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Litigation Publications CUTPA PUNITIVE DAMAGES AND ATTORNEY'S FEES: WHEN ARE THEY RECOVERABLE, AND HOW MUCH IS ENOUGH? CAVEAT: This article includes cases decided through November 10, 2000. On May 17, 2001, the United States Court of Appeals for the Second Circuit vacated Judge Hall’s decision in Microsoft Corporation v. Bristol Technology, Inc., 114 F. Supp. 2d 59 (D. Conn. 2000). The Second Circuit opinion is reported at 250 F. 3d 152. Other than to advise readers of this Second Circuit decision, this caveat does not include reference to any other court decisions issued after November 10, 2000. PUNITIVE DAMAGES 1. The award of punitive damages is within the discretion of the court .....2 2. The purposes of CUTPA punitive damages are to punish unlawful conduct 3. Proof of ascertainable loss, but not of actual damages, is a condition 4. The standard for the court to impose punitive damages is a reckless 5. The amount of punitive damages is determined in part by the reprehensibility 6. The amount of punitive damages is subject to due process limitations.....20 ATTORNEYS' FEES.....21 1. Courts have discretion to award attorneys' fees under CUTPA.....22 2. CUTPA attorneys' fees serve the public policy of encouraging CUTPA litigation.....23 3. Proving actual damages is not a condition precedent to recovery of attorneys’ fees.....24 4. There is a division of authority about awarding attorneys' fees for non-CUTPA 5. An award of attorneys' fees under CUTPA must be reasonable, the amount based PRACTICAL ADVICE IN OBTAINING CUTPA PUNITIVE DAMAGES AND -1- In enacting the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen. Stat. 42-110a et seq., the legislature provided for the recovery of punitive damages and attorneys' fees to be determined by the court, but did not set forth any specific guidelines for the court to decide when they are recoverable or the appropriate amount. This article discusses case law that has evolved in establishing those guidelines, and concludes with some practical suggestions to facilitate recovery of fair and reasonable punitive damages and attorneys' fees. PUNITIVE DAMAGES In their discretion, courts award punitive damages under CUTPA to deter unfair and deceptive practices. To recover punitive damages, a claimant must demonstrate that the defendant committed a CUTPA violation causing an ascertainable loss, and that the defendant acted with reckless indifference or in wanton disregard to the plaintiff’s rights. Willful intent to harm is not required for such an award. Courts consider the reprehensibility of defendant’s conduct and its financial standing in determining the amount of punitive damages. An award of punitive damages which can be fairly characterized as grossly excessive will be struck down as violative of due process. 1. The award of punitive damages is within the discretion of the court. Conn. Gen. Stat. 42-110g(a) provides: "The court may, in its discretion, award punitive damages . . . ." for a CUTPA violation. The Connecticut Supreme Court has held that CUTPA "permits the recovery of . . . punitive damages." See, for example, Willow Springs -2- Condominium Association, Inc. v. Seventh BRT Development Corporation, et al., 245 Conn. 1, 40 (1998) and Freeman v. Alamo Management Co., 221 Conn. 674, 680 n.6 (1992). Unlike common law punitive damages, the court, rather than the jury, decides whether to award CUTPA punitive damages and, if so, the amount of those damages. Tingley Systems, Inc. v. Norse Systems, Inc., 49 F.3d 93, 96 (2d Cir. 1995) and Staehle v. Michael's Garage, Inc., 35 Conn. App. 455, 462 (1994). Even the award of nominal damages under CUTPA opens the door to punitive damages. A plaintiff who establishes CUTPA liability "has access to a remedy far more comprehensive than the simple damages recoverable under common law. . . . This remedy is not limited to mere compensatory damages. Gill v. Petrazzuoli Bros., Inc., 10 Conn. App. 22, 34-35 (1987). Rather, under CUTPA, a plaintiff is entitled to have the trial court consider awarding both punitive damages and attorney's fees. Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 509-10 (1995). See also Associated Investment Co. Ltd. Partnership v. Williams Associates, IV, 230 Conn. 148, 160-61 (1994) and Jacques All Trades Corp v. Brown, 57 Conn. App. 189, 197 (2000). In Bristol Technology, Inc. v. Microsoft Corporation, 2000 WL 1336872 (D. Conn., August 31, 2000), the court awarded $1,000,000 in punitive damages even though the jury found nominal damages of only $1.00 resulting from Microsoft's bait and switch scheme violative of CUTPA. Citing Tillquist v. Ford Motor Credit, Co., 714 F. Supp. 607, 617 (D. Conn. 1989) and Jacques All Trades Corp., supra, the court held that "even where a plaintiff has failed to prove any actual damages resulting from a violation of CUTPA, a court 'in its discretion may award -3- punitive damages and attorney's fees under the CUTPA . . . moreover, a court may also award punitive damages and attorney's fees to a plaintiff who has been awarded only nominal damages resulting from an unfair or deceptive practice under CUTPA . . . . Thus, 'the award of nominal damages under CUTPA opens the door to other important remedies' . . . " Id. at *14. 2. The purposes of CUTPA punitive damages are to punish unlawful conduct and Punitive damages may properly be imposed "to further a State's legitimate interests in punishing unlawful conduct and deterring its repetition." BMW of North America v. Gore, 517 U.S. 559, 568 (1996). The Connecticut Supreme Court has not addressed the purpose of CUTPA punitive damages, although it has recognized that the purpose of common law punitive damages is to "provide for some measure of punishment and deterrence in addition to compensation to the victim." Waterbury Petroleum Products, Inc. v. Canaan Oil & Fuel Co., 193 Conn. 208, 237-38 (1984) and Berry v. Loiseau, 223 Conn. 786, 827 (1992). The Connecticut Supreme Court made this observation even though, at common law, punitive damages are limited to recovery of attorney's fees less taxable costs. See, for example, Waterbury Petroleum Products, Inc. v. Canaan Oil & Fuel Co., 193 Conn. 208, 234-238 (1984). A significant benefit of asserting a successful CUTPA claim is the opportunity to recover meaningful punitive damages in addition to attorneys' fees, as discussed in detail at Section 5 below. The purpose of CUTPA punitive damages is deterrence rather than compensation. Lenz v. CNA Assurance Co., 42 Conn. Supp. 514, 515 (1993). Connecticut courts, and federal courts applying Connecticut law, explicitly recognize the legitimacy of the deterrence rationale where -4- CUTPA punitive damages have been sought. Id.; Bailey Employment System, Inc. v. Hahn, 545 F. Supp. 62, 73 (D.Conn. 1982) ("punitive damages … hopefully will serve as a deterrent to the kinds of unfair and deceptive acts" violating CUTPA practiced by the defendant"); Grand Light & Supply Co. v. Honeywell, Inc., 771 F.2d 672, 681 (2d Cir. 1985) ("an award of punitive damages is appropriate under CUTPA if the court believes ‘that a measure of deterrence is in order,’" citing Bailey Employment System, Inc., 545 F.Supp. at 73, aff'd, 723 F.2d 895 (2d Cir. 1983). For an extended discussion of this deterrence rationale, see Bristol Technology, Inc. v. Microsoft Corporation, 2000 WL 1336872 (D. Conn., August 31, 2000) in which the court "takes as its guiding principle that the purpose of awarding punitive damages under CUPTA is to deter further deceptive or unfair business practices by the defendant and others . . . . The award should serve the broad remedial goals of eliminating or discouraging unfair methods of competition and unfair or deceptive acts or practices." Id., at *16, citing Societa Bario E Derivati v. Kaystone Chem., Inc., 1998 WL 182563, at *10 (D. Conn., Apr. 15, 1998). The Lenz court explicitly recognized that to accomplish deterrence, an award of punitive damages must be tied to the financial position of the defendant. "As with the biblical widow's mite, the financial impact of an event on a party depends on financial circumstances. An amount that might deter a poor widow could seem trifling and leave undeterred a corporate entity with large financial resources." Lenz, 42 Conn. Supp. at 516. In Lenz, the issue was whether the defendant insurance company could be compelled to admit the contents of its financial statement in response to a request to admit on the issue of the -5- amount of CUTPA punitive damages. To support his request for punitive damages, the plaintiff sought the defendant’s admission of the truth of the contents of its financial statement. The court overruled the defendant's objection to the request to admit, holding as follows:
Id. at 516; see also Grand Light & Supply v. Honeywell, Inc., 771 F.2d 672, 674 (2d Cir. 1985) (recognizing that deterrence is a consideration in the award of punitive damages) and Bristol Technology, supra, at *21 (inquiry into the financial standing of the defendant whose future wrongdoing the court seeks to deter "is necessary to craft a punitive damage award that will serve the purpose of deterring future deceptive trade practices" by the defendant and others. The Restatement (Second) of Torts 908(2) includes the financial status of the defendant among the factors in determining the amount of punitive damages: "In assessing punitive damages, the trier of fact can properly consider the character of the defendant’s act, the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause and the wealth of the defendant." Courts in other jurisdictions have likewise considered the financial position of a defendant in awarding punitive damages. See, for example, Hawkins v. Allstate Ins. Co., 152 Ariz. 490, 497, 733 P.2d 1073, 1080 (1987), cert. denied 484 U.S. 874 (1987) (concluding that "[o]bviously the goals of punishment and deterrence would be circumvented if the financial position of the defendant allowed it to comfortably absorb the award") and Capstick v. Allstate Ins. Co., -6- 998 F.2d 810, 823 (10th Cir. 1993) (upholding punitive damage award of $2 million even though actual damages were only $4,500 because such punitive damages were significant enough "to attract the attention of the defendant in order to assure that oppressive practices do not continue"). The rationale for considering the financial position of a defendant in awarding punitive damages is that a function of such damages is to make a defendant wrongdoer disgorge "ill-gotten profits ... to deter future similar conduct by eliminating any profit incentive." Hawkins v. All State Ins. Co., 152 Ariz. at 497, 733 P.2d at 1080-81. See also Farmers Ins. Exchange v. Shirley, 1998 Wyo. Lexis 74, *35 (It is proper to instruct the jury that "if the wrongful conduct was profitable to the defendant, the punitive damage should remove the profit and should be in excess of the profit, so that the defendant recognizes a loss."); American Pioneer Life Ins. Co. v. Williamson, 1997 Ala. LEXIS 385, 704 So.2d 1361, 1366 (1997) ("Any punitive damages award should remove any profit realized by [the insurance company] as a result of its misconduct."); Vandevender v. Sheetz, Inc., 200 W.Va. 591, 598, 490 S.E.2d 678, 685 (1997) ("If the defendant profited from his wrongful conduct, punitive damages should remove the profit and should be in excess of the profit, so that the award discourages further bad acts by the defendant."); Spence v. Howell, 126 Idaho 763, 773, 890 P.2d 714, 712 (1995) (upholding award of punitive damages, stating "the award could easily have been to take away the profit the defendants made . . . ."); Thiry v. Armstrong World Industries, 1983 OK 28, 661 P.2d 515, 517 (1983) ("It should not be profitable for a manufacturer to knowingly continue to market a defective product."); Wangen v. Ford Motor Co., -7- 97 Wis. 2d 260, 304, 294 N.W.2d 437, 460 (1980) (among factors jury should consider in awarding punitive damages is profitability of misconduct to defendant). Beyond direct deterrence, a financially significant award of punitive damages deters wrongful conduct by other companies in the defendant-wrongdoer's industry. Bristol Technology, Inc. v. Microsoft Corporation, 2000 WL 1336872 *16 (D. Conn. Aug. 31, 2000) (". . . the purpose of awarding punitive damages under CUTPA is to deter future deceptive or unfair business practices by the defendant and others"). See also, Aldrich v. Thomson McKinnon Securities, 756 F.2d 243, 249 (2d Cir. 1985) (punitive damages are justified "to discourage repetition of [defendant's] grossly negligent conduct, or instance of such conduct by other brokerage firms"); O'Gilvie v. International Playtex, Inc., 821 F.2d 1438, 1446 (10th Cir. 1987) (purpose of punitive damages is "to restrain and deter others from commission of like wrongs"); and Continental Trend Resources Inc. v. OXY USA, Inc., 810 F.Supp. 1520, 1527 (W.D. Okla. 1992) ("... a judgment of $30 million against this defendant under the justifying circumstances of this case sends a sharp, but certainly not devastating, lesson of deterrence to this defendant and any other potential defendant who is like-minded and similarly situated."). 3. Proof of ascertainable loss, but not of actual damages, is a condition precedent to The threshold requirement for recovery of punitive damages under CUTPA is proving an ascertainable loss of money or property as a result of a violation of CUTPA. Conn. Gen. Stat. 42-110g(a). However, proof sufficient to establish actual damages may not be necessary. In Tillquist v. Ford Motor Credit Co., 714 F. Supp. 607, 617 (D.Conn. 1989), the plaintiff demonstrated that the defendant violated CUTPA, causing "embarrassment and humiliation to -8- plaintiff and the members of his family," but the plaintiff failed to show any actual damages. Id., at 617. Noting it has the discretion to award punitive damages under CUTPA, the court awarded $500 in punitive damages. Id. See also Wagner v. Bezzini, 1995 WL 681560 (Conn. Super. Ct. Nov. 7, 1995) (awarding punitive damages of $1,700 even though plaintiff failed to sustain his burden of proof as to what his CUTPA damages were). However, in A. Secondino and Son, Inc. v. LoRicco, 215 Conn. 336 (1990), the Supreme Court upheld the trial court's refusal to award CUTPA punitive damages because the CUTPA claimant did not meet the threshold requirement to "present evidence providing the court with a basis for a reasonable estimate of the damages suffered." Id., at 343, citing Barco Auto Leasing Corp. v. House, 202 Conn. 106, 120-21 (1987), Conaway v. Prestia, 191 Conn. 484, 494 (1983), and Hinchliffe v. American Motors Corporation, 184 Conn. 607, 619 (1981). The court held that even though CUTPA damages "need not be proven with absolute precision," CUTPA precluded recovery when there is a "failure to present any evidence concerning the nature and extent of the injury sustained." A. Secondino and Son, Inc., 215 Conn. at 344. 4. The standard for the court to impose punitive damages is a reckless indifference The award of punitive damages is in the discretion of the court. Woronecki v. Trappe, 228 Conn. 574 (1994). As the court observed in Lawson v. Whitey's Frame Shop, 42 Conn. App. 599, 609 (1996), rev'd on other grounds, 241 Conn. 678 (1997), "Section 42-110g(a) does not provide a method for determining punitive damages." See also Cimino v. Ciaramella, 1 Conn. Ops. 714 (Super. Ct. June 54, 1995): "The law is not much developed as to how the court's discretion is to be guided in deciding whether to grant punitive damages for proven CUTPA -9- violations." Id. at 715. The exercise of such discretion will not ordinarily be interfered with on appeal unless abuse is manifest or injustice appears to have been done." Gargano v. Heyman, 203 Conn. 616, 622 (1987). The standard for awarding punitive damages under CUTPA was set forth in Gargano v. Heyman, supra:
Id. at 622, citing Venturi v. Savitt, Inc., 191 Conn. 588, 592 (1983); see also Tessman v. Tiger Lee Construction Co., 228 Conn. 42, 54 (1993). It is significant that in Gargano the Supreme Court adopted the common law standard for conduct justifying an award of punitive damages, rather than establishing a separate CUTPA standard. By adopting the common law standard, the Supreme Court has made relevant longstanding case law on this subject. In Gargano, the defendant landlord terminated electricity to the plaintiff tenant who had failed to vacate the premises after the lease expired. Gargano, 203 Conn. at 622. The court affirmed the trial court's denial of punitive damages because the plaintiff did not demonstrate that the defendant’s action was of such a serious nature as to warrant punitive damages. Id. See also Pierce v. Gallagher, et al., 2000 WL 28126 (Conn. Super. April 18, 2000), in which the court refused to award punitive damages in a CUTPA claim arising out of breach of lease because the plaintiff was only "occasionally inconvenienced by brief interruptions of services caused by the remodeling …" Id., at *2. -10- In Bristol Technology, Inc. v. Microsoft Corporation, 2000 WL 1336872 (D.Conn., Aug. 31, 2000), Judge Hall applied Gargano in determining the standard for imposition of punitive damages: ". . . a plaintiff who has established a violation of CUTPA may recover punitive damages if the court finds that the defendant's conduct was recklessly indifferent, intentional and wanton, malicious, violent, or motivated by evil, Gargano v. Heyman, 203 Conn. at 622." Id. at *15, citing Sir Speedy, Inc. v. L & P Graphics, Inc., 957 F.2d, 1033, 1040 (2d. Cir. 1992). The Connecticut Appellate Court has adopted the Gargano standard to affirm punitive damage awards in such cases as Tessman v. Tiger Lee Construction Co., 228 Conn. 42, 53-54 (1993) (upholding punitive damages of $30,000 where the compensatory damages were in the same amount), and Staehle v. Michael's Garage, Inc., 35 Conn. App. 455, 462-63 (1994). But see Sorrentino v. All Seasons Services, Inc., 245 Conn. 756, 777-778 (1998), where the court applied the Gargano standard to affirm the trial court's denial of punitive damages (trial court found that defendant's actions were not egregious or outrageous, nor the result of reckless or wanton disregard of plaintiff's rights in employee discharge case, applying Workers’ Compensation Act, Conn. Gen. Stat. 31-290a(b)). A trial court recently denied punitive damages where a plaintiff failed to meet the Gargano standard of reckless indifference to the rights of others or intentional and wanton violation of those rights. Fairfaxx Corporation v. Nickelson, et al., 200 WL 1409714 (Sept. 14, 2000, Conn. Super.). In light of the fact that the Gargano court applied the common law standard for imposing punitive damages, Connecticut cases defining that standard are applicable in the CUTPA punitive damages analysis. The terms "wilful," "wanton" and "reckless" are treated as having the -11- same meaning. See City of West Haven v. Hartford Ins. Co., 221 Conn. 149, 160-61 (1992); Dubay v. Irish, 207 Conn. 518, 533 (1988); and Menzie v. Kalmonowitz, 107 Conn. 197, 199-200 (1928). Judge Hall appropriately observed that "in practice, the terms willful, wanton, and reckless have been (somewhat incoherently) treated as meaning the same thing. Dubay v. Irish, 207 Conn. 518, 532-533 (1988). They all do involve similar 'highly unreasonable conduct.'" Bristol Technology, Inc., supra, at *15. "Reckless" and "wanton" misconduct "tends to take on the aspect of highly unreasonable conduct, involving an extreme departure from ordinary care, in a situation where a high degree of danger is apparent . . . ." Dubay, 207 Conn. at 532. Recklessness is "more than negligence, more than gross negligence." Id., citing Bordonaro v. Senk, 109 Conn. 428, 431 (1929). The characteristic element of recklessness is the design to injure, either actually entertained or inferred from conduct or circumstances. D. Belt, The Connecticut Unfair Trade Practices Act, 6.16 p. 259 (1994). An actual intent to harm is not required for recklessness; it is sufficient to prove that the defendant acted in reckless disregard of the consequences of its acts. See City of West Haven v. Hartford Ins. Co., 221 Conn. 149, 160-161 (1992); Collens v. New Canaan Water Co., 155 Conn. 477, 490 (1967) ("The conduct of the defendant would appear to be at least in reckless disregard for the consequences it knew or should have known would result, and, if this element is present, an actual intention to do harm to the plaintiffs is not necessary."); and Chaspek Mfg. Corp. v. Tandet, -12- 1 Conn. Ops. 845 (Super. Ct. June 16, 1995) (not necessary that actual intention to harm be proven for punitive damage award to be upheld). At common law, punitive damages have been awarded for fraud, and for representations made with reckless disregard for the truth. See O'Leary v. Industrial Park Corp., 211 Conn. 648, 651 (1989) (fraud); Brower v. Perkins, 135 Conn. 675, 679-681 (1949) (fraud); DeSantis v. Piccadilly Land Corp., 3 Conn. App. 310, 315 (1985) (wanton, willful and false representations); Wedig v. Brinster, 1 Conn. App. 123, 134 (1983), cert. den., 192 Conn. 803 (1984) (fraud); and Jones v. Kreppel-Matarazzo, 12 CLT No. 26, p. 9 (Bankr. D.Conn. May 29, 1986) (knowingly false representations, made without belief in their truth, and representations made with reckless disregard of the truth, rose to the level of reckless indifference or intentional and wanton conduct; accordingly, court awarded punitive damages). But see Vitano, Inc. v. Townline Associates, 1991 WL 151893 (punitive damages not awarded in case of fraudulent misrepresentation). Connecticut courts deny requests for punitive damages where plaintiffs fail to prove that defendants' violation of CUTPA rises to the level of "rascality" required for such an award. See General Clutch v. Lowry, 3 Conn. Ops. at 890-91 (neither punitive damages nor attorneys' fees awarded); Sir Speedy, Inc. v. Blatte, 17 Conn. L. Trib. No. 29, pp. 30-31 (D. Conn., June 26, 1991)(Burns, J.), aff'd in relevant part, rev'd in part, sub nom. Sir Speedy, Inc. v. L&P Graphics, Inc., 957 F.2d 1033 (2d Cir. 1992) (neither attorneys' fees nor punitive damages awarded); Vitano, Inc., 1991 WL 151893 (Conn. Super.) (no punitive damages awarded for fraudulent misrepresentations in violation of CUTPA); Amendola v. Giammatei, 1991 WL 107830 -13- (Conn. Super.) (no punitive damages awarded despite violation of express and implied warranties under New Home Warranty Act). CUTPA punitive damages may be awarded for conduct involving an isolated business dispute. For such an award, CUTPA does not require proof of a pattern of deceptive practices. Tingley Systems, Inc. v. Norse Systems, Inc., 49 F.3d 93, 97 (2d Cir. 1995). The Court did point out, however, that while punitive damages may be awarded under CUTPA for conduct associated with a single, isolated business dispute, the fact that a defendant's wrongful conduct was part of a long-term practice enhances the propriety for imposing punitive damages. Id. In Tingley, the lower court had allowed the parties to agree to refer the issue of CUTPA punitive damages to the jury, which awarded $1,000,000 in punitive damages. Ruling on post-trial motions, the trial court acknowledged that, under CUTPA, such discretion was reserved for the court, and substituted a $20,000 punitive damages award. Id. at 96. The Tingley court held that although there was no evidence showing why a punitive damage award of $1,000,000 was necessary or appropriate, the district court’s finding that the award was excessive was not an abuse of discretion. Id. at 97. 5. The amount of punitive damages is determined in part by the reprehensibility of Even though courts consider the financial standing of a defendant in determining the amount of punitive damages (as discussed in Section 2 above), the "degree of reprehensibility of the defendant's conduct" is perhaps the most important factor in assessing the amount of a punitive damages award. BMW of North America, Inc. v. Gore, 517 U.S. at 559, 575 (1996). "Punitive damages may not be ‘grossly out of proportion to the severity of the offense.’"Id. -14- The Supreme Court identified several aggravating factors normally associated with particularly reprehensible conduct, including "(1) whether a defendant's conduct was violent or presented a threat of violence, (2) whether a defendant acted with deceit or malice as opposed to acting with mere negligence, and (3) whether a defendant has engaged in repeated instances of misconduct." Id. at 575-77. See also Lee v. Edwards, 101 F.3d 805, 809 (2d Cir. 1996) ("Infliction of economic injury, especially when done intentionally through affirmative acts of misconduct . . . or when the target is financially vulnerable, can warrant a substantial penalty."). The court’s determination of a proper punitive damages award does not end with the application of the three BMW factors. Mathie v. Fries, 121 F.3d 808, 816-17 (2d Cir. 1992). The trial court must also compare the requested punitive damages award with awards in similar cases. Ikram v. Waterbury Board of Education, 1997 WL 597111 at 4 (D.Conn.); Mathie, 121 F.3d at 817; Lee, 101 F.3d at 812-13. Further, "[i]t is the duty of a court, as reaffirmed in countless cases involving large damage awards, to keep a verdict for punitive damages within reasonable bounds considering the purpose to be achieved as well as the mala fides of the defendant in the particular case." Aldrich v. Thomson McKinnon Securities, 756 F.2d 243, 248-49 (2d Cir. 1985) (citations omitted; internal quotation marks omitted). "[B]ecause neither compensation nor enrichment is a valid purpose of punitive damages, an award should not be so large as to constitute a ‘windfall to the individual litigant.’" Vasbinder v. Scott, 976 F.2d 118, 121 (2d Cir. 1992) (quoting Aldrich, 756 F.2d at 249). In Aldrich, the jury found a brokerage firm liable to a customer for violations of the Securities Exchange Act, common-law fraud and breach of fiduciary duty as a consequence -15- of the firm's fraudulent manipulation of the customer's securities account. Id., at 245. The jury awarded the plaintiff $175,000 in compensatory damages and assessed $3,000,000 in punitive damages. Id. The Second Circuit, emphasizing the "inexcusable and outrageous" nature of the defendant's conduct, stated that "[a]s the purpose of the punitive damage award is to punish and deter the offender, consideration by the jury of [defendant's] . . . $2 billion assets and $162 million net worth was appropriate in arriving at the amount of punitive damages." Id. at 249. Nevertheless, the court found the award excessive, noting that the award should not constitute a "windfall to the individual litigant." Id. The court remanded for further proceedings because "we are convinced … that $3 million goes considerably beyond what may fairly be justified in order to discourage repetition of [defendant's] . . . grossly negligent conduct . . . ." Id. Even though CUTPA does not set forth the standard for the court in setting the amount of punitive damages, as a multiple of compensatory damages or otherwise, Connecticut courts sometimes award punitive damages in an amount equal to compensatory damages or a multiple thereof. In Bristol Technology, Inc. v. Microsoft Corporation, 2000 WL 1336872 *15 (D.Conn., Aug. 31, 2000) the court noted in dictum that, by common practice, courts generally award punitive damages "in amounts equal to actual damages or multiples of the actual damages," and that many courts have followed the lead of Bailey Employment Sys. v. Hahn, 545 F. Supp. 62, 73 (D.Conn. 1982), aff'd, 723 F. 2d. 895 (2d. Cir. 1983), "in doubling the amount of actual or compensatory damages." In Staehle v. Michael's Garage, Inc., 35 Conn. App. 455 (1994), plaintiff appealed the trial court’s award of punitive damages equal to the award of actual CUTPA damages. The court upheld the award, stating "it is not an abuse of discretion to award -16- punitive damages based on a multiple of actual damages." Id., at 463, citing Bailey Employment System, Inc. v. Hahn, 545 F. Supp. 62, 73 (D. Conn. 1982), aff'd, 723 F.2d 895 (2d Cir. 1983). In Willow Springs Condominium Association, Inc. v. Seventh BRT Development Corporation, et al., 245 Conn. 1 (1998), the Supreme Court upheld the trial court's award of $100,000 in punitive damages where the jury awarded $95,683 in compensatory damages. In some cases, the court awarded punitive damages equal to twice compensatory damages. See, e.g., Bailey Employment System, Inc., 545 F. Supp. at 73 (doubling compensatory damages in awarding punitive damages upon finding that defendant had made blatantly intentional deceptive representations to plaintiff and others as part of a long-term practice); Waterbury Petroleum Products, Inc. v. Canaan Oil and Fuel Co., 193 Conn. 208, 221 n.15 (1984) (vacating trial court award of $5,000 compensatory damages and $10,000 punitive damages on other grounds); Strol v. Strol, 1996 WL 521169 (Conn. Super. 1996), aff'd, 45 Conn. App. 927 (1997) (awarding $5,500 in compensatory damages and $11,000 punitive damages under CUTPA for the defendants' fraud and forgery). In other cases, courts have awarded punitive damages exceeding twice the awarded compensatory damages. See, for example, Bristol Technologies, Inc., supra (actual damages of $1.00; punitive damages of $1,000,000); Nielsen vs. Wisniewski, 7 CSCR 708 (Super. Ct. April 29, 1992 (actual damages of $13,566; punitive damages of $60,000); Fox v. Sousa, 10 CLT No. 30, p. 20 (Super. Ct. March 30, 1984) (actual damages of $20; punitive damages of $800, by analogy to Conn. Gen. Stat. Sec. 47a-13, which provides for recovery of two months' periodic rent for willful failure to supply an essential service); Davidowicz v. Gurevich, 5 CSCR 7 -17- (Super. Ct., Nov. 17, 1989) (compensatory damages of $1,300; punitive damages of $5,000); Eamiello v. Liberty Mobile Home Sales, Inc., 208 Conn. 620, 652 (1988) (remanding trial court award of compensatory damages of $5,356 and punitive damages of $12,000 for recalculation of compensatory damages); and Tillquist v. Ford Motor Credit Co., 714 F. Supp. 607 (D. Conn. 1989) (punitive damages of $500, even though no actual damages awarded). Courts may impose an amount of punitive damages that is less than the compensatory damage award if the conduct is not egregious. See Peets v. Define, 7 CSCR 1044 (Super. Ct. July 21, 1992) (compensatory damages of $5,585; punitive damages of $2,500); Grand Light & Supply Co. v. Honeywell, Inc., 771 F.2d 672 (2d Cir. 1985) (compensatory damages of $116,692.55; punitive damages of $25,000); Aldrich, 756 F.2d at 245, discussed above; Beckenbach v. Null, 1996 WL 434454 (Conn. Super. 1996) (awarding $26,467 in compensatory and $5,000 in punitive damages under CUTPA for the defendants' failure to complete work in accordance with a contract); Russo v. Bonavita, 1994 WL 702916 (Conn. Super. 1994) (awarding compensatory damages of $120,000 and punitive damages of $10,000 for the defendant's CUTPA violation arising from misrepresentations in connection with the sale of land). See also Derivati v. Kaystone Chemical. Inc., 1998 WL 182563 (D. Conn. 1998) (finding two defendants jointly and severally liable for compensatory damages of $92,700, and assessing punitive damages of $5,000 against each defendant for violations of CUTPA arising out of a failed business transaction); and Tillquist v. Ford Motor Credit Co., 714 F. Supp. 607, 617 (D. Conn. 1989) (finding plaintiff entitled to award of $500 in punitive damages against sales finance -18- company pursuant to CUTPA because of intentional violation of banking regulations, where plaintiff was entitled to only nominal compensatory damages). Of course, where the requisite standard is not met, the court will not impose punitive damages at all. Gargano, 203 Conn. at 622 (finding that the circumstances in the case did not satisfy the requirement of a reckless indifference to the rights of others or an intentional and wanton violation of those rights). See also Larson Chelsea Realty Company v. Larson H. Pearce Company, 1995 WL 333152 (Conn. Super. 1995) (awarding no punitive damages where the CUTPA award of compensatory damages was nominal); and General Clutch Corp. v. Lowry, 3 Conn. Ops. 890 (D. Conn. 1997) ($10,000 actual CUTPA damages, but no punitive damages). Some courts have exercised their discretion not to award punitive damages under CUTPA where the plaintiff has been awarded multiple damages under another statute, or where imposing such damages would not serve any proper purpose. See Cimino v. Ciaramella, 1 Conn. Ops. 714 (Super. Ct. June 5, 1995) (no punitive damages awarded where, by operation of Home Improvement Act, defendant could not recover balance due on bill for services provided); Shay v. Gallagher, 1 Conn. Ops. 167 (Super. Ct. Jan. 18, 1995 (punitive damages would not serve any proper purpose, and no basis for determining amount); Forget v. Aleszczyk, 8 CSCR 71 (Super. Ct. Nov. 16, 1992) (punitive damages not awarded under CUTPA as plaintiff's damages were doubled under Conn. Gen. Stat. 47a-46); Livingston v. Fenderson, 7 CSCR 675 (Super. Ct. Apr. 24, 1992) (no punitive damages under CUTPA because double damages awarded under Conn. Gen. Stat. 47a-46). But see John Hay Benevolent Assn. v. Gelinas, 5 CSCR 19 -19- (Super. Ct. Oct. 25, 1989) (CUTPA punitive damages awarded even though double damages also awarded pursuant to Conn. Gen. Stat. 47a-46). 6. The amount of punitive damages is subject to due process limitations The United States Constitution "imposes a substantive limit on the size of punitive damages awards." Honda Motors Co. , Ltd. v. Oberg, 512 U.S. 415, 420 (1994). This is because punitive damages "pose an acute danger of arbitrary deprivation of property." Id., at 432. "Elementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive the fair notice not only of the conduct that will subject him to punishment, but also to the severity of penalty that a State may impose." BMW of North America, Inc. v. Gore, 517 U.S. 559, 574 (1996). However, it is only when an award of punitive damages can be fairly categorized as grossly excessive in relation to a State's legitimate interests in punishment and deterrence does it enter the zone of arbitrariness that violates due process. Id., citing TKO Products Corporation v. Alliance Res Corp., 509 U.S. 443, 456 (1993). Following Gore, the Second Circuit has applied these due process principles in holding that a punitive damage award may be found to be excessive when the amount is "so high as to shock the judicial conscience and constitute a denial of justice." Lee v. Edwards, 101 F. 3d. 805, 808 (2d Cir. 1996). In gauging excessiveness, the court must keep in mind the purpose of punitive damages: "to punish the defendant and to deter him and others from similar conduct in the future." Id. A court must ensure "that the punitive damages are reasonable in their amount and rational in light of their purpose to punish what has occurred and to deter its repetition." Id. -20- The due process excessiveness inquiry begins with an identification of the state interests that a punitive damage award is designed to serve. In Bristol Technology, Inc. v. Microsoft Corporation, 200 WL 1336872 *23 (D. Conn. Aug. 31, 2000), the court noted that the purpose of CUTPA punitive damages is "deterrence of deceptive and unfair business practices by the defendant and others" and "CUTPA seeks to create a climate in which private litigants help to enforce the ban on unfair or deceptive trade practices or acts." The second step in the excessiveness inquiry requires an examination of (1) the degree of reprehensibility of the tortious conduct; (2) the ratio of punitive damages to compensatory damages; and (3) the difference between this remedy and the civil penalties authorized or imposed in comparable cases." Bristol Technology, Inc., supra, citing Gore, 517 U.S. at 574. In Bristol Technology, Inc., Judge Hall applied these factors to determine that it was not a violation of due process to award $1,000,000 against Microsoft Corporation even though the jury found compensatory damages of only $1.00. ATTORNEYS' FEES CUTPA allows an award of reasonable attorneys' fees to a prevailing plaintiff under Conn. Gen. Stat. 42-110a(d). Courts have discretion in determining whether an award is warranted, and in what amount. Some courts have awarded reasonable attorneys' fees to a plaintiff in a multi-count complaint for prosecution of a non-CUTPA claim if it is related to a successful CUTPA claim. Judges apply a twelve-factor analysis in determining the amount of fees to be awarded. -21- 1. Courts have discretion to award attorneys' fees under CUTPA. Conn. Gen. Stat. 42-110g(d) provides:
A trial court retains sole discretion to award attorneys’ fees under CUTPA, which discretion will not be interfered with unless abused. Gargano v. Heyman, 203 Conn. 616, 622 (1987), cited in Jacques All Trades Corp. v. Brown, 57 Conn. App. 189, 198 (2000). Such abuse of discretion must be manifest, or it must appear that injustice was done, for the appellate court to interfere with the exercise of that discretion. Lawson v. Whitey's Frame Shop, 42 Conn. App. 599, 608 (1996), rev'd on other grounds, 241 Conn. 678 (1997), cited in Riggio v. Orkin Exterminating Company, Inc., 58 Conn. App. 309, 317 (2000). See also Staehle v. Michael’s Garage, Inc., 35 Conn. App. 455, 459 (1994) (finding that the "use of the word ‘may’ indicates that the statute does not provide a mandatory award of fees to the plaintiff; rather, the court has discretion to award attorneys' fees."). For a discussion of the standard of review in federal cases, see Bristol Technology, Inc. v. Microsoft Corporation, ____ WL ____ (D. Conn. Nov. 3, 2000) (Civ. Action. No. 3:98-CV-1657(JCH) ("Bristol Fee Decision"): "The standard of review of an award of attorney's fees is highly deferential to the district court. . . . This standard takes into account that the amount sought for attorney's fees is dependent on the unique facts of each case. . . . Attorney's fees must be reasonable in terms of the circumstances of the particular case, and the district court's -22- determination will be reversed on appeal only for an abuse of discretion." Bristol Fee Decision, at 5, citing Alderman v. Pan Am World Airways, 169 F.3d 99, 102 (2d Cir. 1999). 2. CUTPA attorneys' fees serve the public policy of encouraging CUTPA litigation. Awarding attorneys' fees serves an important public policy goal. "The ability to recover … attorneys' fees … enhances the private CUTPA remedy and serves to encourage private CUTPA litigation." Hinchliffe v. American Motors Corporation, 184 Conn. 607, 617 (1981). "The public policy underlying CUTPA is to encourage litigants to act as private attorneys general and to engage in bringing actions that have as their basis unfair or deceptive trade practices. Hernandez v. Monterey Village Associates, L.P., 17 Conn. App. 421, 425 (1989). In order to encourage attorneys to accept and litigate CUTPA cases, the legislature has provided for the award of attorneys' fees and costs. Gill v. Petrazzuoli Bros. Inc., 10 Conn. App. 22, 33 (1987) . . . . Once liability has been established under CUTPA, attorneys' fees and costs may be awarded at the discretion of the court. Ven Nguyen v. DaSilva, 10 Conn. App. 527, 530 (1987)." Freeman v. Alamo Management Co., 24 Conn. App. 124, 133 (1991), rev'd on other grounds, 221 Conn. 674 (1992). Fees are commonly awarded to the prevailing party under CUTPA. S&S Tobacco & Candy Co., Inc. v. The Stop & Shop Cos., Inc., 815 F.Supp. 65, 66 (D.Conn. 1992). However, courts have sometime declined to award attorneys' fees to prevailing parties under CUTPA. In Fink v. Golenbock, 238 Conn. 183 (1996), the Court upheld the trial court’s decision not to include attorneys' fees in a CUTPA award because the fees had already been included in the award of plaintiff’s common law punitive damages under a tort claim. Id. at 188 n.6. In S. Pope, Inc. v. Pope Exterminating, Inc., 1994 WL 389783 (Conn.Super., July 6, 1994), -23- two brothers engaged in a bitter battle over corporate names for competing pest control businesses. The court refused to award attorneys' fees where the parties shared culpability: "Before this court will exercise its discretion and award attorneys' fees in this case, the court should at least be satisfied that the plaintiff's behavior in dealing with the defendants was fair." Id., at 3. The Court concluded that "the plaintiff company shares some blame, some fault and some guilt for inappropriate behavior, and for perpetuating and escalating this conflict. It would be unfair for this court to award attorneys' fees in light of this. It would also be contrary to the remedial nature of [CUTPA]." Id. 3. Proving actual damages is not a condition precedent to recovery of attorneys’ fees. Under CUTPA, the trial court is not precluded from awarding attorneys' fees even if it finds that the plaintiff has not suffered ascertainable damages. Jacques All Trades Corp., 42 Conn. App. 124, 131 (1996), appeal after remand, 57 Conn. App. 189 (2000), citing Tillquist v. Ford Motor Credit Co., 714 F.Supp. 607 (D. Conn. 1989). See also Associated Investment Co. Limited Partnership v. Williams Associates IV, 230 Conn. 148, 160-61 (1994). In Jacques, the Appellate Court held that the award of attorneys' fees "is not to be based on the amount of the actual recovery to the party but rather on the work the attorney performed," because the broad equitable remedies authorized under Conn. Gen. Stat. 42-110g(d) afford the court "discretion to order injunctive and other equitable relief in lieu of damages" and contemplate "judgments which do not include an award of money damages." 57 Conn. App. at 197, citing Associated Investment Co., 230 Conn. 148, 160-61. -24- 4. There is a division of authority about awarding attorneys' fees for non-CUTPA "Before [CUTPA attorneys'] fees and damages are awarded, the moving party must prevail on the CUTPA cause of action." Vezina v. Nautilus Pools, Inc., 27 Conn. App. 810, 821 (1992). There is some uncertainty, however, whether plaintiffs prevailing on a CUTPA count are entitled to recover attorneys' fees for other related counts in the same action. The Court in Versyss, Inc. v. Holbrook, 1993 WL 280126 (Conn. Super.) held that "the plaintiff, who prevailed on all of its claims at trial should not suffer a reduction in the amount of attorneys' fees it reasonably incurred just because some of those claims were not for a violation of CUTPA…." Id. at 3. In Versyss, CUTPA constituted only one count of a ten-count complaint. However, because "all of the conduct of the defendants . . . could be characterized as unfair or deceptive . . . all of the fees reasonably incurred by the plaintiff were related to the CUTPA cause of action." Id. In so ruling, the court relied on Russell v. Dean Witter Reynolds, Inc., 200 Conn. 172 (1986). In Russell, plaintiff was seeking attorney's fees under the Connecticut Uniform Securities Act ("CUSA"), Conn. Gen. Stat. 36-498, after prevailing on three counts of a CUSA violation. Although defendant demanded that the court reduce the award by two-fifths because it included an unsuccessful fraud and CUTPA claim, the Court upheld the award of full attorneys' fees "[b]ecause the amounts he expended on litigation, including dollars spent on his unsuccessful claims, were devoted to the pursuit of a goal he achieved . . . ." Id. at 195. In Boulevard Assocs. v. Sovereign Hotels, Inc., 868 F.Supp. 70 (S.D.N.Y. 1994), rev’d on other grounds, 72 F.3d 1029 (2d Cr. 1994), the court cited Versyss in holding that fees are -25- "reasonable and necessary" so long as they are "related to the prosecution of the CUTPA cause of action." Id. at 73. The defendant claimed that because the court denied an award of expectation damages upon a finding that an expert witness offered no relevant opinion, the cost of the expert witness was not reasonable and necessary. Id. at 72. Noting that "the proper inquiry is not whether a particular theory succeeded for plaintiff but that plaintiff achieved success on the merits of the case," the court held that the fees were related to CUTPA "because they were incurred while plaintiff sought relief from defendant’s behavior which . . . violated CUTPA." Id. at 73. However, in Jacques All Trades Corp. v. Brown, 57 Conn. App. 189, 206 (2000), the court held: "In the absence of abuse of discretion, the court can award attorney's fees under CUTPA only for those expenses that were related to prosecution of a CUTPA claim." In Jacques, a counterclaiming defendant sought recovery of all attorneys' fees incurred in defending a contract action and pursuing counterclaims for breach of contract, violation of the Home Improvement Act, and violation of CUTPA. The defendant relied on Conn. Gen. Stat. Sec. 42-110g(d)'s broad language empowering the court in a CUTPA case to award "reasonable attorneys' fees based on the work reasonably performed by an attorney and not on the amount of recovery . . ." Rejecting that contention, the Appellate Court held that Sec. 42-110g(d) "relates solely to claims related to the prosecution of a CUTPA claim and not to all claims." Jacques, at 197. See also Raven Corp. v. Baldwin-Stewart Electric Co., 1993 WL 284908 (Conn. Super.) (holding that attorneys' fees under CUTPA are to be allocated based only on work required to prosecute the CUTPA claim). -26- In Manufacturers Technologies, Inc. v. Cams, Inc., 728 F.Supp. 75 (D.Conn. 1989), the court, finding that the plaintiff asserted a CUTPA violation merely as a vehicle to recover attorneys' fees without actually having a valid CUTPA claim, refused to award attorney's fees "[g]iven the relative lack of significance of the CUTPA claim vis-a-vis the other claims asserted, the sizable award for copyright infringement, the discovery sanctions previously entered, and the award of attorneys' fees [through other statutory remedies]." Id. at 85. A court will not award attorneys' fees where the CUTPA claim is "brought merely as a vehicle by which to recover attorneys' fees." Versyss, 1993 WL 280126, at *3. See also Raven Corp. v. Baldwin-Stewart Electric Co., 1993 WL 284908 (Conn. Super.) (holding that attorneys' fees under CUTPA are to be allocated based only on work required to prosecute the CUTPA claim). For the most recent case on this issue, see Bristol Fee Decision. Based on the analysis in Hensley v. Eckerhart, 461 U.S. 424 (1982), Judge Hall held: "Contrasting a case where the work on one claim will be unrelated to work on another, with a case where there is a common core of facts or related legal theories, the Hensley Court suggested that, in the former, unrelated work should be treated as raised in a separate lawsuit, while recovery [of attorneys' fees] in the latter case should focus on the 'overall relief obtained in relation to the hours reasonably expended on the litigation.' 461 U.S. at 434-35." Bristol Fee Decision, at 9-10. The Hensley analysis is as follows: "Where the plaintiff failed to prevail on a claim that is distinct in all respects from his successful claims, the hours spent on the unsuccessful claim should be excluded in considering the amount of a reasonable fee. Where a lawsuit consists of related claims, a plaintiff who has won substantial relief should not have his attorney's fee -27- reduced simply because the district court did not adopt each contention raised. But where the plaintiff achieved only limited success, the district court should award only that amount of fees that is reasonable in relation to the results obtained." Hensley, at 440, cited in Bristol Fee Decision at 10. See also Kirsch v. Fleet Street, Ltd., 148 F.3d 149, 173 (2d Cir. 1998), quoting Hensley, 461 U.S. at 434. In the Bristol Fee Decision, plaintiff was successful on its CUTPA claim, but not on its other claims. In determining the amount of CUTPA attorneys' fees, Judge Hall reviewed the fee application and eliminated those entries which related solely to Bristol's antitrust claims, because those entries were not sufficiently related under a Hensley analysis to be included in a CUTPA fee award. The court then considered Microsoft's specific objections to various entries in Bristol's fee application. Finally, the court determined, as necessary, reasonable percentages by which to reduce the overall remaining lodestar figure 1) to adjust for prevailing market rates for the type of services rendered; 2) to adjust for time spent not wholly required to litigate a case involving only a deceptive CUTPA claim on which Bristol prevailed; and 3) to adjust for time the court found excessive, redundant or otherwise unreasonable for the litigation of a successful CUTPA claim. Id. at 15-16. However, as Judge Hall noted in Bristol Fee Decision, at 11, deduction from a legal fee award is improper "'where the hours expended on unsuccessful claims were not frivolous. . . . Where the plaintiff obtains otherwise excellent results, the court's rejection of alternative legal grounds is not a cause for a reduction in fees.' Pridgen v. Andersen, No. 3:94-CV-851, 2000 -28- WL 865053, at *8 (D. Conn. Mar. 31, 2000 (citations omitted); see also Lunday v. City of Albany, 42 F.3d 131, 133 (2d Cir. 1994)..." Judge Hall further noted, at 13, that courts in this circuit have followed Connecticut state court case law, including Russell v. Dean Witter Reynolds, Inc., 200 Conn. 172 (1986), to hold that "where 'there is no reasonable way to segregate counsel's time . . . by claim, the parties' claims were 'interrelated,' and 'the time and money expended . . . were in the pursuit of one common goal,' division of the fee based on a plaintiff's success on one claim but failure on others is not appropriate. J.P. Sedlak Assocs. V. Conn. Life & Cas. Ins. Co., No. 3:98-CV-145, 2000 WL 852331, at *3- *5 & *4 n.8 (D. Conn. Mar. 31, 2000) (discussing Connecticut law). . . ." Judge Hall rejected Microsoft's suggestion that, because Bristol failed to prevail on fifteen of sixteen counts in its complaint, it is entitled to no more than 1/16th of its requested fees. Bristol Fee Decision, at 18. 5. An award of attorneys' fees under CUTPA must be reasonable, the amount based There is no statutory standard for courts to determine the amount of attorneys' fees. Staehle v. Michael’s Garage, Inc. 35 Conn. App. 455, 461-62 (1994). In determining that amount, courts "consistently look to the marketplace as a guide to what is 'reasonable'" Missouri v. Jenkins, 491 U.S. 274, 285 (1989), using their own knowledge of similar cases to determine what are reasonable rates. Evans v. State of Connecticut, 967 F.Supp. 673, 691 (D.Conn. 1997). As CUTPA provides for an award based on work reasonably performed, and not on the amount recovered, courts have awarded fees exceeding the amount recovered as damages. See, for example, Kaplan, et al., v. Gruder, 2000 WL 767679 (Conn. Super. May 25, 2000) -29- (awarding attorneys' fees of $367,208 where recovery of $175,000 plus interest). For a more extreme example, see Bristol Fee Decision, in which Bristol sought over $200,000,000 in damages at trial, but received only $1.00, in nominal damages. After awarding $1,000,000 in punitive damages, the court awarded nearly $3,000,000 in attorneys' fees and over $750,000 in costs. The court so held, in part, because "results obtained" cannot be analyzed in CUTPA cases with reference to the dollar recovery. Id., at 41. The Connecticut Supreme Court has held that the reasonableness of the attorneys' fees must be proved at an "appropriate evidentiary hearing." Barco Auto Leasing Corp. v. Veota House, 202 Conn. 106, 120-21 (1987). The Appellate Court ruled, two years earlier, that a court may calculate a reasonable fee even if there is no evidence of its value because courts "may rely on their general knowledge of what has occurred at the proceeding before them . . ." Guaranty Bank & Trust Co. v. Dowling, 4 Conn. App. 376 (1985). Although the trial court has discretion to determine the amount of attorneys' fees, CUTPA provides little guidance on the amount to award. Staehle at 461. Courts considering fee applications under CUTPA calculate attorneys' fees through the "lodestar" method. Societa Bario E Derivati v. Kaystone Chem., Inc., No. 5:90-CV-599, 1998 WL 182563, at *11 (D. Conn. Apr. 15, 1998); see also Kaplan v. Gruder, No. CV 960334308 S, 2000 WL 7676709, at *1 (Conn. Super. May 25, 2000). This method requires the court "to determine the number of hours reasonably spent on the litigation and to exclude hours which are excessive, redundant or otherwise unreasonable." Societa Bario, 1998 WL 182563, at *11. The court must also determine the "prevailing market rates" for the type of services rendered, i.e., "the fees that -30- would be charged for similar work by attorneys of like skill in the area." Id.; see also Kirsch v. Fleet Street, Ltd., 148 F.3d 149, 172 (2d Cir. 1998), and Blum v. Stenson, 465 U.S. 86, 895 (1984). There is a "strong presumption" that the lodestar figure represents a reasonable fee. Societa Bario, 1998 WL 182563, at *11. However, the award of CUTPA attorneys' fees has features not common to such awards in other types of cases. Jacques of All Trades Corp. v. Brown, 42 Conn. App. 124, 131 (1996), aff'd, 240 Conn. 654 (1997). First, CUTPA speaks of "the plaintiff" recovering fees rather than the "prevailing party" language found in other attorneys' fees statutes. Compare Conn. Gen. Stat. 42-110g(d) with 42 U.S.C. 1988(b). Second, whether to award attorneys' fees, and the amount, is not based on the amount of the recovery. (See Bristol Fee Decision, at 7, and the discussion in section 3, above.) In Hernandez v. Monterey Village Associates, L.P., 24 Conn. App. 514, 517 (1991), the Appellate Court directed the trial court to employ the twelve factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 718-19 (5th Cir. 1974), to determine an appropriate amount of attorneys’ fees. Even though Johnson was a Title VII case, CUTPA has been analogized to such cases. "The guidelines set forth in Johnson for calculating reasonable attorneys' fees are appropriate in CUTPA litigation because, similar to Title VII, ‘CUTPA seeks to create a climate in which private litigants help to enforce the ban on unfair or deceptive trade practices or acts.’" Steiger v. J.S. Builders, Inc., 39 Conn. App. 32, 39 (1995), citing Hinchliffe v. American Motors Corp., 184 Conn. 607, 618 (1981). See also Bristol Fee Decision, in which the court applied the Johnson factors in determining the amount of an attorneys' fee award. The twelve factors are: -31-
Johnson v. Georgia Highway Express, Inc., 488 F.2d at 718-19. The trial court should consider each of these twelve factors. See Steiger, 39 Conn. App. at 39 (finding that trial court’s use of only one factor -- reasonableness of the relationship between the award of attorneys' fees and the award of damages -- was abuse of discretion); see also Jacques All Trades Corp. v. Brown, 57 Conn. App. 189, 198 (2000) (upholding CUTPA attorneys' fees award based on these twelve factors). In Riggio v. Orkin Exterminating Company, Inc., 58 Conn. App. 309 (2000), the court rejected the contention that Steiger requires consideration of all twelve factors individually before awarding attorneys' fees, holding that the court was instead required only "to consider the full panoply of factors and not base its decision solely on one of the elements." Id., at 318, cited with approval in Bristol Fee Decision, at 37 n.22. For an example of a summary approach to the application of these twelve factors, see Willow Springs Condominium Association. v. Seventh BRT Development Corporation, et al., 1996 Ct. Sup. 5412, 17 CLR 559 (Sept. 11, 1996), aff'd, 245 Conn. 1 (1998), in which the court merely listed the twelve factors, and in one sentence dealt with them by simply stating that it reviewed the billing records and considered the twelve criteria. The Johnson factors are "usually subsumed within the initial calculation of hours reasonably expended at a reasonable hourly rate." U.S. Football League v. National Football League, 887 F.2d 408, 415 (2d Cir. 1989), cert. denied, 493 U.S. 1071 (1990), citing Hensley v. Eckerhart, 461 U.S. 424, 434 n.9 (1983). The initial calculation uses the "lodestar" figure, where "the number of hours reasonably expended on the litigation is multiplied by a reasonable hourly rate -33- for attorneys and paraprofessionals." Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992). Although there is a "‘strong presumption’ that the lodestar figure represents the ‘reasonable’ fee," City of Burlington v. Dague, 505 U.S. 557 (1992), "other considerations may lead to an upward or downward departure from the lodestar. The party advocating such a departure, however, bears the burden of establishing that an adjustment is necessary to the calculation of a reasonable fee." Grant v. Martinez, 973 F.2d at 101 (internal citations omitted). Alternatively, some courts have applied "factors used in determining attorneys' fees as an element of damages in connection with contracts providing for the award of reasonable attorneys' fees." Robert M. Langer et al., The Connecticut Unfair Trade Practices Act, Vol. 1 6.17 at 273. These factors include time spent, complexity, novelty of the issues, and fees charged for similar work. Bizzoco v. Chinitz, 193 Conn. 304, 310-11 (1984); Balkus v. Terry Steam Turbine Co., 167 Conn. 170, 179 (1974) (noting in workman’s compensation case "that where attorneys' fees are properly awarded, their reasonableness depends upon many factors, including the amount of preparation required, the novelty of the questions presented and the intricacy of the case, customary charges for similar services, and the results actually obtained."). PRACTICAL ADVICE IN OBTAINING CUTPA PUNITIVE DAMAGES AND ATTORNEYS' FEES In your fact gathering, determine whether the conduct of the defendant demonstrates a reckless indifference to your client's rights or an intentional and wanton violation of those rights. Your factual investigation need not establish an actual intent to harm, but only that the defendant acted in reckless disregard to the consequences of the defendant's acts. Determine whether you have a basis to allege aggravating factors, such as whether the defendant's conduct was violent or -34- presented a threat of violence, whether the defendant acted with deceit or malice, and whether the defendant engaged in repeated instances of misconduct. In drafting the CUTPA count of your complaint, allege more than boilerplate CUTPA language. Indeed, you must allege more to withstand a motion to strike. See, for example, Burrows v. Saint Paul’s Church, 2000 WL 675608, *2 (Conn. Super. 2000); Nacca v. Simione, 1999 Ct. Sup. 5920, 5922 (Conn. Super. 1999); Stratton v. Preferred Properties, 1995 Ct. Sup. 12108, 12109 (Conn. Super. 1995); World Cable Comm. V. Philips Broadband Net., 1994 Ct. Sup. 3170, 3174 (Conn. Super. 1994); Groglio v. Elrac, 1999 Ct. Sup. 480, 481 (Conn. Super. 1999); and Shoreline Vending Service v. Huey, 1996 Ct. Sup. 2119, 2122 (Conn. Super. 1996). Include allegations about the "rascality" of defendant's conduct sufficiently specific so that it will be apparent to the trial judge from the first reading of your complaint that you have a good faith basis to recover punitive damages. Remember, it is the judge, not the jury, who determines the amount of punitive damages. In the discovery phase of your case, develop all the facts related to your CUTPA claim, including facts providing the basis for the court to award punitive damages -- especially facts related the aggravating factors cited above. Obtain financial information about the defendant, since such information is relevant and material to the deterrent function of CUTPA punitive damages, as the court found in Lenz v. CNA Assurance Co., 42 Conn. Supp. 514 (1993). Also, investigate the ratio of punitive damages to compensation damages in analogous cases and civil penalties authorized for defendant's conduct, as guideposts for the court in determining the -35- amount of punitive damages, and, where applicable, to assist the court in the due process "excessiveness" inquiry. In the trial of your case, put into evidence documents and testimony supporting the reckless indifference of the defendant to your client's rights, or defendant's intentional and wanton violation of those rights. Get that "smoking gun" document into evidence, and make the most of it, so the judge will be motivated to award meaningful punitive damages. With regard to attorneys' fees, it will be necessary for you to keep accurate and detailed time records to support your claim as to the number of hours and the nature of the work you devote to the CUTPA claim. Note that Conn. Gen. Stat. 42-110g(d) requires both that the attorneys’ fee be reasonable and that the work itself must be "reasonably performed." Accordingly, you must justify the reasonableness of the work you perform related to the scope and nature of your CUTPA count. Since you will not know at the inception of your representation whether the judge in your case will consider the time you devoted to non-CUTPA but CUTPA-related counts in the award of attorneys' fees, it is prudent to record your time in such a way that you can properly allocate hours to the CUTPA count. As you record your time, be aware that all your time records are subject to discovery during the pendency of the action, except to the extent you satisfy your burden of proof that they contain privileged material. In addition to the number of hours, you must be prepared to address the twelve factors discussed in this article. In the hearing to determine attorneys' fees, you may decide to call a witness to establish the customary fee for similar work in the community (the fifth factor). You -36- should research and present to the court information about awards of attorneys' fees in similar cases (the twelfth factor). Of course, you should also address the other ten factors, which are case specific. For further readings on CUTPA punitive damages and attorneys' fees, see 1 R. Langer et al., The Connecticut Unfair Trade Practices Act (1994), Sec. 6.16 (punitive damages) and Sec. 6.17 (attorneys’ fees), and the 1996 Supplement to that treatise. -37- |
