Opinion
FSTCV146022271S
02-02-2016
Catherine Seals, Executrix of the Estate of Raynald B. Cantin v. Patricia Havey aka Patricia Misthopoulos et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION ON MOTION FOR SUMMARY JUDGMENT DATED AUGUST 3, 2015 (#141.00) FILED BY THE DEFENDANTS CARR, DOUGLAS & CLINE, LLC
Hon. Kevin Tierney, Judge Trial Referee.
The issues in this Motion for Summary Judgment revolve around attorneys fees incurred by Noel Misthopoulos, a defendant in a long-lasting hotly contested Connecticut dissolution of marriage action. Mr. Misthopoulos is not a party in this lawsuit. To the best of this court's knowledge, Noel Misthopoulos resides in a foreign country.
The court has applied all the requisite standards for decisions by trial courts in motions for summary judgment without the need to restate those standards in this Memorandum of Decision. Covello v. Darien, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. FST CV 08-5008909 S (October 22, 2010, Tierney, J.T.R.) ; Forrest v. Southeby's Int'l Realty, Inc., Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. FST CV 11-6010200S, (January 9, 2013, Tierney, J.T.R.).
Cantin Lawyers, P.C. performed legal services for Noel Misthopoulos in the Connecticut contested dissolution action. Cantin Lawyers, P.C. claim that Mr. Misthopoulos had not paid his bill for attorney's services and there remained a large sum outstanding. A lawsuit was commenced by Cantin Lawyers, P.C. against Noel Misthopoulos in the Superior Court, judicial district of Stamford/Norwalk of Stamford, Docket Number FST CV 08-5005829 S returnable on January 8, 2008. A Prejudgment Remedy seeking a real estate attachment was applied for by plaintiff's counsel. On June 16, 2008, the undersigned, sitting in the Special Proceedings civil short calendar docket in Stamford, Connecticut ordered a prejudgment remedy in the form of a real estate attachment on the real property at 5 Shields Lane, Darien, Connecticut in the amount of $50,000 (#102.00). The real estate attachment was served on Noel Misthopoulos and the plaintiff filed an attachment in the Darien land records on June 24, 2008 (#103.10). (#150.00, Exhibit B.) The civil suit was then commenced. Thereafter Noel Misthopoulos was defaulted for failure to appear and a judgment in the amount of $50,914.17 was entered by the Superior Court on December 8, 2008 in that docket number in favor of Cantin Lawyers, P.C. (#106.55). Noel Misthopoulos was the only defendant in FST CV 08-5005829 S. The $50,914.17 judgment consisted of $33,957.03 unpaid attorney fees in the dissolution of marriage action, $3,483.42 interest, $12,480.15 collection attorney fees and $993.57 Bill of Costs (#111.00). Post-judgment interest at the rate of 6% was awarded (#113.86). On January 20, 2009 the plaintiff, Cantin Lawyers, P.C., filed a judgment lien on the real property at 5 Shields Lane, Darien, Connecticut (#112.00). (#150.00, Exhibit C.) This judgment lien was filed within four months from the entry of judgment. Gen. Stat. § 52-328(b). As of that date Noel Misthopoulos still owned the record title to a one-half interest in and to 5 Shields Lane, Darien, Connecticut with his former wife, Patricia Misthopoulos, now referred to as Patricia Havey in this litigation. Further post-judgment efforts were expended in that civil lawsuit for the collection of the attorneys fees judgment. All such efforts were unsuccessful and executions were returned unsatisfied. As of this date the judgment in docket number FST CV08-5005829 S remains in full force and effect as an uncollected civil judgment.
The senior partner in Cantin Lawyers, P.C., Raynald B. Cantin, was assigned the judgment against Noel Misthopoulos. Mr. Cantin passed away and the plaintiff, Catherine Seals, was appointed the Executrix of the decedent Estate of Raynald B. Cantin. After the unsuccessful efforts in docket number FST CV 08-50058295 to collect on the judgment, on May 14, 2014, the plaintiff, as Executrix of the Estate of Raynald B. Cantin, filed this present lawsuit against four defendants. The real property at 5 Shields Lane, Darien, Connecticut was sold on July 5, 2012 and the Cantin Lawyers, P.C. judgment lien was not paid at the closing.
The four defendants in this instant lawsuit are: (1) Patricia Havey, formerly known as Patricia Misthopoulos, the former spouse of Noel Misthopoulos and a party in the Stamford, Connecticut dissolution of marriage action FST FA 04-4000976 S; (2) Attorney Glen J. Moore, who was the real estate closing attorney representing Patricia Havey at the sale to third parties of the real property at 5 Shields Lane, Darien, Connecticut (Moore defendants); (3) Carta, McAlister & Moore, LLC, the law firm in which Glen J. Moore was associated at the time of the real estate closing (Moore defendants); and (4) Carr, Douglas & Cline, LLC., the law firm in which Attorney Linda Douglas was associated in her capacity as the attorney of record for Noel Misthopoulos in the Connecticut contested dissolution of marriage action (Douglas defendants). These attorneys and law firms are also referred to in this Memorandum of Decision as attorney defendants.
The Operative Complaint is the Substitute and Revised Complaint dated January 5, 2015 (#122.00). It is a six-count complaint. The First Count is against Patricia Havey for conversion and impairment of judgment lien. The Second Count is against Attorney Glen J. Moore and his law firm, Carta, McAlister & Moore, LLC, for conversion and impairment of judgment lien. The Third Count is against the law firm of Carr, Douglas & Cline, LLC for conversion and impairment of judgment lien. The Fourth Count in unjust enrichment against all of the defendants. The Fifth Count is an accounting account that had been stricken by the court and is no longer pending. The Sixth Count is against all of the defendants for statutory theft in violation of Gen. Stat. § 52-564.
The Misthopoulos contested dissolution case had been pending since August 2004 as FST FA 04-40009765. It was tried to a conclusion having been transferred from the Stamford/Norwalk judicial district to the Regional Family Docket at the Middletown Superior Court where such contested marital disputes are frequently referred. Patricia Misthopoulos was the plaintiff and Noel Misthopoulos was the defendant. There were no other parties joined in the dissolution of marriage action. Both parties were represented by separate counsel at trial. During this marital litigation, on May 17, 2005 Patricia Misthopolous filed a lis pendens against the real property at 5 Shields Lane, Darien, Connecticut, which was properly served (#114.10).
The trial judge, Abery-Wetstone, J., entered orders on July 25, 2006 granting a decree dissolving the marriage after the conclusion of the contested dissolution trial (#237.00). (#142.00, Exhibit F.) Of interest in this dissolution of marriage lawsuit is Order 10.a. entitled Property Settlement. Order 10.a. relates to the distribution of the family home located at 5 Shields Lane, Darien, Connecticut. The entirety of the Order 10.a. is as follows:
The husband shall quitclaim all his right, title and interest in and to the family home located at 5 Shields Lane, Darien, CT, to the wife within 21 days of the date of judgment. The wife shall hold the husband indemnified and harmless from the real estate taxes, homeowner's insurance, utilities and maintenance for said home. The value of the property is $2,600,000, the mortgage on the property is $1,200,000, and the marital equity in the property is $1,400,000. The wife shall give the husband a mortgage on the home for the principal sum of $420,000 bearing simple interest at the rate of 3% per annum. The mortgage shall be due and payable on the first to occur of: the children reaching the age of 18, the wife's remarriage or cohabitation, the home no longer being used as the principal residence of the wife and children;
Order 10.a. July 25, 2006 Memorandum of Decision.
Noel Misthopoulos appealed. His appeal was transferred to the Supreme Court. The appeal stayed the effect of Order 10.a. In a significant decision issued on July 13, 2010 the Supreme Court reversed the child support order in language affecting most high income families. The Supreme Court affirmed the property distribution orders including Order 10.a. Misthopoulos v. Misthopoulos, 297 Conn. 358, 390, 999 A.2d 721 (2010). After July 13, 2010, the appellate stay was no longer in effect and Order 10.a. became fully enforceable. It is during this interim period of time, July 25, 2006 to July 13, 2010, that the plaintiff's attachment and judgment lien were recorded on the Darien land records.
Thereafter despite efforts by the plaintiff, Patricia Havey, Noel Misthopoulos refused to execute the quitclaim deed to put into full force and effect Order 10.a., Property Settlement. As a result she obtained court orders on December 6, 2010 and January 5, 2011 pursuant to Conn. Stat. § 46b-81(a) and (b). (#142.00, Exhibit A.) Judge Malone, sitting in Stamford where the dissolution of marriage action had originated and where the action had been transferred after the dissolution of marriage judgment entered in Middletown, ordered that all of Noel Misthopoulos's right, title and interest in and to the real property at 5 Shields Lane, Darien, Connecticut be transferred from Noel Misthopoulos to Patricia Misthopoulos, then known as Patricia Havey (#380.00, #381.00, #385.00.) Patricia Havey is claiming that her 100% title to 5 Shields Lane, Darien, Connecticut relates back to her May 17, 2005 recordation of her lis pendens in the dissolution of marriage action. Noel Misthopoulos appealed from Judge Malone's title transfer orders.
From an examination of the Darien land records it would appear that at the time that Patricia Havey obtained complete title to 5 Shields Lane, Darien, Connecticut, the real property was subject to four encumbrances. The first would be the real estate taxes and assessments due the Town of Darien. The second would be the remaining balance of the $1,200,000 mortgage referenced in Order 10.a. of the July 25, 2006 Property Settlement. The third would be the judgment lien to Cantin Lawyers, P.C. as referenced above. The fourth would be an unrecorded mortgage to Noel Misthopoulos in the amount of $420,000 in a manner set forth in Order 10.a. of the July 25, 2006 Property Settlement. The 3% per annum interest has increased that $420,000 sum due Noel Misthopoulos. By a July 27, 2011 order in the dissolution of marriage action, that $420,000 mortgage was substantially offset by sums found to be due Patricia Havey by Noel Misthopoulos. (#405.00.) Future unpaid child support may have or may not have exhausted the remainder of the $420,000 mortgage plus whatever unpaid 3% interest that has since accrued. (#142.00, Exhibit D.) The $420,000 mortgage may or may not have been released by a July 3, 2012 executed document in the dissolution marriage file. (#142.10, Exhibit E.)
Sometime after Patricia Havey acquired full title to the property at 5 Shields Lane, Darien, CT pursuant to the order of Judge Malone, she executed a contract of sale and sold the 5 Shields Lane property to third parties for $1,815,000. (#150.00, Exhibit F.) Glen J. Moore, an attorney with Carta, McAlister & Moore, LLC, both defendants in this instant lawsuit, represented her at the July 5, 2012 real estate closing. Glen J. Moore prepared and executed a closing statement. (#144.00, Exhibit 1 of Exhibit F.) No HUD-1 Settlement Statement form was submitted to this court. The court therefore does not know who was the settlement agent under the Federal Regulations.
Attorney Linda Douglas and her law firm, Carr, Douglas & Cline, LLC, who had filed an appearance by Noel Misthopoulos in the dissolution of marriage action, represented Noel Misthopoulos at the 5 Shields Lane closing. On June 18, 2012, on behalf of Noel Misthopoulos, Carr Douglas & Cline, LLC recorded a lis pendens in the dissolution marriage litigation on the Darien land records as to 5 Shields Lane. (#142.00, Exhibit B, paragraph 19.) (#150.00, Exhibit D.) At the closing Noel Misthopoulos was paid $100,000. A Bank/Certified check for $100,000 was payable to " Carr, Douglas & Cline, Trustees" at the closing and the Closing Statement referenced: " Payment to N. Misthopoulos." The Noel Misthopoulos June 18, 2012 lis pendens was released at the closing. The release was executed by the defendants, Carr, Douglas & Cline by Linda T. Douglas. (#150.00, Exhibit H.) A July 3, 2012 agreement had been executed by Patricia Misthopoulos and Noel Misthopoulos in the dissolution of marriage action to confirm that arrangement. (#142.00, Exhibit D.) (#150.00, Exhibit G). Noel Misthopoulos's appeal from Judge Malone's transfer orders was withdrawn.
Two other Bank/Certified checks were issued at the July 5, 2012 closing: Astoria Federal Mortgage for $1,208,209.04 paying off the first mortgage and $325,242.08 to " Carta, McAlister & Moore, LLC Trustees" for the remaining " balance due Seller" of $325,242.08. (#144.00, Exhibit 1 of Exhibit F.) Neither Linda Douglas nor Carr, Douglas & Cline, LLC represented the buyers, seller, lender and/or title insurance company at the July 5, 2012 closing.
The real property was sold to third-party buyers who are not parties in this litigation. The court assumes that the buyers obtained a mortgage and also purchased title insurance. Neither the lender, buyers, nor the buyers' and lender's title insurance company are parties to this litigation.
The July 5, 2012 closing proceeded without the release of the judgment lien obtained in FST CV 08-5005829 S. No payment of any sum toward that judgment lien was disbursed at the closing. After the payment at the closing of the broker's commissions, conveyance taxes, recording fee, back Darien taxes, common charge adjustments, title insurance, water bill, release tracking fees, and $2,900 legal fees and disbursements to Carta, McAlister & Moore, LLC, the balance of the closing proceeds were paid to the defendant, Patricia Havey, formerly known as Patricia Misthopoulos, in the amount of $215,385.32. There is some question in the court's mind after reviewing the Closing Statement as to whether Carta, McAlister & Moore, LLC issued the above checks for $325,242.08 at the closing. Thereafter, Patricia Havey, formerly known as Patricia Misthopoulos, did not pay any money to the plaintiff, Attorney Raynald B. Cantin or Cantin Lawyers, P.C., nor pay any money to anybody or any entity on account of the judgment lien in FST CV 08-5005829 S. No funds were held in escrow at the closing for the Cantin Lawyers, P.C. judgment lien.
The Moore defendants have filed three Special Defenses; (1) The plaintiff's claim is barred by virtue of Patricia Misthopoulos' payment of all sums due to Noel Misthopoulos; (2) The plaintiff's claim is barred since the judgment lien in FST CV 08-5005829 S is invalid and has no force and effect; and (3) The plaintiff's claim is barred since the judgment in FST CV 08-5005829 S in unenforceable. (#132.00.)
The Douglas defendants have filed four Special Defenses; (1) The judgment lien is void since it is on real property over which the Douglas defendants had no control; (2) The judgment lien relied on is invalid and has no force and effect; (3) The judgment relied on is unenforceable as against the Douglas defendants; and (4) The plaintiff has unclean hands and is not entitled to equitable relief based upon the facts alleged. (#135.00.)
The issues on the pleadings have been joined. The matter has been claimed to a jury trial to commence on the first week of February 2016. Over 300 pages of material have been furnished to this court in the form of documents, pleadings, memorandum of law, and copies of cases.
Two separate Motions for Summary Judgment were filed by the attorney defendants. Both were argued at the same short calendar hearing. No objections were filed by any parties concerning the documents submitted by each party in favor of their respective legal and factual positions. The Douglas defendants' Motion for Summary Judgment is dated August 3, 2015. (#141.00.) The Moore defendants' Motion for Summary Judgment is dated August 4, 2015. (#143.00.)
The gravamen of the Douglas defendant's Motion for Summary Judgment is twofold: (1) Carr, Douglas & Cline, LLC as defendants had no duty to protect the plaintiff's alleged judgment lien on the 5 Shields Lane, Darien, Connecticut real property; and (2) The plaintiff has not lost her security on the subject real property at 5 Shields Lane, Darien, Connecticut and therefore the plaintiff has suffered no damages that are attributable to any claimed omissions or commissions of Carr, Douglas & Cline, LLC.
The gravamen of the Moore defendant's Motion for Summary Judgment is twofold: (1) The judgment lien upon which the plaintiff relies is unenforceable since the plaintiff has no title or possessory right to the money alleged retained or distributed by Carta, McAlister & Moore, LLC; and (2) The Carta, McAlister & Moore, LLC defendants did not unjustly retain any benefit to the plaintiff's detriment.
" While it may seem that there should be a remedy for every wrong, this is an ideal limited perforce by the realities of this world. Every injury has ramifying consequences, like the ripplings of the waters, without end. The problem for the law is to limit the legal consequences of wrongs to a controllable degree." (Internal quotation marks omitted.) RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 386, 650 A.2d 153 (1994); Lawrence v. O & G Indus., supra, 319 Conn. at 666-67; Maloney v. Conroy, 208 Conn. 392, 401-02, 545 A.2d 1059 (1988); Tobin v. Grossman, 24 N.Y.2d 609, 619, 249 N.E.2d 419, 301 N.Y.S.2d 554 (1969). (Quotation apparently coined by Breitel, Judge of the Court of Appeals).
The court is going to discuss four subjects in the remainder of this Memorandum of Decision: whether or not the plaintiff sustained damages on the basis that she still could enforce the judgment lien against the current owners of the real property, the responsibility of the attorney defendants for the tort of conversion, does statutory theft apply under the circumstances of this case, and whether or not the claim of unjust enrichment is viable.
The first subject is whether or not the plaintiff has sustained damages.
The defendant, Patricia Misthopoulos, recorded her lis pendens on the Darien, Connecticut land records in May 17, 2005 pursuant to the marital lis pendens statute, Gen. Stat. § 46b-80(a). (#152.00, page 3.)
Such notice shall, from the time of the recording only, be notice to any person thereafter acquiring any interest in such property of the pendency of the complaint or application. Each person whose conveyance or encumbrance is subsequently executed or subsequently recorded or whose interest is thereafter obtained by descent, or otherwise, shall be deemed to be a subsequent purchaser or encumbrancer, and shall be bound by all proceedings taken after the recording of such notice, to the same extent as if he were made a party to the complaint or application. A notice of lis pendens recorded in accordance with this section may be discharged by the court upon substitution of a bond with surety in an amount established by the court if the court finds that the claim of the spouse against property subject to the notice of lis pendens can be satisfied by money damages.
(b) All notices of lis pendens recorded pursuant to the provisions of subsection (a) of this section shall be subject to the provisions of subsection (c) of section 52-325 and sections 52-325a to 52-325c, inclusive.
Gen. Stat. § 46b-80(a) and (b).
Both attorney defendants claim that since title to 5 Shields Lane, Darien was ordered conveyed by Noel Misthopoulos to Patricia Misthopoulos by reason of the July 25, 2006 dissolution of marriage judgment, Noel Misthopoulos had no right, title or interest in 5 Shields Lane after July 25, 2006. The plaintiff's $50,914.17 judgment lien was recorded on January 20, 2009 on the Darien Land records. The attorney defendants both claim that there was no title registered in Noel Misthopoulos' name as of June 24, 2008 and January 20, 2009 by reason of the May 17, 2005 marital lis pendens recorded by Patricia Misthopoulos and the resulting July 25, 2006 dissolution of marriage judgment conveying title to her. The plaintiff's attachment was recorded pursuant to the prejudgment remedy granted by this court on June 24, 2008. (#103.10.) The January 20, 2009 judgment lien related back to the June 24, 2008 attachment. Gen. Stat. § § 52-328(b); and 52-380a(b); Mac's Car City, Inc. v. DiLoreto, 238 Conn. 172, 173, 679 A.2d 340 (1996).
The attorney defendants claim that by 2008 and 2009, Noel Misthopoulos had no interest in 5 Shields Lane, Darien by reason of Gen. Stat. § 46b-80. Therefore plaintiff's attachment and judgment lien would not be effective to secure the plaintiff's judgment against Noel Misthopoulos.
The plaintiff on the other hand claims that Noel Misthopoulos still had an interest in the real property at 5 Shields Lane. The dissolution decree did not divest Noel Misthopoulos of all of his right, title and interest in 5 Shields Lane. He retained the equitable title to the extent of a $420,000 mortgage. The plaintiff argues that the Cantin Lawyers, P.C. attachment and judgment lien are still effective. The plaintiff argues that she has a January 20, 2009 judgment lien that she can enforce on the real property located at 5 Shields Lane, Darien. The legal effect of that judgment lien relates back to the recordation of the June 24, 2008 attachment, in the event that relation back is needed to enforce the Cantin Lawyers, P.C. judgment lien.
" Connecticut follows the 'title theory' of mortgages, which provides that on the execution of a mortgage on real property, the mortgagee holds legal title and the mortgagor holds equitable title to the property." Sargent v. Smith, 78 Conn.App. 691, 695, 828 A.2d 620 (2003), rev'd on other grounds, 272 Conn. 722, 865 A.2d 1129 (2005). " In a title theory state such as Connecticut, a mortgage is a vested fee simple interest subject to complete defeasance by the timely payment of the mortgage debt." (Internal quotation marks omitted.) Connecticut National Bank v. Esposito, 210 Conn. 221, 226, 554 A.2d 735 (1989). The mortgagor has the right to redeem the legal title previously conveyed by performing the conditions specified in the mortgage document.National City Mortgage Company v. Stoecker, 92 Conn.App. 787, 792-93, 888 A.2d 95 (2006).
A mortgage can be garnished. Gen. Stat. § 52-346; Bachyrycz v. Gateway, 30 Conn.App. 52, 55, 618 A.2d 1371 (1993).
The court believes that there are a number of material issues of fact that prevent this court from granting summary judgment on the attorney defendants' claims that the plaintiff's judgment lien is void and unenforceable and thus the plaintiff has not sustained any damages at the hands of the attorney defendants.
Whether or not the December 6, 2010 order of Judge Malone was part of the " all proceedings" of Gen. Stat. § 46b-80(a)?
Whether or not the January 5, 2011 order of Judge Malone was part of the " all proceedings" of Gen. Stat. § 46b-80(a)?
Why was it necessary for Judge Malone to enter two orders on essentially the same topic?
Was one or both of those Judge Malone title transfer orders void?
While the May 17, 2005 lis pendens contained a legal description, neither the December 6, 2010 order nor the November 9, 2010 motion upon which both orders were based contained a legal description.
Under what authority did Judge Malone have to modify the December 6, 2010 order by adding a legal description to the order on January 5, 2011?
The copy of the January 5, 2011 Judge Malone order before this court filed in the dissolution action as #385.00 and in this lawsuit as #142.00, Exhibit A does not contain a legal description.
Can an order issued pursuant to Gen. Stat. § 46b-80(a) be valid if not entered in recordable form i.e., without legal description?
Is an order for a mortgage in a dissolution of marriage judgment by itself an interest in real estate under Connecticut mortgage title law?
Is an order for a mortgage properly recordable in the Darien land records as an interest in real property without specific terms and conditions of the mortgage and a legal description under Connecticut General Statutes Title 49 Chapter 846?
Did the July 27, 2011 order in the dissolution of marriage action (#405.00) terminate Noel Misthopoulos' claim to any portion of the $420,000 mortgage?
Did the July 3, 2012 agreement entered into by Noel Misthopoulos and Patricia Misthopoulos in the dissolution of marriage action terminate Noel Misthopoulos's claim to any portion of the $420,000 mortgage?
Did the July 5, 2012 document release the $420,000 mortgage when that release did not mention the $420,000 mortgage?
Did Judge Malone improperly modify a property dissolution order by not mentioning the $420,000 mortgage in either of his two post-judgment orders?
Did the July 21, 2011 order improperly modify the July 25, 2006 property dissolution order? Was the dissolution of marriage judgment ever opened in order to enter any of the three postjudgment orders?
Since there was no $420,000 mortgage actually prepared or recorded on the Darien land records, can the $420,000 mortgage be subject to the January 20, 2009 Cantin Lawyers, P.C. judgment lien?
The Third Count sounds in conversion by reason of the impairment of the Cantin Lawyers, P.C. judgment lien as against the Douglas defendants.
" The tort of [c]onversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner's rights." (Internal quotation marks omitted.) Hi-HO Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 43, 761 A.2d 1268 (2000). Thus, " [c]onversion is some unauthorized act which deprives another of his property permanently or for an indefinite time; some unauthorized assumption and exercise of the powers of the owner to his harm. The essence of the wrong is that the property rights of the plaintiff have been dealt with in a manner adverse to him, inconsistent with his right of dominion and to his harm . . . The term owner is one of general application and includes one having an interest other than the full legal and beneficial title . . . The word owner is one of flexible meaning, and it varies from an absolute proprietary interest to a mere possessory right . . . It is not a technical term and, thus, is not confined to a person who has the absolute right in a chattel, but also applies to a person who has possession and control thereof." (Citation omitted; internal quotation marks omitted.) Label Systems Corp. v. Aghamohammadi, 270 Conn. 291, 329, 852 A.2d 703 (2004).Deming v. Nationwide Mutual Insurance Company, 279 Conn. 745, 770-71, 905 A.2d 623 (2006).
This tort claim of conversion filed by one attorney against the opposition attorneys in a transaction or litigation brings to the fore two competing legal theories.
Neither group of attorney defendants represented the plaintiff, Raynald B. Cantin, Catherine Seals as Executrix of the Estate of Raynald B. Cantin and/or Cantin Lawyers. P.C. Each of the parties in these various transactions were either attorneys or were represented by attorneys. In effect this case boils down to a claim of one attorney injured by claimed omissions or commissions of attorneys representing other parties in a transaction.
" [D]etermining when attorneys should be held liable to parties with whom they are not in privity is a question of public policy . . . A central dimension of the attorney-client relationship is the attorney's duty of [e]ntire devotion to the interest of the client . . . This obligation would be undermined were an attorney to be held liable to third parties." (Internal quotation marks omitted.) Clukey v. Sweeney, 112 Conn.App. 534, 543, 963 A.2d 711 (2009); see also Jackson v. R.G. Whipple, Inc., 225 Conn. 705, 727, 627 A.2d 374 (1993). " 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." Krawczyk v. Stingle, 208 Conn. 239, 246, 543 A.2d 733 (1988). " As a general rule, attorneys are not liable to persons other than their clients for the negligent rendering of services. Id., at 244, 543 A.2d 733.Stone v. Pattis, 144 Conn.App. 79, 90-91, 72 A.3d 1138 (2013).
" Our Supreme Court has refused to recognize an attorney's liability to his clients' opponents in all cases except those involving claims for abuse of process and vexatious litigation." Carabetta Construction Co., Inc. v. Martinez, Superior Court, judicial district of New Haven, Docket Number CV 05-4003241 S (November 9, 2006, Taylor, J.) ; Gianetti v. Gerardi, 52 Conn.Supp. 207, 215, 44 A.3d 911 (2010); 133 Conn.App. 858, 38 A.3d 1211 (2012); Scharf v. Statewide Grievance Committee, Superior Court, judicial district of Hartford/New Britain at Hartford, Docket Number CV 94-0536033 S (May 11, 1995, Levine, J.) . " Harbor Hill has provided no authority that an attorney has any duty to the opponents of his clients where the attorney is merely acting as the agent of the client. " A principal is generally liable for the authorized acts of his agent; 1 Restatement (Second), Agency § 140, p. 349 (1958) . . ." Gateway Co. v. DiNoia, 232 Conn. 223, 240, 654 A.2d 342 (1995)." Anziano v. Harbor Hill Care Center, Inc., Superior Court, judicial district of Middlesex at Middletown, Docket No. CV 04-0103648 S (October 29, 2004, Aurigemma, J.) .
The other side of this issue of attorney's responsibility is also supported by case law. The failure of an attorney to pay a valid lien when the attorney knew of the lien and has in possession of funds sufficient to pay off the lien has been held by a number of courts to be a conversion. State v. Angelo, 39 Conn.App. 709, 713, 667 A.2d 81 (1995); State v. Blawie, 31 Conn.Supp. 552, 555, 334 A.2d 484 (1974), cert. denied 167 Conn. 693, 333 A.2d 70 (1975); Parkside Condominium v. Putnam Trust Co., Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV 89-0102334S, (May 26, 1994, Karazin, J.); State v. Porzio, Superior Court, judicial district of Hartford at Hartford, Docket Number HHD CV 10-6008253S (November 10, 2010, Robiana, J.) . The defendants claim that they are obligated, pursuant to the Rules of Professional Conduct, to deliver the proceeds of a claim to a client upon their demand. That premise is generally true. Indeed, the adage that " the lawyer's first duty is to the client" is time-tested and a foundation for the practice of law. However, the rule is not absolute. " [T]he lawyer is constitutionally obligated to deliver the property to the client on demand, despite third party claims to the property, except in three limited situations:
(a) if the lawyer knows of a valid judgment concerning the disposition of the property;
(b) the lawyer knows of a valid statutory or judgment lien against the property; or
(c) the lawyer knows of a letter of protection . . ." Informal Opinion 95-20.
Footnote 3 of Informal Opinion 95-20 explains that knowledge of a lien obligates the lawyer to pay, even over the objection of the client. Further, it states that: " It must be noted, however, that the lawyer should not pay, but merely escrow, funds if there are defenses to the application of the lien that the client could assert."
More directly stated, " A statutory or judgment lien creates a presumptive interest in property, but it is not a final determination of rights to the property. If the client challenges payment of the lien, the lawyer has an obligation to recognize the rights of both the third-party and a client. However, the lawyer 'may not unilaterally assume to arbitrate the dispute between the client and the third-party.' Comment, Rule 1.15. Therefore, the lawyer must hold the property as a fiduciary, Rule 1.15(a), and encourage a judicial resolution of the competing claims." Informal opinion 95-20.State v. Porzio, Id. (November 10, 2010, Robiana, J.).
Impairment of a lien by an attorney can support liability for conversion. Unigard Insurance Company v. Tremont, 37 Conn.Supp. 596, 600-01, 430 A.2d 30 (1981); Devitt v. Manulik, 176 Conn. 657, 662-63, 410 A.2d 465 (1979). The fact of conversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner's rights. Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 43, 761 A.2d 1268 (2000).
The Douglas defendants attended the July 5, 2012 closing. They did not prepare or sign the only Closing Statement presented to this court. (#144.00, Exhibit 1 of Exhibit F.) They represented Noel Misthopoulos and attended the closing to protect his interests. According to that Closing Statement $100,000.00 was paid to " Carr, Douglas & Cline, Trustees Payment to N. Misthopoulos." The Closing Statement contains no breakdown of the $100,000.00. In receiving the payment of $100,000.00 at the closing in the name of " Carr, Douglas & Cline, Trustee, " the Douglas defendants had sufficient funds to pay the Cantin Lawyers, P.C. judgment lien in full and they did not pay any part of that judgment lien.
The Real Estate Settlement Procedures Act (RESPA) requires that the " settlement agent" prepare and execute a HUD-1 form that shows all disbursement made and required to be made at the real estate closing. No party cited RESPA, furnished the HUD-1 form to the court or identified who the settlement agent was.
The court finds that whether or not the possession by the Douglas defendants of sufficient funds at the July 5, 2012 closing to pay off in full the Cantin Lawyers, P.C. judgment lien amounts to conversion is a material issue of fact. This material issue of fact is further buttressed by the Douglas defendants preparing, signing and recording a lis pendens in favor of Noel Misthopoulos that was recorded on the Darien land records on June 18, 2012 (#150.00, Exhibit D, paragraph 8, attachment). As such the Douglas defendants are presumed to know the contents of the Darien land records as to the title to 5 Shields Lane including the Cantin Lawyers, P.C., June 24, 2008 attachment and January 20, 2009 judgment lien. Bristol Lumber Co. v. Dery, 114 Conn. 88, 91, 157 A. 640 (1931).
" Every person who takes a conveyance of an interest in real estate is conclusively presumed to know those facts which are apparent upon the land records concerning the chain of title of the property described in the conveyance; and that this presumption of knowledge is, for all legal purposes, the same in effect as actual knowledge." Beach v. Osborne, 74 Conn. 405, 412, 50 A. 1019 (1902). " Whether a purchaser has or has not actual notice of the contents of a prior deed properly executed and duly recorded, the effect is the same. The policy of our law makes the record sufficient notice." Id., 412. " Generally, a notice of lis pendens is simply a notice that, when properly recorded, warns third parties, such as prospective purchasers, that the title to the property is in litigation; the doctrine underlying lis pendens is that a person who deals with property while it is in litigation does so at his peril . . ." Ghent v. Meadowhaven Condominium, Inc., 77 Conn.App. 276, 284, 823 A.2d 355 (2003).
The court denies Summary Judgment as to the Douglas defendants as to the Third Count sounding in conversion.
Statutory theft under § 52-564 is synonymous with larceny under General Statutes § 53a-119 . . . Pursuant to § 53a-119, [a] person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or [withholds] such property from an owner . . . Conversion can be distinguished from statutory theft as established by § 53a-119 in two ways. First, statutory theft requires an intent to deprive another of his property; second, conversion requires the owner to be harmed by a defendant's conduct. Therefore, statutory theft requires a plaintiff to prove the additional element of intent over and above what he or she must demonstrate to prove conversion. (Citations omitted; internal quotation marks omitted.) Howard v. MacDonald, 270 Conn. 111, 129 n.8, 851 A.2d 1142 (2004).Deming v. Nationwide Mutual Insurance Company, 279 Conn. 745, 770-71, 905 A.2d 623 (2006).
The Sixth Count claims a violation of Gen. Stat. § 52-564 commonly called statutory theft. The essential element requires proof of an intentional act depriving another of property. Howard v. MacDonald, 270 Conn. 111, 129, fn.8, 851 A.2d 1142 (2004). The omissions or commissions of the Douglas defendants at the July 5, 2012 closing were designed to protect the interests of their client, Noel Misthopoulos. There is insufficient proof of criminal intent in the Douglas defendants' failure to pay the Cantin Lawyers, P.C. judgment lien.
Summary judgment as to the Sixth Count sounding in statutory theft as to the Douglas defendants is granted.
The Fourth Count sounds in unjust enrichment as to all defendants. " Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs' detriment." The Douglas defendants negotiated on behalf of Noel Misthopoulos a cash payment of $100,000 to be paid at the closing. They prepared and recorded the lis pendens. They prepared the withdrawal of the appeal and lis pendens. (#150.00, Exhibit H.) They negotiated, prepared and signed the general release. (#150.00, Exhibit G, paragraph 3.) (#142.00, Exhibit E.) They negotiated and participated in the drafting of the July 3, 2012 Agreement. Noel Misthopoulos incurred counsel fees for those legal services and could have paid those fees from the $100,000. New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451-52, 970 A.2d 592 (2009). " Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy . . ." Id., 451. According to the Closing Statement before this court, there is no mention that the Douglas defendants paid to themselves a sum of money at the closing. The Closing Statement shows the payment of $2,900.00 to the Moore defendants. The Douglas defendants did receive $100,000 of the closing proceeds on behalf of their client, Noel Misthopoulos. Noel Misthopoulos could have disbursed to the Douglas defendants further sums from the $100,000 paid to him at the closing in the form of attorney fees, recording fees and other disbursements. The Douglas defendants have not offered any evidence of the security, attachment or court order upon which the Douglas defendants may have received these sums. The plaintiff has a court judgment secured by a recorded judgment lien for sums well in excess of $50,000.
The Douglas defendants could very well have been paid money from the $100,000.00 paid to Noel Misthopoulos at the closing. The plaintiff to date has not been paid any sums to her detriment. The plaintiff has offered sufficient evidence to this court that the issue of unjust enrichment is a material issue of fact as to the Douglas defendants.
Summary judgment as to the Fourth Count as to the Douglas defendants sounding in unjust enrichment is denied.
These are three counts to which the Summary Judgment is addressed as to the Douglas defendants.
This court grants the defendant's, Carr, Douglas & Cline, LLC, August 3, 2015 Motion for Summary Judgment (#141.00) as to the Sixth Count sounding in statutory theft in violation of Gen. Stat. § 52-564.
This court denies the defendant's, Carr, Douglas & Cline, LLC, August 3, 2015 Motion for Summary Judgment (#141.00) as to the Third Count sounding in conversion and as to the Fourth Count sounding in unjust enrichment.