Opinion
No. X03 CV 08 4041080 S
October 21, 2009
MEMORANDUM OF DECISION ON MOTION TO STRIKE (No. 130)
The individual plaintiffs and defendants were members of a limited liability company, FW, LLC, which owns and manages rental properties in West Hartford. Defendants Kristine and Andrew Grocki are husband and wife. Defendant Ajay, LLC, allegedly controlled by Andrew Grocki also owns real estate.
FW, LLC is also a plaintiff.
In their Amended Complaint dated June 1, 2009, the plaintiffs allege that Kristine Grocki misappropriated funds from FW over a period of years in a variety of ways. They further allege that Andrew Grocki, acting through Ajay, has been a participant in and/or beneficiary of Mrs. Grocki's thefts.
The allegations against all three defendants are set forth in five counts. Defendants Andrew Grocki and Ajay, LLC move to strike all five counts insofar as they state claims against them.
First Count — Breach of Fiduciary Duty: The Motion to Strike the First Count is granted, for two reasons. Plaintiffs' allegation (¶ 9) that "[a]t all times the defendants owed a fiduciary duty to the plaintiffs which they breached" is insufficient to support a claim against either of these defendants. Plaintiffs have not alleged sufficient facts to support a claim that either of the moving parties owes them a fiduciary duty. The cases cited by plaintiffs to support their claim that every member of a limited liability company owes a fiduciary duty to every other member do not adequately support their argument.
Plaintiffs' claims against the moving parties are all based on a theory that they "aided and abetted" Kristine Grocki's misappropriations of funds. There are no facts alleged to support this claim other than the claim that Andrew Grocki (who allegedly controls Ajay) "knew or should have known" that his wife was stealing from FW. In Efthimiou v. Smith, 268 Conn. 499, 505 (2004), our Supreme Court set forth the three elements of an "aiding and abetting" claim. The second and third elements of the Efthimiou test are relevant to this situation:
(2) the defendant must be generally aware of his role as part of an overall illegal or tortious activity at the time he provides the assistance [and] (3) the defendant must knowingly and substantially assist the principal violation.
Id. The First Count clearly fails to set forth such a claim.
Second Count — Civil Theft: The Motion to Strike the Second Count is also granted. Our civil theft statute (§ 52-564) requires findings that the defendant received, retained or disposed of property with knowledge or belief, at the time, that the property was probably stolen. Howard v. MacDonald, 270 Conn. 111, 129 (2004); State v. Foster, 45 Conn.App. 369, 376 (1997). Plaintiffs' allegations against the moving defendants clearly fail to state fully and properly the necessary elements of their civil theft claims.
Third Count — Conversion: Conversion is the unauthorized assumption and exercise of ownership over the property of another. Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 45 (2000). Where a plaintiff claims that money has been converted, he or she must plead and prove "legal ownership or right to possession of specifically identifiable moneys." Deming v. Nationwide Mutual Insurance Co., 279 Conn. 745, 772 (2006). Because the Third Count does not allege that either defendant assumed direct control over specifically identifiable funds, plaintiffs have not stated a cause of action in conversion against the moving parties, and the motion to strike the Third Count is granted.
Fourth Count — Unjust Enrichment: The motion is granted with respect to the Fourth Count. Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276 (1994), cited in plaintiffs' brief, highlights the problems with this claim. Plaintiffs have not alleged facts which would, if proven, demonstrate "(1) that the defendants were benefitted, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs' detriment." Id. at 283.
Fifth Count — CUTPA: The motion is also granted as to the Fifth Count. There are no allegations here which go beyond misconduct by some members of a LLC — and, allegedly, another LLC controlled by one of the defendants — as against other members of the same LLC. In other words, the acts in question, if proven, did not occur "in the conduct of any trade or commerce," Conn. Gen. Stat. § 42-110b(a). The Motion to Strike is granted in its entirety. It is so ordered.