Squillante v. Capital Region Development Authority ( 2021 )

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APPENDIX
DAVID SQUILLANTE ET AL. v. CAPITAL
REGION DEVELOPMENT AUTHORITY*
Superior Court, Judicial District of Hartford
File No. CV-XX-XXXXXXX-S
Memorandum filed March 15, 2019
Proceedings
Memorandum of decision on defendant’s motion for
summary judgment. Motion granted.
Matthew S. Carlone, for the plaintiffs.
Benjamin C. Jensen, for the defendant.
Opinion
NOBLE, J.
Before the court is the motion of the defendant, Capi-
tal Region Development Authority (CRDA), for sum-
mary judgment as to the single remaining count for
negligent misrepresentation on the grounds that (1) the
statute of limitations has expired; and (2) there is no
genuine issue of material fact as to the plaintiffs’ inabil-
ity to establish the elements of negligent misrepresenta-
tion. For the following reasons the court grants the
motion for summary judgment on the former ground.
FACTS
This action arises out of a series of communications
between the plaintiff David Squillante and the defen-
dant, CRDA, regarding potential financing for a housing
development project located at 283-291 Asylum Street
in Hartford.1 This action was commenced by service
of process on CRDA on July 26, 2016. The operative
complaint is the three count amended complaint, dated
November 14, 2017. In count three, which is the only
count at issue, the plaintiffs allege a negligent misrepre-
sentation claim.2
Specifically, the plaintiffs allege that, after several
conversations, the parties executed a letter dated May
10, 2013 (letter), in which CRDA agreed to provide
financing for the project if the plaintiffs complied with
the terms and conditions outlined therein. One such
condition allegedly misrepresented that the plaintiffs
would be required to provide a guarantee ‘‘or’’ payment
and performance bonds, when, at all times, CRDA actu-
ally required a guarantee ‘‘and’’ payment and perfor-
mance bonds. In addition, the plaintiffs allege that, in
communications subsequent to the letter, CRDA failed
to provide certain necessary information, including
form agreements, a closing checklist, and that it
required a payment and performance bond for each of
the plaintiffs’ contractors from an insurance company
licensed to do business in Connecticut with a ‘‘ ‘Best
Rating of A-, VII.’ ’’ According to the plaintiffs: (1) CRDA
had a duty to disclose these material facts within a
commercially reasonable time after receipt of the letter;
(2) they reasonably relied on CRDA’s misrepresentation
and omissions; (3) CRDA knew its representation was
false and that the plaintiffs were acting in reliance on
it; and (4) they suffered financial damages as a result.
On October 23, 2017, CRDA filed a motion for sum-
mary judgment. By order dated July 18, 2018, summary
judgment was granted as to each count. Familiarity with
the facts recited therein and the decision are presumed.
See Squillante v. Capital Region Development Author-
ity, Superior Court, judicial district of Hartford, Docket
No. CV-XX-XXXXXXX-S (July 18, 2018). With regard to
count three, this court determined that the claim was
time barred by the applicable statute of limitations,
General Statutes § 52-577. By order dated August 21,
2018, the entry of summary judgment as to count three
was vacated on the basis that CRDA did not plead that
the claim was time barred under § 52-577, but rather
pleaded that it was time barred under General Statutes
§ 52-584. See Mac’s Car City, Inc. v. DeNigris, 18 Conn.
App. 525, 529, 559 A.2d 712 (error for court to grant
summary judgment based on § 52-577 where statute not
raised in pleadings), cert. denied, 212 Conn. 807, 563
A.2d 1356 (1989). CRDA amended its answer to include
the defense that the action was time barred under
§ 52-577.
On October 11, 2018, CRDA filed a second motion
for summary judgment as to count three on the grounds
that the claim is time barred under § 52-577 and the
plaintiffs cannot establish the elements of negligent
misrepresentation. CRDA filed a memorandum of law
in support of the motion and affidavits by Michael Frei-
muth, the executive director of CRDA, and Benjamin
Jensen, the attorney representing CRDA in this action.
On November 23, 2018, the plaintiffs filed an objection
to the motion, which incorporated the facts set forth
in their memorandum in opposition to CRDA’s first
motion for summary judgment, along with excerpts
from the depositions of Mr. Freimuth, Mr. Squillante,
and Richard Polivy, the plaintiffs’ expert. CRDA subse-
quently filed a reply memorandum on November 30,
2018.
STANDARD
The legal standard governing summary judgment
motions is well settled. ‘‘Summary judgment is a method
of resolving litigation when 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. . . . The
motion for summary judgment is designed to eliminate
the delay and expense of litigating an issue when there is
no real issue to be tried. . . . However, since litigants
ordinarily have a constitutional right to have issues of
fact decided by a jury . . . the moving party for sum-
mary judgment is held to a strict standard . . . of dem-
onstrating his entitlement to summary judgment.’’ (Cita-
tion omitted; footnote omitted; internal quotation marks
omitted.) Grenier v. Commissioner of Transportation,
306 Conn. 523, 534-35, 51 A.3d 367 (2012).
‘‘Summary judgment may be granted where the claim
is barred by the statute of limitations.’’ Doty v. Mucci,
238 Conn. 800, 806, 679 A.2d 945 (1996). ‘‘Typically, in
the context of a motion for summary judgment based
on a statute of limitations special defense, a defendant
. . . meets its initial burden of showing the absence of
a genuine issue of material fact by demonstrating that
the action had commenced outside of the statutory
limitation period. . . . Then, if the plaintiff claims the
benefit of a provision that operates to extend the limita-
tion period, the burden . . . shifts to the plaintiff to
establish a disputed issue of material fact in avoidance
of the statute. . . . In these circumstances, it is incum-
bent upon the party opposing summary judgment to
establish a factual predicate from which it can be deter-
mined, as a matter of law, that a genuine issue of mate-
rial fact [as to the timeliness of the action] exists.’’
(Citations omitted; internal quotation marks omitted).
Doe v. West Hartford, 328 Conn. 172, 192, 177 A.3d
1128 (2018).
DISCUSSION
CRDA argues that count three is time barred, pursu-
ant to § 52-577, because the sole alleged misrepresenta-
tion appeared in a letter dated May 10, 2013, and the
plaintiffs commenced the present action on July 26,
2016 (i.e., more than three years later). In response, the
plaintiffs argue that the statute of limitations was tolled
pursuant to the continuing course of conduct doctrine.
Specifically, the plaintiffs claim that, in communica-
tions subsequent to the letter, including two e-mails
that CRDA sent on June 10, 2013, and September 17,
2013, CRDA misrepresented the requisite conditions of
financing and failed to disclose certain material facts,
such as that the plaintiffs would need to procure a
payment and performance bond for each contractor
from an insurance company with a ‘‘ ‘Best Rating of A-,
VII.’ ’’
Section 52-577 provides: ‘‘[n]o action founded upon
a tort shall be brought but within three years from the
date of the act or omission complained of.’’ Because
this is an occurrence statute, the limitation period runs
from the date of the defendant’s conduct, not the date
when the plaintiff first discovers his injury. See Flan-
nery v. Singer Asset Finance Co., LLC, 312 Conn. 286,
311, 94 A.3d 553 (2014). Moreover, as previously men-
tioned, ‘‘[w]hen the plaintiff asserts that the [limitation]
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 statute.’’ (Internal quotation marks
omitted.) Iacurci v. Sax, 313 Conn. 786, 799, 99 A.3d
1145 (2014). The continuing course of conduct doctrine
is one such equitable exception that, if applicable, will
toll the statute of limitations until the course of conduct
is completed. See Flannery v. Singer Asset Finance
Co., LLC, supra, 311.
In evaluating the continuing course of conduct doc-
trine in the context of a summary judgment motion,
the court must determine whether there is ‘‘a genuine
issue of material fact with respect to whether the defen-
dant: (1) committed an initial wrong upon the plaintiff;
(2) owed a continuing duty to the plaintiff that was
related to the alleged original wrong; and (3) continually
breached that duty.’’ (Internal quotation marks omit-
ted.) Id., 313. ‘‘Where . . . [the court has] upheld a
finding that a duty continued to exist after the cessation
of the act or omission relied upon, there has been evi-
dence of either a special relationship between the par-
ties giving rise to such a continuing duty or some later
wrongful conduct of a defendant related to the prior
act.’’ (Internal quotation marks omitted.) Id., 312.
In the present case, the alleged initial wrong is that
the May 10, 2013 letter from CRDA to the plaintiffs
contained a misrepresentation and material omission
related to the conditions of financing. To wit, it stated
that the plaintiffs would be required to provide a guaran-
tee ‘‘or’’ payment and performance bonds, when they
would actually be required to provide a guarantee ‘‘and’’
payment and performance bonds for each contractor
from an insurance company with a ‘‘ ‘Best Rating of A-,
VII.’ ’’ As to the continuing duty prong, the plaintiffs
argue that: (1) CRDA engaged in later wrongful conduct
related to the initial wrong when, in subsequent commu-
nications between the parties, it allegedly made mate-
rial misrepresentations concerning the conditions of
financing, and failed to disclose, until December 4, 2013,
that the plaintiffs would need to procure a payment
and performance bond for each contractor from an
insurance company with a ‘‘ ‘Best Rating of A-, VII’ ’’;
and (2) the relationship between the parties, the cus-
toms of the trade or other objective circumstances were
such that the plaintiffs would reasonably expect CRDA
to fully disclose the conditions of financing before
December 4, 2013.
A. Later Wrongful Conduct Related to the Prior Act
With regard to the plaintiffs’ later wrongful conduct
argument, they specifically point to two e-mails that
CRDA sent on June 10, 2013, and September 17, 2013.
Because the former is still outside of the applicable
three year statute of limitations, this court need not
address its content. Moreover, the September 17, 2013
e-mail cannot serve as a basis for applying the continu-
ing course of conduct doctrine because it does not
reflect any wrongful conduct on the part of CRDA. That
is, contrary to the plaintiffs’ contention, the e-mail does
not contain a material misrepresentation with regard
to the financing conditions. In fact, the e-mail explicitly
notifies the plaintiffs that it expects that the list of
contracts/commitment letters that the plaintiffs identi-
fied as necessary to provide to CRDA before closing
‘‘will be expanded.’’ Moreover, in another e-mail sent
to the plaintiffs on the same day (i.e., September 17,
2013), CRDA attached a template of the formal assis-
tance agreement mentioned in the May 10, 2013 letter.
Section 3.9 of that template, titled ‘‘Payment and Perfor-
mance Bond,’’ put the plaintiffs on notice that ‘‘[DSJ45]
shall provide CRDA with Payment and Performance
Bonds with respect to each Contractor that enters into
a Major Contract with [DSJ45] . . . .’’ (Entry No. 172,
Freimuth Affidavit at pp. 12, 21).3
In addition, the plaintiffs have failed to demonstrate
that CRDA violated a duty to disclose by not notifying
the plaintiffs, until December 4, 2013, that the requisite
payment and performance bonds for each contractor
needed to be from an insurance company with a ‘‘ ‘Best
Rating of A-, VII.’ ’’ 3 Restatement (Second), Torts, Lia-
bility for Nondisclosure § 551 (2) (e), p. 119 (1977) pro-
vides: ‘‘[o]ne party to a business transaction is under a
duty . . . to disclose to the other before the transac-
tion is consummated . . . facts basic to the transac-
tion, if he knows that the other is about to enter into
it under a mistake as to them, and that the other,
because of the relationship between them, the customs
of the trade or other objective circumstances, would
reasonably expect a disclosure of those facts.’’ There
are at least three reasons why this section does not
apply to the present case and, therefore, cannot satisfy
the second prong of the continuing course of conduct
doctrine.
First, the rating of the insurance company that was
to provide the payment and performance bonds cannot
be fairly construed as a fact ‘‘basic to the transaction’’
because it is not a significant enough aspect of the
transaction. See 3 Restatement (Second), supra, § 551
(2) (e), comment (j), p. 123 (‘‘A basic fact is a fact that
is assumed by the parties as a basis for the transaction
itself. It is a fact that goes to the basis, or essence, of
the transaction, and is an important part of . . . what
is bargained for or dealt with. Other facts may serve
as important and persuasive inducements to enter into
the transaction, but not go to its essence. These facts
may be material, but they are not basic.’’).
Second, the plaintiffs have failed to establish that
there is a question of material fact that CRDA knew
that the plaintiffs were about to enter into the transac-
tion under a mistaken belief as to the bond requirement.
As the plaintiffs’ own exhibit submitted in opposition
to the subject motion for summary judgment reveals,
Mr. Freimuth made the assumption that the plaintiffs’
construction budget included the price of obtaining an
acceptable payment and performance bond. (Entry No.
178, Freimuth Dep. at pp. 67-68). See 3 Restatement
(Second), supra, § 551 (2) (e), comment (k), p. 124
(‘‘when the defendant has no reason to think that the
plaintiff is acting under a misapprehension, there is no
obligation to give aid to a bargaining antagonist . . .
and if the plaintiff . . . does not have access to ade-
quate information, the defendant is under no obligation
to make good his deficiencies’’); see also id., comment
(l), p. 125 (‘‘[i]n general, the cases in which the rule
stated in Clause (e) has been applied have been those
in which the advantage taken of the plaintiff’s ignorance
is so shocking to the ethical sense of the community,
and is so extreme and unfair, as to amount to a form
of swindling, in which the plaintiff is led by appearances
into a bargain that is a trap, of whose essence and
substance he is unaware’’).
Third, according to the plain language of 3
Restatement (Second), supra, § 551 (2), the time frame
for communicating information that requires disclosure
under this section is ‘‘before the transaction is consum-
mated.’’ Id., 119. Here, as this court previously deter-
mined, an enforceable agreement was never consum-
mated. As such, even assuming arguendo that CRDA
had a duty to disclose all of the details of the requisite
payment and performance bonds, they did so on Decem-
ber 4, 2013, which was before the transaction was con-
summated. Thus, in the September 17, 2013 e-mail that
the plaintiffs point to, CRDA did not engage in any
wrongful conduct related to the initial wrong that would
warrant application of the continu[ing] course of con-
duct doctrine and toll the applicable statute of limita-
tions.
B. Special Relationship
The plaintiffs have also failed to establish that there
was a special relationship between the parties that
could give rise to a continuing duty on the part of CRDA
to tell the plaintiffs, prior to December 4, 2013, that they
would be required to provide payment and performance
bonds for each contractor from an insurance company
with a ‘‘ ‘Best Rating of A-, VII.’ ’’ With regard to the
meaning of ‘‘special relationship’’ in the context of the
continuing course of conduct doctrine, the Appellate
Court has analyzed the question in terms of whether a
fiduciary or confidential relationship existed between
the parties. See Carson v. Allianz Life Ins. Co. of North
America, 184 Conn. App. 318, 331-32, 194 A.3d 1214(2018), cert. denied, 331 Conn. 924, 207 A.3d 27 (2019).
‘‘[A] fiduciary or confidential relationship is character-
ized 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 inter-
ests of the other. . . . [N]ot all business relationships
implicate the duty of a fiduciary. . . . In particular
instances, certain relationships, as a matter of law, do
not impose upon either party the duty of a fiduciary.’’
(Internal quotation marks omitted.) Id., 331, quoting
Macomber v. Travelers Property & Casualty Corp., 261
Conn. 620, 640, 804 A.2d 180 (2002).
In Carson v. Allianz Life Ins. Co. of North America,
supra, 184 Conn. App. 331-32, the court held that the
continuing course of conduct doctrine did not apply to
toll the applicable statute of limitations because ‘‘[t]he
plaintiff failed to offer contrary authority that her rela-
tionship with the defendant [life insurance company]
was anything more than a commercial transaction. Nor
did she proffer evidence of a unique degree of trust and
confidence between the plaintiff and the defendant akin
to a fiduciary or special relationship.’’ Similarly, here,
the facts indicate that the relationship between the par-
ties was commercial in nature, in that they were negoti-
ating a business transaction, at arm’s length, whereby
CRDA would loan the plaintiffs a portion of the financ-
ing necessary for their housing development project.
Moreover, the plaintiffs have not provided evidence of
a unique degree of trust and confidence between the
parties akin to a fiduciary relationship, nor that CRDA
was under a duty to represent the plaintiffs’ interests.4
Furthermore, the Supreme Court in this state has
made clear that a buyer-seller relationship is not a ‘‘spe-
cial relationship’’ that gives rise to a legal duty to dis-
close any deception related to the transaction. See Flan-
nery v. Singer Asset Finance Co., LLC, supra, 312 Conn.
313 (‘‘the defendant and the plaintiff stood in relation
of buyer and seller and, as such, there was no special
relationship between them that imposed upon the
defendant a duty to disclose to the plaintiff any decep-
tion attendant to the transaction’’); see also Fichera v.
Mine Hill Corp., 207 Conn. 204, 210, 541 A.2d 472 (1988)
(‘‘We are aware of no authority holding that the perpe-
trator of a fraud involving merely a vendor-vendee rela-
tionship has a legal duty to disclose his deceit after its
occurrence and that the breach of that duty will toll the
statute of limitations. Such a [contractual] relationship
does not give rise to obligations equivalent to those
of a fiduciary.’’); Harte Nissan, Inc. v. Market Scan
Information, Docket No. CV-XX-XXXXXXX-S, 2003 WL
352948, *6 (Conn. Super. January 17, 2003) (‘‘the act of
entering into an agreement for the purchase of com-
puter equipment and software does not, by itself, create
the type of special relationship necessary for the [con-
tinuing course of conduct] doctrine to apply’’). Like-
wise, the Supreme Court has held that parties negotiat-
ing an acquisition and financing agreement do not have
a ‘‘special relationship’’ that would give rise to a fidu-
ciary duty to timely disclose all information regarding
the transaction. Glazer v. Dress Barn, Inc., 274 Conn.
33, 85-86, 873 A.2d 929 (2005). These precedents further
support the conclusion that there was no special rela-
tionship between the parties here that could give rise
to a continuing duty to disclose all information per-
taining to the payment and performance bond prior to
December 4, 2013.
Thus, the plaintiffs have failed to establish a genuine
issue of material fact with regard to the applicability
of the continuing course of conduct doctrine and the
court concludes that the action is barred by § 52-577.
Consequently, in light of this conclusion, the substan-
tive issues concerning the count need not be addressed
by this court.
For the foregoing reasons the court grants the defen-
dant’s motion for summary judgment.
* Affirmed. Conn. App. , A.3d (2021).
1
DSJ45, LLC, a limited liability company of which Mr. Squillante is the
sole member, is also a plaintiff in this case. Mr. Squillante and DSJ45, LLC,
will be referred to collectively as the plaintiffs.
2
Counts one and two allege claims of breach of contract and promissory
estoppel, respectively.
3
The fact that the template did not disclose that the requisite payment
and performance bonds would need to be from an insurance company with
a ‘‘ ‘Best Rating of A-, VII’ ’’ does not constitute a fraudulent nondisclosure
because there is no indication in the record that CRDA knew of this fact
and deliberately withheld it from the plaintiffs, with the intention or expecta-
tion to cause a mistake in order to induce the plaintiffs into the transaction.
See Wedig v. Brinster, 1 Conn. App. 123, 130-31, 469 A.2d 783 (1983) (‘‘[O]nce
a vendor [assumes] to speak, he must make a full and fair disclosure as to the
matters about which he assumes to speak. He must then avoid a deliberate
nondisclosure. . . . [T]he nondisclosure must be by a person intending or
expecting thereby to cause a mistake by another to exist or to continue, in
order to induce the latter to enter into or refrain from entering into a
transaction.’’ (Citations omitted; internal quotation marks omitted.)), cert.
denied, 192 Conn. 803, 472 A.2d 1284 (1984).
4
To the extent that the plaintiffs argue that the parties’ relationship was
akin to that of partners, they have not provided authority for the proposition,
nor sufficient evidence to conclude that the parties had entered an informal
partnership, known as a joint venture. See Censor v. ASC Technologies of
Connecticut, LLC, 900 F. Supp. 2d 181, 201 (D. Conn. 2012) (‘‘[t]o constitute
a joint venture, courts in Connecticut prescribe a five part test that requires
that (1) two or more persons must enter into a specific agreement to carry
on an enterprise for profit, (2) an agreement must evidence their intent
to be joint venturers, (3) each must contribute property, financing, skill,
knowledge or effort, (4) each must have some degree of joint control over
the venture, and (5) there must be a provision for the sharing of both profits
and losses’’).