Schaeppi v. Unifund CCR Partners
161 Conn.App. 33
Conn. App. Ct.2015Background
- Unifund sued the Schaepis for credit-card debt; an attorney fact finder initially recommended judgment for plaintiffs but after remand recommended for Unifund; Judge Miller entered judgment in favor of Unifund on June 19, 2006, without a specific dollar amount stated in the judgment.
- Unifund recorded a judgment lien July 18, 2006, then sought weekly payment orders; a September 11, 2006 installment order followed but postdated the lien recording.
- Unifund brought a foreclosure on the judgment lien; Judge Satter and later the Appellate Court found the underlying judgment ambiguous/defective because no amount was specified, and Unifund’s motions to clarify or to open the judgment were denied and affirmed on appeal.
- Plaintiffs sued Unifund and its counsel Tobin & Melien (T&M) for statutory and common-law vexatious litigation, claiming lack of probable cause and seeking double/treble and punitive damages.
- Trial court found Unifund proved reliance on T&M’s advice and that T&M had probable cause to initiate and pursue the foreclosure through the filing of the motion to open, but lacked probable cause only to pursue the subsequent appeal from denial of the motion to open; awarded plaintiffs double damages.
- On appeal, the court affirmed most rulings but reversed as to the lack of probable cause for the appeal from the denial of the motion to open, holding T&M had probable cause throughout; judgment for plaintiffs was reversed insofar as based on that ground.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Unifund proved reliance on T&M’s advice | Plaintiffs: no direct Unifund witness testified to reliance; emails show Unifund merely consented, not relied | T&M/Unifund: firm attorney testimony showed regular representation and that Unifund acted on counsel’s recommendations | Reliance proven — trial court’s finding not clearly erroneous; defense of advice of counsel established |
| Probable cause to initiate foreclosure (was judgment amount ascertainable?) | Plaintiffs: June 19 judgment was not definitive or certain as to amount and thus could not support foreclosure | T&M: record (fact-finder reports, hearings, installment order) gave a reasonable attorney basis to conclude amount was ascertainable | T&M had probable cause to initiate foreclosure; novel but colorable theory that amount was ascertainable from record |
| Probable cause to continue prosecution after adverse rulings | Plaintiffs: repeated adverse rulings put T&M on notice judgment was invalid; counsel should have stopped | T&M: adverse rulings do not eliminate probable cause; attorneys may press arguably correct or novel theories | Continued prosecution did not lose probable cause; adverse rulings alone insufficient to show lack of probable cause |
| Probable cause to appeal denial of motion to open (cross-appeal) | Plaintiffs: appeal was frivolous because trial court and Appellate Court had already said no valid judgment to open | T&M: motion to open invoked equitable theory (mutual mistake); seeking appellate review was reasonable | Court reversed trial court on this point: T&M had probable cause to appeal the denial of the motion to open |
Key Cases Cited
- Verspyck v. Franco, 274 Conn. 105 (Conn. 2005) (advice-of-counsel defense standards)
- Falls Church Group, Ltd. v. Tyler, Cooper & Alcorn, LLP, 281 Conn. 84 (Conn. 2007) (probable-cause standard allows pursuit of novel claims)
- Embalmers' Supply Co. v. Giannitti, 103 Conn. App. 20 (Conn. App. 2007) (objective probable-cause inquiry for attorneys)
- DeLaurentis v. New Haven, 220 Conn. 225 (Conn. 1991) (probable cause may be lost during litigation; standard for initiation/continuation)
- Bernhard-Thomas Building Systems, LLC v. Dunican, 286 Conn. 548 (Conn. 2008) (elements of statutory and common-law vexatious litigation)
- Unifund CCR Partners v. Schaeppi, 126 Conn. App. 370 (Conn. App. 2011) (Appellate Court decision addressing validity/ascertainability of the underlying judgment)