Spitzer v. Haims and Co., 13857

• Decision Date: 26 February 1991
• Docket Number: No. 13857,13857
• Court: Connecticut Supreme Court
• Parties: Horton SPITZER v. HAIMS AND COMPANY et al.

Page 105

587 A.2d 105

217 Conn. 532

Horton SPITZER v. HAIMS AND COMPANY et al.

No. 13857.

Supreme Court of Connecticut.

Argued Dec. 14, 1990.

Decided Feb. 26, 1991.

Lawrence M. Lapine, with whom, on the brief, was Christopher R. Bello, Stamford, for appellant (plaintiff).

William O. Riiska, with whom was Gregory T. D'Auria, Hartford, for appellees (named defendant et al.).

Duncan B. Hume, Stamford, for appellees (defendant W. Parker Seeley et al.).

Before SHEA, GLASS, HULL, BORDEN and HENNESSY, JJ.

BORDEN, Associate Justice.

The principal issue in this appeal is whether the trial court properly allowed the jury to ask questions of the witnesses. The plaintiff, Horton Spitzer, brought a professional malpractice suit against his former lawyers, the defendants W. Parker Seeley and Seeley's law firm, Pullman, Comley, Bradley and Reeves, and against his former accountants, the defendants William Arnone and Arnone's accounting firm, Haims and Company, to recover losses incurred in the sale of his business. During the trial, the court allowed the jurors, after direct and cross-examination of each witness, to submit written questions to be asked of the witness after review of the questions by the court and counsel. The court placed a continuing objection and exception to this procedure on the record for all parties. The jury found for all the defendants in a general verdict, and the plaintiff moved to set aside the verdict. The trial court denied the motion and rendered judgment in accordance with the verdict. The plaintiff appealed to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023.

The plaintiff claims that the trial court improperly: (1) permitted the jury to ask questions of the witnesses; (2) failed to set aside the verdict as against the weight of the evidence; and (3) charged the jury regarding Arnone's contributory negligence. We hold that a trial court has the discretion to permit the jurors to ask questions of witnesses. We conclude that in light of the manner in which the trial court permitted juror questioning in this case, the court did not abuse its discretion in doing so. We also conclude that the plaintiff's remaining claims are meritless. We therefore affirm the judgment.

The jury could reasonably have found the following facts. In 1969, the plaintiff and his partner founded the Watchguard Corporation (Watchguard), a company involved in selling burglar and fire alarm systems. After buying out his partner in 1978, the plaintiff was the sole shareholder and president of Watchguard until 1983 when he sold his interest to the National Guardian Corporation (National Guardian) for the price of $2.2 million. Prior to the sale, the plaintiff engaged the services of the defendants Seeley and Pullman, Comley, Bradley and Reeves to assist him in negotiating the contract of sale. Additionally, the defendants Arnone and Haims and Company, accountants who had performed the limited services of compiling annual financial statements and advising on matters of corporate and personal income tax planning for the plaintiff and Watchguard, were asked numerous questions relating to the sale by Seeley and the plaintiff.

Section 2.2.4 of the proposed contract of sale provided that after National Guardian reviewed Watchguard's accounting books, adjustments in the purchase price would be made for "deferred income." ¹ Because the nature of Watchguard's business required that customers pay in advance for services to be rendered by Watchguard in the future, Watchguard placed a portion of the advance payments in a "deferred income" account. This deferred income account was reflected as a liability on the balance sheet. Not all of the advance payments, however, were treated as deferred income; some were reflected as current income. As a result of these differing accounting treatments of advance payments, a discrepancy existed on Watchguard's books regarding the amount of future services for which it had already been compensated.

During the course of negotiations of the contract, the plaintiff was concerned about the effect that § 2.2.4 would have on the ultimate purchase price. The plaintiff expressed these concerns to Seeley, who was representing the plaintiff, and the plaintiff and Seeley also expressed these concerns to Arnone. ²

There were numerous discussions among the parties concerning § 2.2.4 and the effect that it would have on the purchase price. In particular, Seeley wrote to Arnone requesting that he review the contract specifically § 2.2.4, for any problems. Arnone, upon being phoned by Seeley and the plaintiff, responded that there were "no problems" with the agreement, meaning that the provision was not uncommon or unfair in this type of buy-out arrangement. The plaintiff and Seeley, however, understood this statement to mean that there would not be a price adjustment based upon this provision. The plaintiff signed the final contract of sale and, six months later, National Guardian informed the plaintiff of a reduction of $158,522 in the purchase price pursuant to § 2.2.2 of the final contract that was required to reflect income that Watchguard had received for future services but was not reflected in the deferred income account.

Although claiming that he was unaware that there would be such an adjustment in this case, the plaintiff was familiar with Watchguard's accounting practices regarding the treatment of its deferred income and knew that the total amount of deferred income was not listed in the deferred income account. The plaintiff had often considered the tax consequences of the deferred income account when participating in tax discussions concerning Watchguard. Furthermore, the plaintiff had contacted three other individuals who had sold their security businesses to National Guardian and had learned that National Guardian had made adjustments with respect to deferred income of those businesses after the purchase.

I

At the start of the trial, the court informed counsel that this case, with the approval of the judicial department, was to be part of a program being conducted by the American Judicature Society whereby jurors would be allowed to ask questions of witnesses. The court explained the procedure to be used, and noted a standing objection and exception on the record for all parties.

The procedure implemented by the court was as follows. ³ The court asked the jurors at the conclusion of direct and cross-examination of each witness, whether they had any questions for that witness. If so, the court instructed the jury to retire to the deliberation room where any jurors who had questions wrote them down for submission to the court through the sheriff. Outside the presence of the jury, the court reviewed the questions, allowed the attorneys to object, and ruled on any objections. The court instructed the jury that it could not draw any adverse inference should the court refuse to ask a particular objectionable question. After the court had posed the jurors' questions to the witnesses, counsel were allowed to ask follow-up questions of the witnesses.

The court explained to the jury that "it is the primary responsibility of the lawyers to ask questions. So you are not encouraged to ask a large amount of questions." ⁴ During the course of trial, the jury submitted sixteen questions to Arnone and eleven questions to Seeley. The majority of the questions sought clarification of facts or repetition of testimony.

The plaintiff does not challenge any of the jurors' questions that the court permitted. The plaintiff claims that the procedure implemented by the trial court: (1) violated his constitutional right to trial by jury guaranteed by article first, § 19, of the Connecticut constitution; (2) infringed upon the separation of powers provision of article second of the Connecticut constitution; (3) exceeded the power of the trial court by effecting a change in the rules of court without compliance with General Statutes § 51-14; (4) violated his right to due process of the law under the fourteenth amendment to the United States constitution and article first, § 8, of the Connecticut constitution; and (5) violated his right to an impartial jury under article first, § 8, of the Connecticut constitution by encouraging the jury to deliberate prematurely.

The plaintiff's first claim is that by permitting the jurors to ask questions, a procedure not previously practiced in Connecticut, the court violated his constitutional right to trial by jury because the form of the trial was altered. We disagree.

The Connecticut constitution provides that "[t]he right of trial by jury shall remain inviolate." Conn. Const., art. I, § 19. The prohibition on the abridgement of the right to jury trial "mandates that, given a recognized cause of action to which the right to trial by jury attached prior to the existing constitution, the right to trial by jury must always be available in the trial of that cause." Gentile v. Altermatt, 169 Conn. 267, 299, 363 A.2d 1 (1975), appeal dismissed, 423 U.S. 1041, 96 S.Ct. 763, 46 L.Ed.2d 631 (1976); see also Bishop v. Kelly, 206 Conn. 608, 618, 539 A.2d 108 (1988).

The provision that "[t]he right of trial by jury shall remain inviolate"; Conn. Const., art. I, § 19; does not carry with it, however, the corresponding right that all court rules, procedures and methods current in 1818 would remain unchanged. Indeed, "[i]n speaking to the command of the seventh amendment to the federal constitution that 'the right of jury trial shall be preserved' the United States Supreme Court (Brandeis, J.) said that the seventh amendment 'does not require that old forms of practice and procedure be retained.... It does not prohibit the introduction of new methods for determining what facts are actually in issue, nor does it prohibit the introduction of new rules of evidence. Changes in these may be made. New devices may be used to...