Kilduff v. Adams, Inc.

• Citation: 219 Conn. 314,593 A.2d 478
• Decision Date: 18 June 1991
• Docket Number: No. 14182,14182
• Court: Connecticut Supreme Court
• Parties: , 11 A.L.R.5th 957 Sandra L. KILDUFF et al. v. ADAMS, INC., et al.

Page 478

593 A.2d 478

219 Conn. 314, 11 A.L.R.5th 957

Sandra L. KILDUFF et al. v. ADAMS, INC., et al.

No. 14182.

Supreme Court of Connecticut.

Argued Feb. 21, 1991.

Decided June 18, 1991.

Edward T. Lynch, Jr., with whom, on the brief, was Suzann L. Beckett, New Britain, for appellants (defendants).

Timothy Sheehan, Farmington, for appellees (plaintiffs).

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

CALLAHAN, Associate Justice.

The plaintiffs, Sandra L. Kilduff and her husband, David J. Kilduff, Sr., ¹ brought this action against the defendants seeking damages for fraud and unjust enrichment. The defendants are Adams, Inc., a Connecticut corporation, and Bernard F. Adams and his wife, Violet Adams, both of whom are officers of Adams, Inc. The action arose out of fraudulent misrepresentations allegedly made by the Adamses that enabled the corporate defendant to take title to the plaintiffs' house pursuant to foreclosure proceedings, thereby forcing the Kilduffs and their three children from their home. The trial court, Maloney, J., granted the defendants' motion to strike the unjust enrichment count but denied the motion as to the fraud count. The jury answered special interrogatories and returned a verdict in favor of the three plaintiffs for economic damages in the amount of $45,000. The jury also awarded Sandra Kilduff damages in the amount of $5000 for emotional distress and awarded Sandra and David Kilduff punitive damages in the amount of $16,000. The trial court, D Dorsey, J., denied the defendants' motion to set aside the verdict and their motion for remittitur. The defendants filed an appeal in the Appellate Court, and we transferred the matter to this court pursuant to Practice Book § 4023. We now affirm the judgment of the trial court.

The jury reasonably could have found the following facts. In 1983, the plaintiffs began falling behind in the payments on the mortgage of their home in Berlin when the Social Security Administration terminated the disability income benefits received by David Kilduff for a back injury that prevented him from working. While his appeal of that termination was pending, Connecticut Housing Finance Authority (CHFA), the mortgagee, brought a foreclosure action against the plaintiffs and five other parties who held liens on the plaintiffs' property. One of the lienholders was Adams, Inc., which had operated a store under the name of House of Adams and had sold furniture to the plaintiffs on credit several years earlier. The amount of the judgment lien held by Adams, Inc., was $1012.62. ² On November 26, 1984, a judgment of strict foreclosure was rendered for CHFA, and the court set September 3, 1985, as the law day for the plaintiffs in order to give them a significant period of time within which to resolve the Social Security appeal. The law days for the five lienholders were set for the following week, with the final law day of September 10, 1985, assigned to Adams, Inc.

Prior to September 3, 1985, the Social Security Administration reinstated David Kilduff's disability income benefits and agreed to pay retroactive benefits for the period when those benefits had been terminated. By the end of August, 1985, the plaintiffs had received approximately $9000 in retroactive benefits, and Sandra Kilduff reported this fact to the attorney who represented them in the foreclosure action, so that he could take the steps necessary to avoid foreclosure. Their attorney failed, however, to take any action to open the foreclosure judgment in order to extend the plaintiffs' law day of September 3, 1985. After learning on September 4 or 5 that Adams, Inc., intended to redeem, the attorney advised Sandra Kilduff to "bundle up" her family and go see Bernard Adams to explain her family's plight and to request that he not take their home.

On September 6, the plaintiffs and two of their children went to the Adamses' home and asked Bernard Adams if he was going to take their house. Bernard Adams said that he only wanted the money he was owed, not their house. When Sandra Kilduff offered to pay him the outstanding debt with the Social Security checks she had brought, Bernard Adams refused the payment, explaining that he wanted to contact his attorney to learn the exact amount due. ³ Neither of the Adamses mentioned that on the two days prior to the plaintiffs' visit, Bernard Adams had inspected the Kilduff home three times ⁴ and that earlier in the day on September 6 he had delivered a check to his attorney to effect the redemption of the plaintiffs' home.

On the weekend of September 7 and 8, 1985, Sandra Kilduff called the Adamses' home several times and was told by the defendants that she would be informed on September 9 of the amount due Adams, Inc. The defendants never informed the plaintiffs of this amount. On September 10, Adams, Inc., obtained title to the Kilduff home by paying $49,410.34 to CHFA and receiving a satisfaction of judgment. The Kilduff family was forced to leave their home at the beginning of October, 1985. Approximately four months later, Adams, Inc., sold the house for $100,000.

In 1986, the plaintiffs filed for bankruptcy. The following year the plaintiffs brought an action against their former attorney for negligence, breach of contract and fraud. The damages sought in that suit were the same as those sought in the fraud count brought in the present case, with the exception that the Kilduff children were also named as plaintiffs in the former suit and sought damages for emotional distress resulting from the attorney's alleged negligence. The plaintiffs received $125,000 when this suit was settled prior to trial.

In this appeal, the defendants challenge the trial court's denial of their motion to set aside the verdict and their motion for remittitur on numerous grounds, and also assert that several aspects of the court's charge to the jury were incorrect. ⁵ In addition, the defendants contend that the admission of a psychiatric report concerning Sandra Kilduff was improper. We reject each of these claims.

I

The defendants claim that the trial court should have set aside the verdict because the plaintiffs had no interest in their home after their law day passed on September 3, 1985, and, therefore, that they could have suffered no legally cognizable injury from the misrepresentations that subsequently were made on September 6, 1985. We disagree.

The dispositive issue in determining if the plaintiffs were in fact injured by the defendants' conduct is whether the plaintiffs lost a viable opportunity to retain their interest in their home that they otherwise would have pursued had the misrepresentations not been made. To make that determination, a brief review of the relevant facts is necessary. Sandra Kilduff told her attorney that Bernard Adams had said that he did not intend to take their home. The attorney testified that, if he had known that Adams, Inc., intended to redeem, he would have pursued one or both of the following options: (1) filing a bankruptcy petition; or (2) filing a motion to extend the law day prior to September 10, 1985, and, if that motion had been denied, filing an appeal of the denial. A loan manager for CHFA testified that, given the significant amount of equity that the plaintiffs had in their home, CHFA would have given consideration to reinstating the plaintiffs' mortgage even after the passing of their law day on September 3, 1985. Finally, Sandra Kilduff testified that she had contacted all of the other lienholders to explain the plaintiffs' predicament and stated that each of these parties had agreed not to redeem the property and had agreed to make arrangements for a payment schedule. In fact, none of those parties exercised their redemption rights on their respective law days.

If the plaintiffs had filed a bankruptcy petition prior to the redemption by Adams, Inc., an automatic stay would have been imposed that would have barred temporarily any further proceedings in the foreclosure action, including the defendants' redemption. 11 U.S.C. § 362(a). If the plaintiffs had filed a motion to extend their law day pursuant to General Statutes § 49-15 ⁶ and that motion had been granted, the plaintiffs then would have had an opportunity to make arrangements for the payment of the lienholders and an opportunity to arrange with CHFA to reinstate the mortgage.

In summary, there is sufficient evidence in the record to demonstrate that the plaintiffs would have been able to retain their interest in their home had they pursued one or both of the procedures indicated. If either of these courses of action had been pursued successfully, Adams, Inc., would not have been able to obtain absolute title to the property on September 10, 1985. Because the plaintiffs did not pursue the options available to protect their ownership rights as a result of the Adamses' misrepresentations, we reject the defendants' claim that the plaintiffs suffered no injury as a matter of law. ⁷

II

The defendants also assert that the plaintiffs are barred from seeking damages in an action at law for their misrepresentations because the plaintiffs did not pursue the following alternative remedies: (1) filing an action in equity to obtain relief from the operation of the foreclosure judgment after title became absolute in the defendants; see Crane v. Loomis, 128 Conn. 697, 700, 25 A.2d 650 (1942); Hoey v. Investors' Mortgage & Guaranty Co., 118 Conn. 226, 230, 171 A. 438 (1934); Merry-Go-Round Enterprises, Inc. v. Molnar, 10 Conn.App. 160, 162 n. 1, 521 A.2d 1065 (1987); or (2) seeking to have the bankruptcy trustee void the transfer of title to their home to Adams, Inc., on the grounds that the transfer was a fraudulent conveyance. ⁸ We need not speculate on the likelihood of success of such alternative remedies ⁹ because the defendants are unable to cite any authority, and our research has revealed none, to support their claim that the...