Flannery v. Singer Asset Finance Co. Llc, 31285.

Decision Date10 May 2011
Docket NumberNo. 31285.,31285.
Citation17 A.3d 509,128 Conn.App. 507
PartiesJohn D. FLANNERYv.SINGER ASSET FINANCE COMPANY, LLC, et al.
CourtConnecticut Court of Appeals

OPINION TEXT STARTS HERE

Thomas P. Willcutts, Hartford, for the appellant (plaintiff).Eliot B. Gersten, Hartford, with whom, on the brief, was John H. Van Lenten, for the appellee (named defendant).DiPENTIMA, C.J., and ROBINSON and BEAR, Js.BEAR, J.

The plaintiff, John D. Flannery,1 appeals from the summary judgment rendered by the trial court in favor of the defendant Singer Asset Finance Company, LLC.2 On appeal, the plaintiff claims that the court improperly rendered summary judgment after it determined that the plaintiff's claims were barred by the applicable statutes of limitations. We affirm the judgment of the trial court.

The following facts, as set forth in the plaintiff's complaint, which effectively were uncontested for purposes of the motion for summary judgment, and procedural history are relevant to our resolution of this appeal. In 1988, the plaintiff won the Iowa state lottery in a gross amount of $3,000,000, which was to be paid in twenty annual installments of $150,000. The defendant was engaged in the business of, inter alia, purchasing the installment payments of lottery winners by means of providing those winners with lump sum payments. Prior to March of 1999, the defendant had contacted the plaintiff numerous times in unsuccessful attempts to convince him to sell his lottery installments for a discounted lump sum payment. Prior to March 23, 1999, the defendant entered into a business relationship with attorney Glenn MacGrady for the purpose of having MacGrady provide what was purported to be independent professional advice to lottery winners. This purported independent professional advice, however, actually was based on a marketing scheme developed by the defendant to induce lottery winners to sell their installment payments to it by falsely advising them that they could gain significant tax advantages. In furtherance of this business relationship, the defendant arranged for MacGrady to communicate with the plaintiff in an attempt to induce him through these false tax benefit representations to sell his installment payments to the defendant for a discounted lump sum payment.

On March 23, 1999, the plaintiff entered into a retainer agreement with MacGrady's law firm, Pepe & Hazard, LLP (Pepe & Hazard), whereby MacGrady and Pepe & Hazard promised to provide independent legal advice to the plaintiff, thereby creating a fiduciary attorney-client relationship.3 MacGrady, in advancing the marketing scheme of the defendant, then convinced the plaintiff that he would experience substantial tax benefits if he sold his installment payments to the defendant for a discounted lump sum payment. This tax information, however, was false and erroneous. Relying on MacGrady's advice, the plaintiff eventually sold his eight remaining installment payments, valued at $1,200,000, to the defendant for a discounted rate of $868,500. Thereafter, in conformance with the tax advice of MacGrady, which had been based on the defendant's marketing scheme, the plaintiff filed a 1999 tax return listing the full amount of the lump sum payment as the sale of a capital asset, paying only the capital gains tax rate on the amount. In October, 2002, the Internal Revenue Service notified the plaintiff that it did not agree with his treatment of the lump sum payment, and it concluded that the plaintiff had a tax deficiency of $163,523.

The plaintiff contacted MacGrady, who, in furtherance of his business relationship with the defendant, continued to maintain the correctness of the tax advice. MacGrady encouraged the plaintiff to join a group of similarly situated lottery winners who also were challenging the Internal Revenue Service's treatment of their lump sum payments, which group the plaintiff joined. Throughout this entire time, from 1999 through 2002, MacGrady never disclosed to the plaintiff his business relationship with the defendant, nor did the defendant disclose to the plaintiff its relationship with MacGrady.

On July 22, 2005, the plaintiff brought the present action, claiming in relevant part that the conduct of the defendant amounted to (1) aiding and abetting in the breach of a fiduciary duty 4 and (2) a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq.5 In its answer to the complaint, the defendant set forth two special defenses, namely, statutes of limitations and waiver. The plaintiff denied the special defenses and pleaded, by way of avoidance as to the statutes of limitations defenses, estoppel and fraudulent concealment.6 After considerable discovery, the defendant filed a motion for summary judgment. The plaintiff opposed the motion for summary judgment and also filed a Practice Book § 17–47 affidavit.7 The court granted the defendant's motion for summary judgment on June 30, 2009. This appeal followed.

Initially, we set forth our standard of review. Practice Book § 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. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.... The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is ... entitled to judgment as a matter of law.... The test is whether the party moving for summary judgment would be entitled to a directed verdict on the same facts....

[A] party opposing summary judgment must substantiate its adverse claim by showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue.... It is not enough ... for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact ... are insufficient to establish the existence of [an issue of] material fact and, therefore, cannot refute evidence properly presented to the court [in support of a motion for summary judgment].... Our review of the trial court's decision to grant the defendant's motion for summary judgment is plenary.” (Citation omitted; internal quotation marks omitted.) Cadlerock Joint Venture II, L.P. v. Milazzo, 287 Conn. 379, 390, 949 A.2d 450 (2008). “Summary judgment may be granted where the claim is barred by the statute of limitations.” Doty v. Mucci, 238 Conn. 800, 806, 679 A.2d 945 (1996).

“Although allowing a statute of limitations defense may result in meritorious claims being foreclosed, that must be so. A statute of limitations promotes two important interests: (1) it reflects a policy of law, as declared by the legislature, that after a given length of time a [defendant] should be sheltered from liability and furthers the public policy of allowing people, after the lapse of a reasonable time, to plan their affairs with a degree of certainty, free from the disruptive burden of protracted and unknown potential liability ... and (2) to avoid the difficulty in proof and record keeping which suits involving older [claims] impose.” (Internal quotation marks omitted.) Piteo v. Gottier, 112 Conn.App. 441, 450, 963 A.2d 83 (2009).

On appeal, the plaintiff claims that the court improperly concluded that the applicable statutes of limitations were not tolled by the continuing course of conduct doctrine or by the doctrine of fraudulent concealment. We are not persuaded.

The plaintiff pleaded two counts against the defendant, namely, aiding and abetting in the breach of a fiduciary duty and a violation of CUTPA. “Breach of fiduciary duty is a tort action governed by the three year statute of limitations contained within General Statutes § 52–577.” Ahern v. Kappalumakkel, 97 Conn.App. 189, 192 n. 3, 903 A.2d 266 (2006). A CUTPA claim also is subject to a three year statute of limitations. General Statutes § 42–110g (f). The plaintiff claims on appeal that the applicable statutes of limitations were tolled in this case by the continuing course of conduct doctrine or by the doctrine of fraudulent concealment.

[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.... [I]n order [t]o 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 wrong.... Where [our Supreme Court has] 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.... Thus, there must be a determination that a duty existed and then a subsequent determination of whether that duty is continuing.” (Citation omitted; internal quotation marks omitted.) Stuart v. Snyder, 125 Conn.App. 506, 510–11, 8 A.3d 1126 (2010).

Although we agree with the plaintiff that the continuing course of conduct doctrine can toll the statute of limitations set forth in § 52–577, we also agree with the trial court that the plaintiff did not invoke this doctrine either in his complaint or in his pleading in avoidance. See Practice Book § 10–57 (a [m]atter in avoidance of affirmative allegations in an answer or counterclaim shall be specially pleaded in the reply”). As we stated in Beckenstein Enterprises–Prestige Park, LLC v. Keller, 115 Conn.App. 680, 688, 974 A.2d 764, cert. denied, ...

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    ...breach of contract or to have intentionally concealed such a cause of action from the plaintiff. See Flannery v. Singer Asset Finance Co., LLC , 128 Conn. App. 507, 517, 17 A.3d 509 (2011) (explaining that merely concealing existence of wrongdoing is insufficient to establish that defendant......
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