Connecticut Cases January 07, 2020: Companions & Homemakers, Inc. v. A&B Home Care Solutions, LLC

Case Description

UNPUBLISHED OPINION

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Shapiro, Robert B., J.T.R.

MEMORANDUM OF DECISION

ROBERT B. SHAPIRO JUDGE TRIAL REFEREE

In this commercial dispute between home care providers, evidence was presented to the court at a bench trial on fourteen days in May, June, and July 2019. Thereafter, in lieu of oral argument, pursuant to an agreed briefing schedule, the parties submitted post-trial memoranda, including replies, which were filed on November 12, 2019. After consideration, the court issues this memorandum of decision.

I

Background

The court summarizes below the plaintiff’s allegations. In the amended substitute complaint (#202) (complaint), the plaintiff, Companions And Homemakers, Inc. (Companions) alleges that it is the largest provider of Medicaid funded eldercare services in Connecticut through the Connecticut Home Care Program for Elders (CHCPE), and the defendant, A&B Home Care Solutions, LLC, d/b/a Northwest Homecare (A&B), is the third largest provider of such services. Companions invests in the recruitment and development of a homecare workforce to provide these services and expends resources to make a true "match" between a client’s needs and an employee caregiver’s skill, experience, personality, interests and expertise and on developing the relationship between the client and caregiver. The matches and caregivers are its primary business assets.

Beginning in 2016 and continuing into 2017, the Connecticut Department of Social Services (DSS) mandated changes to the entire billing and timekeeping system (Electronic Visit Verification system or EVV) utilized by Medicaid homecare providers, with a final date of compliance of January 1, 2017. Companions, A&B, and other homecare providers believed that they would be unable to implement EVV system within the short deadline. A&B joined Companions in presenting a petition to DSS seeking a declaratory ruling as to the mandatory use of EVV. When the petition was not acted on by DSS, Companions and other providers, including A&B, joined to commence suit in November 2016 to challenge EVV’s validity.

Companions contends that A&B falsely represented to Companions that it had a uniform interest in the outcome of the suit and that, in reality, A&B had been working to implement EVV to prepare to divert clients and caregivers away from Companions and to itself. While A&B privately took steps to implement the new procedures, it again confirmed to Companions that it could not comply or use the procedures on the January 1, 2017 mandatory use date or any time soon thereafter, and that it fully supported Companions in the suit. Companions alleges that A&B intentionally misled the Companions as to its ability to comply so that the plaintiff, and not A&B, would be threatened with removal from the Medicaid program and A&B could capture the plaintiff’s caregiver-client matches for itself

Companions also alleges that, in December 2016, Companions gave written notice to A&B as to the existence of restrictive covenants between the plaintiff and its employees. Companions alleges that A&B’s president, Aron Galinovsky, told Companions that A&B would not interfere with the plaintiff’s agreements or take any caregiver-client match away from the plaintiff so that Companions would remain engaged in the suit, with the aim of achieving Companions’ permanent removal from the Medicaid program. After DSS informed Companions on January 3, 2017 that it would be removed from the Medicaid program on February 2, 2017, and contrary to its agreement to forego such activities, A&B began interfering with Companions’ agreements with its employees, by soliciting and hiring the plaintiff’s caregivers to exploit the matches between them and the plaintiff’s clients. In addition, A&B retained private counsel and directed plaintiff’s caregivers to speak with that counsel in order to break their agreements with Companions.

Companions claims that it has suffered damages as a result of A&B’s conduct, including the loss of employees, client business, and damage to the relationship and goodwill Companions has with its clients and vendors.

The complaint sets forth two counts: Count One, tortious interference with contractual relations, and Count Two, violation of the Connecticut Unfair Trade Practices Act (CUTPA).

Additional references to the factual background are discussed below.

II

Discussion

In a case tried to the court, "[t]he ... judge, as the trier of facts, is the sole arbiter of the credibility of witnesses and the weight to be given to their testimony." (Internal quotation marks omitted.) Taylor v. Commissioner of Correction, 324 Conn. 631, 637, 153 A.3d 1264 (2017). "[I]t is well established that it is the exclusive province of the trier of fact to make determinations of credibility, crediting some, all, or none of a given witness’ testimony." (Internal quotation marks omitted.) Gonzalez v. State Elections Enforcement Commission, 145 Conn.App. 458, 475, 77 A.3d 790, cert. denied, 310 Conn. 954, 81 A.3d 1181 (2013).

"It is well settled that the trier of fact can disbelieve any or all of the evidence proffered ... and can construe such evidence in a manner different from the parties’ assertions." State v. DeJesus, 236 Conn. 189, 201, 672 A.2d 488 (1996). The trier is not bound by the uncontradicted testimony of any witness. See Mather v. Griffin Hospital, 207 Conn. 125, 145, 540 A.2d 666 (1988). "Testimony that goes uncontradicted does not thereby become admitted or undisputed; [citation omitted] nor does the strength of a witness’s belief raise it to that level." Stanton v. Grigley, 177 Conn. 558, 563, 418 A.2d 923 (1979).

A

Tortious Interference (Count One)

A&B argues that Companions has not proved that A&B’s conduct was either tortious or malicious, and that Companions has not proved its damages claim.

"A claim for tortious interference with contractual relations requires the plaintiff to establish (1) the existence of a contractual or beneficial relationship, (2) the defendants’ knowledge of that relationship, (3) the defendants’ intent to interfere with the relationship, (4) the interference was tortious, and (5) a loss suffered by the plaintiff that was caused by the defendants’ tortious conduct." (Internal quotation marks omitted.) Landmark Inv. Grp., LLC v. CALCO Const. & Dev. Co., 318 Conn. 847, 864, 124 A.3d 847 (2015).

Concerning tortious interference, the Supreme Court has stated that "not every act that disturbs a contract or business expectancy is actionable ..." (Internal quotation marks omitted.) Daley v. Aetna Life & Casualty Co., 249 Conn. 766, 805, 734 A.2d 112 (1999). The Supreme Court "has long recognized a cause of action for tortious interference with contract rights or other business relations." Blake v. Levy, 191 Conn. 257, 260, 464 A.2d 52 (1983). "[F]or a plaintiff successfully to prosecute such an action it must prove that the defendant’s conduct was in fact tortious. This element may be satisfied by proof that the defendant was guilty of fraud, misrepresentation, intimidation or molestation ... or that the defendant acted maliciously." (Citations omitted; internal quotation marks omitted.) Id., 261.

"The plaintiff in a tortious interference claim must demonstrate malice on the part of the defendant, not in the sense of ill will, but intentional interference without justification." (Internal quotation marks omitted.) Daley v. Aetna Life & Casualty Co., supra , 249 Conn. 806.

The court makes the following findings and credits the following evidence, except as noted. DSS operates the CHCPE program, which provides in-home assistance to Connecticut residents over the age of 65 who are at risk of nursing home placement or meet other criteria. Through CHCPE, and pursuant to a contract with DSS called a Provider Enrollment Agreement, Companions is the largest provider of Medicaid and state-funded homecare services in Connecticut. In 2016, it had approximately 1, 400 CHCPE clients. A&B is a competitor of Companions and also has a provider agreement with DSS. A&B purchased Northwest Homecare, Inc. in February 2016 and actively sought to expand its Medicaid business in Litchfield County. Provider agencies like Companions and A&B provide non-medical personal, homemaking, and companion care to clients. Caregivers are employees of provider agencies.

DSS contracts with various access agencies which assist DSS in operating the CHCPE by assessing clients’ functional status, developing individualized plans of care, arranging for that care to be provided by a provider agency, and monitoring ongoing care. Typically, a care manager at an access agency will offer a client a choice of provider agencies to meet the client’s needs.

Companions requires its caregivers to execute a confidentiality, nonsolicitation and noncompetition agreement (noncompete) when they are hired, which provides that a caregiver may not work privately for a client they are matched with through Companions during the course of provision of services and for a period of six months after either the caregiver or the client leaves Companions. A caregiver may work for other providers while working for Companions or A&B. See Exhibit 2.

The matches made between clients and caregivers are significant business assets for both Companions and A&B. A&B’s Employee Handbook reflects this as it contains a non-solicitation clause prohibiting A&B’s caregivers from soliciting and accepting business on behalf of any other company for any A&B client within twelve months. See Exhibit 48.

In March 2016, DSS notified providers that it was requiring providers to use EVV, an electronic time capture system that provides scheduling, payroll and billing functions. Initially, the deadline to implement EVV was July 1, 2016; eventually, the final compliance date for implementation of EVV by providers became January 1, 2017.

Various providers expressed concerns about operational problems with EVV. Companions contacted the largest CHCPE providers, including A&B, to ascertain their interest in joining a legal challenge to DSS’ requirement that EVV be used by providers. Companions offered to act as lead plaintiff and to fund all costs, including legal fees. Three of the four other largest providers, including A&B, agreed to join the legal challenge, and a fifth provider also joined.

Aron Galinovsky, A&B’s chief executive officer, represented to Companions that he agreed with the group’s legal strategy and requested to be included in the legal challenge to EVV. See Exhibit 13 (consent to representation letter). He presented a list of operational concerns about EVV, and asserted that A&B had not been given enough time to train over 650 employees prior to "going live" in the use of EVV. See Exhibits 7, 9. He expressed concerns about being able to bill or pay correctly through EVV. By email to the group’s legal counsel, David Cappelletti, A&B’s chief financial officer, also addressed A&B’s concerns with the EVV implementation process. See Exhibit 84.

The provider group first filed a petition for a declaratory ruling. Subsequently, it filed a verified complaint in the Superior Court seeking injunctive relief from DSS’s implementation of EVV and to stay such implementation. See Exhibits 10, 14 (verified complaint). In the verified complaint, the plaintiffs, including A&B, alleged that the providers and their clients would be irreparably harmed because the providers were unable to implement EVV and would not be able to provide services to their clients if they were not paid by DSS. Galinovsky approved the filing of the verified complaint after it was provided to him for review.

Simultaneously with commencing suit with the verified complaint, the providers, including A&B, agreed to send a letter dated November 16, 2016 (Exhibit 16) (November 16 letter) to DSS, in which they stated that each of them had found the platform for EVV to be unworkable without a software interface; and that each had concluded that they could not meet the then December 1, 2016 deadline for implementation of EVV. They advised DSS that they expected to be able to bill and be paid outside the EVV system until the issues with EVV were resolved. They also advised DSS that if DSS would not permit them to continue to bill through the old system, DSS needed to give the providers notice so that they could end services with their clients. The court does not credit Galinovsky’s trial testimony about the significance of its contents.

At trial, Galinovsky agreed that, concerning the legal challenge, there was an obligation of trust between the participants and that, if any conflict arose with respect to A&B’s participation in the legal challenge, he was obligated to advise of it in writing.

During the course of the petition and litigation process, while continuing to be a part of the coalition of provider/plaintiffs, A&B began to convert to implementing EVV, and began to use EVV by submitting claims and billing through the system and training its staff on the use of EVV. By November 2016, while the other provider/plaintiff’s billed zero through EVV, A&B already had billed over $234, 000 through EVV but did not disclose this to Companions. See Exhibit 17. Galinovsky hid this activity from Companions while knowing that Companions was relying on its representations about its expressed concerns with its ostensible problems with EVV. Companions relied on A&B’s representations in the course of the legal challenge to EVV. This activity by A&B also undermined the representations made by A&B in the verified complaint.

Companions learned, for the first time, that A&B was billing claims through EVV, from opposing counsel, DSS’s attorney, at a court hearing on November 21, 2016. Companions then confronted A&B about this, but, in order to remain as a plaintiff in the litigation, Galinovsky stated that A&B had only used EVV for testing and remained convinced it was unworkable. On December 8, 2016, he provided an email detailing operational problems and stating that A&B had billed approximately $300, 000 through EVV. See Exhibit 19. This again misled Companions as A&B continued to implement EVV, which demonstrated to DSS that A&B was ready to take business from noncompliant providers.

On December 15, 2016, the court (Moukawsher, J.) issued a decision denying prejudgment remedy. See Exhibit 21. On December 21, 2016, Galinowsky advised by email that A&B would like to be part of an appeal of that decision by the plaintiffs/providers. An appeal was filed, including A&B as a party/appellant. See Exhibit 24.

Unbeknownst to Companions and the other appellants, Galinovsky concealed that, on December 16, 2016, the very next day after the issuance of the court’s decision, he was directly communicating with Kathy Bruni, the Director of DSS’s Community Options Unit, about A&B’s successful efforts to implement EVV. See Exhibit 22 (December 16 email). Among his various statements to Bruni, he advised that A&B was doing everything it could possibly do to "use, bill, and work with" the EVV system and "You can see the history and see that with each passing week we utilize the system more and more and have billed through the system."

Obviously, Bruni’s position was adverse to that being taken in the litigation by the plaintiffs/providers, including A&B, which included that they could not comply with the January 1, 2017 deadline to use EVV. Nevertheless, Galinovsky did not advise Companions of this conflict or of his communications with Bruni. Instead, he played both sides of the litigation. This enabled him to continue to receive strategic information from the plaintiffs/providers group and to plan to benefit at their expense from their nonuse of EVV. At the same time, his communications to Bruni negatively impacted the bargaining power of the other plaintiff/providers.

Notably, in the December 16 email, Galinovsky did not request a delay in EVV implementation, which he later stated was his only goal. As of December 23, 2016, A&B had submitted over $715, 000.00 in claims through EVV, more than any other provider. In contrast, the other plaintiffs/providers in the DSS litigation had not billed a single claim through EVV. See Exhibit 25.

On December 26, 2016, Companions sent a letter to other homecare providers, including A&B, in which it noted its policy of refraining from accommodating clients who ask Companions to hire a caregiver of another agency or hiring caregivers who claim they can bring Companions another agency’s client. It also noted that it had non-compete agreements with all its caregivers and clients, which remained enforceable for several months beyond the termination of a matched relationship. Companions also stated that any interference with its agreements or legal rights would be addressed swiftly using any and all available legal resources. See Exhibit 26.

Companions’ general counsel, David Denvir, sought and received Galinovsky’s agreement that A&B would not take Companions’ matches.

In reliance on assurances from A&B and the other providers that they would not take Companions’ matches, and after reviewing its strategy with them, on December 29, 2016, Companions sent a letter to the DSS Commissioner. In this letter, it reiterated concerns previously addressed in the November 16 letter, and advised that it could not utilize a system which violated existing laws and planned to continue to provide services outside EVV until all provider concerns were resolved and that it expected to be paid therefor. See Exhibit 28.

Subsequent to the filing of the appeal, Bruni and others at DSS decided to terminate Companions’ Provider Enrollment Agreement. In advance thereof, Bruni spoke to A&B about taking on Companions’ clients. At the time, Companions and A&B were the largest providers operating in Litchfield County. As a result of terminating Companions’ provider enrollment agreement, Companions’ 1, 400 CHCPE clients would have be reassigned to other providers when the termination was effective, thirty days after notification to Companions.

DSS’s decision to terminate Companions was based, in part, on its knowledge that A&B had successfully implemented EVV, that DSS could rely on A&B to take on Companions’ clients in a difficult service area, and that A&B was willing to hired matched caregivers away from Companions so clients would agree to the reassignment.

On January 3, 2017, DSS sent a letter to Companions providing notice that its Provider Services Agreement would be terminated effective February 3, 2017. See Exhibit 30 (January 3 letter). According to the January 3 letter, termination was based on Companions’ refusal to comply with the requirements of EVV. The January 3 letter referred to Companions’ December 29, 2016 letter (Exhibit 28).

In response to the January 3 letter, Companions communicated to its clients and caregivers and noted that it was working to be reinstated and would continue providing services until February 3. See Exhibit VV. Client access agencies, such as Connecticut Community Care (CCC), initiated efforts to transition Companions’ clients to other providers. A&B was aware that Companions was seeking reinstatement as a CHCPE service provider.

As of January 6, 2017, A&B had billed a total of over $1.0 million through EVV, representing a significant increase from the amount claimed by December 23, 2016. See Exhibit 31. As discussed above, this continuing implementation of EVV by A&B belied its previous representation that it had only tested the system on a limited basis.

At the time, Companions was unaware that A&B was operating as Northwest in Litchfield County. A&B immediately began taking Companions’ matches. See Exhibits 49-50 (discovery responses and Intake Worksheets; Mary Lou Brown, client intake dated January 6, 2017). A&B admitted that it took at least 80 to 85 clients from Companions in its Litchfield office in January 2017. When it did so, A&B had never received this volume of referrals previously, and did not have sufficient caregivers to provide services.

Mediation was scheduled for January 17, 2017 in the action against DSS. A&B did not contact Companions to let its co-plaintiff know that DSS, its adversary in the pending appeal, was shifting Companions’ clients to A&B. Instead, on January 13, 2017, Galinovsky sent an email to his staff, in its various locations, including Litchfield and New Haven, listing the Subject as: "Caregivers," and advising how to engage Companions’ caregivers. See Exhibit 32. In relevant part, Galinovsky informed his staff:

"I just got off the phone with Kathy [Bruni] at DSS we spoke about the fact that the clients we are receiving from ... Companions are reluctant to transfer over until February 3rd because of a letter they received from ... Companions. The second issue we discussed was the non-compete agreement that each caregiver signed with ... Companions. The answer to the first question is we need to tell the clients that we have been instructed to get all of the clients situated in an orderly fashion since everybody cannot come over on the 3rd of February. If there is still resistance please do not get into an argument with the potential new client ... The answer to the second question is that DSS has set up a telephone line ... where attorneys] are ready to represent the caregivers for free as it pertains to the non-compete agreement they signed with ... Companions. Please feel free to pass this number on to the caregivers. That does not mean we actively start soliciting caregivers, we still go about it in a professional way when we introduce ourselves to the client. We are always willing, ready and able to accept new applicants.’ Lastly, if anyone complains about our pay rates, please have them show their current paycheck and match that rate."

Bruni testified that Galinovsky asked about the attorneys and she acknowledged she was aware that A&B was offering to hire matched caregivers. Galinovsky acknowledged that he contacted Bruni to give her a status update on the transfer of clients. He did not advise Companions about his communication with Bruni.

On the very same day, Friday, January 13, 2017, that Galinovsky spoke to Bruni and sent his email message to his staff about their conversation concerning Companions’ caregivers, Galinovsky received an email from Denvir asking if Galinovsky would be attending the mediation scheduled for the following Tuesday or would send a detailed written statement about problems A&B was having with EVV for use at the mediation. Denvir advised that DSS would be coming to the mediation to bargain. See Exhibit 34 (email string). Galinovsky agreed to provide "bullet points" by the following Monday at noon. See Exhibit 34.

Galinovsky’s conduct was deceptive, in that he misled Companions as the extent of A&B’s continuing problems using EVV and did not disclose that A&B was making a concerted effort to take Companions’ matches. Galinovsky also neither advised Denvir that he was speaking to their adversary in the litigation nor that he and Bruni had discussed Companions’ noncompete agreements with its caregivers.

By email message on Sunday January 15, 2017, Galinovsky advised that he was not going to be at the mediation, stating, "we should probably stay away from things as we will only hurt your case since we have billed and received nearly 800k." See Exhibit 35. The reference to "your case" ignored the fact that A&B remained a named plaintiff and party to the appeal, and never withdrew.

On the day before the mediation, January 16, 2019, Galinovsky sent Denvir a list of "major issues" concerning EVV which he claimed A&B was "struggling with." See Exhibit 36. Regarding the mediation, he stated, "we have decided not to hinder the process. Hope you can understand our reasoning."

On January 16, 2017, Denvir called Galinovsky because he believed that A&B had taken two of Companions’ matches in New Haven. Galinovsky responded that if that had happened, it was a mistake, and he would direct his staff that Companions’ matches were not to be taken. This was also misleading, since Galinovsky did not disclose that A&B was in the process of taking 80 to 85 clients from Companions and was hiring Companions’ caregivers.

Denvir also asked Galinovsky whether A&B had received any ‘extra’ attention" from DSS. See Exhibit 3U. Galinovsky again concealed his communications with Bruni concerning Companions’ caregivers and his instructions to his staff about them, and that DSS had been reassigning Companions’ clients to A&B for at least the last 10 days.

Later the same day, in response to Denvir’s request for settlement authority from A&B for use at the mediation, Galinovsky sent another email to Denvir, stating that "[w]e would be OK if they extended this 3 months and made the portal available for those 3 months, this would give us enough time to get everything straightened out on our end. Anything else you obtain is extra as far as we are concerned." See Exhibit 37. Later on January 16, 2017, in another email, he gave full settlement authority to Companions, stating that A&B was "comfortable passing the ability to settle the case to David Denvir or a representative from ... Companions. We are fully onboard with the requests being presented to the Mediator and will accept the decisions made by ... Companions on our behalf." See Exhibit 38.

On the next day, January 17, 2017, Denvir advised Galinovsky that the case was not settled and was scheduled for a second day of mediation. Galinovsky asked Bruni to provide a memorandum concerning Talking Points regarding Companions and Bruni sent it to him. See Exhibit 39 (Talking Points Memo). The Talking Points Memo contained the contact information for additional attorneys who were willing to represent caregivers and stated that other "provider agencies have indicated their willingness to take on both caregivers and clients to provide continuity of care to our clients."

Galinovsky then sent his staff the names and phone numbers of the additional attorneys who were described as "willing to help the caregivers when they are threatened with a law suit by ... Companions." See Exhibit 40. A&B’s deceptive conduct was designed to keep Companions from being reinstated as a CHCPE provider and to take its matches. At the same time, A&B misled Companions into believing that it was in a position of bargaining strength, while undermining its position vis a vis DSS.

On January 20, 2017, Galinovsky was contacted by Denvir concerning settlement and confirmed that A&B did not need an extension until April 2, 2017 to continue to bill on paper. See Exhibit 41. On the same day he attempted to reach Bruni. See Exhibit 42.

When Galinovsky reviewed the Stipulated Judgment (Exhibit 44), which provided for Companions’ reinstatement, and allowed Companions until April 2, 2017 to fully utilize EVV, he objected to it, stating that its "terms appear to serve the interests only of Companions ..., and are to the detriment of A&B Homecare." See Exhibit 45. Galinovsky conceded that every day that the case was not settled permitted A&B to obtain additional clients from Companions. A&B’s objection to the settlement, after providing settlement authority, was an attempt to keep Companions from being reinstated.

On January 23, 2017, Companions’ president, Linda Grigorek, called Galinowsky to complain about A&B’s conduct. Galinovsky’s statements to her included that A&B did not have a non-compete with Companions, and that "you guys were going out of business according to the state." See Exhibit 85 (transcript).

Thus, A&B assured Companions that A&B could not implement EVV, the new recording system, and, consequently, comply with DSS’ recently promulgated requirements and deadline concerning the use of EVV; and (1) A&B implemented and began using the system, and (2) A&B conveyed to Companions that it had a common interest in the prosecution of the litigation, (3) which concerned the required implementation of EVV, and (4) Companions and A&B are two of the largest providers of home care assistance. See Reyes v. Chetta, 143 Conn.App. 758, 764, 71 A.3d 1255 (2013) (setting forth factors as to whether interference is improper): "(a) the nature of the actor’s conduct, (b) the actor’s motive, (c) the interests of the other with which the actor’s conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (f) the proximity or remoteness of the actor’s conduct to the interference and (g) the relations between the parties." (Internal quotation marks omitted.)

The court finds that A&B’s deceptive conduct was actuated, at least in part, by an improper purpose, to interfere with Companions’ provider enrollment agreement with DSS and to drive Companions from the CHCPE program, which would render Companions ineligible to provide home assistance services, through its caregivers, to elderly beneficiaries who make up a significant portion of Companions’ client base.

Such conduct amounts to misrepresentation, and is tortious. A promissory representation (i.e., a statement of future intention) is actionable on a theory of fraudulent misrepresentation if, at the time the statement is made, the speaker did not intend to honor the promise. See Paiva v. Vanech Heights Const. Co., 159 Conn. 512, 515, 271 A.2d 69 (1970). Such conduct was also malicious since it amounted to intentional interference without justification. See Landmark Inv. Grp., LLC v. CALCO Const. & Dev. Co., supra , 318 Conn. 871 (intent and malice may be inferred from defendant’s conduct or acts in light of the circumstances of the particular case, where defendant’s actions were part of a concerted effort to intentionally interfere with a contract, beyond any form of accepted business practice, so that defendant could benefit itself); Daley v. Aetna Life & Casualty Co., supra , 249 Conn. 806.

While Companions and A&B are competitors, they joined together as plaintiffs in the DSS litigation based on representations. While, in general, competition is to be encouraged, deception and unfair competition should not to be condoned.

As discussed above, for a tortious interference claim, a plaintiff must prove a causal link between a loss suffered by the plaintiff and a defendant’s tortious conduct. See Landmark Inv. Grp., LLC v. CALCO Const. & Dev. Co., supra , 318 Conn. 864. "[C]ausation has two components. The first component, causation in fact, requires us to determine whether the injury would have occurred but for the defendant’s conduct ... The second component, proximate causation, requires us to determine whether the defendant’s conduct is a substantial factor in bringing about the plaintiff’s injuries ... That is, there must be an unbroken sequence of events that tied [the plaintiff’s] injuries to the [defendant’s conduct]." (Internal quotation marks omitted.) Bozelko v. Papastavros, 323 Conn. 275, 283, 147 A.3d 1023 (2016).

A&B’s conduct undermined Companions’ position in the DSS litigation and demonstrated to DSS that it was prepared to utilize EVV and to serve clients in a geographically difficult service area (Litchfield County). Without A&B’s willingness to take Companions’ matches, Companions would not have lost the 80-85 clients taken by A&B. A&B’s tortious conduct was a proximate cause of losses incurred by Companions, in that, as a result, DSS terminated Companions’ provider enrollment agreement, reassigned clients away from Companions, stopped referring new clients to Companions, and did not rescind the notice of termination until after the mediated settlement.

The court finds also that A&B interfered with Companions’ agreements with its caregivers by assuring Companions that it would not take Companions’ matches, but (1) then did so anyway (2) with knowledge that noncompete agreements existed between the caregivers and Companions, and (3) A&B provided access to legal counsel to caregivers to assist them in avoiding their obligations under the noncompete agreements.

Such conduct also amounts to misrepresentation, and is tortious. See Arian Enterprises, LLC v. Lawson, Superior Court, judicial district of Middlesex, Complex Litigation Docket, Docket No. X04 CV 05 4004655 (March 7, 2006, Beach, J.) ("[D]efendant ... knew of the non-compete clause, encouraged violation of the agreement and knowingly made misrepresentations designed to conceal [the] arrangement[.]").

A&B also argues that the non-compete agreements that Companions alleges that A&B interfered with are unenforceable. As previously discussed in the court’s May 2, 2019 ruling on the motions in limine (#198.86), the Appellate Court has addressed the issue of whether an unenforceable contract may be the basis of a claim for tortious interference with contractual relations, stating that "The agreement need not ... be enforceable by the plaintiff as a contract ... [T]he law not only does not restrict its protection to rights resting on enforceable contractual relationships, but it also forbids unjustifiable interference with any man’s right to pursue his lawful business or occupation and to secure to himself the earnings of his industry ... Thus, it is not essential to the cause of action that the tort has resulted in an actual breach of contract." (Citations omitted; internal quotation marks omitted.) Wellington Systems, Inc. v. Redding Group, Inc., 49 Conn.App. 152, 167-68, 714 A.2d 21, cert. denied, 247 Conn. 905, 720 A.2d 516 (1998). Accordingly, the court need not determine whether the noncompete agreements are enforceable.

While A&B argues that Companions has not proved that A&B had a copy of its non-compete agreements or knew of the particular contractual provisions at issue, as discussed above, Companions provided notice to A&B, and other providers, in the December 26, 2016 letter (Exhibit 26), which summarized the terms of the noncompete agreements, noting that they remained "enforceable several months beyond the termination of the matched relationship."

Although A&B argues that Companions failed to prove that A&B caused specific breach of a particular noncompete agreement, the Supreme Court has stated that "it is not necessary for a plaintiff to prove that a contract was breached in order to recover on a claim of toritous interference." Landmark Inv. Grp., LLC v. CALCO Const. & Dev. Co., supra , 318 Conn. 866.

Here, Companions was not required to prove that A&B’s conduct caused the caregivers to breach the noncompete agreements; rather it need only prove that it suffered a loss as a result of the A&B’s tortious conduct, which the plaintiff has done by proving that A&B hired the plaintiff’s caregivers after agreeing not to do so.

A&B also contends that an agreement not to hire Companions’ caregivers "likely would violate antitrust laws and therefore be unenforeceable." See A&B’s post-trial brief (#226), p. 36, citing a general antitrust guide available on-line and a federal district court decision from California. "Whe[n] an issue is merely mentioned, but not briefed beyond a bare assertion of the claim, it is deemed to have been waived ..." (Internal quotation marks omitted.) Elec. Contractors, Inc. v. Dep’t of Educ., supra , 303 Conn. 444. In contrast to the briefing there concerning antitrust, which addressed "the standard of review, the statutory provisions allegedly violated, the portions of the complaint containing the antitrust allegations, the manner in which the antitrust statutes were violated and the relevant legal precedent," id. , here, A&B’s antitrust argument is merely mentioned, without accompanying analysis. The court is not required to consider this argument.

B

CUTPA (Count Two)

"[General Statutes] § 42-110b(a) provides that [n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise- in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons] ... All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three ... Thus a violation of CUTPA may be established by showing either an actual deceptive practice ... or a practice amounting to a violation of public policy ... In order to enforce this prohibition, CUTPA provides a private cause of action to [a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice ..." (Internal quotation marks omitted.) Harris v. Bradley Memorial Hospital & Health Center, Inc., 296 Conn. 315, 350-51, 994 A.2d 153 (2010).

"Although CUTPA is primarily a statutory cause of action; see General Statutes § 42-110b; it equally is recognized that CUTPA claims may arise from underlying causes of action, such as contract violations or torts, provided the additional CUTPA elements are pleaded." Sturm v. Harb Development, LLC, 298 Conn. 124, 139, 2 A.3d 859 (2010).

"CUTPA, by its own terms, applies to a broad spectrum of commercial activity ... Trade or commerce ... is broadly defined 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 ... The entire act is remedial in character ... and must be liberally construed in favor of those whom the legislature intended to benefit." (Citations omitted; internal quotation marks omitted.) Willow Springs Condominium Assn., Inc. v. Seventh BRT Development Corp., 245 Conn. 1, 42, 717 A.2d 77 (1998). See General Statutes § 42-110a(4).

A&B contends that the plaintiff failed to prove a violation of CUTPA. In Count Two, the plaintiff incorporates by reference the allegations set forth in Count One, discussed above. See Sportsmen’s Boating Corp. v. Hensley, 192 Conn. 747, 757, 474 A.2d 780 (1984) ("[I]t is difficult to conceive of a situation where tortious interference would be found but a CUTPA violation would not")."[T]his case does not present such a situation." Elliot v. Staron, 46 Conn.Supp. 38, 50, 735 A.2d 902 (Super.Ct. 1997), aff’d, 54 Conn.App. 632, 736 A.2d 196 (1999), appeal dismissed, 255 Conn. 18, 761 A.2d 1291 (2000). A&B’s tortious and deceptive conduct, discussed above, violated CUTPA.

C

Damages

As discussed above, the court finds that Companions suffered an actual loss caused by A&B’s conduct. An award of compensatory damages is appropriate where tortious conduct causes an actual loss. See Landmark Inv. Grp., LLC v. CALCO Const & Dev. Co., supra , 318 Conn. 874. Also, a finding of actual loss may support an award of punitive damages. See Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 34, 761 A.2d 1268 (2000).

In addition, under CUTPA, damages may be awarded where a plaintiff proves that the defendant caused ascertainable loss. "The term loss necessarily encompasses a broader meaning than the term damage, and has been held synonymous with deprivation, detriment and injury ... To establish an ascertainable loss, a plaintiff is not required to prove actual damages of a specific dollar amount ... [A] loss is ascertainable if it is measurable even though the precise amount of the loss is not known." (Internal quotation marks omitted.) Coppola Const Co. v. Hoffman Enterprises Ltd. P’ship, 157 Conn.App. 139, 197, 117 A.3d 876, cert. denied, 315 Conn. 982, 122 A.3d 631 (2015). See DiNapoli v. Cooke, 43 Conn.App. 419, 428, 682 A.2d 603, cert. denied, 239 Conn. 951, 686 A.2d 124 (1996), cert. denied, 520 U.S. 1213, 117 S.Ct. 1699, 137 L.Ed.2d 825 (1997) (plaintiff proved actual loss, but the court could not mathematically compute the precise or approximate pecuniary compensation, or damages, for that loss).

Awards of punitive damages and attorneys fees are also authorized by CUTPA. See General Statutes § § 42-110g(a) and (d).

"It is axiomatic that the burden of proving damages is on the party claiming them." (Internal quotation marks omitted.) Lawson v. Whitey’s Frame Shop, 241 Conn. 678, 689, 697 A.2d 1137 (1997). "The determination of damages involves a question of fact ..." Id., 690. "When damages are claimed, they are an essential element of the plaintiff’s proof and must be proved with reasonable certainty ..." (Internal quotation marks omitted.) Argentinis v. Fortuna, 134 Conn.App. 538, 549, 39 A.3d 1207 (2012). "If the question is whether the plaintiff would have succeeded in attaining a prospective business transaction in the absence of [the] defendant’s interference, the court may, in determining whether the proof meets the requirement of reasonable certainty, give due weight to the fact that the question was made hypothetical by the very wrong of the defendant." (Internal quotation marks omitted.) Am. Diamond Exch., Inc. v. Alpert, 101 Conn.App. 83, 97, 920 A.2d 357, cert. denied, 284 Conn. 901, 931 A.2d 261 (2007).

"It is well settled that the trier of fact can disbelieve ... expert testimony, and can construe such evidence in a manner different from the parties’ assertions." (Internal quotation marks omitted.) State v. Alvarado, 62 Conn.App. 102, 112, 773 A.2d 958, cert. denied, 256 Conn. 907, 772 A.2d 600 (2001). The "court is not required to accept uncontradicted expert testimony. The court might reject it entirely as not worthy of belief or find that the [expert] opinion was based on subordinate facts that were not proven." (Internal quotation marks omitted.) Simard v. Comm’r of Motor Vehicles, 62 Conn.App. 690, 696, 772 A.2d 1137 (2001).

"[T]he proper measure of damages in an action for tortious interference with ... business expectancies is not the profit to the defendant but rather the pecuniary loss to the plaintiff of the benefits of the prospective business relation." (Internal quotation marks omitted.) Kelly v. Kurtz, 193 Conn.App. 507, 531 (2019). "[T]he court must have evidence by which it can calculate the damages, which is not merely subjective or speculative ... but which allows for some objective ascertainment of the amount ... This certainly does not mean that mathematical exactitude is a precondition to an award of damages, but we do require that the evidence, with such certainty as the nature of the particular case may permit, lay a foundation [that] will enable the trier to make a fair and reasonable estimate." (Internal quotation marks omitted.) Id., 527.

Lost profits are an appropriate measure of damages in this context. "Evidence is considered speculative when there is no documentation or detail in support of it and when the party relies on subjective opinion ... At a minimum, opinions or estimates of lost profits must be based on objective facts, figures, or data from which the amount of lost profits may be ascertained ... While the modern tendency is toward greater liberality in the requirements ... [for proving lost profits] it is the unvarying rule that evidence of such certainty as the nature of the case permits should be produced." (Citation omitted; emphasis in original; internal quotation marks omitted.) Id., 527.

For lost profits related to the CHCPE clients reassigned from Companions to A&B, Companions’ expert, Karen Cusato, calculated Companions’ lost profits as amounting to $118, 008.00. See Exhibit 67. These clients were listed as primarily from the Litchfield area. See Exhibit C, Schedule 3 (page 5 of 44) to Cusato Report (Exhibit 67).

A&B argues that this calculation was not limited to clients who were reassigned to A&B and who were cared for at A&B by the caregivers who had cared for those clients at Companions, and that the calculation was not limited in time to the length of the non-compete agreements. The court finds that there is a sufficient causal nexus between A&B’s conduct and Companions’ loss of revenue as to such clients to be included in the calculation of damages.

Although Cusato’s calculations concerning Companions’ lost profits included all of plaintiff’s locations (see Exhibit 67, Exhibit C, Schedule 1), and were not confined to the Litchfield office, they are sufficiently based on objective facts, figures, and data from which a fair and reasonable estimate of the amount of lost profits may be ascertained.

The court concludes that other losses claimed by Companions, related to approximately 400 other reassigned clients, who were assigned to other providers, are too attenuated to be included in an award of damages.

As to punitive damages for tortious interference, "[i]n order to establish that [it] was entitled to punitive damages, the plaintiff was required to show that the defendant’s behavior evidenced a reckless indifference to the rights of others or an intentional and wanton violation of those rights." (Internal quotation marks omitted.) Harris v. Bradley Mem’l Hosp. & Health Ctr., Inc., supra , 296 Conn. 346. "A wilful or malicious injury is one caused by design. Wilfulness and malice alike import intent ... [Its] characteristic element is the design to injure either actually entertained or to be implied from the conduct and circumstances ... Wanton misconduct is reckless misconduct ... It is such conduct as indicates a reckless disregard of the just rights or safety of others or of the consequences of the action." (Citations omitted; internal quotation marks omitted.) Markey v. Santangelo, 195 Conn. 76, 78, 485 A.2d 1305 (1985). As discussed above, A&B’s deceptive conduct was intentional and malicious. It also evidenced a reckless indifference to Companions’ rights. An award of common-law punitive damages is warranted.

Similarly, under CUTPA, punitive damages may be awarded. "A court may exercise its discretion to award punitive damages to a party who has suffered any ascertainable loss pursuant to CUTPA ... In order to award punitive or exemplary damages, evidence must reveal a reckless indifference to the rights of others or an intentional and wanton violation of those rights ... Accordingly, when the trial court finds that the defendant has acted recklessly, [a]warding punitive damages and attorneys fees under CUTPA is discretionary ..." (Citations omitted; internal quotation marks omitted.) Votto v. Am. Car Rental, Inc., 273 Conn. 478, 485-86, 871 A.2d 981 (2005). As discussed above, A&B’s conduct involved a conscious decision to disregard acknowledged business norms." Ulbrich v. Grath, 310 Conn. 375, 446, 78 A.3d 76 (2013). In the exercise of its discretion, the court concludes that awards of punitive damages and attorneys fees under CUTPA are warranted also.

CONCLUSION

1. Judgment may enter for the plaintiff and against the defendant on both counts of the substituted complaint.

2. The plaintiff is awarded compensatory damages in the amount of $118, 008.00.

3. The court will hold a hearing to consider awards of punitive damages and attorneys fees. Counsel are directed to confer in order to pre-mark exhibits in advance with the Caseflow Office and to contact the Caseflow Office concerning the scheduling of a date for a hearing.

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Notes:

Similarly, the court need not consider Companions’ argument, mentioned in one sentence in its brief, without citation to authority, that, as a nonparty, A&B lacks standing to challenge the enforceability of the noncompete agreements. "Whe[n] an issue is merely mentioned, but not briefed beyond a bare assertion of the claim, it is deemed to have been waived ..." (Internal quotation marks omitted.) Elec. Contractors, Inc. v. Dep’t of Educ., 303 Conn. 402, 444, 35 A.3d 188, 217 (2012).

Also, in the lone case cited by A&B, the court stated, "The fact that the court finds that the United States adequately alleged a market allocation agreement does not in and of itself indicate that per se treatment is imminent. Rather, a market allocation agreement or any other restraint traditionally subject to per se treatment will only be found to be per se illegal if it facially appears to be one that would almost always tend to restrict competition and decrease output, i.e. if it is a naked restraint on trade ... In contrast, [w]hen a defendant advances plausible arguments that a practice enhances overall efficiency and makes markets more competitive, per se treatment is inappropriate, and the rule of reason applies." (Citation omitted; internal quotation marks omitted.) United States v. eBay, Inc., 968 F.Supp.2d 1030, 1039 (N.D.Cal. 2013).

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