Opinion
No. CV-08-5022420S
May 6, 2011
RULING ON PLAINTIFF'S MOTION TO STRIKE (#152) AND ORAL MOTION TO DISMISS DEFENDANTS' COUNTERCLAIM
The town of Branford (plaintiff or town) was represented by David S. Doyle and the Marcus Law Firm (defendants) in litigation arising from the town's exercise of its power of eminent domain with respect to property known as 46-86 Tabor Drive. Subsequently, the town brought this action in which it originally asserted claims against the defendants sounding in negligence and breach of fiduciary duty based on allegations regarding the defendants' failure to properly prepare for trial in the earlier litigation.
On August 12, 2008, the town filed a three-count complaint in this action. Thereafter, the defendants filed a request to revise (#101) and the court subsequently sustained the plaintiff's objection to that request (#103). On April 9, 2009, the town filed an amended complaint (#108) which, like the original complaint, contained two counts sounding in negligence and a third count alleging breach of fiduciary duty. Thereafter, the court sustained the plaintiff's objection to the defendant's request to revise (#111) on July 9, 2009.
On December 8, 2009, the defendants filed a motion to strike the third count of the amended complaint (#128) on the ground that it was legally insufficient to allege a breach of fiduciary duty. On January 5, 2010, the town filed its objection to the motion to strike (#132). On October 18, 2010, the parties appeared before the court and argued their positions on the motion to strike. The court (Burke, J.) granted the motion to strike in a memorandum of decision filed on December 7, 2010 (#128.20). In its memorandum, the court, relying on other Superior Court opinions, concluded that specific allegations implicating the defendants' loyalty to the town or implicating the defendants' honesty were required to sufficiently allege a breach of fiduciary duty on the part of counsel. The court found that the complaint "only pleaded facts that implicated the defendants' competence as attorneys," (Memorandum p. 5) and lacked the requisite specificity.
On January 27, 2011, the defendants moved for judgment on the third count (#149) on the ground that more than fifteen days had elapsed since that count was stricken and the plaintiff had not filed a new pleading. Practice Book § 10-44. On February 7, 2011, that motion was granted by the court (#149.10), judgment entered on the third count (#150) and the defendants filed an answer, special defense and counterclaim (#151). The counterclaim alleges that the stricken third count of the plaintiff's amended complaint was brought without probable cause and with malicious intent in violation of General Statutes § 52-568(1) and (2), that is, it alleges statutory vexatious litigation. On February 14, 2011, the town moved to strike the counterclaim (#152). The court heard oral argument on March 7, 2011 at which time the issue of the court's jurisdiction over the vexatious litigation counterclaim was raised and argued. Accordingly, the court must determine whether the allegations of the counterclaim are legally sufficient to state a cause of action sounding in vexatious litigation and also whether the claim is presently ripe for adjudication.
General Statutes § 52-568 provides: "Any person who commences and prosecutes any civil action or complaint against another, in his own name or the name of others, or asserts a defense to any civil action or complaint commenced and prosecuted by another (1) without probable cause, shall pay such other person double damages, or (2) without probable cause, and with a malicious intent unjustly to vex and trouble such other person, shall pay him treble damages."
In paragraphs 2 and 3 of their counterclaim, the defendants allege: "The Third Count of the Amended Complaint was stricken by the court (Burke, J.) on December 7, 2010, and the cause of action terminated in favor of the defendants/counterclaim plaintiffs. Judgment entered in favor of the defendants/counterclaim plaintiffs on the Third Count of the Amended Complaint on February 7, 2011." In its motion to strike, the town maintains that the counterclaim was "brought improperly and prematurely." More specifically, the town argues that the counterclaim is legally insufficient because entry of a presently unappealable partial judgment in a pending action does not satisfy the elemental requirement of vexatious litigation that the original action has terminated in favor of the vexatious litigation plaintiff.
"The cause of action for vexatious litigation permits a party who has been wrongfully sued to recover damages . . . The purpose of the action is to compensate a wronged individual for damage to his reputation and to reimburse him for the expense of defending against the unwarranted action. In Connecticut, the cause of action for vexatious litigation exists both at common law and pursuant to statute . . . The statutory cause of action for vexatious litigation exists under § 52-568, and differs from a common-law action only in that a finding of malice is not an essential element, but will serve as a basis for higher damages." (Internal quotation marks omitted; citations omitted.) Bernhard-Thomas Building Systems, LLC v. Dunican, 286 Conn. 548, 553-54, 944 A.2d 329 (2008). "A vexatious suit is a type of malicious prosecution action, differing principally in that it is based upon a prior civil action, whereas a malicious prosecution suit ordinarily implies a prior criminal complaint . . . To establish a cause of action for either vexatious litigation or malicious prosecution, a plaintiff must prove want of probable cause, malice and a termination of suit in the plaintiff's favor." (Internal quotation marks omitted; citations omitted.) Szekeres v. Szekeres, 126 Conn.App. 829, 851 (2011).
"A condition precedent to the institution of an action for vexatious litigation is that the original action has terminated unsuccessfully." Somers v. Chan, 110 Conn.App. 511, 542, 955 A.2d 667 (2008). Thus, ordinarily "a counterclaim alleging vexatious litigation may not be brought in the same action as that which the defendant claims is vexatious." Id. Permitting a concurrent claim of vexatious litigation in the same action can lead to inconsistent judgments, DeLaurentis v. New Haven, 220 Conn. 225, 251, 597 A.2d 807 (1991), or could improperly influence the jury's determination, see Perez v. D and L Tractor Trailer School, 117 Conn.App 680, 700-01 n. 18, 981 A.2d 997 (2009), cert. denied, 294 Conn. 923, 985 A.2d 1062 (2010), as a vexatious litigation claim "primarily is concerned with the plaintiff's motive in prosecuting a lawsuit." Equality, Inc. v. I-Link Communications, Inc., 76 F.Sup.2d 227, 230 (D.Conn. 1999).
"Sound policy" underlies the termination requirement. Blake v. Levy, 191 Conn 257, 263, 464 A.2d 52 (1983). The termination "requirement serves to discourage unfounded litigation without impairing the presentation of honest but uncertain causes of action to the courts. The requirement furthermore serves the interest of finality of judicial decisions by preventing a person who was unsuccessful in the original proceeding from relitigating the same issues in a subsequent action for vexatious litigation." (Citation omitted.) Id., 263-64.
The town also maintains that the vexatious litigation claim has been brought prematurely because it is not yet able to exhaust its appellate rights with respect to the merits of the court's conclusion to strike the third count and accordingly the court lacks jurisdiction over it. The prematurity claim invokes the ripeness doctrine. "[R]ipeness is one of several justiciability doctrines, including standing and mootness . . . An issue regarding justiciability, which must be resolved as a threshold matter because it implicates this court's subject matter jurisdiction . . . raises a question of law." (Citations omitted). Milford Power Co., LLC v. Alstom Power Co., 263 Conn. 616, 623, 822 A.2d 196 (2003).
The critical question is whether the entry of judgment on the stricken third count of the amended complaint satisfies the requirement that the original or prior action has terminated in favor of the defendants. The answer to this question will address the town's dual argument that the vexatious litigation counterclaim is both improper and premature. The parties agree that this court must answer the critical question, either as a matter of legal sufficiency or as a matter of subject matter jurisdiction, by focusing on the procedural posture of the case at this point in time.
The town maintains that there is a possibility that it will appeal the court's decision to strike the third count upon the entry of a final judgment in its action against the defendants and that possibility makes this case analogous to Keller v. Beckenstein, 122 Conn.App. 438, 998 A.2d 838, cert. granted, 298 Conn. 921, 4 A.3d 1227, 5 A.3d 486 (2010). In Keller, the Appellate Court concluded that if the action on which a vexatious litigation is founded is on appeal at the time the vexatious litigation claim is brought, it is not ripe for adjudication because the underlying action "had yet to terminate in the [vexatious litigant's] favor." Id., 444. The court determined that, until the appeal was resolved, " there was a chance that the underlying allegedly vexatious litigation . . . would never terminate in favor of" the vexatious litigation plaintiff. (Emphasis supplied.) Id., 447. The defendants reply that Keller is inapposite because it did not involve the mere possibility of a future appeal since the underlying case was in fact on appeal at the time the vexatious litigation case was brought. In that regard, the defendants note the Appellate Court's remand to the Keller trial court to reconsider its ruling dismissing the vexatious litigation action in light of the conclusion of the appeal of the original action.
"The jurisdiction of the appellate courts is restricted to appeals from judgments that are final. General Statutes §§ 51-197a and 52-263; Practice Book § [61-1] . . . The policy concerns underlying the final judgment rule are to discourage piecemeal appeals and to facilitate the speedy and orderly disposition of cases at the trial court level . . ." (Citations omitted; internal quotation marks omitted.) Mazurek v. Great American Insurance Co., 284 Conn. 16, 28-29, 930 A.2d 682 (2007). The only way in which a party can appeal a judgment rendered on the granting of a motion to strike is under a narrow exception to the final judgment rule that allows for an interlocutory appeal upon the trial court's "written determination that the issues resolved by the judgment are of such significance to the determination of the outcome of the case that the delay incident to the appeal would be justified, and the chief justice or the chief judge of the court having appellate jurisdiction concurs." Practice Book § 61-4(a). The court's decision striking the third count does not meet the requirements of this exception. Thus, it is clear that the town is presently unable to appeal the court's decision to strike the third count of the complaint.
Notably, "any party may file a motion in the trial court for [a § 61-4(a)] determination," Practice Book § 61-4(b), but that was prudently not done in this case.
However, there is presently a chance that the town will appeal the ruling after the entry of a final judgment in this action. The town has represented that the possibility of appealing the decision to strike the third count, at the appropriate time, is "certainly more than hypothetical." (Transcript of 3/7/11 oral argument, p. 17.) The town contested the motion to strike. It filed a substantive brief in opposition in which it maintained that the allegations of the third count were sufficient to establish the defendants' disloyalty even in the absence of fraud, conflict of interest or self-dealing and argued its position before the court. The court rejected the town's position in the absence on any direct controlling appellate authority. Given the town's position, this court must conclude that at this point in time there is a chance that the trial court's decision on the claim of breach of fiduciary duty could be overturned.
One of the purposes of the termination requirement is to protect litigants who believe they have a valid but uncertain or untested cause of action. Blake v. Levy, supra, 191 Conn. 264. Thus, assuming this case is litigated to a final judgment and is not settled, until the appellate process is exhausted or declined it cannot be said that the claim underlying the vexatious litigation counterclaim has terminated in the defendants' favor. Likewise, since the plaintiff's claims of negligence against the defendants in the first and second counts of the amended complaint remain to be litigated, the underlying action has not yet terminated. See Kantrowitz v. Clipfel, 22 Conn.Sup. 272, 278, 168 A.2d 301 (Superior Court 1959) (Although judgment entered in favor of the vexatious litigation plaintiff on a severed equitable count, a second count alleging breach of contract remained pending on the jury trial list). Cf. Jenkins v. Pope, 217 Cal.App.3d 1292, 1299, 266 Cal.Rptr. 557, 561 (Cal.App. 1990) ("Where . . . the action as a whole is still pending, it is of no consequence whether a single cause of action has been determined in [the vexatious litigant's] favor"). Thus, the defendants' conclusory allegation in the second paragraph of the counterclaim regarding the termination requirement is inadequate as a matter of law and the counterclaim must be stricken.
The defendants' failure to adequately allege the termination requirement also implicates the court's subject matter jurisdiction. Keller v. Beckenstein, supra, 122 Conn.App. 438. The ripeness doctrine requires that it be "clear that a plaintiff has suffered an injury sufficient to give rise to the cause of action alleged." Chapman Lumber, Inc. v. Tager, 288 Conn. 69, 87, 925 A.2d 1 (2008). The defendants cannot allege that they have suffered an injury because termination of the underlying action is presently contingent on future events. See Cadle Co. v. D'Addario, 111 Conn.App. 80, 82, 957 A.2d 536 (2008) (proper for trial court to dismiss action as premature because it was contingent on the resolution of an underlying probate claim). The rationale of the ripeness doctrine allows the pragmatic consideration of "both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration." Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). In this case, permitting the defendants to counterclaim for vexatious litigation exposes the town to a liability finding based on a judgment that may be reversed as well as to potential prejudice. On the other hand, the defendants will suffer no ascertainable harm in awaiting the termination of this action to pursue their claim if appropriate.
Finally, there is a relationship between ripeness and the accrual of the defendants' cause of action for vexatious litigation. The policy reasons articulated in support of the termination requirement, see DeLaurentis v. New Haven, supra, 220 Conn. 251; Blake v. Levy, supra, 191 Conn. 263-64, which balance the law's interest in encouraging novel but uncertain causes of action, discouraging unfounded and malicious litigation, compromising litigation through negotiated settlements, avoiding inconsistent judgments and reinforcing the finality of judgments, also support the conclusion that at the present time, given the town's expressed intention to appeal the decision to strike the third count of the amended complaint at the appropriate time, the defendants' claim for vexatious litigation is premature. Accordingly, the court concludes that it lacks jurisdiction over the counterclaim on the ground that the cause of action for vexatious litigation is not ripe. Keller v. Beckenstein, supra, 122 Conn.App. 444.
For the foregoing reasons, the court grants the plaintiff's motion to strike but also concludes that the counterclaim must be dismissed on the ground of ripeness.