Lewis v. CHELSEA GCA REALTY

• Decision Date: 28 December 2004
• Docket Number: No. 23924.,23924.
• Citation: 86 Conn.App. 596,862 A.2d 368
• Court: Connecticut Court of Appeals
• Parties: Walter J. LEWIS, Jr. v. CHELSEA G.C.A. REALTY PARTNERSHIP, L.P.

862 A.2d 368

86 Conn.App. 596

Walter J. LEWIS, Jr. v. CHELSEA G.C.A. REALTY PARTNERSHIP, L.P.

No. 23924.

Appellate Court of Connecticut.

Argued September 14, 2004.

Decided December 28, 2004.

Norman J. Voog, with whom, on the brief, were Christopher J. Molyneaux, Ridgefield, and Paul R. Kraus, for the appellant (plaintiff).

James V. Somers, with whom were Patrick M. Birney and, on the brief, Joseph G. Fortner Jr., and Regen O'Malley, Hartford, for the appellee (defendant).

DRANGINIS, WEST and DIPENTIMA, Js.

DIPENTIMA, J.

The plaintiff, Walter J. Lewis, Jr., appeals from the judgment of the trial court rendered after it granted the motion for summary judgment filed by the defendant, Chelsea G.C.A. Realty Partnership, L.P. The plaintiff claims that the court (1) incorrectly determined that it lacked subject matter jurisdiction over counts two and three of his complaint, and (2) improperly applied the Noerr-Pennington¹ doctrine to count one of his complaint. We reverse the judgment of the trial court rendered following the granting of the motion for summary judgment and remand the case with direction to dismiss the action.

This case is one of a series arising out of the defendant's development of an outlet mall, Clinton Crossing Factory Stores (Clinton Crossing), in Clinton. The parties first came into conflict in August, 1994, when the plaintiff, a real estate developer and resident of Clinton, joined the Clinton Organization for Responsible Development (citizen group), a citizen group concerned by the defendant's development plans. Although not himself a party, the plaintiff provided funding for the citizen group to appeal, in March, 1995, after the Clinton planning and zoning commission's approval to build Clinton Crossing and, in May, 1995, after the commission's grant of a variance to erect a sign and to permit parking in the surrounding residential areas (zoning appeals). The plaintiff also recommended to the citizen group an attorney, Paul R. Kraus, who had worked for him in the past, to handle the appeals. The Superior Court dismissed both zoning appeals, finding that the plaintiffs named in the appeals lacked standing because none of them owned land that abutted or was within 100 feet of the development. This court granted certification to appeal in both cases. The appeals were subsequently withdrawn.

Concerned by the plaintiff's interference with the development of Clinton Crossing, the defendant sought legal advice in October, 1995, to determine whether the plaintiff's actions violated federal or state law. Once counsel discovered that the plaintiff had filed a bankruptcy petition in the United States Bankruptcy Court for the District of Connecticut in September, 1995, counsel recommended that the defendant file a claim therein, alleging violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. In January, 1996, the defendant filed an adversary proceeding under § 523(a)(6) of the Bankruptcy Code, objecting to the bankruptcy discharge of the debt allegedly owed by the plaintiff to the defendant as a result of the plaintiff's CUTPA violations (adversary proceeding).

While the adversary proceeding was pending, the plaintiff filed this action in July, 1996. The plaintiff alleged violations of CUTPA in that the defendant's adversary proceeding in the Bankruptcy Court and other activities deprived him of his counsel, Kraus, impaired his ability to work as a developer in Clinton, and prevented him from exercising his rights as a resident of Clinton to ensure that the zoning regulations and wetlands laws were followed (count one). During the pendency of this case, the defendant withdrew its adversary proceeding with prejudice.² The plaintiff amended his complaint in November, 1998, adding a second count alleging a vexatious litigation claim under General Statutes § 52-568 and a third count alleging a violation of CUTPA, both based on the adversary proceeding.

At the close of pleadings, the defendant filed a motion for summary judgment on the grounds that the activities alleged in all three counts of the complaint were protected by the Noerr-Pennington doctrine, that the defendant had established an advice of counsel defense to counts two and three, and that counts two and three were preempted by bankruptcy law. The court granted the defendant's motion, concluding that the Noerr-Pennington doctrine barred count one and that bankruptcy law preempted counts two and three. This appeal followed.

On appeal, the plaintiff claims that the court improperly granted the defendant's motion for summary judgment as to counts two and three on federal preemption grounds because the relevant provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure are directed at disciplining attorneys who bring frivolous actions, but not at compensating the victims of such actions. The plaintiff also claims that the court improperly applied the Noerr-Pennington doctrine in rendering summary judgment as to count one because the activities of the plaintiff, himself, related to the zoning appeals were protected by the doctrine. As alternative grounds for affirmance, the defendant argues that the Noerr-Pennington doctrine bars all three claims, and that counts two and three are barred because it filed the adversary proceeding in reliance on counsel.

As a preliminary matter, we set forth the standard of review. "Our review of a trial court's decision to grant [a] motion for summary judgment is plenary.... 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." (Citation omitted; internal quotation marks omitted.) Ryan Transportation, Inc. v. M & G Associates, 266 Conn. 520, 525, 832 A.2d 1180 (2003).

I

The plaintiff first claims that the court improperly determined that counts two and three of his complaint, which alleged vexatious litigation and violation of CUTPA, were preempted by bankruptcy law. Federal preemption implicates the court's jurisdiction. See Cox Cable Advisory Council v. Dept. of Public Utility Control, 259 Conn. 56, 62, 788 A.2d 29, cert. denied, 537 U.S. 819, 123 S.Ct. 95, 154 L.Ed.2d 25 (2002). "The question of preemption is one of federal law, arising under the supremacy clause of the United States constitution.... Determining whether Congress has exercised its power to preempt state law is a question of legislative intent.... [A]bsent an explicit statement that Congress intends to preempt state law, courts should infer such intent where Congress has legislated comprehensively to occupy an entire field of regulation, leaving no room for the States to supplement federal law ... or where the state law at issue conflicts with federal law, either because it is impossible to comply with both ... or because the state law stands as an obstacle to the accomplishment and execution of congressional objectives...." (Internal quotation marks omitted.) Barbieri v. United Technologies Corp., 255 Conn. 708, 717, 771 A.2d 915 (2001).

The United States constitution grants to Congress the power to establish "uniform Laws on the subject of Bankruptcies throughout the United States...." U.S. Const., art. I, § 8. Congress has given the United States district courts original and exclusive jurisdiction over bankruptcy matters arising under title 11 of the United States Code. 28 U.S.C. § 1334(a). Through the United States Bankruptcy Code, 11 U.S.C. § 101 et. seq., Congress has provided "a comprehensive federal system of penalties and protection to govern the orderly conduct of debtors' affairs and creditors' rights." Eastern Equipment & Services Corp. v. Factory Point National Bank, 236 F.3d 117, 120 (2d Cir.2001). The code "contains remedies for the misuse of the [bankruptcy] process more generally...." (Internal quotation marks omitted.) Astor Holdings, Inc. v. Roski, 325 F. Sup.2d 251, 262 (S.D.N.Y.2003); see 11 U.S.C. § 303(i)(2) (creditors who file involuntary bankruptcy petition in bad faith are liable for damages); 11 U.S.C. § 362(h) (persons who wilfully violate bankruptcy stay are liable for damages). Significantly for the plaintiff's claim before this court, the Federal Rules of Bankruptcy Procedure, promulgated under 28 U.S.C. § 2075, provide a remedy for the bad faith filing of an adversary proceeding. Rule 9011 provides that every filing with the Bankruptcy Court shall be signed by either an attorney or unrepresented party, and that such signature certifies that the filing is made in good faith and not for the purpose of needlessly increasing the cost of litigation.³ Sanctions for violations of the rule "shall [be] impose[d] on the person who signed [the submission], the represented party, or both [and] may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the document, including a reasonable attorney's fee." Fed. R. Bankr.P. 9011(a) (1994). The plaintiff argues that the purpose of rule 9011 is to punish attorneys who bring frivolous lawsuits, not to compensate victims injured by such bad behavior. It may be true that the rule is punitive in nature, but the language of the rule as it existed at the time of the adversary proceeding makes it clear that the plaintiff could have sought in Bankruptcy Court, based on the defendant's alleged bad faith filing of the adversary proceeding, to impose sanctions on the defendant directing payment of expenses and attorney's fees. In addition, the plaintiff could have sought damages under 28 U.S.C. § 1927, which provides that any attorney who "so multiplies the proceedings in any case unreasonably and vexatiously may be required...