Opinion
No. X08 FST CV 10-6002996
June 8, 2011
MEMORANDUM OF DECISION RE MOTION TO STRIKE #186
INTRODUCTION
The present action was filed by the plaintiff, First Service Williams Connecticut LLC (Williams) by writ, summons and complaint dated December 23, 2009 with a return date of January 26, 2010. The named defendants are Cory Gubner (Gubner) and RHYS LLC.
The plaintiff has revised the complaint and the operative complaint is dated August 6, 2010. The Revised Complaint consists of ten separate causes of action. Each cause of action relates to the employment agreement of the defendant Gubner with Williams. Gubner transferred his interest in Williams in October 2008 but maintained his employment as President and CEO until his departure on September 24, 2009 when he formed his own business, RHYS LLC. This business was within walking distance of the Williams office. The plaintiff alleges that the formation of the business and soliciting Williams's customers and workers while utilizing confidential information from Williams is a breach of Gubner's employment contract.
In October 2008, the defendant Gubner entered into a "Letter Agreement" for the sale of his interest in Williams.
The court in the factual introduction of the Motion to Cite Additional Parties dated January 6, 2011, makes findings concerning the interest and relationship of Gubner with Williams and other entities. The defendant Gubner entered into a letter agreement for the sale of his interest in the business. This agreement involved eight parties but did not include the plaintiff in this action.
The court has ruled on several prior motions concerning the extent of the legal action and the appropriate parties to this action. The facts found in each of the decisions provides a sufficient factual background which the parties should have familiarity.
The court entered memorandum on January 6, 2011 for a request to amend, a motion to cite in additional parties and a motion to strike.
On February 18, 2011, the defendants filed an answer to the Revised Complaint and seven Special Defenses. The plaintiff has filed a motion to strike the Fourth and Sixth Special Defenses. The defendant has submitted a memorandum dated April 15, 2011 in opposition to the motion to strike.
On May 17, 2011 the court heard argument from each of the parties.
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). "[T]he moving party admits all facts well pleaded." RK Constructors, Inc. v. Fusco Corp. et al., 231 Conn. 381, 383 n. 2, 650 A.2d 153 (1994). It is fundamental that in determining the sufficiency of a [pleading] challenged by a [party's] motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Gazo v. Stamford, 255 Conn. 245, 260, 765 A.2d 505 (2001).
The fourth Special Defense states in part: "the plaintiff acted in bad faith and materially breached the covenant of good faith and fair dealing inherent in the contract excusing further performance on the part of Gubner by, among other things, (i) obtaining, securing and comingling and withholding hundreds of thousands of dollars in which Gubner had a lawful entitlement and ownership interest and by failing to remit said funds to Gubner or to account for said funds, (ii) by withholding and failing to timely remit to Gubner earned brokerage commissions and other monies he earned in connection with his employment to which Gubner was entitled which monies further are `wages' under Connecticut statutes."
The Sixth Special Defense states: "Plaintiff's claims are barred by the doctrine of unclean hands insofar as the plaintiff acted in bad faith by among other things: (i) obtaining, securing, commingling and withholding hundreds of thousands of dollars in which Gubner has a lawful entitlement and ownership interest, and by failing to remit said funds to Gubner or to account for said funds, and (ii) by withholding and failing to timely remit to Gubner earned brokerage commissions and other monies he earned in connection with his employment, in which Gubner was entitled, which monies further are `wages' under Connecticut statutes."
The plaintiff contends that the court should grant the motion to strike because the special defenses do not plead matters which would prove there is no cause of action and the court has already ruled on a similar issue. The defendant contends that the special defenses are proper because "the plaintiff possessing and controlling hundreds of thousands of dollars of the Defendant's monies, and failing to turn over to the Defendant Gubner his money, knowing that the money was his . . . directly relates to the employment relationship between the Plaintiff and Gubner."
The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate nonetheless that the plaintiff has no cause of action. Almada v. Wausau Business Ins. Co., 274 Conn. 449, 456, 876 A.2d 535 (2005); Fidelity Bank v. Krenisky, 72 Conn.App. 700, 705, 807 A.2d 968, 974, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002) (Internal citations omitted); see also P.Bk. § 10-50. The issue of the sufficiency or insufficiency of special defenses is properly raised by the vehicle of the plaintiff's motion to strike. P.Bk. § 10-39(a)(5); Petner v. Electrical Contractors, Inc., 2009 Conn.Super. Lexis 2995 (Conn.Super.Ct. Oct. 30, 2009).
The instant action is clearly an action based upon an employment contract which contained a restrictive covenant for employment with Williams. This court has entered three separate memorandum related to various pleadings including a motion to amend a counterclaim, a motion to cite additional parties and a motion to strike. In each of the pleadings the court was confronted with arguments to address claims beyond the employment contract. In each of the decisions, the court ruled that it would not expand the scope of the pleadings. In the memorandum of decision regarding the motion to cite in additional parties the court stated: "The non-compete and the confidentiality provisions which are the subject of this action have no connection to the sale or the monies that Gubner received as part of his agreement to sell. The defendants efforts to now connect the simple employment agreement with the complexities of the Sales transaction and the monies that the defendant did not receive as a result of the sale and the `Letter Agreement' that was entered into with parties other than the plaintiff does not create any basis for citing in these parties." This court has consistently ruled that the claim of violation of the employment contract is separate and distinct from the claims concerning the "Letter Agreement." Therefore, this court now hesitates to change its' prior rulings to expand the scope of the matters before it.
In Breen v. Phelps, 186 Conn. 86, 99, 439 A.2d 1066, 1073 (1982), the court held "[w]here a matter has previously been ruled upon interlocutorily, the court in a subsequent proceeding in the same case may treat that decision as the law of the case if it is the opinion that the issue was correctly decided, in the absence of some new or overriding circumstances." In Branch v. Grogan-Barone, Superior Court, judicial district of New Britain at New Britain, Docket No. CV-08-4018808 (April 29, 2011, Swienton, J.), the plaintiff filed a motion to strike special defenses contending that the four special defenses were almost verbatim the grounds raised as the basis of a motion to dismiss that had been denied by the court. The law of the case doctrine was raised as a basis to grant the motion. The court examined the doctrine and stated that the doctrine is a flexible one with compelling reasons, that is, "A judge should hesitate to change his own rulings in a case and should be even more reluctant to overrule those of another judge." (Internal quotation marks omitted.) Bowman v. Jack's Auto Sales, 54 Conn.App. 289, 293, 734 A.2d 1036 (1999). "The law of the case is not written in stone but is a flexible principle of many facets adaptable to the exigencies of the different situations in which it may be invoked." Breen v. Phillips, supra, 186 Conn. 99. The defendants have failed to provide the court with any basis to reverse the prior rulings.
The defendant's special defenses are a generic unclean hands and improper commingling of money due to him. However, each of these special defenses is specifically claiming the commingling of funds in relation to his "interest" which would not apply to the instant employment contract nor would the accounting of these funds or commissions. The fourth special defense refers to a contractual obligation but does not connect this to the employment contract with the restrictive covenant. The insertion of the commingling of funds and the accounting claims clearly identify different contracts such as the "Letter Agreement" already determined by this court as beyond the scope of the instant action. The defendant's special defenses do not provide facts which would be the basis to determine that there is no cause of action for the alleged breach of a restrictive covenant. The general nature of the claims in the special defenses do not have a factual connection to the Revised Complaint which is limited to the claim that the defendant Gubner had an employment agreement which restricted him from establishing a competitive real estate business. The Revised Complaint alleges that: "In the event he were to depart the Company, he would be prohibited, for a period of nine (9) months following departure, from "engage[ing] in the real estate brokerage business in association with any person or persons employed or retained by the Company or an affiliate, subsidiary, parent or successor of the Company except those employed by Chase as of the date of this Agreement within the territory of Fairfield County, Connecticut or Westchester County, New York." Each of the counts in the complaint refer to claims as a result of the allegation that Gubner violated the employment agreement. The special defenses go beyond the factual allegations in the Revised Complaint and attempt to infuse other issues into the action which are neither consistent with the allegations of the complaint nor demonstrate that there is no cause of action. The two special defenses at issue involve claims that there was commingling of funds and monies due for "wages" that are not related to the terms of the restrictive covenant that are at issue in this action. These claims may be viewed as more in the nature of a set-off than a defense that would support a position that there is no cause of action. However, even this interpretation of a defense is not properly plead.
The original contract was with Chase Commercial Real Estate LLC who sold to Williams Real Estate of Connecticut LLC and Gubner remained with the new company as the senior executive and head of the company.
Likewise, a claim of a set-off cannot survive because the elements require that the defendants claim arises from a debt due by the plaintiff and that there is a certain sum due. Hope's Architectural Products, Inc. v. Fox Steel Co., 44 Conn.App. 759, 762, 696 A.2d 985 (1997); Nutrico, Inc. v. Frank's Nursery Crafts, Inc., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. 329778 (October 4, 1996, Melville, J.), 17 Conn. L. Rptr. 682.
CONCLUSION
The motion to strike the Fourth and Sixth Special Defenses is granted because the defendant has failed to plead facts consistent with the allegations of the Revised Complaint that would demonstrate there is no cause of action regarding the claims of a breach of the restrictive covenant, and because the claims are related to a different agreement with no facts pled to connect it to this plaintiff. Additionally, the special defenses are inconsistent with the decisions of this court which have specifically found similar claims to be beyond the scope of the Revised Complaint and thus are contrary to the law of the case doctrine.