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A victim of identity theft is entitled to recover both treble damages and punitive damages under Connecticut laws, according to the state’s highest court.

The Connecticut Supreme Court found that the dual awards do not violate the common-law rule against double recovery because they are awarded under separate statutes that have different purposes, neither of which indicates that its remedies are intended to be exclusive. The common law principle that was before the court is one that seeks to ensure that a litigant is compensated only once for the same injury.

Treble damages are awarded to compensate victims under Connecticut’s identity theft statute (搂 52-571h (b)) while punitive damages are awarded when there have been unfair or deceptive trade practices in violation of the Connecticut Unfair Trade Practices Act (CUTPA). The high court stressed that unlike treble damages under the identity theft law, punitive damages awarded under the CUTPA are not intended to compensate plaintiffs but are meant to punish the wrongdoers for their misconduct, and to deter future CUTPA violations.

The court noted that the identity theft law requires that a plaintiff who proves identity theft be awarded ”the greater of one thousand dollars or treble damages.” The amount of damages under CUTPA is at the discretion of the court.

Lawyer Plaintiff

The case involved Frank Charles White, a Connecticut attorney who sued FCW Law Offices and two John Does over their operation of a criminal organization defrauding unsuspecting time-share owners by persuading them to sell their Mexican time-shares. The defendants committed identity theft by using White’s name and juris number to establish a sham website. The victims were induced to transfer funds to the defendants based on the false representation that the funds would be returned to them at the time of the real estate closing. An investigator determined that the scam had approximately 40 victims whose cumulative losses totaled millions of dollars.

White did everything he could to stop the defendants’ fraud including contacting state, federal and state bar authorities. When he called the telephone number on the website purporting to be the number of the FCW Law Offices in New Haven, a person claiming to be an attorney threatened him, stating ‘”calm down and you won’t get hurt.'” He was able to get the website to be taken down twice, although each time it reappeared under a different domain name. He dealt with the issue for months including taking calls from people who thought he was part of the scam.

White brought an action against the defendants in June 2020. Among his counts he alleged identity theft and a violation of CUTPA. The defendants did not answer the complaint. The trial court granted White’s motion to default the defendants for failure to appear. It thereafter concluded that the plaintiff had proven his entitlement to damages under both the identity theft and CUTPA statutes. The court found that ”the plaintiff has lived with the nightmare of this frau] since February 2019. It has affected his family, his career, his livelihood, and his emotional and mental well-being.” The court noted he was still receiving calls from people being scammed.

With respect to the identity theft claim, the trial court awarded White $150,000 in compensatory damages, $20,000 in attorney’s fees, and $1,329.21 in costs. The court also awarded him $300,000 in punitive damages on his CUTPA claim for a total award of $471,329.21.

White complained that he should have received $450,000 in compensatory damages in light of the identity theft law which entitled him to the greater of either $1000 or treble the amount of his actual damages of $150,000 or, in the alternative. The trial court denied the motion without explanation.

Appellate Ruling

White then brought his case to the Appellate Court, claiming that the trial court improperly failed to award him treble damages. The Appellate Court agreed with him that he was entitled to treble compensatory damages. However, at the same time, the Appellate Court concluded that he could not also recover the $300,000 punitive damages under CUTPA as that would violate the “fundamental principle that a plaintiff is entitled to be compensated only once for his injury.”

On appeal to the Supreme Court, White argued that the Appellate Court incorrectly determined that it would violate the rule against double recovery to award both punitive damages and treble damages. He contended that, in the absence of explicit statutory language to the contrary, remedies available under such remedial statutes are intended to be cumulative and not in lieu of other statutory or common-law remedies. He further contended that the rule against double recovery is not implicated in his case because punitive damages under CUTPA, unlike treble damages under the identity theft statute, are not intended to compensate plaintiffs for their losses but to punish defendants for their misconduct, and to deter future CUTPA violations.

Supreme Court

The Supreme Court agreed with White and reversed the Appellate Court insofar as it disallowed the award of punitive damages under CUTPA while retaining the Appellate Court conclusion in favor of the treble compensatory damages.

The high court noted that although a claim for punitive damages and a claim for treble damages may rely on the same or overlapping proof, “they seek relief for distinct categories of legal harm, and the court’s discretion as to whether to award damages and the amount to award is very different under each statute.”

The court also noted: “Remedies are not duplicative simply because their availability arises out of the same transaction, occurrence or event. Just as our criminal statutes authorize multiple punishments for conduct occurring in the same transaction when the statutes in question are intended ”to protect separate and distinct interests of society; so, too, the law sometimes provides a civil claimant multiple, cumulative remedies to redress different or distinctive types of harm, even if precipitated by a single incident.”

Topics Fraud