Opinion
No. FST CV 08 5007577 S
February 17, 2009
MEMORANDUM OF DECISION RE MOTION TO STRIKE (105.00)
Background
In this action Southern Air, Inc. (Southern) has sued its former employee Peter Raymond for allegedly false and defamatory statements, and conduct disruptive and damaging to its air freight business. Before the court is Raymond's motion to strike the five counts of Southern's complaint.
Southern is an all-cargo airline which owns or leases sixteen airplanes and employs approximately 540 people. Its primary business is to provide, through lease, aircraft, crews, maintenance and insurance to other commercial airlines which pay an hourly rate as well as fuel costs, fees, duties and taxes. Southern hired Raymond in the middle of 2006 as a first officer and promoted him to captain after his initial training. On March 1, 2007 Southern alleges it hired Raymond as vice president of safety and security.
The complaint alleges that Raymond was provided a detailed description of his responsibilities and duties in his new position. These included (1) to prepare personnel for a biannual audit by the United States Department of Defense necessary for Southern to continue as a cargo carrier for military operations, (2) to prepare for the 2008 audit by the International Air Transport Association (IATA), (3) to prepare for an audit by the European Aviation Safety Agency (EASA) and (4) to oversee and manage Southern's security and evaluation programs, to rewrite safety and security manuals and other activities in the security and safety areas. According to Southern's complaint, Raymond took no action to prepare for the audits and misled Southern as to his lack of action in this regard. As a result, Southern alleges that two of the audits have been either delayed or will have to be repeated resulting in loss of revenue.
Furthermore, the complaint alleges Raymond "grossly mismanaged" his responsibilities to maintain a regulated security program and at each airport landing and take-off station, failed to oversee the internal evaluation program, "failed to provide any oversight" for the Southern internal evaluation program and "neglected his responsibilities under" the APIS program in which Southern must provide passenger lists 24 hours in advance, failed to rewrite safety and security manuals and generally had "an abysmal job performance." In addition, it is alleged that after Raymond was fired on February 25, 2008, he initiated a "campaign of harassment and disparagement" of Southern by contacting existing and former employees of Southern and encouraging them to file false and disparaging complaints about the company's staffing and safety inadequacies. It is also alleged that Raymond lodged forty-six false complaints with the Federal Aviation Administration (FAA) and thirty-two related complaints with the Federal Occupational Safety and Health Administration (OSHA) setting forth a litany of unsubstantiated safety and regulatory violations.
The Southern complaint is in five counts claiming breach of fiduciary duty, professional negligence, a violation of the Connecticut Unfair Trade Practices Act, General Statutes §§ 42-110a et seq., defamation, and false light invasion of privacy. The complaint seeks money damages and an injunction.
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). "It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Asylum Hill Problem Solving Revitalization Ass'n. v. King, 277 Conn. 238, 246 (2006). "Moreover . . . [w]hat is necessarily implied [in an allegation] need not be expressly alleged." (Internal quotation marks omitted.) Id. "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Rizzuto v. Davidson Ladders, Inc., 280 Conn. 225, 229 (2006). A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged. Fort Trumbull Conservancy, LLC v. Alves, supra.
Discussion
A. Count I: Breach of Fiduciary Duty. Raymond contends he was not a fiduciary of, and owed no fiduciary duty to, Southern. Therefore, he argues, a breach of fiduciary duty claim cannot be sustained. In order to breach a fiduciary duty there must exist a fiduciary relationship. Sherwood v. Danbury Hospital, 278 Conn. 163, 195 (2006). A fiduciary relationship has consistently been defined by the Connecticut Supreme Court as one "characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the other . . . The superior position of the fiduciary or dominant party afford him great opportunity for abuse of the confidence reposed in him." Falls Church Group v. Tyler Cooper Alcorn LLP, 281 Conn. 84, 108 (2007).
The allegations of Southern's complaint that "[a]s an officer of Southern . . . Raymond owed a fiduciary duty of loyalty and honesty to Southern" and that "Raymond breached his fiduciary duty." Complaint, ¶¶ 37-38. Recognizing that these conclusory allegations must be supported by factual allegations, Southern contends that Raymond's motion to strike Count I "cannot overcome the numerous detailed assertions by Southern . . . concerning Raymond's responsibilities as vice-president of Safety and Security, his expertise and skill that Southern . . . needed" (italics added). Southern memorandum (Dkt Entry 109.00) 13. The court agrees that the complaint sets out, in extensive detail, the responsibilities Raymond was allegedly given. See Complaint, ¶¶ 5, 18, 20, 21. However, the complaint is bereft of allegations that Raymond had any training, experience or skills in his areas of management responsibility for Southern, or that he made any representations to Southern to that effect. In this respect, the complaint fails to set forth facts that Raymond had the "superior knowledge, skill or expertise" or that he was a "dominant" party.
In Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20 (2000) the Connecticut Supreme Court quoted with approval from Ward v. Lange, 553 N.W.2d 246, 250 (S.D. 1996) "[t]he law will imply [fiduciary responsibilities] only where one party to a relationship is unable to fully protect its interest [or where one party has a high degree of control over the property or subject matter of another] and the unprotected party has placed its trust and confidence in the other." 255 Conn. 41. In the same case the Connecticut Supreme Court quoted with approval the following from Garrison Contractors, Inc. v. Liberty Mutual Ins. Co., 927 S.W.2d 296 (Tex.App. 1996). "The fact that one business person trusts another and relies on [the person] to perform [its obligations] does not rise to the level of a confidential relationship for purposes of establishing a fiduciary duty." 255 Conn. 41. See also Biller Associates v. Pedersen, 269 Conn. 716, 725 (2004). In this case there is no allegation and no apparent basis for such an allegation that Southern could not protect itself from and was defenseless as to Raymond's alleged transgressions. Apparently, Southern had successfully completed audits in the past and was presumably fully capable of hiring people to fulfill the responsibilities given in 2007 to Raymond. Moreover, even the fact that Southern relied on Raymond is not sufficient to create a confidential relationship. Finally, the superiors of Raymond within the Southern hierarchy had just as much, or more, experience with and control over, the security and safety issues of the company. As the Appellate Court has said in holding there was no fiduciary relationship "[this was not . . . a case involving a savvy well established [person] and an inexperienced person." Democrats v. Wisniowski, 81 Conn.App. 595, 607 (2004).
It is worth pointing out, although it may not be directly on point, that under Delaware corporation law action by a director "that constitutes mere gross negligence — a violation of the duty of care — cannot constitute bad faith" (which would implicate a breach of fiduciary duty). Kahn v. Portnoy, 3515-CC (Del.Ch., December 11, 2008) [citing to In Re Walt Disney Co. Derivative Litigation, 906 A.2d 27 (Del. 2006).
The court takes judicial notice that Southern is a Delaware corporation.
The Connecticut Supreme Court has been disinclined to define a fiduciary relationship "in precise detail and in such a manner as to exclude new situations" and has recognized "the fiduciary relationship is not singular." Alaimo v. Royer, 188 Conn. 36, 41 (1982); Konover Development Corp. v. Zeller, 228 Conn. 206, 222 (1994). However, perhaps recognizing that the lack of definition should not be employed to turn everyday tort or contract actions into breach of fiduciary duty claims with the concomitant significant shifts in the burden and level of proof required of a defendant, the Connecticut Supreme Court has cautioned more than once that "[a]lthough we have not expressly limited the application of these traditional principles of fiduciary duty to cases involving only fraud, self-dealing or conflict of interest, the cases in which we have invoked them have involved such deviations." (Emphasis in original.) Sherwood v. Danbury Hospital, supra, 278 Conn. 196 [quoting Murphy v. Wakelee, 247 Conn. 396, 400 (1998)].
In sum, the court concludes that the extensive allegations in the Southern complaint, while they may set forth a claim that Raymond breached a duty of care owed to Southern see infra do not paint a picture that Raymond, a relatively new employee without management experience, had superior knowledge or expertise or held such a superior position vis a vis Southern so as to have great power to abuse a trust. The court determines that the allegations of Count I do not support a claim that a fiduciary relationship existed between Southern and Raymond, and the count must be stricken.
B. Count II: Professional Negligence. In its complaint Southern claims that Raymond, as an officer, owed a duty of care to Southern, that he breached this duty, and this breach proximately caused damage to Southern. Complaint ¶¶ 42-44. Southern entitles this claim "Professional Negligence." In Paragraph 18 of the complaint, Southern alleges that Raymond was given a very detailed description of his job duties and responsibilities. In Paragraph 19 it is alleged that Raymond recklessly abandoned his duties in virtually every respect "by taking no action to fulfill them."
Raymond contends that professional negligence claims are largely limited to licensed professions, although conceding there is some authority otherwise in Connecticut. The gist of Raymond's attack is that there cannot be a professional negligence claim arising out of an employer-employee relationship, and the plaintiffs have not set forth what the standard of care is that Raymond allegedly breached.
The court is not persuaded that Count II should be stricken simply because, in its title, it refers to professional negligence. Whether it is called professional negligence, or simply negligence, the plaintiff bears the burden of proving the defendant owed a duty of care to the plaintiff and that the duty was breached, or not fulfilled. In professional negligence cases the duty of care is often established and explained by persons expert and experienced in the relevant field. In ordinary negligence cases the duty of care is usually known and easily understood by the general citizenry. In this case Southern has sufficiently alleged that Raymond owed a duty of care in performing the responsibilities he was assigned. Further, Southern has adequately pleaded that the duty was breached through Raymond's failure to act and neglect. Southern will have to prove at trial that there existed a duty of care, what the duty was, that it was breached, and that Raymond knew or should have known that his breach of the duty would cause harm. Construing the pleadings in a light most favorable to the plaintiff at this stage of the litigation, a negligence claim of some sort has been pleaded appropriately. Whether, as a matter of policy, it is appropriate to impose liability on Raymond for his acts or omissions must await the development of further facts.
C. Count III: CUTPA. The plaintiff at oral argument and in its brief withdrew this count. Therefore, as pleaded, Count III is stricken.
D. Counts IV and V. In Count IV Southern makes a claim of defamation alleging that Raymond filed complaints with the FAA and OSHA falsely alleging regulatory violations (and in the case of OSHA, alleging that he had been discriminatorily discharged). In Count V Southern claims it has been placed in a false light which would be highly offensive to a reasonable person.
Raymond contends that Counts IV and V should be stricken on the grounds that his statements to the FHA and OSHA are absolutely privileged. To be liable for defamation it must be found that the defendant published false statements that harmed the plaintiff and was not privileged to do so. Kelly v. Bonney, 221 Conn. 549, 563 (1992).
The effect of an absolute privilege in a defamation action is that damages cannot be recovered for a defamatory statement even if it is published falsely and maliciously.
Id., 565. There is also recognition of the proposition that if an absolute privilege exists it will defeat a claim of false light invasion of privacy. See Milne v. Filenes, Inc. Superior Court, judicial district of Hartford, CV 05 4018766 S (February 21, 2007, Weise, J.) [citing Alexandru v. Dowd, 79 Conn.App. 434, cert. denied, 266 Conn. 925 (2003).
Raymond's claim of absolute privilege is founded on the proposition that statements made during the course of judicial proceedings, even if made falsely and maliciously, are absolutely privileged if they are pertinent to the subject of the controversy. The privilege also attaches to relevant statements made during administrative proceedings which are `quasi judicial' in nature. Once it is determined that a proceeding is `quasi judicial' in nature, the absolute privilege extends to every step of the proceeding until disposition. Petyan v. Ellis, 200 Conn. 243, 246, 247 (1986).
The policy underlying the privilege is that in certain situations the public interest in having people speak freely outweighs the risk that individuals will occasionally abuse the privilege by making false and malicious statements. (Internal quotation marks omitted.) Petyan v. Ellis, supra, 200 Conn. 246. The rationale underlying the privilege is grounded upon the proper and efficient administration of justice. 50 Am.Jur.2d., Libel and Slander § 299 (1995). Participants in a judicial process must be able to testify or otherwise take part without being hampered by fear of defamation suits. Id. Therefore, in determining whether a statement is made in the course of a judicial proceeding, "it is important to consider whether there is a sound public policy reason for permitting the complete freedom of expression that a grant of absolute immunity provides." Kelly v. Bonney, supra, 221 Conn. 567. In making that determination, the court must decide as a matter of law whether the alleged defamatory statements are sufficiently relevant to the issues involved in a proposed or ongoing judicial proceedings, so as to qualify for the privilege. The test for relevancy is generous, and "judicial proceeding" has been defined liberally to encompass much more than civil litigation or criminal trials. Id., 566-67.
Hopkins v. O'Connor, 282 Conn. 821, 838-39 (2007).
The parties do not seriously contest, and this court finds, the FAA and OSHA proceedings in question fall within the liberal definition of "quasi judicial." However, Southern contends that there are unresolved issues as to whether Raymond's allegedly defamatory statements were made solely to the FHA and OSHA or were made to other persons in other venues, as well as whether the statements were pertinent or relevant to the FHA and OSHA proceedings.
In Count IV, the defamation claim, Southern alleged that "Raymond defamed Southern Air by publishing false and defamatory statements and writing to third-party federal regulatory agencies" specifically by filing complaints about regulatory violations with the FAA and OSHA. Complaint, Count IV, ¶¶ 54-56. Taking these allegations alone, there is an issue as to whether the alleged defamatory statements were repeated outside the FAA and OSHA proceeding. However, Count IV specifically incorporates Paragraphs 1 through 52 set forth earlier. Therefore, Count IV also includes allegations that Raymond spoke to former Southern co-workers about "safety and staffing inadequacies" (¶ 23) and allegedly encouraged co-workers to publicize Southern's alleged "safety violations" (¶ 28) and "safety and mismanagement issues" (¶ 30). Therefore, the court concludes that Raymond's privilege argument may not apply to certain of the issues raised in Count IV, and the motion to strike that count is denied.
In Count V, the false light claim, Southern alleges it "has been placed in a false light before the public as a result of Raymond's actions to disparage Southern Air's safety, maintenance and regulatory compliance record" (¶ 61). This allegation is broad enough to cover actions taking place outside of the FHA and OSHA proceedings. Therefore, the absolute privilege relied on by Raymond may not bar all claims, and the motion to strike Count V is denied.
Conclusion
The motion to strike is granted in part, and denied in part. Counts I and III are stricken.