944 ASSOCIATES LIMITED PARTNERSHIP v. CONNECTICUT HOUSING FINANCE AGENCY.

2007 Ct. Sup. 21850
No. CV 06-5006319Connecticut Superior Court Judicial District of Hartford at Hartford
December 20, 2007

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]

MEMORANDUM OF DECISION ON DEFENDANT’S MOTION TO STRIKE TWO COUNTS OF THE PLAINTIFF’S REVISED COMPLAINT
ROBERT SATTER, JUDGE TRIAL REFEREE.

Plaintiff’s second amended complaint, dated October 15, 2007, alleges in Count One a breach of contract in that the plaintiff, having fully paid a mortgage granted to it by the defendant, the defendant refused to pay over to the plaintiff certain funds identified as “reserves for replacement” and “residual receipts.”

In paragraph 9, the plaintiff alleges “As a result of the arbitrary, capricious, and/or malicious acts of the defendant, the plaintiff is damaged by the retention of said reserves.”

Count Two alleges the first nine paragraphs of Count One, and states:

The defendant has breach [sic] implied covenant of good faith and fair dealing which in connection with the release of mortgage not only requires a release of the real estate security but all other security in connection with said mortgage including the replacement and reserves, all to the plaintiff’s special loss and damage.

The defendant moves to strike this Count Two on the grounds that it fails to allege the retention of the funds was done in bad faith — that is, prompted by a dishonest or sinister motive.

Our law recognizes that every contract carries an implied covenant of good faith and fair dealing, requiring neither party do anything that will injure the right of the other to receive the benefits of the agreement. Gaudio v. Griffin Health Services Corp., 249 Conn. 523, 524
(1999). To constitutes a breach of that covenant, “the acts by which the defendant allegedly impedes the plaintiff’s right to receive benefits that he or she reasonably expected to receive under the contract must CT Page 21851 have been taken in bad faith.” Alexandru v. Strong, 81 Conn.App. 68, 81
(2004). Bad faith means more than mere negligence; it involves a dishonest purpose. Habetz v. Condon, 224 Conn. 231, 237-38 (1992). “Absent allegations and evidence of a dishonest purpose or sinister motive, a claim for breach of the implied covenant of good faith and fair dealing is legally insufficient.” Alexandru v. Strong supra.

The plaintiff points to allegation no. 9, incorporated by reference into Count Two. But as the court said in Pine Creek Partners, LLC v. Seaman et al., CV 99-0364880-S, judicial district of Fairfield at Bridgeport (December 20, 2000, Skolnick, J.), allegations that defendant acted “maliciously” do not equate with acting in bad faith. The court said, “Thus, a claim for breach of implied covenant of good faith and fair dealing is not legally sufficient unless a dishonest purpose or sinister motive is alleged.”

Based on these authorities, the motion to strike Count Two is granted.

In Count Three of the complaint, plaintiff alleges:

(8) The failure and refusal to release the reserves and residual receipts constitutes a conversion of plaintiff’s assets, all to the plaintiff’s special loss and damages.

The defendant moves to strike this count on the grounds that plaintiff fails to allege that the reserve funds belong to it. In its brief, the defendant asserts that the plaintiff has not cited any provision of the loan documents to show that these monies belong to it. However, reciting to documents are matters of evidence not appropriately considered in a motion to strike. The allegation that the funds are plaintiff’s is sufficient.

But in order to state a legally viable claim of conversion the plaintiff must allege that the defendant unauthorizedly deprived defendant of that property. The simple allegation of conversion without alleging facts showing that the defendant acted without authority renders this count insufficient as a matter of law.

Based on the foregoing, the motion to strike Counts Two and Three of the plaintiff’s revised complaint is granted.

CT Page 21852