Fichera v. Mine Hill Corp., 13292

• Decision Date: 26 April 1988
• Docket Number: No. 13292,13292
• Citation: 207 Conn. 204,541 A.2d 472
• Court: Connecticut Supreme Court
• Parties: Anthony S. FICHERA et al. v. MINE HILL CORPORATION et al.

Page 472

541 A.2d 472

207 Conn. 204

Anthony S. FICHERA et al. v. MINE HILL CORPORATION et al.

No. 13292.

Supreme Court of Connecticut.

Argued Feb. 3, 1988.

Decided April 26, 1988.

Sharon Wicks Dornfeld, Danbury, for appellants (defendants).

Roberta Napolitano, Stamford, for appellees (plaintiffs).

Before PETERS, C.J., and SHEA, CALLAHAN, GLASS and HULL, JJ.

SHEA, Associate Justice.

In this action for damages and other relief based upon the false representations of the defendants, who had formed a joint venture for the development of a recreational real estate subdivision, Hon. Milton J. Herman, a state trial referee acting as the trial court, rendered judgment for the plaintiffs to recover damages of $28,000 and an attorney's fee of $10,000 on the count of the complaint alleging a violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. (CUTPA). The court did not resolve the two remaining counts alleging fraudulent misrepresentations and breach of contract. In their appeal from the judgment, the defendants claim that the court erred (1) in failing to sustain their special defense that the three year CUTPA statute of limitations, General Statutes § 42-110g(f), ¹ barred the count on which the judgment had been rendered; and (2) in assessing damages by using an inappropriate methodology and by relying upon insubstantial evidence. We agree with the defendants that the court erred in failing to conclude that § 42-110g(f) precluded the CUTPA count. Accordingly, we do not address the issues relating to damages but remand the case for further proceedings.

The facts essential to the disposition of the appeal are undisputed. In February, 1979, the defendants, Mine Hill Corporation and Danbury Savings and Loan Association, formed a joint venture for the purpose of developing a real estate subdivision known as Scatacook Shores on the Shepaug River in the town of Southbury. The plaintiffs, Anthony and Gladys Fichera, had visited this development in August, 1978, before formation of the joint venture, in response to an advertisement placed in a Bridgeport newspaper by a real estate agent acting on behalf of the defendants. This advertisement offered lots for sale at a "Super Executive area in Southbury" as a private recreational development with "5 private acres of waterfront reserved for your fishing, swimming and boating needs." A sign, which the plaintiffs had observed when they visited the property in 1978, indicated, in addition to the items mentioned in the newspaper advertisement, that the development would include such features as a recreation area, beach, boat ramp, and community building with dining facilities. The defendants' sales agents represented to the plaintiffs that a marina, club house, parking area, and town approved road would also be constructed. A brochure given to the plaintiffs contained representations similar to those in the newspaper advertisement and those made by the defendants' sales agents.

On May 29, 1979, the plaintiffs purchased four lots at Scatacook Shores from the defendants for $168,000. The plaintiff Anthony Fichera testified that at the closing of title the defendants' attorney had represented that all of the recreational facilities would be completed by May, 1980. He testified also that at some time after that date, through his attorney, he had attempted unsuccessfully to contact the defendants regarding the promised improvements. It was not until a short while after June 16, 1981, however, that he learned, from a letter written by the attorneys then representing the defendants to the Southbury planning commission, that the defendants did not intend to construct the community recreation center for which they had obtained a special exception in 1974. In this letter the defendants maintained that the community center was "a separate and distinct project to be undertaken by the homeowners' association if they decide to do it." The trial court found that, until the plaintiffs became aware of this letter, they had no "firm indication that the improvements would not be made."

In rendering judgment for the plaintiffs on the CUTPA count, the court found that the defendants had never intended to build "all of the things contained in the brochure" that had been given to the plaintiffs before they made their purchase, but had "never notified purchasers of lots that the defendants did not intend to complete the development as represented." Finding also a public nexus based upon the distribution of the brochure to the public and the advertisement in a newspaper, ² the court concluded that this conduct was a violation of § 42-110b(a) of CUTPA "because it offends public policy and has caused substantial injury to the plaintiffs."

The only ground upon which the defendants now contend that the judgment of the trial court should be reversed is the failure to sustain their special defense that the CUTPA cause of action is barred by § 42-110g(f), which provides that an action for damages suffered by a person from a prohibited practice "may not be brought more than three years after the occurrence of a violation of this chapter." This suit was commenced on January 23, 1984, when the defendants were served, a date more than three years after May 29, 1979, when the plaintiffs had purchased their lots in reliance upon the defendants' misrepresentations as found by the trial court.

In rejecting the statute of limitations defense, the court relied upon a statement in Handler v. Remington Arms Co., 144 Conn. 316, 321, 130 A.2d 793 (1957), that "[w]hen the wrong sued upon consists of a continuing course of conduct, the statute does not begin to run until that course of conduct is completed." See Giglio v. Connecticut Light & Power Co., 180 Conn. 230, 241, 429 A.2d 486 (1980). The court concluded that, although the misrepresentations by the defendants had been made in 1978 and 1979, their "course of conduct was not completed until [June] 16, 1981," ³ when, through their attorneys, they notified the Southbury planning commission that they did not intend to build the community recreation center. Accordingly, the court held that "[s]ince the plaintiffs brought this action in January of 1984, the statute of limitations is not a bar to this action."

I

To support a finding of a "continuing course of conduct" that may toll the statute of limitations there must be evidence of the breach of a duty that remained in existence after commission of the original wrong related thereto. That duty must not have terminated prior to commencement of the period allowed for bringing an action for such a wrong. In Bartha v. Waterbury House Wrecking Co., 190 Conn. 8, 13, 459 A.2d 115 (1983), we held that the alleged negligence of a contractor in failing to safeguard a dangerous hole left on the job site after it had completed its work "would not in itself establish that it had a continuing duty to warn of the danger or to safeguard the hole." We affirmed the summary judgment granted by the trial court in that case because the plaintiff had presented no facts, by affidavit or otherwise, that would reasonably have supported an inference that the duty to protect against the hazard left upon the premises extended for any substantial period beyond the time of the contractor's departure from the site. Similarly, in Prokolkin v. General Motors Corporation, 170 Conn. 289, 301, 365 A.2d 1180 (1976), we held that the concept of a continuing "duty to warn" of a defect as a basis for a claim of negligence that would toll the statute of limitations was inapplicable to a products liability action claiming strict liability for the sale of a defective product, where the statute runs from the date of sale, "the act or omission complained of." General Statutes § 52-577.

Where we have upheld a finding that a duty continued to exist after the cessation of the "act or omission" relied upon, there has been evidence of either a special relationship between the parties giving rise to such a continuing duty or some later wrongful conduct of a defendant related to the prior act. See Giglio v. Connecticut Light & Power Co., supra, 180 Conn. at 242, 429 A.2d 486 ("repeated instructions and advice given to the plaintiff by the defendant" concerning a furnace it had previously converted and left in a defective condition); Giambozi v. Peters, 127 Conn. 380, 385, 16 A.2d 833 (1940) ("[w]hen ... injurious consequences arise from a course of treatment [by a physician], the statute does not begin to run until the treatment is terminated"); cf. Handler v. Remington Arms Co., supra (duty to warn of danger of defective cartridge, "an inherently dangerous article," held to continue in existence until time of injury).

The plaintiffs do not claim any relationship with the defendants that would create a duty continuing after the purchase of the lots other than that based upon the unfulfilled promises to construct various improvements upon the land of the defendants reserved as a recreational area. Such a contractual relationship, however, does not create a fiduciary obligation that might have imposed upon the defendants as the perpetrators of a fraud the continuing duty to disclose their prior lack of candor to the plaintiffs. Nor does the circumstance that the plaintiffs were the victims of deception, as the trial court found, impose such a duty of disclosure on the defendants. We are aware of no authority holding that the perpetrator of a fraud involving merely a vendor-vendee relationship has a legal duty to disclose his deceit after its occurrence and that the breach of that duty will toll the statute of limitations. Such a relationship does not give rise to obligations equivalent to those of a fiduciary.

The only subsequent acts of the defendants claimed to be related to the misrepresentations that ceased after the plaintiffs had bought their lots are (1) the continued maintenance of a sign at the...