CONNECTICUT BAR JOURNAL
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CONNECTICUT BAR
JOURNAL
Volume 85 No. 2
Contents
Professional Responsibility
Review 2010
95
By Kimberly A. Knox and Brendon P. Levesque
VOL. 85 NO. 2, PP 95-194
Annual Survey of Developments
in Insurance Coverage Law
By Charles T. Lee and Mandiey L. Winalski
Business Litigation:
2010 In Review
By William J. OʼSullivan
Survey of Developments in Labor
and Employment Law 2010
By Rita B. Trivedi
2010 Developments in Connecticut
Estate and Probate Law
By Jeffrey A. Cooper and John R. Ivimey
JUNE 2011
ISSN: 0010-6070
USPS: 129-060
121
131
145
179
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CONNECTICUT BAR
JOURNAL
Volume 85 • Number 2
June 2011
ERIKA L. AMARANTE, Editor-in-Chief
Wiggin and Dana LLP, New Haven, (203) 498-4493
JAMES E. WILDES, Managing Editor, North Haven, (203) 407-6000
JAMES F. SULLIVAN, Annual Survey Editor, Hartford, (860) 525-3101
JAMES H. LEE, Technical Editor, Fairfield, (203) 259-4665
SENIOR TOPICAL EDITORS
LIVIA D. BARNDOLLAR, New Canaan
FRANK S. BERALL, Hartford
PETER L. COSTAS, Hartford
TIMOTHY H. EVERETT, Hartford
CARL T. GULLIVER, New Haven
ERNEST M. LORIMER, Stamford
LINDA L. MORKAN, Hartford
EMANUEL MARGOLIS, Stamford
KENNETH R. PLUMB, Hartford
PETER W. SCHROTH, Hartford
JACK STEIGELFEST, Hartford
RICHARD W. TOMEO, Hartford
ROBERT J. YAMIN, Danbury
Family Law
Probate and Estate Planning
Trade Regulation and Intellectual Property
Criminal Law
Bankruptcy
Business Entities
Appellate Law
Human Rights Law
Labor Relations and Employment Law
International Law and Financial Institutions
Civil Litigation
Taxation
Real Property
EDITORS-AT-LARGE
Nicole A. Bernabo, West Hartford
Pamela D. Bochinski, Westport
Cynthia C. Bott, Bridgeport
Samuel L. Braunstein, Fairfield
Fred W. Danforth, North Haven
Proloy K. Das, Hartford
Steven J. Errante, New Haven
Michael F. Ewing, Bridgeport
Michael D. Fox, Waterbury
Domenic D. Perito, Hartford
Elizabeth P. Gilson, New Haven
Leslie I. Jennings-Lax, New Haven
Eugene A. Marconi, East Hartford
Sarah E. Murray, East Hartford
Mark Oland, Hartford
Honorable Robert Satter, Avon
Thomas M. Sheehan, Boston, MA
Ernest F. Teitell, Stamford
L. Kay Wilson, Ellington
INDEX EDITORS
James B. Streeto, Middletown
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ANNO., and in SHEPARDʼS CONN. CITATIONS.
PROFESSIONAL RESPONSIBILITY REVIEW 2010
95
PROFESSIONAL RESPONSIBILITY REVIEW 2010
BY KIMBERLY A. KNOX
AND
BRENDON P. LEVESQUE*
By far the most interesting information gleaned from the
authors’ review of the relevant materials for 2010 was that
attorneys who tried their grievance cases generally fared
worse than their brethren who negotiated and resolved the
matter. That observation has led the authors to reach two
conclusions. First, the Office of Chief Disciplinary Counsel
is actively prosecuting grievance matters. Second, disciplinary counsel is less likely to negotiate a resolution if the
alleged rule violation is sufficiently egregious. The decisions, case law, and ethics opinions discussed in this article
illustrate and highlight the common ethical pitfalls prevalent in our profession.
I. STATEWIDE GRIEVANCE COMMITTEE
After a complaint is filed against an attorney, a local
grievance panel determines whether probable cause exists to
find a violation of the Rules of Professional Conduct.1 If
there is a finding that probable cause does not exist, the complaint is dismissed. That dismissal is not appealable.2 In
the event of a probable cause finding by the local grievance
panel, the complaint is subsequently heard by a three member reviewing committee from the statewide grievance committee.3 The reviewing committee does not have authority to
suspend or disbar an attorney. The reviewing committee has
authority, however, to impose a variety of lesser sanctions
under Practice Book Section 2-37.4 Where the sanctions under
* Of the Hartford Bar.
1 PRACTICE BOOK § 2-32(i).
2 PRACTICE BOOK § 2-32(i).
3 PRACTICE BOOK § 2-35(a).
4 PRACTICE BOOK § 2-37 provides in pertinent part:
(a) A reviewing committee or the statewide grievance committee may
impose one or more of the following sanctions and conditions in accordance
with the provisions of Sections 2-35 and 2-36:
(1) reprimand;
(2) restitution;
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CONNECTICUT BAR JOURNAL
[Vol. 85
Section 2-37 are not appropriate, the reviewing committee
may direct the Office of the Disciplinary Counsel to file a presentment against the attorney in the Superior Court.5 The
Superior Court, which hears the presentment de novo, may
impose whatever discipline it deems appropriate.
A. Statistical Analysis
In 2010, there were eighty-five reported statewide grievance committee decisions in which there were findings or conditional admissions of misconduct.6 Forty percent of the
reviewed decisions were approved proposed dispositions under
Practice Book Section 2-82.7 The remaining sixty percent
were decided by a written decision following a public hearing
on the merits. Following a hearing on the merits, generally
fifty to sixty percent of the total decisions are dismissed.
Total
Presentments
(41)
Total
Reprimands
(37)
Total
Lesser
Sanctions
(7)
Decision
(34)
Decision
(13)
Decision
(2)
§ 2-82
(7)
§ 2-82
(24)
§ 2-82
(5)
0
5
10 15 20 25 30 35 40 45
0
5
10 15 20 25 30 35 40
0
1
2
3
4
5
6
7
(3) assessment of costs;
(4) an order that the respondent return a client’s file to the client;
(5) a requirement that the respondent attend continuing legal education
courses, at his or her own expense, regarding one or more areas of substantive law or law office management;
(6) an order to submit to fee arbitration;
(7) with the respondent’s consent, an order to submit to periodic audits and
supervision of the attorney’s trust accounts to insure compliance with the
provisions of Section 2-27 and the related Rules of Professional Conduct;
(8) with the respondent’s consent, a requirement that the respondent undertake treatment, at his or her own expense, for medical, psychological or psychiatric conditions or for problems of alcohol or substance abuse.
5 PRACTICE BOOK §§ 2-37, 2-47.
6 In order to compile the data referenced in this article, the authors reviewed
eighty-five reported decisions by the statewide grievance committee which were
decided between the dates of January 1, 2010 and December 10, 2010, and which
were published on or before March 1, 2011, (www.jud.ct.gov). The cases include
both decisions following a hearing on the merits and proposed dispositions under
PRACTICE BOOK § 2-82. With regard to the approved proposed dispositions, the
authors included as rules violations only those for which the attorney conditionally admitted there was some evidence of misconduct. Finally, two decisions, which
consolidated more than one case into a single decision by the reviewing committee,
were considered as one decision.
7 PRACTICE BOOK § 2-82 provides in relevant part:
(a) The disciplinary counsel to whom a complaint is forwarded after a find-
8
2011]
PROFESSIONAL RESPONSIBILITY REVIEW 2010
97
After a finding of probable cause, disciplinary counsel
and the respondent may negotiate a proposed disposition of
the complaint. Generally, the disposition is based upon an
admission of misconduct. That admission can take one of
two forms. First, it can be an admission that the material
facts are true regarding all or some of the alleged misconduct. Second, it can be an acknowledgement, similar to an
Alford plea,8 the respondent does not admit the material
facts, but admits that there is sufficient evidence to prove
misconduct by clear and convincing evidence.
If the parties reach an agreement, it is reduced to writing
and submitted, along with the complaint, the record, and the
respondent’s affidavit, to a reviewing committee for consideration at a public hearing. If approved, it becomes the committee’s decision. If the proposal is rejected, the conditional
admission and proposed disposition are withdrawn, not
made public, and are not to be used against the respondent
8
ing that probable cause exists that the respondent is guilty of misconduct
may negotiate a proposed disposition of the complaint with the respondent or, if the respondent is represented by an attorney, with the respondent's attorney. Such a proposed disposition shall be based upon the
respondent's admission of misconduct, which shall consist of either (1) an
admission by the respondent that the material facts alleged in the complaint, or a portion thereof describing one or more acts of misconduct to
which the admission relates, are true, or (2) if the respondent denies
some or all of such material facts, an acknowledgment by the respondent
that there is sufficient evidence to prove such material facts by clear and
convincing evidence.
(b) If disciplinary counsel and the respondent agree to a proposed disposition of the matter, they shall place their agreement in writing and submit it, together with the complaint, the record in the matter, and the
respondent's underlying admission of misconduct, for approval as follows: (i) by the court, in all matters involving possible suspension or disbarment, or possible imposition of a period of probation or other sanctions beyond the authority of the statewide grievance committee, as set
forth in Section 2-37; or (ii) by a reviewing committee of the statewide
grievance committee, in all other matters. If, after a hearing, the admission of misconduct is accepted and the proposed disposition is approved
by the court or the reviewing committee, the matter shall be disposed of
in the manner agreed to. If any resulting admission of misconduct or proposed disposition is rejected by the court or the reviewing committee, the
admission of misconduct and proposed disposition shall be withdrawn,
shall not be made public, and shall not be used against the respondent
in any subsequent proceedings. In that event, the matter shall be
referred for further proceedings to a different judicial authority or
reviewing committee, as appropriate.
North Carolina v. Alford, 400 U.S. 25 (1970).
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[Vol. 85
in any subsequent proceeding. The matter is then referred
to a different reviewing committee for further proceedings.
Nearly one-half of the reviewed decisions were decided
on the merits. Forty-one of the eighty-five reviewed decisions resulted in presentments to the Superior Court.
Thirty-three of the presentment cases were decided upon
the merits.9 In the remaining forty-four reviewed decisions,
which involved reprimands or lessor sanctions, the reviewing committee approved twenty-eight proposed dispositions.
The procedural nature of the reviewing committee decisions in which the attorney was sanctioned were roughly
divided between decisions on the merits and proposed dispositions under Section 2-82. However, the attorneys who tried
their cases on the merits faired less favorably than those who
negotiated a resolution. In the authors’ opinion, the statistical anomaly is a reflection of the egregious nature of the allegations of misconduct in the presentment cases.
B. Presentments on the Merits
Two themes dominated the scene in the decisions directing that presentments be filed. The first theme concerns the
attorney-client relationship. This is demonstrated by the
prevalence of violations of Rule 1.3 (Diligence), Rule 1.4
(Communications), and Rule 1.5 (Fees). Findings of misconduct under Rules 1.3 and 1.4, which are commonly found
together, occurred in over thirty-three percent of the
reviewed presentment cases. Fee violations occurred in
thirty-three percent of the decisions directing presentment.
The second dominant theme is more troublesome. It concerns IOLTAs regulated under Rule 1.15 and other financial
matters. Insufficient funds on checks issued from the clients
funds account alone does not appear to be problematic.
Rather, the failure to respond to multiple requests for infor9 Seven of the presentment cases were approved dispositions. However, the
majority of the Section 2-82 dispositions were approved to allow the subject disciplinary action to be consolidated with a prior disciplinary action pending in the
Superior Court. Grievance Complaint Nos. 08-0892; 09-0784; 09-0841; 09-1128;
10-0059; 10-0356. In the one remaining case, a disposition was approved in a matter involving a misuse of IOLTA funds. Grievance Complaint No. 09-0784.
2011]
PROFESSIONAL RESPONSIBILITY REVIEW 2010
99
mation regarding the overdraft,10 a prior disciplinary history of poor accounting practices dealing with the clients funds
account,11 and failure to make good to a client on the client’s
funds in the sum of forty-thousand dollars12 were some of the
exasperating facts resulting in presentments. Additionally,
related matters concerning client property involve a failure
to return a retainer or provide a record of any alleged legal
work,13 and settling a personal injury case with two insurers,
but failing to distribute funds to the client.14
Rule Violations*
Reprimands or Other Sanctions
Presentments
20
15
10
19
12
5
12
11
7
5
Rule 1.3
Rule 1.4
11
5
6
4
7
6
0
Rule 1.5
Rule 1.15
Rule 8.1
Rule 8.4
* There can be more than one violation in each case.
C. Recurring Professional Issues
The most prevalent violations were of Rules 8.1 (Bar
Admission and Disciplinary Matters; failing to timely
respond), 1.5 (Fees), 1.3 (Diligence), 1.4 (Communication),
8.4 (Misconduct) and 1.15 (Safekeeping Property).
1. Failure to File a Response to a Grievance Complaint
Rule 8.115 was violated in thirty-three percent of the
Grievance Complaint No. 07-0910
Grievance Complaint No. 09-0596.
12 Grievance Complaint No. 09-0471.
13 Grievance Complaint No. 09-0409.
14 Grievance Complaint No. 09-0521.
15 In addition to the violations of Rule 8.1 found in presentment decisions, the
reviewing committee found violations in five non-presentment cases. In the authors’
opinion, the nature of the underlying complaint and subsequent participation in the
disciplinary proceedings may mitigate the sanction for this Rule violation.
10
11
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[Vol. 85
reviewed 2010 cases.16 Failing to respond to a grievance
complaint is misconduct pursuant to Practice Book Section
2-32.17 This failure also runs afoul of Rule 8.1(2) which provides, in part, that a lawyer shall not “knowingly fail to
respond to a lawful demand for information from an admissions or disciplinary authority, except this Rule does not
require disclosure of information otherwise protected by
Rule 1.6.” The failure to file a response to the grievance
complaint occurred in more than one-half of the cases in
which the reviewing committee directed a presentment.18
It is no coincidence that in matters in which the attorneyrespondent ignores a disciplinary complaint, the reviewing committee directs the Office of Disciplinary Counsel to file a presentment. This failure illustrates a lack of respect for the disciplinary and judicial processes. In addition, the conduct reflects
poorly on an attorney’s overall fitness to practice law because it
implicates the lawyer’s obligations to be both diligent and competent. By a significant margin, Rule 8.1(2) and the corresponding Practice Book Section 2-32(a)(1) were the most violated
rules in the reviewed presentment decisions in 2010.
2.
Fees
There are three principles when it comes to fees: they
must be reasonable, the fee agreement should be in writing,
and the fee must be earned. These principles are set forth
in Rule 1.5. This rule was violated slightly more in 2010
than 2009.19 The failure to have a fee agreement with the
client was also repeatedly violated under this Rule.20
16 Most cases involve more than one rule violation. The percentages are based
upon the number of decisions in which a given rule was violated in comparison to
the total of the sixty-seven cases reviewed.
17 PRACTICE BOOK § 2-32(a)(1).
18 In 23 decisions, the reviewing committee found clear and convincing evidence of a violation of Rule 8.1 or directed the disciplinary counsel to add Rule 8.1
as an additional violation in the presentment complaint.
19 In 2009, there were thirteen violations of the rule in a total of fifty-five
cases. In 2010, there were twenty-five violations in a total of eighty-five cases. See
Kimberly A. Knox and Brendon P. Levesque, Professional Responsibility Review
2009, 84(3) CONN. B.J. 227, 238-239 (2009).
20 For example, Grievance Complaint Nos. 08-0676; 09-0409; 09-0638; 09-0673;
09-0734; 09-0790; 09-0818 (unilateral change to terms of a fee agreement);
09-0822; 09-0829; 09-0836; 10-0024; 10-0034; 10-0145.
2011]
PROFESSIONAL RESPONSIBILITY REVIEW 2010
101
The Official Commentary suggests that fee agreements
should be provided “before any substantial services are rendered, but in any event not later than ten days after commencing the representation.”21
A failure to have a fee agreement is a violation of this
rule.22 A lawyer must inform the client with clarity what
services are to be provided, how those services will be
charged (i.e. an hourly rate, flat fee or alternative fee), and
the nature and amount of the costs for which the client will
be responsible. The lawyer must keep the client informed
about the cost of the legal services as the representation
progresses. The attorney-client relationship should begin
with a forthright discussion of legal fees, the client’s ability
to pay the fees, and the scope of the legal representation. In
instances where there was an issue of the reasonableness of
the fee, the committee sanctioned the lawyer and ordered
the matter be submitted to fee arbitration.23
3.
Diligence and Communication
Like the age old question of what came first, the chicken
or the egg, query whether poor lawyering leads to poor communication or vice versa. There is no question, however,
that the damage to the integrity of the profession caused by
such misconduct is enormous. The failure to pursue the
client’s legal action, claim or interest arose in an array of
representations including a divorce case,24 worker’s compensation matters,25 a criminal defense case,26 personal
injury cases,27 other civil actions,28 a juvenile defense matter;29 an estate matter,30 and a real estate transaction.31
21
22
23
24
25
26
27
28
29
30
31
Rule 1.5, Official Commentary.
Grievance Complaint Nos. 09-0822; 09-0829; 09-0836; 10-0001.
Grievance Complaint Nos. 09-0818; 09-1026; 10-0034.
Grievance Complaint No. 09-0208.
Grievance Complaint No. 09-0231; 09-0478.
Grievance Complaint No. 09-0534.
Grievance Complaint No. 09-0570.
Grievance Complaint Nos. 09-0836; 09-0727; 09-1097.
Grievance Complaint No. 10-0145.
Grievance Complaint No. 09-0790.
Grievance Complaint No. 10-0024.
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CONNECTICUT BAR JOURNAL
[Vol. 85
Although attorney defalcations are a readily apparent
mark on the profession, the failure to serve and protect a
client’s interest also has a deleterious effect on the profession. Such conduct imposes an undue burden on the profession to reestablish with the public continually the inherent
commitment, integrity and good will of most members of the
bar and of the judicial process. The authors question the
continued resilience of the legal profession to recover from
the misconduct of a few. Have a few bad apples spoiled the
lot, as evidenced by tasteless and voluminous lawyer jokes
and negative public opinion? To the rhetorical question, the
authors offer some observations. First, as a self-regulating
profession lawyers must report misconduct.32 Second,
lawyers must continue to be sanctioned for misconduct.
Finally, there must be continued efforts to disseminate
information about the inherent commitment, integrity and
good will of profession. This article showcases the bad
apples, but does not address all the good deeds and exceptional legal services provided by lawyers.
4. Misconduct under Rule 8.4
Rule 8.4(3) provides that it is misconduct for a lawyer to
“engage in conduct involving dishonesty, fraud, deceit or
misrepresentation.” The reviewing committee found misconduct under this rule in situations that: a respondent
used his position as an attorney to try and intimidate a
home improvement contractor to avoid paying his debt to
the contractor;33 failed to pay payroll withholding taxes;34
failure to turn over client file;35 and misrepresented to the
client that a lawsuit would be filed.36
Rule 8.4(4) provides that it is misconduct for a lawyer to
“engage in conduct that is prejudicial to the administration
32 Reporting can be accomplished by a complaint, a phone call to the Office of
Chief Disciplinary Counsel or to Lawyers Concerned for Lawyers.
33 Grievance Complaint No. 09-0495.
34 Grievance Complaint No. 09-0598 (the IRS issued a levy on the attorneys
IOLTA, which in turn caused insufficient funds on checks issued from the account).
35 Grievance Complaint No. 09-0648 (Approved Proposed Disposition under
PRACTICE BOOK § 2-82) .
36 Grievance Complaint No. 09-1097.
2011]
PROFESSIONAL RESPONSIBILITY REVIEW 2010
103
of justice.” The reviewing committee found violations of this
rule, generally combined with other rule violations, in the
following situations: in an overdraft investigation “the extent
to which the Respondent stonewalled, deceived and willfully
disobeyed disciplinary authorities over the course of nearly
two years was so great” as to be conduct prejudicial to the
administration of justice;37 failure to respond to requests for
information regarding status of case;38 failure to respond to
the grievance complaint;39 making a monetary demand
based upon a threat of criminal charges to gain an advantage
in a civil action;40 failure to respond to a request for a client’s
file;41 disclosing an expert witness based on a telephone conversation in which the attorney did not obtain an opinion;42
failure to respond to discovery which resulted in a judgment
of non-suit;43 threatening demands in divorce case if wife testified against husband in domestic violence criminal case;44
violation of a court order;45 and mismanagement issues and
the related use of blanket attorney’s fees affidavits.46 In two
cases, the committee concluded there was a violation of Rule
8.4(4), and no other rule violation where the lawyer failed to
comply with the attorney registration and follow-up requests
from the statewide grievance committee,47 and where the
attorney failed to pay a civil judgment.48
In one example of multiple violations of Rule 8.4, after
not paying the remaining balance on a home improvement
Grievance Complaint No. 07-0910.
Grievance Complaint No. 09-0204.
39 Grievance Complaint No. 09-0441 (failure to respond to the complaint was
also a violation of Rule 8.1(2)).
40 Grievance Complaint No. 09-0495.
41 Grievance Complaint No. 09-0648 (Approved Proposed Disposition under
PRACTICE BOOK § 2-82).
42 Grievance Complaint No. 09-0706.
43 Grievance Complaint No. 09-0768 (a new case was filed on behalf of the
client under the accidental failure of suit statute).
44 Grievance Complaint No. 09-0884.
45 Grievance Complaint No. 09-1097.
46 Grievance Complaint No. 10-0342 (approved proposed disposition under
PRACTICE BOOK § 2-82).
47 Grievance Complaint No. 10-0207.
48 Grievance Complaint No. 10-0282.
37
38
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CONNECTICUT BAR JOURNAL
[Vol. 85
contract and receiving multiple calls from the contractor,
the attorney left the following voicemail:
Hi [Contractor]. It’s [Attorney/Homeowner]. I figured I’d
paid enough money so far this weekend and I’m going to
call you back. Every time you called me to talk about
money owed I get 100 bucks plus attorney fees so this far
you called me 65 times so you owe me $6500 plus attorney’s
fees, so let’s call it 10 grand even.
And as far as the project goes, it obviously didn’t comply
with the Home Improvement Act, which I checked on,
because there’s two contracts and they’re backdated, and
all those other nice improprieties. But I think the best part
is that you were using illegal aliens as construction workers, which is [sic] violation of state and federal law.
So I’ll appreciate it if you could just send me a check for say
$10,000 and I’ll call it even. And—and you could apologize
too while we’re at it. So I appreciate your harassing me all
weekend because I just made myself 10 grand. I’ve really
had enough. So thanks and have a good day. Bye-bye.49
This voicemail led to three rules violations. The failure
to pay the balance due on home improvement work resulted
in an 8.4(3)50 violation. The demand for $10,000 resulted in
an 8.4(4)51 violation. The respondent avoided a Rule 8.4(2)
violation based on a lack of clear and convincing evidence,
but his threat to present criminal charges regarding the use
of illegal aliens as workers constituted a violation of Rule
3.4(7).52 As the Preamble to the Rules implies, we are attorneys all the time and must conduct ourselves accordingly.
5.
Safekeeping of Property aka IOLTA
The dominant issues in 2010 with regard to IOLTA were
checks issued without sufficient funds,53 failure to return a
Grievance Complaint No. 09-0495 at p. 2.
Rule 8.4(3) provides: “It is professional misconduct for a lawyer to: . . . (3)
Engage in conduct involving dishonesty, fraud, deceit or misrepresentation;”
51 Rule 8.4(4) provides: “It is professional misconduct for a lawyer to: . . . (4)
Engage in conduct that is prejudicial to the administration of justice;”
52 Rule 3.4(7) provides:
A lawyer shall not . . . (7) Present, participate in presenting, or threaten to
present criminal charges solely to obtain an advantage in a civil matter.
53 Grievance Complaint Nos. 07-0910 (overdraft notification); 09-0471; 090596; 09-1032; 09-0790; 09-0803.
49
50
2011]
PROFESSIONAL RESPONSIBILITY REVIEW 2010
105
client’s retainer when services were not performed,54 and
commingling of the attorney’s monies with client funds.55
The rules governing the safekeeping of property are Rule
1.15 and Practice Book Section 2-27. All lawyers must be
well-versed in management of the clients’ funds accounts.
Although it is a common practice to employ accountants,
bookkeepers or outsource recordkeeping for the clients’
funds, the attorney is ultimately responsible for an IOLTA.
D. Advertising Opinions
The statewide grievance committee issued seven attorney advertising advisory opinions.56 These opinions, published on the Connecticut judicial branch website,57 provide
useful guidance to attorneys on permissible advertising
practices in Connecticut. The advisory opinions considered
an array of advertising mediums and regulatory procedures
applicable to ads.
The 2010 opinions considered billboard ads,58 law firm
names,59 a foreign language law firm brochure,60 an “on
hold” telephone recording,61 an internet promo-video,62 and
an anniversary announcement in a two-page letter to friends
and family, attorneys, and current and former clients.63
An advertisement in which a law firm uses a trade name,
which is also a domain name and a phone number, is permitted with an appropriate disclaimer that the lawyer is not
recognized as a specialist in that area of practice. DisGrievance Complaint Nos. 00-0409; 09-0734.
Grievance Complaint Nos. 09-1110; 10-0107.
56 Advisory opinions may be requested from the statewide grievance committee under PRACTICE BOOK § 2-28A.
57 http://www.jud.ct.gov/sgc/Advopinions/default.htm.
58 Advisory Opinion 10-01283-A.
59 Advisory Opinion 10-01283-A (trade name “LadyDUI” approved); Advisory
Opinion 10-01543-A (“Employment Law Office of . . .” approved).
60 Advisory Opinion 10-01407-A (“The brochure designed for potential clients
based on a specific language need rather than any known need for legal services,”
was approved).
61 Advisory Opinion 10-01361-A.
62 Advisory Opinion 10-03032-A.
63 Advisory Opinion 10-05487-A.
54
55
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claimers must be of a size and duration to be readable by the
viewing consumer.64
Law firms may list in advertisements the boards, commissions, and agencies upon which the lawyers in the firm
have served. However, the statewide grievance committee
opined that a lawyer steps over the regulatory line when the
advertisement implies an ability to influence a board or
agency because members of the law firm have served on
such boards.65 This issue arose in a proposed ad which stated that the lawyers had a “unique perspective” with regard
to representing clients before a certain agency/board.
Lawyer advertisements may be subject to mandatory filing with the statewide grievance committee.66 An unsolicited letter addressed to “family and friends” needs to be filed
as advertising.67 A video placed on a law firm webpage is
considered filed as part of the quarterly filing of the website
domain name.68 A video promotion available via a link
from a website, which is not the law firm website, should be
included in the list of domain names used by the law firm in
its quarterly domain name filing. If the video is not a link or
is used in any other manner, the video must be filed as a
multi-media advertisement.69
The ABA addressed attorney websites and Rule 1.18 in
ABA Formal Opinion 10-457. The Rule and Commentary
were new to Connecticut in 2007. However, before adopting
this Rule, Connecticut courts had applied ABA Model Rule
1.18.70 Rule 1.18 serves to protect the confidentiality of
prospective client communications. It also provides guidance on avoiding subsequent disqualification due to potential client communications.
Id.; Advisory Opinion 10-04941-A.
Advisory Opinion 10-01361-A (making an analysis under Rule 8.4(5) and
CBA Formal Opinion 47).
66 PRACTICE BOOK § 2-28B.
67 Advisory Opinion 10-05487-A.
68 Advisory Opinion 10-03032-A (relying on PRACTICE BOOK § 2-28A (3)).
69 Id. (relying on Statewide Grievance Committee Rules of Procedure, Rule 14E)
70 See e.g., Camuto v. Camuto, 1999 WL 956699 (Conn. Super. Oct. 7, 1999).
64
65
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Lawyers must verify that all information posted on their
website is accurate and not misleading. The lawyer should
include a disclaimer indicating who authored and is responsible for the website content. There should also be a disclaimer on the website indicating the difference between
legal information contained on the website and actual legal
advice. The firm should take steps to ensure that a visitor
who submits information understands that the submission
of information and any future exchange does not create a
prospective client relationship. This depends in part on
whether the attorney invited the submission of specific
detail about a case or how the lawyer responds to the submission. If in fact a prospective client relationship is created, the lawyer may have a duty to treat the specific details
as confidential and the law firm may also face a conflict of
interest which would place prohibitions on other members
in the firm involved in the same or similar matters.
Disclaimers, which have been approved for use in
Connecticut, are one means to prevent a prospective client
relationship. The statewide grievance committee approved
the use of disclaimers in advertising as a useful means to
ensure that the public is not misled.71 Disclaimers are an
effective first line of defense in preventing the formation of
a relationship under Rule 1.18.
II. CASE LAW DEVELOPMENTS
A. On Appeal
Both the Connecticut Supreme Court and Appellate
Court addressed an attorney’s apparent authority to settle
litigation. These were cases of first impression which examined the exception to the general rule that “[a] lawyer shall
71 See Advisory Opinion No. 09-01114-A, at 3 (disclaimer necessary to prevent
statements about past successes from being misleading by creating unjustified
expectations); Advisory Opinion No. 08-01500-A (disclaimer that “similar results
cannot be guaranteed” remedied potentially misleading statements).
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abide by a client’s decision whether to settle a matter.”72 In
early 2010, the Appellate Court decided Yale University v.
Out-of-the-Box, LLC.73 The Court held that the lawyer for
the plaintiff had apparent authority to settle the case based
upon the presence of the plaintiff’s agent at settlement discussion even though the agent remained silent. In dissent,
Judge Borden held that the client only authorized the
lawyer “to enter into a series of negotiations” which did not
give rise to an apparent authority to settle.74 There was no
petition for certification filed in that case.
In late 2010, the Supreme Court in Ackerman v. Sobol
Family Partnership75 held, under a two-part test, that (1)
the plaintiffs had clothed their attorney with authority to
settle and (2) the defendant reasonably believed, under the
circumstances, that the plaintiffs’ attorney had the authority to bind his client. In reviewing the issue of apparent
authority the relevant focus is on the conduct of the client,
as the principal, not the conduct of the attorney. The
Supreme Court rejected the plaintiffs’ claim that an oral
agreement in a complex settlement could not be authorized
without a written agreement. The take-home from this case
is that an attorney, under certain circumstances, can bind a
client to a settlement with which the client does not agree.
Together, Yale and Ackerman suggest that lawyers need to
be very careful to avoid saying or doing things in negotiations that can be taken advantage of by opponents to the
detriment of the relationship with one’s own client.
The saga of Disciplinary Counsel v. Smigelski76 discussed in last year’s article,77 came to a conclusion in 2010
72 Rule 1.2 provides in pertinent part, “[a] lawyer shall abide by a client’s decision whether to settle a matter.”
73 118 Conn. App. 800, 990 A.2d 869 (2010).
74 Id. at 816.
75 298 Conn. 495, 4 A.3d 288 (2010). The authors represented the plaintiff in
the appeal.
76 124 Conn. App. 81, 4 A.3d 336 (2010), cert. denied, 300 Conn. 906, 12 A.3d
1004 (2011).
77 See Kimberly A. Knox and Brendon P. Levesque, Professional
Responsibility Review 2009, 84(3) CONN. B. J. 227, 232 (2009).
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when the Appellate Court affirmed disciplinary sanctions
against a lawyer for charging and disbursing to himself an
unreasonable fee. The defendant claimed on appeal that the
court failed to consider the eight factors enumerated in Rule
1.5 governing fees and improperly relied on evidence unrelated to those eight factors. The Appellate Court roundly
rejected the defendant’s argument because under a consideration of any factors his fee was unreasonable.78
Finally, in the context of the statute governing the qualifications for the Connecticut attorney general,79 the
Supreme Court had the occasion to consider the types of
conduct which constitute the practice of law in Bysiewicz v.
DiNardo.80
In holding that the plaintiff was ineligible to be attorney
general under the statute81 the Court relied on three main
points. First, that the plaintiff had no litigation experience.
Second, performing duties as secretary of the state did not
constitute ten years active practice at the bar of this state.
Finally, as the secretary of the state, she was executing
duties of the office and not representing clients. The case is
narrow, and the authors would suggest a review of Practice
Book § 2-44A82 for a definition of the practice of law.
B. Superior Court Cases
By far the most intriguing Superior Court decision of
2010 was Chief Disciplinary Counsel v. Cohen.83 The case
involved an issue of first impression, whether a bonus
clause in a written fee agreement violated Rule 1.5(d)(1),84
Id.
CONN. GEN. STAT. § 3-124.
80 298 Conn. 748, 6 A.3d 726 (2010). The authors’ law firm represented the
plaintiff in this appeal.
81 CONN. GEN. STAT. § 3-124.
82 See PRACTICE BOOK § 2-44A for a detailed and lengthy definition of the practice of law.
83 2010 WL 5158379 (Conn. Super. Dec. 2, 2010).
84 Rule 1.15(d)(1) provides: “(d) A lawyer shall not enter into an arrangement
for, charge, or collect:
(1) Any fee in a domestic relations matter, the payment or amount of which
is contingent upon the securing of a dissolution of marriage or civil union or upon
the amount of alimony or support, or property settlement in lieu thereof;
78
79
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which prohibits contingent fees in domestic relations matters.85 The court held that bonus agreements in a family
relations matter are permissible. The court’s decision offers
a detailed discussion of the history of attorney’s fees, the
history of Rule 1.5, public policy considerations applicable to
the Rule, and relevant case law.
After concluding that Rule 1.5(d) was not ambiguous, the
court rejected the public policy jurisprudence which disallowed bonuses in family matters. It is interesting to note
that after concluding the Rule was unambiguous, the court
went on a lengthy analysis of the Public Policy.86 The court
held that the public policy was erroneous because it originated from a 1951 Connecticut Supreme Court case,
McCarthy v. Santangelo,87 which was decided more than a
dozen years before the advent of Connecticut’s No-Fault
Divorce Act. Additionally, the court noted that McCarthy
was decided years before the hourly fee became popular.
The court posited that the hourly fee arguably provides the
attorney’s with a greater incentive to favor their own financial interests over their client’s interests.
The court also rejected the argument that the bonus
agreements were a contingent fee in family relations matters.88 The court found that the bonus agreements here did
not have any of the indicia of a commonly recognized contingent fee agreement, namely, the fee is contingent on the
85 Cohen, 2010 WL 5158379. The court considered two bonus agreements. One
of the agreements at issue states: “Our fees are charged primarily on the basis of
the time spent on your behalf. After the case has been concluded by settlement or
trial, we may discuss with you the propriety of an additional reasonable charge for
matters of extraordinary difficulty, or which require special expertise or the giving
of special priority treatment. Any additional fee beyond hourly charges is totally
subject to your approval after discussion with you. It cannot be imposed unless you
believe it to be fair and reasonable and you freely agree to pay it.” Id. at *1.
The other agreement at issue states: “Our fees are primarily on the basis of
the time spent on your behalf. In addition to the hourly charges described, we may
request an additional reasonable charge for matters of extraordinary difficulty, or
which require special expertise or the giving of special priority treatment. This
additional charge is subject to your approval after discussion with you. It cannot
be imposed unless you agree to it.” Id. at *2.
86 See CONN. GEN. STAT.§ 1-2z.
87 137 Conn. 410, 78 A.2d 240 (1951).
88 Cohen, 2010 WL 5158379, at *15.
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amount of recovery; is mathematically calculated; and there
is no fee, if there is no recovery. As such, the bonus did not
violate the prohibition against a contingent fee under Rule
1.5(d)(1). The bonus agreement was held to be reasonable
under the factors set forth in Rule 1.5(a) and for the reason
that the bonus would not be charged without the client’s
consent.89 Although the authors agree with the decision,
the authors recognize that because such a bonus fee is
arguably based on the successful outcome of the case, which
may include the amount of the property award, alimony or
child support, it would appear to be dangerously close to
being a contingent fee in a domestic relations matter. We
advise lawyers to think long and hard before relying on one
Superior Court decision.
The court’s discussion of alternative billings is apropos.90
The profession should be able to perform legal services
under a variety of alternative billing methods, as opposed to
either flat fee or hourly billing. Such alternatives may be
beneficial to both the attorney and the client. For the attorney, alternative billing practices allow for the opportunity to
attract new client business. For the clients, alternative
billing practices may address the demand for incentive
based legal results, which are well recognized in the personal injury practice. Additionally, alternative billing may
give more people access to legal representation.
The Superior Court revisited the issue of the unauthorized practice of law in two cases. In Old Canal Financial
Corp. v. Miller,91 the court held that an individual who filed
a pro se appearance for a trust violated General Statutes
Section 51-88.92 A pro se appearance is allowed where a
Id.
Id. at *14.
91 2010 WL 628013 (Conn. Super. Jan. 22, 2010).
92 General Statutes § 51-88 provides in relevant part: “(a) A person who has
not been admitted as an attorney under the provisions of § 51-80 shall not: (1)
practice law or appear as an attorney-at-law for another, in any court of record in
this state . . . any person who violates any provision of this section shall be deemed
in contempt of court, and the Superior Court shall have jurisdiction and equity . . .
upon its own motion to restrain such violation . . . (d) the provisions of this section
89
90
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person wishes to represent himself or herself, but is not
allowed to represent another person or legal entity. The
court in Traversa v. Statewide Grievance Committee 93 held
that an out-of-state lawyer who used the title “Esq.” on correspondence with a state law librarian also engaged in the
unauthorized practice of law. The court reasoned that the
lawyer was not admitted in Connecticut and could not identify himself an attorney.
Although the motion to disqualify continues to be an
overly-used pleading in the trial court,94 there are occasions
when opposing counsel simply must be disqualified. In
Plummer v. Coles,95 it was undisputed that the plaintiff and
the defendant’s attorney had spoken just prior to this suit
being filed, five times for approximately one hour. If there
was an attorney–client relationship between the plaintiff
and the defendant’s attorney, the defendant’s attorney
would be disqualified. At the disqualification hearing, the
defendant’s attorney was reluctant to answer questions
about the substance of the communications with the plaintiff, unless the plaintiff agreed to waive the attorney–client
privilege. As the court aptly noted, it appeared counterintuitive to claim the attorney-client privilege if there was no
attorney-client relationship in the first place.
After noting that a “Chinese wall” could not rectify the situation of imputed disqualification of the law firm under Rule
1.10, the court granted the motion to disqualify. The court
entertained but rejected an argument that the plaintiff
improperly attempted to “park” the law firm. In the authors’
opinion, the court’s focus on the defendant’s attorney’s claim
of the attorney–client privilege should have resolved the
matter. If the attorney was concerned about divulging client
shall not be construed as prohibiting . . . (2) any person from practicing law or
pleading at the bar of any court of this state in his own cause . . . .”
93 2010 WL 2364428 (Conn. Super. Apr. 30, 2010).
94 WESLEY W. HORTON & KIMBERLY A. KNOX, PRACTICE BOOK ANNO., Rule 1.9,
at 105 (2010 ed.).
95 2010 WL 3260136 (Conn. Super. July 21, 2010).
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confidences, there was no basis to challenge the existence of
a conflict of interest. This case reinforces the need for adequate conflict of interest checks and procedures.
An ex post facto “conflicts wall” failed in U.S. Bank
National Assoc. v. Morales.96 In Morales, the Superior
Court addresses the disqualification of an attorney who
changes law firms. The lawyer initially represented the
plaintiff and subsequently represented the defendant in the
same matter at a mediation. The plaintiff filed a motion to
disqualify his former lawyer and his new law firm from continued representation of the defendant. The court rejected
the claim that the defendant’s law firm erected a proper conflicts wall. First, the lawyer and the new law firm never discussed any conflicts of interest before the lawyer left his previous firm. Second, the lawyer did not discuss client
waivers of any potential conflicts with the former law firm.
Third, no procedures were in place to prevent direct conflicts of interest. Finally, this situation could not be rectified
by an attempt to build a conflicts wall after the motion to
disqualify. After the motion to disqualify was granted in
this case, the court granted motions to disqualify the new
law firm in seven other cases.97 The imputed disqualification of the firm may have been prevented by a timely and
proper conflicts wall surrounding the newly hired lawyer.
The trial court got it wrong in concluding there was a
non-waivable conflict in Jenkins v. Jenkins.98 In this case,
an attorney represented two clients in their respective
divorce proceedings. The clients were business partners
involved in an intimate relationship and signed detailed
50 CONN. L. RPTR. 212 (Conn. Super. July 1, 2010).
Citimortgage, Inc. v. Helena, 2010 WL 3960777 (Conn. Super. Sept. 3,
2010); Deutsche Bank Nat. Trust Co. v. Guerrero, 2010 WL 3787818 (Conn. Super.
Sept. 3, 2010); Countrywide Home Loans Servicing, L.P. v. Morales, 2010 WL
3787821 (Conn. Super. Sept. 3, 2010); Citimortgage, Inc. v. Ventura, 2010 WL
3787882 (Conn. Super. Sept. 3, 2010); Bank of Am., N.A. v. Aguirre, 2010 WL
3960771 (Conn. Super. Sept. 3, 2010); Chase Home Fin., LLC v. Ysabel, 2010 WL
3960775 (Conn. Super. Sept. 3, 2010); Residential Credit Solutions, Inc. v.
Ramirez, 2010 WL 3960780 (Conn. Super. Sept. 3, 2010).
98 2010 WL 188884 (Conn. Super. Apr. 14, 2010).
96
97
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waivers. In granting the motion to disqualify, the court
rejected the signed waivers because one of the conditions,
that the parties have separate additional counsel, was no
longer in place. This case is troubling because the clients
were not directly adverse and the parties waived any conflict. Thus, if an attorney reasonably believes that she can
represent two parties under Jenkins, she does so at her own
peril as the trial court may later conclude that such contemporaneous representations were unreasonable.
Lastly, the court dismissed a disciplinary action against
an attorney following a conviction for negligent homicide
with a motor vehicle.99 Relying on State v. Kluttz,100 the
court stated, “[n]egligent homicide with a motor vehicle is a
motor vehicle violation within the meaning of General
Statutes Section 53a-24 and therefore is not an offense or
crime within the meaning of that statute . . . .”101 Based on
that definition, the defendant argued that she had not been
convicted of a “serious crime” under Practice Book Section
2-40 and therefore the trial court lacked jurisdiction.102 In
response, Disciplinary Counsel argued that the categorization of negligent homicide in Kluttz was not dispositive and
that the trial court “must examine the function and purpose
of the relevant statutes and practice book sections before
deciding the issue of jurisdiction.”103 Although the court
agreed with Disciplinary Counsel, it held that the subject
conviction did not constitute a “serious crime” as required
by Practice Book Section 2-40. The court also held that the
conviction for negligent homicide did not implicate the
defendant’s fitness to practice law.
99 Chief Disciplinary Counsel v. MacPhail, 2010 WL 1793904 (Conn. Super.
Apr. 1, 2010).
100 9 Conn. App. 686, 521 A.2d 178 (1987).
101 MacPhail, 2010 WL 1793904, at *2.
102 PRACTICE BOOK § 2-40(c) provides: “The term ‘serious crime’ as used herein shall mean any felony or any larceny or any crime for which the attorney was
sentenced to a term of incarceration or for which a suspended period of incarceration was imposed.”
103 MacPhail, 2010 WL 1793904, at *2.
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III. 2010 CBA INFORMAL OPINIONS
The Connecticut Bar Association Standing Committee on
Professional Ethics issued ten informal opinions in 2010.
Two informal opinions are significant to private practitioners. The first addresses destruction of client files from
the perspective of a retiring lawyer.104 The second addresses the provision of unbundled legal services.105
The Committee considered the CBA’s “File Retention
Guidelines” (1999), Rules 1.15 and 1.16, and prior informal
opinions in concluding that an attorney must make reasonable efforts to locate and communicate with a former client
regarding the disposition of the client file. The authors note
that compliance with the ethics rules and “best practice”
rules will generally be met by having a procedure to retain
the files for seven to ten years following the date the files
was closed before destroying the file. This period of time
preserves evidence in the event that the attorney needs to
defend a professional liability claim. The authors also recommend that a written notice about the disposition of the
client file be included in the scope of representation agreement, the file closing/termination of representation letter,
or both documents.
The Committee adopted ABA Formal Opinion 07-446
which allows an attorney to assist a pro se litigant in preparing pleadings, briefs and other court documents, without an
appearance and without disclosing or ensuring the disclosure of the nature or extent of such assistance.106 A significant percentage of family matters involve a pro se litigant.
This opinion encourages attorneys to provide unbundled
legal services which will improve the strain imposed on the
court system by pro se litigants who are unfamiliar with the
rules of practice. It will virtually guarantee an increase in
properly completed forms, well-reasoned legal arguments,
and well-drafted briefs and pleadings.
104
105
106
Informal Opinion 2010-07.
Informal Opinion 2010-04.
Informal Opinion 2010-04.
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The Committee opined on a broad array of issues including what constitutes a bona fide law practice,107 the application of the Rules of Professional Conduct to an attorney in
a non-attorney employment position,108 and digital signatures under lawyer advertising rules.109 The Committee
considered two situations in which the lawyer may have
obligations for the safekeeping of a client’s or a third person’s property under Rule 1.15. One opinion concerns
ERISA benefits as an interest under Rule 1.15.110 A second
opinion discusses the attorney’s duties regarding escrowed
funds with third party claims to which the client asserts
defenses, including a discharge in bankruptcy.111 In the
context of litigation matters, the committee discusses the
confidentiality of client files112 and communicating with a
represented person under Rule 4.2.113 Whether this is a
reflection of the times or simply unbecoming of the profession, the committee also had the opportunity to consider a
request regarding the propriety of reporting to credit
bureaus a judgment against a former client who failed to
pay fees.114
IV. CURRENT AND FUTURE PROFESSIONAL ISSUES
A. The Continued Evolution of Advertising
Last year gave us Zelotes v. Rousseau,115 a landmark
decision making clear that the internet was an appropriate
forum for lawyers to advertise. Rousseau concludes that it
is ethically proper for lawyers to spend money on advertisInformal Opinion 2010-09.
Informal Opinion 2010-02.
109 Informal Opinion 2010-10.
110 Informal Opinion 2010-01.
111 Informal Opinion 2010-05.
112 Informal Opinion 2010-03 (in litigation, co-counsel requests communications between insurance defense lawyer and mutual client’s insurer)
113 Informal Opinion 2010-08 (in context of neglect petition, counsel for parent
may not speak directly with DCF social worker over the express objection of counsel for DCF).
114 Informal Opinion 2010-06.
115 Grievance Complaint No. 09-0412.
107
108
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117
ing on the internet. The internet is to attorney advertising
today as the television was to advertising in 1984 in the
Trantolo cases.116 The internet is here to stay and we need
to apply the rules of ethics in this digital world.
Enter Groupon. The attorney advertising issue for the
near future appears to be based on the group advertising
model called Groupon. For the uninitiated, Groupon operates by offering a “group coupon” per day in the market that
it serves. Essentially, if a certain number of people sign up
for that group coupon, then the deal becomes available to
everybody. If the predetermined minimum is not met, then
nobody has access to the coupon. Groupon makes money by
keeping a percentage of the money that each person pays for
the coupon. So for instance, if an attorney offered to prepare
a simple will for a flat fee of $99.00, Groupon would take some
portion of that money. The advantage to using Groupon
from the merchant’s perspective is that unlike traditional
advertising, there is no upfront cost to participate.
On its face, this model is an appealing way to advertise.
The question to be answered shortly is whether it is an ethically proper way for attorneys to advertise under Rule
5.4(a) which deals with fee splitting. Although it has not
been addressed in Connecticut yet, there is a proposed
North Carolina ethics opinion indicating that lawyers cannot ethically offer Groupon deals.117 The proposed opinion
notes that Groupon gets paid a percentage of the amount
earned by the advertising lawyer, which amounts to an
impermissible fee sharing with a non-lawyer.
With respect to the issue of fee splitting, there does not
seem to be an issue considering the Official Commentary to
Rule 5.4 governing the lawyer’s professional independent
116 Grievance Comm. for Hartford-New Britain Judicial Dist. v. Trantolo, 192
Conn. 27, 470 A.2d 235 (1984); Grievance Comm. for Hartford-New Britain
Judicial Dist. v. Trantolo, 192 Conn. 15, 470 A.2d 228 (1984).
117 Debra Cassens Weiss, Proposed North Carolina Ethics Opinion Says
Lawyers Can’t Ethically Offer Groupon Deals, ABA JOURNAL, Jan. 19, 2011; availa
b
l
e
at http://www.abajournal.com/news/.article/proposed_n.c._ethics_opinion_says_
laywers_cant_ethically_offer_group_clea/.
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judgment. It does not appear that by paying for the advertisement from a portion of the fee there is any question
about the lawyer’s independence. The lawyer is going to
have no leanings toward the advertiser under this model,
which is the only other party involved in the transaction.
B. Should United States Supreme Court Justices Adopt a
Code of Ethics
Connecticut adopted a new Code of Judicial Conduct,
effective in 2011.118 Although the changes are beyond the
scope of this article,119 the amendment in Connecticut is
timely in light of public controversy about an ethics code, or
lack thereof, for the United States Supreme Court. One-hundred law professors wrote and signed a highly publicized letter to the United States Supreme Court entitled “Changing
Ethical and Recusal Rules for Supreme Court Justices.”120
In the letter, the professors opine that the United States
Supreme Court should adopt a code of ethics. In particular,
the professors request that a written opinion be issued when
a Supreme Court Justice denies a motion to recuse and procedures be adopted to allow for review of that opinion.
In support of its position, the professors cite to the
Supreme Court case of Caperton v. A.T. Massey Coal Co.,
Inc.121 In Caperton, a West Virginia Supreme Court justice
denied a number of motions to recuse himself despite the
fact that he benefited from campaign contributions made
either directly or indirectly by the president of a company
that had an outstanding $50 million judgment against it
which was pending appeal before that particular West
Virginia Supreme Court justice. Ultimately, the justice
sided with the company in a 3-2 decision which vacated the
judgment. The United States Supreme Court reversed on
due process grounds holding that there was the need for an
independent inquiry “where, as here, there is no procedure
118
119
120
121
PRACTICE BOOK, Code of Judicial Conduct, effective January 1, 2011.
See HORTON AND KNOX, supra note 94, at 156-158 (2011 ed.).
Available at http://www.afj.org/judicial_ethics_sign_on_letter.pdf.
129 S. Ct. 2252 (2009).
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for judicial fact finding and the sole trier of fact is the one
accused of bias.”122
In the authors’ opinion, the current procedure works and
ought to be kept in place. The individual justice should hear
cases at his or her discretion and should be able to determine any conflict of interest in the case. We have confidence
that the justices appointed to the United States Supreme
Court represent the pinnacle of our legal and jurist community and have the moral compass and courage to make the
appropriate decision.
C. On-Line Disciplinary History for Connecticut Lawyers
Effective January 1, 2011, the Connecticut Judicial
Branch allows potential clients with the means to check the
disciplinary history of Connecticut attorneys. The judicial
website no longer reports only whether an attorney’s license
is active, but now includes a full disciplinary history with
final grievance decisions, pending presentments and administrative suspensions. The history will include any deactivation of an attorney’s license for the following reasons:
suspensions or administrative suspensions for the failure to
pay the client security fund in violation of Practice Book
Section 2-70(b);123 retirement pursuant to Practice Book
Section 2-55; and placements on inactive disability status.
The public history will be displayed based on information
on the Judicial Branch’s computerized data base which
extends back to the mid-1980s. Court history extends back to
the attorney’s admission to the bar. Conditional admissions
will not be posted pursuant to Practice Book Section 2-11.
The decision to make attorney discipline information
available on the internet is not groundbreaking or earth
shattering. The information was previously public; it is now
more readily accessible to the public.
Id. at 2264.
The attorney is not allowed to practice while under administrative suspension. That suspension, however, is not considered discipline. The suspension is
removed when the overdue fee is paid.
122
123
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V. CONCLUSION
The authors of this article have discussed the case law,
regulations and opinions that guide in the regulation of the
legal profession. A part of the article focused on misconduct
by members of the bar. The legal profession, like any other
discipline, will have members who deviate from acceptable
moral and legal obligations.
More importantly is the discussion which is absent from
this article. This synopsis of professionalism law in 2010
does not comment on or do justice to the myriad lawyers
who work tirelessly, diligently and with unfaltering commitment to their clients’ interests. These are the lawyers
who are in private practice, public service and corporate
law, whose legal skills and knowledge aid a wide variety of
clients. So although we do not specifically mention them,
the authors would like to recognize the lawyers who are the
true hallmark of the profession.
2011]
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ANNUAL SURVEY OF DEVELOPMENTS
IN INSURANCE COVERAGE LAW
BY CHARLES T. LEE
AND
MANDIEY L. WINALSKI*
This article examines recent developments in insurance
coverage cases involving commercial property and casualty
insurance policies; specifically, it identifies cases of interest
that have been decided by the state and federal courts of
Connecticut during 2010. While no new major doctrines were
announced in the past year, several notable themes have continued to develop. In particular, this article examines developments and patterns regarding (1) timely commencement of
suit; (2) issues arising from the Connecticut Unfair Insurance
Practices Act (“CUIPA”) and the Connecticut Unfair Trade
Practices Act (“CUTPA”); and (3) the definition of an “occurrence” in the context of liability policies. Finally, the article
discusses several rulings concerning other insurance coverage issues that will be of interest to the bar.
I. TIMELY COMMENCEMENT OF SUIT
Timeliness of commencement of suit against an insurance company can be a litigated issue in coverage cases. In
its 1988 decision in Aetna Casualty & Surety Company v.
Murphy,1 the Connecticut Supreme Court established the
rule that late notice of claim in violation of policy conditions
may be excused if the policyholder can show that the insurance company suffered no material prejudice. However, this
principle generally has not been extended to contractual
periods in which suit must be brought against an insurance
company. In Voris v. Middlesex Mutual Assurance
Company,2 the Court strictly enforced such a deadline in a
consumer context, without regard to whether there was any
prejudice to the insurance company. The insurance policy
stated that written notice of intent to bring a suit for underinsured motorist benefits must be provided within three
years of the date of the accident.3 On May 11, 2004, the pol* Of the Stamford Bar.
1 206 Conn. 409, 417-18, 538 A.2d 219 (1988).
2 297 Conn. 589, 999 A.2d 741, 744 (2010).
3 Id. at 592-93.
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icyholders notified the carrier by telephone that an accident
had occurred one day earlier.4 They did not provide written
notice of intent to sue, however, until six weeks after the
three-year deadline, on June 22, 2007.5 The insurance company denied coverage on the basis of breach of the policy
condition.6 The Court enforced the three-year time limit,
explicitly rejecting the application of Aetna Casualty &
Surety Company v. Murphy.7
The trial court in Antonacci v. Darwin Select Insurance
Company 8 applied the rule of Aetna Casualty & Surety Co.
v. Murphy in the context of a claims-made policy, where the
claim was submitted within the policy period but after a prejudgment remedy had been granted against the policyholder,
some seven months after the complaint had been filed. The
insurance company denied defense and indemnity on the
basis of untimely notice because the policy required that the
policyholder give notice of any claim “immediately.”9 At
issue was whether prejudice was relevant in this situation.10
The trial court observed that, in Murphy, the Connecticut
Supreme Court resolved this issue in the affirmative in a
case in which the insured was covered by an occurrencebased policy and noted that the Court’s concern there was
“disproportionate forfeitures.”11 The Antonacci court noted
that “an insured's right to coverage applies equally to a
claims made policy, and that protection of the insured from
such forfeitures does not run counter to the purposes served
by such a policy, as long as notice is given within the policy
period.”12 Accordingly, the court held that late notice within the policy period could be excused where the policyholder
shows lack of prejudice to the insurance company.13
Id. at 593.
Id.
6 Id.
7 Id. at 600.
8 2010 WL 2108125 (Conn. Super. Apr. 21, 2010).
9 Id. at *1, 2.
10 Id. at *4.
11 Id. at *3.
12 Id.
13 Id. at *4. The court also acknowledged the holding of other cases that a
claim first made outside the period of a claims made policy cannot be saved by the
absence of prejudice.
4
5
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In Bacewicz v. NGM Insurance Company,14 a federal district court declined to grant summary judgment to an insurance company on the basis of untimely commencement of suit
in a property damage case involving cracks in a basement
wall. The policy required that suit be brought “within one
year after the date of loss.”15 Under the facts in Bacewicz,
Judge Hall held that this limitation incorporated a discovery
standard under which the one-year period begins to run only
when a reasonable person would have learned of the injury or
loss.16 Compliance with the limitation period raised a question of fact as to when a reasonable person would have first
known about the loss giving rise to the claim.17
Thus, while insurance companies often argue that the
issue of timeliness is dispositive, and in some circumstances
it may well be, recent case law confirms that the defense has
its limits.
II. CUIPA/CUTPA
Perhaps most unsettled on the frontier that is bad faith
litigation under CUIPA/CUTPA is how to demonstrate a
“general business practice” in claim handling as required by
General Statutes Section 38a-816(6). Under that section, a
plaintiff must allege facts showing that the insurer engaged
in unfair claim settlement practices “with such frequency as
to indicate a general business practice.”18 However, the
term “general business practice” is not defined by statute.
No appellate court has addressed this question, and trial
courts continue to evaluate a variety of approaches. The
majority of decisions have held that a generalized assertion
of a “general business practice” is insufficient, but leave the
plaintiff in a quandary as to how to allege, or even gather
facts sufficient to plead, such a business practice.19 Several
2010 WL 3023882, *8 (D. Conn. Aug. 2, 2010).
Id.
16 Id.
17 Id.
18 CONN. GEN. STAT. § 38a-816(6); see also, e.g., Falit v. Provident Life and
Accident Ins. Co., 2010 WL 2710478, *2 (D. Conn. July 7, 2010).
19 Pote v. Nationwide Mut. Ins. Co., 1998 WL 638483 (Conn. Super. Sept. 2,
1998) (two claims of bad acts arising out of same accident insufficient); Serrano v.
Allstate Ins. Co., 1998 WL 2023340 (Conn. Super. Apr. 17, 1998) (single act insuf14
15
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cases in 2010 have addressed this issue.
In Union Street Furniture and Carpet, Inc. v. Peerless
Indemnity Insurance Company,20 the court held that “the
plaintiff must allege that the defendant committed malfeasances against at least one insured other than the plaintiff”
in order to allege sufficiently a “general business practice.”
Similarly, in Falit v. Provident Life and Accident Insurance
Company,21 the district court dismissed a CUIPA/CUTPA
count after observing that the complaint contained no factual allegations that the insurance company had engaged in
a general business practice of conduct similar to the conduct
that the policyholder alleged it took against him.” The
court in Rizzi v. United States Liability Insurance
Company,22 a case involving a fatality in the backyard of a
nightclub, went one step further and rejected the plaintiff’s
argument that the insurance company’s denial of defense
and liability in other liquor liability claims constituted an
unfair business practice absent any evidence that the
denials were wrongful or violated CUIPA.
In Paul Revere Life Insurance Company v. DiBari,23 the
court dismissed the policyholder’s CUTPA claims, rejecting
his argument that previous decisions against the insurance
company evidenced a general business practice where the
ficient); Genovese Enter., Inc. v. Sphere Drake Ins. PLC, 1996 WL 526800 (Conn.
Super. Sept. 9, 1996) (may not allege general business practices on information
and belief); McCormick v. New Hampshire Ins. Co., 1995 WL 656888, at *2 (Conn.
Super. Nov. 1, 1995) (four bad acts in connection with one claim insufficient, and
no facts pleaded to support allegation of general business practice); Levitt v. Am.
Econ. Ins. Co., 1995 WL 646147, at *2 (Conn. Super. Oct. 30, 1995) (conclusory
allegations relating to general business practices insufficient); White v.
Nationwide Mut. Fire Ins. Co., 1995 WL 416169, at *2 (Conn. Super. July 11, 1995)
(must allege similar wrongful conduct); Gonzalez v. Lewis Servs., Inc., 1995 WL
155446, at *1 (Conn. Super. Mar. 31, 1995) (insufficient allegation of frequency of
violation); Pacheco v. Allstate Ins. Co., 1995 WL 127895 (Conn. Super. Mar. 9,
1995) (no general business practice alleged); Bergen v. Standard Fire Ins. Co.,
1995 WL 94756, at *1 (Conn. Super. Feb. 22, 1995) (although multiple plaintiffs
and defendants involved under several policies, only one fire at one location);
Lanese v. Mecca, 1995 WL 55123, at *1 (Conn. Super. Feb. 3, 1995) (failure to
plead facts showing general business practice); Rotz v. Middlesex Mut. Assurance
Co., 1995 WL 43678, at *2 (Conn. Super. Jan. 27, 1995) (same).
20 2010 WL 3259861, *3 (Conn. Super. July 15, 2010).
21 2010 WL 2710478, at *2.
22 2010 WL 3174008, *8 (Conn. Super. July 13, 2010).
23 2010 WL 918084, *6 (D. Conn. Mar. 11, 2010).
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policyholder’s “own description of these cases show them not
to involve the practices of which [the policyholder] complains.” However, the policyholder sufficiently alleged that
the insurance company breached the implied covenant of
good faith and fair dealing,24 and, in a subsequent ruling in
that case, the court allowed the policyholder to obtain certain information through the discovery process regarding
verdicts, judgments, and arbitration awards against the
insurance company and declaratory judgments filed by the
insurance company in similar circumstances. The court’s
ruling potentially opened an important door to discovery of
conduct sufficient to make a showing of a general business
practice in claim settlement.25
Against this backdrop, until Connecticut’s appellate
courts interpret what the Legislature intended by requiring
that plaintiffs prove a “general business practice,” the trial
courts appear likely to continue to resolve the issue in a
variety of ways.
III. DEFINITION
OF AN
“OCCURRENCE”
A common question arising out of the interpretation of
liability policies providing coverage for bodily injury and
property damage caused by an “occurrence” is the meaning
of the term “occurrence,” which is often defined by the policy as an “accident” and interpreted as “an unforeseen
unplanned event … occurring without intent or volition.”26
The court in Scottsdale Insurance Company v. R.I. Pools,
Inc.27 adopted a narrow view of the definition of an “occurrence.” The policyholder, a swimming pool company, was
sued by various pool owners for cracking in the concrete
24 Id. at *5. In another case involving the duty of good faith and fair dealing,
McNeill & Associates, LLC v. Continental Casualty Company, Judge Hall
explained that “the duty of good faith and fair dealing arises from a contract relationship once formed and not out of conduct preceding its formation,” therefore noting that conduct before or during the formation of the contract “cannot give rise to
a claim of bad faith for denial of coverage.” 2010 WL 4456875, *5 (D. Conn. Nov. 1,
2010).
25 2010 WL 1782022 (D. Conn. May 3, 2010).
26 Vermont Mut. Ins. Co. v. Walukiewicz, 290 Conn. 582, 594, 966 A.2d 672
(2009).
27 742 F. Supp. 2d 239, 246 (D. Conn. 2010).
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walls and floors of their pools.28 The policyholder sought
defense and indemnification pursuant to its liability policy
for “actual and potential claims by pool owners in connection with the defective concrete” that had been supplied by
another company.29 The district court reviewed the language of the policy and held that “although an accident can
be a consequence of faulty workmanship, faulty workmanship alone is not an accident.”30 In this case, the only damage alleged was the cost of repair of the faulty workmanship
itself, and no coverage was available.
The court in Colony Insurance Company v. Walnut
Beach, LLC,31 took a broader approach to the definition of
an “occurrence.” In Walnut Beach, LLC, the policyholder
leased property to a pub, leading to a suit by a nearby homeowner who alleged that the policyholder knew or should
have known that the pub operated its business in a dangerous or offensive manner.32 The court interpreted the
“occurrence” provision of the insurance policy broadly and
held that because the harm caused was the result of
“unforeseen, unplanned events,” it was an “accident,” and
was therefore an “occurrence.”33
In Middlesex Insurance Company v. Mara,34 the district
court held that acts of racially motivated intimidation and
harassment were necessarily intentional with inevitable
injury even if characterized as negligent, and awarded summary judgment to the insurance company due to the absence
of an “occurrence” triggering the policy. The court also reasoned that failure to look through the labels of the counts to
the facts alleged therein would encourage “strategic pleading”
of the covered claims where the plaintiff seeks to trigger the
deep pocket of insurance coverage and the defendant does not
seek to dismiss the count in order to retain coverage.35
28
29
30
31
32
33
34
35
Id. at 240.
Id. at 241.
Id. at 246.
2010 WL 1224364, *2 (Conn. Super. Feb. 25, 2010).
Id.
Id. at *6.
699 F. Supp. 2d 439, 449-50 (D. Conn. 2010).
Id. at 458.
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Thus, what constitutes an “occurrence” is a fact-specific
question that is decided on a case-by-case basis. While one
court holds that faulty workmanship is not an accident,
another concludes that noisy tenants are.
IV. MISCELLANEOUS RULINGS
Connecticut courts have issued a variety of rulings on a
number of other issues that are also worthy of note. Of particular interest is a decision issued by the Connecticut
Supreme Court regarding the rationale for equitable subrogation by an insurance company against a liable party. In
Allstate Insurance Company v. Palumbo,36 the Court ruled
that the insurance company could not hold its policyholder’s
fiancé liable under the doctrine of equitable subrogation to
recover money it had paid to the policyholder under her
homeowners policy. The insurance company paid a claim
for damages arising out of a fire at the policyholder’s home,
which had started as a result of her fiancé’s failure to properly install a water heater.37 When the insurance company
sought to recover from the fiancé, who was not named in the
policy, he argued that subrogation was not “equitable,” but
the trial court rejected this argument because of his status
as fiancé and not a spouse.38
The Connecticut Supreme Court reversed, and began its
analysis by reviewing the principles of equitable subrogation:
The object of subrogation is the prevention of injustice. It is
designed to promote and to accomplish justice, and is the
mode which equity adopts to compel the ultimate payment
of a debt by one who, in justice, equity, and good conscience,
should pay it.... As now applied, the doctrine of ... equitable
subrogation is broad enough to include every instance in
which one person, not acting as a mere volunteer or intruder, pays a debt for which another is primarily liable, and
which in equity and good conscience should have been discharged by the latter.39
296 Conn. 253, 994 A.2d 174 (2010).
Id. at 256.
38 Id. at 256-57.
39 Id. at 259, quoting Wasko v. Manella, 269 Conn. 527, 532-33, 849 A.2d 777
(2004) (internal quotation marks omitted).
36
37
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The Court adopted the reasoning of the Nebraska Supreme
Court in Reeder v. Reeder,40 “that not every relationship
will fit squarely into a category that will be determinative of
whether a subrogation action may be brought” and held that
the trial court’s failure to balance the equities was improper.41 The Court reviewed the totality of the circumstances—
including that the policyholder’s fiancé moved in to the
insured residence soon after the policyholder purchased it
and resided there for several years; the house was his sole
residence, and he made substantial improvements to it; the
policyholder’s fiancé did not have his own homeowners
insurance; the couple shared expenses, including repairs to
the house and the mortgage payment, which included the
homeowners insurance premium along with principal and
interest; and the couple reasonably expected that both individuals were covered—and concluded that “the equities
clearly weigh against subrogation.”42
Connecticut courts also issued the following rulings concerning insurance coverage:
•
Madoff losses
In a coverage action arising out of a case in which the
policyholders were sued for investing in a fraudulent
securities scheme perpetrated by Bernard L. Madoff
Investment Securities, LLC, the insurance companies refused to provide defense and coverage. The
district court held that “the investors' claims fall
squarely within an unambiguous reading of either
the insolvency exclusion of the Professional Services
Liability Coverage, or the professional services
exclusion of the Management Liability Agreement,”
and therefore defense and coverage were not available under the policy.43
217 Neb. 120, 124, 348 N.W.2d 832 (1984).
296 Conn. at 265-66.
42 Id. at 263-264, 270 -77.
43 Associated Comm. Bancorp, Inc. v. The Travelers Cos., Inc., 2010 WL
1416842, *12 (D. Conn. Apr. 8, 2010), aff’d, 2011 WL 1781908 (2d Cir. May 11, 2011).
40
41
2011]
•
•
•
•
44
45
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Corporate veil pierced between AIG and
National Union Fire Insurance
Although Connecticut courts are “hesitant to pierce the
corporate veil in all but exceptional cases,” the district
court concluded that, at the pleading stage, the policyholder’s former employee was permitted to name as a
defendant American International Group, Inc., which
was not a party to the insurance agreement, but was
the parent of the insurance company, National Union
Fire Insurance Company of Pittsburgh, PA.44
Unhappy heirs lack standing to bring direct suit
for policy proceeds
Where it was alleged that the beneficiary of a life
insurance policy killed the policy holder, the policyholder’s children, neither beneficiaries of the policy
nor fiduciaries of the estate, did not have standing to
sue the insurance company directly to assert their
claims to the proceeds of the policy. However, the
court held that the children might have other remedies
to challenge the distribution of life insurance benefits, including a declaratory judgment proceeding.45
Insurance broker without authority to issue binder
The agent of the policyholder, which, acting as broker in procuring a policy, issued a binder of insurance securing coverage with the insurance company,
did not have the authority to bind the insurance company. Therefore, the insurance binder “had no legal
effect to bind [the insurance company] to provide liability coverage to the plaintiffs.”46
Summary judgment for insurance company
denied because of disarray of policy
An insurance policy was ambiguous and confusing as
a result of the “melange of numbered and unnumTucker v. Am. Int’l Grp., Inc., 745 F. Supp. 2d 53 (D. Conn. 2010).
Price v. Transam. Life Ins. Co., 2010 WL 3328280 (Conn. Super. July 29,
46 Jimdee, LLC v. Flanagan Assoc., 2010 WL 5610889, *3 (Conn. Super. Dec.
17, 2010).
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bered pages, the lack of clarity as to what is a declarations page and what is not, the inconsistency of
page headings; the inclusion of the capitalized sentence upon which [the insurance company] relies
within an entire page of capitalized phrases and
clauses, and on a page not readily identifiable as part
of the declarations, and finally the inclusion of a
clear property damage coverage provision without
any disclaimer whatsoever” notwithstanding a contrary indication on the declarations page.47
Accordingly, the insurance company’s motion for
summary judgment arguing that coverage did not
exist was denied.
V. CONCLUSION
Although Connecticut courts did not issue any groundbreaking coverage decisions in 2010, all has not been quiet
on the insurance coverage front. Policyholders and insurance companies continue to dispute the timeliness of suit,
whether a CUTPA/CUIPA claim has been sufficiently pled,
and what constitutes an “occurrence” or “accident” giving
rise to a loss, among many other topics.
47 Razor’s Auto Body & Serv., LLC v. The Travelers Indem. Co. and
Underwriters, Inc., 2010 WL 5573742, *3 (Conn. Super. Dec. 13, 2010).
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131
BUSINESS LITIGATION: 2010 IN REVIEW
BY WILLIAM J. O’SULLIVAN*
For Connecticut business litigators, 2010 was noteworthy in two respects. First, in a pair of Connecticut Supreme
Court opinions—one for the majority, one in concurrence—
Justice Peter T. Zarella pointedly challenged bench and bar
to rethink well entrenched principles of business tort law.
Second, a number of court decisions demonstrated how the
practice of mortgage foreclosure law has struggled to keep
up with changes in the mortgage industry, particularly the
bundling and securitization of home mortgages. This article
will discuss these developments, as well as other significant
judicial opinions that were issued in 2010 in the realm of
business law.
The first of the Justice Zarella cases, Naples v. Keystone
Building & Development Corporation,1 contains a useful
discussion, in the majority opinion, about piercing corporate
veils. Of greater interest are the disparate discussions, in
the majority opinion and Justice Zarella’s concurrence,
about the plaintiff’s claim under the Connecticut Unfair
Trade Practices Act (“CUTPA”).2
The majority’s summary of the legal framework for evaluating a CUTPA claim consists largely of familiar language
about the Federal Trade Commission’s “cigarette rule,”3
which the court has been citing for more than twenty-five
* Of the Hartford Bar.
1 295 Conn. 214, 990 A.2d 326 (2010).
2 CONN. GEN. STAT. §§ 42-110a et seq.
3 “It is well settled that in determining whether a practice violates CUTPA we
have adopted the criteria set out in the cigarette rule by the Federal Trade
Commission for determining when a practice is unfair: (1) Whether the practice,
without necessarily having been previously considered unlawful, offends public
policy as it has been established by statutes, the common law, or otherwise-in
other words, it is within at least the penumbra of some common law, statutory, or
other established concept of unfairness; (2) whether it is immoral, unethical,
oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers,
competitors or other businesspersons. All three criteria do not need to be satisfied
to support a finding of unfairness. A practice may be unfair because of the degree
to which it meets one of the criteria or because to a lesser extent it meets all three.”
Naples, 295 Conn. at 227-28. (Citations and internal punctuation omitted.)
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years.4 But in his concurrence, Justice Zarella takes the
entire Supreme Court (himself included) to task for failing
to stay abreast of evolving FTC law—namely, major policy
statements and decisions issued by the FTC, and caselaw
pertaining to the same—in construing CUTPA.5 In failing
to do so, Justice Zarella suggests, the court has not fulfilled
CUTPA’s mandate that “the courts of this state shall be
guided by interpretations given by the Federal Trade
Commission and the federal courts to Section 5(a)(1) of the
Federal Trade Commission Act (15 U.S.C. 45(a)(1)), as from
time to time amended.”6
Justice Zarella notes that the Naples case did not lend
itself to a comprehensive review of CUTPA. However, his
language can be construed as a clear warning that, when
briefing a CUTPA claim, it may not suffice for an attorney to
cut and paste from old briefs containing boilerplate “cigarette rule” language from decisions from the 1980s. Given
the right case, the Connecticut Supreme Court seems open to
a fresh analysis of the proper framework for a CUTPA claim.
The second of the Justice Zarella opinions of interest was
issued in Stuart v. Stuart,7 in which he wrote for a unanimous panel. The narrow holding in Stuart, in a significant
issue of first impression, was that the standard of proof for
a claim for treble damages under the civil theft statute8 is
by a preponderance of the evidence. In so ruling, the
Supreme Court reversed the Appellate Court, which had
held in the same case that the applicable standard is by
“clear and convincing evidence.”9
Much like Justice Zarella’s concurrence in Naples, the
Supreme Court’s opinion in Stuart also contains a broad
4 The court has cited the three-prong “cigarette rule” for purposes of a CUTPA
analysis since at least 1983, in Conaway v. Prestia, 191 Conn. 484, 464 A.3d 847
(1983). A year later, in McLaughlin Ford, Inc. v. Ford Motor Co., 192 Conn. 558,
473 A.2d 1185 (1984), the court added the proviso that a CUTPA violation may be
founded on a serious breach of one of the three prongs.
5 For a thorough discussion of these subsequent developments, see David L.
Belt, Unresolved Issues under the Unfair Trade Practices Act, 82 CONN. B.J. 389
(2008).
6 Naples, 295 Conn. at 239, quoting CONN. GEN. STAT. § 42-110b(b).
7 297 Conn. 26, 996 A.2d 259 (2010).
8 CONN. GEN. STAT. § 52-564.
9 Stuart v. Stuart, 112 Conn. App. 160, 962 A.2d 842 (2009).
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invitation to re-examine a seemingly settled area of the
law—the requirement that a party prove common-law fraud
by clear and convincing evidence. The court observed that
“a review of our case law on the development of the standard
of proof in fraud actions compels us to question the soundness of those prior decisions,10 although we need not decide
in the present case whether they should be overruled.”11
The court quoted at great length from its decision from 1991
in Kilduff v. Adams,12 in which the court had considered,
but dismissed as unpersuasive, the various rationales for
requiring fraud to be proven by the higher standard.13
Apparently the court continues to find that body of law
unpersuasive, and accordingly was “loath to extend the
application of the clear and convincing standard of proof further, to claims brought pursuant to § 52-564.”14 The court
thus appears open to a wholesale examination of the “clear
and convincing evidence” rule as applied to civil fraud cases.
In the realm of foreclosure law, several cases illustrate how
attorneys and judges have lately been struggling with a basic
question that used to have a simple answer: who has standing to foreclose? The issue arises from the relatively recent
development of a vigorous secondary market for residential
mortgages, in which they are repeatedly re-assigned and/or
securitized. This raises the question of who owns, and thus
has standing to foreclose, a given mortgage at a given time.
In a pair of decisions involving the same pro se defendant
but different lenders and different properties, Deutsche
Bank National Trust v. Bialobrzeski15 and LaSalle Bank,
National Association v. Bialobrzeski,16 as well as a third case
involving different parties, Equity One, Inc. v. Shivers,17 the
Appellate Court affirmed the principle that a foreclosing
10 The author analyzed the relevant history in an earlier article. See William
J. O’Sullivan, Proving Fraud: The History and Future of Connecticut’s Clear and
Convincing Evidence Rule, 14 CONNECTICUT LAWYER No. 7, April 2004.
11 Stuart, 297 Conn. at 42.
12 219 Conn. 314, 593 A.3d 478 (1991).
13 Stuart, 297 Conn. at 42, n. 11.
14 Id. at 42, 44.
15 123 Conn. App. 791, 3 A.3d 183 (2010).
16 123 Conn. App. 781, 3 A.3d 176 (2010).
17 125 Conn. App. 201, 9 A.3d 379 (2010).
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bank must prove that it had ownership of the promissory
note at the time it commenced foreclosure. This requires evidence not only of the chain of title to the note, but of the date
on which the foreclosing lender acquired ownership of the
instrument. In all three of these cases, the trial court had
denied the defendant’s motion to dismiss without conducting
an evidentiary hearing, and in all three cases, the Appellate
Court ordered such a hearing after remand.
The Appellate Court emphasized that the critical inquiry
is the date on which the lender acquired the note, not the
date it took an assignment of the mortgage. Evidence of the
latter would not suffice to meet the bank’s evidentiary burden. The court reaffirmed the principle that “the mortgage
follows the note.”18
Another case relying upon that principle was Chase
Home Finance, LLC v. Fequiere.19 The borrower signed a
note payable to BNC Mortgage, Inc., and a mortgage to
MERS (Mortgage Electronic Registration Systems), Inc.20
as nominee for BNC Mortgage, Inc., its successors and
assigns. BNC Mortgage, Inc. endorsed the note in blank,
and MERS assigned the mortgage to the plaintiff, U.S.
Bank National Association, Trustee, a non-MERS member,
by a mortgage assignment recorded on the land records. At
the time of foreclosure, the plaintiff U.S. Bank was in possession of the note.
The defendant argued that the designation of MERS as
mortgage ‘nominee’ for BNC Mortgage Inc. had not given
MERS sufficient title to the mortgage to empower MERS to
assign it to U.S. Bank. Thus, went the argument, the plaintiff lacked standing to foreclose.
The Appellate Court disagreed with the defendant, based
on General Statutes Section 49-17, which allows the holder
of a promissory note secured by a mortgage to foreclose even
though the mortgage has not yet been assigned to him. The
18
19
(2010).
Deutsche Bank, 123 Conn. App. at 797.
119 Conn. App. 570, 989 A.2d 606, cert. denied, 295 Conn. 922, 991 A.2d 564
20 The opinion contains a useful explanation of how the MERS mortgage registration system works. 119 Conn. App. at 572, n. 2.
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statute codifies the common-law rule that “the mortgage follows the note.”21 The note had been endorsed in blank by
the originally obligee, and under General Statutes Section
42a-3-205(a), a note endorsed in blank “becomes payable to
bearer and may be negotiated by transfer of possession
alone.”22 The plaintiff, possessor of the note at the time the
foreclosure was commenced, therefore had standing.
Another foreclosure case of interest was R.F. Daddario &
Sons, Inc. v. Shelansky.23 The plaintiff, holder of a second
mortgage on a condominium unit, refrained from commencing foreclosure for seventeen years after the defendant’s
first payment default. The defendant asserted that the
action should be barred by the doctrine of laches, but the
Appellate Court affirmed the trial court’s rejection of that
defense. The plaintiff’s agent testified that the plaintiff had
held off because for an extended period of time there was no
apparent equity to support the second mortgage, and later
because the defendant was attempting to sell the property.
The trial court found, and the Appellate Court agreed, that
under the circumstances, the delay was not unreasonable,
and that the defendant had failed to prove he had been prejudiced by the delay.24
In another case in the realm of creditors’ rights, Lestorti
v. DeLeo,25 the Supreme Court divided, 3-2, on an issue pertaining to the right of contribution between guarantors.
The counterclaim plaintiff and counterclaim defendant
(“plaintiff” and “defendant,” for ease of reference), guarantors of a commercial mortgage loan, had been named as
defendants in an earlier foreclosure action. In that first
case, the bank failed to make proper service upon the defendant, and the case was dismissed as to him. (By operation
of General Statutes Section 49-1, the bank was barred from
thereafter pursuing the defendant.) The bank continued to
pursue the plaintiff, and following judgment of foreclosure,
21
22
23
24
25
Id. at 576.
Id. at 577.
123 Conn. App. 725, 3 A.3d 957 (2010).
Id. at 737-739.
298 Conn. 466, 4 A.3d 269 (2010).
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they stipulated to a deficiency judgment in the amount of
$275,000, even though the debt and appraisal figures tendered at the foreclosure judgment hearing suggested a possible deficiency in excess of $2 million. The plaintiff paid
the stipulated deficiency judgment, and then sued the
defendant for contribution.
In a majority opinion penned by Justice Zarella, the court
concluded that the plaintiff would be entitled to contribution only to the extent that he had paid more than his contributive share of the entire outstanding obligation—that is,
more than half of the deficiency balance.26 The court held
that the stipulated deficiency of $275,000 was not the appropriate measure; the proper benchmark was the “actual”
debt. Because that issue had not been decided by the trial
court—as noted, the bank and the plaintiff had resolved
that issue between them by stipulation—the Supreme Court
remanded the case to the trial court for calculation of the
deficiency balance.27
Thus, for the plaintiff to obtain relief, he would need to
prove that the “actual” deficiency was less than $550,000, in
which case his payment of $275,000 would prove to be
“excessive,” entitling him to contribution for one-half of his
overpayment. The court acknowledged the unlikelihood of
the plaintiff making that proof.
In a footnote, the court noted that under the
RESTATEMENT OF THE LAW OF RESTITUTION, the plaintiff
would have been entitled to contribution for half of the settlement that he paid if he had thereby procured the defendant’s release.28 However, the plaintiff had not procured
the defendant’s release; the defendant had been released by
operation of law, through the bank’s failure to make proper
service upon him in the underlying foreclosure case. This
principle thus had no application to the case at bar, and the
court reserved judgment on whether or not it even exists
under Connecticut law.29
26
27
28
29
Id. at 474.
Id. at 486, 487.
Id. at 477, n. 11.
Id.
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In a dissent joined by Justice Palmer, Chief Justice
Rogers opined that the plaintiff was entitled to contribution
for half of the $275,000 settlement that he had paid.30
Connecticut’s appellate courts also issued several opinions of interest in the area of business torts. In Sturm v.
Harb Development, LLC,31 the state Supreme Court reaffirmed the principle that an agent or officer of a business
entity may be personally liable in tort for acts that he or she
personally committed while acting on behalf of the business
entity. In such a case it is unnecessary for the plaintiff to
pierce the corporate veil. This fact pattern should be distinguished from an instance where the plaintiff seeks to
hold an agent or officer personally liable solely by virtue of
the latter’s affiliation with the company, for acts performed
by other people.
Sturm was an action against a homebuilding company
and its principal in connection with the construction of a
new home. In the counts of the complaint directed against
the LLC, the plaintiffs claimed breach of contract, violation
of CUTPA, and breach of the New Home Construction
Contractors Act.32 In the counts against the principal, the
plaintiffs claimed breach of the latter two statutes, negligence, and fraudulent and negligent misrepresentation.
The court ruled that where the tortious conduct at issue
was allegedly performed by the company’s principal himself,
it was unnecessary for the plaintiff to plead facts that would
pierce the corporate veil. However, the court further ruled
that the counts against the individual defendant should
nevertheless be stricken due to other pleading deficiencies.
Of particular interest is the court’s discussion of the negligence count, which was built in large part on the contract
claim against the LLC. The court found that the plaintiffs
had failed to plead adequately the alleged source of the individual defendant’s duty to the plaintiffs. The duty could not
be found in the contract, since the individual defendant was
30
31
32
Id. at 494.
298 Conn. 124, 2 A.3d 859 (2010).
CONN. GEN. STAT. § 20-417a et seq.
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not a party to the contract, and the plaintiffs did not identify any other legal duty that would provide the predicate for
a negligence claim.33
This appears to suggest that in some cases the corporate
form equally protects a business owner from claims in contract and also from claims in negligence. This is in contrast
to claims for fraud and other intentional torts under statutory and common law, in which the duty to refrain from bad
conduct arises as a matter of law, and the corporate form
will not protect a company’s principal from the consequences of his or her own behavior.
In Blackwell v. Mahmood,34 the Appellate Court extended liability for treble damages under the civil theft statute35
beyond what many attorneys might expect. The plaintiff
sued for the return of a security deposit for the purchase of
commercial property owned by the defendant. The purchase
contract required the plaintiff, within thirty days of the
contract, to obtain a mortgage commitment; failing that, the
plaintiff could obtain a return of his deposit if, within the
same thirty-day period, the plaintiff furnished the defendant with a copy of a mortgage denial letter.
The plaintiff provided evidence of a mortgage denial after
the thirty-day deadline, and the defendant refused to return
the deposit. The evidence at trial established that the
defendant had agreed to orally extend the thirty-day deadline, and that the plaintiff’s late tender of the letter had
been in reliance on that agreement. The trial court ruled
that the defendant was estopped to enforce the deadline,
and held that the plaintiff was entitled to a return of the
deposit. The trial court further ruled for the plaintiff on his
claim of civil theft, ordering treble damages, and violation of
CUTPA, ordering punitive damages and attorneys’ fees.36
The Appellate Court affirmed on all counts. On the civil
theft claim, the court upheld the trial court’s finding that the
33
34
35
36
298 Conn. at 139-141.
120 Conn. App. 690, 992 A.2d 1219 (2010).
CONN. GEN. STAT. § 52-564.
120 Conn. App. at 692, 693.
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defendant, in keeping possession of the plaintiff’s money,
had not acted “under an honestly held claim of right,” and
thus had larcenous intent.37 The defendant claimed that his
attorney had advised him he could hold onto the deposit
money, but the court pointedly observed that the attorney
had not testified at trial to corroborate this.
In Metcoff v. Lebovics,38 the Appellate Court wrestled
with the issue of what is and what is not intracorporate conduct for the purposes of CUTPA and tortious interference.
The plaintiffs, majority shareholders of Midcore Software
Inc., agreed to merge that entity into NCT Midcore Inc. in
exchange for a promise of future payment from NCT
Midcore’s parent company, NCT Group, Inc. When NCT
Group reneged, the plaintiffs sued its officers and directors,
claiming they had systematically looted NCT Group and
rendered it insolvent and unable to pay its obligation to the
plaintiffs. The trial court struck both counts of the plaintiffs’ complaint, and rendered judgment for the defendants.
The Appellate Court agreed that the plaintiff had failed
to state a claim under CUTPA, holding that the case was in
the nature of an intracorporate dispute that did not implicate trade or commerce as defined by the statute. The court
also held, by a 2-1 vote, that the trial court had properly
stricken the tortious interference count as well. According
to the majority, the complaint described conduct that, while
infected by “sinister motivations,” was “in the normal course
of corporate management.”39 The claim thus fell victim to
the rule that a company—and its agents—cannot tortiously
interfere with its own contract.40
Judge Lavery, dissenting, opined that the plaintiffs had
pled conduct by the defendants aimed wholly at furthering
their own interests, not the company’s.41 Thus, he reasoned,
they were acting as strangers to the contract and could be
held liable for tortiously interfering with its performance.
37
38
39
40
41
Id. at 702.
123 Conn. App. 512, 2 A.3d 942 (2010).
Id. at 523.
Id. at 520.
Id. at 528, 529.
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In another case involving a closely held business,
Gorelick v. Montanaro,42 the Appellate Court addressed the
issue of what is and what is not partnership property. Five
family members each held a twenty percent interest in commercial property, and formed a partnership to develop it.
Two family members later conveyed their interests in the
real estate to others, such that the land records reflected
ownership as 40/40/20.
In an order dissolving the partnership and partitioning
the real estate, the trial court ordered the net proceeds to be
distributed in twenty percent interests, reflecting ownership of partnership interests. One partner appealed, claiming the proceeds should be distributed based on ownership
of the property as shown on the land records.
The Appellate Court noted that under the Uniform
Partnership Act, the issue of whether or not property titled
to a partner is actually partnership property (as among
themselves) is an issue of fact, based on the intent of the
partners. The partnership agreement described the real
estate as partnership property, and the lease of the property named the partnership as the landlord. The Appellate
Court ruled that it was not error to distribute the proceeds
based on ownership in the partnership.
The courts also issued several noteworthy opinions on
the law of trade regulation. In Brown & Brown, Inc. v.
Blumenthal,43 the Supreme Court broadly affirmed the privacy rights of businesses that are subject of antitrust investigatory subpoenas pursuant to General Statutes Section
35-42. The statute provides that documents and information obtained thereunder by the Attorney General may not
be disclosed to the public. The Attorney General argued
that the bar on disclosures to the “public” did not prevent
disclosure to individuals. Therefore, goes the argument, the
AG could use documents subpoenaed from a target company
—even documents containing trade secrets—in the course of
deposing officials from other companies in the industry.
42
43
119 Conn. App. 785, 990 A.2d 371 (2010).
297 Conn. 710, 1 A.3d 21 (2010).
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The court rejected this argument. Furthermore, the court
ruled that materials subpoenaed under this statute cannot
be used in court proceedings unless they have initially been
“lodged” with the court pursuant to Practice Book Sections
7-4B and 7-4C, thus giving the target an opportunity to have
the documents sealed or their disclosure restricted. Finally,
in construing the provision of General Statutes Section 35-42
that allows the Connecticut Attorney General’s office to
share subpoenaed materials with its counterparts in other
states and the federal government, the court ruled that this
is permissible only if the recipient agency provides the same
level of privacy protection as is required in Connecticut.44
Connecticut v. Sunrise Herbal Remedies, Inc.45 was a
trade regulation case in which the Supreme Court weighed
the application of the hearsay rule to third-party consumer
complaints. The state Department of Consumer protection,
through the Attorney General’s office, brought a civil enforcement action under CUTPA, based on 260 consumer complaints. After commencement of the case, the state obtained
an ex parte prejudgment remedy, based on an affidavit signed
by an assistant attorney general, averring to the consumer
complaints and the average claimed financial loss per consumer. The defendants moved to dissolve the attachment,
claiming that the application was fatally defective. More particularly, they claimed that because the affidavit was based
entirely on inadmissible hearsay, the state had failed to fulfill the PJR statute’s requirement that an application be
accompanied by an affidavit from a “competent affiant.”46
The opinion features an extended discussion about the
nature of hearsay and “personal knowledge.” The court
noted “the rule that a witness must testify from personal
knowledge,” which is knowledge “gained through firsthand
observation or experience as distinguished from a belief
based on what someone else has said.”47 The discussion
appears to presage a ruling against the state, given that the
44
45
46
47
Id. at 731, 732.
296 Conn. 556, 2 A.3d 843 (2010).
Id. at 560; CONN. GEN. STAT. § 52-278e.
Id. at 573.
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affiant indisputedly had no personal knowledge about the
facts supporting the consumer complaints.
But the opinion then takes a surprise twist, with the court
concluding that the Assistant Attorney General’s personal
knowledge of the filing of the complaints—not the facts
underlying them—sufficed to make him a competent affiant.
“It is clear … that although he lacked personal knowledge to
aver to the truth of the allegations underlying the complaints, [the affiant] nonetheless was competent to represent
the nature and extent of those complaints.”48 On that basis,
the Supreme Court concluded the trial court indeed had subject matter jurisdiction over the PJR application.
It is important to note that the Supreme Court did not
rule that the State had established probable cause, or that
hearsay testimony by the affiant at the remanded PJR hearing would be admissible. (The court did note a split in the
out-of-state authority on whether or not consumer complaints are admissible under the residual exception of the
hearsay rule.) The ruling was limited to the issue of
whether or not the affidavit was sufficient to give the court
jurisdiction over the application. Left unaddressed is the
question of what other kind of cases, aside from state
enforcement actions, lend themselves to obtaining an ex
parte PJR based on “personal knowledge” that somebody
has a quarrel with the defendant, as opposed to firsthand
knowledge of the facts underlying the quarrel itself.
The Appellate Court’s decision in D’Angelo Development
and Construction Corporation v. Cordovano49 brings into
question just how much leverage a homeowner can obtain
against a builder who fails to comply with the disclosure
requirements of the New Home Construction Contractors
Act.50 The defendants, who had hired the plaintiff to build
a new house for them, counterclaimed on a number of theories, including violation of CUTPA due to the plaintiff’s noncompliance with the Act.
Id. at 575.
121 Conn. App. 165, 995 A.2d 79, cert. denied, 297 Conn. 923, 998 A.2d 167
(2010).
50 CONN. GEN. STAT. § 20-417a et seq.
48
49
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143
It was undisputed that the builder had failed to comply
with the Act’s disclosure requirement, a per se violation of
CUTPA. But the trial court entered judgment for the
builder, holding that the property owners had failed to show
they had suffered an ascertainable loss from the breach. In
affirming, the Appellate Court observed “[i]t would require
speculation to conclude that the Cordovanos would have
acted differently had D’Angelo Development made the disclosures required by the act before the parties executed a
written contract or even while construction was ongoing.”51
The Appellate Court issued another important ruling
under CUTPA in Landmark Investment Group, LLC v.
Chang Family Realty Partnership, LLC.52 The court held
that, in determining possible liability under the statute, the
acts of the defendant’s attorney may be imputed to the
defendant. This is so even though the attorney himself may
be exempt from CUTPA liability, under the principle that
CUTPA applies to the entrepreneurial aspects of legal practice but generally not to an attorney’s representational conduct. That exemption notwithstanding, the acts of an
agent—with no exception for attorneys—may be imputed to
a principal for purposes of CUTPA.
In Pinard v. Dandy Lions, LLC,53 the Appellate Court
demonstrated that the courts’ considerable willingness to
find that parties have an enforceable agreement to arbitrate
does have its limits. In the proceedings below, the parties
had put onto the record, in open court, an agreement to present their case privately to a judge in chambers, who would
thereupon issue a decision that would be treated as an arbitrator’s award. At the conclusion of that process, the judge
issued an award, which the defendant then moved to vacate
on the grounds that there had been no written agreement to
arbitrate, as required by General Statutes Section 52-408.
The trial court granted the motion to vacate. The plaintiff argued on appeal that (i) the court transcript, in which
D’Angelo Development, 121 Conn. App. at 183.
125 Conn. App. 678, 10 A.3d 61 (2010), cert. denied, 300 Conn. 914, 13 A.3d
1100 (2011).
53 119 Conn. App. 368, 987 A.2d 406, cert. denied, 295 Conn. 921, 991 A.2d 566
(2010).
51
52
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the attorneys confirmed the agreement to arbitrate, constituted a writing to sufficient to satisfy General Statutes
Section 52-408, and (ii) the totality of the circumstances
established that the parties had an agreement to arbitrate.
The Appellate Court disagreed, and affirmed the judgment
below vacating the award.54
It should be noted that the decision does not indicate
that the plaintiff ever argued that the defendant had waived
the writing requirement. Any such argument, however,
would surely have been unavailing, as the authority of an
arbitrator is a matter of subject matter jurisdiction55 and
thus principles of waiver would have no effect on the writing requirement.
The Connecticut Supreme Court’s decision in Association
Resources, Inc. v. Wall56 was noteworthy for two things.
First, it is the first decision in which that court expressly
adopted and applied the doctrine of judicial estoppel.
Second, the court found that a nondiscretionary bonus, calculated on a formula based on company profitability, constitutes “wages” for the purposes of Connecticut’s unpaid wage
statutes,57 subjecting nonpayment of such a bonus to an
award of double damages and legal fees for the employee.58
For Connecticut’s business litigators and other courtwatchers, 2010 was an intriguing year in which numerous
important issues were resolved, while other ostensibly settled ones were called into question. The judiciary has invited the business bar to think creatively in challenging seemingly settled principles of law. The bar’s response to that
challenge will play a major role in charting the course of
Connecticut business law in 2011 and beyond.
Id. at 376, 377.
The Supreme Court so held in Bennett v. Meader, 208 Conn. 352, 545 A.2d
553 (1988).
56 298 Conn. 145, 2 A.3d 873 (2010).
57 CONN. GEN. STAT. § 31-71a.
58 CONN. GEN. STAT. § 31-72.
54
55
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SURVEY OF DEVELOPMENTS IN LABOR AND
EMPLOYMENT LAW 2010
BY RITA B. TRIVEDI*
There were several notable additions to Connecticut’s
labor and employment jurisprudence in 2010, including U.S.
Supreme Court decisions on arbitration, the statute of limitations in disparate impact cases, and employee privacy
expectations. The Second Circuit and the District of
Connecticut also issued key decisions on retaliation claims,
application of the Ellerth-Faragher affirmative defense,1
and the effect of electronic filing on “rush to the courthouse”
cases. Meanwhile, state courts addressed the scope of the
Connecticut Family and Medical Leave Act, wages and
bonuses, and labor past practices. From the National Labor
Relations Board came a series of cases concerning bannering and picketing, backpay, and the impact of social media
on protected concerted activity. Statutory developments
and newly-issued regulations also affected background
checks, the Genetic Information Nondiscrimination Act, and
family violence leave laws. This article surveys these and
other significant 2010 developments.
I. SUPREME COURT CASES
The Supreme Court’s decision in New Process Steel, L.P.
v. NLRB2 resolved a split in the circuits over whether
Section 3(b) of the National Labor Relations Act3 authorized
the Board to act when only two out of its five positions are
filled, when it had previously delegated its full powers to a
group of three members and the sitting two constituted a
∗ Of the Hartford Bar.
1 The “Ellerth-Faragher affirmative defense against charges of sexual harassment by an employee is available to an employer if no tangible employment action
has taken place. To satisfy the affirmative defense, the employer must show that “(a)
that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to
take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.” Burlington Industries, Inc. v. Ellerth, 524 U.S. 742,
765 (1998). See also Faragher v. City of Boca Raton, 524 U.S. 775 (1998).
2 130 S. Ct. 2635 (2010).
3 29 U.S.C. § 153(b).
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quorum of the three. Using a textual analysis, the Court
held that the Board did not have such authority, and with
that decision invalidated hundreds of decisions between
December 2007 and 2010. The Board is now revisiting, and
quickly resolving, the affected cases.
Arbitration continued to generate issues before the
Court. In Granite Rock Co. v. International Brotherhood of
Teamsters,4 the Court reversed the Ninth Circuit in a 7-2
decision and held that a dispute over the ratification date of
a collective bargaining agreement should be resolved by a
district court rather than an arbitrator. In June 2004, the
local union in that case initiated a strike against Granite
Rock after the expiration of the collective bargaining agreement between the parties and an impasse in negotiations. A
new agreement with no-strike and arbitration clauses was
agreed to on July 2, but it did not address the union’s liability for strike-related damages between the expiration of the
old collective bargaining agreement and the negotiation of
the new one. Without a hold-harmless/back-to-work clause,
another strike began on July 6. Granite Rock sued in district court for an injunction against the strike and strikerelated damages, alleging that the July 6 strike violated the
no-strike provision in the new contract. It also claimed that
the district court should enjoin the strike because the holdharmless dispute prompting the strike was an arbitrable
grievance. The union held a successful ratification vote on
August 22.
Key to the dispute was the date of ratification: Granite
Rock maintained that the contract was ratified on July 2,
while the union claimed that ratification took place on
August 22. The date of ratification would therefore determine whether the union’s strike activity fell within the contract’s arbitration clause. The district court found that the
question was one for a jury, and a unanimous jury concluded that the Local ratified the contract on July 2. The parties
were ordered to arbitration over the claims for strike-related damages. However, on appeal the Ninth Circuit found
4
130 S. Ct. 2847 (2010).
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that the parties’ dispute over the date of ratification was
itself governed by the arbitration clause and should be arbitrated rather than decided by the district court.
The Supreme Court rejected that argument, finding that
the presumption in favor of arbitration did not override the
basic principle that arbitration is required only when the
parties agree to submit the specific dispute in question.
Rather than a dispute over whether the collective bargaining agreement was ratified, this case presented the question
of when ratification took place. Arbitration would thus be
an issue only after the court was persuaded that the agreement was validly formed, covered the dispute in question,
and was legally enforceable. Because the parties agreed that
the arbitration clause in the new contract covered only disputes “arising under” the agreement, a court first had to
make that decision based on when the agreement was
agreed to. If the collective bargaining agreement was not
formed at the time of the strike activity, it could not have
been covered. Therefore, the majority reasoned, the district
court had to determine the ratification date before deciding
arbitrability on the substantive issue. Dissenting on the
issue of arbitrability, Justices Sotomayor and Stevens maintained that the parties agreed to resolution by arbitration,
as the contract was made retroactive to May 1, before the
strikes began, and that the “formation defense” merely went
to the merits of Granite Rock’s claim.5
In Lewis v. City of Chicago,6 the Supreme Court held
that the statute of limitations for a disparate impact claim
under Title VII can begin upon each application of the
alleged discrimination practice, not just at the time the policy was announced or enacted. The Lewis plaintiffs were job
applicants who filed charges based on the City’s decision to
exclude applicants scoring below 89 out of 100 on its
employment examination for firefighters. In early 1996, the
City announced that it would begin drawing individuals
randomly from the top tier of scorers (“well qualified”) in its
5
6
Granite Rock Co., 130 S. Ct. at 2866-69.
130 S. Ct. 2191 (2010).
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1995 tests, who would then move to the next phase of the
hiring process. Individuals scoring below 65 failed the test.
Those scoring between 65 and 88 were deemed “qualified”
but were told that it was unlikely they would be called for
further processing. The City continued to use applicants
who tested in 1995 to fill positions over the next six years
until it exhausted the “well-qualified” applicants, at which
time it moved to “qualified” candidates. In March of 1997,
plaintiff Smith, an African-American scoring in the “qualified” range on the 1995 examination who had not been
named a candidate firefighter brought suit in court alleging
the policy had a disparate impact on African Americans.7
Relying heavily on statutory language, the unanimous
Court noted that a plaintiff establishes a prima facie disparate impact case by showing that the employer “uses a
particular employment practice that causes a disparate
impact on one of the prohibited bases.”8 The plaintiffs in
this case stated that element, insofar as the City “made use”
of its hiring policy of excluding those scoring 88 or below
each time it filled a new class of firefighters: although the
policy was announced in 1996, the allegedly discriminatory
activity began anew with each round of hiring.9 Stepping
7 The Supreme Court addressed only the timeliness, and not the merits, of the
disparate impact claim.
8 Id. at 2197 (emphasis original). See also id. at 2198-99. The doctrine of disparate impact in employment was closely interpreted in Griggs v. Duke Power Co.,
401 U.S. 424 (1971), in which the Court found that the employer’s requirements of
a high-school diploma and an IQ score acceptable to the company for higher paying
jobs did not relate to the duties of the jobs themselves, and had a disparate impact
on African American applicants/employees as compared to their White counterparts. Congress codified the requirements of the disparate impact claims recognized in Griggs two decades later in 42 U.S.C. § 2000e-2(k). Under that statute, disparate impact is established only if “a complaining party demonstrates that a
respondent uses a particular employment practice that causes a disparate impact
on the basis of race, color, religion, sex, or national origin and the respondent fails
to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity…” 42 U.S.C. § 2000e-2(k)(1)(A)(i).
9 The Court carefully distinguished between Title VII disparate impact and
disparate treatment cases. Lewis, 130 S. Ct. at 2199. While disparate treatment
cases require a showing of intent during that time, disparate impact cases such as
Lewis have no such requirement, as disparate impact does not have a comparable
intent requirement. As such, disparate treatment cases may not be successful
under the Lewis analysis. Independently, of course, disparate treatment cases may
also fail if the treatment was not found to be actually disparate on the facts.
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briefly away from textual analysis, the Court also noted that
the City’s argument would illogically mean that an unlawful practice could continue to be used indefinitely and with
impunity despite ongoing disparate impact, as long as it was
not challenged within the first statute of limitations.
Ultimately, the Court acknowledged that its reading might
mean that some claims that fail under disparate treatment
(with its additional intent requirement) would survive
under disparate impact. However, in an ongoing unwillingness to engage in legislative activity, the Court noted that
this was “the product of the law Congress has written [and]
it is not for us to rewrite the statute so that it covers only
what we think is necessary to achieve what we think
Congress really intended.”10
Another unanimous decision issued in City of Ontario v.
Quon,11 addressing the scope of a government employee’s
expectation of privacy in mobile devices under the Fourth
Amendment.12 As an initial matter, the Court decided to
sidestep the parties’ disagreement over Quon’s privacy
expectation—arguably one of the questions of most practical
relevance—due to an unwillingness to define too closely the
workplace norms with respect to quickly changing dynamics
of communication, technology, and information transmission. As the Court stated, “[t]he judiciary risks error by
elaborating too fully on the Fourth Amendment implications of emerging technology before its role in society has
become clear.”13 Instead, it focused on the reasonableness of
the employer’s search. In Quon, the plaintiffs were issued
‘alphanumeric pagers’ capable of sending and receiving text
messages. The City’s wireless service contract provided a
limited number of characters per month, with overages
resulting in an additional fee. Before distributing the
devices, the City issued a policy reserving the right to “monId. at 2200.
130 S. Ct. 2619 (2010).
12 The Court noted that the Fourth Amendment applies when the government
acts in its capacity as an employer. Id. at 2628. As discussed below, rather than
focusing on this issue, the Court examined (and decided) the case based on the reasonableness of the search, assuming that the employee had a privacy expectation.
13 Id. at 2629. Accord id. at 2633 (Stevens, J., concurring).
10
11
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itor and log” all network activity including email and internet use and stating no expectation of privacy was to exist.
Although the policy did not expressly cover text messages,
employees were told that the City would treat the messages
as it did email. Soon after issuance, the plaintiff exceeded
the monthly usage amount and was reminded that his use
could be audited. However, overages continued over the
next few months, and the plaintiff paid for the additional
costs. An examination of his logs revealed extensive personal use and sexually explicit content. After an investigation, Quon was disciplined.
On these facts, the Court concluded that the City had the
right to examine the plaintiff’s usage logs (including content), particularly as its initial goal was not to pry into the
employee’s personal affairs but rather to determine if officers such as Quon were paying out-of-pocket for genuinely
work-related messages, in which case the City could consider raising its limit, or whether the City unfairly was paying
for employees’ personal messages. In its decision, the Court
assumed arguendo that Quon had a reasonable expectation
of privacy and moved on to what it deemed the key question:
was the search reasonable? When conducted for a noninvestigatory work-related purpose or to investigate workrelated misconduct, a government employer’s search would
be reasonable if justified at its inception and if the measures
taken were reasonably related to the objectives of the search
while not excessively intrusive.14 Here, the City’s justifications were deemed reasonable, normal, and efficient as a
means to determine the cause of the overages. Notably, the
Court indicated approvingly that the City only requested
transcripts of usage for August and September, although
Quon had surpassed the monthly allotment several other
times. The City also redacted Quon’s off-duty messages during the internal investigation, “which reduced the intrusiveness of any further review of the transcripts.”15
Id. at 2630.
Id. at 2631. The Court also noted that even if an expectation of privacy
existed, it was lowered due to the fact that Quon was told his messages were subject to auditing.
14
15
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Although Quon concerned a government employer, it is possible that the reasoning of the case will play a role in defining the scope of searches and monitoring by private employers in the future.
The Court split sharply in a 5-4 decision in Rent-aCenter, W., Inc. v. Jackson16 over the arbitrability of a challenge to the validity of an entire agreement to arbitrate on
the basis of unconscionability. In Rent-a-Center, the parties
entered into an agreement to arbitrate state and federal
employment, including a “delegation” clause in their contract. That delegation clause stated:
The Arbitrator, and not any federal, state, or local court or
agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement, including but not
limited to any claim that all or any part of this Agreement
is void or voidable.17
After the plaintiff brought employment-discrimination
charges in federal court, the employer filed a motion to stay
or dismiss the district court action under the Federal
Arbitration Act (“FAA” or “Act”) on the basis of the arbitration agreement. In opposition, the plaintiff argued that the
entire arbitration agreement was unconscionable and unenforceable under state law. However, he did not dispute that
the language of the agreement assigned the question of arbitrability to an arbitrator.
Writing for the majority, Justice Scalia emphasized that
the plaintiff challenged only the validity of the contract as a
whole as unconscionable, and never specifically mentioned
the delegation clause.18 The FAA, invoked by the employer
in favor of arbitration, requires a written provision to settle
a controversy by arbitration (the “delegation clause”) except
“on such grounds as exist at law and equity for the revocation of any contract.” Delegation clauses such as that in
Rent-a-Center were deemed simply an additional,
antecedent agreement that a party asks a court to enforce.
16
17
18
130 S. Ct. 2772 (2010).
Id. at 2775.
Id. at 2779-81.
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Citing Prima Paint Corp. v. Flood & Conklin Manufacturing
Co.19 and its progeny, the majority concluded that “a party’s
challenge to another provision of the contract, or to the contract as a whole, does not prevent a court from enforcing a
specific agreement to arbitrate.”20 Accordingly, it held that
“unless [the plaintiff] challenged the delegation provision
specifically, we must treat it as valid under Section 2 [of the
FAA], and must enforce it under Sections 3 and 4, leaving
any challenge to the validity of the Agreement as a whole for
the arbitrator.”21
In dissent, Justice Stevens (joined by Justices Ginsburg,
Bryer, and Sotomayor) maintained that “gateway matters”
such as questions of whether the parties have a valid and
binding legal arbitration agreement at all are usually matters for a court to resolve before referring a dispute to arbitration. The dissent maintained that under Supreme Court
precedent,22 a court should not assume the parties agreed to
arbitrate “unless there is clear and unmistakable evidence
that they did so.”23 When a party challenges that agreement
on the basis of unconscionability, no such evidence exists,
since one side claims he was improperly forced into agreement.24 Instead of allowing courts to rule on the alleged
unconscionability of the agreement containing the arbitration clause (and therefore the arbitration clause resulting
from the unconscionable process itself), the dissenters concluded that the majority’s reasoning would inexplicably cre288 U.S. 395 (1967).
Rent-a-Center, 130 S. Ct. at 2778.
21 Id. at 2779. It is noted that the Supreme Court’s rulings concerning the
appropriate adjudicator of arbitrability questions are somewhat confusing and perhaps contradictory. For example, in Rent-a-Center, the Court held that the arbitrability issue was to be decided by the arbitrator, while in Granite Rock Co. (discussed above and decided three days after Rent-a-Center) the Court found that the
question of arbitrability was to be decided by a court in the first instance. See N.
Peter Lareau, “Lareau on Determining the Adjudicator of Arbitrability Issues:
Rent-a-Center West v. Jackson and Granite Rock v. International Brotherhood of
Teamsters” (LEXIS Emerging Issues Analysis, Sept. 2010). In light of the seemingly unsettled readings of arbitrability rules and the difficulty in predicting which
approach will be adopted by the Court in a given case, practitioners should take
particular care to clarify both the scope and the resolution of conflicts under arbitration agreements.
22 See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995).
23 Rent-a-Center, 130 S. Ct. at 2783.
24 Id. at 2785.
19
20
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ate “infinite layers” of severability, improperly forcing courts
to identify the specific sentence delegating matters to the
arbitrator and forcing plaintiffs to identify this single sentence when specifically challenging its validity. For the dissent, unconscionability was a gateway issue distinct from the
merits of the underlying discrimination dispute.
II. SECOND CIRCUIT CASES
In a case of first impression, the Second Circuit engaged
in a close textual and statutory analysis in Spiegel v.
Schulmann25 to conclude that an individual supervisor cannot be held liable under the retaliation provisions of the
Americans with Disabilities Act (“ADA” or “Act”). The
plaintiff in Spiegel alleged that Daniel “Tiger” Schulmann of
the Tiger Schulmann Karate School in Stamford,
Connecticut retaliated against him by filing a state court
lawsuit alleging interference with the school’s contract with
another employee shortly after Spiegel notified Schulmann
of his intention to file an employment discrimination charge
alleging termination based on weight in violation of the
ADA. The Court’s analysis began with a recitation of the
non-discrimination provisions of the Act, stating that under
42 U.S.C. § 12203(a), “no person shall discriminate…” due
to disability. However, the Court quickly noted that Section
12203(c) of the Act deals with retaliation claims, and
expressly adopts the remedies of Title VII.26 Citing its earlier conclusions in Tomka v. Seiler Corp.27 that the remedial provisions in Title VII (including 42 U.S.C. § 2000e-5), do
not provide for individual liability, the Court reasoned that
“the retaliation provision of the ADA, which specifically borrows the remedies set forth in § 2000e-5, cannot provide for
individual liability.” Spiegel presents an interesting case in
which the reading of the ADA retaliation and incorporated
remedial provisions seems to result in an interpretation
which, as the Court itself recognized, “does not comport with
604 F.3d 72 (2d Cir. 2010).
See 42 U.S.C. § 21117; 42 U.S.C. § 2000e-5.
27 66 F.3d 1295, 1313-14 (2d Cir. 1995) abrogated on other grounds by Burlington Indust., Inc. v. Ellerth, 524 U.S. 742 (1998).
25
26
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Congress’s clearly expressed intent.”28 Its balanced analysis also reflects a recognition that the Spiegel reading is
“arguably contrary to a literal reading of § 12203(a), where
the phrase ‘no person shall’ suggests the possibility of individual liability.”29 Nevertheless, the Second Circuit maintained that no basis for individual liability existed, and
upheld the grant of summary judgment to the defendant.
Retaliation under Title VII—and the relationship
between material adversity and the relevant protected
activity—was also the subject of Fincher v. Depository Trust
& Clearing Corp.30 There, the plaintiff alleged retaliation
for filing a complaint with her employer, and that the retaliation consisted of a failure to investigate that same complaint. After initially positive performance evaluations for
her work, Fincher received a series of declining reviews
from her supervisor, which were approved by her department manager. She was also given a written performance
warning. Fincher complained to the Senior Director of
Employee Relations, and allegedly told him that “black people were set up to fail” due to lack of training. When she
asked the Senior Director a week later if he would take
action, he told her he would not.31
In a somewhat semantically driven decision, the Second
Circuit held that an employer’s failure to investigate a complaint of discrimination “cannot be considered an adverse
employment action taken in retaliation for the filing of the
same discrimination complaint.”32 According to the Court,
an employee whose complaint was not investigated experienced no material adverse change in the terms and condiSpiegel, 604 F.3d at 80.
Id.
30 604 F.3d 712 (2d Cir. 2010).
31 The Senior Director had a different recollection of these two events, maintaining that Fincher made only a casual remark to the effect that “if you are white
they hold your hand and if you are black, they don’t” and that he did not understand this to be a complaint of discrimination. Fincher, 604 F.3d at 717 nn. 1 & 2.
Fincher resigned her employment approximately two months later, after her
supervisor told her that he was forced to write her up and that she had been discriminated against. This alleged admission formed another part of the decision not
discussed here.
32 Id. at 721.
28
29
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tions of employment under the Supreme Court’s standard in
Burlington Northern & Santa Fe Railway Co. v. White 33 His
or her work situation after the complaint would be precisely the same as it was before the complaint. The Court thus
distinguished other cases where employees allegedly suffered harms resulting from—but separate from the resolution of—their initial complaints. Although it recognized
that the failure to investigate “would hardly provide a positive incentive to lodge a further challenge,” the Court maintained that the failure to investigate “will not ordinarily
constitute a threat of further harm” sufficient to constitute
retaliation.34 The Court’s recognition raises some question
of how subsequent courts will reconcile it with Burlington’s
position that retaliatory acts require a context-specific
analysis to determine the impact of the action on a reasonable employee and his or her assessment of the impact of
opposing discriminatory conduct and/or willingness to do so.
It is possible that subsequent plaintiffs will delve into the
relationship between the cases and argue that the failure to
investigate itself would deter an employee from opposing
discriminatory conduct, necessitating a further explanation
of the reach of the Fincher case.
One traditionally strong defense for employers against a
hostile work environment charge has been the “EllerthFaragher” affirmative defense, so named for a pair of companion Supreme Court cases announcing a defense for
employers when (1) the employer exercises reasonable care
to prevent and promptly correct discriminatory/ harassing
behavior and (2) the plaintiff employee unreasonably failed
to take advantage of those preventative or corrective opportunities or to avoid harm otherwise.35 In Gorynski v.
JetBlue Airways Corp.,36 however, the Second Circuit limited the application of that doctrine to hold that “an employer
is not, as a matter of law, entitled to the Faragher/Ellerth
548 U.S. 53 (2006).
Fincher, 604 F.3d at 721.
35 Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998); Faragher v. City of
Boca Raton, 524 U.S. 775 (1998).
36 596 F.3d 93 (2d Cir. 2010).
33
34
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affirmative defense simply because an employer’s sexual
harassment policy provides that the plaintiff could have complained to other persons as well as the alleged harasser.”37
Gorzynski involved a plaintiff who complained of perceived
sexual harassment to her supervisor—the alleged harasser.
In addition to an employee’s supervisor, the employer’s sexual harassment policy also offered alternate points of complaint, including other members of management or the
People Department (i.e. Human Resources). Rejecting what
it termed a “brittle reading” of Ellerth-Faragher, the Court
found that Gorzynski’s decision was not per se unreasonable,
even though it left the door open to argument by acknowledging that in some cases it still might be unreasonable to
complain only to a harasser when other channels existed.
According to the Second Circuit, the situation created a genuine issue of material fact. It remains to be seen whether
Gorzynski will, as a practical matter, arise in the context of
subsequent cases and raise the bar in the long term for
employers moving for summary judgment.
A “race to the courthouse” decision also deserves attention. Timely notice and filing is of particular importance to
the legal practitioner. Under the Second Circuit’s Rule 25.1,
an “initiating document” such as a petition for review of an
agency proceeding must be filed by emailing the document
to a specified Second Circuit email address. The document
is considered “filed” as of the date and time listed on the
email submission, and is to be served on other parties via
email. After receipt, the Court then creates an electronic
docket for the case. There is, however, no automated court
response akin to a physical stamp on a hard-copy document.
It was this set of circumstances that faced the Second
Circuit when deciding the validity of a petition for review
under a statute providing that “a copy of the petition or
other pleading which institutes proceedings in a court of
appeals and which is stamped by the court with the date of
filing shall constitute the petition for review.”
37
Id. at 105.
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In Local Union 36, International Board Of Electrical.
Workers v. NLRB,38 an employer filed a petition for review
of an underlying Board order. The D.C. Circuit Court
stamped the petition as “filed” on August 20, 2010—but the
copy sent to the Board was not date-stamped. On August 26,
2010, the Local electronically filed a petition for review of
the underlying Board order with the Second Circuit, emailing a copy of the petition and the email message to the
Board. Per procedure, the emailed petition was not datestamped directly with the Court, but the email message contained the date and time the petition was filed. The Board
moved to transfer venue to the D.C. Circuit.
Under 28 U.S.C. § 2112, if the Board receives one petition
for review filed in a court of appeals, it is to be heard in that
court even if proceedings are instituted in another court of
appeals on that issue. The Board acknowledged that in this
case it received two copies of petitions and that in such cases
the court of appeals to hear the case should be decided randomly. However, the Board argued that because neither
petition was date-stamped, neither could be deemed a “petition for review” under the statute. Thus, it claimed that the
case should go to the D.C. Circuit, where proceedings were
first instituted. In opposition, the Union argued that the
statute did not contemplate mandatory electronic filing, and
that service with the date/time on an email message was
sufficient to meet the law’s intent.
Given the evolution in procedures, the Second Circuit
agreed with the union and held that “service upon an agency
of a petition initiating proceedings in this Court, accompanied
by the filing email containing the date on which the petition
was filed, suffices to constitute a ‘petition for review’ for purposes of section 2112(a)(2).”39 Apparently acknowledging the
practical appeal of the union’s argument, the Court noted
that the purpose behind the statute was to ensure that the
petition was timely filed, and this could be satisfied via email
records. However, it added that this would hold true only for
38
39
631 F.3d 23 (2d Cir. 2010).
Id. at 26.
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circuits following similar electronic filing procedures. When a
circuit uses physical date stamps, the petition must be
received by the Board with a stamp from the court showing
the date of filing. As more courts move to electronic filing,
this decision should prove of increased importance.
Electioneering and related conduct remained a part of the
Second Circuit’s labor law caseload. In National Labor
Relations Board v. Bloomfield Health Care Center,40 the
Court enforced two Board orders involving refusal to bargain
and election-related violations of Sections 8(a)(1), (3), and (5)
of the National Labor Relations Act.41 The underlying case
involved a Board decision concluding that the Union’s distribution of a letter signed by state legislators urging employees to support the union was not objectionable conduct. In
its objections, the employer claimed that employees might
have voted for the union under a belief that the employer
would otherwise lose Medicaid funding. On appeal, the
Circuit agreed with the Board, noting that the letter was not
written on official letterhead, did not mention funding, and
had no implicit or express threats of consequences should the
union lose the election. Nevertheless, the Court left unanswered the question as to precisely what kind of letter from
a public official or other governmental group could constitute
unlawful conduct. Although it cited a case holding that a letter from a congresswoman on official stationary was not
improper because it could not reasonably be interpreted as
an official endorsement, the lines remain unclear and much
room for dispute likely exists.
III. OTHER FEDERAL CASES
The Second Circuit and District of Connecticut issued
several other notable decisions:
• Rejecting arguments from the EEOC as well as the
plaintiff, the Second Circuit found in Pucino v. Verizon
Communications, Inc.42 that the term “bitch” did not constitute “such an intensely degrading sexual epithet that its use
40
41
42
372 Fed. Appx. 118, 188 L.R.R.M. 2393 (2d Cir. Apr. 14, 2010).
29 U.S.C. § 158 (a)(1), (a)(3), (a)(5).
618 F.3d 112 (2d Cir. 2010).
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implies as a matter of law hostility towards women.”43
Rather, as with other epithets or insults, the usage must be
viewed in full context of the facts. In Pucino, the plaintiff
alleged that she was subject to a hostile work environment
because of her sex, including undesirable assignments, foul
language, public humiliation, and harsher criticism as compared to her male colleagues. This included constant use of
the words “bitch,” “stupid” and instructions to “go fuck herself.”44 Despite its careful admonition against automatic
inference of gender hostility based on particularly demeaning language, the Court ultimately found that the verbal
abuse that Pucino experienced supported the conclusion
that the other alleged activity was also motivated by gender.
This may suggest that, as a practical matter, the strong
societal reactions to terms such as “bitch” will trigger emotions leading to a finding of the requisite gender hostility.
• Reinforcing the difficulty of proving constructive discharge, Giaquinto v. Danbury Board of Education45 involved
a plaintiff working in the Danbury Schools as an Assistant
Principal from 1974-2008. Prior to the 2007-2008 school
year, Giaquinto requested a transfer to another school
because he was allegedly subject to discrimination related to
his age and use of disability/medical leave the previous year.
The request was rejected, and, according to the complaint,
the Board of Education began a concerted course of agerelated harassment to force his resignation, including a
statement by the Superintendent of Schools stating that
“you older guys better get with the program, or you can just
leave.”46 While the district court recognized that constructive discharge could satisfy the “discharge” requirement of
the Age Discrimination in Employment Act, it nevertheless
found that the statement merely “smacks of an age oriented
attitude,” insufficient to demonstrate the intolerable working conditions necessary for constructive discharge.47
However, the court’s brief decision leaves unanswered the
question whether the statements would be enough in the
43
44
45
46
47
Id. at 118.
Id. at 116.
2010 U.S. Dist. LEXIS 120403 (D. Conn. Nov. 15, 2010).
Id. at 6.
Id. at 7.
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context of an express termination rather than the high constructive discharge standard.
• In Cooper v. Department of Corrections,48 the
District Court for the District of Connecticut engaged in a
fact-intensive analysis to conclude that an employee put on
paid administrative leave pending an investigation into his
fitness for duty did not experience an adverse retaliatory
employment action, despite the fact that the investigation
began shortly after the employee’s internal complaint
regarding an anti-Semitic cartoon circulated in the workplace by a fellow employee. After investigating, the employer suspended the offending fellow employee for five days
without pay. Upon learning of the punishment, Cooper contacted Human Resources and expressed his displeasure at
what he considered a light punishment, and indicated he
was “looking into” his available legal remedies. The plaintiff also stated that he was “tightly wound,” “extremely
depressed,” “paranoid,” and had “extensive weapons training.”49 Citing Second Circuit precedent in the context of
pending criminal charges against an employee, the District
Court concluded that these statements could well be deemed
threats, and that the Department reasonably applied its
preexisting policy to the situation, particularly in light of
the heightened security concerns in a prison setting. As it
explained, no material adverse change in the terms and conditions of employment took place: when the inquiry ended
after two months, Cooper was restored to his position with
no change in his status.50 Although it is unclear if this case
will be limited to its facts, the courts seem at least willing to
consider the impact of dangerous conditions short of criminal activity in the adverse action analysis.
IV. CONNECTICUT STATE CASES
A. Past Practice
The Connecticut Supreme Court helped further refine
the scope and level of proof required for a “past practice” in
Board of Education. of Region 16 v. State Board. of Labor
48
49
50
2010 U.S. Dist. LEXIS 111417 (D. Conn. Oct. 19, 2010).
Id. at 5-6.
Id. at 25-28.
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161
Relations.51 In that unilateral-change and refusal-to-bargain case brought under General Statutes Section 10-153e
(b)(4), the departure of a high school special education
teacher and the inability to find a replacement left his students without services. The Board’s director of pupil personnel met with the teachers to determine how to service
the teacher’s former students, and they ultimately agreed
that the caseload would be divided between the four remaining teachers. The union was not informed of these meetings. The teachers later complained that their caseloads
were too heavy, and asked the union to request a pay
increase on their behalf. Thereafter, the pupil personnel
director told one of the teachers that they should not proceed with their complaint. It was this chain of events that
prompted the union to file a complaint alleging that the
Board “unilaterally and substantially” increased the case
management workload without notice or bargaining.
At the outset, the Court noted that to establish a unilateral change of a condition of employment, the union must
show that the employment practice was clearly enunciated
and consistent, that it endured over a reasonable length of
time, and that it was an accepted practice by both parties.52
Unilateral changes do not constitute a refusal to bargain,
however, if they (1) do not constitute a substantial change in
a major term or condition; (2) the change concerns a matter
fundamental to the operation of the public agency and
involves sole managerial discretion; or (3) if the collective
bargaining agreement allows the action.
The Court agreed that the union did not meet its burden
to present evidence of a “preexisting, fixed and definite practice concerning the special education teachers’ workload”
showing that the increase in the number of hours worked
per week was a unilateral change.53 In a nuanced analysis,
the Court held that while there was evidence that teachers
worked an additional ten to fifteen hours per week, there
was no evidence that this increase was substantially greater
51
52
53
299 Conn. 63, 7 A.3d 371 (2010).
Id. at 73.
Id. at 75.
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than those worked per week in previous school years.
Making an interesting leap in reasoning, the Court determined that the baseline from which the alleged change
should be considered was not the caseload immediately
before the departure of the special education teacher in this
case but rather the hours worked in previous years: “[t]he
union has provided no authority, however, for the proposition that, when an employment practice has been in place
for years, the board can ignore the historic practice and consider a practice that has been in place for only a matter of
weeks in determining whether there has been a substantial
change from the practice.”54
B. Wages and Bonuses
After its 2008 decision in Weems v. Citigroup, Inc.,55 the
Connecticut Supreme Court continued to examine the relationship between “wages” and “bonuses” in two 2010 decisions. In the first, Ziotas v. The Reardon Law Firm,56 the
Court considered an employee working under an at-will
employment agreement that provided for an end-of-year
bonus, but did not include a fixed formula for calculation of
the bonus amount. Under the terms of the agreement,
annual compensation would be based, in part, on:
(a) Seniority in The Firm; (b) Business generation, (c) Business productivity; (d) Quality of work/professional ability;
(e) Work profitability; (f) Participation in professional activities and pro bono work; (g) Noteworthy outside activities;
[and] (h) Loyalty and commitment to [the defendant].57
Reardon, on behalf of the law firm, solely determined the
plaintiff’s yearly base salary and bonus. The bonuses were
not calculated on any set percentage of the firm’s income.
After sizable bonuses and increases in base salary from
1993 to 1997, Ziotas was not given a bonus in 1998 and
experienced a decline in base salary from the previous year.
In 1998, the plaintiff resigned and brought suit soon
after, seeking damages for Reardon’s failure to pay a bonus
54
55
56
57
Id. at 77.
289 Conn. 769, 961 A.2d 349 (2008).
296 Conn. 579, 997 A.2d 453 (2010).
Id. at 583.
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in 1998. In 2000, that suit was amended to allege a breach
of contract based on the failure to pay a bonus, and a second
claim that Reardon unlawfully withheld wages because the
bonus constituted wages under Connecticut law.58 The
superior court granted a motion to strike, concluding that
the bonus did not constitute statutory wages and did not
accrue based on the plaintiff’s personal efforts alone, but
rather was a reflection of (among other things) the success
of all members of the firm. The parties tried the remaining
breach of contract claim, on which the trial court found for
the plaintiff. The defendant appealed to the Appellate
Court, and the plaintiff cross-appealed. On the appeal, the
Appellate Court affirmed the judgment for breach of contract and on the cross-appeal, it reversed the striking of the
bonus count. The defendant was granted certification to
appeal only the bonus issue to the Supreme Court.59
Drawing on Weems, the Supreme Court agreed with the
law firm and found that when the amount of a bonus is discretionary and not ascertainable by the application of a formula, the bonus does not constitute statutory wages.60 It
noted that General Statutes Section 31-71a (3) defines
“wages” as “compensation for labor or services rendered by
an employee, whether the amount is determined on a time,
task, piece, commission or other basis of calculation…”
Under this language, the Weems court concluded that
bonuses awarded on a discretionary basis and not tied solely to the ascertainable efforts of the employee, are not
wages. Taking the decision a step further, the Ziotas court
rejected the plaintiff’s argument that Weems applies only
when the bonus itself is discretionary, not when the amount
of the bonus is discretionary. Instead, the Court held that
Weems should apply in both cases for two reasons. First,
the language of the wage statute evidences a “more direct
relationship between an employee’s own performance and
the compensation to which that employee is entitled” than
CONN. GEN. STAT. § 31-72.
111 Conn. App. 287, 959 A.2d 1013 (2008), cert. granted, 290 Conn. 903, 962
A.2d 796 (2009).
60 296 Conn. at 587.
58
59
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that found in discretionary bonus payments. Discretionary
additional payments, “as a share in a reward” therefore fall
outside the wage statute.61 Second, although the legislature
made its intention for broad coverage known in other
statutes, it did not do so with respect to the wage statute,
supporting the Court’s reading. However, it did recognize,
as in this case, that a contractual agreement to pay a bonus
(the amount of which is discretionary) may still exist.62
The second “wage and bonus” case of the year, Association Resources, Inc. v. Wall,63 presented a starkly different
set of facts and under the Ziotas reasoning, a necessarily different conclusion. There, the Court examined an agreement
under which the plaintiff would receive bonuses “based
upon the overall profitability of the [employer]”, calculated
pursuant to an attached schedule. The bonus was to be
equal to the annual income received by [the employer] less
$75,000 for fiscal year 2003-2004 and $80,000 for fiscal year
2004-2005, and less the commissions paid pursuant to
paragraph (a) above.64
The plaintiff received his first bonus payment as expected. After some strain in the relationship, the employer did
not pay the second bonus payment for fiscal year 2003-2004
(second bonus) but later offered a lower amount. A new contract was signed between the parties on January 3, 2005,
but the plaintiff claimed he was entitled to another unpaid
bonus under the old contract for the first half of the 20042005 fiscal year (third bonus). Before the Supreme Court,
the employer argued that the bonuses were not “wages”
because they were based on the company’s profitability,
without a direct connection to the plaintiff’s personal labor
or services. Instead, they were considered a profit-sharing
device resulting from the efforts of other employees, payments from clients, and the like. In contrast, the plaintiff
emphasized the purpose and traditionally liberal construction of wage statutes and cited Weems for the proposition
61
62
63
64
Id. at 588-90.
Id. at 589 & f. 5.
298 Conn. 145, 2 A.3d 873 (2010).
Id. at 150-51. Bonuses were to be paid every six months.
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that a contractual, non-discretionary bonus calculated by a
pre-determined formula was subject to state wage statutes.
Citing the principles of Weems and Ziotas, the Court
agreed with the plaintiff and held that the bonuses in this
case were wages under General Statutes Section 31-71a(3),
as they were “entirely nondiscretionary, both as to whether
they would be awarded and the amount thereof.”65 Notably,
the Court also considered the plaintiff’s position as a senior
executive manager of a division of the company, and maintained that the “ascertainable efforts” required for statutory “wages” could be found in the managerial responsibilities,
since the job itself required the plaintiff to be directly
responsible for supervising workers to maintain a profitable
department. As company profits were a component of the
bonus formula, the Court noted that the plaintiff’s work
clearly impacted that figure.
C. Scope of the Connecticut FMLA
A Connecticut superior court also issued a significant
decision directly addressing which employers are subject to
the Connecticut Family and Medical Leave Act (“CFMLA”).
In Velez v. Mayfield,66 the Court rejected two prior decisions
from the Department of Labor and announced that out-ofstate employees will be counted for purposes of determining
whether an employer meets the seventy-five employee
requirement for coverage. That case involved a plaintiff who
fell, injured her hand, and claimed that her employer put
her on involuntary medical leave and ultimately terminated
her employment. The Department of Labor dismissed her
complaint, noting that the employer did not meet the
threshold of seventy-five in-state employees for coverage.
In close statutory analysis, the Court rejected that interpretation, and noted that while the CFMLA does expressly
contains a seventy-five employee threshold, it does not
impose a geographic limitation on the employees to be
counted. It also noted the broader definitions in the regula65
66
Id. at 176.
2010 Conn. Super. LEXIS 1214 (Conn. Super. May 14, 2010).
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tions: Section 31-51qq-1(i) defines an employer as simply
one who employees seventy-five or more employees, and
Section 31-51qq-3 states that any employee whose name
appears on the employer’s payroll for the week including
October 1 shall be counted. Moreover, Section 31-51qq-2(b),
titled “What employers are covered by the act?” explains
that “[n]ormally, the legal entity which employs the employee is the employer under FMLA. Applying this principle, a
corporation is a single employer rather than its separate
establishments or division.” In addition to these texts, the
Court’s analysis was strongly driven by the legislative purpose behind the seventy-five employee rule, namely, to
“relieve the burden on Connecticut’s small employers and to
protect personal relationships in small businesses.”67 As
such, it concluded that restricting the statute to those
employers with seventy-five or more in-state employees
would defeat that purpose, “skew[ing] the exemption in
favor of entities that employee few Connecticut residents
but have large numbers of personnel in other states.”68
V. CONNECTICUT STATE BOARD OF LABOR RELATIONS
Several interesting labor cases also issued from the
Connecticut State Board of Labor Relations (“SBLR”) in
2010. In Wallingford Board of Education and Local 130360 Council 4, AFSCME, AFL-CIO,69 the SBLR held that the
Board of Education violated the Municipal Employee
Relations Act (“MERA”)70 by failing to bargain in good faith
when it refused to implement a successor collective bargaining agreement effective October 1, 2009. On July 15,
2009, the Union and the Board reached a tentative agreement (“TA”) on the successor contract that was to be effective October 1, 2009 through September 30, 2012. The TA
was signed by the parties on that date, and ratified by the
Union on July 21. The Board approved the TA on August 17,
and transmitted it on August 24 to the Town Council for
67
68
69
70
Id. at 14-15.
Id. at 16.
Case No. MPP-28,119 (July 28, 2010).
CONN. GEN. STAT. §§ 7-467 through 7-478(f).
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placement on the council’s September 8 agenda. The Town
Council rejected the TA on September 8, and the matter
went to binding interest arbitration. The SBLR initially
noted that under Section 7-474 of MERA, the Board of
Education was required to submit the TA to the legislative
body within 14 days of reaching that tentative agreement.
Citing established law that failure to act and implement an
agreement within the appropriate statutory time frames is
a prohibited practice, the SBLR found that the Board sent
the July 15, 2009 tentative agreement to the Town Council
on August 24—well after the fourteen-day time period.
Therefore, it held that the Board’s failure to timely submit
the TA on or before July 29 constituted a prohibited practice
under the Act.71
However, the SBLR went on to reject the Union’s argument that the late submission itself acted as an automatic
approval of the TA.72 Instead, the TA reached on July 15
triggered the timeline set forth in Section 7-474(b) of the
Act. Under that timeline, the Board had until July 29 to
submit the TA to the Town (i.e., fourteen days after reaching the TA), after which the Town had thirty days to accept
or reject the agreement (i.e., on or before August 28, 2009).
Because the Town did not either accept or reject the TA by
August 28, the TA was only then approved as a collective
bargaining agreement by operation of law. The Board’s failure to bargain in good faith by implementing that agreement effective October 1, 2009 was a prohibited practice
under the Act.73
The State, like private employers, is facing challenges to
electronic use policies and limits on control of State systems.
In State of Connecticut and CSEA, SEIU, Local 2001,74 the
unions alleged the State violated the State Employee
Relations Act (“SERA”)75 by unilaterally changing/implementing such a policy and refusing to bargain over its
71
72
73
74
75
Id. at 4.
Id. at 5.
Id. at 7.
Case No. SPP-26, 143 (Feb. 17, 2010).
CONN. GEN. STAT. §§ 5-270 through 5-280.
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effects, while also discriminatorily applying the policy to
union communications. The State maintained an electronic
mail use policy as early as 1999 (and arguably 1995) with a
non-exclusive list of appropriate uses. During negotiations
for the 2001-2005 collective bargaining agreement, the
Union proposed modifications of the policy with respect to
union business use, which were rejected and withdrawn. In
2002, a clarification notice concerning appropriate use was
issued. At the same time, the State notified the Union that
transmission of union-business emails to employees at their
State addresses violated the policy. More examples of
acceptable use and misuse were provided in a 2006 notice.
Also in 2006, the State responded to several questions
regarding use with a frequently-asked-questions (“FAQ”)
document containing thirteen questions/answers concerning
the policy. A revised document was issued a few weeks later
after a letter exchange with the Union over alleged discrimination in the FAQ and requested bargaining.
Ultimately, the SBLR agreed with the State that no unilateral change took place and that the 2006 document merely clarified existing policy by providing a detailed list of
examples of acceptable and unacceptable usage. As such, it
was not a change but rather a “reasonable mechanism” to
prevent abuse and a “more specific statement of how the
State intends to exercise the rights and powers it has pursuant to the policy.” Nor did the Union prove discriminatory application; Union-related communications were treated
no differently than communications with outside professional groups and the revised FAQs clearly stated that
employees could use State email to contact Union stewards
and visit the Union website. Notably, the SBLR’s analysis
devoted significant time to a discussion of the National
Labor Relations Board’s 2007 decision in The Guard
Publishing Co.,76 distinguishing that case because there, the
employer’s policy prohibited all non-work use of the system.
In contrast, the State clearly allowed some non-work use
within the boundaries of the FAQ. Taking the analysis one
76
351 NLRB 1110 (2007).
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step further, the SBLR held that “the employer is not
required to open its e-mail system to all non-business use
merely because it permits some non-business use. It simply
cannot discriminate against union members in crafting its
terms of acceptable use.”77 This decision suggests that the
nuances of email use and employer policies are likely to continue to be scrutinized in the coming year as the changing
social media universe prompts clarifications, extrapolations,
and further refinements of existing rules.
Interpretation of arbitration rulings and damages also
came before the SBLR. In Town of Enfield and James
Argenta and AFSCME, Council 4, AFL-CIO Local 1029,78
the Union alleged that the Town violated MERA by, among
other acts, failing to adhere to an arbitration’s make-whole
ruling. The SBLR agreed, finding that the Town’s deduction
of a grievant’s non-Town income when calculating relief was
improper because that income was “normal” before the end
of his employment and could not therefore be used as an offset when it continued afterwards. As the SBLR maintained,
an employer’s liability may be reduced by unemployment or
other compensation from work as long as it was not a normal part of the grievant’s income prior to his discharge. If
the arbitrator had intended to offset all outside earnings, it
could have so specified—but no specification was made.
However, in a reflection of its willingness to examine closely the details of damages claims, the SBLR found that the
Town could offset a portion of the earnings the grievant
earned from outside employment during hours he would
otherwise have been working for the Town.
VI. THE NATIONAL LABOR RELATIONS BOARD
AND OFFICE OF THE GENERAL COUNSEL
2010 was a very active year for the National Labor
Relations Board as it rendered decisions on picketing, bannering, and social media use, among other issues. The
Office of General Counsel, the independent office responsi77
78
State of Connecticut and CSEA, SEIU, Local 2001, Case No. SPP-26, 143 at 19.
Case No. MPP-27,229 (Apr. 16, 2010).
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ble for the investigation and prosecution of unfair labor
practice cases and the general supervision of the NLRB field
offices in the processing of cases, has also taken a stance on
those matters through both its opinion letters and arguments in pending cases.
Bannering, often difficult to distinguish from picketing,
was closely examined in Carpenters Local 1506 (Eliason &
Knuth of Arizona, Inc.).79 In what is probably a case of first
impression, the Board considered whether a union violated
the Act when it displayed a large stationary banner at a secondary employer’s business announcing a labor dispute and
seeking to elicit shame on the primary employer and/or persuade customers not to patronize the employer.80 The union
in the Eliason case displayed large banners held parallel to
the sidewalk so that they did not block the sideways. The
banners read “Shame On” the secondary employer, indicated that a labor dispute existed, and asked that the employer’s product not be consumed. Each banner was held by two
or three union representatives, no more than needed to hold
up the banner. At all times, the banner was stationary.81
On these facts, the employer claimed that the banners constituted “picketing” because they were coercive and had an
object of forcing neutrals not to do business with the
employer. In contrast, the union argued that stationary
355 NLRB No. 159 (Aug. 27, 2010).
The distinction between a primary and secondary employer is an important
one when analyzing picketing and related activities. A primary employer is generally the employer with whom a union and/or employees have a direct labor dispute. In contrast, a secondary employer is often a separate entity that does business with the primary employer. Section 8(b)(4)(ii)(B) of the National Labor
Relations Act generally prohibits “secondary activities” that are threatening, coercive, or restraining and are aimed at forcing a secondary employer to stop doing
business with another person or company (i.e. the primary employer). Otherwise
lawful primary strikes or picketing are not unlawful under this provision.
Additionally, under a proviso to 8(b)(4)(ii)(D), there is no general prohibition on
“publicity, other than picketing, for the purposes of truthfully advising the public,
including consumers and members of a labor organization, that a product or products are produced by an employer with whom the labor organization has a primary
dispute and are distributed by another employer, as long as such publicity does not
have an effect of inducing any individual employed by any person other than the
primary employer in the course of his employment to refuse to pick up, deliver, or
transport any goods, or not to perform any services, at the establishment of the
employer engaged in such distribution…”
81 Id. at 2-3.
79
80
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banners were not picketing, as they did not coerce, threaten, or restrain, and there was no patrolling or confrontational conduct.82
The Board applied a narrow and elemental definition of
picketing, holding that “[t]he language of the Act and its legislative history do not suggest that Congress intended
Section 8(b)(4)(ii)(B) to prohibit the peaceful stationary display of a banner…[r]ather, the display of a stationary banner, like handbilling and even certain types of picketing, is
non-coercive conduct falling outside the proscription in
Section 8(b)(4)(ii)(B).”83 For this Board, “the core conduct
that renders picketing coercive under Section 8(b)(4)(ii)(B)
is not simply the holding of signs (in contrast to the distribution of handbills), but the combination of carrying picket
signs and persistent patrolling of the picketers back and
forth in front of an entrance to a work site, creating a physical, or, at least, a symbolic confrontation between the picketers and those entering the worksite.”84 Applying a strict
factual analysis, the Board concluded that the bannering in
Eliason at the secondary employer’s site was not picketing
and distinguished prior cases holding that picketing took
place despite the absence of patrolling on the basis that the
earlier cases either involved additional traditional picketing
and/or simultaneous picketing at another location.85
The focus on picketing and related issues echoed in the
Office of the General Counsel. In Teamsters Local 814 (JP
Morgan Chase),86 the Office advised the Region to dismiss a
charge involving the display of an inflatable rat during a
lawful area standards picket at three common situs locations.87 In its analysis, the Office rejected the General
Counsel’s argument that the use of the rat balloon, a wellknown signal of a labor dispute, created unlawful signal
Id. at 3.
Id. at 1.
84 Id. at 6.
85 Id. at 6-8. The Board echoed the Eliason reasoning soon afterward in
Grayhawk Dev., Inc., 355 NLRB No. 188 (Sept. 21, 2010).
86 Advice Memorandum, Office of the General Counsel, Case 2-CC-2776 (June
22, 2010).
87 An area standards picket is a picket, lawful in some circumstances, against
an employer who is claimed to pay wages below the standard for the area.
82
83
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picketing meant to induce neutral employers or third persons to withhold their business or labor from the targeted
employer. Instead, the Office advised that the rat balloon
was “merely another form of conduct tantamount to picketing,” and that the balloon in itself “does not otherwise transform a lawful object into an unlawful object under Section
8(b)(4).”88 When combined with the important facts that
there was no evidence the union intended to use the rat to
appeal to employees, to induce them to stop work, or to
interfere with deliveries, and that the union set up the rat
near the public entrances rather than delivery areas and
dismantled it after picketing ended, the union’s picketing
remained lawful despite the use of the rat.89
In contrast to the well-recognized rat, the labor union in
Metallic Lathers Local 46 (Norberto Construction)90 displayed a pig balloon at a jobsite. One week after the pig balloon appeared, the union added a sign stating “Norberto
Pools Shame On You,” and displayed the pig for over two
months. Nevertheless, the General Counsel’s Advice
Memorandum in that case indicated that it did not believe
that the pig balloon constituted picketing at all within the
meaning of Section 8(b)(7), and expressly analyzed the symbolic difference between a pig and a rat.91 In contrast to a
rat—traditionally used to signal a labor dispute—a pig did
not carry specific associations. Absent the confrontation
found in traditional picketing, the pig was a lawful display
designed to attract attention and “visually disseminate
ideas to passersby, and to provoke onlookers to inquire further, rather than conduct intended to confront.”92
The Board and Administrative Law Judges have also dedicated time to the effect of social media and electronic communications as they impact the scope of protected concerted
Id. at 1-2, referring to 29 U.S.C. § 158(b)(4)(B).
Id. at 2. The Office also noted that the union’s picketing also conformed to
the rules for common situs picketing described in Moore Dry Dock, 92 NLRB 547
(1950). Id. at 1.
90 Advice Memorandum, Office of the General Counsel, Case 29-CP-707 (July
12, 2010).
91 Id. at 2, referring to 29 U.S.C. § 158(b)(7).
92 Id. at 2.
88
89
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173
activity between employees. Under Section 7 of the National
Labor Relations Act, employees are guaranteed the right “to
self-organization, to form, join, or assist labor organizations,
to bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for the
purpose of collective bargaining or other mutual aid or protection” as well as to refrain from such activities.93
Salon/Spa at Boro, Inc.94 involved a hair salon and day spa
that promulgated a policy “requiring all employees to avoid
statements and behaviors that could contribute to such an
atmosphere or perception [of negativity] among the customers,” since such negativity was a main reason customers
would leave a salon.95 Such negativity, according to the
employer, included complaints about the salon itself and how
it was run. Some time later, a member of management
informed employees that when using Facebook, “we need to,
you know, like watch our language, and how we conduct ourselves,” and employees should be “kind and positive.”96
Employees were warned that “a lot of people” might be reading those public postings, that they should confine themselves to “positive comments” and, according to employee testimony, that what was posted on social media could “make or
break your career” as well as the company’s success.97 In a
decision affirmed by the Board, such broad policies, combined with the employer’s “vigorous” enforcement, “would
render it impossible for employees to engage in even the
most preliminary forms of discussion of the types that were
given protection under the Act. Indeed, it is impossible to
envision how any group of employees could assert their
Section 7 rights in the face of such a set of policies.”98 Citing
both legislative history and the purpose of Section 7 itself,99
the negativity policies—both in traditional and online are93
94
95
96
97
98
99
29 U.S.C. § 157.
356 NLRB No. 69 (Dec. 30, 2010).
Id. at 2.
Id. at 4.
Id.
Id. at 18.
29 U.S.C § 157.
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nas—were found to defeat the goal of protecting freedom of
association and self-organization.
Using a similar analysis, the Administrative Law Judge
in Hyundai American Shipping Agency, Inc.100 considered
allegations that the employer promulgated an overly broad
electronic communications policy restricting activity protected under Section 7 of the National Labor Relation Act.
That policy included a sentence stating that “employees
should only disclose information or messages from theses
[sic] systems to authorized persons.”101 Recognizing that an
employer has the general right to restrict use of its electronic communications systems to company purposes pursuant to Register Guard,102 the ALJ nevertheless concluded
that, as written, the last sentence of the policy would “prohibit[] employees' disclosure of any information exchanged
on company email, instant messages, and phone systems,
which could reasonably include discussions of wage and
salary information, disciplinary actions, performance evaluations, and other kinds of information that are of common
concern among employees, and which they are entitled to
know and to discuss with each other.”103 Because the
employer did not limit the prohibition on disclosure to confidential matters and state that the limitation would not
involve the terms and conditions of employment, the policy
was unlawful. The Board’s decisions signal, at least initially, that it may choose to apply its traditional analysis of
whether the policy would tend to chill Section 7 activity to
the electronic arena.
Gaining national publicity and analysis, the American
Medical Response of Connecticut, Inc.’s “Facebook” case
directly addressed employers’ social media policies and
recognition that protected concerted activity can take place
100 Case 28-CA-22892 (Oct. 18, 2010), available at http://www.nlrb.gov/casesdecisions/case-decisions/administrative-law-judge-decisions (last visited Aug. 25,
2011).
101 Id. at 12.
102 351 NLRB 1110, 351 NLRB No. 70 (Dec. 16, 2007), enf. denied in part, 571
F.3d 53 (D.C. Cir. 2009).
103 Hyundai Am. Shipping Agency, Inc., Case 28-CA-22892, at 13.
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online.104 On October 27, 2010, the Hartford regional office
issued a complaint in the case involving an employee’s suspension and termination after posting negative comments
about a supervisor on her Facebook page and supportive
“wall-postings” by coworkers. The employee posted the comments after being asked by a supervisor to prepare an investigative report concerning a customer’s complaint about her
work. At that time, she requested and was denied union
representation. The negative comments at work continued
after the Facebook postings. As advised by the Office of
General Counsel, the allegations included claims that the
postings constituted protected concerted activity under
Section 7 of the National Labor Relations Act (generally permitting employees to discuss the terms and conditions of
their employment with co-workers and others), and that the
employer’s internet posting policy was unlawful as it included language prohibiting employees from making disparaging remarks about supervisors and depicting the employer
on the internet.105 The case was settled in February 2011
after the employer agreed to revise the over-broad rules and
stated that it would not discipline or discharge employees
for taking part in protected discussions, threaten discipline,
or deny employee requests for union representation.106
Although the basic definition of protected/concerted activity
has not changed, this case and others suggest that its application is likely to come under renewed scrutiny.
104 Am. Med. Response of Conn., Inc., No. 34-CA-12576. This case was later
settled in February 2011 after the employer agreed to revise the over-broad rules
and stated that it would not discipline or discharge employees for taking part in
such discussions, threaten discipline, or deny employee requests for union representation. See NLRB News Release, “Settlement reached in case involving discharge for Facebook comments,” (Feb. 8, 2011), available at http://www.nlrb.gov/
news/settlement-reached-case-involving-discharge-facebook-comments (last visited August 25, 2011).
105 See generally Advice Memorandum, Office of the General Counsel, 34-CA12576 (Oct. 5, 2010).
106 See NLRB News Release, “Settlement reached in case involving discharge
for Facebook comments,” (Feb. 8, 2011), available at http://www.nlrb.gov/news/settlement-reached-case-involving-discharge-facebook-comments (last visited Aug.
25, 2011).
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In Jackson Hospital Corporation d/b/a Kentucky River
Medical Center,107 the Board ruled that interest on backpay
and other monetary awards will henceforth be compounded
on a daily basis. According to the Board, “compound interest better effectuates the remedial policies of the Act than
does the Board’s traditional practice of ordering only simple
interest and that, for the same reasons, interest should be
compounded on a daily basis, rather than annually or quarterly.”108 Specifically, the Board concluded that compound
interest would demonstrate the time value of money and
more accurately achieve a true make-whole remedy for the
employee while also deterring future violations. The
Kentucky River policy will be applied in all pending cases
“in whatever stage, given the absence of any manifest injustice in doing so.”109
The Office of the General Counsel issued two memoranda concerning its “nip-in-the-bud” initiative in cases of
employees experiencing adverse actions via Section 8(a)(1)
violations during union organizing campaigns. A detailed
discussion of this evolving issue is beyond the scope of this
article, but practitioners are urged to review the Office’s
memoranda.110
VII. STATUTORY AND REGULATORY DEVELOPMENTS
Although the Genetic Information Nondisclosure Act
(“GINA”)111 has been in effect since November 2009, it was
a year later, on November 9, 2010, that the EEOC adopted
final regulations112 implementing the employment-related
provisions of that statute. In general, Title II of GINA (1)
prohibits the use of genetic information in employment decisions; (2) restricts employers from requesting, requiring or
purchasing genetic information; and (3) requires that genetic information be maintained confidentially with strict limi107
108
109
110
111
112
356 NLRB No. 8 (Oct. 22, 2010).
Id. at 3.
Id. at 4.
GC 10-07 (Sept. 30, 2010); GC 11-01 (Dec. 20, 2010).
42 U.S.C. §§ 2000ff, et seq.
29 C.F.R. 1635.
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177
tations on disclosure. In addition, employers cannot discriminate or retaliate against individuals on the basis of
genetic information in the terms and conditions of employment, nor can they separate or limit individuals because of
genetic information. For employers, challenges for compliance are likely to arise in connection with leave or disability accommodation requests. A detailed discussion of the regulations is beyond the scope of this article, but practitioners
are encouraged to review them.113
In 2010, the state legislature passed the Connecticut
Family Violence Victims Leave Law,114 requiring employers
with three or more employees to offer at least twelve days of
paid or unpaid leave to an employee who is the victim of
family violence. This leave shall be granted during any calendar year in order (1) to seek medical care or psychological
or other counseling for physical or psychological injury or
disability for the victim, (2) to obtain services from a victim
services organization on behalf of the victim, (3) to relocate
due to such family violence, or (4) to participate in any civil
or criminal proceeding related to or resulting from such
family violence.115 The legislation also includes several provisions governing advanced notice, verification methods as
to leave necessity, and confidentiality.116
Background checks were also on the state legislative
agenda, with a new limitation on the ability of the state, its
executive, and its judicial branch (and agencies, commissions, boards, departments, etc. thereof) to inquire about a
prospective employee’s past convictions “until such prospective employee has been deemed otherwise qualified for the
position.”117 However, an exception exists for positions
which, pursuant to other statutory provisions, specifically
disqualify a person from employment because of a past
criminal conviction.
29 C.F.R. 1635.
CONN. GEN. STAT. § 31-51ss.
115 CONN. GEN. STAT. § 31-51ss (b).
116 CONN. GEN. STAT. § 31-51ss (c) through (h).
117 CONN. GEN. STAT. § 46a-80 (b). This statute incorporates the definition of
employer in General Statutes § 5-270.
113
114
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VIII. CONCLUSION
2010 saw a wide array of developments in Connecticut
labor and employment law. The growing use of social media
and bannering/picketing appears to be a strong focus of the
National Labor Relations Board along with an increasingly
broad approach to protected concerted activity, while federal and state courts are closely examining retaliation claims,
disparate impact arguments, and arbitration policies.
These issues and the way that they shape labor and employment jurisprudence are likely to be matters to watch in the
coming years.
2011]
2010 DEVELOPMENTS IN CT ESTATE AND PROBATE LAW
179
2010 DEVELOPMENTS IN CONNECTICUT ESTATE
AND PROBATE LAW
BY JEFFREY A. COOPER*AND JOHN R. IVIMEY**
This Article provides a summary of recent developments
impacting Connecticut estate planning and probate practice. Part I discusses 2010 legislative developments. Part II
surveys selected 2010 case law relevant to the field.
I. LEGISLATION
The General Assembly passed only one significant piece
of estates-related legislation during 2010, an act making
numerous revisions to the statutes governing probate court
fees.1 As discussed further below, changes made by the legislation include lowering the fees assessed against estates
that own property in more than one jurisdiction, imposing
interest on probate court fees, and eliminating a peculiar fee
previously assessed on jointly owned real estate.
First, for proceedings commencing after January 1, 2011,
probate courts will collect pro-rated fees on estates of those
domiciled in Connecticut who own real or tangible personal
property located outside of Connecticut and those domiciled
outside of Connecticut who own property located in
Connecticut.2 Previously Connecticut assessed a fee in each
case based upon the value of all of the decedent’s property
wherever located.3 For the estate of someone who died while
domiciled in Connecticut, the new act now excludes the fair
market value of the person's real or tangible personal property located outside of Connecticut.4 For the estate of someone who died while not domiciled in Connecticut, but who
owned real or tangible personal property in Connecticut at
death, the act excludes all of the decedent’s property other
than the real or tangible property in Connecticut.5
* Professor of Law, Quinnipiac University School of Law.
** Of the Hartford Bar. The authors thank Stuyvie Bearns, Frank Berall, Sue
Bocchini, and Agnes Romanowska for reviewing preliminary drafts of this Article.
1 P.A. 10-184 (Reg. Sess.).
2 Id.
3 CONN. GEN. STAT. § 45a-107.
4 P.A. 10-184 § 1.
5 Id.
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Second, for the first time, the act imposes interest on
unpaid probate court fees for the settlement of a person's
estate.6 Effective for the estates of decedents who die on or
after January 1, 2011, interest at the rate of 0.5% per month
or portion thereof will be imposed on fees not paid within 30
days of the probate court's invoice.7 Typically, the invoice for
fees will be mailed after the filing of the Connecticut estate tax
return. However, if a required estate tax return is not filed
with the probate court by the due date, including extensions,
the act applies the 0.5% interest rate to any fees that would
have been due had the return been timely filed, beginning 30
days after the later of the due date or extension expiration
date.8 The probate court can extend the time for paying any
fees, including interest thereon, if it determines that requiring
payment by the due date would cause undue hardship.9
Third, for estates commenced after January 1, 2011, the
act also eliminates an outdated relic of Connecticut’s prior
succession tax regime by eliminating the 0.1% fee previously assessed against interests in non-solely-owned real estate
held by estates with assets under $600,000.10
While the above sections may prove to be the most relevant to practitioners, the legislation makes numerous other
revisions. Included among these is a new provision enabling
parties, or their counsel, to require that the probate court
produce an audio recording of court proceedings.11
II. CASE LAW
A. Probate Appeals
1. Timeliness of Appeal
In DeBruycker v. Duval,12 the Superior Court denied a
motion to dismiss a probate appeal as untimely. The case
6 Id. These new interest provisions apply solely to estates which exceed
$40,000 in assets (or $500,000 in assets for estates in which a surviving spouse is
a beneficiary of the estate).
7 Id.
8 Id.
9 Id.
10 Id., eliminating CONN. GEN. STAT. § 45a-107(b)(4).
11 Id. § 7.
12 2010 WL 2106661 (Conn. Super. Apr. 16, 2010).
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2010 DEVELOPMENTS IN CT ESTATE AND PROBATE LAW
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reveals a serious ambiguity in two of Connecticut’s statutes
governing probate appeals. Unless and until the General
Assembly reconciles these conflicting statutory provisions,
practitioners must be aware of this potential source of controversy.
At issue was the plaintiff’s appeal of a probate court order
allowing the defendant’s conservator to sell certain real
estate.13 Plaintiff contended that the timeliness of his
appeal was governed by General Statutes Section 45a-186.
That statute provides that while most categories of probate
appeals are timely if taken “not later than thirty days after
mailing of an order, denial or decree,” appeals relating to
Conservatorship matters such as the one at bar are subject
to an extended 45-day appeals deadline.14 The defendant
countered that General Statutes Section 45a-187 governed.15
That statute contains no reference to the extended 45-day
deadline for filing certain types of appeals but simply imposes a 30-day deadline for filing all probate appeals.
As discussed in a previous update,16 the General
Assembly’s 2007 revision of certain probate procedures created a disconnect between these two statutes. Prior to that
revision, General Statutes Section 45a-186 governed probate appellate procedures while Section 45a-187 set out the
relevant deadlines. In 2007, the legislature completely
revised Section 45-186 to govern both appellate procedures
and deadlines.17 However, the legislature seemingly negId. at *1.
CONN. GEN. STAT. § 45a-186(a). Plaintiff appealed on December 31, 2009
from a decree mailed on either November 23, 2009 or November 24, 2009.
DeBruycker, 2010 WL 2106661, at *1,4. Plaintiff thus filed his appeal more than
30 days but less than 45 days after this mailing.
15 General Statutes § 45a-187(a) provides in relevant part as follows: “(a) An
appeal under section 45a-186 by persons of the age of majority who are present or
who have legal notice to be present, or who have been given notice of their right to
request a hearing or have filed a written waiver of their right to a hearing, shall
be taken within thirty days, except as otherwise provided in this section.”
16 See John R. Ivimey and Jeffrey A. Cooper, 2009 Developments in
Connecticut Estate and Probate Law, 84 CONN. B.J. 73, 80-81 (2010).
17 See Public Act 07-116, which completely revamped the procedures applicable
to probate appeals under General Statutes § 45a-186 effective October 1, 2007. See
also John R. Ivimey and Jeffrey A. Cooper, 2007 Developments in Connecticut Estate
and Probate Law, 82 CONN. B.J. 119, 127 (2008) (discussing the 2007 legislation).
13
14
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lected to modify Section 45-187, which continues to include
the previous (presumably superseded) deadlines.
In the case at bar, the Superior Court found these two
statutes to be in conflict and turned to two principles of
statutory construction in an attempt to resolve that conflict.
Specifically, the court invoked the maxims of statutory construction that: (1) any statutory change is “intended to
change the meaning of the statute and accomplish some
purpose,”18 and (2) multiple statutes addressing the same
subject should be “read together to create a harmonious
body of law.”19 Applying these principles of statutory construction to the case at bar, the court concluded that the 45day deadline found in Section 45a-186 supersedes the older
provisions found in Section 45a-187.20
We find the court’s approach to be sound and urge the
General Assembly to codify it by amending the text of
Section 45a-187 to conform to the new provisions found in
Section 45a-186.
While failure to file a timely probate appeal will deprive
the court of subject matter jurisdiction, readers should be
aware that deadlines are a proverbial two way street. For
example, in Fielding v. Probate Court for District of
Enfield,21 the court denied an untimely motion to dismiss
an untimely appeal.22
2. Notice
In Godin v. Estate of Buchholz,23 the Superior Court
denied a motion to dismiss the plaintiff’s timely probate
appeal for her failure to properly serve all interested parties. In this case, plaintiff had attempted to effectuate service by mail, violating the clear language of General Statutes
Section 45a-186(b), which mandates personal service “by
state marshal, constable or an indifferent person.”24
18 DeBruycker, 2010 WL 2106661, at *3, citing Chatterjee v. Commissioner of
Revenue Services, 277 Conn. 681, 693, 894 A.2d 919 (2006).
19 Id., citing State v. Garcia, 108 Conn. App. 533, 550-51, 949 A.2d 499 (2008).
20 Id. at *3.
21 2010 WL 5573750 (Conn. Super. Dec. 10, 2010).
22 A motion to dismiss must be filed within thirty days of the date the movant
files an appearance. Id. at *1.
23 2010 WL 4944269 (Conn. Super. Nov. 18, 2010).
24 Id. at *1, citing CONN. GEN. STAT. § 45a-186 (2009).
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Under General Statutes Section 45a-186 as amended in
2007, a probate appeal is timely commenced by filing in the
Superior Court. This approach differs from that under prior
law (whereby an appeal was initiated through the probate
court) as well as that applicable to general civil actions
(which are commenced by service of process). In further
contrast with the statutes governing general civil actions,
General Statutes Section 45a-186(d) provides a simple remedy for failure to properly notice an interested party by
directing the Court to order such notice.25 In light of this
statutory regime, the court concluded that the plaintiff’s
failure to properly effectuate personal service did not impact
the timeliness of her appeal but rather was “only a minor
procedural deviation” which could be cured without depriving the court of jurisdiction.26 In support of this conclusion,
the Court cited Gregorie v. Thompson Probate Court, a case
discussed in last year’s update.27
Readers interested in this topic also should review
Ragette v. O’Grady,28 another case in which the Superior
Court similarly held that a number of procedural defects in
service of process did not deprive the Court of jurisdiction
over a probate appeal.
3. Trial De Novo
In Follacchio v. Follacchio,29 the Appellate Court considered whether the appeal of a probate court matter to
Superior Court had to be held on the record or de novo. The
underlying dispute centered upon a conservator’s decisions
regarding the residence of a conserved person and was
brought pursuant to General Statutes Sections 45a-175 and
45a-656. The probate court hearing was tape-recorded and
available to be transcribed for Superior Court review.30 Due
to the existence of this tape recording, the Superior Court
denied plaintiff’s motion for a de novo appeal and conducted an appeal on the record.31
25
26
27
28
29
30
31
CONN. GEN. STAT. § 45a-186(d) (2009).
Godin, 2010 WL 4944269, at *3.
2009 WL 765939 (Conn. Super. Mar. 3, 2009).
2010 WL 5493509 (Conn. Super. Dec. 8, 2010).
124 Conn. App. 371, 4 A.3d 1251 (2010).
Id. at 375.
Id.
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The Appellate Court reversed and remanded to the
Superior Court for a trial de novo. The court reasoned that
General Statutes Section 45-186 restrict appeals on the
record to two categories of cases: (a) appeals of matters
brought pursuant to General Statutes Sections 17a-498,
17a-685 or 45a-650, or (b) where a stenographic record was
created pursuant to General Statutes Sections 51-72 or 5173.32 The Appellate Court concluded that none of these
statutory sections applied and thus the plaintiff was entitled to a de novo appeal.33
Readers should be aware that the Connecticut Supreme
Court has certified this case for review34 and thus the
Appellate Court’s opinion may not prove to be the final word
on its subject.
B. Wills and Trusts
1. Undue Influence
In Achin v. Pianka,35 the Superior Court affirmed the
admission of a will to probate, finding that the document
had not been procured by undue influence. The court’s opinion provides an extremely useful summary of Connecticut
law governing allegations of undue influence.
At issue was the will of a father who had disinherited two
of his three adult children.36 The plaintiffs were the decedent’s daughters, both of whom were disinherited by his last
will.37 The defendants were the decedent’s third child, a son,
and his wife.38 The plaintiffs had alleged that their brother
and sister-in-law procured the decedent’s will (which named
the brother as residuary beneficiary) by undue influence.39
The legal framework governing this dispute was set out
nearly 150 years ago in St. Leger’s Appeal,40 to which the
32
33
34
35
36
37
38
39
40
Id. at 377.
Id. at 379.
299 Conn. 914, 10 A.3d 530 (2010).
2010 WL 2573695 (Conn. Super. May 10, 2010).
Id. at *1, 4.
Id. at *1.
Id.
Id.
34 Conn. 434 (1867).
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2010 DEVELOPMENTS IN CT ESTATE AND PROBATE LAW
185
court extensively cites. That case established that a finding
of undue influence requires that the alleged influencer must
affirmatively “induce [the decedent] to act contrary to his
wishes, and to make a different will and disposition of his
estate from what he would have done if left entirely to his
own discretion and judgment.”41 By affirmative act of the
alleged influencer, the decedent’s “free agency and independence must have been overcome.”42 In sum the allegation of undue influence rests upon two primary allegations:
(1) that an influencer attempt to subvert the decedent’s will
and (2) that he actually succeed in doing so.
After reviewing the probate court record which “exposed
in excruciating detail every family dispute or disagreement”
among the decedent and the various parties, the Superior
Court agreed that the plaintiffs had not established either
key prong of their allegation of undue influence.43 First, the
defendants evidenced no intent to influence the decedent’s
disposition of his estate.44 Second, the decedent, while in
his 80s, was nevertheless sufficiently “strong-willed” to be
immune from any undue influence.45 His medical records
revealed no disease or defect that would undermine his testamentary capacity46 and his friends knew him to be “‘a
tough old bird.’”47 As a result, while the decedent clearly
favored one child over the others, he did so for “his reasons”
rather than as a result of any external pressure.48 In the
end, the court concludes, “[t]he law simply does not require
a person to treat his children equally.”49
2. Contract to Make a Will
In Di Biase v. Di Biase,50 the Superior Court denied a
motion to dismiss a cause of action alleging breach of a contract to make a will. The plaintiff was one of the decedent’s
41
42
43
44
45
46
47
48
49
50
Id. at 442, 449 (1867), cited in Achin, 2010 WL 2573695, at *6.
Id.
Achin, 2010 WL 2573695, at *1.
Id. at *3.
Id. at *2.
Id. at *4.
Id.
Id. at *8.
Id. at *9.
2010 WL 3173102 (Conn. Super. July 14, 2010).
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[Vol. 84
sons.51 He alleged that his father had promised to leave the
son the family business in exchange for the son’s promise to
work in that business until his father’s death.52 Although
the son faithfully worked in the business for many years, his
father never made a will and thus died intestate.53 The defendants were the decedent’s heirs at law under intestacy.54
The defendants contended that the plaintiff previously
brought his action as a claim against the decedent’s estate in
the Probate Court.55 Accordingly, the defendants moved to
dismiss the plaintiff’s Superior Court cause of action, arguing
that the Superior Court should yield to the ongoing Probate
Court proceedings under the prior pending action doctrine.56
The Superior Court denied the motion to dismiss. Guided
in significant part by the Connecticut Supreme Court’s
recent holding in Bender v. Bender,57 the court found that
even though the present dispute arose in the context of a
decedent’s estate, a Probate Court lacks statutory jurisdiction to adjudicate the plaintiff’s breach of contract claim.58
“Accordingly,” concluded the court, “because the Probate
Court lacks jurisdiction to hear the plaintiff's contract claim
there can be no prior pending action before that tribunal,
and the prior pending action doctrine cannot apply.”59
C. Estate Administration
1. Claims
In Riendeau v. Grey,60 the Superior Court granted a
motion to dismiss a claim against a decedent’s estate, holding that since a written claim had never been filed with the
estate’s fiduciary as required by General Statutes Section
45a-358 (often referred to as the “non-claim statute”), the
Superior Court lacked jurisdiction to adjudicate such claim.
51
52
53
54
55
56
57
58
59
60
Id. at *1.
Id.
Id.
Id. at *1 n.1.
Id. at *2.
Id.
292 Conn. 696, 975 A.2d 636 (2009).
Di Biase, 2010 WL 3173102, at *6.
Id.
2010 WL 3448184 (Conn. Super. Aug. 11, 2010).
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2010 DEVELOPMENTS IN CT ESTATE AND PROBATE LAW
187
In reaching this decision, the Court found that the plaintiff
had failed to file a written claim against the estate and thus
failed to comply with the clear requirements of General
Statutes Section 45a-358(a).61 The Court also found that
General Statutes Section 45a-358(c) deprives a court of
jurisdiction over any alleged claim not presented in accordance with the requisite statutory formalities.62
The court’s holding seems correct on the merits. However,
the court’s opinion fails to adequately highlight a seemingly
vital issue insofar as the fiduciary admitted to having actual
knowledge of the plaintiff’s potential claim against the estate.
General Statutes Section 45a-356 is designed to insulate fiduciaries from liability for any claims not timely presented
against an estate and provides in relevant part that “no fiduciary shall be chargeable for any assets that a fiduciary may
have paid or distributed in good faith in satisfaction of any
lawful claims, expenses or taxes or to any beneficiary before
such claim was presented.”63 The statute continues on to provide that “[a] payment or distribution of assets by a fiduciary
shall be deemed to have been made in good faith unless the
creditor can prove that the fiduciary had actual knowledge of
such claim at the time of such payment or distribution.”64
Accordingly, the defendant’s concession that he had actual
knowledge of the plaintiff’s potential claim presumably
means that he did not thereafter distribute estate assets “in
good faith” within the meaning of the statute.
While the Court indicates that it “would have been the
desirable course of action” for the fiduciary to encourage the
claimant to present her claim in writing in compliance with
General Statutes Section 45a-358(a),65 we would use even
stronger language. Indeed, the fiduciary’s failure to pursue
this course deprived her of the liability protection afforded
by General Statutes Section 45a-356 and under different
facts could have resulted in significant personal liability.
61
62
63
64
65
Id. at *2.
Id.
CONN. GEN. STAT. § 45a-356 (emphasis added).
Id.
Riendeau, 2010 WL 3448184, at *3.
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2. Slayer Statute
In Price v. Transamerica Life Insurance Company,66 the
Superior Court addressed “an issue of first impression” in
the interpretation of Connecticut’s so-called “slayer
statute.”67 Plaintiffs were a decedent’s only two children
and her heirs at law.68 The defendant, individually and as
trustee, was the named beneficiary on multiple life insurance policies insuring the decedent’s life.69 Plaintiffs
alleged that the defendant “intentionally caused the death”
of their mother, thus invoking the provisions of General
Statutes Section 45a-447(c)(1) which bars one who intentionally causes the death of another from receiving life
insurance proceeds payable as a result of that death.70
Defendant moved to dismiss, alleging that General
Statutes Section 45a-447(c)(1) does not provide the plaintiffs with a private right of action and thus they lack standing to bring suit.71 The Superior Court granted the defendant’s motion.
After analyzing the statutory language and relevant legislative history, the Court concluded that under the facts of
this case, General Statutes Section 45a-447(c)(1) does not
provide these individual plaintiffs with a private right of
action to enforce the slayer statute. Rather, the court suggested, the decedent’s estate, and its legal representatives,
as the default beneficiaries on the life insurance policies, are
the proper parties to bring suit under General Statutes
Section 45a-447(c)(1).
The Court stated that its ruling did not leave the plaintiffs without redress. For example, they potentially could
bring a declaratory judgment action in the Superior Court
pursuant to General Statutes Section 52-29.72 The Court
further contended that the plaintiffs had a “significant remedy” insofar as they could simply “contest the accused per66
67
68
69
70
71
72
2010 WL 3328280 (Conn. Super. July 29, 2010).
Id. at *3.
Id. at *1.
Id.
Id.
Id. at *3.
Id. at *6.
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2010 DEVELOPMENTS IN CT ESTATE AND PROBATE LAW
189
petrator’s status in the context of the probate proceeding of
the insured’s estate.”73 The Court may have oversimplified
its discussion of this last point. Given that the life insurance policies are nonprobate property passing by contractual provisions rather than the terms of the decedent’s will, it
is not immediately clear to us that the decedent’s probate
proceedings necessarily would address the distribution of
those policies.
D. Probate-Related Torts
1. Interference With Dead Bodies
In Ginsberg v. Manchester Memorial Hospital,74 the
Superior Court established that the tort of “interference with
dead bodies” is legally cognizable in Connecticut. The Court
also indicated that causing injury to a corpse may constitute
negligent infliction of emotional distress. However, the
Court imposed limits on who may bring these claims.
The plaintiffs in Ginsberg were the decedent’s wife, children and nephew.75 They alleged that while the decedent’s
corpse was in the care of one or both of the defendants, the
hospital in which he died and the funeral home who handled
his remains, someone damaged the head and nose of the
decedent’s corpse.76 In denying in part the defendants’
motion to dismiss the claims against them, the Superior
Court made several significant rulings.
First, the Court established that a cause of action for
“interference with dead bodies” is legally cognizable in
Connecticut. While the Court characterized this cause of
action as tortious in nature,77 it also invoked property law
principles by noting that a decedent’s “next of kin have a
‘quasi-property’ right in a decedent’s body….”78 Consistent
Id. at *5.
2010 WL 796841 (Conn. Super. Feb. 2, 2010) (ruling on motion to strike
filed by co-defendant Manchester Memorial Hospital). The court issued a second
memorandum of decision with respect to a motion to strike filed by co-defendant
Carmon Funeral Homes. See 2010 WL 816982 (Conn. Super. Feb. 2, 2010).
75 Id. at *1.
76 Id.
77 Id. at *2, citing RESTATEMENT (SECOND) OF TORTS § 868.
78 Id. at *3.
73
74
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with this viewpoint, the Court concluded in the instant case
that only the decedent’s wife has a cognizable claim for
interference with the decedent’s dead body, since pursuant
to General Statutes Section 45a-318(c)(1) she had legal custody of her husband’s remains.79 The Court accordingly dismissed the claims of interference filed by other family members, since those family members had no legal right to custody of the decedent’s remains.80
Second, the Court opined that negligently mishandling a
corpse may constitute negligent infliction of emotional distress, where, as in the instant case, the defendants had a
duty to properly handle the corpse and breached that duty
in a manner that caused the plaintiffs severe, foreseeable,
distress.81 In this case, the Court concluded that the decedent’s wife and children were foreseeable victims of the
defendant’s alleged negligence and denied the motion to dismiss their claims. The Court did, however, grant the defendants’ motions to dismiss the nephew’s cause of action for
negligent infliction of emotional distress since he was “not a
member of the deceased’s immediate family” and thus any
emotional distress he suffered was not legally foreseeable.82
2.
Statutory Theft
In Stuart v. Stuart,83 the Supreme Court reversed the
Appellate Court and held that a claim of statutory theft had
to be proven by a preponderance of the evidence rather than
clear and convincing evidence. The plaintiffs in Stuart were
two of a decedent’s three sons and the defendant was the
third son.84 The plaintiffs alleged that their brother had
engaged in numerous financial improprieties with respect to
79 Id. at *4. See General Statutes § 45a-318, which authorizes an individual
to designate “an individual to have custody and control of the disposition of such
person's body upon the death of such person.” In the absence of such designation,
the statute provides a prioritized listing of individuals to act in such capacity, with
a decedent’s spouse being given the top priority.
80 Ginsberg, 2010 WL 796841, at *5.
81 Id. at *7.
82 Id. at *8.
83 297 Conn. 26 (2010), 996 A.2d 259, reversing in part 112 Conn. App. 160,
962 A.2d 842 (2009).
84 Id. at 29.
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2010 DEVELOPMENTS IN CT ESTATE AND PROBATE LAW
191
the ownership and distribution of their father’s assets and
claimed, inter alia, that the defendant’s conduct constituted
statutory theft.85
At issue on appeal was the standard of proof applicable
to the statutory theft claim. After noting that it was unable
to locate any legislative history relevant to the question at
bar, the Supreme Court turned to “other existing legislation
and common-law principles for interpretive guidance.”86
Ultimately, after rigorous analysis, the Supreme Court held
that a statutory theft claim need only be proven by a preponderance of the evidence. In rejecting defendant’s argument that a clear and convincing evidence standard should
apply, the Court thus overruled the Appellate Court’s opinion in Stuart as well as that Court’s 1986 opinion in Schaffer
v. Lindy.87
E. Powers of Attorney
In Kindred Nursing Centers East, LLC v. Morin,88 the
Appellate Court affirmed the Superior Court’s granting of a
motion of summary judgment and held that an attorney-infact for a resident of a nursing home has no duty to assist
that nursing home by maintaining the resident's continued
eligibility for Medicaid financing.
The dispute at bar arose when the attorney in fact under
a ‘short-form’ power of attorney kept approximately $1,100
more in his principal’s bank account than allowed under
current Medicaid rules, thus jeopardizing the principal’s
continued eligibility for Medicaid.89 The plaintiff nursing
home brought a cause of action against the attorney-in-fact
85 Id. at 31. The claim for statutory theft included a claim for treble damages
under General Statutes § 52-564 (2009), which provides: “Any person who steals
any property of another, or knowingly receives and conceals stolen property, shall
pay the owner treble his damages.”
86 Id. at 37.
87 8 Conn. App. 96, 511 A.2d 1022 (1986).
88 125 Conn. App. 165, 1 A.3d 919 (2010).
89 The attorney in fact had been appointed pursuant to the provisions of the
Connecticut Statutory Short Form Power of Attorney Act, CONN. GEN. STAT. §§ 142 to 1-56. The attorney-in-fact defended his decisions with respect to the bank
account by asserting that the power-of-attorney did not authorize him to “draw
down” the bank account in the manner requested by the nursing home.
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alleging that he was negligent in his handling of the bank
account, resulting in the lapse of the principal’s Medicaid
eligibility and the nursing home incurring substantial unreimbursed expenses for the principal’s care.90
The Superior Court granted plaintiff’s motion for summary judgment and the Appellate Court affirmed. In its
opinion, the Appellate Court observed that the detailed
Connecticut statute governing short-form powers of attorney “contains not one provision holding an attorney in fact
accountable to anyone other than his principal.”91 The
Court declined to read such a provision into the statute and
thus affirmed the lower court’s grant of summary judgment.
Readers should note that although the Appellate Court
did not address the validity of the attorney-in-fact’s assertion that a short-form power-of-attorney did not authorize
him to “draw down” a bank account to ensure his principal’s
continued eligibility for Medicaid, the Court did observe
that Connecticut’s short-form power of attorney does not
authorize an attorney-in-fact to make “health care decisions” for his principal.92 It is unclear from this merely
passing reference whether the Court sought to characterize
the question of Medicaid eligibility as implicating “health
care” decisions rather than purely financial ones.
F. End of Life Decisions
The case of In re Zukovs93 provided the Superior Court
the opportunity to wrestle with the question of whether to
continue medical care for a conserved person left in a persistent vegetative state after a motorcycle accident. The
Probate Court had ordered that numerous medical interventions, including dialysis and transfusions, be stopped
and that no CPR should be performed.94 The patient’s family members and pastor appealed that decision to the
Superior Court and moved to stay enforcement of the
90
91
92
93
94
Kindred Nursing Center, 125 Conn. App. at 167-69.
Id. at 173.
Id. at 172.
2010 WL 525629 (Conn. Super. Jan. 11, 2010).
Id. at *1.
2011]
2010 DEVELOPMENTS IN CT ESTATE AND PROBATE LAW
193
Probate Court order pending appeal. The Superior Court
denied the motion.
In reaching this conclusion, the court systematically
applied the four-part test set out in Griffin Hospital v.
Commission on Hospitals and Health Care,95 which
requires a court to balance numerous equities in determining whether or not to issue a stay. While the appellants
emphasized that a stay was necessary to avoid their suffering the irreparable injury of a loved one’s untimely death,96
the court determined that the patient’s countervailing right
to a “comfortable and dignified passing” justified enforcing
the Probate Court’s order.97
In addition to its helpful legal analysis, the case provides
a vivid example of the emotional and legal struggles that
can accompany end of life decisions and the advantages of
adequately addressing those issues during the estate planning process.
G. Attorney-Client Privilege
In Hubbell v. Ratcliffe,98 the Superior Court opined that
Connecticut courts do not recognize a “fiduciary exception”
to the attorney-client privilege. At issue in Hubbell was an
attempt by a beneficiary of a trust to compel disclosure of
certain communications between a trustee and the attorney
for that trustee. The attorney for the trustee argued that
such communications were protected by attorney-client
privilege.99 The beneficiary claimed, inter alia, that the
attorney for a trustee should be considered to represent all
of the trust beneficiaries as well as the trustee and thus cannot claim attorney-client privilege to shield attorney-trustee
communications from the beneficiaries.100 The beneficiary
further argued that numerous other courts have recognized
this “fiduciary exception” to the attorney-client privilege.101
196 Conn. 451, 493 A.2d 229 (1985).
Zukovs, 2010 WL 525629, at *5.
97 Id.
98 2010 WL 4885631 (Conn. Super. Nov. 8, 2010).
99 Id. at *2.
100 Id.
101 Id. at *4.
95
96
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In its opinion, the Superior Court examined the purposes of the attorney-client privilege and concluded that
Connecticut law provides that “‘[e]xceptions to the attorneyclient privilege should be made only when the reason for disclosure outweighs the potential chilling of essential communications.’”102 After applying this rule to the facts of this
case, the Court concluded the reasons for disclosure did not
outweigh the potentially chilling effect and thus held that
“[a]n exception to the attorney-client privilege is not warranted.”103 The Court cited a number of prior Connecticut
cases that similarly refused to recognize a fiduciary exception to the attorney-client privilege.104
102 Id., citing Hutchinson v. Farm Family Casualty Insurance Co. 273 Conn.
33, 38, 867 A.2d 1 (2005).
103 Id. at *6.
104 Id. at *5.
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