Carbone et al v. First NLC Financial Svc LLC et al

Filing 44

ORDER granting 41 Motion for Summary Judgment. Signed by Judge Alvin W. Thompson on 05/04/2010. (Jean-Louis, C)

UNITED STATES DISTRICT COURT DI S T R I C T OF CONNECTICUT ------------------------------------x W I L L I A M CARBONE and : J A C Q U E L Y N CARBONE, : : Plaintiffs, : : v. : Civil No.3:07CV01489(AWT) : F I R S T NLC FINANCIAL SERVICES, : L L C , and JOHN CASTODIO, : : Defendants. : ------------------------------------x O RD E R RE MOTION FOR SUMMARY JUDGMENT T h e plaintiffs, William Carbone and Jacquelyn Carbone, have m o v e d for summary judgment on the second count of their complaint a g a i n s t defendant John Castodio ("Castodio") for violation of the C o n n e c t i c u t Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a et seq. ("CUTPA"). For the reasons set forth below, the

m o t i o n for summary judgment is being granted. I . FACTUAL BACKGROUND The plaintiffs reside in North Haven, Connecticut. In October

2 0 0 6 , the plaintiffs contacted defendant First NLC Financial S e r v i c e s , LLC ("NLC") to refinance their residential mortgage. The

p l a i n t i f f s worked with defendant Castodio, who was an employee of NLC. During discussions about the loan application, Castodio told

t h e plaintiffs that, for the first two years of the loan, the p l a i n t i f f s ' monthly payments would be $1,550. O n or about October 19, 2006, a notary public arrived at the

plaintiffs' home for the closing on the refinance loan.

During the

c l o s i n g , the plaintiffs saw for the first time that monthly p a y m e n t s were $1,850.52, i.e., approximately $300 more than C a s t o d i o told them. t h e closing. Jacquelyn Carbone contacted Castodio during

She discussed with Castodio the discrepancy in the Castodio informed Jacquelyn

a m o u n t of the monthly payments.

C a r b o n e that the first monthly payment would not be due until J a n u a r y 2007. He further informed her that NLC would do an in-

h o u s e refinance to lower the monthly payments to the agreed upon a m o u n t of $1,550. I n reliance upon Castodio's representation, the plaintiffs p r o c e e d e d with the closing. Thereafter, the plaintiffs received a

b i l l for the first monthly payment in the amount of $1,850.52, with a due date of December 1, 2006. C a s t o d i o to discuss the bill. Jacquelyn Carbone contacted Castodio informed her that there had

b e e n a computer glitch and that he would work with the mortgage s e r v i c e r to correct the bill. bill. He also told her not to pay the

Thereafter, the plaintiffs received numerous collection The plaintiffs paid

t e l e p h o n e calls related to the unpaid bill.

t h e bill and continued to ask Castodio about the in-house refinance t o reduce the amount of the bill for the monthly payment to $1,550. The in-house refinance was never done. Ultimately, the plaintiffs

w e r e unable to make the monthly mortgage payments and had to move o u t of their home.

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II.

L E G A L STANDARD

I n a motion for summary judgment, the burden is on the moving p a r t y to establish that there are no genuine issues of material f a c t in dispute and that it is entitled to judgment as a matter of law. See Rule 56(c), Fed. R. Civ. P.; Anderson v. Liberty Lobby, The moving party may satisfy this

I n c . , 477 U.S. 242, 256 (1986).

b u r d e n by demonstrating the absence of evidence supporting the n o n m o v i n g party's case. See PepsiCo, Inc. v. Coca-Cola Co., 315 The court construes the See

F . 3 d 101, 105 (2d Cir. 2002) (per curiam).

f a c t s in the light most favorable to the nonmoving party.

C i o f f i v. Averill Park Cent. Sch. Dist. Bd. of Educ., 444 F.3d 158, 1 6 2 (2d Cir. 2002), cert. denied, 127 S. Ct. 382 (2006). W h e n a motion for summary judgment is supported by documentary e v i d e n c e and sworn affidavits, the nonmoving party must do more t h a n vaguely assert the existence of an unspecified disputed m a t e r i a l fact or offer speculation or conjecture. See Western

W o r l d Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990). If the nonmoving party does not respond to the motion, the

c o u r t may accept as true the moving party's factual statements. See D. Conn. L. Civ. R. 56(a)1 ("All material facts set forth in [ t h e moving party's Rule 56(a)1] statement will be deemed admitted u n l e s s controverted....). Even if the motion is unopposed,

h o w e v e r , the court will not grant summary judgment unless it d e t e r m i n e d that the moving party is entitled to judgment as a m a t t e r of law. See Vermont Teddy Bear Co. v. 1-800 Beargram Co.,

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373 F.3d 241, 242 (2d Cir. 2004). III. DISCUSSION

C U T P A provides that "[n]o person shall engage in unfair m e t h o d s of competition and unfair or deceptive acts or practices in t h e conduct of any trade or commerce." § 42-110b(a). Conn. Gen. Stat.

"Any person who suffers any ascertainable loss of

m o n e y or property, real or personal, as a result of the use or e m p l o y m e n t of a method, act or practice prohibited by section 4 2 - 1 1 0 b " may bring a civil action pursuant to CUTPA. S t a t . § 42-110g. Conn. Gen.

Connecticut courts have adopted the Federal Trade

C o m m i s s i o n ' s "cigarette rule" used to ascertain whether a practice i s unfair, looking at the following factors: ( 1 ) [w]hether the practice, without necessarily having been p r e v i o u s l y considered unlawful, offends public policy as i t has been established by statutes, the common law, or o t h e r w i s e - i n other words, it is within at least the p e n u m b r a of some common law, statutory, or other e s t a b l i s h e d concept of unfairness; (2) whether it is i m m o r a l , unethical, oppressive, or unscrupulous; (3) w h e t h e r it causes substantial injury to consumers, . . . All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because o f the degree to which it meets one of the criteria or b e c a u s e to a lesser extent it meets all three. V e n t r e s v. Goodspeed Airport, LLC, 275 Conn. 105, 155 (2005) ( c i t a t i o n omitted). "[T]he ascertainable loss requirement is a threshold barrier w h i c h limits the class of persons who may bring a CUTPA action s e e k i n g either actual damages or equitable relief. . . . An

a s c e r t a i n a b l e loss is a deprivation, detriment [or] injury that is

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capable of being discovered, observed or established. . . .

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p l a i n t i f f need not prove a specific amount of actual damages in o r d e r to make out a prima facie case [under CUTPA]." Devan Motors

o f Fairfield, Inc. v. Infiniti Division of Nissan North America, I n c . , 579 F. Supp. 2d 294, 308 (D. Conn. 2008)(internal quotation m a r k s omitted; citations omitted). T h e plaintiffs contend that Castodio violated CUTPA by making i n t e n t i o n a l mispresentations to the plaintiffs. The court agrees.

In October 2006, Castodio agreed on behalf of NLC that the p l a i n t i f f s ' monthly payments would be $1,550 for the first two years. During the closing, the plaintiffs contacted Castodio and

w e r e reassured that an in-house refinance would be done so the b i l l s for their monthly payments were $1,550, as had been agreed. Additionally, after the plaintiffs received their first bill, C a s t o d i o reassured them that an in-house refinance was in progress. The plaintiffs suffered substantial injury as a result of C a s t o d i o ' s actions and misrepresentations. There is no issue of

m a t e r i a l fact as to whether Castodio misrepresented and misled the p l a i n t i f f s about what the amount of their monthly payments would be a n d thus engaged in conduct that was immoral, unethical, o p p r e s s i v e , or unscrupulous. See, e.g., IndyMac Bank, F.S.B. v.

R e y a d , No. 3:00CV835(CFD), 2006 WL 2092621, *5 (D. Conn. July 26, 2 0 0 6 ) ( f i n d i n g that in breach of contract "intentional and willful d i s h o n e s t y was immoral, unethical, oppressive, or unscrupulous."). B e c a u s e the court has concluded that there is no genuine issue

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of material fact as to whether Castodio violated the second prong o f the "cigarette rule," it need not address whether an issue of m a t e r i a l fact exists as to the other two prongs. See Ventres v.

G o o d s p e e d Airport, LLC, 275 Conn. 105, 154 (Conn. 2005) (explaining t h a t "[a]ll three criteria do not need to be satisfied to support a f i n d i n g of unfairness" and "[a] practice may be unfair because of t h e degree to which it meets one of the criteria or because to a l e s s e r extent it meets all three"). T h u s , Castodio violated CUTPA, and the plaintiffs are entitled t o summary judgment on the second count of their complaint. Pursuant to Conn. Gen. Stat. § 42-110g(a), the plaintiffs are e n t i t l e d to actual damages for any ascertainable loss of money or p r o p e r t y resulting from Castodio's misrepresentations. The

p l a i n t i f f s are entitled to actual damages in the amount of $ 7 , 2 1 2 . 4 8 , which is the difference between the agreed upon monthly p a y m e n t of $1,550 and the charged monthly payment of $1,840.52, o v e r a two year period. T h e plaintiffs also seek punitive damages pursuant to Conn. G e n . Stat. § 42-110g(a). In order to award punitive or exemplary damages, evidence m u s t reveal a reckless indifference to the rights of others o r an intentional and wanton violation of those rights. . .. Accordingly, when the trial court finds that the d e f e n d a n t has acted recklessly, [a]warding punitive damages a n d attorney's fees under CUTPA is discretionary. C h i v e r t o n v. Federal Financial Group, Inc., 399 F. Supp. 2d 96, 1 0 2 - 1 0 3 (D. Conn. 2005).

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CUTPA itself provides no guidance as to a method for d e t e r m i n i n g the amount of a punitive damages award. . . . Nevertheless, several methods have gained acceptance by the c o u r t s in Connecticut. . . . By common practice, courts g e n e r a l l y award punitive damages in amounts equal to actual d a m a g e s or multiples of the actual damages. . . . Many c o u r t s have followed the lead of the district court in B a i l e y Employment Sys. v. Hahn, 545 F.Supp. 62, 73 (D. C o n n . 1982), in doubling the amount of actual or c o m p e n s a t o r y damages. ... I n the absence of an explicit formula or prescribed method f o r determining the amount of punitive damages in this c a s e , the court takes as its guiding principle that the p u r p o s e of awarding punitive damages under CUTPA is to d e t e r future deceptive or unfair business practices by the d e f e n d a n t s and others. . . . Thus, federal courts in this d i s t r i c t have noted that, although "Section 42-110g does n o t specify how punitive damages are to be measured ... the a w a r d should serve the broad remedial goals of eliminating o r discouraging unfair methods of competition and unfair o r deceptive acts or practices." . . . Similarly, C o n n e c t i c u t courts have also held that a defendant's f i n a n c i a l standing is relevant to a determination of the a m o u n t of punitive damages to award for a CUTPA violation. . . . Accordingly, a punitive damages award under CUTPA s h o u l d take account of the financial status and size of the d e f e n d a n t to ensure that the damage award will have the d e t e r r e n t effect on the defendant and others that it is d e s i g n e d to achieve. Emerald Investments, LLC v. Porter Bridge Loan Co., No. 3:08-cv1 5 9 8 ( J C H ) , 2007 WL 1834507, *8-9 (D. Conn. June 25, 2007). H e r e , Castodio made misrepresentations to the plaintiffs with a reckless indifference to the plaintiffs' rights. Considering the

d e t e r r e n t effect of awarding punitive damages, and the plaintiffs' a c t u a l damages, the court concludes that an award of $5,000 in p u n i t i v e damages is appropriate. L a s t l y , the plaintiffs seek an award of attorneys' fees and

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costs, pursuant to Conn. Gen. Stat. § 42-110g(d), totaling $7,730.80. The court finds the requested amount for attorneys'

f e e s and costs to be reasonable, and substantiated by the records s u b m i t t e d by the plaintiffs. See, e.g., Emerald Investments, LLC

v . Porter Bridge Loan Co., 2007 WL 1834507 (D. Conn. June 25, 2007). IV. CONCLUSION

F o r the reasons set forth above, plaintiffs' Motion for S u m m a r y Judgment (Doc. No. 41) is hereby GRANTED. The Clerk shall

e n t e r judgment, with respect to the second cause of action, i.e., t h e CUTPA claim, in favor of the plaintiffs against defendant John C a s t o d i o in the amount of $19,943.28, representing $7,212.48 in a c t u a l damages, $5,000 in punitive damages, and $7,730.80 for a t t o r n e y s ' fees and costs. The Clerk shall close this case. It is so ordered. S i g n e d this 4th day of May, 2010 at Hartford, Connecticut.

/s/AWT Alvin W. Thompson U n i t e d States District Judge

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