Opinion
X03HHDCV176087023S
07-15-2019
Oleg SHIKHMAN v. BOBCAT ENDOSCOPY, LLC et al.
UNPUBLISHED OPINION
OPINION
Carl J. Schuman, Judge
The court applies the well-settled standards for deciding a motion for summary judgment and construes the evidence in a light most favorable to the nonmovant. See DiPietro v. Farmington Sports Arena, LLC, 306 Conn. 107, 115-16, 49 A.3d 951 (2012); Morrissey-Manter v. Saint Francis Hospital & Medical Center, 166 Conn.App. 510, 517-18, 142 A.3d 363, cert. denied, 323 Conn. 924, 149 A.3d 962 (2016).
I. Defendants’ Motion for Summary Judgment
1. Counts 1 and 2 (Breach of the 2009 Consulting Agreement)
Counts 1 and 2 of the operative Second Amended Complaint (complaint) (Entry #126.00), allege that the defendants breached their promise, made in a 2009 Consulting Agreement (agreement), to issue the plaintiff "15, 000 units of ‘Profits Interest’" and a "20% share of the outstanding equity of LumenR." (Compl. paras. 15, 34, 35, 43, 44.) In their opening brief, the defendants claim that, under the agreement, they promised to compensate the plaintiff only with "15, 000 Class E Units of the Company." (Def. Br., p. 9.) The defendants arrive at this conclusion only by misquoting the agreement. Instead of promising the plaintiff 15, 000 Class E Units of the Company, the agreement in actuality states that the plaintiff would receive "15, 000 of ‘Profits Interest.’" (Def. Ex. D, para. 3(a).) In any event, the defendants deny that they also promised the plaintiff a 20% ownership interest in Lumen. However, merely establishing that they made no such promise would not entitle the defendants to summary judgment. In order to obtain summary judgment on these two counts, the defendants would have to show not only that the contract did not include a promise of 20% ownership but also either: 1) that the defendants paid the plaintiff 15, 000 units of profits interest or 2) that the plaintiff did not perform the work requested. The defendants make no showing on either of the latter two points. Instead, they just argue that "[a]ny relief under Shikhman’s first and second counts is properly limited to 15, 000 profits interests." (Def. Reply Brief, p. 1.) That argument does not provide a basis for summary judgment on the breach of contract counts.
The court will refer to the entity as "Lumen" unless it is quoting the complaint or some other document.
2. Count 9 (Promissory Estoppel concerning the 2012 Compensation Package)
A. Liability
In count nine, the plaintiff alleges that, in March 2012, defendant Piskun promised to pay "cash compensation to Mr. Shikhman and issue him equity interests in LumenR." (Compl., para. 18.) The plaintiff cites to a July 2012 email from Piskun that specifies that his promise was for $3,000 monthly and a "total 1.5% LumenR, subject to capital gains only." (Def. Ex. F.) As the court ruled in connection with the motion to strike, this allegation, now supplemented by a showing of evidence, reveals a promise that was sufficiently clear and definite to constitute a basis for promissory estoppel. (Entry #119.00, p. 1.) The plaintiff’s allegation that he detrimentally relied on this promise; (Pl. Ex. F, ¶5); generates a fact issue on this count that should go to the trier of fact.
B. Statute of Limitations for Promissory Estoppel
The defendants assert that the 3-year statute of limitations for oral contracts applies (General Statutes § 52-581(a)). The plaintiff contends that the 6-year statute for suit on a "simple or implied contract" applies. (General Statues § 52-576(a).) The Appellate Court has explained that both statutes apply to oral contracts but that the 3-year statute applies "only to executory contracts" which it defines as contracts in which "neither party has fully performed its contractual obligations ..." Nassra v. Nassra, 180 Conn.App. 421, 435-36, 183 A.3d 1198 (2018).
In the present case, the plaintiff’s affidavit alleges that he fully performed his part of the contract. (Pl. Ex. F, ¶9.) Therefore, there is at least a fact issue as to whether the six-year statute applies, which would render the action timely filed and warrant denial of the summary judgment motion on this count on statute of limitations grounds. The court accordingly does not need to reach the plaintiff’s alternative arguments that the defendants’ continuing course of wrongful conduct or fraudulent concealment tolls the statute of limitations for this count.
3. Counts 5 and 6 (Fraud based on 2006/2009 Misrepresentations by LumenR and Piskun)
Counts 10 and 11 (Fraud based on 2012 Misrepresentations by LumenR and Piskun)
Because the court finds that the statute of limitations arguments for counts ten and eleven are dispositive, it is not necessary to address the defendants’ arguments on the merits of these counts. The court discusses the statute of limitations issues on counts five and six at the same time because of the similarity of issues.
There is no dispute that counts five, six, ten, and eleven, all alleging fraudulent misrepresentation, are subject to the three-year statute of limitations for torts. See Kidder v. Read, 150 Conn.App. 720, 726, 93 A.3d 599 (2014); General Statutes § 52-577. The statute begins with the date of the act or omission complained of, not the date when the plaintiff first discovers an injury. Id. Given that the plaintiff filed this suit on October 23, 2017, the statute would ordinarily bar actions for fraudulent misrepresentations made before October 23, 2014. Because counts five and six expressly apply to "2006/2009 Misrepresentations by LumenR" and counts ten and eleven allege fraud involving "2012 Misrepresentations by LumenR" (Complaint, counts five, six, ten, and eleven); these counts are presumptively barred by the statute of limitations.
The plaintiff asserts that the continuing course of conduct and fraudulent concealment doctrines toll the statues. The continuous course of conduct doctrine "recognizes that the ‘act’ or ‘omission’ that commences the limitation period may not be discrete and attributable to a fixed point in time. [T]he doctrine is generally applicable under circumstances where [i]t may be impossible to pinpoint the exact date of a particular negligent act or omission that caused injury or where the negligence consists of a series of acts or omissions and it is appropriate to allow the course of [action] to terminate before allowing the repose section of the [limitation period] to run ..." (Internal quotation marks omitted.) Essex Ins. Co. v. William Kramer & Associates, LLC, 331 Conn. 493, 503, 205 A.3d 534 (2019).
The continuous course of conduct doctrine does not apply here because there was no continuous course of the alleged conduct. The plaintiff alleges that the defendants made discrete, specific misrepresentations to him in 2006 (Complaint, ¶¶48, 58), 2009 (Complaint, ¶¶49, 59), and 2012 (Complaint, ¶¶81, 83, 88, 90). There are no allegations of misrepresentations after that point. Thus, it is entirely possible to "pinpoint the exact date of a particular negligent act or omission that caused injury." (Internal quotation marks omitted.) Essex Ins. Co. v. William Kramer & Associates, LLC, supra, 331 Conn. 503. Nor is this case one in which, after 2012 "the negligence consists of a series of acts or omissions and it is appropriate to allow the course of [action] to terminate before allowing the repose section of the [limitation period] to run ..." (Internal quotation marks.) Id.
What the plaintiff argues is that the defendants owed him a continuing fiduciary duty to make good on their promises. Essentially, the plaintiff’s argument is that the defendants failed to make him whole. (Pl. Br., pp. 25-30.) This argument is not a basis for the continuous course of conduct doctrine. See Flannery v. Singer Asset Finance Co., LLC, 312 Conn. 286, 322, 94 A.3d 553 (2014) (citing Fitzgerald v. Seamans, 553 F.2d 220, 230 (D.C.Cir. 1977) ("the mere failure to right a wrong and make [the] plaintiff whole cannot be a continuing wrong which tolls the statute of limitations, for that is the purpose of any lawsuit and the exception would obliterate the rule"). The plaintiff’s theory is that the statute of limitations would not begin to run until the defendants paid him what they promised. At that point, of course, the plaintiff would probably not need to sue. Thus, the plaintiff in actuality seeks an indefinite statute of limitations. That cannot be the law.
The fraudulent concealment doctrine requires the plaintiff to prove by "clear, precise, and unequivocal evidence" that the defendants: "(1) had actual awareness, rather than imputed knowledge, of the facts necessary to establish the plaintiffs’ cause of action; (2) intentionally concealed these facts from the plaintiffs; and (3) concealed the facts for the purpose of obtaining delay on the plaintiffs’ part in filing a complaint on their cause of action." Falls Church Group, Ltd. v. Tyler, Cooper & Alcorn, LLP, 281 Conn. 84, 105-10, 912 A.2d 1019 (2007). See also General Statutes § 52-595. The plaintiff’s argument founders on the third element. The plaintiff argues that it is logical to infer that the only reason the defendants made misrepresentations to the plaintiff in 2012 was to "prevent him ... from bringing a lawsuit to recover on his claims." (Pl. Br., p. 33.) The plaintiff’s position is essentially that they can avoid summary judgment based on what in reality is an inference that one could draw in virtually every case: that wrongdoers seek to avoid lawsuits. The plaintiff presents no evidence that the defendants ever mentioned or referred to lawsuits or litigation as one of their concerns. Without such evidence, the plaintiff has not shown "clear, precise, and unequivocal evidence" that the defendants concealed the facts "for the purpose of obtaining delay on the plaintiffs’ part in filing a complaint on their cause of action." Accordingly, the court rejects the fraudulent concealment doctrine in this case.
Further, on April 17, 2013, counsel for the plaintiff wrote an attorney representing the defendants a three-page letter that previews both plaintiff’s 2009 claims and his 2012 claims against the defendants. The first part of the letter addresses the claim that "Shikhman performed consulting and product development services [between 2006 and 2009] based on Dr. Piskun’s promise that he would receive 15% of the equity securities of the Company." The letter then advances the claim that, in actuality, Shikhman received "absolutely no compensation for these services other than (purportedly) equity interests in the Company that Dr. Piskun described as 15, 000 Class E Units ..." The letter next discusses the claim that "[i]n early 2012, Dr. Piskun requested that Mr. Shikhman resume providing consulting and product development services to the Company [and that] Mr. Shikhman commenced providing such services in March 2012 in reliance on Dr. Piskun’s promise to cause the Company to pay him $45,000 per year (for 8 hours of service per week) and issue him equity securities of the Company representing an additional 1.5% of the outstanding equity securities of the Company." (Def. Ex. I, pp. 1-2.) The letter concluded stating that "Mr. Shikhman intends to bring claims against the Company and Dr. Piskun based on, among other causes of action, fraud, misappropriation, theft, and violation of unfair trade practices acts." (Def. Ex. I, p. 2.)
Under these circumstances, even if the continuous course of conduct or the fraudulent concealment doctrine applied after 2009 (for counts five and six) and 2012 (for counts ten and eleven), these doctrines would not apply after April 2013. "The continuing course of conduct doctrine reflects the policy that, during an ongoing relationship, lawsuits are premature because specific tortious acts or omissions may be difficult to identify and may yet be remedied ..." (Internal quotation marks omitted.) Rosenfield v. Rogin, Nassau, Caplan, Lassman & Hirtle, LLC, 69 Conn.App. 151, 160, 795 A.2d 572 (2002). Obviously, as of April 2013, plaintiffs’ counsel no longer believed that a lawsuit for fraud would be premature. Thus, by that time, the continuous course of conduct doctrine was not necessary to enable the plaintiff to bring an action for the gravamen of the conduct that he now alleges in the complaint. See Fenn v. Yale University, 283 F.Supp.2d 615, 638 (D.Conn. 2003) (given assertion of continuing course of conduct exception, "the applicable three-year statute of limitations did not begin to run until January 1993, when Yale learned the truth"). Similarly, the lawsuit was obviously not fraudulently concealed if the plaintiff could threaten to file it. Accordingly, because the plaintiff, at a very minimum, did not file suit within three years of April 2013, the court grants the motion for summary judgment on counts five, six, ten, and eleven based on statute of limitations grounds.
II. Plaintiff’s Motion for Summary Judgment
1. 4th Counterclaim (Breach of Fiduciary Duty)
A. Standing
As a threshold matter, the plaintiff argues that Lumen lacks standing to litigate its first four counterclaims (now only the fourth, in view of the withdrawal of the first three) because Lumen sold and assigned its rights to the Boston Scientific Corp. (BSC). However, Lumen alleges in its counterclaim that, in view of an October 2017 letter to BSC written by the plaintiff, "BSC has lodged an indemnification claim against escrow funds that would have otherwise been payable to LumenR on November 1, 2017." (Counterclaim, Entry #134.00, in 17, 43.) The plaintiff does not dispute the allegation that LumenR did not receive funds that it expected to receive in November 2017. The loss of funds for almost a two-year period obviously causes financial injury. Therefore, Lumen has made a sufficient showing of standing.
B. Statute of Limitations
In the fourth counterclaim, Lumen claims a breach of fiduciary duty by the plaintiff and alleges that "to the extent that Shikhman could be properly considered a named inventor on any of the Referenced Patents arising from Shikhman’s engagement in 2012, Shikhman was and is obligated by his fiduciary duty to LumenR to assign all ownership rights in such intellectual property to LumenR." (Counterclaim, ¶42.) In view of the statute of limitations issues, it is not necessary for the court to address the plaintiff’s argument on the merits that he did not breach a fiduciary duty to Lumen.
The plaintiff argues that count four transgresses the three-year statute of limitations for tort claims. General Statutes § 52-577. The plaintiff relies on the fact that Lumen, according to its own counterclaim, alleges that "Shikhman again parted ways with LumenR in December[, ] 2012." (Counterclaim, ¶11.) According to the plaintiff, any fiduciary duty of the plaintiff ended at that point, making the counterclaim for breach of fiduciary, which Lumen originally filed in September 2018 (Entry #129.00), untimely under the statute. The court agrees with the plaintiff. Given Lumen’s admission that the plaintiff "parted ways" with Lumen in 2012, it is hard to see how the plaintiff could continue any fiduciary relationship with, or influence over, Lumen after that point. See Essex Ins. Co. v. William Kramer & Associates, LLC, supra, 331 Conn. 512 ("The unique element that gives rise to a fiduciary duty [is] ... the risk that the other party could be taken advantage of as a result of one party’s access to, or influence regarding, another party’s moneys, property, or other valuable resources ...") If the fiduciary relationship has ended, it logically follows that the plaintiff could no longer breach a fiduciary duty. Thus, this alleged tort did not continue after 2012. Because Lumen did not file its counterclaim within three years of that date, the three-year statute of limitation bars this count.
2. 5th Counterclaim (Tortious Interference with Contract)
The plaintiff claims that there are no genuine factual issues as to whether the plaintiff had an improper motive when he informed BSC in the October 2017 letter of his claims of inventorship in the LumenR device. (Pl. Ex. A, ¶8; Def. Ex. E to Ackerman Declaration.) In opposition, Lumen identifies admissible evidence that the plaintiff obtained a confidential agreement and learned that BSC planned to release its payments to Lumen, then held in escrow, on November 1, 2017. The plaintiff sent his letter just two weeks before the escrow release date. (Def. Br., p. 22.) From this evidence of temporal proximity, the fact-finder could reasonably infer that the plaintiff tortiously intended to interfere with the contract between BSC and Lumen. Because of this genuine issue of material fact, the court denies the summary judgment motion on count five of the counterclaim.
III. Conclusion
The court grants the defendants’ motion for summary judgment on counts five, six, ten, and eleven of the complaint and denies the remainder of the motion. The court grants the plaintiff’s motion for summary judgment on the fourth counterclaim and denies the motion on the fifth counterclaim.
It is so ordered.