Starview Ventures v. Acadia Insurance Co. (2011)

Ruling on Cross Motions for Summary Judgment

At issue is whether the court should grant the defendant's motion for summary judgment or the plaintiff's cross motion for summary judgment, both of which pertain to counts eleven and twelve of the plaintiff's complaint.   The court denies both motions.

FACTS

The plaintiff, Starview Ventures, commenced the present action by service of process against defendants Acadia Insurance Company (Acadia), Underwriters at Lloyd's of London (Lloyd's), Matthew Humphrey (Humphrey) and Geoffrey Lyn (Lyn) on April 5, 2006;  defendant Joseph Krar and Associates (Krar) on April 6, 2006;  defendant DNM Autocare, LLC (DNM) on April 11, 2006;  and defendant Dwight Fowlin (Fowlin) on April 12, 2006.   There have been changes in the identities of the defendants since the initiation of the action.   First, on March 28, 2007, the plaintiff moved to cite the defendant who brings the present motion, Wachovia Bank, N.A., into the action and amended the complaint to add two counts against Wachovia.¹  Second, the plaintiff withdrew the action against Acadia in exchange for $15,000 on April 8, 2009.   Finally, the plaintiff withdrew the action against Lloyd's and Krar in exchange for the assignment of Lloyd's and Krar's third-party causes of action against Webster Bank, N.A. (Webster) and United Adjusters, LLC (United) on May 7, 2009.   The plaintiff's motion to substitute itself as the third-party plaintiff in Lloyd's and Krar's third-party action was granted by the court, Blue, J., on February 9, 2009.

The operative version of the plaintiff's complaint is the third amended version filed on March 28, 2007.   It alleges the following relevant facts.   On April 13, 2004, a fire damaged property located at 30 Orange Avenue in New Haven.   The property was owned by the plaintiff and leased to DNM. Humphrey, Lyn and Fowlin were DNM's principals at the time of the fire.   The plaintiff had a commercial property insurance policy with Acadia that was in effect at the time of the fire.   DNM also had an insurance policy for the property in effect at the time of the fire, with Lloyd's.   Krar acted as Lloyd's agent or representative.   Acadia refused to pay the plaintiff for its loss.   Lloyd's, however, accepted DNM's claim of loss.   Therefore, both the plaintiff and DNM hired public adjusting firms to assess the cost and extent of the damage.   Biller Associates TA–State, LLC was the plaintiff's public adjuster.   DNM's public adjuster was United.   After both firms' assessments, on or about November 22, 2004, Lloyd's issued a settlement check (check) payable to the plaintiff, DNM and United through Krar to United in the amount of $86,966.72.   The check was drawn from Krar's account with Webster.   On or about November 29, 2004, Humphrey endorsed the check on behalf of DNM, and a representative likewise on behalf of United.   They presented the check to the defendant on or about November 30, 2004.   The defendant paid the check without the plaintiff's endorsement.   The plaintiff has yet to receive any amounts from the check, either directly or by virtue of repairs done to the subject property and funded by the check's proceeds.

Counts eleven and twelve of the complaint are against the defendant and sound in common-law conversion and statutory conversion in violation of General Statutes § 42a–3–420.   The defendant filed the present motion for summary judgment, a memorandum of law in support thereof and exhibits on May 29, 2008.   The plaintiff in turn filed an opposition to the motion and a cross motion for summary judgment, accompanied by a memorandum of law in support thereof and exhibits, on September 24, 2008.   The defendant then filed a reply memorandum on December 18, 2008, in which it adopted the arguments made by Webster in Webster's motion for summary judgment on the first count of the plaintiff's third-party complaint, which sounds in breach of General Statutes § 42a–4–401.   The court heard the matter at short calendar on January 31, 2011.

DISCUSSION

“Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ․ The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried.”  (Citations omitted.)  Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989).  “However, since litigants ordinarily have a constitutional right to have issues of fact decided by a jury ․ the moving party for summary judgment is held to a strict standard ․ of demonstrating his entitlement to summary judgment.”  (Citation omitted;  internal quotations marks omitted.)   Kakadelis v. DeFabritis, 191 Conn. 276, 282, 464 A.2d 57 (1983).

“[S]ummary judgment is appropriate only if a fair and reasonable person could conclude only one way ․ [A] summary disposition ․ should be on evidence which a jury would not be at liberty to disbelieve and which would require a directed verdict for the moving party ․ [A] directed verdict may be rendered only where, on the evidence viewed in the light most favorable to the nonmovant, the trier of fact could not reasonably reach any other conclusion than that embodied in the verdict as directed.”  (Citations omitted;  emphasis in original;  internal quotation marks omitted.)  Dugan v. Mobile Medical Testing Services, Inc., 265 Conn. 791, 815, 830 A.2d 752 (2003).

“In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.   The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.   Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court ․” (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11, 938 A.2d 576 (2008).

The defendant in the present action moves for summary judgment on the ground that it is entitled to a judgment as a matter of law because there is no genuine issue of material fact about whether the plaintiff's endorsement was required in order for the defendant to cash the check, since the check was payable in the alternative and therefore did not require the endorsements of all the designated payees.   Specifically, the defendant argues that the check was payable in the alternative because it designated United as the agent for delivery.   The defendant also argues that the court must treat the check as payable in the alternative if it concludes that the check is ambiguous with respect to whether the check is payable jointly or in the alternative.   The plaintiff opposes the defendant's motion and moves for summary judgment in turn on the ground that it is entitled to a judgment as a matter of law because there is no genuine issue of material fact about whether the plaintiff's endorsement was required in order for the defendant to cash the check, since the check was jointly payable and therefore required the endorsements of all the designated payees.

A copy of the check is attached to the defendant's memorandum as Exhibit A. The words “pay to the order of” are followed by “DMA AUTO CARE, LLC;  UNITED A.” Below the payee line of the check is the amount of the check written out in words.   Below the amount of the check written out in words is “DMA AUTO CARE, LLC, UNITED ADJUSTERS, LLC & STARVIEW VENTURES, LLC,” written out over three lines with breaks occurring between the “a” and “d” in “adjusters” and the “n” and “t” in “ventures.”   Below the names of the three payees is an illegible symbol followed by “UNITED ADJUSTERS.”   Finally, below the illegible symbol and “UNITED ADJUSTERS” is the address for United.

General Statutes § 42a–3–110(d) provides:  “If an instrument is payable to two or more persons alternatively, it is payable to any of them and may be negotiated, discharged or enforced by any or all of them in possession of the instrument.   If an instrument is payable to two or more persons not alternatively, it is payable to all of them and may be negotiated, discharged or enforced only by all of them.   If an instrument payable to two or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively.”   See also Coregis Ins. Co. v. Fleet National Bank, 68 Conn.App. 716, 793 A.2d 254 (2002).

One of the grounds on which the defendant moves is that the court must treat the check as being payable in the alternative because it is ambiguous on its face with respect to whether it is jointly payable or payable in the alternative.   The defendant argues that the check may be interpreted to be payable in the alternative because United is designated as the agent for delivery of the check proceeds, and therefore, “the check unambiguously provides that it is payable alternatively, requiring only United's endorsement.”   The plaintiff alleges that the check's designated payees are D.N.M., the plaintiff and United.   Therefore, in order for the check to be payable in the alternative, as defined by § 42a–3–110(d), D.N.M., the plaintiff and United each would need to have been able to negotiate, discharge or enforce the check, either individually or collectively.   The defendant posits, however, that the check could only be negotiated, discharged or enforced by United individually or United and D.N.M. or the plaintiff collectively, because United was the designated agent for delivery.   This situation does not fall under the ambit of the definition for “payable in the alternative” contained in § 42a–3–110(d), because it would not allow for D.N.M. or the plaintiff to have negotiated, discharged or enforced the check, either individually or collectively without United.   The court therefore rejects the defendant's argument that it is entitled to a judgment as a matter of law because there is no genuine issue of material fact that the check is ambiguous on its face with respect to whether it is jointly payable or payable in the alternative.

The court also rejects the defendant's argument that it is entitled to a judgment as a matter of law because there is no genuine issue of material fact that United was the only payee whose endorsement was required to deposit the check, due to its designation on the face of the check as the agent for delivery.   The symbol preceding United's name and address is illegible on all of the check copies provided by the parties.   The significance of United's name and address on the check is therefore unclear on the face of the check.   The court will not make legal conclusions based on the drafting of the check that will dispose of the plaintiff's causes of action against the defendant on summary judgment under these circumstances.   Cf. Norwest Mortgage, Inc. v. Domack, Superior Court, judicial district of Fairfield, Docket No. CV 96 0334787 (July 23, 1997, West, J.) (denying motion for summary judgment in foreclosure action where genuine issue of material fact existed with respect to defendant's receipt of notice because documents establishing defendant's receipt of notice were illegible);  Dime Savings Bank of New York, FSB v. Zanesky, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 90 0105513 (April 28, 1993, Lewis, J.) (deeming documentary evidence submitted in opposition to summary judgment inappropriate because it was illegible).   For this reason, the court further rejects the plaintiff's argument that it is entitled to a judgment as a matter of law because there is no genuine issue of material fact that the check is jointly payable and unaffected by the inclusion of United's address, which only served to vest United with temporary custody over the check, not with the authority to deposit the check without the plaintiff's endorsement.

“The question of facial ambiguity presents an extremely fact specific inquiry.”   Brookview Rehab Funding, LLC v. Bank of America, Superior Court, judicial district of Hartford, Docket No. CV 08 5021486 (March 27, 2009, Cofield, J.) (47 Conn. L. Rptr. 437, 438).   In the present action, genuine issues of material fact exist with respect whether and how the presence of United's name and address on the check affected the requirements for negotiating, discharging and endorsing the check.   Such issues cannot be resolved on the present motion, given the court's inability to make legal conclusions based on the face of the check.   See Barco Auto Leasing Corp. v. Bourassa, Superior Court, judicial district of Hartford, Docket No. CV 96 0558681 (February 21, 1997, Sullivan, J.).

For the foregoing reasons, the court denies both parties' motions for summary judgment.

Frechette, J.

FOOTNOTES

FN1. Because Wachovia is the only defendant involved in the present motion, the court will refer to it as the defendant hereinafter..  FN1. Because Wachovia is the only defendant involved in the present motion, the court will refer to it as the defendant hereinafter.

Frechette, Matthew E., J.