Bound Brook Associates v. City of Norwalk

• Decision Date: 18 February 1986
• Court: Connecticut Supreme Court
• Parties: BOUND BROOK ASSOCIATES et al. v. CITY OF NORWALK et al. *

Page 1047

504 A.2d 1047

198 Conn. 660

BOUND BROOK ASSOCIATES et al. v. CITY OF NORWALK et al. ^*

Supreme Court of Connecticut.

Argued Dec. 12, 1985.

Decided Feb. 18, 1986.

James V. Minor, Deputy Corp. Counsel, for appellant (named defendant).

Paul L. Blawie, with whom, on brief, was Karen Reynolds, for appellant (defendant William R. Guarnieri).

Alan R. Spirer and Robert M. Davidson, with whom was Karan Spirer, for appellees (plaintiffs).

Philip M. Block filed a brief as amicus curiae.

Before PETERS, C.J., and HEALEY, SHEA, DANNEHY and SANTANIELLO, JJ.

PETERS, Chief Justice.

The principal issue on this appeal is whether the defendants, the city of Norwalk (hereinafter Norwalk), and William R. Guarnieri, the former chief building inspector for Norwalk, fraudulently concealed the existence of a cause of action so as to toll the running of a statute of limitations. The plaintiffs, owners and former owners of houses in the Bound Brook Estates subdivision in Norwalk, commenced a suit against the defendants ¹ by complaint dated September 19, 1978. In that complaint, the plaintiffs alleged that the defendants were liable for negligence, nuisance, negligent nuisance, and fraudulent and reckless misrepresentations in connection with the construction of houses purchased by the plaintiffs. In order to avoid the defendants' special defenses that the plaintiffs' cause of action was time-barred, the plaintiffs affirmatively pleaded, pursuant to General Statutes § 52-595, ² that the defendants had "fraudulently concealed from the plaintiffs [the] existence of their cause of action." Following a lengthy trial, the defendants unsuccessfully moved for directed verdicts in their favor. Subsequently, the jury returned verdicts for the plaintiffs against Norwalk and Guarnieri on all counts, ³ finding that, although the action had been brought more than three years from the acts and omissions in question, the statute of limitations had been tolled by fraudulent concealment on the part of the defendants. ⁴ Compensatory damages of approximately $2.3 million were awarded to the plaintiffs. Claiming that there was insufficient evidence to support the verdicts, the defendants moved the trial court to set aside the verdicts and to render judgment for the defendants notwithstanding the jury's verdicts. These motions were denied by the trial court on May 9, 1983, and the defendants have appealed. We find error.

The underlying facts are not in dispute. In 1965 and 1966, Bound Brook Estates, Inc. (hereinafter Bound Brook), received the approval of the city of Norwalk's planning commission and its common council to build a residential subdivision of 102 homes in Norwalk. Part of the land to be developed was a swamp composed of "soft, wet, marshy" soils. Bound Brook hired Harry E. Bryan, a well known professional engineer and surveyor of excellent reputation in the area, to plan the subdivision. Because of the soil conditions, Bryan determined that many of the houses would have to be built on pilings.

Subsequently, Raymond Wennik, president of Bound Brook, engineer Bryan, the defendant Guarnieri, and a deputy building inspector met to discuss the pending construction. At the time, Guarnieri had been chief building inspector of Norwalk for approximately eight years. Although he had been involved in the residential construction business for a number of years, Guarnieri had no formal education in either engineering or architecture. Guarnieri discussed with Wennik and Bryan the building code ⁵ requirements for the construction of piling foundations, but indicated that neither he nor anyone on his staff had the professional engineering expertise necessary to evaluate or supervise the design and installation of the pilings. ⁶ Relying on provisions of the building code which permit the building inspector to accept reports and inspections by qualified experts outside the building department, Guarnieri arranged to have engineer Bryan assume responsibility for supervising the installation of the pilings and for certifying their compliance with the building code upon completion.

Following this meeting, Guarnieri issued building permits for the project, and construction began, with untreated wood pilings used to support many houses. In accordance with his regular practice, Guarnieri opened a separate file in the building department office for each house to be constructed. When completed, each file contained the building permit, with a notation on its face that the house had a wood pile foundation; the certificate of occupancy signed by Guarnieri, certifying substantial compliance with the building and zoning regulations of Norwalk; the inspection field sheet, recording periodic inspections of the house during the construction process; a plot plan; and a letter signed and sealed by engineer Bryan, ⁷ certifying that the piling foundation had been constructed in accordance with both the building code and the piling plan on file in the building department. These files were open to public inspection. In mid-1969, construction on the houses ended and Guarnieri issued the final certificates of occupancy.

Shortly after construction had been completed, several houses in the Bound Brook subdivision developed serious settlement problems, necessitating the repiling of three of them by Bound Brook. Bound Brook neither applied for nor obtained building permits for this work. During the next few years, settlement problems of varying degrees developed in some additional houses, culminating in the collapse in 1976 of the ground floor of one house.

In 1977, Norwalk commissioned an engineering study of all the houses in the subdivision to determine the cause and extent of the problem and to attempt to find solutions. The study concluded that the wood pile foundations had been improperly designed, and that the use of untreated wood pilings had been inappropriate because of the fluctuating water table in the area. Following the release of this report, the plaintiffs filed the instant action.

On appeal from the judgment against them, Norwalk and Guarnieri both claim that the trial court erred in failing to direct a verdict in their favor, or to render judgment notwithstanding the verdicts, because the evidence produced at trial was insufficient to establish that they had fraudulently concealed from the plaintiffs the existence of a cause of action. Without proof of fraudulent concealment, the plaintiffs' cause of action was barred by the statute of limitations. ⁸ Because we find this claim of error to be well taken, we need not address the defendants' other assignments of error which challenge the trial court's rulings with regard to certain evidentiary matters, with regard to the instructions given to the jury, and with regard to sovereign immunity as a defense to Norwalk. ⁹

To establish that the defendants had fraudulently concealed the existence of their cause of action and so had tolled the statute of limitations, the plaintiffs had the burden of proving that the defendants were aware of the facts necessary to establish this cause of action; Puro v. Henry, 188 Conn. 301, 311, 449 A.2d 176 (1982); and that they had intentionally concealed those facts from the plaintiffs. ¹⁰ Zimmerer v. G.E. Company, 126 F.Supp. 690, 693 (D.Conn.1954); Lippitt v. Ashley, 89 Conn. 451, 480, 94 A. 995 (1915); see note, "Fraudulent Concealment of a Right of Action and the Statute of Limitations," 43 Harv.L.Rev. 471, 474 (1929); comment, "The Application of the Doctrine of Fraudulent Concealment to Modern Federal Trade Conspiracy Cases," 14 Conn.L.Rev. 115, 127-28 (1981). The defendants' actions must have been "directed to the very point of obtaining the delay [in filing the action] of which [they] afterward [seek] to take advantage by pleading the statute." Lippitt v. Ashley, supra, 89 Conn. at 480, 94 A. 995; Zimmerer v. G.E. Company, supra, 693. To meet this burden, it was not sufficient for the plaintiffs to prove merely that it was more likely than not that the defendants had concealed the cause of action. Instead, the plaintiffs had to prove fraudulent concealment by the more exacting standard of " 'clear, precise, and unequivocal' " evidence; Beckenstein v. Potter & Carrier, Inc., 191 Conn. 150, 163, 464 A.2d 18 (1983); Puro v. Henry, supra, 188 Conn. 308; Alaimo v. Royer, 188 Conn. 36, 39, 448 A.2d 207 (1982).

The plaintiffs claim that they sustained this burden by establishing: (1) that Guarnieri, and through him Norwalk, issued the building permits and certificates of occupancy without first obtaining test results and affidavits required by the Building Code; (2) that a deputy building inspector signed misleading field inspection reports and filed them in the building department office; (3) that Guarnieri permitted the repiling of several houses without requiring building permits; and (4) that both Guarnieri and Norwalk later failed to investigate or to warn the plaintiffs or to revoke the certificates of occupancy when they became aware that settlement problems had developed in a number of houses. The defendants, on the other hand, claim that, even if these allegations were true, they do not establish that the defendants intended to conceal the cause of action from the plaintiffs. Since intent to conceal is an essential element of fraudulent concealment, they maintain that the plaintiffs have not sustained their burden of proof, and that the trial court erred in denying their motions for directed verdicts and for judgment notwithstanding the jury's verdicts.

Our review of a trial court's refusal to direct a verdict or to render judgment notwithstanding the verdict takes place within carefully defined parameters. We must consider the evidence, including reasonable inferences which may be drawn therefrom, in the light most favorable to the parties who were successful at trial; Bleich v. Ortiz, 196 Conn. 498, 501, 493 A.2d 236 (1985); giving particular...