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Ridgaway v. Mount Vernon Fire Insurance Co.

Supreme Court of Connecticut

January 30, 2018

WILLIAM P. RIDGAWAY, SR., ADMINISTRATOR (ESTATE OF WILLIAM P. RIDGAWAY, JR.), ET AL.
v.
MOUNT VERNON FIRE INSURANCE COMPANY

          Argued October 12, 2017

          Robert B. Flynn, with whom were Joseph J. Andriola and Dennis M. Carnelli, for the appellant (defendant).

          Wesley W. Horton, with whom, were Karen L. Dowd and, on the brief, Kimberley A. Knox, for the appellees (plaintiffs).

          Rogers, C. J., and Palmer, McDonald, Robinson and D'Auria, Js.

          OPINION

          McDONALD, J.

         Trial court judges have the difficult task of maintaining order over the judicial proceedings before them and ensuring the integrity of those proceedings. To do so, judges have broad discretion to impose the sanctions necessary to ensure parties' compliance with court orders and the rules of the court. In this certified appeal, the defendant, Mount Vernon Fire Insurance Company, contends that the Appellate Court improperly determined that the trial court abused its discretion when it rendered a judgment of nonsuit against the plaintiffs, William P. Ridgaway, Sr., individually and as administrator of the estate of William P. Ridgaway, Jr., and Rita Grant, for their counsel's conduct in relation to counsel's failure to comply with an order of the court. The plaintiffs contend, as an alternative ground for affirmance, that the trial court based its sanction of nonsuit on facts that were not supported by the record. Although we agree with the plaintiffs that certain factual findings were not supported by the record, we cannot determine as a matter of law whether the trial court would have imposed the same sanction in the absence of those facts. Accordingly, we affirm the judgment of the Appellate Court insofar as that court reversed the judgment of nonsuit, but we direct that court to remand the case to the trial court for further proceedings to consider a sanction proportionate to the facts supported by the record.

         We begin with the undisputed facts and procedural history giving rise to this appeal. Prior to the present action, the plaintiffs settled a dram shop action[1] brought against the owner and operator of a nightclub, Silk, LLC, and several insurance companies providing coverage to Silk. The settlement agreement contained a confidentiality provision, which provided in relevant part: ‘‘It is a material condition of this [a]greement that, except as required by law or court order, the [p]arties shall not disclose to any person or entity, and shall take all reasonable measure to prevent the disclosure of, the existence, terms and/or subject matter of this [a]greement . . . .'' (Emphasis added.)

         The defendant in the present action was also named as a defendant in the dram shop action, but it contested coverage for the liability and refused to participate in the settlement. As part of the settlement agreement, Silk assigned to the plaintiffs its rights against the defendant. In June, 2011, the plaintiffs brought the present action against the defendant seeking to enforce Silk's rights and claiming a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., for the defendant's refusal to provide coverage. The defendant alleged in its special defenses and counterclaim that the insurance policy it issued to Silk did not provide coverage for the alcohol related liability.

         During discovery, in the summer of 2013, the defendant sought disclosure of a transcript of a deposition that had been taken in the dram shop action, along with supporting exhibits (collectively, deposition documents). The plaintiffs' counsel[2] responded by letter that ‘‘[b]ecause the [p]laintiffs are subject to a confidentiality agreement, [counsel would] not be turning over any documents unless ordered to do so by the [c]ourt.'' (Emphasis added.)

         In September, 2013, the defendant moved for a court order requiring the plaintiffs to produce the deposition documents. The defendant appended as an exhibit to the motion the letter from the plaintiffs' counsel. The plaintiffs filed an objection to the motion on the ground that the settlement agreement precluded disclosure of the documents. In a subsequent sur-reply in support of the objection, the plaintiffs' counsel asserted that should the court require a copy of the settlement agreement to determine whether to grant the motion for an order of disclosure, then counsel would request permission to file the agreement under seal and to have the court conduct an in camera review. In the plaintiffs' objection and all subsequent correspondence to the court, the plaintiffs' counsel never informed the court that the settlement agreement permitted disclosure if required by court order.

         On February 26, 2014, the court, Hon. Thomas F. Parker, judge trial referee, issued an order directing that the plaintiffs ‘‘shall file a copy of the confidentiality agreement upon which [they rely] by March 7, 2014, '' but permitted them to redact any dollar amounts. As of March 7, 2014, the plaintiffs had not filed the settlement agreement or any other document related to the order (i.e., motion for extension of time, motion to file under seal) with the court.

         One week after the court's deadline lapsed, the defendant filed a ‘‘Motion for Entry of Nonsuit and Sanctions for Failing to Comply with Discovery Order'' on the ground that the plaintiffs had wilfully failed to comply with the February 26, 2014 ‘‘discovery'' order. In that motion, the defendant requested that the trial court order the plaintiffs to provide the deposition documents to the defendant within ten days of a court order to do so, to render a judgment of nonsuit if the plaintiffs failed to comply with such order, and to further order the plaintiffs to pay the defendant's attorney's fees associated with the motion for nonsuit.

         In response to that motion, the plaintiffs took two actions. On April 8, 2014, the plaintiffs' counsel faxed a copy of the settlement agreement, with dollar amounts redacted, to the defendant. In the accompanying cover memorandum, counsel stated the agreement was being provided pursuant to the court's February 26, 2014 order. Shortly thereafter, the plaintiffs filed an objection to the motion for nonsuit and sanctions on the ground that they had complied with the February 26, 2014 order by providing a copy of the agreement to the defendant. The plaintiffs did not file with the court a copy of the agreement along with their objection.

         Approximately two weeks later, the plaintiffs' counsel undertook certain steps that would permit disclosure of the deposition documents to the defendant. Counsel sent a letter to all parties to the settlement agreement (copied to the defendant) indicating that counsel intended to provide the deposition documents to the defendant in ten days unless the parties to the settlement agreement objected. After two of the settlement parties indicated that they would be opposed to disclosure without acourt order or subpoena, the defendant provided a subpoena for the documents. The plaintiffs did not inform the court of these events.

         On April 28, 2014, without oral argument on the motion for nonsuit or for sanctions, the trial court issued a summary order that granted the defendant's ‘‘motion for nonsuit for failure to comply with [the court's February 26, 2014] order.'' The court did not issue a written decision explaining the reasons for granting the motion or for rejecting the lesser preliminary sanction sought by the defendant, namely, an order for the plaintiffs to provide the defendant with the deposition documents and to pay attorney's fees. The parties did not have notice of the order for several weeks, however, because the court system was delayed in uploading it to the case management system.

         Several events occurred during the intervening period between the date that the court issued its order and the date the court clerk posted the order and entered the judgment of nonsuit. The defendant filed a reply to the plaintiffs' objection to the motion for nonsuit or for sanctions, to which it appended the redacted agreement that the plaintiffs' counsel had provided to the defendant. The plaintiffs' counsel mailed the deposition documents to the defendant, but did not concurrently notify the court of this action.

         On the same date that the court clerk processed the nonsuit order and entered judgment against the plaintiffs, the clerk processed the court's order overruling the plaintiffs' objection to the defendant's motion for nonsuit. In this order, the trial court explained that, while it was aware that the plaintiffs had provided a copy of the settlement agreement to the defendant, such action did not comply with the clear order to file the agreement with the court.

         Later that month, the plaintiffs filed a motion to open the judgment of nonsuit in which they asserted that they had provided the defendant with a redacted copy of the settlement agreement and the deposition documents. In a supplemental memorandum of law in sup- port of their motion to open, they further asserted that the judge trial referee lacked jurisdiction and authority to impose such a sanction.

         Before ruling on the motion to open, on June 5, 2014, the court ordered the plaintiffs to file the settlement agreement with the court by June 12, 2014. After the plaintiffs timely filed an unredacted copy of the settlement agreement, [3] the court denied the motion to open the judgment of nonsuit. The court issued a seventy-one page memorandum of decision setting forth the facts and its reasoning, the latter which we address in part II of this opinion. The court cited Practice Book § 17-19 (sanctions for failure to comply with court order) rather than Practice Book § 13-14 (sanctions for failure to comply with discovery order)-the authority cited by the defendant in its motion for nonsuit or for sanctions-as the authority under which it had granted the motion for nonsuit.[4] In its memorandum of decision, the court indicated that a copy of its decision was going to be sent to the Chief Disciplinary Counsel.

         The plaintiffs appealed to the Appellate Court from the judgment of nonsuit and the denial of their motion to open, claiming that the judge trial referee lacked subject matter jurisdiction or authority to render a judgment of nonsuit, and that the trial court had improperly rendered a judgment of nonsuit and denied the motion to open. The plaintiffs challenged the merits of the decisions both as resting on facts that were not supported by the record and as an abuse of discretion.

         The Appellate Court reversed the judgment of nonsuit on the merits. Ridgaway v. Mount Vernon Fire Ins. Co., 165 Conn.App. 737, 761, 140 A.3d 321 (2016). It held that the trial court had both subject matter jurisdiction and authority to render a judgment of nonsuit. Id., 750-55. The Appellate Court did not reach the plaintiffs' factual claim, instead concluding that the trial court had abused its discretion because the sanction of nonsuit was not proportionate to the misconduct at issue. Id., 755-61. In support of that conclusion, the Appellate Court pointed to the fact that the trial court had attributed the improper conduct solely to the plaintiffs' counsel and that there had been no harm to the defendant. Id., 760-61. The defendant's certified appeal to this court followed. See Ridgaway v. Mount Vernon Fire Ins. Co., 322 Conn. 980, 140 A.2d 978 (2016).

         The defendant claims that the Appellate Court improperly held that the trial court had abused its discretion in rendering judgment of nonsuit. Specifically, the defendant asserts that the Appellate Court improperly applied a proportionality test that applies only to sanctions for violations of discovery orders, but that, under either the proportionality test or the proper general abuse of discretion standard, the trial court properly rendered judgment of nonsuit. In response, the plaintiffs assert that proportionality is a requirement of all sanctions and that the Appellate Court properly held that it was an abuse of discretion to nonsuit the plaintiffs. In the alternative, the plaintiffs assert that the trial court's judgment is based on facts that are clearly erroneous and that the facts supported by the record are an inadequate basis for a sanction of nonsuit. We agree with the plaintiffs that the trial court's judgment is based, ...


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