Opinion
NNHCV166059859
02-10-2017
Karen Symes v. Quinnipiac University
UNPUBLISHED OPINION
MEMORANDUM OF DECISION ON MOTION TO STRIKE [#107.00]
Steven D. Ecker, Judge.
This is a lawsuit alleging breach of contract and related causes of action based on the claim that defendant repudiated a binding written contractual commitment to employ plaintiff, on specified terms, as an Associate Dean of Student Affairs at its School of Medicine. The operative complaint is the Second Amended Complaint, dated July 28, 2016 (" Complaint"). Knowledge of the relevant allegations is assumed, as is the legal standard governing a motion to strike. The motion to strike is denied in all respects.
Counts One and Two --It is unclear to the court whether it is necessary, or even proper, to state separate claims for Breach of Contract (Count One) and Anticipatory Breach of Contract (Count Two). It would seem that the latter is a sub-category of the former; anticipatory repudiation is one way that a contract can be breached. But this issue was not briefed and, at this early stage, it is not essential to decide whether the two ought to be combined in a single count.
Defendant argues that Count One is legally insufficient for two reasons. First, it argues that an essential element of any claim for breach of contract is performance by the plaintiff, and plaintiff's claim is legally insufficient because she has not (and cannot) allege that she had performed her contractual obligations as of the date of defendant's alleged repudiation. Second, it argues that there can be no breach under the facts as alleged, because defendant repudiated the contract before defendant's own performance was due under the contract, and non-performance cannot constitute a breach if it occurs before performance is due.
Neither contention has merit. A party is not exonerated from liability because it backs out of a binding agreement before the time for performance. With respect to plaintiff's performance, which was due to begin when she assumed her new position on December 7, 2015, " [i]t has long been accepted that an anticipatory repudiation discharges any remaining duties of performance of the injured party." 2 E. Allan Farnsworth, Farnsworth on Contracts 527 (2d Ed. 1998). See also Restatement (Second) of Contracts § 253(2) (1981); Cottman Transmission Systems, Inc. v. Hocap Corp., 71 Conn.App. 632, 639, 803 A.2d 402 (2002). According to the Complaint, defendant unequivocally repudiated the contract on December 4, 2015. Under these circumstances, plaintiff was not required to show up on campus with a box of office supplies the following Monday. She will be required to show that she was ready, willing and able to perform had defendant not repudiated, see 2 Farnsworth on Contracts, supra, at 541; Restatement (Second) Contracts, supra, § 254(1), but no actual performance by plaintiff is necessary once defendant announced its repudiation. See Pullman, Comley, Bradley & Reeves v. Tuck-It-Away, Bridgeport, Inc., 28 Conn.App. 460, 611 A.2d 435, 440 (1992) (holding that non-defaulting party is not required to perform a futile act once other party has repudiated contractual obligation). Accepting the allegations of the Complaint as true, plaintiff's duty to perform was discharged when defendant repudiated the contract in the manner alleged.
Defendant's second argument also ignores the fundamental rules governing prospective nonperformance of a contractual obligation. According Complaint, defendant made it crystal clear to plaintiff that it would not honor its obligations under the original agreement. See Second Amended Complaint, ¶ 19 (instructing plaintiff on 12/4/15 that " you are not to come to Quinnipiac on [12/7/15, her start date] unless you sign the new contract . . ."). " Where an obligor repudiates a duty before [it] has committed a breach by non-performance and before [it] has received all of the agreed exchange for it, [its] repudiation alone gives rise to a claim for damages for total breach." Restatement (Second) of Contracts at § 253(1). The example relied on by defendant in its memorandum, taken from the Williston treatise, apparently reflects the view of a scholar hostile to the doctrine of anticipatory repudiation, and, in any event, does not describe the current state of the law. See Thomas Jackson, " 'Anticipatory Repudiation' and the Temporal Element in Contract Law: An Economic Inquiry into Contract Damages in Cases of Prospective Nonperformance, 31 Stan. L.Rev. 69, 73 (1981) (after quoting the same Williston passage referenced by defendant, observing: " Whatever deductive logic this position might have, contract law has almost always been otherwise"); see also 2 Farnsworth on Contracts, supra, at 532 n.18 (noting Williston's hostility to the doctrine of anticipatory repudiation).
Count One is Legally Sufficient
Count Two, whether viewed as a sub-specification of Count One or an independent cause of action, also states a legally sufficient claim. Defendant's arguments, again, are substantially inconsistent with applicable law. First, defendant argues that plaintiff cannot recover contractual expectancy damages in this context, but instead is limited to quantum meruit. This is incorrect. A party in plaintiff's situation has various options, one of which is to rescind the contract and demand payment of any costs or damages sustained by her in reliance on the repudiated (and rescinded) contract. See, e.g., Martin v. Kavanewsky, 157 Conn. 514, 519, 255 A.2d 619 (1969); cf. Restatement (Second) Contracts, supra, § 373 (describing restitution as " alternative" remedy for breach). But another option available to the non-defaulting party is to sue for damages for breach of the contract. See Hoyt v. Pomeroy, 87 Conn. 41, 46, 86 A. 755 (1913) (describing alternatives). The Restatement makes it very clear that repudiation gives rise to a claim for total breach under the circumstances alleged here. See Restatement (Second) of Contracts, supra, at § 253(1); see also id. at § 243, § 250. The Restatement Reporter's comment a to § 253 states: " The measure of damages in a claim under this Section is governed by the rules stated in Topic 2 of Chapter 16." Topic 2 of Chapter 16 contains the usual rules governing contractual damages. See Restatement (Second) of Contracts, supra, § § 346-52.
There is nothing in the Complaint indicating that plaintiff elected to rescind the contract at issue after defendant's alleged repudiation. She therefore is not limited as a matter of law to recover in quantum meruit only, as defendant argues. Beyond that, the court ventures no opinion regarding the appropriate measure of contractual damages applicable to this case. It would be premature to do so.
Defendant also argues, as a matter of " common sense, " that plaintiff could and should have avoided the consequences of defendant's repudiation by commencing employment on defendant's modified terms, and then work out the renewal issue later. See Defendant's Reply Brief dated 8/12/17, at 3-4. This assertion may or may not be arguable, but it certainly is not a conclusion compelled as a matter of law. See Restatement (Second) of Contracts, supra, at § 250, comment d (" [W]here a party wrongfully states that [it] will not perform at all unless the other party consents to a modification of [her] contract rights, the statement is a repudiation even though the concession he seeks is a minor one, because the breach that he threatens in order to exact it is a complete refusal of performance"). Plaintiff obviously was not required to relent to defendant's unilateral demands. Perhaps she was concerned that her acceptance of employment on defendant's " modified" terms would be considered a waiver. Such a concern seems extremely sensible in light of defendant's express directive that she not show up at work unless she first signed the new contract. See Complaint, ¶ 19. The argument based on " avoidable consequences" is not a basis to strike Count Two.
Count Three --In deciding a motion to strike, the operative complaint must be construed broadly and liberally, and the court must accept as true all well-pleaded facts as well as all facts necessarily implied from the allegations. See Lawrence v. O and G Industries, Inc., 319 Conn. 641, 648-49, 126 A.3d 569 (2015). Under this standard, plaintiff's allegations are sufficient to state a claim for breach of the covenant of good faith and fair dealing. See Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 18, 938 A.2d 576 (2008) (discussing elements). Defendant has its own version of the facts, of course, and a court or jury reviewing all of the facts at a later stage of the litigation may find that plaintiff cannot prove, or has not proved, the cause of action set forth in Count Three. We have not reached that point in the case.
Count Five --The claim of negligent misrepresentation is based on the allegation that defendant's agents offered plaintiff employment on terms that (as they related to renewal, at least) were untrue, and should have been known to be untrue when made. Defendant argues that the claim fails as a matter of law because the representation at issue " plainly relates to future acts, " but the complaint " is devoid of an allegation that [defendant] made representations to plaintiff regarding the terms of her prospective employment without any [actual] intention of employing her on those terms . . ."
Count Four, alleging fraudulent misrepresentation, is omitted from the Second Amended Complaint.
In the court's view, the legal sufficiency of Count Five presents a closer question. A false statement of existing material fact is one essential element of any claim of misrepresentation--fraudulent or otherwise. See, e.g., Stuart v. Freiberg, 316 Conn. 809, 821-22, 116 A.3d 1195 (2015). It appears to the court that plaintiff has failed to identify any such factual representation made by defendant's agents. The alleged contractual terms at issue were not themselves factual representations; they were promises binding defendant to honor certain specified commitments in the future. Plaintiff alleges that defendant agreed to a five-year renewal term, subject to certain limited termination conditions, and then shortly thereafter repudiated that promise. This plainly alleges a broken promise, but not a factual misrepresentation. The analysis does not end there, however, because--at least in the context of fraudulent misrepresentations--a promissory representation (i.e., a statement of future intention) is actionable on a theory of fraudulent misrepresentation if, at the time the statement is made, the speaker did not intend to honor the promise. See, e.g., Paiva v. Vanech Heights Construction Co., 159 Conn. 512, 515, 271 A.2d 69 (1970); Sallies v. Johnson, 85 Conn. 77, 80, 81 A. 974 (1911).
The question is whether (and how) this doctrine operates in the context of a claim of negligent misrepresentation. Because a promise regarding one's future intentions becomes a false statement of fact when made with a present intention to deceive, is it also the case that such a promise becomes a false statement of fact when the speaker negligently fails to realize that the promise will not be kept in the future? It is unclear how this question is answered under existing Connecticut law. On the one hand, the distinction between a contract claim and a tort claim is real, and worthy of preservation. If every careless act of contracting exposes the promisor to tort liability for negligent misrepresentation, the tort/contract distinction is significantly eroded. On the other hand, the allegation in the present case, read broadly but fairly, alleges that the individuals responsible for contracting with plaintiff should have known, at the time they signed the contract on behalf of defendant, that the president of the university would not abide by certain material contractual terms. This scenario involves something more than a mere breach of contract, and arguably should be treated as " promissory negligence" in the same way that the intentional misstatement is treated as " promissory fraud." There are Connecticut cases that appear to touch upon the issue, at least indirectly; see, e.g., Glazer v. Dress Barn, Inc., 274 Conn. 33, 74 n.32, 873 A.2d 929 (2005); D'Ulisse-Cupo v. Board of Directors, 202 Conn. 206, 218, 520 A.2d 217 (1987); but the issue has not been thoroughly briefed by the parties, and the court is not comfortable at this point issuing a definitive ruling on this point.
Count Five will not be stricken at this time. The parties are directed to close the pleadings without unnecessary delay. It should be understood, however, that if upon further consideration defendant continues to believe that Count Five is legally insufficient, it may renew that claim at an appropriate time in the future (e.g., by motion for summary judgment). Full briefing will be necessary at that time.
The motion to strike is denied. It is so ordered.