DocketNumber: No. CV 940140932S
Citation Numbers: 1995 Conn. Super. Ct. 6154, 14 Conn. L. Rptr. 308
Judges: D'ANDREA, J.
Filed Date: 6/21/1995
Status: Non-Precedential
Modified Date: 4/18/2021
The plaintiff filed this motion to strike the defendants' special defenses and counterclaim on the grounds that the guaranty provides that the defendants are liable for all interest, default interest, late charges or prepayment premiums; that bankruptcy law does not provide that limitations on actions against principal debtors also protects guarantors; and, the guaranty provides that the plaintiff has no duty to exercise any remedies upon default. "The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of [the pleading] . . . to state a claim upon which relief can be granted. In ruling on a motion to strike, the court is limited to the facts alleged in the [pleading]. The court must construe the facts in the [pleading] most favorably to the non-moving party." (Internal quotation marks omitted.) Novametrix Medical Systems v.BOC Group, Inc.,
The defendants argue that because South Norwalk is in bankruptcy, interest, default interest, late charges and any prepayment premiums cannot accrue pursuant to § 506(b) of the Bankruptcy Code. The plaintiff argues that the bankruptcy law invoked by the defendants only applies to South Norwalk and not to defendants as guarantors.
The court in FDIC v. LaPierre,
In the present case the defendants allege that South Norwalk is in bankruptcy, and provide authority involving instances where a bankruptcy court has exercised jurisdiction over non-debtor guarantors. However, the defendants have not alleged that the bankruptcy court has asserted any jurisdiction over the obligations the defendants have incurred through the guaranty at issue. Furthermore, in paragraph 1, the guaranty expressly provides for the payment of interest, late charges, prepayment fees, penalties and premiums. Therefore,
The plaintiff argues that the second special defense should be stricken because the guaranty provides that the plaintiff had no duty to exercise any remedies to reduce the risk of the defendants. The defendants contend that the plaintiff led the defendants to believe that they would not be defaulted while they attempted to refinance, and that the defendants relied on this to their detriment, thus equitably estopping the plaintiff from enforcing the guaranty.
"Successful assertion of the doctrine of equitable estoppel requires proof of two elements: (1) a statement or action by the party against whom estoppel is claimed designed to induce reliance on that statement or action; and (2) a changed position by the second party in reliance on the act or statement of the first that results in loss or injury to the second party. . . . `For estoppel to exist, there must be misleading conduct resulting in prejudice to the other party.'" Rosenfield v. MetalsSelling Corp.,
The defendants have alleged in their second special defense that the plaintiff insisted that the defendants seek refinancing rather than exercising its remedies under the guaranty, that the defendants relied upon this, and that they were injured in that the interest, default interest, late charges and prepayment premiums continued to accrue. Therefore, the plaintiff's motion to strike the defendants' second special defense is denied. CT Page 6157
Regarding the counterclaim, the plaintiff argues that the plaintiff cannot breach the covenant of good faith and fair dealing by exercising its rights under the guaranty. The defendants contend that the plaintiff breached the covenant by inducing the defendants to incur greater liability on the debt service charges.
"Every contract carries an implied covenant of good faith and fair dealing requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement." Habetz v. Condon,
The defendants allege in their counterclaim that the plaintiff's sole purpose in not exercising its available remedies was to increase the debt service guaranteed by the defendants. Although the guaranty provides that the plaintiff has no duty to assert a remedy to reduce the risk to the defendants, the guaranty does not provide that the plaintiff may forego or delay its remedies for the purpose of increasing the defendants' liability on the guaranty. The defendants' allegations that plaintiff's actions were intended solely to increase the defendants' liability are sufficient to support a cause of action based on a violation of the duty of good faith and fair dealing. Accordingly, the plaintiff's motion to strike the defendants' counterclaim is denied.
So Ordered.
D'ANDREA, J.