Stearns & Wheeler, LLC v. Kowalsky Bros.

• Decision Date: 07 October 2008
• Docket Number: No. 17906.,17906.
• Citation: Stearns & Wheeler, LLC v. Kowalsky Bros., 955 A.2d 538, 289 Conn. 1 (Conn. 2008)
• Parties: STEARNS AND WHEELER, LLC v. KOWALSKY BROTHERS, INC.
• Court: Connecticut Supreme Court

955 A.2d 538

289 Conn. 1

STEARNS AND WHEELER, LLC v. KOWALSKY BROTHERS, INC.

No. 17906.

Supreme Court of Connecticut.

Argued February 4, 2008.

Decided October 7, 2008.

William M. Bloss, with whom were Jan A. Marcus, and, on the brief, Richard A. Bieder, Bridgeport and Cynthia C. Bott, Milford, for the appellant (plaintiff).

Robert C.E. Laney, with whom was Kristine F. Pond, Stamford, for the appellee (defendant).

NORCOTT, KATZ, PALMER, VERTEFEUILLE and SCHALLER, Js.

SCHALLER, J.

In this appeal,¹ the plaintiff, Stearns and Wheeler, LLC,² claims that the trial court improperly rendered summary judgment in favor of the defendant, Kowalsky Brothers, Inc.³ The plaintiff brought this action pursuant to the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., alleging that it had suffered ascertainable loss as the result of the defendant's wrongful conduct, which had caused two separate wrongful death actions to be brought against the plaintiff. The plaintiffs in the wrongful death actions are the administrators of the estates (estates) of two of the defendant's employees who had died in the course of their employment. Thereafter, the plaintiff assigned this action to the estates. The defendant then filed a motion for summary judgment, which the trial court granted. The plaintiff claims on appeal that the trial court improperly determined that the present action must be treated as a wrongful death action by virtue of the plaintiff's assignment of the action to the estates, and that the action, therefore, is barred by the exclusivity provision of the Workers' Compensation Act, General Statutes § 31-275 et seq.⁴ We conclude that enforcement of the assignment of this CUTPA action would violate the public policy embodied in the Workers' Compensation Act and, therefore, affirm the judgment of the trial court.

The record reveals the following undisputed facts and procedural history. In April, 1997, Lansdowne Condominium Association (Lansdowne) hired the plaintiff an environmental engineering firm, to study the discolored appearance of a sedimentation pond located on Lansdowne's property, and to design and implement a plan to remedy the discoloration. The plaintiff concluded that iron leachate, flowing into the pond from a twenty-four inch storm water sewer pipe, was the primary cause of the discoloration. The defendant submitted the winning bid for the repair project, and began work to seal the drainpipe.⁵

On or about July 23, 1998, two of the defendant's employees were assigned the task of cleaning out the manholes that led to the pipe that was scheduled to be sealed. Both employees died from asphyxiation while working in a manhole. The defendant carried workers' compensation insurance, which paid benefits to the estates according to the terms of that policy.⁶ The estates also filed wrongful death actions against the plaintiff, alleging negligence. On or about May 15, 2003, the plaintiff filed the present action against the defendant. In February, 2004, the plaintiff and the estates settled the wrongful death actions.⁷

In the present action, the plaintiff alleged that it was in a commercial relationship with the defendant by virtue of a letter from the plaintiff to the defendant dated January 20, 1998, which outlined the details of the work to be done by the defendant and the method of payment for the work. The plaintiff further alleged that the defendant had represented itself as an experienced and qualified contractor, capable of undertaking the construction project on Lansdowne's property, and that the defendant had violated CUTPA by failing to comply with applicable federal law while offering its services to the public. The plaintiff also alleged that it suffered an ascertainable economic loss as a result of the defendant's violation of CUTPA, including the amounts paid in settlement of the wrongful death actions and attorney's fees. See footnote 7 of this opinion. On or about February 12, 2004, the plaintiff, pursuant to its settlement agreement in the wrongful death actions, assigned its interest in the CUTPA action to the estates. In September, 2005, attorneys for the estates entered appearances on behalf of the plaintiff in this matter.

Thereafter, the defendant filed a motion for summary judgment. First, the defendant argued in its motion that the assignment in this case violated public policy for two reasons: (1) a CUTPA action is not assignable by its nature; and (2) the assignment in this case is an impermissible "`end run'" around the workers' compensation exclusivity provision. Second, the defendant argued that the plaintiff lacked standing to bring a CUTPA claim against the defendant because the plaintiff was neither a competitor of, nor engaged in a commercial relationship with, the defendant. Third, the defendant argued that the plaintiff did not suffer an ascertainable loss as required by CUTPA.⁸

The trial court granted the defendant's motion for summary judgment. In its memorandum of decision, the trial court stated: "The CUTPA claim in this case arises out of the personal injury and death of [the defendant's employees]. If [the defendant's employees] had not been injured and died in the course of their employment, they would not have sought workers' compensation benefits, would not have filed an action against [the plaintiff] for negligence and [the plaintiff] would not have brought this CUTPA claim against [the defendant]. The `ascertainable loss' that [the plaintiff] alleges is the amount that [the plaintiff] agreed to pay to the estates ... in [their] negligence action ... plus their attorney's fees." The trial court then concluded that "this case, while pleaded as a CUTPA claim ... is now, by virtue of the assignment, an action by the ... estates seeking money damages from their employer on account of their deaths that are in addition to the benefits they received under the [Workers' Compensation Act]. It is the nature of the relief sought, that determines the character of the action, not simply how it is characterized by the parties."

The trial court concluded: "The allegations of loss in [the plaintiff's] complaint and the arguments it makes in its memorandum in opposition to the motion for summary judgment ... show how enmeshed [the plaintiff's] CUTPA claim is with the underlying wrongful death actions against [the plaintiff]. The relief sought is actually in the nature of indemnification for the amounts paid by [the plaintiff] in settling the negligence action brought by the estates. Allowing an assignment to the estates ... of a claim against the employer that is directly related to the employees' employment-related deaths would circumvent the public policy underlying the exclusivity provision of the Workers' Compensation Act. Accordingly, the court finds that this action is not assignable as a matter of public policy." The trial court rendered judgment in favor of the defendant. This appeal followed.

On appeal, the plaintiff claims that the trial court improperly concluded that the plaintiff's assignment of the CUTPA action to the estates transformed the action into a wrongful death action that was barred by the exclusivity provision of the Workers' Compensation Act.⁹ We conclude that the assignment of the plaintiff's CUTPA claim to the estates may not be enforced because enforcement would violate the public policy set forth in the workers' compensation exclusivity provision. Because we affirm the judgment of the trial court on that basis, we need not consider whether the assignment of the CUTPA action transformed that action into a wrongful death action.

We review this matter under our well settled standard of review. A court shall render summary judgment "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." Practice Book § 17-49. "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. ... The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law. ... The test is whether the party moving for summary judgment would be entitled to a directed verdict on the same facts. ... Our review of the trial court's decision to grant the defendant's motion for summary judgment is plenary." (Internal quotation marks omitted.) Mazurek v. Great American Ins. Co., 284 Conn. 16, 26-27, 930 A.2d 682 (2007). Moreover, the question of whether the assignment of an action is barred as a matter of public policy is an issue of law; see Faulkner v. United Technologies Corp., 240 Conn. 576, 588, 693 A.2d 293 (1997) (question of whether challenged discharge from employment violates public policy is question of law); and our review is therefore plenary. Prescott v. Meriden, 273 Conn. 759, 764, 873 A.2d 175 (2005).

To resolve the question of whether the assignment of this particular CUTPA claim violates public policy, we first review the general principles that guide our inquiry as to the issue of the assignability of legal actions.¹⁰ We previously have recognized that the assignment of contract claims is permissible. See Rumbin v. Utica Mutual Ins. Co., 254 Conn. 259, 267-68, 757 A.2d 526 (2000). In Rumbin, we stated that "the modern approach to contracts rejects traditional common-law restrictions on the alienability of contract rights in favor of free assignability of contracts. ... Common-law restrictions on assignment were abandoned when courts recognized the necessity of permitting the transfer of contract rights. The force[s] of human convenience and business practice [were] too strong for the common-law doctrine that [intangible contract rights] are not assignable." (Citations omitted; internal quotation marks omitted.) I...