Appellate Notes: Week of July 15th

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Welcome to our Supreme and Appellate Court summaries webpage.  On this page, I provide abbreviated summaries of decisions from the Connecticut appellate courts which highlight important issues and developments in Connecticut law, and provide practical practice pointers to litigants.  I have been summarizing these court decisions internally for our firm for more than 10 years, and providing relevant highlights to my municipal and insurance practice clients for almost as long.  It was suggested that a wider audience might appreciate brief summaries of recent rulings that condense often long and confusing decisions down to their basic elements.  These summaries are limited to the civil litigation decisions based on my own particular field of practice, so you will not find distillations of the many criminal and matrimonial law decisions on this page.  I may from time to time add commentary, and may even criticize a decision’s reasoning. Such commentary is solely my opinion . . . and when mistakes of trial counsel are highlighted because they triggered a particular outcome, I will try to be mindful of the adage . . . “There but for the grace of God . . ..”  I hope the reader finds these summaries helpful. – Edward P. McCreery

Posted July 15, 2013

  • AC34100 - Joseph General Contracting, Inc. v. Couto - Couto v. Landel Realty, LLC

Another case of bad facts making bad law.  You might have noticed lately a trend of CT courts to be awfully quick to disregard the corporate structure and hold officers personally responsible when it can be claimed the corporate officer committed a tort.  Unfortunately, since the tort is often based on the oral statements allegedly made by the officer, that is becoming a common circumstance.  Once again the judiciary ignore the fact that they are becoming part of the economic malaise of CT by contributing to its business unfriendly reputation.

Here the homeowner entered into a contract to build a more than $1 million home with the corporation.  But thereafter the trial court found the company president bound himself personally based on claims of the homeowners that they entered into oral agreements with him individually to change the agreement.  The builder did not help himself by signing some of the subsequent changes without indicating his corporate capacity.  Additionally, the builder tricked the homeowners into paying for the entire job up front when his bank terminated his credit line.  Then, after construction started, he demanded another advance and when the homeowner refused, he recorded a ML and started a foreclosure.   The homeowners hired another contractor to finish and of course, found defects in the work, together with the fact that zoning would not allow their stand-alone garage / apartment, even though the first builder said they could do that.  They filed a counterclaim and won a CUTPA judgment against the corporation and its president, jointly.   CGS 34-133a means that just because you are an officer, you won’t be liable, but, the decision said, you can be liable for any number of other reasons, including entering into the contract on an individual basis.  One must make disclosure when they claim they are acting in a representative capacity, the decision held.  Here the homeowners claimed they weren’t sure whether they were dealing with the builder individually or as a company.  (Really?....What on earth would you expect them to say at trial?…So just signing your name w/o “president" after the main contract is signed changes everything? …And every time you talk to the client you have to end the sentence with….."I say that in my corporate capacity of course."  Give me a break!)

A footnote observed that the builder’s attorney failed to raise a “Merger Clause” in the agreement to argue oral side agreements should be barred, but its not at all clear that would have changed anything as all the conduct was post-contract signing.

  •  AC33968 - JPMorgan Chase Bank, N.A. v. Eldon

Time for someone to put their malpractice carrier on notice.    Good grief.  Here the defendant in a foreclosure action filed a series of Requests for Admission including…admit you do not own the note, along with interrogatories and document production.  Instead of responding, or moving for more time, the plaintiff filed a motion for protective order against all the discovery.   The judge denied the motion, but tells the plaintiff he will give them another 30 days to reply to the admission requests.  OK - now here is where it gets really ludicrous,….. instead of replying ……they renew their protective order request.  The requests to admit were properly deemed admitted due to the passage of time and the defendant was properly granted summary judgment thereon.  Confusion and misunderstanding of the judge’s order and the status of discovery rulings was not a proper basis to ignore the admissions deadline, nor set aside the judgment.   [Bye bye mortgage.  Maybe they could assign the note and meeting to a new LLC and start over?]

  •  AC33944 - Orange Palladium, LLC v. Readey

Here a summary process action was settled with an agreement scratched out in court by the attorneys on the back of a pad and signed by all.  It was probably 4:55 PM and the janitor wanted to shoo them out and lock the doors.  It was so hurriedly written down in chicken scratch, it contained typos, misspellings, abbreviations, and a last paragraph that was unintelligible.  But the jest of the agreement was all there including once the landlord submitted a plan to repair the roof, the tenant was to resume paying rent.  Thus when the tenant failed to pay, the court could hold an Audubon hearing and enforce the settlement and order ejectment of the tenant.  Merely because one part of an agreement can’t be read, does not render the entire agreement ambiguous or unenforceable.

Matrimonial

  •  AC33462 - Albini v. Connecticut Medical Examining Board
  •  AC33462 Concurrence - Albini v. Connecticut Medical Examining Board

Another good grief.  Who are you going to listen to?  In issuing a cease and desist order against two midwives for the unauthorized practice of medicine when they urged their expectant client to ignore the advice of her OBGYN to go to a hospital….and….again later, the advice of the ambulance paramedics…..and when the baby later had complications (surprise surprise,) the Medical Board should not have used the phrase prohibition against diagnosing “any condition” in its Order because condition includes “being pregnant” and midwifery is allowed and is not a regulated field.   They could only be prohibited from practicing medicine.

  •  AC34046 - 418 Meadow Street Associates, LLC v. One Solution Services, LLC

Back to the drawing board.  Here an LLC wanted to sue its tenant for non-payment of rent.  The problem was that the operating agreement called for a majority vote being required to spend money for legal fees.  50% of the membership interest was controlled by the wife of the tenant’s principal.   Thus the tenant claimed the LLC did not have member approval to start the lawsuit and thus lacked standing.  The appellate court agreed and remanded the case for a trial on whether the wife/member was disqualified from voting on the membership’s decision to sue the tenant (owned by her husband.)  On remand the trial court held the wife’s animosity with the other two 50% members disqualified her.  On appeal again, it was held…that was not the proper test.  It is not a member’s animosity towards the other members in an LLC, or about the issue, but whether their interest in the outcome is adverse to that of the LLC’s.  They added that “adverse” can be a pretty broad universe…..hint hint hint.  Thus counsel for the two members trying to evict the husband / tenant should have probably focused in on the fact that her husband being harmed financially would also hurt her, and that she would not want to see her husband harmed or his company put out on the street.  [I wonder if they ever took her deposition to make her state under oath why she felt it was not in the LLC’s best interest to sue a tenant that owed it so much money?]

The facts and holdings of any case may be redacted, paraphrased or condensed for ease of reading.  No summary can be an exact rendering of any decision, however, so interested readers are referred to the full decisions.  The docket number of each case is a hyperlink to the Connecticut Judicial Department online slip opinion.  

[View source.]

Topics:  Appellate Record, Corporate Officers, Corporate Veil

Published In: Business Organization Updates, Civil Procedure Updates, Professional Malpractice Updates, Commercial Real Estate Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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