Connecticut Appeals

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Archives for March 2016

CT Appeals: AC Reverses Foreclosure for Standing Issue

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In this Connecticut appeal, Deutsche Bank National Trust Company, Trustee v. Thompson, the Appellate Court reversed the judgment of foreclosure because the trial court did not make any factual findings as to plaintiff’s standing.

Plaintiff alleged in the complaint that it was the holder of the note. Defendant was defaulted for failure to plead. The trial court entered a judgment of foreclosure but made no factual findings as to whether plaintiff was the holder or owner of the note at the time it commenced the action. The Appellate Court reversed, concluding that, absent such factual findings, it could not answer “[t]he key question … [of] when the note came into the plaintiff’s possession.”

Plaintiff argued on appeal that if it had not presented the note to the trial court, the trial court could not have entered the foreclosure judgment. Plaintiff claimed, in other words, that it’s implicit from the judgment that the trial court had the note before it at the time of entry. The Appellate Court rejected this contention because there was no evidence that plaintiff ever presented the original note to the trial court. Plus, the copy of the note in the record was payable to the original lender, not plaintiff, and was not endorsed. Without an endorsement, plaintiff could not be the holder.

Plaintiff also argued that it had established holder status because it alleged that status in the complaint and defendant was defaulted for failure to plead. The Appellate Court rejected this argument.  Finding standing by a default in pleading would be akin to finding standing by waiver or consent, which the law expressly precludes.

The Appellate Court also “reject[ed] the plaintiff’s argument that an inadequate record precludes our review of its standing.” Though the appellant has the burden of presenting a record adequate for review, plaintiff has the burden of proving standing whenever the issue is raised, including on appeal. Because it is not the Appellate Court’s function to find facts, “[t]he judgment [was] reversed and the case [was] remanded for a determination of the jurisdictional issue and for further proceedings according to law.”

Technical Deficiencies in Appeal Form? No Problem

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In this Connecticut appeal (Levine v. 418 Meadow Street Associates, LLC), the Appellate Court concluded that technical deficiencies in the appeal form did not deprive it of jurisdiction.

Plaintiff and her husband were the only members of the LLC, until husband sold his interest to two others. The LLC owned a single commercial property. Plaintiff’s husband remained associated with some of the tenants in the property and continued to deal with the two members in respect of the property after selling them his interest in the LLC. The LLC ultimately lost the property through foreclosure.

Plaintiff later brought suit seeking to dissolve the LLC “and claimed money damages, alleging [among other things] that [the other two members] breached fiduciary duties owed to her, and that as a result she suffered damages.” The defendant-members counterclaimed against plaintiff and her husband for essentially the same things.

The jury found against plaintiff on her claims in chief and for the defendant-members on their counterclaims. It awarded the defendant-members some $264,000, which was the same amount that the defendant-members paid plaintiff’s husband for his membership interest in the LLC. Plaintiff and her husband moved to set aside the verdict and for remittitur of the verdict. Defendants objected to both motions. The trial court denied both motions without issuing a memoranda of decision.

Plaintiff and her husband appealed. The Appellate Court affirmed.

Technical Deficiencies in the Appeal Form did Not Deprive Appellate Court of Jurisdiction

Plaintiff’s and her husband’s “appeal form, JD-SC-28, indicate[d] that the appeal is taken from the ‘motion to dismiss granted in favor of defendants (see jury verdict (#174), memorandum of decision (#196); and judgment of dismissal (#197).'” However, their “preliminary statement of issues [said], in … part: ‘Did the trial court err in failing to set aside the jury verdict where the damages awarded to the counterclaim plaintiffs … were not supported by the evidence at trial, and were not in conformance with Connecticut law of damages.'”

“[D]efendants assert[ed] that [the Appellate] [C]ourt lacks jurisdiction because [plaintiff and her husband] did not file an appeal form indicating that they sought review of the court’s decisions denying their motions to set aside the verdict and for remittitur of the verdict.”

The Appellate Court noted that the Supreme Court has a policy of not exalting form over substance. “[T]he forms for appeals and amended appeals do not in any way implicate appellate subject matter jurisdiction. They are merely the formal, technical vehicles by which parties seek to invoke that jurisdiction. Compliance with them need not be perfect; it is the substance that matters, not the form.”

“[Plaintiff and her husband] referenced the jury verdict itself on the appeal form, which can be interpreted as an intention to appeal from the judgment.” Moreover, the preliminary statement of issues is a better representation of the substance of the appeal than the appeal form.

Consequently, “[d]espite the imprecise language used on the appeal form, viewing the substance of [plaintiff and her husband’s] amended appeal, they have sufficiently invoked this court’s jurisdiction, and we will review their claims on appeal.”

Plaintiff’s Main Argument on Appeal

“The essence of the [plaintiff’s and her husband’s] claim briefed on appeal is that the jury could not have awarded damages for defendants’ capital contributions to [the LLC] because the complaint only referenced, in all of its counts, losses due to the foreclosure of [the LLC’s] property by People’s Bank, and the value of the property at the time of foreclosure was less than the amount of the mortgage at the time of foreclosure.” In other words, plaintiff and her husband claimed that the defendant-members lost their investment not because of anything plaintiff or her husband did but because the property was underwater.

Appellate Court Concludes there was No Error

“[I]t was possible for the jury to have found that [the LLC’s] property became less valuable, not enough rent was collected to satisfy mortgage payments, and the property was subsequently foreclosed because of the self-dealing and obstructive behavior of [plaintiff and her husband]. The jury also could have concluded that the [defendant-members] … lost the entire amount of their
investments in Meadow when the property was foreclosed. Therefore, it would have been reasonable for the jury to conclude that absent the self-dealing and obstructive behavior of [plaintiff and her husband], [the LLC’s] property might not have been foreclosed, and the [defendant-members] would not have lost their investments in [the LLC].”

“Therefore, on the basis of our review of the limited record provided to us, we conclude that the [plaintiff and her husband] have not shown that the court acted unreasonably or abused its discretion in denying their motions to set aside, and for remittitur of, the verdict thereby rendering judgment in favor of the [defendant-members] on their counterclaims, in accordance with the jury verdict.”

No Lost Profit Damages in Failed Law Firm Case

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The Connecticut appeal in Adler v. Rosenthal involved two lawyers who talked about starting a firm together. They got close enough to sign a “Preliminary Partnership Agreement” which set out draws and profit shares for the two members. They also filed organizational documents with the Secretary of the State and agreed on a starting date for the partnership.

To be ready for the start date, plaintiff “met with landlords to discuss potential office space, negotiated with payroll, telephone, and insurance companies, interviewed and negotiated with prospective staff members, put an advertisement in the yellow pages, set up e-mail accounts and a computer system, opened bank accounts, purchased office supplies, and arranged for a construction crew to construct an office space ….”

Then defendant said he didn’t want to do it. Plaintiff sued him for breach of contract, seeking lost profits, among other things. After a bench trial, “[t]he court awarded the plaintiff $38,786.93 as damages for lost profits and $3678.79 as reliance damages for costs that the plaintiff incurred prior to the breach.”

Defendant appealed. Plaintiff cross-appealed. The Connecticut Appellate Court affirmed everything, except the lost profits award as to which it remanded with an instruction to vacate that part of the judgment.

Defendant’s Argument on Appeal Concerning Lost Profits

Defendant advanced three reasons why the trial court erred in awarding plaintiff lost profits. The Appellate Court found one of those reasons dispositive so it did not address the other two. The dispositive reason was that plaintiff and the trial court based there conclusions on the notion that defendant would have contributed a certain amount of revenue to the firm. But, defendant argued, “there was no support in the evidence for the court’s finding that the defendant would have contributed $250,000 to the firm’s annual revenue.”

Appellate Court Concludes it was Error to Award Lost Profits

The court noted that plaintiff has the “burden of proving lost profits to a reasonable certainty.” This must be done with evidence that “is not merely subjective or speculative . . . but which allows for some objective ascertainment of the amount…. Evidence is considered speculative when there is no documentation or detail in support of it and when the party relies on subjective opinion.”

In awarding lost profits in this case, “[a] crucial piece of evidence upon which the court relied consisted of the defendant’s alleged representation to the plaintiff during the formation of the preliminary agreement that he regularly brought in $250,000 a year to his own law firm ….” But, “plaintiff did not present, to a degree of reasonable certainty, expert testimony or statistical evidence regarding lost profits that resulted from the defendant’s failure to join the law firm. Instead, the plaintiff only produced his own law firm’s profit and loss statement for the … time period
following the defendant’s failure to join the firm. The plaintiff supplemented this data with his own testimony that the defendant had given him a confident projection, orally, that he would bring $250,000 in business to the law firm…. Despite the facts that the defendant had an established law practice and that he continued to practice law after failing to join the plaintiff’s firm, the plaintiff failed to submit any of the defendant’s financial statements into evidence in support of his lost profits claim.”

“The proper remedy in the present situation is to remand the case to the trial court with direction to vacate the award of lost profits. Although the court erred in awarding lost profits, the plaintiff is not entitled to further relief in the form of a new hearing related to lost profits. As our foregoing analysis demonstrates, the plaintiff failed in his burden of proving an entitlement to any amount of lost profits resulting from the defendant’s failure to join the firm. It is well established that in administrative, civil and criminal cases, when the party charged with the burden of proof fails to satisfy that burden, it is not entitled to a second ‘bite at the apple’ on remand.”

Appellate Court Rejects Plaintiff’s Cross-Appeal

“In his cross appeal, the plaintiff claims that the trial court erred by not allowing him to amend his complaint to include a claim for damages related to paralegal fees incurred as a result of the defendant’s failure to join the firm. Next, the plaintiff claims that the court erred by not awarding him damages to compensate him for the time that he personally expended addressing the defendant’s failure to join the firm. Finally, the plaintiff claims that the court erred by excluding $80,000 from his damages award, which he alleges was a cost that he incurred due to his need to hire a new associate to replace the defendant.”

As to plaintiff’s first argument, the Appellate Court concluded: “In light of the evidence considered by the court, the lateness of the plaintiff’s request made during the trial, and the likelihood that an amendment would have caused significant prejudice to the defendant, we conclude that the court’s ruling did not reflect an abuse of its discretion.”

As to plaintiff’s second argument, the Appellate Court concluded: “The [trial] court therefore ruled that there was no sufficient factual predicate for the award requested, and it refused to speculate as to the time that the plaintiff actually spent on those matters…. The court was in the best position to assess the credibility of the evidence submitted at trial and to make findings of fact based upon this assessment. On the basis of our review of the record, we conclude that the court’s findings regarding the time that the plaintiff spent in addressing the defendant’s failure to join the firm were not clearly erroneous.”

The Appellate Court also rejected plaintiff’s third argument, “observ[ing] that there was no persuasive evidence that the plaintiff’s hiring of the new associate was done for the primary purpose of ‘replac[ing]’ the defendant, given that the defendant never actually joined the firm and accordingly added nothing to the plaintiff’s caseload, which required the attention of a new associate regardless of the defendant’s actions. In this regard, the [trial] court observed that one of the reasons why the defendant did not join the firm was that, apart from his work with his own clients, he was concerned about the ‘many new files he would be assigned to by the plaintiff.'”

Other Things to Note

The trial court denied plaintiff’s application for a prejudgment remedy. Plaintiff failed to serve his signed summons and complaint within thirty days of the denial as required by CGS § 52-278j(b).  Defendant moved to dismiss, arguing that, pursuant to the statute, “the civil action effectively was withdrawn, and any action filed after the thirty day period must be dismissed for lack of subject matter jurisdiction.” The trial court denied the motion. On appeal, the Appellate Court confirmed that the statute deems withdrawn only the application for the prejudgment remedy, not the action itself.

Plaintiff also took issue, in the trial court and on appeal, with “plaintiff’s failure to include a return date on the writ of summons and his failure, in amending the writ of summons and complaint, to
include a return date that was within two months from the date on which the plaintiff had first served the defendant.” Once he learned of the omission, plaintiff attempted to cure it with two requests for leave to amend. The Appellate Court “decline[d] to decide this issue on its merits because, procedurally, it was not properly raised in the trial court. The defendant did not object to the plaintiff’s first request for leave to amend within fifteen days, as required by Practice Book §10-60(a)(3). Accordingly, the complaint as amended was deemed to have been filed with the consent of the adverse party by operation of the rule of practice sixteen days after the filing of the request …. The defendant did not file his objection until [too late], and the court never ruled on it, nor was
it required to do so, because of the lateness of the filing of the objection.”

Two Part Test for Admitting Computerized Business Records

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In this Connecticut Appeal (Midland Funding, LLC v. Mitchell-James), the Appellate Court confirmed that there’s a two part test for admitting computerized business records into evidence.

Plaintiff claimed to have purchased defendant’s credit card account from the card issuer, JPMorgan Chase Bank, N.A. Plaintiff moved for summary judgment and submitted an affidavit that it claimed laid the foundation for the admission of two documents into evidence: a bill of sale for unspecified loans and a “field data sheet” reflecting, among other things, defendant’s name and the amount she owed.

Defendant opposed, claiming that the two documents were inadmissible hearsay and plaintiff had not demonstrated that it was the “bona fide owner of the account in question.” Plaintiff replied with another affidavit. This second affidavit “averred that Chase sold a ‘pool of charged-off accounts’ to the plaintiff, and, as part of the sale, ‘electronic records and other records on individual accounts included in the [pool of charged-off accounts] were transferred to [the plaintiff].’ [The affiant] affirmed that he was ‘aware of the process of the sale and assignment of electronically stored business records,’ and averred, without elaborating as to the basis for his averment, that he was ‘not aware of any errors in the [pool of charged-off accounts].'”

The trial court granted plaintiff summary judgment. Defendant appealed. The Appellate Court reversed.

Defendant’s Main Argument on Appeal

“On appeal, … the defendant argue[d] that Stayton’s affidavit failed to provide the ‘evidentiary foundation for the documents submitted [by the plaintiff] as business records.’ Consequently, the defendant argue[d], the plaintiff ‘never established that it was the successor in interest to the account in question’; thus, the court erred in rendering summary judgment because a genuine issue of material fact existed as to whether the plaintiff owned the defendant’s charged-off account.”

Appellate Court Confirms Two Part Test for Admitting Computerized Business Records

“When the proffered business records are computer generated, … the proffering party must satisfy a two part test. First, the proponent must satisfy … the three conditions set forth in General Statutes § 52-180. The court must determine, before concluding that it is admissible, that the record was made in the regular course of business, that it was in the regular course of such business to make such a record, and that it was made at the time of the act described in the report, or within a reasonable time thereafter…. Second, the proponent of the computer generated business records must establish that the basic elements of the computer system are reliable…. The genesis of the second part of the test dates back to American Oil Co. v. Valenti, 179 Conn. 349, 358–59, 426 A.2d 305 (1979), in which our Supreme Court noted that ‘[b]usiness records that are generated by computers present structural questions of reliability that transcend the reliability of the underlying information that is entered into the computer. Computer machinery may make errors because of malfunctioning of the hardware, the computer’s mechanical apparatus. Computers may also, and more frequently, make errors that arise out of defects in the software, the input procedures, the data base, and the processing program…. In view of the complex nature of the operation of computers and general lay unfamiliarity with their operation, courts have been cautioned to take special care to be certain that the foundation is sufficient to warrant a finding of trustworthiness and that the opposing party has full opportunity to inquire into the process by which information is fed into the computer.'”

Plaintiff’s Field Data Sheet Inadmissible because Plaintiff Failed to Demonstrate Computer System Reliability

The Appellate Court concluded that plaintiff’s “affidavit did not establish that the basic elements of the computer system [were] reliable…. Heeding our Supreme Court’s caveat that [c]omputers may … make errors that arise out of defects in the ‘software,’ the input procedures, the data base, and the processing program[,] … we conclude that it was incumbent on the plaintiff to produce an affidavit from a person who is familiar with computerized records not only as a user but also as someone with some working acquaintance with the methods by which such records are made … to
establish the reliability of the plaintiff’s computer system.”

Appellate Court Concludes Plaintiff Failed to Establish Standing

The field data sheet was inadmissible hearsay and thus did not support plaintiff’s claimed ownership of the account. The problem with the bill of sale seems to have been that it did not specifically identify defendant’s account as one of the accounts Chase sold to plaintiff. In other words, there was no evidence that the sale to plaintiff actually included defendant’s account.

Other Things to Note

In footnote 8, the court addressed plaintiff’s argument “that because the ‘defendant failed to produce any evidence to controvert the plaintiff’s motion or . . . [submit a counteraffidavit],’ there was no genuine issue of material fact, thereby affording the court ‘little choice but to grant’ its motion for summary judgment. To be sure, when the moving party seeking summary judgment meets its burden, ‘the opposing party must present evidence that demonstrates the existence of  some disputed factual issue.’ (Internal quotation marks omitted.) Marinos v. Poirot, 308 Conn. 706, 712, 66 A.3d 860 (2013). However, ‘[w]hen documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue.’ (Emphasis added; internal quotation marks omitted.) Id.”

Ho-Hum, Another Foreclosure Plaintiff has Standing

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Some Connecticut appeals seem doomed to fail from the outset. The challenge to plaintiff’s standing to foreclose in Property Asset Management, Inc. v. Lazarte is one of those.

Plaintiff’s motion for summary judgment included an affidavit asserting that plaintiff received delivery of the note, endorsed in blank, on a specific date that was prior to commencement of the action. The trial court didn’t have to rule on the summary judgment motion because it later defaulted defendant for failing to comply with court-ordered discovery. The trial court ultimately entered a judgment of strict foreclosure and set a law date.

After a couple of dismissed bankruptcies later, the parties were back in court to reset the law date. Defendant filed a motion to dismiss, arguing that plaintiff lacked standing to foreclose. The trial court denied the motion to dismiss and reset the law date. Defendant appealed. The Appellate Court affirmed.

Defendant’s Main Arguments on Appeal

“[D]efendant first argue[d] that the court improperly denied her motion to dismiss on the basis of its finding that she had failed to counter the rebuttable presumption that the original plaintiff had standing to initiate this action.”

“[D]efendant also claim[ed] that the trial court improperly failed to conduct an evidentiary hearing on the motion to dismiss.”

Appellate Court Concludes Plaintiff had Standing to Foreclose

A “holder” is a person in possession of a note (assuming it’s a negotiable instrument) endorsed in blank. Under Supreme Court precedent, in a mortgage foreclosure action, the holder is rebuttably presumed also to be the owner of the debt. Since the owner of the debt on the date the action is commenced has standing to foreclose, so too does a person rebuttably presumed to be the owner of the debt, like the holder of the note, on the date the action is commenced.

“[A]lthough the court did not state the basis for its finding that the original plaintiff was in possession of the note when it initiated the foreclosure action, that finding is supported by the record, namely, the affidavit submitted with the motion for summary judgment indicating that the note [endorsed in blank] was delivered to the original plaintiff on or before October 6, 2008. The defendant presented no evidence that the original plaintiff transferred or lost possession of the note prior to commencing the foreclosure action on October 14, 2008.”

“Because the defendant presented the court with nothing to rebut the evidence in the record that the original plaintiff possessed the mortgage note endorsed in blank at the time that it commenced this action, and thus that it had standing, we conclude that the court properly denied the motion to dismiss.”

Appellate Court Concludes No Evidentiary Hearing Required

“A court is required to hold an evidentiary hearing before adjudicating a motion to dismiss only if there is a genuine dispute as to some pertinent jurisdictional fact…. In the present case, there was no jurisdictional fact in dispute necessary to determine whether the original plaintiff had standing to bring the present action. The record before the court revealed that the original plaintiff was in possession of the note, endorsed in blank, at the time it commenced the action, and, thus, there was a rebuttable presumption of standing. Because the defendant failed to demonstrate the existence of any relevant jurisdictional fact that was in dispute, the court was not required to hold an evidentiary hearing before ruling on the defendant’s motion to dismiss.”

Other Things to Note

In footnote 5, the Appellate Court rejected plaintiff’s arguments that defendant had waived standing and public policy militated against raising the standing argument at such a late stage in the proceedings. “As we have indicated, … a party may raise a lack of subject matter jurisdiction at any time, and subject matter jurisdiction cannot be conferred on the court by waiver or consent of the parties…. The defendant’s claim that the original plaintiff lacked standing implicates subject matter jurisdiction and, therefore, is not waivable and is properly before this court.”

Brothers Abandoned Claims in Estate Contest

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The Connecticut appeal in Tyler v. Tyler involved two brothers who were feuding over their mother’s trust but teamed up against the attorney serving as trustee. The Appellate Court concluded that the brothers abandoned their claims against the trustee-attorney.

The case turns on a procedural matter, which is unfortunate because the procedural background is complex — the advance release opinion is 17 pages. I will shorten it as best as I can.

Mom had a living trust and an attorney serving as trustee. The trust divided the remainder among Mom’s five sons according to a formula. When Mom passed, one son was going to get nothing. He started an action against his brothers and the trustee-attorney. One of the defendant-brothers cross-claimed against the trustee-attorney. Between the complaint and the cross-complaint, the brothers asserted what amounted to five distinct counts against the attorney-trustee (complaint asserted five counts and the cross-complaint repeated four of the five).

The trustee-attorney moved for summary judgment as to all claims against him. The trial court granted that motion as to four of the five distinct claims. The brother defendants also had moved for summary judgment as to the claims against them. The advance release opinion is not clear but it seems the trial granted summary judgment for the defendant-brothers on at least one claim against them.

On reargument, the trial court found that there was a genuine issue of material fact in respect of the trustee-attorney and reversed as to that one fact issue. The one fact issue was central to at least two of the four causes of action as to which the trial court had granted summary judgment.  The trial court did not specify which causes of action remained in the case but it’s clear that there were at least two — the one the trial court left in the case with its original summary judgment decision and at least one that was added back on reargument.

The brothers appealed. This is where it gets tricky. While the appeal was pending, the trial court conducted a jury trial on the claims remaining against the trustee-attorney. The jury returned a general verdict for the trustee-attorney. The brothers did not appeal the verdict. Later, the Appellate Court dismissed the brothers’ appeal as to the trustee-attorney claims because the summary judgment ruling was not a final judgment in that it did not dispose of all claims against the trustee-attorney. But, the Appellate Court also reversed and remanded as to one of the claims against the defendant-brothers.

Back in the trial court, the brothers maintained that they were entitled to a trial not only as to the remanded claim against the defendant-brothers but also as to the  claims remaining against the trustee-attorney based on the fact issue the trial court found on reargument. The brothers claimed that there had to be claims remaining against the trustee-attorney because the Appellate Court dismissed the appeal for lack of a final judgment against him after the jury trial.

The trustee-attorney countered that the brothers had abandoned the claims dependent on the one fact issue because (i) there was a jury trial against the trustee-attorney at a time when those claims were in the case; and (ii) the brothers did not “ask that the jury be instructed on those claims at trial and, if dissatisfied with the court’s instructions as given, to claim error in those instructions in a subsequent appeal ….”

The trial court concluded there were no claims remaining against the trustee-attorney. The brothers appealed but they did not submit a trial transcript. The Appellate Court affirmed.

Brothers’ Main Argument on Appeal

The brothers’ argument went more or less like this: Their appeal was pending at the time the jury trial occurred. After the jury trial concluded, the Appellate Court dismissed their appeal because the summary judgment decision did not dispose of all claims against the trustee-attorney. Therefore, there were claims remaining against the trustee-attorney after the jury trial.

Appellate Court Concludes Brothers Abandoned their Claims

The Appellate Court “agree[d] with [the trustee-attorney’s] argument that, even in the absence of a trial transcript, we can clearly tell from the [borthers’] failure to appeal from the judgment rendered upon the jury’s general verdict that none of their claims against him were still pending after the initial appeal was dismissed.” The court gave three reasons for this conclusion:

“First, if and to the extent that the jury was actually instructed on the [brothers’] pending claims, then such claims were no longer pending in the trial court after trial because they all had been resolved in [the trustee-attorney’s] favor by the jury’s general verdict. By not appealing from that judgment, the [brothers] would have accepted the finality of the jury’s determinations with respect to all such instructed-upon claims.”

“Second, if any pending claims were not prosecuted to verdict at trial because the [brothers] did not seek to prove them or to have the jury instructed upon them at trial, then by so failing to prosecute them, they must be deemed to have abandoned such claims, and thus to have forfeited their right to prosecute them further.”

“Third and finally, if the [brothers] requested that the jury be instructed on certain pending claims but the trial court failed or refused to give such instructions, then Tatoian is correct in arguing that they could and should have appealed from the judgment rendered against them upon the jury’s general verdict, claiming error in the court’s failure or refusal to instruct the jury as requested. The [brothers’] failure to appeal from the judgment on the basis of such instructional error constituted an abandonment of all claims as to which the court refused to instruct the jury as requested just as surely as if the [brothers] had not sought instruction on them at all.”

Dismissal of Appeal does Not Mean Claims Remained

The Appellate Court separately addressed the brothers’ argument that there had to be claims remaining against the trustee-attorney because the court dismissed the appeal for that reason after the jury trial. The court said:

“The [brothers’] claim is based on a fundamental misunderstanding of our basic procedure. It is axiomatic that the jurisdiction of this court is restricted to appeals from judgments that are final…. The [brothers] misunderstand the correct measuring point for determining if the judgment appealed from is final…. [W]e concluded that the … summary judgment ruling, from which the [brothers] appealed, was not a final judgment as to [the trustee-attorney] at the time the appeal therefrom was filed because it did not dispose of all of the counts then pending against him. We did not conclude that there was no final judgment as to [the trustee-attorney] at the later time when we finally dismissed the appeal, because the measuring point for determining if an appeal is from a final judgment is when the appeal is filed.”

Other Things to Note

In concluding that there were no claims remaining against the trustee-attorney, the trial court accepted the trustee-attorney’s analysis and gave two additional reasons: “First, because the trial court never ordered bifurcation of the trial, all of the [brothers’] pending claims against [the trustee-attorney] were presumptively contested in that trial. Second, because the jury returned a general verdict for [the trustee-attorney], all such pending claims were presumptively decided in his favor at trial.”

The Appellate Court rejected these reasons: “Because, in the absence of a trial transcript, we cannot determine whether or not such jury instructions were actually given in this case, we cannot agree with the trial court’s presumptive finding that all of the [brothers’] pending claims against [the trustee attorney] on which summary judgment was not previously rendered were finally resolved in his favor by the jury’s general verdict at trial.”

Invited Error Doctrine Precludes Appellate Review

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In this Connecticut appeal, Gladstein v. Goldfield, the Connecticut Appellate Court ruled that the invited error doctrine precluded appellate review of the trial court’s denial of plaintiff’s motion to substitute plaintiff.

Plaintiff initially was a 50% beneficiary of her mother’s trust. Plaintiff’s mother later reduced plaintiff’s share to 10%. Plaintiff filed for bankruptcy in Nevada but didn’t list her interest in the trust as an asset. She also didn’t identify in the bankruptcy the claims she had against (i) her sister and brother-in-law for unduly influencing her mother to reduce her share of the trust; or (ii) her mother’s lawyer for allowing her sister and brother-in-law to influence her mother to reduce her share.

After she received her bankruptcy discharge, plaintiff commenced an action in Connecticut to pursue those claims against her sister, brother-in-law and mother’s lawyer. “[D]efendants filed motions to dismiss on the ground that the plaintiff’s alleged interest in the trust was properly an asset of the plaintiff’s bankruptcy estate and, as such, an asset of the bankruptcy trustee. Thus, the
defendants claimed, the plaintiff had no standing to bring this action. Because the plaintiff lacked standing, the defendants asserted, the court did not have subject matter jurisdiction over the action. Accordingly, the defendants claimed, they were entitled to a dismissal of the action.”

In response, “plaintiff concede[d] that she lacked standing to bring this action in her own name. For that reason, … plaintiff filed a motion to substitute the bankruptcy trustee as the proper plaintiff pursuant to General Statutes § 52-109.” That statute provides that “[w]hen any action has been commenced in the name of the wrong person as plaintiff, the court may, if satisfied that it was so commenced through mistake, and that it is necessary for the determination of the real matter in dispute so to do, allow any other person to be substituted or added as plaintiff.”

Plaintiff urged the trial court to interpret “mistake” as used in § 52-109 the same way as another trial court did in a different case where the Supreme Court had “tacitly approved” the interpretation (DiLieto II). More specifically, plaintiff asked the trial court to find that “mistake” means “an honest conviction, entertained in good faith and not resulting from the plaintiff’s own negligence . . .” Defendants agreed with this definition but objected to the motion to substitute.

“[T]he [trial] court, … relying on the definition of ‘mistake’ advanced by the parties, concluded, inter alia, that the error was the result of the plaintiff’s own negligence and denied the plaintiff’s
motion to substitute. Consequently, the court granted the defendants’ motions to dismiss on the ground that the plaintiff lacked standing.”

Plaintiff appealed. The Appellate Court affirmed.

Plaintiff’s Main Argument on Appeal

“On appeal, the plaintiff … change[d] course and argues that the DiLieto II definition of mistake, as advanced by all parties at trial and embraced by the trial court, was incorrect…. Despite advocating for that precise definition of ‘mistake’ before the trial court, the plaintiff now argues that the court should have concluded that a mistake may result from a party’s own negligence.”

Invited Error Doctrine

“As we previously have explained, the term induced error, or invited error, has been defined as [a]n error that a party cannot complain of on appeal because the party, through conduct, encouraged or prompted the trial court to make the [alleged] erroneous ruling.”

Appellate Court Declines to Review because of the Invited Error Doctrine

“Our review of the record reveals that the plaintiff induced the trial court to apply the definition of mistake adopted by [DiLieto II]…. Specifically, in the trial court, the plaintiff and the defendants expressly cited and relied on the DiLieto II definition of ‘mistake’ in their briefs filed in conjunction with the plaintiff’s motion to substitute. Thus, the plaintiff cannot now disavow on appeal the legal argument that she advanced in the trial court. In short, she cannot now claim, as error, the court’s adoption of the legal position she urged upon the court in support of her motion to substitute.”

Appellate Court Declines to Review under the Plain Error Doctrine

“[P]laintiff request[ed], nevertheless, that [the Appellate Court] consider her claim under the plain error doctrine. ‘The plain error doctrine has been codified at Practice Book § 60-5, which provides in relevant part that [t]he court may reverse or modify the decision of the trial court if it determines . . . that the decision is . . . erroneous in law. . . . The plain error doctrine is … a doctrine that [the Appellate Court] invokes in order to rectify a trial court ruling that, although either not properly preserved or never raised at all in the trial court, nonetheless requires reversal of the trial court’s judgment, for reasons of policy. . . . The plain error doctrine is reserved for truly extraordinary situations where the existence of the error is so obvious that it affects the fairness and integrity of and public confidence in the judicial proceedings. . . . A party cannot prevail under plain error unless it has demonstrated that the failure to grant relief will result in manifest injustice.'”

“On the basis of this record, reversal for plain error is not warranted. Regardless of whether the court properly interpreted § 52-109, no manifest injustice results from our refusal to entertain an argument fashioned anew for appellate purposes, particularly where the freshly minted argument contradicts the position that the plaintiff advanced in the trial court…. In sum, the plain error doctrine is not available to the plaintiff because the record in this matter does not reveal that any error exists in the trial court’s judgment that is so obvious that it affects the fairness and integrity of and the public confidence in the judicial proceedings.”

Appellate Court Declines to Review under its Supervisory Powers

“[P]laintiff [also] urges this court, if we decline to find plain error, to utilize our supervisory powers to review her claim first raised on appeal. This claim warrants no discussion as it is facially inappropriate for the exercise of our supervisory powers…. Moreover, the plaintiff’s request that we review her claim pursuant to our supervisory powers was summarily raised for the first time in her reply brief. As a result, we decline to review her claim.”

Other Things to Note

In footnote 3, the court noted: “Because we conclude that the plaintiff’s claim is not reviewable, we need not determine whether the court’s interpretation of the term ‘mistake’ in § 52-109 was proper. We leave consideration of that issue to the day when such claim properly may come before us.”

Family Magistrate May Order Attorney’s Fees for Contempt

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In this Connecticut appeal, O’Toole v. Hernandez, the Appellate Court concluded that a family support magistrate had the authority to order defendant to pay plaintiff’s attorney’s fees in connection with defendant’s contempt of a support order for the unmarried parties’ minor child.

The state filed a paternity petition “with the Family Support Magistrate Division of the Superior Court, … naming the defendant as the father of the parties’ minor son and seeking financial support for the minor child.” The magistrate found that defendant was the child’s father and ordered him to pay child support.

“The plaintiff, with the assistance of her counsel, thereafter filed several postjudgment motions for contempt against the defendant, claiming repeated noncompliance with the court’s child support orders.” The magistrate found a child support arrearage, held the defendant in contempt, ordered that defendant be incarcerated until he paid a purge amount and ordered defendant to pay plaintiff’s attorney’s fees.

Defendant appealed to the Superior Court. “In his statement of the issues, the defendant challenged the authority of a family support magistrate to order a contemnor to pay his opponent’s legal fees.” The trial court, citing CGS § 46b-171, “concluded that the family support magistrate was within his statutory authority, in a paternity case, which this case is, to order attorney’s fees in a motion for contempt to enforce the orders of support. Therefore, the appeal by the defendant is denied.”

Defendant appealed to the Appellate Court, who affirmed.

Defendant’s Argument on Appeal

“[D]efendant claim[ed] that § 46b-171 does not provide the requisite authority for the awarding of attorney’s fees by a family support magistrate. The defendant further claims that there are no other statutes that do provide such authority. For that reason, the defendant argues that his due process rights were violated when [the magistrate] ordered him to pay the plaintiff … attorney’s fees.”

Plaintiff’s Alternate Ground for Affirmance

“[P]laintiff claim[ed], as an alternative ground for affirmance, that § 46b-231 provided [the magistrate] with the authority to order the payment of attorney’s fees when enforcing child support orders in a contempt proceeding.”

Appellate Court Concludes Family Support Magistrate May Order Attorney’s Fees for Contempt

The Appellate Court affirmed for two primary reasons. “First, … § 46b-231 (m) (7) expressly authorizes a family support magistrate to enforce child support orders entered in that court by finding the obligor in contempt, and further provides that the magistrate ‘may make such orders as are provided by law to enforce a support obligation . . . .'”  The court noted that “[o]nce a contempt has been found, [General Statutes § 52-256b(a)] establishes a trial court’s power to sanction a noncomplying party through the award of attorney’s fees.” In other words, contempt and an award of attorney’s fees are both incidents to enforcing child support orders, which the magistrate is authorized to do.

“Second, it would violate the well established public policy that requires parents to provide for the support of their minor children and prohibits discriminating against children born out of wedlock to hold that support orders for children born out of wedlock cannot be enforced with the same contempt sanctions that are available tools to enforce support orders for children born to married parents. There is no justification for making such a distinction.”

Defendant Denied Attorney’s Fees in Withdrawn Foreclosure

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In this Connecticut appeal (Connecticut Housing Finance Authority v. Alfaro), the Appellate Court denied defendant’s motion for attorney’s fees pursuant to CGS § 42-150bb after plaintiff withdrew its foreclosure action.

Defendant raised a special defense that “plaintiff lacked standing … because it was not a person or entity entitled to enforce the note and mortgage.” Plaintiff moved for summary judgment.  “In his objection, the defendant argued that the plaintiff lacked standing to bring this action because the plaintiff cannot prove that it is the holder of the note as it does not have possession of the original note; it only has possession of a copy of the original note, which does not contain any assignment to the plaintiff from [the original lender].”

Plaintiff withdrew its summary judgment motion. Then, “before any hearing on the merits was held, the plaintiff withdrew its foreclosure action as a matter of right pursuant to General Statutes § 52-80.”

Defendant moved for an award of attorney’s fees pursuant to CGS § 42-150bb. The statute provides that a contract provision requiring a consumer to pay a commercial party’s attorney’s fees is, as a matter of law, reciprocal. In other words, if the commercial party can get its attorney’s fees from the consumer, the consumer can get her attorney’s fees from the commercial party, provided the consumer “successfully prosecutes or defends an action or a counterclaim based upon the contract ….”

The trial court denied defendant’s motion. The Appellate Court affirmed.

Defendant’s Argument on Appeal

“The defendant argue[d] that ‘[i]t is only logical to surmise that the [p]laintiff realized that if the court determined that issues raised by [the defendant] went to the merits of the case, it could lose the right to foreclose on the mortgage,’ and, thus, the plaintiff withdrew its case on
the basis of the defendant’s special defense that the plaintiff lacked standing to bring the action.”

Appellate Court Concludes Defendant Failed to Establish a Successful Defense

“In raising his claim on appeal, the defendant has assumed that the plaintiff withdrew its action in response to his special defense. On the basis of this assumption, the defendant argues that he successfully defended the action and, thus, is entitled to attorney’s fees under § 42-150bb. The record, however, does not indicate the reason that the plaintiff withdrew its action; it may have been because of the defendant’s defense, but it may have been for a myriad of other reasons. There was no hearing on the merits, and the defendant offered no evidence at the hearing on the motion for attorney’s fees to prove that the plaintiff withdrew the action in response to his defense. The defendant’s argument is founded on speculation alone. This court will not speculate on what is not in the record.”

Pendente Lite Awards Cannot Distribute Assets

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The advance release opinion in this Connecticut appeal (Dumbauld v. Dumbauld) confirms that pendente lite alimony and child support cannot result in a distribution of assets.

The trial court found that defendant was drawing on an account to cover his family’s living expenses because his salary was insufficient. The court ordered him to continue paying the living expenses plus additional amounts for pendente lite alimony and child support. The court also ordered defendant to pay “all postsecondary education expenses” for the two college age children (one was attending American University, the other Barnard College).

“[T]he defendant moved for clarification of the court’s decision and moved to open and reargue the court’s decision, claiming that the orders exceeded his ability to pay.” The trial court denied both motions. Defendant appealed. The Appellate Court reversed.

Defendant’s Main Arguments on Appeal

“The defendant claim[ed] that the court improperly ordered alimony pendente lite in excess of his net income … and impermissibly required him to use assets in order to meet his obligations.”

“The defendant [also] claim[ed] that the court erred in ordering him to pay all college education costs for the two children in violation of General Statutes § 46b-56c, which limits education support orders to the amount charged by the University of Connecticut for a full-time in-state student.”

Pendente Lite Awards Cannot Distribute Assets

The Appellate Court noted that under Supreme Court precedent a trial court can order that alimony be paid out of assets where the trial court finds “that the alimony payor had not accurately represented his financial situation and made a specific finding as to either imputed income or earning capacity.”

“In the present case, the trial court made no finding that the defendant’s testimony was not credible, or that he had income or earning capacity that he had failed to disclose. It made no finding of imputed income ….” Consequently, “[t]he key issue in the present case is whether the court had the power in a pendente lite alimony order to order payment of alimony out of assets, which amounted to a distribution of marital property.”

The power of a court to transfer property from one spouse to another comes only from an enabling statute. General Statutes § 46b-81 empowers a court, “[a]t the time of entering a decree . . . dissolving a marriage . . . [to] assign to either spouse all or any part of the estate of the other.” In contrast, “[t]he pendente lite enabling statute, § 46b-83, … does not provide that the court may assign part of the estate of one party to the other, or otherwise suggest that property distribution is permitted.”

“On the basis of our comparison of §§ 46b-81 and 46b-83, we conclude that distribution of property is not authorized by § 46b-83…. If a court orders the use of assets to pay pendente lite alimony, it decides the issue of property distribution before it is statutorily authorized to do so. We conclude that the trial court’s order in the present case, given its specific factual findings and the absence of a finding of imputed income or lack of credibility, amounts to an impermissible pendente lite property distribution.”

Education Support Orders are Limited by Statute

Section 46b-56c(f) provides that any amount awarded for educational “expenses shall not be more than the amount charged by The University of Connecticut for a full-time in-state student”, unless the parties agree otherwise.

Plaintiff claimed “that the parties had entered into a stipulation that the defendant would pay the full costs, as permitted by § 46b-56c(f).” In the stipulation, entered on the record three months prior to the hearing on pendente lite alimony, defendant agreed to make “tuition payments [to the children’s respective colleges], which are past due and are needed to be made so they can complete the year ….” The parties agreed that the stipulation as to the tuition payments (and some other payments defendant agreed to make) was “without prejudice to either party in the sense that neither party will be held to have made an evidentiary or judicial admission that the sums paid or the source of the payments or the mechanism of the payment, binds either party as being an appropriate sum, or that it is based upon the underlying claims of either of the parties as to income, assets, or liabilities.”

The Appellate Court concluded that the stipulation “clearly refers to a onetime payment; the parties specifically stipulated that this payment would
not serve as an admission, and would not be binding on either party…. By ordering that the defendant pay the full education costs under these  circumstances, the trial court violated § 46b-56c, which limits an educational support order to the amount of in-state University of Connecticut
tuition.”

Other Things to Note

Judge Beach issued a concurring opinion. He thought that pendente lite alimony could require the invasion of principal if, for example, that’s what the parties had been doing to cover their expenses prior to commencement of the divorce action. That’s what the parties had done in this case. Judge Beach concurred in the remand because the trial court was going to have to revisit the pendente lite awards in any event and the trial court might have abused its discretion as to the alimony amount.