NO. CV 99-106dc

MASHANTUCKET PEQUOT                                                                 MASHANTUCKET PEQUOT
GAMING ENTERPRISE                                                                        TRIBAL COURT

V.

FELIX C. ZIFFER                                                                                APRIL 6, 2000

MEMORANDUM OF DECISION ON PLAINTIFF’S MOTION

TO DISMISS DEFENDANT’S SPECIAL DEFENSE AND COUNTERCLAIM

The plaintiff moves to dismiss the defendant’s special defense for failure to state a claim upon which relief can be granted, and to dismiss the defendant’s counterclaim for lack of subject matter jurisdiction.

This is a debt collection action in which the plaintiff alleges that the defendant applied for and received a $15,000 line of credit, that on November 13, 1993 the plaintiff advanced $15,000 to the defendant as evidenced by two checks, or "markers ", issued by the defendant, that the defendant’s bank dishonored the checks and that the defendant has refused to repay the amount borrowed from the plaintiff.

After the defendant’s motion to dismiss the complaint was denied, Mashantucket Pequot Gaming Enterprise v. Ziffer, 3 Mash. 254 (1999), he filed a special defense and counterclaim, both of which are based on the same set of facts. He alleges that he was regarded as a "VIP player" by the plaintiff, and as such he was entitled to special treatment and "perks" in consideration of his gambling at the plaintiff’s casino and as an inducement to establish the line of credit. He further alleges that on December 26, 1993, while at the casino for the purpose of paying off his markers, he was harassed by a senior employee of the plaintiff, and intimidated by that employee into gambling and losing several thousand dollars.

As a special defense, the defendant asserts that there existed an implied duty of good faith and fair dealing between the plaintiff and the defendant regarding the defendant’s gambling at the casino, and that the conduct of the plaintiff’s employee resulted in a breach of the implied duty of good faith and fair dealing.

As a counterclaim, the defendant alleges that as a result of the employee’s conduct he "suffered and endured physical assault and battery, and verbal assault, harassment, insults, intimidation and public ridicule and embarrassment", and also was intimidated into gambling and losing money, and also did not receive the complimentary treatment and perks to which he was entitled, and claims money damages.

MOTION TO DISMISS SPECIAL DEFENSE:

Invoking M.R.C.P. 12.b.(6), which authorizes the filing of a motion to dismiss for failure to state a claim upon which relief can be granted, the plaintiff asserts that the facts pleaded by the defendant as a special defense do not support a cognizable legal claim under Mashantucket Pequot Tribal Law.

When considering a motion to dismiss for failure to state a claim pursuant to M.R.C.P. 12.b.(6), the court must accept the material facts alleged in the pleading as true. Fletcher v. Mashantucket (Western) Pequot Tribe, et al, 3 Mash. 265,268 (1998). All doubts and inferences are to be resolved in the pleader’s favor. Id. Under Rule 12.b.(6), a claim or defense "may be dismissed where it either asserts a legal theory that is not cognizable as a matter of law or fails to allege sufficient facts to support a cognizable legal claim." Fletcher v. Mashantucket (Western) Pequot Tribe, et al, 2 Mash. 135 (1997). The pleader must allege facts, either directly or indirectly, that satisfy each element required for recovery or relief under a cognizable legal theory. Id.

In this matter the defendant pleads as a special defense that the conduct of the plaintiff’s employee on December 26, 1993 was egregious harassment and intimidation resulting in a breach of an implied duty of good faith and fair dealing regarding the defendant’s gambling at the casino. The plaintiff asserts that this defense is insufficient as a matter of law, and is barred by Section 10.b. of the Mashantucket Pequot Debt Collection Ordinance, which provides:

The court shall recognize only these affirmative defenses: (1) accord and satisfaction; (2) discharge in bankruptcy; (3) fraud or duress; (4) incapacity; (5) lack of service of process; (6) lack of in personam jurisdiction; (7) lack of subject matter jurisdiction; (8) payment or release; (9) res judicata; and (10) statute of limitations.

IX M.P.T.L. ch. 2, §10.b.

The defendant first claims that Rule 8.c. of the Mashantucket Pequot Rules of Civil Procedure allows the filing of affirmative, or special, defenses. Rule 8.c. provides:

Affirmative Defenses. In pleading to a preceding pleading, a party shall set forth affirmatively, if not otherwise prohibited by tribal law, accord and satisfaction, arbitration and award [and various other legal theories]. . . . (emphasis added).

MRCP 8.c.

The phrase "not otherwise prohibited by law " indicates that the Tribal Council intended and anticipated that, on occasion, there might be limitations on the broad provisions of the Mashantucket Rules of Civil Procedure relating to the filing of affirmative defenses. Section 10.b. of the Debt Collection Ordinance constitutes such a limitation, and restricts affirmative defenses in debt collection actions to certain enumerated defenses. Accordingly, the court’s first inquiry is to determine whether the defendant’s special defense is among the affirmative defenses permitted by the Debt Collection Ordinance.

The defendant’s articulated defense of a violation of the plaintiff’s duty of good faith and fair dealing is not among the defenses permitted by the Debt Collection Ordinance. From the facts as pleaded, it might be inferred that the harassing and intimidating acts of the plaintiff’s employee constitute an allegation of duress, which is one of the permitted defenses. These acts, however, are alleged to have occurred on December 26, 1993, more than five weeks after November 13, 1993, when the defendant is alleged to have signed the markers at issue. There is no allegation that the defendant was pressured into signing the markers on November 13, 1993, or was under duress at that time. The alleged acts of harassment and intimidation on December 26, 1993 are unrelated to the November 13, 1993 credit transaction by which the defendant is alleged to have borrowed to the amount at issue. A defense of duress cannot be inferred from the facts pleaded in the special defense.

The defendant asserts that although a breach of the duty of good faith and fair dealing may not be among the specifically enumerated affirmative defenses allowed by Section 10.b. of the Debt Collection Ordinance, such a duty is an inherent part of every contract, and may be enforced by the parties to a contract. As a general preposition, this is correct. "Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement." Central New Haven Development Corporation v. La Crepe Inc., 177 Conn. 212,217 (1979), citing Restatement (Second), Contracts § 231 (1973). The duty of good faith and fair dealing does not create a generalized obligation of good faith in all aspects of life. Rather, it protects the "benefits of the agreement" between the parties to a contract. "Every contract carries an implied covenant of good faith and fair dealing requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement. Habetz v. Condon, 224 Conn. 231,238,618 A.2d 501 (1992)." Gupta v. New Britain General Hospital, 239 Conn. 574,598 (1996). This is a rule of construction designed to fulfill the reasonable expectations of the contracting parties. Magnan v. Anaconda Industries, Inc., 193 Conn. 558,567 (1984). "Conversely , bad faith means more than mere negligence; it involves a dishonest purpose. " Middletown Commercial Associates Ltd. Partnership v. Middletown, 53 Conn. App. 432,437 (1999), cert. denied 250 Conn. 919 (1999) (citations and quotation marks omitted).

Applying the foregoing principles to the special defense at issue, the defendant must point to some provision of the underlying contract that the plaintiff is attempting to perform or enforce in bad faith. Here, the contract upon which the plaintiff brought suit is a credit transaction alleged to have taken place on November 13, 1993. The actions about which the defendant complains are alleged to have occurred on December 26, 1993, and do not relate to the extension of credit on November 13. The December 26 events did not affect the reasonable expectation and right of the defendant to receive the benefit of the November 13 credit transaction, by which the defendant received funds from the plaintiff. The defendant has not alleged facts sufficient to support a claim that the plaintiff is attempting to enforce the alleged credit contract in bad faith.

II. MOTION TO DISMISS COUNTERCLAIM

In a counterclaim he characterizes as a breach of contract claim, the defendant alleges that he and the plaintiff entered into an unwritten agreement whereby he would gamble at the plaintiff’s casino at a certain level of play which required certain minimum buy-ins, bets and playing time, and the plaintiff would extend credit to him and treat him as a "VIP." The defendant alleges that this agreement, as well as the plaintiff’s covenant of good faith and fair dealing, was violated by the plaintiff on December 26, 1993, when the plaintiff’s employee harassed, threatened, humiliated and intimidated him into gambling and losing several thousand dollars.

A. As discussed previously, a breach of a covenant of good faith and fair dealing involves a claim that the breaching party took some action that amounts to a bad faith assertion of rights under a contract between the parties. The December 26, 1993 actions alleged by the defendant might have been offensive to him, but they are not sufficient to support a claim that the plaintiff was asserting or enforcing its rights under a contract in bad faith. The December 26 acts alleged by the defendant are not sufficient to support a claim of a breach of an implied contractual duty of good faith and fair dealing.

B. From the facts as pleaded, a cause of action sounding in tort might be inferred. The Mashantucket Pequot Tribal Council "abrogated to a limited degree its sovereign immunity from suit to permit a patron on the Tribe’s premises to recover damages in a tort action against the Gaming Enterprise. See Sovereign Immunity Waiver Ordinance, IV M.P.T.L., ch. 1 (1992) ("Title IV"). The enactment specifically provides that a notice of claim and the claim itself must be filed within 180 days after the injury is sustained. It is settled law that the statutory notice requirements are mandatory and jurisdictional in nature. Therefore, the time limitations for the filing of the notice and claim under Title IV are conditions precedent to maintaining a negligence action for damages against the Gaming Enterprise. If the claimant fails to comply with the time mandates, the Tribal Court lacks subject matter jurisdiction and the action must be dismissed." Chamberlin v. Mashantucket Pequot Gaming Enterprise, 1 MPR 60,61 (1998). (citations omitted). Here, the defendant’s counterclaim was filed on December 28, 1999, five years after the occurrence of the alleged acts. To the extent that a cause of action sounding in tort might be inferred from the allegations of the counterclaim, it must be dismissed.

C. Section 9.d. of the Debt Collection Ordinance provides:

"The defendant shall state in short and concise terms the party’s response to the Complaint and the defenses to each claim asserted. No counter-claim shall be allowed." (Emphasis added).

IX M.P.T.L. ch. 2, § 9.d.

The defendant observes that this provision is at variance with Rule 13 of the Mashantucket Rules of Civil Procedure, which mandates the filing of counterclaims related to a transaction described in a complaint, and permits the filing of counterclaims unrelated to that transaction. M.R.C.P. Rule 13.a.,b. It is a universal principle of statutory construction that specific terms covering a given subject matter will prevail over the general language of another statute which might otherwise prove controlling. See Edmund v. United States, 520 U.S. 651,657, 117 S. Ct. 1573, 137 L. Ed. 2d 917 (1997); Almonte v. New York Medical College, 851 F. Supp. 34, 38 (D.Conn. 1994); State v. State Employees’ Review Board, 239 Conn. 638,653 (1997). Here, the Debt Collection Ordinance contains a specific and particular provision which prohibits the filing of counterclaims in debt collection actions. This specific provision prevails over the general provisions regarding counterclaims found in the Mashantucket Rules of Civil Procedure.

III. DUE PROCESS AND EQUAL PROTECTION.

The defendant asserts that the provisions of the Debt Collection Ordinance that limit types of special defenses and prohibit the filing of counterclaims "violate every notion of due process and fairness " because they restrict the ability of defendants "to plead defenses and counterclaims which are otherwise valid defenses and counterclaims." The defendant contends that this results in a violation of his right to due process and equal protection under the Indian Civil Rights Act, 25 U.S.C. § 1302, et. seq.

The defendant’s argument presumes that the special defense and counterclaim he filed in this action would be considered as valid in the absence of the restrictive provisions of the Debt Collection Ordinance. As discussed earlier, however, the facts alleged as a special defense are not sufficient to support a claim that the plaintiff violated an implied contractual duty and good faith and fair dealing. Similarly, those facts do not support a counterclaim sounding in tort; the counterclaim was filed long after the statute of limitations had run. Because the special defense and counterclaim would not be "otherwise valid" in the absence of the restrictive provisions of the Debt Collection Ordinance, the underlying premise of the defendant’s due process and equal protection argument fails. In these circumstances, the Debt Collection Ordinance cannot be found to be a violation of the Indian Civil Rights Act.

For the above reasons, the defendant’s special defense and counterclaim are dismissed.

_____________________________

Edward B. O’Connell, Judge