ELIZABETH CARSON, TRUSTEE v. ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
(AC 39217)
Appellate Court of Connecticut
August 21, 2018
DiPentima, C. J., and Elgo and Beach, Js.
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Syllabus
The plaintiff sought to recover damages for, inter alia, conversion in connection with the alleged theft of certain annuities by the defendant insurance company‘s agent, F. After the plaintiff‘s initial action was dismissed for failure to prosecute with reasonable diligence, the plaintiff filed another action, based on the same allegations, under the accidental failure of suit statute (
- The plaintiff failed to establish a genuine issue of material fact as to whether the applicable statute of limitations was tolled on the basis of F‘s allegedly fraudulent concealment, and, accordingly, the trial court properly granted the defendant‘s motion for summary judgment; the record revealed no evidence of the defendant‘s alleged concealment or knowledge of any purported fraud or misconduct by F, there was no evidence in the record of a fiduciary relationship between the plaintiff and the defendant, and F‘s alleged acts of fraudulent concealment could not serve to toll the statute of limitations under the fraudulent concealment doctrine, as F‘s acts could not be imputed to the defendant.
- The plaintiff could not prevail on her claim that the trial court improperly granted the defendant‘s motion for summary judgment on the ground that the continuing course of conduct doctrine tolled the applicable statute of limitations; the plaintiff failed to establish a genuine issue of material fact as to whether the defendant had a fiduciary duty to the plaintiff such that the continuing course of conduct doctrine would toll the statute of limitations, as the plaintiff failed to offer any support that her relationship with the defendant was anything more than one involving a commercial transaction, and failed to offer any evidence of a unique degree of trust and confidence between them that was akin to a fiduciary or special relationship.
Argued March 15-officially released August 21, 2018
Procedural History
Action to recover damages for, inter alia, conversion, and for other relief, brought to the Superior Court in the judicial district of Hartford, where the court, Peck, J., granted the defendant‘s motion for summary judgment and rendered judgment thereon, from which the plaintiff appealed to this court. Affirmed.
Michael J. Habib, for the appellant (plaintiff).
Michael A. Valerio, with whom, on the brief, were Jonathan C. Sterling and John W. Herrington, for the appellee (defendant).
Opinion
The following facts and procedural history, as set forth by the trial court in its memorandum of decision, are relevant to the plaintiff‘s claims on appeal. “In the original lawsuit, commenced on March 25, 2008, [the plaintiff] sued the [defendant] and David Faubert, [claiming] damages based on allegations of conversion, fraud, violation of the Connecticut Unfair Trade Practices Act (CUTPA), and negligence.2 On March 21, 2011, that action, Carson v. Allianz Life Ins. Co. of North America, CV-08-5018876-S, was dismissed by the court, Graham, J., in accordance with
The defendant filed a motion for summary judgment on December 18, 2014, claiming that the plaintiff‘s previously dismissed action could not be revived by
On September 17, 2015, in its memorandum of decision, the court granted the defendant‘s motion for summary judgment and concluded that the plaintiff‘s original action was time barred, and therefore could not be revived by
As to the continuing course of conduct doctrine, the court stated, “[e]ven assuming for the purpose of this motion for summary judgment that [Faubert] did have a fiduciary relationship with the plaintiff in a professional capacity, that relationship ended no later than March 22, 2005. [Faubert] ceased acting in any professional capacity for, or with any fiduciary relationship toward, the plaintiff as of March 22, 2005, when he confessed his wrongful conduct against the plaintiff to law enforcement and was arrested. The plaintiff has not provided evidence to create a genuine issue of material fact in relation to any wrongful acts or omissions of the defendant or [Faubert] after March 22, 2005, and thus, the statute of limitations began to run as of that date.” Accordingly, the court rendered summary judgment in favor of the defendant, and this appeal followed.
As a preliminary matter, we set forth our standard of review. “Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. . . . The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is . . . entitled to judgment as a matter of law. . . . The test is whether the party moving for summary judgment would be entitled to a directed verdict on the same facts. . . .
“[A] party opposing summary judgment must substantiate its adverse claim by showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue. . . . It is not enough . . . for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of [an issue of] material fact and, therefore, cannot refute evidence properly presented to the court [in support of a motion for summary judgment]. . . . Our review of the trial court‘s decision to grant the defendant‘s motion for summary judgment is plenary.” (Internal quotation marks omitted.) Flannery v. Singer Asset Finance Co., LLC, 128 Conn. App. 507, 512 (2011), aff‘d, 312 Conn. 286 (2014). “[I]n the context of a motion for summary judgment based on a statute of limitations special defense, a defendant typically meets its initial burden of showing the absence of a genuine issue of material fact by demonstrating that the action had commenced outside of the statutory limitation period. . . . When the plaintiff asserts that the limitations period has been tolled by an equitable exception to the statute of limitations, the burden normally shifts to the
The plaintiff does not dispute that her claims would be untimely unless the defendant‘s conduct amounted to fraudulent concealment or a continuing course of conduct that tolled the statute of limitations.7 Accordingly, we address the application of each doctrine in turn.
I
The plaintiff first claims that a genuine issue of material fact exists as to whether Faubert fraudulently concealed the plaintiff‘s cause of action such that the statute of limitations was tolled by the application of
We begin our analysis by setting forth the language of
“[T]o prove fraudulent concealment, [a plaintiff is] required to show: (1) a defendant‘s actual awareness, rather than imputed knowledge, of the facts necessary
“[Additionally], the [defendant‘s] actions must have been directed to the very point of obtaining the delay [in filing the action] of which [the defendant] afterward [seeks] to take advantage by pleading the statute. . . . To meet this burden, it [is] not sufficient for the [plaintiff] to prove merely that it was more likely than not that the [defendant] had concealed the cause of action. Instead, the [plaintiff must] prove fraudulent concealment by the more exacting standard of clear, precise and unequivocal evidence . . . .” (Emphasis in original; internal quotations marks omitted.) Stuart v. Snyder, 125 Conn. App. 506, 513 (2010), cert. denied, 300 Conn. 921 (2011). Our Supreme Court has extended this tolling doctrine to include the defendant‘s failure to disclose material facts to a person toward whom it owed a fiduciary duty. See Falls Church Group, Ltd. v. Tyler, Cooper & Alcorn, LLP, 281 Conn. 84, 106-107 (2007).
Although the plaintiff does not claim that the defendant itself has engaged in conduct that meets the elements of fraudulent concealment, she argues that the rules of agency operate to toll the statute of limitations. Citing to Sheltry v. Unum Life Ins. Co. of America, 247 F. Supp. 2d 169 (D. Conn. 2003), the plaintiff contends that the acts of fraudulent concealment by Faubert may be imputed to the defendant, thereby tolling the limitations period applicable to the plaintiff‘s claims against the defendant. In Sheltry, the court addressed whether the defendant insurance companies were entitled to summary judgment because an insurance agent was acting outside the scope of his authority, and not in furtherance of the defendants’ business, when the agent converted funds that the plaintiffs gave to the agent for purposes of purchasing an insurance policy from the defendants. Id., 172-73. The court in Sheltry determined that there was a genuine issue of material fact as to whether the agent was acting with actual or apparent authority in soliciting the insurance application and receiving the funds from the plaintiffs. Id., 177. In making that determination, the court cited to § 261 of the Restatement (Second) of Agency, which provides that “[a] principal who puts a servant or other agent in a position which enables the agent, while apparently acting within his authority, to commit a fraud upon third persons is subject to liability to such third persons for the fraud.” 1 Restatement (Second), Agency § 261, p. 570 (1958).
The plaintiff argues that the present case falls squarely within the rationale embodied in § 261 of the Restatement (Second) because the defendant placed Faubert in a position that facilitated his ability to consummate the fraud at issue, and, therefore, a genuine issue of material fact exists as to whether the agent was acting with the apparent authority of the defendant when he committed the fraud. The plaintiff‘s reliance on Sheltry and § 261 of the Restatement (Second), however, is misplaced. While the agency discussion contained in Sheltry may be relevant to the merits of the plaintiff‘s vicarious liability theory, it provides no support for the plaintiff‘s assertion that the agent‘s conduct
We reiterate that, in order to toll the statutes of limitation on the basis of fraudulent concealment, the plaintiff bore the burden of demonstrating that the defendant was actually aware of the facts necessary to establish the plaintiff‘s cause of action. Imputed knowledge is not enough. See Macellaio v. Newington Police Dept., 145 Conn. App. 426, 433 (2013); Falls Church Group, Ltd. v. Tyler, Cooper & Alcorn, LLP, supra, 89 Conn. App. 475; see also Cangemi v. Advocate South Suburban Hospital, 364 Ill. App. 3d 446, 462 (2006) (“accountability for an agent‘s fraudulent concealment does not extend to a principal unless the principal is shown to have known or approved of the concealment“); 54 C.J.S., Limitations of Actions § 142 (2018) (“Generally, fraudulent concealment of a cause of action by a person other than the defendant will not toll the statute of limitations. On the other hand, if a third person is in privity with or occupies any agency relationship with the defendant, the defendant‘s knowledge or approval of the concealment is generally sufficient to toll the limitations period.” [Footnotes omitted.]).
In addition, the fraudulent concealment doctrine‘s requirement that a defendant have actual knowledge, rather than imputed knowledge, as a condition for tolling is consistent with the purpose of statutes of limitations. “The purpose of [a] statute of limitation[s] is . . . to (1) prevent the unexpected enforcement of stale and fraudulent claims by allowing persons after the lapse of a reasonable time, to plan their affairs with a reasonable degree of certainty, free from the disruptive burden of protracted and unknown potential liability, and (2) to aid in the search for truth that may be impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents or otherwise.” (Internal quotation marks omitted.) Bellemare v. Wachovia Mortgage Corp., 284 Conn. 193, 199 (2007); see also 51 Am. Jur. 2d, Limitation of Actions § 7 (2018) (“[s]tatutes of limitation are intended to provide an adverse party a fair opportunity to defend a claim, as well as to preclude claims in which a party‘s ability to mount an effective defense has been lessened or defeated due to the passage of time” [footnote omitted]). Tolling the limitations period to pursue claims against an unwitting third party for the fraudulent concealment of another would frustrate the underlying purpose of the statute of limitations.
The plaintiff bore the burden of establishing a genuine issue of material fact as to the defendant‘s actual knowledge and concealment of Faubert‘s involvement in the fraud. “[I]t remains . . . incumbent upon the party opposing summary judgment to establish a factual predicate from which it can be determined, as a matter of law, that a genuine issue of material fact exists.” Connell v. Colwell, 214 Conn. 242, 251 (1990). Our review of the summary judgment motions and the contents of the referenced affidavits reveals no evidence of the defendant‘s alleged concealment or knowledge of any purported fraud by Faubert. In fact, at oral argument before this court, the plaintiff conceded
II
The plaintiff next claims that the trial court erred in granting the motion for summary judgment by failing to find that the continuing course of conduct doctrine tolled the operation of the statute of limitations. In response, the defendant argues that the court properly determined that any tolling under the continuing course of conduct doctrine necessarily came to an end on March 22, 2005, when Faubert confessed his actions to law enforcement and ceased acting in any professional capacity for, or with any fiduciary relationship toward, the plaintiff. In the alternative, the defendant argues that there is no basis for imputing, to the defendant, Faubert‘s alleged fiduciary relationship with, or obligations to, the plaintiff. We agree with the defendant‘s alternative argument.
“The issue . . . of whether a party engaged in a continuing course of conduct that tolled the running of the statute of limitations is a mixed question of law and fact. . . . We defer to the trial court‘s findings of fact unless they are clearly erroneous. . . .
Our Supreme Court has stated that “a fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other. . . . [N]ot all business relationships implicate the duty of a fiduciary. . . . In particular instances, certain relationships, as a matter of law, do not impose upon either party the duty of a fiduciary.” (Citations omitted; internal quotation marks omitted.) Macomber v. Travelers Property & Casualty Corp., 261 Conn. 620, 640 (2002).
The plaintiff‘s claims hinge on the alleged fiduciary relationship between the plaintiff and Faubert. The relevant relationship, however, for purposes of the continuing
Accordingly, the plaintiff has failed to establish a genuine issue of material fact as to whether the defendant had a fiduciary duty to the plaintiff such that the continuing course of conduct doctrine tolls the statute of limitations applicable to her action. Thus, the trial court properly granted the defendant‘s motion for summary judgment.
The judgment is affirmed.
In this opinion the other judges concurred.
Notes
It is undisputed that the defendant transmitted funds to the plaintiff in connection with a withdrawal from an Allianz life annuity on June 3, 2004. The defendant issued two checks to the plaintiff for the total amount of $350,000. Subsequently, the checks were endorsed by the plaintiff and deposited in a bank account of Faubert‘s company, Faubert Financial Group, Inc. Faubert was arrested and confessed to authorities on March 22, 2005.
The defendant also argued that dismissal of the plaintiff‘s 2008 action did not fall within the remedial scope of
Count three, the CUTPA claim, is subject to the three year statute of limitations set forth in
Each of the four counts is based on Faubert‘s criminal conduct and subject to a three year statute of limitations. The relevant date for each statute is the date that the act complained of occurred. Any criminal actions of Faubert necessarily occurred prior to his arrest on March 22, 2005. The original action was commenced on March 25, 2008, and, thus, outside of the three year limitation period for all counts.
