The Morganti Group, Inc. v. Stamford Phase Four JV, LLC

The Morganti Group, Inc. v. Stamford Phase Four JV, LLC

No. FSTCV186038150S

Superior Court of Connecticut, Judicial District of Stamford-Norwalk, Stamford

September 11, 2019

UNPUBLISHED OPINION

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Povodator, Kenneth B., J.T.R.

MEMORANDUM OF DECISION RE MOTION TO STRIKE (#110.00)

POVODATOR, JTR.

Background

Currently before the court is a motion to strike the eighth count of the plaintiff’s complaint. As the court must construe the pleadings in a manner most favorable to the non-moving party, the court largely will rely upon the plaintiff’s recitation of the background facts for context.

Plaintiff has sued ICON, Stamford Phase Four JV, LLC (generally referred to as owner or "Trinity"), and C&H Electric, Inc., seeking damages arising from a dispute in the Trinity Stamford PSW Condominium- Phase Four Unit construction project. The plaintiff, as the contractor, agreed to provide labor, materials, and services for the project. ICON^[1] is the architect for the project, with duties relating to the design of the project and preparation and administration of the contract. In the first count, the plaintiff claims that Trinity failed to make contractually required progress payments that were approved by ICON. The plaintiff’s allegations in the second through seventh counts assert other claims directed to Trinity.

In the eighth count, the sole count directed to ICON, the plaintiff alleges negligence for breach of a "duty of care in the performance of its duty under its Contract with the Owner, because Morganti’s timely, proper and efficient performance of its Contract was inextricably intertwined with, and dependent upon, the Architect’s proper performance of its ... duties under its contract with the Owner." The heart of the plaintiff’s allegation is that the defendant’s construction drawings contained errors that delayed the plaintiff’s construction activities. The plaintiff claims that as a consequence, it suffered losses consisting of significant and costly changes to its work including delayed completion and other resulting financial harm and detriment.

At this juncture, the court must stop semi-quoting and/or paraphrasing the defendant’s description of background facts- as will be discussed below, the subsequent portion of its description of the background facts relies upon its submission of a copy of its contract as an exhibit, improper in the context of a motion to strike.

The defendant claims that as to it, the action commenced by the plaintiff is barred by the economic loss doctrine/rule, generally precluding an action sounding in negligence when there is no injury/damage to person or property- when the only injury alleged is economic in nature.

Legal Standards

The standards for analyzing a motion to strike are well-established. First, [b]ecause a motion to strike challenges the legal sufficiency of a pleading and, consequently, requires no factual findings by the trial court, our review of the court’s ruling ... is plenary ... We take the facts to be those alleged in the complaint that has been stricken and we construe the complaint in the manner most favorable to sustaining its legal sufficiency ... Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied ... Moreover, we note that [w]hat is necessarily implied [in an allegation] need not be expressly alleged ... It is fundamental that in determining the sufficiency of a complaint challenged by a defendant’s motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted. (Internal quotation marks and citation, omitted.) Doe v. Cochran, 332 Conn. 325, 333, 210 A.3d 469, 475 (2019).

Discussion

Some motions to strike challenge the adequacy of the allegations of a complaint to bring the situation in dispute within the scope of a recognized cause of action, e.g., whether a required element has been asserted or a threshold has been met. Thus, a motion to strike might be used to challenge whether a CUTPA claim asserts sufficiently egregious conduct or contains an allegation of ascertainable loss; a motion to strike might be used to challenge whether a claim of intentional infliction of emotional distress describes conduct that is sufficiently outrageous.

Other times, a motion to strike is used to determine whether our courts will/do recognize a particular cause of action, where it is not so much a matter of questioning the sufficiency of allegations as whether the concept itself is legally cognizable; Doe, supra . This case falls into the latter category. The defendant claims that the economic loss doctrine/rule precludes a claim such as is asserted by the plaintiff against ICON, a claim based on negligence but asserting only economic loss without any personal injury or property damage (and no contractual basis for a recovery).

Essentially at the outset, the plaintiff raises a procedural issue that it claims requires the court to deny the motion to strike. In moving to strike the eighth count, the defendant has submitted a copy of its contract with the owner as an exhibit, which the plaintiff correctly characterizes as making this motion an improper speaking motion. The plaintiff does not explain why the court cannot simply disregard that contract and all references to the contract and its contents, much as the court does when incompetent statements of an affiant or otherwise inadmissible materials are submitted in support of a motion for summary judgment. Just as the court has disregarded the factual background recited by the defendant to the extent it relied upon that external document, so too will the court disregard the submitted contract in its determination of legal sufficiency of the eighth count.

Another somewhat preliminary issue relates to the scope of the claims being pursued by the plaintiff. In its motion and supporting brief, the defendant spends some time addressing the inapplicability of a third-party beneficiary claim to the facts of this case, as alleged. In its response, the plaintiff asserts that it is not claiming any rights as a third-party beneficiary. Although some of the cases cited by the parties and some of the cases found in the course of the court’s own research discuss implicit if not explicit claims of third-party beneficiary status, the unambiguous disclaimer of the plaintiff in this regard requires the court to accept the contention that there is no need to analyze issues relating to third-party beneficiary status, as such status is not being claimed.

Again, the background is that the plaintiff was the general contractor on a project involving construction of a "high-rise" apartment building, and the defendant was the architect/design professional. The obligations of the defendant on the project were to prepare the plans and drawings from which the contractor and its subcontractors would obtain the information necessary to construct the building, and its obligations also included project management which, in turn, included approvals of payments as appropriate. The plaintiff contends that the defendant breached its duty to the plaintiff in numerous respects. For purposes of the economic loss doctrine, there is no question that the injuries claimed by the plaintiff are purely economic, setting the stage for consideration of applicability of the doctrine.

The parties disagree- not surprisingly- as to the applicability of the economic loss rule to these circumstances. That, in turn, requires the court to recognize that there are at least a few different conceptual areas in which the rule has been found to be applicable and/or claimed to be applicable. Some cases involve claims between parties that are parties to a contract. Other cases involve parties who do not have a direct contractual relationship, but may be perceived to have a relationship that is analogous to privity. Some cases involve parties who have no direct dealings or commonality of interest, such that the relationship either is fortuitous or comes close to fortuitous. Some cases distinguish between claims based on misrepresentation (emphasizing reliance) as opposed to other forms of negligent behavior. (Even as to misrepresentation, there is a distinction between representations made to induce a contract or other action, as opposed to those during the course of a working relationship; Ulbrich v. Groth, 310 Conn. 375, 405-07, 78 A.3d 76 (2013).) To the extent that the parties cite various cases claimed to support their respective positions, these varying categories- and potentially others- need to be recognized as potentially limiting the extent to which cases involving one of these categories can be applied to another.

Thus, in Lawrence v. O&G Industries, Inc., 319 Conn. 641, 126 A.3d 569 (2015), the court framed the doctrine in terms of the remoteness of the relationship between of the plaintiffs and the defendant, necessarily including the absence of any contractual relationship between the parties. More generally, in footnote 15, the court noted the existence of at least three types of scenarios in which the economic loss doctrine has been applied or claimed to be applicable, with the claim for relief under a tort theory in the absence of any personal injury or property damage as the only common factor.

By way of background, we note that the economic loss doctrine is a multifaceted set of principles that influence three major areas concerning recovery of purely economic losses, namely: (1) "whether purely economic losses caused by a defective product are recoverable under tort law"; (2) "whether a tort claim for economic damages is viable when there is some other contract between the

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