Opinion
CV166059378S
01-11-2017
Debra Westphal v. Tyler Heon et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION TO ENFORCE SETTLEMENT AGREEMENT (#114) (#115)
Robin L. Wilson, J.
STATEMENT OF CASE AND PROCEDURAL HISTORY
The plaintiff, Debra Westphal (plaintiff) commenced this negligence action against the defendants, Tyler Heon and Elizabeth Heon (defendants). The action arises out of a motor vehicle accident involving the plaintiff and the defendant, Tyler Heon. The complaint is in two counts. Count one is as to defendant, Tyler Heon and alleges various ways in which he was negligent. Count two is as to the defendant Elizabeth Heon, owner of the vehicle and alleges that as owner of the vehicle, she was vicariously liable pursuant to § § 14-154a and 52-183. The plaintiff sought compensation only for damages to her vehicle. On August 11, 2016, pursuant to General Statutes § 52-192a, the plaintiff filed an offer of compromise for $5000. On August 16, 2016, the defendant accepted the plaintiff's offer of compromise and on November 2, 2016, the plaintiff filed a withdrawal of the action. On November 4, 2016, and November 22, 2016, the plaintiff filed a motion to enforce the settlement reached between the parties and to order the defendants to tender payment. In addition to payment of the settlement amount, the plaintiff seeks interest, attorneys fees and sanctions. The court held an Audubon hearing on January 9, 2016. The parties stipulated to the following facts:
1. On August 11, 2016, the plaintiff, pursuant to General Statutes § 52-192a filed an offer of compromise in the amount of $5,000.
2. In accordance with § 52-192a, on August 16, 2016, the defendant filed an acceptance of the plaintiff's offer of compromise in the amount of $5,000.
3. On September 14, 2016, the defendant left a voicemail for the plaintiff regarding confirmation of the settlement.
4. On September 14, 2016, the plaintiff left a voicemail for the defendant confirming acceptance of the settlement offer and requested processing of the check.
5. On September 21, 2016, the defendant confirmed with the plaintiff via a phone call that the defendant was in the process of submitting the paperwork for the check.
6. On September 28, 2016, the plaintiff called the defendant and left a voicemail requesting a status update on the settlement payment because no payment had been received by plaintiff's counsel.
7. On October 5, 2016, the plaintiff called the defendant and left a voicemail requesting a status update on the settlement payment because no payment had been received by plaintiff's counsel.
8. On October 12, 2016, the defendant responded and reported that the claims adjuster had sent the check to defendant's counsel and that when it was received, defendant's counsel would send the check to plaintiff's counsel.
9. Over the next two weeks on or about October 18, 2016, and October 25, 2016, both counsel for the parties went back and forth on the status of the check.
10. On October 25, 2016, defendant's counsel was advised by the adjuster that the check was cashed on October 14, 2016.
11. On or about October 25, 2016, it was confirmed that the check was stolen from defendant's counsel's mailbox. On or about that same date, defendant's counsel filed a police report and a report with the North Haven Post Office.
11. On October 25, 2016, plaintiff emailed defendant requesting a status update on the settlement payment because the issued check had not been received by plaintiff's counsel.
12. On or about October 26, 2016, defendant's counsel informed plaintiff's counsel that the claims adjuster had sent a new check via FedEx and expected it to arrive at plaintiff's office on October 28, 2016.
13. On November 2, 2016, the plaintiff filed a withdrawal of the action.
14. On November 2, 2016, plaintiff emailed defendant requesting a status update on the settlement check because the check had not been received by plaintiff's counsel.
15. On November 2, 2016, the defendant's counsel informed plaintiff's counsel that the insurance company refused to issue another check because the check issued had been cashed and could not be canceled.
16. On November 2, 2016, plaintiff left a voicemail with the insurance adjuster requesting follow up information regarding the check in question.
17. Defendant's counsel advised the insurance adjuster that the insurance company could not withhold the check, and that pursuant to Connecticut law, the insurance company was obligated to issue another check to plaintiff and plaintiff's counsel.
18. After November 2, 2016, defendant's counsel had no further contact with the insurance company and plaintiff's counsel began communicating directly with the adjuster.
19. On November 10, 2016, plaintiff's counsel received two documents from Safeco Insurance, an affiliate of Liberty Mutual Insurance Company. The first, was a letter, which required plaintiff to complete a forgery affidavit and to return it completed within 10 days. The second was a Negotiable Item Affidavit, from Northern Trust, the payer bank, requiring that the plaintiff's counsel attest to being a payee on the check; attest to certain facts regarding the cashing of the check, i.e., the account number to which the check was charged, the date the check was paid, that the debit was unauthorized, that the payer bank was " Northern Trust, " and that counsel had reviewed the check and determined that the endorsement on it was not his nor did he authorize anyone to endorse the check on his behalf. The affidavit further required plaintiff's counsel to, in relevant part: " agree to cooperate with any internal or other investigation and/or legal action taken with regard to this matter and authorize the release of information requested, to assist with the investigation related to the fraud, to Law Enforcement. The information provided will be used to assist in the investigation and potential prosecution of the person(s) who committed this fraud. I promise to testify or certify to the truth of all applicable statements in this affidavit before any competent judge, officer of the court or other person, in any case now, pending or which may occur regarding this affidavit . . ." Pl. Exs. A and B. Liberty Mutual also required that the affidavit be sent within 10 days.
Safeco is an affiliate of Liberty Mutual. Therefore, the court will refer to the insured as Liberty Mutual.
20. On November 10, 2016, plaintiff's counsel sent a letter in response to Liberty Mutual's correspondence, indicating that he was uncomfortable with the language demanded by Liberty Mutual and that neither he nor his client, were under any obligation to provide assistance to Liberty Mutual's internal investigation of the missing check. See Pl. Ex. B.
21. On November 15, 2016, plaintiff's counsel spoke with defendant's counsel who indicated that Liberty Mutual would not release the settlement funds until the plaintiff and plaintiff's counsel cooperated with Liberty Mutual's investigation of the stolen check by completing the affidavit forms that were sent to plaintiff's counsel.
22. Liberty Mutual finally released another check to plaintiff's counsel which was received on December 21, 2016.
The court will find further facts as necessary in deciding the merits of the motion.
DISCUSSION
" [T]he concept of an Audubon hearing[; Audubon Parking Associates Ltd. Partnership v. Barclay & Stubbs, Inc., 225 Conn. 804, 626 A.2d 729 (1993); ] a post-settlement hearing intended to enforce a settlement agreement, is premised on the ability of the court to act upon a motion filed after a matter has been withdrawn (based on a presumed settlement). The implication of these cases is that in the context of post-withdrawal proceedings, it is not necessary to do explicitly, that which is necessarily implied." (Footnote omitted.) Wells Fargo Bank v. Pampoukidis, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-07-5003898-S, (August 6, 2014, Povodator, J.) (58 Conn.L.Rptr. 739, 740).
" A hearing pursuant to Audubon Parking Associates Ltd. Partnership . . . is conducted to decide whether the terms of a settlement agreement are sufficiently clear and unambiguous so as to be enforceable as a matter of law." (Citation omitted.) Ackerman v. Sobol Family Partnership, LLP, 298 Conn. 495, 499 n.5, 4 A.3d 288 (2010).
" In connection with a motion to enforce a settlement agreement, the court's function is to act as the trier of fact." Kirk v. Chippenwood Estate Condominium, Inc., Superior Court, judicial district of New Britain, Docket No. CV-04-5000051-S, (September 13, 2006, Shapiro, J.). " [T]he trier of fact's assessment of the credibility of the witnesses . . . is made on the basis of its firsthand observation of their conduct, demeanor and attitude . . . The weight to be given to the evidence and to the credibility of witnesses is solely within the determination of the trier of fact." (Internal quotation marks omitted.) Machado v. Statewide Grievance Committee, 93 Conn.App. 832, 839, 890 A.2d 622 (2006). " It is well established that [t]he trier of fact may accept or reject the testimony of any witness . . . The trier can, as well, decide what--all, none, or some--of a witness' testimony to accept or reject." (Citation omitted; internal quotation marks omitted.) Wilson v. Hryniewicz, 51 Conn.App. 627, 633, 724 A.2d 531, cert. denied, 248 Conn. 904, 731 A.2d 310 (1999).
Concerning the enforcement of a settlement agreement, " [a] trial court has the inherent power to enforce summarily a settlement agreement as a matter of law when the terms of the agreement are clear and unambiguous . . . Agreements that end lawsuits are contracts, sometimes enforceable in a subsequent suit, but in many situations enforceable by entry of a judgment in the original suit." (Citations omitted; internal quotation marks omitted.) Audubon Parking Associates Ltd. Partnership v. Barclay & Stubbs, Inc., supra, 225 Conn. 811. " Due regard for the proper use of judicial resources requires that a trial judge proceed with entry of a settlement judgment after affording the parties an opportunity to be heard as to the precise content and wording of the judgment, rather than resume the trial and precipitate an additional lawsuit for breach of a settlement agreement." (Internal quotation marks omitted.) Id., 812. " Summary enforcement is not only essential to the efficient use of judicial resources, but also preserves the integrity of settlement as a meaningful way to resolve legal disputes. When parties agree to settle a case, they are effectively contracting for the right to avoid a trial." (Emphasis omitted.) Id.
" [T]he Audubon holding has been applied when the parties contest the existence or the terms of the alleged settlement agreement, requiring the trial court to hold evidentiary hearings and make factual findings in order to resolve these issues." (Internal quotation marks omitted.) Scappatura v. G& D Acquisitions, Inc., Superior Court, judicial district of Danbury, Docket No. CV-07-5003116-S, (February 11, 2010, Agati, J.). " [T]he issues are whether a settlement agreement exists, whether its terms are undisputed, clear and unambiguous, and whether the nature of the parties' dispute allows summary enforcement . . . The narrow evidentiary inquiry of an Audubon hearing is solely to determine whether there is any dispute about the existence, terms and enforceability of a clear and unambiguous agreement, not to resolve such disputed facts if they exist." (Internal quotation marks omitted.) Id.
In the present case, the parties do not dispute that there was a clear and unambiguous agreement to settle this case for $5,000 which should be enforced. Indeed, the plaintiff received a check on December 21, 2016. However, in addition to the settlement amount, the plaintiff seeks interest in the amount of $132.87 pursuant to General Statutes § 37-3a for the detention of the money, which is interest at the rate of 10% per annum from September 15, 2016, the settlement due date, until December 21, 2016, the date the check was received. At the hearing on the motions, the defendant did not dispute that the plaintiff is entitled to interest, nor did the defendant dispute the amount of interest claimed. The court will therefore award interest in the total amount of $132.87.
The plaintiff seeks attorneys fees in the amount of $1,050 for the filing of both motions and the time and effort in collecting and administering the delay in payment which included the filing of motions with the court and calls and emails to counsel to properly resolve the issue while payment had not yet been received. The defendant did not object to the plaintiff's claim for attorneys fees for the time spent filing the motions, and therefore the court will award attorneys fees in the amount of $1050.
The plaintiff characterizes her claim for attorneys fees as " equitable costs" however, the claim is essentially for sanctions in the form of an award of attorneys fees in connection with the proceedings following the date on which the settlement payment was to have been received. The court must point out that the Supreme Court in Audubon affirmed the trial court's denial of an award of attorneys fees in an action to enforce a settlement agreement. Audubon, however, is distinguishable from the factual scenario presented before this court. Here, attorneys fees are being sought not based on the agreement itself, but rather because of Liberty Mutual's conduct in failing to pay the settlement after representations were made that a new check would be sent via FedEx, and because of Liberty Mutual's refusal to issue the check until plaintiff and counsel cooperated by completing the forgery affidavit forms it sent to plaintiff's counsel, when plaintiff and plaintiff's counsel was under no obligation to do so, and was not at fault for the missing check. See Centerbank Mortgage Co. v. Maisano Associates et al., Superior Court of Connecticut, Docket No. CV-9503369164, (August 12, 1999, Silbert, J.) (court awarded attorneys fees in motion to compel compliance with settlement agreement. In denying defendant's motion for reargument on the issue of attorneys fees, the court distinguished Audubon from the case before it noting: " [t]his however, is not a case in which attorneys fees are being sought or awarded based on the settlement agreement itself. Rather, fees are being awarded as a sanction for the defendants' conduct in failing to abide by the explicit representations by the defendants' counsel that payment would be made by a specified date. When the court stated, in imposing this sanction, that it was not making any specific findings of fault or responsibility, it meant only that it could not determine whether it was the defendants themselves, their insurer, or their attorney who was responsible for the failure to comply with the settlement agreement and the promised payment date. It is undisputed, however, defendants' counsel had promised that the settlement check would be in the hands of plaintiff's counsel by a certain date, that this promise was not kept, and that there was no excuse given for the failure to have accomplished this task").
The plaintiff also claims attorneys fees in the amount of $900 for the time spent reviewing Liberty Mutual's letter of November 10, 2016, relating to the investigation of the missing check, and the time spent drafting a response to that letter and making phone calls to Liberty Mutual. The defendants objected to this claim on grounds that because the check was made payable to plaintiff's counsel and the plaintiff, and the check was reported stolen, plaintiff's counsel would have had to engage in some investigative process of the claim by Northern Trust Bank, which would require the completion of the forms in any event. The plaintiff clearly was not at fault for the missing check, and certainly was under no obligation to complete the forms submitted by Liberty and Northern Trust regarding the investigation of the missing check. The defendant accepted plaintiff's settlement offer and was required to pay the plaintiff in a timely fashion pursuant to that agreement. The defendant failed to do so. The court will therefore award attorneys fees for the time plaintiff's counsel spent reviewing the documents sent by Liberty.
Plaintiff's counsel submitted evidence of the time spent by himself and paralegals in his office on completing the forms. However, plaintiff's counsel charged a rate at $300 per hour which is his hourly rate for all three hours. The court awards the plaintiff $675 for the three hours spent on reviewing and completing the forms sent by Liberty Mutual, and phone calls made to Liberty Mutual. The plaintiff also seeks attorneys fees in the amount of $200 for attendance at the hearing on both motions. The hearing was approximately forty-five minutes. Based on counsel's hourly rate of $300 per hour, the court awards attorneys fees in the amount of $200.
The court reduced the $900 amount which was based on plaintiff's counsel's $300 hourly rate for three hours, to $675 which is based on 1.5 hours at counsel's rate of $300 per hour, and the paralegal rate of $150 per hour at 1.5 hours.
The plaintiff also requests the court to impose sanctions on the defendant in the amount of $6,000 on grounds that Liberty Mutual acted in bad faith. The plaintiff is essentially requesting the court to award punitive damages. The plaintiff's request is denied because she failed to put forth evidence that Liberty Mutual engaged in " repetitive, knowing or deliberate conduct as such [conduct is] unlikely to be attributable to an honest mistake or mere negligence . . . [or that] the conduct at issue was engaged in purposefully." Marder v. Nationwide Ins. Co., Superior Court, judicial district, Docket No. CV-136038355-S, (Wilson, J. November 12, 2015) . Here, Liberty Mutual was conducting an investigation of a stolen check and engaging in an investigatory process with respect to a missing and/or stolen check. Although it was determined that the check was stolen from defense counsel's mailbox, and that plaintiff had nothing to do with the stolen check, there was no evidence that Liberty's failure to issue a replacement check was " design[ed] to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive . . . Bad faith means more than mere negligence; it involves a dishonest purpose ." (Emphasis added; Internal quotations marks omitted.) De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., supra, 269 Conn. at 433, 849 A.2d 382. " [B]ad faith is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity . . . [I]t contemplates a state of mind affirmatively operating with furtive design or ill will." (Internal quotation marks omitted.) Hutchinson v. Farm Family Cas. Ins. Co., 273 Conn. 33, 42, 867 A.2d 1 n.4 (2005). Here, Liberty Mutual's decision to withhold the issuance of a replacement check until it conducted an investigation of the stolen check may have been poor judgment, however, the plaintiff has not presented any evidence that Liberty's withholding of the check was motivated by a dishonest purpose. Accordingly, the plaintiff's request for sanctions in the form of punitive damages is denied.
CONCLUSION AND ORDER
The court hereby grants the plaintiff's motions to enforce the settlement agreement and enters judgment in favor of the plaintiff in the amount of $5000, plus interest in the amount of $132.87, plus attorneys fees in the amount of $1,925, for a total judgment of $7,057.87. The court denies plaintiff's claim for punitive damages on grounds that Liberty Mutual acted in bad faith. Compliance is ordered on or before January 30, 2017. Failure to comply with this court's order will result in further sanctions.