Middlesex Mutual Assurance Company v. Marguerite A. Komondy (2013)

MEMORANDUM OF DECISION

This matter comes before the court upon the defendant's motion to open a stipulated judgment entered on June 7, 2010.   The plaintiff objected to the motion on the ground that the court lacks jurisdiction to consider it because it was filed more than four months after the judgment was entered, in contravention of General Statutes § 52–212a.   The court heard argument on the jurisdictional claim and found that the four-month rule in § 52–212a operates as a constraint on the court's substantive authority to grant relief from judgment rather than as a limitation on its personal jurisdiction over the parties, see Kim v. Magnotta, 249 Conn. 94, 733 A.2d 809 (1999), and that the court had authority, under certain circumstances, to open a judgment after the four-month time period prescribed by § 52–212a.¹  The court also found that where, as in this case, a party claims mutual mistake as a basis to open the judgment, an evidentiary hearing must be held to determine whether such mistake existed.   A hearing was conducted on December 17, 2012, and March 11, 2013, at which time the court heard testimony and received into evidence various exhibits.

I

PROCEDURAL HISTORY

The factual and procedural history of the present dispute was set forth in detail by the Appellate Court in Middlesex Mutual Assurance Co. v. Komondy, 120 Conn.App. 117, 991 A.2d 587 (2010).   The defendant, Marguerite Komondy, was the owner of a home in Chester which was destroyed in a fire on March 5, 2005.   At the time of the fire, the house was insured under a “restorationist” policy issued by the plaintiff, Middlesex Mutual Assurance Company.   The policy provided coverage that included payment of the amount necessary to restore the home to its original state after a fire or other loss.   The defendant and the plaintiff were unable to agree on a restoration amount.   The matter was submitted to arbitration under the insurance policy.   The arbitrators awarded the insured $1,794,919.76 for “replacement cost damage” and provided that the period of time required for restoration “shall not exceed February 1, 2009.”

The plaintiff filed an application with the court to confirm the award on August 27, 2007.   The defendant objected to the application and moved to vacate the award.   On February 19, 2008, the trial court confirmed the award and denied the defendant's motion to vacate as untimely.   The defendant appealed the trial court's order to the appellate court.   The appellate court affirmed the trial court's decision and remanded the case to the trial court to set a new “period of restoration” since the original date, February 1, 2009, had expired during the pendency of the appeal.

In a written stipulation dated June 2, 2010, the plaintiff and the defendant agreed, that in satisfaction of the appellate court's remand order, the “period of restoration” for reconstruction of the defendant's residence “shall not exceed April 1, 2012.”   The trial court approved the parties' stipulation on June 7, 2010, and entered a stipulated judgment.   On March 19, 2012, approximately two weeks prior to the restoration deadline set on remand, the defendant filed this motion seeking to open the stipulated judgment stating that she was unable to complete the restoration of her home by April 1, 2012, due to unforeseen delays caused by the town of Chester's denial of certain required permits.   The defendant claims further that when the stipulation was signed and the judgment was entered on June 7, 2010, neither party could have anticipated the permit delays she encountered or that she would be unable to rebuild her house by the agreed restoration date.

II

FINDINGS OF FACT

The court has considered the evidence introduced at the hearing, the written submissions of the parties, General Statutes § 52–212a, and all relevant case law.   Based upon the credible evidence before it, the court makes the following findings of fact.

When the parties entered into the written stipulation on June 2, 2010, and the judgment entered thereafter on June 7, 2010, both believed that the defendant would be able to complete construction of the house within the agreed period of restoration.   William Zimmer, the insurance adjuster for the plaintiff, testified credibly that he believed April 1, 2012, was more time than necessary for the reconstruction.   The defendant also testified credibly that she believed she would be able to complete construction of a new house by that date.   Neither party anticipated that permit issues would delay the construction of the house.

Following the entry of the stipulated judgment, the defendant, who was undergoing chemotherapy treatment for cancer,² engaged the assistance of her husband, Christopher Komondy, to find a builder.   The defendant believed that the arbitrators' award was insufficient to enable her to rebuild the same type of house she had lost in the fire, so she decided to build a modular home instead.   In August 2010, the defendant contacted a modular home contractor but, due to her poor health, turned discussions over to her husband.   Christopher Komondy negotiated with the builder to design a modular home of similar size and character to the original house, but to modernize and conform it to current building codes.

The design and planning of the modular house was complicated and took several months to complete.   The defendant and the builder finally signed a contract on May 31, 2011.   The contract provided, among other things, that the builder would be responsible for obtaining permits.   Although almost a year had passed since the stipulated judgment was entered, and less than one year remained before the period of restoration expired, the defendant and the builder anticipated that construction of the defendant's new modular house could be completed by April 1, 2012, if construction commenced immediately and there were no delays.

The defendant sent a copy of the contract to the plaintiff on July 12, 2011, and authorized the plaintiff to make construction cost payments directly to the builder.   On August 2, 2011, the plaintiff made a joint payment to the defendant and the builder in the amount of $321,134.39.   Around August 22, 2011, Christopher Komondy took over as the general contractor for the modular home construction project and assumed responsibility for obtaining all necessary permits.   As a result, the builder returned to the defendant the sum of $181,574 out of the $321,134.39 payment it had previously received.   The balance of the funds held by the plaintiff from the arbitrator's initial award of $1,794,919.76, after taking into account other payments made from the funds by the plaintiff to or on behalf of the defendant, was approximately $903,000.³

The modular house has not been built.   The defendant encountered further delays with the construction of the house when her September 9, 2011 application for a permit to build within 100 feet of a review zone was denied by the town of Chester Inland Wetlands Watercourses Agency on January 9, 2012.⁴  The defendant appealed the agency's denial to the Superior Court on February 2, 2012.   The appeal remains pending.

III

DISCUSSION

A motion to open a judgment is governed by General Statutes § 52–212a and Practice Book § 17–4.  Section 52–212a provides in relevant part:  “Unless otherwise provided by law and except in such cases in which the court has continuing jurisdiction, a civil judgment or decree rendered in the Superior Court may not be opened or set aside unless a motion to open or set aside is filed within four months following the date on which it was rendered or passed ․ The parties may waive the provisions of this Section or otherwise submit to the jurisdiction of the court ․” (Emphasis added.)  Practice Book § 17–4 states essentially the same rule.

A

Continuing Jurisdiction

“The continuing jurisdiction exception to the four month rule is rooted in a court's interest in preserving the integrity of its judgments.   Specifically, this court previously has recognized that it is within the equitable powers of the trial court to fashion whatever orders [are] required to protect the integrity of [its original] judgment ․ A court's continuing jurisdiction derives from these equitable powers.”  (Citations omitted;  internal quotation marks omitted.)  Rocque v. Light Sources, Inc., 275 Conn. 420, 433, 881 A.2d 230 (2005).   See also AvalonBay Communities, Inc. v. Plan & Zoning Commission, 260 Conn. 232, 240–41, 796 A.2d 1164 (2002) (rejecting the argument that continuing jurisdiction to enter postjudgment orders after expiration of the four months prescribed by § 52–212a must derive from some source independent of the court's inherent powers, such as a statute, an order of injunctive relief, or the agreement of the parties, and is separate and distinct from the court's equitable authority to vindicate judgments).

Section 52–212a is “a remedial statute that is grounded in a continuing commitment to common law principles of fairness and justice ․” In re Baby Girl B., 224 Conn. 263, 285, 618 A.2d 1 (1992).   Our Supreme Court has also observed that “where the proceedings are equitable and the statute is remedial in nature, a trial court's refusal to open a judgment must be consistent with the authority conferred upon that court to modify the terms of the judgment in order to achieve an outcome fairer to the parties than provided by the original judgment in light of conditions as they appear when the motion to open is decided ․ [E]ither a forfeiture or a windfall should be avoided if possible.”  (Internal quotation marks omitted.)  Kim v. Magnotta, supra, 249 Conn. 108.

Applying these principles to the present case, the court finds that it has continuing jurisdiction to fashion a remedy appropriate to effectuate the June 7, 2010, judgment pursuant to its inherent equitable powers and that the time limitations imposed by § 52–212a do not limit the court's exercise of that power under the facts of this case.   The June 7, 2010, stipulated judgment set a date by which it was anticipated that the defendant would complete reconstruction of her home.   At the time the judgment entered, both parties reasonably believed that this timeframe would be sufficient.   Due to unanticipated complications in designing and planning the construction of the defendant's new home, and unforeseen delays occasioned by the denial of required permits by the town of Chester Inland Wetlands Watercourses Agency, the defendant was unable to rebuild her house within the time period initially contemplated by the parties and set forth in the stipulated judgment.

The plaintiff will not be prejudiced if the judgment is opened and the period of restoration is extended;  the defendant, however, will be severely prejudiced if the judgment is not opened.   As acknowledged by the plaintiff, the only prejudice likely to be suffered by it if the judgment was opened and the restoration period was extended is the internal costs to maintain the defendant's files.   If the motion is denied, however, the plaintiff will reap a significant windfall in the approximate amount of $903,000.   In sharp contrast, the defendant will be severely prejudiced and will suffer an extreme hardship and forfeiture if the judgment is not opened and the period of restoration extended:  she will lose the approximate $903,000 payment otherwise due to her under her insurance policy, as awarded by the arbitrators and confirmed by the Superior Court.

“Our case law on [§ 52–212a] recognizes that, in some situations, the principle of protection of the finality of judgments must give way to the principle of fairness and equity.”  Kim v. Magnotta, supra, 249 Conn. 109.   Here, the defendant filed her motion to open the judgment prior to the deadline set by the court after the Appellate Court's remand.   The court has an interest in protecting the integrity of its June 7, 2010, judgment, ensuring a fair outcome to the parties, and avoiding a windfall to the plaintiff and its attendant forfeiture to the defendant.   This case presents a clear situation where the principle of fairness and equity must prevail over the principle of protection of the finality of judgments.   The court therefore concludes that, notwithstanding the time limitations imposed by § 52–212a, and pursuant to the court's equitable powers, it has continuing jurisdiction over the June 7, 2010, stipulated judgment and may enter further orders with respect to that judgment.

B

Mutual Mistake

“Courts have interpreted the [§ 52–212a] phrase, ‘[u]nless otherwise provided by law,’ as preserving the common-law authority of a court to open a judgment after the four month period.”  (Internal quotation marks omitted.)   Dougherty v. Dougherty, 109 Conn.App. 33, 38, 950 A.2d 592 (2008).  “A judgment rendered may be opened after the four month limitation if it is shown that the judgment was obtained by fraud, in the absence of actual consent, or because of mutual mistake.”  (Emphasis added;  internal quotation marks omitted.)  Id. “Nevertheless, it is a well-established principle that courts of equity will not relieve against the operation of judgments rendered through the negligence or inattention of the party claiming to be aggrieved.”   (Internal quotation marks omitted.)  Warner v. Brochendorff, 136 Conn.App. 24, 33, 43 A.3d 785, cert. denied, 306 Conn. 902, 52 A.3d 728 (2012).

The defendant asserts that the June 7, 2010 judgment should be opened on the basis of mutual mistake” because neither of the parties anticipated at the time the judgment was entered that the defendant would have to obtain permits to rebuild her house or that the permit process would continue through the restoration period.⁵  The plaintiff responds that there was no mistake on its part regarding the time that it would take the defendant to rebuild her house.   To the contrary, the plaintiff contends that the defendant could have completed construction of her house within the time period required by the stipulated judgment, if she had begun the permitting process sooner, elected to build a different type of house than the one she sought to build or amended her plans to address and resolve the concerns of the Town of Chester rather than appealing the Inland Wetlands Watercourses Agency decision.

“The kind of mistake ․ that would justify the opening of a stipulated judgment under § 52–212a must be mutual;  a unilateral mistake will not be sufficient to open the judgment.”  (Emphasis added;  internal quotation marks omitted.)  Richards v. Richards, 78 Conn.App. 734, 740, 829 A.2d 60, cert. denied, 266 Conn. 922, 835 A.2d 473 (2003).  “A mutual mistake is one that is common to both parties and effects a result that neither intended ․ In that sense, a mutual mistake requires a mutual misunderstanding between the parties as to a material fact.   The existence of a mutual mistake is a question of fact.”  (Citations omitted;  internal quotation marks omitted.)  (Citations omitted;  internal quotation marks omitted.)  Hogan v. Lagosz, 124 Conn.App. 602, 617–18, 6 A.3d 112 (2010), cert. denied, 299 Conn. 923, 11 A.3d 151 (2011).

The evidence establishes that both parties believed in June 2010 that the defendant could rebuild her house within the agreed upon time period.   There was no evidence that they were both mistaken in this belief.   After the stipulated judgment was entered, the defendant elected to build a particular type of house, did not sign a contract with a builder until almost a year after the judgment was entered and did not seek permit approval from the town of Chester until September 9, 2011.   There was no evidence that the defendant, had she made different choices, could not rebuild her house within the agreed upon timeframe.   On the facts proven, the court cannot find that the stipulated judgment was entered due to a mistake common to both parties that effected a result that neither intended.   Accordingly, the court concludes that it cannot open the stipulated judgment on grounds of mutual mistake.

C

Correcting an Injustice Resulting from Judicial Error

The final exception to the four-month period in § 52–212a stems from the court's inherent equitable power to change a judgment in order to correct an injustice which was the result of judicial error.   See Connecticut Savings Bank v. Obenauf, 59 Conn.App. 351, 758 A.2d 363 (2000) (holding that, despite the fact that several years passed since judgment was entered, the trial court's denial of a motion to open a case was erroneous because the original judgment was facially inconsistent with the complaint and must be corrected on the basis of equitable considerations).   The exception recognized in Connecticut Savings Bank v. Obenauf does not apply to the facts of this case and therefore cannot serve as a basis for the court to open the stipulated judgment.

IV

CONCLUSION

For these reasons set forth in part III A, the court finds that it has continuing jurisdiction over the June 7, 2010, stipulated judgment and may enter further orders to preserve the integrity of that judgment.   Accordingly, the court grants the defendant's motion to open the stipulated judgment.   The June 7, 2010, stipulated judgment is hereby opened for the express and limited purpose of establishing a new period of restoration.   The parties shall contact the caseflow office to schedule further proceedings to set a new period of restoration date.

Lisa Kelly Morgan, Judge

FOOTNOTES

FN1. Those circumstances are:  (1) as provided in the statute, where “otherwise provided by law” and where “the court has continuing jurisdiction”;  (2) where the judgment was obtained by fraud, in the absence of actual consent or because of mutual mistake, and (3) to correct an injustice resulting from judicial error.   See Order No 122.40.  FN1. Those circumstances are:  (1) as provided in the statute, where “otherwise provided by law” and where “the court has continuing jurisdiction”;  (2) where the judgment was obtained by fraud, in the absence of actual consent or because of mutual mistake, and (3) to correct an injustice resulting from judicial error.   See Order No 122.40

FN2. On June 19, 2013, the plaintiff filed with the court a Notice of Suggestion of Death indicating that the defendant passed away on June 4, 2013..  FN2. On June 19, 2013, the plaintiff filed with the court a Notice of Suggestion of Death indicating that the defendant passed away on June 4, 2013.

FN3. These payments included advances to the defendant, money paid to the defendant's mortgage lien holder and the August 2, 2011, deposit paid jointly to the modular home builder and the defendant..  FN3. These payments included advances to the defendant, money paid to the defendant's mortgage lien holder and the August 2, 2011, deposit paid jointly to the modular home builder and the defendant.

FN4. The defendant retained counsel in September 2011 to assist her with the permit process..  FN4. The defendant retained counsel in September 2011 to assist her with the permit process.

FN5. The defendant does not claim that the stipulation, and hence the judgment, was obtained by fraud or in the actual absence of consent, thus the court will not address those exceptions..  FN5. The defendant does not claim that the stipulation, and hence the judgment, was obtained by fraud or in the actual absence of consent, thus the court will not address those exceptions.

Morgan, Lisa K., J.