NORMAND JOSEF ENTERPRISES v. CONNECTICUT NATIONAL BANK

14901

230 Conn. 486 (1994) | Cited 59 times | Supreme Court of Connecticut | August 2, 1994

The principal issue in this case is therelationship between a bank's common law right ofsetoff and a judgment creditor's statutory right toenforce a court-issued execution. The plaintiff, NormandJosef Enterprises, Inc. (Josef), filed a four countcomplaint against the defendant, Connecticut NationalBank (bank), alleging, in separate counts, that the bankhad wrongfully dishonored two orders of execution onthe bank account of Josef's judgment debtor, J.H.Hogan, Inc. (Hogan), that the bank's wrongful conductviolated the Connecticut Unfair Trade Practices Act(CUTPA), General Statutes 42-110a et seq.; and thatthe bank had falsely, fraudulently, intentionally andrecklessly misrepresented to Josef that no funds werein the account in question. The trial court, Pellegrino,J., rendered judgment in Josef's favor on the first threecounts,1 and awarded it attorney's fees for the CUTPAviolation. The bank appealed to the Appellate Court

[230 Conn. 489]

     from the judgment and the supplemental judgment, andJosef cross appealed from the denial by the trial court,Pittman, J. of its postjudgment motion for attorney'sfees to defend against the bank's appeal. We transferredthe appeal and the cross appeal to this court pursuantto Practice Book 4023 and General Statutes51-199(c).

The trial court, Pellegrino, J., made the followingfindings of fact. On September 24, 1991, Josef obtaineda judgment against Hogan for $21,000. The validity ofthat judgment is not at issue. Because the judgmentwas not satisfied, Josef obtained an execution issuedby the clerk of the court to recover unpaid damagesin the amount of the judgment. Josef employed a deputysheriff to serve the execution upon the bank in orderto garnish the proceeds of Hogan's checking account.The deputy sheriff tried, unsuccessfully, on two occasions,to garnish this account.

The deputy sheriff first served the execution uponthe bank on Friday, October 25, 1991. On that date,Hogan had a checking account balance at the bank inthe amount of $5326.97. A check drawn to a third partyon Hogan's account in the amount of $380.15 washonored and cleared the following Monday, October 28.Thereafter, however, relying on a default on Hogan'scommercial loan from the bank, the bank set off$4945.82, the remainder of Hogan's account, to itself.Although the bank's "proof ticket" was dated October28, indicating that the setoff occurred on that date,no commercial loan payment was entered in Hogan'saccount until October 29. The bank notified the deputysheriff who had served the execution that, as ofthe date of the execution, no funds were available.

[230 Conn. 490]

Because of subsequent deposits, Hogan's bankaccount had a balance of $63,633.62, $54,620.06 and$51,673.23 on October 29, 30 and 31, respectively. Thedeputy sheriff served the execution for a second timeon Wednesday, November 6, 1991, when Hogan's bankaccount had a balance of $31,304.86. Again relying onHogan's defaulted bank loan, the bank repeated itsexercise of its right of setoff, this time in the amountof $31,303.86. As had occurred previously, the bankmanifested its exercise of that right by a "proof ticket"dated in timely fashion, on November 7, but did notcredit the payment to Hogan's commercial loan accountuntil the following day. The bank notified the deputysheriff that no funds were available on the date of thesecond execution.

The trial court ruled in Josef's favor on the first twocounts of its complaint, concluding that the bank hadfailed to act within the midnight deadline, the time constraintdefined in General Statutes 42a-4-104,2 thatis expressly made applicable to the garnishment of corporatebank accounts by the terms of General Statutes52-367a.3 That time constraint would have required

[230 Conn. 491]

     the bank to exercise any right of setoff, in the firstinstance by midnight of October 28, and in the secondinstance by midnight of November 7. The court specificallyfound that the proof tickets were unreliableand that the bank had not exercised its setoff rightsuntil October 29 and November 8.

With respect to these counts, the trial court also concludedthat, regardless of its timing, the bank had noright of setoff in the circumstances of this case. Thecourt determined that, in the absence of an expressright of setoff in the Hogan loan agreement, the bankcould only invoke a common law right of setoff. No commonlaw right of setoff was available in this case,according to the trial court, because Hogan was notinsolvent and because underlying equitable considerationsdid not support its recognition.

Finally, the trial court ruled in Josef's favor on itsCUTPA claim. The court held that CUTPA applies tobanks and that the bank's exercise of its right of setoffwas, in both cases, a flagrant violation of 52-367a andof the court orders of execution. The court found thatthe bank had engaged in deceptive conduct in returning

[230 Conn. 492]

     the orders of execution on the ground of"no availablefunds" without mentioning the setoffs. Accordingly,the court held that Josef was entitled not onlyto its money judgment and interest, but also to a reasonableattorney's fee. Thereafter, the court awardedattorney's fees calculated on an hourly basis.

On appeal, the bank challenges one of the trial court'sfindings of fact and all of its conclusions of law. As amatter of fact, the bank claims that its setoff was timelybecause it complied with the applicable midnight deadline.As a matter of law, the bank claims that: (1) Joseffailed to state an actionable claim, because it allegedonly that the bank did not act upon the executionaccording to General Statutes 42a-4-303,4 which doesnot apply to the circumstances of this case despite thecross-reference contained in 52-367a; (2) the bank isentitled to a common law right of setoff in the circumstancesof this case; (3) CUTPA does not apply to banks;(4) the bank did not violate CUTPA; and (5) the trialcourt miscalculated recoverable attorney's fees. Thecross appeal filed by Josef challenges the trial court'sruling that, as a matter of law, CUTPA does not authorize

[230 Conn. 493]

     recovery of anticipatory appellate attorney's fees.Although we affirm the judgment of the trial court concerningthe 52-367a violation and agree with its conclusionthat CUTPA applies to banks, we disagree withthe trial court's determination that the bank's actions,under the circumstances of this case, violated CUTPA.

I

The bank first claims that Josef has failed to statean actionable claim and, therefore, cannot recover onthe basis of its pleadings. The bank specifically contendsthat Josef only alleged a failure by the bank to act uponJosef's court-issued postjudgment execution, servedpursuant to 52-367a, in accordance with 42a-4-303before its midnight deadline as defined in 42a-4-104.The bank argues that 42a-4-303 provides rules fordetermining the priority between, inter alia, a setoffor judicial execution and an item, and not between anexecution and a bank setoff. Because 42a-4-303 doesnot apply to the circumstances of this case, whichinvolve a priority dispute between Josef's judicial executionand the bank's setoff, the bank contends thatthe plaintiff cannot prevail on its cause of action.

A

The first issue before us is whether 42a-4-303, whichis identical to 4-303 of the Uniform Commercial Code,resolves a priority dispute between a judicial executionand a bank's setoff. The priority disputes that42a-4-303 addresses are those between an "item, "on the one hand, and legal process such as a judicialexecution or garnishment, a setoff by the payor bank,a bankruptcy petition or a stop payment order, on theother hand.5 A.L.I., Uniform Commercial Code (12th

[230 Conn. 494]

     Ed. 1990) 4-303 and comments 1 and 2. The term"item" is defined by 42a-4-104 (a)(9) as "an instrumentor a promise or order to pay money handled bya bank for collection or payment."6 In order to comewithin 42a-4-303, either the bank's setoff or Josef'spostjudgment judicial execution would, therefore, haveto be an "item." We agree with the bank that neitherthe setoff nor the execution order is an "item."

The right of setoff, although it may arise out of a writteninstrument, is a common law equitable right thatis not itself a written instrument. A setoff involves"[t]he equitable right to cancel or offset mutual debtsor cross demands, commonly used by a bank in reducinga customer's checking or other deposit account insatisfaction of a debt the customer owes the bank."Black's Law Dictionary (6th Ed. 1990) p. 1372; see Sullivanv. Merchants National Bank, 108 Conn. 497,499-500, 144 A. 34 (1928). A setoff is, therefore, notan "item."

[230 Conn. 495]

A postjudgment judicial execution or garnishmentinvolves an order issued under authority of the courtallowing a judgment creditor to obtain satisfaction ofa judgment by reaching debts due from a third party,such as a banking institution, to the judgment debtor.General Statutes 52-367a; Hospital of St. Raphael v.New Haven Savings Bank, 205 Conn. 604, 608,534 A.2d 1189 (1987); see also 1 E. Stephenson, Connecticut CivilProcedure (2d Ed. 1970) 56 (garnishment permitsplaintiff to reach debts owed to defendant, personalproperty of defendant held by third parties and anybenefits owed to defendant from deceased person'sestate). A court-issued legal process, a judicial executionor garnishment is not "an instrument, order orpromise" and, therefore, is not an "item."

Other courts> that have considered priority disputesbetween a postjudgment judicial execution on a bankand a bank's right of setoff have similarly concludedthat Uniform Commercial Code 4-303 is not applicableto such a dispute. See, e.g., Pittsburgh NationalBank v. United States, 657 F.2d 36, 39 (3d Cir. 1981);Ebsary Foundation Co. v. Barnett Bank of SouthFlorida, N.A., 569 So.2d 806, 806-807 (Fla. App. 1990);Victor Werlhof Aviation Ins. v. Garlick, 237 Mont. 51,771 P.2d 962, 967 (1989). Leading commentatorson the Uniform Commercial Code have takenthe same position. See B. Clark, The Law of BankDeposits, Collections and Credit Cards (3d Ed. 1990)¶ 5.04 [7] [c], p. 5-105, ¶ 14.05 [3], p. 14-17 and n. 66,and (Cum. Sup. 1994) ¶ 5.04 [7] [a], p. S5-19; 1 J. White& R. Summers, Uniform Commercial Code (3d Ed.1988) 18-7.

B

Our determination that 42a-4-303 does not applyin the circumstances of this case does not, however,end this matter. The question remains whether the allegations

[230 Conn. 496]

     in Josef's complaint encompass an actionablecomplaint that survives the inapplicability of42a-4-303. We disagree with the bank's contentionthat the complaint stands or falls with 42a-4-303.

"It is fundamental in our law that the right of a plaintiffto recover is limited to the allegations of [its] complaint."(Internal quotation marks omitted.) Lundbergv. Kovacs, 172 Conn. 229, 232, 374 A.2d 201 (1977).However, "[t]he modern trend, which is followed inConnecticut, is to construe pleadings broadly andrealistically, rather than narrowly and technically."(Internal quotation marks omitted.) Beaudoin v. TownOil Co., 207 Conn. 575, 587-88, 542 A.2d 1124 (1988);Fuessenich v. DiNardo, 195 Conn. 144, 150-51,487 A.2d 514 (1985). As long as the pleadings provide sufficientnotice of the facts claimed and the issues to betried and do not surprise or prejudice the opposingparty, we will not conclude that the complaint is insufficientto allow recovery. Tedesco v. Stamford, 215 Conn. 450,459, 576 A.2d 1273 (1990), on remand, 24 Conn. App. 377,588 A.2d 656 (1991), rev'd, 222 Conn. 233,610 A.2d 574 (1992); Giulletti v. Connecticut Ins. PlacementFacility, 205 Conn. 424, 434, 534 A.2d 213 (1987);see also Web Press Services Corp. v. New LondonMotors, Inc., 203 Conn. 342, 359-60, 525 A.2d 57(1987); see also Practice Book 108 and 109.7

[230 Conn. 497]

Furthermore, "a judgment ordinarily cures pleadingdefects. . . ." Tedesco v. Stamford, supra, 215 Conn. 458."The absence of a requisite allegation in a complaintthat would have justified the granting of a motionto strike, however, is not a sufficient basis for vacatinga judgment unless the pleading defect has resultedin prejudice. [I]f parties will insist on going to trial onissues framed in a slovenly manner, they must abidethe verdict; judgment will not be arrested for faults instatement when facts sufficient to support the judgmenthave been substantially put in issue andfound. . . . Want of precision in alleging the cause ofan injury for which an action is brought, is waived bycontesting the case upon its merits without questioningsuch defect." (Citation omitted; internal quotationmarks omitted.) Id., 457.

The bank would have us focus solely on paragraphten of the first two counts of Josef's complaint, whichalleges that "the defendant bank failed to act upon suchexecution according to 42a-4-303 of the ConnecticutGeneral Statutes before its midnight deadline asdefined in 42a-4-104(a) (10) of the Connecticut GeneralStatutes." We decline to read the complaint so narrowly.The gravamen of the first two counts in Josef'scomplaint is that the bank improperly dishonored thejudicial execution authorized by 52-367a because thebank exercised its right of setoff in an untimely manner,namely, after the midnight deadline as defined in42a-4-104 (a) (10).8 Indeed, the language in paragraphten of the first two counts of Josef's complaint mirrorsthe language contained within 52-367a, which specifiesthe manner in which the bank is required to actupon service of an execution.

[230 Conn. 498]

The procedural history of this case demonstrates thatit was neither brought nor tried solely on the basis of42a-4-303. The bank never moved to strike either ofthe first two counts in the complaint, which focused52-367a.9 In addition, the issue regarding the allegationsin Josef's complaint was raised and decided infavor of Josef in the trial court, as evidenced by thetrial court's judgment for Josef on the first two counts,premised, in part, on the finding that the bank had"failed to act within the midnight deadline."10 Notably,the trial court's memorandum of decision containsno mention of 42a-4-303. Finally, at oral argumentbefore us, the bank conceded that it was neither surprisednor prejudiced at trial that the issues in this caserevolved around 52-367a and the application of themidnight deadline.

For all of the foregoing reasons, we reject the bank'sconstruction of Josef's complaint. We conclude thatJosef raised an actionable claim regarding the bank'scompliance with 52-367a and that the bank had sufficientnotice of this cause of action.

II

The bank next challenges the finding of the trial courtthat the setoff was untimely because it occurred afterthe midnight deadline. The bank's challenge is twofold.The first question the bank raises is whether, as a matterof law, the midnight deadline defined in42a-4-104 (a) (10) applies to the bank's exercise of itsright of setoff in response to a service of executionunder 52-367a. The second question the bank raises

[230 Conn. 499]

     is whether, assuming the applicability of the midnightdeadline, the bank, as a matter of fact, exercised itsright of setoff in timely fashion.11

A

We must first determine the rules that govern thetime within which a bank must act on a 52-367a serviceof execution. The relevant portion of 52-367a provides:"Such banking institution [served with anexecution and upon which demand is made of any debtsfrom such banking institution to a judgment debtor]shall act upon such execution according to section42a-4-303 before its midnight deadline, as defined insection 42a-4-104." The bank maintains that, because42a-4-303 does not apply in the circumstances of thiscase, the midnight deadline is equally inapplicable. Josefmaintains, to the contrary, that 52-367a imposes themidnight deadline by its own terms even though42a-4-303 is inapplicable.

"We approach this question according to well establishedprinciples of statutory construction designed tofurther our fundamental objective of ascertaining andgiving effect to the apparent intent of the legislature. . . . In seeking to discern that intent, we lookto the words of the statute itself, to the legislative historyand circumstances surrounding its enactment, tothe legislative policy it was designed to implement, andto its relationship to existing legislation and commonlaw principles governing the same general subject matter."(Citation omitted; internal quotation marks omitted.) Fahyv. Fahy, 227 Conn. 505, 512, 630 A.2d 1328(1993); West Hartford Interfaith Coalition, Inc. v. TownCouncil, 228 Conn. 498, 507-508, 636 A.2d 1342 (1994);Lauer v. Zoning Commission, 220 Conn. 455, 459-60,

[230 Conn. 500]

     600 A.2d 310 (1991); Peck v. Jacquemin, 196 Conn. 53,63-66, 491 A.2d 1043 (1985).

The words of the statute are ambiguous. It is unclearwhether the phrase "before its midnight deadline"modifies the phrase "according to section 42a-4-303"or "act upon such execution." The scant legislative historyof 52-367a is not specifically helpful.

In resolving this ambiguity, we must turn to thepolicy advanced by the statute. That policy is to affordjudgment creditors an effective method for levying onthe bank accounts of their judgment debtors. It is reasonablefor us to effectuate this policy by assuming thatthe legislature intended "before its midnight deadline"to modify "act upon such execution."

If, as the bank urges, the midnight deadline is tiedto the applicability of 42a-4-303, then 52-367a wouldcontain no express time constraints within which a bankis required to act upon an execution when the competingpriority involves not an "item," but another legalevent such as a bank's right of setoff. The legislaturehas, however, at a minimum, manifested its intent thata bank should not have an unlimited time within whichto respond to an execution.

First, in enacting 52-367a the legislature explicitlyreferred to two Uniform Commercial Code provisions,42a-4-303 and 42a-4-104. By including these references,the legislature has made article four of the codethe departure point for our analysis.

Second, article four of the Uniform Commercial Codegoverns bank deposits and collections and delineatesthe duties of a payor bank with regard to various commercialtransactions, such as items and other legalevents, including executions. See General Statutes42a-4-101 et seq. Under article four, these dutiesinclude the requirement of observance of the midnightdeadline.

[230 Conn. 501]

If 52-367a does not incorporate the midnight deadlinedirectly, the statute must be interpreted as requiringa bank to act within a reasonable time. Neither thetext of the statute nor its obvious purpose of protectingthe rights of a judicial lien creditor suggests thata bank has an unlimited amount of time in which to actupon an execution pursuant to 52-367a. The reasonabletime requirement, in turn, is informed, by analogy,by the provisions of article four. We have oftendrawn upon provisions of the Uniform CommercialCode as a source of analogy for the emergent commonlaw. See, e.g., New England Savings Bank v. Lopez,227 Conn. 270, 281-82, 630 A.2d 1010 (1993) (real property);Hospital of St. Raphael v. New Haven SavingsBank, supra, 205 Conn. 610-11 (passbook savingsaccount); Barco Auto Leasing Corp. v. House, 202 Conn. 106,114, 520 A.2d 162 (1987) (automobile leasingagreement); New England Yacht Sales, Inc. v. Commissionerof Revenue Services, 198 Conn. 624, 630,504 A.2d 506 (1986) (transfer of title of personal property);Olean v. Treglia, 190 Conn. 756, 762, 463 A.2d 242(1983) (real property); Conference Center Ltd. v. TRC,189 Conn. 212, 225, 455 A.2d 857 (1983) (real property).

"We proceed, therefore, to a more fundamental principleof adjudication. Just as the legislature is presumedto enact legislation that renders the body of the lawcoherent and consistent, rather than contradictory andinconsistent . . . courts> must discharge their responsibility,in case by case adjudication, to assure that thebody of the law - both common and statutory - remainscoherent and consistent." (Citation omitted.) Fahy v.Fahy, supra, 227 Conn. 513-14. "Statutes are now centralto the law in the courts>, and judicial lawmakingmust take statutes into account virtually all of thetime. . . . More often, the issue is rather to whatextent a statute is itself a source of policy for consistentcommon law development." E. Peters, "Common

[230 Conn. 502]

     Law Judging in a Statutory World: An Address," 43U. Pitt. L. Rev. 995, 998 (1982).

Looking to the Uniform Commercial Code by way ofanalogy in this case, we are persuaded that the midnightdeadline contained in article four is an appropriatedefinition of a reasonable time for a bank to actin response to a service of an execution under52-367a. The code was drafted to simplify, clarify,modernize and unify the law of commercial transactions.General Statutes 42a-1-102(2). In order toachieve certainty and predictability in commercial dealings,"the drafters of the Code found it necessary toengage in line drawing"; Citizens & Peoples NationalBank of Pensacola v. United States, 570 F.2d 1279,1283-84 (5th Cir. 1978); such as by creating deadlinesby which commercial actors were required to act uponcertain events. Article four of the Uniform CommercialCode states the "principal rules of the bank collectionprocess." A.L.I., supra, Uniform CommercialCode 4-101, comment 1. The code establishes the midnightdeadline12 as the standard time frame withinwhich a payor bank13 must pay an item. General Statutes42a-4-301 and 42a-4-302.14

[230 Conn. 503]

We therefore conclude that 52-367a imposes a midnightdeadline on a bank served with an execution. Themidnight deadline arguably was intended by the legislatureto apply directly even in transactions notgoverned by 42a-4-303. Alternatively, if 52-367a hasno express time limitation for transactions that are notgoverned by 42a-4-303, the bank must act within areasonable time, and that reasonable time period is, byanalogy, defined as the midnight deadline that is thebaseline generally for article four provisions governingpayouts by banks.

B

Having determined that the midnight deadline, asdefined in 42a-4-104(a)(10), is the applicable timelimitation within which a bank must act upon a52-367a execution, the trial court appropriately concludedthat the bank was required to exercise its competingright to a setoff before the expiration of thatdeadline. The bank maintains that the trial courtimproperly found that the bank had not taken definitivesteps to manifest its exercise of a setoff within thatprescribed time period. To the contrary, we agree withthe trial court's finding.

On appeal, this court may reverse or modify the decisionof the trial court only "if it determines that thefactual findings are clearly erroneous in view of the evidenceand pleadings in the whole record." PracticeBook 4061.15 "We do not examine the record to determine

[230 Conn. 504]

     whether the trier of fact could have reached a conclusionother than the one reached. Rather, we focuson the conclusion of the trial court, as well as themethod by which it arrived at that conclusion, to determinewhether it is legally correct and factually supported."(Internal quotation marks omitted.) Lukas v.New Haven, 184 Conn. 205, 208, 439 A.2d 949 (1981);Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80,88, 612 A.2d 1130 (1992); Nor'easter Group, Inc.v. Colossale Concrete, Inc., 207 Conn. 468, 473,542 A.2d 692 (1988). "`A finding is "clearly erroneous" whenalthough there is evidence to support it, the reviewingcourt on the entire evidence is left with the definite andfirm conviction that a mistake has been committed.'"Doyle v. Kulesza, 197 Conn. 101, 105, 495 A.2d 1074(1985), quoting United States v. United States GypsumCo., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746(1948); see also Web Press Services Corp. v. New LondonMotors, Inc., 205 Conn. 479, 483, 533 A.2d 1211(1987).

1

For our assessment of the trial court's finding of fact,we must first determine what steps a bank is requiredto take in order to effectuate a setoff. Although we havenot previously addressed this specific question, we arepersuaded that the bank must produce evidence of thetime when it took some positive act manifesting thata setoff was actually made. This is the rule enunciatedby the leading case of Baker v. National City Bank of Cleveland,511 F.2d 1016 (6th Cir. 1975) (applying Ohio law).16That court held that "the act of setoff is not complete

[230 Conn. 505]

     until three steps have been taken: (1) the decisionto exercise the right, (2) some action which accomplishesthe setoff and (3) some record which evidencesthat the right of setoff has been exercised." Id., 1018.The court quoted approvingly from an official commentto 4-303 of the Uniform Commercial Code, whichstates that "`[i]n the case of setoff the effective timeis when the setoff is actually made.'" Id.; A.L.I., supra,Uniform Commercial Code 4-303, comment 5. On thebasis of that comment, the court stated: "It is clearfrom this language that a setoff does not occur automaticallyeach time a bank holds the matured debt ofa depositor. The setoff must be `actually made.' We donot hold that [Uniform Commercial Code 4-303],standing alone, disposes of the issue in this case. However,it is a further sign which points to a policy of theState of Ohio, and of all states that have adopted theUniform Commercial Code, which requires that internalbanking transactions involving adverse interests beevidenced by bookkeeping entries or some similarly bindingovert act. This policy not only provides criteria fordetermining conflicting claims, but also assures thosewho deal with banks that their rights will not bedefeated by unsupported internal declarations of a self-servingnature." (Emphasis added.) Id.; see also In reSaugus General Hospital, Inc., 698 F.2d 42, 47 (1st Cir.1983); United States v. Citizens & Southern NationalBank, 538 F.2d 1101, 1107 (5th Cir. 1976), cert. denied,430 U.S. 945, 97 S.Ct. 1579, 51 L.Ed.2d 792 (1977);Victor Werlhof Aviation Ins. v. Garlick, supra, 771 P.2d 965;United Seeds, Inc. v. Eagle Green Corp., 223 Neb. 360,363, 389 N.W.2d 571 (1986).

[230 Conn. 506]

We therefore hold that as a matter of law, a bankeffectuates its right of setoff only after it has performedsome binding overt act and has made a record to evidencethat action. See Michigan Carpenters' CouncilPension Fund v. Smith & Andrews Construction Co.,681 F. Sup. 1252, 1254-55 (E.D. Mich. 1988) (applyingBaker test to determine if bank exercised right ofsetoff against competing garnishment of bank account).Furthermore, we hold that, consistent with the certaintyand predictability required by banking operationsin the commercial world, the act must be unequivocal,objectively ascertainable and final in order to be overtand binding. Cf. Citizens & Peoples National Bank ofPensacola v. United States, supra, 570 F.2d 1283.

2

We now address the bank's challenge to the validityof the trial court's finding that its effectuation of itsright to a setoff was untimely, in light of the standardjust articulated. In determining that the setoff had notbeen effectuated by the midnight deadline, the courtstated that it "reject[ed] the self-serving testimony ofthe bank employees who testified that the proof ticketswere sufficient to debit the account. The proof tickets,although prepared by the employees who testified, alsohave a box marked `Approved by,' which were signedby [another] bank official who did not appear to testify.The court is not convinced that the proof slipswere, in fact, approved on the day noted on the slips,since the statement records the setoff the following dayafter the midnight deadline in both instances. The courtwas offered no plausible explanation why the defendantbank could not have debited the Hogan accountwithin the midnight deadline on the statement of theirdepositor Hogan if, in fact, this is what they intendedto do. The court places more credence on the Hoganstatement as to the date the account was debited thanthe statements of the defendant's employees who

[230 Conn. 507]

     testified that the accounts were debited on the date theyprepared the `proof tickets.'" The bank has offeredno persuasive argument why these findings of the trialcourt should be overturned.

"Judgments pertaining to the resolution of conflictingfactual claims lie within the province of the trialcourt." Edens v. Kole Construction Co., 188 Conn. 489,495, 450 A.2d 1161 (1982). "It is familiar law that [it]was for the trial court to weigh the evidence and determinethe credibility of the witnesses. This court cannotand will not weigh the evidence contained in the recordbefore us. . . . If there is sufficient evidence inthe record in support of the decision of the trial courtsuch decision must be affirmed." (Citation omitted;internal quotation marks omitted.) Cashman v. Calvo,196 Conn. 509, 513-14, 493 A.2d 891 (1985).

We cannot second-guess the trial court's assessmentof the credibility of the witnesses produced by the bank."It is the trial court which had an opportunity toobserve the demeanor of the witnesses and parties;thus, it is best able to judge the credibility of the witnessesand to draw necessary inferences therefrom."Kukanskis v. Jasut, 169 Conn. 29, 32-33, 362 A.2d 898(1975). "A trier of fact is free to reject testimony evenif it is uncontradicted . . . and is equally free to rejectpart of the testimony of a witness even if other partshave been found credible." (Citations omitted.) Barrilav. Blake, 190 Conn. 631, 639, 461 A.2d 1375 (1983).

Our review of the record discloses no basis for disturbingthe trial court's findings of fact. We conclude,therefore, that the trial court properly determined that,after having been served with Josef's execution, thebank failed to effectuate its right of setoff within theapplicable midnight deadline as required by 52-367a.Accordingly, we affirm the judgment of the trial court

[230 Conn. 508]

     that the bank violated 52-367a as alleged in countsone and two of Josef's complaint.17

III

The bank next claims that the trial court improperlyconcluded that it had violated CUTPA. Again, this challengeis twofold. First, the bank contends that CUTPAdoes not apply to banks. Second, the bank argues thateven if banks are, in principle, subject to CUTPA, itsactions in this case after having been served withJosef's 52-367a execution did not amount to a CUTPAviolation.

A

The bank first argues that the trial court improperlydetermined that CUTPA applies to banks. The bankemphasizes that the legislature has instructed thecourts> and the commissioner of consumer protectionto look to the Federal Trade Commission Act for guidancein the interpretation of CUTPA. General Statutes42-110b(b);18 Russell v. Dean Witter Reynolds, Inc.,200 Conn. 172, 178-79, 510 A.2d 972 (1986). Because5(a)(2) of the Federal Trade Commission Act specificallyexempts banks from its coverage,19 the bank

[230 Conn. 509]

     maintains that we should similarly construe CUTPAas being inapplicable to banks. Furthermore, becausebanks are regulated by state authorities and by federalauthorities other than the Federal Trade Commission,the bank argues that this pattern of pervasive regulationis analogous to the regulation of the securitiesindustry, which we held to be exempt from CUTPA inRussell v. Dean Witter Reynolds, Inc., supra, 172. Wedisagree with the bank's arguments and hold thatCUTPA does apply to banks.

CUTPA provides that "[n]o person shall engage inunfair methods of competition and unfair or deceptiveacts or practices in the conduct of any trade or commerce."General Statutes 42-110b(a). Our startingpoint in interpreting the scope of CUTPA is42-110b(d), which provides that "[i]t is the intentionof the legislature that this chapter be remedial and beso construed." See Web Press Services Corp. v. NewLondon Motors, Inc., supra, 203 Conn. 354; Heslin v.Connecticut Law Clinic of Trantolo & Trantolo,190 Conn. 510, 520, 461 A.2d 938 (1983); Hinchliffe v.American Motors Corp., 184 Conn. 607, 615 n. 4,440 A.2d 810 (1981). Furthermore, a party claiming anexemption from CUTPA has the burden of proof. GeneralStatutes 42-110c(b).

On their face, the definitional sections of CUTPAinclude banks. A bank is a "person," as defined in42-110a(3),20 and is engaged in the conduct of

[230 Conn. 510]

     "trade" or "commerce," as defined in 42-110a(4).21Unless the bank can establish some extrinsic groundof exemption, its conduct with respect to a judicial executionunder 52-367a is, therefore, an act or practicethat comes within the regulatory ambit of CUTPA.

Furthermore, CUTPA expressly provides exceptionsfrom its coverage that exclude a variety of commercialtransactions but do not provide a blanket exemptionfor banks. General Statutes 42-110c.22 We haverepeatedly observed that courts> should not interpretlegislation to enlarge existing statutory exemptions.State v. Turello, 183 Conn. 330, 335, 439 A.2d 364(1981); see also Caulkins v. Petrillo, 200 Conn. 713,718-20, 513 A.2d 43 (1986); Downer v. Liquor ControlCommission, 134 Conn. 555, 560, 59 A.2d 290 (1948).

The fact that banks are exempt from the FederalTrade Commission Act does not establish their exemptionfrom CUTPA. Read precisely, 42-110b(b) urgesus to be guided only by "Section 5(a)(1) of the FederalTrade Commission Act . . . ." Banks, however,derive their federal exemption from 5(a)(2) of the

[230 Conn. 511]

     Federal Trade Commission Act. See footnote 19. It isentirely logical that our legislature would have referredto 5(a)(1), rather than to the Federal Trade CommissionAct in its entirety, because 5(a)(1) is thesource of the substantive standards that the FederalTrade Commission has established to regulate unfairtrade practices.23

It would be inconsistent with the remedial purposesof CUTPA for us to broaden the reference in42-110b(b) to 5(a)(1) of the Federal Trade CommissionAct to incorporate the blanket exemption forbanks that is contained in 5(a)(2) of the federal act."The General Assembly is always presumed to knowall the existing statutes and the effect that its actionor non-action will have upon any one of them. And itis always presumed to have intended that effect whichits action or non-action produces." (Internal quotationmarks omitted.) Plourde v. Liburdi, 207 Conn. 412,417, 540 A.2d 1054 (1988). This presumption includesknowledge, not only of existing Connecticut statutes,but also of all federal statutes, including the FederalTrade Commission Act. Since CUTPA includes its own

[230 Conn. 512]

     exemption section, 42-110c, it is plain that the legislaturerecognized that some limitations on the scopeof CUTPA were desirable. Had it wanted to includebanks within those limitations, it knew how to do so.See Federal Aviation Administration v. Administrator,196 Conn. 546, 551, 494 A.2d 564 (1985); State v.Smith, 194 Conn. 213, 223, 479 A.2d 814 (1984);Edmundson v. Rivera, 169 Conn. 630, 635,363 A.2d 1031 (1975). Courts> should not create exemptions thatthe legislature has not enacted.

The bank argues, however, that the banking industryis entitled to an implied exemption from CUTPAby analogy to the implied exemption of the securitiesindustry that this court recognized in Russell v. DeanWitter Reynolds, Inc., supra, 200 Conn. 172, despitethe absence of an express exemption in CUTPA forsecurities transactions. In Russell, we framed the questionof applicability as "not whether [the suspect] transactionsare exempt from CUTPA but whether CUTPAitself can fairly be interpreted to encompass such transactionsin the first instance." Id., 178. In determiningthat securities transactions were not subject toCUTPA, we engaged in a four part analysis. That analysiswas refined and applied in Mead v. Burns,199 Conn. 651, 661-63, 509 A.2d 11 (1986), and Connellyv. Housing Authority, 213 Conn. 354, 361-64,567 A.2d 1212 (1990). To determine whether the suspect transactionsshould be exempt from CUTPA, we examine:(1) the applicability of Federal Trade Commission rulesto the suspect conduct and the absence of any FederalTrade Commission regulatory activity over industrypractices; (2) the existence and scope of an alternatecomprehensive regulatory scheme or system; (3) theabsence of any activity by the commissioner of consumerprotection within this area; and (4) the case lawof other jurisdictions. Russell v. Dean Witter Reynolds,Inc., supra, 179-84. Applying this four part analysis

[230 Conn. 513]

     to the bank's activities in this case, we conclude thatbanks are not exempt from CUTPA coverage.

The first part of this analysis asks whether the FederalTrade Commission regulates the banking industry,directly or indirectly. Although banks are notdirectly subject to the Federal Trade Commission;15 U.S.C. § 45(a)(2) (1988); United States v. PhiladelphiaNational Bank, 374 U.S. 321, 336 and n. 11, 83 S.Ct.1715, 10 L.Ed.2d 915 (1963);24 the banking industry,unlike the securities industry, is affected by FederalTrade Commission rules and regulations. The FederalTrade Commission has the authority to promulgaterules, regulations and policy guidelines that defineunfair or deceptive practices and that significantlyimpact the conduct of banks. See 15 U.S.C. § 57a(a)and (f) (1988).25 Once the Federal Trade Commission

[230 Conn. 514]

     has promulgated a rule, bank boards, which haveenforcement authority over banks in order to preventunfair and deceptive practices, have sixty days topromulgate a substantially similar regulation. Such parallelregulations are required unless the appropriateboard finds that the acts or practices are not unfair ordeceptive, or the Board of Governors of the FederalReserve System finds that implementation of similarregulations with respect to banks would "seriously conflict

[230 Conn. 515]

     with essential monetary and payments systemspolicies of [the Federal Reserve] Board . . . ."15 U.S.C. § 57a(f)(1) (1988). Thus, although the FederalTrade Commission is not directly responsible forpreventing unfair and deceptive acts or practices withrespect to banks, it has been given the leadership rolein defining what conduct constitutes unfair or deceptiveacts or practices in that industry. In effect, the substanceof any rule promulgated by the Federal TradeCommission applies to banks unless the banks have specificallybeen exempted under the two narrow exceptionsprovided in 15 U.S.C. § 57a(f)(1).

CUTPA's rule making scheme is similar. Once thecommissioner of consumer protection promulgates aregulation pursuant to 42-110b(c),26 that regulationapplies to the conduct of banks unless the commissionerof banking specifically permits such conduct, therebymaking that conduct exempt from CUTPA's ambit asper 42-110c(a)(1).

The Federal Trade Commission has in fact exercisedits authority to promulgate rules and regulations withregard to unfair and deceptive acts or practices thataffect the conduct of banks. Compare FTC Preservationof Consumers' Claims and Defenses Rule,16 C.F.R. § 433 (1993) ("Holder in Due Course Rule" or"Seller Rule") with Comptroller of the Currency, BankingCircular No. 68 [1973-1978 Transfer Binder] Fed.Banking L. Rep. (CCH) ¶ 96,840 (May 14, 1976)(national banks are impacted by Federal Trade Commission's"holder in due course rule") and Board of

[230 Conn. 516]

     Governors of the Federal Reserve System, Letter toPresidents of all Federal Reserve Banks (Bank Involvementin "Seller Rule" Letter) [1973-1978 TransferBinder] Fed. Banking L. Rep. (CCH) ¶ 96,848 (May 24,1976) (same); compare also FTC Credit Practices Rule,16 C.F.R. § 444 (1993) with Board of Governors of FederalReserve System Unfair or Deceptive Acts or PracticesRule (Regulation AA), 12 C.F.R. § 227 (1993).

The relationship in law and in fact between the FederalTrade Commission and the banking industry thereforedemonstrates a substantial amount of regulatoryactivity that affects the conduct of the banking industry.By contrast, the Federal Trade Commission hasnever undertaken to define deceptive practices in thesale and purchase of securities. Russell v. Dean WitterReynolds, Inc., supra, 200 Conn. 180.

The second part of our analysis requires us to determinewhether banks are so comprehensively regulatedby a different regime that CUTPA should not apply.In Russell v. Dean Witter Reynolds, Inc., supra,200 Conn. 180, we recognized that securities transactionswere comprehensively regulated by the Securities andExchange Commission. See Securities Act of 1933,15 U.S.C. § 77a et seq., and Securities Exchange Act of1934, 15 U.S.C. § 78a et seq. We also examined theConnecticut Uniform Securities Act (CUSA); GeneralStatutes 36-470 through 36-502; and its predecessoracts. We noted that these predecessor laws provideda private cause of action for security transaction violationswell before CUTPA had been enacted; Russellv. Dean Witter Reynolds, Inc., supra, 181-82; and thatCUSA provided, not only a private cause of action, butalso all of the same remedies that one could obtain bybringing an action under CUTPA, except for punitivedamages. Id., 175-76.27 We thus determined that the

[230 Conn. 517]

     existence and scope of a comprehensive regulatoryregime under both federal and state law precludedapplication of CUTPA to securities transactions. Id.,180-84.28

While banks are arguably comprehensively regulatedunder federal law,29 even national banks, which areinstrumentalities of the federal government, havealways been subject to the laws of the state in whichthey do business. State laws are preempted only whentheir operation expressly conflicts with the laws of theUnited States. McClellan v. Chipman, 164 U.S. 347,356-57, 17 S.Ct. 85, 41 L.Ed. 461 (1896); Shea v. FirstFederal Savings & Loan Assn. of New Haven, 184 Conn. 285,292-93, 439 A.2d 997 (1981). No claim of preemptionhas been made in this case.

Banks are not so comprehensively regulated understate law30 as to be exempt from CUTPA. The bankhas failed to point to and we have been unable to findany statute or regulation that encompasses the same

[230 Conn. 518]

     type and scope of unfair trade practices that are proscribedby CUTPA. More specifically, we have beenunable to find any statute or regulation that regulatesa bank's duties with regard to its right to setoff anaccount when dealing with others, such as garnishers,who have a direct adverse interest in that same account.Unlike Russell v. Dean Witter Reynolds, Inc., supra,200 Conn. 172, in which we determined that CUTPAwas redundant in light of the pervasive remedial provisionsfor securities transactions contained in CUSA,we have been unable to locate a comparable remedialscheme within this state's banking regulatoryframework.

The mere existence of generic state and federal bankingregulations does not exclude CUTPA coverage.CUTPA is applicable even when its regulatory schemeoverlaps that authorized by another statute or regulation.Mead v. Burns, supra, 199 Conn. 662-63; see alsoHeslin v. Connecticut Law Clinic of Trantolo & Trantolo,supra, 190 Conn. 510; Perdue v. Crocker NationalBank, 38 Cal.3d 913, 702 P.2d 503, 216 Cal.Rptr. 345(1985), appeal dismissed, 475 U.S. 1001, 106 S.Ct.1170, 89 L.Ed.2d 290 (1986). CUTPA recognizes thepossibility of overlap in its provision that expresslyexempts transactions within its ambit only when suchtransactions or actions are "otherwise permitted underlaw as administered by any regulatory [regime] actingunder statutory authority of the state or of the UnitedStates." (Emphasis added.) General Statutes42-110c(a)(1). In Connelly v. Housing Authority,supra, 213 Conn. 361, we held that the actions of amunicipal housing authority in leasing and rentingapartments were exempt from CUTPA scrutinybecause such actions were "expressly authorized andpervasively regulated by both the state department ofhousing and [the United States Department of Housingand Urban Development]." (Emphasis added.) No

[230 Conn. 519]

     banking regulation of which we are aware expresslyauthorizes a bank to delay its response to a judicial executionunder 52-367a.

In the third part of this analysis, we consider whetherthe commissioner of consumer protection, the stateadministrator responsible for enforcing CUTPA, hasundertaken regulatory activities with respect to thesubject area. In Russell v. Dean Witter Reynolds, Inc.,supra, 200 Conn. 182, we determined that thecommissioner of consumer protection had never purported toregulate the conduct of securities transactions. Bycontrast, the commissioner of consumer protection hasinvoked CUTPA authority to compel Connecticut banksto comply with an investigative demand for informationabout real estate lending practices within the bankingindustry. Heslin v. Liberty Bank for Savings, 1977-1Trade Cases (CCH) ¶ 61,311 (Conn. Common Pleas1977). In 1986, the attorney general, at the request ofthe commissioner of consumer protection, brought aCUTPA action against, among others, thirty-five banksfor involvement in home improvement financingirregularities. See amended complaint, State v. TheDartmouth Plan, Inc., United States District Court forthe District of Connecticut, Docket No. H 86-627 (datedMarch 10, 1987).31

Finally, the last part of this analysis consists of aninquiry into the case law of other jurisdictions.Although not unanimous, most state courts> have determinedthat banks are subject to the provisions of theirstate's unfair or deceptive trade practices or consumer

[230 Conn. 520]

     protection statutes.32 See, e.g., Heastie v. CommunityBank of Greater Peoria, 727 F. Sup. 1133 (N.D. Ill.1989) (applying Illinois consumer fraud statute); Perduev. Crocker National Bank, supra, 38 Cal.3d 913;Fletcher v. Security Pacific National Bank, 23 Cal.3d 442,591 P.2d 51, 153 Cal.Rptr. 28 (1979); FirstNational Bank of Anthony v. Dunning, 18 Kan. App. 2d 518,855 P.2d 493 (1993); Raymer v. Bay State NationalBank, 384 Mass. 310, 424 N.E.2d 515 (1981); AttorneyGeneral v. Michigan National Bank, 110 Mich. App. 106,312 N.W.2d 405 (1981), rev'd in part, 414 Mich. 948,325 N.W.2d 777 (1982); Baird v. Norwest Bank,255 Mont. 317, 843 P.2d 327 (1992); Ashlock v.Sunwest Bank of Roswell, N.A., 107 N.M. 100, 753 P.2d 346(1988); Pennsylvania Bankers Assn. v. Commonwealth,58 Pa. Commw. 170, 427 A.2d 730 (1981); Vogtv. Seattle-First National Bank, 117 Wn.2d 541,817 P.2d 1364 (1991). Two of the four state courts> that haveruled to the contrary relied on explicit statutory exemptionsfor banks. See Preferred Investment Corp. v. Neucere,592 So.2d 889 (La. App. 1991), cert. denied,597 So.2d 1028 (La. 1992); First Financial Bank v. Butler,492 So.2d 503 (La. App. 1986); Little v. Gillette,218 Neb. 271, 354 N.W.2d 147 (1984). The remainingminority of courts> either incorporated the exemptionin the Federal Trade Commission Act; Idaho FirstNational Bank v. Wells, 100 Idaho 256, 596 P.2d 429(1979); or concluded that banks were sufficiently andpervasively regulated by other regulatory agencies.NCNB National Bank of North Carolina v. Tiller,814 F.2d 931 (4th Cir. 1987) (applying South Carolina law);Anderson v. Citizens Bank, 294 S.C. 387,365 S.E.2d 26 (1987), overruled in part by Ward v. Dick Dyer &Associates, Inc., 304 S.C. 152, 403 S.E.2d 310 (1991)(overruled to extent that Anderson was based on "generalactivity" test).

[230 Conn. 521]

Our conclusion to apply CUTPA to banks is particularlybolstered by the fact that the Supreme JudicialCourt of Massachusetts reached a similar conclusion;Raymer v. Bay State National Bank, supra,384 Mass. 310; because the "governing statutes in Massachusettsare virtually identical to our own." Russell v. Dean WitterReynolds, Inc., supra, 200 Conn. 183. We have,therefore, repeatedly looked to the reasoning and decisionsof the Supreme Judicial Court of Massachusettswith regard to the scope of CUTPA. Id.; Mead v. Burns,supra, 199 Conn. 663.

Applying this four part analysis to the circumstancesof this case, we conclude that the banking industry,unlike the securities industry, is governed by CUTPA.In light of the text of CUTPA and our case law, thebank has failed to establish its right to a blanket exemptionfrom CUTPA's regulation of unfair trade practices.

B

The bank's final claim is that the trial court, even ifit properly concluded that CUTPA applies to banks,improperly concluded that the manner in which thebank responded to Josef's 52-367a execution constituteda CUTPA violation. The trial court found thatthe bank had violated CUTPA by: (1) failing to complywith the provisions of 52-367a after having beenserved with Josef's executions and (2) sending noticesthat, without mentioning the setoffs, informed the sheriffthat there were no available funds in the account.At oral argument in this court, however, Josef restatedits CUTPA complaint as focusing not on the bank'sintrinsic right of setoff, but on the bank's allegedlydeceptive disclosures that there were insufficient fundsin Hogan's account to satisfy the executions.33 Our

[230 Conn. 522]

     review of the trial court's determination of a CUTPAviolation by the bank is, thus, limited to whether thebank's disclosures were deceptive and violated CUTPA.

"It is well settled that in determining whether [anact or] practice violates CUTPA we have `adopted thecriteria set out in the "cigarette rule" by the federaltrade commission for determining when [an act or]practice is unfair: "(1) [W]hether the practice, withoutnecessarily having been previously considered unlawful,offends public policy as it has been established bystatutes, the common law, or otherwise - whether, inother words, it is within at least the penumbra of somecommon law, statutory, or other established conceptof unfairness; (2) whether it is immoral, unethical,oppressive, or unscrupulous; (3) whether it causes substantialinjury to consumers [competitors or otherbusinessmen]." Conaway v. Prestia, [191 Conn. 484,492-93, 464 A.2d 847 (1983)], quoting FTC v. Sperry& Hutchinson Co., 405 U.S. 233, 244-45 n. 5, 92 S.Ct.898, 31 L.Ed.2d 170 (1972) . . . .' McLaughlin Ford,Inc. v. Ford Motor Co., 192 Conn. 558, 567-68,473 A.2d 1185 (1984).

"`All three criteria do not need to be satisfied to supporta finding of unfairness. A practice may be unfairbecause of the degree to which it meets one of thecriteria or because to a lesser extent it meets all three.Statement of Basis and Purpose, Disclosure Requirementsand Prohibitions Concerning Franchising andBusiness Opportunity Ventures, 43 Fed. Reg. 59,614,[and] 59,635 (1978).' (Internal quotation marks omitted.)Id., 569 n. 15. `Thus a violation of CUTPA maybe established by showing either an actual deceptivepractice; see, e.g., Sprayfoam, Inc. v. Durant's RentalCenters, Inc., 39 Conn. Sup. 78, 468 A.2d 951 (1983);

[230 Conn. 523]

     or a practice amounting to a violation of public policy.See, e.g., Sportsmen's Boating Corporation v. Hensley,[192 Conn. 747, 474 A.2d 780 (1984)].' Web Press ServicesCorporation v. New London Motors, Inc., [supra,203 Conn. 355]. Furthermore, a party need not provean intent to deceive to prevail under CUTPA. See id.,363 (knowledge of falsity, either constructive or actual),need not be proven to establish CUTPA violation)."Cheshire Mortgage Service, Inc. v. Montes, supra,223 Conn. 105-106.

The trial court found that both of the bank's notificationsto the sheriff who had served the bank withJosef's execution were deceptive and constitutedCUTPA violations. The trial court focused on the factthat the bank's notices stated that there were "no availablefunds" and did not mention the bank's setoffs. Thetrial court stated: "This response . . . was deceptiveand came close to a misrepresentation. The actions ofthe [bank] in this case were unfair, illegal, they offendedpublic policy and above all, they were an affront to thiscourt." We disagree with the trial court's findings andconclude that the bank's notifications did not violateCUTPA.

We note, at the outset, that our review of the trialcourt's determination is hampered by the ambiguity ofthe trial court's finding that each of the bank'sresponses "came close to a misrepresentation." We willassume that the trial court's characterization reflectsits finding that, while accurate on their face, the noticeswere misleading because of their failure to disclose thatit was the bank's exercise of its right of setoff that ledto the unavailability of funds for Josef, the executingjudgment creditor.

A failure to disclose can be deceptive only if, in lightof all the circumstances, there is a duty to disclose.Josef has pointed to no authority that would support

[230 Conn. 524]

     the conclusion that a bank served with an executionhas a duty to disclose anything more than that the garnishedfunds are not available. A bank account may bedepleted by any number of competing claimants. If thebank, after having been served with an execution, hadproperly honored competing checks written on thejudgment debtor's account; General Statutes42a-4-303; and the honoring of those checks had leftthe account with insufficient funds to pay the judgmentcreditor based on the execution, the bank would berequired only to disclose that the funds in the accountwere insufficient and not the reason for the insufficiency.We see no reason to differentiate, for noticepurposes, between a bank's right of setoff and thebank's honoring of any other competing claim, such asa check.

Although the bank had no duty to disclose, it actedimproperly in failing to exercise its right of setoff intimely fashion as defined by the midnight deadline that,earlier in this opinion, we have held to govern 52-367aexecutions. The bank's notices that the garnishedaccounts had no available funds were therefore inaccuratein this respect. The trial court did not, however,find that the bank, by giving notices that improperlyassumed that the bank's setoffs had been timely, hadintentionally or fraudulently created a false impression.Moreover, the trial court did not find that the bank hadattempted to falsify or backdate its records as to whenit had effectuated its setoff. The bank's failure to complywith the midnight deadline, in the circumstancesof this case, was therefore no more than a technicalviolation of 52-367a.

The bank's notices, in substance, were not immoral,unethical, oppressive or unscrupulous. The bank's technicalviolation of 52-367a and the lack of explanationin its concomitant notice did not offend public policy,implicate the concept of unfairness or cause the type

[230 Conn. 525]

     of substantial injury that CUTPA was designed toaddress. Cheshire Mortgage Service, Inc. v. Montes,supra, 223 Conn. 105-106; see Hinchliffe v. AmericanMotors Corp., supra, 184 Conn. 617 n. 7. We conclude,therefore, that the trial court improperly determinedthat the bank's actions violated CUTPA.34

The judgment is affirmed with respect to the firstand second counts of Josef's complaint. The judgmentis reversed with respect to the third count of Josef'scomplaint and with respect to the supplemental judgmentawarding attorney's fees to Josef, and the caseis remanded to the trial court with direction to renderjudgment in favor of the bank on the third count andto deny Josef's claim for attorney's fees. The crossappeal is dismissed.

In this opinion the other justices concurred.

1. Although the trial court's judgment and the memorandum ofdecision do not state an explicit finding for the bank on count four,the misrepresentation count, a close reading of the memorandum ofdecision reveals that the trial court considered and implicitly disposedof the fourth count in the bank's favor. In its discussion of countthree, the alleged CUTPA violation, the trial court determined that thebank's response to Josef's execution was "deceptive and came close toa misrepresentation." (Emphasis added.) In concluding the memorandum ofdecision, the court stated that "[j]udgment shall enter for the plaintiffas against the defendant on counts one, two and three of the complaintonly. . . ." (Emphasis added.) Although it is preferable for a trial court to make a formal ruling oneach count, we will not elevate form over substance when it is apparentfrom the memorandum of decision that the trial court did not find thata misrepresentation had been made and that Josef did not prevail on thefourth count. We, thus, determine that the rights of the parties wereconcluded and a final judgment was rendered in this case. See Clark v.Gibbs, 184 Conn. 410, 415 n. 9, 439 A.2d 1060 (1981); Howarth v. Northcott,152 Conn. 460, 462, 208 A.2d 540 (1965), overruled on other grounds byHao Thi Popp v. Lucas, 182 Conn. 545, 438 A.2d 755 (1980); Martin v.Martin's News Service, Inc., 9 Conn. App. 304, 306 n. 2, 518 A.2d 951(1986), cert. denied, 202 Conn. 807, 520 A.2d 1287 (1987).

2. General Statutes 42a-4-104 provides, in relevant part:"DEFINITIONS AND INDEX OF DEFINITIONS. (a) In this article, unless thecontext otherwise requires . . . (10) `midnight deadline' with respectto a bank is midnight on its next banking day following the banking dayon which it receives the relevant item or notice or from which thetime for taking action commences to run, whichever is later. . . ."

3. General Statutes 52-367a provides in relevant part:"EXECUTION AGAINST DEBTS DUE FROM BANKING INSTITUTION. DEBTOR OTHER THANNATURAL PERSON. As used in this section and section 52-367b, the term`banking institution' means a state bank and trust company, nationalbanking association, savings bank, industrial bank, credit union, federalcredit union, savings and loan association and federal savings and loanassociation. Execution may be granted pursuant to this section againstany debts due from any banking institution to a judgment debtor which isnot a natural person. If execution is desired against any such debt, theplaintiff requesting the execution shall so notify the clerk, and theclerk shall issue such execution containing a direction that the officerserving the same shall make demand (1) upon the main office of any bankinginstitution having its main office within the county of such officer. . . for the payment of any debt due to the judgment debtor, and, afterhaving made such demand, shall serve a true and attested copy thereof,with his actions thereon endorsed, with the banking institution officerupon whom such demand is made. If any such banking institution uponwhich such execution is served and upon which such demand is made isindebted to the judgment debtor, it shall pay to such officer, in themanner and at the time hereinafter described, the amount of suchindebtedness not exceeding the amount due on such execution, to bereceived and applied on such execution by such officer. Such bankinginstitution shall act upon such execution according to section42a-4-303 before its midnight deadline, as defined in section 42a-4-104.If such banking institution fails or refuses to pay over to such officerthe amount of such debt, not exceeding the amount due on such execution,such banking institution shall be liable in an action therefor to thejudgment creditor named in such execution, and the amount so recoveredby such judgment creditor shall be applied toward the payment of the amountdue on such execution."

4. General Statutes 42a-4-303 provides in relevant part:"WHEN ITEMS SUBJECT TO NOTICE, STOP-PAYMENT ORDER, LEGAL PROCESS ORSET-OFF. ORDER ON WHICH ITEMS MAY BE CHARGED OR CERTIFIED. (a) Anyknowledge, notice or stop-payment order received by, legal process servedupon, or set-off exercised by a payor bank comes too late to terminate,suspend, or modify the bank's right or duty to pay an item or to chargeits customer's account for the item if the knowledge, notice, stop-paymentorder, or legal process is received or served and a reasonable time forthe bank to act thereon expires or the set-off is exercised after theearliest of the following . . . (4) the bank becomes accountable for theamount of the item under section 42a-4-302 dealing with the payor bank'sresponsibility for late return of items; or (5) with respect to checks,a cut-off hour no earlier than one hour after the opening of the nextbanking day after the banking day on which the bank received the check andno later than the close of that next banking day or, if no cut-off hour isfixed, the close of the next banking day after the banking day on which thebank received the check. "(b) Subject to subsection (a), items may be accepted, paid, certified,or charged to the indicated account of its customer in any order."

5. These legal events include knowledge or notice of: (1) thedepositor's death, incompetency or bankruptcy; (2) the depositor's stoppayment order; (3) legal process on the depositor's account, i.e.,garnishment or judicial execution, and (4) set-off by the payor bank.They are commonly referred to as the "four legals." 1 J. White & R.Summers, Uniform Commercial Code (3d Ed. 1988) 18-7; A.L.I., UniformCommercial Code (12th Ed. 1990) 4-303, comment 3; B. Clark, TheLaw of Bank Deposits, Collections and Credit Cards (3d Ed. 1990) ¶5.04 [1]. For an analysis of 4-303 of the Uniform Commercial Code,see 1 J. White and R. Summers, supra, 18-7.

6. The complete Uniform Commercial Code definition for an itemis "an instrument or a promise or order to pay money handled by a bankfor collection or payment. The term does not include a payment ordergoverned by article 4A or a credit or debit card slip. . . ." GeneralStatutes 42a-4-104 (a)(9). These terms are further defined bythe Uniform Commercial Code as follows: an "`[i]nstrument' means anegotiable instrument"; General Statutes 42a-3-104 (b); a"`negotiable instrument' means an unconditional promise or order to paya fixed amount of money . . . payable to bearer or to order . . . ondemand or at a definite time . . . and . . . [d]oes not state any otherundertaking or instruction by the person promising or ordering paymentto do any act in addition to the payment of money"; General Statutes42a-3-104 (a); a "`[p]romise' means a written undertaking to paymoney signed by the person undertaking to pay"; General Statutes42a-3-103 (a)(9); and an "`[o]rder' means a written instruction to paymoney signed by the person giving the instruction." General Statutes42a-3-103 (a)(6).

7. Practice Book 108 provides in pertinent part: "[GENERAL RULESOF PLEADING] - FACT PLEADING "Each pleading shall contain a plain and concise statement of thematerial facts on which the pleader relies, but not of the evidence bywhich they are to be proved. . . . If any such pleading does not fullydisclose the ground of claim . . . the court may order a fuller and moreparticular statement; and, if in the opinion of the court the pleadingsdo not sufficiently define the issues in dispute, it may direct theparties to prepare other issues, and such issues shall, if the partiesdiffer, be settled by the court." Practice Book 109 provides in pertinent part: "[GENERAL RULES OFPLEADING] - PLEADING LEGAL EFFECT "Acts . . . may be stated according to their legal effect, but in sodoing the pleading should be such as fairly to apprise the adverse partyof the state of facts which it is intended to prove. . . ." (Emphasisadded.)

8. Paragraphs one, three, four, eight and nine, and the prayer forrelief on the first two counts in Josef's complaint explicitly state thatthis action is brought pursuant to General Statutes 52-367a, andthat the bank violated that statute by exercising its right of setoff inan untimely fashion, after the midnight deadline had passed.

9. The bank did unsuccessfully move to strike count three, theCUTPA claim, on the basis that CUTPA does not apply to banks.

10. In its memorandum of decision, the trial court nevermentioned, let alone based its decision on, General Statutes42a-4-303. The trial court, therefore, must have found that theallegations in the complaint were sufficient to place the bank on noticeregarding the facts claimed and the issues to be tried.

11. For the purposes of addressing these questions, we willassume that the bank had a right of setoff with respect to the account ofHogan, its judgment debtor.

12. For the definition of "midnight deadline," seefootnote 2.

13. "`Payor bank' means a bank that is the drawee of adraft. . . ." General Statutes 42a-4-105(3). For the definitionof "draft," see 42a-4-104(a)(7).

14. See also General Statutes 42a-4-303 (incorporatingGeneral Statutes 42a-4-302 into its provisions regarding actingupon an item); General Statutes 42a-4-202(b) (specifyingmidnight deadline as general standard for timely action bycollecting bank); General Statutes 42a-4-213(c) (specifyingmidnight deadline as default rule for final settlement ofcashier's or teller's check that has not been presented orforwarded for collection); and General Statutes 42a-4-214(a)(midnight deadline used as usual time frame to determinecollecting bank liability for item after settlement has beenrevoked and where neither item has been returned nor notificationsent). The midnight deadline serves as a safe harbor provision for apayor bank because it does not become accountable for the amountof an item until after the midnight deadline has passed, unless,before that deadline has passed, it already has made finalpayment pursuant to General Statutes 42a-4-215.

15. Practice Book 4061 provides: "The court may reverseor modify the decision of the trial court if it determines thatthe factual findings are clearly erroneous in view of theevidence and the pleadings in the whole record, or that thedecision is otherwise erroneous in law. "If the court deems it necessary to the proper disposition ofthe cause, it may remand the case for a further articulation ofthe basis of the trial court's factual findings or decision. "It is the responsibility of the appellant to provide anadequate record for review."

16. Although Baker v. National City Bank of Cleveland,supra, 511 F.2d 1016, involved a Uniform Commercial Code 4-303competition between a bank's right of setoff and its depositor,triggered by a court order in bankruptcy proceedings enjoiningsetoff against the depositor's account, similar interests applyto the conflicting claims between a garnisher and the garnisheebank. The garnisher has the same rights as the underlying obligorat the time of garnishment. Hospital of St. Raphael v. New HavenSavings Bank, supra, 205 Conn. 614.

17. Because we agree with the trial court's finding thatthe bank did not exercise its setoff before the midnight deadlineand, thus, did not act upon the execution in a timely manner, weneed not decide whether the trial court correctly determined thatthe bank was not entitled to a common law right of setoff in thecircumstances of this case.

18. General Statutes 42-110b(b) provides: "It is theintent of the legislature that in construing subsection (a) ofthis section, the commissioner and the of this state shallbe guided by interpretations given by the Federal TradeCommission and the federal to Section 5(a)(1) of theFederal Trade Commission Act (15 U.S.C. § 45(a)(1)), as from timeto time amended."

19. Title 15 of the United States Code, 45(a)(2) (1988)provides: "The [Federal Trade] Commission is empowered anddirected to prevent persons, partnerships, or corporations,except banks, savings and loan institutions described in section57a(f)(3) of this title, Federal credit unions described insection 57a(f)(4) of this title, common carriers subject to theActs to regulate commerce, air carriers and foreign air carrierssubject to the Federal Aviation Act of 1958 [49 U.S.C. § 1301 etseq.], and persons, partnerships, or corporations insofar as theyare subject to the Packers and Stockyards Act, 1921, as amended[7 U.S.C. § 181 et seq.], except as provided in section 406(b) ofsaid Act [7 U.S.C. § 227(b)], from using unfair methods ofcompetition in or affecting commerce and unfair or deceptiveacts or practices in or affecting commerce."

20. "Person" is defined at General Statutes 42-110a(3) as"a natural person, corporation, trust, partnership, incorporatedor unincorporated association, and any other legal entity . . . ."

21. "`Trade' and `commerce' means the advertising, thesale or rent or lease, the offering for sale or rent or lease, orthe distribution of any services and any property, tangible orintangible, real, personal or mixed, and any other article,commodity, or thing of value in this state." General Statutes42-110a(4).

22. General Statutes 42-110c provides: "EXCEPTIONS. (a)Nothing in this [Unfair Trade Practices] chapter shall apply to:(1) Transactions or actions otherwise permitted under law asadministered by any regulatory board or officer acting understatutory authority of the state or of the United States; or (2)acts done by the publisher, owner, agent or employee of anewspaper, periodical or radio or television station in thepublication or dissemination of an advertisement, where thepublisher, owner, agent or employee did not have knowledge of thefalse, misleading, unfair or deceptive character of theadvertisement, and did not have direct financial interest in thesale or distribution of the advertised product or service. "(b) The burden of proving exemption, as provided in thissection, from the provisions of this chapter shall be upon theperson claiming the exemption."

23. Furthermore, we have construed General Statutes42-110b as a source of guidance for Connecticut , ratherthan as a mandate by which our are bound. "[A]lthough42-110b(b) provides that and the [commissioner of consumerprotection] shall be guided by the federal interpretations given5 of the Federal Trade Commission Act, they are not limited bysuch interpretations. `As originally enacted, [CUTPA] providedthat state unfair or deceptive acts or practices were to be those"determined to be" unfair or deceptive by the [Federal TradeCommission] or the federal . 1973 Pub. Acts 615, 2(a).However, the Act was amended in 1976 to provide only that in Connecticut [and the . . . commissioner of consumerprotection] were to be "guided by" federal interpretations of 5of the [Federal Trade Commission Act]. The purpose of thechange apparently was to permit . . . practices which had not yetbeen specifically declared unlawful by federal authorities to benevertheless unlawful under CUTPA.' (Emphasis added.) BaileyEmployment System, Inc. v. Hahn, 545 F. Sup. 62, 71 (D. Conn.1982)." Caldor, Inc. v. Heslin, 215 Conn. 590, 598,577 A.2d 1009 (1990), cert. denied, 498 U.S. 1088, 111 S.Ct. 966, 112L.Ed.2d 1053 (1991).

24. The legislative history to the 1974 amendments to theFederal Trade Commission Improvement Act; Pub. L. No. 93-637;states: "Under the Federal Trade Commission Act the Commissiondoes not have authority to regulate banks. This legislation doesnothing to change this situation." H.R. Rep. No. 1107, 93dCong., 2d Sess. (1974), reprinted in 1974 U.S.C.C.A.N. 7702,7729; see also H.R. Rep. No. 265, 95th Cong. 1st Sess. 2-3(1979), reprinted in 1979 U.S.C.C.A.N. 372, 372-73 ("In 1914 whenthe Federal Trade Commission Act was enacted, banks werespecifically exempted from the regulatory and investigativeauthorities of the newly-created Commission because they weresubject to Federal regulatory control by the Federal ReserveBoard.").

25. Title 15 of the United States Code, 57a(a) (1988)provides in pertinent part: "AUTHORITY OF COMMISSION TO PRESCRIBERULES AND GENERAL STATEMENTS OF POLICY (1) . . . [T]he Commissionmay prescribe . . . (B) rules which define with specificity actsor practices which are unfair or deceptive acts or practices inor affecting commerce (within the meaning of section 45(a)(1) ofthis title), except that the Commission shall not develop orpromulgate any trade rule or regulation with regard to theregulation of the development and utilization of the standardsand certification activities pursuant to this section. Rulesunder this subparagraph may include requirements prescribed forthe purpose of preventing such acts or practices." Title 15 of the United States Code, 57a(f) (1988) provides inpertinent part: "UNFAIR OR DECEPTIVE ACTS OR PRACTICES BY BANKS,SAVINGS AND LOAN INSTITUTIONS, OR FEDERAL CREDIT UNIONS;PROMULGATION OF REGULATIONS BY BOARD OF GOVERNORS OF FEDERALRESERVE SYSTEM, FEDERAL HOME LOAN BANK BOARD, AND NATIONAL CREDITUNION ADMINISTRATION BOARD; AGENCY ENFORCEMENT AND COMPLIANCEPROCEEDINGS; VIOLATIONS; POWER OF OTHER FEDERAL AGENCIESUNAFFECTED; REPORTING REQUIREMENTS (1) In order to prevent unfairor deceptive acts or practices in or affecting commerce(including acts or practices which are unfair or deceptive toconsumers) by banks or savings and loan institutions described inparagraph (3), each agency specified in paragraph (2) or (3)of this subsection shall establish a separate division ofconsumer affairs which shall receive and take appropriate actionupon complaints with respect to such acts or practices by banksor savings and loan institutions described in paragraph (3)subject to its jurisdiction. The Board of Governors of theFederal Reserve System (with respect to banks) and the FederalHome Loan Bank Board (with respect to savings and loaninstitutions described in paragraph (3)) and the National CreditUnion Administration Board (with respect to Federal credit unionsdescribed in paragraph (4)) shall prescribe regulations to carryout the purposes of this section, including regulations definingwith specificity such unfair or deceptive acts or practices, andcontaining requirements prescribed for the purpose of preventingsuch acts or practices. Whenever the [Federal Trade] Commissionprescribes a rule under subsection (a)(1)(B) of this section,then within 60 days after such rule takes effect each such Boardshall promulgate substantially similar regulations prohibitingacts or practices of banks or savings and loan institutionsdescribed in paragraph (3), or Federal credit unions described inparagraph (4), as the case may be, which are substantiallysimilar to those prohibited by rules of the Commission and whichimpose substantially similar requirements, unless (A) any suchBoard finds that such acts or practices of banks or savings andloan institutions described in paragraph (3), or Federal creditunions described in paragraph (4), as the case may be, are notunfair or deceptive, or (B) the Board of Governors of the FederalReserve System finds that implementation of similar regulationswith respect to banks, savings and loan institutions or Federalcredit unions would seriously conflict with essential monetaryand payments systems policies of such Board, and publishes anysuch finding, and the reasons therefor, in the Federal Register."

26. General Statutes 42-110b(c) provides: "Thecommissioner may, in accordance with chapter 54, establish byregulation acts, practices or methods which shall be deemed to beunfair or deceptive in violation of subsection (a) of thissection. Such regulations shall not be inconsistent with therules, regulations and decisions of the federal trade commissionand the federal in interpreting the provisions of theFederal Trade Commission Act."

27. In Russell v. Dean Witter Reynolds, Inc., supra,200 Conn. 175-76, we determined that both CUSA and CUTPA allow aprivate party to recover restitutionary damages, interest andattorney's fees. Compare General Statutes 36-498 (buyer'sremedies under CUSA) with General Statutes 42-110g (remediesunder CUTPA).

28. Implicit in our decision in Russell v. Dean WitterReynolds, Inc., supra, 200 Conn. 175-76, that CUTPA does notapply to securities transactions was the determination that theavailability of a punitive damage award in an action under CUTPA,as opposed to CUSA, was insignificant.

29. National banks, including federal savings and loansand credit unions, are primarily regulated under Title 12 of theUnited States Code. They are subject to a myriad of regulatoryagencies including, but not limited to, the Comptroller of theCurrency, the Federal Reserve System, the Federal DepositInsurance Corporation, the Federal Home Loan Bank Board and theNational Credit Union Administration Board. For an overview ofbanking regulation, see C. Lichtenstein, "Regulation of BankingOrganizations under the United States Federal System (the `DualBanking System')," in Institute of Banking Law and Regulation1990 (Practising Law Institute 1990) 11-25; T. Levine, "The DualBanking System," in Institute of Banking Law and Regulation 1990(Practising Law Institute 1990) 27-42.

30. Banks are primarily regulated under Title 36 of theGeneral Statutes, entitled "The Banking Law of Connecticut," 36-1through 36-583, and by the commissioner of banking.

31. This case was settled in 1988 and included thedismissal of all claims against the banks with prejudice. Seefinal judgment 33, State v. The Dartmouth Plan, Inc., supra(March 17, 1988). The State of Connecticut, as amicus curiae inthis appeal, also represented to us in its brief and at oralargument that the commissioner of consumer protection has workedwith the commissioner of banking for a number of years to remedyconsumer protection problems that implicate banking industrypractices.

32. Of course, we recognize that each state's statutoryscheme, including the language of its provisions and itslegislative history, may differ.

33. The third count of Josef's complaint alleged that thebank violated CUTPA through its misrepresentations, whichincluded its response to the sheriff that there were no availablefunds in the judgment debtor's account to satisfy the judgmentcreditor's execution and the fact that this response was indirect variance and contradiction to the bank statements of thejudgment debtor's account.

34. Because we conclude that the bank did not violateCUTPA, Josef is unable to collect attorney's fees under theprovisions of CUTPA. We therefore dismiss, on the ground ofmootness, Josef's cross appeal, challenging the trial

The principal issue in this case is therelationship between a bank's common law right ofsetoff and a judgment creditor's statutory right toenforce a court-issued execution. The plaintiff, NormandJosef Enterprises, Inc. (Josef), filed a four countcomplaint against the defendant, Connecticut NationalBank (bank), alleging, in separate counts, that the bankhad wrongfully dishonored two orders of execution onthe bank account of Josef's judgment debtor, J.H.Hogan, Inc. (Hogan), that the bank's wrongful conductviolated the Connecticut Unfair Trade Practices Act(CUTPA), General Statutes 42-110a et seq.; and thatthe bank had falsely, fraudulently, intentionally andrecklessly misrepresented to Josef that no funds werein the account in question. The trial court, Pellegrino,J., rendered judgment in Josef's favor on the first threecounts,1 and awarded it attorney's fees for the CUTPAviolation. The bank appealed to the Appellate Court

[230 Conn. 489]

     from the judgment and the supplemental judgment, andJosef cross appealed from the denial by the trial court,Pittman, J. of its postjudgment motion for attorney'sfees to defend against the bank's appeal. We transferredthe appeal and the cross appeal to this court pursuantto Practice Book 4023 and General Statutes51-199(c).

The trial court, Pellegrino, J., made the followingfindings of fact. On September 24, 1991, Josef obtaineda judgment against Hogan for $21,000. The validity ofthat judgment is not at issue. Because the judgmentwas not satisfied, Josef obtained an execution issuedby the clerk of the court to recover unpaid damagesin the amount of the judgment. Josef employed a deputysheriff to serve the execution upon the bank in orderto garnish the proceeds of Hogan's checking account.The deputy sheriff tried, unsuccessfully, on two occasions,to garnish this account.

The deputy sheriff first served the execution uponthe bank on Friday, October 25, 1991. On that date,Hogan had a checking account balance at the bank inthe amount of $5326.97. A check drawn to a third partyon Hogan's account in the amount of $380.15 washonored and cleared the following Monday, October 28.Thereafter, however, relying on a default on Hogan'scommercial loan from the bank, the bank set off$4945.82, the remainder of Hogan's account, to itself.Although the bank's "proof ticket" was dated October28, indicating that the setoff occurred on that date,no commercial loan payment was entered in Hogan'saccount until October 29. The bank notified the deputysheriff who had served the execution that, as ofthe date of the execution, no funds were available.

[230 Conn. 490]

Because of subsequent deposits, Hogan's bankaccount had a balance of $63,633.62, $54,620.06 and$51,673.23 on October 29, 30 and 31, respectively. Thedeputy sheriff served the execution for a second timeon Wednesday, November 6, 1991, when Hogan's bankaccount had a balance of $31,304.86. Again relying onHogan's defaulted bank loan, the bank repeated itsexercise of its right of setoff, this time in the amountof $31,303.86. As had occurred previously, the bankmanifested its exercise of that right by a "proof ticket"dated in timely fashion, on November 7, but did notcredit the payment to Hogan's commercial loan accountuntil the following day. The bank notified the deputysheriff that no funds were available on the date of thesecond execution.

The trial court ruled in Josef's favor on the first twocounts of its complaint, concluding that the bank hadfailed to act within the midnight deadline, the time constraintdefined in General Statutes 42a-4-104,2 thatis expressly made applicable to the garnishment of corporatebank accounts by the terms of General Statutes52-367a.3 That time constraint would have required

[230 Conn. 491]

     the bank to exercise any right of setoff, in the firstinstance by midnight of October 28, and in the secondinstance by midnight of November 7. The court specificallyfound that the proof tickets were unreliableand that the bank had not exercised its setoff rightsuntil October 29 and November 8.

With respect to these counts, the trial court also concludedthat, regardless of its timing, the bank had noright of setoff in the circumstances of this case. Thecourt determined that, in the absence of an expressright of setoff in the Hogan loan agreement, the bankcould only invoke a common law right of setoff. No commonlaw right of setoff was available in this case,according to the trial court, because Hogan was notinsolvent and because underlying equitable considerationsdid not support its recognition.

Finally, the trial court ruled in Josef's favor on itsCUTPA claim. The court held that CUTPA applies tobanks and that the bank's exercise of its right of setoffwas, in both cases, a flagrant violation of 52-367a andof the court orders of execution. The court found thatthe bank had engaged in deceptive conduct in returning

[230 Conn. 492]

     the orders of execution on the ground of"no availablefunds" without mentioning the setoffs. Accordingly,the court held that Josef was entitled not onlyto its money judgment and interest, but also to a reasonableattorney's fee. Thereafter, the court awardedattorney's fees calculated on an hourly basis.

On appeal, the bank challenges one of the trial court'sfindings of fact and all of its conclusions of law. As amatter of fact, the bank claims that its setoff was timelybecause it complied with the applicable midnight deadline.As a matter of law, the bank claims that: (1) Joseffailed to state an actionable claim, because it allegedonly that the bank did not act upon the executionaccording to General Statutes 42a-4-303,4 which doesnot apply to the circumstances of this case despite thecross-reference contained in 52-367a; (2) the bank isentitled to a common law right of setoff in the circumstancesof this case; (3) CUTPA does not apply to banks;(4) the bank did not violate CUTPA; and (5) the trialcourt miscalculated recoverable attorney's fees. Thecross appeal filed by Josef challenges the trial court'sruling that, as a matter of law, CUTPA does not authorize

[230 Conn. 493]

     recovery of anticipatory appellate attorney's fees.Although we affirm the judgment of the trial court concerningthe 52-367a violation and agree with its conclusionthat CUTPA applies to banks, we disagree withthe trial court's determination that the bank's actions,under the circumstances of this case, violated CUTPA.

I

The bank first claims that Josef has failed to statean actionable claim and, therefore, cannot recover onthe basis of its pleadings. The bank specifically contendsthat Josef only alleged a failure by the bank to act uponJosef's court-issued postjudgment execution, servedpursuant to 52-367a, in accordance with 42a-4-303before its midnight deadline as defined in 42a-4-104.The bank argues that 42a-4-303 provides rules fordetermining the priority between, inter alia, a setoffor judicial execution and an item, and not between anexecution and a bank setoff. Because 42a-4-303 doesnot apply to the circumstances of this case, whichinvolve a priority dispute between Josef's judicial executionand the bank's setoff, the bank contends thatthe plaintiff cannot prevail on its cause of action.

A

The first issue before us is whether 42a-4-303, whichis identical to 4-303 of the Uniform Commercial Code,resolves a priority dispute between a judicial executionand a bank's setoff. The priority disputes that42a-4-303 addresses are those between an "item, "on the one hand, and legal process such as a judicialexecution or garnishment, a setoff by the payor bank,a bankruptcy petition or a stop payment order, on theother hand.5 A.L.I., Uniform Commercial Code (12th

[230 Conn. 494]

     Ed. 1990) 4-303 and comments 1 and 2. The term"item" is defined by 42a-4-104 (a)(9) as "an instrumentor a promise or order to pay money handled bya bank for collection or payment."6 In order to comewithin 42a-4-303, either the bank's setoff or Josef'spostjudgment judicial execution would, therefore, haveto be an "item." We agree with the bank that neitherthe setoff nor the execution order is an "item."

The right of setoff, although it may arise out of a writteninstrument, is a common law equitable right thatis not itself a written instrument. A setoff involves"[t]he equitable right to cancel or offset mutual debtsor cross demands, commonly used by a bank in reducinga customer's checking or other deposit account insatisfaction of a debt the customer owes the bank."Black's Law Dictionary (6th Ed. 1990) p. 1372; see Sullivanv. Merchants National Bank, 108 Conn. 497,499-500, 144 A. 34 (1928). A setoff is, therefore, notan "item."

[230 Conn. 495]

A postjudgment judicial execution or garnishmentinvolves an order issued under authority of the courtallowing a judgment creditor to obtain satisfaction ofa judgment by reaching debts due from a third party,such as a banking institution, to the judgment debtor.General Statutes 52-367a; Hospital of St. Raphael v.New Haven Savings Bank, 205 Conn. 604, 608,534 A.2d 1189 (1987); see also 1 E. Stephenson, Connecticut CivilProcedure (2d Ed. 1970) 56 (garnishment permitsplaintiff to reach debts owed to defendant, personalproperty of defendant held by third parties and anybenefits owed to defendant from deceased person'sestate). A court-issued legal process, a judicial executionor garnishment is not "an instrument, order orpromise" and, therefore, is not an "item."

Other courts> that have considered priority disputesbetween a postjudgment judicial execution on a bankand a bank's right of setoff have similarly concludedthat Uniform Commercial Code 4-303 is not applicableto such a dispute. See, e.g., Pittsburgh NationalBank v. United States, 657 F.2d 36, 39 (3d Cir. 1981);Ebsary Foundation Co. v. Barnett Bank of SouthFlorida, N.A., 569 So.2d 806, 806-807 (Fla. App. 1990);Victor Werlhof Aviation Ins. v. Garlick, 237 Mont. 51,771 P.2d 962, 967 (1989). Leading commentatorson the Uniform Commercial Code have takenthe same position. See B. Clark, The Law of BankDeposits, Collections and Credit Cards (3d Ed. 1990)¶ 5.04 [7] [c], p. 5-105, ¶ 14.05 [3], p. 14-17 and n. 66,and (Cum. Sup. 1994) ¶ 5.04 [7] [a], p. S5-19; 1 J. White& R. Summers, Uniform Commercial Code (3d Ed.1988) 18-7.

B

Our determination that 42a-4-303 does not applyin the circumstances of this case does not, however,end this matter. The question remains whether the allegations

[230 Conn. 496]

     in Josef's complaint encompass an actionablecomplaint that survives the inapplicability of42a-4-303. We disagree with the bank's contentionthat the complaint stands or falls with 42a-4-303.

"It is fundamental in our law that the right of a plaintiffto recover is limited to the allegations of [its] complaint."(Internal quotation marks omitted.) Lundbergv. Kovacs, 172 Conn. 229, 232, 374 A.2d 201 (1977).However, "[t]he modern trend, which is followed inConnecticut, is to construe pleadings broadly andrealistically, rather than narrowly and technically."(Internal quotation marks omitted.) Beaudoin v. TownOil Co., 207 Conn. 575, 587-88, 542 A.2d 1124 (1988);Fuessenich v. DiNardo, 195 Conn. 144, 150-51,487 A.2d 514 (1985). As long as the pleadings provide sufficientnotice of the facts claimed and the issues to betried and do not surprise or prejudice the opposingparty, we will not conclude that the complaint is insufficientto allow recovery. Tedesco v. Stamford, 215 Conn. 450,459, 576 A.2d 1273 (1990), on remand, 24 Conn. App. 377,588 A.2d 656 (1991), rev'd, 222 Conn. 233,610 A.2d 574 (1992); Giulletti v. Connecticut Ins. PlacementFacility, 205 Conn. 424, 434, 534 A.2d 213 (1987);see also Web Press Services Corp. v. New LondonMotors, Inc., 203 Conn. 342, 359-60, 525 A.2d 57(1987); see also Practice Book 108 and 109.7

[230 Conn. 497]

Furthermore, "a judgment ordinarily cures pleadingdefects. . . ." Tedesco v. Stamford, supra, 215 Conn. 458."The absence of a requisite allegation in a complaintthat would have justified the granting of a motionto strike, however, is not a sufficient basis for vacatinga judgment unless the pleading defect has resultedin prejudice. [I]f parties will insist on going to trial onissues framed in a slovenly manner, they must abidethe verdict; judgment will not be arrested for faults instatement when facts sufficient to support the judgmenthave been substantially put in issue andfound. . . . Want of precision in alleging the cause ofan injury for which an action is brought, is waived bycontesting the case upon its merits without questioningsuch defect." (Citation omitted; internal quotationmarks omitted.) Id., 457.

The bank would have us focus solely on paragraphten of the first two counts of Josef's complaint, whichalleges that "the defendant bank failed to act upon suchexecution according to 42a-4-303 of the ConnecticutGeneral Statutes before its midnight deadline asdefined in 42a-4-104(a) (10) of the Connecticut GeneralStatutes." We decline to read the complaint so narrowly.The gravamen of the first two counts in Josef'scomplaint is that the bank improperly dishonored thejudicial execution authorized by 52-367a because thebank exercised its right of setoff in an untimely manner,namely, after the midnight deadline as defined in42a-4-104 (a) (10).8 Indeed, the language in paragraphten of the first two counts of Josef's complaint mirrorsthe language contained within 52-367a, which specifiesthe manner in which the bank is required to actupon service of an execution.

[230 Conn. 498]

The procedural history of this case demonstrates thatit was neither brought nor tried solely on the basis of42a-4-303. The bank never moved to strike either ofthe first two counts in the complaint, which focused52-367a.9 In addition, the issue regarding the allegationsin Josef's complaint was raised and decided infavor of Josef in the trial court, as evidenced by thetrial court's judgment for Josef on the first two counts,premised, in part, on the finding that the bank had"failed to act within the midnight deadline."10 Notably,the trial court's memorandum of decision containsno mention of 42a-4-303. Finally, at oral argumentbefore us, the bank conceded that it was neither surprisednor prejudiced at trial that the issues in this caserevolved around 52-367a and the application of themidnight deadline.

For all of the foregoing reasons, we reject the bank'sconstruction of Josef's complaint. We conclude thatJosef raised an actionable claim regarding the bank'scompliance with 52-367a and that the bank had sufficientnotice of this cause of action.

II

The bank next challenges the finding of the trial courtthat the setoff was untimely because it occurred afterthe midnight deadline. The bank's challenge is twofold.The first question the bank raises is whether, as a matterof law, the midnight deadline defined in42a-4-104 (a) (10) applies to the bank's exercise of itsright of setoff in response to a service of executionunder 52-367a. The second question the bank raises

[230 Conn. 499]

     is whether, assuming the applicability of the midnightdeadline, the bank, as a matter of fact, exercised itsright of setoff in timely fashion.11

A

We must first determine the rules that govern thetime within which a bank must act on a 52-367a serviceof execution. The relevant portion of 52-367a provides:"Such banking institution [served with anexecution and upon which demand is made of any debtsfrom such banking institution to a judgment debtor]shall act upon such execution according to section42a-4-303 before its midnight deadline, as defined insection 42a-4-104." The bank maintains that, because42a-4-303 does not apply in the circumstances of thiscase, the midnight deadline is equally inapplicable. Josefmaintains, to the contrary, that 52-367a imposes themidnight deadline by its own terms even though42a-4-303 is inapplicable.

"We approach this question according to well establishedprinciples of statutory construction designed tofurther our fundamental objective of ascertaining andgiving effect to the apparent intent of the legislature. . . . In seeking to discern that intent, we lookto the words of the statute itself, to the legislative historyand circumstances surrounding its enactment, tothe legislative policy it was designed to implement, andto its relationship to existing legislation and commonlaw principles governing the same general subject matter."(Citation omitted; internal quotation marks omitted.) Fahyv. Fahy, 227 Conn. 505, 512, 630 A.2d 1328(1993); West Hartford Interfaith Coalition, Inc. v. TownCouncil, 228 Conn. 498, 507-508, 636 A.2d 1342 (1994);Lauer v. Zoning Commission, 220 Conn. 455, 459-60,

[230 Conn. 500]

     600 A.2d 310 (1991); Peck v. Jacquemin, 196 Conn. 53,63-66, 491 A.2d 1043 (1985).

The words of the statute are ambiguous. It is unclearwhether the phrase "before its midnight deadline"modifies the phrase "according to section 42a-4-303"or "act upon such execution." The scant legislative historyof 52-367a is not specifically helpful.

In resolving this ambiguity, we must turn to thepolicy advanced by the statute. That policy is to affordjudgment creditors an effective method for levying onthe bank accounts of their judgment debtors. It is reasonablefor us to effectuate this policy by assuming thatthe legislature intended "before its midnight deadline"to modify "act upon such execution."

If, as the bank urges, the midnight deadline is tiedto the applicability of 42a-4-303, then 52-367a wouldcontain no express time constraints within which a bankis required to act upon an execution when the competingpriority involves not an "item," but another legalevent such as a bank's right of setoff. The legislaturehas, however, at a minimum, manifested its intent thata bank should not have an unlimited time within whichto respond to an execution.

First, in enacting 52-367a the legislature explicitlyreferred to two Uniform Commercial Code provisions,42a-4-303 and 42a-4-104. By including these references,the legislature has made article four of the codethe departure point for our analysis.

Second, article four of the Uniform Commercial Codegoverns bank deposits and collections and delineatesthe duties of a payor bank with regard to various commercialtransactions, such as items and other legalevents, including executions. See General Statutes42a-4-101 et seq. Under article four, these dutiesinclude the requirement of observance of the midnightdeadline.

[230 Conn. 501]

If 52-367a does not incorporate the midnight deadlinedirectly, the statute must be interpreted as requiringa bank to act within a reasonable time. Neither thetext of the statute nor its obvious purpose of protectingthe rights of a judicial lien creditor suggests thata bank has an unlimited amount of time in which to actupon an execution pursuant to 52-367a. The reasonabletime requirement, in turn, is informed, by analogy,by the provisions of article four. We have oftendrawn upon provisions of the Uniform CommercialCode as a source of analogy for the emergent commonlaw. See, e.g., New England Savings Bank v. Lopez,227 Conn. 270, 281-82, 630 A.2d 1010 (1993) (real property);Hospital of St. Raphael v. New Haven SavingsBank, supra, 205 Conn. 610-11 (passbook savingsaccount); Barco Auto Leasing Corp. v. House, 202 Conn. 106,114, 520 A.2d 162 (1987) (automobile leasingagreement); New England Yacht Sales, Inc. v. Commissionerof Revenue Services, 198 Conn. 624, 630,504 A.2d 506 (1986) (transfer of title of personal property);Olean v. Treglia, 190 Conn. 756, 762, 463 A.2d 242(1983) (real property); Conference Center Ltd. v. TRC,189 Conn. 212, 225, 455 A.2d 857 (1983) (real property).

"We proceed, therefore, to a more fundamental principleof adjudication. Just as the legislature is presumedto enact legislation that renders the body of the lawcoherent and consistent, rather than contradictory andinconsistent . . . courts> must discharge their responsibility,in case by case adjudication, to assure that thebody of the law - both common and statutory - remainscoherent and consistent." (Citation omitted.) Fahy v.Fahy, supra, 227 Conn. 513-14. "Statutes are now centralto the law in the courts>, and judicial lawmakingmust take statutes into account virtually all of thetime. . . . More often, the issue is rather to whatextent a statute is itself a source of policy for consistentcommon law development." E. Peters, "Common

[230 Conn. 502]

     Law Judging in a Statutory World: An Address," 43U. Pitt. L. Rev. 995, 998 (1982).

Looking to the Uniform Commercial Code by way ofanalogy in this case, we are persuaded that the midnightdeadline contained in article four is an appropriatedefinition of a reasonable time for a bank to actin response to a service of an execution under52-367a. The code was drafted to simplify, clarify,modernize and unify the law of commercial transactions.General Statutes 42a-1-102(2). In order toachieve certainty and predictability in commercial dealings,"the drafters of the Code found it necessary toengage in line drawing"; Citizens & Peoples NationalBank of Pensacola v. United States, 570 F.2d 1279,1283-84 (5th Cir. 1978); such as by creating deadlinesby which commercial actors were required to act uponcertain events. Article four of the Uniform CommercialCode states the "principal rules of the bank collectionprocess." A.L.I., supra, Uniform CommercialCode 4-101, comment 1. The code establishes the midnightdeadline12 as the standard time frame withinwhich a payor bank13 must pay an item. General Statutes42a-4-301 and 42a-4-302.14

[230 Conn. 503]

We therefore conclude that 52-367a imposes a midnightdeadline on a bank served with an execution. Themidnight deadline arguably was intended by the legislatureto apply directly even in transactions notgoverned by 42a-4-303. Alternatively, if 52-367a hasno express time limitation for transactions that are notgoverned by 42a-4-303, the bank must act within areasonable time, and that reasonable time period is, byanalogy, defined as the midnight deadline that is thebaseline generally for article four provisions governingpayouts by banks.

B

Having determined that the midnight deadline, asdefined in 42a-4-104(a)(10), is the applicable timelimitation within which a bank must act upon a52-367a execution, the trial court appropriately concludedthat the bank was required to exercise its competingright to a setoff before the expiration of thatdeadline. The bank maintains that the trial courtimproperly found that the bank had not taken definitivesteps to manifest its exercise of a setoff within thatprescribed time period. To the contrary, we agree withthe trial court's finding.

On appeal, this court may reverse or modify the decisionof the trial court only "if it determines that thefactual findings are clearly erroneous in view of the evidenceand pleadings in the whole record." PracticeBook 4061.15 "We do not examine the record to determine

[230 Conn. 504]

     whether the trier of fact could have reached a conclusionother than the one reached. Rather, we focuson the conclusion of the trial court, as well as themethod by which it arrived at that conclusion, to determinewhether it is legally correct and factually supported."(Internal quotation marks omitted.) Lukas v.New Haven, 184 Conn. 205, 208, 439 A.2d 949 (1981);Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80,88, 612 A.2d 1130 (1992); Nor'easter Group, Inc.v. Colossale Concrete, Inc., 207 Conn. 468, 473,542 A.2d 692 (1988). "`A finding is "clearly erroneous" whenalthough there is evidence to support it, the reviewingcourt on the entire evidence is left with the definite andfirm conviction that a mistake has been committed.'"Doyle v. Kulesza, 197 Conn. 101, 105, 495 A.2d 1074(1985), quoting United States v. United States GypsumCo., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746(1948); see also Web Press Services Corp. v. New LondonMotors, Inc., 205 Conn. 479, 483, 533 A.2d 1211(1987).

1

For our assessment of the trial court's finding of fact,we must first determine what steps a bank is requiredto take in order to effectuate a setoff. Although we havenot previously addressed this specific question, we arepersuaded that the bank must produce evidence of thetime when it took some positive act manifesting thata setoff was actually made. This is the rule enunciatedby the leading case of Baker v. National City Bank of Cleveland,511 F.2d 1016 (6th Cir. 1975) (applying Ohio law).16That court held that "the act of setoff is not complete

[230 Conn. 505]

     until three steps have been taken: (1) the decisionto exercise the right, (2) some action which accomplishesthe setoff and (3) some record which evidencesthat the right of setoff has been exercised." Id., 1018.The court quoted approvingly from an official commentto 4-303 of the Uniform Commercial Code, whichstates that "`[i]n the case of setoff the effective timeis when the setoff is actually made.'" Id.; A.L.I., supra,Uniform Commercial Code 4-303, comment 5. On thebasis of that comment, the court stated: "It is clearfrom this language that a setoff does not occur automaticallyeach time a bank holds the matured debt ofa depositor. The setoff must be `actually made.' We donot hold that [Uniform Commercial Code 4-303],standing alone, disposes of the issue in this case. However,it is a further sign which points to a policy of theState of Ohio, and of all states that have adopted theUniform Commercial Code, which requires that internalbanking transactions involving adverse interests beevidenced by bookkeeping entries or some similarly bindingovert act. This policy not only provides criteria fordetermining conflicting claims, but also assures thosewho deal with banks that their rights will not bedefeated by unsupported internal declarations of a self-servingnature." (Emphasis added.) Id.; see also In reSaugus General Hospital, Inc., 698 F.2d 42, 47 (1st Cir.1983); United States v. Citizens & Southern NationalBank, 538 F.2d 1101, 1107 (5th Cir. 1976), cert. denied,430 U.S. 945, 97 S.Ct. 1579, 51 L.Ed.2d 792 (1977);Victor Werlhof Aviation Ins. v. Garlick, supra, 771 P.2d 965;United Seeds, Inc. v. Eagle Green Corp., 223 Neb. 360,363, 389 N.W.2d 571 (1986).

[230 Conn. 506]

We therefore hold that as a matter of law, a bankeffectuates its right of setoff only after it has performedsome binding overt act and has made a record to evidencethat action. See Michigan Carpenters' CouncilPension Fund v. Smith & Andrews Construction Co.,681 F. Sup. 1252, 1254-55 (E.D. Mich. 1988) (applyingBaker test to determine if bank exercised right ofsetoff against competing garnishment of bank account).Furthermore, we hold that, consistent with the certaintyand predictability required by banking operationsin the commercial world, the act must be unequivocal,objectively ascertainable and final in order to be overtand binding. Cf. Citizens & Peoples National Bank ofPensacola v. United States, supra, 570 F.2d 1283.

2

We now address the bank's challenge to the validityof the trial court's finding that its effectuation of itsright to a setoff was untimely, in light of the standardjust articulated. In determining that the setoff had notbeen effectuated by the midnight deadline, the courtstated that it "reject[ed] the self-serving testimony ofthe bank employees who testified that the proof ticketswere sufficient to debit the account. The proof tickets,although prepared by the employees who testified, alsohave a box marked `Approved by,' which were signedby [another] bank official who did not appear to testify.The court is not convinced that the proof slipswere, in fact, approved on the day noted on the slips,since the statement records the setoff the following dayafter the midnight deadline in both instances. The courtwas offered no plausible explanation why the defendantbank could not have debited the Hogan accountwithin the midnight deadline on the statement of theirdepositor Hogan if, in fact, this is what they intendedto do. The court places more credence on the Hoganstatement as to the date the account was debited thanthe statements of the defendant's employees who

[230 Conn. 507]

     testified that the accounts were debited on the date theyprepared the `proof tickets.'" The bank has offeredno persuasive argument why these findings of the trialcourt should be overturned.

"Judgments pertaining to the resolution of conflictingfactual claims lie within the province of the trialcourt." Edens v. Kole Construction Co., 188 Conn. 489,495, 450 A.2d 1161 (1982). "It is familiar law that [it]was for the trial court to weigh the evidence and determinethe credibility of the witnesses. This court cannotand will not weigh the evidence contained in the recordbefore us. . . . If there is sufficient evidence inthe record in support of the decision of the trial courtsuch decision must be affirmed." (Citation omitted;internal quotation marks omitted.) Cashman v. Calvo,196 Conn. 509, 513-14, 493 A.2d 891 (1985).

We cannot second-guess the trial court's assessmentof the credibility of the witnesses produced by the bank."It is the trial court which had an opportunity toobserve the demeanor of the witnesses and parties;thus, it is best able to judge the credibility of the witnessesand to draw necessary inferences therefrom."Kukanskis v. Jasut, 169 Conn. 29, 32-33, 362 A.2d 898(1975). "A trier of fact is free to reject testimony evenif it is uncontradicted . . . and is equally free to rejectpart of the testimony of a witness even if other partshave been found credible." (Citations omitted.) Barrilav. Blake, 190 Conn. 631, 639, 461 A.2d 1375 (1983).

Our review of the record discloses no basis for disturbingthe trial court's findings of fact. We conclude,therefore, that the trial court properly determined that,after having been served with Josef's execution, thebank failed to effectuate its right of setoff within theapplicable midnight deadline as required by 52-367a.Accordingly, we affirm the judgment of the trial court

[230 Conn. 508]

     that the bank violated 52-367a as alleged in countsone and two of Josef's complaint.17

III

The bank next claims that the trial court improperlyconcluded that it had violated CUTPA. Again, this challengeis twofold. First, the bank contends that CUTPAdoes not apply to banks. Second, the bank argues thateven if banks are, in principle, subject to CUTPA, itsactions in this case after having been served withJosef's 52-367a execution did not amount to a CUTPAviolation.

A

The bank first argues that the trial court improperlydetermined that CUTPA applies to banks. The bankemphasizes that the legislature has instructed thecourts> and the commissioner of consumer protectionto look to the Federal Trade Commission Act for guidancein the interpretation of CUTPA. General Statutes42-110b(b);18 Russell v. Dean Witter Reynolds, Inc.,200 Conn. 172, 178-79, 510 A.2d 972 (1986). Because5(a)(2) of the Federal Trade Commission Act specificallyexempts banks from its coverage,19 the bank

[230 Conn. 509]

     maintains that we should similarly construe CUTPAas being inapplicable to banks. Furthermore, becausebanks are regulated by state authorities and by federalauthorities other than the Federal Trade Commission,the bank argues that this pattern of pervasive regulationis analogous to the regulation of the securitiesindustry, which we held to be exempt from CUTPA inRussell v. Dean Witter Reynolds, Inc., supra, 172. Wedisagree with the bank's arguments and hold thatCUTPA does apply to banks.

CUTPA provides that "[n]o person shall engage inunfair methods of competition and unfair or deceptiveacts or practices in the conduct of any trade or commerce."General Statutes 42-110b(a). Our startingpoint in interpreting the scope of CUTPA is42-110b(d), which provides that "[i]t is the intentionof the legislature that this chapter be remedial and beso construed." See Web Press Services Corp. v. NewLondon Motors, Inc., supra, 203 Conn. 354; Heslin v.Connecticut Law Clinic of Trantolo & Trantolo,190 Conn. 510, 520, 461 A.2d 938 (1983); Hinchliffe v.American Motors Corp., 184 Conn. 607, 615 n. 4,440 A.2d 810 (1981). Furthermore, a party claiming anexemption from CUTPA has the burden of proof. GeneralStatutes 42-110c(b).

On their face, the definitional sections of CUTPAinclude banks. A bank is a "person," as defined in42-110a(3),20 and is engaged in the conduct of

[230 Conn. 510]

     "trade" or "commerce," as defined in 42-110a(4).21Unless the bank can establish some extrinsic groundof exemption, its conduct with respect to a judicial executionunder 52-367a is, therefore, an act or practicethat comes within the regulatory ambit of CUTPA.

Furthermore, CUTPA expressly provides exceptionsfrom its coverage that exclude a variety of commercialtransactions but do not provide a blanket exemptionfor banks. General Statutes 42-110c.22 We haverepeatedly observed that courts> should not interpretlegislation to enlarge existing statutory exemptions.State v. Turello, 183 Conn. 330, 335, 439 A.2d 364(1981); see also Caulkins v. Petrillo, 200 Conn. 713,718-20, 513 A.2d 43 (1986); Downer v. Liquor ControlCommission, 134 Conn. 555, 560, 59 A.2d 290 (1948).

The fact that banks are exempt from the FederalTrade Commission Act does not establish their exemptionfrom CUTPA. Read precisely, 42-110b(b) urgesus to be guided only by "Section 5(a)(1) of the FederalTrade Commission Act . . . ." Banks, however,derive their federal exemption from 5(a)(2) of the

[230 Conn. 511]

     Federal Trade Commission Act. See footnote 19. It isentirely logical that our legislature would have referredto 5(a)(1), rather than to the Federal Trade CommissionAct in its entirety, because 5(a)(1) is thesource of the substantive standards that the FederalTrade Commission has established to regulate unfairtrade practices.23

It would be inconsistent with the remedial purposesof CUTPA for us to broaden the reference in42-110b(b) to 5(a)(1) of the Federal Trade CommissionAct to incorporate the blanket exemption forbanks that is contained in 5(a)(2) of the federal act."The General Assembly is always presumed to knowall the existing statutes and the effect that its actionor non-action will have upon any one of them. And itis always presumed to have intended that effect whichits action or non-action produces." (Internal quotationmarks omitted.) Plourde v. Liburdi, 207 Conn. 412,417, 540 A.2d 1054 (1988). This presumption includesknowledge, not only of existing Connecticut statutes,but also of all federal statutes, including the FederalTrade Commission Act. Since CUTPA includes its own

[230 Conn. 512]

     exemption section, 42-110c, it is plain that the legislaturerecognized that some limitations on the scopeof CUTPA were desirable. Had it wanted to includebanks within those limitations, it knew how to do so.See Federal Aviation Administration v. Administrator,196 Conn. 546, 551, 494 A.2d 564 (1985); State v.Smith, 194 Conn. 213, 223, 479 A.2d 814 (1984);Edmundson v. Rivera, 169 Conn. 630, 635,363 A.2d 1031 (1975). Courts> should not create exemptions thatthe legislature has not enacted.

The bank argues, however, that the banking industryis entitled to an implied exemption from CUTPAby analogy to the implied exemption of the securitiesindustry that this court recognized in Russell v. DeanWitter Reynolds, Inc., supra, 200 Conn. 172, despitethe absence of an express exemption in CUTPA forsecurities transactions. In Russell, we framed the questionof applicability as "not whether [the suspect] transactionsare exempt from CUTPA but whether CUTPAitself can fairly be interpreted to encompass such transactionsin the first instance." Id., 178. In determiningthat securities transactions were not subject toCUTPA, we engaged in a four part analysis. That analysiswas refined and applied in Mead v. Burns,199 Conn. 651, 661-63, 509 A.2d 11 (1986), and Connellyv. Housing Authority, 213 Conn. 354, 361-64,567 A.2d 1212 (1990). To determine whether the suspect transactionsshould be exempt from CUTPA, we examine:(1) the applicability of Federal Trade Commission rulesto the suspect conduct and the absence of any FederalTrade Commission regulatory activity over industrypractices; (2) the existence and scope of an alternatecomprehensive regulatory scheme or system; (3) theabsence of any activity by the commissioner of consumerprotection within this area; and (4) the case lawof other jurisdictions. Russell v. Dean Witter Reynolds,Inc., supra, 179-84. Applying this four part analysis

[230 Conn. 513]

     to the bank's activities in this case, we conclude thatbanks are not exempt from CUTPA coverage.

The first part of this analysis asks whether the FederalTrade Commission regulates the banking industry,directly or indirectly. Although banks are notdirectly subject to the Federal Trade Commission;15 U.S.C. § 45(a)(2) (1988); United States v. PhiladelphiaNational Bank, 374 U.S. 321, 336 and n. 11, 83 S.Ct.1715, 10 L.Ed.2d 915 (1963);24 the banking industry,unlike the securities industry, is affected by FederalTrade Commission rules and regulations. The FederalTrade Commission has the authority to promulgaterules, regulations and policy guidelines that defineunfair or deceptive practices and that significantlyimpact the conduct of banks. See 15 U.S.C. § 57a(a)and (f) (1988).25 Once the Federal Trade Commission

[230 Conn. 514]

     has promulgated a rule, bank boards, which haveenforcement authority over banks in order to preventunfair and deceptive practices, have sixty days topromulgate a substantially similar regulation. Such parallelregulations are required unless the appropriateboard finds that the acts or practices are not unfair ordeceptive, or the Board of Governors of the FederalReserve System finds that implementation of similarregulations with respect to banks would "seriously conflict

[230 Conn. 515]

     with essential monetary and payments systemspolicies of [the Federal Reserve] Board . . . ."15 U.S.C. § 57a(f)(1) (1988). Thus, although the FederalTrade Commission is not directly responsible forpreventing unfair and deceptive acts or practices withrespect to banks, it has been given the leadership rolein defining what conduct constitutes unfair or deceptiveacts or practices in that industry. In effect, the substanceof any rule promulgated by the Federal TradeCommission applies to banks unless the banks have specificallybeen exempted under the two narrow exceptionsprovided in 15 U.S.C. § 57a(f)(1).

CUTPA's rule making scheme is similar. Once thecommissioner of consumer protection promulgates aregulation pursuant to 42-110b(c),26 that regulationapplies to the conduct of banks unless the commissionerof banking specifically permits such conduct, therebymaking that conduct exempt from CUTPA's ambit asper 42-110c(a)(1).

The Federal Trade Commission has in fact exercisedits authority to promulgate rules and regulations withregard to unfair and deceptive acts or practices thataffect the conduct of banks. Compare FTC Preservationof Consumers' Claims and Defenses Rule,16 C.F.R. § 433 (1993) ("Holder in Due Course Rule" or"Seller Rule") with Comptroller of the Currency, BankingCircular No. 68 [1973-1978 Transfer Binder] Fed.Banking L. Rep. (CCH) ¶ 96,840 (May 14, 1976)(national banks are impacted by Federal Trade Commission's"holder in due course rule") and Board of

[230 Conn. 516]

     Governors of the Federal Reserve System, Letter toPresidents of all Federal Reserve Banks (Bank Involvementin "Seller Rule" Letter) [1973-1978 TransferBinder] Fed. Banking L. Rep. (CCH) ¶ 96,848 (May 24,1976) (same); compare also FTC Credit Practices Rule,16 C.F.R. § 444 (1993) with Board of Governors of FederalReserve System Unfair or Deceptive Acts or PracticesRule (Regulation AA), 12 C.F.R. § 227 (1993).

The relationship in law and in fact between the FederalTrade Commission and the banking industry thereforedemonstrates a substantial amount of regulatoryactivity that affects the conduct of the banking industry.By contrast, the Federal Trade Commission hasnever undertaken to define deceptive practices in thesale and purchase of securities. Russell v. Dean WitterReynolds, Inc., supra, 200 Conn. 180.

The second part of our analysis requires us to determinewhether banks are so comprehensively regulatedby a different regime that CUTPA should not apply.In Russell v. Dean Witter Reynolds, Inc., supra,200 Conn. 180, we recognized that securities transactionswere comprehensively regulated by the Securities andExchange Commission. See Securities Act of 1933,15 U.S.C. § 77a et seq., and Securities Exchange Act of1934, 15 U.S.C. § 78a et seq. We also examined theConnecticut Uniform Securities Act (CUSA); GeneralStatutes 36-470 through 36-502; and its predecessoracts. We noted that these predecessor laws provideda private cause of action for security transaction violationswell before CUTPA had been enacted; Russellv. Dean Witter Reynolds, Inc., supra, 181-82; and thatCUSA provided, not only a private cause of action, butalso all of the same remedies that one could obtain bybringing an action under CUTPA, except for punitivedamages. Id., 175-76.27 We thus determined that the

[230 Conn. 517]

     existence and scope of a comprehensive regulatoryregime under both federal and state law precludedapplication of CUTPA to securities transactions. Id.,180-84.28

While banks are arguably comprehensively regulatedunder federal law,29 even national banks, which areinstrumentalities of the federal government, havealways been subject to the laws of the state in whichthey do business. State laws are preempted only whentheir operation expressly conflicts with the laws of theUnited States. McClellan v. Chipman, 164 U.S. 347,356-57, 17 S.Ct. 85, 41 L.Ed. 461 (1896); Shea v. FirstFederal Savings & Loan Assn. of New Haven, 184 Conn. 285,292-93, 439 A.2d 997 (1981). No claim of preemptionhas been made in this case.

Banks are not so comprehensively regulated understate law30 as to be exempt from CUTPA. The bankhas failed to point to and we have been unable to findany statute or regulation that encompasses the same

[230 Conn. 518]

     type and scope of unfair trade practices that are proscribedby CUTPA. More specifically, we have beenunable to find any statute or regulation that regulatesa bank's duties with regard to its right to setoff anaccount when dealing with others, such as garnishers,who have a direct adverse interest in that same account.Unlike Russell v. Dean Witter Reynolds, Inc., supra,200 Conn. 172, in which we determined that CUTPAwas redundant in light of the pervasive remedial provisionsfor securities transactions contained in CUSA,we have been unable to locate a comparable remedialscheme within this state's banking regulatoryframework.

The mere existence of generic state and federal bankingregulations does not exclude CUTPA coverage.CUTPA is applicable even when its regulatory schemeoverlaps that authorized by another statute or regulation.Mead v. Burns, supra, 199 Conn. 662-63; see alsoHeslin v. Connecticut Law Clinic of Trantolo & Trantolo,supra, 190 Conn. 510; Perdue v. Crocker NationalBank, 38 Cal.3d 913, 702 P.2d 503, 216 Cal.Rptr. 345(1985), appeal dismissed, 475 U.S. 1001, 106 S.Ct.1170, 89 L.Ed.2d 290 (1986). CUTPA recognizes thepossibility of overlap in its provision that expresslyexempts transactions within its ambit only when suchtransactions or actions are "otherwise permitted underlaw as administered by any regulatory [regime] actingunder statutory authority of the state or of the UnitedStates." (Emphasis added.) General Statutes42-110c(a)(1). In Connelly v. Housing Authority,supra, 213 Conn. 361, we held that the actions of amunicipal housing authority in leasing and rentingapartments were exempt from CUTPA scrutinybecause such actions were "expressly authorized andpervasively regulated by both the state department ofhousing and [the United States Department of Housingand Urban Development]." (Emphasis added.) No

[230 Conn. 519]

     banking regulation of which we are aware expresslyauthorizes a bank to delay its response to a judicial executionunder 52-367a.

In the third part of this analysis, we consider whetherthe commissioner of consumer protection, the stateadministrator responsible for enforcing CUTPA, hasundertaken regulatory activities with respect to thesubject area. In Russell v. Dean Witter Reynolds, Inc.,supra, 200 Conn. 182, we determined that thecommissioner of consumer protection had never purported toregulate the conduct of securities transactions. Bycontrast, the commissioner of consumer protection hasinvoked CUTPA authority to compel Connecticut banksto comply with an investigative demand for informationabout real estate lending practices within the bankingindustry. Heslin v. Liberty Bank for Savings, 1977-1Trade Cases (CCH) ¶ 61,311 (Conn. Common Pleas1977). In 1986, the attorney general, at the request ofthe commissioner of consumer protection, brought aCUTPA action against, among others, thirty-five banksfor involvement in home improvement financingirregularities. See amended complaint, State v. TheDartmouth Plan, Inc., United States District Court forthe District of Connecticut, Docket No. H 86-627 (datedMarch 10, 1987).31

Finally, the last part of this analysis consists of aninquiry into the case law of other jurisdictions.Although not unanimous, most state courts> have determinedthat banks are subject to the provisions of theirstate's unfair or deceptive trade practices or consumer

[230 Conn. 520]

     protection statutes.32 See, e.g., Heastie v. CommunityBank of Greater Peoria, 727 F. Sup. 1133 (N.D. Ill.1989) (applying Illinois consumer fraud statute); Perduev. Crocker National Bank, supra, 38 Cal.3d 913;Fletcher v. Security Pacific National Bank, 23 Cal.3d 442,591 P.2d 51, 153 Cal.Rptr. 28 (1979); FirstNational Bank of Anthony v. Dunning, 18 Kan. App. 2d 518,855 P.2d 493 (1993); Raymer v. Bay State NationalBank, 384 Mass. 310, 424 N.E.2d 515 (1981); AttorneyGeneral v. Michigan National Bank, 110 Mich. App. 106,312 N.W.2d 405 (1981), rev'd in part, 414 Mich. 948,325 N.W.2d 777 (1982); Baird v. Norwest Bank,255 Mont. 317, 843 P.2d 327 (1992); Ashlock v.Sunwest Bank of Roswell, N.A., 107 N.M. 100, 753 P.2d 346(1988); Pennsylvania Bankers Assn. v. Commonwealth,58 Pa. Commw. 170, 427 A.2d 730 (1981); Vogtv. Seattle-First National Bank, 117 Wn.2d 541,817 P.2d 1364 (1991). Two of the four state courts> that haveruled to the contrary relied on explicit statutory exemptionsfor banks. See Preferred Investment Corp. v. Neucere,592 So.2d 889 (La. App. 1991), cert. denied,597 So.2d 1028 (La. 1992); First Financial Bank v. Butler,492 So.2d 503 (La. App. 1986); Little v. Gillette,218 Neb. 271, 354 N.W.2d 147 (1984). The remainingminority of courts> either incorporated the exemptionin the Federal Trade Commission Act; Idaho FirstNational Bank v. Wells, 100 Idaho 256, 596 P.2d 429(1979); or concluded that banks were sufficiently andpervasively regulated by other regulatory agencies.NCNB National Bank of North Carolina v. Tiller,814 F.2d 931 (4th Cir. 1987) (applying South Carolina law);Anderson v. Citizens Bank, 294 S.C. 387,365 S.E.2d 26 (1987), overruled in part by Ward v. Dick Dyer &Associates, Inc., 304 S.C. 152, 403 S.E.2d 310 (1991)(overruled to extent that Anderson was based on "generalactivity" test).

[230 Conn. 521]

Our conclusion to apply CUTPA to banks is particularlybolstered by the fact that the Supreme JudicialCourt of Massachusetts reached a similar conclusion;Raymer v. Bay State National Bank, supra,384 Mass. 310; because the "governing statutes in Massachusettsare virtually identical to our own." Russell v. Dean WitterReynolds, Inc., supra, 200 Conn. 183. We have,therefore, repeatedly looked to the reasoning and decisionsof the Supreme Judicial Court of Massachusettswith regard to the scope of CUTPA. Id.; Mead v. Burns,supra, 199 Conn. 663.

Applying this four part analysis to the circumstancesof this case, we conclude that the banking industry,unlike the securities industry, is governed by CUTPA.In light of the text of CUTPA and our case law, thebank has failed to establish its right to a blanket exemptionfrom CUTPA's regulation of unfair trade practices.

B

The bank's final claim is that the trial court, even ifit properly concluded that CUTPA applies to banks,improperly concluded that the manner in which thebank responded to Josef's 52-367a execution constituteda CUTPA violation. The trial court found thatthe bank had violated CUTPA by: (1) failing to complywith the provisions of 52-367a after having beenserved with Josef's executions and (2) sending noticesthat, without mentioning the setoffs, informed the sheriffthat there were no available funds in the account.At oral argument in this court, however, Josef restatedits CUTPA complaint as focusing not on the bank'sintrinsic right of setoff, but on the bank's allegedlydeceptive disclosures that there were insufficient fundsin Hogan's account to satisfy the executions.33 Our

[230 Conn. 522]

     review of the trial court's determination of a CUTPAviolation by the bank is, thus, limited to whether thebank's disclosures were deceptive and violated CUTPA.

"It is well settled that in determining whether [anact or] practice violates CUTPA we have `adopted thecriteria set out in the "cigarette rule" by the federaltrade commission for determining when [an act or]practice is unfair: "(1) [W]hether the practice, withoutnecessarily having been previously considered unlawful,offends public policy as it has been established bystatutes, the common law, or otherwise - whether, inother words, it is within at least the penumbra of somecommon law, statutory, or other established conceptof unfairness; (2) whether it is immoral, unethical,oppressive, or unscrupulous; (3) whether it causes substantialinjury to consumers [competitors or otherbusinessmen]." Conaway v. Prestia, [191 Conn. 484,492-93, 464 A.2d 847 (1983)], quoting FTC v. Sperry& Hutchinson Co., 405 U.S. 233, 244-45 n. 5, 92 S.Ct.898, 31 L.Ed.2d 170 (1972) . . . .' McLaughlin Ford,Inc. v. Ford Motor Co., 192 Conn. 558, 567-68,473 A.2d 1185 (1984).

"`All three criteria do not need to be satisfied to supporta finding of unfairness. A practice may be unfairbecause of the degree to which it meets one of thecriteria or because to a lesser extent it meets all three.Statement of Basis and Purpose, Disclosure Requirementsand Prohibitions Concerning Franchising andBusiness Opportunity Ventures, 43 Fed. Reg. 59,614,[and] 59,635 (1978).' (Internal quotation marks omitted.)Id., 569 n. 15. `Thus a violation of CUTPA maybe established by showing either an actual deceptivepractice; see, e.g., Sprayfoam, Inc. v. Durant's RentalCenters, Inc., 39 Conn. Sup. 78, 468 A.2d 951 (1983);

[230 Conn. 523]

     or a practice amounting to a violation of public policy.See, e.g., Sportsmen's Boating Corporation v. Hensley,[192 Conn. 747, 474 A.2d 780 (1984)].' Web Press ServicesCorporation v. New London Motors, Inc., [supra,203 Conn. 355]. Furthermore, a party need not provean intent to deceive to prevail under CUTPA. See id.,363 (knowledge of falsity, either constructive or actual),need not be proven to establish CUTPA violation)."Cheshire Mortgage Service, Inc. v. Montes, supra,223 Conn. 105-106.

The trial court found that both of the bank's notificationsto the sheriff who had served the bank withJosef's execution were deceptive and constitutedCUTPA violations. The trial court focused on the factthat the bank's notices stated that there were "no availablefunds" and did not mention the bank's setoffs. Thetrial court stated: "This response . . . was deceptiveand came close to a misrepresentation. The actions ofthe [bank] in this case were unfair, illegal, they offendedpublic policy and above all, they were an affront to thiscourt." We disagree with the trial court's findings andconclude that the bank's notifications did not violateCUTPA.

We note, at the outset, that our review of the trialcourt's determination is hampered by the ambiguity ofthe trial court's finding that each of the bank'sresponses "came close to a misrepresentation." We willassume that the trial court's characterization reflectsits finding that, while accurate on their face, the noticeswere misleading because of their failure to disclose thatit was the bank's exercise of its right of setoff that ledto the unavailability of funds for Josef, the executingjudgment creditor.

A failure to disclose can be deceptive only if, in lightof all the circumstances, there is a duty to disclose.Josef has pointed to no authority that would support

[230 Conn. 524]

     the conclusion that a bank served with an executionhas a duty to disclose anything more than that the garnishedfunds are not available. A bank account may bedepleted by any number of competing claimants. If thebank, after having been served with an execution, hadproperly honored competing checks written on thejudgment debtor's account; General Statutes42a-4-303; and the honoring of those checks had leftthe account with insufficient funds to pay the judgmentcreditor based on the execution, the bank would berequired only to disclose that the funds in the accountwere insufficient and not the reason for the insufficiency.We see no reason to differentiate, for noticepurposes, between a bank's right of setoff and thebank's honoring of any other competing claim, such asa check.

Although the bank had no duty to disclose, it actedimproperly in failing to exercise its right of setoff intimely fashion as defined by the midnight deadline that,earlier in this opinion, we have held to govern 52-367aexecutions. The bank's notices that the garnishedaccounts had no available funds were therefore inaccuratein this respect. The trial court did not, however,find that the bank, by giving notices that improperlyassumed that the bank's setoffs had been timely, hadintentionally or fraudulently created a false impression.Moreover, the trial court did not find that the bank hadattempted to falsify or backdate its records as to whenit had effectuated its setoff. The bank's failure to complywith the midnight deadline, in the circumstancesof this case, was therefore no more than a technicalviolation of 52-367a.

The bank's notices, in substance, were not immoral,unethical, oppressive or unscrupulous. The bank's technicalviolation of 52-367a and the lack of explanationin its concomitant notice did not offend public policy,implicate the concept of unfairness or cause the type

[230 Conn. 525]

     of substantial injury that CUTPA was designed toaddress. Cheshire Mortgage Service, Inc. v. Montes,supra, 223 Conn. 105-106; see Hinchliffe v. AmericanMotors Corp., supra, 184 Conn. 617 n. 7. We conclude,therefore, that the trial court improperly determinedthat the bank's actions violated CUTPA.34

The judgment is affirmed with respect to the firstand second counts of Josef's complaint. The judgmentis reversed with respect to the third count of Josef'scomplaint and with respect to the supplemental judgmentawarding attorney's fees to Josef, and the caseis remanded to the trial court with direction to renderjudgment in favor of the bank on the third count andto deny Josef's claim for attorney's fees. The crossappeal is dismissed.

In this opinion the other justices concurred.

1. Although the trial court's judgment and the memorandum ofdecision do not state an explicit finding for the bank on count four,the misrepresentation count, a close reading of the memorandum ofdecision reveals that the trial court considered and implicitly disposedof the fourth count in the bank's favor. In its discussion of countthree, the alleged CUTPA violation, the trial court determined that thebank's response to Josef's execution was "deceptive and came close toa misrepresentation." (Emphasis added.) In concluding the memorandum ofdecision, the court stated that "[j]udgment shall enter for the plaintiffas against the defendant on counts one, two and three of the complaintonly. . . ." (Emphasis added.) Although it is preferable for a trial court to make a formal ruling oneach count, we will not elevate form over substance when it is apparentfrom the memorandum of decision that the trial court did not find thata misrepresentation had been made and that Josef did not prevail on thefourth count. We, thus, determine that the rights of the parties wereconcluded and a final judgment was rendered in this case. See Clark v.Gibbs, 184 Conn. 410, 415 n. 9, 439 A.2d 1060 (1981); Howarth v. Northcott,152 Conn. 460, 462, 208 A.2d 540 (1965), overruled on other grounds byHao Thi Popp v. Lucas, 182 Conn. 545, 438 A.2d 755 (1980); Martin v.Martin's News Service, Inc., 9 Conn. App. 304, 306 n. 2, 518 A.2d 951(1986), cert. denied, 202 Conn. 807, 520 A.2d 1287 (1987).

2. General Statutes 42a-4-104 provides, in relevant part:"DEFINITIONS AND INDEX OF DEFINITIONS. (a) In this article, unless thecontext otherwise requires . . . (10) `midnight deadline' with respectto a bank is midnight on its next banking day following the banking dayon which it receives the relevant item or notice or from which thetime for taking action commences to run, whichever is later. . . ."

3. General Statutes 52-367a provides in relevant part:"EXECUTION AGAINST DEBTS DUE FROM BANKING INSTITUTION. DEBTOR OTHER THANNATURAL PERSON. As used in this section and section 52-367b, the term`banking institution' means a state bank and trust company, nationalbanking association, savings bank, industrial bank, credit union, federalcredit union, savings and loan association and federal savings and loanassociation. Execution may be granted pursuant to this section againstany debts due from any banking institution to a judgment debtor which isnot a natural person. If execution is desired against any such debt, theplaintiff requesting the execution shall so notify the clerk, and theclerk shall issue such execution containing a direction that the officerserving the same shall make demand (1) upon the main office of any bankinginstitution having its main office within the county of such officer. . . for the payment of any debt due to the judgment debtor, and, afterhaving made such demand, shall serve a true and attested copy thereof,with his actions thereon endorsed, with the banking institution officerupon whom such demand is made. If any such banking institution uponwhich such execution is served and upon which such demand is made isindebted to the judgment debtor, it shall pay to such officer, in themanner and at the time hereinafter described, the amount of suchindebtedness not exceeding the amount due on such execution, to bereceived and applied on such execution by such officer. Such bankinginstitution shall act upon such execution according to section42a-4-303 before its midnight deadline, as defined in section 42a-4-104.If such banking institution fails or refuses to pay over to such officerthe amount of such debt, not exceeding the amount due on such execution,such banking institution shall be liable in an action therefor to thejudgment creditor named in such execution, and the amount so recoveredby such judgment creditor shall be applied toward the payment of the amountdue on such execution."

4. General Statutes 42a-4-303 provides in relevant part:"WHEN ITEMS SUBJECT TO NOTICE, STOP-PAYMENT ORDER, LEGAL PROCESS ORSET-OFF. ORDER ON WHICH ITEMS MAY BE CHARGED OR CERTIFIED. (a) Anyknowledge, notice or stop-payment order received by, legal process servedupon, or set-off exercised by a payor bank comes too late to terminate,suspend, or modify the bank's right or duty to pay an item or to chargeits customer's account for the item if the knowledge, notice, stop-paymentorder, or legal process is received or served and a reasonable time forthe bank to act thereon expires or the set-off is exercised after theearliest of the following . . . (4) the bank becomes accountable for theamount of the item under section 42a-4-302 dealing with the payor bank'sresponsibility for late return of items; or (5) with respect to checks,a cut-off hour no earlier than one hour after the opening of the nextbanking day after the banking day on which the bank received the check andno later than the close of that next banking day or, if no cut-off hour isfixed, the close of the next banking day after the banking day on which thebank received the check. "(b) Subject to subsection (a), items may be accepted, paid, certified,or charged to the indicated account of its customer in any order."

5. These legal events include knowledge or notice of: (1) thedepositor's death, incompetency or bankruptcy; (2) the depositor's stoppayment order; (3) legal process on the depositor's account, i.e.,garnishment or judicial execution, and (4) set-off by the payor bank.They are commonly referred to as the "four legals." 1 J. White & R.Summers, Uniform Commercial Code (3d Ed. 1988) 18-7; A.L.I., UniformCommercial Code (12th Ed. 1990) 4-303, comment 3; B. Clark, TheLaw of Bank Deposits, Collections and Credit Cards (3d Ed. 1990) ¶5.04 [1]. For an analysis of 4-303 of the Uniform Commercial Code,see 1 J. White and R. Summers, supra, 18-7.

6. The complete Uniform Commercial Code definition for an itemis "an instrument or a promise or order to pay money handled by a bankfor collection or payment. The term does not include a payment ordergoverned by article 4A or a credit or debit card slip. . . ." GeneralStatutes 42a-4-104 (a)(9). These terms are further defined bythe Uniform Commercial Code as follows: an "`[i]nstrument' means anegotiable instrument"; General Statutes 42a-3-104 (b); a"`negotiable instrument' means an unconditional promise or order to paya fixed amount of money . . . payable to bearer or to order . . . ondemand or at a definite time . . . and . . . [d]oes not state any otherundertaking or instruction by the person promising or ordering paymentto do any act in addition to the payment of money"; General Statutes42a-3-104 (a); a "`[p]romise' means a written undertaking to paymoney signed by the person undertaking to pay"; General Statutes42a-3-103 (a)(9); and an "`[o]rder' means a written instruction to paymoney signed by the person giving the instruction." General Statutes42a-3-103 (a)(6).

7. Practice Book 108 provides in pertinent part: "[GENERAL RULESOF PLEADING] - FACT PLEADING "Each pleading shall contain a plain and concise statement of thematerial facts on which the pleader relies, but not of the evidence bywhich they are to be proved. . . . If any such pleading does not fullydisclose the ground of claim . . . the court may order a fuller and moreparticular statement; and, if in the opinion of the court the pleadingsdo not sufficiently define the issues in dispute, it may direct theparties to prepare other issues, and such issues shall, if the partiesdiffer, be settled by the court." Practice Book 109 provides in pertinent part: "[GENERAL RULES OFPLEADING] - PLEADING LEGAL EFFECT "Acts . . . may be stated according to their legal effect, but in sodoing the pleading should be such as fairly to apprise the adverse partyof the state of facts which it is intended to prove. . . ." (Emphasisadded.)

8. Paragraphs one, three, four, eight and nine, and the prayer forrelief on the first two counts in Josef's complaint explicitly state thatthis action is brought pursuant to General Statutes 52-367a, andthat the bank violated that statute by exercising its right of setoff inan untimely fashion, after the midnight deadline had passed.

9. The bank did unsuccessfully move to strike count three, theCUTPA claim, on the basis that CUTPA does not apply to banks.

10. In its memorandum of decision, the trial court nevermentioned, let alone based its decision on, General Statutes42a-4-303. The trial court, therefore, must have found that theallegations in the complaint were sufficient to place the bank on noticeregarding the facts claimed and the issues to be tried.

11. For the purposes of addressing these questions, we willassume that the bank had a right of setoff with respect to the account ofHogan, its judgment debtor.

12. For the definition of "midnight deadline," seefootnote 2.

13. "`Payor bank' means a bank that is the drawee of adraft. . . ." General Statutes 42a-4-105(3). For the definitionof "draft," see 42a-4-104(a)(7).

14. See also General Statutes 42a-4-303 (incorporatingGeneral Statutes 42a-4-302 into its provisions regarding actingupon an item); General Statutes 42a-4-202(b) (specifyingmidnight deadline as general standard for timely action bycollecting bank); General Statutes 42a-4-213(c) (specifyingmidnight deadline as default rule for final settlement ofcashier's or teller's check that has not been presented orforwarded for collection); and General Statutes 42a-4-214(a)(midnight deadline used as usual time frame to determinecollecting bank liability for item after settlement has beenrevoked and where neither item has been returned nor notificationsent). The midnight deadline serves as a safe harbor provision for apayor bank because it does not become accountable for the amountof an item until after the midnight deadline has passed, unless,before that deadline has passed, it already has made finalpayment pursuant to General Statutes 42a-4-215.

15. Practice Book 4061 provides: "The court may reverseor modify the decision of the trial court if it determines thatthe factual findings are clearly erroneous in view of theevidence and the pleadings in the whole record, or that thedecision is otherwise erroneous in law. "If the court deems it necessary to the proper disposition ofthe cause, it may remand the case for a further articulation ofthe basis of the trial court's factual findings or decision. "It is the responsibility of the appellant to provide anadequate record for review."

16. Although Baker v. National City Bank of Cleveland,supra, 511 F.2d 1016, involved a Uniform Commercial Code 4-303competition between a bank's right of setoff and its depositor,triggered by a court order in bankruptcy proceedings enjoiningsetoff against the depositor's account, similar interests applyto the conflicting claims between a garnisher and the garnisheebank. The garnisher has the same rights as the underlying obligorat the time of garnishment. Hospital of St. Raphael v. New HavenSavings Bank, supra, 205 Conn. 614.

17. Because we agree with the trial court's finding thatthe bank did not exercise its setoff before the midnight deadlineand, thus, did not act upon the execution in a timely manner, weneed not decide whether the trial court correctly determined thatthe bank was not entitled to a common law right of setoff in thecircumstances of this case.

18. General Statutes 42-110b(b) provides: "It is theintent of the legislature that in construing subsection (a) ofthis section, the commissioner and the of this state shallbe guided by interpretations given by the Federal TradeCommission and the federal to Section 5(a)(1) of theFederal Trade Commission Act (15 U.S.C. § 45(a)(1)), as from timeto time amended."

19. Title 15 of the United States Code, 45(a)(2) (1988)provides: "The [Federal Trade] Commission is empowered anddirected to prevent persons, partnerships, or corporations,except banks, savings and loan institutions described in section57a(f)(3) of this title, Federal credit unions described insection 57a(f)(4) of this title, common carriers subject to theActs to regulate commerce, air carriers and foreign air carrierssubject to the Federal Aviation Act of 1958 [49 U.S.C. § 1301 etseq.], and persons, partnerships, or corporations insofar as theyare subject to the Packers and Stockyards Act, 1921, as amended[7 U.S.C. § 181 et seq.], except as provided in section 406(b) ofsaid Act [7 U.S.C. § 227(b)], from using unfair methods ofcompetition in or affecting commerce and unfair or deceptiveacts or practices in or affecting commerce."

20. "Person" is defined at General Statutes 42-110a(3) as"a natural person, corporation, trust, partnership, incorporatedor unincorporated association, and any other legal entity . . . ."

21. "`Trade' and `commerce' means the advertising, thesale or rent or lease, the offering for sale or rent or lease, orthe distribution of any services and any property, tangible orintangible, real, personal or mixed, and any other article,commodity, or thing of value in this state." General Statutes42-110a(4).

22. General Statutes 42-110c provides: "EXCEPTIONS. (a)Nothing in this [Unfair Trade Practices] chapter shall apply to:(1) Transactions or actions otherwise permitted under law asadministered by any regulatory board or officer acting understatutory authority of the state or of the United States; or (2)acts done by the publisher, owner, agent or employee of anewspaper, periodical or radio or television station in thepublication or dissemination of an advertisement, where thepublisher, owner, agent or employee did not have knowledge of thefalse, misleading, unfair or deceptive character of theadvertisement, and did not have direct financial interest in thesale or distribution of the advertised product or service. "(b) The burden of proving exemption, as provided in thissection, from the provisions of this chapter shall be upon theperson claiming the exemption."

23. Furthermore, we have construed General Statutes42-110b as a source of guidance for Connecticut , ratherthan as a mandate by which our are bound. "[A]lthough42-110b(b) provides that and the [commissioner of consumerprotection] shall be guided by the federal interpretations given5 of the Federal Trade Commission Act, they are not limited bysuch interpretations. `As originally enacted, [CUTPA] providedthat state unfair or deceptive acts or practices were to be those"determined to be" unfair or deceptive by the [Federal TradeCommission] or the federal . 1973 Pub. Acts 615, 2(a).However, the Act was amended in 1976 to provide only that in Connecticut [and the . . . commissioner of consumerprotection] were to be "guided by" federal interpretations of 5of the [Federal Trade Commission Act]. The purpose of thechange apparently was to permit . . . practices which had not yetbeen specifically declared unlawful by federal authorities to benevertheless unlawful under CUTPA.' (Emphasis added.) BaileyEmployment System, Inc. v. Hahn, 545 F. Sup. 62, 71 (D. Conn.1982)." Caldor, Inc. v. Heslin, 215 Conn. 590, 598,577 A.2d 1009 (1990), cert. denied, 498 U.S. 1088, 111 S.Ct. 966, 112L.Ed.2d 1053 (1991).

24. The legislative history to the 1974 amendments to theFederal Trade Commission Improvement Act; Pub. L. No. 93-637;states: "Under the Federal Trade Commission Act the Commissiondoes not have authority to regulate banks. This legislation doesnothing to change this situation." H.R. Rep. No. 1107, 93dCong., 2d Sess. (1974), reprinted in 1974 U.S.C.C.A.N. 7702,7729; see also H.R. Rep. No. 265, 95th Cong. 1st Sess. 2-3(1979), reprinted in 1979 U.S.C.C.A.N. 372, 372-73 ("In 1914 whenthe Federal Trade Commission Act was enacted, banks werespecifically exempted from the regulatory and investigativeauthorities of the newly-created Commission because they weresubject to Federal regulatory control by the Federal ReserveBoard.").

25. Title 15 of the United States Code, 57a(a) (1988)provides in pertinent part: "AUTHORITY OF COMMISSION TO PRESCRIBERULES AND GENERAL STATEMENTS OF POLICY (1) . . . [T]he Commissionmay prescribe . . . (B) rules which define with specificity actsor practices which are unfair or deceptive acts or practices inor affecting commerce (within the meaning of section 45(a)(1) ofthis title), except that the Commission shall not develop orpromulgate any trade rule or regulation with regard to theregulation of the development and utilization of the standardsand certification activities pursuant to this section. Rulesunder this subparagraph may include requirements prescribed forthe purpose of preventing such acts or practices." Title 15 of the United States Code, 57a(f) (1988) provides inpertinent part: "UNFAIR OR DECEPTIVE ACTS OR PRACTICES BY BANKS,SAVINGS AND LOAN INSTITUTIONS, OR FEDERAL CREDIT UNIONS;PROMULGATION OF REGULATIONS BY BOARD OF GOVERNORS OF FEDERALRESERVE SYSTEM, FEDERAL HOME LOAN BANK BOARD, AND NATIONAL CREDITUNION ADMINISTRATION BOARD; AGENCY ENFORCEMENT AND COMPLIANCEPROCEEDINGS; VIOLATIONS; POWER OF OTHER FEDERAL AGENCIESUNAFFECTED; REPORTING REQUIREMENTS (1) In order to prevent unfairor deceptive acts or practices in or affecting commerce(including acts or practices which are unfair or deceptive toconsumers) by banks or savings and loan institutions described inparagraph (3), each agency specified in paragraph (2) or (3)of this subsection shall establish a separate division ofconsumer affairs which shall receive and take appropriate actionupon complaints with respect to such acts or practices by banksor savings and loan institutions described in paragraph (3)subject to its jurisdiction. The Board of Governors of theFederal Reserve System (with respect to banks) and the FederalHome Loan Bank Board (with respect to savings and loaninstitutions described in paragraph (3)) and the National CreditUnion Administration Board (with respect to Federal credit unionsdescribed in paragraph (4)) shall prescribe regulations to carryout the purposes of this section, including regulations definingwith specificity such unfair or deceptive acts or practices, andcontaining requirements prescribed for the purpose of preventingsuch acts or practices. Whenever the [Federal Trade] Commissionprescribes a rule under subsection (a)(1)(B) of this section,then within 60 days after such rule takes effect each such Boardshall promulgate substantially similar regulations prohibitingacts or practices of banks or savings and loan institutionsdescribed in paragraph (3), or Federal credit unions described inparagraph (4), as the case may be, which are substantiallysimilar to those prohibited by rules of the Commission and whichimpose substantially similar requirements, unless (A) any suchBoard finds that such acts or practices of banks or savings andloan institutions described in paragraph (3), or Federal creditunions described in paragraph (4), as the case may be, are notunfair or deceptive, or (B) the Board of Governors of the FederalReserve System finds that implementation of similar regulationswith respect to banks, savings and loan institutions or Federalcredit unions would seriously conflict with essential monetaryand payments systems policies of such Board, and publishes anysuch finding, and the reasons therefor, in the Federal Register."

26. General Statutes 42-110b(c) provides: "Thecommissioner may, in accordance with chapter 54, establish byregulation acts, practices or methods which shall be deemed to beunfair or deceptive in violation of subsection (a) of thissection. Such regulations shall not be inconsistent with therules, regulations and decisions of the federal trade commissionand the federal in interpreting the provisions of theFederal Trade Commission Act."

27. In Russell v. Dean Witter Reynolds, Inc., supra,200 Conn. 175-76, we determined that both CUSA and CUTPA allow aprivate party to recover restitutionary damages, interest andattorney's fees. Compare General Statutes 36-498 (buyer'sremedies under CUSA) with General Statutes 42-110g (remediesunder CUTPA).

28. Implicit in our decision in Russell v. Dean WitterReynolds, Inc., supra, 200 Conn. 175-76, that CUTPA does notapply to securities transactions was the determination that theavailability of a punitive damage award in an action under CUTPA,as opposed to CUSA, was insignificant.

29. National banks, including federal savings and loansand credit unions, are primarily regulated under Title 12 of theUnited States Code. They are subject to a myriad of regulatoryagencies including, but not limited to, the Comptroller of theCurrency, the Federal Reserve System, the Federal DepositInsurance Corporation, the Federal Home Loan Bank Board and theNational Credit Union Administration Board. For an overview ofbanking regulation, see C. Lichtenstein, "Regulation of BankingOrganizations under the United States Federal System (the `DualBanking System')," in Institute of Banking Law and Regulation1990 (Practising Law Institute 1990) 11-25; T. Levine, "The DualBanking System," in Institute of Banking Law and Regulation 1990(Practising Law Institute 1990) 27-42.

30. Banks are primarily regulated under Title 36 of theGeneral Statutes, entitled "The Banking Law of Connecticut," 36-1through 36-583, and by the commissioner of banking.

31. This case was settled in 1988 and included thedismissal of all claims against the banks with prejudice. Seefinal judgment 33, State v. The Dartmouth Plan, Inc., supra(March 17, 1988). The State of Connecticut, as amicus curiae inthis appeal, also represented to us in its brief and at oralargument that the commissioner of consumer protection has workedwith the commissioner of banking for a number of years to remedyconsumer protection problems that implicate banking industrypractices.

32. Of course, we recognize that each state's statutoryscheme, including the language of its provisions and itslegislative history, may differ.

33. The third count of Josef's complaint alleged that thebank violated CUTPA through its misrepresentations, whichincluded its response to the sheriff that there were no availablefunds in the judgment debtor's account to satisfy the judgmentcreditor's execution and the fact that this response was indirect variance and contradiction to the bank statements of thejudgment debtor's account.

34. Because we conclude that the bank did not violateCUTPA, Josef is unable to collect attorney's fees under theprovisions of CUTPA. We therefore dismiss, on the ground ofmootness, Josef's cross appeal, challenging the trial

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