Diane Counihan et al. v. Webster Bank, N.A. et al. (2013)

MEMORANDUM OF DECISION RE WEBSTER BANK N.A.'S MOTION FOR SUMMARY JUDGMENT (# 147)

The issues before the court are whether to grant Webster Bank, N.A.'s motion for summary judgment as to counts two, and five through nine on the ground that there is no genuine issue of material fact that plaintiff Diane Counihan lacks standing in her individual capacity, and as to counts five through nine on the ground that there is no genuine issue of material fact that the claims are barred by the statute of limitations.

I

FACTS

A detailed review of the procedural history of this case is necessary as the first issue this court must decide is to which complaint the summary judgment motion should be addressed.

On May 9, 2011, the plaintiffs, Diane Counihan and Banner Spring Corporation (“BSC”), filed a complaint against the defendants, Webster Bank, N.A. (“Webster”) and Michael Counihan,¹ arising out of financial transactions between and among the parties.   On May 20, 2011, the plaintiffs filed an amended complaint, followed by a revised amended complaint on October 13, 2011.   The plaintiffs then filed a second revised amended complaint on November 21, 2011.   The second revised amended complaint was the subject of a motion to strike filed by Webster on January 11, 2012, which was resolved, partially by the agreement of the parties and partially by order of the court, on March 20, 2013 [55 Conn. L. Rptr. 658].

On May 13, 2013, Webster filed the present motion for summary judgment along with a supporting memorandum of law and evidentiary support.   Webster moved for summary judgment as to counts two, and five through nine of the second revised amended complaint on the ground that there is no genuine issue of material fact that Diane Counihan lacks standing to bring the action against Webster, and as to counts five through nine on the ground that there is no genuine issue of material fact that the claims are barred by the statute of limitations.

One day later, on May 14, 2013, the plaintiffs filed a third revised amended complaint, which incorporated the revisions agreed upon by the parties concerning Webster's motion to strike.   Thereafter, on June 5, 2013, the plaintiffs filed a request to amend the complaint along with a proposed fourth revised amended complaint.   On June 18, 2013, the plaintiffs filed a memorandum and evidentiary support in opposition to Webster's motion for summary judgment.   On June 19, 2013, Webster filed an objection to the plaintiffs' request to amend the complaint.   Webster then filed a reply memorandum to the plaintiffs' opposition to the motion for summary judgment on June 28, 2013.   Finally, on July 1, 2013, the day of the short calendar hearing, the plaintiffs filed a supplemental memorandum and evidentiary support in opposition to the motion for summary judgment.

The summary judgment motion came before the court for a hearing at the July 1, 2013 short calendar.   At the hearing, the parties were unable to agree upon which complaint the summary judgment motion should be directed, whether it be the second revised amended complaint filed on October 13, 2011, which was the subject of the motion to strike, the third revised amended complaint filed on May 14, 2013, one day after Webster filed its motion for summary judgment, or the proposed fourth revised amended complaint filed on June 5, 2013.   Thus, this court must first determine which complaint is the operative pleading for purposes of the summary judgment motion.

II

DISCUSSIONAOperative Complaint

This court must determine whether the plaintiffs' second revised amended complaint, third revised amended complaint or proposed fourth revised amended complaint is the operative pleading.

On March 20, 2013, the court, Danaher, J., issued a memorandum of decision on Webster's motion to strike counts two, five, six and seven of the plaintiffs' second revised amended complaint.   The court's decision notes that the motion to strike counts two, five and six was resolved by agreement of the parties.   Specifically, the court noted that the parties agreed that the plaintiffs would revise (1) count two to include an allegation that the plaintiffs fulfilled their obligations to the defendant under the customer agreement that was in effect during the relevant time period;  (2) count five to include the elements necessary to state a cause of action for aiding and abetting;  and (3) count six to incorporate, by reference, the allegations of count five, thus providing a factual basis for the plaintiffs' bad faith claim.   The court stated that “[i]n view of the agreements reached among the parties regarding counts two, five and six, the court will take no action regarding the motion to strike those counts.”   The motion to strike count seven was denied.   In a footnote, the court also stated that, in view of its ruling on the motion to strike count seven, “the plaintiffs are now in a position to file a revised complaint.”

As the parties agreed to revise the second revised amended complaint in lieu of a judicial ruling, the plaintiffs were not strictly bound by Practice Book § 10–44, which would have required the plaintiffs to file a substitute pleading within fifteen days of the court's ruling on the motion to strike.²  Unfortunately, the plaintiffs did not file the third revised amended complaint until May 14, 2013, almost two months after the court's ruling on the motion to strike.   Although Webster filed its motion for summary judgment as to the second revised amended complaint because it was the operative complaint as of May 13, 2013, Webster had agreed to the revisions contained in the third revised amended complaint in lieu of a ruling on its motion to strike.   Accordingly, as between the second and third revised amended complaints, it is only fair that Webster's motion for summary judgment relate to the third revised amended complaint.

The question remains, however, whether this court should grant the plaintiffs' motion for leave to amend in order to file its fourth revised amended complaint, filed June 5, 2013, some three weeks after Webster filed its motion for summary judgment.   Webster's motion for summary judgment, filed May 13, 2013, is based, partially, on Webster's argument that the statute of limitations bars the plaintiffs' claims contained in counts five through nine.   The plaintiffs' fourth revised amended complaint seeks to cure any such deficiency by adding the allegation that Michael Counihan knowingly, intentionally, wilfully and fraudulently concealed the facts of his improper activities from the plaintiffs so as to hinder and/or delay the filing of their complaint.   However, the plaintiffs restricted this new allegation only to those counts against Michael Counihan, and did not expressly state this new allegation in or incorporate it by reference into any of the counts against Webster.   The court notes that Michael Counihan has not filed an objection to the plaintiffs' request to amend.

The rules that govern the amendment of a complaint are well established.   Practice Book § 10–59 provides in relevant part:  “The plaintiff may amend any defect, mistake or informality in the writ, complaint or petition and insert new counts in the complaint, which might have been originally inserted therein ․ during the first thirty days after the return day.”  Practice Book § 10–60(a) further provides in relevant part:  “[A] party may amend his or her pleadings or other parts of the record or proceedings at any time subsequent to that stated in [Practice Book § 10–59] in the following manner:  (1) By order of judicial authority;  or (2) By written consent of the adverse party;  or (3) By filing a request for leave to file such amendment, with the amendment appended, after service upon each party ․ and with proof of service endorsed thereon.”

“Our courts have pursued a liberal policy in allowing amendments.”  (Internal quotation marks omitted.)  McNeil v. Riccio, 45 Conn.App. 466, 473, 696 A.2d 1050 (1997).  “While our courts have been liberal in permitting amendments ․ this liberality has limitations.   Amendments should be made seasonably.   Factors to be considered in passing on a motion to amend are the length of the delay, fairness to the opposing parties and the negligence, if any, of the party offering the amendment ․ The motion to amend is addressed to the trial court's discretion which may be exercised to restrain the amendment of pleadings so far as necessary to prevent unreasonable delay of the trial ․ Whether to allow an amendment is a matter left to the sound discretion of the trial court.”  (Citations omitted;  internal quotation marks omitted.)   Wagner v. Clark Equipment Co., 259 Conn. 114, 128, 788 A.2d 83 (2002).  “In the final analysis, the court will allow an amendment unless it will cause an unreasonable delay, mislead the opposing party, take unfair advantage of the opposing party or confuse the issues, or if there has been negligence or laches attaching to the offering party.”  (Internal quotation marks omitted.)   McNeil v. Riccio, supra, 474.

“[A]n amended complaint in response to a motion for summary judgment does not constitute prejudice per se.”  Id. “While a trial court may be well-advised to exercise leniency when amendments are proffered in response to a motion for summary judgment, rather than on the eve of trial, [our Supreme Court] [has] affirmed as discretionary the denial of permission to amend under such circumstances ․” (Citation omitted.)  Conference Center Ltd. v. TRC, 189 Conn. 212, 216–17, 455 A.2d 857 (1983), citing Citizens National Bank v. Hubney, 182 Conn. 310, 313, 438 A.2d 430 (1980) (affirming trial court's decision denying amendment of defendant's answer after pleadings were closed and motion for summary judgment filed);  see Miller v. Fishman, 102 Conn.App. 286, 292, 925 A.2d 441 (2007), cert. denied, 285 Conn. 905, 942 A.2d 414 (2008) (trial court abused its discretion in denying plaintiffs' request to amend the complaint where that request would have mooted the defendant's pending motion for summary judgment).

In the present case, the plaintiffs filed their request for leave to amend on June 5, 2013.   The case was originally scheduled for a court trial to begin on July 18, 2013.   The trial date has since been continued to September 2013.   The plaintiffs seek to amend to add the following allegation:  “Defendant Michael Counihan knowingly, intentionally, wilfully and fraudulently concealed his aforesaid actions from the plaintiffs for many years.”   Although it appears that the plaintiffs may have been attempting to add the allegation to toll the statute of limitations for certain claims against Webster, as previously noted, this allegation is added only to those counts against Michael Counihan.   As such, the allegation does not set forth a new theory of liability against Webster or Michael Counihan and does not confuse the issues.   Accordingly, the court will grant the plaintiffs' request for leave to amend.

The court will now review Webster's motion for summary judgment as it relates to the plaintiffs' fourth revised amended complaint.

B

Summary Judgment

“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.”  (Internal quotation marks omitted.)  Sherman v. Ronco, 294 Conn. 548, 553–54, 985 A.2d 1042 (2010).  “[T]he ‘genuine issue’ aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred ․ A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case.”  (Citation omitted;  internal quotation marks omitted.)  Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002).

“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 under Practice Book § [17–45].”  (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11, 938 A.2d 576 (2008).

1

Fourth Revised Amended Complaint

With the granting of the motion for leave to amend, the operative complaint is now the plaintiffs' fourth revised amended complaint.   The court will address Webster's motion for summary judgment with respect to the court's allowance of this new complaint.

The operative complaint alleges in relevant part that plaintiff Diane Counihan is the majority shareholder and chief executive officer of plaintiff BSC. Defendant Michael Counihan is an officer of BSC as well as Diane Counihan's former husband.   Diane Counihan had a longstanding customer relationship with Webster as an individual as well as in her capacity as an officer of BSC. Likewise, BSC had a long-standing relationship with Webster, as it continuously had a business checking account at Webster.   The plaintiffs had, and continue to have, a contractual relationship with Webster, which includes the terms and conditions promulgated by Webster and accepted by the plaintiffs for their accounts.   The contractual relationship obligated Webster to accept checks payable to BSC for deposit into the account of BSC, only.

Commencing in 2005, and continuing until the present time, Michael Counihan wrongfully came into possession of checks issued to BSC as payee from vendors, intended as payment for invoices billed by BSC. Michael Counihan presented these checks to Webster on many occasions and improperly directed Webster to cash them for him or deposit them into his personal account, as opposed to BSC's account.   Webster complied with these directions and allowed and facilitated the practices of check cashing and/or improper depositing of checks.

Webster's actions operated to deprive BSC of income, cash flow and/or working capital, resulting in a loss of business and profits by BSC. Diane Counihan relied, and continues to rely on the income and profits from BSC as an employee and corporate officer for her salary, income and self-support.

2

Standing

Webster moves for summary judgment as to counts two, and five through nine on the ground that the court lacks subject matter jurisdiction based on Diane Counihan's lack of standing, in her individual capacity, to bring an action against Webster.   According to Webster, the basis of the plaintiffs' complaint is that Michael Counihan misappropriated funds belonging to the corporation and, hence, any wrongs committed were against BSC, not Diane Counihan, individually.   Webster argues that, although Diane Counihan may have felt the impact of those wrongs, the primary injury was sustained by BSC. Thus, Diane Counihan lacks standing to bring this action in her individual capacity.

In contrast, the plaintiffs argue that summary judgment is not the preferred method to challenge standing and subject matter jurisdiction, but rather, Webster should have made this challenge in a motion to dismiss.   Nonetheless, the plaintiffs contend that Diane Counihan is not a mere stockholder or passive investor, but is an aggrieved party because, as an employee and corporate officer of BSC, she was a direct beneficiary of any and all of the income from BSC, which was being embezzled and misappropriated by Michael Counihan with the aid and assistance of Webster.   The plaintiffs further argue that Diane Counihan maintained personal accounts with Webster which were garnished in a suit brought by Webster to recover on a commercial loan.   Thus, the plaintiffs assert, it is disingenuous for Webster to claim that Diane Counihan lacks standing in this matter while at the same time attempting to recover from her, personally, in a different action.

“Subject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it ․ [A] court lacks discretion to consider the merits of the case over which it is without jurisdiction ․ The objection of want of jurisdiction may be made at any time ․ [a]nd the court or tribunal may act on its own motion, and should do so when the lack of jurisdiction is called to its attention ․ The requirement of subject matter jurisdiction cannot be waived by any party and can be raised at any stage [of] the proceedings.”  (Internal quotation marks omitted.)   J.P. Alexandre, LLC v. Egbuna, 137 Conn.App. 340, 347, 49 A.3d 222, cert. denied, 307 Conn. 913, 53 A.3d 1000 (2012).  “Although the proper way to challenge subject matter jurisdiction is by a motion to dismiss, rather than a motion for summary judgment ․ it is not improper to treat a motion for summary judgment as a motion to dismiss.”  (Citation omitted;  internal quotation marks omitted.)   Id., 345 n.5. Accordingly, this court will treat Webster's motion for summary judgment, as to standing, as a motion to dismiss for lack of subject matter jurisdiction.

“A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction.”  (Internal quotation marks omitted.)   Dayner v. Archdiocese of Hartford, 301 Conn. 759, 774, 23 A.3d 1192 (2011).  “[T]he plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 430 n.12, 829 A.2d 801 (2003).

“When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, it must consider the allegations of the complaint in their most favorable light ․ In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader.”  (Internal quotation marks omitted.)   Conboy v. State, 292 Conn. 642, 651, 974 A.2d 669 (2009).  “In contrast, if the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss ․ other types of undisputed evidence ․ and/or public records of which judicial notice may be taken ․ the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint ․ Rather, those allegations are tempered by the light shed on them by the [supplementary undisputed facts].”  (Citations omitted;  emphasis in original;  internal quotation marks omitted.)  Id., 651–52.

The plaintiffs' fourth revised amended complaint alleges that Michael Counihan is an officer of BSC and, with the assistance of Webster, converted BSC's funds to his own use, causing injury to BSC and Diane Counihan as an employee and officer.   The plaintiffs argue that Diane Counihan suffered an injury distinct from BSC because, as an employee and corporate officer, she was a direct beneficiary of any and all of the income from BSC, which was being embezzled and misappropriated by Michael Counihan with the aid and assistance of Webster.

“Since at least the middle of the [nineteenth] century, it has been accepted in this country that the law should permit shareholders to sue derivatively on their corporation's behalf under appropriate conditions ․ [I]t is axiomatic that a claim of injury, the basis of which is a wrong to the corporation, must be brought in a derivative suit, with the plaintiff proceeding secondarily, deriving his rights from the corporation which is alleged to have been wronged.”  (Internal quotation marks omitted.)  Smith v. Snyder, 267 Conn. 456, 461, 839 A.2d 589 (2004).  “If a third party does something to harm a corporation, then all of its shareholders are harmed, and any one shareholder can only seek redress derivatively.”   Cavaliere v. Yaworski, Superior Court, complex litigation docket at Hartford, Docket No. X04 CV 06 4034586 (October 26, 2011, Bright, J.).

“[I]f the injury is one to the plaintiff as a stockholder, and to him individually, and not to the corporation ․ the cause of action is personal and individual ․ In such a case, the plaintiff-shareholder sustains a loss separate and distinct from that of the corporation, or from that of other shareholders, and thus has the right to seek redress in a personal capacity for a wrong done to him individually.”  (Citations omitted.)  Yanow v. Teal Industries, Inc., 178 Conn. 262, 281–82, 422 A.2d 311 (1979).   However, “[i]t is commonly understood that [a] shareholder—even the sole shareholder—does not have standing to assert claims alleging wrongs to the corporation.”   (Internal quotation marks omitted.)  Smith v. Snyder, supra, 267 Conn. 461.

In fact, it is not unusual in cases of a closely held corporation ³ for the affairs of the shareholders to be “inextricably interwoven with the affairs of the corporation ․” (Internal quotation marks omitted.)   Peterson v. Woodbridge & Cusano, Superior Court, judicial district of New Haven, Docket No. CV 04 0487404 (November 23, 2005, Silbert, J.) (40 Conn. L. Rptr. 326, 328).   For that reason, “the injury criterion can be most misleading in cases involving closely held corporations.   If followed literally, the criterion would convert almost all actions by the shareholders of closely held corporations into individual actions, since the impact of almost any injury to such corporations will fall heavily upon its shareholders.”  (Internal quotation marks omitted.)  Fink v. Golenbock, 238 Conn. 183, 202–03, 680 A.2d 1243 (1996).   As the court in Peterson v. Woodbridge & Cusano, supra observed, it would “hardly be equitable” to allow a shareholder of a closely held corporation to institute a personal action for a harm done to the corporation when the shareholders incorporated “precisely for the purpose of protecting themselves from being sued in their individual capacities.   One of the primary reasons for a business to incorporate is to limit individual liability.   In Connecticut, as in other states, courts will disregard corporate structure and pierce the corporate veil only under exceptional circumstances ․ The opposite side of that same coin is that those who make contracts on behalf of their corporation are not to be permitted to assert potential corporate claims as though they were their own individual claims.”   (Citation omitted;  internal quotation marks omitted.)

In the present case, the plaintiffs argue that Diane Counihan's standing arises from the injuries she suffered as an employee and corporate officer of BSC because she was a direct beneficiary of any and all of the income from BSC. Although Diane Counihan's affairs are inextricably interwoven with the affairs of BSC, Diane Counihan should not be permitted to assert potential BSC claims as though they were her own individual claims.   See Fink v. Golenbock, supra, 238 Conn. 202–03.

In the fourth revised amended complaint, the plaintiffs also allege that Diane Counihan has a contractual relationship with Webster, in her individual capacity, separate from that of Webster and BSC. However, the plaintiffs do not allege that the injuries allegedly suffered by Diane Counihan are based on Webster's breach of the separate, individual contractual relationship between Webster and Diane Counihan.   Rather, the plaintiffs' allegations relate only to Webster's failure to ensure that BSC checks were credited to BSC's account.   There are no allegations related to Diane Counihan's individual account, such that her independent contractual relationship with Webster would provide her with standing under the circumstances of this case.

Diane Counihan has not alleged that she suffered an injury distinct from that of BSC and thus, does not have standing, individually, to assert claims against Webster.   Accordingly, the court will grant Webster's motion for summary judgment and dismiss counts two, and five through nine, as to plaintiff Diane Counihan, only, on the ground that she lacks standing, in her individual capacity, to bring an action against Webster.

In addition, based on this court's review of the operative complaint and the foregoing standing analysis, it is clear to this court that Diane Counihan also lacks standing, in her individual capacity, to pursue claims against Michael Counihan.   As such, this court, sua sponte,⁴ dismisses counts one, three and four,⁵ as to plaintiff Diane Counihan, only, on the ground that she lacks standing, in her individual capacity, to bring an action against Michael Counihan.   Nonetheless, BSC remains a plaintiff entitled to pursue these claims against Michael Counihan.

3

Statute of Limitations

“Summary judgment may be granted where [a] claim is barred by the statute of limitations ․ as long as there are no material facts concerning the statute of limitations in dispute.”  (Citation omitted.)  Haggery v. Williams, 84 Conn.App. 675, 678–79, 855 A.2d 264 (2004).

Webster asserts that there is no genuine issue of material fact that counts five, six and seven, alleging common-law torts,⁶ are barred by the three-year statute of limitations provided in General Statutes § 52–577;  that count eight, alleging violations of Articles 3 and 4 of the Uniform Commercial Code, is barred by the three-year statute of limitations provided in General Statutes §§ 42a–3–118(g) and 42a–4–111;  and that count nine, alleging a violation of Connecticut's Unfair Trade Practices Act (“CUTPA”), is barred by the three-year statute of limitations contained in General Statutes § 42–110g(f).  According to Webster, the date of the last negotiation or handling of any checks by Webster was October 28, 2007, more than three years prior to the commencement of the plaintiffs' action in 2011.

In support of its position, Webster submits the affidavit of Kim Syrop, Senior Vice President of Webster Bank, N.A., in which she attests that “[p]ursuant to the records maintained by Webster Bank, N.A. in the ordinary course of its business, October 28, 2007, was the date of the last transaction in which a check payable to Banner Spring Corporation was deposited to the personal account of Michael Counihan at Webster Bank, N.A.;   according to the records of Webster Bank, N.A., no further transactions containing checks payable to Banner Spring Corporation were made to Michael Counihan's account after October 28, 2007;  [and] Webster Bank, N.A. has no record of any other negotiation of checks payable to Banner Spring Corporation for the benefit of Michael Counihan subsequent to October 28, 2007.”

Counts five through seven of the complaint are governed by the statute of limitations set forth in General Statutes § 52–577 which provides that “no action founded upon a tort shall be brought but within three years from the date of the act or omission complained of.”  General Statutes § 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 ․ 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 filed ․ The three year limitation period of § 52–577 begins with the date of the act or omission complained of, not the date when the plaintiff first discovers an injury.”  (Citations omitted;  internal quotation marks omitted.)  Collum v. Chapin, 40 Conn.App. 449, 451, 671 A.2d 1329 (1996).

Count eight of the complaint is governed by the statute of limitations set forth in General Statutes §§ 42a–3–118(g) and 42a–4–111, which provide that an action to enforce an obligation, right or duty under Articles 3 and 4 of the UCC must be commenced within three years after the cause of action accrues.  “Applied to a cause of action, the term to accrue means to arrive;  to commence;  to come into existence;  to become a present enforceable demand ․ With certain exceptions ․ in cases involving the misappropriation of funds of an other, the right of action will accrue at the time of the defalcation ․ unless the statutory period is extended as a result of fraudulent concealment ․ in which case the cause of action will not accrue until its existence is discovered by the injured ․” (Citations omitted;  internal quotation marks omitted.)  D'Occhio v. Connecticut Real Estate Commission, 189 Conn. 162, 182–83, 455 A.2d 833 (1983).

Finally, count nine is governed by the statute of limitations set forth in General Statutes § 42–110g(f) which provides that an action under CUTPA “may not be brought more than three years after the occurrence of a violation of this chapter.”   As an occurrence statute, “the time period within which a plaintiff must commence an action begins to run at the moment the act or omission complained of occurs.”  (Internal quotation marks omitted.)  Collum v. Chapin, supra, 40 Conn.App. 451.

Webster has provided sufficient evidence to support its contention that any act it may have committed would be time barred by the various statutes of limitation.   Specifically, Webster presented evidence that the date of the last negotiation or handling of the BSC checks presented by Michael Counihan to Webster was October 28, 2007.   The three-year statute of limitations for each of the plaintiffs' counts began to run on October 28, 2007, and, as such, the plaintiffs had until October 28, 2010, to commence an action against Webster.   The plaintiffs commenced the present action by way of service of the writ, summons and complaint on Webster on April 21, 2011.⁷

Accordingly, Webster has provided sufficient evidence to shift to the plaintiffs, as the non-moving party, “the burden to ․ present evidence that demonstrates the existence of some disputed factual issue.”  (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., supra, 11.

In their memorandum of law, the plaintiffs argue that the statute of limitations was tolled by Michael Counihan's continued embezzlement through 2008–2009 and his fraudulent concealment in deceiving and lying to the plaintiffs in order to delay their filing suit.   The plaintiffs support their argument with an affidavit from Diane Counihan, in which she attests to the following.   In 2007, it came to Diane Counihan's attention that Michael Counihan was engaged in an embezzlement scheme with Webster's assistance.   Although Michael Counihan assured her that he was no longer embezzling and, in October 2007, he ceased his prior acts of depositing BSC's checks into his personal account at Webster, Michael Counihan “found another way to gain access to these funds with the complicity of Webster Bank.” Diane Counihan learned from auditing the books and records that he was continuing to embezzle by exchanging BSC checks for cash at Webster, at least through 2009.   Webster never informed Diane Counihan that Michael Counihan was depositing BSC's checks or converting these checks to cash.   Michael Counihan knowingly, fraudulently, intentionally and actively concealed the embezzlement scheme from Diane Counihan for many years and concealed the facts necessary to afford the plaintiffs a cause of action.⁸

“A plaintiff seeking to rely on a claim of fraudulent concealment as a basis for avoiding the bar of the statute of limitations must affirmatively plead his claim, either in the body of his complaint or in a plea in avoidance submitted along with or as a part of his reply.”   Tricon International, Ltd. v. United Construction, Inc., Superior Court, complex litigation docket at New Britain, Docket No. X03–CV–98–0518862–S (April 1, 2005, Sheldon, J.);   see D'Occhio v. Connecticut Real Estate Commission, supra, 189 Conn. 182–83 (plaintiff must plead fraudulent concealment statute).

Moreover, in Collum v. Chapin, supra, 40 Conn.App. 453, the Appellate Court concluded that “the trial court properly declined to address the plaintiff's claim of a continuing course of conduct” where the plaintiff did not allege in his complaint that the defendants engaged in any continuing course of conduct but rather, relied solely on an affidavit filed as part of his opposition to the motion for summary judgment.   The Appellate Court explained that “[a] summary judgment is proper where the affidavits do not set forth circumstances which would serve to avoid or impede the normal application of the particular limitations period ․ Affidavits are not pleadings, however, and a plaintiff cannot, under the guise of fortifying the complaint, present an entirely new cause of action or expand the scope of his cause of action by means of a counter-affidavit ․ The issue must be one which the party opposing the motion is entitled to litigate under his pleadings and the mere existence of a factual dispute apart from the pleadings is not enough to preclude summary judgment.”   (Internal quotation marks omitted.)  Id.

As noted earlier, the allegations of fraudulent concealment and a continuing course of conduct contained in the plaintiffs' fourth revised amended complaint are limited only to those counts against Michael Counihan.   No such allegations are contained in any count against Webster.   This court declines to consider the plaintiffs' fraudulent concealment and continuing course of conduct allegations as they are not pleaded but are contained solely within Diane Counihan's affidavit in opposition to the motion for summary judgment.   See Bass v. Great American Ins. Co., Superior Court, judicial district of Danbury, Docket No. CV–03–0348341–S (November 19, 2004, Moraghan, J.T.R.) (granting summary judgment based on statute of limitations where defendant's continuing course of conduct allegation was contained only in affidavit in opposition to summary judgment);  LaBow v. Rubin, Superior Court, judicial district of Fairfield, Docket No. CV–03–0400970–S (March 12, 2004, Stevens, J.), aff'd, 95 Conn.App. 454, 897 A.2d 136, cert. denied, 280 Conn. 933, 909 A.2d 960 (2006).

Accordingly, this court will grant Webster's motion for summary judgment as to counts five through nine, brought by the remaining plaintiff, BSC, as there is no genuine issue of material fact that those counts are barred by the applicable statutes of limitation.

III

CONCLUSION

In sum, this court grants Webster's motion for summary judgment, dismissing counts two, and five through nine, as to plaintiff Diane Counihan, only, on the ground that she lacks standing, in her individual capacity, to bring an action against Webster.   Likewise, this court, sua sponte, dismisses counts one, three and four, as to plaintiff Diane Counihan, only, on the ground that she lacks standing, in her individual capacity, to bring an action against Michael Counihan.   This court also grants Webster's motion for summary judgment as to counts five through nine, brought by the remaining plaintiff, BSC, as there is no genuine issue of material fact that those counts are barred by the applicable statutes of limitation.

The effect of this court's decision is to remove Diane Counihan, in her individual capacity, as a party in this case.   Nonetheless, BSC is still a proper plaintiff and the following counts by BSC remain:  (1) Count one alleging conversion against Michael Counihan;  (2) Count two alleging breach of contract against Webster;  (3) Count three alleging fraud against Michael Counihan;  and (4) Count four alleging negligence against Michael Counihan.

This court directs Webster and Michael Counihan to file an answer or other responsive pleading to the fourth revised amended complaint within fifteen (15) days of the date of this order.

Wilson J. Trombley, Judge

FOOTNOTES

FN1. Michael Counihan is not a party to the present summary judgment motion..  FN1. Michael Counihan is not a party to the present summary judgment motion.

FN2. Practice Book § 10–44 allows a plaintiff fifteen days to file a substitute pleading after a motion to strike has been granted and provides that the judicial authority may enter judgment against said party on the stricken complaint when no substitute pleading is filed within that time limit..  FN2. Practice Book § 10–44 allows a plaintiff fifteen days to file a substitute pleading after a motion to strike has been granted and provides that the judicial authority may enter judgment against said party on the stricken complaint when no substitute pleading is filed within that time limit.

FN3. Connecticut does not have a statute specifically providing for the formation of a closely held corporation.   A closely held corporation is defined as “[a] corporation whose stock is not freely traded and is held by only a few shareholders (often within the same family).”   Black's Law Dictionary (9th Ed.2009).   Moreover, in a closely held corporation, “profits are more likely to be distributed in the form of salaries and fringe benefits ․” Turgeon v. Turgeon, 190 Conn. 269, 276, 460 A.2d 1260 (1983).   Although the plaintiffs' complaint does not allege that BSC is a closely held corporation, it does allege that Diane Counihan is the majority shareholder and CEO of BSC and Michael Counihan is an officer of BSC. A finding that BSC is a closely held corporation is not necessary in order for this court to consult and rely upon judicial decisions concerning shareholder derivative suits relating to closely held corporations..  FN3. Connecticut does not have a statute specifically providing for the formation of a closely held corporation.   A closely held corporation is defined as “[a] corporation whose stock is not freely traded and is held by only a few shareholders (often within the same family).”   Black's Law Dictionary (9th Ed.2009).   Moreover, in a closely held corporation, “profits are more likely to be distributed in the form of salaries and fringe benefits ․” Turgeon v. Turgeon, 190 Conn. 269, 276, 460 A.2d 1260 (1983).   Although the plaintiffs' complaint does not allege that BSC is a closely held corporation, it does allege that Diane Counihan is the majority shareholder and CEO of BSC and Michael Counihan is an officer of BSC. A finding that BSC is a closely held corporation is not necessary in order for this court to consult and rely upon judicial decisions concerning shareholder derivative suits relating to closely held corporations.

FN4. “If a party is found to lack standing, the court is without subject matter jurisdiction ․ The subject matter jurisdiction requirement ․ may be raised by a party, or by the court sua sponte, at any stage of the proceedings ․” (Citation omitted;  internal quotation marks omitted.)   Citibank (South Dakota), N.A. v. Evvard, 128 Conn.App. 843, 845, 18 A.3d 682 (2011)..  FN4. “If a party is found to lack standing, the court is without subject matter jurisdiction ․ The subject matter jurisdiction requirement ․ may be raised by a party, or by the court sua sponte, at any stage of the proceedings ․” (Citation omitted;  internal quotation marks omitted.)   Citibank (South Dakota), N.A. v. Evvard, 128 Conn.App. 843, 845, 18 A.3d 682 (2011).

FN5. Counts one, three and four were brought by Diane Counihan and BSC against Michael Counihan, and allege conversion, fraud and negligence, respectively..  FN5. Counts one, three and four were brought by Diane Counihan and BSC against Michael Counihan, and allege conversion, fraud and negligence, respectively.

FN6. Counts five, six and seven allege aiding and abetting, breach of good faith and fair dealing, and negligence, respectively..  FN6. Counts five, six and seven allege aiding and abetting, breach of good faith and fair dealing, and negligence, respectively.

FN7. The return of service is dated April 12, 2011, and states that service was made on Webster and “afterward on the 21st day of April 2011” service was made on Michael Counihan.”   It is unclear from the return of service whether the date of service on Webster was April 12, 2011, or April 21, 2011.   This court will give the plaintiffs the benefit of the doubt that service occurred, and thus suit was commenced, on April 21, 2011..  FN7. The return of service is dated April 12, 2011, and states that service was made on Webster and “afterward on the 21st day of April 2011” service was made on Michael Counihan.”   It is unclear from the return of service whether the date of service on Webster was April 12, 2011, or April 21, 2011.   This court will give the plaintiffs the benefit of the doubt that service occurred, and thus suit was commenced, on April 21, 2011.

FN8. The plaintiffs did not attach any documentation to the affidavit to support the allegation that Michael Counihan continued his embezzlement through 2009 by cashing BSC checks and depositing the cash into his personal account.   Rather, in their memorandum of law, the plaintiffs merely state that they will offer “substantial evidence at trial that defendant Michael Counihan actively engaged in deceiving the plaintiffs as to his activities by several means, and moreover, the defendant Webster Bank never acted to stop him or alerted either plaintiff to the improper activities for several years.”.  FN8. The plaintiffs did not attach any documentation to the affidavit to support the allegation that Michael Counihan continued his embezzlement through 2009 by cashing BSC checks and depositing the cash into his personal account.   Rather, in their memorandum of law, the plaintiffs merely state that they will offer “substantial evidence at trial that defendant Michael Counihan actively engaged in deceiving the plaintiffs as to his activities by several means, and moreover, the defendant Webster Bank never acted to stop him or alerted either plaintiff to the improper activities for several years.”

Trombley, Wilson J., J.