Scholz v. Epstein

• Decision Date: 29 September 2021
• Docket Number: SC 20492
• Citation: 341 Conn. 1,266 A.3d 127
• Parties: Stephen W. SCHOLZ v. Juda J. EPSTEIN
• Court: Connecticut Supreme Court

341 Conn. 1

266 A.3d 127

Stephen W. SCHOLZ

v.Juda J. EPSTEIN

SC 20492

Supreme Court of Connecticut.

Argued April 28, 2021

Officially released September 29, 2021^*

Jonathan J. Klein, Bridgeport, for the appellant (plaintiff).

Daniel J. Krisch, Hartford, with whom, on the brief, were Joshua M. Auxier and Stephen P. Fogerty, for the appellee (defendant).

Robinson, C.J., and McDonald, D'Auria, Kahn, Ecker and Keller, Js.

D'AURIA, J.

In this certified appeal, we are asked to determine the scope of the litigation privilege, which provides absolute immunity from liability, in relation to a lawyer's conduct in a foreclosure proceeding. The plaintiff, Stephen W. Scholz, appeals from the Appellate Court's judgment affirming the trial court's dismissal of the statutory theft claim he brought against the defendant, Juda J. Epstein, for lack of subject matter jurisdiction on the ground of absolute immunity. Epstein, an attorney licensed to practice law in Connecticut, represented Benchmark Municipal Tax Services, Ltd. (Benchmark), in the underlying foreclosure proceeding. The plaintiff claims that, under the circumstances of this case, the Appellate Court incorrectly concluded that the defendant enjoyed absolute immunity from the plaintiff's claim of statutory theft, specifically, by determining that (1) public policy considerations were served by affording the defendant this immunity, and (2) all of the defendant's alleged conduct occurred within the scope of the underlying foreclosure proceeding. We disagree and affirm the judgment of the Appellate Court.

As alleged in the plaintiff's complaint, the following facts, viewed in the light most favorable to the plaintiff, and procedural history are relevant to our review of this claim. The plaintiff resides at 405 Helen Street in Bridgeport and became the owner of an adjacent lot located at 744 Stillman Street in Bridgeport (Stillman property). The plaintiff uses these two properties together to operate his business, which includes the storing, repair, and resale of industrial equipment. When the plaintiff failed to pay $1018.74 in real property taxes on the Stillman property owed to the city of Bridgeport (city), the city recorded a certificate of lien on the land records for the unpaid taxes, interest and related charges. The city subsequently sold the lien to Benchmark pursuant to an assignment recorded on the land records.

The defendant, acting as Benchmark's attorney, began a civil action against the plaintiff to foreclose the lien. The summons recited the plaintiff's address as 69 Settlers Farm Road, Monroe, CT 06468. The state marshal's return of service did not reflect that service was made on the plaintiff. Further, the return of service did not describe any effort by the state marshal to locate the plaintiff, or any attempt to effect service on him, notwithstanding that the defendant himself knew throughout the foreclosure proceeding that the plaintiff resided at 405 Helen Street.¹

The defendant then cited in the plaintiff as a defendant in the foreclosure proceeding, representing the following to the trial court: "[1] at the time the action was commenced, he believed that ... [the plaintiff] had been properly served; [2] [the plaintiff] was unable to be served; [3] [the defendant] directed a state marshal to effectuate service [on the plaintiff], but [the plaintiff] was not at any of the ‘possible locations’; [4] [the defendant] had done his due diligence in trying to locate [the plaintiff], but ‘all possible locations’ had been exhausted ... [5] the notice most likely to come to the attention of [the plaintiff] was the publication of an order of notice of the institution of the foreclosure action in the Connecticut Post, a newspaper circulated in the Bridgeport area, once a week for two successive weeks; and [6] ‘the last known address of [the plaintiff] is unknown.’ " All of these claims "were materially false, and [the defendant] knew [they] were materially false when he made them" because he knew that the marshal's return of service did not reflect that any service was made on the plaintiff, that the return of service did not describe any effort made by the marshal to locate the plaintiff, the possible locations where the plaintiff could have been found, and that the plaintiff resided, and could have been properly served, at 405 Helen Street in Bridgeport. The trial court subsequently ordered notice by publication.

Approximately one month later, the defendant filed a motion to default the plaintiff for failure to appear, which was granted. As a result, the plaintiff alleges that the defendant perpetrated "a fraud [on] the court" by "knowingly making materially false representations to the court with the intent to induce and cause the court to rely on those statements to order notice by publication and, ultimately, to default [the plaintiff] for failure to appear and to [render] a judgment of strict foreclosure."

The defendant then moved for a judgment of strict foreclosure. According to the complaint, the defendant sought a judgment of strict foreclosure, rather than a foreclosure by sale, by misleading the court as to the plaintiff's equity in the Stillman property based on a flawed appraisal report, which stated that the plaintiff's equity was tens of thousands of dollars less than it truly was. The court granted the motion for a judgment of strict foreclosure.

The plaintiff alleged that, "[b]y wrongfully misleading the court into [rendering] a judgment of strict foreclosure, rather than a judgment of foreclosure by sale, [the defendant] purposefully evaded the requirement of posting a sign on the property within a few feet of the front door of [the plaintiff's] residence at 405 Helen Street ... announcing a scheduled foreclosure auction sale, and thereby purposefully deprived [the plaintiff] of notice that a foreclosure of the property was pending, and purposefully deprived him of the opportunity to redeem the property from the foreclosure or otherwise to act to protect his ownership interest in the property."

After the running of the law days and Benchmark's taking title to the property, the defendant drafted a certificate of foreclosure but did not record the certificate of foreclosure in the Bridgeport land records until approximately six months after title had vested in Benchmark. This delay, the plaintiff alleged, resulted in the town's issuing of the real property tax bill to him, not Benchmark, depriving him of an opportunity to learn of the property's sale. Benchmark then sold the property to a third party for approximately three times the fair market price listed in the appraisal report.

As a result of this conduct, the plaintiff alleged that "[he] was unaware ... that the tax lien foreclosure action had even been commenced, let alone that it had gone to judgment, that the law days had run, that Benchmark had taken title to the property by strict foreclosure and that Benchmark had sold the property to third parties for a windfall profit ...." When the plaintiff discovered that the property had been sold, he bought back the property because he operated a business on both the property at 405 Helen Street and the Stillman property and feared his business and livelihood might be destroyed by the loss of the Stillman property. Accordingly, the plaintiff alleged that the defendant "wrongfully engaged in the conduct alleged ... with the intent to deprive [him] of his property and/or to appropriate the property to Benchmark, thereby committing [statutory] theft in violation of [General Statutes] § 52-564, and causing [him] great financial loss."

The defendant moved to dismiss the plaintiff's action for lack of subject matter jurisdiction. He argued that, because all of the alleged conduct occurred during the foreclosure proceeding, the litigation privilege shielded him from the plaintiff's statutory theft claim. The plaintiff opposed the defendant's motion, arguing that his claim of statutory theft fell outside the scope of the litigation privilege. The trial court granted the defendant's motion to dismiss.

The plaintiff appealed to the Appellate Court, which affirmed the judgment of the trial court, holding that (1) the balancing of policy considerations, as required under Simms v. Seaman , 308 Conn. 523, 543–44, 69 A.3d 880 (2013), weighed in favor of applying absolute immunity to the plaintiff's claim of statutory theft, and (2) all the alleged conduct occurred within the underlying foreclosure proceeding. Scholz v. Epstein , 198 Conn. App. 197, 231–33, 232 A.3d 1155 (2020). The plaintiff then petitioned this court for certification to appeal, which we granted, limited to the following issue: "Under the circumstances of this case, did the Appellate Court correctly conclude that the defendant attorney enjoyed absolute immunity from the plaintiff's claim of statutory theft, arising from the defendant's conduct during prior judicial proceedings?" Scholz v. Epstein , 335 Conn. 943, 237 A.3d 2 (2020).

"When a ... court decides a jurisdictional question raised by a pretrial motion to dismiss ... a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) MacDermid, Inc . v. Leonetti , 310 Conn. 616, 626, 79 A.3d 60 (2013). We review de novo a trial court's decision on a motion to dismiss under Practice Book § 10-30 (a) (1). See, e.g., id. The parties do not dispute that absolute immunity implicates the trial court's subject matter jurisdiction. See, e.g., Tyler v. Tatoian , 164 Conn. App. 82, 87, 137 A.3d 801, cert. denied, 321 Conn. 908, 135 A.3d 710 (2016) ; see also Chadha v. Charlotte Hungerford Hospital , 272 Conn. 776, 787, 865 A.2d 1163 (2005) (like colorable claim of sovereign immunity, to protect against threat of suit, colorable claim of absolute immunity based on participation in judicial...