Terracino v. Buzzi

121 Conn.App. 846

1 A.3d 115

Jerome G. TERRACINO et al.

v.Andrew J. BUZZI et al.

No. 30543.

Appellate Court of Connecticut.

Argued Jan. 5, 2010.

Decided June 22, 2010.

COPYRIGHT MATERIAL OMITTED.

Michael S. Lynch, Shelton, for the appellants (plaintiffs).

Leonard M. Isaac, Waterbury, for the appellee (named defendant).

Paul A. Sobel, Bridgeport, for the appellees (defendant Robert Rossman et al.).

LAVINE, BEACH and ROBINSON, Js.

BEACH, J.

The plaintiffs, Patricia Morasco, the administratrix of the estate of Jerome G. Terracino, ¹ and Guardian Systems, Inc. (Guardian), appeal from the judgment of the trial court rendered after it granted, in part, the motions for summary judgment filed by the defendants, Andrew J. Buzzi, Catherine Rossman and Robert Rossman, and after the plaintiffs withdrew their remaining claim. The plaintiffs claim that the court improperly concluded that their claims were barred by collateral estoppel. We disagree and affirm the judgment of the trial court.

The relevant background facts are set forth in Terracino v. Fairway Asset Management, Inc., 75 Conn.App. 63, 815 A.2d 157, cert. denied, 263 Conn. 920, 822 A.2d 245 (2003), as follows. “On July 19, 1991, [Mutual Communications Associates, Inc. (Mutual) ] entered into a loan agreement with Brookfield Bank (Brookfield) to borrow $270,000. Mutual, through two of its corporate officers, [Richard T.] DeMarsico and Terracino, signed a promissory note for the loan amount. Mutual secured the debt by a mortgage on one of its properties. DeMarsico, Terracino and [Robert] Rossman, another corporate officer, signed personal guarantees as well. Terracino and [Robert] Rossman signed an additional guarantee as principals and officers of Guardian, an alarm company in which they were the only shareholders.

“On May 8, 1992, the Federal Deposit Insurance Corporation (FDIC) took possession of Brookfield's assets, including the promissory note, mortgage and guarantees. At about the same time, Mutual defaulted on the loan. On or about November 30, 1994, the FDIC commenced a foreclosure action against Mutual and the other defendants. A judgment of foreclosure by sale was rendered on December 16, 1996.

“Thereafter, the judgment was opened and a judgment of strict foreclosure was rendered with law days commencing March 25, 1997. Prior to the judgment of strict foreclosure, JLM Services Corporation (JLM) succeeded the FDIC as plaintiff, and title vested in JLM when Mutual failed to redeem its equity within the set law days. JLM filed a motion for a deficiency judgment on April 1, 1997....

“While JLM's motion was pending, relations between guarantors Terracino and [Robert] Rossman deteriorated, as the two became embroiled in various business disputes. Also, during that time, Rossman allegedly asked his friend and attorney, [Buzzi], to attempt to purchase the note, guarantees and deficiency claim from JLM on his behalf. JLM eventually sold the note, guarantees and deficiency claim to Andrew J. Buzzi, Jr., Trustee for $30,000. Buzzi, in turn, assigned the note, guarantees and deficiency claim to Consolidated Asset Management, LLC (Consolidated), a limited liability company that he had formed with [Robert] Rossman's wife, Catherine Rossman. Thereafter, Consolidated assigned the note, guarantees and deficiency claim to Fairway Asset Management, Inc. (Fairway), [which became] the substituted plaintiff and judgment creditor....

“[Terracino and Guardian] filed three special defenses, a cross complaint and a counterclaim in response to the motion for a deficiency judgment. The special defenses, as amended, alleged facts that occurred subsequent to the judgment of strict foreclosure. The defendants claimed that [Robert] Rossman breached the fiduciary duty that he owed them because of his role in assigning the note to Consolidated.... The counterclaim and cross complaint ... requested a judgment that Fairway and its predecessors could enforce the note only to claim a proportionate contribution toward funds actually paid on behalf of [Robert] Rossman for the note, or a judgment declaring the note null and void.... At trial, Buzzi testified that he did not purchase the note on behalf of [Robert] Rossman.

He testified, instead, that he had purchased the note on behalf of Consolidated.

“The court [ DiPentima, J.] granted the motion for a deficiency judgment. It rejected the third special defense and concluded that there was insufficient evidence to find that either Buzzi or Catherine Rossman acted as [Robert] Rossman's agent [in purchasing the note from JLM], and, therefore, there was no need to address the defendants' other claims premised on a theory of agency. The court also concluded that the defendants had not met their burden of proof on the counterclaim and cross claim.... On or about January 28, 2000, the court rendered judgment for the substitute plaintiff, Fairway, in the amount of $324,631.08, plus attorney's fees. Thereafter, Terracino and Guardian appealed to this court from that judgment. This court, with Chief Judge William J. Lavery dissenting, affirmed the judgment of the trial court....

“While the appeal in Federal Deposit Ins. Corp. v. Mutual Communications Associates, Inc., [66 Conn.App. 397, 784 A.2d 970 (2001), appeal dismissed, 262 Conn. 358, 814 A.2d 377 (2003) ], was pending, the plaintiffs, Terracino and Guardian, filed ... [a] petition for a new trial on the ground that they had discovered new evidence that likely would have produced a different result had it been presented to the court during the trial. That new evidence consisted of three pieces of correspondence, which, some four months after judgment had entered in the original action, counsel for [Terracino and Guardian] received from the law firm that had represented JLM in conjunction with its sale of the note, guarantees and deficiency claim to Buzzi. In their petition, [Terracino and Guardian] claimed that the new evidence demonstrated that JLM had accepted [Robert] Rossman's offer to purchase the note and, therefore, the defenses that [Terracino and Guardian] raised in the original trial were applicable. They also claimed that Buzzi, [Robert] Rossman and Rossman's wife, Catherine Rossman, prevented them from discovering that correspondence before or during the trial, and that the correspondence demonstrated that Buzzi and the Rossmans testified falsely at trial that Buzzi had not purchased the note, guarantees and deficiency claim from JLM on behalf of [Robert] Rossman. Finally, [Terracino and Guardian] claimed that the testimony of Buzzi and the Rossmans was intended to mislead the court and to prevent [Terracino and Guardian] from fairly presenting their defenses to Fairway's claims.

“In a memorandum of decision filed March 8, 2001, the court [ DiPentima, J.] denied [Terracino's and Guardian's] petition for a new trial. It concluded that although the evidence presented by [Terracino and Guardian] had, in fact, been newly discovered and would be material to the issue of whether Buzzi had purchased the note on behalf of [Robert] Rossman, the plaintiffs failed to demonstrate that they had exercised due diligence in their efforts to discover that evidence prior to trial.” (Citations omitted, internal quotation marks omitted.) Terracino v. Fairway Asset Management, Inc., supra, 75 Conn.App. at 65-68, 815 A.2d 157.

We turn now to the present case. On January 23, 2006, the plaintiffs filed a second revised complaint, which alleged “civil fraud” (count one), “civil conspiracy to commit fraud” (count two) and indemnification (count three) against the defendants. Only Terracino also alleged a claim for emotional distress (count four). On June 20, 2007, Robert Rossman and Catherine Rossman filed an answer and asserted three special defenses, including, inter alia, collateral estoppel. On that same date, Buzzi and the Rossmans filed motions for summary judgment as to all claims against them.

The court, Cremins, J., granted the motions for summary judgment as to counts one, two and four of the complaint as to all defendants. It granted Buzzi's motion as to count three and the Rossmans' motion as to count three but only as to Catherine Rossman. The plaintiffs subsequently withdrew count three as to Robert Rossman. The plaintiffs then appealed. Additional facts will be set forth as necessary.

Judge Cremins concluded, as a matter of law, that the plaintiffs' claims were barred by principles of collateral estoppel in that a determinative issue had been decided adversely to them in a prior action. The plaintiffs claim that the court's conclusion in this regard was erroneous. We disagree.

We first set forth our standard of review. “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 moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law.... On appeal, we must determine whether the legal conclusions reached by the trial court are legally and logically correct and whether they find support in the facts set out in the memorandum of decision of the trial court.... Our review of the trial court's decision to grant [a party's] motion for summary judgment is plenary.” (Internal quotation marks omitted.) Southwick at Milford Condominium Assn., Inc. v. 523 Wheelers Farm Road, Milford, LLC, 294 Conn. 311, 318, 984 A.2d 676 (2009).

“Whether the ... doctrine of collateral estoppel [is applicable] is a question of law for which our review is plenary.... Collateral estoppel, or issue preclusion, means simply that...