What You Need to Know About Non-Compete Agreements
March 8, 2011
In the current economic environment, understanding your obligations under a non-compete agreement could be essential to finding new employment. In uncertain times, an employee may not understand that not all non-compete agreements are enforceable. Here are seven (7) important things to know about non-compete agreements.
(1) Courts do not view all non-compete agreements equally: Courts view non-compete agreements ancillary to the sale of a business or between partners differently than they view non-compete agreements between an employee and employer. “When an employee agrees to be subjected to future work restrictions, he or she does so in order to obtain employment and ordinarily gets nothing in return for giving up this important freedom. Thus the employee is at a great bargaining disadvantage.” CT Cellar Doors, LLC v. Stephen Palamar, 2010 Conn. Super. LEXIS 3247, J.D. of Waterbury, Docket No. UWY-CV-10-5016075-S (2010). Therefore, the courts will view such a non-compete with great scrutiny.
(2) Reasonableness requirement: By definition, a non-compete is a restrictive covenant that prevents employees from competing with their former employers after termination, thereby creating a restraint on the free market. Given this, Connecticut courts may find that these covenants are against public policy. Consequently, non-compete agreements are only enforceable if the restraint imposed is reasonable.
(3) Courts consider multiple factors in evaluating the reasonableness of a non-compete: In deciding whether a particular non-compete agreement is reasonable, the court will look to the following factors: “(1) the length of time the restriction operates; (2) the geographical area covered; (3) the fairness of the protection afforded to the employer; (4) the extent of the restraint on the employee’s opportunity to pursue his occupation; and (5) the extent of interference with the public’s interests.” Robert S. Weiss and Associates, Inc. v. Wiederlight, 208 Conn. 525 (1988). The Connecticut Appellate Court has instructed that “the five pronged test is disjunctive; a finding of unreasonableness in any one of the criteria is enough to render the covenant unenforceable.” New Haven Tobacco Co., Inv. v. Perrelli, 18 Conn. App. 531 (1989).
(4) Involuntarily termination not required: A prevalent feeling among employees is that if “let go,” a non-compete should not apply. However, this is not the law. When reviewing a non-compete agreement for reasonableness, the Court will not look to whether the employee left his position voluntarily or involuntarily.
(5) Geography: “The general rule is that the application of a restrictive covenant will be confined to a geographical area which is reasonable in view of the particular situation.” Scott v. General Iron, 171 Conn. 132 (1976) (upheld statewide restriction). Geographic restrictions should be “narrowly tailored to the plaintiff’s business situation.” Robert S. Weiss & Associates, Inc. v. Wiederlight, supra, 208 Conn. at 531. In CT Cellar Doors, LLC v. Stephen Palamar, supra, the Court held that a three-year restriction that covered the entire State of Connecticut was unenforceable, unfair and an unreasonable restraint of trade and was contrary to public policy. Compare that to Robert S. Weiss and Associates, Inc. v. Wiederlight, supra, where the Supreme Court held that a two-year restriction that covered a 10-mile radius of Stamford, was narrowly tailored and therefore reasonable. See also, Access America, LLC v. Mazzotta, 2005 Conn. Super. LEXIS 2597, J.D. of Middlesex, Docket No. CV-O5-4003389 (2005)(15-mile restriction upheld); compare, Trans-Clean Corp. v. Terrell, 1998 Conn. Super. LEXIS 717, J.D. of Fairfield, Docket No. CV-97-0348039-S (1998) (60-mile restriction held unreasonable).
(6) Duration: Connecticut courts have frequently enforced non-compete periods of a year or more. However, the courts have stated that the reasonableness of time and geographic restrictions in non-compete agreements are intertwined and “that broad geographic restrictions may be reasonable if the duration of the covenant is short, and longer periods may be reasonable if the geographic area is small.” Van Dyck Printing Company v. DiNicola, 43 Conn. Supp. 191 (1993), affirmed per curiam 231 Conn. 272 (1994) (one year); Robert S. Weiss & Assoc. v. Wiederlight, supra (two years); Hart Nininger & Campbell Assoc. v. Rogers, 16 Conn. App. 619 (1988) (two years); Scott v. General Iron & Welding Co., 171 Conn. 132 (1976) (five years); Torrington Creamery, Inc. v. Davenport, 126 Conn. 515 (1940) (two years).
(7) Forfeiture Clauses: Forfeiture clauses differ from non-compete agreements in that the employee does not make an express promise not to compete, but rather agrees to a forfeiture of benefits if the employee engages in competition with its former employer. Despite this difference, the Connecticut Supreme Court has held that “a covenant not to compete and a forfeiture upon competing are but alternative approaches to accomplish the same practical result.” Deming v. Nationwide Mut. Ins. Co., 279 Conn. 745 (2006). Consequently, forfeiture clauses are subject to the reasonable requirement of non-compete agreements.
Before signing a non-compete agreement, speak to an attorney who is well versed in the law surrounding restrictive covenants and employment contracts. If you have already signed the non-compete agreement, contact an attorney before pursuing a course of conduct that might violate a non-compete clause. A violation of a non-compete may result in legal action brought against you by your former employer, whether or not such agreement is enforceable. Situations involving non-compete agreements are very fact specific, requiring case-by-case analysis. If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Leigh H. Ryan, Esq. by phone at (203) 221-3100 or via e-mail at LRyan@Mayalaw.com.
What You Need to Know About Severance Packages
March 8, 2011
During these economic times, many companies big and small, are facing the hard reality of layoffs. As hard as it is for companies, it is even harder for employees. Faced with no job and a bare economy, accepting a severance package might seem like the best choice. But before signing anything, it is important to understand the basics of the severance package and the potential rights that might be relinquished in the process.
(1) Time to Consider the Severance Package: A prevalent misconception is that all employees are entitled to twenty-one (21) days to review severance package offers. Unfortunately, that is not the case. In the case where the employer is only offering a severance package to one employee, and that employee is under the age of forty (40), there is no specific time to review the documents that is required by law. However, as the severance package must be made “knowingly and voluntarily,” that allows the employee some time to consider the severance agreement. There is no statutory minimum amount of time.
If, however, the employee being offered the severance agreement is forty (40) years or older, he or she is protected by the Age Discrimination in Employment Act (“ADEA”) of the Older Workers Benefit Protection Act (“OWBPA”). By law, when only one employee is offered the severance agreement and a release of ADEA claims is included, the employer must provide the employee with twenty-one (21) days to review and consider the proposed severance agreement. Moreover, if the employer and employee engage in negotiations, the consideration period commences on the date of the employer’s final offer.
If more than one employee is terminated at or around the same time, it is considered a “group layoff.” By law, when a severance agreement is offered as part of a group layoff, and a single employee is over the age of forty (40), and a release of ADEA claims is included, then every employee regardless of age must be given forty-five (45) days to consider the agreement.
(2) Release of Claims: Most severance agreements contain a release of a variety of claims, including claims you may have based upon your age, race, national origin, gender, disability, religion, among others. It may also include a release of all claims, whether known to you or not at the signing of the agreement. However, the United States Equal Employment Opportunities Commission (“EEOC”) has held that, although the severance agreement may restrict the employee’s ability to file a lawsuit, the release cannot restrict the rights of an employee to file a charge of discrimination with the EEOC, nor can the severance agreement limit an employee’s right to testify, assist or participate in an investigation, hearing or other proceeding conducted by the EEOC. Furthermore, the EEOC has declared that an agreement cannot waive an employee’s rights regarding acts of discrimination that occur after the signing of the agreement.
(3) Seven (7) Day Revocation Period: When a severance agreement contains an ADEA release of claims, by law, the employer must provide you with seven (7) days to revoke the agreement after signing it. This seven (7) day window cannot be waived or changed by either party.
(4) Ability to Consult with an Attorney: Severance packages generally contain more than just the release of ADEA claims, but also claims under Title VII of the Civil Rights Act, Americans with Disabilities Act, Employee Retirement Income Security Act, retaliation, whistle blowing, breach of contract, invasion of privacy, among others. Given the breadth of the claims released, before the signing of a severance agreement, it is extremely important to consult with an attorney prior to its execution. Moreover, when the severance agreement contains a release, the agreement must specifically advise the employee to seek the advice of any attorney. Faced with financial distress because of the layoff, you may not be able to think objectively concerning your rights and options. It is best to consult an attorney.
(5) Consideration: Consideration is required for every agreement. That means that an employee must receive something of value in exchange for giving up certain rights. That “something of value” must be above and beyond what the employee would otherwise be entitled to.
(6) Ability to Negotiate: Despite the “take it or leave it” undertones of an employer, generally, many employers will negotiate severance on some level. Given that, there is also a risk that an employer will revoke the offer of severance if negotiation is attempted. Your chances of negotiating successfully increase if there is a claim that your particular severance package is not fair in light of your industry, your position, or the circumstances of your employment. Additionally, the negotiations do not need to focus on the dollar amount connected with the severance agreement. Employers might be willing to extend insurance coverage, disability benefits, or other items.
(7) Gather All Information: Before deciding to accept, negotiate, or reject a severance package, it is important to understand completely what is being offered to you, including compensation, benefits and insurance. If you are in an industry that provides for deferred stock options or bonus, it is important to understand whether you would still be entitled to it. You should gather information concerning your employer’s welfare plans, health plans, vacation and sick leave policies, as well as any structured bonus plans or stock options. If the severance package is only offering you what you would be entitled to, the agreement may lack adequate consideration.
(8) Restrictive Covenants: Many employers will place some kind of restrictive covenant into the severance package. These range from confidentiality clauses, to non- disclosure agreements, to non-solicitation agreements, to non-compete agreements. Therefore, it is important to understand how signing the severance agreement may restrict your ability to find new employment.
Before you sign a severance agreement, it is important to fully understand your rights and the consequences of accepting the offer. The attorneys at Maya Murphy, P.C., have years of experience in all sectors of employment law. If you have any questions relating to your severance agreement, please contact Leigh H. Ryan, Esq. by phone at (203) 221-3100 or via e-mail at LRyan@Mayalaw.com.
What You Need to Know About Offer Letters
March 8, 2011
In Connecticut, an employment relationship is “at will,” unless governed by a contract. Employment at will grants both parties the right to terminate the relationship for any reason or no reason, at any time. But what about employment pursuant to an offer letter? Here are a few things you need to know about an offer letter and its terms.
(1) At-Will Employees: Most employees are “at-will” employees and an offer letter will most likely confirm that the employment is “at-will.” When an offer letter states that employment will be “at-will” it means that the employer or employee may terminate the employment for a good reason, a bad reason, or for no reason at all, at any time. In a 2006 case, Petitte v. DSL.net, Inc., the Superior Court held that the employer could terminate an “at-will” employee, in which it offered employment pursuant to an offer letter, prior to the commencement of the employee’s duties. 2006 Conn. Super. LEXIS 915, J.D. of New Haven, Docket. No. CV-04-0489777-S (2006).
(2) Position and Duties: When reviewing or drafting an offer letter, you want to make sure that the employer stated the initial position the employee is being hired for and what duties or responsibilities are included as part of that position. This way, everyone will have a better understanding of what is expected from the employee. A well-drafted offer letter will often include a reservation of rights for the employer that could include a clause that allows for a change in position, assignment of additional duties and/or the elimination of duties.
(3) Compensation: An offer letter should set forth clearly what the base salary is and how that base salary will be paid. For example, is it to be paid out weekly, bi-weekly, or annually? More importantly, any bonus or compensation should be clearly defined as well, including how and when such bonus or commission will be paid. Generally, in a skillfully drawn up offer letter, there will be a clause reserving the employer’s rights to alter or rescind these arrangements. If the bonus or commission structure is highly complex, an employment agreement or schedule to the offer letter should be considered.
(4) Benefits: As an employee, you would want your employer to outline the specific benefits you are expected to receive, including vacation, sick days, personal days, health benefits, pension benefits, 401(k) plans (or the similar), and any other comparable matters. Generally, the employer will reserve the right to rescind or alter these benefits, in accordance with the corresponding plan. An employer must provide notice to the employee if it makes any changes to these benefits. Conn. Gen. Stat. §31-71f.
(5) Restrictive Covenants: An offer letter will generally not include non-solicitation clauses or non-compete clauses. However, an offer letter can condition employment upon the signing of these documents at commencement of employment. What is generally found in offer letters are confidentiality clauses and non-disclosure clauses. By signing the offer letter, the employee (depending on the clause) may agree to refrain from disclosure of certain information, such as salary or client lists. Moreover, the employee may be requested to affirmatively acknowledge that he or she is not currently subject to any restrictive covenants, such as a non-compete clause.
(6) Conditions of Employment: While in most circumstances, the employment is “at-will,” the employer can still make the offer of employment contingent of other items, such as satisfactory references, drug screening, background check, valid driver’s license, or proof of authorization.
As with any employment related document, complex issues can arise. Careful drafting and review is necessary to protect the interests of the employee and employer. If you have any questions relating to any offer letter or employment agreement, please contact Leigh H. Ryan, Esq. by phone at (203) 221-3100 or via e-mail at LRyan@Mayalaw.com.
Physician Adequately Alleges Violation of CUTPA Against His Former Counsel
March 1, 2011
In a recent decision, the Superior Court for the Judicial District of Stamford/Norwalk held that a plaintiff physician adequately alleged a violation of the Connecticut Unfair Practices Act against his former counsel. More specifically, the Court held that, as alleged, the defendant law firm’s actions were entrepreneurial in nature, and, thus, were not subject to immunity which ordinarily attaches to conduct involving legal representation.
In reaching its decision, the Court relied on the following facts, as alleged in the plaintiff’s complaint:
In this action, the plaintiff has brought suit against the defendants Yale-New Haven Health Services, Greenwich Hospital, MCIC Vermont, Inc. and the law firm of Heidell, Pittoni, Murphy & Bach, LLP (the defendant).[1]The operative pleading, which is the plaintiffs amended complaint dated August 20, 2010, alleges the following relevant facts. Until January 3, 2008, the plaintiff was employed by Yale-New Haven Health Services as the director of the emergency services department at Greenwich Hospital. On August 4, 2006, the plaintiff met and treated a patient during the course of his employment. Subsequent to this treatment, the patient initiated a medical malpractice lawsuit against Greenwich Hospital and five physicians including the plaintiff. As a result of this lawsuit, the plaintiff was contacted by Y ale-New Haven Health Services and told that he could be provided a defense in the Sousa lawsuit pursuant to an undisclosed insurance policy provided by MCIC Vermont, Inc. The plaintiff was further told that the defendant law firm would represent all five of the physicians who were defendants in the underlying lawsuit, as well as Greenwich Hospital. According to the complaint, the plaintiff was not told that he had a right to obtain independent counsel or that he had the ability to object to any settlements. There was no written retainer agreement between the plaintiff and the defendant law firm. The plaintiff further alleges that the defendant law firm never informed him of any potential conflicts of interest arising from this joint representation. In fact, upon meeting with one of the defendant’s partners, the plaintiff was told that it was “not necessary” for him to obtain independent counsel because in “most cases,” settlements were covered entirely by the subject insurance policy and that individual physicians were “very rarely” reported to the National Practitioners Data Bank pursuant to 45 C.F.R. § 60.5.
According to the plaintiff, “throughout the representation [the defendant] failed to exercise the degree of skill and learning commonly applied to protect a client in Plaintiffs position as independent from the competing interests of common clients, including [Greenwich Hospital].” Specifically, the plaintiff alleges that the defendant failed to inform him in a timely manner of the occurrence of the deposition of the plaintiff in the underlying case, which deprived him of an opportunity to be present and provide input. The plaintiff further alleges that he was not told for nine months that the defendant had obtained the services of an independent medical expert. In November 2009, the plaintiff was informed that the case was settled on his behalf and that he would not be reported to the National Practitioners Data Bank. When the plaintiff asked whether he could object to the settlement, the plaintiff was told that he could not because of the contractual arrangement between MCIC Vermont, Inc. and Greenwich Hospital or Yale-New Haven Health Services. The plaintiff was further informed that he would not be named as a payor of the settlement proceeds. Several weeks later, however, the plaintiff was in fact told that he would be named in the settlement and reported to the National Practitioners Data Bank. The reason for this decision was because of an independent expert opinion that the plaintiff was not told about until after the settlement. None of the other physicians represented by the defendant were reported to the National Practitioners Data Bank. On December 22, 2009, the plaintiff eventually obtained independent counsel and the defendant has refused to turn over relevant documents to the plaintiffs new attorneys.
As a result of all of this conduct, the plaintiff alleges the following claims: (1) legal malpractice against the defendant; (2) breach of fiduciary duty against the defendant; (3) breach of fiduciary duty against MCIC Vermont, Inc.; (4) breach of contract against Greenwich Hospital; (5) breach of contract against Yale-New Haven Health Services; (6) breach of the covenant of good faith and fair dealing against Greenwich Hospital; (7) breach of the covenant of good faith and fair dealing against Yale-New Haven Health Services; (8) breach of the covenant of good faith and fair dealing against MCI C Vermont, Inc.; (9) violations of the Connecticut Unfair Trade Practices Act, General Statutes § 42-1a et seq. (CUTP A), against the defendant; (10) negligence against MCIC Vermont, Inc.; (11) violations of CUTP A against MCIC Vermont, Inc. and (12) violations of the Connecticut Unfair Insurance Practices Act, General Statutes § 3Sa-S15 et seq. (CUlPA) against MCIC Vermont, Inc.
On August 20, 2010, the defendant filed a motion to strike and a memorandum of law in support of its motion (Dkt. Entries 107.00 and 10S.00). As originally filed, the defendant’s motion sought to strike counts one and six, as well as the prayer for relief associated with count one, which were located in the plaintiffs revised complaint dated August 5, 2010. The plaintiff filed a memorandum of law in opposition to this motion on September 2, 2010 (Dkt. Entry 112.00). Following the filing of the defendant’s motion to strike, on August 23, 2010, the plaintiff filed a request for leave to file an amended complaint, as well as a proposed amended complaint. This complaint is now the operative complaint in the case.2 In this amended complaint, the plaintiff added a new cause of action against the defendant for breach of fiduciary duty and changed the numbering of the counts that are directed to the plaintiff. As a result, on October 4, 2010, the defendant filed a supplemental motion to strike and supporting memorandum of law addressing count two (Dkt. Entry121.00 and 123.00). The plaintiff further filed a memorandum of law in opposition to this supplemental motion to strike on November 5, 2010 (Dkt. EntryI28.00). When read together, the defendant’s original and supplemental motions to strike request that the court strike all of the counts levied against the defendant in the plaintiffs amended complaint dated August 20, 2010. These are counts one, two and nine. The defendant is also moving to strike the portions of the prayer for relief associated with count one that seek punitive damages and attorney’s fees. The court heard argument in this matter at short calendar on December 6, 2010.
From a legal perspective, the Court reasoned as follows:
”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). In a motion to strike, “the moving party admits all facts well pleaded.” RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381,383 n.2, 650 A.2d 153 (1994). Therefore, “[i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied.” (Internal quotation marks omitted.) Batte-Homgren v. Commissioner o/Public Health, 281 Conn. 277,294,914 A.2d 996 (2007). Nevertheless, “[a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged.” (internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 498. When deciding a motion to strike, the court must “construe the complaint in the manner most favorable to sustaining its legal sufficiency.” (internal quotation marks omitted.) Sullivan v. Lake Com pounce Theme Park, Inc., 277 Conn. 113, 117,889 A.2d 810 (2006).
The defendant first moves to strike count nine alleging CUTP A on the ground that the plaintiff fails to allege facts involving the entrepreneurial aspects of the defendant’s law practice.3 In its memorandum of law, the defendant argues that all of the allegations in this count arise from the defendant’s legal representation of the plaintiff and that such allegations cannot form a legally cognizable CUTPA claim against a law firm. As a result of this immunity from CUTPA liability, the defendant argues that count nine is legally insufficient. In response, the plaintiff argues that he alleges facts involving the defendant’s “engaging and disengaging of clients, its billing practices and fees.” Specifically, the plaintiff contends that he alleges actions taken by the defendant in order to secure the plaintiff as a client and prevent him from obtaining independent counsel. Furthermore, the plaintiff argues that he alleges facts involving the defendant’s improper billing practices. Consequently, the plaintiff contends that count nine sets forth a legally viable CUTPA cause of action.
”[I]n general, CUTPA applies to the conduct of attorneys…. The statute’s regulation of the conduct of any trade or commerce does not totally exclude all conduct of the profession of law. . .. Nevertheless, [the Connecticut Supreme Court has] declined to hold that every provision of CUTPA permits regulation of every aspect of the practice of law…. [The Supreme Court has] stated, instead, that, only the entrepreneurial aspects of the practice of law are covered by CUTPA. … [P]rofessional negligence that is, malpractice does not fall under CUTPA.” (Citations omitted; internal quotation marks omitted.) Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 781, 802 A.2d 44 (2002). “Our CUTPA cases illustrate that the most significant question in considering a CUTP A claim against an attorney is whether the allegedly improper conduct is part of the attorney’s professional representation of a client or is part of the entrepreneurial aspect of practicing law.” Id. “The ‘entrepreneurial’ exception is just that, a specific exception from CUTP A immunity for a well-defined set of activities-advertising and bill collection, for example.” Id., 782; see also Haynes v. Yale-New Haven Hospital, 243 Conn. 17,34-38,699 A.2d 964 (1997) (stating that CUTPA can apply to the professions of law and medicine, but only for entrepreneurial aspects such as solicitation of clients and billing).
In paragraph fourteen of count one, which is incorporated by reference into count nine, the plaintiff alleges that “at the outset of the representation, [he] inquired as to whether he needed separate counsel and was told it was ‘not necessary,’ especially as in ‘most cases,’ settlements were covered entirely by [MCIC Vermont, Inc.] on behalf of [Greenwich Hospital] and [Yale-New Haven Health Services] ….” As further alleged in paragraphs thirty-two and thirty-three of count nine, “[t]he representation of all individual physicians and [Greenwich Hospital] in the Sousa lawsuit, while purposefully overlooking potential and actual conflicts of interest, permitted [the defendant] to bill numerous hours above and beyond what it would have been able to bill if it only represented one physician or one hospital” and “[i]t is and/or was [the defendant's] pattern and practice to increase billable hours, regardless of its ethical obligations to its individual clients.” If read in a light most favorable to the pleader and accepted as true, these allegations suggest that the defendant failed to divulge a potential conflict of interest in order to convince the plaintiff to have it represent him in the Sousa lawsuit and that this was done so that the plaintiff could over-bill its clients. As stated by one Superior Court judge, “the solicitation of a client is more apt to involve the entrepreneurial, as opposed to the representational, aspects of a legal practice because such an activity more often involves conduct occurring before the creation of the attorney-client relationship.” (Emphasis in original.) Tracey v. Still, Superior Court, judicial district ofAnsonia-, Milford at Derby, Docket No. CV 054001883 (March 23, 2006, Stevens, J) (41 Conn. L. Rptr. 101, ‘ 104); see also Anderson v. Schoenhorn, 89 Conn. App. 666, 674,874 A.2d 798 (2005) (stating that “the conduct of a law firm in obtaining business and negotiating fee contracts does fall within the ambit of entrepreneurial activities”).
The allegations of count nine also directly implicate the defendant’s billing practices in that the plaintiff alleges that the defendant over-billed as a result of its representation of multiple clients in the Sousa lawsuit. Cf. Proskauer Rose, LLP v. Lindholm, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 07 5005353 (May 19, 2008, Tobin, J) (45 Conn. L. Rptr. 503, 505) (striking CUTP A counterclaim because of the defendant’s failure “to allege any wrongdoing on the plaintiffs part other than over-billing. There are no claims that the plaintiffs bill, for example, included time incurred in working for other clients …. Without such allegations claims of over-billing necessarily involve only the professional judgment of the plaintiff as to how to staff the defendant’s case ….”). Consequently, although it is a close call, the court finds that the plaintiff alleges enough facts regarding the solicitation of clients and billing practices to arguably place this matter within the entrepreneurial exception to the CUTP A immunity afforded to attorneys.
Additionally, the defendant argues that count nine is legally insufficient because the plaintiff fails to allege causation. In its memorandum of law, the defendant argues that there are no facts alleged indicating that the defendant’s actions were the proximate cause of the plaintiffs injuries. In response, the plaintiff argues that he alleges sufficient facts in the amended complaint to establish the causation element because he alleges that he suffered injury “as a result” of the defendant’s conduct.
CUTP A provides in relevant part that: “Any person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by section 42-110b, may bring an action in the judicial district in which the plaintiff or defendant resides or has his principal place of business or is doing business, to recover actual damages ….” General Statutes § 42-110g (a). “Our courts have interpreted § 42-110g (a) to allow recovery only when the party seeking to recover damages meets the following two requirements: First, he must establish that the conduct at issue constitutes an unfair or deceptive trade practice .. . . Second, he must present evidence providing the court with a basis for a reasonable estimate of the damages suffered …. Thus, in order to prevail in a CUTPA action, a plaintiff must establish both that the defendant has engaged in a prohibited act and that, ‘as a result of this act, the plaintiff suffered an injury. The language ‘as a result of requires a showing that the prohibited act was the proximate cause of a harm to the plaintiff.” (Citations omitted; emphasis in original; internal quotation marks omitted.) Scrivani v. Vallombroso, 99 Conn. App. 645, 651-52,916 A.2d 827, cert. denied, 282 Conn. 904, 920 A.2d 309 (2007).
In paragraph thirty-seven of count nine, the plaintiff alleges that he “has suffered damages as a result of [the defendant's] conduct, including but not limited to damage to his professional reputation, loss of prospective economic advantage, loss of future earnings, and diminished value in the professional marketplace.” With this allegation, it can be seen that the plaintiff alleges that he suffered specific damages “as a result” of the defendant’s acts that are prohibited under CUTP A. The “as a result of” phrasing tracks the language of§ 42-1 10g (a) and that used by the Appellate Court in Scrivani. At the motion to strike stage, the plaintiff need only allege causation in order to have a legally sufficient cause of action. The plaintiff here alleges that he suffered specific harm “as a result of’ the defendant’s alleged violation of CUTPA; that sufficiently alleges the causation element. See, e.g. Myers v. Ocean Trace Development, Superior Court, judicial district of Fairfield, Docket No. CV 00 0375476 (May 3, 2002, Gallagher, J.) (stating that the plaintiffs “adequately allege causation by alleging that [they] suffered damages ‘as a result’ of the defendants’ recklessness”). Accordingly, this court denies the defendant’s motion to strike count nine.
FOOTNOTES
1. As Heidell, Pittoni, Murphy & Bach, LLP is the only defendant that is a party to the motion to strike that is presently before the court, it alone will be referred to as “the defendant” is this memorandum.
2. After the plaintiff filed the request for leave to file this amended complaint, the defendant filed an objection. This objection was overruled by the court, Jennings, JTR., on September 22, 2010. Another defendant in this case later filed a request to revise this amended complaint, to which the plaintiff filed an objection. All of the plaintiffs objections were sustained by the court, Karazin, JTR., on October 14, 2010.
3. The various counts will be addressed in the order that they are raised in the defendant’s two memoranda of law in support of its motions to strike, even though this is not the numerical order set forth in the amended complaint.
