Robbins v. Physicians for Women's Health, LLC, No. 31816.

Decision Date21 February 2012
Docket NumberNo. 31816.
Citation38 A.3d 142,133 Conn.App. 577
CourtConnecticut Court of Appeals
PartiesLisa ROBBINS, Administratrix (Estate of Elijah Jamal Hezekia Robbins Martin), et al. v. PHYSICIANS FOR WOMEN'S HEALTH, LLC, et al.

OPINION TEXT STARTS HERE

Steven D. Ecker, Hartford, with whom were Joel T. Faxon, New Haven, and, on the brief, M. Caitlin S. Anderson, for the appellants (plaintiffs).

Frank H. Santoro, with whom, on the brief, was R. Cornelius Danaher, Jr., Hartford, for the appellees (named defendant et al.).

GRUENDEL, BEAR and SCHALLER, Js.

SCHALLER, J.

The principal issue in this case is whether the trial court incorrectly concluded that a covenant not to sue, executed by the plaintiff in favor of a corporate tortfeasor, forecloses the imposition of successor liability, as a matter of law, on a subsequent purchaser of that company's assets. For the reasons listed below, we answer this question in the affirmative and, accordingly, reverse the judgment of the trial court.

The record contains the following undisputed facts and procedural history that are relevant to our resolution of the present case. The plaintiff, Lisa Robbins, individually and as administratrix of the estate of her son, Elijah Jamal Hezekia Robbins Martin, appeals from the summary judgment rendered by the trial court in favor of the defendants Physicians for Women's Health, LLC, and Women's Health USA, Inc.1 On appeal, the plaintiff claims that the court incorrectly concluded that her settlement with Shoreline Obstetrics and Gynecology, P.C. (Shoreline), necessarily terminated her suit for successor liability against the defendants.

On October 10, 2005, the plaintiff gave birth to a son at Lawrence and Memorial Hospital (Lawrence and Memorial) in New London. Shortly after his birth, the child died. Jonathan Levine, an obstetrician, and Donna Burke–Howes, a certified nurse midwife, were present at the time and were responsible for rendering medical care to the plaintiff and her son. Levine and Burke–Howes were employees of Shoreline. In July, 2006, Shoreline was sold to the defendants. Shortly thereafter, the plaintiff filed suit against Levine, Burke–Howes, Shoreline, Lawrence and Memorial and the defendants, alleging medical malpractice.

On July 3, 2008, the defendants filed a motion for summary judgment, arguing, inter alia, that they “had no connection to the care and treatment rendered to the plaintiff['s][son] nor were they in a business or contractual relationship with ... Shoreline [at the time of his death],” such that they could be liable for the plaintiff's malpractice claim. In response, the plaintiff filed an amended complaint alleging that the defendants were liable under a theory of successor liability and then an objection to the defendants' motion for summary judgment on that ground. Specifically, the plaintiff argued that the continuity of enterprise exception applied because “Shoreline still called itself Shoreline, the same people were employed, the same management existed and the same location and equipment were utilized.” The trial court agreed with the plaintiff and denied the motion for summary judgment, stating that “the defendants ha[d] failed to meet their burden of establishing the absence of a genuine issue of material fact as to successor liability....”

On November 14, 2008, after reaching a settlement and executing two separate covenants not to sue, the plaintiff withdrew her claims against Levine, Burke–Howes and Shoreline.2 The record demonstrates that this settlement was reached by providing the plaintiff with monetary compensation through a medical malpractice insurance policy that covered both Levine and Burke–Howes. Insurance documents and interrogatory responses indicate that Levine and Burke–Howes were each insured for up to $1 million.3 An affidavit submitted by the plaintiff's attorney, dated July 6, 2009, states that Levine, Burke–Howes and Shoreline “tender[ed the] policy limits” in this settlement.4

On July 1, 2009, the defendants filed a second motion for summary judgment. In this motion, the defendants argued that “successor liability ... derives exclusively from and is coterminous with the liability of [Shoreline].” From this premise, the defendants argued that the plaintiff could not proceed because the covenant not to sue “completely discharged” Shoreline from liability. On December 7, 2009, the court issued a memorandum of decision granting the defendants' motion for summary judgment on these grounds. This appeal followed.

On appeal, the plaintiff claims that her execution of a covenant not to sue in favor of Shoreline does not prevent her from seeking recovery from the defendants under a theory of successor liability. In doing so, the plaintiff argues that a covenant not to sue is an agreement not to proceed against a particular defendant that, unlike a release, does not discharge liability for the underlying cause of action. In response, the defendants argue that successor liability may afford no greater recovery against a successor than is available against the predecessor and, therefore, the covenant not to sue executed in favor of Shoreline also inures to their benefit.

On September 21, 2011, this court ordered the parties to file supplemental briefs addressing whether the plaintiff's recovery from Shoreline foreclosed the possibility of successor liability as a matter of law.5 The defendants filed a supplemental brief on October 5, 2011, in which they argue that successor liability may be imposed only when the predecessor corporation is no longer able to afford the plaintiff relief. The defendants also assert that the plaintiff's settlement with Shoreline demonstrates that she cannot meet this threshold requirement as a matter of law. The plaintiff filed a supplemental brief on October 6, 2011, arguing that a case premised on a theory of successor liability may be pursued when recovery has been obtained from the predecessor corporation and that, in such a case, “the successor entity is liable for the difference between [the] plaintiff's damages ... and the amount ... that the plaintiff was able to recover from the predecessor.”

We review the [plaintiff's] claims under the well established standard of review regarding the rendering of summary judgment.... An appellate court must decide whether the trial court erred in determining that there was no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Citation omitted; internal quotation marks omitted.) Coss v. Steward, 126 Conn.App. 30, 40, 10 A.3d 539 (2011). “Where the trial court is presented with undisputed facts ... our review of its conclusions is plenary, as we must determine whether the court's conclusions are legally and logically correct....” (Internal quotation marks omitted.) Id., at 41, 10 A.3d 539.

I

We first address whether the imposition of successor liability is foreclosed by the plaintiff's settlement with Shoreline.6 Although we agree with the defendants' assertion that a case premised on the mere continuation or continuity of enterprise theories of successor liability may not be maintained when the predecessor corporation constitutes a viable source of recovery, we conclude that the undisputed evidence contained within the record does not establish that the plaintiff has failed to meet this requirement as a matter of law.

The legal principles governing a claim for successor liability in Connecticut were first set forth by this court in Chamlink Corp. v. Merritt Extruder Corp., 96 Conn.App. 183, 899 A.2d 90 (2006). In that case we explained that [t]he mere transfer of the assets of one corporation to another corporation or individual generally does not make the latter liable for the debts or liabilities of the first corporation except where the purchaser expressly or impliedly agrees to assume the obligations, the purchaser is merely a continuation of the selling corporation, [the companies merged] or the transaction is entered into fraudulently to escape liability.” (Internal quotation marks omitted.) Id., at 187, 899 A.2d 90. We continued by noting that [t]here are two theories used to determine whether the purchaser is merely a continuation of the selling corporation.” Id., at 187–88, 899 A.2d 90. “Under the common law mere continuation theory, successor liability attaches when the plaintiff demonstrates the existence of a single corporation after the transfer of assets, with an identity of stock, stockholders, and directors between the successor and predecessor corporations.” (Internal quotation marks omitted.) Id., at 188, 899 A.2d 90. “Under the continuity of enterprise theory, a mere continuation exists if the successor maintains the same business, with the same employees doing the same jobs, under the same supervisors, working conditions, and production processes, and produces the same products for the same customers.” 7 (Internal quotation marks omitted.) Id.

The imposition of successor liability is generally intended to prevent corporations from externalizing the costs of contract or tort liability by transferring assets into the name of a second corporation. See United States v. General Battery Corp., Inc., 423 F.3d 294, 306 (3d Cir.2005) ([t]he overriding goal of successor liability ... is to balance the interest in preventing tortfeasors from externalizing the costs of their misconduct with the interest in a fluid market in corporate assets” [internal quotation marks omitted] ), cert. denied sub nom. Exide Technologies v. United States, 549 U.S. 941, 127 S.Ct. 41, 166 L.Ed.2d 250 (2006); United States v. Mexico Feed & Seed Co., 980 F.2d 478, 487 (8th Cir.1992) ([t]he purpose of corporate successor liability ... is to prevent corporations from evading their liabilities through changes in ownership”); G. Kuney, “A Taxonomy and Evaluation of Successor Liability,” 6 Fla. St. U. Bus. L.Rev. 9, 60 (2007) ( “the...

To continue reading

Request your trial
5 cases
  • Robbins v. Physicians for Women's Health, LLC
    • United States
    • Connecticut Supreme Court
    • May 27, 2014
    ...amount ... that the plaintiff was able to recover from the predecessor.’ ” (Footnotes omitted.) Robbins v. Physicians for Women's Health, LLC, 133 Conn.App. 577, 580–83, 38 A.3d 142 (2012). A divided Appellate Court reversed the trial court's judgment on two grounds. Id., at 587–88, 595–96,......
  • Gambardella v. Schmitt
    • United States
    • Connecticut Superior Court
    • July 18, 2016
    ... ... Cardiothoracic Surgical Associates, LLC, HHC PhysiciansCare, ... Inc., d/b/a ... University of Connecticut Health Center, and two physicians ... who, it is ... Robbins v ... Physicians for Women's Health, LLC, ... ...
  • Flake v. Schrader-Bridgeport Int'l, Inc.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • August 15, 2013
    ...when that predecessor corporation remains active and constitutes a viable source of recovery. Robbins v. Physicians for Women's Health, LLC, 38 A.3d 142, 146 (Conn. Ct. App. 2012) ("[W]e agree with the defendants' assertion that a case premised on the mere continuation or continuity of ente......
  • Crown Milford, LLC v. Jackson Law Group, LLC
    • United States
    • Connecticut Superior Court
    • November 1, 2017
    ... ... 183, 899 A.2d 90 (2006)." ... Robbins v. Physicians for Women's Health, LLC, ... 133 ... ...
  • Request a trial to view additional results
2 books & journal articles
  • Tort Developments in 2012
    • United States
    • Connecticut Bar Association Connecticut Bar Journal No. 87, 2013
    • Invalid date
    ...to determine the facts unless they disclose that no genuine issue as to a material fact exists. Id. [198] Id. [199] Id. at 682. [200] 133 Conn.App. 577, 38 A.3d 142, cert, granted, 304 Conn. 926, 41 A.3d 1052 (2012). [201] Id. at 593-94. Judge Bear opined in his dissent that recovery by the......
  • Business Litigation: 2012 in Review
    • United States
    • Connecticut Bar Association Connecticut Bar Journal No. 87, 2013
    • Invalid date
    ...law shall apply.'" Id. at 458. [21] Id. at 458. [22] Id. at 463 (internal citations omitted). [23] Id. at 458. [24] Id. at 466. [25] 133 Conn.App. 577, 38 A.3d 142, cert, granted, 304 Conn. 926, 41 A.3d 1052 (2012). [26] Id. at 580. [27] Id. at 581-82. [28] Id. at 581, fn. 2. [29] Id. at 58......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT