Opinion
FSTCV126013831S
02-16-2018
WELLS FARGO ADVISORS, LLC v. BONGIORNO FAMILY, LLC et al.
UNPUBLISHED OPINION
OPINION
Hon. Kevin Tierney, Judge Trial Referee
Did a grandmother take money that belonged to six of her grandchildren for her own uses?
This interpleader action nominally involves $209,956.63 of cash investments made or on behalf of the Bongiorno family being held by the plaintiff, Wells Fargo Advisors, LLC. Ex. 19, Ex. 23.
" A complaint in an interpleader action should allege only such facts as show that there are adverse claims to the fund or property and need not, in fact, should not, allege the basis upon which any claimant relies to justify his claims; the latter allegations are to be made in the statement of claim following the interlocutory judgment of interpleader." John Hancock Mutual Life Insurance Company v. Advance Realty Company, 9 Conn.Supp. 367, 368 (1941). " The interlocutory judgment of interpleader determines the propriety of the interpleader procedure ... Until the interlocutory judgment of interpleader has been rendered, there can be no trial on the interpleader proceeding ... In an interpleader proceeding, therefore, there are, in effect, two separate and distinct suits, the first suit ... determining whether there shall be a decree of interpleader, and the second ... determining who shall get the fund or thing in dispute." Yankee Millwork Sash and Door Company v. Bienkowski, 43 Conn.App. 471, 473-74 (1996).
Wells Fargo Advisors, LLC as plaintiff filed this May 1, 2012 Bill of Interpleader on May 4, 2012 pursuant to General Statutes § 52-484. (# 100.31.) The three defendants named in the Bill of Interpleader were Bongiorno Family, LLC, George Bongiorno and Marie Bongiorno. George Bongiorno passed away on March 13, 2016. Marie Bongiorno is the duly appointed Executrix of the Estate of George Bongiorno. She has been substituted as a party defendant (# 201.01). The Statement of Claim filed by the plaintiff, Wells Fargo Advisors, LLC, in the Bill of Interpleader was later amended on July 26, 2017 (# 206.00). The matter was assigned to this court for all purposes. On February 25, 2015 this court issued a three-page Memorandum of Decision on " Motion for Interlocutory Judgment of Interpleader dated January 8, 2015 (# 132.00)" filed as pleading # 138.00 in this lawsuit. In that Memorandum of Decision the court ordered the plaintiff to deposit with the Clerk of the Court the above mentioned litigated sum where it remains on deposit without interest. The court entered specific orders in the Interlocutory Judgment of Interpleader concerning various claims to the disputed funds as well as the parties’ claims against one another. Pursuant to that Interlocutory Judgment of Interpleader each of the parties including Wells Fargo Advisors, LLC has filed a claim against said sum or a portion of said sum. The court specifically did not release or discharge the plaintiff, Wells Fargo Advisors, LLC, as a party in this litigation nor from any claims of liability against it by any other party. The court further in the Interlocutory Judgment of Interpleader permitted each party to file independent claims in pleading form as against each of the other parties. As a necessary result of that court order, the pleadings are complicated, convoluted, repetitive, and impossible to briefly describe in this portion of this Memorandum of Decision. It appears that each of the four main parties, the plaintiff, Wells Fargo Advisors, LLC, and the three defendants, Bongiorno Family, LLC, Marie Bongiorno individually and as Executrix of the Estate of George Bongiorno, have claims against one another, which claims are defended by multiple Answers and Special Defenses. All of those claims are directly tied in to the $209,956.63 now on deposit with the Superior Court. Ex. 19. Ex. 23. The court makes the following findings of fact and legal conclusions.
George Bongiorno and Marie Bongiorno, husband and wife, were long standing residents of the City of Stamford. They have four children; Frank Bongiorno, Michele Nizzardo, John A. Bongiorno, and Bridjay Capone. In turn those four children had between them nine grandchildren of George and Marie Bongiorno. George Bongiorno died on March 13, 2016 as a resident of Stamford, Connecticut and Marie Bongiorno has been duly appointed as the Executrix of the decedent’s estate of George Bongiorno by the Stamford Probate Court. She has been substituted as a party defendant for the initial defendant, George Bongiorno. This interpleader action was commenced during George Bongiorno’s lifetime.
The plaintiff, Wells Fargo Advisors, LLC, was and is authorized to do business in the State of Connecticut as an investment advisory service and stockbroker. As of the date of the commencement of this Bill of Interpleader, the plaintiff, Wells Fargo Advisors, LLC, possessed the disputed funds in a numbered investment account. At the commencement of this Bill of Interpleader, the investment account had on deposit two large certificates of deposit, which were paying respectively 4.0% and 4.2% annual interest as well as a money market sweep account.
The first set of factual issues presented to this court for determination revolve around the status of Bongiorno Family, LLC. Some of those issues were first raised by an October 23, 2014 Motion to Dismiss Respondent’s Cross Claim/Counter Claim filed by the defendant, Marie Bongiorno, alleging that Bongiorno Family, LLC lacked standing (# 127.00). This first Motion to Dismiss was not heard. This court did hear an identically phrased Motion to Dismiss dated March 28, 2017 brought by the defendant, Marie Bongiorno, against Bongiorno Family, LLC (# 194.00). On the first day of trial on March 28, 2017, this court commenced an evidentiary hearing on the March 28, 2017 Motion to Dismiss. The evidentiary hearing on the Motion to Dismiss concluded the next day, after testimony by Frank Bongiorno, son of Marie and George Bongiorno and manager of Bongiorno Family, LLC, and Maurice Nizzardo, husband of Michele Nizzardo and son-in-law of George and Marie Bongiorno. Frank Bongiorno and Michele Nizzardo are co-trustees of the nine grandchildren’s trusts. Ex. 8, Bongiorno Minors Trust. Sixteen exhibits were offered at the hearing on the Motion to Dismiss. In a thirty-minute oral decision issued from the bench, the court denied the Motion to Dismiss on March 29, 2017. (# 194.01.) No transcript or written memorandum was filed, just the oral decision. The parties agreed that the sixteen exhibits and the testimony offered in the prosecution and defense of the Motion to Dismiss would be considered by this court in the trial in chief. During the trial, further testimony was heard concerning the status of Bongiorno Family, LLC as well as the admission into evidence of documents related to that status.
A document entitled Articles of Organization of the Bongiorno Family, Limited Liability Company was executed on December 24, 1997. Exhibit 9. It was filed with the Connecticut Secretary of State on December 26, 1997. Although the Articles of Organization refer to an Operating Agreement, no Operating Agreement was offered in evidence before this court at any time. According to the office of the Connecticut Secretary of State, Bongiorno Family, LLC is an active Limited Liability Corporation. A package of exhibits showing the annual reports of Bongiorno Family, LLC since its formation was before this court. Exhibit 61. Income tax returns filed by Bongiorno Family, LLC with a redacted employee identification number (EIN) were offered into evidence for the years 2008, 2009, 2010, 2011 and 2012. Exhibit 10, 12, 13, 14, and 15. Prior to the disputed funds being placed on deposit at Wells Fargo Advisors, LLC they were on deposit with an account with Smith Barney also known as Solomon Smith Barney and also known at various times as Morgan Stanley Smith Barney. The first of those accounts was opened on December 29, 1999. Exhibit 11. Exhibit 11 identifies the two managers of Bongiorno Family, LLC as George Bongiorno and Frank Bongiorno. Exhibit 11 at the bottom contains signatures on behalf of what Frank Bongiorno has testified to as the thirteen original members of the Bongiorno Family, LLC. The thirteen original members of Bongiorno Family, LLC consist of the four children of George and Marie Bongiorno and their nine grandchildren with the grandchildren’s interest held in the grandchildren’s trust. No additional members were ever added to Bongiorno Family, LLC. The twenty-nine-page grandchildren’s trust dated October 1, 1998 was offered as an exhibit before this court. Exhibit 8. Schedule A of this grandchildren’s trust sets forth the percentage that each of the nine named Borgiorno grandchildren have or had in the trust. According to Exhibit 11, Marie Bongiorno was not a member of Bongiorno Family, LLC. That fact is further buttressed by the K-1s attached to each of the tax returns for the years 2008 through 2012. Exhibits 10, 12, 13, 14, and 15. Marie Bongiorno has never been issued a K-1 nor was she named in any of the Bongiorno Family, LLC tax returns or the Secretary of State filings, Exhibit 11, or Articles of Organization in evidence.
Trial testimony by Marie Bongiorno and her attorney, Mary Badoyannis confirmed that Marie Bongiorno never had a membership or manager interest in Bongiorno Family, LLC yet she signed all the transfer documents on behalf of the LLC; she had no specific information as to the LLC; she did not know its employee identification number; she was never the manager of the LLC; she never saw any documents that indicated that she was a member or manager of the LLC other than the stockbroker account documents that she signed and were in evidence at the trial; she did not sign Exhibit 11 that opened the Smith Barney account; her name was not on Exhibit 11; someone told Marie Bongiorno that the funds on deposit at Smith Barney in the name of the LLC belonged to George Bongiorno and Marie Bongiorno; she could not recall who gave her that information; she had no documents that support the claim that George Bongiorno and Marie Bongiorno owned the LLC funds in 2010; she did not ever deposit or contribute any money to the Smith Barney account; she knew that she was transferring funds from the LLC to her own name when account 1265 was opened; she consented as George Bongiorno’s spouse when the 1997 Gift Tax Return was filed, which consent meant that she knew it was a gift by George Bongiorno to Bongiorno Family, LLC; she did not read the Limited Liability Authorization opening the Wells Fargo Advisors, LLC account when she signed it; she never had any ownership interest in the Danbury land; and she only withdrew money once from the LLC account, the $53,100 in 2012.
The United States Gift Tax Return Form 709 for the calendar year 1997 was offered in evidence. Exhibit 41. The gift tax return was filed by George Bongiorno for gifts he made to his four named children and his nine named grandchildren. In detail the gift tax return explains the source of funds that form the basis of the disputed amount before this court. In addition Frank Bongiorno testified credibly concerning that same history. That history is as follows: George Bongiorno along with two other individuals purchased thirty plus acres of real property located just north of I-84 in Danbury, Connecticut. They owned the property for approximately thirty years. When it came time to sell the property in 1997, George Bongiorno owned an undivided one-sixth interest in and to the real property. In addition George Bongiorno had advanced certain funds for road improvements, professional fees, zoning costs, and mortgage payments which he expected to be repaid from the sale of the real property. The property had been divided into two separate parcels. Both parcels sold for approximately $4,700,000. From that sales price, closing costs, conveyance taxes, attorneys fees, reimbursement for the construction of a road in the approximate sum of $300,000, and reimbursement of other advances made by the partners to the real estate investment were made. The proceeds payable to George Bongiorno from that sale was between $550,000 and $585,000. Prior to the sale of the Danbury property, except for 1/2 of 1%, on December 31, 1997 all of George Bongiorno’s interest in the undivided one-sixth share of the real property in Danbury, Connecticut had been conveyed by George Bongiorno to Bongiorno Family, LLC. Ex. 41. The Federal Gift Tax Return filed by George Bongiorno in 1997 further verified the intent of George Bongiorno that those two belonged to Bongiorno Family, LLC. Ex. 41. Not all of the documents for that Danbury land conveyance were before this court. No title search was presented to the court. No one testified concerning the status of the Danbury land records. The George Bongiorno sales proceeds were deposited in December 1999 to a Soloman Smith Barney account. Exhibit 63. The account assets consisted of certificates of deposit in various banks, each less than $100,000 in order to be covered by FDIC type insurance.
From December 1999 through the commencement of this Interpleader action, the disputed funds were on deposit with either a Smith Barney account or Wells Fargo Advisors, LLC account. Monthly statements for these accounts were printed and made available. Not every single one of those monthly statements was offered before this court. Portions of or in some cases complete monthly statements were offered as evidence before this court. See Exhibits 50 through 55, Exhibits 63 through 66, Exhibits 70 through 77.
According to the credible testimony of Frank Bongiorno, between December 1999 and December 2002, all four of the Bongiorno children cashed in and received their full share of the Danbury sale proceeds from the Bongiorno Family, LLC and thus received the distribution of their entire interest in Bongiorno Family, LLC. Ex. 16. In addition three of the grandchildren also received their full shares during that same three-year period. This court examined in detail Exhibits 70 through 77, the various Smith Barney monthly statements for the period of December 31, 2002 through and including December 31, 2009. The court examined the beginning entry and the end entry as well as all entries in between and reached the following conclusions: the balance in the Smith Barney account as of December 31, 2002 was $177,268.87. Ex. 71. The balance seven years later on December 31, 2009 was $234,648.40. Ex. 76. The court was not able to find any significant withdrawals that were taken from that account in that seven-year period nor any large deposits made to the account in that seven-year period. The interest and dividends earned on the account were reinvested into the account and not withdrawn. The funds were invested in cash type investments solely as Certificate of Deposits, Money Market Accounts and Savings accounts. The balance at the end of seven years was $57,380 higher than the beginning balance. This is a 32.3% increase, an average of approximately 4.6% annual return each year for those full seven years. The court reviewed the investments for that seven-year period and found that they were mainly sweep money market accounts and multiple certificates of deposit that had various interest rates. The 4.6% average annual return is consistent with those investment vehicles. The court therefore finds that there was no activity in that seven-year period other than the automatic deposit of earned interest invested back into the account. The only owners of the Bongiorno Family, LLC assets in that account as of December 31, 2002 were the six grandchildren’s trusts, since all distributions had been taken by all four adults and three of the grandchildren prior to December 31, 2002. Frank Bongiorno credibly testified to the conclusions reached in the prior two sentences.
At the beginning of the Smith Barney Bongiorno Family, LLC account in December 1999, George Bongiorno had his own individual account with Smith Barney. He withdrew some $700,000 from that account and along with the profits of the Danbury property sale deposited funds into the Bongiorno Family, LLC account at Smith Barney. George Bongiorno therefore intermingled his own personal funds in the early years of the LLC with those of his relatives to which he had gifted and for which gifts he filed a 1997 gift tax return. Ex. 41. Various other withdrawals and deposits were made between the Bongiorno Family, LLC and the George Bongiorno individual account at Smith Barney during the early years 1999 and 2000. There was no evidence before this court of any intermingling by George Bongiorno of any deposits into Bongiorno Family, LLC account or any withdrawal of funds by George Bongiorno from the Bongiorno Family, LLC account on or after December 31, 2002. There was no evidence of any investments by, contributions by or withdrawals by George Bongiorno in and to the LLC after December 31, 2002. All of George Bongiorno’s assets had long since been withdrawn from the Smith Barney account well before the account was moved from Smith Barney to Wells Fargo Advisors, LLC. From and after December 2009 George Bongiorno was neither a member or manager of Bongiorno Family, LLC. From and after December 2009 George Bongiorno had no control over the funds on deposit in the name of Bongiorno Family, LLC. Frank Bongiorno signed George Bongiorno’s name as TMP (Tax Matters Partner) on various Bongiorno Family, LLC’s Federal tax returns for the years 2008, 2009, and 2010 Ex. 12, 13, and 14. Frank Bongiorno signed the LLC’s Federal tax returns in his own name as TMP for the years 2011 and 2012. Ex. 15, Ex. 10.
Before the court discusses and resolves the claims to the funds made by each of the four parties and their respective Counterclaims and Cross Claims against each of the other parties along with the enumerated dozens of Special Defenses, the court must consider six issues all related to the status of the defendant, Bongiorno Family, LLC; (1) Is the Bongiorno Family, LLC a proper entity capable of bringing suit?, (2) Has the Bongiorno Family, LLC complied with Connecticut statutes in order to maintain its claims in this litigation?, (3) Who are the current members of Bongiorno Family, LLC?, (4) Who are the current managers of Bongiorno Family, LLC?, (5) Is Marie Bongiorno a member or manager of Bongiorno Family, LLC?, and (6) Has Marie Bongiorno ever been a member or manager of Bongiorno Family, LLC?
There was no evidence that the Bongiorno Family, LLC conducted annual meetings, produced minutes, held a formal family meeting with all members in attendance, filed most LLC documents, or engaged in a vote concerning the status of who the managers were or who the members were. The only documents filed or prepared by and on behalf of Bongiorno Family, LLC were the annual reports filed with the Connecticut Secretary of State, the income tax returns of the LLC, the financial records prepared by the accountant hired by the LLC, the investment records of Smith Barney and Wells Fargo Advisors, LLC, and the 1997 gift tax return.
Regardless of those deficiencies, the court finds that Bongiorno Family, LLC is a duly constituted and active Limited Liability Company doing business in the State of Connecticut properly registered with the Secretary of State. It hired and paid for an accountant who prepared and filed timely tax returns on behalf of the LLC, of which five were offered into evidence, the last five immediately prior to the commencement of this Bill of Interpleader. In the event it is argued that the Bongiorno Family, LLC has not complied with all the rules and regulations for setting up and maintaining an LLC, the court finds in the alternative that Bongiorno Family, LLC is a de facto LLC. DiFrancesco v. Kennedy, 114 Conn. 681, 683-84 (1932). The court treats a de facto LLC as a de jure limited liability company. Clark-Franklin-Kingston Press, Inc. v. Romano, 12 Conn.App. 121, 128, cert. denied 205 Conn. 803 (1987).
This court finds that as it did on March 29, 2017 when it denied the Motion to Dismiss (# 194.00) that the Bongiorno Family, LLC was duly constituted Connecticut limited liability company at all times and was a proper entity to receive the ownership of the disputed funds. The court further finds that the financial interests in the Bongiorno Family, LLC have not been distributed to the following six grandchildren members; The four children of Frank Bongiorno and the two Sandolo children, whose mother is Bridjay Capone. The court finds that these six Bongiorno grandchildren are the only current members of the Bongiorno Family, LLC.
One of the issues raised in this litigation is whether or not General Statutes § 34-187(a) (repealed effective July 1, 2017) permitted Bongiorno Family, LLC to file claims in this lawsuit because there was no vote of the members and/or managers to pursue these claims. The Motion to Dismiss raises that issue and it was denied on March 29, 2017 during trial after argument was fully presented at the aforementioned hearing on the Motion to Dismiss. (# 194.01.) General Statutes § 34-186 states: " Suits may be brought by or against a limited liability company in its own name." In 2016 PA 16-97 # 110 the Connecticut legislature adopted the Connecticut Uniform Limited Liability Company Act. This act was effective July 1, 2017 and it repealed General Statutes § 34-187 effective July 1, 2017. Public Act No. 16-97 Sec. 9 states: " (a) A limited liability company has the capacity to sue and be sued in its own name and the power to do all things necessary or convenient to carry on its activities and affairs." Prior to July 1, 2017 this court heard and denied the Motion to Dismiss addressing the LLC member voting issue. (# 194.01.)
General Statutes § 34-187(a) states: " Except as otherwise provided in an operating agreement, suit on behalf of a limited liability company may be brought in the name of the limited liability company by: (1) Any member or members of a limited liability company, whether or not the articles of organization vest management of the limited liability company in one or more managers, who are authorized to sue by the vote of a majority in interest of the members ..." There is no evidence in this case that there was a vote or that a meeting was held for the purpose of instituting this lawsuit by all the members. No operating agreement was presented to this court. From that fact the court concludes that this LLC has no operating agreement. Each of the members filed an affidavit, verifying that the members did authorize the commencement of the Claims, Counterclaims, and Cross Claims in this action. Ex. 1 through Ex. 7.
One question is whether or not General Statutes § 34-187(a) is mandatory or directory.
The test to be applied in determining whether a statute is mandatory or directory is whether the prescribed mode of action is the essence of the thing to be accomplished, or in other words, whether it relates to a matter of substance or a matter of convenience ... If it is a matter of substance, the statutory provision is mandatory ... If, however, the ... provision is designed to secure order, system and dispatch in the proceedings, it is generally held to be directory ... Linguistically, a statutory provision generally is considered directory if the requirement is stated in affirmative terms unaccompanied by negative words ... Furthermore, the lack of a penalty provision or invalidation of an action as a consequence for failure to comply with a statutory directive is a significant indication that the statute is directory.Weems III v. Citigroup, Inc., 289 Conn. 769, 790-91 (2008).
There are seven factors that the court should use to determine whether or not a statute is directory or mandatory. (1) The use of " shall" versus " may" ; (2) Is a penalty provided in the statute?; (3) Does the statute void the underlying action for failure to comply with the statutory requirements?; (4) Is negative language present?; (5) Is the statute designed to secure order, system and dispatch?; (6) Does the failure to comply result in an unwarranted windfall to one of the parties?; and (7) Is the violation of the statutory requirement a mere technical violation? The City of Stamford v. Tandet, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV16-6030397-S (July 11, 2017, Tierney, JTR) . General Statutes § 1-2z provides that the meaning of a statute shall be determined from the text of the statute itself. If the meaning of the text is plain and unambiguous and does not yield absurd or unworkable results, evidence of the statute’s meaning from outside its text shall not be considered. Carmel Hollow Associates Limited Partnership v. Bethlehem, 269 Conn. 120, 129 (2004).
This court concludes that there no use of the word " shall." " May" appears in the statute twice. There is no penalty provided in the statute. There is no statement in the statute that a violation of the statute is a lack of subject matter jurisdiction. There is no negative language in the statute. There is no criminal penalty, monetary fine, or any other form of sanction set forth in the statute. The court finds the statute is plain and unambiguous. The court finds that the statute is directory not mandatory. Weems v. Citigroup, supra, 289 Conn. 789-94; 418 Meadow Street Associates, LLC v. Clean Air Partners, LLC, 304 Conn. 820, 827 (2012).
The court hereby answers the six questions it propounded on pages 9 and 10 of this Memorandum of Decision based on the conclusions already reached herein:
(1) The Bongiorno Family, LLC is a proper entity capable of bringing suit.
(2) The Bongiorno Family, LLC’s commencement of the claims in this lawsuit has complied with the intention of Gen. Stat. § 34-187.
(3) The current members of the Bongiorno Family, LLC are the six Bongiorno grandchildren; The four children of Frank Bongiorno and the two Sandor children of Bridjay Capone. Exhibits 1-8.
(4) The current managers of Bongiorno Family, LLC are Frank Bongiorno and Maurice Nizzardo.
(5) Marie Bongiorno is not a member or manager of Bongiorno Family, LLC.
(6) Marie Bongiorno has never been a member or manager of Bongiorno Family, LLC.
The parties have stipulated that the pleadings have been closed. The court has tried but is unable to count the number of legal and factual issues raised by the pleadings. Wells Fargo Advisors, LLC is claiming attorneys fees to be paid from the $209,956.63 fund in the amount of $19,610.19 under the interpleader statute, General Statutes § 52-484. Ex. 20, Ex. 21, Ex. 22. It is also claiming as against Marie Bongiorno, individually, Marie Bongornio, as Executrix of the Estate of George Bongiorno and Bongiorno Family, LLC damages for indemnity, contribution and whole harmless claims for additional attorneys fees. Part of those indemnity claims for attorney fees are based upon an executed Bongiorno Family, LLC " Limited Liability Company Authorization" dated January 28, 2010, which it claims will exceed an additional $200,000. Ex. 11, Ex. 42. The Bongiorno Family, LLC seeks $209,956.63 from the funds held by the Clerk of the Superior Court. Marie Bongiorno seeks $209,956.63 from the funds held by the Clerk of the Superior Court. In addition she claims that she is entitled to keep as her own property the $53,100 she withdrew from the Bongiorno Family, LLC investment account at Wells Fargo Advisors, LLC and to receive the payment of an additional $100,000 paid by her attorney Mary Badoyannis to Bongiorno Family, LLC for settlement of a negligence claim. Exhibit 34 established the exact amount paid by Wells Fargo Advisors, Inc. to Marie Bongiorno on February 17, 2012 as $53,100. Marie Bongiorno seeks the same three awards in her capacity as the Executrix of the Estate of George Bongiorno. Bongiorno Family, LLC seeks money damages, punitive damages, attorneys fees, and interest against Wells Fargo Advisors, LLC for negligence and breach of fiduciary duty on each of the two separate investment accounts. Wells Fargo Advisors, LLC asserts twelve special defenses against the Bongiorno Family, LLC’s above claims which Special Defenses are own misconduct, last clear chance, negligence, waiver, ratification, estoppel, laches, unclean hands, failure to show monetary damages, failure to mitigate damages, no statute cited for punitive damages, and no statutory or contractual basis for attorneys fees. Bongiorno Family, LLC is seeking treble damages, attorneys fees and various statutory relief against Marie Bongiorno for conversion, statutory theft and identity theft. Wells Fargo Advisors, LLC claims against Marie Bongiorno are based on multiple theories of indemnity, including the interpleader statute, breach of contract, fraud, and contribution. Similar claims of indemnity less the fraud and contribution claims are being made by Wells Fargo Advisors, LLC against the Estate of George Bongiorno. Similar claims of indemnity based on the interpleader statute, breach of contract and contribution are being made by Wells Fargo Advisors, Inc. against Bongiorno Family, LLC. All of those indemnity claims included attorney fees expended by Wells Fargo Advisors, LLC in this litigation. Marie Bongiorno has her own lawsuit against Wells Fargo Advisors, LLC in a one-count thirty-five paragraph complaint specifying that she suffered pecuniary losses. To that Wells Fargo Advisors, LLC alleges ten special defenses of improper conduct, last clear chance, negligence, waiver, ratification, estoppel, laches, failure to show monetary damages, failure to mitigate damages, and unclean hands. A similar one-count thirty-five paragraph complaint has been alleged against Wells Fargo Advisors, LLC by the Estate of George Bongiorno and was met with the same ten special defenses by Wells Fargo Advisors, LLC. Marie Bongiorno has filed a claim against the Bongiorno Family, LLC for emotional distress and claims that all of the underlying monetary sums belong to Marie Bongiorno and/or to the Estate of George Bongiorno. She seeks a constructive trust, damages and a declaration that the property belongs to Marie Bongiorno. No jury claim was filed by any party. This litigation was tried to this court over ten days from March 28, 2017 to August 2, 2017.
The court now turns to the claims for relief filed by each of the four parties as set forth in the previous lengthy paragraph.
This court having completed the first of the two proceedings customary in a Bill of Interpleader, to wit, the issuance of an Interlocutory Judgment of Interpleader on February 25, 2015 (# 132.01), the court must proceed to the second portion of the proceedings, the determination of who shall get the funds in dispute. The funds in dispute in this interpleader action are on deposit with the Clerk of the Superior Court in the amount of $209,956.63. Ex. 19. The three parties making a claim for all of these funds are Bongiorno Family, LLC, Marie Bongiorno, individually, and Marie Bongiorno, as Executrix of the Estate of George Bongiorno. The court finds that these funds were the proceeds of a Danbury real estate sale and at the time of the real estate sale the title to the real estate was held in the name of Bongiorno Family, LLC. At that time the members of Bongiorno Family, LLC were the four Bongiorno children and nine Bongiorno grandchildren. There were no documents provided to this court demonstrating that Marie Bongiorno was at any time a manager or member or manager/member of the LLC. Her own self generated documents with the stockbrokers are not sufficient to demonstrate that Marie Bongiorno was ever connected with the LLC. Immediately after the Danbury real estate sale closed those funds were placed on deposit with Smith Barney in December 1999 when the first Bongiorno Family, LLC investment account was opened. Exhibit 11. The funds remained on deposit in a Bongiorno Family, LLC account first with Smith Barney later with Wells Fargo Advisors, Inc. and finally with the Clerk of the Superior Court. There was no evidence offered at trial that any of the six current members of Bongiorno Family, LLC being six of the Bongiorno grandchildren ever authorized the transfer of the Smith Barney account in the name of Bongiorno Family, LLC to be transferred to the sole name of Marie Bongiorno. There was further no evidence that Frank Bongiorno as the manager of Bongiorno Family, LLC nor Maurice Nazzardo who assisted in some management duties in the LLC, ever authorized the transfer of the assets then on deposit with Wells Fargo Advisors, LLC to Marie Bongiorno in her individual name. The court finds that the defendant, Bongiorno Family, LLC, has sustained its burden of proof that the entirety of the funds currently on deposit with the Clerk of the Superior Court, to wit, $209,956.63 should be conveyed by the Clerk of the Superior Court to Bongiorno Family, LLC twenty-one days after the filing of this Memorandum of Decision. The court further finds that Marie Bongiorno, individually, and Marie Bongiorno, as Executrix of the Estate of George Bongiorno, are not entitled to receive any of the $209,956.63 on deposit with the Clerk of the Superior Court.
Wells Fargo Advisors, LLC is claiming attorneys fees of $19,610.19 to be paid from the $209,956.63 fund in accordance with the interpleader statute, General Statute § 52-484: " Such court shall hear and determine all questions which may arise in the case, may tax costs at its discretion and, under the rules applicable to an action of interpleader, may allow to one or more of the parties a reasonable sum or sums for counsel fees and disbursement, payable out of such fund or property; but no such allowance shall be made unless it has been claimed by the party in his complaint or answer." This statute has allowed the stakeholder to be awarded counsel fees and expenses from the funds on deposit. Chase v. Benedict, 72 Conn. 322, 328 (1899); Union Trust Company v. Stamford Trust Company, 72 Conn. 86, 93, 96 (1899); Phoenix Insurance Company v. Carey, 80 Conn. 426, 431 (1908). Wells Fargo Advisors, LLC has made the claim for attorneys fees and costs in both the May 1, 2012 Bill of Interpleader (# 100.31) and in its amended Statement of Claim dated July 26, 2017 (# 206.00). The claims by Wells Fargo Advisors, LLC for attorneys fees and costs to be paid out of the sum to the stakeholder were acknowledged by this court in its February 25, 2015 interlocutory Judgment of Interpleader. (# 138.00, # 132.01.)
The plaintiff, Wells Fargo Advisors, LLC, is making the claim for $19,610.19 expended as attorney fees from the commencement of the litigation up to the entry of the interlocutory judgment of interpleader to be paid out of the funds on deposit with the Clerk of the Superior Court. Ex. 20, Ex. 21, Ex. 22. The court finds that Wells Fargo Advisors, LLC has filed a claim against those funds for the attorneys fees incurred by Wells Fargo Advisors, LLC as stakeholder up through the issuance by this court of its February 25, 2015 Memorandum of Decision in an Interlocutory Judgment of Interpleader. (# 138.00, # 132.01.) The court finds that the Interlocutory Judgment of Interpleader permitted Wells Fargo Advisors, LLC to file such attorney fees claims to be paid from the fund.
Since this court has already determined that the funds belong to Bongiorno Family, LLC, the court turns to the three-count counterclaim filed by Bongiorno Family, LLC against Wells Fargo Advisors, LLC for negligence and breach of fiduciary duty on each of the two separate investment accounts. Bongiorno Family, LLC is seeking money damages, punitive damages, attorneys fees, and interest against Wells Fargo Advisors, LLC in that Second Amended Counterclaim dated August 1, 2017. (# 213.00.)
The Second Count of the Second Amended Counterclaim relates to the opening of Wells Fargo Advisors, LLC account 1733 and the transfer into that account 1733 the assets located in an account with Smith Barney. Both accounts were in the name of Bongiorno Family, LLC. The defendant, Marie Bongiorno, performed the above transfers on or about January 20, 2010 and she was assisted in those transfers by Kevin Kelly and Scott Kelly, both employees and agents of Wells Fargo Advisors, LLC. Ex. 40. The value of the assets transferred was approximately $239,849.55 as of early February 2010. Ex. 32, Ex. 50 (# 230.00, page 1). The Kelly brothers had administered the funds on deposit with Smith Barney while so employed. The Kelly brothers changed employment from Smith Barney to Wells Fargo Advisors, LLC shortly before February 2010.
The Third Count of the Second Amended Counterclaim relates to the transfer of the funds of Bongiorno Family, LLC on deposit with Wells Fargo Advisors, LLC in account 1733 to an individual account solely in the name of Marie Bongiorno as account 1265 at Wells Fargo Advisors, LLC on October 22, 2010. This transfer was also assisted by the Kelly brothers, then employed by Wells Fargo Adviors, LLC. Ex. 33. The value of the assets transferred was approximately $248,325.73 as of October 22, 2010. Ex. 52.
As to both transfers alleged in the Second Count and Third Count of the Second Amended Counterclaim (# 213.00), Bongiorno Family, LLC claims that Wells Fargo Advisors, LLC through its employees, Kevin Kelly and/or also Scott Kelly, breached their fiduciary duty to Bongiorno Family, LLC in thirteen specific ways. (# 213.00, Second Count, paragraph 12(a) through (m), Third Count, paragraph 12(a) through (m) ).
" The essential elements to pleading a cause of action for breach of fiduciary duty under Connecticut case law are: (1) That a fiduciary relationship existed which gave rise to (a) a duty of loyalty on the part of the defendant to the plaintiff, (b) an obligation on the part of the defendant to act in the best interests of the plaintiff, and (c) an obligation on the part of the defendant to act in good faith in any matter relating to the plaintiff; (2) [T]hat the defendant advances his own interests to the detriment of the plaintiff; (3) That the plaintiff sustained damages; (4) That the damages were proximately caused by the fiduciary’s breach of his or her fiduciary duty." (Internal quotation marks omitted.) AW Power Holdings, LLC v. FirstLight Waterbury Holdings, LLC, Superior Court, Judicial District of Hartford, CV 146047836S (Feb. 17, 2015, Peck, J.) ; Ochieke v. Turbine Controls, Inc., Superior Court, judicial district of Hartford, Docket No. CV-10-5035041-S (October 8, 2014, Elgo, J.).
We have stated that a fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other ... The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him. (Citations omitted.) Dunham v. Dunham, supra, 204 Conn. at 322, 528 A.2d 1123.Konover Development Corporation v. Zeller, 228 Conn. 206, 219 (1994).
Connecticut has not defined what is and what is not a fiduciary relationship in detail. " Rather than attempt to define a fiduciary relationship in precise detail and in such a manner to exclude new situations, we have instead chosen to leave the bars down for situations in which there is a justifiable trust confided on one side and a resulting superiority and influence on the other." Dunham v. Dunham, supra, 204 Conn. 320.
The assets in the Smith Barney account consisted of Certificates of Deposits and a money market fund. The assets were not invested in stocks or bonds or any other type of investments other than cash that paid a certain rate of interest. There is no evidence of trading of the certificates of deposit from 2010 to the date of trial. The transfer of the cash investments took place in February 2010 with no change in the assets. The interest earned on the certificates of deposit stayed in the account in the form of a money market account that too paid interest that was reinvested in the same money market account. When the account was changed from the name of Bongiorno Family, LLC to Marie Bongiorno in October 2010, again no change in the assets occurred. In effect, both Smith Barney and Wells Fargo Advisors, LLC were holders of the assets and not purveyors of investment advise nor were they brokers selling and trading assets. Both stockbrokers held the funds as a stockbrokers account not a discretionary investment account. There was no evidence that any stockbroker’s fees or commissions were ever charged by either Smith Barney or Wells Fargo Advisors, LLC or either of the Kelly brothers. The Bongiorno were not classified as investment advisory client by Wells Fargo Advisors, LLC. The account agreement between Marie Bongiorno and Wells Fargo Advisors, LLC specifically stated that Wells Fargo Advisors, LLC was not acting in a fiduciary capacity in holding these funds. Ex. 43, page 14, paragraph 10; page 27, paragraph 3a, Ex. 49, page 1, Ex. 56, pages 4, 5, and 18.
Connecticut cases involve stockbrokers’ liability do not generally ascribe a fiduciary duty to the general duties of stockbroker. Ling v. Malcom, 77 Conn. 517, 526-27 (1905). No Connecticut case holds that a stockbroker owes a fiduciary duty to a client where no discretionary duties have been performed by the stockbroker. A stockbroker is a fiduciary if the account is discretionary or if the broker has agreed to manage a non-discretionary account, but a broker is not a fiduciary if the account is non-discretionary and the broker has merely offered advice. Marchese v. Nelson, 809 F.Supp. 880, 894-95 (D. Utah, 1993); Hofmar v. Listrom and Company, Inc., 808 F.2d 1384, 1385-86 (10th Cir. 1987).
The research of the parties and the court discloses no Connecticut appellate law discussing the discretionary/nondiscretionary distinction as to financial advisors and the creation of a fiduciary duty. While it is clear that a financial advisor may, under some circumstances, owe a fiduciary duty to an investor, it is unclear as to which particular circumstances create the fiduciary duty and the extent of that duty, see Southbridge Associates, LLC v. Garofalo, 53 Conn.App. 11, 18, 728 A.2d 1114 (1999).
The defendants rely upon the law of other jurisdictions to bolster their argument that the allegations of the first count fail to set forth a viable cause of action for breach of fiduciary duty, see e.g., De Kwiatkowski v. Bear, Stearns and Co., Inc., 306 F.3d 1293 (2d Cir. 2002).
Under the De Kwiatkowski, case, supra, however, a fiduciary duty may still arise in the nondiscretionary situation where " transformative special circumstances’ exist. Id., at 1308. One transformative factor is where the client " has impaired faculties.’ id. A fiduciary relationship may be created where the client " is infirm or ignorant of business affairs,’ even where a nondiscretionary mode of operation exists. Id., at 1309.Childree v. New Alliance Investment, Inc., Superior Court, judicial district of Tolland, Docket Number TTD CV09-5005036 S (January 6, 2010, Sferrazza, J.) .
These cases including the 2002 Second Court of Appeals decision in De Kwiatkowski cause this court to conclude that the Superior Court would adopt the rule that a nondiscretionary account does not establish a fiduciary relationship between the customer and the stockbroker. The De Kwiatkowski, exception is not relevant to the set of transactions before this court since there is no evidence of impaired faculties or ignorance of business affairs. The court finds that no " transformative special circumstances" exist in the case before this court.
The three accounts before this court, one at Smith Barney and two at Wells Fargo Advisors, Inc., were non-discretionary accounts. No commissions were charged. No trading took place. The stockbroker merely placed the order at the instructions of the Bongiornos into interest bearing Certificate of Deposits not to exceed the insurable limits of federal law. The account documents from Wells Fargo Advisors, LLC verify this. Ex. 43, page 27, paragraph 3a, page 14, paragraph 10.
The court finds that at none of the times relevant herein was Smith Barney, Wells Fargo Advisors, Inc. and/or the Kelly brothers acting as a fiduciary for any Bongiorno family member or entity. The issues on the Second Amended Counterclaim (# 213.00) are found for Wells Fargo Advisors, LLC as to the Second Count and Third Count sounding in breach of fiduciary duty.
Common-law negligence was also alleged in this the First Count of the Second Amended Counterclaim by Bongiorno Family, LLC against Wells Fargo Advisors, LLC. The Bongiorno Family, LLC has sustained its burden of proof of showing that the two Kelly brothers were negligent in number of commission and omissions. The court finds that Wells Fargo Advisors, LLC had a duty to the funds it held on deposit and a duty to the actual owner of those funds. Wells Fargo Advisors, Inc. opened the account in the name of an existing legal entity, Bongiorno Family, LLC. It is to that LLC that Wells Fargo Advisors, LLC owed a duty. By obtaining the Bongiorno Family, LLC employee identification number (EIN) from an unauthorized source, this enabled the Kelly brothers to open in the first instance the Wells Fargo Advisors, LLC account 1733 in the name of Bongiorno Family, LLC and then authorized the moving of the funds from the Smith Barney account. The Kelly brothers failed to obtain the EIN from any member of the Bongiorno family including Marie Bongiorno. Ex. 24. They failed to contact any of the six existing members of the Bongiorno family, to wit, the six Bongiorno grandchildren and/or Frank Bongiorno and/or Maurice Nizzardo, with whom the Kelly brothers had dealt in the past on this Bongiorno Family, LLC investment. They failed to obtain written or documentary verification that Marie Bongiorno had the authority to act for Bongiorno Family, LLC when she executed the necessary documents to open up account 1733 at Wells Fargo Advisors, LLC. They failed to verify the authority of Marie Bongiorno to act for Bongiorno Family, LLC when the second account 1265 at Wells Fargo Advisors, LLC was opened and the money transferred into the name of Marie Bongiorno individually. The Kelly brother also failed to obtain, review or even access on the internet in order to obtain the necessary documents from the Connecticut Secretary of State, documents that would verify that Marie Bongiorno had no interest in Bongiorno Family, LLC. Wells Fargo Advisors, LLC acting by its employees, the Kelly brothers, were negligent when once they found out that there was lack of authority for Marie Bongiorno to so act for the Bongiorno Family, LLC it did not transfer the money and funds back to the name of Bongiorno Family, LLC. The first act of negligence was the failure of the Kelly brothers to transfer the Bongiorno Family, LLC account from Smith Barney to their new employer, Wells Fargo Advisors, LLC at the same time the other much larger Bongiorno transfers were made. At all times the Kelly brothers were acting as authorized agent and employees of Wells Fargo Advisors, LLC.
Wells Fargo Advisors, LLC filed twelve Special Defenses to the three-count Bongiorno Family, LLC Second Amended Counterclaim on August 11, 2017 (# 215.00). At that time the three counts of the Second Amended Counterclaim consisted of one count of negligence and two counts of breach of fiduciary duty. The Special Defenses were not broken down to be applicable to either the negligence or breach of fiduciary counts. Since the issues on Second Count and Third Count of the Second Amended Counterclaim for breach of fiduciary duty have been found for Wells Fargo Advisors, LLC, there is no need to discuss any of the twelve Special Defenses directed towards those two counts. This discussion will only consider the twelve Special Defenses as applicable to the First Count of the Second Amended Counterclaim sounding in negligence. Each of the Special Defenses has incorporated by reference the same thirty paragraphs in the section entitled " Factual Background" in pleading # 215.00 and then incorporates thereafter the allegations of the previous Special Defenses with one new sentence for each of the twelve Special Defenses. The court will accept that the allegations of each of the twelve Special Defenses in the following fashion: The first thirty numbered paragraphs are incorporated into each and every one of the twelve Special Defenses; The court will disregard the incorporation of the previous Special Defenses; Each of the remaining twelve Special Defenses will therefore contain thirty-one paragraphs; The first thirty numbered paragraphs being incorporated by reference and the last paragraph being the only new allegation for each of the twelve Special Defenses. The court will characterize the Special Defenses as labeled by the Wells Fargo Advisors, Inc. in pleading # 215.00.
FIRST SPECIAL DEFENSE - " The damages for which the BF, LLC seeks to hold Wells Fargo liable, if any, were proximately caused by the BF, LLC’s own improper conduct.
Although not cited in this First Special Defense, the First Count of the Bongiorno Family, LLC Counterclaim alleges common-law negligence and seeks money damages against Wells Fargo Advisors, LLC for damage to the specific property of Bongiorno Family, LLC; to wit, the funds on deposit with Smith Barney held in the name of Bongiorno Family, LLC since 1999. Such damage claims are controlled by Gen. Stat. § 52-572h, our tort reform statute; 1973, P.A. 73-622, section 1. " In a negligence action to recover damages resulting from personal injury, wrongful death or damages to property occurring on or after October 1, 1987, if the damages are determined to be proximately caused by the negligence of one of more than one party, each party against whom recovering is allowed shall be liable to the claimant only for such party’s proportionate of the recoverable economic damages and the recoverable noneconomic damages except as provided in subsection (g) of this section." Gen. Stat. § 52-572h(c). In the First Count the Special Defense alleges that it was proximately caused by BF, LLC’s own improper conduct. Although not defined in the First Special Defense or in the thirty paragraphs that were incorporated by reference, the court notes that comparative negligence has been alleged in the Third Special Defense. The court therefore finds that the allegations of the First Special Defense of " improper conduct" invokes the comparative negligence concept. Juchniewicz v. Bridgeport Hospital, 281 Conn. 29, 37 (2007). Since comparative negligence is alleged as the Third Special Defense, the court rejects the First Special Defense alleging Bongiorno Family, LLC’s own improper conduct.
SECOND SPECIAL DEFENSE - " BF, LLC’s claims are barred as BF, LLC had the last clear chance to avoid any damage it may have occurred.
In 1973 our legislature abolished the legal doctrine of last clear chance in negligence actions in which property damage is claimed. " The legal doctrines of last clear chance and assumption of risk in actions to which this section is applicable are abolished." Gen. Stat. § 52-572h(1). Sepega v. DeLaura, 326 Conn. 788, 805 (2017). Wells Fargo Advisors, LLC cited a 1969 case in support of its last clear chance claim, a case that has since been overruled by the 1973 act. The court finds the issues on the Second Special Defense for Bongiorno Family, LLC.
THIRD SPECIAL DEFENSE - " The negligence of the members and/or fiduciaries of the BF, LLC caused any damages that it may have suffered.
This is an allegation of comparative negligence based upon our tort reform statute. Gen. Stat. § 52-572h(d). This statute is applicable to " damage to property" and thus is applicable to the loss of money herein. Gen. Stat. § 52-572h(c).
Wells Fargo Advisors, LLC in the thirty paragraphs that it has incorporated by reference in this Third Special Defense claims that Frank Bongiorno as manager of Bongiorno Family, LLC, Maurice Nizzardo as an Bongiorno family member assisting in the management of Bongiorno Family, LLC, and the other members of Bongiorno Family, LLC were negligent in failing to bring to the attention of either Smith Barney or Wells Fargo Advisors, LLC any objections they had to the transfer of the account from Smith Barney to Wells Fargo Advisors, LLC or the eventual transfer of the account at Wells Fargo Advisors, LLC from Bongiorno Family, LLC to Marie Bongiorno individually. Wells Fargo Advisors, LLC claim that the above parties were negligent in allowing George Bongiorno to have access to the assets, not blocking his access to the assets, not reacting to the change of ownership when the monthly statements were mailed to 288 West Avenue, Stamford, Connecticut, not objecting to any changes in the name on the account statements including Marie Bongiorno in the monthly statements that were sent to 288 West Avenue, Stamford, Connecticut, failing to react when Smith Barney was no longer was sending the monthly account statements to 288 West Avenue on or after January 2010, not reacting in October 2010 and thereafter when the address of record for Bongiorno Family, LLC kept by Wells Fargo Advisors, LLC was changed from 288 West Avenue to 22 Willoughby Road, Stamford, Connecticut, the personal home address of Marie Bongiorno, making no objection to the change of address to Wells Fargo Advisors, LLC, utilizing tax documents sent for the tax year 2010 that contained the new address of 22 Willoughby Road, Stamford, Connecticut, making no inquiry to anyone of the change of address in those tax documents, and filing income tax returns using Wells Fargo, LLC provided tax documents received from Wells Fargo Advisors, LLC with the address of 22 Willoughby Road, Stamford, Connecticut on those tax documents. It was only in late 2011 when Frank Bongiorno called Wells Fargo Advisors, LLC seeking to access funds belonging to his children for investment purposes, that any objection was made by the three referenced Bongiorno family members.
There was no evidence before this court that either Kevin Kelly or Scott Kelly had contacted Frank Bongiorno and/or Maurice Nizzardo directly concerning any of the above account changes, the change of the account from Smith Barney to Wells Fargo Advisors, LLC, the new account set up at Wells Fargo Advisors, LLC under the signature of Marie Bongiorno in the name of Bongiorno Family, LLC, and the eventual transfer of that account from Bongiorno Family, LLC to the individual name of Marie Bongiorno. The essential claim of negligence being made by Wells Fargo Advisors, LLC by the representatives of Bongiorno Family, LLC is the failure to abide by documents that had been sent to them or should have been sent to them through the United States mail. The investment account was opened in December 1999. Between then and 2011 the original stockbroker changed names at least three times: Morgan Stanley, Solomon Smith Barney and Smith Barney. This was only a name change and not a change in the stockbroker entity holding the Bongiorno Family, LLC invested funds. At all times the Kelly brothers were named the listed stockbrokers.
Wells Fargo Advisors, LLC briefs this Third Special Defense as " contributory negligence" (# 230.00, page 14). The brief fails to cite or discuss the tort reform act and the theory of comparative negligence that is currently Connecticut law. 47 Connecticut Bar Journal 416 (1973). The court will not apply the doctrine of contributory negligence since it is no longer Connecticut law in negligence cases.
This court finds that the alleged omissions did occur. The court finds none of those omissions by any representative of Bongiorno Family, LLC were the proximate cause of the funds eventually being placed in the name of Marie Bongiorno beyond the control of any of the agents of Bongiorno Family, LLC. The court finds that the Bongiorno Family, LLC and its agents had zero percentage of negligence attributable to them as claimant and thus no reduction in the damages are warranted. Gen. Stat. § 52-572h(d).
The issues on the Third Special Defense are found for Bongiorno Family, LLC.
FOURTH SPECIAL DEFENSE - " BF, LLC’s claims are barred by the doctrine of waiver.
" As our Supreme Court has explained, a necessary element to waiver is the requisite knowledge of the right ... Waiver presupposes a full knowledge of an existing right or privilege and something done designedly or knowingly to relinquish it ... Where one lacks knowledge of a right there is no basis upon which a waiver of it can rest ... Accordingly, to determine the presence of waiver, there must be evidence of intelligent and intentional action by the petitioner of the right claimed to be waived ... It must be shown that the party understood its rights and voluntarily relinquished them anyway ... Each case should be considered upon the particular facts and circumstances surrounding that case, including the background, experience and conduct of the party that is waiving its rights." Worth Construction Company, Inc. v. Department of Public Works, 139 Conn.App. 65, 70-71 (2012).
Wells Fargo Advisors, LLC argues that the facts contained in the first thirty paragraphs incorporated by reference, which have been discussed in the above mentioned Third Special Defense, are sufficient to apply the doctrine of waiver. There is no evidence that Marie Bongiorno or George Bongiorno, Kevin Kelly or Scott Kelly or anyone connected with Smith Barney or Wells Fargo Advisors, LLC ever directly contacted Frank Bongiorno and/or Maurice Nizzardo or any other member of the Bongiorno Family, LLC advising them specifically that Marie Bongiorno has executed documents to transfer the account from Smith Barney to Wells Fargo Advisors, LLC and later to transfer the title of the account from Bongiorno Family, LLC to Marie Bongiorno individually. Furthermore there was no evidence that any specific notice of the withdrawal of $53,100 made by Marie Bongiorno after she obtained full title to the account then at Wells Fargo Advisors, LLC was ever furnished to Frank Bongiorno and/or Maurice Nizzardo or any other member of the Bongiorno Family, LLC. The mere receipt of routine monthly account statements in a passive investment account insufficient to demonstrate waiver.
The court finds that Wells Fargo Advisors, LLC has failed to sustain its burden of proof concerning the elements of the doctrine of waiver. The issues on the Fourth Special Defense are found for Bongiorno Family, LLC.
FIFTH SPECIAL DEFENSE - " BF, LLC’s claims are barred by the doctrine of ratification.
" As a general rule, ratification is defined as the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account ... Ratification requires acceptance of the results of the act with an intent to ratify, and with full knowledge of all material circumstances ... In order to ratify the unauthorized act of an agent and make it effectual and obligatory upon the principal, the general rule is that the ratification must be made by the principal with a full and complete knowledge of all material facts connected with the transaction to which it relates; and this rule applies, of course, to ratification by a corporation of an unauthorized contract or other act by its officers or agents, whether the ratification is by the stockholders or by the directors, or by a subordinate officer having authority to ratify." Community Collaborative of Bridgeport, Inc. v. Ganim, 241 Conn. 546, 561 (1997). Wells Fargo Advisors, LLC offers the same proof as already outlined in the Third Special Defense and Fourth Special Defense in support of its claim that Frank Bongiorno and/or Maurice Nizzardo and/or any of the members of Bongiorno Family, LLC ratified the transfer of the assets from Smith Barney to Wells Fargo Advisors, LLC establishing account 1733 and thereafter establishing the account in the name of Marie Bongiorno in transferring the funds to Marie Bongiorno’s individual name in account 1265. The court finds that Wells Fargo Advisors, LLC has failed to sustain its burden of proof and that the representatives of Bongiorno Family, LLC possessed full and complete knowledge of all material facts.
The court finds the issues on the Fifth Special Defense for Bongiorno Family, LLC.
SIXTH SPECIAL DEFENSE - " BF LLC’s claims are barred by the doctrine of estoppel.
" There are two essential elements to an estoppel; the party must do or say something that is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief, and the other party, influenced thereby, must actually change his position or do some act to his injury which he otherwise would not have done." Reinke v. Greenwich Hospital Association, 175 Conn. 24, 28 (1978). Herein the Wells Fargo Advisors, LLC are relying on the same thirty paragraph allegations. This court has already found that there was no direct contact with the management of Bongiorno Family, LLC by either the Kelly brothers, George Bongiorno and/or Marie Bongiorno concerning any of the account transfers mentioned above. This court finds that the Wells Fargo Advisors, LLC has failed to prove the essential allegations of estoppel.
The issue of the Sixth Special Defense are found for Bongiorno Family, LLC.
SEVENTH SPECIAL DEFENSE - " BF, LLC claims are barred by the doctrine of laches.
" The defense of laches, if proven, bars a plaintiff from seeking equitable relief ... First, there must have been a delay that was inexcusable and, second, that delay must have prejudiced the defendant ... The mere lapse of time does not constitute laches ... unless it results in prejudice to the opposing party ... as where, for example, the opposing party is lead to change his position with respect to the matter in question." Caminis v. Troy, 112 Conn.App. 546, 552 (2009).
The first transfer of the account occurred in January 2010 and Frank Bongiorno raised an objection in December 2011. This is a long standing investment account with no trading activity and with the automatic reinvestment of interest earned. The court finds that the passage of this amount of time is not the type of delay that is inexcusable upon which laches can be invoked. In addition there is no evidence that Marie Bongiorno was prejudiced by any delay from January 2010 to December 2011. There is no evidence that Wells Fargo Advisors, LLC was prejudiced by that delay. Wells Fargo Advisors, LLC has failed to prove either of the elements of laches.
The First Count of Bongiorno Family, LLC Counterclaim is an at law claim of negligence. Laches is only a defense to an equitable action. Negligence is not an equitable action. The equitable defense of laches does not apply to. the common-law claim of negligence. " Laches is purely an equitable doctrine, is largely governed by the circumstances, and is not to be imputed to one who has brought an action at law within the statutory period." State v. Lombardo Brothers Mason Contractors, Inc., 307 Conn. 412, 417, fn.3 (2012). A. Sangivanni and Sons v. F.M. Floryan and Company, Inc., 158 Conn. 467, 474 (1969).
The court finds the Seventh Special Defense for Bongiorno Family, LLC.
EIGHTH SPECIAL DEFENSE - " BF, LLC’s claims are barred by the doctrine of unclean hands.
" Our jurisprudence has recognized that those seeking equitable redress in our courts must come with clean hands. The doctrine of unclean hands expresses the principle that where a plaintiff seeks equitable relief, he must show that his conduct has been fair, equitable and honest as to the particular controversy in issue ... The party seeking to invoke the clean hands doctrine to bar equitable relief must show that his opponent engaged in wilful misconduct with regard to the matter in litigation." Monetary Funding Group, Inc. v. Pluchino, 87 Conn.App. 401, 407 (2005). Unclean hands is an equitable defense applicable only to equitable causes of action. Thompson v. Orcutt, 257 Conn. 301, 310 (2001). The First Count of the Counterclaim is a common-law count of negligence. The equitable defense of unclean hands is not applicable to a negligence action. The evidence has not shown willful misconduct by Bongiorno Family, LLC in attempting to regain control of the funds originally in its name. The court finds the issues on the Eighth Special Defense for Bongiorno Family, LLC.
NINTH SPECIAL DEFENSE - " BF, LLC’s claims are barred as it has failed to show monetary damages.
" The defendant contends that, because causation and actual injury are essential elements of a negligence claim, a plaintiff’s claim of negligence must fail entirely he cannot establish these elements." Right v. Breen, 277 Conn. 364, 370 (2006). Breach of duty by the defendant and a causal connection between defendant’s breach of duty and the resulting harm to the plaintiff are essential elements for the cause of action and negligence; they are there for necessary ingredients for actionable harm. Jagger v. Mohawk Mountain Ski Area, Inc., 269 Conn. 672, 687, fn. 13 (2004).
Bongiorno Family, LLC has successfully proven to this court’s satisfaction that it was the owner of all the assets in excess of $230,000 on deposit with Smith Barney. This court has awarded the sum of $209,956.63 currently on deposit with the Clerk of the Superior Court to Bongiorno Family, LLC. The court therefore finds that Bongiorno Family, LLC has sustained damages in the form of the difference between those two amounts of money as well as the interest that would have accrued in excess of $53,100. Although the court has not awarded Bongiorno Family, LLC a specific dollar amount, it has prevented Wells Fargo Advisors, LLC as stakeholder from recovery of $19,610.19 in attorneys fees from the $209,956.63 awarded to Bongiorno Family, LLC. The court finds that Bongiorno Family, LLC has sustained its burden of proof as to the element of monetary damages in their First Count of negligence.
The issues in the Ninth Special Defense are found for Bongiorno Family, LLC.
TENTH SPECIAL DEFENSE - " BF, LLC has failed to mitigate its damages.
" To claim successfully that the plaintiff failed to mitigate damages, the defendant must show that the injured party failed to take reasonable action to lessen the damages; that the damages were in fact enhanced by such failure; and the damages which could have been avoided can be measured with reasonable certainty." Preston v. Keith, 217 Conn. 12, 22 (1991).
This court has already found that the assets on deposit by Bongiorno Family, LLC were conservatively invested in cash or cash equivalents with those investments paying interest and with the interest being redeposited into the account. As a result over a period of a number of years the account increased in value. There are two periods of time when the account did not increase in value; (1) When Marie Bongiorno withdrew $53,100, the accrued interest on the certificates of deposit, and (2) When the funds were paid to the Clerk of the Superior Court, where they are currently being held without accruing interest. There is no evidence that Bongiorno Family, LLC delayed in the prosecution of this case in seeking the return of the funds on deposit with the Superior Court nor in failing to make a monetary claim for money damages for the $53,100 withdrawn by Marie Bongiorno. There is insufficient evidence before this court that Bongiorno Family, LLC failed to mitigate its damages. There is no evidence of any monetary amount of the alleged loss of damages by Wells Fargo Advisors, LLC.
Issues on the Tenth Special Defense are found for Bongiorno Family, LLC.
ELEVENTH SPECIAL DEFENSE - " BF, LLC has failed to allege any statute which would provide for exemplarily or punitive damages.
The only count that is being prosecuted is the First Count of the Counterclaim by Bongiorno Family, LLC claiming negligence. Actions for ordinary negligence do not support a claim for punitive damages under Connecticut common law. Stohlts v. Gilkinson, 87 Conn.App. 634, 646-47 (2005). This court has not considered any award for punitive or exemplary damages on the First Count of Bongiorno Family, LLC’s Counterclaim.
The court therefore finds the Eleventh Special Defense as moot since the court does not intend to make any such award.
TWELFTH SPECIAL DEFENSE - " BF, LLC has failed to provide a contractual or statutory right providing for attorneys fees and costs.
" Generally, attorneys fees may not be recovered, either as costs or damages, absent contractual or statutory authorization ... Attorneys fees may be awarded, however, as a component of punitive damages ... To furnish a basis for recovery of such damages, the pleadings must allege and the evidence must show wanton or wilful malicious misconduct, and the language contained in the pleadings must be sufficiently explicit to inform the court and opposing counsel that such damages are being sought." Farrell v. Farrell, 36 Conn.App. 305, 311 (1994).
Since this court is not going to award any attorneys fees and costs, to the Bongiorno Family, LLC the court finds that the issues on the Twelfth Special Defense are moot.
In summation, the court has found that Wells Fargo Advisors, LLC has failed to prove each and every one of its listed twelve Special Defenses as alleged in its August 11, 2017 pleading (# 215.00).
This court finds the issues on the First Count of the Second Amended Counterclaim sounding in negligence in favor of Bongiorno Family, LLC as against Wells Fargo Advisors, LLC. In lieu of money damages, the court orders that Wells Fargo Advisors, LLC is not entitled to any portion of the disputed funds for attorneys fees in accordance with its claim as stakeholder under Gen. Stat. § 52-484.
Bongiorno Family, LLC has filed a three-count direct claim against Marie Bongiorno for conversion, statutory theft and identity theft seeking damages treble damages, attorneys fees and various forms of statutory relief. See Amended Crossclaims dated August 1, 2017 (# 213.00, page 13 of 20). After the funds were moved from Smith Barney to Wells Fargo Advisors, LLC, Marie Bongiorno removed $53,100 from those funds. Those funds had been invested in various certificates of deposit. The certificates of deposit were not sold by Marie Bongiorno but the income that had been earned on those certificates of deposit amounted to approximately $53,100. That was the source of the $53,100 removed by Marie Bongiorno. Bongiorno Family, LLC is claiming money damages, punitive damages and attorneys fees for the removal of that $53,100.
In a separate lawsuit returnable on October 22, 2013 Bongiorno Family, LLC filed a claim against Mary Badoyannis, the attorney for Marie Bongiorno, during this period of time. Bongiorno Family, LLC v. Mary Badoyannis, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV-13-6020102-S. A settlement in that lawsuit in favor of Bongiorno Family, LLC occurred and Bongiorno Family, LLC was paid the sum of $100,000.00. Ex. 22. The lawsuit was then withdrawn on December 13, 2016. (# 146.00.) At the time that Bongiorno Family, LLC accepted the settlement of $100,000.00, they knew all the facts concerning the withdrawal of the $53,100 and had in mind if not on paper a claim against Marie Bongiorno for the $53,100 damages currently before this court. Ex. 27, Settlement Agreement dated December 13, 2016. The court finds that the payment of the $100,000.00 was accepted by Bongiorno Family, LLC in full and final settlement of those claims. The court further finds that the claims being made in this lawsuit against Marie Bongiorno by Bongiorno Family, LLC for conversion, statutory theft and identity theft have been adequately compensated by the Mary Badoyannis payment of $100,000.00. The court notes its award to Bongiorno Family, LLC of the entire $209,956.63. The issues on the Bongiorno Family, LLC Amended Crossclaims dated August 1, 2007 against Marie Bongiorno are found for the defendant, Marie Bongiorno. (# 213.00, page 13 of 20.)
Wells Fargo Advisors, LLC has filed a claim against Marie Bongiorno, individually based upon multiple theories of indemnity including the interpleader statute, Gen. Stat. § 52-484, breach of contract, fraud, and contribution. (# 141.00, See Supplemental Counts First, Fourth, Fifth, and Sixth.) In effect Wells Fargo Advisors, LLC is pointing the finger at Marie Bongiorno stating that it was her actions that caused this entire litigation.
The claims for relief filed by Wells Fargo Advisors, LLC as against Marie Bongiorni for the above four legal claims state: (1) " Wells Fargo be granted its attorneys fees in this matter." (2), (3) and (4) " in the event this Court finds Wells Fargo liable for any damages," that Wells Fargo claims contribution, indemnification and liability for those damages against Marie Bongiorno in these Supplemental Claim for Relief. The court will now discuss the above four legal claims argued by Wells Fargo Advisors, Inc. for indemnification: The interpleader statute Gen. Stat. § 52-484 that permits in effect three forms of relief: (1) A determination who is entitled to the funds, (2) Taxing of costs and, (3) " may allow to one or more of the parties a reasonable sum or sums for counsel fees and disbursements, payable out of such fund or property." Wells Fargo Advisors, LLC claims that they are entitled to their entire attorneys fees, not only prosecuting this bill of interpleader but for defending the various claims made by other parties in this litigation as well as prosecuting their own individual claims. Upon information and belief, Wells Fargo Advisors, LLC may be claiming additional attorneys fees in excess of $200,000.
This court has already entered an order finding that Bongiorno Family, LLC is entitled to the entire proceeds on deposit with the Clerk of the Superior Court and no attorneys fees are to be allowed to Wells Fargo Advisors, LLC as against those stakeholders funds. The court rejects the first indemnity remedy under Gen. Stat. § 52-484.
The second remedy under Gen. Stat. § 52-484 claimed by Wells Fargo Advisors, LLC is " may tax costs at its discretion." Connecticut follows with the American rule. The court believes that this section of Gen. Stat. § 52-484 relates to taxable costs not attorneys fees. The court finds that the language of the statute is not broad enough to allow for a statutory claim of attorneys fees under the phrase " may tax costs at its discretion."
The third remedy under the statute, Gen. Stat. § 52-484, is that the court " may allow to one or more of the parties a reasonable sum or sums for counsel fees and disbursements, payable out of such fund or property." This court has already entered a Interlocutory Judgment of Interpleader and in that Interlocutory Judgment, the court has permitted Wells Fargo Advisors, LLC to seek attorneys fees in later litigation with the specific authority for these attorneys fees are to be " payable out of such fund or property" (# 138.00) Since such fund or property has been ordered by this court to be paid to Bongiorno Family, LLC, the court has already determined that Wells Fargo Advisors, LLC is not entitled to attorneys fees " payable out of such fund or property."
This court finds that Gen. Stat. § 52-484 does not permit the award of attorneys fees to any party other than those " payable out of the fund or property." The court therefore finds that Wells Fargo Advisors, LLC is not entitled to the remedy of additional attorneys fees against Marie Bongiorno under the authority of Gen. Stat. § 52-484.
Wells Fargo Advisors, LLC’s second claim for indemnity is breach of contract against Marie Bongiorno. It points to two separate documents executed by Marie Bongiorno at the time of opening up the Wells Fargo Advisors, LLC account 1733. The court will discuss both documents. The first document was a form entitled " Limited Liability Company Authorization." Ex. 42, page 1. It commences with the language: " I, Marie Bongiorno, being duly elected, qualified and acting manager or managing manager of Bongiorno Family a limited liability company ..." The document was signed on January 28, 2010. Marie Bongiorno signed the document as " a member of an LLC." Two boxes on this form were checked: " Member" and " a Member-Managed LLC." She also signed the middle of the document in paragraph three but her capacity for that second signature was not indicated next to her signature. The contractual language for indemnity is found in paragraph four which states: " WFA shall be fully protected in relying upon this authorization and shall be indemnified and held harmless by the LLC from any and all claims, demands, expenses, losses or damages, including reasonable attorneys fees, incurred by WFA on account of WFA’s honoring the signature or instruction (written or oral) of any person designated in this authorization as having the power and the authority to act on behalf of the LLC." The contractual indemnity language indicates that it is the LLC that shall pay for and hold Wells Fargo Advisors, LLC harmless, not the individual member or manager who executed the document. Two out of the three names of Marie Bongiorno that appear on this document are in her alleged capacity as being the manager and/or member of the LLC. There is no contractual language in this document that binds her individually to Wells Fargo Advisors, LLC for indemnity for attorneys fees.
Examination of the indemnity agreement in this case makes it clear that it falls within the general rule rather than within the exception. The agreement makes no reference to attorneys fees and limits its scope to " expenses ... incurred with any action brought to enforce [the Lichtenheims’] first refusal rights." This language allows no reasonable interpretation other than that attorneys fees would be limited to defense of the original action. The trial court’s holding to the contrary was therefore in error.
There is error in part; the judgment is set aside and the case is remanded with direction to enter judgment for the plaintiff modified by the elimination of the item of $6,000 allowed as attorneys fees.Burr v. Lichtenheim, supra, 190 Conn. 364.
In general attorney fees are not awarded in seeking indemnification. Link v. City of Shelton, 186 Conn. 623, 632 (1982).
The plain language of this contract clause is insufficient to hold Marie Bongiorno individually as the indemnifier of all attorneys fees incurred by Wells Fargo Advisors, LLC in this litigation. Burr v. Lichtenheim, 190 Conn. 351, 363-64 (1983).
The second document is a W-9 form executed by Marie Bongiorno on behalf of Bongiorno Family, LLC. Ex. 42, page 3. The employment identification number of the LLC is placed on file with Wells Fargo Advisors, LLC in a form filed with the Internal Revenue Service. The court has examined the language of that document and cannot find clear language that arises to a contractual obligation by Marie Bongiorno individually, to hold Wells Fargo Advisors, LLC harmless from its attorneys fees. The W-9 is a routine preprinted IRS form. The IRS document was executed on behalf of Bongiorno Family, LLC. The court cannot find that Marie Bongiorno is contractually obligated to indemnify Wells Fargo Advisors, LLC for its attorneys fees based upon either of these two claimed executed documents. Ex. 42, page 1, Ex. 42, page 3.
The third basis of an indemnity claim by Wells Fargo Advisors, LLC against Marie Bongiorno is the common-law right of contribution between joint tortfeasors. This court has already found Wells Fargo Advisors, LLC negligent in regard to its handling of the funds in dispute. In this regard the Wells Fargo Advisors, LLC is making a claim for contribution. " The doctrines of indemnification and contribution are based on fundamentally different principles. Indemnity involves a claim for reimbursement in full from one on whom a primary liability is claimed to rest, while contribution involves a claim for reimbursement of a share of a payment necessarily made by the claimant which equitably should have been paid in part by others." Skuzinski v. Bouchard Fuels, Inc., 240 Conn. 694, 697-98, fn. 3 (1997). " Ordinarily there is no right of indemnity or contribution between joint tort feasors ... Where, however, one of the defendants is in control of the situation and his negligence alone is the direct immediate cause of the injury and the other defendant does not know of the fault, has no reason to anticipate it and may reasonably rely upon the former not to commit a wrong, it is only justice that the former should bear the burden of damages due to the injury ... Indemnity shifts the impact of liability from passive joint tortfeasors to active ones." Crotta v. Home Depot, Inc., 249 Conn. 634, 640-42 (1999). Under this claim of contribution being made by Wells Fargo Advisors, LLC, the court must determine whether both Marie Bongiorno and Wells Fargo Advisors, LLC were tortfeasors, and if so, was once a passive torfeasor.
In its finding of negligence this court has determined that the Kelly brothers performed duties in obtaining the transfer of the funds from Smith Barney to Wells Fargo Advisors, LLC, obtained the employment identification number when it was not provided by Marie Bongiorno, filled out all the documents and papers, dealt with Marie Bongiorno who is not a sophisticated investor, gave her instructions on how to execute the various documents, permitted the transfer of $53,100 to her own name after those funds were withdrawn from the account, and refused to transfer the account back to Bongiorno Family, LLC in December 2011 when such a demand was made upon them. Under those circumstances the court cannot find that Wells Fargo Advisors, LLC and its agents were passive joint tortfeasors. This court cannot invoke contribution between joint tortfeasors in allowing Wells Fargo Advisors, LLC to recover attorneys fees against Marie Bongiorno.
The final claim for attorneys fees made by Wells Fargo Advisors, LLC against Marie Bongiorno is on the basis of fraud. " The essential elements of a cause of action in fraud are: (1) a false representation was made as a statement of fact; (2) it was untrue and known to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon that false representation to his injury ... All of these ingredients must be found to exist; and the absence of any one of them is fatal to a recovery ... Additionally, [t]he party asserting such a cause of action must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which higher standard we have described as clear and satisfactory or clear, precise and unequivocal." (Citations omitted; internal quotation marks omitted.) Citino v. Redevelopment Agency, 51 Conn.App. 262, 275-76, 721 A.2d 1197 (1998). Wells Fargo Advisors, LLC alleges that it was Marie Bongiorno who made the representations that she had the authority to act on behalf of Bongiorno Family, LLC and that at all times Wells Fargo Advisors, LLC was following the directions of Marie Bongiorno. This court finds that Wells Fargo Advisors, LLC has failed to sustain its burden of proof by clear and convincing evidence that Marie Bongiorno engaged in fraud and in effect pulled the wool over the eyes of Wells Fargo Advisors, LLC. This court’s factual findings concerning the negligence of the agents of Wells Fargo Advisors, LLC belie its later claim of fraud.
Although punitive damages may be award upon a showing of fraud, those punitive damages are limited to attorney fees. Plikus v. Plikus, 26 Conn.App. 174, 180 (1991), Hylton v. Gunter, 313 Conn. 472, 484 (2014). The nature of egregious conduct necessary to award attorney fees as common-law punitive damages has not been presented to this court. The plaintiff’s burden to prove that conduct under this fraud exception to the American Rule is clear and convincing evidence. Intentional, wanton or willful conduct is needed to show common-law punitive damages. Metcoff v. NCT Group, Inc., 52 Conn.Supp. 363, 380-81 (2011). The issues of fraud have not been proven to this court’s satisfaction.
Wells Fargo Advisors, LLC is claiming attorneys fees in its March 27, 2015 pleading (# 141.00) as against Marie Bongiorno on four separate theories; The interpleader statute Gen. Stat. § 52-484, contractual indemnity, contribution between joint tortfeasors and the fraud of Marie Bongiorno. This court has found all four of those issues as against Wells Fargo Advisors, LLC. The court denies the claim for attorney fees based on equitable considerations. Vaccaro v. DeAngelo, Superior Court, judicial district of Fairfield at Bridgeport, Docket Number CV 15-6048881 S (March 6, 2017, Radcliffe, J.) .
Wells Fargo Advisors, LLC has brought similar claims for attorney fees by reason of indemnity and less the fraud and contribution claim against the Estate of George Bongiorno. (# 141.00 See Supplemental Counts First and Fourth.) No evidence was offered that George Bongiorno engaged in any untoward actions as to this account. At worst he merely executed a document or documents proffered to him while he lived in Florida at the behest of Marie Bongiorno. The issues on the two indemnity claims brought by Wells Fargo Advisors, LLC as against the Estate of George Bongiorno are found for the Estate of George Bongiorno. (# 141.00.)
Wells Fargo Advisors, LLC has filed a claim against Bongiorno Family, LLC based upon three theories of indemnity; the interpleader statute, Gen. Stat. § 52-484, breach of contract, and contribution. (# 141.00, See Supplemental Counts First, Second, Third and Seventh.) The plaintiff is seeking an award of attorneys fees under one or all of the above theories against the defendant, Bongiorno Family, LLC.
The First Supplemental Count as against the Bongiorno Family, LLC cites General Statutes § 52-484. Wells Fargo Advisors, LLC joins in Marie Bongiorno and George Bongiorno in that First Supplemental Count. This court has already analyzed and rendered a decision on this claim for attorneys fees and additional attorneys fees under General Statutes § 52-484 in the earlier section of this Memorandum of Decision in regard to Wells Fargo Advisors, LLC claims for indemnity for attorneys fees as against the defendant, Marie Bongiorno, individually and the defendant, Marie Bongiorno as Executrix of the Estate of George Bongiorno. For the reasons stated therein this court rejects Wells Fargo Advisors, LLC indemnity claim for attorneys fees under the authority of General Statutes § 52-484 as against the defendant, Bongiorno Family, LLC.
Wells Fargo Advisors, LLC in the Seventh Supplemental Count seeks attorneys fees by reason of indemnification utilizing the common-law right of contribution between joint tortfeasors. This issue has already been discussed in and decided by this court this Memorandum of Decision concerning Wells Fargo Advisors, LLC’s claim against Marie Bongiorno individually and Marie Bongiorno as Executrix of George Bongiorno. This court rejected those claims for indemnity based upon contribution. This court hereby adopts those reasons and rejects Wells Fargo Advisors, LLC claims for indemnity based upon contribution as against the defendant, Bongiorno Family, LLC.
The Second Supplemental Count as against the Bongiorno Family, LLC alleges that it contracted with Wells Fargo Advisors, LLC to fully protect and indemnify Wells Fargo Advisors, LLC and hold it harmless against all claims, demands, expenses, losses, and damages including attorneys fees. No such document was produced in evidence before this court. The documents in which Wells Fargo Advisors, Inc. produced for the contractual indemnity claims against Marie Bongiorno are contained in Exhibit 42. Exhibit 42 are documents in the name of Bongiorno Family, LLC but they were only executed by Marie Bongiorno. The court has already found that at no time was Marie Bongiorno a member or manager of Bongiorno Family, LLC. There is no evidence before this court to indicate that any member or manager of Bongiorno Family, LLC authorized Marie Bongiorno to execute Exhibit 42, the " Limited Liability Company Authorization" on behalf of Bongiorno Family, LLC.
Wells Fargo Advisors, LLC has failed to sustain its burden of proof to demonstrate that it had a contract of indemnity with Bongiorno Family, LLC. The Second Supplemental Count is found for the defendant, Bongiorno Family, LLC.
The Third Supplemental Count as against the Bongiorno Family, LLC brought by Wells Fargo Advisors, LLC alleges that there was a contract between Bongiorno Family, LLC and Wells Fargo Advisors, LLC. This claim of contract has been rejected by this court in the previous Second Supplemental Count. In addition the allegations are that the Wells Fargo Advisors, LLC followed the directions of Marie Bongiorno in the handling of the Bongiorno Family, LLC account. Although that fact may be correct, there is no indication that Marie Bongiorno at the time that she was furnishing directions to Wells Fargo Advisors, Inc. was either a manager or member of Bongiorno Family, LLC or authorized to act and to bind Bongiorno Family, LLC to any indemnity provisions. The issues on the Third Supplemental Count are found in favor of the Bongiorno Family, LLC.
The issues on the four indemnity claims brought by Wells Fargo Advisors, LLC as against Bongiorno Family, LLC in pleading # 141.00 are found for the defendant, Bongiorno Family, LLC.
Marie Bongiorno has filed her own thirty-five paragraph one-count lawsuit against Wells Fargo Advisors, LLC specifying that she has suffered pecuniary losses. See Counterclaim as to Plaintiff Wells Fargo Advisors dated August 18, 2017 (# 220.00). To that one-count Marie Bongiorno Counterclaim, Wells Fargo Advisors, LLC alleges on August 18, 2017 ten Special Defenses: improper conduct, last clear chance, negligence, waiver, ratification, estoppel, laches, failure to show monetary damages, failure to mitigate damages, and unclean hands, (# 223.00, paragraph 28-37). Without itemizing any of the specific facts or the elements of each of those ten Special Defenses, this court has made certain findings on similar Special Defenses raised by Wells Fargo Advisors, Inc. as against Bongiorno Family, LLC. The court finds that Marie Bongiorno has failed to sustain her burden of proof in the allegations of the thirty-five paragraph one-count Counterclaim as to Plaintiff Wells Fargo Advisors dated August 18, 2017 (# 220.00). There is no need to review any of the ten Special Defenses.
A thirty-five paragraph complaint has been alleged against Wells Fargo Advisors, LLC by the Estate of George Bongiorno (# 220.00) and the same ten Special Defenses were filed by Wells Fargo Advisors, LLC. (# 223.00). The court finds that the Estate of George Bongiorno has failed to sustain its burden of proof and finds the issues on that thirty-five paragraph one-count Counterclaim as to Plaintiff Wells Fargo Advisors, LLC dated August 18, 2017 for Wells Fargo Advisors, LLC. There is therefore no need to deal with either the factual or legal claims in the ten Special Defenses.
Marie Bongiorno individually and as Executrix of the Estate of George Bongiorno filed a one-count thirty-three paragraph Cross Complaint against Bongiorno Family, LLC on July 17, 2017 (# 202.00). The Cross Complaint noted the continuing claim being made by Bongiorno Family, LLC to the accounts of Smith Barney and Wells Fargo Advisors, Inc. The last three paragraphs of the Cross Complaint summarizes the basis for the Claim for Relief in this Cross Complaint.
" 31. Upon information and belief, the claims set forth by Bongiorno Family, LLC are made as part of a larger infra-family dispute between the various members of the Bongiorno family over the assets George and Marie Bongiorno accumulated during their lifetime through various business ventures.
32. Upon information and belief, the claims set forth by Bongiorno Family, LLC are made for the purpose of causing emotional and financial distress to George Bongiorno’s widow, Defendant Marie Bongiorno.
33. The Property of the Second Wells Fargo Account rightly belongs to George and Marie Bongiorno as a result of the foregoing."
The Claims for Relief requests damages, the imposition of a constructive trust and a declaration that the property that is the subject of this interpleader action belongs to Marie Bongiorno.
The property issue has been decided in this Memorandum of Decision in favor of Bongiorno Family, LLC. The court rejects the additional claims of damages and the imposition of a constructive trust.
The issues on this thirty-three paragraph Cross Complaint dated July 17, 2017 (# 202.00) are found for Bongiorno Family, LLC.
Marie Bongiorno has filed a Corrected Claim dated July 27, 2017 (# 209.00) and asks as a Claim for Relief that all the underlying monetary sums; being the $100,000.00 settlement against Mary Badoyannis, the $53,100.00 withdrawal, and the $209,956.63 on deposit with the Clerk of the Superior Court be awarded to her. See Corrected Defendant Marie Bongiorno & Marie Bongiorno, Executrix of the Estate of George Bongiorno Statement of Claims dated July 27, 2017 (# 209.00). She is seeking a declaration that the above stated property belongs to Marie Bongiorno. For the reasons previously stated, all of the above issues brought by Marie Bongiorno and as well as these Claims have already been decided adverse to Marie Bongiorno, individually and as Executrix. The court enters an order finding the issues on that Corrected Claims (# 209.00) in favor of the defendant, Bongiorno Family, LLC.
This order disposes of the claims filed by each of the four parties: Wells Fargo Advisors, LLC, Bongiorno Family, LLC, Marie Bongiorno, individually, and Marie Bongiorno, Executrix of the Estate of George Bongiorno as against the $209,956.63 on deposit with the Clerk of the Superior Court. This Memorandum of Decision disposes of each of the claims as well as the Supplemental Claims filed by each of those four parties against those funds. This Memorandum of Decision further disposes of all of the attorneys fees claims filed by the stakeholder, Wells Fargo Advisors, LLC, in accordance with Gen. Stat. § 52-484 and the indemnity, fraud and contribution claims being brought by Wells Fargo Advisors, LLC as against the individual defendant, Marie Bongiorno. This Memorandum of Decision also disposes of all claims by each of the four parties against each of the other remaining three parties in whatever fashion those claims were made and disposes of each and every single Special Defense alleged therein.
Judgment will enter in accordance with this Memorandum of Decision.
The Court Clerk will not tax costs to any party.