127 Conn. App. 428
Conn. App. Ct.2011Background
- Charter Oak Lending Group, LLC sues former employees and their new employer CTX alleging misappropriation of confidential information.
- Trial court dismissed several counts under Practice Book § 15-8 after plaintiff rested; remaining counts were resolved in favor of defendants.
- Key program: Loan Manager, with access controls; customers and referrals tracked; data treated as confidential business information.
- In Nov 2004 CTX recruited several defendants at a seminar; Dec 2004–Jan 2005 many employees resigned and joined CTX, taking customer information and files.
- Plaintiff alleged CUTSA violations, breach of fiduciary duty, CUTPA violations, civil conspiracy, conversion, statutory theft, and computer-related offenses.
- Appellate court reverses in part, finds error in § 15-8 dismissal standards and remands for new trial on CUTSA, breach of fiduciary duty, CUTPA, and civil conspiracy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 15-8 dismissal standard was misapplied | Gambardella standard applied; evidence could prove prima facie case. | Record showed insufficient evidence even under favorable view; proper to dismiss. | Court erred; standard misapplied, requiring reversal on this count. |
| CUTSA elements and trade secret status | Customer list constitutes a trade secret; CTX misappropriated it. | Insufficient proof that information was a trade secret or protected. | Evidence supports prima facie CUTSA claim; dismissal improper. |
| Breach of fiduciary duty by individual defendants | Relationship was fiduciary; defendants breached by self-dealing and disclosure. | Relationship was principal-agent, not fiduciary; no self-dealing proven. | Court erred; prima facie case for breach of fiduciary duty established. |
| CUTPA viability given underlying claims | CUTPA claims derive from CUTSA/breach, thus viable. | CUTPA lacked independent factual/legal basis after dismissal of underlying claims. | CUTPA counts cannot stand; judgment to be reversed on damages/claims tied to underlying errors. |
| Civil conspiracy elements and sufficiency | Conspiracy exists when underlying torts proven; interdependent with other counts. | No underlying actionable tort proven; conspiracy unsupported. | Judgment on civil conspiracy reversed; requires new trial on counts. |
Key Cases Cited
- Gambardella v. Apple Health Care, Inc., 86 Conn.App. 842 (2005) (prima facie standard under §15-8; favorable-inference approach)
- Elm City Cheese Co. v. Federico, 251 Conn. 59 (1999) (trade secret and CUTSA elements; reasonable secrecy efforts)
- Thomas v. West Haven, 249 Conn. 385 (1999) (motion to dismiss under §15-8; credibility not weighty at dismissal)
- Marshak v. Marshak, 226 Conn. 652 (1993) (civil conspiracy damages; no standalone conspiracy claim)
- News America Marketing In-Store, Inc. v. Marquis, 86 Conn.App. 527 (2004) (agency fiduciary duty; self-dealing and confidential information)
- Town & Country House & Homes Service, Inc. v. Evans, 150 Conn. 314 (1963) (agency fiduciary duties; scope of loyalty and confidential information)