Opinion
No. X05 CV 02 4009795 S
May 13, 2009
MEMORANDUM OF DECISION ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (#183)
I INTRODUCTION
This is an action to enforce a note brought by the plaintiff Cadle Company (Cadle). The note, executed in 1985 by the late F. Francis D'Addario in favor of the Bank of New Haven, is a demand note in the principal amount of $1 million dollars (Note). F. Francis D'Addario died in 1986, and his two sons, David D'Addario and Lawrence D'Addario were appointed as co-executors of his estate. Both D'Addario sons continue to act as executors, and it is important to note (as the court's decision here makes clear) that this litigation was commenced against them solely in their capacities as executors of their father's estate (D'Addario Estate, or Defendants). Cadle had purchased the Note in 1994 from the Bank of New Haven, and in 2002 Cadle commenced this action to collect on the Note from the D'Addario Estate.
There have been prior rulings as to this Note and the claims of the parties, both in the instant proceedings at the trial court level, and in a prior action between the parties on the Note that has been subject to appellate review. The Connecticut Supreme Court has ruled that the Bank of New Haven did file a timely claim against the D'Addario Estate pursuant to statute for payment of the Note. Cadle Co. v. D'Addario, 268 Conn. 441 (2004). In addition, an earlier motion for summary judgment filed by Cadle in this case was denied by the trial court (Adams, J., #155), on the grounds that a genuine issue of material fact exists as to exactly what amount is owed to Cadle on the Note. Cadle has now moved for summary judgment on the Defendant's counterclaim. That counterclaim alleges Cadle's collection efforts violated the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. (CUTPA). The D'Addario Estate advances four specific grounds in their counterclaim as the basis for a CUTPA violation by Cadle, each of which Cadle argues is deficient as a matter of law. The court will first set forth the applicable standard of review, followed by an analysis of the CUTPA allegations at issue in the Defendants' counterclaim, particularly in light of the prior rulings by the court.
II STANDARD OF REVIEW
The standards governing the court's consideration of a motion for summary judgment are well established. "Practice Book § 17-49 provides that summary judgment shall be rendered forthwith 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. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party moving for summary judgment has the burden of showing . . . that the party is . . . entitled to judgment as a matter of law . . ." (Internal quotation marks and citation omitted.) Hopkins v. O'Connor, 282 Conn. 821, 829 (2007).
"In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . 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." (Citations and internal quotation marks omitted.) Liberty Mutual Insurance Company v. Lone Star Industries, Inc., 290 Conn. 767, 787 (2009).
III DISCUSSION
The Defendants' current CUTPA counterclaim must be viewed against the procedural background of the case, and the prior rulings of the court that have brought the parties to this juncture. The CUTPA counterclaim has been previously examined by the court and found wanting. It was one of three counterclaims that were originally alleged in this case by the D'Addario Estate. Two other counterclaims (no longer a part of this case because of prior rulings by Judge Shay) alleged that Cadle's actions constituted both vexatious litigation and/or an abuse of process. In an earlier ruling on Cadle's motion to strike, all three counterclaims were ordered stricken by the court (Shay, J., #148). However, that portion of the Defendants' counterclaim dealing with CUTPA was later partially reinstated on a restricted basis by the court following reconsideration (Shay, J., #157). The word "restricted" is appropriate, as Judge Shay's order upon reconsideration imposed significant limitations upon the parameters of any possible CUTPA counterclaim by the D'Addario Estate. The order specifically struck any portion of the Defendant's CUTPA counterclaim that alleged vexatious litigation; abuse of process, or breach of the covenant of good faith and fair dealing. Id. Whether that decision left any viable CUTPA counterclaim remaining in this case at all in light of the facts and the law is a question now put to rest by this court's ruling here.
To return to a narration of this case's procedural history, in light of the "gutting" of the CUTPA counterclaim (as counsel for the Defendants characterized Judge Shay's prior rulings at oral argument on this motion for summary judgment), Judge Adams later ordered the Defendants to more specifically allege each action or inaction of Cadle that caused damage to the D'Addario Estate, and how such behavior would be recoverable pursuant to their CUTPA counterclaim. Judge Adam's order stated quite properly that, "[T]he court understands Judge Shay's prior decisions to remove the institution and conduct of litigation, per se [to enforce the Note], as a basis for the [CUTPA] counterclaims." (Emphasis added; Adams, J., #177.) In an attempt to allege other viable grounds to proceed, the Defendants filed a response to the court's order.
The Defendants' response alleges that four tortious acts or incidents were perpetrated by Cadle and/or its agents during the Superior Court phase of the prior action on the Note mentioned earlier (which resulted in the Supreme Court opinion). Incident one references a 1997 Cadle memorandum introduced at the deposition of Daniel Cadle. That memo evinced a desire to "stir up commotion" with the D'Addario Estate, and stated that, "[T]he amount the family will settle for depends on the amount of aggravation we cause." Incident two alleges that Cadle is attempting to charge and is seeking to collect default interest on the Note. Incident three concerns a 2002 voicemail message about the Note allegedly left by Daniel Cadle for David D'Addario. Incident four involves an alleged 2003 phone conversation about the Note between Daniel Cadle and David D'Addario.
As to each of these four allegations, the Defendants conclude, " Each incident caused Defendant David D'Addario aggravation, fear, annoyance, and emotional disturbance and pain. Defendants cannot articulate any specific amount of damages resulting from these incidents, other than nominal damages." (Emphasis added.) As to Cadle's attempt to collect default interest on the Note, the Defendants conclude, "Because Defendants have not paid these charges, they have suffered nominal damages resulting from the illegal imposition of them." It is the legal sufficiency of these four allegations articulated by the Defendants following the court's earlier rulings on Cadle's motion to strike the CUTPA counterclaim that the court must now consider in ruling on this motion for summary judgment.
The issue of standing must be addressed forthwith. The Plaintiff argues that the Defendants, as executors of the D'Addario Estate, lack standing to seek redress for any alleged harm to David D'Addario individually, as David D'Addario himself is not a party to this action in his personal capacity. The court must first address this issue of standing, because it presents a question of the court's subject matter jurisdiction. Ragin v. Lee, 78 Conn.App. 848, 859, 829 A.2d 93 (2003). "[I]n the absence of standing the court lacks subject matter jurisdiction to determine the merits of the case . . ." Sadloski v. Manchester, 235 Conn. 637, 650, 668 A.2d 1314 (1995). "[O]nce the question of lack of jurisdiction of a court is raised, [it] must be disposed of no matter in what form it is presented . . . and the court must fully resolve it before proceeding further with the case." (Internal quotation marks omitted.) Simmons-Cook v. Bridgeport, 285 Conn. 657, 665 n. 7, 941 A.2d 291 (2008).
The Connecticut Supreme Court, in State v. McElveen, 261 Conn. 198, 802 A.2d 74 (2002), noted the "long-settled principle that standing cannot be inferred argumentatively from averments in the pleadings, but rather must affirmatively appear in the record . . ." Id., 210. Citing precedents that included the U.S. Supreme Court's seminal decision in Baker v. Carr, 369 U.S. 186 (1962), the Connecticut Supreme Court also stated, "[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor, clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute . . ." (Citation omitted.) Id. Here, the only parties who affirmatively appear in the record, and therefore the only parties with standing to assert a cognizable counterclaim, are David D'Addario and Lawrence D'Addario, not as individuals, but only in their capacities as executors of the D'Addario Estate. It is their burden to clearly allege facts demonstrating that the D'Addario Estate is the proper party to invoke judicial resolution of a claim of emotional distress as to David D'Addario personally.
This is a highly dubious proposition at best, because an estate, like a corporation, exists only as a legal fiction. Moreover, the very meaning of that fiction, for purposes of this case, is that an estate's standing to assert counterclaims shall be determined as if the fiction were the truth. Such legal conceptions have a long history in this country. See Remington v. Samana Bay Co., 140 Mass. 494, 5 N.E.2d 292, 297 (1886) (Holmes, J.). Claims of emotional distress to an executor personally do not fall within the properties of an estate that this court can or should recognize at law, as legal fictions such as estates are devoid of flesh and blood emotions.
The answer filed by the D'Addario Estate in response to the allegations in Cadle's complaint is telling. It states plainly, "The Defendants deny that `David D'Addario' is a defendant in this case. Defendants admit that David D'Addario, as the executor of the Estate of F. Francis D'Addario is a named defendant." Answer, ¶ 3. A different outcome might result if David D'Addario executor was also named a party to this action personally, but that is not the state of this record. This is a commercial collection case on a Note, as properly framed. The court cannot stand by and allow a claim that emotional harm is recoverable by an estate on this record. As the great Chief Justice John Marshall once wrote about corporations, in an observation that applies perforce to estates, "A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence." Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat) 518, 636 (1819).
David D'Addario as executor cannot be held personally liable in this case for payment on the Note, even if the D'Addario Estate, a creature of law, is later found to owe Cadle. Therefore, neither can David D'Addario as executor personally recover damages for emotional distress in a counterclaim for the alleged collection efforts on the Note by Cadle, a creditor of the Estate. The logic of this may readily be grasped by using an example in the corporate context. Imagine the D'Addario Estate was instead a corporation being sued, and that instead of David D'Addaiio executor, he was an officer of that corporation, and he was not named as a party to the suit in his personal or individual capacity. In this scenario, no one could seriously countenance allowing David D'Addario to proceed with a counterclaim for emotional distress in the name of the corporation, as the corporation is not the proper party to assert the claim at issue.
This is the crux of the matter, and is the focus of what the Supreme Court refers to as "standing jurisprudence." Standing jurisprudence is expressed "by the focus on whether the plaintiff is the proper party to assert the claim at issue . . ." PNC Bank, N.A. v. Kelepecz, 289 Conn. 692, 705-706, 960 A.2d 563 (2008). The D'Addario Estate lacks standing here, because the alleged personal emotional distress to the person, even if that person happens to be an executor of an estate, cannot be a justiciable interest of that estate. "[Standing] is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests . . ." (Citations omitted; internal quotation marks omitted.) Bongiorno Supermarket, Inc. v. Zoning Board of Appeals, 266 Conn. 531, 538, 833 A.2d 883 (2003).
The D'Addario Estate also alleges that Cadle's efforts to charge interest on the Note are an actionable wrong under CUTPA, as it is arbitrary and without a sound legal basis pursuant to the holding in Federal Deposit Insurance Corp. v. Napert-Boyer Partnership, 40 Conn.App. 434 (1996). The court is not persuaded. Napert-Boyer stands for the proposition that in an action to recover amounts due on a promissory note, a plaintiff may not recover late charges once the note has been accelerated and demand for payment has been made on the defendant. However, Napert-Boyer did not involve a CUTPA claim, and the facts of this case including arguably the terms of the Note, are sufficiently distinguishable from it. Most importantly, the parties here were already in litigation over the Note when this interest rate issue arose in 2000.
The court finds that the Defendants have not suffered an ascertainable loss for purposes of CUTPA. See, e.g., Rizzo Pool Co. v. Del Grosso, 232 Conn. 666, 684-85, 657 A.2d 1087 (1995) (denying recovery on CUTPA claim because counterclaim plaintiffs "presented no evidence that they had suffered an ascertainable loss of money or property.") Without an ascertainable loss, the statements of a party during litigation, including a disagreement over the terms of a Note, cannot on these facts form the basis for CUTPA liability.
IV CONCLUSION
While the court recognizes the standards for granting motions for summary judgment, it also recognizes the burden the Defendants must clearly meet when the issue of standing and a lack of jurisdiction are raised in that motion. Just as standing cannot be inferred argumentatively from averments in the pleadings, State v. McElveen, supra, neither may standing be conferred by averments in the pleadings unsupported by the law and/or the facts.
The Defendant's CUTPA counterclaim is fatally defective. This is a flawed effort to salvage and recharacterize the counterclaim following an adverse ruling by Judge Shay on the motion to strike. An argument over interest charges in the language of the Note arising during litigation cannot on these facts and by dint of creative theory be transformed into a CUTPA claim. It is also an attempt to convert a personal claim of emotional distress by a person (who happens to be an executor) into a claim by the estate itself. None of these tactics can save this counterclaim.
Whatever the merits or the lack thereof of the Plaintiffs case in chief, this commercial note collection case has been pending for seven years, with numerous motions and rulings thereon. Rather than presenting a genuine CUTPA dispute, issues such as those raised in this counterclaim seem more a reflection of the fact that finality and closure in this case are perhaps overdue. Trial will soon commence on the terms of the Note. A jury trial is the proper forum to resolve the remaining differences between the parties. This decision is the last hurdle before jury selection and hearing the evidence in that trial. Both counsel are reminded of the requirements of the trial management order.
For the foregoing reasons, the motion for summary judgment is granted.
SO ORDERED.