Opinion
No. CV X06 04 402459 S
May 13, 2010
MEMORANDUM OF DECISION ON THE DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (#147)
STATEMENT OF THE CASE
The plaintiffs in this action are Summitwood Development, LLC of Connecticut (Summitwood) and Nipmuc Properties, LLC of Massachusetts (Nipmuc). The defendants are PDC-El Paso Meriden, LLC of Connecticut (PDC-EI Paso), and its agents Kenneth Roberts, Michael Armitage, Thomas Atkins and John DeTore. This case arises out of a commercial transaction involving the plaintiffs' sale of a large tract of real property to the defendant PDC-EL Paso. The land (Nipmuc Tract) is situated in the adjoining municipalities of Meriden and Berlin, Connecticut. The transaction involved the building of a power-generating company (power plant) on the property after the sale. As explained more specifically below, the plaintiff's assert various claims against the defendants relating to this sale transaction. Pending before the court is the defendants' motion for summary judgment. The defendants maintain that the complaint is barred by the doctrine of res judicata because the plaintiffs' claims arise from the same transaction and nucleus of facts adjudicated an earlier action, in which the court, Taylor, J., rendered judgment for the defendants after a lengthy trial (the 2002 case). See Nipmuc Properties, LLC v. PDC-El Paso Meriden, LLC, Superior Court, judicial district of New Haven at Meriden, Docket No. CV 02 0281664 (August 11, 2005, Taylor, J.), aff'd, 103 Conn.App. 90, 927 A.2d 978, cert. denied, 284 Conn. 932, 934 A.2d 247 (2007). The court agrees with the defendants' position and grants the summary judgment motion.
The defendants' motion for summary judgment was filed on November 13, 2009. On January 8, 2010, the plaintiffs filed their memorandum in opposition to the motion. The defendants filed a responsive memorandum on January 22, 2010. Argument was heard before this court on February 1, 2010.
Practice Book § 17-49 provides that summary judgment shall be granted "if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." (Internal quotation marks omitted.) Schilberg Integrated Metals Corp. v. Continental Casualty Co., 263 Conn. 245, 252, 819 A.2d 773 (2003). "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Id. "Moreover, summary judgment is an appropriate vehicle for raising a claim of res judicata." Joe's Pizza, Inc. v. Aetna Life Casualty Co., 236 Conn. 863, 867 n. 8, 675 A.2d 441 (1996). Based on the pleadings and the parties' submissions, the following facts are pertinent to the disposition of the defendants' summary judgment motion.
In February of 1998, Joseph Carabetta (on behalf of the plaintiff Nipmuc) and the defendant Armitage (on behalf of the defendant PDC-El Paso) engaged in negotiations for Nipmuc to sell the Nipmuc Tract to PDC-El Paso. According to the complaint, during these negotiations Armitage "repeatedly represented that PDC-El Paso would deed back to Summitwood . . . as many as thirty . . . contiguous acres of land within the Nipmuc Tract." On April 8, 1998, Summitwood entered into an agreement with PDC-El Paso "in reliance upon the . . . representations of defendant Armitage that Summitwood would retain the right, without tendering further consideration, to acquire, use and enjoy thirty . . . acres of land within the Meriden portion of the Nipmuc Tract."
According to the complaint, Joseph Carabetta was "the duly authorized agent and representative of Nipmuc and of Summitwood" in the sale transactions. Complaint ¶ 10. Roberts, Armitage, Atkins and Detore were "agent(s), employee(s) and/or authorized representative(s) of defendant PDC-El Paso." Complaint ¶¶ 38-41.
Over the course of the next three months, Armitage "sought certain accommodations and modifications of the purchase and sales agreement, including the formation of a trust to hold title to the Nipmuc Tract on an interim basis, pending a closing of the transaction between PDC-El Paso and Summitwood." On July 15, 1998, a trust denominated the "1998 Real Estate Trust" (the trust) was formed with one Attorney Thomas Cadden designated as its trustee. On the same day, Summitwood entered into an "amended and restated purchase and sale agreement" (the July 1998 agreement) with PDC-El Paso and Cadden, which stated in relevant part that Summitwood "shall have the right to purchase for no consideration, up to thirty . . . acres of the [Nipmuc Tract]." Said agreement also provided for a closing on the Nipmuc Tract on or before December 31, 2000.
In compliance with the July 1998 agreement, Nipmuc deeded the Nipmuc Tract to the trust pending closing and PDC-El Paso applied to the Connecticut siting council (the council) for regulatory approval of the power plant that it intended to construct and operate on a portion of the Nipmuc Tract comprising approximately thirty-six acres. Based on the specifications provided by PDC-El Paso regarding the proposed power plant, the council issued a certificate of environmental compatibility and public need in April of 1999. At some time between April 1999 and December 2000, however, PDC-El Paso determined that it was necessary to modify its plans for the power plant to use different turbine generating equipment than originally proposed. Accordingly, Armitage and Roberts advised Nipmuc and Summitwood that implementing the modifications would require that PDC-El Paso again seek the approval of the council, thereby rendering it unable to meet the December 31, 2000 closing deadline set forth in the July 1998 agreement.
On December 21, 2000, the defendants Atkins and Roberts met with Carabetta to negotiate an amendment to the July 1998 agreement extending the closing date to January 21, 2001, and reducing the purchase price by $500,000. The amendment provided that Nipmuc would acquire a lease of a portion of the property, rather than having a right to purchase a portion. More specifically, the complaint alleges that in order to induce Carabetta to agree to the amendment, Atkins and Roberts agreed that as part of the sale, PDC-El Paso would "lease back to Summitwood or its designee, Nipmuc, approximately 51 contiguous acres of the Nipmuc Tract." The complaint further alleges that Atkins and Roberts represented that: the lease to the fifty-one-acre parcel would be effective upon the council's granting approval to PDC El-Paso for the necessary modification; and that they would apprise the council of the terms of the lease back agreement. A form of lease was prepared together with a form of deed to the fifty-one acre parcel, and both were simultaneously executed and placed in trust with the trustee. Summitwood and PDC-El Paso memorialized the changes to their contract, entering into a new amendment to the purchase and sale agreement (the December 2000 amendment).
Despite Atkins, Armitage and Roberts' repeated representations that the council had been apprised of the increased allotment in acreage to Summitwood pursuant to the December 2000 amendment, on August 8, 2001, the plaintiffs discovered that the council was never actually notified of the same. Rather, throughout the course of the proceedings with the council, agents of PDC-El Paso represented that any remaining property within the Nipmuc Tract not needed for the power plant would be donated to the municipalities of Meriden and Berlin. On September 6, 2001, the defendants delivered a letter to the council stating that: (1) Summitwood and Nipmuc's right to the use and enjoyment of the fifty-one-acre parcel was "subject to approval of the council"; (2) the contractual agreements underlying the plaintiffs' rights were entered into "subsequent to the council's original decision and order"; and (3) disapproval by the council would result in the fifty-one-acre parcel being "donated to the city of Meriden, purportedly free of plaintiffs' right to the use and enjoyment thereof." The plaintiffs claim that "[t]he false content and negative tenor of [this] letter virtually assured that the council would take action contrary to [the] plaintiffs' interest," and that they "have been and continue to be substantially deprived of the benefit of the bargain and of the use and enjoyment of [this fifty-one] acre parcel."
On May 17, 2004, the plaintiffs instituted the present action. The complaint contains nine counts. The first count alleges common-law fraud against defendants PDC-El Paso, Roberts, Armitage, Atkins. The second count is against defendant Roberts claiming breach of contract. In the second count, Summitwood claims that Roberts breached an agreement with Summitwood to act as Summitwood's liaison with the council; Nipmuc alleges that it was a third-party beneficiary of the contract. The third count alleges that Roberts breached the implied covenant of good faith and fair dealing of this agreement. Counts four, five and six are against all the defendants. The fourth count alleges a violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110b. The fifth count alleges civil conspiracy. The sixth count alleges tortious interference with contractual relations. The seventh count claims slander of title against PDC-El Paso. The eighth count seeks reformation of the sale agreement to comport with Summitwood's understanding "that the lease would be effective upon PDC-El Paso receiving approval to construct and operate the electric generating facility on the Nipmuc Tract." Count nine asserts a claim for "fraudulent concealment" against all the defendants.
In or about August 2002, prior to the commencement of the present action, Nipmuc instituted another action against PDC-El Paso and other parties. In the 2002 case, as indicated by the trial and appellate courts' opinions, Nipmuc also asserted its factual contentions about the sale transaction and its failure to receive the leasehold interests after the council approved the construction of the power plaint. That complaint sought a declaration that the lease was valid and an order that the trustee, Thomas Cadden, deliver the lease to NIPMUC. The 2002 case was tried to the court, Taylor, J., and the court rendered a verdict in favor of the defendants. In the 2002 case, the court considered the parties' evidence on how the sale agreement should be construed and adjudicated the question "whether the parties tied the question of the delivery of the lease to its approval by [the council]." The court found that under the terms of the sale agreement, the delivery of the lease by the escrow agent was conditioned on the council's approval of its amended application, including approval of the proposed lease to Nipmuc. More specifically, in ruling in favor of PDC-El Paso on its first special defense, the court found that the council's approval of the lease was a condition precedent to the lease being delivered and effectuated. Based on these findings, the court denied Nipmuc's request for declaratory and injunctive relief. The trial court's decision was affirmed on appeal. Nipmuc Properties, LLC v. PDC-El Paso Meriden, LLC, supra 103 Conn.App. 90.
The other defendants in the 2003 action were Meriden Gas Turbines LLC (who purportedly was assigned all of PDC-El Paso's interest in the sale contract), Thomas P. Cadden, as trustee of the 1998 real estate trust, and the City of Meriden.
Specifically, the prayer for relief in the 2002 complaint, as amended, stated the following Wherefore, NIPMUC Properties LLC prays that this Court:
1. Determine and enter judgment declaring that the Lease is valid and in effect, and that without regard for what entity may be or become the record owner of the leased land, NIPMUC Properties LLC, and its assigns, are entitled to all of the rights set forth in the lease so long as they fulfill their obligations under the lease;
2. Determine and enter judgment directing that Cadden specifically perform the terms of the amendment and deliver the lease to NIPMUC Properties LLC.
3. Enter such further orders and relief as may be necessary and just.
DISCUSSION
"The doctrine of res judicata holds that an existing final judgment rendered upon the merits without fraud or collusion, by a court of competent jurisdiction, is conclusive of causes of action and of facts or issues thereby litigated as to the parties and their privies in all other actions in the same or any other judicial tribunal of concurrent jurisdiction . . . If the same cause of action is again sued on, the judgment is a bar with respect to any claims relating to the cause of action which were actually made or which might have been made . . . The rule of claim preclusion prevents reassertion of the same claim regardless of what additional or different evidence or legal theories might be advanced in support of it . . .
"[The Supreme Court has] adopted a transactional test as a guide to determining whether an action involves the same claim as an earlier action so as to trigger operation of the doctrine of res judicata. [T]he claim [that is] extinguished [by the judgment in the first action] includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose. What factual grouping constitutes a transaction and what groupings constitute a series, are to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage . . . In applying the transactional test, we compare the complaint in the second action with the pleadings and the judgment in the earlier action . . .
"Finally . . . [the] decision [regarding] whether to apply the doctrine of res judicata to claims that have not actually been litigated should be made based upon a consideration of the doctrine's underlying policies, namely, the interests of the defendant and of the courts in bringing litigation to a close . . . and the competing interest of the plaintiff in the vindication of a just claim. We have stated that res judicata should be applied as necessary to promote its underlying purposes. These purposes are generally identified as being (1) to promote judicial economy by minimizing repetitive litigation; (2) to prevent inconsistent judgments which undermine the integrity of the judicial system; and (3) to provide repose by preventing a person from being harassed by vexatious litigation . . . The judicial [doctrine] of res judicata . . . [is] based on the public policy that a party should not be able to relitigate a matter which it already has had an opportunity to litigate . . . Stability in judgments grants to parties and others the certainty in the management of their affairs which results when a controversy is finally laid to rest." (Emphasis in original; citations omitted; internal quotation marks omitted.) New England Estates, LLC v. Branford, 294 Conn. 817, 842-43, 988 A.2d 229 (2010).
"Accordingly, the elements of res judicata are (1) a final judgment on the merits in an earlier suit, (2) sufficient identicality between the causes of action asserted in the earlier and later suits, and (3) sufficient identicality between the parties in the two suits." Gonzalez v. Banco Central Corp., 27 F.3d 751, 755 (1st Cir. 1994).
Any comparison between this action and the 2002 case makes it indisputedly clear that both cases arise from the same connected transactions and operative facts specifically involving the plaintiffs' claim that their interests were not fully articulated to the council and that under the terms of the sale agreement, Nipmuc was entitled to receive a leasehold interest in the fifty-one-acre parcel. Furthermore, the motivation behind both of these actions is also to address the same injury: Nipmuc and Summitwood seek redress for the alleged wrongful acts committed by PDC-El Paso and its agents causing Nipmuc to be deprived of the subject lease.
The 2002 action sought different remedies than the present action, but in these actions the plaintiffs are merely asserting alternate theories of recovery for the same underlying conduct. In 2002, Nipmuc sued PDC-El Paso requesting the court to interpret and enforce the sale agreement in order to declare Nipmuc's purported leasehold interest "valid and in effect" and to direct the trustee to deliver the lease to Nipmuc. The first and ninth counts of the present complaint allege fraud regarding the defendants' conduct in the negotiation or performance of the sale agreement. The second and third counts of the present complaint against Roberts are for his breach of a contract that he would "act as Summittwood's sole liaison to communicate with both PDC-EI Paso and the council." These counts against Roberts are entirely based on and emanate from the sale agreement and the plaintiffs' claims that PDC-El Paso did not sufficiently present or articulate their interests to the council. Similarly, the fourth, fifth and sixth counts of the complaint alleging CUTPA violations, civil conspiracy and tortious interference are all premised on the defendants' actions pertaining to the negotiation or performance of the sale contract. The eighth count seeks reformation of the sale agreement to comport with Summitwood's understanding "that the lease would be effective upon PDC-El Paso receiving approval to construct and operate the electric generating facility on the Nipmuc Tract." The relief requested in count eight seeks a remedy that would directly conflict with the holding of the 2002 case because the court there held that the lease would not become effective solely upon the council's approval of the application to construct the electric generating facility. The 2002 case held that the council's approval of the lease itself was a condition precedent to the delivery of the lease and that this condition had not been met.
Consequently, the fact that the plaintiffs are asserting different claims in the two actions does not preclude the application of the res judicata doctrine, because as previously explained, res judicata not only bars claims that were actually asserted in the earlier action, but also bars claims that might have been made in that earlier action. The plaintiffs do not even contend that the claims of the present action could not have been asserted in the 2002 case. "The rule of claim preclusion prevents reassertion of the same claim regardless of what additional or different evidence or legal theories might be advanced in support of it." Fink v. Golenbock, 238 Conn. 183, 191, 680 A.2d 1243 (1996); accord Powell v. Infinity Ins. Co., 282 Conn. 594, 922 A.2d 1073 (2007); Duhaime v. American Reserve Life Ins. Co., 200 Conn. 360, 511 A.2d 477 (1986); Wade's Dairy, Inc. v. Fairfield, 181 Conn. 556, 436 A.2d 24 (1980); Stein v. Horton, 99 Conn.App. 477, 914 A.2d 606 (2007); Labieniec v. Nichols, 18 Conn.App. 117, 556 A.2d 635 (1989).
"To understand the transactional approach, it is necessary to appreciate that a single transaction or series of transactions can — and often does — give rise to a multiplicity of claims. Phrased another way, a single cause of action can manifest itself in an outpouring of different claims, based variously on federal statutes, state statutes, and the common law. The necessary identity will be found to exist if both sets of claims — those asserted in the earlier action and those asserted in the subsequent action derive from a common nucleus of operative facts. This principle pertains no matter how diverse or prolific the claims themselves may be. See 1B J. Moore, Federal Practice ¶ 0.410[1] at 350 (2d ed. 1993) (explaining that "the `cause of action' or `claim' . . . is bounded by the injury for which relief is demanded, and not by the legal theory"). It follows that the omission of a particular statement of claim from the original suit is of no great consequence; if the transaction is the same and the other components of the test are satisfied, principles of res judicata will bar all claims that either were or could have been asserted in the initial action. The key is to define the underlying injury." (Citations omitted; internal quotation marks omitted.) Gonzalez v. Banco Central Corp., 27 F.3d 751, 755-56 (1st Cir. 1994).
The parties in the 2002 case are not exactly the same as the parties in the present case, but the differences are without legal significance. Summitwood was not a named party to the 2002 case. However, there is no dispute that Nipmuc, as the owner of the property, transferred the exclusive right to purchase the property to Summitwood. Summitwood, in turn, executed the sale agreement with PDC-EL Paso under which Nipmuc claims its leasehold interest. There is no dispute that Carabetta was either the agent or controlling principal of both Nipmuc and Summitwood.
PDC-EL Paso was a named defendant in both the 2002 case and the present case. The other defendants in the present case were not defendants in the 2002 case, but in all the counts of the present complaint, these defendants are alleged to have acted as agents or authorized representatives of PDC-EL Paso. Complaint, ¶¶ 38-41. PDC-EL Paso, as a corporate entity, can act only through its individual officers or agents, and in the instant case, the plaintiffs also have sued the persons acting on behalf of this corporate defendant, rather than suing only PDC-EL Paso.
Consequently, Summitwood and the individual defendants who were not parties in the earlier action are "in privity" respectively with Nipmuc and PDC-EL Paso who were parties in the earlier action. The plaintiffs do not contend otherwise. As previously stated, the doctrine of res judicata bars relitigation of a claim in a subsequent action "between the same parties or those in privity with them." Fink v. Golenbock, supra, 238 Conn. 191. Privity is often an elusive concept, but its application is without difficulty here. By definition, "[f]or the purposes of the doctrine of res judicata, [privity involves] such an identity in interest that one person represents the same legal right as another . . ." Ballentine's Law Dictionary; see generally Gonzalez v. Banco Central Corp., supra 27 F.3d 757-62.
[Courts] continue to apply res judicata to nonparties when the circumstances warrant . . . [C]ourts continue routinely to formulate res judicata as a doctrine that bars parties `or their privies' from relitigating claims. The doctrine of res judicata serves many desirable ends, among them finality and efficiency. Logic suggests that the doctrine can achieve its goals only if its preclusive effects occasionally can reach persons who, technically, were not parties to the original action. The pitfalls of a more mechanical rule are obvious; making party status a sine qua non for the operation of res judicata opens the door to countless varieties of manipulation, including claim-splitting, suits by proxy, and forum-shopping . . . [C]ategorically eliminating res judicata whenever there are technically distinct parties is at loggerheads with the hoary concept of privity — a concept long since integrated into the legal lexicon and routinely applied in analogous situations. Consequently, . . . res judicata can sometimes operate to bar the maintenance of an action by persons who, technically, were not parties to the initial action . . .
(Citations omitted; internal quotation marks omitted.) Gonzalez v. Banco Central Corp., supra 27 F.3d 757; accord Somers v. Chan, 110 Conn.App. 511, 538 n. 19, 955 A.2d 667 (2008).
The plaintiffs' primary argument in opposition to the motion for summary judgment is that the 2002 case addressed only the duties of the escrow agent to deliver the lease whereas the present action seeks damages for fraud and for Roberts' breach of a "different contractual undertaking." As alleged in counts two and three, this undertaking was for Roberts "to act as Summitwood's sole liaison to communicate with both PDC El Paso and the council." Complaint ¶ 27. The court rejects the plaintiffs' argument.
As previously discussed, the plaintiffs' claims based on fraud and on the undertaking of Roberts, as the agent or representative of PDC-El Paso, all emanate from the negotiations and performance of the sale agreement. To reiterate, the claims in both the 2002 case and the instant case arise from the same series of transactions and seek redress for the same injury.
Similarly, the duties of the escrow agent were controlled by the terms of the sale agreement and Nipmuc's right to receive the lease under these terms. In the 2002 case, Nipmuc expressly requested a declaration that the lease was "valid and in effect" and that it was entitled to the rights set forth in the lease without regard to the property's record owner. In this first case, the parties litigated whether Nipmuc had a right to receive the lease under the sale agreement and the court adjudicated this claim. Although the plaintiffs have chosen to assert different theories of recovery by emphasizing different aspects of the same allegations, both cases are premised on identical factual underpinnings. The plaintiffs' contentions to the contrary are meritless.
In summary, a pragmatic analysis of the complaints in the present case and the 2002 case establishes that their operative facts are related in time, origin and motivation. Moreover, their allegations and claims form a "convenient trial unit." New England Estates, LLC v. Branford, supra, 294 Conn. 842. The application of res judicata in this case supports the purposes of this doctrine, particularly the policies to promote judicial economy and to prevent inconsistent judgments. The plaintiffs have received the opportunity to litigate their claims arising from the transactions relating to the sale agreement, and to allow further litigation of their claims as they propose would violate basic tenets of procedural practice premised on the res judicata doctrine.
CONCLUSION
Therefore, for all the foregoing reasons, the defendants' motion for summary judgment (#147) is hereby granted.
So ordered this 13th day of May 2010.