FORD MOTOR CREDIT v. FLEMING, No. CV 05 4001748 (Oct. 24, 2005)

BARRY K. STEVENS, JUDGE.

Should the court grant the plaintiff's motion to strike the defendant's entire four-count counterclaim on the basis of the defendant's failure to join an indispensable party to the issues raised by the counterclaim.

On February 17, 2005, the plaintiff, Ford Motor Credit Company, filed a complaint against the defendant, Theresa K. Fleming, for defaulting on monthly installment payments. This action arises out of a Retail Installment Contract between the defendant and Central Ford Mercury of Plainfield, Connecticut, to purchase a 1999 Ford Expedition. Subsequently, the contract was assigned to the plaintiff for value.

In its complaint, the plaintiff alleges the following facts. The defendant agreed to pay the purchase price of the vehicle in seventy-two monthly installments, but only paid forty-one monthly installment payments due under the terms of the contract; thus, the plaintiff repossessed and resold the vehicle. Under General Statutes § 36a-785, the defendant's account was credited with the fair market value of the vehicle. The defendant remains indebted to the plaintiff and the defendant has refused and neglected to repay the remaining balance.

On April 20, 2005, the defendant filed an answer, special defenses, setoff and a four-count counterclaim. The defendant alleges that the plaintiff, by itself or through its agents, took advantage of her in setting the cash price for the vehicle, by failing to inform her of alternative financing, and by providing limited information on "GAP" insurance. The defendant further alleges that the plaintiff is in violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a, et seq., and, as a result, the defendant has suffered an ascertainable loss. CT Page 13351-jc

On May 4, 2005, the plaintiff filed a motion to strike the defendant's entire counterclaim, accompanied by a memorandum in support, on the ground of nonjoinder of a necessary party based on the allegations of the counterclaim. On May 11, 2005, the defendant filed a memorandum of law in opposition to the motion to strike.

"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "A motion to strike tests the legal sufficiency of a cause of action and may properly be used to challenge the sufficiency of a counterclaim." (Citations omitted; internal quotation marks omitted.) Fairfield Lease Corp. v. Romano's Auto Service, 4 Conn.App. 495, 496, 495 A.2d 286 (1985).

The plaintiff moves to strike the defendant's entire counterclaim on the grounds of nonjoinder of a necessary party based on the allegations of the counterclaim. In support of the motion, the plaintiff argues that the defendant's allegations involve the acts of the car dealership, Central Ford Mercury, before the plaintiff was assigned the contract that the car dealership is a necessary party to this action, and contends that a motion to strike is the exclusive remedy for nonjoinder of parties. The plaintiff further maintains that because the plaintiff was not involved in any negotiations between the defendant and the car dealership at the time the contract was entered into, and made no representations to the defendant about the retail installment contract, the car dealership should be made a party to this action. The plaintiff also argues that even if the defendant claims that Central Ford Mercury is an "agent" of the plaintiff, Central Ford Mercury must still be made a party, and that the defendant has not set forth facts supporting an agency relationship between the plaintiff and Central Ford Mercury.

The defendant counters alleging that the car dealership is not a necessary party because the assignment to the plaintiff was provided for in the contract, thus, the plaintiff was involved in the original purchase transaction of the vehicle. The plaintiff also argues that the defendant's payment obligations were to the plaintiff and not the car dealership, which shows that the defendant entered into a contract with the plaintiff. The plaintiff also contends that because the car dealership has no interest in the balance due from the defendant, it is not an indispensable party because an indispensable party must have an CT Page 13351-jd interest in the controversy of the suit. Finally, the defendant argues that an agency relationship exists between the plaintiff and the car dealership, thus, the plaintiff is liable for the acts of its agent.

"[T]he exclusive method to raise the issue of nonjoinder of an indispensable party is by way of a motion to strike . . ." Hilton v. New Haven, 233 Conn. 701, 723, 661 A.2d 973 (1995). The Supreme Court has concluded that "[p]arties are considered indispensable when they not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such condition that its final [disposition] may be . . . inconsistent with equity and good conscience . . . Indispensable parties must be joined because due process principles make it essential that [such parties] be given notice and an opportunity to protect [their] interests by making [them] a party to the [action]." (Citations omitted; internal quotation marks omitted.) Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, 225-26 n. 10, 680 A.2d 127 (1996), cert. denied, 520 U.S. 1103, 117 S.Ct. 1106, 137 L.Ed.2d 308 (1997).

"While courts and commentators have sometimes blurred or questioned the distinction between `indispensable' and `necessary' parties, the rules of practice, as elucidated by our Supreme Court, specify when a court must or may strike a complaint for failing to [include] certain parties as defendants. Under Practice Book § 9-18, a court `may determine the controversy as between the parties before it, if it can do so without prejudice to the rights of others.' Hence, if determining the case would prejudice the rights of non-parties, the court cannot hear the matter and must grant a proper motion to strike for failure to join them as parties. Such parties are sometimes referred to as `indispensable,' terminology the rule itself wisely omits. Torrington Farms Assn., Inc. v. Torrington, Superior Court, judicial district of Litchfield, Docket No. CV 99 0081120 (September 22, 2000, Frazzini, J.) ( 28 Conn. L. Rptr. 199, 201)." (Internal quotation marks omitted.) Lukasik v. Banknorth, National Assn., Superior Court, judicial district of New Britain, Docket No. CV 04 4001336 (April 26, 2005, Burke, J.).

In her counterclaim, the defendant alleges that the plaintiff, by itself or through its agents, took advantage of the defendant in setting the cash price for the vehicle, by failing to inform her of alternative financing, and providing limited information on "GAP" insurance. The defendant further alleges that the plaintiff is in violation of CUTPA, and, as a result, the defendant has suffered an ascertainable loss.

Based on the defendant's allegations in her counterclaim that the CT Page 13351-je plaintiff took advantage of her in setting the cash price, in failing to inform her of alternative financing, and providing limited information on "GAP" insurance, these acts are directed towards the conduct of Central Ford Mercury, and not the conduct of the plaintiff. In addition, the acts that the defendant complains of occurred during the contract negotiations between the defendant and Central Ford Mercury. The plaintiff was not involved in the negotiations at the time the contract was entered into. Thus, it is Central Ford Mercury that has an interest in this action and should be made a party. Accordingly, the court finds that Central Ford Mercury is an indispensable party that the defendant should have joined.

Also, the defendant's argument that the plaintiff is liable for the acts of its agent and that Central Ford Mercury is not a necessary party is misplaced. This court found in Ford Motor Credit Co. v. Harnage, Superior Court, judicial district of Windham at Putnam, Docket No. CV 04 0073024 (December 21, 2004, Riley, J.), that the defendant failed to provide facts indicating that the plaintiff had control over the car dealership's formation of the retail installment contract, "as required to prove the existence of an agency relationship." The same holds true in the present case.

In Harnage, this court quotes the law on agency, which provides that "[t]he relation of agency is created as the result of conduct by two parties manifesting that one of them is willing for the other to act for him subject to his control, and that the other consents so to act. 1 Restatement (Second) Agency § 1, comment (a) (1958). Furthermore, it is well-settled that [a]gency is a legal concept which depends upon the existence of required factual elements: the manifestation by the principal that the agent shall act for him, the agent's acceptance of the undertaking and the understanding of the parties that the principal is to be in control of the undertaking. 1 Restatement (Second), supra, § 1 comment (b)." (Internal quotation marks omitted.) Ford Motor Credit Co. v. Harnage, supra, Superior Court, Docket No. CV 04 0073024.

In the defendant's memorandum, in the present case, her arguments do not set forth facts that would support the plaintiff having control over Central Ford Mercury's negotiations of the contract with her. The defendant argues that the plaintiff was involved in the original purchase transaction because the contract language provided for the assignment of the contract to the plaintiff. This contract language, however, does not demonstrate that an agency relationship existed between the plaintiff and Central Ford Mercury, and that the plaintiff had control over the contract negotiations at the time the contract was entered into.

For the foregoing reasons, the plaintiff's motion to strike the CT Page 13351-jf defendant's counterclaim on the basis of nonjoinder of an indispensable party is granted.