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Straw Pond Associates, LLC v. Fitzpatrick, Mariano & Santos, P.C.

Court of Appeals of Connecticut

August 23, 2016

STRAW POND ASSOCIATES, LLC, ET AL.
v.
FITZPATRICK, MARIANO & SANTOS, P.C., ET AL.

          Argued February 3, 2016

         Appeal from Superior Court, judicial district of Stamford-Norwalk, Hon. David R. Tobin, judge trial referee.

          Brenden P. Leydon, for the appellants (plaintiffs).

          Raymond J. Plouffe, Jr., for the appellees (defendants).

          Lavine, Beach and Prescott, Js.

          OPINION

          LAVINE, J.

         In this legal malpractice action, the plaintiffs, Straw Pond Associates, LLC, Straw Pond Real Estate, LLC, Straw Pond Holdings, LLC, and CUDA Associates, LLC, appeal from the summary judgment rendered by the trial court in favor of the defendants, Fitzpatrick, Mariano & Santos, P.C. (firm), and Edward G. Fitzpatrick, an attorney in the firm. On appeal, the plaintiffs claim that the court erred in granting the defendants’ motion for summary judgment by (1) adjudicating, rather than identifying, issues of fact, (2) concluding that their claims were barred by the statute of limitations, and (3) deciding that there were no issues of fact as to the defendants’ alleged breach of fiduciary duty. We agree with the plaintiffs’ first two claims and, therefore, reverse, in part, the judgment of the trial court.

         The plaintiffs commenced the present action by service of process on June 14, 2011. The complaint sounded in three counts: professional negligence, breach of fiduciary duty, and breach of contract.[1] In count one, the plaintiffs alleged that, in March, 2005, they retained the defendants to obtain approvals from various land use boards in the town of Middlebury, including the Water Pollution Control Authority (sewer authority), the Planning and Zoning Commission, and the Board of Selectmen, to enable them to develop a senior housing project (project). In August, 2005, the sewer authority conditionally approved the flow capacity for the project, and in September, 2005, sent a letter (2005 letter) to Straw Pond Real Estate, LLC, in care of Fitzpatrick. In the 2005 letter, the sewer authority set forth its conditional capacity approval and the conditions to which the plaintiffs were required to agree.[2] The sewer authority instructed the plaintiffs to sign the letter and return it.

         The complaint further alleged that on certain dates in 2006 and 2007, Kenneth J. Pocius, an attorney for the sewer authority, communicated with Fitzpatrick about the status of the 2005 letter. According to the plaintiffs, Fitzpatrick failed to respond to Pocius or to inform them of his inquiries. In October, 2007, the sewer authority invited Fitzpatrick to attend its November, 2007 meeting, but Fitzpatrick was unable to attend the meeting.[3] The plaintiffs alleged that Fitzpatrick did not tell them that they should attend the meeting. At the November, 2007 meeting, the sewer authority rescinded its conditional capacity approval for the project and thereafter so informed Fitzpatrick.

         The plaintiffs alleged that the sewer authority rescinded its conditional capacity approval for the project and refused to reinstate it due to Fitzpatrick’s inattention to the 2005 letter and Pocius’ inquiries about the status of the 2005 letter. Moreover, the plaintiffs alleged that the defendants failed to inform them of the 2005 letter until December, 2007, after the conditional capacity approval had been rescinded. They also alleged that Fitzpatrick had failed to inform them of the action that they needed to take with respect to the 2005 letter or of the consequences of their failing to respond to it.

         The plaintiffs appealed from the sewer authority’s rescission of its approval to the Superior Court (sewer appeal), but the appeal was dismissed on March 8, 2011.[4]The sewer authority has denied the plaintiffs’ efforts and subsequent application to regain capacity approval.

         The plaintiffs further alleged that, in addition to obtaining initial approval from the sewer authority, the defendants acted on their behalf to secure other approvals needed for the project to move forward. Some of the plaintiffs’ applications for those other approvals resulted in administrative appeals. The plaintiffs alleged that, from the time they retained the defendants until the time they commenced the present action, they had relied on the defendants, who were their lead counsel charged with getting all of the approvals needed for the project. On August 26, 2009, Fitzpatrick represented the plaintiffs at a global settlement conference to resolve all outstanding project related issues. According to the plaintiffs, the settlement conference failed to meet its objective due to the sewer authority’s refusal to reinstate its capacity approval.

         The plaintiffs alleged that the defendants continuously represented them on all permitting efforts related to the project up to, and including, the dismissal of the sewer appeal in March, 2011.[5] The plaintiffs alleged that they relied to their detriment on the defendants’ expertise in obtaining the necessary approvals for similar projects. Moreover, the plaintiffs alleged that the defendants caused them to believe that the harm caused by the defendants’ acts and omissions with respect to the sewer authority rescission could be mitigated and a viable final approval for the project obtained.

         The plaintiffs further alleged that the defendants failed to exercise diligence and competence, and failed to communicate properly. The plaintiffs claimed that the defendants ‘‘put their own and other interests ahead of the plaintiffs’ [interests] and failed to keep loyalty and fidelity to the plaintiffs’ project as paramount.’’ In addition, the plaintiffs alleged that the defendants’ acts and/or omissions were in violation of the Rules of Professional Conduct, including rules 1.1 (competence), 1.3 (diligence), and 1.4 (communication). As a result of the defendants’ claimed acts or omissions, the plaintiffs alleged that they have sustained and will sustain substantial damages.

         The defendants filed an amended answer and five special defenses on October 8, 2013. They admitted that the plaintiffs ‘‘authorized’’ them to acquire approvals for the project from land use boards and the Middlebury Board of Selectmen, and to negotiate pending zoning and Conservation Commission appeals. The defendants, however, denied that they filed sewer capacity applications on behalf of the plaintiffs.[6] The defendants admitted that the plaintiffs received capacity approval from the sewer authority ‘‘ ‘subject to technical approval, assessment and payment discussions and decisions, ’ ’’ and that the 2005 letter ‘‘required a signature on the part of Straw Pond Real Estate, LLC, verifying its agreement, amongst other things, to the assessment of hookup fees and expenses to which it did not agree . . . .’’ The defendants also admitted that Fitzpatrick received e-mail correspondence from Pocius.

         The defendants, however, denied that they failed to tell the plaintiffs about the 2005 letter until December, 2007, failed to inform them of the action they needed to take in response to the letter or the consequences of failing to respond to the letter, and that they ‘‘continued to represent the plaintiffs during ‘this entire time.’ ’’ The defendants alleged that the plaintiffs had retained other counsel to represent them with respect to ‘‘specific performance, breach of contract, and zoning appeal matters, ’’ and to prosecute certain appeals. In addition, although Fitzpatrick attended the August, 2009 settlement conference, the defendants denied that he was the plaintiffs’ lead counsel. They denied that they had violated the Rules of Professional Conduct and that they failed to exercise diligence and competence, and failed to communicate properly. The defendants also denied that the plaintiffs sustained damages as a result of their alleged acts or omissions. Moreover, the defendants denied that they breached their fiduciary duties and breached their contract with the plaintiffs.

         In their special defenses, the defendants alleged that all three counts of the complaint were barred by General Statutes § 52-577 in that the action was commenced more than three years after the act or omission complained of. The defendants also alleged that, if the plaintiffs sustained any damages, those damages were proximately caused by the plaintiffs’ own carelessness and negligence in that they failed to agree to the sewer authority’s hookup costs and failed to authorize Fitzpa-trick to accept the conditions stated in the 2005 letter. The defendants further pleaded that the plaintiffs failed to mitigate their damages. The plaintiffs replied to the defendants’ special defenses in a one sentence general denial.[7]

         On April 9, 2014, the defendants filed a motion for summary judgment as to all counts of the complaint on the ground that each was barred by § 52-577.[8] In the alternative, the defendants asserted that all counts of the plaintiffs’ complaint fail, as a matter of law, in that the plaintiffs cannot establish a breach of the standard of care, a breach of fiduciary duty, breach of the parties’ fee agreement, or that the plaintiffs’ alleged damages were caused by the defendants. In their accompanying memorandum of law, the defendants represented that the plaintiffs fully were aware of the 2005 letter and that they declined to sign the letter because they disagreed with the $2.057 million hookup fees and the time constraints the sewer authority had imposed on them with respect to obtaining other board and agency approvals. The defendants also argued that there was no evidentiary support for the plaintiffs’ claims.

         The defendants appended numerous documents, including Fitzpatrick’s affidavit, to their memorandum of law. In his affidavit, Fitzpatrick attested, in part: ‘‘I personally met with and spoke to Ben Morris, the principal member of Straw Pond with whom I dealt, on multiple occasions concerning the project, including many discussions from September, 2005 through 2007, concerning Straw Pond’s refusal to sign the . . . 2005 letter of conditional capacity approval. . . . Ben Morris communicated to me personally that Straw Pond and its affiliates refused to sign the . . . letter because it did not agree to the conditions specified, especially the assessment of over [$2 million] in hook-up fees and the two year deadline for obtaining all government agency approvals.’’ They also appended copies of the plaintiffs’ briefs filed in the sewer appeal in which the plaintiffs admitted that they were aware of the conditions contained in the 2005 letter and that they intentionally refused to sign off on those conditions because they were inconsistent with the sewer authority’s August, 2005 authorization.

         As to count two, which alleged breach of fiduciary duty, the defendants asserted that it failed to state a claim upon which relief can be granted. They argued that a proper cause of action for breach of fiduciary duty requires factual allegations impugning an attorney’s honesty, morality, or loyalty. The plaintiffs’ complaint, they continued, solely alleged conduct that objectively pertains to the alleged breach of the standard of care. They asserted that the plaintiffs’ allegations of disloyalty were merely conclusory.

         On September 17, 2014, the plaintiffs filed an objection to the motion for summary judgment, contending that there were genuine issues of material fact as to whether the defendants had been retained to obtain project approval from the sewer authority. They appended numerous documents, including the transcript of Fitzpatrick’s deposition testimony, and an affidavit of John Nelson, one of the plaintiffs’ principals.[9]The plaintiffs argued that the defendants had represented them at least through the global settlement conference held on August 26, 2009, and that the continuous representation doctrine tolled the running of the statute of limitations. Therefore, they concluded, the action was timely ‘‘filed’’ in June, 2011.[10]

         The plaintiffs also argued in their memorandum of law that Fitzpatrick had a conflict of interest in that, while he was representing the plaintiffs before the sewer authority, he represented other applicants seeking an allocation of the limited sewer capacity that was available, and at times he served as counsel for the Naugatuck Regional Water Authority, which provided sewer services for Middlebury. The plaintiffs argued that Fitzpatrick failed to disclose the alleged conflicts of interest.

         The defendants submitted a supplemental memorandum of law and presented evidence that in December, 2007, the plaintiffs retained Robert Fuller, an attorney, to pursue the sewer appeal, and Robin M. Pearson, an attorney, to file a new sewer capacity application.[11] The defendants argued that by retaining Fuller and Pearson, the plaintiffs de facto terminated Fitzpatrick’s representation for the purpose of obtaining sewer capacity approval for the project.

         The trial court issued a memorandum of decision on December 5, 2014, in which it granted the defendants’ motion for summary judgment. On the basis of the evidence presented, the court concluded with respect to the count of professional negligence that the defendants were not the cause of the plaintiffs’ alleged damages. With respect to the count of breach of fiduciary duty, the court stated that the plaintiffs submitted no evidence to raise an issue of fact as to the defendants’ loyalty or honesty, but merely alleged a ‘‘bald assertion of disloyalty.’’ The court also found that the plaintiffs’ claims were barred by the statute of limitations, § 52-577, and that the continuous representation doctrine did not toll the running of the statute.

         The plaintiffs filed a motion to reargue in which they claimed that the court had misapprehended or overlooked significant issues of material fact and that this court’s decision in Cefaratti v. Aranow, 154 Conn.App. 1, 19-20, 105 A.3d 265 (2014) (genuine issue of material fact whether continuing course of treatment doctrine tolled statute of limitations in medical malpractice action), aff’d, 321 Conn. 637, 645, A.3d (2016) (same), cast doubt on the trial court’s reasoning. The plaintiffs argued that their legal malpractice claim primarily was focused on the defendants’ failure to advise them of the sewer authority’s inquiries in 2006 and of the November, 2007 sewer authority meeting. The court denied the motion to reargue in a memorandum of decision issued on December 30, 2014, stating that it had considered the plaintiffs’ argument, which they made in their objection to the motion for summary judgment, when it granted the motion for summary judgment. The court found, on the basis of the evidence presented, that the plaintiffs knew of the defendants’ alleged negligence more than three years prior to commencing the present action and that the continuous representation doctrine did not toll the statute of limitations because, in late 2007 or early 2008, the plaintiffs hired other attorneys to deal with the sewer authority. The plaintiffs appealed from the granting of the defendants’ motion for summary judgment. Additional facts will be set forth as needed.

         ‘‘Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. . . . [S]ummary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried. . . . However, since litigants ordinarily have a constitutional right to have issues of fact decided by a jury . . . the moving party for summary judgment is held to a strict standard . . . of demonstrating his entitlement to summary judgment.’’ (Citation omitted; footnote omitted; internal quotation marks omitted.) Grenier v. Commissioner of Transportation, 306 Conn. 523, 534-35, 51 A.3d 367 (2012).

         ‘‘This court’s review of a trial court’s granting of a motion for summary judgment is plenary in nature. . . . Our task is to determine whether [the trial court’s] conclusions are legally and logically correct and find support in the facts that appear in the record. . . . Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. . . . The party moving for summary judgment has the burden of showing . . . that the party is . . . entitled to judgment as a matter of law.’’ (Internal quotation marks omitted.) Targonski v. Clebowicz, 142 Conn.App. 97, 105-106, 63 A.3d 1001 (2013).

         I

         The plaintiffs claim that the court improperly rendered summary judgment by resolving issues of fact, rather than by determining whether any genuine issues of material fact exist as to the element of causation. We agree.

         ‘‘The party moving for summary judgment bears the burden of proving the absence of a dispute as to any material fact. . . . The court must view the evidence in the light most favorable to the nonmovant. . . . In ruling on a motion for summary judgment, the court’s function is not to decide issues of material fact, but rather to determine whether any such issues exist.’’ (Citations omitted; internal quotation marks omitted.) Lomangino v. LaChance Farms, Inc., 17 Conn.App. 436, 438, 553 A.2d 197 (1989).

         In its memorandum of decision, the court set forth the elements of a cause of action for professional negligence. ‘‘In general, the plaintiff in an attorney malpractice action must establish: (1) the existence of an attorney-client relationship; (2) the attorney’s wrongful act or omission; (3) causation; and (4) damages.’’ (Internal quotation marks omitted.) Lee v. Harlow, Adams & Friedman, P.C., 116 Conn.App. 289, 297, 975 A.2d 715 (2009). As to causation in legal malpractice actions, ‘‘[a] causal relation between the defendant’s wrongful conduct and the plaintiff’s injuries is a fundamental element without which a plaintiff has no case . . . . Thus, if the plaintiff’s injury would not have occurred but for the defendant’s conduct, then the defendant’s conduct is a cause in fact of the plaintiff’s injury.’’ (Citations omitted; internal quotation marks omitted.) Baruno v. Slane, 151 Conn.App. 386, 399, 94 A.3d 1230, cert. denied, 314 Conn. 920, 100 A.3d 851 (2014).

         In granting the motion for summary judgment, the court concluded that the plaintiffs had failed to raise an issue of fact as to whether the defendants were the cause of their alleged loss. In coming to that conclusion, the court drew inferences from the affidavits before it and chose to credit Fitzpatrick, rather than Nelson, as to whether Fitzpatrick had informed the plaintiffs of the 2005 letter and that it was to be signed and returned. The court also was influenced by the language in the briefs the plaintiffs submitted in their sewer appeal, [12]which, according to the court, established that the plaintiffs would not in any event have accepted the conditions that the sewer authority sought to impose on them. For these reasons, the court concluded that the defendants had demonstrated the absence of a genuine issue of material fact as to whether Fitzpatrick committed an act or omission that might constitute professional negligence because he did not inform the plaintiffs of the conditions in the 2005 letter, or that the plaintiffs were damaged by his alleged negligence.

         On appeal, the plaintiffs claim that the court decided issues of fact and too narrowly defined their claims of professional negligence. They argue that their malpractice claim is founded not only on Fitzpatrick’s failure to inform them of the 2005 letter, but also on his failure to inform them of the sewer authority’s ongoing inquiries and concerns in 2006 and 2007, his failure to respond to the sewer authority’s inquiries, his failure to advise them as to how they should deal with the sewer authority, and, particularly, his failure to inform them that the sewer authority would discuss the project at its November, 2007 meeting, which Fitzpatrick did not attend. Nelson averred that the plaintiffs would have attended that meeting had they known about it. As to the court’s findings that the plaintiffs’ admitted in their sewer appeal that they did not agree with the conditions the sewer authority imposed in the 2005 letter, the plain- tiffs argue in their reply brief to this court, for the first time on appeal, that arguments made in another proceeding are not judicial admissions.[13] We agree that the court improperly made credibility determinations when ruling on the defendants’ motion for summary judgment, but disagree that the court improperly considered the plaintiffs’ briefs in the sewer appeal. See Nationwide Mutual Ins. Co. v. Allen, 83 Conn.App. 526, 541-42, 850 A.2d 1047 (pleadings from another case not judicial admissions but admissible as evidentiary admissions for trier of fact to consider), cert. denied, 271 Conn. 907, 859 A.2d 562 (2004).

         A

         We first address the plaintiffs’ assertion that the court improperly relied on statements made in their sewer appeal briefs when concluding that there were no genuine issues of material fact as to causation. See footnote 12 of this opinion. We do not agree.

         The case of Nationwide Mutual Ins. Co. v.Allen, supra, 83Conn. App. 527, a declaratory judgment action, guides our consideration of the plaintiffs’ claim. In Nationwide Mutual Ins. Co., the trial court concluded that the plaintiff insurance company was not obligated to defend or indemnify the defendant employer, Allen, in an underlying negligence action brought by the defendant employee, William Shaw, who also had filed a workers’ compensation claim against Allen. Id., 528. The issue in that case that is relevant to the present appeal is whether the court in the declaratory judgment action ...


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