Opinion
No. CV04-0103857
June 1, 2006
MEMORANDUM OF DECISION
PROCEDURAL HISTORY
On March 4, 2004, the plaintiffs, Ravenswood Construction, LLC, Ravenswood Company, LLC, and Dean Fiske, filed a five-count complaint against the defendants, Stanley Bysiewicz and Michael Dowley. The complaint alleges the following: (1) breach of contract against Bysiewicz; (2) breach of contract against Dowley; (3) breach of a fiduciary duty against Dowley; (4) fraudulent misrepresentation as to both defendants; and (5) civil theft as to both defendants.
At the conclusion of the plaintiff's case, the court granted the defendants' oral motions to dismiss counts four and five of the complaint as to both defendants, pursuant to Practice Book § 15-8. Since these counts have been dismissed, they will not be addressed here.
On July 23, 2004, the defendants filed revised answers with a special defense and counterclaims. The special defense alleges that the plaintiffs transferred the deed to Lot 2, which was being held in escrow, prior to receipt of final approval and prior to the date of performance in violation of their good faith obligations. The counterclaims alleged by Bysiewicz are the following: (1) breach of contract; (2) common-law slander of title; (3) statutory slander of title; and (4) violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-100a et seq. The counterclaims alleged by Dowley are the following: (1) common-law slander of title; (2) statutory slander of title; (3) CUTPA; and (4) interpleader.
On November 24, 2004, the plaintiffs filed a reply to the special defenses, an answer to the counterclaims and special defenses to the counterclaims. The plaintiffs also filed revised special defenses to Dowley's counterclaims on June 17, 2005. Each defendant filed an answer to the plaintiffs' special defenses.
On December 12, 2005, the defendant Dowley filed a motion for summary judgment. The motion was denied by this court, Booth, J., on April 6, 2006. A hearing on the merits was held on April 25, 2006, and April 26, 2006.
DISCUSSION
"It is well settled that an agreement to settle a lawsuit constitutes an enforceable contract and is binding upon the parties. Audubon Parking Assoc. Ltd. Partnership v. Barclay Stubbs, Inc., 225 Conn. 804, 626 A.2d 729 (1993). Agreements that end lawsuits are contracts, sometimes enforceable in a separate suit but also enforceable by entry of a judgment in the original suit. Janus Films, Inc. v. Miller, 801 F.2d 578, 583 (2d Cir. 1986). Once reached, a settlement agreement cannot be repudiated by either party . . . The Connecticut Supreme Court has recognized that settlement agreements, voluntarily and fairly made, should be held valid and enforced by the Courts. Tallmadge Brothers, Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 746 A.2d 1277 (2000)." (Citation omitted.) Finley Associates, Inc. v. Crossroads Investment Co., L.P., Superior Court, complex litigation docket at New Britain, Docket No. X03 CV 99 0499388 (December 17, 2001, Aurigemma, J.).
I Breach of Contract as to Bysiewicz
"The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." (Internal quotation marks omitted.) Rosato v. Mascardo, 82 Conn.App. 396, 411 (2004). "A settlement agreement is a contract that is interpreted according to general principles of contract law." (Internal quotation marks omitted.) Sharon Motor Lodge, Inc. v. Tai, Superior Court, judicial district of Litchfield, Docket No. CV 98 0077828 (March 1, 2006, Bozzuto, J.).
The plaintiffs advanced two theories at trial to show that Stanley Bysiewicz breached the settlement agreement. First, the plaintiffs argued that Bysiewicz breached the agreement when he signed the waiver of conflict form granting permission to Dowley to represent Thaddeus Bysiewicz, the defendant Bysiewicz's nephew, in his appeal of the Middletown planning and zoning commission's (commission) final approval of phase 1B on October 8, 2003. The second theory was that Bysiewicz breached the contract by failing to turn over the deed to Lot 2 pursuant to the settlement agreement when the plaintiffs obtained final approval on October 8, 2003.
In Bysiewicz v. Planning Zoning Commission, Superior Court, judicial district of Middlesex, Docket No. CV 03 0102870 (October 3, 2004) ( 40 Conn. L. Rptr. 72), cert. granted (February 8, 2006), the court, Silbert, J., dismissed the plaintiff's appeal, holding that the Middletown planning and zoning commission's final approval of phase 1B of the 38-lot subdivision on October 8, 2003, was not unreasonable, arbitrary or illegal. On November 8, 2005, the court, Silbert, J., denied a motion to reargue this decision. The plaintiff filed a petition for certification on November 30, 2005, which was granted by the Appellate Court on February 8, 2006. The defendants filed a motion to dismiss this appeal, which was granted by the court on April 26, 2006. Furthermore, the plaintiff's motion seeking permission to file a late appeal was denied on April 26, 2006.
Paragraph four of the settlement agreement states in relevant part: "The Developer [the plaintiffs] shall transfer to the Local Resident [the defendant Bysiewicz] or a business entity to be formed by Local Resident ("His Nominee"), at his option, marketable unencumbered title to Lot No. 36, Lot No. 37 and Lot No. 38 on the approved subdivision map which subdivision is the subject of this litigation. Said transfer shall occur on or before May 15, 2004, or within 60 days of final approval issued by the Planning and Zoning Commission of said lots, whichever date occurs first. Local Resident and/or His Nominee agree not to hinder, interfere or obstruct issuance of said final approval." (Emphasis added.)
The defendant Bysiewicz testified at trial that he did not believe that signing the waiver would be in violation of the settlement agreement and that he relied on the advice of his counsel, defendant Dowley. The defendant Bysiewicz further testified that he was not involved in the appeal brought by Thaddeus Bysiewicz. Furthermore, Thaddeus Bysiewicz testified that he would have definitely hired another attorney if Dowley was unavailable.
"Where . . . there is clear and definitive contract language, the scope and meaning of that language is not a question of fact but a question of law . . . [W]e interpret contract language in accordance with a fair and reasonable construction of the written words and . . . the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract." (Internal quotation marks omitted.) Santana v. Hartford, 94 Conn.App. 445, 463-64 (2006).
In the present case, the defendant Bysiewicz agreed that he would not "hinder, interfere or obstruct" the plaintiffs' attempts to acquire final approval. Black's Law Dictionary defines "hinder" as to "obstruct or impede." Black's Law Dictionary (6th Ed. 1990). "Interfere" is defined as "hamper" or "hinder" but continues by stating that it is "to enter into, or to take part in, the concerns of others." Id. Furthermore, "obstruct" is defined as "[t]o hinder or prevent from progress, check, stop, also to retard the progress of, make accomplishment of difficult and slow." Id. The testimony clearly shows that the defendant Bysiewicz did not think that his actions would have any effect on the plaintiffs' attempts to acquire final approval. Furthermore, he believed that his waiver of conflict was not prohibited by the contract because Thaddeus Bysiewicz would have sought another attorney and brought the appeal. Finally, there is no evidence that the defendant Bysiewicz participated in any way with the appeal by Thaddeus Bysiewicz. The defendant Bysiewicz did not breach the settlement agreement when he signed the waiver of conflict.
The plaintiffs also argue that the defendant Bysiewicz breached the agreement by failing to turn over the deed to Lot 2 on October 8, 2003, when the plaintiffs obtained final approval. The evidence clearly demonstrates that the defendant Bysiewicz does not have and never had the deed to Lot 2 in his possession or control. Furthermore, the defendant Bysiewicz testified that he relied on the expertise of Attorney Dowley when he informed the defendant Bysiewicz that he did not believe that the plaintiffs had obtained final approval. The defendant Bysiewicz did not breach the settlement agreement by failing to return the deed to Lot 2 to the plaintiffs.
II Breach of Contact as to Dowley
In the present case, the more difficult issue is whether Dowley breached his contractual obligations owed to the plaintiffs when he failed to return the deed to Lot 2. According to the terms of the settlement agreement, Dowley is not liable for any decisions he made with respect to the deed for Lot 2, "except for those decisions made in bad faith." (Emphasis added.) "As a rule, whether bad faith is established is a question of fact." 12 Havemeyer Place Co., LLC v. Gordon, 93 Conn.App. 140, 156-57 (2006). "Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive . . . Bad faith means more than mere negligence; it involves a dishonest purpose." (Citation omitted; internal quotation marks omitted.) Habetz v. Condon, 224 Conn. 231, 237 (1992).
Dowley advanced several theories at trial to explain that his decisions were not made in bad faith. First, the settlement agreement required the plaintiffs to transfer title to Lots 36, 37 and 38 "on or before May 15, 2004, or within 60 days of final approval issued by the Planning and Zoning Commission." (Emphasis added.) Since the plaintiffs obtained conditional final approval, according to the testimony of William Warner, a town official, and the Middletown Subdivision Regulations differentiate between "final approval" and "conditional final approval," Dowley did not believe that the conditions of the settlement agreement had been satisfied. Dowley presented evidence of a letter from Attorney Mark Branse in support of this position and testified that he believes that there is a practical difference between final approval and conditional final approval. While Branse's letter was hearsay as to its truth, the court admitted it for the limited purpose of its effect on the hearer, Dowley. Second, Dowley believed that Thaddeus Bysiewicz's appeal to the Appellate Court could affect the plaintiffs' ability to transfer "marketable unencumbered title" for Lots 36, 37 and 38 as required by the settlement agreement and, thus, it was improper to release the deed to Lot 2. Finally, Dowley testified that he believed that the plaintiffs had breached the settlement agreement by transferring by quitclaim deed title to Lot 2 to the Navar Company, a corporation controlled by the plaintiffs, prior to the May 15, 2004 date. Dowley also testified at trial that the obligation to return the deed for Lot 2 to the plaintiffs does not arise until the deeds to Lots 36, 37 and 38 are given to the defendant Bysiewicz. Since these deeds have yet to be transferred to the defendant Bysiewicz, the obligation to return the deed for Lot 2 to the plaintiffs has not yet arisen and, thus, there has not been a breach of his duty. The court finds at a minimum that Dowley did not act in "bad faith" and, therefore, did not breach any contractual obligations owed to the plaintiffs.
III Breach of Fiduciary Duty as to Dowley
"Breach of fiduciary duty implicates a breach of the duties of loyalty and honesty." Rosenblatt, Rintoul Rintoul, LLC v. Carnelli, Superior Court, judicial district of Hartford, Docket No. CV 99 0594739 (March 9, 2006, Keller, J.). Under Connecticut law, "[a] fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other . . ." (Internal quotation marks omitted.) Cadle Co. v. D'Addario, 268 Conn. 441, 455, 844 A.2d 836 (2004). A fiduciary relationship exists where the fiduciary is either in a "dominant position, thereby creating a relationship of dependency, or [is] under a special duty to act for the benefit of another." Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 38 (2000). "The fiduciary duty comprises two prongs: a duty of care, and a duty of loyalty . . . While the duty of care requires that the . . . fiduciaries exercise their best care and judgment . . . the duty of loyalty derives from the prohibition against self-dealing that inheres in the fiduciary relationship." (Internal quotation marks omitted.) Matrix Investment Corp. v. Ward, Superior Court, judicial district of New London, Docket No. CV 0567613 (September 16, 2004, Hurley, J.T.R.) ( 37 Conn. L. Rptr. 896, 897); see Gurski v. Rosenblun Filan, LLC, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 00 0179063 (February 23, 2001, D'Andrea, J.) ( 28 Conn. L. Rptr. 717, 718).
"No Connecticut cases expressly authorize or discuss the viability of a cause of action for breach of fiduciary duty against an escrow holder/agent; however, other jurisdictions recognize such a cause of action. See, e.g., Armbruster v. Alvin, 437 So.2d 725, 726 (Fla.App. 1983), cert. denied, 450 So.2d 485 (Fla. 1984) ('It is well settled that an escrow agent may be liable in damages for breach of the fiduciary duties owed to the parties to the escrow'); Smith v. First National Bank Trust, 440 N.W.2d 915 (Mich.App. 1989) ('[A]n escrow agent may be liable in tort for the negligent performance of its duties as escrow agent or breach of fiduciary responsibilities owed to its principal'); Southern Cross Lumber Millwork Co. v. Becker, 761 S.W.2d 269, 272 (Mo.App. 1988) ('An escrow agent's failure to strictly follow the terms of the escrow agreement is a breach of his fiduciary duty. The breach of such duty constitutes a tort.')." Thorpe Trucking, LLC v. Devit, Superior Court, judicial district of New Haven, Docket No. CV 03 0474926 (September 15, 2003, Thompson, J.) ( 35 Conn. L. Rptr. 485, 486). "[A] number of Superior Courts have held that an escrow agent can be a fiduciary. Where an escrow agreement exists, the escrow agent is required to act in accordance with the terms of the escrow agreement, even though he may have a special relationship to one of the parties to the escrow as an attorney, fiduciary or otherwise." (Internal quotation marks omitted.) Id.; see also General Statutes § 51-81h(b) ("No escrow agreement shall be ineffective, invalid or unenforceable because the escrow holder is the attorney-at-law, law firm or agent for one or more parties to the escrow agreement, whether in connection with the matter to which the escrow agreement is related or otherwise").
"The Connecticut Supreme Court has never recognized the existence of a fiduciary relationship without some facts indicating that the claimed fiduciary has in some manner agreed to protect that person's interests. In Konover Development Corp. v. Zeller, 228 Conn. 206, 218 (1996), the Court included in the elements of a fiduciary relationship the need to show that the claimed fiduciary is under a duty to represent the interests of the other." (Internal quotation marks omitted.) Dudrow v. Ernst Young, Superior Court, complex litigation docket at Waterbury, Docket No. X01 CV98 0144211 (January 14, 1999, Hodgson, J.).
In the present case, there is no basis for the court to conclude that Dowley owed a fiduciary duty to the plaintiffs. There was no evidence produced at trial to show that Dowley undertook to represent the interests of the plaintiffs. Rather, the evidence at trial showed that Dowley did not sign, nor was he subject in any way, to an escrow agreement. Also, Dowley did not sign the settlement agreement between the plaintiffs and the defendant Bysiewicz. Furthermore, the settlement agreement specifically states that the deed for Lot 2 "shall be placed in escrow with the [defendant Bysiewicz's] counsel." (Emphasis added.) Rather, the only time that Dowley is referred to as an escrow agent, and the only paragraph that imposes any obligation on Dowley, states the following: "Any of the escrow agents holding documents hereunder shall not be liable to any of the parties for carrying out their duties or for any decision made with regard thereto except for those decisions made in bad faith." The plaintiffs are sophisticated business entities that were represented by counsel and the settlement agreement was negotiated as an arms length transaction. If the plaintiffs desired that Dowley owe them a fiduciary relationship, this certainly could have been established in the settlement agreement or with the use of an escrow agreement, but this is not the case here. Finally, the plaintiffs offered copies of checks for payments made to Dowley pursuant to this agreement. However, as the settlement agreement shows and as Dowley testified, these payments were for his services as an attorney and were not compensation for services as an escrow agent. Dowley did not owe the plaintiffs a duty in a fiduciary capacity.
Even if the court found that Dowley owed the plaintiffs a duty as a fiduciary, Dowley did not breach his duty. "Once a [fiduciary] relationship is found to exist, the burden of proving fair dealing properly shifts to the fiduciary." (Internal quotation marks omitted.) Konover Development Corp. v. Zeller, supra, 228 Conn. 219. "The escrow agent's duty is limited by the terms of the escrow agreement . . . [I]t is not in his province to interpret or construe a contract where he has a duty to perform; he must be guided in his duty by what the contract says." (Citation omitted; internal quotation marks omitted.) Hayber v. Department of Consumer Protection, 49 Conn.Sup. 192, 198 (2004) ( 36 Conn. L. Rptr. 603), aff'd, 87 Conn.App. 625 (2005).
In the present case, Dowley is not liable for any decisions he made with respect to the deed for Lot 2, "except for those decisions made in bad faith." (Emphasis added.) As discussed above, Dowley advanced several uncontradicted theories at trial to explain that his decisions were not made in bad faith. Whether or not Dowley's theories were correct, they demonstrate an absence of bad faith and Dowley has not breached any fiduciary duties owed to the plaintiffs.
IV Breach of Contract
The defendants allege that the plaintiffs breached their obligations pursuant to the settlement agreement when they transferred their interest in Lot 2 to the Navar Company by quitclaim deed. The settlement agreement provided that the deed to Lot 2 be returned to the plaintiffs "within 60 days of final approval." The commission granted final approval on October 8, 2003. The plaintiff Fiske testified that the title to Lot 2 was transferred to the Navar Company on February 24, 2004, to protect the plaintiffs' interest in this property since they believed that the defendants were in breach of the settlement agreement for failing to return the deed for Lot 2 to the plaintiffs within 60 days of final approval.
The plaintiffs did not breach the settlement agreement by transferring the deed to Lot 2 because the defendants have failed to prove damages. Since this court has previously determined that the plaintiffs obtained final approval on October 8, 2003, the duty to return the deed to Lot 2 became due on December 8, 2003. The defendants had no further right to the deed, nor any expectancy interest in, Lot 2 after that date. Furthermore, the defendant Bysiewicz testified that he never expected to obtain title to Lot 2 pursuant to the settlement agreement. Finally, the settlement agreement specifically provided that the defendants had a right to the deed for Lot 2 "[o]nly upon breach of this Agreement by [the plaintiffs]." Since the plaintiffs obtained final approval on October 8, 2003, and were able to transfer marketable unencumbered title for Lots 36, 37 and 38, the plaintiffs did not breach the settlement agreement.
In Ravenswood Construction, LLC v. Bysiewicz, Superior Court, judicial district of Middlesex, Docket No. CV 04 0103857 (April 6, 2006, Booth, J.), the court held that "[t]he phase `final approval' is unambiguous because it conveys a definite and precise intent in that `final approval by the planning and zoning commission' could not be interpreted to include any appeals. The ordinary meaning leaves no ambiguity, and it is only when Dowley advances his interpretation of `final approval' that the statement becomes ambiguous." Dowley's argument that the escrow agreement required a distinction between "final approval" and "conditional final approval" was not clearly made in the earlier summary judgment argument in this case. Although the argument was made in this case at trial, the court had already determined that the approval was "final" for purposes of interpreting the parties' rights and duties under the escrow agreement. While the testimony at this trial might support a difference between "final approval" and "conditional final approval," there is no evidence that this distinction was intended as the term "final approval" was used in the earlier settlement agreement.
The defendants also allege that the plaintiffs breached their good faith obligations under the settlement agreement. "Every contract carries an implied covenant of good faith and fair dealing requiring that neither party do anything that will injure the right of the other to receive the benefits of the agreement. Habetz v. Condon, 224 Conn. 231, 238, 618 A.2d 501 (1992) . . . To prove a lack of good faith or, conversely, bad faith, a party must show more than bad judgment or negligence or mistake. Elm Street Builders [Inc.] v. Enterprise Park Condominium [Assn., Inc.], 63 Conn.App. 657, 667-68 (2001)." (Citations omitted; internal quotation marks omitted.) Suitt Construction Co. v. Bottling Group, LLC, Superior Court, complex litigation docket at Waterbury, Docket No. X06 CV 02 0176332 (March 18, 2004, Alander, J.). "The obligation of good faith and fair dealing extends to the assertion, settlement and litigation of contract claims and defenses. The obligation is violated by dishonest conduct such as conjuring up a pretended dispute, asserting an interpretation contrary to one's own understanding, or falsification of facts. 2 Restatement (Second), Contracts, Duty of Good Faith and Fair Dealing, § 205, p. 909, comment e." (Internal quotation marks omitted.) Suitt Construction Co. v. Bottling Group, LLC, supra, Superior Court, Docket No. X06 CV 02 0176332.
In the present case, the defendants have not proven that the plaintiffs acted in bad faith. Fiske's testimony that the plaintiffs believed that they had obtained final approval on October 8, 2003, in satisfaction of the terms of the settlement agreement, was uncontroverted by the defendants. Furthermore, there has been no evidence contradicting Fiske's testimony that the plaintiffs believed that the defendants' duty to return the deed to Lot 2 had arisen and that the defendants had failed to return it in breach of the settlement agreement. Although Fiske testified that the plaintiffs did not notify or otherwise inform the defendants of this quitclaim deed of Lot 2 to the Navar Company, the plaintiffs did admit into evidence a letter from Joseph Milardo, Jr., addressed to Dowley, dated January 26, 2004, indicating that the plaintiffs believed that final approval had been obtained and that the duty to return the deed to Lot 2 had arisen. The court concludes that the defendants have failed to establish that the plaintiffs breached the settlement agreement.
V Common-Law Slander of Title
At common law, "[a] cause of action for slander of title consists of the uttering or publication of a false statement derogatory to the plaintiff's title, with malice, causing special damages as a result of the diminished value of the plaintiff's property in the eyes of third pates. The publication must be false, and the plaintiff must have an estate or interest in the property slandered. Pecuniary damages must be shown in order to prevail on such a claim." (Internal quotation marks omitted.) Elm Street Builders, Inc. v. Enterprise Park Condominium Assn., Inc., supra, 63 Conn.App. 669-70.
In the present case, the plaintiffs filed a quitclaim deed on the Middletown land records, indicating that the property known as Lot 2 was transferred from Ravenswood Construction, LLC, to the Navar Company. The deed was signed February 23, 2004, by plaintiff Fiske. The defendants argue that this was done "knowingly and intentionally and with malice" in violation of the settlement agreement, which provided the deed to Lot 2 to the defendant Bysiewicz in escrow to secure his interests in Lots 36, 37 and 38 of the agreement and to secure the plaintiffs' performance under the agreement.
To prevail under this cause of action, the defendants must allege and prove that the plaintiffs acted with malice and that the defendants suffered pecuniary loss. R.A. Villanova Co. v. Chatfield, Superior Court, judicial district of Waterbury, Docket No. CV 04 0182702 (February 8, 2005, Agati, J.). "To satisfy the element of malice, the plaintiff must allege that the defendant made the statement with knowledge that [it was] false or with a reckless disregard of the truth or falsity of the facts stated." (Internal quotation marks omitted.) Marks v. Matulevich, Superior Court, judicial district of Middlesex, Docket No. CV02 0099337 (January 31, 2005, Silbert, J.) ( 38 Conn. L. Rptr. 724, 732 n. 10). Fiske testified that the title to Lot 2 was transferred to the Navar Company to protect the plaintiffs' interest in this property since they believed that the defendants were in breach of the settlement agreement for failing to return the deed for Lot 2 to the plaintiffs after the commission granted final approval on October 8, 2003. This is supported by the settlement agreement, which states that the deed to Lot 2 was to be returned "within 60 days of final approval." The defendants have failed to prove that the plaintiffs acted with malice.
Furthermore, the defendants failed to prove a pecuniary loss. "Our jurisprudence indicates that a clouded title, alone, does not constitute damages per se. Rather, a plaintiff must present evidence of how the clouded title resulted in some pecuniary loss." Gilbert v. Beaver Dam Assn. of Stratford, Inc., 85 Conn.App. 663, 673 (2004), cert. denied, 272 Conn. 912 (2005). The defendants failed to present evidence of monetary loss caused by the alleged clouded title. The only hypothetical and foreseeable way that the defendants would be able to prove pecuniary loss is if the Appellate Court reverses the trial court's decision in the appeal brought by Thaddeus Bysiewicz and this reversal means that the plaintiffs failed to transfer marketable unencumbered title for Lots 36, 37 and 38 to the defendant Bysiewicz. The damages caused by this hypothetical situation are too speculative and remote to constitute pecuniary damages sufficient for a slander of title cause of action. See id., 674 ("[p]ecuniary injuries are such as can be, and usually are, without difficulty estimated by a money standard"). The defendants have failed to prove a cause of action for common-law slander of title.
VI Statutory Slander of Title
The defendants also allege statutory slander of title pursuant to the Marketability of Title Act, General Statutes § 47-33b et seq., and seek damages pursuant to General Statutes § 47-33j. As discussed above, the defendants have failed to prove that the plaintiffs took this action as to Lot 2 for a malicious purpose and have failed to prove pecuniary loss. See Marks v. Matulevich, supra, 38 Conn. L. Rptr. 731. The defendants have failed to prove a cause of action for statutory slander of title.
General Statutes § 47-33j provides: "No person may use the privilege of recording notices under sections 47-33f and 47-33g for the purpose of slandering the title to land. In any action brought for the purpose of quieting title to land, if the court finds that any person has recorded a claim for that purpose only, the court shall award the plaintiff all the costs of the action, including such attorneys fees as the court may allow to the plaintiff and in addition, shall decree that the defendant asserting the claim shall pay to the plaintiff all damages the plaintiff may have sustained as the result of such notice of claim having been so recorded."
VII Violation of the Connecticut Unfair Trade Practices Act (CUTPA)
The defendants next argue that the plaintiffs violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-100a et seq., which prohibits unfair or deceptive acts in the conduct of trade or business. The defendants incorporate the allegations of slander of title and allege that the plaintiffs' actions were "intentional, reckless and done with malicious disregard of Stanley Bysiewicz's rights." Since the defendants relied on the allegations of slander of title and failed to prove that the plaintiffs acted maliciously, the court finds that the defendants' CUTPA claim must also fail.VIII Interpleader
"The purpose of an interpleader action is to bring all adverse claimants together in a single action for an adjudication of all matters in controversy related to a particular fund to which the adverse claimants seek entitlement." Millman v. Paige, 55 Conn.App. 238, 241 (1999), citing 2 E. Stephenson, Connecticut Civil Procedure (2d Ed. 1970) § 263, p. 1088. "The historical and still the primary purpose of interpleader is to enable a neutral stakeholder . . . to shield itself from liability for paying over the stake to the wrong party." (Internal quotation marks omitted.) Guilford v. Cristini, 45 Conn.Sup. 235, 236 (1997). "The basis for an action of interpleader is the existence of conflicting claims to property in the hands of the stakeholder. In the absence of evidence of conflicting claims, no basis for an interpleader action exists." Commercial Discount Co. v. Plainfield, 120 Conn. 274, 278-79 (1935).
"[T]he normal interpleader action in Connecticut is an action in which the stakeholder deposits a fund into court calling upon the court to divide the money between the other claimants and asks that its expenses for being caught in the middle of the controversy be paid from the funds of the claimants." Levine v. Massey, Superior Court, judicial district of New Haven, Docket No. CV 93 0346481 (November 23, 1993, Booth, J.), rev'd on other grounds, 232 Conn. 272 (1995). "Generally speaking four conditions are necessary to entitle a stakeholder . . . to maintain a bill of interpleader: (1) the same thing, debt, or duty must be claimed by both or all of the parties against whom the relief is demanded; (2) all their adverse titles or claims must be dependent, or be deprived, from a common source; (3) the plaintiff must not have or claim any interest in the subject matter; [and] (4) the plaintiff must have incurred no independent liability to either of the claimants, but must stand indifferent between them merely as a stakeholder." (Internal quotation marks omitted.) Crozier v. Zaboori, 14 Conn.App. 457, 459-60 n. 2 (1988).
Pursuant to General Statutes § 52-484, an interpleader action arises out of equity. "It is a fundamental principle of equity jurisprudence that for a complainant to show that he is entitled to the benefit of equity he must establish that he comes into court with clean hands . . . The clean hands doctrine is applied not for the protection of the parties but for the protection of the court . . . It is applied not by way of punishment but on considerations that make for the advancement of right and justice." (Emphasis in original; internal quotation marks omitted.) Government Employees Insurance Co. v. Lao, Superior Court, judicial district of Fairfield, Docket No. CV 05 4008736 (November 29, 2005, Rodriguez, J.) ( 40 Conn. L. Rptr. 399, 400).
General Statutes § 52-484 provides: "Whenever any person has, or is alleged to have, any money or other property in his possession which is claimed by two or more persons, either he, or any of the persons claiming the same, may bring a complaint in equity, in the nature of a bill of interpleader, to any court which by law has equitable jurisdiction of the parties and amount in controversy, making all persons parties who claim to be entitled to or interested in such money or other property. Such court shall hear and determine all questions which may arise in the case, may tax costs at its discretion and, under the rules applicable to an action of interpleader, may allow to one or more of the parties a reasonable sum or sums for counsel fees and disbursements, payable out of such fund or property; but no such allowance shall be made unless it has been claimed by the party in his complaint or answer."
In the present case, Dowley filed an interpleader action and deposited the deed to Lot 2 with the court. There was a valid dispute between the parties regarding the term "final approval," as used in the settlement agreement, which resulted in a trial on the merits. Each party claims a right to the deed to Lot 2. Furthermore, as discussed above, there is no evidence that Dowley breached his duties under the settlement agreement nor any fiduciary duties. Thus, Dowley has not incurred any liability to the parties and brings this claim as an independent party.
REMEDY
1. Dowley should deliver the deed to Lot 2 to developer's counsel, and a deed to Lots 36, 37 and 38 to local resident or his designee.
2. Stanley Bysiewicz should release the Notice of Agreement on the Middletown land records so as to avoid any cloud on the title to Lot 2.
3. Stanley Bysiewicz should release Dean Fiske from any liability under his personal guarantee.
CT Page 10332
4. No attorneys fees are awarded to any party at this time.
5. The court has made no decision in regard to any party's right to attorneys fees pursuant to Conn. Gen. Stat. § 52-484. Any party who has made such a claim in its complaint or answer may submit a claim for fees within two weeks of the date of this decision. The court will hold a hearing on any such request if requested by an adverse party within two weeks of the submission of the claim.