Opinion
HHDCV166071027S
12-13-2017
STATE of Connecticut v. DRESSLER STRICKLAND, LLC
UNPUBLISHED OPINION
OPINION
ROBERT B. SHAPIRO, JUDGE
On October 30, 2017, the court heard oral argument concerning the plaintiff State of Connecticut, Department of Administrative Services’ (DAS) motion for summary judgment as to its claim against the defendant Dressler, Strickland, LLC (Dressler), a law firm, for allegedly failing to honor a statutory lien as provided by General Statutes § 17b-94. After consideration, for the reasons stated below, the motion is denied.
Section 17b-94 provides, in relevant part, " (a) In the case of causes of action of beneficiaries of aid under the state supplement program, medical assistance program, aid to families with dependent children program, temporary family assistance program or state-administered general assistance program ... the claim of the state shall be a lien against the proceeds therefrom in the amount of the assistance paid or fifty per cent of the proceeds received by such beneficiary or such parent after payment of all expenses connected with the cause of action, whichever is less, for repayment ... and shall have priority over all other claims except attorneys fees for said causes, expenses of suit, costs of hospitalization connected with the cause of action by whomever paid over and above hospital insurance or other such benefits, and, for such period of hospitalization as was not paid for by the state, physicians’ fees for services during any such period as arc connected with the cause of action over and above medical insurance or other such benefits; and such claim shall consist of the total assistance repayment for which claim may be made under said programs."
I
Background
In its complaint, DAS alleges that Dressler represented a plaintiff in connection with a personal injury claim and that plaintiff had received public assistance. DAS also alleges that, prior to settling the personal injury claim, on March 1, 2012, DAS sent to Dressler, via facsimile, a notice of lien letter and a lien amount letter, which were faxed to a valid number used by Dressler. DAS also alleges that it received a fax confirmation page, stating that the facsimile was successfully transmitted, as indicated by the statement " OK." See Exhibit B to complaint.
DAS further alleges that, in December 2012, Dressler settled the personal injury claim for the sum of $6, 500.00 and, pursuant to General Statutes § 17-93 et seq., DAS was entitled to fifty percent of the net settlement proceeds. DAS alleges that, despite having received the notice of lien letter and lien amount letter, Dressler failed to honor DAS’s statutory lien on the settlement proceeds and improperly paid the full net settlement proceeds to its client.
In addition, DAS asserts that, in its answer, Dressler admitted that the fax number was a valid number which Dressler has used and that the personal injury claim was settled for the net amount of $6, 150.00.
Dressler has denied receiving the fax and asserted special defenses.
Additional references to the factual background are set forth below.
II
Standard of Review
" In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ... As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ... When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ... Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Romprey v. Safeco Ins. Co. of America, 310 Conn. 304, 319-20, 77 A.3d 726 (2013).
III
Discussion
As part of its support of its motion for summary judgment, DAS submits the affidavit of Reyne Maturo, Reimbursement Analyst, and a copy of the Communication Result Report (fax confirmation sheet). Maturo’s deposition demonstrates that she faxed the Notice of Lien Letter and a Lien Amount Letter (lien notice) to Dressler’s fax number and received a contemporaneous confirmation of successful transmission. In its memorandum, DAS points to Dressler’s answer, which admits that the firm’s fax number is the fax number to which the lien notice was sent. DAS argues that the fax confirmation sheet and Dressler’s admission conclusively establish receipt of the lien notice.
In addition, the plaintiff equates the faxing of the lien notice with the " mailbox rule, " arguing that the faxing of notice and the subsequent fax confirmation received, establish a rebuttable presumption that notice was, in fact, received by Dressler. " The mailbox rule is the name for the prevailing tenet in contract law that in any case where a mailed acceptance is reasonable ... [a] contract is regarded as made at the time and place that the letter of acceptance is put into the possession of the postal service.’ 1 A. Corbin, Contracts (1993) § 3.24, p. 437." Echavarria v. Nat ’l Grange Mut. Ins. Co., 275 Conn. 408, 417 n.10, 880 A.2d 882, 888 (2005).
In Echavarria, a contract dispute arose out of the defendant’s cancellation of the plaintiff’s auto insurance policy, notice of which was sent by U.S. Mail. See id., 411-12. Such notice is governed by General Statutes § 38a-343(a), specifying the methods by which notice of cancellation of an insurance policy must be given. See id., 410. Because the defendant provided written notice to the plaintiff, and delivered that notice through the United States Postal Service, the resolution of the dispute was governed by the mailbox rule. See id., 418.
The present case does not involve a contractual dispute, and does not involve a statute which specifically provides the manner in which notice must be given. In addition, DAS did not choose to provide written notice to Dressler using the United States Postal Service, and instead sent the lien notice via facsimile.
DAS cites favorably to Laouini v. CLM Freight Lines, Inc., 586 F.3d 473 (7th Cir. 2009), for the proposition that a fax confirmation creates a rebuttable presumption of receipt. In Laouini, however, the court ultimately concluded that " fax confirmations may not always be conclusive proof of receipt, " and that in this particular instance, it was not the plaintiff’s burden to prove receipt, but the defendant’s burden, as the party moving for summary judgment, to prove absence of receipt. Id., 477-78. Thus, the plaintiff s fax confirmation created " a factual dispute sufficient to preclude summary judgment." Id., 477. Accordingly, after weighing all of the evidence, the Seventh Circuit Court of Appeals vacated the district court’s decision, and remanded the matter for further proceedings. See id., 479. In the present case, DAS moves for summary judgment, arguing that the fax confirmation sheet creates a rebuttable presumption of Dressler’s receipt of the lien notice. For the aforementioned reasons, Laouini is unpersuasive, and in effect serves to undermine DAS’s argument.
DAS also cites Ferrer v. State of Connecticut, Department of Social Services, Superior Court, judicial district of New Britain, Docket No. CV 01 0507765 (August 6, 2001, Wiese, J.), in which the plaintiff appealed from a Department of Social Services (DSS) decision denying benefits to her under the work-related child care program. DSS ultimately denied benefits to the plaintiff on the basis that a completed application had not been received, and therefore could not be timely processed. On appeal, among the issues before the court was whether there was sufficient evidence in the record to support DSS’s finding that the plaintiff failed to submit an application for benefits. In its decision, the court refers to the fact that the plaintiff failed to submit evidence proving that an application had been filed. The court reasoned that an example of proof may include " an application date stamped with the Child Care Assistance Program’s stamp or a fax confirmation." This is the sum total of the court’s discussion about the potential relevance of a fax confirmation. In Ferrer, its significance underscores the weighing of the evidence in the record, and the lack of evidence submitted by the plaintiff in support of her appeal. In addition, at no time did either party allege having faxed any relevant documents to the other. Moreover, the court did not address whether a fax confirmation is conclusive proof of notice, and, in fact, notice of the denial of benefits to the plaintiff was not among the issues before the court. For these reasons, Ferrer is unpersuasive in supporting DAS’s argument here that a fax confirmation sheet is conclusive proof of notice.
As discussed below, Dressler’s opposition and evidence submitted in support demonstrate that a fax confirmation sheet is a computer generated business record and, therefore, the plaintiff’s evidence in support of presumptive notice is insufficient to meet its burden that notice of the lien was received by Dressler.
" Hearsay is an out-of-court statement offered to prove the truth of the matter asserted ... Unless subject to an exception, hearsay is inadmissible ... If the proffered evidence consists of business records, the court must determine whether the documents satisfy the modest requirements under § 52-180 to admit them under the business records exception to the hearsay rule ... When the proffered business records are computer generated, however, the proffering party must satisfy a two part test." (Citations omitted; footnote omitted; internal quotation marks omitted.) Midland Funding, LLC v. Mitchell -James, 163 Conn.App. 648, 655-56, 137 A.3d 1 (2016).
Before concluding that computer generated evidence is admissible, the court must determine " that the record was made in the regular course of business, that it was in the regular course of such business to make such a record, and that it was made at the time of the act described in the report, or within a reasonable time thereafter ... To qualify a document as a business record, the party offering the evidence must present a witness who testifies that these three requirements have been met." (Internal quotation marks omitted.) Id., 656. " Second, the proponent of the computer generated business records must establish that the basic elements of the computer system are reliable ... The genesis of the second part of the test dates back to American Oil Co. v. Valenti, 179 Conn. 349, 358-59, 426 A.2d 305 (1979) in which our Supreme Court noted that " [b]usiness records that are generated by computers present structural questions of reliability that transcend the reliability of the underlying information that is entered into the computer. Computer machinery may make errors because of malfunctioning of the hardware, the computer’s mechanical apparatus. Computers may also, and more frequently, make errors that arise out of defects in the software, the input procedures, the data base, and the processing program ... in view of the complex nature of the operation of computers and general lay unfamiliarity with their operation, courts have been cautioned to take special care to be certain that the foundation is sufficient to warrant a finding of trustworthiness and that the opposing party has full opportunity to inquire into the process by which information is fed into the computer.’ " (Citations omitted; internal quotation marks omitted.) Midland Funding, LLC v. Mitchell-James, supra, 163 Conn.App. 656-57.
When considering witness testimony offered in support of the computer generated business record, " [w]hat is crucial is not the witness’ job description but rather his knowledgeability about the basic elements that afford reliability to computer print-outs ... The witness must be a person who is familiar with computerized records not only as a user but also as someone with some working acquaintance with the methods by which such records are made." (Citation omitted.) American Oil Co. v. Valenti, supra, 179 Conn. 360-61. " Trial courts must have considerable latitude in determining the admissibility of evidence in [the area of computer generated business records] as in others." (Internal quotation marks omitted.) Federal Deposit Ins. Corp. v. Carabetta, 55 Conn.App. 369, 376, 739 A.2d 301, cert. denied, 251 Conn. 927, 742 A.2d 362 (1999).
Dressler’s presentation raises questions as to whether the plaintiff’s faxing of the lien notice satisfies due process, and whether the fax confirmation sheet is admissible under the computer generated business records exception to the hearsay rule. Dressler argues that the fax confirmation sheet is a computer generated business record requiring additional indicia of reliability.
Dressler submits the affidavit of William Flanagan, a telecommunications consultant, who avers that a " telefax machine is a computer with hardware and software designed to convert a visual image into a data stream, transmit that data stream through a modem over a telephone line to another telefax machine, which receives the data stream and reconstructs the data stream into a document image. The computer software allows one machine to communicate with another telefax machine according to a standard communication protocol ..." Defendant’s Exhibit 3, paragraph 4.
Paragraph eight of Flanagan’s affidavit goes on to explain that " An ‘OK’ on the communications results report on the transmitting fax machine means there has been successful data communication with another machine or server. It does not mean that the document faxed was actually printed in legible form on the end user’s fax machine ... [I]t is possible that the ‘OK’ means that a communication ‘handshake’ was accomplished between the transmitting machine and a remote server that stores and relays fax messages; or it could mean that the communication was successful along the entire communication route. It is not possible to tell, however, simply from the report generated by the sending fax machine. One would need to know the type of transmitting fax machine, the type of receiving machine, and the type of transmission system being used to attempt to make an accurate assessment of successful transmission. My understanding is that neither the State of Connecticut nor Dressler Strickland has information available about the transmission path within the telephone carrier or how the connection was processed. The report generated by the sending machine means that a software connection was made between two transmission points, without knowing specifically which transmission points established that communication." Thus, Dressler’s exhibit demonstrates that a fax transmission confirmation sheet is a computer generated business record, and that any fax transmission may be fraught with unreliability.
Maturo’s affidavit and Maturo’s deposition testimony do not demonstrate any indicia of reliability as to DAS’s chosen method of presenting notice of a DAS lien to a personal injury plaintiff’s counsel of record. Maturo’s affidavit and deposition testimony do not establish that the basic elements of the computer system are reliable, or demonstrate that she is knowledgeable about the basic elements that afford reliability to fax confirmations.
In the matter of Midland Funding, LLC v. Mitchell -James, supra, 163 Conn.App. 648, the Appellate Court reversed the trial court’s granting of summary judgment in favor of the plaintiff because the plaintiff’s computer generated business records did not carry sufficient indicia of reliability to be admitted as computer generated business records. The Appellate Court concluded that " the plaintiff’s evidence did not establish it as the owner of the debt and, therefore, the court improperly rendered summary judgment." Id., 658. " [T]he affidavit did not establish that the basic elements of the computer system [were] reliable ... Heeding our Supreme Court’s caveat that [c]omputers may ... make errors that arise out of defects in the software, the input procedures, the data base, and the processing program ... we conclude that it was incumbent on the plaintiff to produce an affidavit from a person who is familiar with computerized records not only as a user but also as someone with some working acquaintance with the methods by which such records are made ... to establish the reliability of the plaintiff’s computer system." (Citations omitted; footnote omitted; internal quotation marks omitted.) Id., 660-61.
" Stayton’s affidavit did not suggest that she understood how Chase transmitted the electronically stored business records to the plaintiff or how the plaintiff processed the electronic records to create computer generated business records that somehow resided with her employer, Midland Credit Management, Inc. In short, Stayton’s affidavit did not establish that the plaintiff’s computer systems were reliable. Accordingly, the plaintiff failed to meet the court’s strict standard of showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ... as to whether the plaintiff not only owned a pool of charged-off accounts, but also owned the defendant’s debt. Thus, Stayton’s affidavit was not sufficient to admit the attached computer generated documents under the business records exception to the hearsay rule. Without that evidence, the plaintiff failed to sustain its burden of establishing that it owned the defendant’s debt. Because of this failure, we conclude that the plaintiff failed to establish that there was no genuine issue of material fact as to its ownership of the defendant’s alleged debt." (Citations omitted; internal quotation marks omitted.) Id., 661-62.
Similar to Stayton’s affidavit in Midland Funding, Maturo’s affidavit and deposition do not suggest that she understands how fax machines transmit information from the sender to the receiver, or that using fax transmission as the sole means of providing notice of a DAS lien is reliable. Maturo’s testimony does not establish that the State of Connecticut’s computer systems or system of fax transmission are reliable. Accordingly, DAS has failed to meet the court’s strict standard of showing that it is quite clear what the truth is, which excludes any real doubt as to the existence of any genuine issue of material fact that the fax transmission system is reliable, or that Dressler received the lien notice. Therefore, Maturo’s affidavit and testimony are insufficient to establish the admissibility of the fax confirmation sheet, a computer generated business record, under the business records exception to the hearsay rule. See General Statutes § 52-180.
Without this evidence, DAS fails to sustain its burden. DAS has failed to establish that there is no genuine issue of material fact as to Dressler’s receipt of the lien notice. Accordingly, the court need not consider Dressler’s due process and other arguments.
CONCLUSION
Based on the reasons stated above, DAS’s motion for summary judgment is denied.