Opinion
No. CV 10-6008853-S
August 4, 2011
MEMORANDUM OF DECISION RE MOTION TO DISMISS NO. 194
The cross complaint defendant, Michael Levin, filed this motion to dismiss Fidelco Guide Dog Foundation, Inc. (Fidelco)'s cross complaint on the ground that the court is without subject matter jurisdiction. Michael Levin's wife, Nancy Levin, former executive vice president at Fidelco, sued Fidelco for refusing to honor a deferred compensation agreement after her resignation. Fidelco then filed a cross complaint against Michael Levin, an attorney, and his former law firm, Ford Paulekas, LLP (F P), which alleges the following relevant facts.
Michael Levin was counsel to F P and provided Fidelco with legal services as "general counsel." Despite that Michael Levin owed Fidelco a fiduciary duty to act in its best interests, he nonetheless provided representation related to his wife's deferred compensation agreement, causing a conflict of interest. Michael Levin benefitted directly or indirectly from the compensation and benefits his wife received as a result of this agreement but never disclosed to Fidelco that the terms of the agreement (1) could endanger Fidelco's tax exempt status; (2) were unreasonable under the tax code; and (3) were subject to board approval.
Both the third amended cross complaint and the corrected amended third cross complaint contain eight counts, of which the following four are against Michael Levin: professional malpractice (count one); fraudulent misrepresentation by a material omission (count three); negligent misrepresentation by material omission (count five); and breach of fiduciary duty (count seven). Michael Levin filed a motion to dismiss the cross complaint on the ground that the court lacks subject matter jurisdiction because Fidelco does not have standing to assert claims sounding in legal malpractice. Michael Levin also submitted a memorandum of law and two affidavits. In response, the defendants filed a memorandum in opposition and corresponding exhibits.
Michael Levin did not identify which cross complaint he seeks to dismiss; rather, in footnote one of his memorandum, he represented that the present motion applies to either the third amended complaint or to the corrected third amended complaint, whichever is operative. Similarly, this ruling applies to whichever cross complaint is deemed operative, as the relevant claims and allegations are the same.
DISCUSSION
A motion to dismiss "attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Emphasis in the original; internal quotation marks omitted.) Gurliacci v. Mayer, 218 Conn. 531, 544, 590 A.2d 914 (1991). "The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss." (Internal quotation marks omitted.) May v. Coffey, 291 Conn. 106, 113, 967 A.2d 495 (2009). "Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless [one] has, in an individual or representative capacity, some real interest in the cause of action . . . Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved . . . The fundamental test for determining [classical] aggrievement encompasses a well-settled twofold determination: first, the party claiming aggrievement must successfully demonstrate a specific personal and legal interest in the subject matter of the decision, as distinguished from a general interest, such as is the concern of all the members of the community as a whole. Second, the party claiming aggrievement must successfully establish that the specific personal and legal interest has been specially and injuriously affected by the decision . . . Aggrievement is established if there is a possibility, as distinguished from a certainty, that some legally protected interest . . . has been adversely affected . . . A determination regarding a trial court's subject matter jurisdiction is a question of law." (Citation omitted; Internal quotation marks omitted.) Gold v. Rowland, 296 Conn. 186, 207, 994 A.2d 106 (2010). The burden of demonstrating that a party has standing to bring an action is on the plaintiff. See Seymour v. Region One Board of Education, 274 Conn. 92, 104, 874 A.2d 742, cert. denied, 546 U.S. 1016, 126 S.Ct. 659, 163 L.Ed.2d 526 (2005).
"[I]f the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss . . . other types of undisputed evidence . . . and/or public records of which judicial notice may be taken . . . the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint . . . Rather, those allegations are tempered by the light shed on them by the [supplementary undisputed facts] . . . If affidavits and/or other evidence submitted in support of a defendant's motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusion with counteraffidavits . . . or other evidence, the trial court may dismiss the action without further proceedings . . . If, however, the defendant submits either no proof to rebut the plaintiff's jurisdictional allegations . . . or only evidence that fails to call those allegations into question . . . the plaintiff need not supply counteraffidavits or other evidence to support the complaint, but may rest on the jurisdictional allegations therein . . ." (Citations omitted; emphasis in original; internal quotation marks omitted.) Conboy v. State, 292 Conn. 651-52, 974 A.2d 669 (2009).
"[W]here a jurisdictional determination is dependent on the resolution of a critical factual dispute, it cannot be decided on a motion to dismiss in the absence of an evidentiary hearing to establish jurisdictional facts . . . Likewise, if the question of jurisdiction is intertwined with the merits of the case, a court cannot resolve the jurisdictional question without a hearing to evaluate those merits." (Citations omitted; emphasis in original; internal quotation marks omitted.) Id., 652-53. "An evidentiary hearing is necessary because a court cannot make a critical factual [jurisdictional] finding based on memoranda and documents submitted by the parties." (Internal quotation marks omitted.) Id., 653-54. "When the jurisdictional facts are intertwined with the merits of the case, the court may in its discretion choose to postpone resolution of the jurisdictional question until the parties complete further discovery or, if necessary, a full trial on the merits has occurred." Id., 653 n. 16.
In the present case, Michael Levin argues that Fidelco lacks standing because the four counts against him are based on the existence of an attorney-client relationship related to the drafting of his wife's deferred compensation agreement and that he did not have such a relationship with Fidelco. Michael Levin contends that while he did have an attorney-client relationship with Fidelco on some discrete matters, he specifically rescued himself from providing counsel related to his wife's deferred compensation agreement and communicated his conflict of interest to Fidelco, as well as his intention to look out for the interests of his wife. In response, Fidelco argues that there existed an attorney client relationship between it and Michael Levin and that, in any event, this issue goes to the merits of the claims against Michael Levin.
"As a general rule, attorneys are not liable to persons other than their clients for the negligent rendering of services." Krawczyk v. Stingle, 208 Conn. 239, 244, 543 A.2d 733 (1988). Accordingly, "to prove any legal malpractice claim, a plaintiff must establish . . . four necessary elements: [including an] (1) an attorney-client relationship . . ." (Citation omitted.) Lee v. Harlow, Adams Friedman, P.C., 116 Conn.App. 289, 302, 975 A.2d 715 (2009). An exception to this general rule exists when the "plaintiff can demonstrate that he or she was the intended or foreseeable beneficiary of the attorney's services." Krawczyk v. Stingle, supra, 208 Conn. 244. "Whether in fact an attorney-client relationship or fiduciary relationship existed between the parties, or whether the plaintiff possessed a reasonable belief that such a relationship existed between the parties, at the time of the alleged misconduct is a question of fact, the determination of which is for the trier of fact. Dunham v. Dunham, 204 Conn. 303, 320, 528 A.2d 1123 (1987), overruled on other grounds, Santopietro v. New Haven, 239 Conn. 207, 682 A.2d 106 (1996)." Darlow v. Day, Berry Howard, Superior Court, judicial district of Hartford, Docket No. CV 97-0575509 (March 4, 1999, Peck, J.).
In the present case, a jurisdictional determination is dependent on the resolution of a critical factual dispute as to whether there was an attorney-client relationship between Michael Levin and Fidelco. Michael Levin submitted a personal affidavit and that of George Salpietro, former executive director of Fidelco, in which they testify that Michael Levin did not provide any legal services to Fidelco regarding Nancy Levin's deferred compensation agreement and that Michael Levin was not general counsel to Fidelco, but instead worked on discrete legal matters, upon request. Salpietro further testified that after Levin communicated his conflict of interest, Fidelco hired John Gallette, an attorney at the law firm of Reid Riege, P.C. to represent it in connection with Nancy Levin's deferred compensation agreement. To rebut Michael Levin's argument that no attorney-client relationship existed, Fidelco submitted evidence, including billing invoices from for legal services that Michael Levin rendered on behalf of Fidelco and e-mails between him and Gallette with whom he "associated" regarding deferred compensation packages. In a September 22, 2006 e-mail, Michael Levin attached a memorandum identifying issues that "affect the parties," not just those of Nancy Levin. The defendants also submitted a September 14, 2006 e-mail in which Gallette notes that Levin "suggested that [Reid Riege] provide our legal work [for "deferred compensation agreement[s] for employees of Fidelco Guide Dogs"] to him as our client." Because the affidavits and evidence submitted by the parties are at odds with each other, a genuine issue of material fact exists as to whether Michael Levin had an attorney-client relationship with Fidelco. Accordingly, the court cannot make a critical factual jurisdictional finding on the issue of standing based on the memoranda and documents submitted by the parties; instead, it must hold an evidentiary hearing. See Pasquariello Electric Corp. v. Nyberg, Superior Court, judicial district of New Haven, Docket No. CV 08 5024983 (October 7, 2009, Zoarski, JTR).
In addition, because the jurisdictional issue — whether there was an attorney-client relationship so as to confer standing on Fidelco — is intertwined with the merits of the case, the court, in the exercise of its discretion, hereby postpones consideration of this jurisdictional issue until the hearing on the merits, scheduled for November 8, 2011. See Conboy v. State, supra, 292 Conn. 654. At such time, the court must allow an opportunity for the parties to present oral testimony on the issue of an attorney-client relationship. In addition, to the extent possible, the court should consider the jurisdictional issue at the outset and make such consideration clear on the record. See, e.g., Webster Bank v. Zak, 259 Conn. 766, 774, 792 A.2d 66 (2002) (because subject matter jurisdiction addresses the basic competency of the court to adjudicate the case, it must be addressed when raised). Cf. Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 55, 459 A.2d 503 (1983) (finding trial court erred because record of hearing was unclear and no opportunity for testimony was given).
CONCLUSION
For the reasons stated above, the court reserves judgment on Michael Levin's motion to dismiss until a hearing on the merits is held to determine whether the court has subject matter jurisdiction. The court notes that defendants Levin and Ford Paulekas, LLP have filed motions for summary judgment (nos. 195 and 177, respectively). Having reserved judgment on the present motion to dismiss, the court will proceed to consider these pending motions.