210 Conn.App. 289
Conn. App. Ct.2022Background
- Karen and Loftus signed a prenuptial agreement (para. 6(B)) providing that if Loftus’s departure from Merrill Lynch was "tantamount to a ‘sale’" of his interest, certain "Sale Proceeds" would be shared with Karen.
- Parties disputed whether Loftus’s 2008 departure (formation of LLBH and later option/transaction with Focus) triggered para. 6(B); they stipulated to binding arbitration on that issue.
- Arbitrator C. Ian McLachlan heard testimony (Feb. 2017) and concluded Loftus’s departure was not "tantamount to a sale;" the trial court incorporated that decision into the dissolution judgment (June 2017).
- More than four months later Karen moved to open the judgment, alleging Loftus gave false testimony (perjury/fraud) in arbitration and the arbitrator relied on it; she cited subsequent litigation among Loftus’s partners as evidence.
- Trial court denied the motion, treating it as a motion for a new proceeding based on newly discovered evidence, requiring due diligence and concluding the evidence was not newly discovered or likely to change the result.
- On appeal the court of appeals held the motion was properly characterized as a motion to open for fraud, the trial court applied the wrong legal standard (imposing due diligence), and reversed and remanded for a preliminary probable-cause hearing on fraud.
Issues
| Issue | Plaintiff's Argument (Karen) | Defendant's Argument (Loftus) | Held |
|---|---|---|---|
| Nature of motion: fraud v. newly discovered evidence | Motion alleges Loftus perjured himself at arbitration; seeks to open judgment on fraud grounds | Motion is actually a new-proceeding motion based on newly discovered evidence (Karen didn’t initially use word “fraud”) | Court of appeals: motion alleges elements of fraud and should be treated as a motion to open for fraud; pleadings construed broadly |
| Applicable legal standard | Fraud standard applies: court must first find probable cause to believe judgment was obtained by fraud (no due-diligence requirement) | Trial court properly analyzed newly discovered-evidence factors (including due diligence) | Trial court applied incorrect standard (used newly discovered-evidence test and imposed due diligence); reversed and remanded for a preliminary probable-cause hearing |
| Need for merits determination now (would a new trial likely change result) | Karen said perjury was material and likely would change the outcome | Loftus argued this is relitigation and evidence was available earlier/cumulative | Appellate court did not decide merits; remanded for preliminary fraud hearing before any merits ruling |
Key Cases Cited
- Oneglia v. Oneglia, 14 Conn. App. 267 (Conn. App. 1988) (trial court must hold preliminary hearing to determine probable cause that judgment was obtained by fraud)
- Billington v. Billington, 220 Conn. 212 (Conn. 1991) (eliminated prior due-diligence requirement for opening dissolution judgment obtained by fraud)
- Grasso v. Grasso, 153 Conn. App. 252 (Conn. App. 2014) (standard for new proceeding based on newly discovered evidence: due diligence, materiality, noncumulativeness, likelihood of different result)
- Varley v. Varley, 180 Conn. 1 (Conn. 1980) (earlier case applying diligence requirement to fraud-based relief prior to Billington)
- Weinstein v. Weinstein, 275 Conn. 671 (Conn. 2005) (elements of fraud claim)
- Bruno v. Bruno, 146 Conn. App. 214 (Conn. App. 2013) (recognizing common-law authority to open judgment obtained by fraud despite four-month statutory limit)