Dowling v. Finley Associates, Inc.

• Decision Date: 06 April 1999
• Docket Number: (SC 15998)
• Citation: 727 A.2d 1245,248 Conn. 364
• Parties: VINCENT J. DOWLING, SR., ET AL. v. FINLEY ASSOCIATES, INC., ET AL.
• Court: Connecticut Supreme Court

248 Conn. 364

727 A.2d 1245

VINCENT J. DOWLING, SR., ET AL. v. FINLEY ASSOCIATES, INC., ET AL.

(SC 15998)

Supreme Court of Connecticut.

Argued February 17, 1999.

Officially released April 6, 1999.

Callahan, C. J., and Borden, Berdon, Katz and Peters, JS. Richard P. Weinstein, with whom, on the brief, was Nathan P. Schatz, for the appellants (plaintiffs).

R. Bartley Halloran, with whom, on the brief, was Steven S. Berizzi, for the appellees (defendants).

Opinion

KATZ, J.

The principal issue in this certified appeal is whether a general verdict rendered in a prior action may be relied upon as a basis on which to invoke the doctrine of collateral estoppel in a subsequent action between the same parties. We conclude that a general verdict may not serve as a basis for the doctrine of collateral estoppel. Accordingly, we reverse the judgment of the Appellate Court to the contrary.

This appeal arises out of two separate but related actions between the same parties. Judgments were rendered for the defendants in both actions and the appeals from those judgments were consolidated. The following relevant facts were set forth by the Appellate Court in its opinion. "The first action was based on an investment made by the plaintiffs in a real estate project in downtown Hartford. It was commenced in 1992 when the plaintiffs Vincent J. Dowling, Sr., and Vincent J. Dowling, Jr., filed a five count complaint against the defendants George C. Finley and Finley Associates, Inc. Counts one and two alleged violations of the Connecticut Uniform Securities Act (CUSA), General Statutes (Rev. to 1995) § 36-470 et seq.¹ Count three alleged a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. Count four alleged intentional misrepresentation, and count five alleged negligent misrepresentation. The plaintiffs sought monetary damages, rescission and interest. "The defendants filed an answer and raised special defenses based on the applicable statutes of limitation. Count one, which alleged a violation of CUSA and sought the equitable remedy of rescission, was reserved to the court. The plaintiffs withdrew count three, and the remaining counts were tried to a jury, which returned a general verdict for the defendants on January 27, 1995. On the plaintiffs' motion, a mistrial was entered as to count one on January 16, 1996, because a decision had not been rendered within the required 120 day period. See General Statutes § 51-183b.

"The second action, which arose from the same facts as the first, was commenced in 1995, when the plaintiffs filed a two count complaint against the defendants, seeking indemnification of sums paid in a prior settlement.² The trial court granted the defendants' request to file a consolidated motion for summary judgment as to count one of the 1992 action and both counts of the 1995 action.

"The trial court granted the motion for summary judgment as to count one of the 1992 action, finding that the plaintiffs failed to bring their cause of action within the maximum five year limitation period established in General Statutes § 36b-29 (f).³ The court also granted the motion as to both counts of the 1995 action, concluding that these claims were barred by the doctrine of collateral estoppel." Dowling v. Finley Associates, Inc., 49 Conn. App. 330, 331-33, 714 A.2d 694 (1998).

The plaintiffs filed a consolidated appeal to the Appellate Court from the trial court's rendering of summary judgment as to the 1995 action and count one of the 1992 action, claiming that "the trial court improperly (1) determined that count one of the 1992 action was barred by the statute of limitations set forth in § 36b-29 (f) and (2) concluded that the 1995 action was barred by the doctrine of collateral estoppel." Id., 333.

In the first count of the 1992 action, the plaintiffs alleged that the defendants, in violation of CUSA, had held themselves out as financial consultants, sold securities to the plaintiffs without being registered as broker-dealers and concealed the fact that they were receiving a sales commission in connection with the plaintiffs' investment. The Appellate Court concluded that, "[a]lthough the plaintiffs sought equitable relief in count one, they are not exempt from the [five year] time limitations set forth in § 36b-29 (f) because their cause of action was brought pursuant to § 36b-29 (a). Where a party seeks equitable relief pursuant to a cause of action that would also allow that party to seek legal relief, concurrent legal and equitable jurisdiction exists, and the statute of limitations that would be applicable to bar the legal claim also applies to bar the equitable claim.... [B]ecause the plaintiffs filed their complaint more than five years after the alleged CUSA violation, the trial court properly determined that count one of the 1992 action was barred by the statute of limitations set forth in § 36b-29 (f)." (Citations omitted.) Id., 335.

With regard to their second claim on appeal, the plaintiffs first argued that collateral estoppel would not apply because there would be no final judgment in the 1992 action were the Appellate Court to reverse the judgment of the trial court as to count one of the 1992 action and to remand for further proceedings. Because the Appellate Court declined to reverse the 1992 judgment, it concluded that the 1992 judgment was final. Id., 336.

The plaintiffs next argued that "collateral estoppel cannot be applied in cases of general verdicts because it is not possible to ascertain on which facts the jury relied." Id., 336-37. The Appellate Court determined that the doctrine applied to the present case and, accordingly, affirmed the judgment of the trial court. Id., 339.

We granted the plaintiffs petition for certification limited to the following issue: "Did the Appellate Court properly conclude that, with respect to the plaintiffs' 1995 indemnification action, the prior general verdict barred the action because of the doctrine of collateral estoppel?" Dowling v. Finley Associates, Inc., 247 Conn. 907, 720 A.2d 513 (1998). This appeal followed.

In this certified appeal, the plaintiffs again argue that collateral estoppel cannot be applied in cases of general verdicts because it is not possible to ascertain the facts on which the jury relied.⁴ Before deciding this issue, it is incumbent upon the court to revisit some well established principles of law and their relation to one another.⁵

We begin with the standards governing our review of a trial court's decision to grant a motion for summary judgment. "Practice Book § 384 [now § 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.... Miller v. United Technologies Corp., 233 Conn. 732, 744-45, 660 A.2d 810 (1995). In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.... Id., 745. The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law; D.H.R. Construction Co. v. Donnelly, 180 Conn. 430, 434, 429 A.2d 908 (1980); and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact. Practice Book § 381 [now § 17-46].... Suarez v. Dickmont Plastics Corp., 229 Conn. 99, 105, 639 A.2d 507 (1994)." (Internal quotation marks omitted.) Doty v. Mucci, 238 Conn. 800, 805-806, 679 A.2d 945 (1996).

In the 1992 action, the trial court submitted three counts to the jury, each alleging (1) that the defendants had violated the plaintiffs' legal rights by receiving commissions from the sale of securities despite the fact that they were unlicensed and (2) that the defendants had caused damages to the plaintiffs as a result. The defendants denied the plaintiffs' claims of liability and damages and pleaded special defenses to each count on the basis of the applicable statute of limitations.⁶ The jury rendered a general verdict in favor of the defendants on all three counts. We, therefore, turn next to our law on the general verdict rule.

"Under the general verdict rule, if a jury renders a general verdict for one party, and no party requests interrogatories, an appellate court will presume that the jury found every issue in favor of the prevailing party.... Thus, in a case in which the general verdict rule operates, if any ground for the verdict is proper, the verdict must stand; only if every ground is improper does the verdict fall.... The rule rests on the policy of the conservation of judicial resources, at both the appellate and trial levels." (Citations omitted; internal quotation marks omitted.) Gajewski v. Pavelo, 229 Conn. 829, 836, 643 A.2d 1276 (1994).

"On the appellate level, the rule relieves an appellate court from the necessity of adjudicating claims of error that may not arise from the actual source of the jury verdict that is under appellate review. In a typical general verdict rule case, the record is silent regarding whether the jury verdict resulted from the issue that the appellant seeks to have adjudicated. Declining in such a case to afford appellate scrutiny of the appellant's claims is consistent with the general principle of appellate jurisprudence that it is the appellant's responsibility to provide a record upon which reversible error may be predicated. See, e.g., McLaughlin v. Bronson, 206 Conn. 267, 277-78, 537 A.2d 1004 (1988).

"In the trial court, the rule relieves the judicial system from the necessity of affording a second trial if the result of the first trial potentially did not depend upon the trial errors claimed by the appellant. Thus,...