Opinion
No. FA90 027 66 33
May 9, 2011
MEMORANDUM OF DECISION RE PLAINTIFF'S POST-JUDGMENT MOTION TO OPEN #458
Presently before this court is the plaintiff, Mary Alice Cooke's motion to open the dissolution judgment rendered on February 18, 1992. The judgment of dissolution incorporated the separation agreement which provides in Article 11, paragraph 3 that the defendant, Richard Cooke, pay the plaintiff $72,500 upon the sale of the martial residence. The plaintiff transferred her interest in the marital residence property by quitclaim deed to the defendant on April 14, 1992. She now moves to open the judgment of dissolution on the "grounds that the defendant: (1) committed fraud to obtain the judgment; and (2) after the judgment, committed additional frauds to prevent the plaintiff from exercising her rights under the judgment and to prevent the court from fairly effectuating the judgment."
Since the rendering of the dissolution judgment, a plethora actions were filed in the federal and state court by these parties. A time line as to what transpired in this case is as follows. In a Superior Court notice dated October 19, 1992, a judgment of strict foreclosure was entered on the marital home, given a fair market value of $862,000. On December 15, 1992, the defendant filed for bankruptcy protection, a chapter 11 proceeding, in the federal District Court for the District of Connecticut, Case No. 92-54150. The bankruptcy schedules filed by the defendant on December 22, 1992 listed a fair market value of the property at $856,000 with debts of $1,293,000. This included a first mortgage on the property to Mechanics Savings Bank executed in 1986 for $500,000, a second mortgage, initially in favor of Yegen Equity Loan Corporation, then assigned to the United States Resolution Trust Corporation (RTC) and executed in 1988 for $350,000. On March 25, 1993, the plaintiff filed an adversary proceeding as a part of the bankruptcy hearing for a determination that certain debts, such as the marital residence, were nondischargeable under the Bankruptcy Code, 11 U.S.C. §§ 523(a)(2)(A), (a)(5) and (a)(6). The defendant filed, on July 23, 1993, his first plan of reorganization and, on August 27, 1993, a second amended plan of reorganization, which included an intention that he planned to retain the marital residence, and, on September 24, 1993, a third amended plan of reorganization with that same intention. Also on September 24, 1993, the bankruptcy court found the value of the home to be $1,020,000 and voided eleven liens against the house for lack of equity. The defendant never confirmed the required bankruptcy plan by the bar date of September 24, 1993. Consequently, on March 4, 1994, the reorganization bankruptcy proceeding was converted into a chapter 7 liquidation proceeding.
During 1993, the plaintiff filed various motions for modification in the state Superior Court. The first motion for modification was heard before Judge Thim on November 4, 1993, in which he increased the plaintiff's child support to $410 per week for eight weeks or until the end of 1993. Alimony was not at issue. Next, was the plaintiff's motion for modification dated December 31, 1992 seeking an increase in alimony and child support. This was heard on November 18 and 19, 1993. The court stated that for the past year the plaintiff and her two sons were living in Washington. On December 3, 1993, the court, Petroni, J., denied the motion as to the alimony request and modified the child support request back to $300 per week as set forth in the dissolution decree. On December 23, 1993, the plaintiff's motion for reconsideration was denied.
While the bankruptcy matter was proceeding, the plaintiff, on January 12, 1994, filed Cooke v. Tarnow in the federal District Court alleging malpractice against her former divorce attorney. The District Court granted Tarnow's motion to dismiss, or in the alternative, motion for summary judgment on the ground that the plaintiff failed to file opposition papers to the motion. A judgment was entered in favor of Tarnow on January 14, 1997. The plaintiff appealed this judgment to the United States Court of Appeals for the Second Circuit. Again, her then attorney failed to observe the deadlines and the Court of Appeals denied the motion for reconsideration for permission to file out of time.
On June 13, 1994, the state court entered an order of strict foreclosure setting the fair market value of the marital residence at $910,000, and, on September 13, 1994, the court entered a stipulated motion for a deficiency judgment of $310,017.91. The stipulation indicated that title to the property had been transferred to Everett Reed, the defendant's stepfather, subject to the Mechanics Savings Bank mortgage as discharge of the defendant's debt. Reed had already bought the RTC mortgage on the residence on November 5, 1993. Thus, on August 26, 1994, Reed obtained title to the marital residence by strict foreclosure and rented the residence to the defendant. The defendant continued to make mortgage payments directly to Mechanics Savings Bank and paid all of the taxes for the property. Sometime later, Reed transferred the property to the Everett Reed Trust. In July 1998, the trust transferred the house to Wendy Cooke, the defendant's present wife, who on April 22, 2004 transferred her 1/2 interest to the defendant for $1.
As a result of the defendant having forged the plaintiff's signature on a note to the Chase Bank in May 1990, he was convicted of forgery in July 1995 in the state criminal court. This conviction "statutorily disqualified" him from securities trading, his livelihood. Further, in that same year in the Superior Court on the civil side on November 6, 1995, the plaintiff moved to reargue her earlier motion for modification claiming that the defendant had committed fraud on her and on the court regarding his assets when the court, Petroni, J., heard her motion on November 18 and 19, 1993. Judge Mintz, on November 28, 1995, granted the plaintiff's motion to reargue and opened the post-judgment orders. Hearings on the plaintiff's motion for modification and eight other motions relating to the judgment of dissolution, including the defendant's motion for modification, were scheduled before Judge Doherty. The parties were self-represented on all of these motions, which were heard over fourteen days. The basis of these motions was the claim that the defendant had an earning capacity which he purposely failed to utilize in order to prevent the plaintiff from obtaining what she considered to be fair and appropriate orders of support and alimony. The court agreed with her to an extent. It chose to use the defendant's earning capacity to determine his alimony and support obligations. Further, the court acknowledged that a transfer of title of the house to Reed had been a part of the defendant's discharge in the bankruptcy proceeding, Case No. 92-54150, and took judicial notice of that judgment giving it full faith and credit. Next, the court addressed the plaintiff's motion for contempt dated November 15, 1995, in which the plaintiff sought "to have the defendant found in contempt of court for his failure to pay to her the sum of $72,500 due to her with interest from May 1, 1992 plus attorneys fees and expenses incurred by the plaintiff to collect that sum." As to that motion, the court stated: "The basis of the plaintiff's claim is the provision in paragraph 3(c) of Article 11 of the parties' Separation Agreement (`Marital Residence') which provide[d] that `upon the sale of [that] premise the defendant would pay that sum to the plaintiff from the "net proceeds" of such sale. For the reasons stated in the facts as set forth herein-above, the court finds that the plaintiff has failed to establish that the transfer of the property to Everett Reed in bankruptcy was not a bona fide, involuntary transfer of title from the parties. For that reason the relief sought herein is denied.'" The decision was filed on January 13, 1997. In a supplemental memorandum of decision, Doherty, J., filed an amended support order on April 29, 1997 and on May 14, 1997, he filed a corrected memorandum of decision as to the support orders.
On November 11, 1999, the plaintiff filed in the United States District Court for the District of Connecticut an action against her attorney, who had represented her in the first federal court action against Tarnow, her former divorce attorney. This was captioned Cooke v. Williams Pattis, No. 3:99CV223 (WWE). The court, Eginton, J., found in favor of the defendant on its motion for summary judgment. While the court found that the plaintiff's first attorney, Tarnow, had breached the standard of care as to his negotiation and drafting of the separation agreement, the court also found that she sustained no injury or damages as a result of this breach. The court stated that her expert witness, "averred that he could not say, whether, had Tarnow drafted an appropriate alimony provision, plaintiff would have received more money than she had received to date, that he had no knowledge of plaintiff incurring damages resulting from the agreement provision that proceeds from the sale of the marital home could be used to pay joint debts, that plaintiff had not been deprived of any life insurance benefit owing to her, and that there was no life insurance in effect naming her as a beneficiary at the time of the dissolution . . . [Her expert witness] also observed that, if no equity existed in the home, plaintiff could not claim any damages concerning Mr. Tarnow's breach of the standard of care related to her receipt of proceeds from the marital home. It is undisputed that a judgment of foreclosure in favor of Mechanic's Savings Bank [had] entered on the marital home on October 19, 1992. A subsequent order of strict foreclosure was entered on June 13, 1994, resulting in the transfer of title from Richard Cooke to Everett Reed and a deficiency judgment." The court held that she was collaterally estopped from relitigating her interest in the marital home since she had been a party to the various foreclosure actions brought against it by third parties; the value of the property had been litigated and adjudicated in the Mechanics Savings Bank foreclosure, Richard Cooke's bankruptcy and the Reed foreclosure; the plaintiff had been a party in both the first foreclosure and the bankruptcy proceeding and that equity existed in the house. The court also found against her on claims of fraudulent concealment of assets by the defendant in their divorce action. The court based its conclusions on the fact that "[a]ll inferences of fact indicate that Mary Alice Cooke intended to move across the country with her children shortly after the dissolution agreement was signed. Furthermore, the transcript from the court approval of the dissolution agreement demonstrates that plaintiff knew that she was agreeing to the provision to vacate the premises within two weeks of the signing date." Lastly, the court concluded that, since as it previously had stated that the various courts who heard this matter had determined that there was no equity in the home, the plaintiff had not been injured by failing to receive proceeds from the sale of the marital home. The decision was filed on August 29, 2002, and, the plaintiff did not appeal.
Meanwhile, on August 7, 2000, the plaintiff had filed in state court a motion to compel regarding the children's summer camp and educational expenses. In his memorandum of decision, Judge Trial Referee Novack stated in subparagraph (3) "[t]he plaintiff's request to compel the defendant to pay her $72,500 was withdrawn after the court indicated that this matter was previously ruled upon at a prior hearing before the court. (Doherty, J.)."
On December 7, 2005, Judge Shiff rendered his decision in the bankruptcy proceeding that had begun in 1992 and in which the plaintiff brought the adversary proceeding to determine which debts were nondischargeable under 11 U.S.C. § 523(a)(2)(A). Under that statute, "exceptions from discharge include any debt for money to the extent it was obtained by false pretense, a false representation, or actual fraud." In the plaintiff's adversary proceeding in count three of the amended complaint, she alleged that the $72,500 debt had been "obtained by false pretenses and false representation." The court pointed out that, on December 22, 1992, the defendant in his bankruptcy schedules listed the fair market value of the property, the martial house, at $856,000, although previously he had listed the property for sale at $2.5M. Also, on that same date, the court noted that the defendant repudiated his obligations in the dissolution decree by reporting that he would retain, rather than sell, the property notwithstanding his plans for reorganization which all stated that he would retain the property. Inasmuch as the defendant had deceived the plaintiff, the court opined, he should not succeed in discharging the debt, the product of his deception. Moreover, the court noted that the plaintiff had relied on the representation that the defendant would sell the property and that there would be sufficient equity for her to receive $72,500, and that her reliance on the text of Article 11, paragraph 3 of the dissolution agreement was justifiable. "[A]t the time of the execution of the Dissolution Agreement, the defendant, by false pretenses, false representations, and actual fraud, intended to get and keep control of the Property without paying the plaintiff her interest in it." The court rendered judgment on count three in favor of the plaintiff that the $72,500 debt was not dischargeable and the defendant was to pay the plaintiff that amount.
On June 27, 2007, the plaintiff filed the present motion to open the judgment of dissolution on the ground that the defendant committed fraud to obtain the judgment and thereafter, committed additional fraud to prevent her from exercising her rights and the court from effectuating the judgment. She requests the court to open the judgment, have the defendant pay her legal fees, place this matter on the trial docket, have a trial on the merits and enter orders of attachment to secure the assets of the defendant. She submitted her affidavit in support of the motion attesting to the truth and accuracy of the facts therein and a copy of Judge Shiff's memorandum and decision on the issue of the dischargeability of debts in bankruptcy dated December 7, 2005. In response, the defendant filed an objection and memorandum in opposition. The defendant also requests legal fees and costs associated with this matter. He submitted as exhibits from the bankruptcy proceeding a copy of the plaintiff's statement of claims, her second amended complaint and her motion for leave to amend her complaint as well as a copy of the judgment in Cooke v. Williams Pattis by Judge Eginton on August 27, 2002. A hearing on the motion to open was held on December 21 and 22, 2010 before this Court. On February 25, 2011, both parties submitted post-hearing briefs.
MOTION TO OPEN
"Pursuant to General Statutes § 52-212a `a civil judgment or decree rendered in the Superior Court may not be opened or set aside unless a motion to open or set aside is filed within four months following the date on which it was rendered or passed . . .' Accord Practice Book § 17-4 (`[A]ny civil judgment or decree rendered in the superior court may not be opened or set aside unless a motion to open or set aside is filed within four months succeeding the date on which notice was sent.'). In addition, the civil rules for opening a judgment are applicable to family matters. Practice Book § 25-38. `A motion to open and vacate a judgment . . . is addressed to the [trial] court's discretion . . .' (Internal quotation marks omitted.) Reiner, Reiner Bendett, P.C. v. Cadle Co., 278 Conn. 92, 107, 897 A.2d 58 (2006). `[O]nce a judgment is rendered it is to be considered final . . . and should be left undisturbed by post-trial motions except for a good and compelling reason.' (Citations omitted.) Steve Viglione Sheet Metal Co. v. Sakonchick, 190 Conn. 707, 713, 462 A.2d 1037 (1983).
"`Although generally a motion to open must be filed within four months of entry of the judgment . . . a motion to open on the basis of fraud is not subject to this limitation but should be presented promptly after the discovery of the alleged fraud. See Varley v. Varley, 180 Conn. 1, 3-4, 428 A.2d 317 (1980).' (Citation omitted.) Konefal v. Konefal, 107 Conn.App. 354, 359 n. 5, 945 A.2d 484 [cert. denied, 288 Conn. 902, 952 A.2d 810] (2008). Even `[a] judgment rendered by the court with the consent of the parties may be subsequently opened if it is shown that the agreement was obtained by fraud or intentional material misrepresentation[s].' Jucker v. Jucker, 190 Conn. 674, 677, 461 A.2d 1384 (1991); Accord A. Rutkin, K. Hogan S. Oldham, 8A Connecticut Practice Series: Family Law and Practice With Forms (2000) § 52.7, p. 260." Clukey v. Clukey, Superior Court, judicial district of New Haven, Docket No. FA 96 391871 (November 30, 2010, Abery-Wetstone, J.).
In the plaintiff's memoranda in support of the motion to open on the ground of fraud, she argues the following: (1) The evidence clearly and convincingly shows that the defendant committed fraud at the time of the dissolution of the marriage, prior to and in obtaining the separation agreement; (2) The doctrine of collateral estoppel and res judicata apply and dictate that the same result on the issue of fraud reached by Judge Shiff in the bankruptcy proceeding must be the decision of this court; (3) There is a substantial likelihood that the result of a new trial would be different; and (4) There was no laches or reasonable delay by the plaintiff in commencing this action. The defendant in his memoranda of law in opposition to the motion to open counters as follows: (1) The plaintiff's claims should be denied as a matter of law based on the doctrines of res judicata, collateral estoppel and laches; and (2) Inasmuch as there was no equity in the marital residence at the date of dissolution, the plaintiff's claims would still be barred as a matter of law because she has failed to satisfy her burden of proving that she would have obtained a more favorable result in the absence of any alleged fraud by the defendant.
"Fraud consists in deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed . . . The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment . . . A marital judgment based upon a stipulation may be opened if the stipulation, and thus the judgment, was obtained by fraud . . . A court's determinations as to the elements of fraud are findings of fact . . .
"There are three limitations on a court's ability to grant relief from a dissolution judgment secured by fraud: (1) there must have been no laches or unreasonable delay by the injured party after the fraud was discovered; (2) there must be clear proof of the fraud; and (3) there is a substantial likelihood that the result of the new trial will be different." (Internal quotation marks omitted.) Weinstein v. Weinstein, 275 Conn. 671, 685, 882 A.2d 53 (2005). In addition, "a party . . . cannot utilize res judicata or collateral estoppel when it has committed a fraud. Jackson v. R.G. Whipple, Inc., 225 Conn. 705, 721 [ 627 A.2d 374] (1993); cf. Slattery v. Maykut, 176 Conn. 147, 157 [ 405 A.2d 76] (1978)." (Internal quotation marks omitted.) Paolella v. Probate Court of New Haven, Superior Court, judicial district of New Haven, Docket No. CV 05 4013703 (December 27, 2007, J. Corradino) ( 44 Conn. L. Rptr. 686, 686).
"Laches consists of an inexcusable delay which prejudices the defendant . . . First, there must have been a delay that was inexcusable, and, second, that delay must have prejudiced the defendant . . . A determination that a plaintiff has been guilty of laches is one of fact for the trier and not one that can be made by this court, unless the subordinate facts found make such a determination inevitable as a matter of law." (Internal quotation marks omitted.) Jeudy v. Jeudy, 106 Conn.App. 372, 378, 942 A.2d 476 (2008).
"The party alleging fraud bears the burden of proving it with clear, precise and unequivocal evidence . . . The evidence can be direct or circumstantial." (Internal quotation marks omitted.) Garrigus v. Viarengo, 112 Conn.App. 655, 665, 963 A.2d 1065 (2009). The standard of proof is a demanding one, that of "[c]lear and convincing evidence . . . This burden is sustained if the evidence convinces the trier of fact of a reasonable belief that the facts asserted are `highly probably true, that the probability that they are true or exist is substantially greater than the probability that they are false or do not exist.' Shelton v. Statewide, 85 Conn.App. 440, 443-44 [ 857 A.2d 432] (2004), quoting Somers v. Statewide Grievance Committee, 245 Conn. 277, 290-91 [ 715 A.2d 712] (1998). The imposition of this standard of proof serves as a caution to preclude relief if the evidence does not meet this standard. In re Tyqwane [V.], 85 Conn.App. 528, 539 [ 857 A.2d 963] (2004)." (Internal quotation marks omitted.) Lavouge-Sinatro v. Sinatro, Superior Court, judicial district of Hartford, Docket No. FA 05 4008647 (September 12, 2008, Epstein, J.).
"To determine whether there was proof of fraud, we consider the evidence through the lens of our well settled policy regarding full and frank disclosure in marital dissolution actions . . . Our cases have uniformly emphasized the need for full and frank disclosure in th[e] [affidavits filed by the parties.] A court is entitled to rely upon the truth and accuracy of sworn statements required by . . . the [rules of practice], and a misrepresentation of assets and income is a serious and intolerable dereliction on the part of the affiant which goes to the very heart of the judicial proceeding . . . These sworn statements have great significance in domestic disputes in that they serve to facilitate the process and avoid the necessity of testimony in public by persons still married to each other regarding the circumstances of their formerly private existence." (Internal quotation marks omitted.) Clukey v. Clukey, supra, Superior Court, Docket No. FA 96 391871. Thus, the court may in its discretion open the judgment of dissolution on the ground of fraud if it finds that the plaintiff has proven fraud by clear and convincing evidence and that there has been no unreasonable delay or laches in filing the motion.
In the present case, the crux of the plaintiff's motion to open is based on the alleged fraudulent conduct of the defendant as found by Shiff, J. in the bankruptcy court proceeding. Specifically, he determined that the defendant made false representations to the plaintiff that he would sell the marital residence and there would be sufficient equity after the sale to meet his obligations even though the defendant knew the representations were false when he made them; that he induced her to quitclaim her interest in the marital residence; and that he falsely represented the value of that residence. The decision further found that her reliance on the false representations regarding the sale and equity of the property was reasonable and justifiable. On the other hand, the defendant has framed the issue to be that the divorce decree was rendered only after both parties agreed to the terms in the separation agreement, the Court canvassed them as to the fairness of that agreement, the plaintiff was represented by counsel, that the subsequent court decisions determined that the marital residence at the time of the dissolution was encumbered and that Judge Shiff found that the plaintiff was entitled only to the value of the martial residence as determined in the separation agreement and the defendant has paid the plaintiff $72,500.
RES JUDICATA and COLLATERAL ESTOPPEL
As noted previously, the defendant argues that the doctrines of res judicata and/or collateral estoppel apply to the present case to deny the plaintiff's claims and this Court makes such a finding. The judgment of dissolution shall not be opened on the ground of fraud.
"The doctrine of res judicata holds that an existing final judgment rendered upon the merits without fraud or collusion, by a court of competent jurisdiction, is conclusive of causes of action and of facts or issues thereby litigated as to the parties and their privies in all other actions in the same or any other judicial tribunal of concurrent jurisdiction . . . If the same cause of action is again sued on, the judgment is a bar with respect to any claims relating to the cause of action which were actually made or which might have been made." (Citations omitted.) Wade's Dairy, Inc. v. Fairfield, 181 Conn. 556, 559-60, 436 A.2d 24 (1980).
"[C]ollateral estoppel, or issue preclusion . . . prohibits the relitigation of an issue when that issue was actually litigated and necessarily determined in a prior action between the same parties or those in privity with them upon a different claim. Cumberland Farms, Inc. v. Groton, 262 Conn. 45, 58, 808 A.2d 1107 (2002); R R Pool Patio, Inc. v. Zoning Board of Appeals, 257 Conn. 456, 466, 778 A.2d 61 (2001). An issue is actually litigated if it is properly raised in the pleadings or otherwise, submitted for determination, and in fact determined . . . 1 Restatement (Second), Judgments § 27, comment (d) (1982). An issue is necessarily determined if, in the absence of a determination of the issue, the judgment could not have been validly rendered. F. James G. Hazard, Civil Procedure (3d Ed. 1985) § 11.19 . . . Dowling v. Finley Associates, Inc., supra, 374 . . . Efthimiou v. Smith, 268 Conn. 499, 506-07, 846 A.2d 222 (2004)." (Internal quotation marks omitted.) Powell v. Infinity Ins. Co., 282 Conn. 594, 601, 922 A.2d 1073 (2007). Thus, "a judgment in a prior proceeding bars a party and its privies from relitigating an issue if, but only if: (1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and actually decided, (3) there was full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits." (Internal quotation marks omitted.) Byars v. Bella Vista Condominium Assn., Superior Court, judicial district of Waterbury, Docket No. CV 04 0185006 (February 1, 2008, Alvord, J.)
The Court denies the motion and dismisses the action.