of Motion, pgs. 14-20. Accordingly, the plaintiff’s argument that the defendant should have filed a request to revise rather than a motion to strike is unavailing.
Because the consent order was attached to the complaint, the consent order is considered a part of the complaint, and the court can properly consider its contents when ruling on this motion to strike. Dlugokecki v. Vieira, 98 Conn.App. 252, 258 n.3, cert. denied, 280 Conn. 951 (2006). In his opposition to the defendant’s motion to strike, the plaintiff argues that the defendant’s motion improperly relies on evidence outside the complaint. Because the consent order is a part of the complaint, the plaintiff’s contention is without merit to the extent that the defendant relies on the consent order. The plaintiff also appears to argue that the defendant improperly relied on statements made to the district courts in other actions. Because the court does not base its ruling on any of these statements and finds them to be immaterial to the present action, the court need not address this argument in relation to those statements.
The defendant makes three arguments in support of its contention that the plaintiff has failed to sufficiently plead that it breached the terms of the annuity policy, none of which are persuasive. The defendant first argues that the breach of contract claim should be stricken because the plaintiff failed to identify a specific contract provision that was breached. Contrary to the defendant’s contention, however, the complaint does identify a specific provision in the annuity policy that the defendant allegedly violated, as the plaintiff expressly alleges that the policy required the defendant to comply with all applicable laws. The cases that the defendant cites in support of its position are also distinguishable from the present action. See DVG Public Adjustment Services, LLC v. Peoples United Bank, Superior Court, judicial district of New Haven, Docket No. CV-15-6055941-S (May 12, 2016, Wilson, J.) (granting motion to strike breach of contract claim when plaintiff failed to allege the specific contract provision that was breached and instead vaguely alleged that defendant’s conduct "exceeded its rights" under the applicable contract); Schifano v. Bank of New York Co., Superior Court, judicial district of Danbury, Docket No. CV-12-5009097-S (April 1, 2013, Doherty, J.) (granting motion to strike breach of contract claim when plaintiff failed to specifically identify any provision that the defendant allegedly breached). The defendant’s first argument is thus unavailing.
Second, the defendant contends that the plaintiff’s breach of contract claim is insufficiently pleaded because the NYDFS approved the changes to the annuities, and never withdrew or revoked its approval notwithstanding its subsequent criticisms of the defendant’s filings. This argument appears to attack the plaintiff’s allegation that the policy contained a provision stating that "the defendant would not change the investment policy unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with applicable laws or regulations." Complaint, ¶14. Because the court has already concluded that the defendant’s violation of the New York Insurance Law constituted a breach of the annuity policy, whether the NYDFS approved the changes to the annuity is immaterial.
Finally, the defendant argues that the plaintiff’s breach of contract claim fails because, in order to plead a breach of contract claim predicated on an alleged violation of N.Y. Ins. Law § 4240(e), the plaintiff would need to allege facts sufficient to establish that the defendant misstated or failed to disclose necessary information in its filings with the NYDFS. In essence, the defendant is arguing that the plaintiff has pleaded himself out of court by stating that his breach of contract claim is not based on any misrepresentations or omissions that the defendant made to either himself or to the NYDFS in order to avoid SLUSA’s preclusive effect. This argument fails, however, because the plaintiff is not required to allege any such facts in order to plead a sufficient breach of contract claim. See Keller v. Beckenstein, supra, 117 Conn.App. 558. The plaintiff has satisfied his pleading requirements for purposes of this motion to strike on the breach of the agreement element by alleging a specific provision that the policy contained and alleging facts sufficient to support his allegation that the defendant breached this provision. Moreover, the case that the defendant relies on in support of this contention is distinguishable from the present action. See Beary v. ING Life Ins. and Annuity Co., 520 F.Supp.2d 356 (2007). In Beary, the plaintiff, in an attempt to avoid SLUSA preemption, refashioned his claim to expressly disavow any reliance on misrepresentation, manipulation, scheme, or fraud. Id., 364. These concessions, however, left the plaintiff with no viable breach of fiduciary duty claim, and resulted in a lawsuit that did not state a valid cause of action. Id., 358. This is not the case in the present action, as the plaintiff did not need to plead any misrepresentations or omissions in order to maintain a legally sufficient breach of contract claim. Consequently, none of the defendant’s arguments are persuasive.
Accordingly, the court concludes that the plaintiff has sufficiently pleaded that the defendant breached a term of the annuity policy.
B. Whether the Plaintiff Has Sufficiently Pleaded Causation of Damages
The defendant next contests the legal sufficiency of the damages element of the plaintiff’s breach of contract claim. The defendant argues that the plaintiff’s complaint does not plead any facts showing that a breach of the annuity policy caused the plaintiff to suffer any damages. Specifically, the defendant contends that the plaintiff appears to be speculating that, but for the putative deficiencies in its filings with the NYDFS, the NYDFS would never have permitted the use of the ATM Strategy and the funds in his annuity would have been invested in other investments. The defendant further maintains that the consent order itself confirms that this was not the case, as the NYDFS did not revoke or withdraw its approval of the ATM Strategy and permitted the defendant to continue utilizing it. Instead, the NYDFS suggested that if the defendant’s filings had been different, it "may have required that the existing policyholders affirmatively opt in to the ATM Strategy." Complaint, Exhibit A ¶9. Accordingly, the plaintiff relies on impermissible speculation to make his prima facie case that he was damaged. In response, the plaintiff argues that he has sufficiently alleged that the defendant’s breach of the annuity policy caused him damages because the complaint alleges that the policies that did not utilize the ATM Strategy generated higher returns to policyholders.
Causation of damages is a crucial element in a prima facie case for breach of contract. See McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 504, cert. denied, 277 Conn. 928 (2006). A plaintiff "may recover only for damages that are direct[ly] and proximate[ly] caused by a defendant’s breach of contract ..." (Internal quotation marks omitted.) Id. "The causation requirement focuses on whether a loss may fairly and reasonably be considered [as] arising naturally, i.e., according to the usual course of things, from such breach of contract itself." (Internal quotation marks omitted.) Meadowbrook Center, Inc. v. Buchman, 149 Conn.App. 177, 187 (2014). Generally, "damages for breach of contract are recoverable where: (1) the damages were reasonably foreseeable by the breaching party at the time of contracting; (2) the breach is a substantial causal factor in the damages; and (3) the damages are shown with reasonable certainty." Id., 186. "Under Connecticut law, damages may not be predicated on a contingency," and "recovery for speculative damages is precluded." Id., 191-93. See also Leisure Resort Technology, Inc. v. Trading Cove Associates, 277 Conn. 21, 35 (2006) (noting damages may not be calculated based on a contingency or conjecture).
Meadowbrook, Leisure Resort, and Criscuolo v. Shaheen, 46 Conn.Supp. 53 (1999) , are all instructive on the issue of whether the plaintiff has sufficiently pleaded the causation element for his breach of contract claim. In Meadowbrook, the defendant’s mother entered care at the plaintiff residential care facility. Meadowbrook Center, Inc. v. Buchman, supra, 149 Conn.App. 181. The mother agreed to pay for her care, except to the extent that Medicare or Medicaid covered it. Id., 179. Once her assets ran out, the defendant agreed to provide any information that the Connecticut Department of Social Services (the "department") requested in order to apply for Medicaid assistance. Id., 180. The defendant, however, failed to provide the requested information, and his mother’s Medicaid application was denied. Id., 181. When the mother died, she had an unpaid balance of $99,820.78 due to the plaintiff. Id. The plaintiff then sued the defendant, alleging that he had breached the agreement by failing to provide the requested information for his mother’s Medicaid application in a timely fashion. Id., 181-82. The parties stipulated that, had the department granted the mother’s application for Medicaid benefits, the department would have paid the plaintiff $47,561.18. Id., 181. The trial court held for the plaintiff, and the defendant appealed. Id., 184.
On appeal, the Appellate Court reversed the trial court’s holding on the ground that the damages stemming from the breach of the agreement were impermissibly speculative. Meadowbrook Center, Inc. v. Buchman, supra, 149 Conn.App. 184. In so holding, the Appellate Court held that the plaintiff had failed to provide evidence of causation because "the plaintiff produced no evidence that established or supported an inference that, had the defendant complied with his obligations under the agreement, the department would have granted, and the plaintiff would have received, those Medicaid benefits." Id., 191-92. Because the plaintiff’s claim for damages was predicated on an unresolved contingency, the approval of the mother’s Medicaid application, "the court’s finding that [b]y failing to make the deadlines set by the [department], the defendant caused the plaintiff to lose the Medicaid money is mere speculation and conjecture, which are not allowable in a breach of contract action." (Internal quotation marks omitted.) Id., 193.
In Leisure Resort, the plaintiff sued the defendant in a dispute arising from the sale of the plaintiff’s beneficial interest in a corporation that was planning to construct and manage a casino. Leisure Resort Technology, Inc. v. Trading Cove Associates, supra, 277 Conn. 24-25. While the plaintiff and defendant were negotiating the terms of the sale, the defendant was engaged in talks with the Mohegan tribe to terminate its existing agreements with the tribe and to establish a new agreement that would expand the tribe’s gaming and nongaming facilities. Id., 25. Although the defendant had informed the plaintiff that it was in negotiations with the tribe, it did not fully inform it of the details and substance of its negotiations. Id., 28. Nevertheless, the plaintiff entered into an agreement with the defendant to sell its beneficial interest. Id., 27. The defendant’s negotiations with the tribe later came to fruition, as they entered into agreements that provided the defendant with the right to develop a new casino, luxury hotel, and convention and events center. Id. The plaintiff then brought an action against the defendants alleging claims for breach of fiduciary duties, fraudulent nondisclosure, and unjust enrichment. Id., 28. The defendant moved for summary judgment, and the court granted the defendant’s motion on the ground that the plaintiff could not satisfy its burden of proving the diminution in value of its beneficial interest caused by the defendants’ alleged nondisclosure. Id., 29. The plaintiff appealed.
On appeal, the Supreme Court affirmed the trial court’s ruling. In so holding, the court noted that the formula that the plaintiff had based its damages calculations on was flawed. This was because the calculation relied on values that the defendant and tribe had exchanged during negotiations which had not been finalized as of the date that the plaintiff sold its beneficial interest to the defendant. Leisure Resort Technology, Inc. v. Trading Cove Associates, supra, 277 Conn. 36. Thus, the values that the plaintiff submitted were subject to two contingencies: (1) that an agreement would be reached; and (2) that those values would be reflected in the final agreement. Id. Neither of these contingencies, however, "had been resolved as of the date of the sale of the plaintiff’s beneficial interest." Id. As a result, the court held that the trial court had "correctly concluded that any enhancement in the actual value of the beneficial interest at the time of its sale due to the ongoing negotiations would have been speculative." Id.
In Criscuolo, the trial court granted the defendant’s motion to strike the plaintiff’s claims for fraud, forgery, and violation of the Connecticut Unfair Trade Practices Act ("CUTPA"). Criscuolo v. Shaheen, supra, 46 Conn.Supp. 63. The plaintiff brought these claims against the defendant, alleging that the defendant forged her signature on a sales contract for the purchase of a condominium unit. Id., 54. The plaintiff alleged that due to the defendant’s conduct, she "may potentially suffer increased tax liabilities, including but not limited to, Connecticut Gift Tax, Federal Gift Tax, and State of Connecticut Transfer Tax." Id. The court held that the plaintiff had failed to state legally sufficient causes of action for all three claims on the ground that the damages alleged were speculative at best. Id., 54-55. For the fraud and forgery claims, the plaintiff was required to allege actual damages, as damages in a fraud action may not be speculative or contingent, and the plaintiff based her damages for her forgery claim on the same allegations pleaded for her fraud claim. Id., 57-58. The damages that the plaintiff alleged, however, were both speculative and contingent, as the plaintiff would not suffer any damages if she incurred no tax liability due to the defendant’s conduct. Id., 58. As a result, the court held that the plaintiff’s fraud and forgery claims were legally insufficient. Id., 58-60.
The court made a similar finding regarding the plaintiff’s CUTPA claim. To state a legally sufficient CUTPA claim, the plaintiff was required to allege that she suffered an ascertainable loss. Criscuolo v. Shaheen, supra, 46 Conn.Supp. 61. Based on this principle, the court concluded that her CUTPA claim was legally insufficient because the plaintiff "relie[d] on speculation rather than inference to establish her asserted loss, and it is the necessity of speculation that is fatal to her cause." Id., 63. Because the plaintiff did not allege facts from which it could safely be inferred that the alleged tax liabilities would in fact be incurred, her CUTPA claim failed. Id. Accordingly, the court granted the defendant’s motion to strike as to all three claims. Id.
In the present action, the court concludes that the causation of damages the plaintiff has alleged for his breach of contract claim are speculative, and that, as a result, his complaint fails to plead facts that sufficiently allege the causation element of his breach of contract claim. Like the plaintiff in Meadowbrook, the plaintiff here bases his damages on speculation concerning what the NYDFS may have done had the defendant adequately informed and explained the significance of the changes that the ATM Strategy made. See Meadowbrook Center, Inc. v. Buchman, supra, 149 Conn.App. 193. For example, the plaintiff appears to allege that, but for the deficiencies in the defendant’s filings with the NYDFS, the NYDFS would not have permitted the use of the ATM Strategy, and the plaintiff’s annuity account would have performed better without it. In addition to the fact that these purported allegations are based on pure speculation, the remaining paragraphs of the consent order further foreclose the plaintiff’s causation theory. Although the NYDFS criticized the defendant’s implementation of the ATM Strategy, it did not prohibit the defendant from using the ATM Strategy in the future, or require it to make reparations to the affected policyholders. Instead, the consent order stated that, had the NYDFS "been aware of the extent of the changes, it may have required that the existing policyholders affirmatively opt in to the ATM Strategy." (Emphasis added.) Complaint, Exhibit A ¶9. The plaintiff cannot rely on this paragraph either, however, because it is predicated on a contingency, and any reliance on this paragraph to allege causation of damages would involve impermissible speculation concerning what the NYDFS may or may not have done. The necessity of the plaintiff’s reliance on speculation in order to plead causation is thus fatal to his breach of contract claim. See id., 63.
Moreover, none of the plaintiff’s allegations can be construed to support an inference that such contingencies would actually occur. See Meadowbrook Center, Inc. v. Buchman, supra, 149 Conn.App. 191-92; Criscuolo v. Shaheen, supra, 46 Conn.Supp. 63. The plaintiff, for example, pleads no facts that would allow the inferences that had the NYDFS known the full extent of the changes that the ATM Strategy made, it would have prevented the defendant from implementing it, or that the NYDFS would have required the defendant to allow existing policyholders to opt into the ATM Strategy. The only allegations that relate to these issues are the contents of the consent order, which, as discussed above, do not indicate that the NYDFS would have prevented implementation or required the offer to allow existing policyholders to opt in to the ATM Strategy. Additionally, the plaintiff even fails to plead that he would have chosen to opt into the ATM Strategy if he had the opportunity to do so. The lack of facts sufficient to support any inference that the defendant’s actions caused the plaintiff damages, therefore, further indicates that the causation of damages element of the plaintiff’s breach of contract claim is legally insufficient.
Finally, the plaintiff argues that he has sufficiently alleged that he was damaged and that the defendant’s actions caused his damages because the losses that he alleges in his complaint were neither speculative nor conjecture. In support of this contention, the plaintiff points to his allegation that "during the period 2010 through 2012, there was a sharp divergence in performance between two equivalent investments that was attributable to the use of the ATM Strategy. Specifically, the investment without the ATM Strategy generated approximately 11.5 percent higher returns to policyholders during this period than the investment that utilized the ATM Strategy." Complaint, ¶23. This method that the plaintiff alleges can be used to calculate damages, however, is premised on the impermissible speculations and unresolved contingencies that the court has identified above. See Leisure Resort Technology, Inc. v. Trading Cove Associates, supra, 277 Conn. 36. Therefore, even if the measure of damages that the plaintiff alleges were acceptable, this does not resolve the pleading deficiencies in the causation element of his breach of contract claim. See id., 35.
In summary, the court concludes that the plaintiff’s breach of contract claim fails as a matter of law because he has failed to adequately allege that the defendant’s actions caused him damages. Accordingly, the court grants the defendant’s motion to strike the sole count of the plaintiff’s complaint.
For its final argument, the defendant contends that the court should exercise its authority and dismiss this action as precluded by SLUSA if it concludes that the plaintiff seeks recovery on a theory that the defendant misrepresented or omitted some fact to him or to the NYDFS. The court need not reach this argument, having already concluded that the plaintiff’s breach of contract claim is legally insufficient due to his failure to adequately allege that the defendant’s breach caused him damages. In any event, the court declines the defendant’s invitation to diverge from the Second Circuit’s opinion in O’Donnell v. AXA Equitable Life Ins. Co., 887 F.3d 124 (2d Cir. 2018), especially given that "[i]t is well established that when Connecticut courts interpret federal statutes, [t]he decisions of the Second Circuit Court of Appeals carry particularly persuasive weight." Modzelewski’s Towing & Recovery, Inc. v. Commissioner of Motor Vehicles, 322 Conn. 20, 32 (2016), cert. denied, 137 S.Ct. 1396 (2017).
CONCLUSION
By reason of the foregoing, the court grants the defendant’s motion to strike the sole count of the plaintiff’s complaint. Because the court is granting the defendant’s motion to strike, the defendant’s motion to dismiss is denied as moot.