Straw Pond Assocs., LLC v. Fitzpatrick, Mariano & Santos, P.C.

• Decision Date: 23 August 2016
• Docket Number: No. 37589.,37589.
• Citation: 145 A.3d 292,167 Conn.App. 691
• Court: Connecticut Court of Appeals
• Parties: STRAW POND ASSOCIATES, LLC, et al. v. FITZPATRICK, MARIANO & SANTOS, P.C., et al.

167 Conn.App. 691

145 A.3d 292

STRAW POND ASSOCIATES, LLC, et al.

v.FITZPATRICK, MARIANO & SANTOS, P.C., et al.

No. 37589.

Appellate Court of Connecticut.

Argued Feb. 3, 2016.

Decided Aug. 23, 2016.

Brenden P. Leydon, Stamford, for the appellants (plaintiffs).

Raymond J. Plouffe, Jr., Shelton, for the appellees (defendants).

LAVINE, BEACH and PRESCOTT, Js.

LAVINE, J.

In this legal malpractice action, the plaintiffs, Straw Pond Associates, LLC, Straw Pond Real Estate, LLC, Straw Pond Holdings, LLC, and CUDA Associates, LLC, appeal from the summary judgment rendered by the trial court in favor of the defendants, Fitzpatrick, Mariano & Santos, P.C. (firm), and Edward G. Fitzpatrick, an attorney in the firm. On appeal, the plaintiffs claim that the court erred in granting the defendants' motion for summary judgment by (1) adjudicating, rather than identifying, issues of fact, (2) concluding that their claims were barred by the statute of limitations, and (3) deciding that there were no issues of fact as to the defendants' alleged breach of fiduciary duty. We agree with the plaintiffs' first two claims and, therefore, reverse, in part, the judgment of the trial court.

The plaintiffs commenced the present action by service of process on June 14, 2011. The complaint sounded in three counts: professional negligence, breach of fiduciary duty, and breach of contract.¹ In count one, the plaintiffs alleged that, in March, 2005, they retained the defendants to obtain approvals from various land use boards in the town of Middlebury, including the Water Pollution Control Authority (sewer authority), the Planning and Zoning Commission, and the Board of Selectmen, to enable them to develop a senior housing project (project). In August, 2005, the sewer authority conditionally approved the flow capacity for the project, and in September, 2005, sent a letter (2005 letter) to Straw Pond Real Estate, LLC, in care of Fitzpatrick. In the 2005 letter, the sewer authority set forth its conditional capacity approval and the conditions to which the plaintiffs were required to agree.² The sewer authority instructed the plaintiffs to sign the letter and return it.

The complaint further alleged that on certain dates in 2006 and 2007, Kenneth J. Pocius, an attorney for the sewer authority, communicated with Fitzpatrick about the status of the 2005 letter. According to the plaintiffs, Fitzpatrick failed to respond to Pocius or to inform them of his inquiries. In October, 2007, the sewer authority invited Fitzpatrick to attend its November, 2007 meeting, but Fitzpatrick was unable to attend the meeting.³ The plaintiffs alleged that Fitzpatrick did not tell them that they should attend the meeting. At the November, 2007 meeting, the sewer authority rescinded its conditional capacity approval for the project and thereafter so informed Fitzpatrick.

The plaintiffs alleged that the sewer authority rescinded its conditional capacity approval for the project and refused to reinstate it due to Fitzpatrick's inattention to the 2005 letter and Pocius' inquiries about the status of the 2005 letter. Moreover, the plaintiffs alleged that the defendants failed to inform them of the 2005 letter until December, 2007, after the conditional capacity approval had been rescinded. They also alleged that Fitzpatrick had failed to inform them of the action that they needed to take with respect to the 2005 letter or of the consequences of their failing to respond to it.

The plaintiffs appealed from the sewer authority's rescission of its approval to the Superior Court (sewer appeal), but the appeal was dismissed on March 8, 2011.⁴ The sewer authority has denied the plaintiffs' efforts and subsequent application to regain capacity approval.

The plaintiffs further alleged that, in addition to obtaining initial approval from the sewer authority, the defendants acted on their behalf to secure other approvals needed for the project to move forward. Some of the plaintiffs' applications for those other approvals resulted in administrative appeals. The plaintiffs alleged that, from the time they retained the defendants until the time they commenced the present action, they had relied on the defendants, who were their lead counsel charged with getting all of the approvals needed for the project. On August 26, 2009, Fitzpatrick represented the plaintiffs at a global settlement conference to resolve all outstanding project related issues. According to the plaintiffs, the settlement conference failed to meet its objective due to the sewer authority's refusal to reinstate its capacity approval.

The plaintiffs alleged that the defendants continuously represented them on all permitting efforts related to the project up to, and including, the dismissal of the sewer appeal in March, 2011.⁵ The plaintiffs alleged that they relied to their detriment on the defendants' expertise in obtaining the necessary approvals for similar projects. Moreover, the plaintiffs alleged that the defendants caused them to believe that the harm caused by the defendants' acts and omissions with respect to the sewer authority rescission could be mitigated and a viable final approval for the project obtained.

The plaintiffs further alleged that the defendants failed to exercise diligence and competence, and failed to communicate properly. The plaintiffs claimed that the defendants “put their own and other interests ahead of the plaintiffs' [interests] and failed to keep loyalty and fidelity to the plaintiffs' project as paramount.” In addition, the plaintiffs alleged that the defendants' acts and/or omissions were in violation of the Rules of Professional Conduct, including rules 1.1 (competence), 1.3 (diligence), and 1.4 (communication). As a result of the defendants' claimed acts or omissions, the plaintiffs alleged that they have sustained and will sustain substantial damages.

The defendants filed an amended answer and five special defenses on October 8, 2013. They admitted that the plaintiffs “authorized” them to acquire approvals for the project from land use boards and the Middlebury Board of Selectmen, and to negotiate pending zoning and Conservation Commission appeals. The defendants, however, denied that they filed sewer capacity applications on behalf of the plaintiffs.⁶ The defendants admitted that the plaintiffs received capacity approval from the sewer authority “ ‘subject to technical approval, assessment and payment discussions and decisions,’ ” and that the 2005 letter “required a signature on the part of Straw Pond Real Estate, LLC, verifying its agreement, amongst other things, to the assessment of hookup fees and expenses to which it did not agree....” The defendants also admitted that Fitzpatrick received e-mail correspondence from Pocius.

The defendants, however, denied that they failed to tell the plaintiffs about the 2005 letter until December, 2007, failed to inform them of the action they needed to take in response to the letter or the consequences of failing to respond to the letter, and that they “continued to represent the plaintiffs during ‘this entire time.’ ” The defendants alleged that the plaintiffs had retained other counsel to represent them with respect to “specific performance, breach of contract, and zoning appeal matters,” and to prosecute certain appeals. In addition, although Fitzpatrick attended the August, 2009 settlement conference, the defendants denied that he was the plaintiffs' lead counsel. They denied that they had violated the Rules of Professional Conduct and that they failed to exercise diligence and competence, and failed to communicate properly. The defendants also denied that the plaintiffs sustained damages as a result of their alleged acts or omissions. Moreover, the defendants denied that they breached their fiduciary duties and breached their contract with the plaintiffs.

In their special defenses, the defendants alleged that all three counts of the complaint were barred by General Statutes § 52–577 in that the action was commenced more than three years after the act or omission complained of. The defendants also alleged that, if the plaintiffs sustained any damages, those damages were proximately caused by the plaintiffs' own carelessness and negligence in that they failed to agree to the sewer authority's hookup costs and failed to authorize Fitzpatrick to accept the conditions stated in the 2005 letter. The defendants further pleaded that the plaintiffs failed to mitigate their damages. The plaintiffs replied to the defendants' special defenses in a one sentence general denial.⁷

On April 9, 2014, the defendants filed a motion for summary judgment as to all counts of the complaint on the ground that each was barred by § 52–577.⁸ In the alternative, the defendants asserted that all counts of the plaintiffs' complaint fail, as a matter of law, in that the plaintiffs cannot establish a breach of the standard of care, a breach of fiduciary duty, breach of the parties' fee agreement, or that the plaintiffs' alleged damages were caused by the defendants. In their accompanying memorandum of law, the defendants represented that the plaintiffs fully were aware of the 2005 letter and that they declined to sign the letter because they disagreed with the $2.057 million hookup fees and the time constraints the sewer authority had imposed on them with respect to obtaining other board and agency approvals. The defendants also argued that there was no evidentiary support for the plaintiffs' claims.

The defendants appended numerous documents, including Fitzpatrick's affidavit, to their memorandum of law. In his affidavit, Fitzpatrick attested, in part: “I personally met with and spoke to Ben Morris, the principal member of Straw Pond with whom I dealt, on multiple occasions concerning the project, including many discussions from September, 2005 through 2007, concerning Straw Pond's refusal to sign the ... 2005 letter of conditional capacity approval.... Ben Morris communicated to...