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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.

 

Foreign Judgment Appeal Stays CT Enforcement Action

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Plaintiff in this Connecticut appeal (Edizione, S.P.A. v. Dragone) obtained a money judgment against defendants from a court in Rome, Italy. Alleging that the individual defendant was a Connecticut resident and the corporate defendant was a Connecticut corporation, plaintiff commenced a collection action in Connecticut pursuant to the Uniform Enforcement of Foreign Judgments Act (UEFJA). Plaintiff also alleged in its complaint that there had been a “full and fair hearing on the merits of the claims in Italy, that the judgment remained unsatisfied, and that the judgment had not been stayed or appealed.” Defendants did not appear in the Connecticut action.

A year and a half later, the Connecticut trial court held a dormancy hearing. Plaintiff represented that defendants had appealed the Italian judgment and asked the Connecticut court to stay the Connecticut action pending the outcome of the Italian appeal. The court denied the requested stay and dismissed the action pursuant to Practice Book § 14-3 for failure to prosecute.

“[P]laintiff filed a motion for clarification or to open the judgment. In that motion the plaintiff requested that the court either clarify that its dismissal was without prejudice to the plaintiff refiling
the action after the Court of Appeals of Rome decided the appeal, or that the court restore the matter to the docket and order that it be stayed pending the outcome of the appeal in the Court of Appeals of Rome.”

The trial court denied the motion for clarification. Plaintiff appealed. The Appellate Court reversed.

Plaintiff’s Argument on Appeal

“The plaintiff argues that, during these enforcement proceedings, the defendants filed an appeal in the Court of Appeals of Rome, of the Court of Rome’s judgment, and that, pursuant to [CGS] § 52-606, [a provision of the UEFJA], this matter should be stayed pending the outcome of that appeal.”

Appellate Court Concludes that Foreign Judgment Appeal Stays Connecticut Enforcement Action

“Section 52-606 provides: ‘(a) If the judgment debtor shows the court that an appeal from the foreign judgment is pending … the court shall stay enforcement of the foreign judgment until the appeal is concluded ….'”

“Although generally, a request to stay enforcement of a foreign judgment is made by the judgment debtor, which in this case would be the nonappearing defendants, the plaintiff requested that this action to enforce the Court of Rome’s judgment be stayed pending the outcome of the defendants’ appeal of that judgment to the Court of Appeals of Rome. We can ascertain no reason why it would be improper to allow the plaintiff, a judgment creditor in this case, to make such a request.”

“The judgment is reversed and the case is remanded to the trial court with direction to restore the case to the docket and to stay the matter pending the outcome of the appeal in the Court of Appeals of Rome.”

Strict Compliance with Home Improvement Act Unnecessary

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A Connecticut appeal confirms that contractors do not have to strictly comply with the Home Improvement Act. The advance release opinion becomes official on March 1, 2016.

The homeowners in Ippolito v. Olympic Construction, LLC hired a contractor to repair some water damage to his home. They terminated the contract before the contractor completed the work. Contractor commenced an arbitration to recover its lost profit. Homeowners claimed that contractor could not enforce the contract because it did not comply with the Home Improvement Act. Specifically, homeowners asserted that the contract did not comply with the notice of the right to cancel provision of CGS § 20-429(a)(6) or specify starting and completion dates as required by § 20-429(a)(7).

Arbitrator found for contractor. Homeowners moved to vacate the award in Superior Court. Contractor moved to confirm the award. “[Homeowners] claimed that the award violated the clear public policy of this state because it contravened the previously described provisions of the [Home Improvement Act], and that the arbitrator, by not strictly enforcing those statutory provisions, had manifestly disregarded the law.” The trial court rejected homeowners claims, denied their motion to vacate the award, and granted contractor’s motion to confirm it.

Homeowners appealed. The Connecticut Appellate Court affirmed.

Homeowners’ Main Arguments on Appeal

“[Homeowners] argue[d] … that the location of the cancellation notice within the contract does not comply with § 20-429(a)(6), and that the contract does not contain a starting date and completion date, as required by § 20-429 (a)(7).”

Appellate Court Confirms Strict Compliance with Home Improvement Act is Unnecessary

Quoting Supreme Court authority, the Appellate Court noted that “‘[t]o determine whether an arbitration award must be vacated for violating public policy, we employ a two- pronged analysis. . . . First, we must determine whether the award implicates any explicit, well-defined, and dominant public policy. . . . To identify the existence of a public policy, we look to statutes, regulations, administrative decisions, and case law. . . . Second, if the decision of the arbitrator does implicate a clearly defined public policy, we then determine whether the contract, as construed by the arbitration award, violates that policy.'”

The court “first turn[ed] to the [homeowners’] claim that the contract violates public policy because it does not comply with the notice of cancellation requirements of § 20-429(a)(6), which requires that a home improvement contract include notice of the homeowner’s cancellation rights in accordance with the provisions of the [Home Solicitation Sales Act. The [homeowners] do not dispute that the parties’ contract contains a notice of their cancellation rights, nor do they argue that the language or typeface of that cancellation notice is in any way deficient. Instead, they argue that the location of the notice within the contract documents does not comply with General Statutes § 42- 135a (1) … of the [Home Solicitation Sales Act].”

“Section 42-135a (1) of the [Home Solicitation Sales Act] requires, inter alia, that the seller include a cancellation notice ‘in immediate proximity to the space reserved in the contract for the signature of the buyer . . . .'” The contract in this case incorporated by reference another document [AIA document A201–2007, General Conditions of the Contract for Construction] directly above one of the homeowner’s signature lines. That other document consisted of thirty-nine pages. The notice of cancellation provision was on pages thirty-eight to thirty-nine.

“Although our Supreme Court has recognized that compliance with § 20-429 (a) is mandatory, it has not required perfect compliance.” “The arbitrator in this case found that the cancellation notice complied in substance with the requirements of the [Home Improvement Act], because, even though it was set forth on pages thirty-eight and thirty-nine of a separate document that had been incorporated into the contract by reference, the incorporated document itself was referenced in close proximity to the signature line on the contract. Here, then, because the [homeowners] have not demonstrated that the cancellation notice was missing from the contract, or that the language or typeface or any other aspect of the cancellation notice was deficient in such a way as to deprive them of notice of their cancellation rights under the [Home Improvement Act], we cannot conclude that enforcement of the contract against the homeowners violated an explicit, well-defined and dominant public policy of this state.”

The Court “turn[ed] next to the [homeowners’] claim regarding § 20-429 (a) (7), which provides that: ‘No home improvement contract shall be valid or enforceable against an owner unless it . . . (7) contains a starting date and completion date . . . . ‘ The plaintiffs claim that the contract does not comply with that provision because it does not contain specific calendar dates for starting and completing work under the contract.”

The arbitrator found that the contract defined the starting and completion dates by references to events rather than actual dates and that this was sufficient. “In this matter, the start dates and the completion date can be readily adduced by looking at the entire contract . . . .” “[T]he [trial] court expressly noted that the plaintiffs could not provide any case law that held that ‘the starting date and/or completion date need to be fixed calendar dates rather than dates to be determined upon the occurrence of certain events. (E.g., the completion of plans; issuance of a building permit; notification of closing on construction financing.)'”

The Appellate Court concluded that, for these reasons, “the [homeowners’ ] claim on appeal fails, for even if strict enforcement of the starting date and completion date requirement of the statute were an explicit, well-defined, and dominant public policy of this state, the contract here at issue does not violate that requirement or the public policy it is designed to promote.”

Other Things to Note

Homeowners also claimed on appeal that “the arbitrator’s enforcement of a contract that is noncompliant with § 20-429 (a) (6) and (7) of the [Home Improvement Act] demonstrates a manifest disregard of the law, and thus that the award should be set aside pursuant to § 52-418 (a) (4).” The Appellate Court rejected this argument because the deviation from the Home Improvement Act in respect of the notice of cancellation was “minor and technical” and the contract did provide start and completion dates.

Homeowners also claimed on appeal that contractor failed to comply with the Home Improvement Act, via § 42-135a(2) of the Home Solicitation Sales Act, because the contractor did not attach two blank notices of cancellation to the contract. “Although the [homeowners] argued in the trial court that the contract violated § 42-135a (2), the trial court’s decision did not reference that claim and … [t]he [homeowners] never filed a request for articulation to receive a ruling on their claim under § 42-135a (2). Moreover, the [homeowners] have failed to adequately brief their claim as to § 42-135a (2) by failing to set forth how the contract here at issue violates that subdivision. Thus, we decline to review the plaintiffs’ claim to the extent that it asserts a violation of that subdivision.”

The court footnoted its “decline to review” discussion, as follows: “We are aware that Practice Book § 61-10 was recently amended to include subsection (b), which provides in relevant part that ‘[t]he failure of any party on appeal to seek articulation pursuant to Section 66-5 shall not be the sole ground upon which the court declines to review any issue or claim on appeal. . . . ‘ The commentary for § 61-10 provides, however, that ‘[t]he adoption of subsection (b) is not intended to preclude the court from declining to review an issue where the record is inadequate for reasons other than solely the failure to seek an articulation . . . .'”

The lesson is that, if you don’t seek articulation, you better brief the tar out of the issue.

Foreclosure Property Valuation Challenge Fails

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The appeal in Salisbury Bank & Trust Co. v. Christophersen involved two adjacent undeveloped parcels of waterfront property in Westport. Defendant borrowed money from plaintiff against the properties, planning to repay the debt when he sold them. Defendant defaulted and plaintiff started a foreclosure action.

The Appellate Court provided a detailed factual background but ultimately there isn’t really much to this advance release opinion.  One of the main issues was whether to value the properties as one two-acre parcel or two one-acre parcels. The record contained a lot of competing evidence. The court chose to treat the properties as one two-acre parcel for three reasons: (i) one of the parcels arguably was subject to a restrictive covenant which “represented a significant cloud on title that adversely affected the ability of the parcel to be marketed as a single building lot”; (ii) “plaintiff’s appraiser credibly testified that the fair market value should be determined as one two-acre lot on the basis of the information he had obtained about the … parcel and the restrictive covenant”; and (iii) “defendant often marketed the property as a single building lot.”

The trial court found that the debt exceeded the value of the property and entered a judgment of strict foreclosure. Defendant appealed. The Appellate Court affirmed.

Defendant’s Argument on Appeal

“On appeal, the defendant claim[ed] that the court abused its discretion by rendering a judgment of strict foreclosure rather than a foreclosure by sale ‘because there is monumental uncertainty as to the value of the property and as a result there is also monumental uncertainty as to whether the debt owed to [the] plaintiff is greater than the value of the property.’ The defendant argue[d], on the basis of his appraiser’s opinion, that the … parcels should be valued as two separate building lots, which would result in a value in excess of the debt owed the plaintiff.”

Appellate Court Concludes that Superior Court Properly Valued the Properties as One Parcel

“On the basis of our review of the record and the [trial] court’s detailed and well reasoned memorandum of decision, we conclude that it did not abuse its discretion by ordering a judgment of strict foreclosure.”

 

 

Appellate Stay Exemption Bites Foreclosure Defendant

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In an advance release opinion issued February 29, 2016, the Connecticut Appellate Court concluded that the new anti perpetual motion machine rule concerning appellate stays in foreclosure cases required it to dismiss the borrower’s appeal.

The first law day in Citigroup Global Markets Realty Corporation v. Christiansen was April 7, 2009. “The judgment was opened and the law day extended five times over the six years that followed the initial judgment of strict foreclosure as a consequence of five bankruptcy petitions filed by [one of] the [mortgagors].” Plaintiff obtained relief from stay in the final bankruptcy. On plaintiff’s motion, the trial court reset the law date for August 25, 2015.

Defendant filed three consecutive motions to open the judgment and extend the law date. The trial court denied all three motions. But, as to the first two, the court sua sponte opened the judgment and extended the law date. The court didn’t do that in respect of the third motion and left the law date at December 1, 2015.

Defendant filed his appeal on November 30, 2015. The December 1 law date came and went without redemption. On December 9, defendant moved the Appellate Court to dismiss the appeal as moot. Defendant did not respond to the motion.

Plaintiff’s Main Argument on its Motion to Dismiss the Appeal

“The plaintiff argue[d] that the court’s denial of the defendant’s third motion to open did not stay the running of the law day, that title to the property accordingly has vested in the plaintiff, and that there is no relief that this court can afford the defendant.”

Appellate Court Concludes Anti Perpetual Motion Machine Rules Rendered Appeal Moot

Practice Book § 61-11(a) is the source of the automatic appellate stay. The section provides that “proceedings to enforce or carry out the judgment or order shall be automatically stayed until the time to file an appeal has expired. If an appeal is filed, such proceedings shall be stayed until the final determination of the cause.” Where the judgment is a judgment of strict foreclosure, this Practice Book rule means that the law date cannot be set sooner than the time to file an appeal — twenty days from entry — because a sooner law date would deprive defendant of his right to appeal.

Defendant also has a right to appeal, within twenty days of entry, a denial of a motion to open the judgment and extend the law date. So, even if the court was denying a mortgagor’s motion to open and extend, it had to sua sponte extend the law date at least twenty-one days so as to not deprive the borrower of the right to appeal the court’s denial of his motion to open and extend. In other words, defendant was more or less guaranteed an unlimited number of twenty-one day extensions of the law date. In First Connecticut Capital, LLC v. Homes of Westport, LLC, 112 Conn. App. 750, 762, 966 A.2d 239 (2009), the Appellate Court described this process as “almost the perfect perpetual motion machine.”

To address this problem, Pratice Book § 61-11 was amended effective October 1, 2013. “Practice Book § 61-11(g) applies in this appeal and provides in relevant part: ‘In any action for foreclosure in which the owner of the equity has filed, and the court has denied, at least two prior motions to open or other similar motion, no automatic stay shall arise upon the court’s denial of any subsequent contested motion by that party, unless the party certifies under oath, in an affidavit accompanying the motion, that the motion was filed for good cause arising after the court’s ruling on the party’s most recent motion. . . .’’’

“The defendant’s third motion to open, filed on November 16, 2015, did not have an accompanying affidavit, and, thus, the motion did not meet the requirement contained in § 61-11 (g) to set forth a good cause that arose after the court’s ruling on the defendant’s most recent motion. As was the case with the prior two motions, the defendant’s third motion to open sought an extension of the law day as [defendants] pursued alternatives to foreclosure. Under § 61-11 (g), the denial of that motion to open on November 30, 2015, did not create an automatic appellate stay. Because the defendant failed to exercise his right of redemption on his law day, title to the property vested in the plaintiff after the close of business on December 1, 2015.”

Snow Plowing, Vexatious Litigation and Probable Cause

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The Connecticut appeal in Lichaj v. Sconyers involved snow plowing, vexatious litigation and probable cause. The advance release opinion, which becomes official on March 1, 2016, explains that the Welles and the Lichajes had a common driveway. The deeds included the following provision addressing maintenance of the driveway: “Responsibility for payment for said maintenance [specifically including snow plowing] shall be shared equally by the owners of Lot 1 and Lot 2.”

The Underlying Action

The court didn’t say so, but it seems to me that the genesis of the dispute was that Mr. Lichaj, understandably, didn’t want to pay for something he could very well do himself. He got in the habit of plowing the driveway with his tractor. The Welles didn’t like that and repeatedly asked him to stop. Mr. Lichaj continued, even though for a time Mrs. Welles’ father plowed and, after the father’s truck failed, the Welles hired a professional to plow.

Mr. and Mrs. Welles hired Sconyers and his firm to commence an action against Mr. and Mrs. Lichaj seeking to enjoin Mr. Lichaj from plowing the driveway. The trial court denied the Lichajes summary judgment motion. On the succeeding trial, the court granted an injunction in the Welles’ favor, enjoining Mr. Lichaj from plowing. The trial court found in Mrs. Lichaj’s favor as to the injunction.

The Lichajes appealed. The Appellate Court reversed and remanded.

The Vexatious Litigation Action

After the remand, the Lichajes commenced a vexatious litigation action against the Welles and Sconyers and his firm. “The Lichajes alleged, inter alia, that the underlying injunctive action was brought and maintained without probable cause.” Sconyers and his firm moved for summary judgment. “[They] maintained that there was probable cause because the Welleses had prevailed at trial in the underlying action as against [Mr.] Lichaj, their claim against [Mrs.] Lichaj survived summary judgment, and the facts known to Sconyers were sufficient for him to believe that there was probable cause to commence the injunctive action against both [Mr.] Lichaj and [Mrs.] Lichaj.”

The trial court granted summary judgment against Mr. and Mrs. Lichaj. As to Mr. Lichaj, “[t]he court reasoned that, as a matter of law, the finding of the trial court in the underlying action in favor of the Welleses, who were represented by Sconyers, as to their claim against [Mr.] Lichaj was conclusive evidence of probable cause as to him, and the reversal of that claim on appeal was not inconsistent with the existence of probable cause.”

As to Mrs. Lichaj, the trial court concluded “that the denial of the motion for summary judgment in the prior case precluded a finding that there had not been probable cause to pursue that action.” The court noted that “some jurisdictions, such as California, Georgia, Pennsylvania and the United States Court of Appeals for the Eighth Circuit, conclude that a denial of a motion for summary judgment creates a presumption of probable cause sufficient by itself to defeat a subsequent claim for vexatious litigation; others, such as Kentucky, Arizona and Vermont, conclude that a denial of a motion for summary judgment is but one factor to consider in the analysis of probable cause…. [T]here was no controlling Connecticut precedent on the issue and [the trial court] decided to follow the line of cases that hold that a previous denial of a motion for summary judgment is conclusive evidence of the existence of probable cause to bring the prior action.”

The Lichajes appealed. The Appellate Court affirmed.

Plaintiffs’ Main Argument on Appeal

“The Lichajes claim that the court erred when it granted the motion for summary judgment against [Mrs.] Lichaj. They contend that this court should hold that a prior denial of a motion for summary judgment is but one factor to consider in the analysis of probable cause.”

Defendants’ Alternative Ground for Affirmance

As an alternative ground for affirmance, Sconyers and his firm argued “that, as a matter of law, there was probable cause to include [Mrs.] Lichaj as a defendant in the prior action, regardless of the effect of the prior denial of the motion for summary judgment.”

Appellate Court Concludes Sconyers had Probably Cause Independent of Summary Judgment Denial

The Appellate Court agreed with Sconyers’ alternate ground for affirmance. The court noted that want of probable cause is an element of common law and statutory vexatious litigation. Sconyers had probable cause to name Mrs. Lichaj as a defendant in the injunction action, even though she wasn’t the one doing the plowing, because she co-owned the property with Mr. Lichaj. The injunction action involved the construction of the maintenance provision in schedule A of the deed. The construction of that provision could have affected Mrs. Lichaj’s rights as a co-owner of the property. She was a necessary, if not indispensable party.

Other Things to Note

As mentioned, the trial court noted that out-of-state decisions reflected two lines of thinking: (i) denial of plaintiff’s summary judgment motion in the underlying action is presumptive probable cause and conclusively defeats a later claim of vexatious litigation; and (ii) denial of plaintiff’s summary judgment motion is but one factor of the probable cause analysis.

In footnote 5, the Appellate Court decided not to deal with this split of authority : “We express no opinion as to whether a denial of a motion for summary judgment, without more, is sufficient to negate the lack of probable cause for the purpose of a subsequent action in vexatious litigation.”