Colleen Yacono v. Paul A. Gordon (2014)

MEMORANDUM OF DECISION RE MOTION TO STRIKE (No. 115)

The Motion To Strike now before the Court presents an issue concerning the impleading of a third party by a first-party defendant pursuant to Conn. Gen.Stat. § 52–102a(a).   For the reasons stated below, the Motion must be granted in part and denied in part.

The first-party action involves the sale of an allegedly defective condominium unit.   According to the first-party complaint, the first-party defendant, Paul A. Gordon, owned a condominium unit located in a complex known as Currier Ridge in Hamden (“Premises”).   On October 23, 2011, Gordon entered into a written agreement to sell the Premises to the first-party plaintiff, Colleen Yacono.   The closing occurred on November 7, 2011.   After the closing, Yacono allegedly found problems of “water penetration, flooding, excessive moisture and water backup” in the Premises.

The first-party action was commenced on June 12, 2013.   Yacono is the sole plaintiff, and Gordon is the sole defendant.   Yacono's Amended Complaint against Gordon consists of three counts.   The First Count alleges that Gordon knew that his representations in a “Residential Property Condition Disclosure Report” and a “Mold and Mold–Forming Condition Disclosure” concerning the condition of the Premises “were untrue, were made to induce [Yacono] to rely thereon and to enter into the contract to purchase the Premises.”   The Second Count alleges a violation of Conn. Gen.Stat. § 20–327b.   The Third Count alleges negligent misrepresentation.

On October 8, 2013, Gordon commenced the third-party action at issue here by means of service of process on a number of third-party defendants.   Only two of the third-party defendants are at issue here:  Currier Ridge Condominium Association, Inc. (“Currier Ridge”) and Margolis Management & Realty Corp. (“Margolis”).

Gordon's claims against Currier Ridge are contained in the Eighth through the Tenth Counts of the Third–Party Complaint.   The Eighth Count alleges breach of contract.   It claims that Currier Ridge was contractually obliged to maintain the “common elements” of the condominium complex.   The Ninth Count alleges negligence.   It claims that Currier Ridge was negligent in failing to maintain the common elements.   The Tenth Count claims common-law indemnification.   It claims that Currier Ridge failed to maintain the common elements, that this negligence was the direct, immediate cause of Yacono's damages, that Currier Ridge was in exclusive control of the situation, and that Gordon did not know of its negligence.

The Eleventh Count of the Third–Party Complaint, directed against Margolis, alleges negligence.   It claims that Margolis was the management company hired by Currier Ridge to manage the common areas and that it negligently failed to conduct such maintenance.

On November 27, 2013, Currier Ridge and Margolis filed the Motion To Strike now before the Court.   The Motion seeks to strike the Eighth through the Eleventh Counts of the Third–Party Complaint on the ground that they are legally insufficient.   The Motion was argued on February 3, 2014.   Supplemental briefs were filed on February 18, 2014.

The starting point for analysis is the text of § 52–102a(a).   A defendant in a civil action may implead “a person not a party to the action who is or may be liable to him for all or part of the plaintiff's claim against him.”   (Emphasis added.)   This sentence “finds its counterpart in Rule 14(a) of the Federal Rules of Civil Procedure.   Some guidance is thus furnished by the construction given by the federal courts and commentators to the federal rule.”  Senior v. Hope, 156 Conn. 92, 96, 239 A.2d 486 (1968).

Under Fed.R.Civ.P. 14(a), “[t]he liability of the third-party defendant to the party that impleaded it must be for losses sustained by that party as a result of plaintiff's claim;  unrelated liability to the defendant is not a basis for impleader.”   3 James Wm. Moore, Moore's Federal Practice § 14.04[2] at 14–15 (3rd ed.   2010) (“Moore”).  (Emphasis in original;  footnote omitted.)   The term “claim” was “intended to broaden the practice by jettisoning antiquated notions of the scope of a ‘cause of action’ in favor of a transaction-based definition.   In the Federal Rules, ‘claim’ is defined transactionally, and has nothing to do with the legal theory on which a party relies.”  Id., at 14–16.  (Footnote omitted.)  “The theory adopted in [the Federal Rules] has been that the ‘transaction’ or ‘occurrence’ is the subject matter of a claim, rather than the legal rights arising therefrom;  additions to or subtractions from the central core of fact do not change this central identity.”  Dery v. Wyer, 265 F.2d 804, 807 (2nd Cir.1959).  (Internal quotation marks and citations omitted.)

The proper scope of Rule 14(a) has been explained by the Fifth Circuit in a much-cited opinion:

The question whether a defendant's demand presents an appropriate occasion for the use of impleader or else constitutes a separate claim has been resolved consistently by permitting impleader only in cases where the third party's liability was in some way derivative of the outcome of the main claim.   In most such cases, it has been held that for impleader to be available the third party defendant must be liable secondarily to the original defendant in the event that the latter is held liable to the plaintiff ․ Stating the same principle in different words, other authorities declare that the third party must necessarily be liable over to the defendant for all or part of the plaintiff's recovery ․ or that the defendant must attempt to pass on to the third party all or part of the liability asserted against the defendant ․ Whichever expression is preferred, it is clear that impleader under Rule 14 requires that the liability of the third party be dependent upon the outcome of the main claim.

United States v. Joe Grasso & Son, Inc., 380 F.2d 749, 751–52 (5th Cir.1967).  (Emphasis in original;  quotation marks and citations omitted.)

Given this analysis, the first-party plaintiff's claims against the first-party defendant must now be examined.   There are three such claims:  (1) intentional misrepresentation, (2) a violation of Conn. Gen.Stat. § 20–327b, and (3) negligent misrepresentation.   These claims must be separately considered.

Liability for the first-party plaintiff's first claim—intentional misrepresentation—may not be shared with or passed on to a third party, at least one who is not alleged to have actively participated in the asserted fraud.   This is a fundamental matter of public policy.   Intentional misrepresentation is, by definition, an intentional tort, and public policy prohibits contractual or other legal efforts to reduce liability for intentional torts.  Pruet v. Dugger–Holmes & Associates, 162 So.2d 613, 615 (Ala.1964).   A contrary holding would create a moral hazard in the form of a legal incentive (in the form of reduced liability) to commit an intentional wrong.

The first-party plaintiff's second claim—violation of § 20–327b—is similarly inappropriate for impleader under these circumstances.  “A statement pursuant to § 20–327b is made only to the best of the seller's knowledge and is specifically not a warranty.”  Reid v. Landsberger, 123 Conn.App. 260, 270, 1 A.3d 1149, cert. denied, 298 Conn. 933, 10 A.3d 517 (2010).   Consequently, Gordon will be liable to Yacono under the Second Count of the first-party complaint only if the statement in question was not made to the best of his knowledge.   Public policy should not create an incentive (by way of reduced liability) for property sellers to make statements that are not to the best of their knowledge.

In any event, the whole thrust of the Third–Party Complaint is that Gordon did not know of the conditions complained of.  (He specifically alleges this in the Tenth Count.)   If this assertion is correct, Gordon will not be held liable on the Second Count of the first-party complaint, and there will be no liability to share.

The Third Count of the first-party complaint alleges negligent misrepresentation.   The various counts of the Third–Party Complaint must now be examined with respect to this allegation.

The Third Count of the first-party complaint and the Ninth and Eleventh Counts of the Third–Party Complaint sound in negligence.   The allegations of negligence underlying these counts are inappropriate for impleader since they involve separate transactions.   The alleged acts of negligence are distinct acts occurring on distinct occasions.   The first-party complaint alleges that Gordon was negligent in preparing the disclosures he submitted to Yacono.   The Third–Party Complaint alleges that Currier Ridge and Margolis were negligent in maintaining the common elements of the condominium complex.   If these allegations of negligence are to be pleaded at all in the Third–Party Complaint, they must be pleaded pursuant to the specific law governing common-law indemnification.   That aspect of Gordon's third-party claim is considered below with respect to the Tenth Count of the Third–Party Complaint.

The Eighth Count of the Third–Party Complaint alleges breach of contract.   The contractual provision allegedly breached is not an obligation to indemnify Gordon for failure to observe due diligence in making disclosures to potential buyers such as Yacono.   It is, rather, an obligation to maintain the common elements of the condominium complex.   For reasons already explained, a breach of such a contractual provision has nothing to do with whether Gordon did or did not fail to observe due diligence in submitting his disclosures to Yacono.   Gordon's liability cannot be passed on to Currier Ridge and Margolis under this theory.

The Tenth Count of the Third–Party Complaint, claiming common-law indemnification, must now be considered.   If a claim is within the scope of a contractual agreement to indemnify, “there is no doubt that impleader is proper.”   Moore, § 14.04[3][b], at 14–21.   That is not claimed here.   The claim in the Tenth Count is for tortious indemnification.   The viability of this claim is an issue of substantive law.  Id.

Our Supreme Court has recently explained that,

[T]ortious indemnification is an action that arises between two tortfeasors, one, whose passive negligence resulted in a monetary recovery by the plaintiff;  and a second, whose active negligence renders him liable to the first by way of reimbursement ․ Kaplan [v. Merberg Wrecking Corp., 152 Conn. 405, 207 A.2d 732 (1965) ] imposes an implied obligation of indemnity on a tortfeasor whose active negligence is primarily responsible for a plaintiff's injuries, thus superseding the indemnitee's passive negligence.

ATC Partnership v. Coats North America Consolidated, Inc., 284 Conn. 537, 551, 935 A.2d 115 (2007).  (Internal quotation marks and some citations omitted.)

Does the Kaplan obligation of indemnity apply to alleged tortfeasors in the position of the third-party defendants here?   A recent decision of the Appellate Court strongly suggests that the answer to this question is Yes. Pellecchia v. Connecticut Light & Power Co., 139 Conn.App. 767, 57 A.3d 803 (2012), cert. denied, 308 Conn. 911, 61 A.3d 532 (2013), reversed a trial court's granting of a motion to strike a third-party complaint in a tragic case involving the death of a motorcyclist electrocuted by a downed power line.   The motorcyclist's estate claimed that Quinebaug Valley Emergency Communications, Inc. (“Quinebaug”), the first-party defendant, had negligently failed to notify Connecticut Light & Power Co. (“Power Company”) of a tip it had received that the power line was down.   Quinebaug, in turn, filed a third-party complaint against the Power Company, claiming that its own alleged negligence in failing to notify the Power Company was passive, whereas the Power Company's failure to de-energize the line after receiving the tip was active.   Under these circumstances, the Appellate Court held that the motion to strike the third-party complaint should have been denied.

In Pellecchia, as here, the judicial focus turned “on the meaning of the term ‘the situation.’ as used in Kaplan and later cases to define the third essential element of active-passive negligence.”  139 Conn.App., at 775.   The trial court in Pellecchia had considered “the situation” to be Quinebaug's own allegedly negligent conduct.   The Power Company plainly did not control that “situation.”   The Appellate Court, however, reasoned that “the situation” was the underlying “dangerous condition that allegedly exposed the plaintiff's decedent to harm by virtue of such conduct.”  Id.

Pellecchia is plainly analogous to the present case.   The third-party defendants did not control Gordon's disclosures to Yacono.   They did, however, control (at least allegedly) the underlying tortious situation creating the defect of which Yacono now complains.   Water damage and mold in a condominium complex create a foreseeable risk of economic harm to the unsuspecting buyer of a condominium unit.   This is “the situation” over which the third-party defendants must now be shown to have had exclusive control before their liability to indemnify Gordon can be established.   Because the necessary allegations are pleaded in the Third–Party Complaint, the Tenth Count, seeking common-law indemnification, withstands the Motion To Strike.

For the foregoing reasons, the Motion To Strike the Third–Party Complaint is granted as to the Eighth, Ninth, and Eleventh Counts of that complaint It is denied as to the Tenth Count of that complaint.

Jon C. Blue

Judge of the Superior Court

Blue, Jon C., J.