Claridge Associates, LLC v. Pursuit Partners, LLC

CLARIDGE ASSOCIATES, LLC v. PURSUIT PARTNERS, LLC

No. FSTCV156026069S

Superior Court of Connecticut, Judicial District of Stamford-Norwalk, Stamford

November 14, 2018

UNPUBLISHED OPINION

OPINION

POVODATOR, J.T.R.

Currently before the court is the plaintiffs’ somewhat unorthodox motion for summary judgment. It is "somewhat unorthodox" because the plaintiffs are not actually seeking judgment with respect to any of the multiple counts asserted in the most recent/operative complaint, but rather are seeking to have the court determine that certain facts have been established in such a manner and to such a degree as to obviate the need for any proof/evidence at the time of trial. The plaintiffs have acknowledged that if the court does not believe that the motion can be characterized as a motion for summary judgment, then it should be treated as a variation on a motion in limine, again, seeking to establish that certain facts need not be proved at trial (and correspondingly cannot be challenged by the defendants at trial).

The court is well-familiar with the voluminous records and extensive history for this litigation (and related litigation), and this motion itself has been supported by dozens of exhibits including probably in excess of 1, 000 pages of transcripts, and hundreds of pages of other documents including memoranda of decision from New York courts, arbitration proceedings, and other Connecticut litigation. Given the complex factual and documentary history, the court certainly would welcome any simplification of issues that need to be addressed during the course of eventual trial on the merits. On that basis, the court will attempt to address the issues raised, "repurposing" the motion for summary judgment as a motion seeking determination of facts that have been established by way of collateral estoppel or otherwise, facts established with a level of finality sufficient to obviate the need for proof at trial and with sufficient finality to preclude any evidence to the contrary.

In their motion and supporting brief, the plaintiffs have identified four issues that they wish to have the court determine have been established conclusively, and during the course of extended argument on the motion, there was an agreement of the parties as to two of those issues, thereby narrowing the scope of issues that the court needs to resolve in this decision.

Although recited in detail in their motion, the plaintiffs more succinctly identify the four issues that are the subject of this motion on page 20 of their memorandum in support of the motion, relying upon judicial estoppel and/or collateral estoppel (and line breaks have been added for clarity of presentation):

[T]he Defendants should be estopped from re-litigating four discrete issues that have already been conclusively decided by other courts:

(1) that the entities that form the Pursuit Hedge Fund including PCM, PIM, Pursuit Partners, LLC, Opportunity Fund and Capital Fund are a unitary, unified, integrated entity with each entity in privity with one another;

(2) that the [plaintiffs] remain limited partners in the Capital Fund and retain their interest in the Capital Fund’s portion of the UBS Proceeds;

(3) that the [plaintiffs] possess a 35.027901 percent interest in the Capital Fund; and

(4) the Capital Fund’s rightful share of the UBS Settlement is $15, 364, 800.

During the course of extensive argument, the parties agreed that # 3 and # 4 have been established, subject to the qualification that the percentage and dollar figures are only applicable to the extent that the plaintiffs prove their case. In other words, the parties agreed/stipulated that if the plaintiffs prove their entitlement to "something," they are entitled to a roughly 35% interest in a pool of money that has a starting point of $15, 364, 800, less any adjustments that might be required.

ISSUE # 1

The plaintiffs claim that the first issue is amenable to resolution under the doctrines of collateral estoppel and judicial estoppel. It is appropriate to articulate the appropriate standards, as a starting point.

Collateral estoppel:

The fundamental principles underlying the doctrine of collateral estoppel are well established. The common-law doctrine of collateral estoppel, or issue preclusion embodies a judicial policy in favor of judicial economy, the stability of former judgments and finality ... Collateral estoppel, or issue preclusion, is that aspect of res judicata which prohibits the relitigation of an issue when that issue was actually litigated and necessarily determined in a prior action between the same parties upon a different claim For an issue to be subject to collateral estoppel, it must have been fully and fairly litigated in the first action. It also must have been actually decided and the decision must have been necessary to the judgment ...

An issue is actually litigated if it is properly raised in the pleadings or otherwise, submitted for determination, and in fact determined ... An issue is necessarily determined if, in the absence of a determination of the issue, the judgment could not have been validly rendered ... If an issue has been determined, but the judgment is not dependent [on] the determination of the issue, the parties may relitigate the issue in a subsequent action. Before collateral estoppel applies [however] there must be an identity of issues between the prior and subsequent proceedings. To invoke collateral estoppel the issues sought to be litigated in the new proceeding must be identical to those considered in the prior proceeding." (Internal quotation marks and citations, omitted.) MacDermid, Inc. v. Leonetti, 328 Conn. 726, 183 A.3d 611 (2018).

Judicial Estoppel:

We begin by setting forth our standard of review of the defendant’s claim. Because the rule is intended to prevent improper use of judicial machinery ... judicial estoppel is an equitable doctrine invoked by a court at its discretion ... Accordingly, our review of the trial court’s decision not to invoke the doctrine is for abuse of discretion.

[J]udicial estoppel prevents a party in a legal proceeding from taking a position contrary to a position the party has taken in an earlier proceeding ... [J]udicial estoppel serves interests different from those served by equitable estoppel, which is designed to ensure fairness in the relationship between parties ... The courts invoke judicial estoppel as a means to preserve the sanctity of the oath or to protect judicial integrity by avoiding the risk of inconsistent results in two proceedings. The doctrine protect[s] the integrity of the judicial process ... by prohibiting parties from deliberately changing positions according to the exigencies of the moment ...

Judicial estoppel applies if (1) a party’s later position is clearly inconsistent with its earlier position, (2) the party’s former position has been adopted in some way by the court in the earlier proceeding, and (3) the party asserting the two positions would derive an unfair advantage against the party seeking estoppel. The application of judicial estoppel is further limited to situations where the risk of inconsistent results with its impact on judicial integrity is certain. In addition, generally speaking, the doctrine will not apply if the first statement or omission was the result of a good faith mistake ... or an unintentional error. (Internal quotation marks and citations, omitted.) Barton v. City of Norwalk, 326 Conn. 139, 155-56, 161 A.3d 1264 (2017).

It is clear that the two doctrines serve different purposes. Collateral estoppel relies on the notion that once an issue has been determined with finality, there should be finality accorded to that determination in subsequent proceedings. Thus, collateral estoppel and the related concept of res judicata often are raised by summary judgment, and while there are some exceptions, a denial of a motion for summary judgment invoking collateral estoppel (and especially res judicata) often/typically is immediately appealable; Blakely v. Danbury Hospital, 323 Conn. 741, 747 n.4, 150 A.3d 1109 (2016); whereas the denial of summary judgment otherwise generally is not an appealable final judgment. (This is in part explained as a consequence of the doctrines being something in the nature of civil counterparts to the double jeopardy concept in criminal proceedings; Singhaviroj v. Board of Education of Town of Fairfield, 124 Conn.App. 228, 236, 4 A.3d 851 (2010) ("[A] res judicata or collateral estoppel claim is the ‘civil law analogue’ to a double jeopardy challenge").

Equally if not more important, given the manner in which the issue is being raised (summary judgment), is that applicability of collateral estoppel (or res judicata) generally is an issue of law, whereas, as noted in the above cited passage, judicial estoppel generally is a matter of discretion for the court. Except in the most clear-cut of situations, an issue that is dependent upon the discretion of the court is ill-suited for summary judgment or any other avenue to conclusive determination by way of a procedure that does not implicate the fact-finding function of the court-a procedure that prohibits fact-finding and weighing of the evidence.

At this point, it is perhaps helpful to restate the issue that the plaintiff’s claim has been established to a level of certainty so as to preclude any need for evidence at trial, and so as to preclude any contrary evidence or argument from the defendants:

[T]he Defendants should be estopped from re-litigating ... (1) that the entities that form the Pursuit Hedge Fund, including PCM, PIM, Pursuit Partners LLC, Opportunity Fund, and Capital Fund are a unitary, unified, integrated entity with each entity in privity with one another.

This...