United States District Court, D. Connecticut
ORDER RE PARTIAL MOTION TO DISMISS
W. Thompson United States District Judge
reasons set forth below, Defendants' Partial Motion to
Dismiss Plaintiffs' Complaint (Doc. No. 20) is hereby
GRANTED in part and DENIED in part. The motion is being
granted with respect to Counts Five (but with leave to
replead), Eight, Nine (but with leave to replead), Ten,
Eleven (except with respect to any cause of action arising
under 12 U.S.C. § 2605(b)), Twelve (but with leave to
replead), Thirteen, and Fourteen. The motion is being denied
with respect to Counts Two, Four, Seven and any remaining
cause of action arising under 12 U.S.C. § 2506(b).
Two and Four - Good Faith and Fair Dealing
contract carries an implied duty requiring that neither party
do anything that will injure the right of the other to
receive the benefits of the agreement." Rafalko v.
Univ. of New Haven, 129 Conn.App. 44, 51 (2011).
"[T]o constitute a breach of the [implied covenant of
good faith and fair dealing], the acts by which a defendant
allegedly impedes the plaintiff's right to receive
benefits that he or she reasonably expected to receive under
the contract must have been taken in bad faith."
Caires v. JP Morgan Chase Bank, N.A., 880 F.Supp.2d
288, 307-08 (D. Conn. 2012) (quotation marks omitted)
(quoting Landry v. Spitz, 102 Conn.App. 34, 42
(2007)). "Bad faith means more than mere negligence; it
involves a dishonest purpose." De La Concha of
Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424,
433 (2004) .
Bad faith in general implies [either] actual or constructive
fraud, or a design to mislead or deceive another, or a
neglect or refusal to fulfill some duty or some
contractual obligation, not prompted by an honest
mistake as to one's rights or duties, but by some
interested or sinister motive.
Habetz v. Condon, 224 Conn. 231, 237 (1992)
(emphasis added) (quoting Funding Consultants, Inc. v.
Aetna Casualty & Surety Co., 187 Conn. 637, 644
(1982)). "A plaintiff cannot state a claim for breach of
the implied covenant simply by alleging a breach of the
contract, in and of itself." TD Bank, N.A. v. J
& M Holdings, LLC, 143 Conn.App. 340, 349 (2013).
the plaintiffs allege not only that the defendants
"failed" to honor the first modification and second
modification agreements, but also that the defendants
"refused" to honor these agreements. See
Compl. Count Two ¶¶ 20(a), (b) and (c), 21, 24, and
Count Four ¶¶ 18(a), and 21. Also, the facts
alleged with respect to the fraudulent misrepresentation
claim support an inference that the defendants' refusal
to honor the modification agreements was designed to mislead
or deceive, and that the defendants operated with an
interested or sinister motive in their handling of the first
modification and second modification agreements. When these
factual allegations are read together with those under Count
Two and Count Four, the plaintiffs have adequately alleged
the plaintiffs have sufficiently alleged a claim for breach
of the implied covenant of good faith and fair dealing in
both Count Two and Count Four, and the motion to dismiss is
being denied as to these counts.
Five and Twelve - Fraudulent Misrepresentation and
"When a party pleads fraud, the alleged fraud must be
pled with the particularity required by Rule 9(b)."
Trefoil Park, LLC v. Key Holdings, LLC, No.
3:14-CV-364 (VLB), 2015 WL 1138542, at *5 (D. Conn. Mar. 13,
2015). "Rule 9(b) provides that Mi]n alleging fraud or
mistake, a party must state with particularity the
circumstances constituting fraud or mistake.'"
Id. "In this Circuit, therefore, a complaint
based on fraudulent acts must Ml) specify the statements that
the plaintiff contends were fraudulent, (2) identify the
speaker, (3) state where and when the statements were made,
and (4) explain why the statements were
fraudulent."' Id. (quoting Mills v.
Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.
1993)). While "[m]alice, intent, knowledge and other
conditions of a person's mind may be alleged generally,
" as a safeguard to a defendant's reputation,
plaintiffs "must allege facts that give rise to a strong
inference of fraudulent intent." Id. (quoting
Parola v. Citibank (South Dakota) N.A., 894
F.Supp.2d 188, 200 (D. Conn. 2012)). "The 'strong
inference of fraud' may be established by either alleging
facts to show that a defendant had both the motive and
opportunity to commit fraud, or facts that constitute strong
circumstantial evidence of conscious misbehavior or
recklessness.'" Id. (quoting
Parola, 894 F.Supp.2d at 200)).
the defendants argue that the complaint fails to satisfy
requirements two, three and four of the heightened pleading
standard as articulated in Mills. The plaintiffs
"have pled that 'authorized agents, representatives,
and/or employees' of the Defendants made the
representations, " which they contend "states with
enough particularity that an authorized
individual(s)/representative(s) [sic] of the Defendants
allegedly made the representations." Pis.' Mem.
(Doc. No. 26) 15. While the plaintiffs correctly point out
that courts have permitted reference to a company's
agents to satisfy the requirement that the speaker be
identified, see Reynolds v. Lifewatch, Inc., 136
F.Supp.3d 503, 523-24 (S.D.N.Y. 2015), the court need not
assess whether such a reference is sufficient with respect to
the speaker here, because the plaintiffs fail to plead the
time and place with particularity.
plaintiffs also argue the Complaint "allege[s] that the
statements were made in writing or through the mediation
program and the dates the agreements were offered and
accepted." Pis.' Mem. 14. The court disagrees. The
Complaint does not specify that the statements were made in
writing or through the mediation program, and even if it did,
any such specification would not be sufficient to satisfy the
requirement of particularity. For example, with respect to
Count Five ¶¶ 28-30 of the Complaint, the
plaintiffs do not point to where such statements appear in
the first modification agreement, and the court is unable to
locate any. See First Modification Agreement, Compl.
Ex. 1 (Doc. No. 25). Nor do the plaintiffs give any
indication as to when during the mediation program the
statement may have been made, whether in writing or orally,
whether in person or by telephone. The allegations in
¶¶ 31-33 are similarly insufficient, although the
second modification agreement is not attached to the
Complaint, and thus the court did not review it.
addition, the alleged representations by the defendants to
the plaintiffs "that the Plaintiffs had to be in default
in order to modify their loan, " Compl. Count Five
¶ 38(g), would have to have been made prior to the
plaintiffs' default, so it is not apparent how they would
have occurred "through the mediation program, " as
the plaintiffs state. For instance, the plaintiffs allege:
"Prior to the Plaintiffs defaulting upon the Note, the
Plaintiffs contacted the Defendant, Deutsche Bank[, ] to
request a modification and at that time the Defendant advised
the Plaintiffs that it would not consider a request for
modification unless the subject loan was in default."
Compl. Count Five ¶ 34. Without more, even when viewed
in the light most favorable to the plaintiffs and drawing all
reasonable inferences in their favor, such a statement is
insufficient to satisfy the third requirement as to
defendants also argue that the plaintiffs fail to explain how
the representations were fraudulent, and thus do not satisfy
the fourth requirement as to particularity. The court agrees
with respect to any statements or allegations related to the
"Defendants['] incorporation of erroneous figures in
the First Modification [A]greement without the knowledge of
the Plaintiffs." Compl. Count Five ¶ 39(c). The
plaintiffs fail to specify which figures were false and what
made them false. Accordingly, these statements are
insufficient to satisfy the fourth requirement as to
the motion is being granted with respect to Count Five, but
with leave to replead. Because the plaintiffs plead no
additional facts in Count Twelve, but rather incorporate by
reference the allegedly fraudulent statements from Count
Five, the motion also is being granted with respect to Count
Twelve, but also with leave to replead.
Seven - CUTPA
"[T]o prevail on a CUTPA claim, the plaintiffs must
prove that (1) the defendant[s] engaged in unfair or
deceptive acts or practices in the conduct of any trade or
commerce . . . and [the plaintiffs suffered] ascertainable
loss of money or property as a result of the
defendant[s'] acts or practices." Caires v.
JPMorgan Chase Bank, N.A., 880 F.Supp.2d 288,
299 (D. Conn. 2012) (quoting Neighborhood Builders, Inc.
v. Town ...