Opinion ID: 1525653
Heading Depth: 1
Heading Rank: 3

Heading: sc 18021, sc 18023, sc 18026) [26]

Text: The defendant raises a plethora of legal challenges to the jury's verdict. These claims, however, were not raised during trial or in the defendant's posttrial motions to set aside the verdict. Rather, the defendant raised these matters for the first time in either his motion to open or in his motion to reargue the postverdict motions, both of which were filed after judgment had been rendered. [27] The principles that govern motions to open or set aside a civil judgment are well established. Within four months of the date of the original judgment, Practice Book [§ 17-4] vests discretion in the trial court to determine whether there is a good and compelling reason for its modification or vacation. . . . Because opening a judgment is a matter of discretion, the trial court [is] not required to open the judgment to consider a claim not previously raised. [28] The exercise of equitable authority is vested in the discretion of the trial court and is subject only to limited review on appeal. . . . We do not undertake a plenary review of the merits of a decision of the trial court to grant or to deny a motion to open a judgment. The only issue on appeal is whether the trial court has acted unreasonably and in clear abuse of its discretion. . . . In determining whether the trial court abused its discretion, this court must make every reasonable presumption in favor of its action. (Citations omitted; internal quotation marks omitted.) Mazziotti v. Allstate Ins. Co., 240 Conn. 799, 808-809, 695 A.2d 1010 (1997). In light of the extremely deferential standard of review governing the disposition of new claims raised posttrial and without the benefit of the trial court's reasoning as to those claims; see footnote 27 of this opinion; the defendant's arguments are entitled to brief consideration only.
The defendant claims that the judgment cannot stand because it is contrary to public policy. He argues specifically that the judgment, by faulting him for failing to disclose to the plaintiff that Scalzo did not own the property subject to the mortgage, improperly imposes a duty on an attorney to a nonclient. Aside from being untimely raised in the trial court, this claim is both sparsely briefed and wholly without merit. It therefore warrants little discussion. However far the duty of an attorney to zealously represent his client extends, it necessarily falls short of the point at which the representation constitutes a fraud on a third party or the assistance in the perpetration of such a fraud, whether by affirmative misrepresentations or knowing nondisclosures. See Rules of Professional Conduct 1.2(d) and 4.1. Moreover, this court's refusal to permit litigants to raise claims against opposing counsel under the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq.; see, e.g., Jackson v. R.G. Whipple, Inc., 225 Conn. 705, 729, 627 A.2d 374 (1993); cannot be construed, as the defendant suggests, as affording blanket immunity to attorneys for tortious acts they commit against third parties while representing clients. See, e.g., Mozzochi v. Beck, 204 Conn. 490, 497, 529 A.2d 171(1987) (allowing, under certain circumstances, third party abuse of process claims against attorneys). Finally, this case is factually distinguishable from those in which attorneys inadvertently assisted clients in effecting fraudulent transfers. See, e.g., Nastro v. D'Onofrio, 263 F. Sup.2d 446, 458-59 (D.Conn.2003) (disallowing fraudulent transfer claim against attorney for mere preparation of legal documents). Rather, the evidence shows that the defendant negotiated, and directed his client to execute, a note and mortgage relating to property that the defendant knew the client did not own. The trial court did not abuse its discretion in declining to open and set aside the judgment on the basis of this claim.
The defendant next claims, for a variety of reasons, that the judgment against him cannot stand because it is contrary to the substantive law governing the causes of action alleged by the plaintiff. [29] All of these claims are meritless because they rest on an untenable premise. In making these arguments, the defendant attempts to recast the plaintiff's claim of fraud as in reality one of fraudulent transfer, because the defendant's fraudulent statements and nondisclosures bore some relation to what purportedly was such a transfer from Scalzo to Martino. The two causes of action are, however, distinct; see Weinstein v. Weinstein, 275 Conn. 671, 685, 882 A.2d 53 (2005) (listing elements of fraud); General Statutes § 52-552e (defining fraudulent transfer); and the action alleged, argued and ultimately proven by the plaintiff was one of fraud. [30] Because the defendant through these claims sought to disprove allegations that the plaintiff had not made, the trial court did not abuse its discretion in rejecting them. [31]
The defendant claims further that the court should have opened and set aside the judgment because the plaintiff failed to prove that the defendant's conduct caused the plaintiff's damages. The defendant argues, in essence, that nothing he did could have altered the course of events that unfolded subsequent to Scalzo's transfer of the Padanaram Road property. According to the defendant, pursuant to bankruptcy law, once Scalzo filed for bankruptcy, any potential fraudulent transfer claims against Scalzo arising from transfers occurring in the year prior, including those relating to the Padanaram Road property or Scalzo's personal residence, became the sole prerogative of the bankruptcy trustee. The defendant claims, therefore, that even if the plaintiff had not been misled by his misrepresentations and nondisclosures into sitting idle for the greater part of 2000, believing it had a valid mortgage on property that soon was to be sold, it would have been precluded from pursuing such claims itself. In other words, the result would have been the same. This argument is unpersuasive because it ignores the allegations of the plaintiff's complaint and the evidence presented at trial. The theory on which the plaintiff alleged that it could have recovered from Scalzo, absent the defendant's fraud, was broader than the defendant's argument implies. Specifically, the plaintiff alleged that, [i]n reliance upon the representations and nondisclosures of the defendant, [it] believed the note and mortgage to be valid and [therefore] did not take steps to obtain security or otherwise legally secure its right to be paid at closing or take other steps to collect said money, as a result of which, the plaintiff has been damaged. . . . (Emphasis added.) The plaintiff alleged additionally that the defendant's conspiracy with Scalzo caused it to refrain from, inter alia, obtaining security on any other property of Scalzo . . . . (Emphasis added.) The evidence presented at trial showed that Scalzo possessed substantial other assets during the year 2000 that the plaintiff might have pursued in collection of Scalzo's debt, and therefore, the jury reasonably could have concluded that, regardless of whether the plaintiff could have been repaid in full from the equity in the two transferred real properties, it could have recovered otherwise. [32] We conclude that the court's refusal to open the judgment on the basis of this argument was not an abuse of discretion.
The defendant claims next that the trial court improperly awarded prejudgment interest to the plaintiff pursuant to § 37-3a because he personally did not wrongfully detain any money due to the plaintiff or renege on a promise to pay the plaintiff money. [33] According to the plaintiff, the defendant properly was held liable for interest on an amount due from Scalzo pursuant to the note that Scalzo fraudulently executed with the defendant's assistance. We agree with the plaintiff. The decision of whether to grant interest under § 37-3a is primarily an equitable determination and a matter lying within the discretion of the trial court. . . . In determining whether the trial court has abused its discretion, we must make every reasonable presumption in favor of the correctness of its action. (Citation omitted; internal quotation marks omitted.) MedValUSA Health Programs, Inc. v. MemberWorks, Inc., 273 Conn. 634, 666, 872 A.2d 423, cert. denied sub nom. Vertrue, Inc. v. MedValUSA Health Programs, Inc., 546 U.S. 960, 126 S.Ct. 479, 163 L.Ed.2d 363 (2005). To the extent that the defendant is challenging the applicability of § 37-3a under the circumstances, however, our review is plenary. See Tang v. Bou-Fakhreddine, 75 Conn. App. 334, 346-47, 815 A.2d 1276 (2003). The trial court awarded the plaintiff prejudgment interest on the basis of the jury's finding that the defendant had conspired with Scalzo to deprive the plaintiff of moneys that were owed to it. Pursuant to the allegations of the plaintiff's complaint, which the jury found to be proven, Scalzo and the defendant conspired fraudulently to induce the plaintiff to forgo collection efforts, and instead, to extend Scalzo's credit by means of the promissory note negotiated by the defendant. The evidence at trial indisputably showed that when that note matured, Scalzo failed to make any payment. Further, on the basis of Scalzo's testimony the jury reasonably could have found that on the defendant's advice, Scalzo had executed the note with the intention of defaulting. Pursuant to Connecticut's jurisprudence, there is, precisely speaking, no independent claim for civil conspiracy. [34] Rather, [t]he action is for damages caused by acts committed pursuant to a formed conspiracy rather than by the conspiracy itself. (Internal quotation marks omitted.) Macomber v. Travelers Property & Casualty Corp., 277 Conn. 617, 636, 894 A.2d 240 (2006). [T]he purpose of a civil conspiracy claim is to impose civil liability for damages on those who agree to join in a tortfeasor's conduct and, thereby, become liable for the ensuing damage, simply by virtue of their agreement to engage in the wrongdoing. Id.; see also Biro v. Hirsch, 62 Conn.App. 11, 17, 771 A.2d 129 (all conspirators are civilly liable for the damage resulting from any overt act committed by one of them pursuant to the combination [internal quotation marks omitted]), cert. denied, 256 Conn. 908, 772 A.2d 601 (2001); 1 S. Speiser, C. Krause & A. Gans, American Law of Torts (2003) § 3:4, p. 405 ([o]nce a conspiracy is proven, each co-conspirator is responsible for all acts done by any of the conspirators in furtherance of the unlawful combination [internal quotation marks omitted]). Under . . . § 37-3a, interest may be recovered and allowed in civil actions . . . as damages for the detention of money after it becomes payable. For example, interest is awarded at the maturity of a debt from the time the money becomes due. (Internal quotation marks omitted.) Westport Taxi Service, Inc. v. Westport Transit District, 235 Conn. 1, 41, 664 A.2d 719 (1995); see also 47 C.J.S. 53, Interest and Usury § 40 (2005) (detention of money . . . arises where a debt has become due and the debtor withholds payment without having the right to do so [internal quotation marks omitted]). Pursuant to the foregoing, we conclude that the trial court properly held the defendant liable for the interest accruing on Scalzo's debt after Scalzo failed to repay the plaintiff as he had agreed. [35] By agreeing to join Scalzo's scheme to evade payment of his debt and by assisting him in perpetrating that scheme, the plaintiff thereby became liable for all of the ensuing damage, including the interest that, absent the defendant's assistance, only Scalzo would have owed. [36] Consequently, the defendant's claim is unavailing.
The defendant's last claim is that the trial court improperly refused to conduct an evidentiary hearing in connection with his motion to open or to allow him to make an evidentiary proffer. According to the defendant, the court's refusal to hold a hearing when there were disputed issues of fact was a due process violation, and further, the court had no discretion to disallow a proffer. Under the circumstances of this case, we conclude that the court's disallowance of an evidentiary hearing or proffer was not an abuse of discretion. The following additional procedural history is relevant. In his motion to open, the defendant, in light of the plaintiff's recovery from the bankruptcy trustee and its failure to apprise the court of that recovery, enumerated two issues for the court's consideration: (1) whether the plaintiff's claims had not been ripe for adjudication; and (2) whether the judgment was substantially inflated. The defendant, in his motion, did not state that the judgment was a product of fraud, nor did he request an evidentiary hearing or indicate that testimony was required. His accompanying twenty-four page memorandum of law focused largely on the two issues identified in his motion, at times venturing into the arguments addressed in part II of this decision, but lacked any definitive allegation of fraud. [37] Although extensive documentation from Scalzo's bankruptcy file was appended to the memorandum, none of that documentation indicated that the plaintiff was complicit in any fraud. At the outset of the July 18, 2005 hearing on the motion to open, the defendant's counsel informed the court that he had subpoenaed documents and witnesses and intended to present several hours, maybe a half a day of evidence. He subsequently indicated that, during his postjudgment exploration of the concluded bankruptcy proceedings, certain information had suggested to him that the plaintiff could have pursued its fraudulent transfer action against Scalzo in regard to the Padanaram Road property. [38] The defendant's counsel continued to discuss other things that require I think some discovery, namely, the circumstances surrounding the plaintiff's withdrawal of its fraudulent transfer action against Scalzo and Martino following its stipulation with Scalzo in the bankruptcy proceedings. He further stated that he had obtained the closing file on the Padanaram Road property and that it indicated Scalzo's counsel was to receive some of the closing proceeds. Moreover, according to the defendant's counsel, but without elaboration, [t]here was also some indication . . . that some money may have gone to [the plaintiff]. The defendant's counsel proceeded to pose a number of questions in regard to the plaintiff's motivations in withdrawing its action against Scalzo and Martino, then stated: Those are all questions that I would submit need to be explored in connection with this motion to open. In arguing his objection to the motion to open, the plaintiff's counsel denied defense counsel's vague allegations of wrongdoing and, otherwise, responded to the claims the defendant had made in his motion and memorandum of law. The plaintiff's counsel repeatedly noted that the defendant, who was a named creditor of Scalzo in the bankruptcy proceedings, had had full access to the bankruptcy file at all times. The defendant's counsel, in reply, asked to present evidence, and the court denied that request. The defendant's counsel reiterated that Scalzo's counsel had received funds from the closing of the Padanaram Road property. He stated: I need to present evidence. I need, based upon what I know so far, to take some discovery. I need to find out why [Scalzo's counsel] was looking to receive . . . proceeds from the closing of [the] Padanaram Road property. All of this occurred several years before this case was tried in this court.  (Emphasis added.) The trial court again denied defense counsel's requests to present evidence and to make a proffer of evidence. It opined that counsel was attempting to retry a case that a jury already had decided, and was bringing up facts that could have been presented at trial. The court then denied the defendant's motion to open. In his subsequent motion to reargue that motion; see footnote 18 of this opinion; the defendant contested the court's refusal to hold an evidentiary hearing. According to the defendant, at the July 18, 2005 hearing, he had described for the [c]ourt facts that may constitute bankruptcy fraud, as well as evidence that the plaintiff in this case may have concealed facts relating to an additional recovery prior to trial and requested the opportunity to present evidence and to proffer evidence. Both requests were denied. [39] He did not state with specificity, however, what evidence he would have offered, nor did the motion include any exhibits. In his supplemental motion to open, [40] the defendant stated that he has reason to believe and wishes to present evidence that after [the plaintiff] obtained judgment in the [b]ankruptcy [c]ourt, it did not . . . merely provide voluntarily and without further consideration, a [w]ithdrawal of its actions affecting the Padanaram Road property but that, [the plaintiff], Scalzo, Scalzo's counsel and/or others actually received payment and/or proceeds of the closing as consideration for their cooperation and actions in eliminating the temporary restraining order issued by this [c]ourt and releasing the supposedly worthless mortgage granted by Scalzo. . . . Again, no particular evidence was identified or attached to the motion, which the court denied. The defendant now claims that the testimony and evidence that he sought to present would have shown that the judgment was a product of fraud and was invalid as a matter of law, and that the court's disallowance of a proffer was manifest error. He argues that he had evidence to show that Scalzo knowingly had given false testimony at trial; that the paper transfer of Scalzo's interest in the Padanaram Road property was a sham; that Scalzo retained and benefited from a hidden interest in the property; and that the plaintiff may have been complicit in this scheme. According to the defendant, when there are disputed factual issues, as he contends there were here, given the plaintiff's denial of his allegations, due process requires a hearing. We disagree. Courts have an inherent power to open, correct and modify judgments. . . . A civil judgment of the Superior Court may be opened if a motion to open or set aside is filed within four months of the issuance of judgment. (Citations omitted; internal quotation marks omitted.) Steve Viglione Sheet Metal Co. v. Sakonchick, 190 Conn. 707, 710, 462 A.2d 1037 (1983); see also General Statutes § 52-211(a); Practice Book § 17-4. Once the trial court has refused to open a judgment, the action of the court will not be disturbed on appeal unless it has acted unreasonably and in clear abuse of its discretion. (Internal quotation marks omitted.) Steve Viglione Sheet Metal Co. v. Sakonchick, supra, at 711, 462 A.2d 1037. In determining whether the trial court abused its discretion [in denying a motion to open], this court must make every reasonable presumption in favor of its action. . . . The manner in which [this] discretion is exercised will not be disturbed so long as the court could reasonably conclude as it did. (Citations omitted; internal quotation marks omitted.) Gillis v. Gillis, 214 Conn. 336, 340-41, 572 A.2d 323 (1990). A motion to open in order to permit a party to present further evidence need not be granted where the evidence offered is not likely to affect the verdict. Steve Viglione Sheet Metal Co. v. Sakonchick, supra, 190 Conn. at 712, 462 A.2d 1037. Newly-discovered evidence which is merely cumulative, or which impeaches the . . . credibility of a witness, will not suffice ordinarily to grant a new trial, and never unless it appears reasonably certain that injustice has been done in the judgment rendered, and that the result of a new trial will probably be different. (Internal quotation marks omitted.) Dick v. Dick, 167 Conn. 210, 227, 355 A.2d 110 (1974). When a party seeks to open and vacate a judgment based on new evidence allegedly showing the judgment is tainted by fraud, he must show, inter alia, that he was diligent during trial in trying to discover and expose the fraud, and that there is clear proof of that fraud. See Varley v. Varley, 180 Conn. 1, 4, 428 A.2d 317 (1980); see also 2 Restatement (Second), Judgments § 70(2), p. 179 (1982); but see Billington v. Billington, 220 Conn. 212, 218-19, 595 A.2d 1377 (1991) (abandoning diligence requirement in context of marital dissolution actions). These rules are motivated by the policy that [o]nce a judgment [is] rendered it is to be considered final and it should be left undisturbed by post-trial motions except for a good and compelling reason. (Internal quotation marks omitted.) TLC Development, Inc. v. Planning & Zoning Commission, 215 Conn. 527, 533, 577 A.2d 288 (1990). Otherwise, there might never be an end to litigation. (Internal quotation marks omitted.) Buster v. Commissioner of Correction, 26 Conn.App. 48, 52, 596 A.2d 943 (1991). It is apparent from the record that the defendant did not make the showing necessary to warrant an opening of the judgment. The reasons for which he claims an opening of the judgment was required were not included in his motion to open, and were not accompanied by supporting evidence, but were articulated for the first time at the hearing on that motion. At that hearing, the defendant's arguments to the trial court were vague and rambling and, even with the benefit of a printed transcript, are difficult to understand. See 2 Restatement (Second), supra, § 70(2)(b) (party seeking relief from judgment based on fraud must state claim with such particularity as to indicate it is well founded). To the extent the defendant's claims concerned alleged wrongdoings of Scalzo, whose credibility as a witness was strongly contested at trial, they did nothing to call into question the integrity of the verdict, even if they were well-founded. Importantly, as the trial court recognized and as the defendant's counsel admitted, the matters counsel wished to explore had occurred years before trial and were related to proceedings to which the defendant had had complete access. Accordingly, the defendant clearly had not exercised the requisite diligence in uncovering the purported malfeasance. See Varley v. Varley, supra, 180 Conn. at 4, 428 A.2d 317; 2 Restatement (Second), supra, § 70(2); see also Damico v. Dalton, 1 Conn.App. 186, 187-88, 469 A.2d 795 (1984) (upholding denial of motion to open based on newly discovered evidence where evidence was just as much within the power of the defendant to produce before judgment as after). In regard to the allegedly fraudulent conduct of the plaintiff, it is obvious from defense counsel's statements that the defendant had no evidence in support of his allegations, but rather, sought to go on a fishing expedition in the hope of discovering some. This is not a proper reason to hold a hearing on a motion to open a judgment. To be entitled to a hearing, the defendant needed to make some threshold showing that his claims had substance, which he failed to do. See Brinley v. Ives, 153 Conn. 718, 719, 220 A.2d 438 (1966) (concluding motion to open based on newly discovered evidence was fatally defective in that it did not set forth who the witnesses were and what their testimony would be); 2 Restatement (Second), supra, at 70, comment (d) (party seeking relief must demonstrate, before being allowed to present his case, that he has a substantial case to present [emphasis added]). On the basis of the foregoing analysis, the defendant's final claim fails.