Matysiak v. Spectrum Services

Filing 62

ORDER (see attached) - While it is sympathetic to Plaintiff's claims, the Court does not agree that Plaintiff, under the facts of the Complaint, may properly bring a CUTPA claim for Defendants' alleged misreporting of wages in public works projects bids. The Court recognizes that Plaintiff has in his Complaint alleged many of the elements of a CUTPA claim; ultimately, however, Plaintiff's lack of standing cannot be overcome. Plaintiff, under the facts that have been provided to the Court, is not within the class of persons whom CUTPA protects with respect to the incidents which give rise to this lawsuit. The overall character of this matter, and of Defendants' alleged actions insofar as they impacted and damaged Plain tiff, is fundamentally based upon and limited to an employer-employee relationship between Plaintiff and Defendants. Consequently, the Court GRANTS 48 Defendants' Partial Motion to Dismiss and DISMISSES Count Three of Plaintiff's Amended Complaint. Signed by Judge Charles S. Haight, Jr. on 2/10/14.(Hornstein, A)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
ZBIGNIEW MATYSIAK,
Plaintiff,
v.

3:10-cv-01841 (CSH)

THE SPECTRUM SERVICES COMPANY,
INC. and MATTHEW M. SHAMAS,
Defendants.

RULING ON DEFENDANTS' PARTIAL MOTION TO DISMISS
HAIGHT, Senior District Judge:
This is an action by Plaintiff Zbigniew Matysiak (hereinafter "Plaintiff") against Defendants
The Spectrum Services Company, Inc. and Matthew M. Shamas (hereinafter "Defendants") arising
out of an alleged failure on the part of his former employer either to pay Plaintiff what Plaintiff avers
are mandatory prevailing wages on public works projects, or to pay Plaintiff overtime pay for those
weeks in which Plaintiff states he worked more than forty hours. Plaintiff's Amended Complaint,
which states that at all times relevant to this lawsuit Plaintiff was an employee of Defendants, alleges
three counts: (1) violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (hereinafter
"FLSA") and the overtime wage payment provisions of Connecticut law, Conn. Gen. Stat. § 31-58,
et seq.; (2) violations of the Connecticut prevailing wage statutes, Conn. Gen. Stat. § 31-53, et seq.;
and (3) violations of the Connecticut Unfair Trade Practices Act (hereinafter "CUTPA"), Conn. Gen.
Stat. § 42-110a, et seq.
Plaintiff's initial Complaint in this matter was filed pro se on November 24, 2010 against a
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defendant Plaintiff referred to as "Spectrum Services," see [Doc. 1], and an Amended Complaint was
filed on October 28, 2013, several months after Plaintiff's current counsel filed a Notice of
Appearance with the Court. See [Doc. 53]; [Doc. 29]. Defendants filed a Partial Motion to Dismiss
on August 28, 2013, [Doc. 48], to which Plaintiff filed a memorandum in opposition, [Doc. 50].
Defendants filed a brief in reply to Plaintiff's opposition, [Doc. 51], and thus this matter is ripe for
adjudication. While some of this briefing took place prior to the filing of Plaintiff's Amended
Complaint, the Court, in an October 15, 2013 Order granting Plaintiff's Motion for Joinder and for
Permission to File a First Amended Complaint, noted "Defendants' apparent consent to [Plaintiff's
aforementioned] motion," as, "[r]ather than file an opposition memorandum, ... Defendants filed
[their] Partial Motion to Dismiss," the subject of the Ruling now before this Court, a pleading which
"repeatedly refer[ed] to Plaintiff's [then-proposed] Amended Complaint as the operative complaint
in this action," and, further, "Defendants ha[d] also both altered the case caption and referred to
Matthew ... Shamas – whom Plainitff sought to join as a Defendant in this matter – as a Defendant,
further reflecting their consent to Plaintiff's Motion for Joinder and for Permission to File a First
Amended Complaint." [Doc. 52]. Consequently the Court construes all pleadings concerning
Defendants' Partial Motion to Dismiss to pertain to the Amended, and operative, Complaint in this
action.
In their Partial Motion to Dismiss, Defendants, pursuant to Fed. R. Civ. P. 12(b)(6), "move
to dismiss Count III of ... Plaintiff's Amended Complaint because ... Plaintiff's claims under
[CUPTA] are barred as [these] allegations fall under the Fair Labor Standards Act, 29 U.S.C. §
203(e)(1), and Connecticut Gen.[] Stat.[] § 31-58 and 31-71a(2) and alleged employment and wages
claims cannot be asserted as CUTPA claims." [Doc. 48] at 1. "Defendants assert that an alleged
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employer-employee relationship is distinctly a wage-based claim that unequivocally does not fall
within the purview of CUTPA," as, "[a]s a matter of law, matters that relate to the employeremployee relationship do not fall within the purview of CUTPA insomuch as violations of Conn.
Gen. Stat. § 42-110b(a) must involve and constitute trade or commerce and must fall within the
defendants' primary business." Id.; [Doc. 49] at 4 (citing Pergament v. Green, 32 Conn. App. 644
(Conn. App. Ct. 1993)). Thus, Defendants contend, "[w]here a plaintiff has not asserted a claim that
the defendant utilized anti-competitive actions in trade or commerce, outside of the scope of the
employment relationship, no CUTPA claim exists." [Doc. 49] at 4 (citing Drybrough v. Acxiom
Corp., 172 F.Supp. 2d 366, 369 (D.Conn. 2001)).
Plaintiff unsurprisingly disagrees with Defendants' assessments of the legal merits of his
CUTPA claim and avers that "[c]ontrary to the [D]efendant[s'] unfounded and unsupported
assertions, ... [P]laintiff has pled sufficient facts to satisfy each element of a proper CUTPA claim."
[Doc. 50] at 3. Plaintiff points to his Amended Complaint, which alleges that "[e]ach time ...
[P]laintiff worked on a public works project, ... [D]efendants paid him only his regular rate and not
the much higher prevailing wage and benefit rates set by the Connecticut Commissioner of Labor
in accordance with Conn. Gen. Stat. §§ 31-53 and 31-53a," and that Defendants, who "routinely
falsified forms WWS-CP1, Payroll Certifications for Public Works Projects, to the contracting
government agencies[,] ... did not report the hours worked by and wages paid to ... [P]laintiff and
other employees on those projects, but instead certified that prevailing wages had been paid to
persons who did not actually work on those projects." [Doc. 53] at 4-5. The Amended Complaint
further states that Defendants "repeatedly certified that prevailing wages were being paid to all
employees on public works projects but instead retained the prevailing wage premiums as profit.
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The [D]efendants [therefore] engaged in unfair and deceptive business practices, in violation of
Conn. Gen. Stat. § 42-110b, by undercutting their competitors and bilking the taxpayers." Id. at 8.
Given the language and allegations contained in his Amended Complaint, Plaintiff avers that he has
sufficiently "alleged that ... [D]efendants used specific unfair and deceptive business practices in the
conduct of their trade or commerce that were outside of their employment relationship with [him]."
[Doc. 50] at 3.
A motion to dismiss for a failure to state a claim upon which relief can be granted is brought
under Fed. R. Civ. P. 12(b)(6). Such a motion must be decided on "facts stated on the face of the
complaint, in documents appended to the complaint or incorporated in the complaint by reference,
and [] matters of which judicial notice may be taken." Lunardini v. Massachusetts Mut. Life Ins.
Co., 696 F.Supp. 2d 149, 155 (D. Conn. 2010) (citing Leonard F. v. Israel Disc. Bank of N.Y., 199
F.3d 99, 107 (2d Cir. 1999) and Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007)). A court's focus
on a motion to dismiss under Rule 12(b)(6) is "not whether the plaintiff will ultimately prevail but
whether the plaintiff is entitled to offer evidence to support the claims." Villager Pond, Inc. v. Town
of Darien, 56 F.3d 375, 378 (2d Cir. 1995). For this reason, when "deciding a motion to dismiss
under Rule 12(b)(6), the court must accept as true all factual allegations in the complaint and must
draw inferences in a light most favorable to the plaintiff." Moore v. Mara, 3:08-CV-01946, 2010
WL 3270223 at *3 (D. Conn. August 17, 2010). However, while a complaint need not contain
detailed factual allegations to survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), it will not
suffice if it merely "tenders naked assertions devoid of further factual enhancement." Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007)).
Thus a plaintiff must do more than provide labels and conclusions; "a formulaic recitation of the
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elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. at 555. "To
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to
state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. at 678 (internal
quotation marks and citation omitted).
In sum, the overarching function of a motion to dismiss "is merely to assess the legal
feasibility of the complaint, not to assay the weight of evidence which might be offered in support
thereof" and, accordingly, 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 claims." Bici v. Napolitano, No.
3:10-CV-01991, 2012 WL 642781 at *1 (D. Conn. Feb. 28, 2012) (internal quotation marks omitted)
(quoting Mytych v. May Dept. Store Co., 34 F.Supp. 2d 130, 131 (D. Conn. 1999) and United States
v. Yale New Haven Hosp., 727 F.Supp. 784, 786 (D. Conn. 1990)).
The CUTPA is a remedial statute which provides that "[n]o person shall engage in unfair
methods of competition and unfair or deceptive acts or practices in the conduct of any trade or
commerce," see C.G.S.A. § 42-100b(a) and (d), and, further, that "[a]ny person who suffers any
ascertainable loss of money or property ... as a result of the use or employment of a method, act or
practice prohibited by section 42-110b, may bring an action ... to recover damages." C.G.S.A. § 42110g(a). "In determining whether a method, act, or practice is unfair or deceptive under CUTPA,
Connecticut has adopted the 'Cigarette Rule' used by the Federal Trade Commission: (1) whether the
practice, without necessarily having been previously considered unlawful, offends public policy as
it has been established by the 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
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substantial injury to consumers" – or to "competitors or other business men." Gersich v. Enterprise
Rent A Car, No. 3:96-CV-01053, 1995 WL 904917 at *3 (D.Conn. Nov. 20, 1995) (citing Conway
v. Prestia, 191 Conn. 484, 492-93 (Conn. 1983) (some internal quotation marks omitted)); see also
C.G.S.A. § 42-110b(b).
Connecticut courts have consistently held that CUPTA is to be liberally construed within
certain confines. The statute, while it pertains to unfair trade practices, "imposes no requirement of
a consumer relationship" and is" not limited to conduct involving consumer injury;" accordingly, "a
competitor or other business person can maintain a CUTPA cause of action without showing
consumer injury." Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 495-96 (Conn. 1995)
(emphasis added). Thus "although consumers were expected to be a major beneficiary of [CUTPA's]
passage, the act was designed to provide protection to a much broader class." Id. at 497. The
CUTPA does not, however, apply to those matters which fall outside of trade and commerce,
including those which are strictly of an employer-employee nature.
In support of his contention that his CUTPA claim – i.e., Count Three of his Amended
Complaint – was properly brought, Plaintiff points to the language of the statute itself, which
provides that "[a]ny person who suffers any ascertainable loss of money or property ... as a result
of the use or employment of a method, act or practice prohibited by section 42-110b, may bring an
action ... to recover damages." See [Doc. 50] at 3 (quoting C.G.S.A. § 42-110g(a)). Indeed, Plaintiff
contends, he has alleged both that the conduct at issue constituted an unfair or deceptive trade
practice, and that he has suffered damages due to this conduct; therefore, his claim ought to be
allowed to survive Defendants' motion for dismissal and instead proceed. Id.
The Court does not agree. In Connecticut, as noted supra, claims "arising from the employer6

employee relationship fall outside the ambit of the phrase trade or commerce and, thus, cannot [on
their own] constitute a cognizable CUTPA violation." Derosier of Greenwich v. Shumway Captial
Partners, FST-CV-05-4004621, 2006 WL 1680063 at *5 (Conn. Super. May 30, 2006) (citations
and internal quotation marks omitted). Thus "although an employer may engage employees for the
purpose of promoting trade or commerce, the actual employment relationship is not itself trade or
commerce for the purpose of CUTPA." Drybrough v. Acxiom Corp., 172 F.Supp. 2d 366, 369
(D.Conn. 2001) (quoting Quimby v. Kimberly Clark Corp., 28 Conn. App. 660 (Conn. 1992)).
Generally in order to "determine whether certain actions fall within or outside the employment
relationship, the defendant's conduct – not the employment relationship – is dispositive." Id.
(citation omitted); see also, e.g., Larsen Chelsey Realty Co. v. Larsen, 232 Conn. at 480 (holding
that allegations which concern actions lying outside the boundaries of the employer-employee
relationship may under certain circumstances be brought under CUTPA).
In the case at bar, allegations that Defendants"repeatedly certif[ied] that prevailing wages
were being paid to all employees on public works projects [while they] instead retain[ed] the
prevailing wage premiums as profit" could certainly suggest damages to competitors through
undercutting, as well as to taxpayers and other individuals, and could conceivably be found to fall
within the above-enumerated requirements of the Cigarette Rule. However, Defendants' alleged
practice of misreporting wages in bids for public works projects, which the Court takes as true for
the purposes of adjudicating this Partial Motion to Dismiss, did not injure or cause damage to
Plaintiff. Rather, Plaintiff's alleged injury and damages stem from what Plaintiff describes as a lack
of proper wage and salary payments, a strictly employment-related matter which underlay any wage
misreporting in public works projects bids rather than resulted therefrom. Simply put, then,
7

Defendants' fraud and misrepresentation as described in the Complaint did not cause or result in
Plaintiff's damages. Pursuant to C.G.S.A. § 42-110g(a), "[a]ny person who suffers any ascertainable
loss of money or property ... as a result of the use or employment of a method, act or practice
prohibited by section 42-110b, may bring an action ... to recover damages." C.G.S.A. § 42-110g(a)
(emphasis added). Plaintiff's damages were not a result of any prohibited actions on the part of
Defendants, and therefore Plaintiff, who alleges other employment-related causes of action against
Defendants which are not the subject of this Partial Motion to Dismiss, is simply not "within the
class of claimants which CUTPA is intended to protect." See Gersich v. Enterprise Rent A Car,
1995 WL 904917 at *5.1
Thus while it is sympathetic to Plaintiff's claims, the Court does not agree that Plaintiff,
under the facts of the Complaint, may properly bring a CUTPA claim for Defendants' alleged

1

CUTPA's legislative history, which is thoroughly reviewed in the Connecticut Supreme
Court decision of Larsen Realty Co. v. Larsen, 232 Conn. 480, further limits any reading of
actions brought under the statute to those who have been harmed by a defendant's unfair trade or
commerce practices:
According to Representative Howard A. Newman, who reported the CUTPA legislation
out of committee to the House of Representative, the act 'gives honest businessmen great
protection [against] deceptive or unscrupulous [businessmen] who by unfair methods of
competition and deceptive advertising, etc., unlawfully divert trade away from law
abiding businessmen.' ... Other supporters of the bill made similar comments ... [for
example the] remarks of Stuart Dear, a member of the board of directors of the
Connecticut Consumer Association (CUTPA will 'assist the businessmen in not losing
out to those members of the business community who won't play fair'....). [Or for example
the] remarks of Assistant Attorney General Robert M. Langer (CUTPA covers
transactions 'between one business and another business.')
Id. at 497-98.
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misreporting of wages in public works projects bids.2 The Court recognizes that Plaintiff has in his
Complaint alleged many of the elements of a CUTPA claim; ultimately, however, Plaintiff's lack of
standing cannot be overcome. Plaintiff, under the facts that have been provided to the Court, is not
within the class of persons whom CUTPA protects with respect to the incidents which give rise to
this lawsuit. The overall character of this matter, and of Defendants' alleged actions insofar as they
impacted and damaged Plaintiff, is fundamentally based upon – and limited to – an employeremployee relationship between Plaintiff and Defendants. Consequently, the Court GRANTS
Defendants' Partial Motion to Dismiss and DISMISSES Count Three of Plaintiff's Amended
Complaint.
It is SO ORDERED.
Dated: New Haven, Connecticut
February 10, 2014

/s/ Charles S. Haight, Jr.
Charles S. Haight, Jr.
Senior United States District Judge

2

This is not to say that others could not bring a CUTPA claim on the same facts, were
such individuals or entities differently positioned with respect to Defendants' alleged actions.
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