Ring v. Bancorp, 167 A.3d 462, 174 Conn. App. 813 (2017)

July 18, 2017 · Connecticut Appellate Court · (AC 39111).

167 A.3d 462, 174 Conn. App. 813

Mary Ann RING
v.
LITCHFIELD BANCORP

(AC 39111).

Appellate Court of Connecticut.

Argued April 25, 2017
Officially released July 18, 2017

Charles F. Brower, for the appellant (plaintiff).

Linda Clifford Hadley, for the appellee (defendant).

DiPentima, C. J., and Keller and Graham, Js.

KELLER, J.

The plaintiff, Mary Ann Ring, appeals from the judgment of the trial court rendered in favor of the defendant, Litchfield Bancorp, following the granting of the defendant's motion to strike her amended complaint. On appeal, the plaintiff claims that the court improperly granted the motion to strike because she sufficiently alleged a cause of action against the defendant for violating the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110 et seq. We conclude that the plaintiff waived her right to appeal from the granting of the motion to strike the amended complaint. Accordingly, we affirm the judgment of the trial court.

As a preliminary matter, we note that "[i]n ruling on a motion to strike, we take the facts alleged in the complaint as true." St. Denis v. de Toledo , 90 Conn.App. 690, 691, 879 A.2d 503, cert. denied, 276 Conn. 907, 884 A.2d 1028 (2005). Here, the allegations include the following facts. Water pipes in the plaintiff's home froze and caused significant water damage to the property. The plaintiff engaged the services of a contractor, Chamberlin Kitchen & Bath, LLC (Chamberlin),¹ to repair her home. On May 23, 2015, Chamberlin presented a proposal for the work to be performed, which estimated that the cost to remediate the water damage would be $84,636. The plaintiff accepted that proposal.

After executing a contract with Chamberlin to perform the repairs, the plaintiff made a series of payments to Chamberlin. On June 9, 2015, the plaintiff paid Chamberlin the sum of $10,000. On June 29, 2015, the plaintiff made another payment of $10,000 to Chamberlin.

Finally, on July 30, 2015, the plaintiff paid Chamberlin the sum of $40,000. That final payment is the only sum of money in dispute in the present action. Following the final payment on July 30, 2015, Chamberlin did not provide the plaintiff with any materials or perform any labor.

At all relevant times, Chamberlin held a banking account with the defendant. On August 4, 2015, Chamberlin's account had $42,037.36 on deposit, which included the plaintiff's July 30, 2015 payment of $40,000. On that date, the defendant exercised its setoff rights² against Chamberlin's account by offsetting the balance in the sum of $42,037.36.

The defendant's setoff of Chamberlin's account was confirmed by a letter sent to Chamberlin's owner, Tyson Chamberlin (Tyson), dated August 4, 2015. That same day, Tyson contacted the defendant's special assets officer, Dan Casey, and informed him that $40,000 of the deposited money in the Chamberlin account belonged to the plaintiff. Casey told Tyson that there was nothing that could be done. Tyson also spoke with the defendant's president, Paul McLaughlin, and claimed that the defendant was not entitled to the setoff. In addition, the plaintiff, through counsel, made several demands to the defendant and its counsel to return the $40,000 that was deposited in Chamberlin's account. The defendant refused to return the deposited money.

On August 24, 2015, the plaintiff commenced the present action with a one count complaint against the defendant, alleging that its conduct in offsetting the funds in Chamberlin's account violated CUTPA. On September 9, 2015, the defendant filed a motion to strike the plaintiff's complaint, which the court granted by memorandum of decision issued on December 7, 2015. On December 15, 2015, the plaintiff filed an amended complaint, again alleging that the defendant violated CUTPA by offsetting the account.³ Thereafter, the defendant filed a motion to strike the amended complaint, which the court granted on February 29, 2016. The court rendered judgment in favor of the defendant on April 11, 2016. This appeal followed.

On appeal, the plaintiff claims that the court erred in striking her amended complaint and concluding that she had failed to plead a cognizable cause of action under CUTPA. In response, the defendant argues that the court's ruling was proper because the facts alleged in the amended complaint do not support a cause of action under CUTPA. The defendant also argues that the plaintiff's claim on appeal was waived because her amended complaint was not materially different from the original complaint.⁴ We agree with the defendant that the plaintiff waived her claim on appeal.

With respect to the waiver argument, we are guided by the following legal principles and standard of review. "After a court has granted a motion to strike, the plaintiff may either amend his pleading or, on the rendering of judgment, file an appeal .... The choices are mutually exclusive [as] [t]he filing of an amended pleading operates as a waiver of the right to claim that there was error in the sustaining of the [motion to strike] the original pleading." (Citation omitted; internal quotation marks omitted.) St. Denis v. de Toledo , supra, 90 Conn.App. at 693-94, 879 A.2d 503 ; see also Practice Book § 10-44. "Further-more, if the allegations in a complaint filed subsequent to one that has been stricken are not materially different than those in the earlier, stricken complaint, the party bringing the subsequent complaint cannot be heard to appeal from the action of the trial court striking the subsequent complaint." Caltabiano v. L & L Real Estate Holdings II, LLC , 128 Conn.App. 84, 90, 15 A.3d 1163 (2011). "Construction of pleadings is a question of law. Our review of a trial court's interpretation of the pleadings therefore is plenary." Kovacs Construction Corp. v. Water Pollution & Control Authority , 120 Conn.App. 646, 659, 992 A.2d 1157, cert. denied, 297 Conn. 912, 995 A.2d 639 (2010).

We first examine the ruling striking the original complaint to determine whether the waiver rule applies. St. Denis v. de Toledo , supra, 90 Conn.App. at 694, 879 A.2d 503. In that ruling, the court concluded that the complaint alleged insufficient facts to support the requisite elements of a CUTPA claim.⁵ With respect to the defendant exercising its setoff rights, the court noted that "once a check has been endorsed, has cleared, and has been deposited into an account, absent a seasonable stop payment order or a designation known to the [defendant] on the account or the money held therein that informs the [defendant] that the money is being held for the benefit of a person other than the account owner, the deposited money becomes the money of the account owner. After that time, the [defendant] may treat it as the account owner's money and exercise its right to a setoff." Ultimately, the court concluded that the alleged facts were insufficient to establish a CUTPA claim and granted the motion to strike.

We next examine the court's ruling on the amended complaint. In granting the defendant's motion to strike the plaintiff's amended complaint, the trial court recognized that the substance of the plaintiff's CUTPA claim in the original complaint and as claimed in the amended complaint were not materially different by stating: "The court will not reiterate its legal discussion of either a motion to strike or of the legal sufficiency of CUTPA claims. Rather, in both of these regards, the court incorporates by reference its December 7, 2015 memorandum of decision striking the original complaint." The court further stated that "the allegations of the substituted complaint are actually less sufficient than those of the original complaint, which at least alleged an unfounded legal conclusion of misappropriation."

On the basis of our review of the relevant pleadings and the court's rulings in granting the defendant's motions to strike, we conclude that the plaintiff failed to allege any new facts in her amended complaint that materially altered the original complaint. In short, none of the new factual allegations in the plaintiff's amended complaint corrected the deficiencies identified by the court when it granted the motion to strike the original complaint. For example, the alleged facts in the amended complaint do not suggest that the defendant owed a duty to the plaintiff as a consumer, that the defendant engaged in an act or practice that was against public policy, or in an act or practice that was immoral, unethical, oppressive or unscrupulous, or alleged a conscious departure from known, standard business norms. See Artie's Auto Body, Inc. v. Hartford Fire Ins. Co. , 287 Conn. 208, 217-18, 947 A.2d 320 (2008) discussing elements plaintiff must prove to prevail on CUTPA claim); see also Ulbrich v. Groth , 310 Conn. 375, 409-410, 78 A.3d 76 (2013). Moreover, the plaintiff failed to allege any facts as to whether the defendant, prior to exercising its setoff rights, was aware or should have been aware that the funds deposited by Chamberlin belonged to the plaintiff.⁶ We further note that, although there are some differences in the two complaints, the primary differences in the original complaint from the amended complaint pertain to Tyson's communications with the defendant subsequent to the defendant exercising its right to a setoff, as opposed to how the defendant's actions violate CUTPA. In our view, those additions do not materially alter the allegations set forth in the original complaint.

Because the amended complaint merely reiterates the CUTPA claim that was previously disposed of by the court, and the additional alleged facts do not materially alter the original complaint, we conclude that the plaintiff has waived her right to appeal from the court's ruling granting the motion to strike the amended complaint. Thus, we need not reach the merits of her claim.⁷

See St. Denis v. de Toledo , supra, 90 Conn.App. at 691 n.1, 879 A.2d 503. Accordingly, the court properly granted the motion to strike the amended complaint.

The judgment is affirmed.

In this opinion the other judges concurred.

1 Chamberlin is not a party to the present action.

2 "Connecticut law, like law generally, treats a deposit in a bank as a promise to pay from the bank to the depositor. If the depositor is also indebted to the bank, such debts of the depositor and the bank are mutual, and the bank may set off a past due debt with deposits held by the bank, provided there is no express agreement to the contrary and the deposit is not specifically applicable to some other particular purpose." In re Colonial Realty Co., 208 B.R. 616, 618 (Bankr. D. Conn. 1997), citing Southington Savings Bank v. Rodgers, 40 Conn.App. 23, 29, 668 A.2d 733 (1995), cert. denied, 236 Conn. 908, 670 A.2d 1307 (1996).

3 The plaintiff's amended complaint initially contained two counts: (1) a violation of CUTPA; and (2) a claim for unjust enrichment. During the pendency of the defendant's motion to strike the amended complaint, the plaintiff withdrew the unjust enrichment claim.

4 We note that the plaintiff has not filed a reply brief in this court addressing the defendant's waiver claim. At oral argument, however, the plaintiff simply argued that the additional facts pleaded in the amended complaint materially altered the original complaint.

5 The court identified several deficiencies from which the original complaint suffered, including the failure to identify an act or practice that violated public policy, an act or practice that was immoral, unethical, oppressive or unscrupulous, or a conscious departure from known, standard business norms, among other things.

6 In its memorandum of decision granting the defendant's second motion to strike, the court concluded, as it did in ruling on the first motion to strike, that there were "no allegations at all that the [defendant] even knew of any relationship between the plaintiff and Chamberlin prior to the setoff." In that same ruling, the court also concluded, for the second time, that "[o]nce the $40,000 was deposited into the Chamberlin account and cleared ... it became Chamberlin's money and was available for the setoff." The amended complaint simply did not cure the deficiencies identified by the court because it was not alleged that the defendant was aware, prior to the setoff, that the funds were held for the benefit of the plaintiff. Moreover, the funds were furnished to Chamberlin for services rendered in repairing the plaintiff's home. Nothing about that transaction suggests that the funds were held in trust or for the benefit of the plaintiff. Nonetheless, the plaintiff's allegation that the defendant was not entitled to exercise its setoff right is legally unsound. See In re Colonial Realty Co., 208 B.R. 616, 618 (Bankr. D. Conn. 1997), citing Southington Savings Bank v. Rodgers, 40 Conn.App. 23, 29, 668 A.2d 733 (1995), cert. denied, 236 Conn. 908, 670 A.2d 1307 (1996).

7 We note, however, that even if we were to reach the merits, her claim would likely fail in light of this court's prior decision in Southington Savings Bank v. Rodgers, 40 Conn.App. 23, 29, 668 A.2d 733 (1995), cert. denied, 236 Conn. 908, 670 A.2d 1307 (1996).