Opinion
No. CV 01 0812030 S
June 14, 2004
MEMORANDUM OF DECISION
This is a vexatious litigation action. After extensive preparation for trial by jury and less than a day of testimony, the parties agreed that, because there was little factual dispute as to most of the elements and most of the issues were questions of law for the court in any event, it would be appropriate to prepare and to argue cross motions for summary judgment. This was done, and shortly thereafter the parties were informed that summary judgment would be granted and a memorandum of decision would follow. The jury was excused.
The facts in the underlying action, at least insofar as they pertain to the subsequent vexatious litigation action, are as follows. The plaintiff in that action was one Elliott Kelbick, who was employed by the Hebrew Home and Hospital, Inc. (the "home"), which was also a defendant in that action and the plaintiff in this action. Kelbick was evidently displeased by several turns of events in the course of his employment and sought the counsel of James S. Brewer, an attorney, who represented Kelbick in the underlying action and is the defendant in this action. On behalf of Kelbick, Brewer brought an action against the home in the United States District Court for the District of Connecticut in nine counts. United States District Judge Squatrito dismissed one of the federal counts, granted summary judgment as to two others, and dismissed the pendant state counts without prejudice to their being presented in Superior Court. Those remaining counts were subsequently disposed of by means of summary judgment. After summary judgment was granted, Kelbick filed a motion to open, which motion was denied. During the appeal period from the denial of the motion to open, the parties negotiated a settlement between Kelbick and the home. The home then brought this vexatious litigation action against Brewer.
The written document was signed after the expiration of the appeal period.
Crucial to the resolution in this case, though by no means the sole ground, is the issue of whether there was probable cause supporting the underlying action. I will review in some detail the information known to Brewer during the more specific discussion of each count. For now, the following background will suffice as to Brewer's knowledge.
Brewer submitted an affidavit in connection with this motion; other information is apparent from reading documents submitted in the underlying case.
Kelbick was employed by the home since 1983. He was a social worker, and in 1987 was promoted to the position of Assistant Director of his department. For much of the period of employment his supervisor was one Gloria Raphael. He and she had a number of conflicts over the years. In 1993, Kelbick claimed that Raphael requested him to forge a doctor's signature on a required form. He refused to do so, and at some point complained to the administration about being asked to do so. He requested time in 1994 to deal with a ruptured Achilles tendon, and Raphael responded that he just wanted to go home to have sexual relations with his wife. In 1998, Gloria Raphael retired, and in a reorganization of sorts one Jonas Steiner was designated head of the new department rather than Kelbick. Steiner was four years younger than Kelbick, though both were in their forties. Kelbick reported that he was allowed less flexibility in his hours than other employees and that he had been denied a fair grievance procedure following a complaint by a family member of a prospective patient and consequent reprimand.
Kelbick entered into an attorney-client relationship with Brewer in January 1998. Represented by Brewer, Kelbick first filed a complaint with the Commission on Human Rights and Opportunities along with the requisite affidavit. After an investigation, the commission found no probable cause to pursue the action and authorized him to bring an action in court. The Equal Employment Opportunity Commission issued a similar authorization.
In November 1998, Brewer filed on behalf of Kelbick an action in the United States District Court for the District of Connecticut. The defendants included the home, as well as several individual officers and employees of the home. The complaint comprised, initially, twenty-two counts, and alleged discrimination on account of age and sex, as well as retaliatory actions, several variations of emotional distress and defamation. In a ruling dated June 16, 1999, Judge Squatrito dismissed several individuals from several of the counts and dismissed count two, a federal sexual discrimination claim, because it was untimely. The court declined to dismiss the state law claims, because it was not certain that no facts supported the claims; in fact, there was "sufficient information in the complaint that the defendants' assertions in their motion to dismiss would be more efficiently evaluated in a motion for summary judgment."
The home and the other defendants did pursue a motion for summary judgment. Judge Squatrito granted the motion as to the federal counts and dismissed on jurisdictional grounds the state counts. The court noted that Kelbick continued to be employed by the home. He had filed a grievance with the home in 1994 as a result of the alleged request to forge a signature, and claimed retaliation as a result, including a number of verbal threats on the part of Raphael. The threats including the prospect of termination. The court mentioned the written warning following the complaint by the family member of a prospective patient on January 5, 1998; Kelbick was instructed by the home to write a letter of apology. In early 1998, Raphael announced her retirement and the home said that it looked to the "younger generation" to carry on. When she retired, the admissions department was merged with the social services department, of which Raphael had been director and Kelbick assistant director. The current director of admissions, Steiner, who was younger than Kelbick, was promoted to the position of head of the new, merged department.
This event was apparently the immediately precipitating cause of Kelbick's going to Brewer.
While the federal case was pending, Kelbick had some difficulty with the home's email system and the meetings with Bonnie Gauthier, then vice president of the home, to resolve those difficulties did not go well. Gauthier wrote a memo to Kelbick questioning "issues of accountability, initiative and self-control." The memo was to remain in Kelbick's personnel file until his next review.
While the case was pending in federal court, Kelbick nonetheless received at least fair evaluations and was never demoted, suspended or terminated. Throughout the proceedings, until their ultimate resolution, he remained assistant director of the social services department and received regular periodic pay increases.
Judge Squatrito decided that summary judgment should enter in favor of the defendants in that action. He first considered the ADEA (federal age discrimination) claim. He held that the burden shifting analysis of McDonnell Douglas Corp. v. Green, CT Page 9309 411 U.S. 792 (1973), provided the appropriate analytic framework. Judge Squatrito held that the element of an "adverse employment action," required for recovery under the ADEA, was not satisfied, because a failure to promote did not qualify as such an action. Alternatively, he held that the promotion of the slightly younger Steiner did not, in the circumstances, show age discrimination. He cited authority to the effect that small differences in age will "rarely" support a prima facie case, and held that the letter which mentioned passing the torch to the "younger generation" was not sufficiently persuasive to show discriminatory intent. Judge Squatrito, then, found that a prima facie case was not advanced on the issue of age discrimination.
Even if there had been such a prima facie case, he found that employer's reason for promoting Steiner — greater familiarity with Medicare and finances — was not pretextual and was supported by substantial evidence.
As to the claim of retaliation, the court again found that there was no adverse employment action or material adverse change in terms and conditions of employment, nor, with some qualifications, was there a sufficient causal connection between any protected activity and the alleged adverse employment action. Judge Squatrito, as noted above, dismissed the state law claims, with the understanding that they could be asserted in Superior Court. The judgment was appealed by Kelbick to the Court of Appeals for the Second Circuit and the trial court imposed trial court costs of $1,348.11. In May 2001, a voluntary dismissal of the appeal was entered in the Second Circuit; pursuant to Rule 42(b) of the Federal Rules of Appellate Procedure, the parties agreed to dismiss the appeal "without costs to either party."
It was never suggested that the 1994 complaint and the 1998 CHRO complaint were anything other than protected activities.
In July 2001, Brewer on behalf of Kelbick brought the state court action in the Superior Court for the Judicial District of Hartford. This complaint contained three counts: negligent infliction of emotional distress, intentional infliction of emotional distress, and defamation. The home and the individual defendants moved for summary judgment, which was granted in court by Judge Rittenband No one appeared to argue on behalf of Kelbick. Kelbick subsequently moved to open the judgment, on the ground that there had been some confusion in Brewer's office regarding the oral argument and he mistakenly thought the motion had been marked "off." The motion to open was denied by Judge Sferazza on April 18, 2002, on the grounds that no opposition to the motion for summary judgment had been filed in any event, and thus good cause had not been shown as to why the judgment should be opened. There ordinarily would have been an appeal period of twenty days from the denial of the motion to open; in this case, the appeal period would have expired on May 8, 2002.
The matter had, for some reason, been referred to the complex litigation docket.
Meanwhile, Kelbick had been sued by the home for vexatious litigation. Because one defense was reliance on advice of counsel, and Brewer would thus be a witness, another attorney, David Jaffe, entered an appearance for Kelbick. Jaffe and attorneys for the home entered into settlement discussions, which culminated in an executed agreement signed by Kelbick on May 14, 2002, and by Gauthier, now president of the home, on May 21, 2002. Jaffe submitted an affidavit to the effect that the settlement was substantially agreed upon by the end of April 2002. Pursuant to the agreement, Kelbick agreed to terminate his employment with the home, effective April 26, 2002. He was to receive vacation and severance pay and the extension of some benefits. Kelbick agreed to withdraw "with prejudice" his action against the home and the home agreed to withdraw "with prejudice" its action in vexatious litigation against Kelbick. Each party to the agreement released the other from liability.
As indicated above, the home has pressed this vexatious litigation action against Brewer, however, and both sides have moved for summary judgment. The standards governing motions for summary judgment are well established. Summary judgment should be granted "if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Section 17-49 of the Practice Book. A material fact is one which will make a difference in the result. Barrett v. Southern Connecticut Gas Company, 172 Conn. 362, 378 (1977). The movant has the burden of showing the absence of a genuine issue, and the evidence is to be viewed in the light most favorable to the nonmoving party. Hammer v. Lumberman's Mutual Casualty Company, 214 Conn. 573, 578 (1990). If the moving party successfully sustains its burden, the opposing party has the burden of presenting evidence to show that there is a genuine issue. It is not enough to state in conclusory fashion that an issue exists. Daily v. New Britain Machine Company, 200 Conn. 562, 568 (1986). The motion should be granted if a verdict would be directed on the same evidence. Batick v. Seymour, 186 Conn. 632, 647 (1984).
In order to recover on a theory of vexatious litigation, a plaintiff must prove several elements. "A vexatious suit is a type of malicious prosecution action, differing principally in that it is based upon a prior civil action, whereas a malicious prosecution suit ordinarily implies a prior criminal complaint. To establish either cause of action, it is necessary to prove want of probable cause, malice and a termination of suit in the plaintiff's favor." Vandersluis v. Weil, 176 Conn. 353, 356 (1978). Probable cause, in turn, has been defined as follows:
For purposes of a vexatious suit action, "[t]he legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it." Wall v. Toomey, 52 Conn. 35, 36 (1884); accord Ledgebrook Condominium Assn., Inc. v. Lusk Corporation, 172 Conn. 577, 584, 376 A.2d 60 (1977). "Probable cause is the knowledge of facts, actual or apparent, strong enough to justify a reasonable man in the belief that he has lawful grounds for prosecuting the defendant in the manner complained of." Shea v. Berry, 93 Conn. 475, 477, 106 A. 761 (1919). Thus, in the context of a vexatious suit action, the defendant lacks probable cause if he lacks a reasonable, good faith belief in the facts alleged and the validity of the claim asserted. See Albertson v. Raboff, 46 Cal.2d 375, 382, 295 P.2d 405 (1966); 3 Restatement (Second), Torts 662, comment (c), 675, comment (d); cf. Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978) (proof that an affiant included a false or reckless statement on a warrant affidavit may void the warrant); compare State v. Hamilton, 214 Conn. 692, 707 n. 6, 573 A.2d 1197, vacated on other grounds, 498 U.S. 933, 111 S.Ct. 334, 112 L.Ed.2d 299 (1990) (the test for probable cause is objective; an arresting or investigating officer's good faith is insufficient).
DeLaurentis v. New Haven, 220 Conn. 225, 256-57 (1991).
The determination of probable cause is a question of law for the court, but where the facts are disputed, the court may submit the question to the jury as a mixed question of law and fact. DeLaurentis v. New Haven, supra, 252-53. The resolution of the probable cause issue is not cut and dry, as indeed the various definitions frequently contain an element of tautology: if a reasonable person would think there was reason to believe in fact sufficient to entertain the action, probable cause exists. Stated conversely, probable cause is lacking when the supporting information is such that a reasonable person having such information would not entertain the action. Information supporting probable cause is not necessarily that which makes success on the merits probable or even merely questionable. Rather, a lack of probable cause exists when the known information objectively provides essentially no chance of success on the merits. Our jurisprudence, for better or for worse, does not prohibit long shots and does not provide, usually, for attorney fees when long shots fail; it does provide penalties for bringing actions which are so groundless that it may be presumed that they could not reasonably have been brought with the goal, however remote, of succeeding on the merits.
One definition of probable cause is that it is "the knowledge of facts, actual or apparent, strong enough to justify a reasonable man in the belief that he has lawful grounds for prosecuting the defendant in the manner complained of." Shea v. Berry, 93 Conn. 475, 477 (1919).
We turn, then, to an examination of the issue of probable cause in the instant case. As briefly noted above, a number of counts were brought in two different forums. The preliminary issue is to organize the claims into groupings of operative facts. In Bridgeport Hydraulic Co. v. Pearson, 139 Conn. 186 (1952), one issue was to determine what group of facts the defendant had sought to litigate in the underlying action: it may have been vexatious in the circumstances to pursue one cause of action but not another. The defendant in the vexatious litigation action had disputed the validity of the plaintiff's efforts to condemn several pieces of property. The court stated that a "cause of action is that single group of facts which is claimed to have brought about an unlawful injury to the plaintiff and which entitles the plaintiff to relief. (Citation omitted.) Even though a single group of facts may give rise to rights for several different kinds of relief, it is still a single cause of action." Id., 197. The court considered the circumstances of the underlying actions in the context of two categories, one for each parcel of land sought to be condemned.
The court similarly grouped theories of recovery in DeLaurentis, supra. There, a former chairperson of the New Haven Parking Authority claimed that the mayor and the city of New Haven had administratively brought a number of vexatious charges against him. As matters developed analytically, there may have been probable cause for some of the charges but not for others. The court posed the problem as follows:
These opposing contentions raise this question: for what must the defendant have lacked probable cause? For filing suit? For asserting a particular cause of action? For alleging particular facts? If a civil plaintiff had probable cause to assert one cause of action but joined to that claim ten others that he knew to be groundless, the victim called upon to defend himself against the ten groundless claims would not suffer less because one good claim was included among them. It is common practice, however, for a plaintiff to allege alternative factual theories when he cannot be sure which version most accurately reflects the events that transpired. Each time a civil plaintiff responds to a request to revise, or amends his complaint after realizing one part of his claim is baseless, must he fear liability for vexatious suit?
DeLaurentis v. New Haven, supra, 253.
The Supreme Court thought it appropriate to divide the underlying charges into four distinct groups, where each group presented "essentially one unified assertion." It is sensible to follow the same process here. It makes no sense to consider each count of the underlying action, for example, for the purpose of determining probable cause to bring the action. Suppose, as fairly commonly happens, a party alleges a breach of contract and a CUTPA violation arising from the same general set of facts, and it comes to pass that the CUTPA claim is untenable but the breach of contract claim is plausible. Is the plaintiff exposed to an action for vexatious litigation? One would think not. On the other hand, if a party brings two otherwise unrelated claims in the same complaint, where only one is supported by probable cause, should a plaintiff be insulated from a vexatious litigation action because one of the claims was sustainable? The accepted resolution has been to sort the underlying counts into discrete groups of operative facts, for the purpose of analyzing probable cause.
But for the proposition that the existence of probable cause as to some portions of a complaint negates a subsequent malicious prosecution action as to all, see Global NAPs, Inc., v. Federal Insurance Co., 214 F. Sup.2d 61, 66 (D.Mass. 2002), aff'd, 336 F.3d 59 (1st Cir. 2003); Campion Funeral Home v. State, 569 N.Y.S.2d 518, 520 (1991).
In the instant case, the underlying counts of the complaints may be sorted into several categories of operative fact. The first category, brought only in federal court, is the claim of age discrimination. Brewer asserted that Kelbick had been disciplined and denied promotion because of his age. He alleged that he had been an employee for many years, had received good evaluations and had been promoted in 1987 to Assistant Director of Social Services. He alleged that the home promoted Steiner to "replace (Kelbick's) supervisor," and Steiner was younger.
In analyzing the claim for the purpose of deciding the federal motion for summary judgment, Judge Squatrito used the burden shifting process outlined in, inter alia, McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). See also Ford v. Blue Cross Blue Shield of Connecticut, 216 Conn. 40 (1990). The plaintiff has the burden of proving a minimal prima facie case; if the prima facie case is shown, the employer has the burden of producing evidence showing a legitimate reason for the challenged action. Once that reason is advanced, the employee has the ultimate burden of proving discrimination, either by proving that the employer's reason is pretextual or that, even if there was a legitimate reason, the discriminatory reason was still a motivating factor. The elements of the prima facie case are (1) membership in a protected class; (2) qualification for the position in question; (3) an adverse employment action; and (4) circumstances providing an inference of age discrimination. See Brown v. Coach Stores, Inc 163 F.3d 706, 709 (2d Cir. 1998).
Because he was over forty, Kelbick was in a protected class, and there was sufficient evidence to show qualification. Judge Squatrito held, however, that there was insufficient evidence presented in opposition to the motion for summary judgment to present a genuine issue as to an adverse employment action or discriminatory intent.
The question to be resolved in the vexatious litigation context, is somewhat different and, from an evidentiary point of view, even less stringent: was there information known such that a reasonable person would even entertain the notion of possible success? It is to be borne in mind that the tort of vexatious litigation requires such a lack of probable cause that there can be no legitimate reason to bring the lawsuit. Here, Brewer knew that Kelbick was older than Steiner, that there had been expression, albeit minimal, of an intention to place responsibility in a younger generation, and that Steiner rather than Kelbick had been chosen for a new position. There was information to the effect that Kelbick had been singled out for criticism and had been the subject of a heightened degree of scrutiny. The discipline arising from the experience with the family who had complained about Kelbick's actions and attitude in conducting the introductory tour was, according to Kelbick, arbitrarily and unfairly imposed. He was issued a "final warning." Kelbick received his first negative evaluation just prior to the announcement of the position to which Steiner was appointed.
For details of claimed adverse action, see, e.g., Kelbick's affidavit in opposition to the federal motion for summary judgment.
The ADEA prohibits an employer to "fail or refuse to hire or discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions or privilege of merit, because of such individual's age." 29 U.S.C. § 631(a). Kelbick's claim is that the reorganization did not shield the employer from scrutiny; in the circumstances, it was claimed, the employer's combination of two departments at the time of his supervisor's retirement and placing Steiner, from the other department, in the vice president's position supervising him was an adverse employment action. Although case law was in effect requiring an adverse employment action defined in more narrow terms, such that ordinary reorganizations not resulting in actual demotions were not considered adverse employment actions. it could also be argued — though perhaps somewhat tenuously — that under the broad language of the statute the failure to place Kelbick, as the former deputy director, in the position of the head of the department when the director retired, was a discriminatory action.
See, e.g., Holt v. KMI-Continental, Inc., 95 F.3d 123 (2d Cir. 1996).
The context of reorganization does not necessarily negate the element of adverse employment action with discriminatory purpose. In Cronin v. Aetna Life Insurance Co., 46 F.3d 196 (2d Cir. 1995), for example, the Second Circuit recognized that the plaintiff's prima facie burden is minimal; if, in a reorganization, new positions are created for younger employees, the inference of discriminatory intent in an adverse employment action may be drawn. Id., 204. See Also Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 38-40 (2d Cir. 1994).
In consideration of the age discrimination claim, Judge Squatrito also found, in addition to the absence of an adverse employment action, that there was insufficient evidence of intent to discriminate on the basis of age. Though I do not disagree for the purpose of summary judgment, I do believe there was sufficient evidence for the purpose of probable cause to bring an action. In addition to the statement previously mentioned regarding the younger generation and the fact that Steiner was younger, though not by much, Brewer had information that Kelbick had been criticized for difficulties in dealing with email — perhaps an age-related shortcoming. Though again a slender one, perhaps even extremely so, there was at least a reed supporting the claim of discriminatory intent.
Judge Squatrito cited authority to the effect that a small age difference between the plaintiff and the successful candidate will "rarely" create a prima facie case; O'Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308, 312-13 (1996); and as a general proposition it is indisputable. But, at least for the purpose of probable cause, Brewer's position is buttressed considerably by authority such as Nembhard v. Memorial Sloan-Kettering Cancer Center; 918 F. Sup. 784 (S.D.N.Y. 1996), aff'd, 104 F.3d 353 (2d Cir. 1996). The issue before the trial judge was whether a verdict in favor of the plaintiff should be set aside. An employee, later the recipient of an adverse employment action, had heard comments to the effect that the employer was "looking for younger blood" and that she was a "good source of historical information." She believed she had been denied computer training so that younger workers could be trained. Nondiscriminatory reasons could have been found to be pretextual, in that others were arguably treated differently and stray remarks indicated a desire to replace her. There was but a one-year age difference between the plaintiff and her replacement. The court decided that the verdict could stand: there was no magic formula as to the requisite age difference, and the remarks provided enough circumstantial evidence of intent to create a question of fact. Though obviously not "on all fours," there are marked similarities between Nembhard and the case at hand.
Under the McDonnell Douglas burden shifting test, once a prima facie case has been shown, the employer has the burden of at least suggesting a non-discriminatory reason for the action; if a plausible reason is produced, then the fact-finder's role is to determine if the stated reason is pretextual; even if it is not pretextual, the employee may still recover if the discriminatory reason was still a motivating factor in the adverse decision. For the purpose of a subsequent vexatious litigation action, the balancing would not seem to be necessary. If a fact-finder could find a neutral reason nonpersuasive, then it seems that a finding of probable cause for the prima facie case is all that is required to negate an action for vexatious litigation.
The next set of operative fact concerns the retaliation claim. This category lends itself, in the circumstances of this case, to a far more straightforward analysis. In order to prove retaliation under Title VII, a plaintiff must show that he participated in a protected activity known to the employer, that he suffered an adverse employment action to his disadvantage and that there is a causal connection between the two. See, e.g., Holt v. KMI Continental, Inc., supra, 130. There is no question that Kelbick's internal complaint about being requested to forge a doctor's signature in 1994 and the CHRO complaint in 1998 were protected activities known to the home. Judge Squatrito found that there was no disadvantaging employment action. "A materially adverse change might be indicated by a termination of employment, a demotion evinced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices . . . unique to a particular situation." See, e.g., Weeks v. New York State Division of Parole, 273 F.3d 76, 85 (2d Cir. 2001). Judge Squatrito referred to authority holding that declining evaluations or warnings, without more, did not constitute material changes in circumstances.
Brewer did have, however, information which might be argued to constitute material changes, and the category "other indices unique to a particular situation" can certainly accommodate, at least for the minimal burden of satisfying probable cause in the vexatious litigation context, several of the claimed actions. There were continuing instances of criticism and threats from Raphael, the immediate supervisor, about firing and other adverse actions. Perhaps more significantly, Kelbick informed Brewer that he had been singled out for adverse treatment regarding scheduling, working hours, and the like. Although the claim is far from persuasive, it is based on sufficient information from the client to avoid a vexatious litigation claim.
See also the prior discussion of adverse employment action regarding Steiner's "promotion."
The third general area is sex discrimination. Brewer had information that Kelbick had been subjected to derogatory sexual comments by Raphael in 1994 and that he filed a complaint with the CHRO. Judge Squatrito dismissed the sexual discrimination claims, because he found there was not a continuing pattern, or a "systemic mechanism" and thus the claim was time barred. Ordinarily, a dismissal in the prior action on statute of limitations grounds does not prevent a finding of probable cause for the purpose of defeating the subsequent vexatious litigation action, because the passage of time is not inconsistent with the existence of probable cause. Lackner v. LaCroix, 35 Cal.App.3d 747, 602 P.2d 393 (1979). Additionally, a dismissal of the prior action on limitations grounds ordinarily does not constitute a favorable termination of the underlying action sufficient to satisfy that element necessary for a vexatious litigation action. Meskew v. Hess, 910 P.2d 223, 228-32 (Kan.App. 1996); Alcorn v. Gordon, 762 S.W.2d 809, 811 (Ky.App. 1988); Palmer Development Corp. v. Gordon, 723 A.2d 881 (Me. 1999). See also Annot., 30 ALR4th 572, § 13. In any event, Brewer had some information supporting the concept of continuing pattern.
I find, then, that there was sufficient probable cause to support the bringing of the causes of action on which the federal court entered judgment. The case was extraordinarily weak and in hindsight ought not to have been brought. But our jurisprudence does not ordinarily provide for attorneys fees for the prevailing party, and a case on which summary judgment is appropriately granted does not necessarily provide the basis for a subsequent action for vexatious litigation.
Brewer claims as well that the subsequent settlement of the appeal in the federal courts, which provided for a withdrawal without costs to either side, negates the requirement that in order to succeed in a vexatious litigation action, the underlying case must have terminated favorably to the vexatious litigation plaintiff. The requirement of favorable termination ordinarily precludes settlement of any kind. See Blake v. Levy, 191 Conn. 257, 264 (1983):
When a lawsuit ends in a negotiated settlement or compromise, it does not terminate in the plaintiff's favor and therefore will not support a subsequent suit for vexatious litigation. See Baird v. Aluminum Seal Co., 250 F.2d 595, 601-02 (3d Cir. 1957); Merritt-Chapman Scott Corporation v. Elgin Coal, Inc., 358 F. Sup. 17, 20 (E.D.Tenn. 1972); Prosser, Torts (4th Ed. 1971) 120; 3 Restatement (Second), Torts § 674, comment j, § 660, comments a, c (1977). This conclusion recognizes that the law favors settlements, which conserve scarce judicial resources and minimize the parties' transaction costs, and avoids burdening such settlements with the threat of future litigation.
See also Annot., 30 ALR4th, supra, § 17.
Neither party supplied me with authority, nor did I find any authority, to the effect that a withdrawal of an appeal without costs constitutes a negotiated settlement for the purpose of the favorable termination element of the cause of action. Though in a sense it is a compromise resolution, it is also rather minimal. A "true" settlement on appeal, however, is not a favorable termination sufficient to support a subsequent vexatious litigation action. See Bezona v. Tomson, 960 P.2d 252, 255 (Kan.App. 1998). Whether a voluntary dismissal of a claim in general is to be considered a favorable termination can be a question for the factfinder; see Plouffe v. Montana, 45 P.3d 10, 18 (Mt. 2002); if a jury question is created, then there necessarily is probable cause on that ground. In any event, I need not decide the matter on that ground.
This does not, however, end the inquiry. The United States District Court dismissed the state claims with the understanding that they could be raised in Superior Court. And so they were. The federal court dismissal was not a determination on the merits, and the subsequent state court action is to be independently analyzed. See, e.g., Ramsey v. Leath, 706 F.2d 1166, 1170 (11th Cir. 1983); Nal II, Ltd. v. Tonkin, 705 F. Sup. 522, 524 (D.Kan. 1989). The state court claims were intentional and negligent infliction of emotional distress and defamation. It should be recalled that Kelbick had told Brewer about a series of arguably degrading and at times humiliating course of events. At the time, the Superior Courts were split on the issue of whether an action for negligent infliction of emotional distress could be brought other than in the termination context; at the time the action was brought, of course, Kelbick was still employed by the home. The Connecticut Supreme Court subsequently decided in Perodeau v. Hartford, 259 Conn. 729 (2002), that an action for negligent infliction of emotional distress may not be brought in the employment context except where such infliction occurs in the termination process. Intentional infliction of emotional distress claims may be brought only where the conduct is truly outrageous and virtually uncivilized. Appleton v. Board of Education, 254 Conn. 205, 210 (2000). Kelbick had seen health care professionals for anxiety. In sum, there were facts sufficient to entertain the belief in bringing the emotional distress action. As to defamation, the complaint in state court alleged that the home had falsely told peers and others that Kelbick had performed in an inadequate and inferior manner.
Brewer probably had probable cause sufficient to withstand a subsequent action for vexatious litigation. More significantly, however, this action was not terminated favorably to the home, for this purpose, because the entire matter was settled prior to the expiration of the time period for appeal from the denial of the motion to open the judgment. It will be recalled that Attorney David Jaffe represented Kelbick after the home had filed the vexatious litigation action against Kelbick. After the motion to open the state court judgment had been denied, but before the expiration of the appeal period, Jaffe and the home entered into extensive negotiations which culminated in a document entitled "Separation Agreement, Waiver and General Release." By virtue of this agreement, Kelbick left the employment of the home and in return was granted some severance benefits. Of special significance to this action are clauses to the effect that Kelbick agreed to withdraw with prejudice his action against the home "pending in the Tolland Superior Court against the Hebrew Home . . ." and the home agreed to "withdraw with prejudice the lawsuit against Mr. Kelbick pending in the Superior Court for the Judicial District of Hartford known as The Vexatious Suit." Both sides executed general releases.
It should be noted that the home very specifically released only Kelbick, thus leaving open this action against Brewer. The release of the client does not automatically release the attorney. See, e.g., Embalmer's Supply Co. v. Giannitti, 36 Conn. L. Rptr. 550, 2004 Ct. Sup. 2693 (Tobin, J.) (2004).
The point here, however, is not that the release specifically released Brewer, but rather that the underlying action was not terminated favorably to the plaintiff, as "favorable termination" is applied in the vexatious litigation context.
The home claims that because the settlement document was physically signed after the expiration of the appeal period, it could have had no effect in actually settling the state court matter and thus simply can't have the effect of terminating the action. Brewer, on the other hand, relies on affidavits by Jaffe and Brewer's colleague Erin O'Neill to the effect that the settlement was actually agreed upon by no later than April 30 and that O'Neill had been requested by Kelbick and Jaffe prior to the expiration of the appeal period not to file a notice of appeal because the case had been settled. The representation is reinforced, to some extent, by the billing records of the attorneys for the home: substantial amounts of time are recorded in negotiation and drafting, reviewing and revising the settlement agreement at the end of April. It is axiomatic that one opposing summary judgment must submit factual material to counter evidence offered by the moving party, and no factual material has been submitted to counter the Jaffe-O'Neill affidavits. I find, then, that the agreement was substantially reached prior to the expiration of the appeal deadline and that O'Neill relied on the agreement in not filing an appeal. Because a settlement was reached in the underlying action, this vexatious litigation action is barred.
A settlement agreement which reflects a meeting of the minds is enforceable. Audubon Parking Associates Ltd. Partnership v. Barclay Stauffer, 225 Conn. 804 (1993). See also Nelson v. Charlesworth, 82 Conn. App. 710 (2004), for the proposition that the four-month limitation regarding motions to open can be extended in some circumstances.
Finally, Brewer claims that there is no evidence of malice and that judgment should be entered in his favor for that reason alone. I had told the parties that I believed that malice was a factual issue which, somewhat unlike the existence of probable cause, could be an appropriate issue for a jury to resolve. I am not therefore resolving the issue of malice except to note that malice may ordinarily be inferred from the sort of lack of probable cause required to support a claim of vexatious litigation, on the theory that if probable cause is entirely lacking then there must be an ulterior and perhaps nefarious motive. Here it is difficult to perceive any specific malice directed by Brewer toward the home; but it is not necessary to resolve that issue.
Judgment may enter in favor of the defendant Brewer.
Beach, J.