Opinion
No. 566501
November 1, 2004
MEMORANDUM OF DECISION RE MOTION TO STRIKE
FACTS
On July 23, 2003, the plaintiff, Tyler B. Lyman, Inc., commenced this present action by filing a three-count complaint against the defendant, Nineteen Thames Street Partnership (the partnership), and the partnership members individually (collectively referred to as the defendants). Count one of the complaint alleges breach of contract, count two alleges breach of the implied covenant of good faith and fair dealing and count three alleges unjust enrichment. This action arises out of a contractual relationship between the parties. The complaint alleges that on November 4, 1996, the plaintiff entered into a listing agreement with the defendants, whereby the plaintiff, a real estate broker, would procure a tenant to lease the defendant's commercial property located at 1-19 Thames Street in Groton, Connecticut. In accordance with the terms of the listing agreement, the plaintiff, upon procuring a customer ready, willing and able to lease the premises upon terms agreeable to the defendants, would receive a commission equal to ten (10%) of the gross rent for any original term and five (5%) for any additional lease term.
The defendants in this action are: Nineteen Thames Street Partnership; Helen Langfield; Joanna Langfield Rose; Stanley Bergman, Trustee for the Harry Elion Trust FBO; Stanley Bergman, Trustee for the Ellen Langfield Trust; Calema One L.L.C.; Louise Chesler; Jonathan E. Sanders; Ellen Sanders Nirenstein; Alfred Agrin; SYBS, Inc.; and Jeffrey Nirenstein, Co-Trustee for the Esther B. Smithline Trust.
The plaintiff further alleges that on February 12, 1997, it procured a tenant, Proto-Power, ready, willing and able to lease the premises. As a result, the defendants and Proto-Power entered into a five-year lease agreement with an option to extend the lease for an additional five years. Furthermore, as a condition of this lease agreement the defendants required that Kollmorgan Corporation, a parent company of Proto-Power, execute a Guaranty of Lease Agreement. Upon fulfilling the terms of the listing agreement, the defendant paid the plaintiff its 10% commission for a period of five years (the initial lease term) until January 2002. The complaint further alleges that on January 31, 2002, Proto-Power and the defendants terminated the lease and thereafter on February 17, 2002, the defendants executed a new lease with Excel Energy. The plaintiff alleges that the termination of the Proto-Power lease, voided any obligation on the part of the defendant to pay renewal commissions to the plaintiff. Despite the execution of the new lease with Excel Energy, however, the tenant/occupant of the premises has been exclusively, the original tenant, Proto-Power.
The interrelationship between the entities (Proto-Power and Excel Energy) must be established for clarity. The hierarchal chain of command is as follows: Proto-Power is a wholly owned subsidiary of Utility Engineering and Utility Engineering is a wholly owned subsidiary of Excel Energy.
In count one of the complaint, the plaintiff alleges a breach of contract, arising out of a breach of the listing agreement. The plaintiff alleges that the new lease with Excel Energy is in essence a renewal of the original lease with Proto-Power. The plaintiff substantiates its argument on the ground that because Excel Energy is the parent company of Proto-Power and Proto-Power is still occupying the premises as the tenant, this constitutes a renewal of the original lease. Therefore, the plaintiff is entitled to its renewal commission pursuant to the terms of the listing agreement. More specifically, as a result of Proto-Power's occupation of the premises for an additional five years, the plaintiff alleges that it is entitled to a five (5%) commission of gross rent, amounting to approximately $22,000 per year for five years. The defendants counter that the lease with Excel Energy is a new lease with a new tenant, thereby terminating any obligation to pay the plaintiff a renewal commission.
In count two of the complaint, the plaintiff alleges that the defendants have breached the implied covenant of good faith and fair dealing, by intentionally circumventing the renewal commission. The plaintiff alleges that, the defendants in anticipation of the upcoming termination of the lease with Proto-Power, purposefully terminated the lease early and executed a new lease directly with Proto-Power's parent company, Excel Energy. The plaintiff alleges that the defendants portrayed Excel Energy as a new tenant procured by the defendants, in an effort to avoid paying renewal commissions. The plaintiff thereby alleges a breach of the implied covenant of good faith and fair dealing and that it has suffered injury from this breach. Additionally, in count three of the complaint, the plaintiff alleges that the defendants have been unjustly enriched by retaining the commission rightfully owed to the plaintiff.
The procedural posture of this case consists of an abundance of motions to strike on behalf of the defendants. On August 26, 2003, and thereafter on September 2, 2003, September 4, 2003, and September 10, 2003 the defendants, collectively, filed four separate but identical motions to strike the complaint in its entirety, with accompanying memoranda of law in support. Also on September 10, 2003, the plaintiff filed in response to the defendants' motions to strike memoranda of law in opposition. On December 29, 2003, this court filed a memorandum of decision granting the motions to strike in their entirety. The court held that the plaintiff was barred from receiving its commission for failure to comply with the requirements of General Statutes § 20-325a(b). The court held that the plaintiff specifically failed to plead that, "it is a licensed broker, that the listing agreement was signed by the partnership as the owner of the premises and . . . the terms of the listing agreement." (Internal quotation marks omitted.) Tyler B. Lyman, Inc. v. Nineteen Thames Street Partnership, Superior Court, judicial district of New London at Norwich, Docket No. 0566501 (December 29, 2003, Hurley, J.T.R.). The court upon finding a faulty listing agreement, likewise, held that there could be no breach of the implied covenant of good faith and fair dealing. Furthermore, the court held that the plaintiff was precluded from recovering under a theory of unjust enrichment in the absence of compliance with the requirements of General Statutes § 20-325a(b).
Defendant's Motion to Strike #101 consisting of: Joanna Langfield Rose, Helen Langfield, Stanley Bergman, Trustee of the Harry Elion Trust FBO and Elion Langfield Trust.
Defendant's Motion to Strike #103 consisting of: Nineteen Thames Street Partnership.
Defendants' Motion to Strike #104 consisting of: Louise Chesler, Jonathan E. Sanders, Ellen Sanders Nirenstein, SYBS, Inc., Jeffrey Nirenstein, Co-Trustee of the Esther E. Smithline Trust.
Defendant's Motion to Strike #106 consisting of: Calema One, LLC.
In response, the plaintiff, on January 12, 2004 filed an amended complaint alleging the same three-count complaint sounding in breach of contract, breach of the implied covenant of good faith and fair dealing and unjust enrichment. The defendants once again in unison filed identical motions to strike, supported by accompanying memoranda of law, resting on the same grounds as the original motions to strike and further argue that there are no material changes between the original complaint and the amended complaint. The plaintiff counters and asserts that any necessary deficiencies in the original complaint have been remedied in the amended complaint.
The defendants refer to: Defendant's Motion to Strike #111, Nineteen Thames Street Partnership, Defendants' Motion to Strike #113, Louise Chesler, Jonathan Sanders, Ellen Sanders Nirenstein, SYBS, Inc., and Jeffrey Nirenstein, Co-trustee of the Ester E. Smithline Trust, Defendants' Motion to Strike # 115, Calema One, LLC. (Defendant's Joanna Langfield Rose, Helen Langfield, Alfred Agrin, Stanley Bergman, Trustee of the Harry Elion Trust FBO and Elion Langfield Trust did not file a motion to strike.)
On April 29, 2004, this court filed a memorandum of decision granting the motions to strike in their entirety for failure to adhere to the requirements of General Statutes § 20-325a(b). The court held that the plaintiff has fixed previous deficiencies in the original complaint and that the amended complaint is in compliance with General Statutes § 20-325a(b)(1) and (b)(4) because the plaintiff had successfully pleaded that Ronald Lyman is a licensed real estate broker, and the complaint states the essentials terms of the listing agreement. The plaintiff, however, failed to comply with General Statutes § 20-325a(b)(7), by not alleging that the partnership is the owner of the premises. The court held that General Statutes § 20-325a(b)(7), demands strict compliance and plaintiff's noncompliance renders count one insufficient to establish a valid contract. Therefore, the court held that, in the absence of a valid contract, counts two and three must also fail.
On May 4, 2004, the plaintiff filed a second amended complaint. In response the defendants on May 13, 2004, June 20, 2004, and May 24, 2004 filed identical but separate motions to strike the plaintiff's second amended complaint in its entirety. On June 2, 2004, the plaintiff filed a response in opposition to the defendants' motions to strike, with accompanying memorandum of law. Thereafter, on July 26, 2004, this court denied the motions to strike filed on May 13, 2004 and May 24, 2004 for failure to appear. The defendants' motion to strike filed June 20, 2004 is presently before the court and is the subject of this memorandum. This matter was heard on the short calendar July 6, 2004.
Defendant's Motion to Strike #118, 19 Thames Street Partnership.
Defendants' Motion to Strike #125 Louise Chesler, Jonathan Sanders, Ellen Sanders Nirenstein, SYBS, Inc., and Jeffrey Nirenstein, Co-trustee of the Ester B. Smithline Trust.
Defendant's Motion to Strike #119, Calema One, LLC.
Motion to Strike #118.
Motion to Strike #119.
Defendants hereinafter refer to: Louise Chesler, Jonathan Sanders, Ellen Sanders Nirenstein, SYBS, Inc., and Jeffrey Nirenstein, Co-trustee of the Ester B. Smithline Trust.
Motion to Strike #125.
DISCUSSION
"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, 815 A.2d 1188 (2003). "A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court." (Internal quotation marks omitted.) Broadnax v. New Haven, 270 Conn. 133, 173, 851 A.2d 1113 (2004). "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, 498. Furthermore, "[i]t is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Commissioner of Labor v. C.J.M. Services, Inc., 268 Conn. 283, 292, 842 A.2d 1124 (2004). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Vacco v. Microsoft Corp., 260 Conn. 59, 65, 793 A.2d 1048 (2002). Moreover, "[i]f a motion to strike is directed to the entire complaint, the motion must fail if any of the plaintiff's claims is legally sufficient." Kovacs v. Kasper, 41 Conn.Sup. 225, 226, 565 A.2d 18 (1989).
The defendants base their motion to strike on three grounds: (1) that the listing agreement is no longer in effect because a renewal of the underlying lease does not exist; (2) that the broker's contract by its own terms expired on February 2, 1997; and (3) that the plaintiff is not in compliance with General Statutes § 20-325a, et seq. The defendants argue that the plaintiff is not in compliance with General Statutes § 20-325a(b) because the plaintiff has failed to specifically allege in counts one and two of the complaint, (1) the essential terms of the listing agreement, (2) that the listing agreement was signed by an owner of the property, and (3) that the plaintiff is a licensed real estate broker. The defendants contend that these omissions statutorily bar the plaintiff from recovering a commission. The defendants further argue that a renewal of the original lease does not exist because the defendants procured a new tenant, terminated the original lease and then signed a new lease with a different tenant. Additionally, the defendants argue, on the basis of case law, that the plaintiff cannot recover a commission under the theory of quantum meruit.
General Statutes § 20-325a in relevant part:
(b) No person, licensed under the provisions of this chapter, shall commence or bring any action with respect to any acts done or services rendered after October 1, 1995, as set forth in subsection (a), unless the acts or services were rendered pursuant to a contract or authorization from the person for whom the acts were done or services rendered. To satisfy the requirements of this subsection any contract or authorization shall: (1) Be in writing, (2) contain the names and addresses of the real estate broker performing the services and the name of the person or persons for whom the acts were done or services rendered, (3) show the date on which such contract was entered into or such authorization given, (4) contain the conditions of such contract or authorization, (5) be signed by the real estate broker or the real estate broker's authorized agent, (6) if such contract or authorization pertains to any real property, include the following statement: `THE REAL ESTATE BROKER MAY BE ENTITLED TO CERTAIN LIEN RIGHTS PURSUANT TO SECTION 20-325a OF THE CONNECTICUT GENERAL STATUTES,' and (7) be signed by the person or persons for whom the acts were done or services rendered or by an agent authorized to act on behalf of such person or persons, pursuant to a written document executed in the manner provided for conveyances in section 47-5, except if the acts to be done or services rendered involve a listing contract for the sale of land containing any building or structure occupied or intended to be occupied by no more than four families, the listing contract shall be signed by the owner of the real estate or by an agent authorized to act on behalf of such owner pursuant to a written document executed in the manner provided for conveyances in section 47-5.
Alleged violation of General Statutes § 20-325a(b)(4).
Alleged violation of General Statutes § 20-325a(b)(7).
Alleged violation of General Statutes § 20-325a(a).
General Statutes § 20-235a states:
"(a) No person who is not licensed under the provisions of this chapter, and who was not so licensed at the time the person performed the acts or rendered the services for which recovery is sought, shall commence or bring any action in any court of this state, after October 1, 1971, to recover any commission, compensation or other payment with respect to any act done or service rendered by the person, the doing or rendering of which is prohibited under the provisions of this chapter except by persons duly licensed under this chapter."
The plaintiff counters, by asserting that the defendants' arguments are better suited for a motion for summary judgment than a motion to strike, that it has sufficiently pleaded a cause of action for breach of contract, breach of the implied covenant of good faith and fair dealing and unjust enrichment. The plaintiff further maintains that it has sufficiently revised its complaint in compliance with this court's memorandum of decision dated April 29, 2004. Specifically, the plaintiff asserts that it has pleaded in the complaint, (1) that Ray Langfield was an authorized agent of the defendant, (2) that the partnership was the record owner of the premises, (3) that Ronald E. Lyman was a licensed real estate broker, and (4) that it has outlined the essential terms of the listing agreement. Additionally, the plaintiff argues that the defendants by negotiating a lease with Excel Energy, the parent company of the tenant secured by the plaintiff (Proto-Power), constitutes a renewal of the lease. The plaintiff also argues that the terms of the listing agreement regarding commissions did not expire on February 2, 1997, but rather this expiration clause entitled the plaintiff to the exclusive right to list until that date.
"The right of a brokerage firm to recover a commission depends upon the terms of its employment contract with the seller. To be enforceable, this employment contract, often called a listing contract, must be in writing and must contain the information enumerated in General Statutes § 20-325a(b)." Revere Real Estate, Inc. v. Cerato, 186 Conn. 74, 77, 438 A.2d 1202 (1982). Previous decisions have firmly established that, "[l]isting contracts are governed exclusively by § 20-325a." (Internal quotation marks omitted.) Klein v. William Raveis Real Estate, Inc., Superior Court, judicial district of Stamford, Docket No. CV 00 0181224 (April 10, 2001, Lewis, J.) ( 29 Conn. L. Rptr. 355, 356).
See footnote 15.
"The statutory scheme of § 20-325a requires that a party who sues for a real estate commission must first show that the written contract or authorization under which the claim is made satisfies the facial requirements of the statute as to names, addresses, date, conditions and signatures." (Emphasis in original.) CMG Realty of Connecticut, Inc. v. Colonnade One Ltd. Partnership, 36 Conn.App. 653, 658, 653 A.2d 207 (1995). "Section 20-325a(b) conditions the recovery of a real estate sale commission on, inter alia, the existence of a contract or authorization for brokerage services that is in writing and signed by the real broker or the broker's authorized agent . . . General Statutes (Rev. to 1997) § CT Page 16292 20-325a(b)(1) and (5). For many years after its enactment, the provisions of § 20-325a(b) were strictly construed and enforced. Under this strict reading, a real estate broker who failed to comply with any provisions of § 20-325a did so at his peril." (Citation omitted; internal quotation marks omitted.) Dow Condon, Inc. v. Muros North Ltd. Partnership, 69 Conn.App. 220, 226, 794 A.2d 554 (2002). The legislature subsequently, adhered to a less stringent standard of compliance for certain subdivisions of the statute by adding subsection (c). Section 20-325a(c) allows a real estate broker to recover if he has substantially complied with the requirements of the statutes subdivisions (3) through (6). Tyler E. Lyman v. Nineteen Thames Street Partnership, supra, Superior Court, Docket No. 0566501.
In the defendants' motion to strike, the defendants allege that the plaintiff has failed to comply with the requirements of § 20-325a et seq. This court, however, disagrees. As this court previously outlined in its memorandum of decision dated April 29, 2004, the plaintiff satisfies the requirements of § 20-325a(a) by pleading in its revised complaint that Ronald E. Lyman, who signed the listing agreement on behalf of the plaintiff, is a licensed real estate broker. Tyler E. Lyman v. Nineteen Thames Street Partnership, supra, Superior Court, Docket No. 566501. The plaintiff is also in compliance with § 20-325a(b)(4) by pleading, "the terms of the Listing Agreement . . ." This allegation sufficiently pleads the essential terms of the listing agreement. Id. The plaintiff by pleading that Raymond L. Langfield was an authorized agent, who signed on behalf of the defendant and that the defendant, Nineteen Thames Street Partnership, is the record owner of the premises also satisfies the strict requirements of § 20-325a(b)(7). Furthermore, the listing agreement is still enforceable despite the parties' failure to procure the deed-like documents required under General Statutes § 47-5. These documents are unnecessary under these particular circumstances. The Connecticut Supreme Court has held that, "requiring the formalities of a deed for the authority of an agent to act for the principal in signing a listing agreement, is to impress upon the principal the need for caution and prudence in granting such authority. That purpose simply does not apply where the principal can act only through its agents . . . The statute does not apply however, where . . . the owner, as an entity, can act only through its agents." (Emphasis In original) Levey Miller Maretz v. 595 Corporate Circle, 258 Conn. 121, 133, 780 A.2d 43 (2001). In the present case, because the record owner of the property is a partnership, an entity that can act only through its agents, compliance with § 47-5 was unnecessary. Consequently, this court finds that the plaintiff has sufficiently pleaded a cause of action in compliance with the mandates of the statute in count one of the complaint.
Section 47-5 provides:
(a) All conveyances of land shall be: (1) In writing; (2) if the grantor is a natural person, subscribed, with or without a seal, by the grantor with his own hand or with his mark with his name annexed to it or by his attorney authorized for that purpose by a power executed, acknowledged and witnessed in the manner provided for conveyances or, if the grantor is a corporation, limited liability company or partnership, subscribed by a duly authorized person; (3) acknowledged by the grantor, his attorney or such duly authorized person to be his free act and deed; and (4) attested to by two witnesses with their own hands.
(b) In addition to the requirements of subsection (a), the execution of a deed or other conveyance of real property pursuant to a power of attorney shall be deemed sufficient if done in substantially the following form:
Name of Owner of Record
By: (Signature of Attorney-in-Fact) L.S.
Name of Signatory
His/Her Attorney-in-Fact
(c) Nothing in subsection (b) precludes the use of any other legal form of execution of deed or other conveyance of real property.
The defendants argue further that the plaintiff has failed to allege facts sufficient to support a claim of renewal. The plaintiff has alleged that it procured the tenant, Proto-Power, which entered into a lease agreement with the defendants. Additionally the plaintiff alleges that as a condition of the lease the defendants required a guaranty of lease agreement to be executed by Kollmorgan Corporation, a parent company of Proto-Power. On the termination date of the lease the defendants and Proto-Power's parent company, Excel Energy, executed a new lease for another term of five years. The plaintiff has further alleged that the tenant/occupant for the period covered under the new lease was exclusively Proto-Power. The plaintiff maintains that the listing agreement is still valid, because of the relationship between the parent and subsidiary companies and the fact that Proto-Power remained the exclusive tenant/occupant during the new lease period thereby, entitling it to a renewal commission.
This court finds that the plaintiff has alleged facts sufficient to support a claim of renewal of the lease. The plaintiff has alleged that, in essence, the original tenant and the new tenant are the same entity. This court finds that the defendants were willing to acknowledge the parent/subsidiary relationship in its guaranty of lease agreement but now seeks to deny its legal significance in the execution of the new lease. As the plaintiff alleges in its complaint, Proto-Power is a wholly owned subsidiary of Utility Engineering, which is a wholly owned subsidiary of Excel Energy. Furthermore, the same tenant Proto-Power has continually occupied the premises, thereby alluding to the new lease agreement as a mere formality.
The defendants rely upon the case, Freiheit v. Broch, 98 Conn. 166, 118 A. 828 (1922), for the proposition that a renewal of the underlying lease does not exist because the lessee has failed to give adequate notice of an intent to renew and furthermore, a covenant of renewal is not effective until a new lease is delivered. Id., 169. The defendants failed, however, to realize that the court has distinguished between a covenant of renewal and an option or privilege of extension in a lease. The court has held that, "a covenant of renewal, . . . [can] not become effective until the new lease was delivered; in this respect it is unlike an option or privilege of extension, or an agreement for further occupation, which is part of the original lease and hence requires no new lease." Id.
The plaintiff has alleged in its revised complaint that "Proto-Power corporation would lease the premises from the partnership for an initial term of five (5) years with an option to extend for an additional five (5) year lease term." (Emphasis added). Therefore, notice was not a prerequisite to renewal under these circumstances. "Whether a clause in a lease is a covenant of renewal or an agreement for an extension, depends upon the intention of the parties to the lease, and the use of the word `renewal' although it imports the giving of a new lease like the old one . . . does not necessarily indicate that it is used in this strict and technical sense; the entire lease may determine otherwise." (Citation omitted; internal quotation marks omitted.) Id.
On a motion to strike, this court must take, "all well-pleaded facts and those necessarily implied from the allegations . . . as admitted." (Internal quotation marks omitted.) Commissioner of Labor v. C.J.M. Services, Inc., supra, 268 Conn. 292. Accordingly, this court finds that the plaintiff has plead sufficient facts to support a claim of renewal.
The plaintiff has also pleaded alternatively, that the defendants intentionally terminated the lease, and executed a new lease on the same day, without changing the original tenant. The plaintiff alleges that this is essentially the same lessee due to the parent/subsidiary relationship and the same continuing tenant/occupant. Thereby, alleging that proper notice was given to the defendants for a covenant of renewal on the same day as the termination of the lease by the execution of the new lease for an additional five years by Excel Energy. This court finds that on a motion to strike, "[i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Vacco v. Microsoft Corp., supra, 260 Conn. 65. Therefore, the motion to strike count one of the complaint is denied.
The defendants further argue that the terms of the listing agreement expired on February 2, 1997, and, therefore, no cause of action exists under § 20-325a et seq. The plaintiff counters by arguing that the February 2, 1997 expiration date allowed the plaintiff to procure a tenant until that date and is not the commission expiration date. "Connecticut law requires an issue of contract interpretation to be resolved by reading the contract in its entirety, with each provision read in light of the other provisions . . . and every provision [to] be given effect if it is possible to do so . . . Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity." (Citation omitted; internal quotation marks omitted.) Connecticut Properties Tri-Town Plaza, LLC v. Seymour Cinema, Inc., 84 Conn.App. 569, 577, 854 A.2d 756 (2004). This court finds that the listing agreement must be read as a whole and the term "additional term" is unambiguous. Thus, the listing agreement must be read to impart to give each provision a given effect. If this court were to adopt the defendants' interpretation, that the listing agreement expired in its entirety, on February 2, 1997, the provision dictating for a 5% commission on additional terms would be meaningless. Accordingly, this court finds that the listing agreement did not expire by its own terms on February 2, 1997, and therefore a valid listing agreement was in effect at the time the services were rendered.
The defendants also move to strike count two of the complaint, which alleges a breach of the implied covenant of good faith and fair dealing. "The common law implies into every contract, including employment agreements, a covenant of good faith and fair dealing. The implied covenant of good faith and fair dealing requires faithfulness to an agreed common purpose and consistency with the justified expectation of the other party in the performance of every contract . . . Essentially, it is a rule of construction designed to fulfill the reasonable expectations of the contracting parties as they presumably intended." (Internal quotation marks omitted.) Jones v. H.N.S. Management Co., Inc., Superior Court, judicial district of New Haven, Docket No. 471419 (September 17, 2004, Levin, J.). "To constitute a breach of the [implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith . . . Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive . . . Bad faith means more than mere negligence; it involves a dishonest purpose." (Citations omitted; internal quotation marks omitted.) De La Concha of Hartford, Inc. v. Aetna Life Ins., Co., 269 Conn. 424, 433, 849 A.2d 382 (2004).
The plaintiff has alleged the existence of contract between the parties under which the plaintiff reasonably expected to receive benefits. The plaintiff has also alleged in its revised complaint, that the defendants were intentionally acting in bad faith when the partnership injured the plaintiff's right to receive these benefits. This court finds that the plaintiff has pleaded facts sufficient for a breach of the implied covenant of good faith and fair dealing; therefore, the motion to strike count two is denied.
The defendants also move to strike count three of the complaint, in which the plaintiff alleges that the defendants have been unjustly enriched by retaining the plaintiff's rightfully earned commission. The defendants argue that in accordance with case law, the plaintiff is precluded from recovering in quantum merit. The defendants' reliance on, Goldblatt Associates v. Panza, 24 Conn.App. 250, 253, 587 A.2d 433 (1991), is misplaced. In Goldblatt, the court explained that, "[i]f the listing agreement should prove faulty, such as its not being in compliance with § 20-325a, the broker is precluded from recovering in quantum meruit . . . or from seeking equitable relief . . . [A] careful reading [of the statute] shows that by its terms this statute limits recovery to the terms of the contract between the parties." (Citations omitted.) Id., 253-54. The court is not uniformly precluding equitable relief but conditions such relief upon compliance with the terms of the listing agreement and the § 20-325a et seq. In the present case, the plaintiff complies with § 20-325a and the terms of the listing agreement; however, the plaintiff did not properly plead equitable relief. As previously set forth in this court's memorandum of decision dated April 29, 2004, "[t]he lack of remedy under a contract is a precondition to recovery based on unjust enrichment . . . Where a plaintiff incorporates allegations of an express contract in a count alleging unjust enrichment, the claim for unjust enrichment cannot lie." (Internal quotation marks omitted.) Lyman v. Nineteen Thames Street Partnership, Superior Court, judicial district of New London, Docket No. 566501 (April 29, 2004, Hurley, J.T.R.) citing Whitby School, Inc. v. Grenaille, Superior Court, judicial district of Stamford, Docket No. CV 03 0195602 (December 29, 2003, Lewis, J.T.R) ( 36 Conn. L. Rptr. 285, 286).
The plaintiff in count three of its revised complaint, incorporates paragraphs one through sixteen of the second count, and the second count incorporates paragraphs one through fourteen of the first count. The plaintiff thereby is precluded from recovering for unjust enrichment because count three incorporates allegations of an express contract in a count alleging unjust enrichment. Because count three must fail, the motion to strike count three is granted.
Based upon the foregoing, the defendants' motion to strike counts one and two are denied and granted as to count three.
D. Michael Hurley, JTR