Time Does Not Run Against The King Or The State of Connecticut

Imagine you are a subcontractor hired to work on a project for the State of Connecticut in 1994.  You did not deal with the State at all in your contractual dealings.  You were hired by a general contractor to do a small part of a large building project.  Next, you priced your work, completed it, and got paid.

Now, fast forward 12 years.  Without any notice to you (some defendants claimed they had no notice of issues) of any problems for 12 years, the State of Connecticut knocks on your door with a lawsuit seeking over 15 million dollars from more than 20 defendants, including your company.

When you receive this lawsuit, you might immediately conclude that the lawsuit is time barred by the statute of limitations for breach of contract and negligence.  You might even ask your attorney, and your attorney probably would agree that the statute of limitations for your work has long expired. Nothing to worry about, right?  WRONG.

Here is the case:  State of Connecticut v. Lombardo Brothers Mason Contractors, et al.  In this case, the Supreme Court of Connecticut upheld the ancient doctrine of nullum tempus occurrit regi, or "no time runs against the king."  The king is the State of Connecticut.  The court noted that nullum tempus is "a common-law rule that exempts the state from the operation" of time based statutes, such as statutes of limitation and repose. In short, the 12 year passage of time does not matter because the state is like the king.        

The state filed its lawsuit against more than 20 contractors in 2008 for over 15 million dollars in alleged damages caused by faulty construction and water leakage at the University of Connecticut law library.   The work was completed in 1996.  The state immediately began to notice problems with water leakage.  This was not a hidden defect case.  The State knew right away, and did not bring a lawsuit for damages for 12 years.  The state sought recovery for breach of contract, negligence, and product liability.  

None of this mattered as the Supreme Court found that nullum tempus has been alive and well in Connecticut since at least 1879 and traceable all the way back to English common law.  The court deemed it "well established and clear-cut."  Maybe so, but clarity to the court does not make it any less shocking to contractors and their attorneys.  The court also noted that if someone wants the common law of Connecticut changed, that is the job of the legislature.  

Nothing like a 15 million dollar lawsuit to remind you that our law is largely based on English common law....

 

Connecticut Supreme Court and Appellate Court Cases and Briefs Online

There are three good online resources to get information on appellate court cases in Connecticut.  

The first resource is a new addition to the state judicial branch website.  The public now has access to the case and docket information regarding Supreme Court and Appellate cases.  Here is the link.   Previously, you could only access trial level cases.  This is a great addition to the website and will cut down on trips to the clerk's office to check on the status of a case.

You can get download advanced release opinions from the Supreme Court and Appellate Court.  Here is the link.

You can also download copies of some briefs for cases assigned for argument before the Supreme Court.  Here is the link.  This website is maintained by the Appellate Advocacy Committee of the Connecticut Bar Association. Briefs are typically posted several months after being filed with the court.

Can An Attorney Bind A Client To A Settlement Agreement Even If The Client Did Not Agree?

The answer is -   yes, under the right set of facts.  In Connecticut, attorneys must abide by a client's decision to settle a case.  Additionally, an attorney has to consult with a client and secure consent to accept or make a settlement offer.  Seems straightfoward, right? 

However, what happens if an attorney reasonably believes he has consent, but the client later disagrees?  Or, what if the client does give consent, but later changes her mind?  Or, how about a situation where it appears to the opposing party that the client's attorney had authority to settle based on conduct of the client.  Does it matter whether there really was express authority given to the attorney to settle?

In a recently released decision,Ackerman v. Sobol Family Partnership, et al, the Connecticut Supreme Court addressed these very issues.  In the case, the Supreme Court upheld a trial court judgment in favor of a group of defendants that sought to enforce a settlement agreement.  The case involved a history of negotiations between well known attorneys for the two sides, including a failed mediation and a few months of verbal and written exchanges on settlement terms. 

The underlying case involved a dispute concerning "management and oversight of a family partnership and various family trusts."  Shortly before trial was scheduled to start, the defendants believed that a global settlement was reached for 1.1 million dollars based on an agreement with the plaintiffs' attorney.  The plaintiffs disagreed and claimed that their attorney did not have authority to bind the plaintiffs to the settlement.  The defendants then filed a motion to enforce the settlement agreement.  Judge Eveleigh held a hearing on the motion, made factual findings on the record, and ultimately entered judgment in the case based on the settlement agreement.  

On appeal, the Supreme Court gave deference to Judge Eveleigh's findings and upheld his decision to enforce the settlement agreement despite one of the plaintiffs stating her attorney had no authority to settle the case.    The Court's decision was based on the actual or apparent authority that the plaintiffs' attorney had to settle the case coupled with the defendants' reasonable belief that the attorney had the authority. 

The following factors, if present, can result in an attorney binding a client to an enforceable settlement agreement whether the client actually agreed or not:

  • Terms of the settlement are clear, certain, and unambiguous
  • Offer and acceptance of the terms
  • Attorney had actual or apparent authority to agree to the terms
  • If apparent authority, then opposing party must have good faith belief that attorney had authority

On the issue of apparent authority, the basic question is whether it reasonably appeared to the opposing party that the attorney had authority to settle regardless of whether there was express authority.  The relevant inquiry for the court is the conduct of the client, not the attorney.  In other words, the client can engage in conduct that permits others to believe the client's attorney had authority to settle.  For example, a court may find apparent authority existed if the client through her own actions held the attorney out as "possessing sufficient authority" or knowingly permitted the attorney to act with such authority.   If it was reasonable for the opposing party to believe there was authority to settle, a binding agreement can exist.  In these circumstances, as in the Sobol case, the court can enforce a settlement agreement even if the client later claims that there was no actual authority for the attorney to settle the case.  

The take away here is that a settlement agreement negotiated between attorneys can, under some circumstances,  bind a client to the agreement in court even if a client did not intend to agree or the client later changes her mind.  If a client wants to have final approval over every aspect of a settlement agreement, it should be clear to not only the client's attorney, but also communicated to the opposing party as well. 

CT Supreme Court Affirms Right To Challenge Foreign Judgment With Special Defense

One of the many issues to consider when filing a lawsuit against a party in another state is how you will go about enforcing the judgment if you win.  For example, lets assume you live in Alaska and want to sue someone who lives in Connecticut.  You decide you do not want to hire a Connecticut lawyer, but instead decide to sue in Alaska state court.  You win a "default" judgment in the Alaska case because the Connecticut resident never appeared in the case or hired a lawyer to defend the case. 

Typically, in these circumstances, you take the judgment from one state, hire an attorney in the state where the defendant lives, and you "domesticate" the judgment.  In this example, you would take the Alaska state court judgment to a court in Connecticut and ask the Connecticut court to enforce it.  Under the Full Faith and Credit Clause of the United Stated Constitution, states have a duty to recognize or give "credit" to the "judicial proceedings" of every other state.  

Sounds simple right?  Not always the case.  There are various ways to challenge a foreign or out of state judgment.  One of the primary methods Connecticut attorneys use to challenge a foreign judgment is to contest the personal jurisdiction of the court that rendered the judgment.  This is exactly what happened in Maltas v. Maltas (download here) which was officially released yesterday by the Connecticut Supreme Court. 

John Maltas, an Alaskan resident, sued his brother Brian Maltas in Alaska state court.  He won a default judgment because his brother stayed in Connecticut and ignored the lawsuit.  John Maltas then filed a lawsuit in Connecticut seeking to enforce the default judgment.  Brian Maltas raised as a special defense that the Alaska court lacked jurisdiction over the matter in the first place and no "credit" should be given to the judgment.

At the trial level, John Maltas won summary judgment after arguing that personal jurisdiction may only be challenged in Connecticut state court through a motion to dismiss as opposed to asserting an answer with a special defense.  On appeal, the Connecticut Supreme Court reversed the decision and stated that a special defense may be used to contest whether the Alaska state court had jurisdiction to rule on a dispute involving a Connecticut resident.  As a result, all of John Maltas' efforts thus far, dating back to 2005, have been fruitless and reversed.  He may ultimately win at trial, but for now, jurisdictional defenses have defeated his claim without any hearing at all on the merits of the case.    

The takeaway here is that decisions regarding where to file suit are important, especially when the lawsuit will involve an out of state defendant.   There are ways to avoid or mitigate potential problems that may arise with domesticating a foreign judgment.  For example, you could elect to file the lawsuit where the defendant lives.  This may be an inconvenience in the short term, but it might also avoid jurisdictional problems when the time comes to enforce the judgment. Of course, the ability to enforce the judgment is only one of many issues to consider at the time of filing a lawsuit.

Connecticut Civil Procedure - A Law Clerk's Perspective

Corey Dennis, a former Superior Court clerk in Connecticut, sent me an article he recently published on Connecticut civil procedure.  I am posting the article,  "Roadmap to Connecticut Procedure" (download here), with the permission of the Connecticut Bar Journal and Corey.  The article brings the perspective of a Law Clerk who was involved with the procedural aspects of the Connecticut Superior Court on a regular basis. It is a nice summary of the basics of early motion practice in Connecticut state courts.   The article also has a useful chart on distinctions between state and federal procedure in a few important areas.  Corey practices complex litigation and dispute resolution at Governo Law Firm in Boston, MA.

Complex Litigation Docket For Business Disputes In Connecticut

 

 

The Complex Litigation Docket or “CLD” is a special session of the Connecticut Superior Court  designed to accommodate the needs of complex cases.  The Judicial Branch published a fact sheet about the CLD.   Here is a summary of the CLD facts:

  • Designed for cases with intricate legal issues, multiple parties, or significant damages;
  • A single judge is assigned over all aspects of the case, similar to federal court;
  • Assignment of hearing dates for motions instead of the standard "short calendar" sessions;
  • Judges and court officers fully supported by staff with newer technology; and
  • Enhanced use of court-annexed mediation, include special masters.

Any party, or a judge, may request a transfer of a case from the regular Superior Court docket to the CLD.  A request is made by filling out and submitting an application.  Any objection must be filed within 15 days.  The Chief Administrative Judge of the Civil Division handles the request, and a hearing may be held to determine if referral to the CLD is appropriate.  The determination for placement on the CLD is made by an evaluation of several factors listed on the fact sheet.

For many business dispute or commercial cases, the CLD may be an appropriate venue rather than the regular docket.   The CLD is more akin to the federal court.  The benefits of a single judge assignment can be significant as it reduces delays in discovery and motion practice.  The CLD judges have standing orders designed to streamline the process.  Each case is also assigned a court officer who remains involved in the scheduling and administrative process.  In this way, cases are actively managed. 

The CLD also affords an opportunity to change venue in a case.  If your case is in a venue that you deem unfavorable to your case or client, one of three CLD venues (Hartford, Stamford, Waterbury) may be preferable.  You can request a particular venue when applying for the CLD, but there is no certainty that the request for a specific location will be granted.  Nevertheless, any one of the three venues may be preferable to others venues.

Although there are many upsides to the CLD, there are some reasons to stay on the regular docket.  For example, trial dates on the CLD are currently being scheduled 2 to 3 years out from assignment.  Although CLD trial dates are less likely to be continued than dates on the regular docket, CLD cases can take longer to arrive at resolution, especially if trial is necessary.   Also, there can be some gamesmanship involved with referrals to the CLD.  I have seen litigants applying to the CLD simply to delay the proceedings on the regular docket.  There is also a $325.00 fee for the docket.

In most significant business disputes or commercial litigation cases, the advantages available on the CLD, such as the single judge assignment,  may make the CLD the preferable venue. 

 

Did A Secretary Cause A Billion Dollar Default Judgment Against PepsiCo?

Imagine your company is so busy preparing for a board meeting that a secretary sets aside paperwork from a recently served lawsuit for a billion dollars over trade secrets.  Imagine further that your company bureaucracy fails to put it together that a lawsuit has been filed until such a time that your company becomes defaulted in the case, to the tune of $1.26 billion dollars.  Ouch. 

Well, that is exactly what happened at PepsiCo according to a report by Lynne Marek in the National Law Journal.  According to the story, PepsiCo for various reasons, failed to realize a lawsuit had been filed or a motion for default until it was too late.  The case involved allegations that PepsiCo stole trade secrets and ideas for Aqaufina from two Wisconsin men.  When the suit went unnoticed,  a Wisconsin state court judge granted a motion for default against PepsiCo.

Marek writes that PepsiCo is trying to undo the damage and vacate the default.  Perhaps PepsiCo can vacate the default, but if not, it is a devastating blow in litigation to lose your liability defenses. By all accounts PepsiCo indicates the lawsuit is questionable suggesting numerous defenses exist.  Unfortunately, it appears there is a chance they may never get to assert the defenses.

In Connecticut, if you are defaulted for failing to respond to a lawsuit and a default judgment enters against you, you also can lose the ability to defend against the allegations in the complaint.  If you further fail to appear in the case before the court determines the amount of damages (usually at a hearing), then you may also lose your ability to defend against damages claims. Of course, there are various ways to avoid a default judgment (such as filing an appearance before judgment enters), but if a lawsuit is ignored too long, you could face a similar fate as PepsiCo.

To avoid the PepsiCo disaster, Connecticut businesses should have a policy in place to handle all matters related to litigation or lawsuits.  A business should designate one person that all staff can refer litigation issues, lawsuit papers or any other documents.  Lawsuits should be given immediate attention so as to not miss any deadlines. 

In state court, deadlines can determined from civil summons or cover page of the lawsuit. 

  • A defendant has to file an appearance within 2 days of the return date listed on the civil summons
  • A defendant also has 30 days from the return date to file a responsive pleading to the complaint . 

These deadlines should not be ignored.  Although there are methods for vacating a default, even a frivolous lawsuit can end in a judgment if ignored for too long.

Withdrawn Negligence Defense In Rape Case Could Still Be A Problem

After making national news, Stamford Marriott Hotel & Spa has requested that its attorneys withdraw a special defense in a case involving a rape in its hotel parking garage. 

In 2006, a 40 year old woman was sexually assaulted in front of her two small children in the hotel's garage.  The assailant admitted the crime and was sentenced to prison.  As such, the rape was not in dispute.  The woman later sued and brought a complaint against the Marriott alleging various allegations of negligence. 

As detailed by Christian Nolan of The Connecticut Law Tribune, the attorneys representing Marriott raised two special defenses to the woman's complaint that caused a public backlash against Marriott.  Reportedly, Marriott's defenses included contributory negligence of the rape victim and failure to mitigate damages for the children. 

Marriott quickly changed its course and withdrew the defenses.   Marriott's withdrawal of the defenses may spare it further public relations problems, but the potential for an angry jury at trial could remain a problem. 

At least one Connecticut attorney estimated that a jury might very well award a premium for that type of defense if pursued at trial and not proved.  Although Marriott has now withdrawn the defenses, it could still become a problem at trial based on Connecticut law concerning withdrawn pleadings. 

In Connecticut, withdrawn pleadings are no longer judicial admissions by the party, but they can remain available at trial as an evidentiary admission.   If this matter goes to trial, Marriott will have various ways to argue against admissibility of the pleading, but the initial defenses could still wind up in front of a jury as an evidentiary admission.  Once in evidence, Marriott should get the chance to explain the circumstances of raising the defenses, which may help mitigate any damage done.

In high exposure cases, the decision to raise certain special defenses is not always easy or a formality as in some jurisdictions.  In Marriott's case, although it seems difficult to understand why the defenses were raised, we should not automatically assume there was no basis for it without knowing the full details.    Nevertheless, it appears Marriott did the right thing in withdrawing the defenses.

The rule on withdrawn pleadings serves as a reminder that withdrawing a claim in a pleading will not always prevent your opponent from using it against you in court.  As such, in Connecticut, business owners will want to consider the contents of certain pleadings filed in court because the pleadings could be used against the business as an admission. 

Getting A Contract In Writing Does Not Always Satisfy The Statute Of Frauds

One of the first things lawyers check for when contesting an oral contract is the statute of frauds.  The statute of frauds comes from an English rule dating back to the 1600's.  At its most basic level, the statute of frauds requires certain types of contracts to be in writing or else they are not enforceable in court actions.  However, sometimes, even when a contract is in writing, it still will not satisfy the statute of frauds.

That is what happened in SS-II, LLC v. Bridge Street Associates, an advanced opinion released today by the Connecticut Supreme Court.  The dispute involved an option to purchase property pursuant to a commercial lease that was in writing.  The tenant wanted to exercise the option and the seller did not want to close on the sale. 

When the tenant brought a lawsuit for specific performance trying to force the sale, the owner raised the Connecticut Statute of Frauds as a defense and won in court.  In Connecticut, the agreements that must be in writing under the statute of frauds include the following:

  • any agreement by any executor promising to answer damages out of his own property
  • any promise to answer for the debt, default or miscarriage of another
  • any agreement made upon consideration of marriage
  • any agreement for the sale of real property or any interest in or concerning real property
  • any agreement that is not to be performed within one year 
  • any agreement for a loan in an amount which exceeds fifty thousand dollars.

Not only do these agreements have to be in writing, but they also have to contain the contract's essential terms.  In a contract to sell land, the terms must describe a certain price, the parties to the contract, and the land.  In the SS-II case, the contract did not comply with the statute of frauds because the purchase price was not certain and was subject to some conditions.  Although there are counter defenses to the statute of frauds, such as partial performance, the court deemed that they did not apply. 

The takeaway from this case is to be cautious with oral contacts and do not assume a writing alone will make the agreement enforceable.  A contract has to be in writing, signed, and have the proper terms in it or else you may not have an enforceable agreement if the statute of frauds applies.  

Connecticut State Court To Phase In Mandatory E Filing

The Connecticut Judicial Branch will implement mandatory electronic filing in Connecticut state superior courts in all civil cases by December 5, 2009.  The Judicial Branch is also going paperless for short calendar and notices will no longer be sent by paper in the mail (unless the firm or litigant is exempt) starting September 1, 2009.

The mandatory e-filing will be implemented in phases as follows:

E-filing will be available in all remaining civil cases (with few exceptions) starting August 22, 2009.

E-filing is mandatory in all foreclosure cases starting September 1, 2009.

E-filing is mandatory in all remaining civil cases starting December 5, 2009.

Law firms and attorneys can receive e-filing training in each judicial district.

E-filing will be mandatory starting December in Connecticut in both state superior and federal district courts unless a law firm or litigant qualifies for an exemption.