Suffield Development Associates Ltd. Partnership v. National Loan Investors, LP

• Decision Date: 09 July 2002
• Docket Number: (SC 16586).
• Citation: 802 A.2d 44,260 Conn. 766
• Court: Connecticut Supreme Court
• Parties: SUFFIELD DEVELOPMENT ASSOCIATES LIMITED PARTNERSHIP v. NATIONAL LOAN INVESTORS, L.P., ET AL.

260 Conn. 766

802 A.2d 44

SUFFIELD DEVELOPMENT ASSOCIATES LIMITED PARTNERSHIP v. NATIONAL LOAN INVESTORS, L.P., ET AL.

(SC 16586).

Supreme Court of Connecticut.

Argued February 15, 2002.

Officially released July 9, 2002.

Borden, Norcott, Katz, Vertefeuille and Zarella, Js. Richard P. Weinstein, with whom was Nathan A. Schatz, for the appellant (plaintiff).

Kerry R. Callahan, with whom, on the brief, was Karen K. Clark, for the appellees (defendant Berman and Sable et al.).

Opinion

ZARELLA, J.

The plaintiff, Suffield Development Associates Limited Partnership, appeals from the judgment of the Appellate Court affirming the trial court's judgment in favor of the defendants, National Loan Investors, L.P. (National), the law firm of Berman and Sable, and attorney James W. Oliver.¹Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 64 Conn. App. 192, 194, 779 A.2d 822 (2001). The trial court rendered judgment for the defendants granting the defendants' motions to strike the plaintiff's original and amended complaints.² The complaint and amended complaint were based on the defendants' alleged fraud and misrepresentation when obtaining an execution that the plaintiff alleges was for an amount in excess of the amount due under a stipulated judgment between the parties. The amended complaint alleged: (1) abuse of process; (2) fraudulent misrepresentation; (3) tortious interference with a settlement agreement between the plaintiff and a third party; and (4) a violation of the Connecticut Unfair Trade Practices Act (CUTPA); General Statutes § 42-110a et seq.; and sought common-law punitive and exemplary damages, punitive damages under CUTPA and attorney's fees. We reverse the judgment of the Appellate Court with regard to the first count and affirm the judgment with regard to the other counts.

This litigation arises from a previous dispute between the plaintiff and National (National litigation). In the National litigation, National was represented by Oliver and the law firm of Berman and Sable. Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., supra, 64 Conn. App. 195. The National litigation was resolved by a stipulated judgment between the parties that contained a provision that the judgment could "be satisfied only by proceeds from a certain Lender Liability Judgment in favor of [the plaintiff] . . . ."

The term "certain Lender Liability Judgment" in the stipulated judgment referred to a judgment that the plaintiff previously had obtained against Society for Savings and its successor bank, BankBoston, as a result of a damages action instituted by the plaintiff (Society for Savings litigation). At the time that the stipulated judgment containing this term was entered in the National litigation, the judgment that the plaintiff had obtained in the Society for Savings litigation was on appeal. The Society for Savings judgment was vacated on appeal and a new trial was ordered. See Suffield Development Associates Ltd. Partnership v. Society for Savings, 243 Conn. 832, 846, 708 A.2d 1361 (1988). Prior to the new trial, the plaintiff settled the Society for Savings litigation with BankBoston for $1.5 million. Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., supra, 64 Conn. App. 195-96.

Essentially, under the stipulated judgment in the National litigation, National could recover from the plaintiff only out of funds that the plaintiff recovered from BankBoston in the Society for Savings litigation. The stipulated judgment entitled National to 15 percent of the amount recovered by the plaintiff in the Society for Savings litigation if that amount exceeded $1,333,333.33.

After the plaintiff and BankBoston agreed to settle the Society for Savings litigation for $1.5 million, the plaintiff notified the defendants in the present action of the settlement. The plaintiff stated that it did not believe it had any duty under the stipulated judgment and offered to place in escrow some of the funds received from the settlement. The plaintiff then instituted an action seeking a declaratory judgment that it did not have a duty to pay a portion of the $1.5 million settlement to National. Id., 196 n.3; see Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 60 Conn. App. 842, 844-46, 763 A.2d 1049 (2000). The plaintiff alleged that the phrase "certain Lender Liability Judgment" applied to the first award in the Society for Savings litigation, which had been vacated, and not to the eventual $1.5 million settlement. Essentially, the plaintiff alleged that because it had not recovered any money under the original judgment against Society for Savings, it owed no money to National in the National litigation.³ In response, the defendants applied to the trial court for an execution in the National litigation to seize $375,000 of settlement funds received by the plaintiff from BankBoston. The trial court granted the application, and the defendants directed a sheriff to carry out the execution.

The plaintiff then instituted the present action alleging that: (1) the defendants' execution overstated the amount due them under the stipulated judgment between the parties and was an abuse of process; (2) the defendants committed fraud on the court by misrepresenting the amount owed them under the stipulated judgment; (3) the defendants' execution on the settlement proceeds constituted tortious interference with the contractual relationship between the plaintiff and BankBoston; (4) the defendants were engaged in the conduct of trade or commerce and their actions were immoral, oppressive, unethical and unscrupulous, and therefore violated CUTPA. After the trial court granted the defendants' motions to strike the amended complaint, the plaintiff appealed to the Appellate Court. The Appellate Court affirmed the judgment of the trial court; Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., supra, 64 Conn. App. 195; and the plaintiff petitioned this court for certification to appeal. We granted the plaintiff's petition for certification to appeal, limited to the following question: "Did the Appellate Court properly conclude that the plaintiff had not sufficiently alleged facts constituting causes of action for: (1) abuse of process; (2) fraudulent misrepresentation; or (3) violation of [CUTPA]?" Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 258 Conn. 922, 782 A.2d 1252 (2001).

"A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court. As a result, our review of the court's ruling is plenary. Napoletano v. CIGNA Healthcare of Connecticut, Inc., 238 Conn. 216, 232-33, 680 A.2d 127 (1996), cert. denied, 520 U.S. 1103, 117 S. Ct. 1106, 137 L. Ed. 2d 308 (1997). We take the facts to be those alleged in the complaint that has been stricken and we construe the complaint in the manner most favorable to sustaining its legal sufficiency. Bohan v. Last, 236 Conn. 670, 674, 674 A.2d 839 (1996); see also Mingachos v. CBS, Inc., 196 Conn. 91, 108-109, 491 A.2d 368 (1985). Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied. Waters v. Autuori, 236 Conn. 820, 826, 676 A.2d 357 (1996)." (Internal quotation marks omitted.) Jewish Home for the Elderly of Fairfield County, Inc. v. Cantore, 257 Conn. 531, 537-38, 778 A.2d 93 (2001).

I ABUSE OF PROCESS

Turning to the plaintiff's first claim, we conclude that the plaintiff has alleged facts sufficient to support a claim of abuse of process. Therefore, the defendants' motion to strike should have been denied as to count one of the amended complaint.

"An action for abuse of process lies against any person using a legal process against another in an improper manner or to accomplish a purpose for which it was not designed. Varga v. Pareles, [137 Conn. 663, 667, 81 A.2d 112 (1951)]; Schaefer v. O. K. Tool Co., 110 Conn. 528, 532-33, 148 A. 330 (1930). Because the tort arises out of the accomplishment of a result that could not be achieved by the proper and successful use of process, the Restatement Second (1977) of Torts, § 682, emphasizes that the gravamen of the action for abuse of process is the use of a legal process . . . against another primarily to accomplish a purpose for which it is not designed . . . . Comment b to § 682 explains that the addition of primarily is meant to exclude liability when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant. See also 1 F. Harper, F. James & O. Gray, Torts (2d Ed. 1986) § 4.9; R. Mallen & V. Levit, Legal Malpractice (2d Ed. 1981) § 61; W. Prosser & W. Keeton, Torts (5th Ed. 1984) § 121." (Emphasis in original; internal quotation marks omitted.) Mozzochi v. Beck, 204 Conn. 490, 494, 529 A.2d 171 (1987).

Because the gravamen of the action for abuse of process is the use of "a legal process . . . against another primarily to accomplish a purpose for which it is not designed"; 3 Restatement (Second), Torts § 682 (1977); we first must examine the purpose for which the process at issue in this case, namely an execution against debts due from a bank, is designed. Our statutes provide various mechanisms for a party with a judgment in its favor to recover money from an adversary that is unwilling to pay voluntarily. See General Statutes § 52-350f ("money judgment may be enforced, by execution or by foreclosure of a real property lien, to the amount of the money judgment"); Black's Law Dictionary (7th Ed. 1999) (defining execution as "judicial enforcement of a money judgment"). The defendants in the present case specifically availed themselves of General Statutes § 52-367a,⁴ which provides a mechanism for a party to obtain an execution against,...