Court Opinion

ID: 6351197
Source: CourtListenerOpinion
Date Created: 2022-06-20 18:01:40.344207+00
Date Added: 2024-06-11T12:47:42.548361
License: Public Domain

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         JEFFERSON SOLAR, LLC v. FUELCELL
               ENERGY, INC., ET AL.
                    (AC 44777)
                       Elgo, Cradle and Alexander, Js.

                                   Syllabus

The plaintiff, an energy company, sought to recover damages for, inter
   alia, an alleged violation of the Connecticut Unfair Trade Practices Act
   (CUTPA) (§ 42-110a et seq.), in connection with an alleged false bid
   certification submitted by the defendants, competing energy companies,
   in an attempt to secure a long-term clean energy contract with a utility
   company. As part of the bidding process, the defendants were required
   to demonstrate that they had full control over the property for the
   proposed energy facility. The plaintiff alleged that the city of Danbury,
   in executing an option agreement to lease certain land to the defendants,
   failed to comply with the city charter and with statutory notice require-
   ments, which effectively invalidated the defendants’ option agreement.
   The plaintiff claimed it suffered damages in lost revenue that it would
   have received in securing the contract but for the defendants’ false bid
   certification that was ultimately chosen. Thereafter, the defendants filed
   a motion to dismiss the complaint on the ground that the plaintiff lacked
   standing to pursue its CUTPA claim, which the trial court granted. On
   the plaintiff’s appeal to this court, held: the trial court did not err in
   concluding that the plaintiff lacked standing to maintain its CUTPA
   action against the defendants, as the plaintiff’s claims were remote and
   indirect because, if the defendants’ knowingly submitted a false bid and
   the option agreement was unlawful and without legal effect as the
   plaintiff alleged, the utility company that was a party to the energy
   facility contract would have been a directly injured party and would
   have been best suited to seek a remedy for the harm; moreover, although
   the plaintiff claimed that it was certain to have received the contract
   in question if the defendants lacked the necessary site control, because
   that contention was not alleged in the operative complaint and was
   undermined by the plain language of the request for bids, which stated
   that the utility company retained discretion in awarding shared clean
   energy facility contracts and reserved the right to reject any or all offers,
   the plaintiff’s purported injuries were purely speculative.
            Argued March 1—officially released June 14, 2022

                             Procedural History

  Action to recover damages for, inter alia, a violation
of the Connecticut Unfair Trade Practices Act, and for
other relief, brought to the Superior Court in the judicial
district of New Haven, where the court, Young, J.,
granted the defendants’ motion to dismiss and rendered
judgment thereon, from which the plaintiff appealed to
this court. Affirmed.
   Thomas Melone, for the appellant (plaintiff).
  Proloy K. Das, with whom were Jennifer M. DelMon-
ico and, on the brief, Terence J. Brunau, for the appel-
lees (defendants).
                         Opinion

   PER CURIAM. The plaintiff, Jefferson Solar, LLC,
appeals from the judgment of the trial court granting
the motion to dismiss filed by the defendants, FuelCell
Energy, Inc. (FuelCell), and SCEF1 Fuel Cell, LLC (com-
pany). On appeal, the plaintiff claims that the court
improperly concluded that it lacked standing to main-
tain an action under the Connecticut Unfair Trade Prac-
tices Act (CUTPA), General Statutes § 42-110a et seq.
We affirm the judgment of the trial court.
   ‘‘A motion to dismiss tests, inter alia, whether, on
the face of the record, the court is without jurisdiction.
. . . In deciding a jurisdictional question raised by a
motion to dismiss, a court must take the facts to be
those alleged in the complaint, including those facts
necessarily implied from the allegations, construing
them in a manner most favorable to the pleader. . . .
[W]hen the complaint is supplemented by undisputed
facts established by affidavits submitted in support of
the motion to dismiss . . . the trial court, in determin-
ing the jurisdictional issue, may consider these supple-
mentary undisputed facts and need not conclusively
presume the validity of the allegations of the complaint.
. . . Rather, those allegations are tempered by the light
shed on them by the [supplementary undisputed facts].
. . . If affidavits and/or other evidence submitted in
support of a defendant’s motion to dismiss conclusively
establish that jurisdiction is lacking, and the plaintiff
fails to undermine this conclusion with counteraffida-
vits . . . or other evidence, the trial court may dismiss
the action without further proceedings.’’ (Citations
omitted; internal quotation marks omitted.) North Sails
Group, LLC v. Boards & More GMBH, 340 Conn. 266,
269–70, 264 A.3d 1 (2021).
   This case concerns the procurement of a long-term
agreement for a clean energy facility. Appended to the
defendants’ motion to dismiss, as an exhibit to the affi-
davit of Frank Wolak, senior vice president of sales at
FuelCell, was a request for production (request) jointly
issued by Eversource Energy and the United Illuminat-
ing Company (United Illuminating) on April 30, 2020,
for a contract to sell energy pursuant to the shared
clean energy facility program codified in General Stat-
utes § 16-244z. All such contracts require approval by
the Public Utilities Regulatory Agency (PURA). See
General Statutes § 16-244z (a) (2).
   Pursuant to the terms of the request, ‘‘bids that [did]
not include . . . proof of site control’’ would ‘‘not be
considered.’’ Section 4.4 of the request provides, as a
prerequisite to eligibility, that a bidder must submit a
‘‘Bid Certification Form, including the affidavit from
the owner of the project site and the applicable docu-
mentation demonstrating that the Bidder has control
of the generation site, or an unconditional right, granted
by the property owner, to acquire such control . . . .’’
Section 2.4.1 further specifies what is required for
‘‘Proof of Site Control,’’ stating in relevant part: ‘‘The
Bidder must demonstrate that it has control of the gen-
eration site, or an unconditional right, granted by the
property owner, to acquire such control. . . . In order
to be considered to have site control for generation,
the Bidder must provide copies of executed documents
between the Bidder and [the] property owner showing
one of the following: (a) that the Bidder owns the site
or has a lease or easement with respect to the site on
which the [facility] will be located . . . or (b) that the
Bidder has an unconditional option agreement to pur-
chase or lease the site . . . .’’
   The plaintiff and the company each submitted bids
in response to the request. The company proposed a 2.8
megawatt fuel cell facility on land owned by the city
of Derby (city) and located at 49 Coon Hollow Road
(property). Its bid included the affidavit of Richard Dzie-
kan, the mayor of the city, in which he attested that
the company had ‘‘control of the generation site, or an
unconditional right . . . to acquire such control.’’1 That
bid also included a copy of an option to lease agreement
between the city and FuelCell regarding the property
(option agreement), as well as an assignment of that
option from FuelCell to the company (assignment).2
The company’s bid ultimately was selected for a project
in United Illuminating territory.
   The plaintiff thereafter commenced the present action
against the defendants. The operative complaint is dated
October 22, 2020, and contains two counts.3 In count
one, the plaintiff sought a declaratory ruling that the
option agreement ‘‘does not provide the defendants
with any legally enforceable rights’’ due to the city’s
alleged failure to comply with the requirements of the
city charter and General Statutes § 7-163e. In count two,
the plaintiff alleged that the defendants had submitted
‘‘a false bid certification’’ in violation of CUTPA as a
result of the city’s alleged failure to comply with the
requirements of the city charter and § 7-163e ‘‘prior to
executing’’ the option agreement.
   On December 10, 2020, the defendants filed a motion
to dismiss the action, alleging, inter alia, that the plain-
tiff lacked standing.4 That motion was accompanied by
Wolak’s affidavit and copies of the request, the com-
pany’s bid, the option agreement, and the assignment.
On December 21, 2020, the plaintiff filed an objection
to the motion to dismiss, but did not submit counteraffi-
davits or any other evidence.
  On February 18, 2021, the court ordered ‘‘all briefing,
documentation and affidavits’’ related to the motion to
dismiss to be filed by March 19, 2021. In accordance
with that order, both parties filed supplemental briefs
on March 19, 2021. At that time, the plaintiff offered
the affidavit of its attorney, Thomas Melone, who averred
that the plaintiff had provided notice of the action to
the city. The defendants also submitted additional docu-
mentation.5 In its ‘‘further objection’’ to the motion to
dismiss, the plaintiff stated in relevant part: ‘‘The foun-
dation of the plaintiff’s challenge rests on the nonbind-
ing option [agreement] executed between [the defen-
dants] and the [city]. . . . The [city] failed to engage
in any competitive process for its disposition of a real
property interest, violating its city charter and [§] 7-
163e.’’
   By memorandum of decision dated April 30, 2021, the
court granted the motion to dismiss. The court first
concluded that the plaintiff’s request for a declaratory
ruling was not ripe for adjudication, as ‘‘PURA [had]
not yet approved the [company’s] bid . . . .’’ The court
then concluded that the plaintiff lacked standing to
bring its CUTPA claim against the defendants, as its
alleged injuries ‘‘are remote and indirect.’’ Accordingly,
the court rendered a judgment of dismissal, and this
appeal followed.
  On appeal, the plaintiff claims that the court improp-
erly concluded that it lacked standing to maintain the
CUTPA action alleged in count two of its complaint.6
We do not agree.
   ‘‘The issue of standing implicates a court’s subject
matter jurisdiction and is subject to plenary review.’’
Channing Real Estate, LLC v. Gates, 326 Conn. 123,
137, 161 A.3d 1227 (2017). ‘‘To establish standing to raise
an issue for adjudication, a complainant must make a
colorable claim of direct injury.’’ Connecticut Associ-
ated Builders & Contractors v. Hartford, 251 Conn. 169,
178, 740 A.2d 813 (1999). ‘‘The requirement of directness
between the injuries claimed by the plaintiff and the
conduct of the defendant also is expressed, in our stand-
ing jurisprudence, by the focus on whether the plaintiff
is the proper party to assert the claim at issue. . . .
[I]f the injuries claimed by the plaintiff are remote,
indirect or derivative with respect to the defendant’s
conduct, the plaintiff is not the proper party to assert
them and lacks standing to do so. [When], for example,
the harms asserted to have been suffered directly by a
plaintiff are in reality derivative of injuries to a third
party, the injuries are not direct but are indirect, and
the plaintiff has no standing to assert them.’’ (Citations
omitted.) Ganim v. Smith & Wesson Corp., 258 Conn.
313, 347–48, 780 A.2d 98 (2001). As our Supreme Court
has explained, ‘‘notwithstanding the broad language
and remedial purpose of CUTPA, we have applied tradi-
tional common-law principles of remoteness . . . to
determine whether a party has standing to bring an
action under CUTPA.’’ (Footnote omitted.) Vacco v.
Microsoft Corp., 260 Conn. 59, 88, 793 A.2d 1048 (2002).
   Connecticut courts ‘‘employ a three part policy analy-
sis . . . [in applying] the general principle that plain-
tiffs with indirect injuries lack standing to sue. . . .
First, the more indirect an injury is, the more difficult
it becomes to determine the amount of [the] plaintiff’s
damages attributable to the wrongdoing as opposed to
other, independent factors. Second, recognizing claims
by the indirectly injured would require courts to adopt
complicated rules apportioning damages among plain-
tiffs removed at different levels of injury from the vio-
lative acts, in order to avoid the risk of multiple recover-
ies. Third, struggling with the first two problems is
unnecessary [when] there are directly injured parties
who can remedy the harm without these attendant prob-
lems.’’ (Internal quotation marks omitted.) Connecticut
Podiatric Medical Assn. v. Health Net of Connecticut,
Inc., 302 Conn. 464, 469–70, 28 A.3d 958 (2011).
   It is undisputed that the company, as part of its bid,
submitted both the affidavit of Mayor Dziekan, in which
he attested that the company had ‘‘control of the genera-
tion site, or an unconditional right . . . to acquire such
control,’’ and a copy of the option agreement between
the city and FuelCell, which option was assigned to the
company. Those materials demonstrate that the com-
pany’s bid comported with the requirement, set forth
in §§ 2.4.1 and 4.4 of the request, that a bidder submit
proof ‘‘that it has control of the generation site, or an
unconditional right, granted by the property owner, to
acquire such control.’’
   The plaintiff’s quarrel is not with the adequacy of the
company’s bid, but rather its legitimacy. In its com-
plaint, the plaintiff alleged that the city’s failure to com-
ply with the ‘‘bid process’’ requirements of § 22 of the
city charter and § 7-163e rendered the option agreement
‘‘unlawful,’’ ‘‘without legal effect,’’ and ‘‘void and illu-
sory.’’ The plaintiff further alleged that, as a result of
the city’s failure to comply with those requirements,
‘‘the [option agreement] does not provide the defen-
dants with the unconditional right required by the
[request] requirements.’’ For that reason, the plaintiff
alleged that the defendants had submitted ‘‘a false bid
certification’’ in violation of CUTPA, which allegedly
caused the plaintiff to suffer ‘‘an ascertainable loss of
money because [it] will lose the revenue from the
[shared clean energy facility program] that it would
have received but for [the] defendants’ submission of
a false bid certification.’’
  In its memorandum of decision, the trial court noted
that, if the option agreement was unlawful and without
legal effect as the plaintiff alleged, and the defendants
did not have control of the site, the defendants ‘‘will
be unable to fulfil their obligations under the contract.
Presumably, the project would then be the subject of
another [request for production], in which the plaintiff
most strenuously asserts it will prevail. The direct recip-
ient of any injury resulting from false certification
would be [United Illuminating], the beneficiary of the
project. [United Illuminating] would presumably have
at least one cause of action against the defendants.
Additionally, the real party with purported unclean
hands is [the city], which is claimed to have ignored
its own city charter in order to furnish the option to
lease to the defendants. The plaintiff has not brought
an action against [the city], nor does it appear that the
plaintiff has standing to maintain such an action. The
plaintiff’s claims are remote and indirect. If there is a
potential victim of the defendants’ alleged duplicity, it
is [United Illuminating], not the plaintiff. The plaintiff
lacks standing to bring the CUTPA claim.’’
    We concur with that reasoning. If the defendants know-
ingly submitted a false bid, as the plaintiff alleges, the
utility company that was a party to the contract for the
shared clean energy facility would be a directly injured
party and would be best suited to seek a remedy for
the harm. Moreover, although the plaintiff on appeal
claims that it was ‘‘100 percent certai[n]’’ to receive the
shared clean energy facility contract in question if the
defendants lacked the necessary site control, that con-
tention is not alleged in the operative complaint and is
undermined by the plain language of the request. On
its first page, the request states: ‘‘EVERSOURCE AND
[THE UNITED ILLUMINATING COMPANY] RESERVE
THE RIGHT TO REJECT ANY OR ALL OFFERS OR
PROPOSALS.’’ Section 1.8 of the request further pro-
vides in relevant part that ‘‘[t]he [utility] [c]ompanies
will evaluate all conforming Bids . . . however, the
[utility] [c]ompanies make no commitment to any Bid-
der that it will accept any Bid(s).’’ Section 3.1.3 further
confirms that the utility companies retain discretion in
awarding a shared clean energy facility contract, stat-
ing: ‘‘Bids that are not selected as winning Bids may
remain active on ‘standby.’ If one or more Bidders who
were selected . . . do not execute the [s]tandard
[a]greement, the next lower cost Bid may be offered
an award.’’ (Emphasis added.) See A. Dubreuil & Sons,
Inc. v. Lisbon, 215 Conn. 604, 610–11, 577 A.2d 709
(1990) (observing that use of word ‘‘shall’’ in contract
signifies mandatory directive while use of word ‘‘may’’
generally ‘‘imports permissive conduct and the use of
discretion’’ and ‘‘is an indication that the parties
expressly intended something other than [a] manda-
tory’’ obligation); 17A C.J.S. Contracts § 428 (2022)
(‘‘[i]n the construction of contracts, the word ‘may’ ordi-
narily is regarded as permissive, rather than manda-
tory’’). Because the utility companies, by the plain terms
of the request, retained discretion in awarding shared
clean energy facility contracts and reserved the right
to reject any or all offers, the plaintiff’s purported injur-
ies are purely speculative. See, e.g., State v. Dixon,
114 Conn. App. 1, 9, 967 A.2d 1242 (‘‘aggrievement or
standing to appeal requires something more than con-
jecture or speculation of injury’’), cert. denied, 292
Conn. 910, 973 A.2d 108 (2009); Goldfisher v. Connecti-
cut Siting Council, 95 Conn. App. 193, 198, 895 A.2d
286 (2006) (‘‘mere speculation that harm may ensue is
not an adequate basis for finding aggrievement’’).
   We, therefore, agree with the trial court’s determina-
tion that the plaintiff lacked standing to maintain its
CUTPA action against the defendants. For that reason,
the court properly granted the motion to dismiss.
      The judgment is affirmed.
  1
     A copy of the company’s bid was submitted as an exhibit to Wolak’s
affidavit in support of the defendants’ motion to dismiss.
   2
     The company is a subsidiary of FuelCell.
   3
     This action was commenced by service of process on November 2, 2020.
   4
     Because the issue of the plaintiff’s standing implicates the subject matter
jurisdiction of the court; see Rodriguez v. Kaiaffa, LLC, 337 Conn. 248,
274, 253 A.3d 13 (2020); ‘‘all other action in the case must come to a halt
until such a determination is made.’’ (Internal quotation marks omitted.)
Igersheim v. Bezrutczyk, 197 Conn. App. 412, 420, 231 A.3d 1276 (2020).
For that reason, the plaintiff’s subsequent filing of an amended complaint
on December 21, 2020, was improper. As this court has noted, ‘‘our Supreme
Court has explicitly held that the court cannot consider any amended plead-
ing before ruling on the motion to dismiss. See Federal Deposit Ins. Corp.
v. Peabody, N.E., Inc., 239 Conn. 93, 99, 680 A.2d 1321 (1996) (inappropriate
for court to consider amended third-party complaint rather than initial com-
plaint, when acting on state’s motion to dismiss for lack of subject matter
jurisdiction); Gurliacci v. Mayer, 218 Conn. 531, 545, 590 A.2d 914 (1991)
(‘[b]y considering the motion to amend prior to ruling on the challenge to
the court’s subject matter jurisdiction, the court acted inconsistently with
the rule that, as soon as the jurisdiction of the court to decide an issue is
called into question, all other action in the case must come to a halt until
such a determination is made’).’’ Igersheim v. Bezrutczyk, supra, 420.
   5
     The defendants appended six documents to their March 19, 2021 filing.
Exhibit A is a copy of the January 22, 2021 notice from PURA informing
the parties that it had denied the plaintiff’s challenges to the bid submitted
by the company because they ‘‘do not rise to the level of a programmatic
deficiency . . . .’’ Exhibits B and C are notices from PURA regarding its
‘‘Review of Statewide Shared Clean Energy Facility Program Requirements,’’
while Exhibit D is the ‘‘Shared Clean Energy Facility (‘SCEF’) Tariff Terms
Agreement Subscriber Organization’’ dated January 22, 2021. Exhibit E is a
twenty-two page document titled ‘‘The United Illuminating Company Shared
Clean Energy Facility Rider Subscriber Organization Terms and Conditions,’’
and Exhibit F is a research report from the Office of Legislative Research
dated October 1, 2018, on energy procurements.
   6
     In this appeal, the plaintiff does not contest the propriety of the court’s
determination that the request for a declaratory ruling set forth in count
one was not ripe for adjudication.