Breach of Contract

By: James A. Lenes Esq.

In Connecticut business litigation, when possible, plaintiff’s attorneys will add a count alleging a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”). The benefit of including a CUTPA claim is that it enables the plaintiff to seek recovery of its attorney’s fees and punitive damages when the defendant’s alleged conduct is intentional, reckless, unethical or unscrupulous. Because of this potential additional recovery, CUTPA claims are regularly added to breach of contract actions.

Although there are cases that hold that a breach of contract can give rise to a CUTPA violation, “[n]ot every contractual breach rises to the level of a CUTPA violation.” (Internal quotation marks omitted). Naples v. Keystone Building & Dev. Corp., 295 Conn. 214, 228 (2010). Where the same facts are relied upon to establish both a CUTPA violation and a breach of contract claim, the focus “has been on whether the defendant’s breach of contract was merely negligent or incompetent, in which case the CUTPA violation was barred, or whether the defendant’s actions would support a finding of intentional, reckless, unethical or unscrupulous conduct, in which case the contractual breach will support a CUTPA claim….” (Footnote omitted; internal quotation marks omitted). Ulbrich v. Groth, 310 Conn. 375, 410 (2013). 

“Our Supreme Court has cited with approval language employed by federal courts indicating that absent substantial aggravating circumstances, [a] simple breach of contract is insufficient to establish [a] claim under CUTPA….” (Internal quotation marks omitted). Medical Device Solutions, 207 Conn. App. 707, 778 (2021). The aggravating factors alleged “must involve bad faith conduct or violation of some concept of fairness in order to sufficiently plead a CUTPA claim by way of breach of contract.” Metromedia Energy, Inc. v. 21st Century Mgmt., Inc., 2014 WL 6412273, No. CV13-6043097S at *5 (Conn. Super. Ct. Oct. 2, 2014). Aggravating circumstances must be alleged which constitute either immoral, unethical, unscrupulous or offensive to public policy. D2E Holdings, LLC v. Corp. for Urban Home Ownership of New Haven, 2018 WL 2047944, No. CV17-6075593S at *4 (Conn. Super. Ct. Apr. 3, 2018). 

The bottom line is that the defendant’s conduct must be pretty outrageous before a breach of contract would give rise to an unfair trade practices claim. The conduct must be far beyond one’s simple failure to perform as agreed or negligent performance.