Opinion
No. CV-05-4009042
April 23, 2009
MEMORANDUM OF DECISION ON MOTION TO SET ASIDE VERDICT
The defendants, Neil W. Kraner and the Law Offices of George B. Bickford, have moved to set aside the verdict rendered in favor of the plaintiff, Gerald Marciano, in the amount of $196,000 on Count Four of the complaint which alleged a breach of fiduciary duty.
The complaint was in five counts. The court granted the defendants' oral motion for directed verdict with respect to Counts One, Two and Five, which alleged legal malpractice, breach of contract and violation of CUTPA, respectively. The jury found in favor of the defendants on Count Three, which alleged fraudulent misrepresentation.
The evidence presented at trial is described as follows. The plaintiff, Gerald Marciano, and his family had lived in a house located in Barkhamsted, Connecticut since 1996. The house had been purchased by Gerald's father, Francis Marciano, Sr. Gerald paid taxes on the house and had maintained it, but never paid any rental to his father. Gerald had tried to persuade his father to deed him the house, but his father had refused to do so.
Prior to 2000, Gerald's mother had entered a nursing home. In early 2000 Francis Marciano, Sr. developed serious mental problems which necessitated his admission to the Institute of Living in Hartford. Gerald feared that if his father's mental condition remained poor, he would have to enter a nursing home.
In March 2000, Gerald met with the defendant, Neil Kraner, who was an attorney at the defendant, Law Offices of George Bickford. Gerald explained that his mother was already in a nursing home, his father was suffering from mental health issues, he had a power of attorney from his father, the house in which he lived was in his father's name, he wanted to obtain title to his house and preserve his parents' assets if possible. He also advised Attorney Kraner that his parents' assets consisted of the Barkhamsted house in which Gerald lived, which had a value of $122,500, a house in Torrington in which his father lived, which had a value of $132,500, approximately $130,000 in cash, and cars worth $22,000 for a total value of the estate of approximately $407,000.
Attorney Kraner advised Gerald that his parents' assets would have to be used to pay for nursing home care until they had spent down their assets to $1,600 at which point they would be eligible for payment of their nursing home expenses by the State under Title XIX ( 42 U.S.C § 1396). Attorney Kraner reviewed various avenues for saving Gerald's parents' assets which included Gerald's house), and ultimately advised Gerald that the only way his parents could save their assets and qualify for Title XIX (without spending down all of their assets, was to transfer all of their real and personal property to a disabled child. This advise was memorialized in a letter from Attorney Kraner to Gerald dated April 14, 2000 which stated, in pertinent part:
If your father's prognosis for recovering sufficient awareness to execute a new power of attorney is not good, then perhaps the best path for protecting some of your father's assets would be to transfer them to his disabled son. As we discussed, to do that you will need to petition the probate court to be appointed as Conservator of the Estate and then apply for permission to gift assets to your brother.
The reference to the disabled brother in the foregoing letter referred to Francis Marciano, Jr., who was living in California and receiving disability benefits. Attorney Kraner provided Francis, Jr. with a list of California attorneys so that he could engage an attorney to advise him as to whether the receipt of his parents' assets would have any impact on his receipt of state or federal benefits. Francis Jr. agreed to accept a transfer of the assets of his parents. He also agreed to transfer to Gerald his parents' Barkhamsted house in which Gerald lived.
Attorney Kraner handled the legal work involved in getting Gerald appointed as the conservator of his father's estate and obtaining approval from the Probate Court for the transfer of his father's assets to Francis, Jr. All work performed by Attorney Kraner was paid for from the assets of Gerald's parents. Attorney Kraner claimed that he advised Gerald that he represented Gerald's parents, but did not represent Gerald. Gerald claimed that he believed that Attorney Kraner represented him. However, he did admit at trial and in answers to interrogatories that he had not used any of his own funds to pay Attorney Kraner.
On October 26, 2000, in Attorney Kraner's office, Gerald executed two fiduciary deeds of the houses owned by the father to Francis, Jr. Francis Jr. also executed a quitclaim deed of the Barkhamsted house to Gerald. The testimony concerning the quitclaim deed was inconsistent. Gerald testified at trial that he believed that Attorney Kraner was going to record all of the deeds. However, there was also evidence that Attorney Kraner advised Gerald at the time that the quitclaim deed could not be recorded until after his father's application for Title XIX benefits had been granted.
There was evidence that as of the start of 2000 Gerald's mother was in a nursing home and his father was in a nursing home by the early part of 2000. The cost for each nursing home per year was approximately $80,000. Gerald's mother died in early 2002 and his father died on March 30, 2003.
After Attorney Kraner prepared the application for Title XIX benefits for Gerald's father, he was contacted by someone from the State of Connecticut Department of Social Services who advised him that the State had become aware (apparently through Francis, Jr.) of the deed from Francis Jr. to Gerald, and that if the deed was not destroyed, then the application for Title XIX benefits would not be granted. The State, apparently, viewed the deed to Gerald from Francis Jr. as an attempt to circumvent the Title XIX laws in that it was evidence that the father's property had not really been transferred to his disabled son, which the law allows, but rather, the disabled son had just been used as a conduit to transfer the property to Gerald, which the law did not allow. Before the State granted the Title XIX application, it required an assurance that the quitclaim deed of the Barkhamsted house to Gerald had been destroyed. Therefore, Attorney Kraner destroyed the quitclaim deed and advised the State that he had done so, and the application was then granted.
There was substantial controversy as to whether Gerald was aware that the quitclaim deed had been destroyed. At trial Gerald testified that he was not aware that the deed had been destroyed. However, in his responses to the defendants' interrogatories he stated that two weeks after the quitclaim deed was signed, Attorney Kraner called Gerald, advising him that the quitclaim deed had to be destroyed and that filing the quitclaim deed would be illegal and fraudulent. The evidence that the Title XIX application would not have been granted without the destruction of the deed was uncontroverted.
Had the application for Title XIX been denied, then Gerald's parents' assets (including the house in which Gerald lived), rather than State funds, would have been used to pay for their nursing home care.
Gerald's father died in March 2003. At or around the same time Gerald and Francis, Jr. had a falling-out. In November 2004, Gerald and his wife went to see Attorney Kraner about preparing a new deed. Attorney Kraner's notes reflect that Gerald told him that his father had "recently passed away," and Gerald wanted to know whether Francis, Jr. could now deed them the Barkhamsted property. Attorney Kraner advised Gerald that he had the deed set to go, and just needed the signature of Francis, Jr. Francis, Jr., however, remained unwilling to deed Gerald the property and was so mad at Gerald that he sold the property to a third party.
On October 15, 2007 Gerald was ultimately able to purchase the Barkhamsted property from a third party for $120,000. At trial, Gerald claimed that he had to obtain a mortgage for most of the purchase price and claimed the $120,000 purchase price and interest paid on the mortgage as damages.
The plaintiff's counsel did not specify any damage amounts in his final argument, so the court has no exact amount of the claimed interest damages.
After the plaintiff presented his case, the defendants moved for a directed verdict with respect to all counts of the complaint. The court granted the motion as to Count One, which alleged legal malpractice, Count Two, which alleged breach of contract, and Count Five which alleged a violation of the Connecticut Unfair Trade Practice Act. The court reserved decision on the remaining counts, Count Three, which alleged fraudulent misrepresentation and Count Four, which alleged breach of fiduciary duty.
The jury's responses to jury interrogatories is set forth below:
1. Do you find that Plaintiff proved he retained the Defendant to represent his personal interests in obtaining the Barkhamsted property? Yes.
2. Do you find that Defendant expressly or impliedly agreed to represent the Plaintiff's personal interests in obtaining the Barkhamsted property? Yes.
3. Do you find that Plaintiff paid consideration to Defendant for the law firm's representation of Plaintiff individually? Yes.
4. Do you find by clear and convincing evidence that Defendant represent to Plaintiff that Defendant would protect the Plaintiff's interest in the Barkhamsted property? No.
5. Do you find by clear and convincing evidence that Defendant's representation to Plaintiff was false and Defendant knew it to be false? No.
6. Do you find by clear and convincing evidence that Plaintiff relied on this false statement in making the transfer of the Barkhamsted property? No.
7. Do you find by clear and convincing evidence that Defendant's fraudulent misrepresentation caused Plaintiff's damages? No
8. Did the Defendant fraudulently misrepresent to Plaintiff or breach a fiduciary duty due Plaintiff after the date of February 24, 2002? Yes.
9. Do you find that the Defendant breached a fiduciary duty to the Plaintiff? Yes.
The jury foreperson executed the Plaintiff's Verdict Form which indicated that the jury did not find in favor of the plaintiff on Count Three, fraudulent misrepresentation, but did find in favor of the plaintiff on Count Four, breach of fiduciary duty. The jury awarded $196,000 in damages.
There was no expert testimony and, therefore, no expert testimony as to what conduct by the defendants constituted a breach of fiduciary duty.
The decision to set aside a jury verdict is a matter within the broad legal discretion of the trial court. Melo v. Spencer, 62 Conn.App. 727, 729-30, 774 A.2d 217 (2001). A trial judge has the duty to set aside a verdict and grant a new trial when he or she finds the verdict to be so clearly against the weight of the evidence in the case as to indicate that the jury did not correctly apply the law to the facts in evidence in the case. Birgel v. Heintz, 163 Conn. 23, 27, 301 A.2d 249 (1972). It is the court's duty to set aside the verdict where it finds that it does manifest injustice and is palpably against the evidence. Malmberg v. Lopez, 208 Conn. 675, 679-80, 546 A.2d 264 (1988). While the Court has broad discretion in determining whether to set aside a verdict, such broad discretion is not unfettered. Suarez v. Sordo, 43 Conn.App. 756, 759-60, 685 A.2d 1144, cert. denied 240 Conn. 906 (1997); Lee v. Lee, 171 Conn. 1, 3, 368 A.2d 11 (1976). In fact, the setting aside of a verdict of a jury raises serious constitutional issues. Jacobs v. Goodspeed, 180 Conn. 415, 416-79 A.2d 915, 42 (1980); Suarez, supra, at 759-60. Litigants have a constitutional right to have issues of fact decided by a jury. Connecticut Constitution, Art. I, § 21; see also Ginsberg v. Fusaro, 225 Conn. 420, 425, 623 A.2d 1014 (1993); Suarez, supra, at 760.
In support of their oral motion for directed verdict made after the plaintiff had rested, the defendants argued that the plaintiff had not established a claim for breach of fiduciary duty because there was no evidence of an attorney-client relationship between Gerald and Attorney Kraner and because there was no expert testimony as to what conduct by the defendants constituted a breach of the fiduciary duty.
In the memoranda of law concerning the motion to set aside the verdict, the parties devote much attention to the issue of whether Gerald paid anything to Attorney Kraner. An attorney-client relationship is established when the advice and assistance of the attorney is sought and received in matters pertinent to his profession. Somma v. Gracey, 15 Conn.App. 371, 379, 544 A.2d 668 (1988). The burden of establishing an attorney-client relationship is on the party claiming the existence of such a relationship. Solomon v. Aberman, 196 Conn. 359, 384, 493 A.2d 193 (1985).
Regardless of whether Gerald paid any money to Attorney Kraner, there was evidence that Gerald sought and received Attorney Kraner's advice and assistance in matters pertinent to his profession. Therefore there was evidence of an attorney-client relationship.
Every attorney-client relationship imposes a fiduciary duty on the attorney. Matza v. Matza, 226 Conn. 166, 183-84, 627 A.2d 414 (1993). The problem with sustaining the verdict in this case is that there was no expert testimony as to what fiduciary duty Attorney Kraner breached.
The plaintiff also brought a claim for legal malpractice. "Malpractice is commonly defined as the failure of one rendering professional services to exercise that degree of skill and learning commonly applied under all the circumstances in the community by the average prudent reputable member of the profession with the result of injury, loss, or damage to the recipient of those services . . . Generally, to prevail in a case alleging legal malpractice, a plaintiff must present expert testimony to establish the standard of proper professional skill or care . . . Furthermore, the plaintiff must prove (1) the existence of an attorney-client relationship; (2) the attorney's wrongful act or omission; (3) causation; and (4) damages." Dubreuil v. Witt, 80 Conn.App. 410, 420, 835 A.2d 477 (2003), aff'd, 271 Conn. 782, 860 A.2d 698 (2004).
"The rationale underlying [the requirement of expert testimony] is that in most cases, the determination of an attorney's standard of care, which depends on the particular circumstances of the attorney's representation, is beyond the experience of the average layperson, including members of the jury and perhaps even the presiding judge . . . The general rule does not, however, apply to cases where there is present such an obvious and gross want of care and skill that the neglect is clear even to a lay person." St. Onge, Stewart, Johnson Reens, LLC v. Media Group, Inc., 84 Conn.App. 88, 95, 851 A.2d 1242, cert. denied, 271 Conn. 918, 859 A.2d 570 (2004).
The breach of fiduciary duty claim here is not one which alleges any self-dealing by Attorney Kraner. The courts have distinguished cases such as this one from cases where the fiduciary has engaged in self-dealing. See Murphy v. Wakelee, 247 Conn. 396, 721 A.2d 1181 (1998). Where self-dealing is alleged, as in most breach of fiduciary duty cases, see, i.e., Dunham v. Dunham, 204 Conn. 303, 322-23, 528 A.2d 1123 (1987), Alaimo v. Royer, 188 Conn. 36, 41, 448 A.2d 207 (1982), Rosenfield v. Metals Selling Corp., 229 Conn. 771, 795-96, 643 A.2d 1253 (1994); Osborne v. Locke Steel Chain Co., 153 Conn. 527, 534, 218 A.2d 526 (1966), Konover Development Corp. v. Zeller, 228 Conn. 206, 219, 635 A.2d 798 (1994), there is no necessity for expert testimony. The breach of the fiduciary duty is self-evident: the fiduciary's misappropriation of money or property.
In the present case, however, there was no allegation that Attorney Kraner misappropriated anything. Therefore, expert testimony was needed to establish whether Attorney Kraner had a particular duty to the plaintiff and whether that duty was violated.
The plaintiff failed to introduce admissible expert testimony to support his legal malpractice claim and, therefore, a directed verdict was granted as to that claim. A plaintiff cannot obviate the necessity for expert testimony by couching his claim in terms of contract rather than tort. see, i.e., Celentano v. Grudberg, 76 Conn.App. 119, 818 A.2d 841 (2003) ("a breach of contract action against an attorney, on the basis of an implied contract is, essentially, governed by the same principles as a negligence action, and both are predicated on the standard of care applicable to the attorney." 76 Conn.App. at 125). By the same token, a plaintiff cannot avoid the need for expert testimony by referring to the attorney's conduct as a breach of fiduciary duty. In the absence of self-dealing by the fiduciary, the nature and extent of the duties of a lawyer vis a vis his client are not within the knowledge of the average juror and expert testimony is required to establish them.
The failure to introduce expert testimony as to what fiduciary duty was violated by Attorney Kraner was fatal to the plaintiff's claim for breach of fiduciary duty and, therefore, there was no competent evidence to support the jury's verdict and it must be set aside.
Even if the plaintiff could prevail on his claim for breach of fiduciary duty, the verdict could still not be sustained because there was absolutely no evidence as to how the destruction of the quitclaim deed from Francis, Jr. to Gerald caused any damages to Gerald.
Gerald had no legal rights to the house in which he lived. That house belonged to his father. The uncontroverted evidence was that if the father's property (including the house in which Gerald lived) was not transferred to Francis, Jr., then it would have had to remain available to pay for the nursing home care for both parents. There was evidence that the cost of that care from 2000 until 2003 was equal to or greater than the amount of Gerald's father's assets. There was further uncontroverted evidence that the State would not have approved the Title XIX application unless the deed from Francis Jr. to Gerald was destroyed. Based on the foregoing, the only act which the plaintiff claimed was a breach of fiduciary duty, was also the only act which preserved Gerald's father's assets.
State of Connecticut Dept of Social Services Uniform Policy Manual (UPM) § 3028.10 provided that assets transferred to a disabled child would not be considered as part of the estate of an applicant for Title XIX benefits. But a transfer to anyone else which occurred within three years of the date of the application would be set aside and the transferred assets would be considered as part of the applicant's estate.
But for the destruction of the quitclaim deed, the transfer of assets to Francis Jr. would not have been allowed, or would have been set aside by the State, and those assets (including the house in which Gerald lived) would have been used to pay the State for the parents' care. Therefore, there was no evidence that the destruction of the deed caused Gerald to sustain any damage. On the contrary, but for the actions of Attorney Kraner, Gerald would probably never even have had the opportunity to purchase his father's house.
Moreover, nothing done by Attorney Kraner prevented Francis, Jr. from executing another quitclaim deed of the Barkhamsted house to Gerald after the Title XIX application for Gerald's father had been approved. However, since Francis, Jr. was the legal owner of the house, he was free to change his mind about transferring it to his brother, as he apparently did. There was no evidence that Attorney Kraner could have taken any legal action to interfere with Francis Jr.'s ability to dispose of his property as he saw fit.
Based on the foregoing, there was no evidence that any conduct by Attorney Kraner caused the plaintiff to sustain any damages. The plaintiff had to purchase a house in which he had no legal interest and in which he had lived rent-free for 11 years. The plaintiff never had to move from his father's Barkhamsted house, and was able to purchase it in 2007 for a price lower than its value in 2000. This lack of any evidence of a causal relationship between the defendants' alleged misconduct and the $196,000 awarded by the jury is an additional basis for setting aside the verdict.
For the foregoing reasons, the motion to set aside the verdict is ordered granted.