Stephen Falcigno v. David Falcigno (2013)

RULING ON MOTION TO DISMISS

The defendant has moved to dismiss this action based upon the prior pending action doctrine.   For the reasons which follow, the court grants the defendant's motion.

The defendant in this action, David Falcigno (David), has previously brought a lawsuit against the plaintiff in this action, Stephen Falcigno (Stephen).   The prior action is styled, David Falcigno v. Stephen Falcigno, Superior Court, judicial district of New Haven at New Haven, Docket No. CV–12–6033535 (the “prior action”).   The court takes judicial notice of that file.

The dispute in the prior action revolves around a contract dated October 9, 2009, which contract is signed by David Falcigno, and is attached to his complaint as “Appendix A.” The contract is one paragraph, and purports to involve the sale of the stock of a corporation (Statewide Meats and Poultry, Inc. (“Statewide Meats”) by David Falcigno, to Stephen Falcigno.   The contract does not contain an integration or merger clause.   The complaint in the prior action has ten counts.   Count One is for breach of contract and requests, in the alternative, damages pursuant to the October 9, 2009 contract, or recision of that contract with other specified remedies.   While the allegations of the plaintiff in the prior action are lengthy, they in essence claim that David was fraudulently induced by Stephen to enter into the October 9, 2009 contract.   The basis of David's claims of fraud involve allegations that Stephen (who is his brother), over a number of years, deliberately mishandled the management of the corporation (of which David was a minority member) and deliberately concealed from David the true financial status of the corporation.   This was done, David alleges, in order to induce David to sell his shares for much less than their true value.   David also alleges that as part of the discussions leading to the signing of the October 9, 2009 contract, Stephen orally promised David, that should Statewide Meats become profitable in the future, that he, Stephen, would “cut [David] back in” and that David would receive his percentage of any proceeds should Statewide Meats be sold.   The complaint alleges that Statewide Meats was subsequently sold (at a vastly greater price) and that Stephen reneged on his promise to share the proceeds of that sale with David.   In essence, David is alleging that as part of the October 9, 2009 contract, Stephen made the aforementioned promises.   Neither the October 9, 2009 contract, nor the “Certificate of Satisfaction, Representations and Warranties and Indemnification Regarding Shares of Stock” (both of which are attached to Stephen's complaint in the present action) contain an integration or merger clause.

Essentially, David is alleging in the prior action that he was fraudulently induced to enter into the October 9, 2009 contract.   He is generally seeking to (1) have the contract enforced together with Stephen's oral promise to include David in on a percentage of the later sale proceeds of Statewide Meats, or (2) recision of the contract based upon Stephen's alleged fraud.   The subsequent counts of the prior action all incorporate (to one degree or another) the allegations of the first count.   Each count seeks to enforce the agreement that David has alleged above, or recision of the October 9, 2009 contract.

The case now before the court (the second action) is a suit to enforce the same October 9, 2009 contract according to its terms as understood by Stephen.   Stephen denies that there was a prior or contemporaneous promise to “cut [David] back in” on the subsequent sale of Statewide Meats.   However, the failure of either the October 9, 2009 contract or of the “Certificate of Satisfaction” to contain an integration or merger clause at the very least allows a trier of fact to consider David's claim that there was a contemporaneous oral agreement regarding the October 9, 2009 contract.  (See, Benvenuti Oil Co. v. Foss Consultants, Inc., 64 Conn.App. 723, 727 (2001):  “ ‘The parol evidence rule prohibits the use of extrinsic evidence to vary or contradict the terms of an integrated written contract.’  ‘The parol evidence rule does not apply, however, if the written contract is not completely integrated.’  “ (Citations omitted;  emphasis added.).)   Even if there were an integration clause, our courts have held that the parol evidence rule does not have application in circumstances involving fraud.  Id. at 728, n.4.

Stephen is attempting to use this (the second) action to litigate the same contract and related issues that are at issue in the prior action.   The “Certificate of Satisfaction” which is attached to Stephen's complaint as “Exhibit B,” expressly references and incorporates the October 9, 2009 contract.   When questioned at oral argument, Stephen's counsel admitted that all of the rights and remedies he is seeking in the second action can be sought and obtained in the prior action.   Moreover, there is no right or remedy that Stephen is seeking in the second action that is not equally and as readily available in the prior action, and counsel has offered no explanation as to why he has not yet pursued the remedies he claims in the prior action.

“The prior pending action doctrine permits the court to dismiss a second case that raises issues currently pending before the court.   The pendency of a prior suit of the same character, between the same parties, brought to obtain the same end or object, is, at common law, good cause for abatement ․ This is a rule of justice and equity, generally applicable, and always, where two suits are virtually alike, and in the same jurisdiction.”  (Citations omitted.)   Kleinman v. Chapnick, 140 Conn.App. 500, 505 (2013).  “ ‘Where actions are virtually, but not exactly alike ․ the trial court exercises discretion in determining whether the circumstances justify dismissal of the second action’ ․ ‘[T]he applicability of the doctrine does not turn on the issue of whether the two actions seek the same remedy ․ The key question is whether the two actions are brought to adjudicate the same underlying rights.”  Id. at 505.

In the case at bar it is very clear that each action seeks to adjudicate the same underlying rights.   Each case has at its heart the October 9, 2009 contract.   The plaintiff in each action literally attaches and incorporates into his complaint the October 9, 2009 contract.   Resolution of the issues related to that contract are central to both lawsuits.

“Connecticut has long recognized that ‘two suits shall not be brought for the determination of matters in controversy between the same parties, whether relating to legal or equitable rights, or to both, when such determination can be had as effectively and properly in one suit.’  ‘When two separate lawsuits are ‘virtually alike’ the second action is amenable to dismissal by the court.'  “ (Citations omitted.)  BCBS Goshen Realty v. Planning & Zoning Conn., 22 Conn.App. 407, 408 (1990).

By Stephan Falcigno's own admission at oral argument, all of the claims he is making in this lawsuit can be brought in the prior action.  “Under these circumstances, we see no good reason why the Superior Court, as a court of equity, should be called upon to grant relief in a second suit, involving additional expense and delay to all concerned, when relief just as ample and adequate can be had more quickly and cheaply in the first suit.”  (Emphasis added.)  Welles v. Rhodes, 59 Conn. 498, 505 (1890).   All of the plaintiff's claims in this lawsuit can and should be litigated in the prior action.   “[A]llowing an action that raises claims that are substantially identical to claims raised in a prior action would undermine an orderly and efficient judicial process and would potentially lead to inconsistent verdicts.”   Larobina v. McDonald, 274 Conn. 394, 409 (2005).  “The public's interest in avoiding unnecessary litigation and conserving scarce judicial resources is too powerful a factor to ignore.”  Nielson v. Nielson, 3 Conn.App. 679, 684 (1985).   Allowing this duplicative lawsuit to proceed “would ․ be entirely contrary to the modern concept which favors the determination of related matters in a single action.”  Redmond v. Matthies, 149 Conn. 423, 428 (1962).

The motion to dismiss is granted.

Frechette, J.

Frechette, Matthew E., J.