WESTERN DERMATOLOGY CONSULTANTS, P.C. v. VITALWORKS, INC., et al., SC 19248
Judicial District of Danbury
Conflict of Laws; Whether CUTPA Applies to this Case and, if so, Whether Plaintiff Failed to Satisfy Act's Requirement that Trade or Commerce Occur in Connecticut. The plaintiff operates a medical practice in New Mexico. It brought this action against VitalWorks, Inc., a Delaware corporation headquartered in Connecticut, and its successor, Cerner Physician Associates, Inc., alleging that they sold it defective computer software and claiming, among other things, a violation of the Connecticut Unfair Trade Practices Act (CUTPA). Finding that the injury occurred in New Mexico, the trial court applied Connecticut conflict of laws principles to evaluate whether CUTPA applied to this case. Connecticut follows the doctrine of lex loci delicti, which provides that tort controversies are governed by the law of the place of injury. If applying that doctrine would produce an arbitrary or irrational result, however, the "most significant relationship" test of the Restatement (Second) of Conflict of Laws (1971) is utilized. Finding that application of New Mexico law would produce an arbitrary or irrational result here, the trial court declined to utilize lex loci delicti. On applying the Restatement (Second) test, the court concluded that Connecticut law applied because this state has the most significant relationship to the occurrence and the parties. The trial court found that the defendants violated CUTPA, and the defendants appealed. The plaintiff also appealed, challenging the trial court’s refusal to award it punitive damages and certain litigation costs under CUTPA. The Appellate Court (146 Conn. App. 169) concluded that CUTPA did not apply to the defendants' conduct for two reasons. First, it determined that the plaintiff was unable to satisfy CUTPA's requirements because no "trade" or "commerce" occurred "in this state" within the meaning of §§ 42-110b (a) and 42-110a (4). Second, employing Connecticut choice of law principles, it determined that New Mexico law should apply, because application of lex loci delicti would not produce an arbitrary or irrational result. The court reasoned that the injury's occurrence in New Mexico did not turn upon a fortuitous circumstance, as the plaintiff was present in that state throughout the contractual relationship and the goods and services purchased under the contract were installed and performed there. Moreover, the court determined that, even under the Restatement (Second) test, New Mexico law would still apply because that state had the greatest contact with the parties. Accordingly, the court reversed the judgment for the plaintiff on the CUTPA count and ruled that the plaintiff could not prevail on its claims that it was entitled to punitive damages, the full amount of the attorney’s fees it requested, and certain costs under CUTPA. The Supreme Court will now review the Appellate Court's determination that, under the established Connecticut principles of conflict of laws and the facts of this case, CUTPA does not apply here. If it decides that CUTPA applies, the court will then decide whether the Appellate Court properly determined that the plaintiff failed to satisfy CUTPA's requirements in that no trade or commerce occurred in this state. Finally, if it determines that CUTPA's requirements were satisfied, the Supreme Court will consider whether the trial court properly declined to award the plaintiff prejudgment interest, punitive damages and certain litigation costs.