Opinion
No. CV 06-5007438 S
May 17, 2010
MEMORANDUM OF DECISION
Motions for nonsuit have been filed by Deutsche Bank and Litton and in behalf of Attorney Crook and the law firm. The Bank and Litton have also filed a motion for permission to file a motion for summary judgment. Certain aspects of these motions raise the argument that the Fifth Amended complaint advances counts and allegations which should be barred by the court's previous ruling on the motion for summary judgment that it decided. It is also argued that the complaint improperly asserts a new cause of action against the Bank and Litton.
There are also disputes concerning compliance with discovery orders in the motions filed by both sides.
The various motions filed which the court will try to address constitute the 296th, 297th and 298th motions and/or pleadings filed in this case which does raise complicated issues.
(1)
The court issued a lengthy memorandum of decision in this case on a motion for summary judgment on June 17, 2009. On January 10, 2010 a chamber's conference was held with all counsel. The court put on the record the proposed ambit of a Fifth Amended complaint that was to be filed. That complaint was filed on February 2, 2010.
The court said on January 10th that the filing of the Fifth Amended complaint and the removal some of the claims originally made, as a result of a dismissal of those claims by reason of the decision on the summary judgment motion, would of course not constitute a waiver of any appeal rights the plaintiffs might wish to pursue.
The court also said that, concerning the allegations in the proposed complaint that "insofar as any of the factual allegations don't comport with the claims that are viable in light of the court's ruling on the motion for summary judgment (they) should not be in the new complaint."
The discussion in the transcript becomes confusing at that point. It is fair to say, however, that in requesting that a Fifth Amended Complaint be filed it was the understanding of the court and counsel that it would comply with its ruling on the motion for summary judgment. That fact is absolutely clear from the reading of the January transcript and the right of a party prevailing on a motion for summary judgment to rely on the court's ruling in the conduct of further litigation. A motion for summary judgment after all was involved not a motion to strike with a right to plead over.
The court conceives its task to review its decision on the motion for summary judgment and compare it with the claims and allegations of the Fifth Amended complaint.
The court must also examine the Fifth Amended complaint in the context of its being a response to the court's ruling on the summary judgment motion.
The court will first make two caveats. It is of course true that if the court erred in its decision on the summary judgment motion any of the rulings it is about to make will not compel the plaintiffs' right to appeal those errors. Compliance with the court's rulings will not constitute a waiver — how could it?
Also the language of the cases the court is about to refer to is somewhat harsh. But the court has to quote authority defining the ambit of its powers in this situation before it addresses the merits of the issue raised and by no means relies on that language to make a personal criticism of the lawyers for whom it has admiration as it does for all the lawyers in this case even though they have given me little rest in their vigorous defense of their clients' interests.
Very generally we have Rule 1-8 of the Practice Book, referred to in Burritt Mutual Savings Bank of New Britain v. Tucker, 183 Conn. 369 (1981) which said, quoting from the then Rule 6, now Rule 1-8. "The design of these rules being to facilitate business and advance justice, they will be interpreted liberally in any case where it shall be manifest that a strict adherence to them will not work surprise or injustice . . . Courts have an inherent power to disregard sham or frivolous pleadings which have been interposed for the purpose of thwarting the orderly progress of a case." Id., page 373.
The court by no means suggests that in filing the new complaint counsel intended to file sham pleadings or thwart the orderly progress of the case — they have every motive to have this case tried. But the language just quoted must mean that pleadings contradicting a ruling of the court must be ignored by the court. Judge Flynn in B D Molded Products v. Vitek Research Corportation, 25 CLR 94 (1999), for example, said: "While the doctrine of res judicata ordinarily operates to preclude the relitigation in one action of a claim or issue that has been determined in a previous separate action, res judiciata may operate in the same case." As he noted the court in State v. Aillon, 189 Conn. 416, 425 (1983) said . . ."a judgment may be final in a res judicata sense as to a part of an action although litigation continues as to the rest."
The foregoing may be related to another principal of amendments in the context of rulings on motions for summary judgment. In Shuster v. Buckley, 5 Conn.App. 473, 479 (1985) the court said: "The trial court's refusal to allow a belated amendment to a pleading in response to the filing of a motion for summary judgment by the adverse party will be sustained unless there is clear evidence of an abuse of discretion . . . Where, as here, the motion was filed after the court had already ruled in favor of the defendant on its summary judgment motion, its action was clearly justified," also see Pekera v. Purpora, 273 Conn. 348 (2005).
Even if the foregoing considerations do not apply, on a perhaps more mundane level, the court may have "directed" that the Fifth Complaint be filed but it did so with the expectation that it would simply assert the claims made in light of its decision on the summary judgment motion. It did not intend and indeed has no authority to give either side a reprieve on following the rules of practice. Practice Book § 10-60 regarding amendments to the complaint is quite clear. New counts filed beyond the thirty-day grace period in Practice Book § 10-59 can only be added "(1) by order of the judicial authority (2) by written consent of the adverse party or (3) by filing a request for leave to file such amendment . . ."
(a)
The first matter the court will address is the Fifth Count of the present amended complaint. It asserts a "Violation of the Fair Debt Collection Practices Act by Litton and Deutsche Bank with December 6 Notice of Default." This claim against these two entities was not made in the Second Amended Complaint with reference to which the court wrote its summary judgment opinion. In no subsequent amended complaint was the claim against the bank and Litton made within the thirty-day grace period of Practice Book § 10-59. It cannot be considered to be a response to the court's ruling since the claim against these entities was not made in the second amended complaint. The assertion of this claim in the Fifth Amended Complaint appears to be an understandable reaction to the court's dismissal of the FDCPA claims against the defendant attorney and law firm. In effect it attempts to amend the prior operative complaint without requesting the court for leave to make the amendment under Practice Book § 10-60(3). Given these circumstances if the rules of practice are to be enforced and those rules are to be liberally interpreted to enforce their purpose, (see Practice Book § 1-8) the court has no other option than to strike the Fifth Count of the Fifth Amended complaint.
No request to amend the prior operative complaint has been made to the court. It will not do to say that the amended complaint does not allege a new cause of action but merely alleges facts amplifying the claim originally made. The point is that new defendants are being made the subject of the cause of action.
Even if a request for leave to amend was to be filed and thus properly before the court and other considerations about the propriety of such a request, were not to be considered, it is difficult to understand how the court could conclude a statute of limitations violation was not involved. The Fifth Amended complaint now asserts a FDCPA violation against Litton and the bank based on a December 6, 2006 letter regarding default sent to the Lichtenfels, but the statute on the federal act has long since run.
The original complaint and the First Amended complaint did not make a claim against the Bank and Litton under the FDCPA. Such a claim is now made in the Fifth Amended complaint and references a notice of default dated December 6, 2006. But the act provides for a one-year-statute of limitations in § 1692k(d). The statute appears to have run as to any such claim. Given the reasoning of the court in holding an equitable tolling argument could not prevent dismissal certain of these claims against the attorney and the law firm, it would appear it could not avoid a limitations defense here, fn1.
(b) (i)
The defendants also complain of the continued references to Mrs. Lichtenfels's medical condition. They claim that previous rulings of the court have made such references irrelevant and improper. The court has examined the complaint and the CUTPA count makes several references to Mrs. Lichtenfels's condition.
For better or worse we do not have a procedure like the Federal Courts which allows a motion to strike to be filed against particular paragraphs of a complaint. The defendants would have to resort to filing requests to revise. To expedite matters from their perspective both sets of defendants have filed motions for nonsuit based on the foregoing and on other issues which provide the topic of this court's present decision. The court is not inclined to grant such motions even if it were to accept their premises. The matter is not far from trial and all sides would be better off in the long run if the matter is litigated on whatever merits it might be proven to have.
As indicated the primary references to the illness are made in the CUTPA count against Litton in the Sixth Count. Such references are made in paragraphs 52 and 55 and in the same paragraphs in the CUTPA count against the attorney and the law firm. Both the Sixth and Seventh Count incorporate paragraph 18 of the "General Allegations" which apply to other counts of which more later. That paragraph says:
18. Because Mrs. Lichtenfels was ill with multiple sclerosis, the plaintiffs elected to obtain a restatement figure from Litton, and to pay that amount upon the condition that Litton and Deutsche Bank would conduct a retrospective interest accounting to determine the appropriate interest rate and to credit or reimburse them for all overpayments.
The above referenced paragraphs 52 and 55 read as follows:
52. Litton, in concert with its agents Crook and the Firm, engaged in the foregoing conduct knowing it would or was reasonably certain to cause great psychological harm and severe emotional distress to Plaintiffs, particularly in that the Defendant was aware that there was no valid basis for attempting to collect through foreclosure a consumer debt that was not in default, and knowing that Mrs. Lichtenfels suffers from multiple sclerosis and that she suffered stress, anxiety and depression, which were exacerbated by the Defendant's conduct.
In paragraph 54 this conduct was described as "intentional egregious, extreme and outrageous." Paragraph 55 reads as follows:
55. At the time Litton, in concert with its agents Crook and the Firm, engaged in the foregoing conduct, they knew or should have known that their conduct created an unreasonable risk of causing great psychological harm and severe emotional distress to Plaintiffs, particularly in that these Defendants were aware that there was no valid basis for commencing or prosecuting the foreclosures, and because they were aware that Mrs. Lichtenfels suffers from multiple sclerosis and accordingly suffers severe physical symptoms in response to stress.
The court in its decision on the motion for summary judgment explicitly held that a CUTPA count cannot make a damage claim based on emotional harm or distress. Do these allegations represent an attempt to circumvent the ruling of the court? If they do, then relying on the general comments and references to the law previously made would permit the court to strike these paragraphs or the inappropriate portions thereof.
However, in its prior decision the court also made an observation which it believes is relevant to the issue at hand. Section 42-110b of the general statutes specifically says in subsection (b) that in construing subsection (a) which describes "unfair or deceptive acts or practices in the conduct of any trade or commerce our courts "shall be guided" by interpretations given by the Federal Trade Commission and the federal courts to Section 5(a)(1) of Federal Trade Commission Act. Danbury v. Dana Investment Corp., 249 Conn. 1, 20 (1999), described the history of the federal act as "a lodestar" in interpreting CUTPA.
In its decision the court cited a comment in § 6.8 at page 441 of Vol. 12 of the Connecticut Practice Series on Unfair Trade Practices which was commenting on the FTC Act. The Act itself is not relevant to a damage claim under our act because the federal act does not provide for damage remedies but in § 6.8 it does say that the FTC has recognized that "physical injury and even emotional harm may be relevant to whether an unfair act or practice has caused or may cause substantial injury to consumers." See also footnote 23 at page 441 where it says rather cryptically in a letter from the FTC "Unwarranted Health and Safety risks may also support a finding of unfairness. Emotional impact and other more subjective types of harm, on the other hand, will not ordinarily make a practice unfair . . . In an extreme case, however, where tangible injury could be clearly demonstrated, emotional effects might possibly be considered as a basis for a finding of unfairness; cases cited are American Financial Services v. F.T.C., 767 F.2d 957, 972, 973, N 18 CDC Circuit, (1985), In re International Harvester, 104 FTC 949, 1064 (1984), Talbot v. Kirkup, 2000 WL 147, 582, a decision by this writer in 2000, (see page 6 of the court's summary judgment decision in this case.)
The decisions make clear as does the FTC commentary that introducing such evidence in a CUTPA claim may require the plaintiffs to meet a heavy burden on materiality. This matter should be addressed by way of a motion in limine before trial.
(ii)
There is one other matter regarding the plaintiff's medical condition that must be addressed. The complaint is well-structured in that it includes "general allegations" that are ancillary to all the counts. But that presents a problem in the court's opinion. Paragraph 18 reads as follows:
18. Because Mrs. Lichtenfels was ill with multiple sclerosis, the plaintiffs elected to obtain a reinstatement figure from Litton, and to pay that amount upon the condition that Litton and Deutsche Bank would conduct a retrospective interest accounting to determine the appropriate interest rate and to credit or reimburse them for all overpayments.
These general allegations are incorporated in the First and Second Counts alleging libel and slander. They allege that as a result of libel and slander "among other things" the plaintiffs suffered a loss of reputation, loss of business expectations, loss of loan and mortgage opportunities and damage to their reputations.
The Third and Fourth counts allege Slander of Title. The Fifth Count alleges a Violation of the Fair Debt Collection Practices Act sets forth a demand "for statutory fees and penalties," see 15 USC § 1692k(a)(2)A.
The motive Mr. Lichtenfels may had had to obtain a reinstatement figure as set forth in paragraph 18 is not something that appears to have any logical relationship to the substantive claims in these first five counts nor apparently is it advanced as an element of the damage claim in these five counts; it is not something that could be introduced as evidence to advance these counts so how can it be properly alleged absent some relevance that the court is failing to appreciate.
In order to avoid the seemingly endless pleading in this case the court would suggest that plaintiffs' counsel inform the defendants if they consent to removing the reference in paragraph 18 from the complaint. If they do not the defendants can file a request to revise and the plaintiffs in their objection thereto can point out to the court why they think it has erred on this particular issue which the court will examine and rule upon.
(c) (i)
In the second amended complaint a claim of libel and slander was made against Crook and the law firm in the Fifth Count. The claim is set forth in paragraphs 42 and 43 of that count:
42. Crook and the Firm acting as consumer debt collectors disseminated and published to third parties false information about the Plaintiffs.
43. These false statements, including that the Plaintiffs were in default of a Note and Mortgage when they were in fact not in default, were published in the periodical commonly known as "The Commercial Record," which is a periodical published for, delivered to, and read by third parties.
The court granted these defendants' motion for summary judgment as to this count for reasons set forth in that June 17, 2009 opinion at pages 67 through 69.
Now in the First Count of the Fifth Amended complaint the plaintiffs allege the same claim against these same defendants and make the following substantive allegations to support it:
42. Crook and the Firm acting as consumer debts collectors disseminated and published to third parties false information about the Plaintiffs.
43. These false statements, including that the Plaintiffs were in default of a Note and Mortgage when they were in fact not in default, were published in the periodical commonly known as "The Commercial Record," which is a periodical published for, delivered to, and read by third parties.
The same allegations are made in the Fifth Amended complaint regarding this claim as it is alleged against the lawyer and the Firm as was made in the Second Amended complaint. No affidavits or counter affidavits were filed in opposition to the motion for summary judgment nor was an explanatory affidavit filed pursuant to Practice Book § 17-47, see Dorazio v. M.B. Foster Electric Co., 157 Conn. 226, 229-30 (1968), Plouffe v. New York, NHZ H.R. Co., 160 Conn. 482, 490 (1997); Sheridan v. Board of Education, 20 Conn.App. 231, 237 (1989), cf. Peerless Ins. Co. v. Gonzalez, 241 Conn. 476, 489 (1997). If Rule 1-8 of the Practice Book is to have any meaning, given the purposes of Summary Practice procedure, based on the record now before the court, it has no choice but to dismiss this count (also see comments in introduction to this decision).
(ii)
A complication arises as to this Libel and Slander claim in the Second Count of the Fifth Amended complaint which is directed against Litton. The same claim was made against Litton in the Second Amended complaint but as the court remembers the summary judgment motion filed by Litton was not directed against this count. In fact at page 69 of its decision the Libel and Slander count was dismissed only as it was directed at the law firm and Crook. However, the same factual allegations, quoted in the immediately preceding section, were made in the Second Count to support the Libel and Slander claim against the law firm and against Litton. The same claim in the Fifth Count against the Firm and Litton was supported by the same factual allegations which mirrored those in the Second Amended complaint.
The court cannot fault the plaintiffs for failing to follow Practice Book § 10-60 practice with regard to this claim against Litton; it merely repeated in the Fifth Amended complaint a count not dismissed in the summary judgment ruling. It also seems late in the day to permit summary process practice given the imminence of the trial. On the other hand there is such a thing as law of the case and if that doctrine is followed here it would seem no great delay will be occasioned by permitting the motion to be litigated. The court is not aware of any concrete factual claim that the plaintiffs are now prepared to offer to resist such a motion as to this claim which was not presented in the prior summary judgment proceeding when the same claim was advanced against Crook and the Bank.
On the other hand this is a matter which, given the foregoing, the trial judge could handle if that would expedite the proceedings. Since the status conference is to occur shortly the court will let the presiding judge decide what option is preferable so as not to unduly delay this litigation yet allow the parties to fully present their position which may not be feasible in the trial context.
(d) CT Page 11285
Counsel for the law firm and the attorney object to the repeated use of the term debt collectors to characterize the conduct of his clients. Under modern practice the complaint will not go to the jury. Insofar as it is relevant to any of the remaining counts, evidence that a debt was attempted to be collected can come into evidence. This by no means implies that the whole panoply of the FDCPA can, will, or should come before the jury through the back door so to speak and the trial judge can enforce this prerequisite to a fair trial in accordance with the court's previous rulings on the claims under the federal act.
* * * *
The court denies the motions for nonsuit and relies on the foregoing in response to the motions filed. It will address the discovery issue in a motion to be filed by May 19, 2010.