Cornerstone Realty, Inc. v. Dresser Rand Co.

993 F. Supp. 107, 1998 U.S. Dist. LEXIS 1069, 1998 WL 45277
CourtDistrict Court, D. Connecticut
DecidedJanuary 5, 1998
DocketCivil 3:94CV1560 (DJS)
StatusPublished
Cited by13 cases

This text of 993 F. Supp. 107 (Cornerstone Realty, Inc. v. Dresser Rand Co.) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cornerstone Realty, Inc. v. Dresser Rand Co., 993 F. Supp. 107, 1998 U.S. Dist. LEXIS 1069, 1998 WL 45277 (D. Conn. 1998).

Opinion

ORDER

SQUATRITO, District Judge.

After a careful, de novo review, and over the objections of the plaintiff and the defendant, the Magistrate Judge’s recommended ruling (Document number 256) is hereby adopted, ratified and approved. The motion to dismiss is granted in part and denied in part. Document number 192. The motions for summary judgment are denied without prejudice. Document numbers 243 and 246. The parties shall file a joint trial memorandum relating to all issues to be decided by the court on March 23, 1998. The pretrial compliance shall include:(l) proposed findings of fact; (2) issues of law; (3) a list of witnesses; and (4) a list of documents.

RECOMMENDED RULING ON CONSOLIDATED MOTION TO DISMISS SECOND AMENDED COMPLAINT

MARTINEZ, United States Magistrate Judge.

This action arises out of a failed real estate transaction of commercial property in Windsor, Connecticut. Having discovered contamination on the property, the intended purchaser of the property brought this action for injunctive relief and damages against the *110 current and former property owners. The second amended complaint asserts claims under federal and state environmental laws, the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn.Gen.Stat. § 42-110a et seq., and state common law.

Pending before the court is the defendants’ motion to dismiss counts 6, 7, 9,10,13 and 15 of the plaintiffs second amended complaint. 1 For the reasons that follow, the court recommends that the Consolidated Motion to Dismiss Second Amended Complaint (doc. # 192) be GRANTED as to counts 7 and 9 and DENIED as to counts 6, 10, 13 and 15.

STANDARD OF REVIEW

When considering a Rule 12(b) motion to dismiss, the court accepts as true all factual allegations in the complaint and draws inferences from these allegations in the light most favorable to the plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Easton v. Sundram, 947 F.2d 1011, 1014-15 (2d Cir.1991), cert. denied, 504 U.S. 911, 112 S.Ct. 1943, 118 L.Ed.2d 548 (1992). Dismissal is warranted only if, under any set of facts that the plaintiff can prove consistent with the allegations, it is clear that no relief can be granted. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Frasier v. General Elec. Co., 930 F.2d 1004, 1007 (2d Cir.1991). “The issue on a motion to dismiss is not whether the plaintiff will prevail, but whether the plaintiff is entitled to offer evidence to support his or her claims.” United States v. Yale New Haven Hosp., 727 F.Supp. 784, 786 (D.Conn.1990) (eiting Scheuer, 416 U.S. at 232).

DISCUSSION

I. COUNT SIX: BREACH OF DUTY OF . GOOD FAITH

The defendants argue that there is no separate cause of action for the breach of the duty of good faith and fair dealing and that the plaintiffs claim should be dismissed because it is subsumed within the plaintiffs claim for breach of contract. The defendants also argue, apparently in the alternative, that the plaintiff must allege that Dresser-Rand unfairly performed under the contract in order to assert a claim for breach of the duty of good faith. The plaintiff responds that the sixth claim for relief alleges facts which show thát Dresser-Rand acted dishonestly in performing its contractual duties without necessarily having violated an express written provision of the contract.

The Connecticut Supreme Court has recognized the implied covenant of good faith and fair dealing in a variety of contractual relationships, including leases, insurance contracts and construction contracts. Magnan v. Anaconda Industries, Inc., 193 Conn. 558, 566, 479 A2d 781 (1984). Designed to fulfill the reasonable expectations of the contracting parties as they presumably intended, the covenant requires that “neither party do anything that will injure the right of the other to receive the benefits of the agreement.” Home Ins. Co. v. Aetna Life & Casualty Co., 235 Conn. 185, 200, 663 A.2d 1001 (1995) (quoting Habetz v. Condon, 224 Conn. 231, 238, 618 A.2d 501 (1992)). Breach of the implied covenant of good faith and fair dealing gives rise to an independent cause of action. 2

*111 The plaintiff here has alleged a cause of action for breach of the implied covenant of good faith and fair dealing sufficient to overcome the defendants’ motion to dismiss. The plaintiff has alleged that Dresser-Rand purposefully withheld documents when it was contractually obligated to disclose all reports in its possession or control. Second Amended Complaint, Count 6, ¶40. The plaintiff also alleges that Dresser-Rand obstructed Cornerstone’s attempt to exercise its contractual right to investigate the condition of the property. Id. at ¶ 41. The plaintiff further alleges that, upon discovery of the condition of the property, Dresser-Rand either refused to speak or meet with Cornerstone or negotiated in bad faith for the purpose of delaying enforcement of the contract. Id. at ¶40. These allegations state facts which show that the defendants acted in a manner to injure the plaintiffs right to receive the benefit of its bargain. Count Six should not be dismissed.

II. COUNT SEVEN: CUTPA

In the seventh claim for relief, the plaintiff alleges that Dresser-Rand violated CUTPA by engaging in a pattern of conduct in which it knowingly misrepresented the condition of the property and bargained in bad faith in an “attempt to transfer environmentally contaminated properties to unsuspecting purchasers.” Second Amended Complaint, Count 7, ¶ 48. The defendant Dresser-Rand moves to dismiss the plaintiffs CUTPA claim on the following three grounds: (1) that the plaintiff failed to allege that Dresser-Rand’s primary trade or commerce is the sale of real estate; (2) that the complaint establishes that Dresser-Rand’s conduct was not unfair; and (3) that the plaintiff suffered no ascertainable loss. The CUTPA claim should be dismissed because the allegations cannot support a finding that Dresser-Rand’s attempt to sell the Windsor property occurred in the conduct of its primary trade or commerce. The other grounds for dismissal raised by Dresser-Rand need not be reached.

CUTPA provides that “no person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Conn.Gen.Stat. § 42-110b(a).

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Bluebook (online)
993 F. Supp. 107, 1998 U.S. Dist. LEXIS 1069, 1998 WL 45277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cornerstone-realty-inc-v-dresser-rand-co-ctd-1998.