No. CV-03-0481077 S
July 19, 2004
MEMORANDUM OF DECISION RE MOTION TO STRIKE
The defendant Weber has filed a motion to strike Counts Two and Four of the plaintiff's revised amended complaint dated March 29, 2004. Count Two against Weber alleges a breach of contact. Count Four alleges detrimental reliance, in that as "[a] result of the representations of the defendant Robert J. Weber, III, the plaintiff continued to forgo collection efforts against Margaret Libero."
The defendant claims that Count Two is barred by: (1) the Statute of Frauds, General Statutes § 52-550(a); and (2) the laws of agency, which bar the plaintiff from recovering from an agent where the principle is known to him. The defendant moves to strike Count Four for the reason that: (1) absent a directive from a client, an attorney cannot make payment to an unsecured creditor; (2) the defendant Weber owed the plaintiff no duty; and (3) the laws of agency bar the plaintiff from recovering from an agent where the principle is known to him.
The plaintiff, in opposition, argues that § 52-550(a), the Statute of Frauds is not applicable, as the plaintiff has not alleged that the defendant agreed to answer for the debt of the client, and thus, has not alleged that Weber is personally responsible for the outstanding bill for chiropractic services. The plaintiff, instead, argues that the complaint alleges that the bill should have been satisfied from any money due the client.
The plaintiff has filed a memorandum of law in opposition to the motion to strike consisting of argument on all issues raised by the defendant. However, other than citing appropriate case law regarding the legal standards applicable to a review of a motion to strike, the plaintiff's memorandum is completely devoid of any statutory or case law citations pertaining to the issues raised by tile defendant. The court, therefore, will consider the defendant's legal claims in the absence of any such legal claims in opposition from the plaintiff.
As to the defendant's argument that the laws of agency makes the plaintiff's claims insufficient, the plaintiff argues that the letter of protection signed by co-defendant Kennedy and orally acknowledged by Weber, did not independently create an obligation for the client, but rather grants security for an already existing obligation. The plaintiff is not attempting to collect a debt that Weber incurred on behalf of his client but rather, payment of a debt the client incurred and the defendant Weber agreed to satisfy from the proceeds of the client's recovery from her personal injury claim.
A review of the plaintiff's revised amended complaint reveals that the plaintiff alleges that a co-defendant, Attorney David Kennedy, entered into a written agreement (letter of protection) agreeing to satisfy his client's bill for chiropractic services rendered to said client by the plaintiff. The bill was to be paid from the proceeds of the client's personal injury lawsuit. The client's matter was thereafter referred to the defendant Attorney Robert J. Weber, who allegedly orally acknowledged the agreement between the plaintiff and the co-defendant Kennedy. Weber never signed a similar agreement with the plaintiff. Weber subsequently resolved the client's personal injury claim, but the plaintiff's outstanding bill for chiropractic services was not satisfied. Plaintiff thereafter filed the present action against Weber and the co-defendant Kennedy.
"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." Mingachos v. CBS, Inc., 196 Conn. 91, 108, 491 A.2d 368 (1985). A motion to strike shall be granted if "the plaintiff's complaint [does not] sufficiently [state] a cognizable cause of action as a matter of law." Mora v. Aetna Life and Casualty Ins. Co., 13 Conn. App. 208, 211, 535 A.2d 390 (1988).
A motion to strike "admits all facts well pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Emphasis omitted.) Id. "A motion to strike is properly granted, where a plaintiff's complaint alleges legal conclusions unsupported by facts." Id. "In ruling on a motion to strike, the court is limited to the facts alleged in the complaint." Gordon v. Bridgeport Housing Authority, 208 Conn. 161, 170, 544 A.2d 1185 (1988). A motion to strike "is to be tested by the allegations of the pleading demurred to, which cannot be enlarged by the assumption of any fact not therein alleged." (Internal quotation marks and citations omitted.) Alarm Applications Co. v. Simsbury Volunteer Fire Co., 179 Conn. 541-50, 427 A.2d 822 (1980).
Upon deciding a motion to strike, the trial court must construe the "plaintiff's complaint in [a] manner most favorable to sustaining its legal sufficiency." Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991). "The allegations of the pleading involved are entitled to the same favorable construction a trier would be required to give in admitting evidence under them and if the facts provable under its allegations would support a defense or a cause of action, the motion to strike must fail." Mingachos v. CBS, Inc., supra, 196 Conn. 108-09. However, if the plaintiff has alleged mere conclusions of law unsupported by the requisite facts, the motion to strike should be granted. Cavallo v. Derby Savings Bank, 188 Conn. 281, 285, 449 A.2d 986 (1982).
Generally, "[i]n ruling on a motion to strike the trial court is limited to considering the grounds specified in the motion." Meredith v. Police Commission, 182 Conn. 138, 140, 438 A.2d 27 (1980). "[G]rounds other than those specified should not be considered by the trial court in passing upon a motion to strike . . ." Internal quotation marks omitted.) Gazo v. Stamford, 255 Conn. 245, 259, 765 A.2d 505 (2001).
The issue of whether an agreement is voidable under the statute of frauds may be raised by a motion to strike. Breen v. Phelps, 186 Conn. 86, 439 A.2d 1066 (1982). Tallman v. Gawel, 11 Conn. App. 801, 526 A.2d 535 (1987).
THE STATUTE OF FRAUDS
In the present case, the plaintiff asserts that Weber tacitly agreed to protect the balance of the bill, owed by the client to the plaintiff from any settlement funds recovered by Weber in the client's behalf in accordance with the letter of protection sent to the plaintiff by the co-defendant Kennedy.
General Statutes § 52-550(a), Connecticut's Statute of Frauds provides in relevant part:
(a) No civil action may be maintained in the following cases unless the agreement or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged: . . . (2) against any person upon any special promise to answer for the debt, default or miscarriage of another . . .
The Statute of Frauds was principally designed to prevent imposition of liability on the basis of swearing contests about the alleged relationship between the parties. Willow Funding Co., L.P. v. Grencom Associates, 63 Conn. App. 832, 850, 779 A.2d 174 (2001). Puliafico v. Pascale, Superior Court, judicial district of Windham, No. CV 95 0052123 S (Mar. 28, 1996, Sferrazza, J.).
In an action to enforce a contract, the party to be charged, within the meaning of the Statute of Frauds is the party against whom the contract is to be enforced. Kasper v. Anderson, 5 Conn. App. 358, 362 (1985). Our case law requires "definite agreement on the essential terms of an enforceable agreement." Willow Funding Co., L.P. v. Grencom Associates, 63 Conn. App. 832, 845, 779 A.2d 174 (2001); see also, Suffield Development Associates Ltd Partnership v. Society for Savings, 243 Conn. 832, 843, 708 A.2d 1361 (1998); 111 Whitney Ave. v. Comm. of Mental Retardation, 70 Conn. App. 692, 699, 802 A.2d 117 (2002); Coady v. Martin, 65 Conn. App. 758, 766, 784 A.2d 897 (2001), cert. denied, 259 Conn. 905, 789 A.2d 993 (2002).
There is no written agreement or contract between the plaintiff and the defendant Weber, and none has been alleged. The plaintiff is attempting to charge Weber in a legal proceeding, and Weber is not a party to any contract between Kennedy, the client and the plaintiff. Weber is protected by the provisions of the Statute of Frauds. Kasper v. Anderson, supra, 5 Conn. App. 358. No action, therefore, can be maintained for the direct enforcement of the agreement against Weber.
The motion to strike Count Two is hereby granted.
The attorney-client relationship is one of agency. See Kubeck v. Foremost Foods, Co., 190 Conn. 667, 673 n. 6, 461 A.2d 1380 (1983); see also Porrini v. Bissonnette, Superior Court, judicial district of New Britain, No. CV-00-499365 (Jun. 28, 2001, Graham, J.); Gianetti v. Donahue, Superior Court, judicial district of Fairfield, Docket No. 319218 (September 27, 1996, Levin, J.), 18 Conn. L. Rptr. 14. "It is a general rule of law that the principal in a principal/agent relationship is only bound by, and liable for, the acts [that] his agent does with or within the actual or apparent authority from the principal, and within the scope of the agent's employment." (Internal quotation marks omitted.) Newtown Assoc. v. Northeast Structures, Inc., 15 Conn. App. 633, 637-38, 546 A.2d 310 (1988).
"It is also a settled rule of law that an agent is not liable where, acting within the scope of his authority, he contracts with a third party for a known principal." Scribner v. O'Brien, Inc., 169 Conn. 389, 404, 363 A.2d 160 (1975); see Behlman v. Universal Travel Agency, Inc., 4 Conn. App. 688, 690, 496 A.2d 962 (1985). An agent, by making a contract only on behalf of a competent disclosed principal whom he has the power to bind, does not thereby become liable [on the contract] for [the principal's] nonperformance. Under the rules of agency, unless otherwise agreed, a person making or purporting to make a contract with another as agent for a disclosed principal does not become a party to the contract. See, 2 Restatement (Second), Agency § 320 (1958); Rich-Taubman Associates v. Commissioner of Revenue Services, 236 Conn. 613, 619, 674 A.2d 805 (1996). This doctrine has been applied in the context of the attorney-client agency relationship." (Internal quotation marks omitted.) Gianetti v. Donahue, supra, Docket No. 319218 (September 27, 1996, Levin, J.).
No written contract between the plaintiff and Weber is alleged by the plaintiff or conceded by Weber. However, if one existed, the identified client would be the principal and Weber would be the known principal's agent. Weber cannot be held liable under a contract theory as an agent or a principal.
It is also been determined by a superior court that an attorney holding funds for a client has no legal obligation to satisfy unsecured claims against a client out of funds of the client that come into the attorneys hands absent a court order. A decision of the Superior Court by Judge Levine draws a distinction in such circumstances between a "just claim" or an "interest" as opposed to the claim of an unsecured creditor who had a generalized interest in all of the assets of the lawyer's client. Scharf v. Grievance Committee, 1995 Ct. Sup. 5563, 14 Conn. L. Rptr. 330 (1995), J.D. of Hartford/New Britain at Hartford. In Scharf, the client directed the attorney to withhold real estate commission funds from the realtor.
However, in Biller Associates v. Peterken, Superior Court, judicial district of New Haven at New Haven, No. CV 93-00354173-S (Nov. 4, 1997, DeMayo, J.), discussed an attorneys obligation and role as a "fiduciary" to protect the interests of a third person, who has a claim against settlement funds of an attorneys client. "A fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties . . ." Dunham v. Dunham, 204 Conn. 303, 322 (1987).
Judge DeMayo concluded that "even if the plaintiff's claim is treated as unsecured, there is the relationship of the parties prior to the settlement, forcing the conclusion that [the attorney] misled the plaintiff to its detriment. First, there was the record of their correspondence, discussions and dealings which implied that [the attorney] would protect the plaintiff. Finally, there is the testimony . . . of [the plaintiff] describing his conversation with [the attorney] in which he was assured the plaintiff would be protected." Id. In ruling that the attorney was in a fiduciary position with the plaintiff when he assumed control over the settlement proceeds and that he violated that position when he disbursed the funds without either holding the disputed fee in escrow or giving the plaintiff an opportunity to take steps to preserve its assignment, Judge DeMayo reviewed the Rules of Professional Conduct, 1.15(b) and the commentary, and stated: "While it is true that a breach of the Rules of Professional Conduct `does not of itself give rise to a cause of action,' a breach of the Rules could indeed, under the right circumstances, give rise to liability in tort." Id., citing Trudeau v. Gold, Superior Court, Judicial District of Danbury at Danbury No. 320519 (Feb. 29, 1996, Moraghan, J.), 16 Conn. L. Rptr. 271.
Rule 1.15(b) is as follows:
Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly tender a full accounting regarding such property.
The comment to this rule reads:
Third parties, such as a client's creditors, may have just claims against funds or other property in a lawyer's custody. A lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client and accordingly may refuse to surrender the property to the client. However, a lawyer should not unilaterally assume to arbitrate a dispute between the client and the third party.
While Weber has not signed any agreement as a principal and nor can he be held liable as an agent, he may face liability as a fiduciary. The plaintiff claims in Count Four that he relied upon the representations of the defendant Weber and the co-defendant Kennedy to his detriment. The plaintiff claims that he would not have rendered services and treatment to the client but for the representations of the defendants. In addition, the plaintiff claims that he continued to forgo collections efforts against the client based on the defendants' representations, written and oral, that they would protect his bill.
"The allegations of the pleading involved are entitled to the same favorable construction a trier would be required to give in admitting evidence under them and if the facts provable under its allegations would support a defense or a cause of action, the motion to strike must fail." Mingachos v. CBS, Inc., supra, 196 Conn. 108-09. The court is limited to reviewing the subject pleadings. It is unknown in this review why the plaintiff's bill was not paid, and the court cannot speculate. However, after reviewing Biller Associates v. Peterken, supra, No. CV 93-00354173-S (Nov. 4, 1997, DeMayo, J.), the court finds that the plaintiff has sufficiently pleaded a cause of action for detrimental reliance to defeat a motion to strike. Accordingly, the motion to strike Count Four is denied.
The court grants the motion to strike Count Two and denies the motion to strike Count Four of the plaintiff's revised amended complaint, dated March 29, 2004.
By Arnold, J.