Iacurci v. Sax ( 2014 )

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ARTHUR IACURCI v. LARRY SAX ET AL.
(SC 19119)
Rogers, C. J., and Palmer, Zarella, Eveleigh, McDonald and Robinson, Js.
Argued March 18—officially released September 30, 2014
Benjamin Blue Hume, for the appellant (plaintiff).
Kerry R. Callahan, with whom, on the brief, was
David R. Makarewicz, for the appellees (defendants).
Opinion
ROBINSON, J. The principal issue in this certified
appeal is whether, under the specific circumstances of
this case, a certified public accountant performing tax
return preparation services had a fiduciary relationship
with his client. The plaintiff, Arthur Iacurci, appeals,
upon our grant of his petition for certification,1 from
the judgment of the Appellate Court affirming the trial
court’s grant of the motion for summary judgment filed
by the defendants, Larry Sax, and Cohen, Burger,
Schwartz & Sax, LLC, on the ground that the plaintiff’s
accounting malpractice action was time barred. See
Iacurci v. Sax, 139 Conn. App. 386, 411, 57 A.3d 736
(2012). On appeal, the plaintiff claims that the Appellate
Court improperly concluded that there was no genuine
issue of material fact with respect to the tolling of the
three year statute of limitations for torts, General Stat-
utes § 52-577,2 via the fraudulent concealment statute,
General Statutes § 52-595.3 The plaintiff contends spe-
cifically, in connection with a claim of first impression
regarding shifting the burden of proving fraudulent con-
cealment in cases involving fiduciaries,4 that the Appel-
late Court improperly: (1) determined that the question
of whether a fiduciary duty exists presents a question
of law, rather than deferring to the trial court’s factual
finding that a fiduciary relationship existed between the
parties; and (2) concluded that there was no fiduciary
relationship on the facts of this case. We disagree and,
accordingly, affirm the judgment of the Appellate Court.
The record reveals the following facts and procedural
history.5 From 1989 to 2006, Sax, who is a certified
public accountant, prepared federal and state income
tax returns for the plaintiff on behalf of the accounting
firm presently known as Cohen, Burger, Schwartz &
Sax, LLC.6 Client engagement letters exchanged by the
parties specified that the defendants would prepare the
tax returns using information the plaintiff furnished,
and also provide income tax advice to him. The engage-
ment letters stated that, in the absence of instructions
from the plaintiff, the defendants would use their pro-
fessional judgment to resolve tax questions in his favor
‘‘whenever possible.’’ The engagement letters cau-
tioned, however, that the plaintiff bore ‘‘the final respon-
sibility for the income tax returns,’’ and instructed him
to review the returns carefully before signing them.
From 1989 through 2003, the defendants filed tax
returns for the plaintiff that reported his real estate
investment income as capital gains using schedule D.
From 2004 through 2006, however, the defendants filed
tax returns for the plaintiff that reported his real estate
investment income as ordinary income using schedule
C. In January, 2007, the plaintiff hired Robert Walsh, a
financial planner, to prepare his tax returns. Walsh also
reviewed some of the plaintiff’s previously filed tax
returns. Walsh believed the defendants erred in
reporting the plaintiff’s real estate investment income
using schedule C, rather than schedule D, and brought
the change to the plaintiff’s attention because Walsh
thought it had caused a tax overpayment. It was at
this point, in late January, 2007, that the plaintiff first
discovered that the defendants had changed the way
his real estate investment income was reported.
On November 10, 2009, the plaintiff commenced this
action against the defendants. He alleged that, in Febru-
ary, 2007, he sent amended tax returns to the Internal
Revenue Service (IRS) that sought reclassification of
his real estate investment income under schedule D for
the filings made from 2004 through 2006. The plaintiff
further alleged that, following an audit, the IRS accepted
the proposed reclassification and began reimbursing
his overpayments. The plaintiff claimed that, as a result
of the defendants’ professional malpractice and negli-
gence, he sustained damages arising from audit
expenses and missed investment opportunities while
the IRS possessed his overpayment funds. The plaintiff
claimed these damages were caused by the defendants’
arbitrary change to the way in which he reported his
real estate investment income, as well as their failure
to discuss the ramifications of this change with him.
In answering the complaint, the defendants raised
the special defense that the plaintiff’s claims are time
barred by the applicable three year statute of limita-
tions, § 52-577. The defendants subsequently moved for
summary judgment, asserting that the action was
untimely under § 52-577 because it was commenced on
November 10, 2009, a date more than three years after
the last act on which the plaintiff’s claims were based—
namely, the defendants’ completion and filing of his tax
returns on April 17, 2006. The plaintiff objected to the
motion for summary judgment, arguing that a genuine
issue of material fact existed as to whether the defen-
dants’ alleged fraudulent concealment tolled the statute
of limitations in accordance with § 52-595.7 On March
23, 2011, the trial court granted the defendants’ motion
for summary judgment on the basis that the plaintiff’s
action was time barred.
In concluding that the action was time barred, the
trial court reasoned that the defendants had presented
unrefuted evidence that the last act on which the plain-
tiff’s claims were based occurred on April 17, 2006,
more than three years prior to the commencement of
the action on November 10, 2009. The trial court then
concluded that, because the defendants made out a
prima facie case for summary judgment, the burden
shifted to the plaintiff to establish a genuine issue of
material fact with regard to whether the fraudulent
concealment statute tolled the statute of limitations.
The trial court then cited Falls Church Group, Ltd. v.
Tyler, Cooper & Alcorn, LLP, 281 Conn. 84, 105, 912
A.2d 1019 (2007), in which this court concluded that,
in order to establish fraudulent concealment, a plaintiff
must show that a defendant: ‘‘(1) had actual awareness,
rather than imputed knowledge, of the facts necessary
to establish the [plaintiff’s] cause of action; (2) inten-
tionally concealed these facts from the [plaintiff]; and
(3) concealed the facts for the purpose of obtaining
delay on the [plaintiff’s] part in filing a complaint on
their cause of action.’’ The trial court then cited to Falls
Church Group, Ltd., for the proposition that nondisclo-
sure is sufficient to satisfy the second element of fraudu-
lent concealment ‘‘when the defendant has a fiduciary
duty to disclose material facts.’’8 (Internal quotation
marks omitted.) Id., 107.
Applying Falls Church Group, Ltd., in this context,
the trial court reasoned that the plaintiff presented evi-
dence to satisfy the second element of fraudulent con-
cealment via fiduciary nondisclosure. It observed that
the plaintiff submitted an affidavit in which he attested
to ‘‘[relying] on the defendants as tax experts with their
superior knowledge and skill’’ and ‘‘trust[ing] the defen-
dants to prepare his taxes for him for seventeen years
. . . .’’ The trial court also observed that Walsh signed
an affidavit averring that the defendants owed the plain-
tiff a fiduciary duty and that, in his opinion, the ‘‘change
in the plaintiff’s tax status was a material fact that
should have been disclosed.’’ Accordingly, the trial
court determined that the plaintiff ‘‘submitted sufficient
evidence to establish that the defendants had a fiduciary
relationship with the plaintiff and [that] their failure to
disclose his changed status on the tax returns was a
breach of their duty to disclose material facts to [him].’’
Because, however, the plaintiff did not present any evi-
dence with regard to the first or third elements of fraud-
ulent concealment—namely, the defendants’ actual
awareness of the facts necessary to establish the plain-
tiff’s cause of action and the defendants’ withholding
of such facts for purposes of delaying the plaintiff’s
filing of a complaint—the trial court held that the plain-
tiff had failed to demonstrate the existence of a genuine
issue of material fact concerning the potential applica-
tion of § 52-595. The trial court, therefore, reasoned
that the plaintiff’s claims were time barred and granted
the defendants’ motion for summary judgment.
The plaintiff appealed from the judgment of the trial
court to the Appellate Court, claiming that, following its
determination that the defendants owed him a fiduciary
duty, the trial court improperly failed to shift the burden
of proof to make the defendants responsible for demon-
strating that one or more of the fraudulent concealment
elements could not be satisfied.9 Iacurci v. Sax, supra,
139 Conn. App. 394–95. The Appellate Court reasoned
that this burden shifting claim was inextricably inter-
twined with the threshold question whether the plaintiff
had presented evidence to the trial court that could
support a determination that the parties had a fiduciary
relationship. Id., 396–97. The Appellate Court concluded
that the plaintiff did not meet that burden because of,
inter alia, an absence of evidence in the record that the
relationship between the plaintiff and the defendants
was one characterized by a unique degree of trust and
confidence.10 Id., 405. Accordingly, the Appellate Court
affirmed the judgment of the trial court. Id., 411.
Judge Lavine dissented, concluding that the trial
court improperly granted the defendants’ motion for
summary judgment. Id., 423. In his view, whether a
fiduciary relationship existed between the parties was
a question of fact, meaning it was inappropriate for: (1)
the trial court to resolve the question at the summary
judgment stage; and (2) the Appellate Court to evaluate
the question for itself in turn. Id., 426–27. Judge Lavine
opined that the Appellate Court should have addressed
only the plaintiff’s burden shifting argument—with
which he agreed based on federal precedent and state
precedent occurring beyond the context of § 52-595.
See id., 424–25, 427–28; see also footnote 9 of this opin-
ion. This certified appeal followed. See footnote 1 of
this opinion.
On appeal, the plaintiff claims that the Appellate
Court improperly: (1) disturbed the trial court’s deter-
mination that the defendants owed him a fiduciary duty,
which he characterizes as a factual finding; and (2)
concluded that he did not present evidence to the trial
court that could support a determination that the parties
had a fiduciary relationship. We address each claim
in turn.
I
We begin with the plaintiff’s claim that it was
improper for the Appellate Court to disturb the trial
court’s determination that the defendants owed him a
fiduciary duty. The plaintiff contends that ‘‘appellate
courts should not decide questions of fact’’ and argues
that fiduciary duty determinations fall under this gen-
eral prohibition. The plaintiff does not, however, direct
our attention to any case law that supports the specific
proposition that fiduciary duty inquiries are questions
of fact. Rather, he emphasizes that the existence of
a fiduciary duty is ‘‘purely fact driven’’ and must be
evaluated ‘‘based upon the facts of each case.’’ The
plaintiff thus contends that, in absence of clear error,
the Appellate Court was bound to adopt the trial court’s
determination that a fiduciary relationship existed
between the parties. In response, the defendants cite
Biller Associates v. Peterken, 269 Conn. 716, 849 A.2d
847 (2004), and Dugan v. Mobile Medical Testing Ser-
vices, Inc., 265 Conn. 791, 830 A.2d 752 (2003), for the
proposition that fiduciary duty determinations are legal,
and not factual, in nature. We conclude that the trial
court’s determination that the defendants owed the
plaintiff a fiduciary duty was a conclusion of law not
subject to deference on appeal.
Cases from this court dating back to the nineteenth
century have recognized that ‘‘whether [some] duty
exists is a question of law.’’ Schoonmaker v. Albertson &
Douglass Machine Co., 51 Conn. 387, 392 (1883). This
principle was restated many times during the next two
centuries: ‘‘The existence of a duty is a question of law
and [o]nly if such a duty is found to exist does the trier
of fact then determine whether the defendant violated
that duty in the particular situation at hand.’’ (Internal
quotation marks omitted.) Petriello v. Kalman, 215
Conn. 377, 382–83, 576 A.2d 474 (1990); accord, e.g.,
Dugan v. Mobile Medical Testing Services, Inc., supra,
265 Conn. 807. Given the many types of legal duties
that can exist, it is most important to observe that this
standard has been applied specifically in cases involving
purported fiduciaries.11 See Biller Associates v.
Peterken, supra, 269 Conn. 721–22. Because a fiduciary
duty determination is a question of law, it is subject to
plenary review on appeal. Id., 722. Under plenary
review, an appellate court must decide whether the trial
court’s determination is ‘‘legally and logically correct
and find[s] support in the facts that appear in the
record.’’ (Internal quotation marks omitted.) Id.
The plaintiff properly observes that, in many cases,
the existence of a fiduciary duty may turn on the unique
facts presented in the record. The fact driven nature
of a question of law does not, however, transform it
into a question of fact. Bass ex rel. Bass v. Miss Porter’s
School, 738 F. Supp. 2d 307, 330 (D. Conn. 2010); cf.
Fraser v. United States, 236 Conn. 625, 632–33, 674
A.2d 811 (1996) (‘‘[d]uty is a legal conclusion about
relationships between individuals’’ that is ‘‘determined
by the circumstances surrounding the conduct of the
individual’’ [internal quotation marks omitted]). Con-
trary to the arguments made by the plaintiff and the
conclusions in the dissenting opinion at Appellate
Court; see Iacurci v. Sax, supra, 139 Conn. App. 426–27
(Lavine, J., dissenting); given the undisputed underly-
ing facts, the Appellate Court properly decided, as a
matter of law, whether the defendants owed the plaintiff
a fiduciary duty. The Appellate Court was not required
to defer to the trial court’s determination that the parties
had a fiduciary relationship as a matter of law. See
Biller Associates v. Peterken, supra, 269 Conn. 722.
Accordingly, the Appellate Court properly engaged in
a plenary review of the record to determine whether the
undisputed factual evidence supported the trial court’s
conclusion that a fiduciary relationship existed between
the parties.12
II
We next turn to the plaintiff’s claim that the Appellate
Court improperly concluded that he had not presented
evidence to the trial court to support a determination
that the parties had a fiduciary relationship. Specifi-
cally, the plaintiff notes that he filed an affidavit in
which he attested to ‘‘[relying] on the defendants as tax
experts with their superior knowledge and skill when
compared to his own knowledge of tax matters.’’ The
plaintiff observes that the defendants had prepared his
taxes for seventeen years, and that he justifiably placed
his trust in their decisions about how his tax returns
were prepared.13 In the plaintiff’s view, the Appellate
Court did not appear to take these relationship dynam-
ics into account. He contends that the majority opinion
concluded, as a matter of law, ‘‘that there can be no
fiduciary relationship when one party is a tax preparer
and the other party is a client.’’
In response, the defendants argue that the Appellate
Court did not conclude that a tax return preparer can
never have a fiduciary relationship with a client. Rather,
the defendants contend that the Appellate Court prop-
erly observed that the relationship between a tax return
preparer and a client is not ordinarily fiduciary in
nature. The defendants concede that a tax return pre-
parer might owe its client a fiduciary duty under differ-
ent circumstances. They argue, however, that the
Appellate Court properly concluded that, here, the
plaintiff did not present any unique factual evidence
that would be consistent with a fiduciary dynamic. Spe-
cifically, the defendants contend that the plaintiff did
not present evidence of a unique degree of trust or
expertise, nor of dominance or control. They further
contend that the plaintiff did not present any evidence
that the relationship between the parties ‘‘invite[d] the
kind of fraud or self-dealing that requires imposing
heightened, fiduciary duties.’’ The defendants warn that
if, as the plaintiff hopes, ‘‘a client may declare a profes-
sional his fiduciary by simply proclaiming lesser knowl-
edge and reliance . . . every business person [would
be turned into] his or her clients’ or customers’ fiduciar-
ies.’’ We agree with the defendants and conclude that,
based on the specific circumstances of this case, they
did not owe a fiduciary duty to the plaintiff.
‘‘The standards governing [an appellate tribunal’s]
review of a trial court’s decision to grant a motion for
summary judgment are well established. Practice Book
[§ 17-49] provides that summary judgment shall be ren-
dered forthwith 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. . . . In deciding a
motion for summary judgment, the trial court must view
the evidence in the light most favorable to the nonmov-
ing party. . . . [T]he scope of our review of the trial
court’s decision to grant the [defendants’] motion for
summary judgment is plenary.’’ (Internal quotation
marks omitted.) Romprey v. Safeco Ins. Co. of America,
310 Conn. 304, 312–13, 77 A.3d 726 (2013). ‘‘[I]n the
context of a motion for summary judgment based on
a statute of limitations special defense, [the defendants]
typically [meet their] initial burden of showing the
absence of a genuine issue of material fact by demon-
strating that the action had commenced outside of the
statutory limitation period. . . . When the plaintiff
asserts that the limitations period has been tolled by
an equitable exception to the statute of limitations, the
burden normally shifts to the plaintiff to establish a
disputed issue of material fact in avoidance of the stat-
ute.’’ (Citation omitted.) Id., 321. Put differently, it is
then ‘‘incumbent upon the party opposing summary
judgment to establish a factual predicate from which
it can be determined, as a matter of law, that a genuine
issue of material fact exists.’’ Connell v. Colwell, 214
Conn. 242, 251, 571 A.2d 116 (1990).
Thus, to toll a statute of limitations by way of our
fraudulent concealment statute, a plaintiff must present
evidence that a defendant: ‘‘(1) had actual awareness,
rather than imputed knowledge, of the facts necessary
to establish the [plaintiff’s] cause of action; (2) inten-
tionally concealed these facts from the [plaintiff]; and
(3) concealed the facts for the purpose of obtaining
delay on the [plaintiff’s] part in filing a complaint on
their cause of action.’’ Falls Church Group, Ltd. v.
Tyler, Cooper & Alcorn, LLP, supra, 281 Conn. 105. For
purposes of this case, we assume, without deciding,
that the second element of fraudulent concealment,
namely, intentional concealment, could alternatively be
satisfied upon a plaintiff’s submission of evidence that
a defendant owed him a fiduciary duty and failed to
disclose information as that duty required. See footnote
8 of this opinion.
Turning to the standard for determining whether a
fiduciary relationship exists, this court has recognized
that some actors are per se fiduciaries by nature of the
functions they perform. These include ‘‘agents, part-
ners, lawyers, directors, trustees, executors, receivers,
bailees and guardians.’’ (Internal quotation marks omit-
ted.) Falls Church Group, Ltd. v. Tyler, Cooper & Alc-
orn, LLP, supra, 281 Conn. 108–109. Beyond these per
se categories, however, a flexible approach determines
the existence of a fiduciary duty, which allows the law
to adapt to evolving situations wherein recognizing a
fiduciary duty might be appropriate. Id. This court has
instructed that, ‘‘[a] fiduciary or confidential relation-
ship is characterized by a unique degree of trust and
confidence between the parties, one of whom has supe-
rior knowledge, skill or expertise and is under a duty
to represent the interests of the other. . . . The supe-
rior position of the fiduciary or dominant party affords
him great opportunity for abuse of the confidence
reposed in him.’’ (Internal quotation marks omitted.) Id.,
108. With these principles in mind, ‘‘we have recognized
that not all business relationships implicate the duty of
a fiduciary.’’ Hi-Ho Tower, Inc. v. Com-Tronics, Inc.,
255 Conn. 20, 38, 761 A.2d 1268 (2000).
This court has not previously considered whether a
tax return preparer, including an accountant, ordinarily
owes a fiduciary duty to its client. Consistent with the
foregoing general principles, our cases considering
whether ad hoc fiduciary duties existed in business
relationships have turned on the presence of a special
vulnerability.14 See Sherwood v. Danbury Hospital, 278
Conn. 163, 196, 896 A.2d 777 (2006). That is, ‘‘trust and
confidence,’’ ‘‘superior knowledge, skill or expertise,’’
and an expectation that one party is ‘‘under a duty
to represent the interests of the other’’ are typically
necessary, but not always dispositive, conditions giving
rise to a fiduciary duty in business settings. Rather,
particular attention is given to whether there is a ‘‘great
opportunity for abuse of the confidence reposed in’’ the
hired party. (Internal quotation marks omitted.) Falls
Church Group, Ltd. v. Tyler, Cooper & Alcorn, LLP,
supra, 281 Conn. 108. This follows logically from the
need to avoid assigning the serious, significant duties
that are expected of a fiduciary to every business
arrangement. Ostensibly, any time one party hires
another to perform a service on their behalf, ‘‘trust and
confidence’’ is placed in the latter party. Likewise, most
customers and clients invariably rely on a service pro-
vider’s ‘‘superior knowledge, skill, or expertise’’ in their
trade. The unique element that inheres a fiduciary duty
to one party is an elevated risk that the other party
could be taken advantage of—and usually unilaterally.
That is, the imposition of a fiduciary duty counterbal-
ances opportunities for self-dealing that may arise from
one party’s easy access to, or heightened influence
regarding, another party’s moneys, property, or other
valuable resources. All of this precludes us from unduly
extending the scope of fiduciary obligations to all ordi-
nary business relationships.
To the extent that courts in other jurisdictions have
addressed the present question, they have concluded
that a fiduciary relationship does not exist when a client
relationship is limited to the preparation of tax returns.
See Sorenson v. H & R Block, Inc., 107 Fed. Appx. 227,
230–31 (1st Cir. 2004) (affirming holding that tax return
preparer was not fiduciary or agent); In re Marcet, 352
B.R. 462, 472 (Bankr. N.D. Ill. 2006) (tax advisor and
tax return preparer was not fiduciary where no evidence
was adduced to show control or advice regarding cli-
ent’s finances); Peterson v. H & R Block Tax Services,
Inc., 971 F. Supp. 1204, 1214 (N.D. Ill. 1997) (same).
The plaintiff has not directed this court’s attention to
any decisions holding to the contrary.15
In contrast, courts have concluded that the relation-
ship between a tax return preparer and a client is fidu-
ciary in nature when a heightened risk of abuse of
trust or confidence exists, such as when the tax return
preparer or accountant acts as an investment advisor
or manages the client’s funds. See Burdett v. Miller,
957 F.2d 1375, 1381–82 (7th Cir. 1992) (accountant who
held himself out as expert in investments and provided
advice on tax shelter investments owed client fiduciary
duty); Haas v. Haas, 137 Conn. App. 424, 434–35, 48
A.3d 713 (2012) (accountant who, inter alia, filed tax
returns for his elderly mother undisputedly owed her
fiduciary duty by virtue of agreeing to manage her finan-
cial affairs and investments); Khan v. Deutsche Bank
AG, 978 N.E.2d 1020, 1041 (Ill. 2012) (plaintiff ade-
quately pleaded existence of fiduciary duty via detailed
allegations that defendants provided investment and
tax advice); see also authorities discussed in footnote
15 of this opinion.
On the facts of this case, even when the evidence is
viewed in a light that is most favorable to the plaintiff,
we conclude that, as a matter of law, the defendants
did not owe him a fiduciary duty. The plaintiff has not
argued in this appeal that the defendants fall into one
of the per se fiduciary categories. His affidavit averred
that the defendants prepared his annual tax returns, and
thereafter contained conclusory recitals of our standard
for fiduciary duty determinations. Cf. Kottler v.
Deutsche Bank AG, 607 F. Supp. 2d 447, 465–66
(S.D.N.Y. 2009) (vague, conclusory allegations that
defendants served plaintiff as financial and tax advisor
insufficient to establish fiduciary relationship).
Although the plaintiff averred to placing trust and confi-
dence in the defendants when they prepared his annual
tax returns, the same might be said of any relationship
where one party hires another to perform a professional
service competently on their behalf. Cf. Beverly Hills
Concepts, Inc. v. Schatz & Schatz, Ribicoff & Kotkin,
247 Conn. 48, 57, 717 A.2d 724 (1998) (‘‘[p]rofessional
negligence implicates a duty of care, while breach of a
fiduciary duty implicates a duty of loyalty and hon-
esty’’). Similarly, the plaintiff averred that the defen-
dants possessed ‘‘knowledge, skill and expertise that
was clearly superior’’ to his own in tax matters. This
aptitude differential, without a corresponding risk of
abuse, does not transform their professional relation-
ship in any special way to warrant the imposition of a
fiduciary duty. See Hi-Ho Tower, Inc. v. Com-Tronics,
Inc., supra, 255 Conn. 42 (‘‘[s]uperior skill and knowl-
edge alone do not create a fiduciary duty among parties
involved in a business transaction’’). Nor does the undis-
puted duration of the parties’ relationship—which is
certainly lengthy at seventeen years—change its core
qualitative characteristics. See In re Marcet, supra, 352
B.R. 472 (certified public accountant who served as tax
advisor and prepared income tax returns for twenty
years did not owe fiduciary duty). The plaintiff did not
present any other evidence regarding his claimed fidu-
ciary relationship with the defendants.
The other undisputed evidence in the record, namely,
the client engagement letters the defendants submitted
to the trial court, also does not create a genuine issue
of material fact that would support the plaintiff’s claim
that a fiduciary relationship existed. To a point, these
letters are favorable to the plaintiff because they indi-
cate that the defendants were hired to provide tax
advice and, where possible, resolve tax questions in the
plaintiff’s favor when preparing his returns. No specific
evidence was presented, however, about the extent or
nature of any tax advice that was actually rendered.
The absence of such evidence is fatal to the plaintiff’s
fiduciary claim. Granted, the plaintiff averred that he
earned income through real estate investments and that
the defendants prepared tax returns relating to that
income. By itself, that does not, however, demonstrate
that the defendants provided him with any substantive
advice concerning those investments. Had the plaintiff
adduced evidence, for example, of a disparity in bar-
gaining power, or that the defendants’ tax advice veered
into the investment realm—such that they recom-
mended financial transactions to him or managed his
investment funds—our view of the parties’ relationship
may well have been different. Under that alternative
scenario, a client’s special vulnerability would be more
readily apparent.16
‘‘The purposes of statutes of limitation include final-
ity, repose and avoidance of stale claims and stale evi-
dence. . . . These statutes represent a legislative
judgment about the balance of equities in a situation
involving a tardy assertion of otherwise valid rights:
[t]he theory is that even if one has a just claim it is
unjust not to put the adversary on notice to defend
within the period of limitation and that the right to be
free of stale claims in time comes to prevail over the
right to prosecute them.’’ (Citation omitted; internal
quotation marks omitted.) Flannery v. Singer Asset
Finance Co., LLC., 312 Conn. 286, 322–23, 94 A.3d 553
(2014). Although the fraudulent concealment statute
may toll the three year statute of limitations for torts,
the plaintiff’s lone theory of fraudulent concealment
required him to establish a fiduciary relationship with
the defendants. Because he failed to do so, his claims
are time barred. Accordingly, we conclude that the
Appellate Court properly affirmed the trial court’s sum-
mary judgment rendered against the plaintiff.
The judgment of the Appellate Court is affirmed.
In this opinion ROGERS, C. J., and PALMER, ZARE-
LLA and McDONALD, Js., concurred.
1
We granted the plaintiff’s petition for certification for appeal limited to
the following issue: ‘‘Did the Appellate Court properly affirm the trial court’s
entry of summary judgment against the plaintiff?’’ Iacurci v. Sax, 308 Conn.
910, 61 A.3d 1100 (2013).
2
General Statutes § 52-577 provides: ‘‘No action founded upon a tort shall
be brought but within three years from the date of the act or omission
complained of.’’
3
General Statutes § 52-595 provides: ‘‘If any person, liable to an action
by another, fraudulently conceals from him the existence of the cause of
such action, such cause of action shall be deemed to accrue against such
person so liable therefor at the time when the person entitled to sue thereon
first discovers its existence.’’
4
See footnote 9 of this opinion and accompanying text.
5
We note that the defendants denied all allegations of wrongdoing, but
do not appear to contest any of these historical facts for summary judg-
ment purposes.
6
In his affidavit, Sax admitted to preparing the plaintiff’s taxes from 1989
to 1999 at a predecessor firm, Schwartz and Sax, LLP. Sax thereafter served
the plaintiff at Cohen, Burger, Schwartz & Sax, LLC, which was formed
in 1999.
7
The plaintiff also requested leave to amend his reply pleading to the
special defense, dated January 27, 2010. The plaintiff’s amended reply
asserted: ‘‘[T]he applicability of the tolling provisions of . . . § 52-595, Con-
necticut’s fraudulent concealment statute, in that: (a) at all times, a fiduciary
relationship existed between the plaintiff and the defendants; (b) the defen-
dants never disclosed to the plaintiff the specific acts on the part of the
defendants which are alleged in [the] plaintiff’s complaint to constitute
negligence; (c) at all times, the defendants had a fiduciary duty to make
such disclosure to the plaintiff; and (d) said negligent acts of the defendants
were not discovered by the plaintiff until late January of 2007 . . . .’’
8
This quotation cites a proposition that has gained general acceptance
in federal cases applying Connecticut law. See, e.g., Fenn v. Yale University,
283 F. Supp. 2d 615, 636–37 (D. Conn. 2003). As the trial court acknowledged,
however, this court has ‘‘not yet decided whether affirmative acts of conceal-
ment are always necessary’’ to satisfy the second element of fraudulent
concealment under § 52-595. (Internal quotation marks omitted.) Falls
Church Group, Ltd. v. Tyler, Cooper & Alcorn, LLP, supra, 281 Conn. 107.
The trial court nonetheless proceeded as though a fiduciary’s mere nondis-
closure, if found, could supplant the need for evidence of acts of intentional
concealment. The Appellate Court followed a similar course. See Iacurci
v. Sax, supra, 139 Conn. App. 394 n.2.
We emphasize that, in Falls Church Group, Ltd., this court only explained,
in the context of evaluating a vexatious litigation action, that a law firm
had probable cause to believe that it could assert a fraudulent concealment
claim in light of federal precedent allowing fiduciary nondisclosure to substi-
tute for intentional concealment. Falls Church Group, Ltd. v. Tyler, Cooper &
Alcorn, LLP, supra, 281 Conn. 103–105, 107–108, 112. That is, in Falls Church
Group, Ltd., this court did not actually adopt the federal approach of allowing
fiduciary nondisclosure to substitute for the second element of a fraudulent
concealment claim. Nor do we adopt the federal approach in the present
case, as the parties have not brought it directly into dispute. Rather, in the
present case, we will assume without deciding that a fiduciary’s nondisclo-
sure could satisfy the second element of fraudulent concealment for the
purpose of § 52-595.
9
This argument was not proffered to the trial court—as admitted by the
plaintiff’s counsel at oral argument before this court. The defendants raised
this potential preservation issue before the Appellate Court and, likewise,
brought it to this court’s attention at oral argument.
Ultimately, we need not address this potential preservation issue or the
merits of the plaintiff’s underlying argument regarding a potentially shifting
burden of proof in § 52-595 cases—which would be a matter of first impres-
sion for this court. See Martinelli v. Bridgeport Roman Catholic Diocesan
Corp., 196 F.3d 409, 422 (2d Cir. 1999) (‘‘[a]lthough there is no Connecticut
decision specifically addressing whether the usual practice of shifting the
burden of proof to a fiduciary to prove it has acted fairly extends to an
allegation of fraudulent concealment under the tolling statute, we think that
under Connecticut law such an allocation is compelled’’). The plaintiff’s
burden shifting argument is entirely dependent on whether the defendants
owed him a fiduciary duty. Under our plenary review, we answer that
threshold legal question in the negative.
10
The fiduciary relationship issue was raised before the trial court, but
only superficially addressed by the parties in their initial briefs to the Appel-
late Court. Iacurci v. Sax, supra, 139 Conn. App. 397 n.3. Because the
plaintiff’s burden shifting argument depended on the demonstration of a
fiduciary relationship between the parties, the Appellate Court ordered sup-
plemental briefing on that issue. Id.
11
We note this court’s approach in Biller Associates v. Peterken, supra,
269 Conn. 721–22, is consistent with that of other states. See, e.g., Gliko v.
Permann, 331 Mont. 112, 120, 130 P.3d 155 (2006) (‘‘whether a fiduciary
duty exists between two parties is a question of law’’); National Plan Admin-
istrators, Inc. v. National Health Ins. Co., 235 S.W.3d 695, 700 (Tex.
2007) (same).
12
We emphasize that, when the resolution of a question of law, such as
the existence of a fiduciary duty, depends on underlying facts that are in
dispute, that question becomes, in essence, a mixed question of fact and
law. Thus, we would review the subsidiary findings of historical fact, which
‘‘constitute a recital of external events and the credibility of their narrators,’’
for clear error, and engage in plenary review of the trial court’s ‘‘application
of . . . legal standards . . . to the underlying historical facts.’’ (Internal
quotation marks omitted.) Lindholm v. Brant, 283 Conn. 65, 76–77, 925 A.2d
1048 (2007); see also, e.g., Haas v. Haas, 137 Conn. App. 424, 432, 48 A.3d
713 (2012) (whether continuing course of conduct tolls statute of limitations
is mixed question of law and fact, with underlying factual findings reviewed
for clear error and ultimate conclusions of law subject to plenary review).
13
The plaintiff and the dissent further rely on Walsh’s affidavit attesting
that, ‘‘in his expert opinion, the defendants owed a fiduciary duty to the
plaintiff . . . .’’ Walsh’s affidavit is only informative to the extent that he
describes facts surrounding the services he provided to the plaintiff in
January, 2007. Walsh’s expertise in tax preparation does not qualify him
to render an opinion on the legal question of whether the defendants owed
the plaintiff a fiduciary duty. See State v. Douglas, 203 Conn. 445, 453, 525
A.2d 101 (1987) (‘‘in order to be admissible, the proffered expert’s knowledge
must be directly applicable to the matter specifically in issue’’). Moreover,
even if a fiduciary duty could properly be found to exist in the present case,
any averment by Walsh as to whether that duty was breached would be
inadmissible. See Updike, Kelly & Spellacy, P.C. v. Beckett, 269 Conn. 613,
652 n.30, 850 A.2d 145 (2004) (expert testimony that certain conduct consti-
tuted breach of fiduciary duty was improper legal opinion on ultimate issue).
14
Indeed, the presence of some special vulnerability is also a common
thread among per se fiduciary relationships. See, e.g., Fink v. Golenbock,
238 Conn. 183, 210, 680 A.2d 1243 (1996) (jury could reasonably find breach
of fiduciary duty in light of testimony that director absconded with corporate
funds for personal speculative investments); see also R. Cooter & B. Freed-
man, ‘‘The Fiduciary Relationship: Its Economic Character and Legal Conse-
quences,’’ 66 N.Y.U. L. Rev. 1045, 1046 (1991) (hallmark of per se fiduciary
relationship is that ‘‘a beneficiary entrusts a fiduciary with control and
management of an asset,’’ which ‘‘necessarily involves risk and uncertainty’’).
15
The cases cited by the dissent for the proposition that ‘‘other jurisdic-
tions that have considered this issue have concluded that there may be
sufficient evidence adduced to hold a tax preparer to a fiduciary responsibil-
ity in the absence of said tax preparer offering investment advice,’’ namely,
Watts v. Jackson Hewitt Tax Service, Inc., 579 F. Supp. 2d 334 (E.D.N.Y.
2008), Green v. H & R Block, Inc., 355 Md. 488, 735 A.2d 1039 (1999), and
Basile v. H & R Block, Inc., 777 A.2d 95 (Pa. Super. 2001), appeal denied,
569 Pa. 714, 806 A.2d 857 (2002), do not dictate a contrary conclusion in
the present case. Those decisions are factually or legally distinguishable
from the present case.
First, the federal District Court’s decision in Watts v. Jackson Hewitt Tax
Service, Inc., supra, 579 F. Supp. 2d 339–40, is distinguishable because that
court did not consider whether a fiduciary relationship existed between the
plaintiffs and the defendant, a major tax preparer, which was claimed, inter
alia, to have engaged in practices with respect to the calculation of its fees
and the sale of financial products, such as refund anticipation loans, which
constituted violations of New York unfair trade practices statutes and com-
mon-law fraud by omission. In considering the plaintiffs’ common-law fraud
claim, the court noted that, under New York law, a claim of fraudulent
omission or concealment must allege, inter alia, a breach of a duty to
disclose; id., 350; and that such a duty ‘‘arises in three situations: (1) where
a party has made a partial or ambiguous statement, as a party cannot give
only half of the truth; (2) where a party has a fiduciary duty to another; or
(3) where a party has superior knowledge that is not available to the other
party and the party with superior knowledge knows that the other party
is acting on the basis of mistaken knowledge.’’ (Internal quotation marks
omitted.) Id., 352. The District Court observed that the tax preparer defen-
dants denied the existence of a fiduciary relationship, but did not address
that potential issue because of allegations in the plaintiffs’ complaint that
satisfied the other options for establishing a duty to disclose, namely, that
the ‘‘[d]efendants are alleged to have made a partial and ambiguous represen-
tation of their minimum fees to customers,’’ and that they ‘‘had superior
and exclusive knowledge of the actual charges applied to each customer’s
tax preparation fee, especially regarding the seasonal multiplier fee.’’ Id.
As the Appellate Court noted; see Iacurci v. Sax, supra, 139 Conn. App.
409 n.8; the Pennsylvania intermediate appellate court’s decision in Basile
v. H & R Block, Inc., supra, 777 A.2d 95, is distinguishable because of the
factual depth of the record in that case with respect to establishing the
presence of unequal bargaining power, with the attendant risk of self-dealing,
requisite to establishing a fiduciary relationship. In Basile, the court consid-
ered ‘‘whether evidence produced by the parties in discovery is sufficient
to demonstrate a confidential relationship between the plaintiff class of
Pennsylvania taxpayers . . . and mass-market tax preparer,’’ H & R Block,
Inc. (Block). Id., 98. Basile involved claims that Block’s failure to disclose
that its ‘‘Rapid Refund’’ service was in reality an extremely high-interest
loan breached, inter alia, state and federal consumer protection statutes,
and Block’s common-law fiduciary duty. (Internal quotation marks omitted.)
Id. The court held that there was sufficient evidence of a fiduciary relation-
ship to defeat Block’s summary judgment motion, noting that the plaintiffs
‘‘did not deal on equal terms, but . . . sought Block’s assistance from a
position of pronounced intellectual and economic weakness. . . . The
plaintiffs have adduced a significant quantum of evidence, much in the form
of internal Block documents, tending to demonstrate that Block’s customers
possessed limited education and suffered from chronic economic scarcity.
The evidence suggests as well that Block encouraged these customers to
repose a high level of trust in the company and that the [p]laintiffs responded
by placing their trust in Block, both to prepare their tax returns and to
secure their tax refunds. Possessing no significant expertise in the services
Block offered . . . the [p]laintiffs made no distinction concerning the role
Block played in tendering the ‘Rapid Refund’ service, but rather . . . merely
sought the most expeditious way to comply with the tax laws and to recoup
taxes they had overpaid. In point of fact, many of Block’s customers had
no significant understanding of the ‘Rapid Refund’ service.’’ (Citations omit-
ted.) Id., 106. Citing Block’s internal marketing studies, the court further
emphasized that the ‘‘evidence suggests further that Block recognized its
customers’ confusion and exploited a corresponding opportunity to abuse
[their] trust for personal gain.’’ (Internal quotation marks omitted.) Id.; see
also id., 104–105 (discussing marketing studies that showed defendant’s
awareness that low income customers used Rapid Refund to address press-
ing financial needs); id., 105–106 (noting Block trained its employees to
‘‘provide minimal explanation’’ of Rapid Refund, despite fact that record
demonstrated customers’ confusion about tax preparation and refund pro-
cess and followed preparers’ directions without question).
Finally, Green v. H & R Block, Inc., supra, 355 Md. 488, also arising from
the Rapid Refund loan process, is similarly distinguishable. In concluding
that a confidential agency relationship existed between the tax preparer
and the plaintiff, Maryland’s highest court considered factual allegations
concerning the tax return and refund loan application process, as well as
the tax preparer’s marketing strategies, which are far more detailed than
those in the rather limited record in the present appeal with respect to
establishing the requisite trust and dependency. See id., 516–17.
16
The dissent contends that we establish ‘‘a bright line rule to the effect
that a tax preparer can never be a fiduciary, unless he also gives investment
advice.’’ We respectfully disagree with the dissent’s reading of our opinion.
We readily acknowledge that a record in a different case might well establish
a fiduciary relationship between a tax preparer and its client, even in the
absence of investment advice or a financial planning relationship. See, e.g.,
Haas v. Haas, supra, 137 Conn. App. 434–35; Basile v. H & R Block, Inc.,
777 A.2d 95, 106 (Pa. Super. 2001), appeal denied, 569 Pa. 714, 806 A.2d 857
(2002); see also footnote 15 of this opinion. Beyond conclusory allegations,
this record is, however, simply devoid of any evidence that establishes a
genuine issue of material fact with respect to the existence of a fiduciary
relationship between the parties. Contrary to the dissent’s view, there is
simply no evidence in the present case of disparity in bargaining power, or
special trust, to ‘‘establish that the parties were not dealing in an arm’s-
length transaction,’’ despite the relative length of their business relationship.