Janet Wagner et al. v. Our Lady of Mount Caritas, O.S.B., Inc.

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Superior Court of Connecticut.

Janet Wagner et al. v. Our Lady of Mount Caritas, O.S.B., Inc.

CV125015530

Decided: December 04, 2013

MEMORANDUM OF DECISION RE MOTION TO SET ASIDE THE VERDICT, # 134;  MOTION FOR AWARD OF PUNITIVE DAMAGES, # 136

This case arises out of a dispute between the plaintiffs and defendant in which the plaintiffs claimed that the defendant misrepresented its affiliation with the Roman Catholic Church, which led to the plaintiffs making charitable contributions as well as entering into a contract to construct a chapel for the defendant.   The plaintiffs' complaint was in seven counts:  breach of contract, breach of good faith and fair dealing, promissory estoppel, fraud in the inducement, fraudulent misrepresentation, negligent misrepresentation, and statutory theft.1

The case was tried to a jury, which returned a verdict in favor of the plaintiffs on all counts.   The jury awarded damages in the amount of $207,301.18, and also answered that the plaintiff was entitled to punitive damages.

At the conclusion of the evidence, the defendant made a motion for directed verdict, which the court reserved decision.   The defendant has now filed a motion to set aside the verdict as to three of the counts:  promissory estoppel, fraudulent misrepresentation, and negligent misrepresentation.2  The basis for the motion to set aside the verdict is that the defendant is claiming that the verdict is contrary to the evidence.   The defendant also asks the court to set aside the finding of punitive damages because there was no evidence that the defendant's conduct was outrageous or done with reckless disregard to the rights of others.

No written objection to the motion to set aside the verdict was filed by the plaintiffs.   The plaintiffs did file a motion for award of punitive damages together with a memorandum of law in support.   They request that the court award $105,073.78 in attorneys fees and $2,846.37 in non-taxable costs and expenses.

The court heard oral argument on these matters on September 9, 2013.

In ruling on the defendant's motions, the court is mindful of the standard relating to sustaining a verdict.  “The evidence is viewed in a light most favorable to the prevailing party and to sustaining the verdict ․ A court is empowered to set aside a jury verdict when, in the court's opinion, the verdict is contrary to the law or unsupported by the evidence ․ A verdict should not be set aside, however, where it is apparent that there was some evidence on which the jury might reasonably have reached its conclusion.  (Citations omitted;  internal quotation marks omitted.)  McDermott v. Calvary Baptist Church, 68 Conn.App. 284, 293–94, 791 A.2d 284 (2002).

A jury “verdict will be set aside and judgment directed only if [the court] find[s] that the jury could not reasonably and legally have reached their conclusion.”  (Internal quotation marks omitted.)  Smith v. Greenwich, 278 Conn. 428, 441, 899 A.2d 563 (2006).  “[T]he [trial] court must determine whether the evidence, viewed in the light most favorable to the prevailing party, reasonably supports the jury's verdict.”  (Internal quotation marks omitted.)  Cheryl Terry Enterprises, Ltd. v. Hartford, 270 Conn. 619, 639, 854 A.2d 1066 (2004).   Litigants have a constitutional right to have factual issues resolved by the jury.  Seals v. Hickey, 186 Conn. 337, 350, 441 A.2d 604 (1982).

“[T]he role of the trial court on a motion to set aside the jury's verdict is not to sit as a seventh juror, but, rather, to decide whether, viewing the evidence in the light most favorable to the prevailing party, the jury could reasonably have reached the verdict that it did ․ A verdict is not defective as a matter of law as long as it contains an intelligible finding so that its meaning is clear ․ A verdict will be deemed intelligible if it clearly manifests the interest of the jury.”  (Internal quotation marks omitted.)   Hall v. Bergman, 106 Conn.App. 660, 680, 943 A.2d 515 appeal dismissed, 288 Conn. 903 (2008).

Addressing the defendant's motion to set aside the verdict on the grounds that the verdict is contrary to the evidence, the court instructed the jury as to the elements needed to prove claims of fraudulent misrepresentation and negligent misrepresentation.   The minimum required to support an action for fraudulent misrepresentation is that the fraudulent representation was recklessly made, and for the purpose of inducing action upon it.  “The essential elements of an action in common law fraud, as we have repeatedly held, are that:  (1) a false representation was made as a statement of fact;  (2) it was untrue and known to be untrue by the party making it;  (3) it was made to induce the other party to act upon it;  and (4) the other party did so act upon that false representation to his injury ․ Under a fraud claim of this type, the party to whom the false representation was made claims to have relied on that representation and to have suffered harm as a result of the reliance.   In contrast to a negligent representation, [a] fraudulent representation ․ is one that is knowingly untrue, or made without belief in its truth, or recklessly made and for the purpose of inducing action upon it ․ This is so because fraudulent misrepresentation is an intentional tort.”  (Citations omitted;  internal quotation marks omitted.)  Sturm v. Harb Development, LLC, 298 Conn. 124, 142, 2 A.3d 859 (2010).

In contrast, when it comes to negligent misrepresentation, even an innocent misrepresentation of fact may be actionable if the declarant had the means of knowing, ought to known, or had the duty of knowing the truth of the misrepresentation.  “This court has long recognized liability for negligent misrepresentation ․ The governing principles [of negligent misrepresentation] are set forth in similar terms in § 552 of the Restatement (Second) of Torts (1977):  One who, in the course of his business, profession or employment ․ supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information ․ As a result, [w]e have held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth.”  (Citations omitted;  internal quotation marks omitted.)  Sturm v. Harb Development, LLC, supra, 298 Conn. 143–44.

The court instructed the jury that in order to find in favor of the plaintiffs on the claim of fraudulent misrepresentation the plaintiff would have to prove, by clear and convincing evidence, that the defendant made a false statement of fact—that is, it was a part of the Benedictine Order of the Catholic Church—that the statement was untrue and known to be untrue by the defendant or that the defendant made the statement with reckless disregard for the truth of the matter, and that the defendant made the false statement in order to induce the plaintiffs to act upon it.   Finally, the plaintiffs would have to prove by a fair preponderance of the evidence that the plaintiffs did act on the statement to their injury.

The court, having heard the same evidence that was heard by the jury, cannot accept the assertion that the jury could not have found, by clear and convincing evidence, that the defendant made the false misrepresentations, or that the plaintiffs relied on said misrepresentations in making the contributions to the defendant.   The jury could have reasonably credited the testimony of the plaintiffs as to their version of the events rather than the version submitted by the defendant, and found that misrepresentations were made either recklessly or intentionally, or that the defendant knew or should have known the truth of the misrepresentation.   The court finds that the jury could reasonably, logically and legally have reached its conclusion from the evidence viewed most favorably to the plaintiffs.

The court further instructed the jury that the plaintiffs were seeking an award of punitive damages, which would be awarded if they found from the facts established that the defendant's conduct was with reckless indifference to the rights of the plaintiffs, and was in fact outrageous.   Again, in viewing the evidence most favorably to the plaintiffs, the jury could have reasonably and logically reached the conclusion that the conduct of the defendant was done with reckless indifference to the rights of the plaintiffs, or that the conduct was outrageous.   The motion to set aside the verdict as to the fraudulent misrepresentation and negligent misrepresentation counts is denied, as well as denying the defendant's request to set aside the finding of outrageous conduct which allows for an award of punitive damages.

The plaintiffs are seeking punitive damages in the total amount of $107,920.15, which represents $105,073.78 in attorneys fees, and $2,846.37 in non-taxable costs.   Although the fee agreement between the plaintiffs and their counsel was a contingency fee arrangement allowing for counsel to recover one-third of the total judgment, the plaintiffs have performed calculations increasing the attorneys fees in order to allow for a full recovery of the $207,301.18 judgment.   The court inquired of the plaintiffs if they had any authority to support such a method of calculation, and none were found or provided.

Awarding punitive damages is a two-stop process:  First, the court must determine whether the case warrants the granting of punitive damages.   Second, the amount of damages must be determined.  “In awarding punitive damages in the form of attorneys fees, [t]he trial court has broad discretion in determining whether damages are appropriate ․ Punitive damages are awarded when the evidence shows a reckless indifference to the rights of others or an intentional and wanton violation of those rights.”  Bhatia v. Debek, 287 Conn. 397, 420, 948 A.2d 1009 (2008).

Punitive damages “are restricted to cost of litigation less taxable costs of the action being tried and not that of any former trial ․ Further, for an award of punitive damages it is essential that evidence of the cost of the litigation of the case being tried must be offered.”   R. Yules, 6 Connecticut Practice Series:  Trial Practice (2013 2d ed.) § 5.20. “Taxable costs” are fees of the clerk, e.g., docket fees, costs of serving process, etc., while “non-taxable costs” include attorneys fees, medical reports, etc.   The upper limit for an award of punitive damages are the costs of litigation.   Nevertheless, there is no case in Connecticut where less than the limit has been awarded.   “Since no case has been found where a jury has awarded less than the limit, experience teaches that juries seem to treat the limit as the measure of punitive damages.   The plaintiff's attorney can feel secure that if the jury awards punitive damages they will most likely award the limit, i.e. all of the proven non-taxable expenses of suit.”   R. Yules, 6 Connecticut Practice Series, supra, § 5.20. It must be noted, however, that the plaintiff must still prove the non-taxable expenses.

The plaintiffs are seeking attorneys fees which are inconsistent with the fee agreement which called for a contingency fee of one-third of the amount recovered.   This is the only amount authorized by the fee agreement.   The court, having considered the supporting documentation provided, finds the contingency fee agreement to be reasonable as well as the non-taxable costs and expenses.

The court awards punitive damages in the total amount of $71,255.76, which represents $68,409.39 in attorneys fees, and $2,846.37 in non-taxable costs and expenses.

CONCLUSION

The motion to set aside the verdict as to the promissory estoppel count is granted.   The motion to set aside the verdict as to the fraudulent misrepresentation and negligent misrepresentation counts is denied, as well as the finding made by the jury which allows for an award of punitive damages.

Judgment is entered in the amount of $207,301.18, plus punitive damages in the total amount of $71,255.76.

Swienton, J.

FOOTNOTES

FN1. The parties agreed to the withdrawal of the fraud in the inducement count prior to the charge to the jury..  FN1. The parties agreed to the withdrawal of the fraud in the inducement count prior to the charge to the jury.

FN2. The parties agreed that the promissory estoppel count must be set aside because it would be in conflict with the part of the verdict that found in favor of the plaintiff on the breach of contract count, and contrary to the instructions given to the jury by the court..  FN2. The parties agreed that the promissory estoppel count must be set aside because it would be in conflict with the part of the verdict that found in favor of the plaintiff on the breach of contract count, and contrary to the instructions given to the jury by the court.

Swienton, Cynthia K., J.