Western Dermatology Consultants, P.C. v. VitalWorks, Inc.

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WESTERN DERMATOLOGY CONSULTANTS, P.C. v.
VITALWORKS, INC., ET AL.
(SC 19248)
Palmer, Zarella, Eveleigh, McDonald and Vertefeuille, Js.
Argued September 10, 2015—officially released August 16, 2016
Linda L. Morkan, with whom, on the brief, were
Phyllis S. Lynn, pro hac vice, and Bradford S. Babbitt,
for the appellant (plaintiff).
Kimberly A. Knox, with whom were Dana M. Hrelic
and, on the brief, Wesley W. Horton and Edward T.
Krumeich, for the appellee (named defendant).
Steven R. Smart, for the appellee (defendant Cerner
Physician Associates, Inc.).
Opinion
PALMER, J. In this certified appeal, the plaintiff,
Western Dermatology Consultants, P.C., claims that the
Appellate Court improperly reversed the judgment of
the trial court, which found that the defendants,
VitalWorks, Inc. (VitalWorks),1 and Cerner Physician
Associates, Inc. (Cerner), had violated the Connecticut
Unfair Trade Practices Act (CUTPA), General Statutes
§ 42-110a et seq.,2 by making misrepresentations in con-
nection with the sale of certain practice management
and electronic medical records software to the plaintiff.
The plaintiff contends that the Appellate Court incor-
rectly concluded that, under applicable choice of law
principles, the law of New Mexico, rather than CUTPA,
governs the plaintiff’s unfair trade practices claim. We
conclude that the Appellate Court correctly determined
that that claim is governed by New Mexico law. Con-
trary to the determination of the Appellate Court, how-
ever, we conclude that the case must be remanded for
a new trial so that New Mexico law can be applied to
the plaintiff’s unfair trade practices claim.3
The following facts, as found by the trial court, and
procedural history are relevant to our resolution of this
appeal. The plaintiff is a dermatological clinic with two
offices located in Albuquerque, New Mexico. Vital-
Works is a Delaware corporation that, at all times rele-
vant to this appeal, had its corporate headquarters in
Ridgefield, Connecticut, and was engaged in the market-
ing and selling of software designed to assist physicians
in efficiently managing patient appointments, billing,
and medical records. VitalWorks’ software develop-
ment and technical support facility is located in Ala-
bama. Cerner is a Delaware corporation with its prin-
cipal place of business in Missouri. In January, 2005,
Cerner purchased VitalWorks’ Alabama operations and
continued to market, service, and develop the soft-
ware thereafter.
In March, 2003, the plaintiff’s representative attended
a medical conference in San Francisco, California,
where VitalWorks was demonstrating its software. At
the time, the plaintiff did not contemplate the purchase
of new software because it was satisfied with older
software that it had been using in its practice since 1997.
At the conference, however, Tim Holman, a VitalWorks’
salesperson, and Terri Cannady, a representative from
the company that marketed the older software,
informed the plaintiff’s representative that the plaintiff
would need to replace the older software because it
was going to be phased out and would no longer be
supported. As a replacement for the older software, the
plaintiff was offered VitalWorks’ software. Holman told
the plaintiff that VitalWorks’ software was ‘‘user-
friendly’’ and would increase the plaintiff’s efficiency
and save it money by streamlining the preparation of
medical notes and billing statements. Specifically, Hol-
man represented that the new software would allow
the plaintiff’s receptionist to confirm a patient’s infor-
mation upon the patient’s arrival and create a note that,
with ‘‘[a] click [of] a button,’’ would be sent to the
physician, who would fill it out while examining the
patient, thereby creating a billing statement with the
required diagnostic codes and necessary prescriptions.
In September, 2003, Holman traveled to one of the
plaintiff’s Albuquerque offices to conduct a follow-up
demonstration. Following that demonstration, Holman
sent the plaintiff a letter stating that, on the basis of
the plaintiff’s then existing monthly transcription
expense of $2500,4 the plaintiff would realize ‘‘a return
on investment in two years’’ were it to purchase the
new software. Holman also informed the plaintiff that,
by purchasing the new software prior to the end of
2003, it would avoid a 15 percent price increase.
Having been told that the older software no longer
would be supported and that a price increase for the
new software was imminent, the plaintiff agreed to pur-
chase the new software for $44,170.30, which included
software training by VitalWorks employees. On Decem-
ber 19, 2003, the plaintiff signed a standard form con-
tract produced by VitalWorks’ Connecticut headquar-
ters. The choice of law provision of the contract pro-
vided that ‘‘[the] [a]greement shall be construed and
interpreted in accordance with the laws of the [s]tate
of Connecticut and any dispute shall be resolved in a
forum located in the [s]tate of Connecticut.’’
As soon as the new software was installed, the plain-
tiff began experiencing technical difficulties while
attempting to use it. Contrary to the representations
made by Holman, the plaintiff’s physicians and staff
found the software neither fast nor user-friendly. The
plaintiff experienced a wide variety of problems with
the software, including (1) loss of access to the system
while attempting to schedule appointments, (2) the
need to change passwords on multiple occasions, (3)
claims not closing when payments were posted, thereby
requiring the plaintiff to manually enter secondary bill-
ing statements, (4) uninitiated user log offs, (5) disap-
pearing toolbar buttons, (6) inaccurate patient ledgers,
and (7) blank screens that required a complete reboot
of the system. In addition to these fundamental software
flaws, the physicians were not able to use the system
while seeing patients because the software did not have
preinstalled dermatological terminology and did not
allow users to indicate the number and size of lesions
and biopsies, the name or dosage of prescribed medica-
tion, or whether the patient had been informed about
the potential risks and benefits of medication. As a
result of these defects, creating medical notes with the
new software took far longer than it did to create those
notes manually.
When the plaintiff complained to VitalWorks about
the new software’s poor performance, VitalWorks
denied that the problems were software related and
recommended additional training for the plaintiff’s
employees. Despite that training, however, the plain-
tiff’s problems persisted because, in fact, they were
primarily software related. Indeed, the plaintiff never
was able to bill a patient, generate a prescription or
complete a real time checkout using the software, and,
as a consequence, the plaintiff ultimately abandoned it
in May, 2005. The plaintiff commenced the present
action against the defendants in August, 2006.
In its second amended complaint, the plaintiff alleged
six counts: (1) breach of contract; (2) breach of war-
ranty; (3) fraud; (4) negligent misrepresentation; (5)
unjust enrichment; and (6) a violation of CUTPA.5 Fol-
lowing a bench trial, the court concluded that the plain-
tiff had proven its case against VitalWorks on the breach
of contract, breach of warranty, negligent misrepresen-
tation, and CUTPA counts.6 The court also found in
favor of the plaintiff on its CUTPA claim against Cerner,
concluding that Cerner was liable under CUTPA pursu-
ant to the continuity of enterprise exception to the
successor in interest doctrine. The court further con-
cluded that, following the acquisition of VitalWorks’
Alabama operations, Cerner itself had violated CUTPA
by engaging in unfair trade practices while being
involved in trade or commerce that was intimately asso-
ciated with Connecticut.7 Thereafter, the defendants
filed motions to reargue and for articulation, and the
plaintiff filed motions for costs, attorney’s fees, prejudg-
ment interest, and punitive damages.8
In its motion to reargue, VitalWorks asserted, among
other things, that the trial court improperly had failed
to subject the plaintiff’s unfair trade practices claim to
a choice of law analysis and, instead, appeared to have
‘‘automatically’’ assumed that Connecticut law applied
to that claim. VitalWorks further argued that, under a
choice of law analysis, it was clear that New Mexico
rather than Connecticut law should govern the plain-
tiff’s claim because New Mexico had the most signifi-
cant contacts with the occurrence and the parties. In
its memorandum of decision on VitalWorks’ motion
to reargue, the trial court noted that it had applied
Connecticut choice of law principles to the facts and
determined that Connecticut was the state that had the
most significant relationship to the occurrence and the
parties involved. The trial court explained that, in evalu-
ating the choice of law issue, it had utilized the princi-
ples set forth in §§ 6 (2) and 145 (1) of the Restatement
(Second) of Conflict of Laws. See 1 Restatement (Sec-
ond), Conflict of Laws § 6 (2), p. 10 (1971); 1 id., § 145
(1), p. 414. In a subsequent memorandum of decision
on VitalWorks’ motion for articulation, the trial court
further explained that ‘‘the strongest and most predict-
able contact’’ in the present case was Connecticut
because ‘‘Ridgefield, Connecticut was the corporate
headquarters for VitalWorks. Corporate responsibility
for product development, marketing, sale and delivery
of a functioning product is most strongly connected
to Connecticut. The sales agreement was drafted in
Connecticut by VitalWorks. . . . Among the terms [of
that agreement] . . . was a standardize[d] choice of
law/forum provision [that] required that Connecticut
law apply to contract interpretation and required [Con-
necticut] to be the locus of dispute resolution.’’
In addition to its choice of law argument, VitalWorks
contended that, even if Connecticut law did apply to
the plaintiff’s unfair trade practices claim, VitalWorks’
conduct, as alleged by the plaintiff, did not fall within
the purview of CUTPA because VitalWorks had not
engaged in any trade or commerce in Connecticut. The
trial court rejected this argument, noting that the facts
that it found supported the conclusion that the actions
that gave rise to the plaintiff’s claims ‘‘occurred in Con-
necticut or were the result of [VitalWorks’] corporate
[decision] to market and sell software systems [that] it
knew had not been fully developed and [that] would
not operate as represented to [the plaintiff].’’ Specifi-
cally, the trial court explained that ‘‘[t]he contract in
question qualified as trade or commerce within the state
of Connecticut . . . . It [was] the genesis of the rela-
tionship between [the] plaintiff and VitalWorks . . . .’’
(Internal quotation marks omitted.)
On appeal to the Appellate Court, VitalWorks and
Cerner both claimed, inter alia, that the trial court incor-
rectly had determined that Connecticut law governed
the plaintiff’s unfair trade practices claim. See Western
Dermatology Consultants, P.C. v. VitalWorks, Inc., 146
Conn. App. 169, 197, 78 A.3d 167 (2013). The defendants
further argued that, even if Connecticut law applies to
that claim, the trial court incorrectly concluded that
the plaintiff had satisfied the requirements of CUTPA.
Id., 198. The Appellate Court agreed with both conten-
tions. See id., 201, 211.
The Appellate Court first concluded that, by its
express terms, CUTPA applies only to acts of trade or
commerce conducted in Connecticut. Id., 200. The court
further concluded that the practices that the plaintiff
complained of actually had occurred outside of Con-
necticut. See id., 200–201. Specifically, the court
referred to the evidence demonstrating that the plaintiff
was located in New Mexico, and the first and second
product demonstrations by VitalWorks took place in
California and New Mexico, respectively. Id., 200. The
court also observed that (1) the software and hardware
purchased under the contract were installed in New
Mexico, and the concomitant services were also per-
formed in that state; id., 200–201; (2) the VitalWorks
employees with whom the plaintiff dealt were located
in Alabama, and those employees remotely installed the
new software in New Mexico; id., 201; and (3) all of
the development work on the new software from 2001
forward had been performed in Alabama. Id. On the
basis of this evidence, the court concluded that the
plaintiff had no cause of action under CUTPA because
no ‘‘trade’’ or ‘‘commerce’’ within the meaning of
CUTPA had occurred in Connecticut. (Internal quota-
tion marks omitted.) Id.Next, the Appellate Court engaged in a choice of
law analysis in accordance with the most significant
relationship test set forth in §§ 6 (2) and 145 of the
Restatement (Second) of Conflict of Laws; see, e.g.,
Jaiguay v. Vasquez, 287 Conn. 323, 349–50, 948 A.2d
955 (2008) (adopting most significant relationship test
of Restatement [Second] of Conflict of Laws for tort
actions); and concluded that the trial court incorrectly
had determined that the plaintiff’s unfair trade practices
claim was governed by Connecticut law.9 See Western
Dermatology Consultants, P.C. v. Vitalworks, Inc.,
supra, 146 Conn. App. 211. In particular, the Appellate
Court concluded that the application of the factors out-
lined in § 145 (2) of the Restatement (Second) militated
in favor of applying New Mexico law because that state
had the ‘‘greatest contact’’ with the parties. Id., 207–208.
Specifically, New Mexico was the center of the relation-
ship, it was where the plaintiff was injured, and it was
where the contracted for goods were installed and ser-
viced. Id., 207. Similarly, the Appellate Court concluded
that consideration of the factors outlined in § 6 (2) of
the Restatement (Second) also supported the applica-
bility of New Mexico law.10 Id., 208–11. Accordingly,
the Appellate Court reversed the judgment of the trial
court and directed that court to render judgment for
the defendants on the CUTPA count.11 Id., 214.
We granted the plaintiff’s petition for certification to
appeal, limited to the following issues: ‘‘1. Under the
established [conflict of law] principles . . . and the
facts of this case, did the Appellate Court properly
determine that [CUTPA] applies to this case?’’ Western
Dermatology Consultants, P.C. v. VitalWorks, Inc., 310
Conn. 955, 81 A.3d 1182 (2013). ‘‘2. If the answer to the
first question is in the affirmative, did the Appellate
Court properly determine that the plaintiff failed to
satisfy the requirements of CUTPA because, under the
facts of this case, no trade or commerce occurred in
the state of Connecticut?’’ Id. ‘‘3. If the answer is in the
negative, did the trial court correctly determine not
to award prejudgment interest, punitive damages and
certain requested litigation costs?’’ Id. Upon review of
the record, however, and after due consideration of the
claims that the parties raised in their briefs and at oral
argument, we conclude that the first and second certi-
fied questions do not accurately reflect the issues raised
by this appeal. Therefore, we consider it necessary to
reformulate those questions so that they reflect the
actual issues presented. See, e.g., Rosado v. Bridgeport
Roman Catholic Diocesan Corp., 276 Conn. 168, 191,
884 A.2d 981 (2005) (court may ‘‘reformulate . . . the
certified question to reflect . . . accurately the issues
presented’’). Accordingly, we set forth the following
revised certified questions: 1. Under established choice
of law principles, did the Appellate Court properly
determine that CUTPA does not apply to the plaintiff’s
unfair trade practices claim? 2. If the answer to the first
question is in the negative, did the Appellate Court
properly determine that the plaintiff failed to satisfy
the requirements of CUTPA because, under the facts
of this case, no trade or commerce occurred in the state
of Connecticut? 3. If the answer to the second question
is in the negative, did the trial court properly decline
to award prejudgment interest, punitive damages and
certain requested litigation costs?
On appeal, the plaintiff argues that the Appellate
Court incorrectly determined that the law of New Mex-
ico should govern the plaintiff’s unfair trade practices
claim because (1) the defendants waived their right to
argue that New Mexico law should apply to that claim
by failing to allege and establish in the trial court that
there exists an outcome determinative conflict between
the laws of Connecticut and New Mexico, and (2) under
the test set forth in §§ 6 (2) and 145 of the Restatement
(Second) of Conflict of Laws, Connecticut law governs
its unfair trade practices claim. The defendants dispute
the plaintiff’s contention and argue, in addition, that,
in light of the Appellate Court’s disposition of the case
against the plaintiff on all counts, there are no remaining
facts to support the plaintiff’s CUTPA claim, and, conse-
quently, the appeal is moot. We conclude that the plain-
tiff’s appeal is not moot and that the Appellate Court
correctly determined that New Mexico law governs the
plaintiff’s unfair trade practices claim. We therefore
remand the case for a new trial at which the plaintiff’s
unfair trade practices claim shall be decided under New
Mexico law.12
We first address the defendants’ contention that this
appeal is moot. See, e.g., In re Jorden R., 293 Conn.
539, 555, 979 A.2d 469 (2009) (‘‘[m]ootness is a question
of justiciability that must be determined as a threshold
matter because it implicates [a] court’s subject matter
jurisdiction’’ [internal quotation marks omitted]). As
we previously indicated, the defendants argue that the
appeal is moot because the Appellate Court’s reversal
of the trial court’s judgment on the breach of contract,
breach of warranty and negligent misrepresentation
counts eliminated all of the possible factual bases for
the alleged CUTPA violation. In addition, Cerner sepa-
rately argues that there is no factual basis to support
the plaintiff’s CUTPA claim against it because the trial
court found in favor of the defendants on the plaintiff’s
unjust enrichment claim, and because the plaintiff
alleged in its complaint that Cerner violated CUTPA
only on the basis of the allegations in the unjust enrich-
ment count. We disagree with both contentions.
With respect to the first contention, the record
reveals that the Appellate Court reversed the trial
court’s judgment on the plaintiff’s breach of contract
claim not because the trial court’s factual findings relat-
ing to that claim were unsupported but, rather, because
the plaintiff failed to comply with the notice require-
ments in the parties’ contract and the Uniform Commer-
cial Code for bringing such a claim. See Western Derma-
tology Consultants, P.C. v. VitalWorks, Inc., supra, 146
Conn. App. 182–83. Similarly, the Appellate Court
reversed the trial court’s judgment on the breach of
warranty and negligent misrepresentation claims not
because the trial court’s factual findings relating to
those claims were unsupported but, rather, because the
trial court improperly had determined that the merger
clause of the parties’ contract did not limit the plaintiff
to the warranties expressly provided thereunder.13 Id.,
191, 197. We also reject Cerner’s separate contention
because the record shows that the unjust enrichment
count was not the only count that provided a factual
basis for the unfair trade practices count. Specifically,
in its CUTPA count, the plaintiff alleged that the defen-
dants’ conduct, ‘‘including but not limited to their mis-
representations, their sale of nonfunctioning products,
their refusal to comply with their obligations under the
contract, their refusal to return [money] paid by the
plaintiff for which the plaintiff received nothing of
value, and their attempt to contract through false pre-
tenses . . . constitute[s] unfair and deceptive trade
practices . . . .’’ Thus, it is clear that the plaintiff did
not predicate its CUTPA count against Cerner solely
on the allegations contained in the unjust enrichment
count. Accordingly, we conclude that this appeal is
not moot.
We turn, therefore, to the merits of the plaintiff’s
contention that the Appellate Court incorrectly deter-
mined that, contrary to the conclusion of the trial court,
the law of New Mexico, rather than the law of Connecti-
cut, governs the plaintiff’s unfair trade practices claim.14
We begin our analysis by setting forth the legal princi-
ples that govern our review of this claim. Choice of law
questions are subject to de novo review. E.g., American
States Ins. Co. v. Allstate Ins. Co., 282 Conn. 454, 461,
922 A.2d 1043 (2007). When evaluating choice of law
questions sounding in tort, this court applies the ‘‘most
significant relationship’’ test set forth in the Restate-
ment (Second). Jaiguay v. Vasquez, supra, 287 Conn.
349. As we previously have observed, the choice of law
principles applicable to tort actions also apply to claims
brought under CUTPA. See Macomber v. Travelers
Property & Casualty Corp., 277 Conn. 617, 640, 894
A.2d 240 (2006).
‘‘Section 145 of the Restatement [(Second) of Conflict
of Laws] provides in [relevant part] that ‘[t]he rights
and liabilities of the parties with respect to an issue [in
tort] are determined by the local law of the state which,
with respect to that issue, has the most significant rela-
tionship to the occurrence and the parties under the
principles stated in § 6.’ [1 Restatement (Second), supra,
§ 145 (1), p. 414.] Section 6 of the Restatement [Second],
in turn, provides: ‘(1) A court, subject to constitutional
restrictions, will follow a statutory directive of its own
state on choice of law. (2) When there is no such direc-
tive, the factors relevant to the choice of the applicable
rule of law include (a) the needs of the interstate and
international systems, (b) the relevant policies of the
forum, (c) the relevant policies of other interested
states and the relative interests of those states in the
determination of the particular issue, (d) the [protec-
tion] of justified expectations, (e) the basic policies
underlying the particular field of law, (f) certainty, pre-
dictability and uniformity of result, and (g) ease in the
determination and application of the law to be applied.’
[1 id., § 6, p. 10.]’’ O’Connor v. O’Connor, 201 Conn.
632, 650–51, 519 A.2d 13 (1986).
‘‘For assistance in our evaluation of the policy choices
set [forth] in §§ 145 (1) and 6 (2), we turn . . . to § 145
(2) of the Restatement [Second], which establishes
black-letter rules of priority to facilitate the application
of the principles of § 6 to tort cases. . . . Section 145
(2) provides: ‘Contacts to be taken into account in
applying the principles of § 6 to determine the law appli-
cable to an issue include: (a) the place where the injury
occurred, (b) the place where the conduct causing the
injury occurred, (c) the domicil, residence, nationality,
place of incorporation and place of business of the
parties, and (d) the place where the relationship, if any,
between the parties is centered. These contacts are to
be evaluated according to their relative importance with
respect to the particular issue.’ [1 Restatement (Sec-
ond), supra, § 145 (2), p. 414.]’’ (Citation omitted.)
O’Connor v. O’Connor, supra, 201 Conn. 652.
Applying § 145 (2) (a) of the Restatement (Second)
to the present case, we agree with the Appellate Court
that the plaintiff’s injury occurred in New Mexico, the
place where the plaintiff suffered the adverse conse-
quences of its decision to purchase the new software.
With respect to § 145 (2) (b), the Appellate Court con-
cluded that the injury causing conduct occurred in New
Mexico, ‘‘where the goods were installed, service was
provided, and training occurred.’’ Western Dermatology
Consultants P.C. v. VitalWorks, Inc., supra, 146 Conn.
App. 207. We do not agree completely with the Appellate
Court’s conclusion. Our review of the pertinent facts
reveals that the events that the Appellate Court relied
on were the consequences of an earlier occurrence,
namely, VitalWorks’ decision to make a binding offer
for sale of the new software to the plaintiff from its
headquarters in Connecticut, which, in turn, was the
result of VitalWorks’ earlier demonstrations of the soft-
ware to the plaintiff in California and New Mexico. We
thus are persuaded that the injury causing conduct in
this case occurred in California, New Mexico, and Con-
necticut. With regard to § 145 (2) (c), we conclude that
it is a neutral factor: the plaintiff is located in New
Mexico, whereas VitalWorks was, at the time, headquar-
tered in Connecticut, and Cerner is headquartered in
Missouri. Finally, with respect to § 145 (2) (d), we agree
with the Appellate Court that the relationship between
the parties was centered in New Mexico, where the
plaintiff ‘‘reviewed and signed the contract, beginning
the [legal] relationship . . . [and where] [t]he goods
and concomitant services contracted for were deliv-
ered, installed, and performed . . . .’’ Id., 208.
As we previously have explained, ‘‘it is the signifi-
cance, and not the number, of § 145 (2) contacts that
determines the outcome of the choice of law inquiry
under the Restatement [Second] approach. As the con-
cluding sentence of § 145 (2) provides, [t]hese contacts
are to be evaluated according to their relative impor-
tance with respect to the particular issue.’’ (Internal
quotation marks omitted.) Jaiguay v. Vasquez, supra,287 Conn. 353. Although the trial court found that ‘‘[t]he
sales agreement was drafted in Connecticut by
VitalWorks,’’ and that ‘‘Connecticut was the state where
the parties’ relationship initiated,’’ these factors alone
do not outweigh the significant contacts to New Mexico.
Consistent with the determination of the Appellate
Court, therefore, we conclude that, on balance, ‘‘New
Mexico had the greatest contact with the parties in
this case.’’ Western Dermatology Consultants P.C. v.
VitalWorks, Inc., supra, 146 Conn. App. 208.
Likewise, the factors enumerated in § 6 (2) of the
Restatement (Second) also militate in favor of the appli-
cability of New Mexico law to the plaintiff’s unfair trade
practices claim. Section 6 (2) (a), the needs of the inter-
state and international systems, supports neither state’s
law. With regard to § 6 (2) (b), the relevant policies
of the forum, we conclude that, although Connecticut
undoubtedly has an interest in applying its law to ensure
that local businesses do not engage in unfair trade prac-
tices in this state, that interest is not especially strong
in the present case in view of the limited nature of the
contact that occurred between the parties in Connecti-
cut.15 New Mexico’s interest in protecting its citizens
and commercial enterprises from unfair or deceptive
trade practices, however, is especially strong in the
present case considering the facts that the plaintiff con-
ducts its business exclusively in New Mexico and that
the majority of the dealings between the parties took
place in that state. Accordingly, we conclude that § 6
(2) (c), which requires consideration of the relevant
policies of other interested states and the relative inter-
ests of those states, also supports application of New
Mexico law.
Turning to § 6 (2) (d), the protection of justified
expectations, we agree with the Appellate Court that
there was ‘‘no justified expectation that Connecticut
law, including CUTPA, would apply to tort claims not
arising from the construction and interpretation of the
contract itself.’’ Id., 210. As we explained, the Appellate
Court reached its determination on the basis of the
choice of law provision in the parties’ contract, which
designated Connecticut as the forum state but expressly
limited the application of Connecticut law to ‘‘the con-
struction and interpretation of the contract itself.’’ Id.
Thus, on the basis of the breadth and depth of the
parties’ contacts with New Mexico, we agree with the
Appellate Court that it was much more reasonable for
the parties to expect New Mexico law to govern any
consumer protection related dispute arising out of their
business relationship.
We also agree with the Appellate Court that § 6 (2)
(e), the basic policies underlying the particular field of
law, is a neutral factor because the unfair trade practice
statutes of both New Mexico and Connecticut are
intended to effectuate the same policies, namely, ‘‘[t]he
deterrence of tortious conduct and the provision of
compensation for the injured victim . . . .’’ Id., quoting
1 Restatement (Second), supra, § 145, comment (b), p.
416. The remaining factors, § 6 (2) (f) and (g), direct
us to examine the certainty, predictability and unifor-
mity of result, and the ease in the determination and
application of the law to be applied, respectively. As
we observed in O’Connor, these factors ‘‘should ‘not
be overemphasized’ ’’; O’Connor v. O’Connor, supra,
201 Conn. 651–52; because the Restatement (Second)
‘‘cautions against attaching independent weight to these
auxiliary factors, noting that they are ancillary to the
goal of providing rational, fair choice of law rules.’’ Id.,
651. Once again, we agree with the Appellate Court
that, to the extent they are relevant, the factors set
forth in § 6 (2) (f) and (g) militate in favor of applying
New Mexico law ‘‘because the vast majority of the plain-
tiff’s contact with the defendants happened in New
Mexico. It would, therefore, be predictable and uniform,
as well as easy, to determine and apply’’ the law of
that state. Western Dermatology Consultants P.C. v.
VitalWorks, Inc., supra, 146 Conn. App. 210. Accord-
ingly, we conclude that the Appellate Court properly
determined that New Mexico had the most significant
relationship with the parties in the present case, thus
requiring that the law of that state be applied to the
plaintiff’s unfair trade practices claim.
We note, finally, that, after reversing the trial court’s
judgment in favor of the plaintiff on its CUTPA claim,
the Appellate Court remanded the case to the trial court
with direction to render judgment for the defendants.
Id., 214. As we explain hereinafter, however, the Appel-
late Court, having determined that the trial court incor-
rectly applied Connecticut law to the plaintiff’s unfair
trade practices claim; id., 211; should have remanded
the case for a new trial on that claim.
As we previously noted, the Appellate Court first
determined that the plaintiff could not establish a viola-
tion of CUTPA; see id., 198–202; and only then did it
address the choice of law issue. Id., 203–11. It is not
clear from the Appellate Court’s opinion why it reached
the CUTPA claim even though the defendants main-
tained that there was an outcome determinative conflict
between the laws of Connecticut and New Mexico. See
id., 197 (‘‘[t]he defendants also contend that an outcome
determinative conflict of laws exists regarding whether
the plaintiff could claim a CUTPA violation sounding
in tort against VitalWorks and Cerner’’). Logically, how-
ever, once the Appellate Court had been apprised of
the multistate nature of the relationship between the
parties and of the potential outcome determinative con-
flict between the laws of the various states involved, it
should have addressed the broader question of which
state’s law governs the dispute before determining
whether any law had been violated. See, e.g., Gibson
v. Fullin, 172 Conn. 407, 411, 374 A.2d 1061 (1977)
(‘‘[w]hen the rights and liabilities of parties to an action
result from an occurrence involving a significant rela-
tionship in another state, the court in which the action
is pending must determine whether its own law or the
law of the other state shall be applied’’). Therefore, the
Appellate Court should have resolved the choice of law
issue first.
Having resolved that issue in favor of New Mexico
law, we now must determine the proper remedy. Ordi-
narily, the trial court’s failure to apply the correct legal
standard results in a remand to the trial court for appli-
cation of the correct standard. See, e.g., McDermott v.
State, 316 Conn. 601, 611, 113 A.3d 419 (2015) (‘‘[w]e
have often stated that . . . a party is generally entitled
to a new trial when, on appeal, a different legal standard
is determined to be required, unless we conclude that,
based on the evidence, a new trial would be pointless’’);
Reichhold Chemicals, Inc. v. Hartford Accident &
Indemnity Co., 243 Conn. 401, 423, 426, 703 A.2d 1132(1997) (remanding case for new trial when trial court
incorrectly applied New York rather than Washington
law); Deroy v. Estate of Baron, 136 Conn. App. 123,
127, 43 A.3d 759 (2012) (‘‘[w]hen an incorrect legal
standard is applied, the appropriate remedy is to reverse
the judgment of the trial court and to remand the matter
for further proceedings’’); see also Leane v. Joseph
Entertainment Group, Inc., 267 Ill. App. 3d 1036, 1043,
642 N.E.2d 852 (1994) (reversing and remanding case
for new trial under Wisconsin law when trial court
incorrectly applied Illinois law to parties’ dispute);
Ohayon v. Safeco Ins. Co. of Illinois, 91 Ohio St. 3d
474, 476, 482–83, 486, 747 N.E.2d 206 (2001) (upholding
Ohio Appellate Court’s remand for application of Ohio
law to parties’ dispute when trial court incorrectly
applied Pennsylvania law); Cudd Pressure Control, Inc.
v. Sonat Exploration Co., 202 S.W.3d 901, 903, 911–12
(Tex. App. 2006) (reversing judgment and remanding
case to trial court to apply Louisiana law when trial
court incorrectly applied Texas law), aff’d, 271 S.W.3d
228 (Tex. 2008). There is no reason to deviate from that
general principle in the present case. The defendants
did not challenge the application of Connecticut law to
the plaintiff’s unfair trade practices claim until after the
trial had concluded, and the plaintiff tried its claim and
prevailed in accordance with that unchallenged legal
framework. The plaintiff was fully entitled to rely on
that framework and had no reason to put forth an alter-
native theory of liability under New Mexico law.16 See,
e.g., Lockett v. Flying U Rodeo Co., California Court of
Appeal, Docket No. A102814 (Cal. App. September 22,
2004) (‘‘[t]ypically, a forum state applies its own law
to the determination of issues that are raised in an
action filed in that state unless a party makes a timely
invocation of a request that the law of another state
should apply’’ [emphasis omitted]); cf. Burns v. Quin-
nipiac University, 120 Conn. App. 311, 318–20, 991
A.2d 666, cert. denied, 297 Conn. 906, 995 A.2d 634(2010). Accordingly, we conclude that the present case
must be remanded for a new trial to allow the parties
to present their cases under the governing law, namely,
the law of New Mexico, and to allow the trial court to
evaluate the facts of the case in light of that law.17
The judgment of the Appellate Court is reversed with
respect to its disposition of the plaintiff’s CUTPA claim
and the case is remanded to that court with direction
to remand the case to the trial court for a new trial on
the plaintiff’s unfair trade practices claim, which shall
be governed by New Mexico law; the judgment of the
Appellate Court is affirmed in all other respects.
In this opinion the other justices concurred.
1
VitalWorks is now known as Amicas, Inc. We nevertheless refer to it as
VitalWorks, which was its name at all times relevant to the present case.
2
General Statutes § 42-110b (a) provides in relevant part: ‘‘(a) No person
shall engage in unfair methods of competition and unfair or deceptive acts
or practices in the conduct of any trade or commerce. . . .’’
The terms ‘‘trade’’ and ‘‘commerce,’’ in turn, are defined in CUTPA as
‘‘the advertising, the sale or rent or lease, the offering for sale or rent or
lease, or the distribution of any services and any property, tangible or
intangible, real, personal or mixed, and any other article, commodity, or
thing of value in this state.’’ General Statutes § 42-110a (4).
3
The parties also raise several additional claims on appeal. In particular,
the plaintiff argues that the Appellate Court incorrectly concluded that
CUTPA was not implicated on the ground that the defendants had not
engaged in any trade or commerce in Connecticut. The plaintiff also chal-
lenges the trial court’s refusal to award punitive damages, full attorney’s
fees, prejudgment interest, and certain costs. Cerner argues that the Appel-
late Court’s decision that the plaintiff cannot maintain a CUTPA claim
against Cerner can be affirmed on the alternative ground that the trial court
improperly imposed liability on Cerner as a successor to VitalWorks. In
light of our resolution of the case, we need not address the parties’ arguments
with regard to CUTPA, Cerner’s alternative ground for affirmance or the
plaintiff’s arguments with regard to punitive damages, attorney’s fees, pre-
judgment interest, and certain costs.
4
During that time, the plaintiff documented patient visits by having dic-
tated notes transcribed at a cost of between $2000 and $2500 per month.
5
In addition to making CUTPA-specific allegations in count six, the plain-
tiff also incorporated by reference the allegations in the other five counts.
6
The trial court determined, however, that the plaintiff had not met the
higher standard of proof applicable to the fraud count. The court also
declined to award any damages on the unjust enrichment count, concluding
that to allow for such damages in the present case ‘‘would . . . create a
windfall profit for the plaintiff, rather than properly compensating [it] for
the defendants’ breach.’’ Finally, although the trial court found that the
defendants had breached the contract, it did not award the plaintiff any
damages on that count. See Western Dermatology Consultants, P.C. v.
VitalWorks, Inc., 146 Conn. App. 169, 173–74, 214, 78 A.3d 167 (2013). With
respect to the remaining counts, the the plaintiff was awarded $83,399.82
for the breach of warranty count, $5100 for the negligent misrepresentation
count, and $157,441.58 for the CUTPA count. Id., 174.
7
See e.g., Titan Sports, Inc. v. Turner Broadcasting Systems, Inc., 981
F. Supp. 65, 71 (D. Conn. 1997) (‘‘[a] CUTPA violation . . . need not neces-
sarily occur in Connecticut, but instead, the violation must be tied to a form
of trade or commerce intimately associated with Connecticut’’ [emphasis
omitted; internal quotation marks omitted]).
8
The trial court denied the plaintiff’s request for punitive damages and
prejudgment interest. See Western Dermatology Consultants, P.C. v.
VitalWorks, Inc., 146 Conn. App. 169, 174, 78 A.3d 167 (2013). The court
did, however, award the plaintiff $496,051.95 in attorney’s fees and $47,340.16
in costs. Id., 174–75.
9
In conducting the choice of law analysis in the present case, both the
trial court and the Appellate Court, citing O’Connor v. O’Connor, 201 Conn.
632, 519 A.2d 13 (1986), first applied the doctrine of lex loci delicti—the
place of injury—before proceeding to the most significant relationship test
set forth in §§ 6 (2) and 145 of the Restatement (Second) of Conflict of
Laws. See Western Dermatology Consultants, P.C. v. VitalWorks, Inc., supra,
146 Conn. 203–206. As we stated in Jaiguay, however, ‘‘we have moved
away from the place of the injury rule for tort actions and adopted the
most significant relationship test found in §§ 6 and 145 of the Restatement
(Second) of Conflict of Laws.’’ Jaiguay v. Vasquez, supra, 287 Conn. 349.
To the extent that there may be some lingering confusion as to whether we
have completely abandoned the lex loci test in tort actions, we take this
opportunity to reiterate that the most significant relationship test outlined
in §§ 6 (2) and 145 of the Restatement (Second) of Conflict of Laws is the
proper test to apply in tort actions to determine which state’s law applies.
10
In its appeal to the Appellate Court, the plaintiff claimed that the trial
court ‘‘abused its discretion in denying the [plaintiff’s request for] punitive
damages, reducing the amount of attorney’s fees and refusing to award it
certain costs,’’ and that the trial ‘‘court erred in declining to award it prejudg-
ment interest.’’ Western Dermatology Consultants, P.C. v. VitalWorks, Inc.,
supra, 146 Conn. App. 176. The Appellate Court concluded that the plaintiff
was not entitled to punitive damages, attorney’s fees or costs, which were
recoverable only under CUTPA, as the plaintiff could not prevail on that
claim. Id., 213. The court also concluded that the plaintiff was not entitled
to prejudgment interest because it was ‘‘foreclosed from recovering under
the contract, either for breach of contract or warranty, such that there
could not be money due to the plaintiff that would have been subject to
prejudgment interest . . . .’’ Id., 214.
In addition, Cerner contended that the trial court improperly imposed
successor liability on it. Id., 212. In light of its conclusion that CUTPA was
not applicable to the present dispute, the Appellate Court did not address
the issue of successor liability. See id., 212–13.
11
The Appellate Court also directed the trial court to render judgment
for the defendants on the other counts, namely, breach of contract, breach
of warranty, and negligent misrepresentation. See Western Dermatology
Consultants, P.C. v. VitalWorks, Inc., supra, 146 Conn. App. 214. The plaintiff
has not challenged the Appellate Court’s judgment as to these counts.
12
In light of our remand for a new trial, we need not address the third
certified question regarding the denial of prejudgment interest, punitive
damages and certain costs. See footnote 3 of this opinion.
13
In support of their argument to the contrary, the defendants rely on
Gomes v. Commercial Union Ins. Co., 258 Conn. 603, 783 A.2d 462 (2001).
Gomes, however, is inapposite to the present case. In Gomes, the plaintiffs’
gas station suffered fire damage following a burglary. Id., 606. Several guests
at an adjacent hotel alerted the hotel clerk about the break-in and the
subsequent fire, and the clerk promised to take care of the situation but
failed to take any action. Id. As a result, both the gas station and the hotel
were damaged by fire and smoke. Id. The hotel’s losses were covered by
its insurance carrier, which, in turn, sought reimbursement from the plaintiffs
in a standard subrogation letter. See id. The plaintiffs brought an action
against the hotel and the insurance carrier, claiming, among other things,
that (1) the hotel clerk had intentionally or negligently prevented a hotel
guest from rendering aid to the plaintiffs, and (2) the act of sending the
letter, coupled with the knowledge of the hotel clerk’s intentional or negligent
acts, constituted a violation of CUTPA. Id., 604–605, 620. The trial court
granted summary judgment, and we affirmed, concluding that, because the
hotel clerk’s conduct was not actionable under either an intentional tort or
negligence theory, the plaintiffs’ CUTPA claim also failed because ‘‘the
factual predicate of the claimed unfair or deceptive act or practice . . .
[did] not exist.’’ Id., 620. Thus, contrary to the defendants’ contention, our
holding in Gomes does not stand for the proposition that a plaintiff cannot
prevail on a CUTPA claim if it also failed to prevail on the underlying claims.
Instead, Gomes holds that a CUTPA claim cannot be sustained when it is
partially predicated on separate wrongful conduct, and when that conduct
has been deemed not to be wrongful as a matter of law. In the present case,
such a determination could not have been made because, unlike the plaintiffs
in Gomes, the plaintiff in the present case did not allege that the claims
of breach of contract, breach of warranty, unjust enrichment, negligent
misrepresentation or fraud, alone or in conjunction with some other acts,
also constituted a violation of CUTPA. Rather, the plaintiff alleged that
certain of the defendant’s acts, taken in the course of the parties’ business
relationship, independently constituted a breach of contract, breach of
warranty, negligent misrepresentation, unjust enrichment, fraud, and an
unfair trade practice.
14
We note that the plaintiff contends that the defendants waived their
right to argue that New Mexico law governs the plaintiff’s unfair trade
practices claim by failing to raise that claim in a proper manner in the trial
court. Specifically, the plaintiff argues that the trial court was not required
to apply New Mexico law to its unfair trade practices claim because the
defendants never argued at trial that New Mexico’s unfair trade practices
law conflicts with CUTPA, and, in Connecticut, the party seeking a choice
of law determination bears the burden of demonstrating such a conflict.
See, e.g., Walzer v. Walzer, 173 Conn. 62, 76, 376 A.2d 414 (1977) (‘‘[w]hen
the applicable law of a foreign state is not shown to be otherwise, we
presume it to be the same as our own’’); Cohen v. Roll-A-Cover, LLC, 131
Conn. App. 443, 465–66, 27 A.3d 1 (‘‘The threshold choice of law issue in
Connecticut, as it is elsewhere, is whether there is an outcome determinative
conflict between applicable laws of the states with a potential interest in
the case. If not, there is no need to perform a choice of law analysis, and
the law common to the jurisdiction should be applied.’’ [Internal quotation
marks omitted.]), cert. denied, 303 Conn. 915, 33 A.3d 739 (2011). The plaintiff
also argues that the defendants, by failing to raise the choice of law issue
prior to trial, and instead waiting to do so until after trial, are estopped
from raising the issue on appeal. The plaintiff, however, never argued in
the Appellate Court that that court should decline to review the defendants’
choice of law claim on the basis of the defendants’ failure to raise it in a timely
and otherwise proper manner in the trial court. As we recently explained, ‘‘[i]t
would undermine the interests of judicial economy, the orderly administra-
tion of justice and principles of fairness to allow a party to stand silent
when the opposing party raises an unpreserved claim in the Appellate Court
and then, after the unpreserved claim has been resolved in favor of the
party that raised it, to allow the party that stood silent to object to review
of the claim for the first time on appeal to this court.’’ Mueller v. Tepler,
312 Conn. 631, 644, 95 A.3d 1011 (2014). Consistent with this principle, we
decline to consider the plaintiff’s claim that the defendants waived their
choice of law claim.
We do note, however, that there is, in fact, an outcome determinative
conflict of laws between the unfair trade practices law of New Mexico and
CUTPA. Specifically, N.M. Stat Ann. § 57-12-1 et seq. (2000 & Supp. 2015),
unlike CUTPA, requires a showing that the alleged false or misleading repre-
sentation was ‘‘knowingly made . . . .’’ N.M. Stat. Ann. § 57-12-2 (D) (Supp.
2015); see, e.g., Stevenson v. Louis Dreyfus Corp., 112 N.M. 97, 100–101,
811 P.2d 1308 (1991) (‘‘[t]he knowingly made requirement is met if a party
was actually aware that the statement was false or misleading when made,
or in the exercise of reasonable diligence should have been aware that the
statement was false or misleading’’ [internal quotation marks omitted]); cf.
Web Press Services Corp. v. New London Motors, Inc., 203 Conn. 342, 363,
525 A.2d 57 (1987) (knowledge of falsity, constructive or actual, need not
be proven under CUTPA).
We note, moreover, that the defendants did not identify the New Mexico
statute’s scienter requirement as the outcome determinative conflict when
it asked the trial court to apply New Mexico law. The defendants argued,
rather, that the New Mexico statute of limitations barred the plaintiff’s claim.
In fact, the statute of limitations for actions brought under the New Mexico
Unfair Practices Act is four years, one year longer than CUTPA’s limitation
period. Compare Nance v. L.J. Dolloff Associates, Inc., 138 N.M. 851, 856,
126 P.3d 1215 (App. 2005) (claim that is founded on violation of statute,
such as New Mexico Unfair Practices Act, that does not specify limitation
period is subject to four year statute of limitations), with General Statutes
§ 42-110g (f) (specifying three year limitation period).
15
We express no opinion as to whether the defendants were engaged in
trade or commerce in this state for purposes of CUTPA.
16
As we have explained, it is only because the plaintiff did not challenge
the propriety of the defendants’ choice of law claim in the Appellate Court
that we are obliged to review that claim in the present appeal. See footnote
14 of this opinion. Generally, however, choice of law claims must be raised
in the trial court in a timely manner; otherwise, they are deemed to be
waived. E.g., Harty v. Cantor Fitzgerald & Co., 275 Conn. 72, 90, 881 A.2d
139 (2005) (‘‘[w]e agree with the plaintiff that [the] issue must be determined
under Connecticut law because, at trial, the defendant failed to raise the
New York choice of law provision as applied to [the statute at issue] and
because the trial court rendered its decision solely by reference to Connecti-
cut law’’); id., 90 n.9 (noting that defendants, having relied on Connecticut
law in their briefs in trial court, cannot later complain that trial court should
have applied another state’s law).
17
We note that none of the parties has specifically requested a new trial
in the event that this court concluded that the trial court should have applied
New Mexico law to the plaintiff’s unfair trade practices claim. If the trial
court had decided the choice of law issue correctly, however, that court
would have been required to apply New Mexico law to the plaintiff’s claim.
In such circumstances, the defendants, having asked the trial court to apply
New Mexico law to the plaintiff’s unfair trade practices claim—presumably
because they believed that that state’s statute of limitations favored them—
have no cause to complain about a remand so that New Mexico law can
be applied. Such a remedy simply places them in the position that they
would have been in if the trial court had decided the choice of law issue
correctly, in accordance with the defendants’ request.