50 Morgan Hospitality Group, LLC v. Excel Hotel Services, Inc.

Filing 86

For the reasons discussed in the attached, 50 Morgan's motion to amend (ECF No. 73) is GRANTED. Crest's motion to dismiss (ECF No. 59) is DENIED as moot. TPC's motion to dismiss (ECF No. 61) is DENIED as moot. Signed by Judge Michael P. Shea on 12/20/2017. (Taykhman, N.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
50 MORGAN HOSPITALITY GROUP, LLC,
No. 3:17-cv-332 (MPS)

Plaintiff,
v.
EXCEL HOTEL SERVICES, INC., D/B/A
EXCEL & ASSOCIATES,
Defendant.

MEMORANDUM AND ORDER
Plaintiff 50 Morgan Hospitality Group, LLC (“50 Morgan”) brought this lawsuit against
Defendant Excel Hotel Services, Inc., d/b/a Excel & Associates (“Excel”), alleging that Excel
failed to progress, complete, and otherwise fulfill its obligations as a general contractor for a
construction project known as Radisson Hartford (“the Project”), consisting of converting the
upper floors of a hotel into multi-family apartments and upgrading areas of the building for
continuing use as a hotel. Excel thereafter filed a Third-Party Complaint and Cross-Claim
impleading Third-Party Defendants Electrical Contractors, Inc. (“ECI”), Crest Mechanical
Services, Inc. (“Crest”), TPC Associates, Inc. (“TPC”), Crosskey Architects, LLC (“Crosskey
Architects”), William W. Crosskey II (“Crosskey”), and Kaurette Construction, Inc. (“Kaurette”)1
(collectively, “Third-Party Defendants”). (ECF No. 17.) Excel also filed an Apportionment
Complaint against the Third-Party Defendants. (ECF No. 18.)
50 Morgan moves for leave to file an amended complaint. (ECF No. 73.) Crest and TPC
each moves to dismiss the Apportionment Complaint. (ECF Nos. 59 and 61.)

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All Third-Party Defendants have entered appearances and responded to the Third-Party
Complaint except Kaurette. The Court entered default against Kaurette under Fed. R. Civ. P. 55(a)
on July 19, 2017. (ECF No. 38.) Under the Court’s September 12, 2017 order, Excel shall have
until 21 days from the entry of final judgment or disposition of this action by settlement to file a
motion for default judgment against Kaurette. (ECF No. 71.)
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I.

Procedural Background

50 Morgan filed a lawsuit in Connecticut Superior Court on January 27, 2017, asserting
claims against Excel for breach of contract, intentional misrepresentation, negligent
misrepresentation, and violation of the Connecticut Unfair Trade Practices Act (“CUTPA”),
Connecticut General Statutes (“Conn. Gen. Stat.”) § 42-110a et seq. (ECF No. 1-1.) Excel removed
the action to federal court on the basis of diversity jurisdiction on February 23, 2017. (ECF No.
1.) On May 26, 2017, Excel responded to the Complaint by filing an Answer, Affirmative
Defenses, and Counterclaims against 50 Morgan. (ECF No. 16.) Excel asserted counterclaims for
breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment,
fraudulent misrepresentation, negligent misrepresentation, violation of the CUTPA, and
foreclosure of a mechanic’s lien in connection with the Project. (ECF No. 16.)
On June 1, 2017, Excel filed the Third-Party Complaint, asserting claims for breach of
contract and indemnification against ECI, Kaurette, Crest, and TPC, and claims for intentional
misrepresentation, negligent misrepresentation, violation of the CUTPA, and tortious interference
with contractual relations against Crosskey Architects and Crosskey. (ECF No. 17.) Also on June
1, 2017, Excel filed the Apportionment Complaint under Conn. Gen. Stat. §§ 52-102b2 and 52572h.3 (ECF No. 18.) Excel alleges that to the extent 50 Morgan was damaged as alleged in the
Complaint, the damages were caused by the negligence of each of the Third-Party Defendants, and

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Section 52-102b(a) provides, in relevant part, that “[a] defendant in any civil action to which
section 52-572h applies may serve a writ, summons and complaint upon a person not a party to
the action who is or may be liable pursuant to said section for a proportionate share of the plaintiff’s
damages in which case the demand for relief shall seek an apportionment of liability.”
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Section 52-572h(c) provides, in relevant part, that “[i]n a negligence action to recover damages
resulting from personal injury, wrongful death or damage to property . . . if the damages are
determined to be proximately caused by the negligence of more than one party, each party against
whom recovery is allowed shall be liable to the claimant only for such party’s proportionate share
of the recoverable economic damages and the recoverable noneconomic damages . . . .”
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that in the event 50 Morgan recovers damages against Excel, each of the Third-Party Defendants
would be liable for a proportionate share of such damages. (ECF No. 18.)
Crest and TPC filed substantially similar motions to dismiss the Apportionment Complaint
under Fed. R. Civ. P. 12(b)(6).4 (ECF Nos. 59 and 61.) Crest and TPC each argue that
apportionment of liability is not available under Conn. Gen. Stat. §§ 52-102b and 52-572h because
50 Morgan’s underlying Complaint against Excel does not include a negligence claim, and because
50 Morgan alleged economic losses only, and did not allege personal injury, wrongful death, or
property damage.
On September 1, 2017, the Court granted the parties’ joint motion to modify the scheduling
order governing this case. (ECF No. 68.) The Court adopted all of the modifications set forth in
the parties’ joint motion, including that 50 Morgan would be permitted to file an amended
complaint by September 15, 2017, and that fact discovery would be completed by August 31, 2018.
(ECF No. 65 at 3, ECF No. 68.) The parties have since been engaged in discovery.
50 Morgan filed a motion for leave to amend the complaint on September 15, 2017. (ECF
No. 73.) 50 Morgan’s proposed amended complaint adds a negligence claim, adds factual
allegations in support of its breach of contract, intentional misrepresentation, negligent
misrepresentation, CUTPA, and breach of the covenant of good faith and fair dealing claims, and
amends 50 Morgan’s request for relief. (ECF No. 73-4.) No party opposed the motion to amend.
II.

Discussion

A. Motion to Amend

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Crest moved to dismiss Count Four of the Apportionment Complaint, which includes allegations
against Crest. (ECF No. 59.) TPC moved to dismiss Count Five of the Apportionment Complaint,
which includes allegations against TPC. (ECF No. 61.)
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Before trial, “a party may amend its pleading only with the opposing party’s written
consent or the court’s leave,” which the Court should “freely give . . . when justice so requires.”
Fed. R. Civ. P. 15(a)(2). Despite the liberal standard for amending or supplementing pleadings,
“[a] district court has discretion to deny leave for good reason, including futility, bad faith, undue
delay, or undue prejudice to the opposing party.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d
184, 200 (2d Cir. 2007) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).
As the proposed amendments identify and clarify the nature of Plaintiff’s alleged damages,
no party opposes the amendments, and the case is in the early stages of discovery, I find that the
proposed amendments are neither futile nor made in bad faith, and would not unduly delay
litigation or prejudice the parties. I GRANT the motion for leave to amend, as “justice so requires.”
Fed. R. Civ. P. 15(a)(2).
B. Motions to Dismiss
Having granted 50 Morgan’s motion to file an amended complaint, I find that the
amendments moot Crest and TPC’s motions to dismiss the Apportionment Complaint. Crest and
TPC first argue that Excel could not seek apportionment of liability because 50 Morgan did not
assert a negligence claim. As 50 Morgan’s amended complaint adds a negligence claim against
Excel, this argument is moot. Crest and TPC next argue that apportionment is not available because
50 Morgan alleged economic losses only, and did not include allegations of personal injury,
wrongful death, or property damage against Excel. As 50 Morgan’s amended complaint includes
allegations of property damage caused by Excel’s alleged negligence, this argument is moot as
well. (See, e.g., ECF No. 73-4 ¶ 30.) I therefore DENY Crest and TPC’s motions to dismiss the
Apportionment Complaint as moot.
III.

Conclusion

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For the reasons discussed above, 50 Morgan’s motion to amend (ECF No. 73) is
GRANTED. Crest’s motion to dismiss (ECF No. 59) is DENIED as moot. TPC’s motion to dismiss
(ECF No. 61) is DENIED as moot.
Excel shall respond to the Amended Complaint (ECF No. 73-3) by January 10, 2018,
including by filing any proposed Amended Third-Party Complaint or Amended Apportionment
Complaint. The Third-Party Defendants shall respond to any filed Amended Third-Party
Complaint or Amended Apportionment Complaint by January 31, 2018.

IT IS SO ORDERED.
/s/
Michael P. Shea, U.S.D.J.
Dated:

Hartford, Connecticut
December 20, 2017

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