574 F.Supp.3d 52
D. Conn.2021Background
- In April 2012 Edwards obtained a mortgage from McMillen Capital for a Cromwell, CT property; the note labelled the loan a "commercial" transaction but required owner-occupancy; Edwards says it was actually a consumer/home loan.
- Edwards filed administrative complaints and then a state-court action (2015) asserting TILA/Conn. TILA, CUTPA, negligence, negligent infliction of emotional distress (NIED), and breach of the covenant of good faith and fair dealing; the state court struck complaints multiple times and ultimately dismissed for failure to prosecute in 2017.
- Edwards filed this federal suit in 2018 raising substantially the same claims; the district court initially dismissed under Rooker–Feldman, the Second Circuit vacated and remanded because the state dismissal was not on the merits.
- On remand McMillen moved to dismiss again, arguing res judicata/collateral estoppel, statutes of limitations, and failure to state tort and CUTPA claims; Edwards invoked the Connecticut savings statute (§ 52-592) to preserve timeliness.
- The district court held res judicata and collateral estoppel did not bar the suit because the state dismissal was for failure to prosecute (not an adjudication on the merits), found most statutory claims time-barred, determined § 52-592 saved certain claims, but dismissed the tort and contract-based claims for failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preclusion (res judicata / collateral estoppel) | Edwards: state dismissal was not on the merits so preclusion doesn't apply | McMillen: state court previously considered and struck identical claims so preclusion bars relitigation | Court: preclusion inapplicable — state dismissal was for failure to prosecute, not a merits adjudication; issues were not actually decided |
| TILA / HOEPA statute of limitations | Edwards: HOEPA 3-year period, discovery rule, equitable tolling, or rescission timing makes claims timely | McMillen: TILA claims accrued in April 2012 and are time-barred (1-year for damages; even 3-year HOEPA claim untimely) | Court: TILA/HOEPA claims time-barred; plaintiff failed to plead facts supporting discovery rule, equitable tolling, or rescission-based tolling |
| CUTPA timing / continuing course of conduct | Edwards: continuing wrongful conduct (failed disclosures, foreclosure/forced sale efforts, misrepresentations to Banking Commission) tolls 3-year CUTPA period | McMillen: CUTPA claim accrued at transaction and is time-barred | Court: CUTPA claim time-barred — plaintiff failed to plead a continuing special duty or subsequent wrongful acts sufficient to invoke continuing-course-of-conduct tolling |
| Connecticut savings statute (§ 52-592) | Edwards: prior state dismissals were for "matter of form," so § 52-592 saves his claims | McMillen: Edwards' repeated, legally deficient repleadings were egregious, so § 52-592 shouldn't apply | Court: § 52-592 may apply — dismissal for failure to prosecute can be a "matter of form" and facts here (pro se requests for extensions/clarification) do not show egregious conduct; thus some claims are saved for timeliness purposes |
| Common-law torts and implied covenant (negligence, NIED, breach of implied covenant) | Edwards: duties arise from loan commitment, TILA, and public policy; McMillen's conduct caused emotional distress and denied contract benefits | McMillen: no special/fiduciary duty; statutory duties don't create tort duty here; allegations are conclusory | Court: dismissed these claims for failure to state a claim — no plausible duty or facts showing severe emotional harm or deprivation of contract benefits |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Kremer v. Chemical Constr. Corp., 456 U.S. 461 (1982) (full faith and credit / preclusion principles)
- Weiss v. Weiss, 297 Conn. 446 (2010) (res judicata standard under Connecticut law)
- Lacasse v. Burns, 214 Conn. 464 (1990) (dismissal for failure to prosecute is not adjudication on the merits for res judicata)
- Ruddock v. Burrowes, 243 Conn. 569 (1998) (scope and remedial purpose of Conn. Gen. Stat. § 52-592 savings statute)
- De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424 (2004) (scope of implied covenant of good faith and fair dealing)
- Flannery v. Singer Asset Fin. Co., LLC, 312 Conn. 286 (2014) (continuing-course-of-conduct doctrine and fiduciary/continuing duty analysis)
- Carrol v. Allstate Ins. Co., 262 Conn. 433 (2003) (elements required for negligent infliction of emotional distress)