Opinion
CV156058332S
02-09-2018
Robert FUGEDI v. Steve YOUNG et al.
UNPUBLISHED OPINION
OPINION
Wilson, J.
FACTS
The plaintiff, Robert Fugedi, commenced the present action against defendants Steve Young, Brenda Young, Amanda Young, Connecticut Reconstruction Services, LLC (CRS), and the James D. Young Company, Inc. (JDY), on November 5, 2015. In his six-count revised complaint (# 113), the plaintiff asserts two counts for breach of contract as well as one claim each for conversion, breach of fiduciary duty, violation of the Connecticut Unfair Trade Practices Act (CUTPA), and defamation. The plaintiff alleges that his claims arise from his employment with CRS; the plaintiff had owned 5 percent of CRS, and the individual defendants- Steve, Brenda, and Amanda Young- are alleged to be the sole members of JDY, which had owned 95 percent of CRS. The plaintiff alleges that his employment was terminated, and CRS was sold, in February of 2013.
The defendants filed their answer and counterclaim (# 123) on October 26, 2016, and an amended answer and counterclaim (# 126) on November 30, 2016. The defendants’ claims mirror the plaintiff’s, except with respect to the plaintiff’s claim for defamation. Accordingly, counts one and two of the counterclaim assert claims for breach of contract, and counts three, four and five, state claims for conversion, breach of fiduciary duty, and CUTPA, respectively. The plaintiff filed an answer and special defenses (# 131) in response to the defendants’ counterclaim on February 14, 2017. By way of special defenses, the plaintiff argued, inter alia, that the third, fourth, and fifth counts of the counterclaim are barred by the applicable statutes of limitations.
On March 31, 2017, the plaintiff filed a motion for summary judgment (# 133) on the ground that counts three, four, and five are time-barred. The motion was accompanied by a memorandum of law (# 134) filed on the same day. The defendants filed a memorandum of law in opposition (# 146) on November 2, 2017. The parties were heard at short calendar on November 6, 2017, at which time the court granted permission to the plaintiff to file a supplemental exhibit in support of his motion for summary judgment. The plaintiff filed the supplemental exhibit (# 148) that same day. Following argument at short calendar, the court reserved decision on the motion.
DISCUSSION
" [A]ny party may move for summary judgment upon any counterclaim or cross complaint as if it were an independent action ..." Practice Book § 17-44. " Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ... [S]ince litigants ordinarily have a constitutional right to have issues of fact decided by a jury ... the moving party for summary judgment is held to a strict standard ... of demonstrating his entitlement to summary judgment." (Citation omitted; footnote omitted; internal quotation marks omitted.) Grenier v. Commissioner of Transportation, 306 Conn. 523, 534-35, 51 A.3d 367 (2012). " [I]n the context of a motion for summary judgment based on a statute of limitations special defense, [the moving party] typically meets its initial burden of showing the absence of a genuine issue of material fact by demonstrating that the action had commenced outside of the statutory limitation period." (Internal quotation marks omitted.) Cefaratti v. Aranow, 321 Conn. 637, 645, 138 A.3d 837 (2016).
The plaintiff argues that counts three, four, and five are barred by the applicable statutes of limitations, and therefore, he is entitled to judgment as a matter of law as to those claims. The plaintiff contends that the defendants had three years to bring their claims for conversion, breach of fiduciary duty, and CUTPA. The plaintiff then argues that because the defendants’ counterclaims arise from his employment with CRS, time began to run in February of 2013, when the plaintiff’s employment was terminated. Moreover, the plaintiff notes that the defendants terminated his employment and sold CRS in February of 2013, and therefore, the continuing course of conduct doctrine does not toll the applicable statutes of limitations.
In response, the defendants argue that the continuing course of conduct doctrine does toll the applicable statutes of limitations, and in the alternative, that the court should not bar the present case due to policy considerations. First, the defendants argue that the plaintiff entered into a competing business venture shortly after his termination, in violation of a restrictive covenant in the employment agreement between the plaintiff and CRS. The defendants contend that this new business constitutes a continuing violation of the plaintiff’s obligations to the defendants. The defendants further note that the continuous nature underlying their counterclaims is implied, and that not only should the plaintiff have filed a request to revise if the pleadings were unclear, but also that the court must construe the defendants’ pleadings broadly and realistically. In the alternative, the defendants argue that the policies underlying statutes of limitations are not at issue in the present case, and also that requiring the defendants to plead their counterclaims prior to the filing of their answer constitutes a waste of resources. The defendants further maintain that because certain statutory language found in a comparable statute of limitations would permit the defendants’ filing, the court should permit the counterclaims in the present case to proceed.
The first matter for the court to determine is whether the plaintiff has demonstrated that the defendants’ action commenced outside of the statutory limitations period. See Cefaratti v. Aranow, supra, 321 Conn. 645. " For the purpose of the statute of limitations, an action upon the subject of a counterclaim is deemed to have begun when it is filed or, where permission to do so is necessary, when a proper motion for that purpose is served on the opposing party." (Internal quotation marks omitted.) Howard v. Robertson, 27 Conn.App. 621, 625 n.4, 608 A.2d 711 (1992); see also Valentine v. LaBow, 95 Conn.App. 436, 447 n.10, 897 A.2d 624 (" In order for a defendant to commence an action against a plaintiff, and therefore satisfy a statute of limitations, the proper procedure is to bring a counterclaim. See Practice Book § 10-10." ), cert. denied, 280 Conn. 933, 909 A.2d 963 (2006).
General Statutes § 52-577 provides: " No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of." " The relevant date of the act or omission complained of, as that phrase is used in § 52-577, is the date when the negligent conduct of the defendant occurs and not the date when the plaintiffs first sustain damage. When conducting an analysis under § 52-577, the only facts material to the trial court’s decision on a motion for summary judgment are the date of the wrongful conduct alleged in the complaint and the date the action was filed." (Internal quotation marks omitted.) Piteo v. Dottier, 112 Conn.App. 441, 445-46, 963 A.2d 83 (2009).
Additionally, " CUTPA provides a statutory cause of action for any person who has suffered an ascertainable loss of money or property as a result of an unfair trade practice ... In General Statutes § 42-110g(f), the legislature provided such cause of action with a specific statute of limitations and provided that an action alleging unfair trade practices under CUTPA ‘may not be brought more than three years after the occurrence of a violation ...’ General Statutes § 42-110g(f). Pursuant to the clear and unambiguous language of § 42-110g(f), no cause of action can be maintained under CUTPA if brought more than three years after the unfair practice occurs." (Citations omitted.) Bellemare v. Wachovia Mortgage Corp., 94 Conn.App. 593, 606 n.6, 894 A.2d 335 (2006), aff’d, 284 Conn. 193, 931 A.2d 916 (2007).
In the present case, it is undisputed that the plaintiff’s employment with CRS ended in February of 2013 and that the defendants filed their original counterclaim against the plaintiff in October of 2016, more than three years later. Pursuant to the statutes of limitations applicable to the causes of action set forth in the defendants’ amended counterclaim, § § 52-577 and 42-110g(f), counts three, four and five of the defendants’ amended counterclaim are untimely. Indeed, the defendants do not appear to argue to the contrary; rather, the defendants contend that the applicable statutes of limitations are tolled. Accordingly, the plaintiff has demonstrated that there is no genuine issue of material fact concerning the timeliness of counts three, four, and five of the defendants’ counterclaim, and the burden shifts to the defendants. See Cefaratti v. Aranow, supra, 321 Conn. 645-46 (" When the [party opposing summary judgment] asserts that the limitations period has been tolled by an equitable exception to the statute of limitations, the burden normally shifts to the [party opposing the motion] to establish a disputed issue of material fact in avoidance of the statute" ).
" In certain circumstances ... we have recognized the applicability of the continuing course of conduct doctrine to toll a statute of limitations. Tolling does not enlarge the period in which to sue that is imposed by a statute of limitations, but it operates to suspend or interrupt its running while certain activity takes place ... Consistent with that notion, [w]hen the wrong sued upon consists of a continuing course of conduct, the statute does not begin to run until that course of conduct is completed." (Internal quotation marks omitted.) Vaccaro v. Shell Beach Condominium, Inc., 169 Conn.App. 21, 44, 148 A.3d 1123 (2016), cert. denied, 324 Conn. 917, 154 A.3d 1008 (2017). In determining whether an untimely counterclaim is spared by the continuing course of conduct doctrine at summary judgment, this court " must determine if there is a genuine issue of material fact with respect to whether the [plaintiff]: (1) committed an initial wrong upon the [defendants]; (2) owed a continuing duty to the [defendants] that was related to the alleged original wrong; and (3) continually breached that duty." Id., 45.
The court addressed the standard for summary judgment when a party asserts the applicability of the continuing course of conduct doctrine in LaBow v. Rubin, 95 Conn.App. 454, 897 A.2d 136, cert. denied, 280 Conn. 933, 909 A.2d 960 (2006). The court in LaBow noted the following: " In [Collum v. Chapin, 40 Conn.App. 449, 671 A.2d 1329 (1996) ], as in the present case, the plaintiff argued that the continuous course of conduct doctrine tolled the limitations period contained in § 52-577 and attempted to rely on an affidavit, filed as part of his opposition to the defendants’ motion for summary judgment, which stated that the defendants continued to engage in tortious conduct. There, we concluded that summary judgment is proper where the affidavits do not set forth circumstances which would serve to avoid or impede the normal application of the particular limitations period ... Affidavits are not pleadings, however, and a plaintiff cannot, under the guise of fortifying the complaint, present an entirely new cause of action or expand the scope of his cause of action by means of a counter-affidavit ... The issue must be one which the party opposing the motion is entitled to litigate under his pleadings and the mere existence of a factual dispute apart from the pleadings is not enough to preclude summary judgment." (Internal quotation marks omitted.) LaBow v. Rubin, supra, 95 Conn.App. 471; see also Bellemare v. Wachovia Mortgage Corp., supra, 94 Conn.App. 607 (court notes it need not reach merits of argument that continuing course of conduct tolled statute of limitations for CUTPA claim because party " asserted it for the first time in a pleading filed in opposition to the ... motion for summary judgment ..." ).
In the present case, the defendants offer Brenda Young’s affidavit in support of their argument that the statutes of limitations are tolled due to the continuing course of conduct doctrine. In her affidavit, Brenda Young states that after the plaintiff’s employment with CRS ended, the plaintiff entered into a competing business in violation of the restrictive covenant of the employment agreement; she further states that the plaintiff’s continuing involvement with this new business " constitutes a continuing violation of the obligations of [the plaintiff], and [is] the basis for a continuing conversion, breach of fiduciary obligations and continuing violations of [CUTPA] ..." The defendants’ pleadings, however, do not contain allegations concerning either the restrictive covenant or the plaintiff’s post-CRS business venture. Rather, in their amended counterclaim, the defendants allege that the plaintiff’s liability arises from his conduct during his employment with CRS. Nor are there allegations concerning an ongoing relationship between the plaintiff and the defendants. As the defendants are unable to expand the scope of their claims through Brenda Young’s affidavit, the defendants have not demonstrated circumstances that would toll the statutes of limitations.
The only mention of " competition" in the defendants’ counterclaim is the following: " [The plaintiff’s] competition with CRS, which he was General Manager for CRS, was a violation of the [employment agreement], and lead to lost income and profits for CRS." Even if the court does not presume that " which" is a typographical error and should be corrected to " while," this allegation does not put forward a claim of a continuing violation because the harm is attributed to CRS, which ceased to operate in February of 2013.
Moreover, it would be particularly unfair to countenance the defendants’ argument regarding the continuing course of conduct doctrine in the present case. As the plaintiff’s supplemental exhibit establishes, in the defendants’ response to the plaintiff’s first set of interrogatories, the defendants affirmatively stated that " [t]he counterclaim filed by the defendants does not allege violation of the non-compete clause." To the extent that the defendants now argue that the plaintiff ought to have filed a request to revise if the counterclaim appeared unclear as to the continuing nature of the plaintiff’s conduct- and that the court should construe the defendants’ pleadings broadly- the defendants’ former characterization of their counterclaim clearly cuts against the interpretation they currently propose. The defendants cannot so easily revoke their earlier statement in an attempt to avoid summary judgment. Accordingly, the defendants’ tolling defense fails.
The defendants’ alternative arguments also do not permit the court to determine that the statutes of limitations have been tolled in the present case. First, the defendants concede that there is no rule mandating that counterclaims be filed with the answer. The time required for the pleadings in the present case to proceed therefore does not excuse the untimeliness of the defendants’ counterclaim. Next, the defendants have offered no supporting case law, and the court can find none, concerning the assertion that a potential " waste of resources," or the defendants’ perception of how to proceed in the most efficient manner, excuses the clear language of a statute of limitations. Finally, although the defendants correctly assert that " [General Statutes § ] 52-584 expressly provides that a counterclaim may be filed at any time prior to the close of pleadings, irrespective of whether the statute of limitations governing the counterclaim has run" ; Mulcahy v. Mossa, 89 Conn.App. 115, 126, 872 A.2d 453, cert. denied, 274 Conn. 917, 879 A.2d 894 (2005); the court lacks the authority to effectively re-write the statutes of limitations applicable to the present case. Indeed, the absence of such language concerning the time permitted to file counterclaims in the applicable statutes of limitations counsels against imputing the language of § 52-584 to § § 52-577 and 42-110g(f). See Beebe v. East Haddam, 48 Conn.App. 60, 68, 708 A.2d 231 (1998) (court lacked authority to extend limitations period where tolling provision provided in different statute of limitations was not included in the language of the applicable statute).
The defendant correctly argues that statutes of limitations have underlying policies, including " to ... prevent the unexpected enforcement of stale and fraudulent claims by allowing persons after the lapse of a reasonable time, to plan their affairs with a reasonable degree of certainty, free from the disruptive burden of protracted and unknown potential liability, and ... to aid in the search for truth that may be impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents or otherwise." (Internal quotation marks omitted.) Neuhaus v. DeCholnoky, 280 Conn. 190, 207, 905 A.2d 1135 (2006). Nevertheless, despite the defendants’ arguments, the court lacks the authority to simply waive the applicable limitations periods, and moreover hesitates to do so notwithstanding the defendants’ assertions that the purposes of a limitations period are not met here, as " any tolling of the statute of limitations may compromise the goals of the statute itself." (Internal quotation marks omitted.) Id., 207. The defendants’ policy arguments are not persuasive and therefore do not defeat the plaintiff’s established defense that counts three, four, and five of the amended counterclaim are untimely.
CONCLUSION
For the foregoing reasons, the plaintiff’s motion for summary judgment as to counts three, four, and five of the defendants’ amended counterclaim is granted, as those claims are barred by the applicable statutes of limitations and the defendants have not established that the limitations periods are tolled.