Opinion
No. CV 03 0070087
July 20, 2004
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO STRIKE #110
BACKGROUND
On January 28, 2004, the plaintiff, Barry Pohronezny, filed an eight-count revised complaint against the defendant, Donald Wilcox, Jr. In counts one (breach of contract), two (quantum meruit) and three (unjust enrichment), the plaintiff alleges the following facts. In October 1998, the plaintiff and defendant entered into an oral agreement pursuant to which the plaintiff agreed to make improvements to the defendant's tavern, the Hangout Cafe, located at 48 Prospect Street in Moosup, Connecticut. In exchange for the plaintiff's services, the defendant agreed to pay the plaintiff 25 percent of the net proceeds from the eventual sale of the business and adjoining real property. The parties further agreed that the business and real property would not be sold immediately, rather the plaintiff would manage it until the parties agreed to sell it. The plaintiff managed the cafe and used his personal funds to make various improvements to the cafe, resulting in increased sales. On May 14, 2002, the defendant gave the plaintiff a letter stating that he was no longer allowed at the Hangout Cafe. As a result of the defendant's conduct, the plaintiff has been deprived of his 25 percent interest in the cafe, or alternatively, 25 percent of the proceeds from the sale of the cafe.
In counts four (defamation), five (breach of fiduciary duty), six (fraudulent misrepresentation), seven (failure to exercise reasonable diligence) and eight (Connecticut Unfair Trade Practices Act), the plaintiff alleges the following facts. In October 1998, the plaintiff sought the defendant's assistance with some accounting matters. The defendant agreed to prepare and submit the plaintiff's income tax returns. The plaintiff later discovered that the defendant failed to file his tax returns for the years 1999-2001. Around February 2002, the defendant also agreed to prepare and submit a mortgage refinancing application to a lender on behalf of the plaintiff. The defendant knowingly communicated false information to the lender in connection with the application, resulting in harm to the plaintiff's reputation, emotional distress, economic loss and the plaintiff's failure to procure a mortgage at a favorable interest rate. Pursuant to these allegations, the plaintiff seeks money damages, a 25 percent interest in the Hangout Cafe, punitive damages, punitive damages under the Connecticut Unfair Trade Practices Act (CUTPA) and reasonable attorneys fees.
On February 2, 2004, the defendant filed a motion to strike counts one, two and three of the revised complaint, as well as the prayer for a 25 percent interest in the cafe and real estate and the prayer for attorneys fees. On April 2, 2004, the plaintiff filed a memorandum in opposition to the defendant's motion to strike.
DISCUSSION
Practice Book § 10-39(a) provides in relevant part: "Whenever any party wishes to contest . . . the joining of two or more causes of actions 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." "Whenever a party wishes to contest the legal sufficiency of the allegations of any complaint . . . that party may do so by filing a motion to strike the contested pleading or part thereof." Practice Book § 10-39(a)(1). The same Practice Book provision allows a party to contest the legal sufficiency of any prayer for relief by filing a motion to strike. Practice Book § 10-39(a)(2). "Practice Book . . . § 10-39, allows for relief to be stricken only if the relief sought could not be legally awarded." Pamela v. Ment, 244 Conn. 296, 325, 709 A.2d 1089 (1998).
The role of the trial court in ruling on a motion to strike is "to examine the [complaint], construed in favor of the [plaintiff], to determined whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997). "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, 693 A.2d 293 (1997).
I.A.
The defendant moves to strike counts one, two and three on the ground that the allegations set forth in those counts are improperly joined with the allegations set forth in counts four, five, six, seven and eight because they arise out of separate and distinct circumstances. The plaintiff argues in opposition that the first three counts are properly joined with the remaining five counts because they arise out of the same series of transactions.
Practice Book § 10-21 provides in relevant part: "if several causes of action are united in the same complaint they shall all be brought to recover, either . . . upon claims, whether in contract or tort or both, arising out of the same transaction or transactions connected with the same subject of action." It is proper "to join . . . different causes of action in one complaint, either if both arose out of the same transaction, or if while one arose out of one transaction, and the other out of another, both of these transactions were connected with the same subject of action." (Internal quotation marks omitted.) Craft Refrigerating Machine Co. v. Quinnipiac Brewing Co., 63 Conn. 551, 560, 29 A.2d 76 (1893).
One of the purposes of joinder is "to enable parties to settle all their controversies in a single action . . . and it also furthers the general policy of our law which favors as far as possible the litigation of related controversies in one action . . . It is now an established principle in our law of civil procedure that two suits shall not be brought for the determination of matters in controversy between the same parties, whether relating to legal or equitable rights, or to both, when such determination can be had as effectually and properly in one suit." (Citations omitted; internal quotation marks omitted.) Veits v. Hartford, 134 Conn. 428, 436, 58 A.2d 389 (1948). "Trial courts are vested with discretion in addressing issues of joinder; however, they should always consider the interests of judicial economy and practicality in applying the joinder rules." Johnson-Pierce v. Elrac, Inc., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 01 0380971 (March 25, 2002, Gallagher, J.) ( 31 Conn. L. Rptr. 657, 659).
Here, the plaintiff asserts different theories of recovery based on the defendant's alleged breach of an oral agreement in the first three counts. In those counts, the plaintiff describes a failed business transaction between him and the defendant involving the Hangout Cafe. In the remaining five counts, the plaintiff alleges facts relating to accounting and financial services that the defendant provided for the plaintiff. In those counts, the plaintiff alleges that the defendant provided unsatisfactory services. Although the first three counts and remaining five counts assert two different grievances against the defendant, the plaintiff alleges that both arose in October of 1998 when the parties started doing business together. This suggests that the source of both disputes is the ongoing business relationship between the parties. Furthermore, it would be a waste of judicial resources to try the counts separately because they arise out of business dealings between the same two individuals.
The defendant's motion to strike counts one, two and three on the ground that they are improperly joined with the remaining five counts is therefore denied.
I.B.
The defendant moves to strike counts one, two and three on the ground that they are legally insufficient because the plaintiff fails to allege the existence of a legally enforceable contract. The plaintiff argues in opposition that he does allege facts sufficient to support a legally enforceable contract.
"To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties." LR Realty v. Connecticut National Bank, 53 Conn. App. 524, 534, 732 A.2d 181 (1999), cert. denied, 250 Conn. 901, 734 A.2d 984 (1999). "To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties." Bridgeport Pipe Engineering Co., Inc. v. DeMatteo Construction Co., 159 Conn. 242, 249, 268 A.2d 391 (1970). "If the minds of the parties have not truly met, no enforceable contract exists." LR Realty v. Connecticut National Bank, supra, 535. "The existence of a contract is a question of fact to be determined by the trier on the basis of all the evidence." Id., 534.
Here, the plaintiff alleges that the parties entered into an oral agreement, pursuant to which the plaintiff would manage the Hangout Cafe and receive a 25 percent ownership interest in the cafe and real estate in exchange. The plaintiff further alleges that he performed his part of the agreement, but the defendant did not. The plaintiff describes the terms of the agreement as understood by both he and the defendant. If construing all of the facts in a light most favorable to the plaintiff, he has sufficiently pleaded the existence of a contract based on an identical understanding of both parties.
The defendant's motion to strike counts one, two and three on the ground that they are legally insufficient because the plaintiff fails to allege the existence of a legally enforceable contract is therefore denied.
I.C.
The defendant moves to strike counts one, two and three on the ground that they arise out of a purported oral agreement concerning real property in violation of the statute of frauds, General Statutes § 52-550. The plaintiff argues in opposition that the first three counts do not violate the statute of frauds because the parties entered into a joint venture rather than an agreement for the sale of real property.
General Statutes § 52-550(a) provides in relevant part: "No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement is made in writing and signed by the party, or the agent of the party, to be charged upon . . . any agreement for the sale of real property or any interest in or concerning real property." The statute of frauds applies to interests in land and requires a written instrument for transfers of land Foley v. Huntington Co., 42 Conn. App. 712, 735, 682 A.2d 1026 (1996). Joint enterprise agreements, however, are outside of the scope of the statute of frauds.
An "agreement for a joint enterprise in the nature of a copartnership which has for its purpose the purchase, improvement, and sale of real estate for the profit arising therefrom . . . is not within the statute." Jacobs v. Thomas, 26 Conn. App. 305, 309, 600 A.2d 1378 (1991). Courts look to the subject matter of the purported oral agreement to determine whether the parties entered into a joint enterprise or an agreement for the sale of real estate. Id. In Faiola v. Faiola, 156 Conn. 12, 21, 238 A.2d 405 (1968), the court characterized the parties' oral agreement as a joint enterprise stating, "Although this enterprise was one which contemplated and involved the management of real estate and a division of funds derived from its rental and sale, it was, not the real estate, but the fund in which the plaintiff claims an interest by reason of the agreement."
In the present case, the plaintiff alleges that he managed and made improvements to the Hangout Cafe, which was owned by the defendant, pursuant to an oral agreement between the parties. The plaintiff further asserts the parties agreed that the business would not be sold immediately, rather the plaintiff would continue to manage the cafe until the parties agreed to sell it at a later date. The plaintiff seeks a 25 percent ownership interest in the cafe and real estate as a result of the defendant's alleged breach of the agreement. Based on these allegations, the subject of the agreement was the management and improvement of the cafe itself, rather than the sale or transfer of real property. Although the plaintiff alleges that the parties discussed the eventual sale of the Hangout Cafe, the primary objective of the partnership was for the defendant to procure the plaintiff's assistance with the management and improvement of his already existing business.
Moreover, "[c]laims of unjust enrichment and quantum meruit are forms of the equitable remedy of restitution by which a plaintiff may recover the benefit conferred on a defendant in situations where no express contract has been entered into by the parties. Burns v. Koellmer, 11 Conn. App. 375, 385, 527 A.2d 1210 (1987). These claims are non-contractual claims, and they do not fall within the application of the statute of frauds. The statute of frauds only applies to counts of a civil action in which a party seeks to enforce the terms of a contract." Urda v. Sahl, Superior Court, judicial district of New Haven, Docket No. CV 02 0468800 (April 17, 2003, Arnold, J.). The statute of frauds therefore does not apply to the allegations in counts two and three because they assert claims for quantum meruit and unjust enrichment, respectively.
The defendant's motion to strike counts one, two and three on the ground that the alleged oral agreement violates the statute of frauds is therefore denied. Because the court has denied the defendant's motion to strike counts one, two and three on all three grounds, the defendant's motion to strike the corresponding prayer for a 25 percent ownership interest in the cafe and real estate is also denied.
II
The defendant also moves to strike the prayer for attorneys fees on the ground that the plaintiff fails to plead a statutory basis for awarding attorneys fees. The plaintiff argues in opposition that he is entitled to reasonable attorneys fees pursuant to CUTPA, General Statutes § 42-110g(d).
"The general rule of law known as the `American rule' is that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a statutory or contractual exception." (Internal quotation marks omitted.) Rizzo Pool Co. v. Del Grosso, 240 Conn. 58, 72, 689 A.2d 1097 (1997). Connecticut adheres to the American rule . . . Connecticut recognizes, however, the exceptions to this rule. A successful litigant is entitled to an award of attorneys fees if they are provided by contract . . . by statute . . . or as an aspect of punitive damages." (Citations omitted; internal quotation marks omitted.) Jones v. Ippoliti, 52 Conn. App. 199, 209, 727 A.2d 713 (1999).
General Statutes § 42-110g(d) provides in relevant part: "In any action brought by a person under this section, the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery." CUTPA therefore provides a statutory basis for awarding attorneys fees. Here, the plaintiff does not explicitly allege in his prayer for relief that he seeks attorneys fees pursuant to General Statutes § 42-110g(d). The plaintiff, however, does allege a CUTPA violation in count eight which the defendant did not move to strike. Bearing in mind that the court must construe the complaint in the light most favorable to the plaintiff, he would be entitled to reasonable attorneys fees under General Statutes § 42-110g(d) if he were to prevail on the CUTPA claim. The defendant's motion to strike the prayer for attorneys fees on the ground that the plaintiff fails to allege an adequate statutory basis for their award is therefore denied.
Practice Book § 10-3(a) states: "When any claim made in a complaint, cross complaint, special defense, or other pleading is grounded on a statute, the statute shall be specifically identified by its number." The Connecticut Supreme Court, however, has held that the provision is directory, rather than mandatory. Steele v. Stonington, 225 Conn. 217, 221 n. 7, 622 A.2d 551 (1993). Thus, although the plaintiff here failed to cite the specific statutory provision that entitles him to attorneys fees, the court must construe the complaint in favor of the plaintiff and will assume that the plaintiff seeks attorneys fees in conjunction with the CUTPA violation alleged in count eight.
CONCLUSION
The defendant's motion to strike counts one, two and three of the plaintiff's revised complaint and the corresponding prayer for a 25 percent ownership interest in the cafe and real estate is denied. The defendant's motion to strike the plaintiff's prayer for attorneys fees is also denied.
Foley, J.