Alyssa Peterson v. Connecticut Attorneys Title Insurance Company et al. (2010)

MEMORANDUM OF DECISION

FACTS AND PROCEDURE:

This is a case in which the plaintiff (hereinafter “Peterson”) allegedly was in an oral partnership with one Hannah Woldeyohannes (hereinafter “Hannah”) to purchase certain condominium units on Farmington Avenue in West Hartford, Connecticut.   According to the allegations Hannah ceased communications with the plaintiff and continued with the purchase of the condominiums for her own personal interest to the exclusion of the partnership and the plaintiff.   It is also alleged that in another matter when the plaintiff brought suit against Hannah she filed a Lis Pendens on the land records.   The Lis Pendens made reference to the underlying suit brought by the plaintiff against Hannah but, contrary to the allegations in the complaint, paragraph 45 of Count Ten the Lis Pendens although referencing the underlying litigation did not “clearly set forth that A to Zee, LLC was actually an alter ego created by Hannah to facilitate the fraudulent sale of the condominium units.”   The Lis Pendens which the Court has reviewed does mention the underlying litigation but makes no mention of any fraudulent sale.   At a certain point Attorney Richard Witt (hereinafter “Witt”) was retained by a Ms. Caldwell (hereinafter “Caldwell”) in the purchase of units C-9. Attorney Witt was not only a licensed Attorney but a title agent for the Connecticut Attorneys Title Insurance Company according to the allegations.   The plaintiff further alleges that Witt failed in his title search, and although he was aware of the Lis Pendens, he never disclosed same to Ms. Caldwell and despite knowledge of the Lis Pendens, Witt issued a title policy on behalf of the Connecticut Attorneys Title Insurance Company for unit C-9. Plaintiff further alleges that the sale of C-9 went through and because of the issuance of the title insurance policy, and thus made the unit unavailable to satisfy plaintiff's judgment against Hannah.   At that time, however, the suit against Hannah were only allegations.

In the instant case plaintiff has brought suit against Witt, Count Ten, for Aiding and Abetting Fraud committed by Hannah.   Count Eleven with the same basic facts is against Witt for negligence.

Attorney Witt filed a Motion to Strike, which this Court denied.

Witt brought a Motion to Reargue which this Court granted, and a hearing was held on the Motion to Reargue, with reargument held before this Court on November 10, 2010.

STANDARD OF REVIEW:

“The purpose of a Motion to Strike is to contest ․ the legal sufficiency of the allegations of any complaint ․ to state upon which relief can be granted.   In ruling on a Motion to Strike, the Court is limited to the facts alleged in the complaint.   The Court must construe the facts in the complaint most favorably to the plaintiff.”  (Internal quotation marks omitted.)   Waters v. Autuori, 236 Conn. 820, 825, 676 A.2d 357 (1996).   The same principles apply to a Motion to Strike Special Defenses as well as counterclaims.

ISSUES AND FINDINGS:

1. As to Count Ten Alleging Aiding and Abetting Fraud, did Witt have a Duty as Alleged to the Plaintiff, Peterson?

The short answer is No.

Attorney Witt represented Ms. Caldwell and was an agent of the Connecticut Attorneys Title Insurance Company (hereinafter “CATIC”) and issued a title insurance policy to both Ms. Caldwell and on behalf of CATIC.   The Court concludes that Witt had a duty only to Caldwell and not to the plaintiff.   He was never retained by the plaintiff and owed her no duty.   He may have had a duty to CATIC to provide a proper title search and issue a proper title insurance policy, but in that case he was acting as an agent for CATIC, and if he was wrong in his title insurance policy, the plaintiff may have a cause of action against CATIC although this is unlikely because no policy was issued to her.   Any claim against Witt would have to be as an agent of CATIC and that issue as to whether CATIC is liable is not presently before this Court.   Plaintiff's counsel at the hearing of November 10, 2010 gave an example of a driver who was negligent and hit someone causing that person to hit another car.   The duty in an automobile accident case is not analogous to the duty to represent someone, in this case the plaintiff, and Witt did not represent the plaintiff.

Further, as to the Aiding and Abetting claim, plaintiff in her brief fails to cite the statute mentioned in her brief as to the necessity of doing a proper title search.

Additionally, the plaintiff in Count Ten does not specify the fraudulent acts, and even if the fraudulent acts are spelled out in the underlying suit notice of which was given by the Lis Pendens, there is no factual basis for concluding that Witt knew that fraudulent acts had been committed.   At that point in the underlying suit against Hannah, they were mere allegations, and since Witt was not aware of any evidence finding Hannah guilty of fraud, there is no way he could have Aided and Abetted in a Fraud which had not yet been proven.   He was unaware of any evidence or proof that Hannah had committed fraud since only allegations had been set forth at that point.

Further, the plaintiff fails to set forth the specific fraudulent acts in this suit that would possibly make Witt liable if he was aware of them and if he had a duty to the plaintiff which he did not.

There was no privity between Witt and the plaintiff.   He did not represent her and had no duty to her.   His duty as a title searcher was to CATIC and to Caldwell, his client, and not to the plaintiff.

As to the issue of Aiding and Abetting, there were no facts in the complaint in Count Ten that Witt actually knew of the alleged fraud by Hannah and no facts are alleged to the effect that Witt engaged in any activity with Hannah in furtherance of a fraud.

In Jackson v. R.G. Whipple, Inc., 225 Conn. 705, 727 (1993), the Court quoted Krawczyk v. Stingle, 208 Conn. 239, 245 (1988) stating “determining when attorneys should be held liable to parties with whom they are not in privity is a question of public policy ․ Providing a private cause of action ․ to a supposedly aggrieved party for the actions of his or her opponent's attorney would stand the attorney-client relationship on its head and would compromise an attorney's duty of undivided loyalty to his or her client and thwart the exercise of the attorney's independent professional judgment on his or her client's behalf.”  Id. 727.

Finally, in Field v. Kearns, 43 Conn.App. 265, 278 (1996), the Court stated “attorneys are not liable to persons other than their clients for the negligent rendering of services ․ this rule has been fashioned as a matter of public policy.   The obligation of an attorney to focus her entire devotion to the interests of the client ․ would be seriously undermined were the rule different.   Because the defendant owes no duty to the plaintiff, his cause of action must fail.”  Id. 278-79.

These cases buttress the Court's conclusion that Witt owed no duty to third party Peterson.

2. Is Witt Liable to the Plaintiff in Negligence as Alleged in Count Eleven?

The short answer is No.

This is in the third amended complaint as is Count Ten on which the Court has already expounded.

For the same reasons cited in the Court's comments in regard to Count Ten, the Court concludes that as to the negligence count, Witt had no duty to the plaintiff.   The issue of fraud does not arise in Count Eleven, but since Witt had no duty to the plaintiff as alleged, the same cases cited above apply.

CONCLUSION:

For the forgoing reasons, the denial of the motion to strike on September 21, 2010 is vacated, and the Motion to Strike Counts Ten and Eleven of the third amended complaint is granted.   Also, the Prayer for Relief as it applies to Witt is stricken.

Rittenband, JTR

Rittenband, Richard M., J.T.R.