Village Mortgage Co. v. Veneziano
2017 WL 3098217
Conn. App. Ct.2017Background
- Village Mortgage Company sued its longtime founding officer/director James Veneziano for conversion, statutory theft, and embezzlement, alleging unauthorized withdrawals and advances from corporate funds from 2004–2014; suit filed October 16, 2012.
- Veneziano, who controlled the company’s finances until his retirement (~2010) and remained influential until 2012, counterclaimed asserting the funds were back pay or investments and raised a statute-of-limitations defense (§ 52-577).
- After a 12-day bench trial with 113 exhibits (including a forensic accountant’s report and the CFO’s investigative report), the trial court found Veneziano breached fiduciary duties and misappropriated funds, awarding Village $2,080,185.09; the court credited the CFO’s report and treble-damages for post‑limitations acts.
- The court concluded Village knew (through its bookkeepers and financial staff who entered Veneziano’s handwritten notes into QuickBooks beginning in 2004) of the improper withdrawals; therefore fraudulent-concealment tolling (§ 52-595) did not apply and recovery was limited to the three years prior to suit.
- Veneziano appealed factual findings, discovery rulings, and alleged spoliation/discovery misconduct; Village cross‑appealed the limitations ruling. The appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court’s factual findings about statutory theft/misappropriation were clearly erroneous | Village: trial evidence (CFO, auditor, forensic accountant) proved misappropriation and amounts | Veneziano: court improperly relied on Finkel’s forensic report, misread financials, ignored his claimed investments/backpay | Findings supported by record; court credited CFO and forensic testimony — not clearly erroneous |
| Whether discovery rulings (Oct 27, Dec 9, Jan 16) constituted reversible error | Village: complied with discovery; court properly denied further relief absent motion to compel | Veneziano: plaintiff withheld handwritten ledgers and ledgers would have altered outcome | Appellate court declined review for lack of adequate record/briefing and no showing of harm |
| Whether plaintiff engaged in spoliation or discovery misconduct | Village: no adjudicated spoliation; discovery disputes were litigated below | Veneziano: records were intentionally destroyed/withheld and trial court erred by not finding spoliation | Not reviewed — claim not raised before trial or in posttrial brief, so waived |
| Whether statute of limitations was tolled by fraudulent concealment | Village: Veneziano concealed misconduct; exclusive control prevented discovery until 2012, so tolling should apply | Veneziano: withdrawals were open, transparent, and known to bookkeepers; knowledge imputable to corporation, so no tolling | Court properly found no tolling; knowledge of bookkeepers imputed to corporation; recovery limited to 3 years prior to suit |
Key Cases Cited
- Iacurci v. Sax, 313 Conn. 786 (Conn. 2014) (elements required to toll limitations via fraudulent concealment)
- Bound Brook Assn. v. Norwalk, 198 Conn. 660 (Conn. 1986) (public or notorious conduct can defeat concealment claim)
- Mountaindale Condominium Assn., Inc. v. Zappone, 59 Conn. App. 311 (Conn. App. 2000) (facts that should prompt inquiry undermine concealment)
- Reardon v. Mutual Life Ins. Co., 138 Conn. 510 (Conn. 1952) (agent's knowledge obtained within scope of authority may be imputed to principal)
- E. Udolf, Inc. v. Aetna Casualty & Surety Co., 214 Conn. 741 (Conn. 1990) (knowledge of store manager/bookkeeper imputed to corporation for certain purposes)