204 Conn.App. 313
Conn. App. Ct.2021Background:
- United Illuminating Company (UI) owned a long-operating power plant site contaminated with hazardous materials; UI commissioned a TLG study estimating ~$7.6M for remediation and ~$13.2M for decommissioning.
- In 2000 UI told the DPUC higher confidential figures (including ~$20M), but publicly and in SEC Form 10-Ks reported much lower remediation figures (~$2M–$8M); UI sold the site to Quinnipiac Energy in 2000 and funded a ~$1.9M RAP escrow.
- Quinnipiac later conveyed parcels to Evergreen and Asnat (plaintiffs) in 2005–2006 via leases/option-to-buy; regulatory orders (DEEP, Coast Guard) in 2012–2014 restricted site activity and led to remediation/enforcement costs for plaintiffs.
- A 2015 Hartford Courant story revealed the larger remediation estimates; DEEP entered a partial consent order requiring UI to make $30M available for remediation, but plaintiffs allege UI never remedied the site.
- Plaintiffs sued (fraudulent nondisclosure/misrepresentation and unjust enrichment). The trial court granted defendants’ motion to strike most fraud counts and an unjust enrichment count against UIL; plaintiffs appealed and the appellate court affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint pleaded fraudulent misrepresentation vs. fraudulent nondisclosure | Plaintiffs asserted both theories; complaint alleges false public statements and SEC filings | Defendants argued plaintiffs elected a single theory (fraudulent nondisclosure) and failed to plead specifics | Court held plaintiffs had affirmatively presented fraudulent nondisclosure as their sole fraud theory and treated counts accordingly |
| Whether fraud allegations met specificity requirement | Plaintiffs contended filings/representations sufficed to show specific fraudulent acts | Defendants contended allegations were general and failed to identify specific acts or particulars of the fraud | Court held the fraud pleading was too general; plaintiffs failed to plead specific acts required for fraud |
| Whether defendants owed a duty to disclose to plaintiffs (basis for fraudulent nondisclosure) | Plaintiffs argued SEC filings and DPUC statements created a duty to potential purchasers like them | Defendants argued any duty from DPUC statements ran to DPUC/Quinnipiac and SEC disclosure duties ran to securities investors, not real‑estate purchasers | Court held no duty to plaintiffs: they were strangers to the DPUC proceedings and not within the class protected by SEC disclosure duties |
| Whether unjust enrichment claim against UIL should be reinstated | Plaintiffs asked reinstatement of unjust enrichment against UIL | Defendants argued the claim was insufficient and plaintiffs failed to properly brief it on appeal | Court declined to review/reinstate unjust enrichment claim because plaintiffs inadequately briefed the issue on appeal |
Key Cases Cited
- Coppola Construction Co. v. Hoffman Enterprises Ltd. Partnership, 309 Conn. 342 (Conn. 2013) (motion to strike standard; pleadings construed broadly in plaintiff’s favor)
- Whitaker v. Taylor, 99 Conn. App. 719 (Conn. App. 2007) (elements of fraud; must plead specific acts)
- Saggese v. Beazley Co. Realtors, 155 Conn. App. 734 (Conn. App. 2015) (fraudulent nondisclosure requires duty and intent to induce)
- Maruca v. Phillips, 139 Conn. 79 (Conn. 1952) (a mere allegation of fraud is insufficient; specific acts must be set forth)
- DiMichele v. Perrella, 158 Conn. App. 726 (Conn. App. 2015) (existence of duty to disclose is a question of law; special relationship required)
- Roberts v. Paine, 124 Conn. 170 (Conn. 1938) (duty to disclose depends on relationship and circumstances)