Punitive Damages under the Connecticut Unfair Trade Practices Act

Page 8 Summer 2008 The DEFENSE

ithregularfrequency,casesofalltypesincludea

countallegingviolationofConnecticut’sUnfair

TradePracticeAct(“CUTPA”).Althoughthe

Connecticutcourtshavedoneagoodjobin

framingthestandardsbywhichaCUTPAviolationisdeter-

mined,thestandardsformeasuringpunitivedamagesisless

certain.Inthisarticle,wewillexplorebrieythecircumstances

underwhichpunitivedamagescanbeawardedandthendiscuss

thevariouswaysthecourtshavemeasuredthosedamages.

CUTPAprovidesthat“[n]opersonshallengageinunfairmeth-

odsofcompetitionandunfairordeceptiveactsorpracticesin

theconductofanytradeorcommerce.”

Acauseofactionfora

violationofCUTPAaccrueswhereonesuers“anascertainable

lossofmoneyorproperty,realorpersonal,asaresultoftheuseor

employmentofamethod,actorpractice”asdescribedabove.

CUTPAprovidesforpunitivedamageawards.

Indeed,theGen-

eralStatutesprovidethat“[t]hecourtmay,initsdiscretion,

awardpunitivedamages…asitdeemsnecessaryorproper.”



Punitivedamageawardsaremadebythecourt,ratherthan

thejury.

Bywayofbroadstatutorylanguage,thelegislature

bestoweduponthecourtsgreatexibilityincalculatingand

awardingpunitivedamagesforviolationsofCUTPA.Assuch,

punitivedamageawardsforCUTPAviolationsdonotfollowa

consistentpatternofapplicationorcalculation.

Inordertoproperlysupportanawardofpunitivedamages,

the“evidencemustrevealarecklessindierencetotherights

ofothersorintentionalandwantonviolationofthoserights.”



Indeed,theConnecticutSupremeCourthasexplainedthat“the

1 Connecticut General Statutes § 42-110b.

2 Connecticut General Statutes § 42-110g. “The ‘ascertainable loss’ stan-

dard requires no more than the ‘…production of evidence fairly sugges-

tive that, as a result of an unfair or deceptive trade practice, [the plainti]

received something dierent from that for which [he] had bargained … .”

Zelencich v. American Yacht Services, No.CV-20187145S, 2006 Conn. Super.

LEXIS 2296, at *19 (Conn. Super. Ct. July 31, 2006) (quoting Hinchlie v.

American Motors Corp., 184 Conn. 607, 619 (1981)).

3 Connecticut General Statutes § 42-110g(a).

4 Id.

5 Connecticut General Statutes § 42-110g(a) (stating that the “court may,

in its discretion, award punitive damages”).

6 Advanced Financial Services, Inc. v. Associated Appraisal Services, Inc., 79

Conn. App. 22, 34 (Conn. App. Ct. 2003).

Punitive Damages under the Connecticut

Unfair Trade Practices Act

by Mark K. Ostrowski and Brooke E. Havard

avorofthebasicrequirementtojustifyanawardofpunitive

damageisdescribedintermsofwantonandmaliciousinjury,

evilmotiveandviolence.”

Withoutsuchevidence,anawardof

punitivedamagesisinappropriate.

ereexistsnopreciseformulatocalculatepunitivedamage

awardsinCUTPAcases.Rather,courtslooktoseveralguiding

principlesincraftingtheirawards.First,courtsrecognizethe

deterrentpurposebehindtheimpositionofpunitivedamages

andseektofurtherthisgoalwhenawardingpunitivedamag-

es.

Second,courtslooktothenancialstandingofthepar-

ticulardefendantinordertoensurethatthepunitivedamage

awardhasthedesireddeterrenteect.

ird,incalculating

thepunitivedamagesaward,courtswilllooktoallfactual

circumstancesoftheCUTPAclaimanddamages,including

mitigatingevidence.

Although,asexplainedabove,the“CUTPAstatutesdonot

provideamethodfordeterminingpunitivedamages,courts

generallyawardpunitiveintheamountsequaltoactualdamages

ormultiplesofactualdamages.”

Punitivedamages,however,

mayalsobeawardedwheretheplaintidoesnotshowtheexis-

tenceofactualdamagesowingfromtheCUTPAviolation

or

7 Gargano v. Heyman, 203 Conn. 616, 622 (1987) (quoting Venturi v. Savitt,

Inc., 1991 Conn. 588, 592 (1983)).

8 See Bristol Technology, Inc. v. Microsoft Corp., 114 F. Supp. 2d 59, 80 (D.

Conn. 2000) (holding that “[a] punitive damages award under CUTPA

should … take account of the nancial status and size of the defendant

to ensure that the damage award will have the deterrent eect on the

defendant an others that it is designed to achieve.”).

9 See Id.

10 See Carmel Homes, Inc. v. Bednar, No. CV990079393S, 2001 Conn. Super.

LEXIS 2865, at *33-34 (Oct. 1, 2001). In Carmel Homes, the defendant

alleged a CUTPA violation in a counterclaim against the plainti builder

for failing to install re stopping material in its structures. Id. at *34. The

court addressed the mitigating circumstances and recognized that,

almost immediately, all parties were aware of the dangerous condition.

See Id. Furthermore, the plainti was not able to monitor the repairs by

the manufacturer because the defendant had ordered the plainti o

of the property. Id. The court therefore concluded that both the high

measure of damages proposed by the defendant and the low measure

of damages set forth by the plainti were inappropriate given the

circumstances. See id. at *35. The court awarded punitive damages in the

amount of $15,000. Id.

11 Advanced Financial Services, Inc. v. Associated Appraisal Services, Inc., 79

Conn. App. 22, 34 (Conn. App. Ct. 2003).

12 Zelencich, 2006 Conn. Super. LEXIS at *21 (citing Larobina v. Home Depot,

Inc., 76 Conn. App. 586, 598 (Conn. App. Ct. 2003); Tillquist v. Ford Motor

Credit Co., 714 F. Supp. 607, 617 (D. Conn. 1989)).

The DEFENSE Summer 2008 Page 9

whenthecourtawardsonlynominaldamages.

Additionally,

aplaintineednotpleadorprovecompensatorydamagesin

ordertorecoverpunitivedamagesunderCUTPA.

Because

theapplicationofpunitivedamagesunderCUTPAissobroad

andundened,theConnecticutSupremeCourthasnotedthat

“CUTPAcreatesanessentiallyequitablecauseofaction.”

Lastly,despitethedeterrentpurposeofpunitivedamagesunder

CUTPA,thecourtmustensurethatapunitivedamageaward

adheretothenotionsoffairness.

Indeterminingwhetheran

awardadherestothatstandard,courtsgenerallylooktothe

threefactorslistedinBMW of North America, Inc. v. Gore.



efactorsareasfollows:“[1]thedegreeofreprehensibilityof

the[relevantconduct];[2]thedisparitybetweentheharmorthe

potentialharmsueredby[theplainti ]andhispunitivedam-

agesaward;and[3]thedierencebetweenthisremedyandthe

civilpenaltiesauthorizedorimposedincomparablecases.”

efollowingareaselectionofrecentcaseschosentodemon-

stratehowpunitivedamageawardsforCUTPAviolationsare

awardedandcalculated.

InEmerald Investments,theDistrictCourtfortheDistrictof

Connecticutawarded$1.1millioninpunitivedamagesunder

CUTPAbecausethisamount“reectsdamagetotheplaintis

dueto[defendant’s]fraudandforwhichtheplaintisreceived

nobenet”andbecausetheamountwassucienttoachieve

CUTPA’sdeterrentpurpose.

First,thecourtrecognizedthat,

inordertoproperlymeasurepunitivedamages,thecourtmust

determinethenancialstatusofthedefendantsothatthecourt

canbeassuredthatthepunitivedamageawardwillaccomplish

itsdeterrenteect.

ecourtthenconcludedthatthepuni-

13 See Emerald Investments, LLC v. Porter Bridge and Loan Co., No. 3:05-cv-

1598, 2007 U.S. Dist. LEXIS 45621, *26 (D. Conn. June 25, 2007). (stating

that “a court may also award punitive damages and attorney’s fees to a

plainti who has been awarded only nominal damages resulting from

an unfair or deceptive practice under CUTPA.”). When no compensatory

damages are awarded, or when only nominal damages are awarded,

courts will disregard the typical standard of applying multipliers to the

compensatory damages award and instead look to the deterrent eect

when determining the punitive damages under CUTPA for nominal

compensatory amounts. See Bristol Technology, 114 F. Supp. 2d 59, 85 (D.

Conn. 2000).

14 Emerald Investments, 2007 U.S. Dist. LEXIS 45621, at *26.

15 See id. (quoting Associated Inv. Co. Ltd. P’ship v. Williams Assocs., 230 Conn.

148, 155 (1994)).

16 See Fabri v. United Tech. Int’l, Inc., 387 F.3d 109, 125 (2d Cir. 2004).

17 See id. (citing BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996)).

18 Fabri, 387 F.3d at 125 (quoting BMW of North America, 517 U.S. at 575).

19 See 2007 U.S. Dist. LEXIS 45621, at *32.

20 See id. at *29-30.

tivedamageswouldbecalculatedbyaddingthecompensatory

damageawardand“thatportionoftherescisionaryamountthat

waslostinthefailed…developmentandmoniespaidtothe

defendants.”

ecourtreasonedthat,ifthepunitivedamages

werelimitedtotheamountofthejuryaward,theawardwould

notfullyreecttheextentoftheplainti’sdamages.

If,how-

ever,thecourtawardedpunitivedamagesinthefullrestitution-

aryamount,thedamageswouldbeinappropriatebecausethe

awardwouldinclude“moneythatbenettedtheplainti.”

Furthermore,inField v. CYR Concrete Contractors,thecourt,

usingthetypicalcalculationofpunitivedamages,awarded

$12,400inpunitivedamages,whichwasequaltotheamount

ofactualdamages.

eplaintisinFieldclaimedthatthe

defendantviolatedCUTPAasaresultofitsperseviolationof

theHomeImprovementAct.

edefendantdefaultedand,

assuch,thecourtdeterminedthat“thedefendant…admitted

thatitsactionswerewillful,deliberate,andcausedtheplainti

substantialinjury…,”and,therefore,determinedthatanaward

ofpunitivedamageswasappropriate.

ecourtawardedonly$25,000forpunitivedamagesinRoss-

man v. Morasco,aminimalamountinthatitequaledonly

one-thirdoftheactualdamagesawarded.

ecaseinvolveda

disputearisingoutofabusinessandfamilyrelationshipwhere

neitherpartyhaduncleanhands.

us,thecourtawarded

minimalpunitivedamages“forthepurpose,notofrewarding

thedefendants,buttovindicatethepurposeoftheunfairtrade

practicesstatutewhichistodissuadebusinessactivitieswhich

areunfairordeceptive.”

Conversely,inClark v. Hunt,thecourtdeterminedthatthe

plaintiwasnotentitledtoanyawardofpunitivedamages

becausethedefendantdidnotexhibitarecklessindierence

totherightsoftheplainti,“noranintentionalandwanton

21 Id. at *31.

22 Id.

23 Id.

24 No. HHBCV064010141S, 2007 Conn. Super. LEXIS 2600, at *3 (Conn. Supp.

Ct. Sept. 27, 2007).

25 Id. at *2.

26 Id. at *3.

27 No. X08CV010183603S, 2006 Conn. Super. LEXIS 2297, at *8 (Conn. Supp.

Ct. July 31, 2006).

28 See id.

29 Id.

See Punitive Damages on Page 10

Page 10 Summer 2008 The DEFENSE

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30 No. CV0287877, 2003 Conn. Super. LEXIS 209, at *5 (Conn. Super. Ct. Jan.

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31 See id. at *4.

32 Id. at *5.

Punitive Damages

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Mark Ostrowski is a partner and Brooke Howard is an associate

at Shipman & Goodwin, LLP

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Lewis S. Lerman is a principal at Bai, Pollock, Blueweiss &

Mulcahey, P.C.

Volunteers from Bai, Pollock, Blueweiss & Mulcahey participating in Shelton’s

Clean Sweep (Article - CDLA Members join Shelton’s Earth Day Celebration)

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