Hartford Nat. Bank and Trust Co. v. DiFazio, 3120

• Decision Date: 25 March 1986
• Docket Number: No. 3120,3120
• Citation: 506 A.2d 1069,6 Conn.App. 576
• Court: Connecticut Court of Appeals
• Parties: HARTFORD NATIONAL BANK AND TRUST COMPANY v. Paul T. DiFAZIO et al.

Page 1069

506 A.2d 1069

6 Conn.App. 576

HARTFORD NATIONAL BANK AND TRUST COMPANY v. Paul T. DiFAZIO et al.

No. 3120.

Appellate Court of Connecticut.

Argued Nov. 13, 1985.

Decided March 25, 1986.

Robert L. Hirtle, Jr., Hartford, for appellants (defendants).

Thelma A. Santos, with whom were Stephen R. Humphrey and Christine I. Andrew, Hartford, for appellee (plaintiff).

Before HULL, DALY and BIELUCH, JJ.

BIELUCH, Judge.

This appeal arises out of the second trial on the defendants' counterclaim against the plaintiff bank. ¹ The defendants claim as error the trial judge's failure to recuse himself and a variety of subsequent evidentiary issues arising out of the retrial. We find no error.

The defendants, Paul T. DiFazio and his mother, Edith A. DiFazio, were the owners of a five-building apartment complex located in the city of Hartford known as Broadview Gardens. The plaintiff bank financed construction by a mortgage loan on the complex. In 1973, as a result of increasing losses from the project, the DiFazios attempted to convert the apartment complex into condominium units with the assistance of state and federal "home ownership" programs. Pursuant to these programs, the Connecticut housing finance authority (CHFA) was to provide mortgages to the purchasers of individual condominium units to be insured by the federal department of housing and urban development (HUD). HUD imposed conditions upon the project before agreeing to provide mortgage insurance. These conditions included, among others, requirements that the DiFazios (1) complete capital improvements valued at nearly $100,000; (2) settle all outstanding financial obligations prior to the closing of the first sale; and (3) presell 80 percent of the value of the units in the complex. This last requirement was the major condition and, on application of the defendants, was later reduced by HUD to 65 percent of each type of unit involved in the project. HUD's commitment to provide insurance for the venture, if these conditions were met, was issued for one year, but was extendable if circumstances dictated.

The defendants employed, as their agent for the sale of the units, Invest Management Group, Inc. In 1974, after another processing agent withdrew, the plaintiff bank undertook to handle the processing of condominium purchase applications for an origination fee of .75 percent of the principal amount of mortgages closed. The bank's first mortgage was then in default. The plaintiff assigned Thomas Kelly, a junior mortgage official, to the responsibility of screening applications. During his association with the defendants for about three months, Kelly spent the greater portion of his time embezzling in excess of $100,000 from the bank until he departed on a vacation from which he never returned. ² When he voluntarily left the bank and his responsibility to the defendants, Kelly took with him their file containing unprocessed mortgage applications submitted to the bank by Invest. These documents were subsequently recovered a few weeks later from a Hartford parking garage. The bank then assigned another of its officers, William McCue, in replacement for Kelly, to process the condominium applications. McCue retained this duty until the condominium conversion project was abandoned in January, 1975, no sale of a condominium unit having been completed.

In August, 1975, the present action was instituted by the bank to foreclose the defendants' mortgage. The defendants counterclaimed against the plaintiff seeking damages for the failure of the condominium project. After trial, judgment was rendered for the plaintiff on the foreclosure and also on the counterclaim. The defendants appealed only from the judgment on their counterclaim. By its decision, reported in 177 Conn. 34, 411 A.2d 8 (1979), the Supreme Court remanded the counterclaim for a new trial.

On retrial, the court, Gaffney, J., held that Kelly's failure to process the applications while he pursued his embezzlement scheme was not a material factor in the failure of the defendants' venture. Rather, the court concluded that Kelly's role in the project's collapse was "of only peripheral significance," and that the true cause of the failure of the defendants' condominium conversion project was their unwillingness and financial inability to comply with HUD's preconditions for mortgage insurance to finance the unit sales, especially its requirement "that the total outstanding financial obligations [which] are in the neighborhood of $780,000 ... would have to be settled prior to the closing of the first sale."

The defendants' first claim of error is that Judge Gaffney should have granted their motion that he recuse himself from trying the case. In support of this assignment, they recite a long litany of the political rivalry between the Gaffney and DiFazio families in New Britain. They also maintain that Judge Gaffney was acquainted with William McCue, the plaintiff's officer, who was placed in charge of the mortgage applications upon Kelly's abandonment of his employment and who was a principal witness in the case. The defendants failed to support these allegations at trial, with the exception of Judge Gaffney's acquaintance with the DiFazio family and McCue. Counsel for the defendants stated, prior to the introduction of evidence at trial, that Pasquale DiFazio, husband of the defendant Edith A. DiFazio and father of the defendant Paul T. DiFazio, ³ "recalled that he had been acquainted with you and other members of the Gaffney family over the years, and was also under the impression that Your Honor was acquainted with Mr. William McCue, who will be a witness in the case." In response to the defendants' motion for rectification of this appeal, the court filed an addendum to its memorandum of decision, stating as follows: "Counsel did not elaborate further on the ground of the motion or request permission to present evidence in reference thereto. Moreover, at no time was it expressly claimed that Mr. DiFazio's acquaintanceship with the court and other family members or the court's acquaintanceship with witness-McCue would cause the court to become biased or infringe on the appearance of impartiality. Papa v. New Haven Federation of Teachers, 186 Conn. 725, 744-46 (1982)." (Footnote omitted.)

On the basis of the record before us, we are unable to conclude that Judge Gaffney erred in failing to recuse himself. We cannot go beyond the proper record before us in the determination of issues presented on appeal. Grunschlag v. Ethel Walker School, Inc., 189 Conn. 316, 320, 455 A.2d 1332 (1983); Burkert v. Petrol Plus of Naugatuck, Inc., 5 Conn.App. 296, 300 n. 3, 497 A.2d 1027 (1985). ⁴

While proof of actual bias is not required in order to obtain a judge's recusal; Cameron v. Cameron, 187 Conn. 163, 170, 444 A.2d 915 (1982); the record must "give fair support to [the] claim [of actual bias]." Szypula v. Szypula, 2 Conn.App. 650, 656, 482 A.2d 85 (1984). The mere assertion of an acquaintance between the court and two of the witnesses before it, in this case, constitutes nothing more than "vague and unverified assertions of opinion and speculation" regarding the court's impartiality. Id.

In Cameron v. Cameron, supra, the court was faced with such an undeniable record of the trial court's actual bias toward the defendant that review of the claim, even under the "plain error" doctrine of Practice Book § 3063, mandated reversal. Id., 187 Conn. 168-71, 444 A.2d 915. In the present case, however, the record does not even indicate the presence of a situation which would justify the necessary "suspicion as to the fairness of the court's administration of justice" which is required in order to make a claim of actual bias. Krattenstein v. G. Fox & Co., 155 Conn. 609, 615, 236 A.2d 466 (1967). Hence, we cannot find error based upon the record before us. ⁵

With regard to two of the defendants' other claims of error, specifically claims eight and nine of the defendants' brief asserting that the trial court gave undue weight to the HUD presale requirements and the testimony of Joseph DiPaolo, an employee of the plaintiff, we note that these claims were not noticed in the defendants' preliminary statement of issues as required by Practice Book § 3012(a). We, therefore, decline to review those claims.

Of the remaining claims of error, the first to be considered is the claim that the court gave undue weight to the testimony of Barbara Kamanitz, an employee of Invest, concerning the reasons she assigned, in a letter to the defendants' counsel, for the project's failure, ⁶ and that the court ignored the evidence offered by the defendants that Kamanitz was pressured by the plaintiff not to disclose that the negligence of the bank and the fraud of its employee precipitated the project's failure. In evaluating the evidence, the court found the contents of this letter to be "particularly illuminating." The court, in its memorandum of decision, noted that "[t]he defendants are critical of the letter which they assert was orchestrated by Richard Clinton, an officer of the Bank, who insisted it contain no reference to Kelly and whatever responsibility might be attributable to him for failure of the project." Nonetheless, it found as follows: "Apart from the lack of reference to the role of Thomas Kelly in the collapse of the project, a role which this court deems of only peripheral significance, the court perceives Miss Kamanitz's letter as an honest and straight-forward statement of fact. Her observations, particularly the first quoted paragraph, constitute a valid appraisal of built-in problems which, it soon become apparent, were of unsurmountable magnitude."

It has long been held that the evaluation of witnesses and their credibility is peculiarly within the province of the trier of fact. Robert S. Weiss & Co. v. Mullins, 196 Conn. 614, 621, 495 A.2d 1006 (1985); Jazlowiecki v. Cyr, 4 Conn.App. 76, 77, 492...