Opinion
FSTCV196042584S
01-10-2020
Rosalie Calve et al. v. Mark P. Santagata et al.
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Genuario, Robert L., J.
MEMORANDUM OF DECISION RE DEFENDANT’S MOTION TO STRIKE (#104) AND PLAINTIFF’S OBJECTION THERETO (#104)
GENUARIO, J.
I. BACKGROUND
Two of the plaintiffs in this case, Rosalie Calve (Rosalie) and Catherine Calve (Catherine) are the daughters and coexecutors of the estate of the late Elizabeth Calve who died on October 17, 2008. (The decedent.) According to the allegations of the complaint the decedent was the owner of six parcels of real property as well as a limited liability company which owned a seventh parcel of real property all of which had substantial value. Rosalie and Catherine, as coexecutors, retained the defendants who are a firm of attorneys and an individual attorney who was a principal in that firm to represent them in their role as coexecutors. The third plaintiff Diane Calve (Diane) alleges that she is a third-party beneficiary of that retainer agreement.
The essence of the claimed wrongdoings of the defendants is that for estate tax purposes "the value of the gross estate is usually determined on the date of death. However, in situations where the estate depreciates immediately after the decedent’s death, the executor can elect to value the gross estate at an alternative date ... six months after the date of death of the decedent ..." The plaintiffs alleged that the defendants did not advise them of their option to have the value of the real property determined at the alternative date which would have resulted in a substantially lower value of the gross estate and therefore would have resulted in a substantially lower net estate tax. The plaintiffs allege that the defendants did not advise Rosalie and Catherine of the alternative valuation method, did not explore using the alternative valuation. method and did not advise Rosalie and Catherine of the desirability of having appraisals performed at the six-month alternative date. They further allege that the defendants did not advise the coexecutors that the election of the valuation method was irrevocable.
The plaintiffs seek recovery in twelve counts. The first and second counts are brought by Rosalie and Catherine and sound in legal malpractice; similarly, the second count is also brought by Rosalie and Catherine and sounds in legal malpractice under the theory of respondeat superior. The fifth and sixth count allege intentional misrepresentation and negligent misrepresentation by the defendants to the plaintiffs Rosalie and Catherine. The first, second, fifth and sixth counts are not the subject of this motion to strike.
The defendants seek to strike the third and ninth count on the grounds that they attempt to state a claim in favor of Rosalie and Catherine in breach of contract and are legally insufficient because they do not allege that the defendants breached an agreement to obtain a specific or guaranteed result or that they otherwise breached a specific contractual provision. The defendants move to strike the fourth and tenth counts which are labeled "fraudulent concealment" because fraudulent concealment is not an independent cause of action. The defendants further move to strike counts seven through twelve all of which are asserted, not on behalf of Rosalie or Catherine but, on behalf of Diane on the basis that she was not a client of the defendants, and therefore they did not owe or breach a duty to her.
II. THE MOTION TO STRIKE
"The purpose of a motion to strike is to contest ... the legal sufficiency of the allegations of any complaint ... to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498 (2003). "It is fundamental that in determining the sufficiency of a complaint challenged by a defendant’s motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318 (2006). "[F]or the purpose of a motion to strike, the moving party admits all facts well-pleaded." RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 383 n.2, (1994). A motion to strike admits all facts well-pleaded; it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." Faulkner v. United Technologies Corp., 240 Conn. 576, 588 (1997). (Emphasis in original; internal quotation marks omitted.) In ruling on a motion to strike the court must "construe the complaint in the manner most favorable to sustaining its legal sufficiency." Sullivan v. Lake Compounce Theme Park, Inc., 277 Conn. 113, 117 (2006). (Internal quotation marks omitted.)
III. DISCUSSION
A. The Breach of Contract Counts, Counts Three and Nine
In the third count the plaintiffs, Rosalie and Catherine, allege that they had a contract with the defendant law firm and that "implicit in the contract between the parties is that the defendant would seek to minimize the tax obligations of the estate and its beneficiaries." The ninth count alleges a similar substantive claim but is brought on behalf of Diane as a "third party beneficiary of this contract."
In the third and ninth count the plaintiffs incorporate all of the allegations of the first count sounding in legal malpractice and adds that the legal relationship between the parties constituted a contract and that the plaintiff breached the terms of the contract.
"[I]t is well established that claims may be brought against attorneys sounding in contract or in tort, and that some complaints state a cause of action in both contract and tort. [O]ne cannot bring an action [under both theories however] merely by couching a claim that one has breached a standard of care in the language of the contract ... [T]ort claims cloaked in contractual language are, as a matter of law, not breach of contract claims." Myers v. Livingston, Adler, Pulda, Meiklejohn & Kelly, P.C., 311 Conn. 282, 290-91. "Whether a plaintiff’s cause of action is one for malpractice [or contract] depends upon the definition of [those terms] and the allegations of the complaint." Id. at 291. The Connecticut Supreme Court has succinctly distinguished the two types of claims as follows. "An action in contract is for breach of a duty arising out of a contract ... [whereas] an action in tort is for breach of duty imposed by law," Gazo v. Stamford, 255 Conn. 245, 263 (2001). In Myers, the Supreme Court upheld the granting of a motion for summary judgment in favor of the defendant attorneys on the contract claim noting that the allegations therein did not refer to violations of a specific contractual provision. The contract for legal services entered into by the parties in Myers required the attorneys to represent the plaintiff therein in connection with her claims.
In reaching a similar result our Appellate Court in the case Weiner v. Clinton, 106 Conn.App. 379 (2008) noted that the purported contractual count of a complaint that also contained a legal malpractice count "contain[ed] no allegations that refer to specific actions required by the defendant ..." Id. at 385. See also Caffery v. Stillman, 79 Conn.App. 192 (2003).
In the case at bar when the plaintiffs allege that "implicit in the contract" was the defendants’ duty to seek to minimize the tax obligations of the estate and its beneficiaries, what they are actually saying is that the contract does not expressly require such. Even the allegation of what is "implicit" does allege that the defendants were contractually required to perform a specific function or obtain a specific result. There is no express or specific contractual provision that the plaintiffs allege the defendants breached. The "implicit" provision that they allege requires the defendants to use reasonable care in minimizing the estate taxes incurred by the plaintiffs in their capacity as executors. Thus this, in turn, brings us back to the succinct statement in Gazo, that the duty for which the defendant seeks to hold the plaintiff liable is one that arises out of law, to wit, the duty to use care required of an attorney representing a client, rather than a duty that arises out of a specific contractual provisions. Put another way, the retainer agreement may establish the attorney-client relationship; the law establishes the duty required of the attorney once the relationship established.
Accordingly, the court concludes that the alleged wrongdoings are breaches of duty that arise out of law and not of contractual provisions and the motion to strike the third and ninth count must be granted. The Ninth Count brought by Diane must be stricken for additional reasons which will be discussed subsequently.
B. The Fraudulent Concealment Counts, Counts Four and Ten
The plaintiffs set forth in the fourth count a claim entitled "fraudulent concealment" on behalf of Rosalie and Catherine and in the tenth count a claim of fraudulent concealment brought on behalf of Diane. The defendants move to strike the fourth and tenth count on the grounds that there is no cause of action recognized in Connecticut law of fraudulent concealment. The court agrees; it is apparent that the plaintiffs anticipate that the defendants will assert the special defense of the statute of limitations since the alleged wrongdoing occurred in 2007 or 2008 but this action was not brought until 2019.
However, the doctrine of fraudulent concealment, while acting to toll a statute of limitations, is not an independent cause of action in and of itself. Indeed, what is it that the defendants are alleged to have fraudulently concealed? They are alleged to have fraudulently concealed the cause of action and their own alleged wrongful conduct.
The doctrine of fraudulent concealment acts to toll an applicable statute of limitations when the existence of a cause of action has been fraudulently concealed by a defendant ... Under General Statutes [§ 52-595], a fraudulently concealed cause of action accrues when a plaintiff first discovers its existence. The statute is pleaded in avoidance of a special defense that an action is time barred ... The doctrine of fraudulent concealment does not give rise to an independent cause of action.Pirreca v. Koltchine, 54 Conn.L.Rptr. 307 (Lager, J. 2012), 2012 WL 3264026.
Accordingly, the court must strike counts four and ten of the complaint. The Tenth Count brought on behalf of Diane must be stricken for additional reasons which will be discussed in the next section.
C. The Third-Party Beneficiary Counts, Counts Seven through Twelve
In counts seven through twelve Diane asserts claims sounding in legal malpractice, respondeat superior, breach of contract, fraudulent concealment, intentional misrepresentation and negligent misrepresentation. All of these counts suffer from the same failure to allege facts which would give rise to a duty arising either under contract or the law to Diane. There is no allegation that there was an attorney/client relationship between the defendants and Diane and there is no allegation that there was a contractual relationship between the defendants and Diane. In other words there are no allegations which would give rise to a claim that Diane was the client of the defendants.
"As a general rule, attorneys are not liable to persons other than their clients for the negligent rendering of services. A number of jurisdictions have recognized an exception to this general rule when the plaintiff can demonstrate that he or she was the intended or foreseeable beneficiary of the attorney’s services." Krawczyk v. Stingle, 208 Conn. 239, 244 (1988). In Connecticut this exception has been narrowly construed and effectively has been limited to claims where an attorney has alleged to have erred in the preparation of a will, in which case he may be held liable to the intended beneficiary under the will. See e.g. Stowe v. Smith, 184 Conn. 195 (1981).
"Determining when attorneys should be held liable to parties with whom they are not in privity is a question of public policy. In addressing this issue, the courts have looked principally to whether the primary or direct purpose of the transaction was to benefit the third party. Additional factors considered have included the foreseeability of harm, proximity of the injury to the conduct complained of, the policy of preventing future harm and the burden on the legal profession that will result in the imposition of liability." Krawczyk at 245-46 (Internal citations omitted.) "Courts have refrained from imposing liability when such liability had the potential of interfering with the ethical obligations owed by an attorney to his or her client." Id. In Krawczyk, the Connecticut Supreme Court found error and directed judgment in favor of the defendant attorney in a case where a jury had previously found an attorney negligent for failing to complete a trust document that would have benefitted the plaintiff. The Krawczyk court discussed in detail the difficulties and conflicts that would be placed on an attorney in the event that the attorney may be held liable to persons who are not his client. "A central dimension of the attorney/client relationship is the attorney’s duty of entire devotion to the interest of the client." Krawczyk at 246 (internal citations and quotations omitted). The court demonstrated that an attorney who has to worry about liability to a third party may be put in a position where the duty he has to his client and the devotion to that duty is compromised.
Similarly in Litvack v. Artusio, 137 Conn.App. 397 (2012), the Connecticut Appellate Court affirmed the decision of the trial court to dismiss the complaint of an individual who claimed, inter alia, that she was third-party beneficiary of the agreement for legal services between the defendant and her deceased father.
Essentially Diane claims that she was a beneficiary of the estate of her deceased mother and harmed by the failure to minimize the tax consequences to the estate. One of the allegations of the complaint provides emphasis to the potential and problematic position that an attorney might find him or herself in with the expansion of those to whom the legal duty exists. In paragraph 7 of the complaint the plaintiffs allege that the decedent had eight children only two of whom are the coexecutors of the estate. Imagine the potential conflicts that might arise if an attorney owed a duty to all of the potential beneficiaries of an estate (who may not agree on multiple issues) and had to be concerned about liability to the beneficiaries at the same time the attorney is charged with an obligation of devotion to the client.
Moreover, there is no countervailing public policy that would justify an expansion of the narrow exception in the case at bar. If the plaintiffs Rosalie and Catherine can prevail in their claim of legal malpractice in their capacity as coexecutors then the estate will be made whole for any damages suffered by that alleged legal malpractice. Diane, in turn, as a beneficiary of the estate will also be made whole as any damages collected are disposed of through the orderly estate process.
Connecticut has recognized a narrow exception to the general rule that an attorney is liable only to his client for failure to perform his services consistent with the standard required by law or contract. The court sees no reason to expand that exception in the case at bar. Accordingly counts seven through twelve must also be stricken.
IV. CONCLUSION
For all these reasons the court grants the defendants’ motion to strike the third, fourth, seventh, eighth, ninth, tenth, eleventh and twelfth counts of the complaint and overrules the plaintiffs’ objection to the same.