Carolina Cas. Ins. Co. v. Conn. Solid Surface, LLC

207 Conn.App. 525

262 A.3d 885

CAROLINA CASUALTY INSURANCE COMPANY

v.CONNECTICUT SOLID SURFACE, LLC

AC 43215

Appellate Court of Connecticut.

Argued February 16, 2021

Officially released September 14, 2021

Taryn D. Martin, with whom, on the brief, was Robert A. Ziegler, Plainville, for the appellant (named defendant).

Jane S. Bietz, with whom, on the brief, was Carmine Annunziata, Cheshire, for the appellee (defendant Howard Kantrovitz ).

Prescott, Cradle and DiPentima, Js.

PRESCOTT, J.

An essential element of a claim of vexatious litigation is that the prior civil action underlying the claim must have terminated in favor of the proponent of the claim . See Blake v. Levy , 191 Conn. 257, 263, 464 A.2d 52 (1983). The dispositive issue in the present appeal is whether a prior action that ended in the summary dismissal of the action by agreement of the parties constitutes such a favorable disposition. We conclude that it does not.

The defendant and cross claim plaintiff, Connecticut Solid Surface, LLC (CT Solid Surface), appeals from the summary judgment rendered on its vexatious litigation cross claim by the court in favor of the cross claim defendant, Attorney Howard Kantrovitz.¹ It claims that the court improperly concluded that Kantrovitz was entitled to judgment as a matter of law because CT Solid Surface had failed to demonstrate the existence of a genuine issue of material fact regarding whether the prior action underlying the vexatious litigation cross claim had terminated in its favor, particularly in light of undisputed evidence that the parties to the prior action had reached a settlement that resulted in the court's dismissal of that action.² We affirm the judgment of the court.

The record before the court established the following undisputed facts and procedural history. Prior to the filing of the action underlying the present appeal, Kantrovitz, on behalf of his client, Berkley Net Underwriters, Inc. (Berkley), a servicing agent for Carolina Casualty,³ commenced a civil action against CT Solid Surface to collect certain unpaid premiums that CT Solid Surface allegedly owed on a workers’ compensation insurance policy issued by Carolina Casualty. See Berkley Net Underwriters, Inc. v. Connecticut Solid Surface, LLC , Superior Court, judicial district of New Britain, Docket No. CV-16-6034163-S. CT Solid Surface filed a motion to dismiss that prior action, arguing that Berkley was not the proper party to bring the action because it was not a legal entity registered to do business in the state nor was it registered with the insurance commissioner. Although Berkley filed a motion for permission to substitute Carolina Casualty as the proper party plaintiff, the court denied that motion.⁴ CT Solid Surface thereafter filed a counterclaim against Berkley asserting violations of the Unauthorized Insurers Act, General Statutes § 38a-271 et seq., the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq., and the Connecticut Unfair Insurance Practices Act, General Statutes § 38a-815 et seq. Berkley filed a motion to dismiss the counterclaim in which it argued that (1) the court lacked subject matter jurisdiction because the counterclaim was brought against a nonexistent entity, and (2) the causes of action all fell outside of the applicable statute of limitations. On July 24, 2017, the court, Young , J ., issued notice disposing of the parties’ motions to dismiss without discussing the merits, indicating in its order that each was "[g]ranted by agreement of the parties."

Carolina Casualty commenced the underlying action against CT Solid Surface on June 30, 2017, seeking the same unpaid premiums sought in the prior action. The court granted CT Solid Surface's motion to cite in Kantrovitz as an additional defendant. CT Solid Surface thereafter filed a cross complaint against Kantrovitz asserting a claim of vexatious litigation with respect to the prior action.⁵ According to CT Solid Surface, Kantrovitz’ failure to investigate properly whether Berkley was the correct party to maintain the prior action led to the filing of an unnecessary civil action, against which CT Solid Surface was required to expend both time and money to defend.

On February 1, 2019, Kantrovitz filed a motion for summary judgment on the cross complaint. He argued, in relevant part, that "[t]he undisputed material facts, including [CT Solid Surface's] own admissions, demonstrate that the underlying action did not terminate in favor of [CT Solid Surface]. Rather, the underlying action was settled by agreement of both parties to dismiss their claims against each other." Because a favorable termination of the prior action is an essential element of a vexatious litigation claim, Kantrovitz argued that CT Solid Surface's cross claim failed as a matter of law.

In support of his argument, Kantrovitz submitted CT Solid Surface's responses to the request for admissions as an exhibit. Part of those responses included CT Solid Surface's admission that "a settlement agreement was reached in the [prior action], in which the parties agreed to resolve their claims by mutual releases and both parties withdrawing their claims." Although it is undisputed that mutual releases never were executed and withdrawals of the complaint and counterclaims were never filed, Kantrovitz also submitted in support of his motion for summary judgment a transcript from a hearing in the prior action on the parties’ motions to dismiss, at which Attorney Jared Alfin, who had replaced Kantrovitz as counsel for Berkley and who also represented Carolina Casualty, appeared and advised the court that "[t]he parties have spoken about this matter and we have agreed to have confirmation be e-mailed that both motions can be granted today."⁶ Moreover, in its responses to the request for admissions filed in the present case, CT Solid Surface admitted that it "would not have agreed to a dismissal of its counterclaim against [Berkley] if [CT Solid Surface] did not receive, in exchange , a dismissal of [Berkley's] claims against it." (Emphasis added.)

CT Solid Surface filed an objection to Kantrovitz’ motion for summary judgment. It did not challenge the validity of the evidence submitted by Kantrovitz, but only the legal conclusions to be drawn from that evidence. It acknowledged that the law in Connecticut is that a civil action that ends in a negotiated settlement is not considered to have terminated in favor of either party and, thus, cannot support a subsequent vexatious litigation claim. See Blake v. Levy , supra, 191 Conn. at 264, 464 A.2d 52. It argued, however, that courts have stated that a final determination on the merits is not necessary to satisfy the favorable termination requirement and that proof of a dismissal or abandonment of a prior action is sufficient "so long as the proceeding has terminated without consideration." DeLaurentis v. New Haven , 220 Conn. 225, 251, 597 A.2d 807 (1991). CT Solid Surface maintained that the only "negotiated settlement" was the one in which the parties agreed to exchange mutual releases and withdrawals, which never occurred.

Following a hearing, the trial court granted Kantrovitz’ motion for summary judgment on the vexatious litigation cross claim. It concluded that CT Solid Surface had not presented any evidence that tended to demonstrate that the prior action had terminated in its favor because the undisputed evidence showed that the parties had exchanged consideration for an agreed upon disposition of the prior action. On the basis of that conclusion, the court held that CT Solid Surface could not prove an essential element of its vexatious litigation claim, and it rendered summary judgment in favor of Kantrovitz. This appeal followed.

CT Solid Surface claims that the trial court improperly rendered summary judgment in favor of Kantrovitz on its cross claim for vexatious litigation on the ground that CT Solid Surface failed to present evidence that tended to show that the prior action on which it based its cross claim had terminated in its favor. It essentially argues that the evidence, properly construed, definitively demonstrates that the prior action terminated in its favor, or, alternatively, that a genuine issue of material fact exists regarding whether the parties entered into a negotiated settlement. We disagree.

"The fundamental purpose of summary judgment is preventing unnecessary trials. ... If a plaintiff is unable to present sufficient evidence in support of an essential element of his cause of action at trial, he cannot prevail as a matter of law. ... To avert these types of ill-fated cases from advancing to trial, following adequate time for discovery, a plaintiff may properly be called upon at the summary judgment stage to demonstrate that he possesses sufficient counterevidence to raise a genuine issue of material fact as to any, or even all, of the essential elements of his cause of action. ...

"Practice Book § [17-49] provides that summary judgment shall be rendered 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 nonmoving party. ... The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact. ...

"It is not enough ... for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact ... are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the...