49 Conn. App. 582 | Conn. App. Ct. | 1998
The plaintiff, Norse Systems, Inc. (Norse), appeals from the trial court’s granting of summary judgment on all counts of its complaint in favor of the defendant, Tingley Systems, Inc. (Tingley). On appeal, Norse claims that the trial court improperly (1) failed to recuse itself from hearing Tingley’s motion for summary judgment and (2) granted Tingley’s motion for summary judgment because (a) there are genuine issues of material fact and (b) the law was misapplied with respect to (i) Tingley’s special defense relating to advice of counsel and (ii) Norse’s abuse of process and Connecticut Unfair Trade Practice Act (CUTPA)
The following facts are relevant to the case before this court. Norse, a Connecticut corporation, and Tingley, a Florida corporation, do business in the computer industry. Norse develops software programs and systems for health maintenance organizations. Sometime prior to 1988, Tingley had licensed the use of its health maintenance organization software program (software program) under certain conditions to Aetna Health Care Systems, Inc. (Aetna). In or about 1987, Tingley knew that Aetna intended to upgrade its computer hardware. Aetna hired Norse as a consultant to assist in its upgrading efforts. Sequoia Systems, Inc. (Sequoia), was a computer hardware vendor offering to sell Aetna a new computer. In early 1988, Tingley learned certain information that caused its principals to believe that the software program had been used in a manner that violated the license. Tingley received information that Norse had assisted Aetna and Sequoia in benchmarking
On May 16, 1988, Tingley commenced suit against Norse in the United States District Court for the District of Connecticut, alleging copyright infringement, unauthorized access to and misuse of a computer system in violation of General Statutes §§ 53a-251 and 52-570b, tortious interference with a business relationship, misappropriation of trade secrets, common-law unfair competition and CUTPA violations. On July 28, 1988, the District Court, Nevas, J., dissolved the temporary restraining order obtained by Tingley, finding that there was no actual or imminent harm to Tingley. Norse moved for sanctions against Tingley.
On August 3, 1998, Tingley voluntarily dismissed the suit without prejudice pursuant to Rule 41 (a) (1) of the Federal Rules of Civil Procedure.
Judgment entered in the federal litigation on September 15,1993. On September 20,1993, Norse commenced the present action against Tingley alleging vexatious litigation with malice pursuant to General Statutes § 52-568 (2), vexatious litigation pursuant to General Statutes § 52-568 (1), abuse of process and CUTPA violations. In 1995,
Norse’s first claim is that the trial court improperly failed to recuse itself from hearing Norse’s motion for summary judgment. Norse’s claim of judicial bias has two bases: first, that the trial court was privy to settlement discussions and, second, that the trial court acted with bias toward Norse as a result of the prejudgment remedy hearing. We do not agree.
The following additional facts are necessary for our review of this claim. Norse’s application for a prejudgment remedy was heard on October 9 and 10, 1996. Prior to the hearing, the trial court met with counsel in chambers during which time the prospects of settlement were discussed. Although there is no transcript of the discussion, the trial court made brief mention of the settlement discussion on the record prior to the prejudgment remedy hearing.
Lief Petterson, president of Norse, was called as a witness to testify, in part, as to the damages Norse incurred as a result of the federal litigation. During cross-examination, Tingley’s counsel elicited a response from Petterson that revealed that he had not accurately represented the amount of attorney’s fees Norse had incurred at the time of his testimony in the federal case.
On October 29,1996, Norse filed a motion for recusal. The motion for recusal was based on the trial court’s comments about Petterson’s testimony and the final argument of Norse’s counsel in the federal trial. The motion did not include an affidavit or a certification by counsel that the motion was made in good faith. The motion was denied by the trial court on December 5, 1996.
“A motion to disqualify a judicial authority shall be in writing and shall be accompanied by an affidavit setting forth the facts relied upon to show the grounds for disqualification and a certificate of the counsel of record that the motion is made in good faith. The motion shall be filed no less than ten days before the time the case is called for trial or hearing, unless good cause is shown for failure to file within such time.” Practice Book § 997, now Practice Book (1998 Rev.) § 1-23. “This provision creates a mandatory procedure to be followed by any party seeking to recuse a judge. See State v. Cook, 183 Conn. 520, 521-23, 441 A.2d 41 (1981).” State v. Weber, 6 Conn. App. 407, 412, 505 A.2d 1266, cert. denied, 199 Conn. 810, 508 A.2d 771 (1986). “ ‘It is axiomatic that the burden of establishing a record that a judicial impropriety has occurred which demonstrates or gives the appearance of bias or partiality so as to require recusal rests with the party who claims the occurrence of such an impropriety.’ State v. Santangelo, 205 Conn. 578, 584, 534 A.2d 1175 (1987).” State v. Teel, 42 Conn. App. 500, 506, 681 A.2d 974, cert. denied, 239 Conn. 921, 682 A.2d 1012 (1996).
In this case, Norse did not comply with the rules of practice in either instance in which it attempted to have the trial court recuse itself. Norse’s written motion contained no affidavit setting forth the facts relied on
The motion made during the summary judgment hearing was not only oral, it was untimely, not having been filed ten days before the hearing. Norse also failed to show good cause why its second motion
II
Norse’s second claim is that the trial court improperly granted Tingley’s summary judgment motion. It bases that claim on its assertions that there are genuine issues of material fact and that the court misapplied the law with respect to Tingley’s advice of counsel special
The following facts are relevant to this claim. Norse’s suit against Tingley alleges the following claims: vexatious litigation with malice pursuant to § 52-568 (2)
“Our standard of review of a trial court’s decision to grant a motion for summary judgment is well established.” Zichichi v. Middlesex Memorial Hospital, 204 Conn. 399, 402, 528 A.2d 805 (1987). “The judgment sought 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.” Practice Book § 384, now Practice Book (1998 Rev.) § 17-49. A “material fact” is a fact that will make a difference in the result of the case. See Hammer v. Lumberman’s Mutual Casualty Co., 214 Conn. 573, 578, 573 A.2d 699 (1990). The facts at issue are those alleged in the pleadings. See Plouffe v. New York, N.H. & H.R. Co., 160 Conn. 482, 489, 280 A.2d 359 (1971). The party
“While the court must view the inferences to be drawn from the facts in the light most favorable to the party opposing the motion, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986), a party may not ‘rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment.’ Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986), cert. denied, 480 U.S. 932, 107 S. Ct. 1570, 94 L. Ed. 2d 762 (1987).” Gallien v. Connecticut General Life Ins. Co., 49 F.3d 878, 882 (2d Cir. 1995). “On appeal, however, the burden is on the opposing party to demonstrate that the trial court’s decision to grant the movant’s summary judgment motion was clearly erroneous. Pandolphe’s Auto Parts, Inc. v. Manchester, 181 Conn. 217, 222, 435 A.2d 24 (1980).” 2830 Whitney Avenue Corp. v. Heritage Canal Development Associates, Inc., 33 Conn. App. 563, 567, 636 A.2d 1377 (1994).
A defendant’s motion for summary judgment “is properly granted if it raises at least one legally sufficient defense that would bar the plaintiffs claim and involves
A
Norse’s first claim is that Tingley’s motion for summary judgment should have been denied because there is a genuine issue of material fact as to whether Tingley had probable cause to initiate the federal court litigation. The following additional facts are necessary for our analysis.
Tingley’s motion for summary judgment was based on its having probable cause to commence a copyright infringement claim against Norse in federal court. The motion was supported by affidavits of Tingley’s counsel, and the testimony of various Tingley and Norse employees, among other things. Norse opposed summary judgment, claiming that because the federal jury found Tingley had malice in bringing its claim of copyright infringement against Norse, Tingley lacked probable cause and the real purpose in commencing the litigation was to put Norse out of business. Norse also heavily relies on its interpretation of Tingley’s prelitigation investigation.
In granting Tingley’s motion for summary judgment, the trial court found the following facts. “The dispute had its origin in a licensing agreement between Tingley, a computer software company, and Aetna. Aetna was licensed to use Tingley software, but was to maintain it in a confidential manner. In 1988, Tingley learned its copyrighted software had been permitted by Aetna to be taken to another site, where a computer seller tested
“Tingley’s investigation confirmed these facts, and there does not appear to be any question but that these events occurred. In fact, one George Curley, an Aetna employee, admitted in the federal litigation that this had occurred and that the Tingley-Aetna licensing agreement had been breached.”
In addition to those facts, which the trial court described as “undisputed,” the trial court took note of the evidence that Tingley presented in support of its summaiy judgment motion: affidavits from two of its attorneys, experts in computer law who were involved in the federal litigation, attesting that it was their belief that “a sufficient factual basis existed to allege each of the claims asserted,”
Although it is pleaded in several alternatives, Norse’s claim against Tingley is really one of vexatious litigation. “A vexatious suit is a type of malicious prosecution
“For purposes of a vexatious suit action, ‘[t]he legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it.’ Wall v. Toomey, 52 Conn. 35, 36 (1884); accord Ledgebrook Condominium Assn., Inc. v. Lusk Corp., 172 Conn. 577, 584, 376 A.2d 60 (1977). ‘Probable cause is the knowledge of facts, actual or apparent, strong enough to justify a reasonable man in the belief that he has lawful grounds for prosecuting the defendant in the manner complained of.’ Shea v. Berry, 93 Conn. 475, 477, 106 A. 761 (1919). Thus, in the context of a vexatious suit action, the defendant lacks probable cause if he lacks a reasonable, good faith belief in the facts alleged and the validity of the claim asserted.” DeLaurentis v. New Haven, 220 Conn. 225, 256, 597 A.2d 807 (1991).
The essence of Norse’s appeal is that it does not agree with the trial court’s finding of facts and would have this court reinterpret the facts. Norse bases its argument on the federal jury’s finding that Tingley commenced the federal suit with malice. Because there was a finding of malice, Norse believes Tingley brought the federal court action to put Norse out of business. What Norse believes is not relevant to the issue of Tingley’s reasonable belief in grounds to commence the lawsuit. Although malice is probably a motivating factor in much litigation, malice alone is not sufficient to prove vexatious litigation. Want of probable cause may prove malice, but malice does not prove a lack of probable cause. See id.
Norse’s claim that the District Court’s ruling on the Rule 11 sanctions motion is not res judicata as to the question of probable cause is not availing. The trial court did not rule that the issue of probable cause was previously adjudicated in the District Court. The trial court merely identified the District Court’s ruling as evidence of Tingley’s reasonable belief that it had reasonable grounds for prosecuting a copyright infringement claim against Norse. The trial court properly granted Tingley’s motion for summary judgment on the claim of vexatious litigation.
Norse’s next claim is that the trial court improperly applied the law with respect to Tingley’s special defense to the vexatious litigation claim that it relied on the advice of counsel. We agree with the trial court.
Tingley presented uncontested evidence from two lawyers, experts in the field of computer law, who testified that based on Tingley’s investigation there were reasonable grounds for Tingley to allege the claims it asserted. “Advice of counsel is a complete defense to an action of . . . vexatious suit when it is shown that the defendant . . . instituted his civil action relying in good faith on such advice, given after a full and fair statement of all facts within his knowledge, or which he was charged with knowing.” Id., 361. Norse contends that the testimony of one of the lawyers with respect to the law of copyrighted materials was legally incorrect. We need not decide that question. “The fact that the attorney’s advice was unsound or erroneous will not affect the result.” Id.
Norse attempts to distinguish Vandersluis from the facts of the case before us. Norse claims that the “advice of counsel” defense is available only to common-law claims of vexatious litigation and not the § 52-568 statutory causes of action it alleged. Norse cites no law in support of its argument. The elements of a common-law or statutory cause of action for vexatious litigation are identical. Therefore, the special defense of advice of counsel can be pleaded in response to both causes of action.
C
Norse’s final claim is that the trial court improperly applied the doctrine of res judicata to count three, abuse of process, and count four, CUTPA, in granting Tingley’s motion for summary judgment. Because public policy
“[CJlaim preclusion, sometimes referred to as res judicata, and issue preclusion, sometimes referred to as collateral estoppel, are first cousins. Both legal doctrines promote judicial economy by preventing relitigation of issues or claims previously resolved. . . .
“[T]he doctrine of res judicata, or claim preclusion, [provides that] a former judgment on a claim, if rendered on the merits, is an absolute bar to a subsequent action on the same claim. A judgment is final not only as to every matter which was offered to sustain the claim, but also as to any other admissible matter which might have been offered for that purpose .... The rule of claim preclusion prevents reassertion of the same claim regardless of what additional or different evidence or legal theories might be advanced in support of it.
“We have adopted a transactional test as a guide to determining whether an action involves the same claim as an earlier action so as to trigger operation of the doctrine of res judicata. [T]he claim [that is] extinguished [by the judgment in the first action] includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose. What factual grouping constitutes a ‘transaction,’ and what groupings constitute a ‘series,’ are to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage. ... In applying the transactional
“We recognize that the mere explication of the doctrine of claim preclusion does not resolve all difficulties which may appear at the point of application. As was stated long ago, the law of estoppel by judgment is well settled, the only difficulty being in its application to the facts. . . . The difficulty has always been in determining what matters are precluded by the former adjudication. ... In applying the rule of claim preclusion, the critical question is how broad a definition to give to the term same claim or cause of action. The broader the definition, the broader the scope of preclusion.” (Citations omitted; internal quotation marks omitted.) Delahunty v. Massachusetts Mutual Life Ins. Co., 236 Conn. 582, 589-91, 674 A.2d 1290 (1996).
1
In the federal court litigation, Norse asserted a tortious interference with contractual relations counterclaim against Tingley, alleging in part that Tingley, “knowing of the contractual relationship by and between Norse and Sequoia, intentionally sought to interfere with said contractual relationship by making certain defamatory statements and allegations to Sequoia about Norse with the intent of stopping any payment to Norse pursuant to its agreement with Sequoia.” The federal jury found in favor of Norse on this counterclaim, and judgment entered against Tingley.
In the amended complaint before the trial court, Norse asserted a CUTPA claim, alleging, in part: “Tingley engaged in unfair methods of competition and/or unfair or deceptive acts or practices in the conduct of such trade or commerce in violation of General Statutes
The CUTPA claim before the trial court is an attempt to assert a hybrid claim of both tortious interference with a business or contractual relationship and vexatious litigation. This is a tortious interference with a business or contractual relationship claim recast as a CUTPA claim. Any claim for tortious interference with Norse’s business or contractual relationships was resolved in the federal litigation. Norse cannot now have a second bite of the apple for damages resulting from an injury to its business interests. Therefore, Norse’s CUTPA claim is barred by the doctrine of res judicata.
2
Norse next claims that the trial court improperly held that Norse’s abuse of process claim was barred by the doctrine of res judicata because it could have been asserted in the federal litigation. Norse maintains that because the claim was not ripe for adjudication, it could not have been asserted in the federal litigation. Although we affirm the trial court’s judgment that Norse’s abuse of process claim is barred by the doctrine of res judicata, we reach this conclusion on the basis of grounds different from those relied on by the trial
Norse alleged no abuse of process claim in its counterclaims in the federal litigation. In count three of its amended complaint before the trial court, Norse alleged that Tingley had commenced a civil action against it in the District Court, that Tingley had prosecuted the prior action “with the primary ulterior and improper motive to harm and/or destroy its business competitor, Norse. . . . There was no probable cause justifying commencement and prosecution of the [federal litigation] . . . [and] Norse suffered financial damages as a result of Tingley’s abuse of process . . . .”
Once again, Norse attempts to assert a tortious interference with business or contractual relationships as another cause of action, specifically, abuse of process. A tortious interference with business or contractual relationship claim cannot be converted into an abuse of process claim simply by labeling it as such. Furthermore, the facts of this case, as a matter of law, do not constitute abuse of process.
“The action of malicious prosecution lies where a civil or criminal action has been instituted with malice and without probable cause, and has terminated unsuccessfully. The plaintiff must allege and prove that the original action, whether civil or criminal, was instituted without probable cause, with malice, and that it terminated in his favor. Abuse of process is the misuse of
In the case before us, Tingley commenced the federal litigation with probable cause to protect its copyright. Tingley pursued federal litigation for its intended purpose, i.e., to obtain damages for copyright violations by means of a successful lawsuit. A party does not abuse legal process merely by filing a lawsuit. To allege a viable cause of action for abuse of process, a claimant
The judgment is affirmed.
In this opinion the other judges concurred.
See General Statutes § 42-110a et seq.
Benchmarking is a test of the compatibility among a computer software program, the data to be processed and the computer hardware.
Under the terms of the license, the software program was to be used on a designated computer at Aetna’s Middletown offices.
The motion for sanctions was eventually denied based on a stipulation of the parties.
Rule 41 (a) (1) provides in relevant part: “Subject to the provisions of Rule 23(e), of Rule 66, and of any statute of the United States, an action may be dismissed by the plaintiff without order of court (i) by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment . . . .”
Following postverdict motions, Norse was awarded $515,000, in damages on its counterclaim, $20,000 of which was punitive in nature pursuant to CUTPA.
Some of the damages awarded by the jury were duplicative.
Rule 11 (c) provides: “Sanctions. If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.”
Further action in the Superior Court was delayed pending the outcome of Tingley’s appeal to the United States Court of Appeals for the Second Circuit.
The trial court stated: “All right. Our efforts in another direction having failed, let’s proceed with the hearing on the PJR.”
See Practice Book § 430, now Practice Book (1998 Rev.) § 19-3.
In the federal case, Petterson testified that Norse had incurred approximately $250,000 in legal fees. During the prejudgment remedy hearing, Petterson testified that from the time the federal litigation commenced until the temporary injunction was dissolved, Norse incurred attorney’s fees at an hourly rate (approximately $80,000). After the District Court vacated Tingley’s withdrawal of the federal action, Norse entered into a contingency fee
Norse’s counsel argued to the jury, “Now, there is what is called punitive damages. But under that category, you can also take note of the legal fees and costs that Norse has incurred in defending itself—that Norse has incurred in defending itself against these charges, in dealing with these charges, up through today. You have heard evidence from Mr. Petterson that that cost was about $250,000.”
The attorney who represented Norse in the federal trial was not the same attorney who represented Norse in the Superior Court, although the two attorneys were partners at the time of the federal trial.
The trial court stated: “What I would like, Mr. Bainer, to set my mind at ease that I’m doing my chore diligently and properly, I’d like an affidavit from you, outlining the fee arrangement with Mr. Petterson, so that I am able to ascertain from that document what the state of the billings and finances were at the time of trial. I know the contingency fee basis was involved there. I’d like a statement of that, that I can examine at my leisure and do the fair thing and right thing.”
Even if we were to consider Norse’s oral motion for recusal as a motion to reargue, it, too, would not have been timely filed. Practice Book § 204B (a), now Practice Book (1998 Rev.) § 11-12, provides in relevant part: “A party who wishes to reargue a decision or order rendered by the court shall, within twenty days from the issuance of notice of the rendition of the decision or order, file a motion to reargue . . . .” (Emphasis added.)
General Statutes § 52-568 provides: “Any person who commences and prosecutes any civil action or complaint against another, in his own name or the name of others, or asserts a defense to any civil action or complaint commenced and prosecuted by another (1) without probable cause, shall pay such other person double damages, or (2) without probable cause, and with a malicious intent unjustly to vex and trouble such other person, shall pay him treble damages.”
See footnote 17.
One of the attorneys also testified at the hearing on the summaiy judgment motion.
In ruling on Norse’s postverdict motion for Rule 11 sanctions, the District Court, Restani, J. stated: “The motion for sanctions. Motions for sanctions are inappropriate. . . . [Tingley] had a good claim for copyright infringement. It has had some other dubious claims, which it voluntarily dismissed, and at one point in time it had a reason for bringing those claims. It soon found out that it didn’t have a very good reason, and that caused a lot of the problems here. It should have found out sooner, I suppose, but as far [as] what it did in this court, after the counsel was substituted, I really do not see a good reason to rule for sanctions, and they are denied. I think that Tingley pursued its claims appropriately. If it overstated some of its claims, well, [Norse] overstated some of its claims, too, and I think ... it put Tingley to some disadvantage, at least initially, with its moving around on
“We can sustain a right decision although it may have been placed on a wrong ground.” Stapleton v. Lombardo, 151 Conn. 414, 417, 198 A.2d 697 (1964).