348 Conn. 132
Conn.2023Background
- Companions and A&B are competing providers in Connecticut’s Home Care Program for Elders (CHCPE); both had provider enrollment agreements with the Department of Social Services (DSS).
- DSS required use of a new Electronic Visit Verification system (EVV) effective Jan. 1, 2017; Companions organized a UAPA legal challenge and invited A&B to join. Companions relied on A&B’s representations in the joint litigation.
- A&B’s CEO, Aron Galinovsky, repeatedly told Companions that A&B could not implement EVV and agreed A&B would not take Companions’ clients or recruit its employees; these statements induced Companions’ litigation strategy.
- Unbeknownst to Companions, A&B had implemented EVV and billed DSS; Galinovsky separately told DSS that A&B was using EVV and could take clients, undercutting Companions’ position.
- Companions informed DSS on Dec. 29, 2016 that it would not meet the EVV deadline; DSS then terminated Companions’ provider enrollment agreement and reassigned roughly 80–85 Companions’ clients to A&B.
- After a bench trial the court found A&B made fraudulent misrepresentations, tortiously interfered with Companions’ contractual relationships (including the provider enrollment agreement), violated CUTPA, and awarded $118,008 in lost profits plus punitive damages and attorney’s fees. The judgment was affirmed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether A&B’s statements constituted tortious interference (fraudulent misrepresentation) with Companions’ provider enrollment agreement | A&B made affirmative false statements and assurances (not mere silence); Companions relied to its detriment | A&B owed no duty to disclose; any nondisclosure cannot support fraud | Court: A&B made express, affirmative misrepresentations (not just nondisclosure); tortious interference established |
| Causation: Did A&B’s conduct cause Companions’ losses? | A&B’s misrepresentations led Companions to notify DSS it wouldn’t implement EVV and DSS relied on A&B’s availability to take clients, causing termination and client transfers | DSS decision was based solely on Companions’ refusal to implement EVV; A&B did not cause termination | Court: factual findings supported causation; evidence (including DSS communications and Companions’ reliance) supported damages award |
| Whether tortious interference supports a CUTPA claim | Interference was unfair/deceptive commercial conduct violating CUTPA | No tortious interference, so no CUTPA violation | Court: because tortious interference proven, CUTPA violation sustained |
| Tortious interference with noncompete agreements and enforceability of those agreements | A&B induced Companions’ employees to defect and provided counsel to challenge noncompetes | Noncompetes are void as against public policy; therefore no actionable contract to interfere with | Court: did not decide noncompete enforceability on appeal; any error was harmless because damages were supported by interference with the provider enrollment agreement |
Key Cases Cited
- Nazami v. Patrons Mut. Ins. Co., 280 Conn. 619 (Conn. 2006) (elements of fraudulent misrepresentation)
- Macomber v. Travelers Prop. & Cas. Corp., 261 Conn. 620 (Conn. 2002) (party who assumes to speak must make full and fair disclosure)
- Landmark Investment Group, LLC v. CALCO Constr. & Dev. Co., 318 Conn. 847 (Conn. 2015) (elements of tortious interference with contractual relations)
- Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20 (Conn. 2000) (plaintiff must show actual loss from interference)
- Lipshie v. George M. Taylor & Son, Inc., 265 Conn. 173 (Conn. 2003) (causation findings subject to clearly erroneous standard)
- Beverly Hills Concepts, Inc. v. Schatz & Schatz, Ribicoff & Kotkin, 247 Conn. 48 (Conn. 1998) (damages findings in bench trials entitled to deference)
- Reserve Realty, LLC v. Windemere Reserve, LLC, 346 Conn. 391 (Conn. 2023) (trial court may reject testimony and assess witness credibility)