Tyler v. Tatoian, 37799.

• Decision Date: 22 March 2016
• Docket Number: No. 37799.,37799.
• Citation: 164 Conn.App. 82,137 A.3d 801
• Court: Connecticut Court of Appeals
• Parties: Jay M. TYLER et al. v. Richard TATOIAN.

164 Conn.App. 82

137 A.3d 801

Jay M. TYLER et al.

v.Richard TATOIAN.

No. 37799.

Appellate Court of Connecticut.

Argued Nov. 19, 2015.

Decided March 22, 2016.

Bruce D. Tyler, Somers, self-represented, and Jay M. Tyler, self-represented, the appellants (plaintiffs).

Kathleen Eldergill, Manchester, for the appellee (defendant).

LAVINE, SHELDON and MULLINS, Js.

SHELDON, J.

The issue in this case is whether the litigation privilege, also referred to as absolute immunity,¹ shields a defendant from claims of fraud and violations of the Connecticut Unfair Trade Practices Act (CUTPA)² arising from communications made during the course of a prior litigation between the parties. The plaintiffs, Jay M. Tyler and Bruce D. Tyler, appeal from the trial court's judgment granting the defendant Richard Tatoian's motion to dismiss. The plaintiffs are brothers who were named, inter alios, as beneficiaries of their mother's trust, for which the defendant, an attorney, served as trustee. The alleged mismanagement of the trust by the defendant was the subject of a prior litigation between these parties, and on the basis of various communications made by the defendant in that prior litigation, the plaintiffs brought this action alleging fraud and violations of CUTPA. The defendant filed a motion to dismiss, asserting that the litigation privilege applied to his statements because they were made in the course of the prior litigation, and thus that he was absolutely immune. The trial court agreed with the defendant and dismissed the plaintiffs' complaint in its entirety. On appeal, the plaintiffs claim error in the trial court's application of absolute immunity to their claims of fraud and violations of CUTPA, which they assert fall under an exception to absolute immunity for causes of action alleging an improper use of the judicial system. We affirm the judgment of the trial court.

For purposes of this appeal, we must take as true the following facts as set forth in the plaintiffs' complaint. See Rioux v. Barry, 283 Conn. 338, 341, 927 A.2d 304 (2007) (“[b]ecause in this appeal we review the trial court's ruling on a motion to dismiss, we take the facts to be those alleged in the complaint, construing them in a manner most favorable to the pleader” [internal quotation marks omitted] ). The plaintiffs' mother, Ruth Tyler, established a trust naming the plaintiffs as beneficiaries and the defendant as trustee. Following their mother's death, the plaintiffs commenced an action³ against the defendant in early 2011, alleging, inter alia, that he had mismanaged the trust by failing to diversify the trust's assets.⁴ The defendant testified during a deposition in that case that he had relied on the advice of an investment advisor in deciding not to diversify the trust assets. In response to that testimony, the plaintiffs requested that the defendant pursue a claim against the advisor to recover for the losses of the trust pursuant to General Statutes § 45a–541i.⁵ The defendant declined this request, and the court likewise denied the plaintiffs' motion to compel the defendant to seek recovery from the advisor. The plaintiffs thus attempted to recover from the investment advisor directly by citing in the advisor and amending their complaints, which the court ultimately dismissed for lack of standing. Upon that dismissal, the plaintiffs amended their complaints against the defendant to include counts seeking damages for his failure to pursue a claim against the advisor to recover for the losses of the trust. In order to prevail on their claims, the plaintiffs had to establish that the defendant relied on the advice of the investment adviser in deciding not to diversify the trust funds. At trial in October, 2013, the defendant testified that he had not relied on the advisor's advice in deciding not to diversify the trust assets. The jury returned a verdict for the defendant.

Following the jury's verdict against the plaintiffs in the initial action, the plaintiffs commenced a second action against the defendant on October 28, 2014, in the judicial district of Tolland, alleging fraud and violations of CUTPA. In their claim of fraud, the plaintiffs alleged that the defendant's differing testimony at his deposition and at trial constituted a fraud that caused them to waste resources in pursuing claims against the investment advisor and the defendant for the losses of the trust's assets, and that such fraud constituted an abuse of the legal system. In the CUTPA count, the plaintiffs alleged that the defendant engaged in unfair business practices by (1) “perpetrating a fraud on the plaintiffs by making false statements under oath”; (2) intimidating Jay Tyler by sending him a letter stating that “unless he withdrew his claims ‘immediately’ the costs incurred by him and the trust ‘[would] result in a claim against him for the cost of defenses, including legal fees' ”; and (3) seeking court approval for accountings of the trust that included exorbitant fees when he had no fee agreement with Ruth Tyler.

The defendant filed a motion to dismiss the plaintiffs' complaint, claiming that the defendant's communications in the initial case were made during the course of judicial proceedings and were thus protected by the litigation privilege. The court granted the motion, ruling that “[t]he defendant's statements made in court and in a deposition in that prior action are absolutely privileged under the legal doctrine known as the ‘litigation privilege.’ Simms v. Seaman, 308 Conn. 523 (2013) ; Rioux v. Barry, [supra] 283 Conn. at 338 .... Because the plaintiffs' action is premised wholly on statements made by the defendant in connection with judicial proceedings, and those statements are absolutely privileged, this case is dismissed.” The plaintiffs filed a motion to reargue the motion to dismiss, which the court granted. The court denied the relief requested but clarified its initial dismissal of the complaint as follows: “[T]he court clarifies that its prior order granting the defendant's motion to dismiss also applies to count two of the complaint, which relies upon a litigation related letter, which is attached to the complaint. See Hopkins v. O'Connor, 282 Conn. 821, 832, 925 A.2d 1030 (2007) (‘[t]he scope of privileged communication extends not merely to those made directly to a tribunal, but also to those preparatory communications that may be directed to the goal of the proceeding’)....”

The plaintiffs claim that the trial court erred in not recognizing the exception from absolute immunity for cases in which the plaintiff alleges that the defendant improperly used the judicial system. The defendant responds that all of his statements were made in the course of a judicial proceeding, and that the limited exception for claims alleging an improper use of the judicial system does not apply.

“Because the resolution of this claim requires us to consider the trial court's ultimate legal conclusion and its resulting judgment of dismissal, our review is de novo.” Rioux v. Barry, supra, 283 Conn. at 343, 927 A.2d 304. “As the doctrine of absolute immunity concerns a court's subject matter jurisdiction ... we are mindful of the well established notion that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged .... The question before us is whether the facts as alleged in the pleadings, viewed in the light most favorable to the plaintiff, are sufficient to survive dismissal on the grounds of absolute immunity.” (Citations omitted; internal quotation marks omitted.) Perugini v. Giuliano, 148 Conn.App. 861, 873, 89 A.3d 358 (2014).

“It is well settled that communications uttered or published in the course of judicial proceedings are absolutely privileged so long as they are in some way pertinent to the subject of the controversy.” (Internal quotation marks omitted.) Hopkins v. O'Connor, supra, 282 Conn. at 830–31, 925 A.2d 1030. The privilege extends beyond statements made during a judicial proceeding to “preparatory communications that may be directed to the goal of the proceeding.” Id., at 832, 925 A.2d 1030. The litigation privilege was initially applied to bar claims of defamation. See Simms v. Seaman, supra, 308 Conn. at 531–40, 69 A.3d 880 (detailing history of litigation privilege). More recently, however, our Supreme Court has expanded the scope of immunity afforded to statements made during the course of a judicial proceeding beyond defamation. See, e.g, id., at 568–69, 69 A.3d 880 (“attorneys are protected by the litigation privilege against claims of fraud for their conduct during judicial proceedings”); Rioux v. Barry, supra, 283 Conn. at 350, 927 A.2d 304 (“absolute immunity does bar the plaintiff's claim of intentional interference with contractual or beneficial relations”); Petyan v. Ellis, 200 Conn. 243, 255, 510 A.2d 1337 (1986) (absolute immunity bars claim of intentional infliction of emotional distress based on allegedly defamatory statement).

In expanding the scope of the litigation privilege, however, our Supreme Court has “recognized a distinction between attempting to impose liability upon a participant in a judicial proceeding for the words used therein and attempting to impose liability upon a litigant for his improper use of the judicial system itself.... In this regard, we have refused to apply absolute immunity to causes of action alleging the improper use of the judicial system.” (Citation omitted.) MacDermid, Inc. v. Leonetti, 310 Conn. 616, 629, 79 A.3d 60 (2013) ; see also, e.g., id., at 625–26, 79 A.3d 60 (litigation privilege did not shield claim by employee against employer alleging that employer had brought action against employee solely in retaliation for employee exercising his rights under Workers' Compensation Act); Rioux v. Barry, supra, 283 Conn. at 343, 927 A.2d 304 (“in the context of a quasi-judicial proceeding, absolute immunity does not attach to...