LLC v. LLP (2013)

MEMORANDUM OF DECISION RE MOTION TO STRIKE NO. 102.00

This legal malpractice action has been brought against the law firm of Sandak, Hennessey & Greco, LLP and the individual attorney assigned to the plaintiff's file, Attorney Elizabeth A.B. Suchy.   These defendants have moved to strike the first, second and third counts of the plaintiff's complaint on the grounds that none of said counts state a cause of action upon which relief may be granted to the plaintiffs.   The plaintiffs allege that they sustained monetary damages due to the defendants' malpractice and allege three different grounds for recovery—negligence, breach of fiduciary duty and breach of contract.

FACTS

The factual background to the case is somewhat complicated, but the court will recite in this memorandum the salient facts as set forth in the complaint and opposing memoranda of law as they bear directly on the court's decision on whether each of the three counts alleged by the plaintiffs is legally sufficient to state a cause of action.   The plaintiffs are Cedar Hammocks, LLC, a limited liability company, and its members.   The limited liability company owns a small island located approximately one-third to one-half mile offshore in Norwalk Harbor.   On this island there exists a boathouse in a dilapidated condition that the plaintiffs wish to reconstruct.   The plaintiffs allege that prior to making their initial application for a variance to construct the new structure, they were very concerned about potential neighborhood opposition to any application they might make.   So, in August of 2009, they submitted an application to the Norwalk Zoning Board accompanied by the required public notice, but without personally notifying landowners along the shore on the premise that landowners this far away could not be considered “adjacent” or “abutting” property owners as defined by the zoning regulations.   Their initial application was denied, but the denial was due to lack of a quorum at the hearing, and not because of any neighborhood opposition.   The plaintiffs then consulted the defendants as to the next steps to take to obtain the proper authorizations to build.

Upon consulting Attorney Elizabeth A.B. Suchy, the plaintiffs allege that they communicated their concerns about possible neighborhood opposition to her prior to retaining her and her firm in October of 2009.   The plaintiffs allege that no notice of their first application was sent to property owners along the shoreline who might be deemed to be “abutting property owners” as defined in the Norwalk Zoning Regulations, and that as a result, no neighbors appeared at the hearing of their first application.   The plaintiffs still believed that no notice was necessary to “abutting” or “adjacent” owners as the island was approximately one-third of a mile offshore and therefore had no abutting property owners.   The plaintiffs allege that during the preliminary negotiations leading up to their decision to retain Attorney Suchy and her firm, Attorney Suchy agreed with them that no notice of the new applications would be sent to owners of the shoreline directly across the water from the island.   The plaintiffs allege that they were then advised by Attorney Suchy that the firm, Sandak, Hennessey & Greco, LLP, would represent them with the zoning appeal and new applications if a conflicts check for their firm found no conflicts of interest.   Both parties agree that when no conflicts were found, the parties then entered into an attorney-client relationship whereby the defendants would represent the plaintiffs in all aspects related to the appeal of the prior application that had been denied and the filing of new zoning variance and Coastal Area Management applications.

The plaintiffs allege that just prior to filing the new applications in April of 2009, they received an email from Attorney Suchy, which confirmed that she planned to send notice to the shoreline property owners.   As this was directly contrary to their instructions and the understanding that the plaintiffs thought they had with Attorney Suchy, the plaintiffs allege that they immediately contacted Attorney Suchy to voice their objection to the way she had prepared the application.   The plaintiffs allege that they received only a response that she was on vacation and would handle the matter on her return.   The next day the plaintiffs received the hard copy of the application in the mail with the list of shoreline property owners to be notified, and it was too late at that point to file an application without this list.

Later, in June of 2009 the plaintiffs further allege that just two days before the variance application was to be heard by the Norwalk Zoning Board of Appeals, the defendants advised them that they had a conflict of interest with one of the shoreline property owners who had received notice of the pending application and who had advised the defendants that he intended to oppose the application.   The defendants immediately communicated this conflict of interest to the plaintiffs and also notified them that neither Attorney Suchy nor the firm could any longer represent them in connection with the pending appeal or variance application.

The plaintiffs allege that the property owner in question (who was a former client of the defendants) did oppose the application, which caused them to incur unnecessary expenses and delays.   Furthermore, they allege in their memorandum that their litigation with this property owner is on appeal and ongoing as of the date of this motion.

The first count of plaintiffs' complaint alleges negligence on the part of the defendants.   First, they allege that the defendants failed to properly perform their conflicts check.   The plaintiffs allege that the defendants should have known that the property owner in question was likely to oppose their application, and had they identified him as a possible adversary sooner, the plaintiffs would not have had to retain substitute counsel at the last minute.   Second, they allege that the defendants failed to abide by their instructions as to notice to “abutting” property owners, which caused them to be subject to unnecessary opposition.   Third, the plaintiffs allege that the defendants failed “to prepare all documents in a reasonably careful and prudent fashion.”

The second count incorporates the same forty-one paragraphs of the first count and claims that the plaintiffs sustained a “substantial financial loss” as a result of the defendants' breach of fiduciary duties owed to the plaintiffs.   In the second count the plaintiffs allege that the fiduciary obligations were breached as a result of the “sub-standard representation provided by the defendant attorneys.”   In plaintiffs' third count, the plaintiffs incorporate paragraphs 1 through 44 of the preceding two counts and allege breach of contract by the defendants in that:  (1) they failed to perform a “reasonably thorough and complete conflicts check;  (2) they failed to adhere to the plaintiffs' instructions;  and (3) failed to prepare necessary documents in a reasonably careful and prudent fashion.”

DISCUSSION

“The purpose of a motion to strike is to contest ․ the legal sufficiency of the allegations of any complaint ․ to state a claim upon which relief can be granted.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003).  “A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court ․ We take the facts to be those alleged in the complaint ․ and we construe the complaint in the manner most favorable to sustaining its legal sufficiency ․ Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, supra, at 498.  “A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged.”   Novametrix Medical Systems, Inc. v. BOC Group, Inc., 224 Conn. 210, 215, 618 A.2d 25 (1992).

“It is fundamental that in determining the sufficiency of a complaint challenged by the defendant's motion to strike, all well-pleaded facts and those necessarily implied from the allegations are taken as admitted.”   (Internal quotation marks omitted.)  Doe v. Board of Education, 76 Conn.App. 296, 299–300, 819 A.2d 289 (2003).  “The role of the trial court [on ruling on a motion to strike] [is] to examine the [complaint], construed in favor of the plaintiff, to determine whether the [pleading party] has stated a legally sufficient cause of action.”  (Internal quotation marks omitted.)  Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378, 698 A.2d 859 (1997).

In this case, the plaintiffs' first count alleges negligent representation, or legal malpractice.   As the defendants properly point out in their memorandum, “to prove any legal malpractice claim, a plaintiff must establish the four necessary elements:  (1) an attorney-client relationship;  (2) a wrongful act or omission by the attorney;  (3) proximate cause;  and (4) legal damages.”   Lee v. Harlow, Adams & Friedman, P.C., 116 Conn.App. 289, 302, 975 A.2d 715 (2009).

The defendants argue that the first count is legally insufficient because the plaintiffs are unable to prove causation.   The defendants argue that even if the plaintiffs' claims of improper representation are correct, their cause of action in negligence fails because, among other reasons, the plaintiffs' zoning application was approved.   Therefore, they argue, assuming that the defendants' failure to properly identify their potential conflict of interest and failure to abide by the plaintiffs' instructions as to notice, the plaintiffs suffered no adverse consequences.   In fact, the defendants argue, the plaintiffs are actually in a better position because any potential opposition that might have lain dormant without notice has been addressed, and (at least for the moment) defeated.

But this analysis requires the court to make a finding as to causation and damages which is not appropriate for a motion to strike.  “Where the legal grounds for ․ a motion [to strike] are dependent upon underlying facts not alleged in the plaintiff's pleadings, the defendant must await the evidence which may be adduced at trial, and the motion should be denied.”  (Internal quotation marks omitted.)  Commissioner of Labor v. C.J.M. Services, Inc., 268 Conn. 283, 293, 842 A.2d 1124 (2004).   Also, while it is true that the plaintiffs do not specify in detail the documents which caused them to sustain their damages, the court finds that, taken as a whole and read in the light most favorable to sustaining the cause of action, the first count of the complaint adequately advises the defendants of the plaintiffs' claims of negligent representation.   A motion to strike should not be used as a request to revise;  if the defendants wished to obtain a more particular statement of the documents referred to in paragraph 38, subsection (c) of the complaint, the proper course would have been to file a request to revise.

In reviewing a motion to strike, the court is required to “assume the truth of both the specific factual allegations and any facts fairly provable thereunder.   In doing so, moreover, we read the allegations broadly, rather than narrowly.”  Craig v. Driscoll, 262 Conn. 312, 321, 813 A.2d 1003 (2003).   The court finds that the facts set forth in the first count would, if proven, support a cause of action for negligence.   Therefore, the defendants' motion to strike as to the first count of the plaintiffs' complaint is denied.

With respect to the second count of plaintiffs' complaint, the court agrees with the defendants that a cause of action for breach of fiduciary duty must set forth with some specificity the conduct implicating the attorney's honesty, morality or loyalty to the client.   It is also true that “[w]hat is necessarily implied [in an allegation] need not be expressly alleged.”  (Internal quotation marks omitted.)  Lombard v. Edward J. Peters, Jr., P.C., 252 Conn. 623, 626, 749 A.2d 630 (2000).   As a result, this court does not agree that the plaintiffs have failed to state sufficient facts in the second count to place the defendants on notice of what conduct of the defendants constituted a breach of their fiduciary obligations to the plaintiffs.

The second count of the plaintiffs' complaint alleges a breach of fiduciary obligation because of the defendants' failure to follow their express instructions.   An action for breach of fiduciary obligation does not automatically arise from a claim of professional negligence but may lie where an attorney has engaged in conduct which could be found to be disloyal or dishonest.  Beverly Hill Concepts, Inc. v. Schatz and Schatz, Ribicoff & Kotkin, 247 Conn. 48, 56–57, 717 A.2d 724 (1998).   Although not entirely clear from a reading of paragraph 43 of the second count, construing the allegations therein in a manner most favorable to the pleader, the plaintiffs allege that the failure to follow instructions was both a violation of the Rules of Professional Conduct and “sub-standard representation.”  Rule 1.2(a) of the Rules of Professional Conduct states that, “[s]ubject to [legal limitations], a lawyer shall abide by a client's decisions concerning the objectives of representation and ․ shall consult with the client as to the means by which they are to be pursued.”   In this case, the plaintiffs allege an agreement between client and counsel on allocation of decision making, a breach of which could constitute disloyalty to a client.   The plaintiffs allege that the parties agreed as to notice to abutting property owners and that the defendants breached that agreement.   Hence, the plaintiffs argue, the defendants violated the Rules of Professional Conduct, and breached a duty of loyalty to them, which caused their damages.   Striking the second count also requires the court to make an implicit ruling that the plaintiffs do not have a right to direct their counsel to represent them in the way they choose, for better or for worse.   So long as the instructions given by the plaintiffs were not illegal per se, the defendants arguably had a duty to obey them.

The court disagrees that the second count is a mere re-packaging of the first count sounding in negligence and nothing more.   The plaintiffs cite the Rules of Professional Conduct, which, as stated above, require counsel to abide by client instructions unless the same are unlawful.   Therefore, when construed in the manner most favorable to the plaintiffs, the court finds that the allegations of the second count, could, if proven, support a cause of action for breach of the fiduciary duty of loyalty to one's client.

Similarly, part of the factual basis for the breach of contract claim in the third count is the alleged failure of the defendants to follow the plaintiffs' instructions, which they allege caused them to sustain monetary losses.   The defendants' reliance on Caffery v. Stillman, 79 Conn.App. 192, 829 A.2d 881 (2003) and Weiner v. Clinton, 106 Conn.App. 379, 942 A.2d 469 (2008), is correct as to the allegations of paragraph 46, subsections (a) and (c) but misplaced as to subsection (b).  According to Caffery v. Stillman, supra, 197, “one may [not] bring an action in both negligence and contract merely by couching a claim that one has breached a standard of care in the language of contract.”   The court agrees that the allegations of failure to perform a thorough and complete conflicts check and “to prepare necessary documents in a reasonably careful and prudent fashion” simply re-state allegations of negligence that, without more, do not support a cause of action for breach of contract.   But with respect to the claim regarding instructions in paragraph 46 subsection (b), it is not true that the plaintiffs are setting forth a claim for negligence and simply repackaging it as a breach of contract action in the third count.   In paragraph 46, subsection (b) of their third count, the plaintiffs allege breach of a material term of their attorney-client relationship.  “Connecticut law recognizes that one may bring against an attorney an action sounding in both negligence and contract”;  (internal quotation marks omitted) Weiner, supra, 383;  which is exactly what the plaintiffs have done.

Furthermore, § 55(1) of the Restatement (Third) of the Law Governing Lawyers, states that “[a] lawyer is subject to liability to a client for injury caused by breach of contract in the circumstances and to the extent provided by contract law.”   1 Restatement (Third), the Law Governing Lawyers § 55 (2000).   Comment (c) to this section states that “[a] client may also assert against a lawyer contractual claims that likewise could be asserted as tort claims or claims of fiduciary breach ․ such as claims that a lawyer disobeyed the client's valid instruction or an agreement concerning what the lawyer would do ․” Id., comment (c), p. 412;  see also id., § 27, comment (f), p. 206 (“When a client is bound by an act of a lawyer with apparent but not actual authority, a lawyer is subject to liability to the client for any resulting damages to the client, unless the lawyer reasonably believed that the act was authorized by the client ․”).  In the court's view, paragraphs 1 through 46, subsection (b) of the third count sufficiently set forth a cause of action for breach of contract against the defendants.

CONCLUSION

For the foregoing reasons, the defendants' motion to strike is denied regarding counts one and two.   Further, regarding the third count of the plaintiffs' complaint, the defendants' motion to strike is granted as to subsections (a) and (c) and denied as to subsection (b) of paragraph 46 of the complaint.

By the Court,

Anthony D. Truglia, Jr., J.

Truglia, Anthony D., J.