Opinion
No. X04-CV 0127150S
July 15, 2003
MEMORANDUM OF DECISION RE MOTION TO STRIKE
The defendants move to strike counts three, four and five of an amended five-count complaint. Count one alleges legal malpractice in estate planning provided by the decedent attorney and his law firm. Count two is also not challenged and sounds in breach of contract. Count three sets forth a claim for breach of fiduciary duty, count four is a claim of breach of fiduciary duty as to third-party beneficiaries and count five is for negligent infliction of emotional distress. For the reasons set forth in detail below, the court grants the motion as to counts three and four and strikes the claim for legal fees and punitive damages. The court takes no action as to count five, as plaintiffs conceded in oral argument that count five is withdrawn and will be redrafted.
I. Facts
In 1989, Seymour Lavitt executed a will in which he left his residence and remainder of his estate to his two children, Joseph and Darryl Lavitt. Sometime after July 1, 1999, the defendants drafted a new will for Mr. Lavitt identical to the earlier will except for a transfer of funds in the amount of $60,000 to a shared account with his wife, Carol Lavitt. The transfer, the amended complaint alleges, was carried out through Carol Lavitt. The plaintiffs, Mr. Lavitt's estate and his two children, claim that the defendants had a conflict of interest, since they had earlier represented Mrs. Lavitt and had allegedly declined to represent Mr. Lavitt. They also claim that law firm failed to inventory Mr. Lavitt's estate and determine that no individual retirement account beneficiaries had been designated.
II DISCUSSION
A. Legal Standard
"The purpose of a motion to strike is to contest the legal sufficiency CT Page 8413-hz of the allegations of any [complaint] to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Peter-Michael, Inc. v. Sea Shell Associates, 244 Conn. 269, 270, 709 A.2d 558 (1998). In ruling on a motion to strike, the trial court examines the complaint "construed in favor of the plaintiffs, to determine whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997). When deciding the motion, "the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). "[I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . ." (Citation omitted; internal quotation marks omitted.) Lombard v. Edward J. Peters, Jr., P.C., 252 Conn. 623, 626, 749 A.2d 630 (2000).
B. The Tort of Breach of Fiduciary Duty
The defendants claim that the allegations of count three are merely a restatement of the allegations of legal malpractice set forth in count one and do not set forth a cause of action for breach of fiduciary duty. In Beverly Hills Concepts, Inc. v. Schatz Schatz, Ribicoff Kotkin, 247 Conn. 48, 56-57, 717 A.2d 724 (1998), the court stated "[p]rofessional negligence alone . . . does not give rise automatically to a claim for breach of fiduciary duty. Although an attorney-client relationship imposes a fiduciary duty on the attorney . . . not every instance of professional negligence results in a breach of that fiduciary duty . . . Professional negligence implicates a duty of care, while breach of fiduciary duty implicates a duty of loyalty and honesty." Although our Supreme Court "[has] not expressly limited the application of these traditional principles of fiduciary duty to cases involving only fraud, self-dealing or conflict of interest the cases in which [the court has] invoked them have involved such deviations." Murphy v. Wakelee, 247 Conn. 396, 400, 721 A.2d 1181 (1998).
In count three, the plaintiffs incorporate the allegations of the negligence count, and also allege in paragraph 26 that the defendants "failed to disclose to Seymour Lavitt that they had a previously formed relationship with Carol Lavitt." In the earlier counts they had alleged and re-allege in this count that the defendants "failed to decline representation of Seymour Lavitt when there existed an ethical and/or legal conflict of interest which was not disclosed or waived [and that) they failed to consider the best interests of their client." These are the factual allegations which plaintiffs claim show either fraud, self-dealing or conflict of interest and to which they point in their CT Page 8413-ha opposition to this motion. And in their prayers for relief they seek punitive damages and legal fees.
These allegations raise the question of exactly what type of conflict of interest gives rise to an actionable tort of breach of fiduciary duty. Is it the type of conflict that represents a breach of the Rules of Professional Conduct in an attorney's dealings with his client and implicates the duty of care the attorney owes the client? Or is it a conflict which exists between the attorney's own interests and the client's interests, in which case the conflict becomes a type of self-dealing as well as a breach of the professional's duty. When the attorney's professional duty of care without any aspect of self-dealing is implicated, no actionable breach of fiduciary duty has occurred. This is the precise distinction Beverly Hills Concepts, Inc., supra, makes. And in those cases analyzing breach of fiduciary duty generally, an actionable breach is based on a conflict of interest the fiduciary himself has with the purpose of his duties on behalf of his client. See for example Sisk v. Jordan Co., 94 Conn. 384, 390, 109 A. 181 (1920). The use of the same legal term "breach of fiduciary duty" to describe both sets of circumstances causes this difficulty in analysis and confusion in argument. As Justice Holmes noted many years ago when rejecting a claim that the same word was interchangeable in its meaning in both the U.S. Constitution and a later enacted statute: "A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used." Towne v. Eisener, 245 U.S. 418, 424 (1918).
Several superior court cases have reviewed these issues in the context of motions to strike. In Welty v. Criscilo, Superior Court, judicial district of New Haven, Docket No. 46110, (May 16, 2000, Blue, J.), 2000 Ct. Sup. 5914, 27 Conn.L.Rptr. 253, the allegations were of professional negligence and the defendants, in opposition to the motion to strike a portion of their counterclaim, did not rely on fraud but claimed that the alleged breach of the attorney-client relationship was enough to state a cause of action for breach of fiduciary duty. The trial court rejected this claim and analyzed the issues from the point of view of the punitive damages claimed. Specifically, the court's inquiry focused on whether or not the conduct in question warranted such "augmented" penalties. The court compared the claim of negligence with the same set of facts claiming a breach of fiduciary duty and stated: "the policy of the law in negligence cases is to award compensation but not to impose punishment. Punishment is reserved for cases involving moral wrong." With this analysis in mind, the Welty court concluded the claim was no more than one of professional negligence and did not rise to the level of a moral wrong. It struck the claim and the prayer for punitive damages. CT Page 8413-hb
In another Superior Court case, Flexo Converters USA, Inc. v. Adelman, Superior Court, judicial district of Tolland at Rockville, Docket No. CV99 00725553 (November 30, 2000, Bishop, J.) ( 29 Conn.L.Rptr. 78, 80), the court found that "to the extent that the factual allegations of the third count are mere repetitions of the allegations of the prior two counts cast as breaches of fiduciary duty, they have no independent vitality because the acts and malfeasance they allege do not constitute breaches of fiduciary duty as that tort is understood."
The conflict of interest alleged in count three of the amended complaint between Mr. Lavitt and his spouse Carol implicates the defendants' professional duty of care owed to the client and makes no allegations of any type of self-dealing by the defendants. When comparing these allegations to the allegations in the first two counts of the amended complaint, the court concludes these allegations are "mere repetitions of the prior two counts." They indeed have no "independent vitality." A cause of action for the tort of breach of fiduciary duty has not been stated. In addition, there is nothing about these facts which supports the notion of a wrong for which punishment and punitive damages would be appropriate as opposed to compensation for the wrong inflicted. For the foregoing reasons the court strikes count three as well as the claim for punitive damages and legal fees.
C. Breach of Contract as to Third-Party Beneficiaries
In count four of the complaint, the allegations of negligence, breach of contract and fiduciary duty are restated. One additional paragraph alleges that the plaintiff and the defendants "expressly understood and intended" that the plaintiff's son and daughter were to benefit from the contract to write a will and that the defendants therefore owed a duty to the testator's children as third-party beneficiaries of the contract. The actual facts alleged are as previously stated, that $60,000 from Seymour Lavitt's personal funds were placed in a joint account with his wife and that there were no beneficiaries designated on his individual retirement account.
Determining when attorneys should be held liable to parties with whom they are not in privity is a question of public policy and in addressing this issue, courts have looked principally to whether the primary or direct purpose of the transaction was to benefit the third party. Krawczyk v. Stingle, 208 Conn. 239, 244-45, 543 A.2d 733 (1988).
The current state of our law is well reviewed in the case of Leavenworth v. Mathes, 38 Conn. App. 476 (1995). At pages 479-89, the CT Page 8413-hc court stated:
"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 . . . Accordingly, courts have held that the intended beneficiary has a cause of action against an attorney who failed to draft a will in conformity with a testator's wishes; see, e.g., Lucas v. Hamm, 56 Cal.2d 583, 364 P.2d 685, 15 CaI.Rptr. 821 (1961), cert. denied, 368 U.S. 987, 82 S.Ct. 603, 7 L.Ed.2d 525 (1962); Needham v. Hamilton, 459 A.2d 1060 (D.C.App. 1983); Ogle v. Fuiten, 112 Ill. App.3d 1048, Page 480, 445 N.E.2d 1344 (1983), aff'd, 102 Ill.2d 356, 466 N.E.2d 224 (1984); failed to supervise the proper execution of a will; see, e.g., Licata v. Spector, 26 Conn. Sup. 378, 225 A.2d 28 (1966); Succession of Killingsworth, 292 So.2d 536 (La. 1973); Auric v. Continental Casualty Co., 111 Wis.2d 507, 331 N.W.2d 325 (1983); or failed to advise a client of the consequences of not revising a will; see, e.g., McAbee v. Edwards, 340 So.2d 1167 (Fla.App. 1976) . . ." Krawczyk v. Stingle, 208 Conn. 239, 244-45, 543 A.2d 733 (1988).
The Leavenworth court noted "The claims of malpractice alleged in these cases focus on errors in the drafting and execution of the wills. Here, the plaintiffs make no claim that a particular bequest was not included as directed, or that the will was improperly drafted or executed." This summarizes the defendants' central claim concerning count four in the present case. The factual allegations in plaintiffs' claims against the decedent attorney and his law firm relate to an inter-vivos transfer of funds from one account to a joint account, which funds Seymour Lavitt could have drawn on until used in full during the course of his life time, regardless of which account held the funds. The other remaining allegation is the defendants' failure to ensure that beneficiaries were named on Mr. Lavitt's individual retirement account. None of the alleged facts concerns specific errors in the drafting or execution of the will. And indeed, the Leavenworth court held there was no duty owed to the beneficiaries to ensure the existence of testamentary assets when drafting a will, the precise factual claims the plaintiffs assert in the case at bar.
In their opposition to the motion to strike, plaintiffs argue that the critical facts which led to a finding of no duty in Krawcsczk and Leavenworth are not present in their claims and that it is improper for the court to assume them. While plaintiffs have alleged an express intention on the part of Seymour Lavitt to benefit them, the conduct CT Page 8413-hd about which they complain is set forth in the facts of their complaint. Those are the critical facts and they do not, as a matter of law, give rise to a duty to these beneficiaries, even if Seymour Lavitt intended to benefit them. Adding the existence of the alleged conflict of interest to the two groups of facts above summarized cannot alter the inescapable conclusion that these facts do not implicate any duty on the part of the defendants. The court need not await the affidavits and arguments on a summary judgment motion for that which is evident from the facts now alleged. Moreover, if there are other facts, which would give rise to a duty to these plaintiffs on the part of the defendants as a matter of law, then plaintiffs may plead over and state them. For all the foregoing reasons, the court grants the motion to strike count four.
BY THE COURT
BARBARA M. QUINN, Judge