Opinion
HHDCV175045039S
09-25-2018
Alyssa PETERSON v. LAURELHART CONDOMINIUM ASSOCIATION, INC. et al.
UNPUBLISHED OPINION
OPINION
CESAR A. NOBLE, J.
Before the court is Attorney Gregory Arcaro’s motion to dismiss counts three, four, and five of the plaintiff’s complaint- alleging respectively fraudulent concealment, aiding and abetting, and negligent misrepresentation- on the ground of litigation privilege. For the following reasons, the court grants the motion to dismiss as to all three counts.
FACTS
The operative complaint is the February 26, 2018, Second Amended Complaint (complaint) which contains the following extensive allegations. The plaintiff, Alyssa Peterson, is the owner of two units in the defendant Laurelhart Condominium Association, Inc. (Laurelhart), which is managed by the defendant Advance Property Management, Inc. (APM). In 2009, the plaintiff’s obligations for common charges for the two units were in arrears in the approximate amount of $4,000 and Laurelhart commenced foreclosure. The plaintiff alleges that the foreclosures were in violation of statute and Laurelhart’s by-laws. Additionally, she asserts that the amount of the arrearage was misstated. The plaintiff thereafter filed for Chapter 13 bankruptcy protection. The proof of claim prepared by the plaintiff as part of her bankruptcy filings contained an error in the amount she allegedly owed for the condominium fees such that it was reported as $14,288 rather than $4,288. In 2013, the plaintiff’s bankruptcy plan was confirmed resulting in a surplus payment to Laurelhart of a sum in excess of $4,000. Laurelhart continued to prosecute the foreclosure actions and, in 2014, obtained a relief from bankruptcy stay on the basis of misrepresentations and omissions of facts contained in its motion for relief. Thereafter, summary judgment in favor of Laurelhart was obtained on the foreclosure actions on the basis of false affidavits. Laurelhart’s motions for strict foreclosure contained additional false affidavits. Both foreclosure actions were ultimately withdrawn.
In 2015, the plaintiff commenced an adversary proceeding related to the bankruptcy file against Laurelhart and obtained a default for failure to appear. The movant herein, Gregory Arcaro, first appears in this history with his appearance on behalf of Laurelhart two weeks after the default. The plaintiff alleges that the defendant filed a motion to set aside the default judgment with a false affidavit from Schaefer. Compl., ¶ 39. Additionally, the defendant is alleged to have falsely claimed unspecified improper service of the motion for default; Compl., 42; filed multiple "compliance" documents, presumably in some form of discovery which falsely claimed either $10,000 or $11,000 was owed by plaintiff; Compl., ¶¶ 43 and 47; communicated a threat to the plaintiff relating to the litigation; Compl., ¶ 50; assisted in providing sworn interrogatories and production responses with another false affidavit; Compl., ¶ 51; and failed to correct any of his false filings. Compl., ¶ 51.
Because Laurelhart, APM and Schaefer are not implicated by the present motion to all references to "the defendant" are to Arcaro.
On March 28, 2018, the defendant filed a motion to dismiss all counts of the plaintiff’s complaint directed to him on the grounds of the absolute immunity afforded by the litigation privilege. On April 30, 2018, the plaintiff filed a memorandum in opposition to the defendant’s motion to dismiss in which she asserted that the commission of a fraud, as pled in her complaint, is not governed by the litigation privilege. On May 11, 2018, the defendant filed a reply brief. On June 4, 2018, the court heard oral arguments on the motion to dismiss during short calendar.
The Defendant filed a motion to strike concurrently with the present motion to dismiss. Practice Book § 10-6, however, outlines the appropriate order of pleadings: the plaintiff’s complaint, the defendant’s motion to dismiss the complaint, the defendant’s request to revise the complaint, the defendant’s motion to strike the complaint, the defendant’s answer including any special defenses to the complaint, the plaintiff’s request to revise the defendant’s answer, the plaintiff’s motion to strike the defendant’s answer, the plaintiff’s reply to any special defenses. Accordingly, filing a motion to strike concurrently with a motion to dismiss is procedurally improper, confusing, and potentially inefficient because, as in the present case, the granting of dismissal would render superfluous the filed motion to strike and the responsive objection.
The defendant also moved to dismiss count six on the ground of litigation privilege. The defendant, however, did not address this count in the memorandum of law in support of dismissal. The court, therefore, will not address it. See Connecticut Light & Power Co. v. Dept. of Public Utility Control, 266 Conn. 108, 120, 830 A.2d 1121 (2003).
STANDARD
"[A] motion to dismiss ... properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 350, 63 A.3d 940 (2013). "Subject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it." (Internal quotation marks omitted.) Keller v. Beckenstein, 305 Conn. 523, 531-32, 46 A.3d 102 (2012). "[T]he plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 430 n.12, 829 A.2d 801 (2003). "[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor ... clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute ... It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged." (Internal quotation marks omitted.) Financial Consulting, LLC v. Commissioner of Ins., 315 Conn. 196, 226, 105 A.3d 210 (2015).
"When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, it must consider the allegations of the complaint in their most favorable light ... In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Columbia Air Services, Inc. v. Dept. of Transportation, 293 Conn. 342, 347, 977 A.2d 636 (2009).
ANALYSIS
I
LITIGATION PRIVILEGE
"Like other jurisdictions, Connecticut has long recognized the litigation privilege ... The general rule is that defamatory words spoken upon an occasion absolutely privileged, though spoken falsely, knowingly, and with express malice, impose no liability for damages recoverable in an action in slander ... [T]he privilege extends to judges, counsel, and witnesses participating in judicial proceedings ..." Simms v. Seaman, 308 Conn. 523, 536, 69 A.3d 880, 887 (2013)
"The purpose of affording absolute immunity to those who provide information in connection with judicial and quasi-judicial proceedings is that in certain situations the public interest in having people speak freely outweighs the risk that individuals will occasionally abuse the privilege by making false and malicious statements ... Put simply, absolute immunity furthers the public policy of encouraging participation and candor in judicial and quasi-judicial proceedings. This objective would be thwarted if those persons whom the common-law doctrine was intended to protect nevertheless faced the threat of suit ... [B]ecause litigants cannot have [unfettered] access [to our courts] without being assured of the unrestricted and undivided loyalty of their own attorneys, we have afforded attorneys, as officers of the court, absolute immunity from liability for allegedly defamatory communications in the court of judicial proceedings." (Citations omitted; internal quotation marks omitted.) Simms v. Seaman, supra, 308 Conn. 523, 539-40, 69 A.3d 880, 887 (2013). "[T]he privilege is not intended to protect counsel who may be motivated by a desire to gain an unfair advantage over their client’s adversary from subsequent prosecution for bad behavior but, rather, to encourage robust representation of clients and to protect the vast majority of attorneys who are innocent of wrongdoing from harassment in the form of retaliatory litigation by litigants dissatisfied with the outcome of a prior proceeding." Id., 562-63.
There is a "distinction between attempting to impose liability upon a participant in a judicial proceeding for words used therein and attempting to impose liability upon a litigant for his improper use of the judicial system itself." MacDermid, Inc. v. Leonetti, 310 Conn. 616, 629, 79 A.3d 60 (2013).
II
COUNT THREE: FRAUDULENT CONCEALMENT, GENERAL STATUTES § 52-562
The defendant moves to dismiss count three, claiming fraudulent concealment in violation of § 52-562, on the ground that the court lacks subject matter jurisdiction. In particular, the defendant argues that all of his actions taken on behalf of Laurelhart, in connection to the adversary proceedings, are protected by litigation privilege. More specifically, the defendant contends that the allegations of fraud against him constitute the sort of retaliatory litigation that our Supreme Court counseled against in Simms v. Seaman, supra, 308 Conn. 523. In opposition, the plaintiff cites to Chapman Lumber, Inc. v. Tager, 288 Conn. 69, 95, 952 A.2d 1 (2008), for the proposition that even though an attorney has a duty to represent a client zealously, that duty "falls short of the point at which the representation constitutes a fraud on a third party or the assistance in the perpetration of such fraud, whether by affirmative misrepresentations or knowing nondisclosures." For the following reasons, the court agrees with the defendant.
In count three of plaintiff’s complaint, she alleges fraudulent concealment in violation of General Statutes § 52-595. In her memorandum in opposition, the plaintiff clarifies that there was an error in citing to § 52-595. Instead, she meant to allege fraudulent concealment pursuant to § 52-562. In his reply, the defendant does not object to the plaintiff’s error, and maintains that absolute immunity through the litigation privilege bars any claim for fraudulent concealment, regardless of whether it is brought pursuant to § § 52-562 or 52-595. Because the parties do not contest this issue, the court need not address this clerical error and, therefore, will address fraudulent concealment brought under § 52-562.
The defendant also moved to dismiss counts three and four on the ground of standing, particularly because the plaintiff is not a creditor and, therefore, cannot bring a claim under § 52-562. Because the court dismisses both of these counts on the basis of litigation privilege, it need not address the defendant’s standing argument.
Section 52-562 provides in relevant part: "When any person is guilty of fraud in contracting a debt, or conceals, removes or conveys away any part of his property, with intent to prevent it from being taken by legal process, or refuses to pay any debt admitted by him or established by a valid judgment, while having property, not exempt from execution, sufficient to discharge the debt, concealed or withheld by him so that the property cannot be taken by legal process, or refuses to disclose his rights of action, with intent to prevent the rights of action from being taken by foreign attachment or garnishment, any creditor aggrieved thereby may institute an action against him, setting forth his debt and the fraudulent act or acts particularly in the complaint."
The Supreme Court has found that an action under the statutory predecessor to § 52-562, is "closely akin to a common-law action of fraud." Farley-Harvey Co. v. Madden, 105 Conn. 679, 681, 136 A. 586 (1927). A common-law action of fraud based on conduct that occurred in judicial proceedings is shielded by litigation privilege. See Simms v. Seaman, supra, 308 Conn. 545.
In Simms, the court examined several factors in determining whether the litigation privilege shields attorneys from claims of fraud. These were: (1) whether the conduct complained of subverts the underlying purpose of a judicial proceeding; (2) whether it is similar in essential respects to the tort of defamation to which the immunity has been applied; (3) whether the conduct may be adequately addressed by other available remedies; and (4) whether other courts have extended the privilege to the conduct or communication. See Simms v. Seaman, supra, 308 Conn. 545.
In evaluating whether allegations of fraud were protected by the litigation privilege, the Simms court explained why such conduct does not subvert the underlying purpose of a judicial proceeding: "[A] claim of fraud, including the claim that the defendants ... deliberately concealed material evidence from the plaintiff and incorrectly portrayed the plaintiff’s former spouse as economically disadvantaged, does not require consideration whether the underlying purpose of the litigation was proper but, rather, whether an attorney’s conduct while representing or advocating for a client during a judicial proceeding that was brought for a proper purpose was entitled to absolute immunity." Simms v. Seaman, supra, 308 Conn. 546-47. Moreover, the court underscored similarities between claims of fraud and defamation in that, unlike claims for vexatious litigation, they do not "provide the same level of protection against the chilling effects of a potential lawsuit ... [A] claim of vexatious litigation requires proof that the plaintiff was the defendant in a prior lawsuit decided in his favor and that the lawsuit was commenced without probable cause and for an improper purpose ... These requirements establish a very high hurdle that minimizes the risk of inappropriate litigation while still providing an incentive to report wrongdoing, thus protecting the injured party’s interest in being free from unwarranted litigation." (Citation omitted; emphasis added; internal quotation marks omitted.) Id., 549. Given the similarities between § 52-562 and the common-law action of fraud; see Farley-Harvey Co. v. Madden, supra, 105 Conn. 681; and the underlying purpose of the litigation privilege set forth in Simms, this court concludes that litigation privilege bars count three of the plaintiff’s complaint.
Furthermore, the court finds that Chapman Lumber, Inc., as well as other cases cited by the plaintiff, are misplaced and readily distinguishable. In particular, Chapman Lumber, Inc. did not discuss the doctrine of the litigation privilege, and the facts that gave rise to the claims there occurred outside the context of litigation.
III
COUNT FOUR: AIDING AND ABETTING
The defendant asserts count four, which alleges liability on the basis of aiding and abetting, is also barred by the litigation privilege. In particular, the defendant argues that any claim for aiding and abetting must be premised on an underlying cause of action. The defendant asserts that the underlying cause of action here is premised on conversion, and at least one other court has extended absolute immunity to the tort of conversion. See Gordon v. Eckert Seamans Cherin & Mellott, LLC, Superior Court, judicial district of New Haven, Docket No. CV-175038333-S, 2018 WL 3846398 (February 6, 2018, Wilson, J.) (65 Conn.L.Rptr. 893) extending litigation privilege to claims of conversion because no consideration necessary of whether the underlying purpose of the litigation was improper). The plaintiff counters that the alleged conduct rises to the level of false behavior, which is not protected by litigation privilege.
The plaintiff also premised its aiding and abetting claim on fraudulent concealment pursuant to § 52-562. Because the court in the previous section held that litigation privilege bars claims of fraudulent concealment in the context of judicial proceedings, the court need not engage in any further analysis regarding this cause of action. Therefore, this section will address whether conversion, as the underlying cause of action for the claim of aiding and abetting claim, is protected by litigation privilege.
In Efthimiou v. Smith, 268 Conn. 499, 505, 846 A.2d 222 (2004), the court made clear that a "[c]ivil action of aiding and abetting cannot stand alone and depends upon existence of valid underlying cause of action." In the plaintiff’s complaint, the claim of aiding and abetting is premised on the tort of conversion. Therefore, the court must address whether litigation privilege extends to conversion.
For the reasons set forth in Simms v. Seaman, supra, 308 Conn. 545-46, the court holds that the litigation privilege bars claims of aiding and abetting premised on the tort of conversion. First, unlike the claims of abuse of process and vexatious litigation, the plaintiff’s claim of conversion does not require that the court determine the propriety of the adversary proceedings but, rather, whether the defendant’s conduct while representing Laurelhart is entitled to absolute immunity. Second, the elements of conversion do not provide the same level of protection against the chilling effects of a potential retaliatory lawsuit. By contrast, vexatious litigation "requires proof that the plaintiff was the defendant in a prior lawsuit decided in his favor and that the lawsuit was commenced without probable cause and for an improper purpose." Simms v. Seaman, supra, 308 Conn. 549. Unlike conversion, the elements of a vexatious litigation claim, "establish a very high hurdle that minimizes the risk of inappropriate litigation while still providing an incentive to report wrongdoing, thus protecting the injured party’s interest in being free from unwarranted litigation." (Internal quotation marks omitted.) Id. Accordingly, count four is barred by litigation privilege and is dismissed.
"The tort of conversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner’s rights." (Internal quotation marks omitted.) News America Marketing In-Store, Inc. v. Marquis, 86 Conn.App. 527, 544, 862 A.2d 837 (2004), aff’d, 276 Conn . 310, 885 A.2d 758 (2005).
The defendant also moved to dismiss count four for aiding and abetting on the basis of a prior pending action. Because the court has dismissed count four on grounds of the litigation privilege, the court need not address this argument.
IV
COUNT FIVE- NEGLIGENT MISREPRESENTATION
Finally, the defendant moves to dismiss count five, claiming negligent misrepresentation, on the ground of litigation privilege. The defendant contends that negligent misrepresentation is a cause of action that has been specifically identified as protected by the litigation privilege.
No Connecticut trial or appellate court has specifically evaluated whether the litigation privilege applies to claims of negligent misrepresentation. An evaluation of the claim of negligent misrepresentation through the prism of the factors considered by the Simms when considering the application of the litigation privilege to fraud claims yields the conclusion that negligent misrepresentation is barred by the privilege. First, unlike the claims of abuse of process and vexatious litigation, a claim of negligent misrepresentation does not implicate the propriety of the underlying proceedings rather than the attorney’s role as an advocate for his or her client. Second, the tort of negligent misrepresentation is similar in to the tort of defamation in that both involve, as does the tort of fraud, false communications. "[B]ecause the privilege protects the communication, the nature of the theory on which the challenge is based is irrelevant." Simms v. Seaman, supra, 308 Conn. 548 (quoting 3 R. Mallen & J. Smith, Legal Malpractice (2010) § 22:8, pp. 185-86.) Third, there are other available remedies which may adequately regulate the conduct. Rule of Professional Conduct 8.4(3) and (4) proscribe, respectively, "conduct involving dishonesty, fraud, deceit or misrepresentation," and "conduct that is prejudicial to the administration of justice." As noted by the court in Simms judges of the Superior Court have the inherent authority to regulate this conduct and to discipline members of the bar accordingly. See Simms v. Seaman, supra, 308 Conn. 552. Fourth, the United States District Court for the District of Connecticut, as well as some of our sister courts, have extended the litigation privilege to claims of negligent misrepresentation. In Costello v. Wells Fargo Bank National Association, United States District Court, Docket No. 16-cv-1706 (VAB) (D.Conn. July 31, 2017), the court reasoned that negligent misrepresentation is "barred by the ... litigation privilege ... because the nature of the theory on which a claim is based is irrelevant if the claim arises from a party or attorney’s statements made during judicial proceedings or other actions during litigation." (Internal quotation marks omitted.) See also Rickenbach v. Wells Fargo Bank, N.A., 635 F.Supp.2d 389, 402 (D.N.J. 2009) (noting that New Jersey courts have applied litigation privilege to negligent misrepresentation claims). The court concludes that the litigation privilege bars claims for negligent misrepresentation and count five is dismissed.
CONCLUSION
For the foregoing reasons, counts three, four, and five are barred, and therefore dismissed, because of the application of the litigation privilege.