Source: https://www.appellateinsights.com/category/connecticut-supreme-court/page/2/
Timestamp: 2019-04-22 12:00:49+00:00

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The Connecticut Supreme Court recently heard argument in Channing Real Estate, LLC v. Gates, an appeal that rose out of a failed real estate development joint venture. This case presents two issues of interest to Connecticut’s business community. The first issue is whether the whole case needs to be retried after an appellate ruling that the parol evidence rule blocks evidence of prior and contemporaneous statements from varying the meaning of promissory notes. The second issue is whether the payor on those notes can counterclaim under the Connecticut Unfair Trade Practices Act (“CUTPA”) when he was a member of a limited liability company that was working on a joint venture with the limited liability company that was the payee. This post will focus on the application of CUTPA to joint ventures, which is an issue of first impression for the Supreme Court.
Since it was enacted in 1973, CUTPA has been the basis for countless lawsuits in part because it is one of the few vehicles that litigants can use to recover their attorneys’ fees and punitive damages. Conn. Gen. Stat. § 42-110g. Indeed, the defendant in this lawsuit, Mr. Gates, was awarded his attorneys’ fees by the trial court even though he did not prove he was entitled to damages on his CUTPA claim. The courts have interpreted CUTPA broadly, citing its remedial purpose, but they also have ruled that certain conduct cannot violate CUTPA because it is not “trade” or “commerce” as required under the statute. One of those categories of conduct that is outside of the bounds of CUTPA is intra-corporate or intra-partnership disputes. In its appeal, Channing Real Estate, LLC argues that this is a dispute between former joint venturers, and that therefore Mr. Gates cannot pursue his CUTPA counterclaim. Although the appellate courts have ruled a few times on what is or is not an internal business dispute outside of the reach of CUTPA, this case presents a fresh opportunity to clarify whether CUTPA applies to disputes in business arrangements that are not corporations or partnerships.
The Court starts the week by hearing oral arguments in two criminal cases. In State v. Tilus, SC 19503, an appeal from a robbery conviction of a convenience store, the Court will consider whether a prosecutor equating the defendant’s claim that the victim-convenience store operated an illegal lottery with arguing that a sexual assault victim was a prostitute constituted prosecutorial impropriety. In Taylor v. Commissioner of Correction, SC 19462, the Court will decide if a trial court’s error in sealing the contents of a juror’s note without first sharing it with defense counsel is subject to harmless error analysis.
The Court starts the November term with CCT Communications, Inc. v. Zone Telecom, Inc., SC 19574, a case which explores whether a contract’s termination clause for filing bankruptcy is effective when the bankruptcy case is filed but subsequently dismissed. The second case is Disciplinary Counsel v. Elder, SC 19698, where the Court will consider whether a lawyer was properly suspended for misrepresenting his identity on a telephone call ten years prior to the grievance complaint, in light of the Practice Book’s six year limitations period for attorney grievances.
On October 14, the Connecticut Supreme Court heard arguments in the appeal of Lackman v. McAnulty, SC 19668, a case in which two nieces sued their two aunts in a battle over real estate from their grandfather’s estate. The underlying question was whether the “Property” should pass through the grandfather’s revocable trust – in which case the aunts shared in the Property – or whether the property should pass by specific bequest in the grandfather’s will – in which case only the nieces and their father would get the Property.
The Supreme Court heard oral argument in the case of Jefferson Allen, et al. v. Commissioner of Revenue Services, SC 19567, on October 13, 2016. The issues in the case concern the constitutionality of Connecticut’s taxation of the exercise of qualified stock options by former residents when the options had no readily ascertainable value when received as part of compensation for work performed in Connecticut. As part of this question, the Court is asked to interpret certain tax regulations referencing the applicable time period for taxing income derived from or connected with sources within this state. Finally, because the nonresidents actually filed and paid income taxes within Connecticut for income from the exercise of qualified stock options in 2002, but later tried to amend and get a refund of those taxes, the Court is asked to address the issue of whether the statute of limitations is jurisdictional and equitably tolled by the existence of an audit.
The Supreme Court heard oral argument for a second time in the 15-year old lawsuit by a class of Connecticut state employees claiming that they were members entitled to shares of stock when their insurer, Anthem, demutualized in 2001. At the time Anthem converted from a mutual to a stock corporation, Anthem determined that the State of Connecticut, as the group under the policies, was the member under Anthem’s Articles of Incorporation. Therefore, the State received 1,645,773 shares of stock that it later sold for $93 million. The employees claim that the Articles of Incorporation also deem them, as individual certificate holders under the group policy, to be members and that they should have received stock or cash. Both Judge Sheldon and Judge Bright ruled on summary judgment that the Articles of Incorporation are ambiguous. Judge Bright held a bench trial and issued a 90-page decision in which he ruled for Anthem that only the State was a member at the time of the demutualization.
The Court starts the week by hearing oral argument in Gold v. Rowland, SC 19585, a fifteen year old lawsuit by state employees claiming that they were entitled to stock when their insurer demutualized. Two criminal cases follow: In State v. Samuel M., SC 19578, the Court will consider what the standards should govern determining when a child charged with a felony should be tried as an adult on the regular criminal docket. In State v. Bouknight, SC19326, the Court is confronted with the question of how Facebook profiles should be authenticated to support admission as evidence.
The Court starts the October term with a family appeal and a habeas appeal. In Gabriel v. Gabriel, SC 19571, the Court granted certification to review the Appellate Court’s decision as to whether the trial court’s modification of unallocated alimony and child support was proper after there was a change in the primary custodial parent. In Kaddah v. Commissioner of Correction, SC 19512, the Supreme Court will consider whether a prisoner has a right to the effective assistance of counsel in a second habeas proceeding, challenging the quality of the representation at the first habeas proceeding.
Can “Blind” Negligence Constitute a Breach of a Fiduciary Duty?
In Heisinger v. Cleary, SC 19633, the Supreme Court heard argument in a case alleging mismanagement of a decedent’s estate and residuary trust. The plaintiff claimed that the overvaluing of the principal asset of the estate by some $3,000,000 was a breach of the co-executor’s fiduciary duty to plaintiff, the sole beneficiary of the estate, because reliance upon an allegedly erroneous appraisal resulted in severe federal estate tax liabilities.
The co-executors, the plaintiff’s aunt and an attorney with a long-time relationship with the decedent, raised several special defenses, including the fact that they were entitled to rely on an expert appraisal in valuing the assets of the estate – the so-called third party reliance rule. The defendants ultimately moved for summary judgment, which was denied initially as premature. After much discovery and numerous depositions, the defendants renewed their summary judgment motions just prior to trial. The plaintiff also sought partial summary judgment.

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