Source: https://www.scribd.com/document/50820922/Knights-seek-dismissal-of-sexual-abuse-case
Timestamp: 2017-11-24 00:29:43
Document Index: 366746152

Matched Legal Cases: ['§ 52', '§ 16', '§ 16', '§ 1226', '§ 142', '§ 6', '§ 187', '§ 541', '§ 541', '§ 108', '§ 1226', '§ 145', '§ 145', '§ 122', '§ 142', '§ 142', '§ 6', '§ 6', '§ 52', '§ 52577', '§ 16', '§ 16', '§ 187', '§ 541', '§ 541', '§ 108']

Knights seek dismissal of sexual abuse case | Negligence | Pleading
Description: A memorandum in support of the Knights of Columbus' motion to dismiss two sexual abuse cases filed against the Catholic fraternal organization.
A memorandum in support of the Knights of Columbus' motion to dismiss two sexual abuse cases filed against the Catholic fraternal organization.
Case 3:10-cv-01960-CSH Document 18
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JOHN DOE NO. 1 Plaintiff, v. KNIGHTS OF COLUMBUS, Defendant. ___________________________________/ CASE NO. 3:10-CV-1960 CSH
DEFENDANT'S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF'S COMPLAINT
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TABLE OF CONTENTS Page I. II. III. PRELIMINARY STATEMENT ....................................................................................... 1 BACKGROUND ............................................................................................................... 1 ARGUMENT..................................................................................................................... 2 A. B. The Applicable Legal Standard ............................................................................. 2 Plaintiff's Negligence Claim is Barred by Texas' Statute of Limitations .............. 4 1. 2. C. D. Choice of Law: The Substantive Law of Texas Applies to this Action......................................................................................................... 4 Procedural Law: This Court Should Apply Texas' Statute of Limitations ................................................................................................. 6
Plaintiff's Negligence Claim Fails Because He Has Failed to Plead Foreseeability......................................................................................................... 9 The Release Bars Plaintiff's Negligence and Declaratory Relief Claims ............ 15 1. 2. Choice of Law.......................................................................................... 15 Plaintiff's Negligence and Declaratory Relief claims should be dismissed because the pleaded facts show as a matter of law that he was not justified in relying on the alleged misrepresentation.................. 17 Plaintiff's Negligence and Declaratory Relief claims should be dismissed because the pleaded facts show as a matter of law that he ratified the Release................................................................................... 22
CONCLUSION................................................................................................................ 26
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TABLE OF AUTHORITIES Page(s) CASES ABM Farms, Inc. v. Woods, 692 N.E.2d 574 (Ohio 1998) ...................................................................................................21 Advest Inc. v. Wachtel, 235 Conn. 559 (1995) ................................................................................................................7 Alford v. Wabash Ry. Co., 73 S.W.2d 277 (Mo. Ct. App. 1934)........................................................................................20 Alires v. McGehee, 85 P.3d 1191 (Kan. 2004) ........................................................................................................17 Am. States Ins. Co. v. Allstate Ins. Co., 922 A.2d 1043 (Conn. 2007) ...................................................................................................16 Anselmo v. Mfrs. Life Ins. Co., 771 F.2d 417 (8th Cir. 1985) .............................................................................................22, 23 Arroyo Shrimp Farm, Inc. v. Hung Shrimp Farm, Inc., 927 S.W.2d 146 (Tex. App.—Corpus Christi 1996, no writ)..................................................21 Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)...................................................................................2, 3, 12, 13, 15, 23 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)...................................................................................................2, 3, 12, 13 Benefit Concepts N.Y., Inc. v. New England Life Ins. Co., No. 3:03-1456, 2004 WL 1737452 (D. Conn. July 30, 2004) ...................................................6 Bilodeau v. Vlack, No. 07-1178, 2009 WL 1505571 (D. Conn. May 20, 2009)..................................................6, 7 Bilton v. Monsanto Co., 947 F. Supp. 1344 (E.D. Mo. 1996).........................................................................................23 Brandewiede v. Emery Worldwide, 815 F. Supp. 60 (D. Conn. 1992).............................................................................................15 Brass v. Am. Film Techs., Inc., 987 F.2d 142 (2d Cir. 1993).....................................................................................................15
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C.F.L., Inc. v. Moffitt & Duffy, Inc., No. 38655, 1991 WL 61417 (Conn. Super. Ct. Apr. 12, 1991)...............................................23 Chapman Lumber, Inc. v. Tager, No. 10086006, 2003 WL 22080469 (Conn. Super. Ct. Aug. 22, 2003) ............................17, 21 Cordero v. Tenet Healthcare Corp., 226 S.W.3d 747 (Tex. App.—Dallas 2007, pet. denied) ...................................................22, 23 Doe v. Boys Club of Greater Dallas, Inc., 907 S.W.2d 472 (Tex. 1995)................................................................................................9, 10 Doe v. Catholic Soc. of Religious and Literary Educ., No. 09-1059, 2010 WL 345926 (S.D. Tex. Jan. 22, 2010)................................................10, 14 Doe v. St. Stephen's Episcopal Sch., 382 F. App'x. 386 (5th Cir. 2010)..............................................................................................8 Dyrssen v. Union Elec. Light & Power Co., 295 S.W. 116 (Mo. 1927) ............................................................................................17, 18, 20 E. Devoe Tompkins, Inc. v. Bridgeport, 123 A. 135 (Conn. 1923) .........................................................................................................22 Economu v. Borg-Warner Corp., 652 F. Supp. 1242 (D. Conn. 1987).........................................................................................16 El Chico Corp. v. Poole, 732 S.W.2d 306 (Tex. 1987)......................................................................................................9 Elgar v. Elgar, 679 A.2d 937 (Conn. 1996) .....................................................................................................16 Field v. Mans, 516 U.S. 59 (1995).............................................................................................................18, 22 Franke v. Global Credit and Collection Corp., No. 3:10-cv-1535, 2010 WL 4449373 (D. Conn. Nov. 1, 2010).............................................11 Frith v. Fairview Baptist Church, No. 05-01-01605, 2002 WL 1565664 (Tex. App.—Dallas July 17, 2002, pet. denied)..........11 Gallon v. Burns, 101 A. 504 (Conn. 1917) ...................................................................................................17, 21 Gen. Motors Corp. v. Courtesy Pontiac, Inc., 538 S.W.2d 3 (Tex. App. - Tyler 1976, no writ) ...............................................................18, 21
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Graff v. Beard, 858 S.W.2d 918 (Tex. 1993)......................................................................................................9 Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990)..............................................................................................9 Grymes v. Sanders, 93 U.S. 55, 62 (1876)...............................................................................................................24 Hanson v. Acceptance Fin. Co., 270 S.W.2d 143 (Mo. Ct. App. 1954)................................................................................17, 18 Herschbach v. City of Corpus Christi, 883 S.W.2d 720 (Tex. App.—Corpus Christi 1994, writ denied) ...........................................23 Hicks v. Soroka, 55 Del. 424 (Del. Super. Ct. 1963) ..........................................................................................21 Houser v. Smith, 968 S.W.2d 542 (Tex. App.—Austin 1998, no pet.) .................................................................9 In re Helicopter Crash Near Wendle Creek, British Columbia on Aug. 8, 2002, 485 F. Supp. 2d 47 (D. Conn. 2007)........................................................................................16 In re Mercer, 246 F.3d 391, 418 (5th Cir. 2001) ...........................................................................................20 In re Parcel Tanker Shipping Servs. Antitrust Litig., 541 F. Supp. 2d 487 (D. Conn. 2008)................................................................................11, 13 Jaiguay v. Vasquez, 948 A.2d 955 (Conn. 2008) .......................................................................................................9 Judd v. Walker, 114 S.W. 979 (Mo. 1908) ..................................................................................................19, 20 Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941).................................................................................................................15 Lewis v. Bank of Am. NA, 343 F.3d 540 (5th Cir. 2003)......................................................................................17, 18 Maryland Casualty Co. v. Continental Casualty Co., 332 F.3d 145 (2d Cir. 2003).......................................................................................................4 McAward v. Kett, Inc., No. 3:10-496, 2010 WL 4876155 (D. Conn. Nov. 22, 2010)................................................4, 5
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McLean v. Clapp, 141 U.S. 429 (1891).................................................................................................................24 Mellon Mortgage Co. v. Holder, 5 S.W.3d 654 (Tex. 1999)........................................................................................................10 MM Global Services, Inc. v. Dow Chem. Co., 283 F. Supp. 2d 689 (D. Conn. 2003)........................................................................................5 Moore v. Farm & Ranch Life Ins. Co., 505 P.2d 666 (Kan. 1973) ........................................................................................................22 Morgan Cty. Coal Co. v. Halderman, 163 S.W. 828 (Mo. 1913) ........................................................................................................24 Old Rep. Ins. Co. v. Fuller, 919 S.W.2d 726 (Tex. App. – Texarkana 1996, writ denied)..................................................23 Patrowicz v. Transamerica HomeFirst, Inc., 359 F. Supp. 2d 140 (D. Conn. 2005)......................................................................................15 Phillips v. Scott, 446 F. Supp. 2d 70 (D. Conn 2006)...........................................................................................6 S.V. v. R.V., 933 S.W.2d 1, 4 (Tex.1996).......................................................................................................8 See v. Bridgeport Roman Catholic Diocesan Corp., 1997 WL 466498 ........................................14 Slaymaker v. Westgate State Bank, 739 P.2d 444 (Kan. 1987) ............................................................................................17, 18, 20 Staehr v. Hartford Fin. Services Group, Inc., 547 F.3d 406 (2d Cir. 2008).......................................................................................................3 Stuart & Sons, L.P. v. Curtis Publ. Co., Inc., 456 F. Supp. 2d 336 (D. Conn. 2006)........................................................................................6 Svege v. Mercedes Benz Credit Corp., 182 F.Supp.2d 226 (D. Conn. 2002)..........................................................................................5 Tammen v. Directors of Alfalfa Pellets, Inc., 95 P.3d 135 (Kan. Ct. App. 2004) ...........................................................................................22 Tips v. Barneburg, 276 S.W. 932 (Tex. Civ. App. 1925) .......................................................................................19 Tomdra Invests., L.L.C. v. CoStar Realty Information, Inc., 735 F. Supp. 2d 528 (N.D. Tex. 2010) ....................................................................................11 -4-
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Waggoner v. Zundelowitz, 231 S.W. 721 (Tex. Comm'n App. 1921) ................................................................................24 Werner v. Int'l Bank of Commerce, 71 F.3d 879 (5th Cir. 1995) .....................................................................................................17 Western Tractor Equip. Co. v. Ayers, 225 P. 115 (Kan. 1924) ............................................................................................................20 Williams v. State Farm Mutual Auto. Ins. Co., 229 Conn. 359 (1994) ................................................................................................................5 Williams v. United Pentecostal Church Intern., 115 S.W.3d 612 (Tex. App.—Beaumont 2003, no pet.) ...................................................10, 14 STATUTES Conn. Gen. Stat. § 52-577d..............................................................................................................8 Tex. Civ. Prac. & Rem.Code § 16.001(a)-(b)..................................................................................8 Tex. Civ. Prac. & Rem.Code § 16.003 ............................................................................................8 RULES Fed. R. Civ. P. 8.........................................................................................................................3, 14 Fed. R. Civ. P. 8...............................................................................................................................1 Fed. R. Civ. P. 8(a)(2)......................................................................................................................3 Fed. R. Civ. P. 8(a)(23)....................................................................................................................3 Fed. R. Civ. P. 9(f)...........................................................................................................................4 Fed. R. Civ. P. 12(b)(6)........................................................................................................1, 2, 3, 4 D. Conn. Local Rule 7 .....................................................................................................................1 OTHER AUTHORITIES 5 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1226 (3d ed. 2004) ..........................................................................................................................................3 Restatement (Second) of Conflict of Laws § 142............................................................................7 Restatement (Second) Conflict of Laws § 6 ....................................................................................7 Restatement (Second) of Conflict of Laws §§ 187 cmt.................................................................16
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Restatement (Second) of Conflicts of Laws ................................................................................6, 7 Restatement (Second) of Torts § 541 (1976).................................................................................18 Restatement (Second) of Torts § 541 (1977).................................................................................17 Torts § 108 (4th ed. 1971)..............................................................................................................18
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Defendant Knights of Columbus ("Knights") respectfully moves, pursuant to Rules 8 and 12(b)(6) of the Federal Rules of Civil Procedure and D. Conn. Local Rule 7, to dismiss Plaintiff John Doe No. 1's ("Plaintiff") Complaint for failure to state a claim upon which relief can be granted. I. PRELIMINARY STATEMENT
Plaintiff asserts a negligence claim against the Knights for alleged sexual abuse of a minor over 24 years ago in Texas by a Knights volunteer youth leader and seeks a declaratory judgment that the Settlement Agreement and Full Release ("Release") he signed in 2009 agreeing to release the Knights from any claims related to the alleged sexual abuse was procured by fraud. The Complaint should be dismissed because (1) the claims are barred by the statute of limitations, (2) Plaintiff has failed to properly plead foreseeability as required to maintain a negligence cause of action; (3) the pleaded facts show as a matter of law that Plaintiff was not justified in relying on the alleged misrepresentation when he signed the Release; and (4) the pleaded facts show as a matter of law that Plaintiff ratified the Release. II. BACKGROUND
The Knights is a fraternal benefit society, organized under the laws of Connecticut, founded on the principles of charity, unity and fraternity. See Complaint ¶ 7. Social and intellectual fellowship is promoted among members and their families through educational, charitable, religious, social welfare, war relief, and public relief works. Membership in the Knights is open to men 18 years of age or older who are practicing Catholics and are committed to supporting the Catholic Church and making their community a better place. See id. ¶ 8. Since its founding in New Haven, Connecticut in 1882, the Knights has grown from several members
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in one council to more than 14,000 councils and 1.8 million members throughout the United States, Canada and the world. The Columbian Squires program, which was founded in 1925, is the official youth program of the Knights. Id. ¶ 10. The Columbian Squires program strives to promote the spiritual, cultural, civic, social and physical improvement of its members, and the development of their leadership qualities. Plaintiff was born in 1968 and joined the Columbian Squires in Brownsville, Texas, in approximately 1978. Id. ¶¶ 11-12. Plaintiff left the Columbian Squires in 1986 when he turned 18. In December 2009, when Plaintiff was 41 years old, Plaintiff first told Knights' officials that he had been sexually abused by Julian Rivera, a Columbian Squires leader, over 23 years earlier. Id. ¶ 23. In response to Plaintiff's request, the Knights agreed to pay for Plaintiff's choice of treatment for chemical addiction, and Plaintiff signed a Settlement Agreement and Full Release releasing the Knights from all liability related to Rivera or the Columbian Squires on December 23, 2009. Id. ¶ 24 & Exhibit A. On December 14, 2010, Plaintiff filed this lawsuit against the Knights alleging negligence related to the alleged abuse against Plaintiff when he was a member of the Columbian Squires in the 1970s and 1980s. III. ARGUMENT A. The Applicable Legal Standard
To survive a Rule 12(b)(6) motion, a claim's factual allegations must raise "a right to relief above the speculative level on the assumption that all allegations in the complaint are true[.]" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In support of his claims, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Id. at 570. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 129 S. Ct. -2-
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1937, 1949 (2009). A claim is plausible when the factual allegations permit a court to draw the "reasonable inference" that the defendant is liable for the alleged misconduct; alleging facts that are "merely consistent with a defendant's liability" is not enough. Id. Rule 8(a)(2) of the Federal Rules of Civil Procedure requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Prior to Twombly, claims were subject to dismissal only where a plaintiff could prove "no set of facts" that would entitle the plaintiff to relief. Twombly, 550 U.S. at 561 (quotations omitted).
Twombly dispensed with the "no set of facts" standard and instead held that plaintiffs are required to plead sufficient facts to "give the defendant fair notice of what the … claim is and the grounds upon which it rests." Id. at 555. Rule 8 "does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Iqbal, 129 S. Ct. at 1950. In assessing the sufficiency of a complaint, a court "begin[s] by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumptions of truth." Iqbal, 129 S. Ct. at 1950. After identifying the well pled factual allegations, "a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. That determination is a "context-specific task that requires the reviewing court to draw on its judicial experience and common-sense." Id. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'shown'—that the pleader is entitled to relief." Id. (quoting Rule 8(a)(23)) (alteration omitted). Additionally, "a defendant may raise an affirmative defense in a pre-answer Rule 12(b)(6) motion if the defense appears on the face of the complaint." Staehr v. Hartford Fin. Services Group, Inc., 547 F.3d 406, 425-26 (2d Cir. 2008); see also 5 Charles Alan Wright &
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Arthur R. Miller, Federal Practice & Procedure § 1226 (3d ed. 2004) (“[T]he current trend in the cases is to allow [the statute of limitations defense] to be raised by a motion to dismiss under Rule 12(b)(6) when the defect appears on the face of the complaint.”). Timeliness is “material when testing the sufficiency of a pleading.” Fed. R. Civ. P. 9(f). Plaintiff's negligence and declaratory relief claims against the Knights fall far short of the mark. B. Plaintiff's Negligence Claim is Barred by Texas' Statute of Limitations
The alleged abuse in this case took place entirely between 1978 and 1986 in Texas and other locations throughout the United States. Complaint ¶¶ 6, 17. Plaintiff was born in 1968 and therefore reached the age of majority – the relevant date for when a cause of action accrues in Texas – in 1986. Id. ¶ 11. Because the place of the injury and the forum with the most significant contacts in this case is Texas, and because there is no allegation that any of the abuse occurred in Connecticut, this court should apply both the substantive and procedural law of Texas and dismiss this claim as time barred under the applicable statute of limitations. 1. Choice of Law: The Substantive Law of Texas Applies to this Action
"A federal court sitting in diversity applies the choice of law rules of the forum state." Maryland Casualty Co. v. Continental Casualty Co., 332 F.3d 145, 151 (2d Cir. 2003). In Connecticut, the traditional choice of law rule for a court sitting in diversity in a negligence case is to apply the doctrine of lex loci delecti; in other words, "[t]he Connecticut Supreme Court has held that the nature and extent of tort liability is governed by the place of injury." McAward v. Kett, Inc., No. 3:10-496, 2010 WL 4876155, at *2 (D. Conn. Nov. 22, 2010) (internal quotation omitted). Connecticut courts have, however, strayed from the traditional rule of lex loci delicti when its application would frustrate the legitimate expectations of the parties and undermine an important policy of Connecticut. Id. In such cases, "[t]he evaluation of which law should apply -4-
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should be guided by the factors of the 'most significant relationship test' listed in the Restatement (Second) § 145"; specifically, those factors are: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the residence, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. Id. (citing Svege v. Mercedes Benz Credit Corp., 182 F.Supp.2d 226, 229 (D. Conn. 2002)). Applying the Restatement analysis, the Connecticut Supreme Court has held that "[w]hen the injury occurred in a single, clearly ascertainable state and when the conduct which caused the injury also occurred there, that state will usually be the state of the applicable law." Williams v. State Farm Mutual Auto. Ins. Co., 229 Conn. 359, 372 (1994) (quoting Comment e to Restatement § 145). In this case, at the time of the alleged abuse, Doe and Rivera were both residents of Texas and the Columbian Squires unit to which they both belonged was located in Texas. Complaint ¶ 7. Although the Complaint alleges that abuse occurred in Texas and throughout the United States, there are no specific allegations of any abuse that occurred outside of Texas, nor does he alleged that any of the abuse occurred in Connecticut. See Complaint ¶ 17. Indeed, what is apparent from the Complaint is that Connecticut's only connection to this case is that it is the place of incorporation and home office of the Knights. See MM Global Services, Inc. v. Dow Chem. Co., 283 F. Supp. 2d 689, 704 (D. Conn. 2003) (finding that the mere fact that a corporation is headquartered in Connecticut insufficient to warrant application of Connecticut law). Accordingly, under either the doctrine of lex loci delicti or the Restatement's "most significant relationship test," the substantive law of Texas should apply to this action.
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Procedural Law: This Court Should Apply Texas' Statute of Limitations
Unlike the traditional rule of lex loci delicti or the Restatement's "most significant relationship" test which determine the substantive law to be applied to a case, "[t]raditionally in Connecticut, the law of the forum state governs on matters of procedure." Bilodeau v. Vlack, No. 07-1178, 2009 WL 1505571, at *3 (D. Conn. May 20, 2009) (internal citation omitted). "Under Connecticut’s choice of law rules, if the underlying claim existed at common law, the statute of limitations is considered procedural." Stuart & Sons, L.P. v. Curtis Publ. Co., Inc., 456 F. Supp. 2d 336, 343 (D. Conn. 2006). As negligence is a cause of action found at common law, Connecticut courts will generally apply Connecticut procedure (which includes Connecticut's statute of limitations) to such claims. See Bilodeau, 2009 WL 1505571 at *3. Connecticut courts have, however, deviated from this rule and applied the statutes of limitations of other forums. See Phillips v. Scott, 446 F. Supp. 2d 70 (D. Conn 2006) (rejecting the traditional rule and applying the Restatement analysis to find that California, not Connecticut's, statute of limitations applied); Benefit Concepts N.Y., Inc. v. New England Life Ins. Co., No. 3:03-1456, 2004 WL 1737452 (D. Conn. July 30, 2004) (applying New York statute of limitations to, inter alia, negligence claims where the alleged injuries and the cause of the injuries mostly took place in New York). The court in Phillips noted that, although the traditional rule in Connecticut is that a statute of limitations is procedural, "this . . . is not the end of the inquiry." Phillips, 446 F. Supp. 2d at 83 n.25. The Philips court cited Comment e of the notes to § 122 of the Restatement (Second) of Conflicts of Laws which provides that "the 'emerging trend' is for courts to 'select the state whose law will be applied to the issue of limitations by a process essentially similar to that used in the case of other issues of choice of law.'" Id. The court added that "Connecticut
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courts have turned to § 142 of the Restatement (Second) of Conflicts of Laws which outlines a test similar to the most significant relationship test addressed above." Id. (citing Advest Inc. v. Wachtel, 235 Conn. 559, 668 (1995)). According to the Restatement (Second) of Conflict of Laws § 142: Whether a claim will be maintained against the defense of the statute of limitations is determined under the principles stated in § 6 [governing choice-oflaw principles]. In general, unless the exceptional circumstances of the case make such a result unreasonable: 1. The forum will apply its own statute of limitations barring the claim. 2. The forum will apply its own statute of limitations permitting the claim unless: a. b. maintenance of the claim would serve no substantial interest in the forum; and the claim would be barred under the statute of limitations of a state having a more significant relationship to the parties and the occurrence. (Emphasis added)
Further, the Advest court stated that if, as here, "a state has no constitutional or statutory directive as to its choice of law, the forum court should consider the following factors: '(a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law being applied.'" Advest, 235 Conn. at 568 n.9 (citing 1 Restatement (Second) Conflict of Laws § 6). If ever there was a case to depart from the traditional rule and apply the Restatement, this is it. Here, Doe, Rivera, and the Columbian Squires unit to which they belonged have no connection to Connecticut and none of the alleged abuse took place in Connecticut. Indeed, in Bilodeau v. Vlack, No. 07-1178, 2009 WL 1505571, at *3 (D. Conn. May 20, 2009), a case involving similar issues, Judge Hall supports her decision to apply Connecticut's statute of -7-
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limitations by noting, more than once, that at least some of the alleged abuse occurred in Connecticut – a distinction not present in this case. For public policy reasons, this Court should not permit cases with no nexus to Connecticut to take advantage of Connecticut's generous statute of limitations simply because the court has personal jurisdiction over the defendant based on their being incorporated and located in Connecticut. See Conn. Gen. Stat. § 52-577d. Indeed, if this Court does apply § 52577d, any national organization subject to personal jurisdiction in Connecticut could find itself defending decades old allegations in the Connecticut courts for alleged abuse which occurred wholly in foreign jurisdictions. Such a scenario could lead to countless new lawsuits being filed in Connecticut simply because they were not timely in the forum in which the abuse occurred. Accordingly, because Texas is the forum with the most significant contacts in this case, indeed, the forum with the only significant contacts, this Court should apply the Restatement and Texas' statute of limitations. In Texas, the statute of limitations for negligence claims is "two years from the date of the accrual of the claim." See e.g. Doe v. St. Stephen's Episcopal Sch., 382 F. App'x. 386, n.3 (5th Cir. 2010) (citing Tex. Civ. Prac. & Rem.Code § 16.003). A cause of action accrues "when a wrongful act causes some legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred." S.V. v. R.V., 933 S.W.2d 1, 4 (Tex.1996). However, "when the victim is a child, the statute of limitations is tolled until the child turns eighteen." Doe v. St. Stephen's Episcopal Sch., 382 F. App'x. at 388 (citing Tex. Civ. Prac. & Rem.Code § 16.001(a)-(b)). Doe was born in 1968 (Complaint ¶ 11) and therefore turned eighteen in 1986. Unless an exception to the statute of limitations applies to toll the running of the statute of limitations,
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Doe's cause of action was barred, at the latest, by 1988. Doe has not alleged any facts that support tolling Texas' statute of limitations. As such, this case should be dismissed with
prejudice for failure to plead a cause of action for which relief may be granted. C. Plaintiff's Negligence Claim Fails Because He Has Failed to Plead Foreseeability
Plaintiff's negligence claim against the Knights is premised on the Knights' alleged negligence in failing to protect him from the alleged abuse of Rivera. This claim must be dismissed, however, because the Complaint fails to allege any facts that would support a finding that the injuries to Plaintiff were foreseeable to the Knights. The elements of a negligence cause of action are a duty, a breach of that duty, and damages proximately caused by the breach of duty.1 Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990); Doe v. Boys Club of Greater Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995). To establish a negligence claim against the Knights, Plaintiff must plead that (1) the Knights owed a legal duty to Plaintiff to protect him from Rivera's actions, and (2) Plaintiff sustained damages proximately caused by breach of that duty. See Houser v. Smith, 968 S.W.2d 542, 544 (Tex. App.—Austin 1998, no pet.). Duty is the threshold inquiry in all negligence cases and is a question of law for the court to decide from the facts surrounding the occurrence in question. See Graff v. Beard, 858 S.W.2d 918, 919 (Tex. 1993); Phillips, 801 S.W.2d at 525. In determining whether the particular defendant has a duty, a court should consider several factors, including the risk involved, the foreseeability of the risk, and the likelihood of injury. Phillips, 801 S.W.2d at 525. Of these factors, foreseeability is the foremost and dominant consideration. See El Chico Corp. v. Poole,
Texas law also applies to Plaintiff's negligence claim because the alleged sexual abuse underlying the cause of action occurred in Texas and Connecticut courts apply the "most significant relationship" test to tort claims. See Jaiguay v. Vasquez, 948 A.2d 955, 972-74 (Conn. 2008).
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732 S.W.2d 306, 311 (Tex. 1987). Foreseeability "requires that a person of ordinary intelligence should have anticipated the danger created by a negligent act or omission." Doe v. Boys Club of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995). Foreseeability "requires more than someone, viewing the facts in retrospect, theorizing an extraordinary sequence of events whereby the defendant's conduct brings about the injury." Id. The proximate cause element of negligence is also premised on the foreseeability analysis. Mellon Mortgage Co. v. Holder, 5 S.W.3d 654, 655 (Tex. 1999); Doe, 907 S.W.2d at 478. In fact, "the 'foreseeability analysis' is the same for both duty and proximate cause." Id. (holding that it is proper for court to rely on a single discussion of foreseeability to establish both duty and proximate cause). Texas courts have consistently rejected cases against organizations regarding the alleged sexual abuse of minors by an employee or volunteer when there was nothing in the record to indicate that the organization had a specific reason to know that its employee or volunteer was likely to commit the alleged abuse. See Doe v. Boys Club of Greater Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995) (holding that plaintiff failed to produce evidence that alleged abuse by a volunteer was foreseeable to the Boys Club at the time the abuse occurred because an investigation into the volunteer's background "would not have caused the club reasonably to anticipate his subsequent sexual assaults on the minor plaintiffs"); Doe v. Catholic Soc. of Religious and Literary Educ., No. 09-1059, 2010 WL 345926, at *10 (S.D. Tex. Jan. 22, 2010) (granting summary judgment because there was "no evidence in the record that Strake Jesuit had actual knowledge that Beeler was a risk to students"); Williams v. United Pentecostal Church Intern., 115 S.W.3d 612, 616 (Tex. App.—Beaumont 2003, no pet.) (upholding summary judgment because "it is undisputed that [defendant] had no information from which it should
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have known of an unreasonable risk that Jonathan Hart would sexually abuse appellants."); Frith v. Fairview Baptist Church, No. 05-01-01605, 2002 WL 1565664, at *5 (Tex. App.—Dallas July 17, 2002, pet. denied) (holding that employee's convictions for burglary, possession of controlled substance, public intoxication, possession of marijuana, unlawful carrying of weapon, and evading arrest did not make his sexual assault of child foreseeable). While these cases were dismissed at the summary judgment stage, dismissal is appropriate in this case on this 12(b)(6) motion because Plaintiff has failed to make any factual allegations in his Complaint that Rivera had a propensity to commit the alleged abuse against Plaintiff or that the Knights had a reason to know that Rivera was likely to commit the abuse. See Tomdra Invests., L.L.C. v. CoStar Realty Information, Inc., 735 F. Supp. 2d 528, 534 (N.D. Tex. 2010) (dismissing case on 12(b)(6) motion because the plaintiff "failed to plead facts demonstrating that the alleged injury to [the plaintiff] was reasonably foreseeable."); In re Parcel Tanker Shipping Servs. Antitrust Litig., 541 F. Supp. 2d 487, 491-92 (D. Conn. 2008) (dismissing case on 12(b)(6) motion because "the complaint never alleges specific facts" that support the plaintiffs' claims). As this Court has made clear, "[a] plaintiff is obliged to amplify a claim with some factual allegations to allow the court to draw the reasonable inference that the defendant is liable for the alleged conduct." Franke v. Global Credit and Collection Corp., No. 3:10-cv-1535, 2010 WL 4449373, at *2 (D. Conn. Nov. 1, 2010). Here, Plaintiff has completely failed to plead foreseeability as required to support its negligence claim against the Knights. In lieu of well-pled factual allegations, the Complaint relies extensively on conclusory recitations of the legal elements of the claim. The only
allegations in the Complaint that address the foreseeability requirement of negligence are entirely
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conclusory and devoid of any factual support. Specifically, the Complaint states the following conclusory allegations: For many years preceding the sexual abuse of JOHN, the KNIGHTS OF COLUMBUS was aware that adult leaders used the COLUMBIAN SQUIRES to gain access to boys for purposes of pedophilia. In this regard, the KNIGHTS OF COLUMBUS became familiar with the specific characteristics, patterns of behavior and "red flags" that suggested an adult leader had a sexual interest in boys. Despite this knowledge, the KNIGHTS OF COLUMBUS allowed and enabled such persons who posed a grave risk of sexual abuse to boys, including RIVERA, to serve as adult leaders of COLUMBIAN SQUIRES. As a direct and proximate result of the KNIGHTS OF COLUMBUS' acts and omissions, JOHN suffered severe and permanent physical and psychological injuries, including, but not limited to, chemical addictions, nightmares, depression, anxiety, suicidal tendencies, lack of trust, anger, shame, embarrassment, guilt, and low self-esteem. Complaint ¶¶ 21-22. The Complaint simply provides no facts to support these statements. Simply alleging that a defendant "has knowledge," without factual support, is insufficient to meet the Twombly standard. These types of conclusory allegations cannot withstand a motion to dismiss for failure to state a claim. See Twombly, 550 U.S. 544. In Ashcroft v. Iqbal, the respondent alleged "a claim of unconstitutional discrimination against officials entitled to assert the defense of qualified immunity." 129 S. Ct. 1937, 1947 (2009). The Supreme Court first noted the elements of this claim, and then determined that the plaintiff must plead "sufficient factual matter to show that petitioners adopted and implemented the detention policies at issue not for a neutral, investigative reason but for the purposes of discriminating on account of race, religion, or national origin." Id. at 1948-49. The respondent pled that the petitioners "knew of, condoned, and willfully and maliciously agreed to subject [him]' to harsh conditions of confinement 'as a matter of policy, solely on account of [his] religion, race, and/or national origin and for no legitimate penological interest." Id. at 1951 (emphasis added). The Supreme Court held: -12-
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These bare assertions, much like the pleading of conspiracy in Twombly, amount to nothing more than a 'formulaic recitation of the elements' of a constitutional discrimination claim…. As such, the allegations are conclusory and not entitled to be assumed true. To be clear, we do not reject these bald allegations on the ground that they are unrealistic or nonsensical. . . . It is the conclusory nature of respondent's allegations, rather than their extravagantly fanciful nature, that disentitles them to the presumption of truth. Id. Similarly, in this case, Plaintiff has simply alleged that the Knights "became familiar with" and had "knowledge" of characteristics and behavior that posed a risk of sexual abuse. These conclusory allegations, however, are simply a recitation of the element of foreseeability and are "naked assertions devoid of further factual enhancement." See id. at 1949. Plaintiff utterly fails to support these conclusory allegations with any facts as to how the alleged abuse to Plaintiff by Rivera was foreseeable to the Knights. Indeed, the only factual allegation regarding the Knights' knowledge included in Plaintiff's Complaint is Plaintiff's assertion that he did not make the Knights aware of any alleged abuse until December 2009, over 23 years after the alleged abuse. Plaintiff simply provides no factual support that the Knights knew or should have known at the time of the alleged abuse that Rivera posed a risk of harm to Plaintiff. Although the Complaint generally refers to "specific characteristics, patterns of behavior and 'red flags,'" the Complaint does not give any factual support as to what these 'red flags' were and how they applied to Rivera and Plaintiff at the time of the abuse. See In re Parcel Tanker Shipping Servs. Antitrust Litig., 541 F. Supp. 2d 487, 491-92 (D. Conn. 2008) (dismissing case because "[a]lthough the complaint repeatedly refers to these alleged 'clandestine meetings' among certain defendants, it states no specific examples of the defendants' conduct in the meetings, other than general allegations of conspiracy."). Plaintiff also attempts to meet the foreseeability requirement by alleging a general knowledge that "adult leaders used the COLUMBIAN SQUIRES to gain access to boys for -13-
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purposes of pedophilia." See Complaint ¶ 21. Other than Rivera, however, Plaintiff does not identify any other "adult leaders" nor does he allege how the Knights knew that Rivera or anyone else was using the Columbian Squires to "gain access to boys." Moreover, a general knowledge that such abuses occur, even if true, does not support foreseeability in a particular instance. Doe v. Catholic Soc. of Religious and Literary Educ., No. 09-1059, 2010 WL 345926, at *12 (S.D. Tex. Jan. 22, 2010) ("[T]he existence of sexually abusive Jesuit teachers does not give rise to an inference that [Defendants] had constructive knowledge that Beeler had a propensity to sexually abuse students."); Williams v. United Pentecostal Church Intern., 115 S.W.3d 612, 616 (Tex. App.—Beaumont 2003, no pet.) (dismissing case because, "[w]ithout any supporting authority, appellants seek to transform this general knowledge that such abuses occur into foreseeability in this particular instance."); see also See v. Bridgeport Roman Catholic Diocesan Corp., No. 930302072, 1997 WL 466498, at *6 (Conn. Super. Ct. July 31, 1997) ("The fact that the Diocese was aware of, or should have been aware of, sexual misconduct by other diocesan priests does not establish that the harm allegedly committed by Father Pcolka was foreseeable to the defendants. What must be shown is that the Diocese had notice of Father Pcolka's propensity to engage in sexual misconduct."). There must be allegations that the Knights knew that Rivera was likely to commit such acts. See id. Plaintiff has simply not provided any factual support that the Knights had any reason to know, at the time of the alleged abuse, that Rivera posed a risk Plaintiff. The Supreme Court has made clear that Plaintiff is not allowed to make conclusory allegations in the hopes of discovering actual facts supporting these allegations through discovery: "Rule 8 marks a notable and generous departure from the hyper-technical, code pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed
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with nothing more than conclusions." Iqbal, 129 S. Ct. at 1950. Because Plaintiff has failed to plead any factual allegations regarding foreseeability as required for both the duty and proximate cause elements of negligence, Plaintiff's negligence claim against the Knights must be dismissed with prejudice. D. The Release Bars Plaintiff's Negligence and Declaratory Relief Claims
The Release that Plaintiff signed is a general release, and by its express terms releases all of Plaintiff's causes of action. See Complaint, Exhibit A. Plaintiff admits in his Complaint that he signed the Release and has attached the full Release to the Complaint.2 See id. ¶ 20 & Exhibit A. Plaintiff now seeks to avoid the clear consequences of the Release by alleging that he "signed the signature page as a result of the Knights' fraud and misrepresentation, which renders the purported agreement voidable." Id. ¶ 41. However, the facts as pled by Plaintiff negate this allegation because they show as a matter of law that (1) Plaintiff was not justified in relying on the alleged misrepresentation and (2) Plaintiff has waived his right to assert fraud as a ground to avoid the Release because he ratified the transaction by accepting its benefits after gaining full knowledge of the alleged fraud. The Court should therefore dismiss Plaintiff's Complaint in its entirety. 1. Choice of Law
A federal trial court sitting in diversity jurisdiction must apply the law of the forum state to determine the choice-of-law. Brandewiede v. Emery Worldwide, 815 F. Supp. 60, 63 (D. Conn. 1992) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 497 (1941)). In Connecticut, the forum state in this case, the first step in any case presenting a potential choice of
When deciding a motion to dismiss, a "court is not limited to the factual allegations of the complaint but may consider 'documents attached to the complaint as exhibits or incorporated in it by reference, [] matters which judicial notice may be taken or [] documents either in plaintiffs' possession or of which plaintiffs had knowledge and relied on in bring suit.'" Patrowicz v. Transamerica HomeFirst, Inc., 359 F. Supp. 2d 140, 144 (D. Conn. 2005) (quoting Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993)).
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law issue is to determine whether there is an actual conflict between the laws of the jurisdictions involved. See In re Helicopter Crash Near Wendle Creek, British Columbia on Aug. 8, 2002, 485 F. Supp. 2d 47, 55 (D. Conn. 2007). There are several possible state's laws that could apply to the circumstances surrounding the signing of the Release. The Release contains a "Governing Law" provision that states that any dispute will be governed by Texas law. See Elgar v. Elgar, 679 A.2d 937, 942 (Conn. 1996) (holding that Connecticut law "give[s] effect to an express choice of law by the parties to a contract provided that it was made in good faith."). However, when, as here, a party alleges that there was fraud in the execution of the contract, Connecticut applies the "most significant relationship" test in evaluating the choice-of-law question. See Economu v. Borg-Warner Corp., 652 F. Supp. 1242, 1247-49 (D. Conn. 1987); Am. States Ins. Co. v. Allstate Ins. Co., 922 A.2d 1043, 1047-48 (Conn. 2007); Restatement (Second) of Conflict of Laws §§ 187 cmt. b, 188 (1971). The Complaint is not entirely clear on the facts surrounding the formation of the Release. The Complaint states that Plaintiff is a "resident of the State of Kansas," but the signature page of the Release, which Plaintiff admits he signed and is attached to the Complaint, states that Plaintiff was "presently residing in Missouri" at the time the Release was signed. See Complaint ¶ 1 & Exhibit A at p. 7. The Complaint does not state where the execution of the signature page took place. See Complaint ¶ 24. In addition to Kansas and Missouri, Texas could also be the state with the most significant relationship to the contract and alleged fraud because the Complaint alleges that the abuse that led to the execution of the Release took place in Texas. Moreover, Connecticut law could also apply because the Release was negotiated with Knights officials in Connecticut. However, as discussed in the sections below, this Court does not need
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to perform a choice of law analysis because the laws of Kansas, Missouri, Texas and Connecticut do not conflict on these issues. 2. Plaintiff's Negligence and Declaratory Relief claims should be dismissed because the pleaded facts show as a matter of law that he was not justified in relying on the alleged misrepresentation
Plaintiff seeks to avoid the Release based on the allegedly fraudulent actions of the Knights' agents. To sustain a fraud claim, Plaintiff must plead and prove: (1) a false
representation of fact made by the Knights; (2) the Knights' knowledge or belief that the representation was false, or made with reckless indifference to the truth; (3) intent to induce Plaintiff to act; (4) Plaintiff's action was taken in justifiable reliance on the representation made by the Knights; and (5) damage to Plaintiff as a result of such reliance. Alires v. McGehee, 85 P.3d 1191, 1195 (Kan. 2004); Hanson v. Acceptance Fin. Co., 270 S.W.2d 143, 149 (Mo. Ct. App. 1954); Lewis v. Bank of Am. NA, 343 F.3d 540, 545-46 (5th Cir. 2003). Plaintiff's own pleading demonstrates as a matter of law that he could not have justifiably relied on the purported misrepresentation that the one-page document he signed was simply an acknowledgement that the Knights would pay for his treatment. A recipient of a fraudulent misrepresentation is not justified in relying upon its truth if he knows that it is false or if its falsity is obvious to him. Restatement (Second) of Torts § 541 (1977); Slaymaker v. Westgate State Bank, 739 P.2d 444, 542-43 (Kan. 1987); Dyrssen v. Union Elec. Light & Power Co., 295 S.W. 116, 118 (Mo. 1927); Hanson, 270 S.W.2d at 149; Lewis, 343 F.3d at 545-46; Werner v. Int'l Bank of Commerce, 71 F.3d 879 (5th Cir. 1995); Chapman Lumber, Inc. v. Tager, No. 10086006, 2003 WL 22080469, at *4 (Conn. Super. Ct. Aug. 22, 2003) (quoting Gallon v. Burns, 101 A. 504 (Conn. 1917)). Although the recipient of a
fraudulent misrepresentation is not barred from recovery because he was negligent in failing to discover its falsity, he is nonetheless required to use his senses, and cannot recover if he blindly -17-
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relies upon a misrepresentation the falsity of which would be patent to him if he had utilized his opportunity to make a cursory examination or investigation. Slaymaker, 739 P.2d at 542-43; Dyrssen., 295 S.W. at 118; Hanson, 270 S.W.2d at 149; Lewis, 343 F.3d at 545-46; Gen. Motors Corp. v. Courtesy Pontiac, Inc., 538 S.W.2d 3, 6 (Tex. App. - Tyler 1976, no writ). The Supreme Court of the United States presents a hypothetical situation that clearly explains the limits of justifiable reliance: [A] person is "required to use his senses, and cannot recover if he blindly relies upon a misrepresentation the falsity of which would be patent to him if he had utilized his opportunity to make a cursory examination or investigation. Thus, if one induces another to buy a horse by representing it to be sound, the purchaser cannot recover even though the horse has but one eye, if the horse is shown to the purchaser before he buys it and the slightest inspection would have disclosed the defect. On the other hand, the rule stated in this Section applies only when the recipient of the misrepresentation is capable of appreciating its falsity at the time by the use of his senses. Thus a defect that an experienced horseman would at once recognize at first glance may not be patent to a person who has had no experience with horses." A missing eye in a "sound" horse is one thing; long teeth in a "young" one, perhaps, another. Field v. Mans, 516 U.S. 59, 71 (1995) (quoting Restatement (Second) of Torts § 541 (1976)). The Supreme Court also quotes Prosser's Law of Torts: "It is only where, under the circumstances, the facts should be apparent to one of his knowledge and intelligence from a cursory glance, or he has discovered something which should serve as a warning that he is being deceived, that he is required to make an investigation of his own." Id. (quoting W. Prosser, Law of Torts § 108, p. 718 (4th ed. 1971)). The Supreme Court of Missouri gives the following examples: For instance, if B. wants oats, and A. shows B. an open sack of beans (both A. and B. being sui juris, and knowing beans when the bag is open), and A. tells B. they are oats, B. ought not to complain when he buys the sack because he gets beans. If C. points D. to his horses in the field, and tells D. they are black, when in fact they are white, and D. buys them for black horses, he is guilty of an act of folly, and has no remedy. If E. takes F. over his hilly, broken land, and tells F. It is level and arable, and F. buys it as level, arable land, he ought not to recover. In -18-
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such case the fraud is made innocuous by the fact that it was patent to the vendee. The vendee is held to know what his own eyes would disclose, and, knowing, could not be deceived. Judd v. Walker, 114 S.W. 979, 980 (Mo. 1908). Like the buyers in the examples above, Plaintiff's allegations of fraud turn logic on its head and are beyond the bounds of reason and common sense. See Tips v. Barneburg, 276 S.W. 932, 934 (Tex. Civ. App. 1925) ("Too often men make trades and enter into foolish contracts on their mistaken judgment and then raise the cry of fraud to relieve them of the consequences, but the courts of the country will not assume the guardianship of the affairs of such men, nor encourage such claims for damages or a cancellation of the contracts."). The very document that Plaintiff alleges forms the basis of the fraudulent misrepresentation clearly demonstrates that it was not what the agents allegedly told Plaintiff it was. Plaintiff claims that the agents handed him a "single piece of paper and asked him to sign it to acknowledge that the Knights of Columbus would pay for his treatment." Complaint ¶ 6. He then signed the paper, which was notarized by the agent's wife. Id. Even a cursory glance at this single piece of paper would have alerted Plaintiff that he was not signing a simple acknowledgement. The piece of paper, which is attached to the Complaint at the end of Exhibit A, is clearly labeled as page "7" and it contains five lines of text above the signature line that indicate that this paper is not simply an acknowledgement.3 These five lines of text, which Plaintiff would easily see as he signed the page, are clearly an incomplete paragraph that continues from a previous page. This incomplete paragraph refers to "this Agreement" and also references an earlier "paragraph 4" that is not contained on the page. The text also references "a court of competent jurisdiction" and "a valid, legal and enforceable replacement provision."
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At a minimum, the law required Plaintiff to "use his senses" and make a "cursory examination or investigation." Such a cursory investigation would have made it obvious to Plaintiff that he was not signing a simple acknowledgement. See Slaymaker v. Westgate State Bank, 739 P.2d 444, 542-43 (Kan. 1987) ("[I]f the recipient of a fraudulent representation has information which would serve as a danger signal to a person of ordinary intelligence and experience, he is not justified in relying upon that representation.") (quotation omitted); Western Tractor Equip. Co. v. Ayers, 225 P. 115, 116 (Kan. 1924) ("[The contract] was so short and simple that its contents could be taken in at a glance …. The time taken to attach his signature was abundant to enable the defendant to see that the writing could not contain anything substantial [as was represented]."); Dyrssen v. Union Elec. Light & Power Co., 295 S.W. 116, 118 (Mo. 1927) ("The common law affords to every one reasonable protection against fraud in dealing; but it does not go to the romantic length of giving indemnity against the consequences of indolence and folly or a careless indifference to the ordinary and accessible means of information."); Judd v. Walker, 114 S.W. 979, 980 (Mo. 1908) ("If one voluntarily shuts his eyes when to open them is to see, such a one is guilty of an act of folly (in dealing at arm's length with another) to his own injury; and the affairs of men could not go on if courts were being called upon to rip up transactions of that sort."); Alford v. Wabash Ry. Co., 73 S.W.2d 277, 281 (Mo. Ct. App. 1934) ("The physical facts surrounding the execution of these papers, including the one plaintiff signed in the office of Tead, show beyond any question that plaintiff knew that he was not signing papers for wages, if he looked at the papers at all…. We think … plaintiff is in no position to claim that he was defrauded and that the release stands as a bar to his recovery in this case."); In re Mercer, 246 F.3d 391, 418 (5th Cir. 2001) ("[T]he recipient of a fraudulent misrepresentation may justifiably rely on it unless its falsity is obvious or there are "red flags"
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indicating such reliance is unwarranted.") (emphasis in original); Arroyo Shrimp Farm, Inc. v. Hung Shrimp Farm, Inc., 927 S.W.2d 146, 153-54 (Tex. App.—Corpus Christi 1996, no writ) ("A person must exercise reasonable ordinary care for the protection of his own interests and discover the existence of fraud if he has knowledge of facts that would put a reasonably prudent person on inquiry."); Gen. Motors Corp. v. Courtesy Pontiac, Inc., 538 S.W.2d 3, 6 (Tex. App.— Tyler 1976, no writ) ("[Plaintiff may not justifiably rely on] representations which any [person of normal intelligence, experience, and education] would recognize at once as preposterous … or which are shown by facts within his observation to be so patently and obviously false that he must have closed his eyes to avoid discovery of the truth.")(quotation omitted); Chapman Lumber, Inc. v. Tager, No. 10086006, 2003 WL 22080469, at *4 (Conn. Super. Ct. Aug. 22, 2003) (quoting Gallon v. Burns, 101 A. 504 (Conn. 1917) ("If a person buys property having a defect known or visible to the buyer, it would be absurd to hold or find as a fact that he relied upon a statement in making the purchase that was contrary to what was known to him to be true.")); Hicks v. Soroka, 55 Del. 424, 437 (Del. Super. Ct. 1963) ("The most casual glance at the printed portions of the release or release-draft by one able to read would have disclosed the contract was one of release and settlement."); ABM Farms, Inc. v. Woods, 692 N.E.2d 574, 579 (Ohio 1998) ("A person of ordinary mind cannot be heard to say that he was misled into signing a paper which was different from what he intended, when he could have known the truth by merely looking when he signed.") (quotation omitted). Even assuming arguendo that Plaintiff's pled facts are true and that the agents misrepresented to Plaintiff what he was signing, it is clear that the falsity of this alleged misrepresentation was patently obvious to Plaintiff at the time he signed the single piece of paper. At a minimum, a cursory glance at the page as Plaintiff was signing it should, as a matter
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of law, have "serve[d] as a warning that he [was] being deceived." See Field v. Mans, 516 U.S. 59, 71 (1995). Therefore, the facts set forth in the Complaint and the Release referenced in and attached to the Complaint eliminate as a matter of law Plaintiff's ability to claim that he justifiably relied on the alleged misrepresentations made by the agents. Plaintiff's illogical fraud allegations relating to the release must therefore be dismissed with prejudice. 3. Plaintiff's Negligence and Declaratory Relief claims should be dismissed because the pleaded facts show as a matter of law that he ratified the Release
Even assuming the facts as pled in the Complaint are true, Plaintiff has waived his right to assert fraud as a ground to avoid the Release because he ratified the transaction by accepting its benefits after gaining full knowledge of the alleged fraud. Under the laws of Kansas, Missouri, Texas, and Connecticut, the power of a party to avoid a contract for a misrepresentation is lost if, after he knows of such misrepresentation, he manifests to the other party his intention to affirm it or acts with respect to anything that he has received in a manner inconsistent with disaffirmance, or he does not within a reasonable time manifest to the other party his intention to avoid it. Moore v. Farm & Ranch Life Ins. Co., 505 P.2d 666, 672-73 (Kan. 1973); Anselmo v. Mfrs. Life Ins. Co., 771 F.2d 417, 420 (8th Cir. 1985); Cordero v. Tenet Healthcare Corp., 226 S.W.3d 747, 750 (Tex. App.—Dallas 2007, pet. denied); E. Devoe Tompkins, Inc. v. Bridgeport, 123 A. 135, 137-38 (Conn. 1923). When benefits of a contract are retained with a full knowledge of the fraud, the defrauded party waives any right to assert fraud as a ground to avoid the agreement. See Moore, 505 at 672-73 ("It does not matter whether the court is dealing with waiver, ratification, or equitable estoppel, a party will not be permitted to accept the benefit of a contract, with full knowledge of all the facts, and then deny his own responsibility thereunder."); Tammen v. Directors of Alfalfa Pellets, Inc., 95 P.3d 135 (Kan. Ct. App. 2004) ("Generally, a party cannot acquiesce or accept the benefits of a contract or a bargain -22-
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and then bring an action seeking to rescind the transaction or claim it was illegal."); Anselmo, 771 F.2d at 420 ("Silence and acquiescence for a considerable period thereafter, action in accord with it, and acceptance of benefits under it, amount to a ratification."); Bilton v. Monsanto Co., 947 F. Supp. 1344, 1353 (E.D. Mo. 1996) ("This Court finds that when the plaintiff accepted the enhanced benefits . . . and chose not to revoke his release and not tender back the benefits received in consideration for the release, plaintiff manifested his intention to be bound by the terms and conditions of the VRP documents, including the release."); Cordero, 226 S.W.3d at 750 ("If a party who has been induced by fraud to enter into an agreement engages in conduct that recognizes the agreement as binding after the party becomes aware of the fraud, the party ratifies the agreement and waives any right to assert fraud as a ground to avoid the agreement."); Old Rep. Ins. Co. v. Fuller, 919 S.W.2d 726, 729 (Tex. App. – Texarkana 1996, writ denied) ("By electing to receive the benefits of the agreement, with full knowledge of its fraudulent nature, Fuller ratified the settlement and forfeited his right to object to it.") (emphasis in original); Herschbach v. City of Corpus Christi, 883 S.W.2d 720, 737 (Tex. App.—Corpus Christi 1994, writ denied) ("When a person having the right to accept or reject a transaction accepts benefits from it, that person ratifies the transaction. He or she is bound by it, and cannot avoid its obligation or effect by taking a position inconsistent with it."); C.F.L., Inc. v. Moffitt & Duffy, Inc., No. 38655, 1991 WL 61417, at *1 (Conn. Super. Ct. Apr. 12, 1991) ("A party cannot accept the benefits of a settlement agreement and then proceed to sue."). "The question of ratification of a contract may be determined as a matter of law if the pertinent evidence is uncontroverted or uncontrovertible." Old Rep. Ins. Co. v. Fuller, 919 S.W.2d 726, 728 (Tex. App. - Texarkana 1996, writ denied). At the motion to dismiss stage, the facts as pled in the Complaint are treated as true and cannot be controverted. See Iqbal, 129 S.
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Ct. at 1950. The facts as pled in the Complaint show a ratification of the alleged fraud as a matter of law. Plaintiff alleges that the Knights' agents met with him on December 23, 2009 and fraudulently induced him to sign one page of the Release on that day. Complaint ¶ 24. He claims that "[n]o other pages were attached to the paper the agent asked [him] to sign." Id. Plaintiff alleges that the agents told him that the single piece of paper he signed was an acknowledgement that the Knights would pay for his treatment but made no mention of a release of claims. Id. Plaintiff then alleges that, "[a]bout a week later," he received a package in the mail that contained a copy of the complete "Settlement Agreement and Full Release" including the signature page which he signed. Id. At this point, at the end of December 2009, Plaintiff had full knowledge that the document he signed included a release of all claims. Yet Plaintiff did not make any mention of an alleged fraud or attempt to challenge the validity of the Release until the filing of this lawsuit on December 14, 2010, almost a full year later. The Supreme Court warned against this type of action all the way back in 1876: Where a party desires to rescind upon ground of mistake or fraud, he must, upon the discovery of the facts, at once announce his purpose and adhere to it. If he be silent, and continue to treat the property as his own, he will be held to have waived the objection, and will be conclusively bound by the contract, as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsisted. Grymes v. Sanders, 93 U.S. 55, 62 (1876); Morgan Cty. Coal Co. v. Halderman, 163 S.W. 828, 844 (Mo. 1913) (quoting language above from Grymes favorably); Waggoner v. Zundelowitz, 231 S.W. 721, 725-26 (Tex. Comm'n App. 1921) (citing Grymes favorably and stating that a party "may not, with knowledge of the fraud, speculate upon the advantages or disadvantages of the contract, receiving its benefits, and at the same time repudiate its obligations"); see also McLean v. Clapp, 141 U.S. 429, 432 (1891) ("[T]he law is clear that he cannot take the benefits of [a] contract and repudiate its burdens."). According to Plaintiff's own allegations, he gained
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full knowledge of the alleged fraud only a week after it allegedly occurred, but instead of taking action to rescind the Release, he remained silent and accepted the full benefits of the Release. Now, however, Plaintiff is attempting to avoid its obligations. This Court should not permit Plaintiff to "play fast and loose" when his own pleadings clearly demonstrate that he is bound by the terms of the Release by his own actions. Therefore, this Court should dismiss all of Plaintiff's claims because they are barred by the Release as a matter of law.
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Plaintiff's negligence claim fails as a matter of law because it is barred by the statute of limitations and Plaintiff has failed to properly plead foreseeability as required to maintain a negligence cause of action. Furthermore, Plaintiff's negligence claim is barred by the Release. The Release is valid and precludes Plaintiff's negligence claim because the pleaded facts show as a matter of law that Plaintiff was not justified in relying on the alleged misrepresentation when he signed the Release and that Plaintiff ratified the Release. For the foregoing reasons, the Knights respectfully requests that this Court dismiss Plaintiff's Complaint with prejudice.
Dated: Hartford, Connecticut March 14, 2011 Respectfully submitted, BRACEWELL & GIULIANI LLP
By: ___/s/ Kevin J. O'Connor________ Kevin J. O'Connor (ct12124) James S. Needham (ct28171) 225 Asylum Street, Suite 2600 Hartford, CT 06103 Telephone: (860) 256-8602 Facsimile: (860) 246-3201 ATTORNEYS FOR DEFENDANT KNIGHTS OF COLUMBUS
Case 3:10-cv-01960-CSH Document 18-1
Filed 03/14/11 Page 1 of 1
CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document has been forwarded to all counsel of record via the Court's CM/ECF system on March 14, 2011.
By: /s/ James S. Needham______ James S. Needham
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