Opinion
MMXCV156012973
04-27-2016
Anita Wolinsky, Executrix of the Estate of Martin Wolinsky v. John M. Brady
UNPUBLISHED OPINION
MEMORANDUM OF DECISION ON MOTION TO STRIKE
Julia L. Aurigemma, J.
The plaintiff, Anita Wolinsky, executrix, has moved to strike the defendant's counterclaims on the grounds that the first and second counterclaims are time barred by Connecticut General Statutes § 52-577 and the third counterclaim fails to state a cause of action for abuse of process.
Factual and Procedural History
The plaintiff, the executrix of the estate of Martin Wolinsky, brought this collections action on December 30, 2014, against the defendant, John Brady. The plaintiff alleges the following facts. The defendant is the owner of the parcel of land known as 24 Indian Drive, Clinton. On or about April 19, 2005, Mitoi, Inc., commenced an action against the defendant and against the company Security Professionals, LLC. On January 4, 2007, Mitoi obtained a judgment in court against the defendant and Security Professionals, LLC, in the amount of $2,084,364.91 (the judgment). Following entry of the judgment, Mitoi, Inc. assigned all of its right, title and interest in and thereto to Martin Wolinsky. Martin Wolinsky passed away on July 3, 2014. Upon Martin Wolinksy's death, all right, title and interest which he held in and to the judgment passed to the estate of Martin Wolinsky.
On September 10, 2014, the Connecticut Probate Court for the district of Derby appointed Martin Wolinsky's wife, the plaintiff, executrix of the estate. On November 3, 2014, the judgment having been unsatisfied in the amount of $2,063,684.91, the plaintiff caused a certificate of judgment lien to be filed against 24 Indian Drive, Clinton. The judgment presently remains unpaid in the amount of $2,063,684.91. The plaintiff claims foreclosure of the judgment lien, immediate possession of the liened premises, and attorneys fees.
By way of counterclaims filed on November 12, 2015, the defendant alleges the following facts. In the late 1990s Security Professionals, LLC purchased the assets of ABA Alarms of New Haven Connecticut (ABA Alarms). At the time of the purchase, the defendant executed a one million dollar guarantee in favor of Mitoi, Inc., which was owned and/or controlled by Martin Wolinsky. The guaranty guaranteed the payment of certain subordinated debt. In 2001, the assets acquired by Security Professionals, LLC from ABA Alarms were sold. A portion of the debt guaranteed by the defendant was paid for at that time. The defendant subsequently assisted in the liquidation of assets of ABA Alarms that was not acquired. The proceeds of the liquidation of assets were paid to Martin Wolinsky. On May 13, 2004, the defendant met with Martin Wolinsky to resolve the remaining balance of the guarantee. The defendant and Wolinsky agreed that the defendant's guarantee liability would be satisfied by the following considerations: 1) monthly payment in the amount of $1,200 payable until the death of Wolinsky and his wife, the plaintiff in this matter, Anita Wolinsky, and 2) a life insurance policy insuring the life of the defendant and naming Wolinsky as the beneficiary. Wolinsky advised the defendant to obtain the life insurance policy in the amount of one million to " reflect the present note" with accumulated interest. The defendant alleges that he obtained the requested life insurance policy and renewed it annually thereafter, forwarding copies of the renewal documentation to Wolinsky.
In late 2006, the defendant received a notice from the Superior Court, indicating that Mitoi, Inc. was seeking a judgment against the defendant. The defendant contacted Wolinsky to inquire about this action, whereupon Wolinksy stated that " he had nothing to do with the filing in Superior Court and [he] would take care of it." The defendant asked Wolinsky if he needed to retain a lawyer and appear in court, and Wolinsky assured the defendant that he would take care of the matter before the hearing. Based on Wolinsky's representation, the defendant did not retain counsel and appear. In early 2007, Mitoi, Inc. obtained a judgment against the defendant in the amount of $2,084,364.91. Upon learning of the judgment, the defendant alleges that he contacted Wolinsky and asked why Wolinsky failed to abide by his promise to cancel the hearing in the Superior Court. The defendant and Wolinsky agreed that the defendant would continue to meet his obligations under the agreement. The counterclaim alleges that Wolinsky also agreed to set the judgment aside. The counterclaim further alleges that the next week Wolinsky called the defendant and told the defendant the action would be set aside as long as the defendant continued to make the agreed upon monthly payments and kept the life insurance policy in full force and effect.
The defendant's first counterclaim thus sounds in fraud, asserting that Wolinsky made the following misstatements of fact to the defendant: that he would accept monthly payments in satisfaction of the remaining obligations under the loan, that he would not proceed with the Mitoi, Inc. motion for judgment, and that he would have the judgment in favor of Mitoi, Inc. set aside. The defendant asserts that Wolinsky made the aforementioned representations knowing them to be false and with the intention to induce the defendant to make monthly payments and provide the benefits of an insurance policy, to not contest the action of Mitoi, Inc., and to not dispute the amount of damages claimed by Mitoi, Inc. The defendant asserts that he relied on the misstatements of Wolinsky, and was damaged thereby.
Count two sounds in negligent misrepresentation. The defendant asserts that Wolinsky had a duty to give correct information to the defendant, that he made misrepresentations concerning his acceptance of monthly payments in satisfaction of the judgment, and proceeding with and setting aside of the judgment. The defendant further claims that Wolinsky knew or should have known that such statements were incorrect, that Wolinsky supplied this information for a serious purpose and with the intention that the defendant rely on it, and that the defendant did in fact rely on the representations to his damage.
The third counterclaim sounds in abuse of process. The defendant asserts that prior to August 19, 2014, the plaintiff obtained a bank execution, which she then executed on the defendant's bank account, that the bank execution was used for purposes for which it was not designed, and that as a result, the plaintiff's attachment was excessive.
A motion to strike the defendant's counterclaims was filed on December 4, 2015, with an accompanying memorandum. An objection was filed by the defendant on January 15, 2016. The plaintiff filed a reply to the objection on January 26, 2016. This matter was heard on short calendar on February 1, 2016.
Discussion of the Law and Ruling
" The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). " A motion to strike tests the legal sufficiency of a cause of action and may properly be used to challenge the sufficiency of a counterclaim." (Internal quotation marks omitted.) Cadle Co. v. D'Addario, 131 Conn.App. 223, 235, 26 A.3d 682 (2011). In deciding a motion to strike the trial court must consider as true the factual allegations, but not the legal conclusions set forth in the complaint. Liljedahl Bros., Inc. v. Grigsby, 215 Conn. 345, 348, 576 A.2d 149 (1990); Blancato v. Feldspar Corp., 203 Conn. 34, 36, 522 A.2d 1235 (1987).
The court should view the facts in a broad fashion, not strictly limited to the allegations, but also including the facts necessarily implied by and fairly provable under them. Dennison v. Klotz, 12 Conn.App. 570, 577, 532 A.2d 1311 (1987). In ruling on a motion to strike, the court must take as admitted all well-pled facts, and those necessarily implied thereby, and construe them in the manner most favorable to the pleader. Norwich v. Silverberg, 200 Conn. 367, 370, 511 A.2d 336 (1986).
The plaintiff argues that the first and second counterclaims are barred by the statute of repose as enumerated in General Statutes § 52-577 as far as the claims are premised upon the alleged agreement with Wolinsky, Wolinsky's alleged representation that he would not proceed to judgment in the collection action, and Wolinsky's representation that he would set aside judgment in the collection action. The plaintiff further argues that the third counterclaim fails to state a claim for abuse of process.
Connecticut General Statutes § 52-577 states: " No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of."
Counts one and two of the defendant's counterclaim allege fraudulent misrepresentation and negligent misrepresentation, respectively, and assert that the three years statute of repose must be tolled by the continuing course of conduct doctrine. In deciding whether there was continuing course of conduct, this court must determine whether there is " (a) evidence of a special relationship between the parties giving rise to such a continuing duty or (b) some later wrongful conduct of the [plaintiff] related to the prior act." Macellaio v. Newington Police Dept., 145 Conn.App. 426, 436, 75 A.3d 78 (2013). A " special relationship is one that is built upon a fiduciary or otherwise confidential foundation." Saint Bernard School of Montville, Inc. v. Bank of America, 312 Conn. 811, 835, 95 A.3d 1063 (2014). A fiduciary or confidential relationship is a relationship that 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. See Ahern v. Kappalumakkel, 97 Conn.App. 189, 194, 903 A.2d 266 (2006). The defendant has not pleaded a special relationship. The defendant has pleaded merely that the parties had engaged in a contractual relationship. " A mere contractual relationship does not create a fiduciary or confidential relationship." Saint Bernard School of Montville, Inc. v. Bank of America, supra, 312 Conn. 835.
As for the second prong of the continuing course of conduct doctrine, relation back to a prior wrongful act, both the Appellate Court and the Connecticut district court agree that " the continuing course of conduct doctrine has no application after [the party] has discovered the harm." (Citation omitted, internal quotation marks omitted.) Rosato v. Mascardo, 82 Conn.App. 396, 405, 844 A.2d 893 (2004). See also AT Engine Controls Ltd. v. Goodrich Pump & Engine Control Systems, United States District Court, Docket No. 3:10-CV-01539 (JAM), (D.Conn. December 18, 2014), aff'd, AT Engine Controls Ltd. v. Goodrich Pump & Engine Control Systems, No. CV-15-179, (2d Cir. February 5, 2016) (" Upon discovery of the harm, the policy behind the continuing course of conduct doctrine, to preserve the ongoing relationship with the hope that any potential harm from a negligent act or omission may yet be remedied, no longer has any force").
The counterclaims allege that the defendant received notice in late 2006 that the motion for judgment had been filed. Therefore, the counterclaims are barred insofar as they are premised upon the plaintiff's alleged representation that he would not prosecute the motion for judgment. The defendant received notice that judgment had been entered in early 2007. Therefore, the counterclaims are barred insofar as they are premised on the plaintiff's alleged representation that he would not seek a judgment. Lastly, the defendant's claims are barred as to the plaintiff's representation that he would set aside the judgment. The court entered its judgment on January 4, 2007. Any party seeking to open the judgment in order to set it aside was required to file a motion to open no later than May 4, 2007. See Practice Book § 17-4(a) (motion to open or set aside must be filed within four months following transmission of notice of judgment). As no motion was ever filed, the defendant was aware of the misrepresentation that the judgment would be set aside no later than May 4, 2007. Thus, the defendant knew or should have known that there was actionable harm no later than May 4, 2007. The counterclaims are barred and counts one and two must be stricken.
In addition to the continuing course of conduct doctrine, the defendant argues that Connecticut General Statutes § 52-595 must toll the statute of limitations as to the first two counterclaims. That statute states: " If any person, liable to an action by another, fraudulently conceals from him the existence of the cause of such action, such cause of action shall be deemed to accrue against such person so liable therefor at the time when the person entitled to sue thereon first discovers its existence." For the statute of limitations to be tolled under this statute, the defendant must have pleaded that the plaintiff " (1) had actual awareness, rather than imputed knowledge, of the facts necessary to establish the [defendant's] cause of action; (2) intentionally concealed these facts from the [defendant]; and (3) concealed the facts for the purpose of obtaining delay on the [defendant's] part in filing a complaint on their cause of action." (Citation omitted, internal quotation marks omitted.) Bozelko v. Webster Bank, N.A., 159 Conn.App. 821, 827, 123 A.3d 1250 (2015), cert. denied, 320 Conn. 910, 128 A.3d 954 (2015). Having reviewed the counterclaims, this court finds that the defendant has not pleaded such elements. The defendant did not intentionally conceal the fact that he had obtained a judgment, or that he had failed to set it aside. Therefore, the defendant cannot toll the limitations period via the fraudulent concealment statute enumerated in Connecticut General Statutes § 52-595.
Lastly, the defendant asserts that the plaintiff is equitably estopped from asserting a statute of limitations defense. The essential elements of equitable estoppel as related to the party to be estopped are: (1) conduct which amounts to a false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) the intention, or at least the expectation, that such conduct shall be acted upon by, or influence, the other party or other persons; and (3) knowledge, actual or constructive, of the real facts. See TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 322, 338, 71 A.3d 541 (2013). As previously mentioned, the plaintiff did not conceal the facts as to his failure to refrain from obtaining a judgment or his failure to set aside the judgment. The defendant, therefore, knew as of January 4, 2007, that Martin Wolinsky had misrepresented that he would refrain from obtaining a judgment against him, and knew no later than May 4, 2007 that Martin Wolinsky had misrepresented that he would set aside the judgment. Equitable estoppel is, therefore, not suitable to toll the limitations period in this action.
" An action for abuse of process lies against any person using a legal process against another in an improper manner or to accomplish a purpose for which it was not designed . . . Because the tort arises out of the accomplishment of a result that could not be achieved by the proper and successful use of process, the Restatement Second (1977) of Torts, § 682, emphasizes that the gravamen of the action for abuse of process is the use of a legal process . . . against another primarily to accomplish a purpose for which it is not designed . . . Comment b to § 682 explains that the addition of primarily is meant to exclude liability when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant." (Citation omitted.) Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 772-73, 802 A.2d 44 (2002).
In the third count of the counterclaim, the defendant alleges that the plaintiff used a bank execution pursuant to Connecticut General Statutes § § 52-356b, 367a and 367b for purposes for which it was not designed, in that when the plaintiff obtained the bank execution the plaintiff stated that the amount paid on the judgment was $20,680, when the plaintiff's predecessor had been paid nearly $300,000 in cash and received the benefits of life insurance. The defendant, thus, claims that the plaintiff's attachment was excessive. The court must take the facts alleged in the counterclaim as being true, but need not take the legal conclusions as true. See, Liljedahl Bros., Inc. v. Grigsby, supra .
The defendant has not alleged sufficient facts to support the legal conclusion that the execution was excessive. Taking the facts alleged by the counterclaim as true, the execution was only excessive if the defendant had more than $1,784,364.91 in his account. The defendant has alleged that the judgment amount was $2,084,364.91 and he paid $300,000 to Martin Wolinsky. If true, that would leave $1,784,364.91 owed on the judgment. The defendant has failed to plead what amount was in his account. The court suspects it was less than $1,784,364.91. Otherwise, the plaintiff would not have brought this action on the judgment because same would have been completely satisfied by the execution.
The plaintiff argues that the defendant fails to claim that the abuse of process was not used primarily to accomplish a purpose for which it was not designed, as required by National Loan Investors, supra . This court agrees. The primary purpose of General Statutes § § 52-356b, 367a and 367b is to assist a judgment creditor in obtaining an unsatisfied judgment via an execution from the court. See § § 52-356b, 367a and 367b. The defendant has alleged a judgment against the defendant and owing to the plaintiff which has been only partially satisfied. The bank execution was entered for the purpose of collecting the balance of that judgment. The defendant's third counterclaim fails to properly plead a cause of action sounding in abuse of process.
For the aforementioned reasons, the motion to strike the defendant's counterclaims is granted as to all counts.