Associated Inv. Co. Ltd. Partnership v. Williams Associates IV

• Decision Date: 19 July 1994
• Docket Number: No. 14725,14725
• Citation: Associated Inv. Co. Ltd. Partnership v. Williams Associates IV, 645 A.2d 505, 230 Conn. 148 (Conn. 1994)
• Parties: ASSOCIATED INVESTMENT COMPANY LIMITED PARTNERSHIP v. WILLIAMS ASSOCIATES IV, et al.
• Court: Connecticut Supreme Court

Page 505

645 A.2d 505

230 Conn. 148

ASSOCIATED INVESTMENT COMPANY LIMITED PARTNERSHIP v. WILLIAMS ASSOCIATES IV, et al.

No. 14725.

Supreme Court of Connecticut.

Argued Sept. 28, 1993.

Decided July 19, 1994.

Paul R. Kraus, for appellants (defendants).

Robert E. Wright, Hartford, for appellee (plaintiff).

Richard Blumenthal, Atty. Gen., and Robert M. Langer, Asst. Atty. Gen., filed a brief for the office of Atty. Gen., as amicus curiae.

Before PETERS, C.J., and BORDEN, BERDON, KATZ and PALMER, JJ.

PALMER, Associate Justice.

The principal issue in this appeal is whether the Connecticut constitution guarantees a right to a jury trial for actions brought under the Connecticut Unfair Trade Practices Act (CUTPA). General Statutes § 42-110a et seq. ¹ We conclude that the state constitution does not require a jury trial for CUTPA claims. ²

The relevant facts are as follows. The plaintiff, Associated Investment Company Limited Partnership, brought an action against the defendants, Williams Associates IV, Walter J. Lewis, Jr., Norman J. Voog and Victor J. Buselli (Williams Associates), to collect on a promissory note allegedly due and owing in the principal amount of $750,000. The defendants filed an answer, special defenses and a counterclaim alleging a CUTPA violation. ³ The counterclaim alleged that the interest rates and late fees charged by the plaintiff, together with certain of the plaintiff's collection practices and the attachment of various of the defendants' properties, constituted unfair or deceptive acts or practices. The defendants' prayer for relief sought rescission, punitive damages, costs, attorney's fees and such other relief as the court deemed just and proper. ⁴

The defendants thereafter filed a claim to the jury docket, which the plaintiff moved to strike. The trial court granted the plaintiff's motion concluding that: (1) with respect to the complaint, the defendants had waived their right to a jury trial by failing to make the claim in a timely manner; ⁵ and (2) with respect to the counterclaim, the defendants did not have a state constitutional right to a jury trial for actions brought under CUTPA. Prior to trial, the defendants filed a motion for default and other sanctions against the plaintiff on the ground that the plaintiff had failed to attend its duly noticed deposition. The court denied the defendants' motion, and the case proceeded to trial. At the conclusion of the trial, the court rendered judgment for the plaintiff on the complaint in the amount of $1,258,180.60, and for the plaintiff on the defendants' counterclaim.

On appeal, ⁶ the defendants claim that the trial court: (1) improperly determined that the defendants' counterclaim alleging a CUTPA violation was not triable to a jury; and (2) abused its discretion by denying the defendants' motion for default and for other sanctions because of the plaintiff's alleged failure to attend its deposition. We conclude that the trial court properly granted the plaintiff's motion to strike the defendants' counterclaim from the jury docket, and that its denial of the defendants' motion for sanctions did not constitute an abuse of discretion. ⁷ We therefore affirm the judgment.

I

The defendants assert that they are entitled to a jury trial on their counterclaim alleging a CUTPA violation under article first, § 19, of the Connecticut constitution, ⁸ which guarantees the right to a jury trial in all cases for which such a right existed at the time of the adoption of that constitutional provision in 1818. ⁹ Commissioner of Environmental Protection v. Connecticut Building Wrecking Co., 227 Conn. 175, 182, 629 A.2d 1116 (1993); Skinner v. Angliker, 211 Conn. 370, 373-74, 559 A.2d 701 (1989). "Article first, § 19, also provides the right to a jury trial in cases that are substantially similar to cases for which the right to a jury trial existed at common law in 1818." Commissioner of Environmental Protection v. Connecticut Building Wrecking Co., supra, 227 Conn. at 182, 629 A.2d 1116. Because at common law only legal claims were tried to a jury, the state constitutional right to a trial by jury does not extend to equitable claims. Skinner v. Angliker, supra, 211 Conn. at 374, 559 A.2d 701; Franchi v. Farmholme, Inc., 191 Conn. 201, 210, 464 A.2d 35 (1983).

Accordingly, in determining whether a party has a right to a trial by jury under the state constitution and General Statutes § 52-215, ¹⁰ we "must ascertain whether the action being tried ... has roots in the common law, and if so, whether the remedy involved was one in law or equity. If the action existed at common law and involved a legal remedy, the right to a jury trial exists and the legislature may not curtail that right either directly or indirectly." Skinner v. Angliker, supra, 211 Conn. at 376, 559 A.2d 701. "Consequently, statutory actions established since the adoption of the constitution of 1818 ordinarily fall outside the scope of the provision, 'unless, perhaps, the new remedy constitutes "a modification of existing remedies, so vital as to unduly limit and violate the right of trial by jury." ' United States Fidelity & Guaranty Co. v. Spring Brook Dairy, Inc., 135 Conn. 294, 297, 64 A.2d 39 (1949), quoting Meigs v. Theis, 102 Conn. 579, 592, 129 A. 551 (1925)." Bishop v. Kelly, 206 Conn. 608, 618, 539 A.2d 108 (1988); Ford v. Blue Cross & Blue Shield of Connecticut, Inc., 216 Conn. 40, 49-50, 578 A.2d 1054 (1990). Because CUTPA creates an essentially equitable cause of action not substantially similar to common law claims triable to a jury prior to 1818, we conclude that a jury trial is not constitutionally required for actions brought under CUTPA.

We have recently reviewed the nature and scope of the broad prohibition of CUTPA against "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." General Statutes § 42-110b(a). "It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [w]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise--whether, in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers [or competitors or other businessmen]...." (Internal quotation marks omitted.) Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80, 105-106, 612 A.2d 1130 (1992). ¹¹ We also noted that "[a]ll three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three.... Thus a violation of CUTPA may be established by showing either an actual deceptive practice ... or a practice amounting to a violation of public policy.... Furthermore, a party need not prove an intent to deceive to prevail under CUTPA." (Citations omitted; internal quotation marks omitted.) Id. at 106, 612 A.2d 1130.

The expansive nature of the CUTPA scheme, which we have described as establishing "an action more flexible and a remedy more complete than did the common law"; Hinchliffe v. American Motors Corp., 184 Conn. 607, 617, 440 A.2d 810 (1981); may be traced directly to § 5(a)(1) of the Federal Trade Commission Act (FTCA); 15 U.S.C. § 45(a)(1); ¹² the statutory provision on which CUTPA is modeled and the interpretation of which "serve[s] as a lodestar for interpretation of the open-ended language of CUTPA." Russell v. Dean Witter Reynolds, Inc., 200 Conn. 172, 179, 510 A.2d 972 (1986). The FTCA, enacted in 1914, authorizes the Federal Trade Commission to define, identify and prevent "unfair methods of competition" and "unfair or deceptive acts or practices," language used by Congress to reach conduct beyond that proscribed at common law. Federal Trade Commission v. R.F. Keppel & Bro., Inc., 291 U.S. 304, 310-12, 54 S.Ct. 423, 425-26, 78 L.Ed. 814 (1934). ¹³ Indeed "[w]hen Congress created the Federal Trade Commission in 1914 and charted its power and responsibility under § 5 [of the FTCA], it explicitly considered, and rejected, the notion that it reduce the ambiguity of the phrase 'unfair methods of competition' by tying the concept of unfairness to a common-law or statutory standard or by enumerating the particular practices to which it was intended to apply." Federal Trade Commission v. Sperry & Hutchinson Co., 405 U.S. 233, 239-40, 92 S.Ct. 898, 903, 31 L.Ed.2d 170 (1972). Instead, it adopted a concept that does not "admit of precise definition but the meaning and application of which must be arrived at by ... the gradual process of judicial inclusion and exclusion." (Internal quotation marks omitted.) Federal Trade Commission v. R.F. Keppel & Bro., Inc., supra, 291 U.S. at 312, 54 S.Ct. at 426. ¹⁴

Likewise, our General Assembly, in adopting the sweeping language of § 5(a)(1) of the FTCA, "deliberately chose not to define the scope of unfair or deceptive acts proscribed by CUTPA so that courts might develop a body of law responsive to the marketplace practices that actually generate such complaints." Sportsmen's Boating Corp. v. Hensley, 192 Conn. 747, 755, 474 A.2d 780 (1984). "Predictably, [therefore,] CUTPA has come to embrace a much broader range of business conduct than does the common law tort action." Id. at 756, 474 A.2d 780. Moreover, "[b]ecause CUTPA is a self-avowed 'remedial' measure, General Statutes § 42-110b(d), it is construed liberally in an effort to effectuate its public policy goals." Id. Indeed, there is "no ... unfair method of competition, or unfair [or] deceptive act or practice that cannot be...