Nancy Levin v. Fidelco Guide Dog Foundation, Inc. (2011)

MEMORANDUM OF DECISION ON CROSS–CLAIM DEFENDANT'S MOTION FOR SUMMARY JUDGMENT, NO. 195

The present motion for summary judgment, filed by the cross-claim defendant Michel Levin, arises in the context of a suit brought by the plaintiff, Nancy Levin, against her former employer, defendant Fidelco Guide Dog Foundation, Inc. (Fidelco), concerning Fidelco's refusal to honor a deferred compensation agreement following her resignation.   Fidelco filed a cross complaint against Nancy Levin's husband, Michael Levin, an attorney, and his former law firm, Ford & Paulekas, LLP (law firm).   In its third amended cross complaint,¹ Fidelco alleges the following relevant facts.   Michael Levin was counsel to the law firm and provided Fidelco with legal services as “general counsel.”   Despite the fiduciary duty Michael Levin owed Fidelco as its attorney, to act in its best interests, he provided representation relating to the drafting of his wife's deferred compensation and employment agreements, resulting in a conflict of interest.   Michael Levin benefitted directly or indirectly from the compensation and benefits his wife received as a result of these agreements, but never disclosed to Fidelco that the terms of the agreements could endanger Fidelco's tax exempt status, were unreasonable under the tax code and were subject to board approval.

Fidelco alleges claims against Michael Levin for professional malpractice (count one), fraudulent misrepresentation (count three), negligent misrepresentation (count five) and breach of fiduciary duty (count seven).²  On April 8, 2011, Michael Levin filed a motion for summary judgment (No. 195), on the grounds that:  1) Fidelco's action lacks merit on the facts;  2) Fidelco's cross-complaint fails to allege a viable cause of action;  3) Fidelco cannot establish the required element of causation, between the alleged torts and harm suffered;  and 4) Fidelco's claims are barred by the applicable statute of limitations.   In support of his motion, Michael Levin submitted a memorandum of law and the following exhibits:  his personal affidavit and that of George Salpietro, former executive director at Fidelco;  Nancy Levin's employment and nonqualified deferred compensation agreements (agreements);  the amended complaint and corresponding answer;  the third amended cross complaint;  and the marshal's return of service.   On May 26, 2011, Michael Levin filed a memorandum in opposition accompanied by thirty-three exhibits including, inter alia:  the deposition testimony of Michael Levin and Nancy Levin;  billing invoices from Michael Levin's law practice;  and e-mail correspondence between Michael Levin and Fidelco, and Michael Levin and other Fidelco counsel.   Argument on this matter was heard by the court at the May 31, 2011 short calendar.

Law

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the 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.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party ․ The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled of judgment as a matter of law.”  (Internal quotation marks omitted.)  Sherman v. Ronco, 294 Conn. 548, 553–54, 985 A.2d 1042 (2010).  “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 under Practice Book § [17–45].”  (Internal quotation marks omitted.)  Zielinski v. Kotsoris, 279 Conn. 312, 318–19, 901 A.2d 1207 (2006).

I

MERITS

Michael Levin first argues that the allegations of the cross complaint are without merit because they are premised on the existence of an attorney-client relationship, which did not exist.

This court held, in ruling on Michael Levin's motion to dismiss, that a genuine issue of material fact exists with respect to whether there was an attorney-client relationship between Michael Levin and Fidelco, and that this issue of fact is critical to the jurisdictional issue of standing and is intertwined with the merits of the case.   The court, in its discretion, reserved judgment on this issue until the final hearing on the merits.   Summary judgment on this ground is denied.

II

VIABILITY

Michael Levin argues that summary judgment is warranted because the cross complaint contains a shrouded claim for common law indemnification, which is unavailable as a matter of law.

“Ordinarily there is no right of indemnity or contribution between joint tortfeasors.”  Kaplan v. Merberg Wrecking Corp., 152 Conn. 405, 412, 207 A.2d 732 (1965).  “The Kaplan case established a narrow exception to the general common law principle ․” (Emphasis in original.)  Hammond v. Waterbury, 219 Conn. 569, 576, 594 A.2d 939 (1991).  “To assert a claim for indemnification under Kaplan, an out-of-pocket defendant must show that:  (1) the party against whom the indemnification is sought was negligent;  (2) that party's active negligence, rather than the defendant's own passive negligence, was the direct, immediate cause of the accident and the resulting injuries ․;  (3) the other party was in control of the situation to the exclusion of the defendant seeking reimbursement;  and (4) the defendant did not know of the other party's negligence, had no reason to anticipate it, and reasonably could rely on the other party not to be negligent” (Citation omitted.)  Smith v. New Haven, 258 Conn. 56, 66, 779 A.2d 104 (2001).

In support of his motion, Michael Levin argues that the following language in the cross complaint reveals that Fidelco has in fact alleged a claim for indemnification:  “As a direct result of [Levin's] negligence, Fidelco has been caused to suffer significant monetary losses and other damages, and will continue to suffer such losses in connection with the suit filed by N. Levin for enforcement of the unlawful or otherwise improper agreements” and “[a]s a direct result of [Levin's] breach of his duty of loyalty, Fidelco has been caused to suffer significant monetary losses and other damages, and will continue to suffer such losses in connection with the suit filed by N. Levin for enforcement of the unlawful or otherwise improper agreements.”   Michael Levin maintains that such a claim is barred because the underlying action does not sound in tort, but breach of contract.   In opposition, Fidelco argues that it does not seek indemnification from Michael Levin;  rather, it is suing for damages caused by his professional negligence, breach of fiduciary duty and fraudulent non-disclosure, and that its claimed damages go beyond the amount of any judgment that might be entered in favor of Nancy Levin in the underlying action.   Fidelco maintains that, even if it prevails in the underlying action, it would still have a right to recover from Michael Levin for the fees and costs incurred in successfully defending Nancy Levin's suit.

Michael Levin's contention that indemnification is only available for tort claims is incorrect.   A defendant may implead a third party for negligence in conjunction with a first party claim for breach of contract so long as the two claims arise out of the same transaction.   See, e.g., Sun Care Corp. v. Long Ridge Nursing & Rehabilitation Center, Inc., Superior Court, judicial district of Stamford, Docket No. CV 95 0144862 (April 27, 1999, Lewis, J.) (24 Conn. L. Rptr. 409) (permitting third-party claim for legal malpractice to be joined with first party breach of contract claim);  Middlesex Mutual Ins. Co. v. Black, 40 Conn.Sup. 63, 480 A.2d 614 (1984) (third-party complaint for indemnification must relate to same transaction as underlying complaint).   In Sun Care Corp. v. Long Ridge Nursing & Rehabilitation Center, Inc., supra, 24 Conn. L. Rptr 409, the court denied a motion to strike an indemnification claim because it found that the third party defendant, a law firm, could only be held liable if its client in the underlying lawsuit was found to have illegally breached a contract.   It is inferred that, in that case, the alleged malpractice and breach of contract were related to the same transaction;  namely, an option provision.   In the present case, however, the underlying lawsuit and the claims against Michael Levin arise from different transactions such that Michael Levin may be found liable for breach of fiduciary duty and negligence even if Fidelco is successful in defending the underlying breach of contract action brought against it by Nancy Levin.   The court finds that there is no genuine issue with respect to whether Fidelco is seeking indemnification from Michael Levin—it is not—and denies the motion for summary judgment on this ground.

III

CAUSATION

Michael Levin argues that he is entitled to judgment as a matter of law because there is no causal relationship between his alleged failure to act and the harm Fidelco claims to have suffered.

“In general, the plaintiff in an attorney malpractice action must establish:  (1) the existence of an attorney-client relationship;  (2) the attorneys wrongful act or omission;  (3) causation;  and (4) damages ․ When proof of the existence of an attorney-client relationship is conceded, proof of the second element, a wrongful act or omission, normally involves expert testimony as to the existence of a professional duty on the part of the attorney and a departure from it by some negligent act or omission ․ As to causation:  In legal malpractice actions, the plaintiff typically proves that the defendant attorney's professional negligence caused injury to the plaintiff by presenting evidence of what would have happened in the underlying action had the defendant not been negligent.   This traditional method of presenting the merits of the underlying action is often called the case-within-a-case.”  (Citations omitted;  internal quotation marks omitted.)  Lee v. Harlow, Adams & Friedman, P.C., 116 Conn.App. 289, 297, 975 A.2d 715 (2009).

“Issues of negligence are ordinarily not susceptible [to] summary adjudication but should be resolved by trial in the ordinary manner.”  Fogarty v. Rashaw, 193 Conn. 442, 446, 476 A.2d 582 (1984).  “Summary judgment procedure is especially ill-adapted to negligence cases, where ․ the ultimate issue in contention involves a mixed question of fact and law, and requires the trier of fact to determine whether the standard of care was met in a specific situation ․ [T]he conclusion of negligence is necessarily one of fact.”   (Citations omitted;  internal quotation marks omitted.)  Michaud v. Gurney, 168 Conn. 431, 434, 362 A.2d 857 (1975).   Further, “[c]ausation is ordinarily a question of fact.”  Phinney v. Casale, 40 Conn.App. 495, 499, 671 A.2d 851 (1996).

In the present case, in count one, Fidelco alleges that Michael Levin failed to provide it with services according to the standard of professional care, thereby causing it to suffer the claimed damages.   Michael Levin argues that summary judgment on is warranted on this count because there can be no causation as a matter of law as Fidelco was represented by its own attorney, Fred Galiette of Reid & Reige, P.C., not by him, and because Fidelco, through its officers, was aware of the deferred compensation and employment agreements.   In response, Fidelco maintains that a genuine issue of material fact exists with respect to whether it would have consented to the agreements, now the subject of the underlying suit by Nancy Levin, had Michael Levin not been negligent in his acts and omissions;  including, inter alia, his failure to obtain board approval for the agreements.   Fidelco further contends that, to the extent that any of its agents authorized the agreements, they acted outside the scope of their authority.

Whether Michael Levin met the applicable standard of care, or deviated from it and caused Fidelco to suffer the claimed damages, is a question of fact that is not appropriate for determination on summary judgment.   See, e.g, Simonson Properties, Inc. v. Conway, Superior Court, judicial district of New London, Docket No. CV 096833 (June 4, 1993, Teller, J.) (denying motion for summary judgment in legal malpractice action where issue of causation was question of fact).   While Michael Levin has submitted affidavits in which he and Salpietro testify that there was no attorney-client relationship between himself and Fidelco, and that he had recused himself, Fidelco has submitted conflicting evidence that Galiette was contacted by Michael Levin and instructed to treat him, not Fidelco, as the law firm's client.   The court concludes that Michael Levin has failed to establish that there exists no genuine issue of material fact with respect to the element of causation.   Summary judgment on this ground is denied.

IV

STATUTE OF LIMITATIONS

Michael Levin argues that summary judgment is warranted because General Statutes § 52–577 bars Fidelco's claims for legal malpractice, fraudulent misrepresentation, negligent misrepresentation,³ and breach of fiduciary duty, because they were filed more than three years from the date of the alleged wrongful acts or omissions.

General Statutes § 52–577 provides:  “No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of.”  “Section 52–577 is an occurrence statute, meaning that the time period within which a plaintiff must commence an action begins to run at the moment the act or omission complained of occurs ․ The three year limitation period of § 52–577, therefore, begins with the date of the act or omission complained of, not the date when the plaintiff first discovers an injury ․ The question whether a party's claim is barred by the statute of limitations is a question of law ․” (Citations omitted;  internal quotation marks omitted.)  LaBow v. Rubin, 95 Conn.App. 454, 468–69, 897 A.2d 136, cert. denied, 280 Conn. 933, 909 A.2d 960 (2006).  “When conducting an analysis under § 52–577, the only facts material to the trial court's decision on a motion for summary judgment are the date of the wrongful conduct alleged in the complaint and the date the action was [commenced by service of process].”  (Internal quotation marks omitted.)  Farnsworth v. O'Doherty, 85 Conn.App. 145, 149–50, 856 A.2d 518 (2004).

In the present case, it is undisputed that the cross complaint was served upon Michael Levin on July 6, 2010.   The parties dispute, however, the date of the alleged wrongful acts and omissions.   Michael Levin argues that the date of the alleged acts is, at the latest, the date Nancy Levin signed the deferred compensation agreement—October 2, 2006—and so Fidelco needed to have filed its action by October 2, to comply with § 52–577.   Fidelco argues, under the continuous course of conduct doctrine, that, because Michael Levin owed Fidelco a fiduciary duty as its attorney, he was obligated to disclose information related to Nancy Levin's employment and deferred compensation agreements until the day his representation finally ceased, in January of 2009.

“[Section] § 52–577 is a statute of repose in that it sets a fixed limit after which the tortfeasor will not be held liable and in some cases will serve to bar an action before it accrues ․ Nonetheless, [w]hen the wrong sued upon consists of a continuing course of conduct, the statute does not begin to run until that course of conduct is completed ․ [I]n order [t]o support a finding of a continuing course of conduct that may toll the statute of limitations there must be evidence of the breach of a duty that remained in existence after commission of the original wrong related thereto.   That duty must not have terminated prior to commencement of the period allowed for bringing an action for such wrong ․ Where [our Supreme Court has] upheld a finding that a duty continued to exist after the cessation of the act or omission relied upon, there has been evidence of either a special relationship between the parties giving rise to such a continuing duty or some later wrongful conduct of a defendant related to the prior act ․ Thus, there must be a determination that a duty existed and then a subsequent determination of whether that duty is continuing.”  Lee v. Brenner, Saltzman & Wallman, LLP, 128 Conn.App. 250, 257, 15 A.3d 1215, cert. denied, 301 Conn. 926, 22 A.3d 1277 (2011).

To determine whether the continuing course of conduct doctrine operates to toll the statute of limitations, the court must first resolve the questions of fact central to the issue of duty;  specifically, whether Michael Levin owed a duty to Fidelco relating to Nancy Levin's employment and deferred compensation agreements, and whether that duty was “continuing.”   The parties dispute whether an attorney-client relationship existed between them with respect to the agreements executed by Nancy Levin and whether there was a special relationship related thereto that continued after October of 2006.   Both parties have submitted evidence to support their conflicting arguments.⁴  The court finds that there remain genuine issues of material fact with respect to the duty Michael Levin owed or did not owe to Fidelco, and so it is unable to resolve the question of whether § 52–577 applies to bar Fidelco's claims on a motion for summary judgment.   See Keller v. Beckenstein, 117 Conn.App. 550, 556–57, 979 A.2d 1055, cert. denied, 294 Conn. 913, 983 A.2d 274 (2009) (in ruling on a motion for summary judgment, the function of the trial court “is not to decide issues of material fact, but rather to determine whether any such issues exist.”);   Demoraes v. Nakian, Superior Court, judicial district of Stamford–Norwalk, Docket No. CV 06 5002049 (August 19, 2008, Tobin, J.) (the scope of an attorney's duty is a question of fact to be determined by the trier).   Summary judgment on this ground is denied.

Conclusion

For the foregoing reasons, the motion for summary judgment is denied.

Domnarski, J.

FOOTNOTES

FN1. The court notes that its analysis of the present motion for summary judgment is the same, regardless the third amended cross complaint or the corrected third amended cross complaint is operative..  FN1. The court notes that its analysis of the present motion for summary judgment is the same, regardless the third amended cross complaint or the corrected third amended cross complaint is operative.

FN2. The court notes that the cross complaint does not explicitly allege a claim for fraudulent concealment and, accordingly, it does not address the parties' arguments on this issue..  FN2. The court notes that the cross complaint does not explicitly allege a claim for fraudulent concealment and, accordingly, it does not address the parties' arguments on this issue.

FN3. The court rejects Michael Levin's contention that General Statutes § 52–584 governs Fidelco's negligent misrepresentation claim and applies § 52–577 because Fidelco seeks to recover damages for economic losses, as opposed to injuries to its person or to its real or personal property.   See Viejas Band of Kumeyaay Indians v. Lorinsky, 116 Conn.App. 144, 157 n.15, 976 A.2d 723 (2009) (§ 52–577 applied where plaintiff's negligent misrepresentation claim was predicated on economic losses);  Lombard v. Edward J. Peters, Jr., P.C., 79 Conn.App. 290, 299, 830 A.2d 346 (2003) ( § 52–584 applied where plaintiff's negligent misrepresentation claim was predicated on injury to personal property)..  FN3. The court rejects Michael Levin's contention that General Statutes § 52–584 governs Fidelco's negligent misrepresentation claim and applies § 52–577 because Fidelco seeks to recover damages for economic losses, as opposed to injuries to its person or to its real or personal property.   See Viejas Band of Kumeyaay Indians v. Lorinsky, 116 Conn.App. 144, 157 n.15, 976 A.2d 723 (2009) (§ 52–577 applied where plaintiff's negligent misrepresentation claim was predicated on economic losses);  Lombard v. Edward J. Peters, Jr., P.C., 79 Conn.App. 290, 299, 830 A.2d 346 (2003) ( § 52–584 applied where plaintiff's negligent misrepresentation claim was predicated on injury to personal property).

FN4. Michael Levin submitted his own affidavit and that of Salpietro to support his claim that the only time he provided legal counsel to Fidelco on matters relating to executive compensation and benefits was in September of 2006.   Michael Levin attests:  “[A]lthough I expressed an opinion on January 31, 2007 about submission of an employment agreement and deferred compensation to the Board, it was directly in reference to the Executive Director's agreements.   The opinion was directed to Fidelco's attorney, not to Fidelco, as to an employment agreement and a deferred compensation agreement for the Executive Director, Mr. Salpietro.”   Levin also testified that his “relationship with Fidelco after February 19, 2007 remained one of occasional retention for a specific assignment of which, I believe, there were three;  I had a recurring, not a continuing role as attorney for Fidelco ․”In support of its claim that there was a continuing duty, Fidelco submitted the deposition of Michael Levin in which he testified:  that, on or around September 23, 2008, he looked at Nancy Levin's deferred compensation agreement and that of George Salpietro, at Salpietro's request, to examine the differences between the two;  that he did not think about who his client was, but that he “could easily characterize it as Fidelco;” that he was performing “some legal work for Fidelco” as of January 2009, including providing counsel for an “ad hoc work group”;  and stated that “each time I completed a specific assignment [for Fidelco] ․ I did not charge them for, there's no bill in the file, I was asked a specific question, I provided free of charge.”.  FN4. Michael Levin submitted his own affidavit and that of Salpietro to support his claim that the only time he provided legal counsel to Fidelco on matters relating to executive compensation and benefits was in September of 2006.   Michael Levin attests:  “[A]lthough I expressed an opinion on January 31, 2007 about submission of an employment agreement and deferred compensation to the Board, it was directly in reference to the Executive Director's agreements.   The opinion was directed to Fidelco's attorney, not to Fidelco, as to an employment agreement and a deferred compensation agreement for the Executive Director, Mr. Salpietro.”   Levin also testified that his “relationship with Fidelco after February 19, 2007 remained one of occasional retention for a specific assignment of which, I believe, there were three;  I had a recurring, not a continuing role as attorney for Fidelco ․”In support of its claim that there was a continuing duty, Fidelco submitted the deposition of Michael Levin in which he testified:  that, on or around September 23, 2008, he looked at Nancy Levin's deferred compensation agreement and that of George Salpietro, at Salpietro's request, to examine the differences between the two;  that he did not think about who his client was, but that he “could easily characterize it as Fidelco;” that he was performing “some legal work for Fidelco” as of January 2009, including providing counsel for an “ad hoc work group”;  and stated that “each time I completed a specific assignment [for Fidelco] ․ I did not charge them for, there's no bill in the file, I was asked a specific question, I provided free of charge.”

Domnarski, Edward S., J.