Posts tagged with "immunity"

Student’s Negligence Action Against School

Student’s Negligence Action Against School, City of Stamford Survives Motion for Summary Judgment

Jesse was a twenty-year-old special education student attending high school in Stamford. She repeatedly informed teachers and school officials about the unwanted romantic advances made by her classmate, Jonathan, but no action was ever taken. On February 28, 2005, Jesse asked to use the restroom located in the special education classroom; she was then sexually assaulted by Jonathan. Both students were sent to the office of the special education coordinator, and Jesse explained what occurred. Despite this knowledge, school officials permitted the two to ride on the same school bus home, during which Jesse was teased and called a liar by Jonathan.

Various teachers and staff, the Board of Education, and even the City of Stamford were later sued in a negligence action filed by Jesse. She contended that “the defendants were aware of [Jonathan’s behavior], but they failed to take appropriate measures to protect [her] from the sexual assault.”[1] However, in their motion for summary judgment, the defendants claimed protection through governmental immunity.

Municipal employees are “liable for the misperformance of ministerial acts, but has qualified immunity in the performance of governmental acts…”[2] Basically, governmental acts are supervisory and discretionary, while ministerial acts must “be performed in a prescribed manner without the exercise of judgment or discretion.”[3] However, even if a defendant successfully claims, as they did in this case, that the acts in question were discretionary, thus invoking governmental immunity, a plaintiff may still defeat a motion for summary judgment by asserting one of three exceptions (discussed in greater detail here): in this case, the identifiable person-imminent harm exception.

The identifiable person-imminent harm exception requires a showing of three things: “(1) an imminent harm; (2) an identifiable victim; and (3) a public official to whom it is apparent that his or her conduct is likely to subject that victim to that harm.”[4] A person will be deemed “identifiable… if the harm occurs within a limited temporal and geographical zone, involving a temporary condition;”[5] a harm is imminent if it is “ready to take place within the immediate future.”[6]

In discussing the motion to dismiss, the Court agreed that Jesse was an identifiable victim of the assault, but she failed to meet the imminent harm requirement. There was no evidence on the record as to when the previous sexual advances were made, nor did she show that the defendants should have known the sexual assault would take place on or about February 28, 2005.[7] However, the Court agreed that the exception was satisfied as to the school officials’ conduct in allowing the two to ride home together:

[Two school officials] admit in their affidavits that they knew some sort of sexual conduct had occurred between [Jesse] and [Jonathan]. Despite this fact, they did not stop [Jesse] from taking the bus with [Jonathan]. At that time, [Jesse] was an identifiable victim of harassment by [Jonathan], and the risk was limited in geographic and temporal scope because [Jesse] and [Jonathan] were riding the bus together and the risk only lasted the duration of the bus ride home. Moreover, the risk of harm was arguably imminent because the dismissal bell had just sounded to release the students early because of a snowstorm, and the bus would presumably be leaving soon thereafter.

Thus, the Court denied the motion for summary judgment as to most of the counts in the complaint (it granted the motion as to one negligence per se count). Although the lawsuit was later withdrawn[8] by Jesse, this case nonetheless serves as another example of a student and/or parent surviving a motion for summary judgment in the face of defendants asserting governmental immunity protection.

Written by Lindsay E. Raber, Esq.

Should you have any questions about any education law matter, please do not hesitate to contact Attorney Joseph C. Maya, Esq. He may be reached at Maya Murphy, P.C., 266 Post Road East, Westport, Connecticut (located in Fairfield County), by telephone at (203) 221-3100, or by email at JMaya@mayalaw.com.


[1] Estrada v. Stamford Board of Education et al., Superior Court, judicial district of Stamford, Docket No. CT 06 5002313. 2010 Conn. Super. LEXIS 3022 (November 19, 2010, Tobin, J.).

[2] Bonington v. Westport, 297 Conn. 297, 306, 999 A.2d 700 (2010).

[3] Id.

[4] Cotto v. Board of Education, 294 Conn. 265, 273, 984 A.2d 58 (2009).

[5] Id. at 275-76.

[6] Stavrakis v. Price, Superior Court, judicial district of Litchfield, Docket No. CV 10 6001285, 2010 Conn. Super. LEXIS 2257 (September 7, 2010, Roche, J.).

[7] See Footnote 1.

[8] http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=FSTCV065002313S

Connecticut Supreme Court Addresses the Identifiable Person-Imminent Harm Exception to Governmental Immunity

In a decision released just last week, the Supreme Court of Connecticut had an opportunity to address municipal immunity, and specifically, the “identifiable victim-imminent harm” exception to discretionary act immunity.

In Haynes v. City of Middletown, the plaintiff, acting on behalf of her plaintiff son, sought to recover damages for negligence from the City of Middletown after her son was pushed into a broken locker by a fellow high school student. He sustained personal injuries. In response to plaintiff’s complaint, the defendant city invoked a defense of governmental immunity.  In their response, the plaintiffs failed to plead any exceptions to the defendant’s claim of immunity. A jury found for the victim, however the trial court granted the defendant’s motion to set aside the verdict on the ground of governmental immunity.  The appellate court affirmed the trial court’s decision to set aside the verdict, holding that the plaintiffs never made the identifiable victim-imminent harm argument to the defendant’s claim of municipal immunity.  The identifiable victim-imminent harm exception is one of three exceptions to discretionary act immunity that Connecticut courts have carved out.  Where defendants’ acts are discretionary, they may invoke governmental immunity, barring a plaintiff’s claim against the governmental entity.  However, the identifiable victim-imminent harm exception applies when the circumstances make it apparent to the public officer charged with the exercise of discretion that his or her failure to act would be likely to subject an identifiable person to imminent harm.

In the instant case, the Supreme Court reversed the appellate court’s decision and remanded the case to the appellate court for consideration of the sole issue of the plaintiff’s failure to plead the identifiable victim-imminent harm exception.  The Supreme Court found that, because the Appellate Court didn’t hear full arguments on that specific issue, it was not in a position to decide the case on that issue.  Thus, the Supreme Court remanded the case on that one, sole ground.

Decisions like this serve as reminders that it is imperative to consult with attorneys who are well-versed in education law and able to effectively litigate this type of claim.  The identifiable victim-imminent harm exception is invoked in bullying and cyberbullying cases, when victims of bullying seek action against the school district.  If you have questions about bullying, cyberbullying, or education law, do not hesitate to contact Joseph Maya, Esq. in our Westport office, at either 203-221-3100, or at JMaya@mayalaw.com.

Bullying In Schools: Are We Doing Enough to Protect Children?

Bullying In Schools: Are We Doing Enough to Protect Children?

On September 22, 2010, Seth Walsh should have been skateboarding or playing baseball, listening to his new favorite song, perhaps, or talking on the phone with friends.  He should have been happy and care free.  After all, Seth was only thirteen years old, an age when children should be laughing and dreaming of the endless opportunities that lie ahead.  Instead, Seth Walsh was lying beneath a tree in his backyard unconscious, no longer breathing.  He had just hung himself.  After spending the next week on life support, with his mother looking on, Seth ultimately died.

And just days earlier on the other side of the country, Tyler Climenti, an eighteen year old student at Rutgers posted what would be his last Facebook message, “Jumping off the gw bridge sorry.” Later that night Tyler took his own life as well- throwing himself into the dark and frigid water of the Hudson River.

In September, 2010, within nineteen days, four teenagers from around the country committed suicide.  William Lucas, from Greensburg Indiana was only fifteen, Asher Brown from Houston Texas was thirteen.  Like Seth, Billy hung himself.  Asher shot himself in the head with one of his step-father’s guns.  The common link?  All four had been relentlessly tormented at school.  Shining new light on what has become a national epidemic, these cases illuminate the devastating and increasingly deadly effects of bullying.  There is some debate over whether bullying is a new phenomenon or whether children are simply reacting differently.  Whatever the case may be, one thing is clear- we must take action to protect the destruction of more innocent lives.

The Department of Education recently entered the fray, releasing a “Dear Colleague” letter in which it urged school districts to address bullying within the classroom, providing school administrators with guidance on how to end harassment.  Additionally, within the last couple of years, many states, including New York and Connecticut, have passed anti-bulling legislation.  At what point should a school district be held liable when it fails to prevent bullying?  The answer to that question is not clear-cut.  Indeed, parents face several legal challenges when they pursue a case.

For instance, in 2008, the Superior Court at New Britain held that parents of a Berlin High School student could not maintain a negligence cause of action against the school district, the administrators or the child’s coach.  In Dornfried v. Berlin Board of Education, et al, Robby Dornfried’s parents alleged that while a freshman and sophomore at the high school, and a place-kicker on the varsity football team, their son was subjected to “incessant bullying, harassment, intimidation and was the victim of threats and/or acts of violence” by his teammates.  They further alleged that school administrators, the guidance counselor, even Robby’s coach, knew of the problem, but did nothing to stop the behavior.  Robby eventually sought medical treatment and ultimately transferred to Northwest Catholic High School halfway though his sophomore year.

Analyzing whether the principal of governmental immunity barred suit, the Court recited the general rule that a municipal employee may be liable for the misperformance of ministerial acts, but has qualified immunity in the performance of governmental acts- those performed wholly for the benefit of the public and supervisory or discretionary in nature.  Agreeing with the defendants, the Court found that the supervision of school children, not only during school hours, but at extra-curricular events such as football practice or a football game is a discretionary matter.  It next addressed whether it was appropriate to apply any of the exceptions to the immunity doctrine.  Generally, there are three:

  1. Liability may be imposed for a discretionary act when the alleged conduct involved malice, wantonness or intent to injure.
  2. Liability may be imposed for a discretionary act when a statute provides for a cause of action against a municipality or municipal official for failure to enforce certain laws.
  3. Liability may be imposed when the circumstances make it apparent to the public officer that his or her failure to act would be likely to subject an identifiable person to imminent harm.

Ignoring the first two exceptions, the Court addressed whether Robby was an “identifiable person subject to imminent harm” under the law.  Citing Supreme Court precedent, Judge Trombley, found he was not, explaining the only identifiable class of foreseeable victims the courts have recognized is that of school children attending public schools during school hours.  The Court ultimately held that although participation in school sponsored athletic programs is most likely encouraged, the participation is on a purely voluntary basis and, therefore, governmental immunity barred Robby’s negligence claims.

Earlier this year the Superior Court at New Haven reached a different conclusion in a bullying case.  In Esposito v. Town of Bethany, et al, the father of an elementary school student brought suit against the Town of Bethany, the Board of Education and the Bethany Public School District alleging negligence.  The student, Christina, was allegedly teased on a regular basis and at one point another student threw a ball at the back of her head during recess.  Christina sustained severe injuries “leaving her with an acquired brain injury and severe optical dysfunction.”

In response to Connecticut’s anti-bulling legislation, which became effective July, 2002, the Town of Bethany adopted a comprehensive anti-bullying policy.  The Plaintiff’s pointed to that policy arguing that the school failed to follow it and, thus, their acts were ministerial rather than discretionary in nature.  The Court framed the issue as whether, “…a detailed method of behavior was laid down for administrators and teachers for dealing with bullying depriving them of any judgment or discretion, or that, actions were dictated to deal with the problem that involved merely the execution of an established policy.”  Leaving this question unanswered, the Court ultimately erred on the side of caution, allowing the plaintiff an opportunity to present the facts at trial.

Later in its decision the Court addressed whether the “identifiable person subject to imminent harm” exception would apply if the school’s actions were in fact discretionary.  In doing so, the Court hinted at expanding its view of the doctrine in the context of school bullying.  The Court interpreted prior case law as suggesting that the only identifiable class of foreseeable victims is that of school children attending school during school hours, but went on to suggest, “[b]ut if a clearly identifiable person, child or adult, is exposed to imminent harm then the exception could apply also if that individual is exposed to imminent harm,” continuing, “an individual may be identifiable for purposes of the exception to qualified immunity if the harm occurs within a limited temporal and geographical zone, involving a temporary condition.”

In ruling in Christina’s favor, the court also noted that the appellate courts have relaxed the “identifiable person” portion of the analysis as it pertains to school children stating simply, “they are a foreseeable class to be protected.”  The Court concluded it must assume a similarly protective attitude will be applied in examining the “imminent harm” requirement stating, “bullying is condemned by state statute, children must attend schools, children are not as capable of defending themselves, they are vulnerable in the entire school area where unsupervised conduct prevails, and the bullying concept includes… a particular child subject to these acts.”

Whether a victim of bullying will be successful in bringing a claim against a school district will depend heavily on the facts and circumstances of the case as well as the theory of liability, the state in which the claims are made and the causes of action asserted.   As set forth above, in Connecticut governmental immunity may preclude recovery altogether unless the victim can demonstrate the application of an exception is appropriate.

By: Michael D. DeMeola

If you have any questions regarding bullying in schools, or any special education law matter, please contact Joseph Maya at 203-221-3100 or by email at JMaya@MayaLaw.com.

Physician Adequately Alleges Violation of CUTPA Against His Former Counsel

In a recent decision, the Superior Court for the Judicial District of Stamford/Norwalk held that a plaintiff physician adequately alleged a violation of the Connecticut Unfair Practices Act against his former counsel.  More specifically, the Court held that, as alleged, the defendant law firm’s actions were entrepreneurial in nature, and, thus, were not subject to immunity which ordinarily attaches to conduct involving legal representation.

In reaching its decision, the Court relied on the following facts, as alleged in the plaintiff’s complaint:

In this action, the plaintiff has brought suit against the defendants Yale-New Haven Health Services, Greenwich Hospital, MCIC Vermont, Inc. and the law firm of Heidell, Pittoni, Murphy & Bach, LLP (the defendant).[1]The operative pleading, which is the plaintiffs amended complaint dated August 20, 2010, alleges the following relevant facts. Until January 3, 2008, the plaintiff was employed by Yale-New Haven Health Services as the director of the emergency services department at Greenwich Hospital. On August 4, 2006, the plaintiff met and treated a patient during the course of his employment. Subsequent to this treatment, the patient initiated a medical malpractice lawsuit against Greenwich Hospital and five physicians including the plaintiff. As a result of this lawsuit, the plaintiff was contacted by Y ale-New Haven Health Services and told that he could be provided a defense in the Sousa lawsuit pursuant to an undisclosed insurance policy provided by MCIC Vermont, Inc. The plaintiff was further told that the defendant law firm would represent all five of the physicians who were defendants in the underlying lawsuit, as well as Greenwich Hospital. According to the complaint, the plaintiff was not told that he had a right to obtain independent counsel or that he had the ability to object to any settlements. There was no written retainer agreement between the plaintiff and the defendant law firm. The plaintiff further alleges that the defendant law firm never informed him of any potential conflicts of interest arising from this joint representation. In fact, upon meeting with one of the defendant’s partners, the plaintiff was told that it was “not necessary” for him to obtain independent counsel because in “most cases,” settlements were covered entirely by the subject insurance policy and that individual physicians were “very rarely” reported to the National Practitioners Data Bank pursuant to 45 C.F.R. § 60.5.

According to the plaintiff, “throughout the representation [the defendant] failed to exercise the degree of skill and learning commonly applied to protect a client in Plaintiffs position as independent from the competing interests of common clients, including [Greenwich Hospital].” Specifically, the plaintiff alleges that the defendant failed to inform him in a timely manner of the occurrence of the deposition of the plaintiff in the underlying case, which deprived him of an opportunity to be present and provide input. The plaintiff further alleges that he was not told for nine months that the defendant had obtained the services of an independent medical expert. In November 2009, the plaintiff was informed that the case was settled on his behalf and that he would not be reported to the National Practitioners Data Bank. When the plaintiff asked whether he could object to the settlement, the plaintiff was told that he could not because of the contractual arrangement between MCIC Vermont, Inc. and Greenwich Hospital or Yale-New Haven Health Services. The plaintiff was further informed that he would not be named as a payor of the settlement proceeds. Several weeks later, however, the plaintiff was in fact told that he would be named in the settlement and reported to the National Practitioners Data Bank. The reason for this decision was because of an independent expert opinion that the plaintiff was not told about until after the settlement. None of the other physicians represented by the defendant were reported to the National Practitioners Data Bank. On December 22, 2009, the plaintiff eventually obtained independent counsel and the defendant has refused to turn over relevant documents to the plaintiffs new attorneys.

As a result of all of this conduct, the plaintiff alleges the following claims: (1) legal malpractice against the defendant; (2) breach of fiduciary duty against the defendant; (3) breach of fiduciary duty against MCIC Vermont, Inc.; (4) breach of contract against Greenwich Hospital; (5) breach of contract against Yale-New Haven Health Services; (6) breach of the covenant of good faith and fair dealing against Greenwich Hospital; (7) breach of the covenant of good faith and fair dealing against Yale-New Haven Health Services; (8) breach of the covenant of good faith and fair dealing against MCI C Vermont, Inc.; (9) violations of the Connecticut Unfair Trade Practices Act, General Statutes § 42-1a et seq. (CUTP A), against the defendant; (10) negligence against MCIC Vermont, Inc.; (11) violations of CUTP A against MCIC Vermont, Inc. and (12) violations of the Connecticut Unfair Insurance Practices Act, General Statutes § 3Sa-S15 et seq. (CUlPA) against MCIC Vermont, Inc.

On August 20, 2010, the defendant filed a motion to strike and a memorandum of law in support of its motion (Dkt. Entries 107.00 and 10S.00).  As originally filed, the defendant’s motion sought to strike counts one and six, as well as the prayer for relief associated with count one, which were located in the plaintiffs revised complaint dated August 5, 2010. The plaintiff filed a memorandum of law in opposition to this motion on September 2, 2010 (Dkt. Entry 112.00). Following the filing of the defendant’s motion to strike, on August 23, 2010, the plaintiff filed a request for leave to file an amended complaint, as well as a proposed amended complaint. This complaint is now the operative complaint in the case.2  In this amended complaint, the plaintiff added a new cause of action against the defendant for breach of fiduciary duty and changed the numbering of the counts that are directed to the plaintiff. As a result, on October 4, 2010, the defendant filed a supplemental motion to strike and supporting memorandum of law addressing count two (Dkt. Entry121.00 and 123.00). The plaintiff further filed a memorandum of law in opposition to this supplemental motion to strike on November 5, 2010 (Dkt. EntryI28.00). When read together, the defendant’s original and supplemental motions to strike request that the court strike all of the counts levied against the defendant in the plaintiffs amended complaint dated August 20, 2010. These are counts one, two and nine. The defendant is also moving to strike the portions of the prayer for relief associated with count one that seek punitive damages and attorney’s fees. The court heard argument in this matter at short calendar on December 6, 2010.

From a legal perspective, the Court reasoned as follows:

“The purpose of a motion to strike is to contest … the legal sufficiency of the allegations of any complaint … to state a claim upon which relief can be granted.” (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). In a motion to strike, “the moving party admits all facts well pleaded.” RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381,383 n.2, 650 A.2d 153 (1994). Therefore, “[i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied.” (Internal quotation marks omitted.) Batte-Homgren v. Commissioner o/Public Health, 281 Conn. 277,294,914 A.2d 996 (2007). Nevertheless, “[a] motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged.” (internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 498. When deciding a motion to strike, the court must “construe the complaint in the manner most favorable to sustaining its legal sufficiency.” (internal quotation marks omitted.) Sullivan v. Lake Com pounce Theme Park, Inc., 277 Conn. 113, 117,889 A.2d 810 (2006).

The defendant first moves to strike count nine alleging CUTP A on the ground that the plaintiff fails to allege facts involving the entrepreneurial aspects of the defendant’s law practice.3 In its memorandum of law, the defendant argues that all of the allegations in this count arise from the defendant’s legal representation of the plaintiff and that such allegations cannot form a legally cognizable CUTPA claim against a law firm. As a result of this immunity from CUTPA liability, the defendant argues that count nine is legally insufficient. In response, the plaintiff argues that he alleges facts involving the defendant’s “engaging and disengaging of clients, its billing practices and fees.” Specifically, the plaintiff contends that he alleges actions taken by the defendant in order to secure the plaintiff as a client and prevent him from obtaining independent counsel. Furthermore, the plaintiff argues that he alleges facts involving the defendant’s improper billing practices. Consequently, the plaintiff contends that count nine sets forth a legally viable CUTPA cause of action.

“[I]n general, CUTPA applies to the conduct of attorneys…. The statute’s regulation of the conduct of any trade or commerce does not totally exclude all conduct of the profession of law. . .. Nevertheless, [the Connecticut Supreme Court has] declined to hold that every provision of CUTPA permits regulation of every aspect of the practice of law…. [The Supreme Court has] stated, instead, that, only the entrepreneurial aspects of the practice of law are covered by CUTPA. … [P]rofessional negligence that is, malpractice does not fall under CUTPA.” (Citations omitted; internal quotation marks omitted.) Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 781, 802 A.2d 44 (2002). “Our CUTPA cases illustrate that the most significant question in considering a CUTP A claim against an attorney is whether the allegedly improper conduct is part of the attorney’s professional representation of a client or is part of the entrepreneurial aspect of practicing law.” Id. “The ‘entrepreneurial’ exception is just that, a specific exception from CUTP A immunity for a well-defined set of activities-advertising and bill collection, for example.” Id., 782; see also Haynes v. Yale-New Haven Hospital, 243 Conn. 17,34-38,699 A.2d 964 (1997) (stating that CUTPA can apply to the professions of law and medicine, but only for entrepreneurial aspects such as solicitation of clients and billing).

In paragraph fourteen of count one, which is incorporated by reference into count nine, the plaintiff alleges that “at the outset of the representation, [he] inquired as to whether he needed separate counsel and was told it was ‘not necessary,’ especially as in ‘most cases,’ settlements were covered entirely by [MCIC Vermont, Inc.] on behalf of [Greenwich Hospital] and [Yale-New Haven Health Services] ….” As further alleged in paragraphs thirty-two and thirty-three of count nine, “[t]he representation of all individual physicians and [Greenwich Hospital] in the Sousa lawsuit, while purposefully overlooking potential and actual conflicts of interest, permitted [the defendant] to bill numerous hours above and beyond what it would have been able to bill if it only represented one physician or one hospital” and “[i]t is and/or was [the defendant’s] pattern and practice to increase billable hours, regardless of its ethical obligations to its individual clients.” If read in a light most favorable to the pleader and accepted as true, these allegations suggest that the defendant failed to divulge a potential conflict of interest in order to convince the plaintiff to have it represent him in the Sousa lawsuit and that this was done so that the plaintiff could over-bill its clients. As stated by one Superior Court judge, “the solicitation of a client is more apt to involve the entrepreneurial, as opposed to the representational, aspects of a legal practice because such an activity more often involves conduct occurring before the creation of the attorney-client relationship.” (Emphasis in original.) Tracey v. Still, Superior Court, judicial district ofAnsonia-, Milford at Derby, Docket No. CV 054001883 (March 23, 2006, Stevens, J) (41 Conn. L. Rptr. 101, ‘ 104); see also Anderson v. Schoenhorn, 89 Conn. App. 666, 674,874 A.2d 798 (2005) (stating that “the conduct of a law firm in obtaining business and negotiating fee contracts does fall within the ambit of entrepreneurial activities”).

The allegations of count nine also directly implicate the defendant’s billing practices in that the plaintiff alleges that the defendant over-billed as a result of its representation of multiple clients in the Sousa lawsuit. Cf. Proskauer Rose, LLP v. Lindholm, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 07 5005353 (May 19, 2008, Tobin, J) (45 Conn. L. Rptr. 503, 505) (striking CUTP A counterclaim because of the defendant’s failure “to allege any wrongdoing on the plaintiffs part other than over-billing. There are no claims that the plaintiffs bill, for example, included time incurred in working for other clients …. Without such allegations claims of over-billing necessarily involve only the professional judgment of the plaintiff as to how to staff the defendant’s case ….”). Consequently, although it is a close call, the court finds that the plaintiff alleges enough facts regarding the solicitation of clients and billing practices to arguably place this matter within the entrepreneurial exception to the CUTP A immunity afforded to attorneys.

Additionally, the defendant argues that count nine is legally insufficient because the plaintiff fails to allege causation. In its memorandum of law, the defendant argues that there are no facts alleged indicating that the defendant’s actions were the proximate cause of the plaintiffs injuries. In response, the plaintiff argues that he alleges sufficient facts in the amended complaint to establish the causation element because he alleges that he suffered injury “as a result” of the defendant’s conduct.

CUTP A provides in relevant part that: “Any person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by section 42-110b, may bring an action in the judicial district in which the plaintiff or defendant resides or has his principal place of business or is doing business, to recover actual damages ….” General Statutes § 42-110g (a). “Our courts have interpreted § 42-110g (a) to allow recovery only when the party seeking to recover damages meets the following two requirements: First, he must establish that the conduct at issue constitutes an unfair or deceptive trade practice .. . . Second, he must present evidence providing the court with a basis for a reasonable estimate of the damages suffered …. Thus, in order to prevail in a CUTPA action, a plaintiff must establish both that the defendant has engaged in a prohibited act and that, ‘as a result of this act, the plaintiff suffered an injury. The language ‘as a result of requires a showing that the prohibited act was the proximate cause of a harm to the plaintiff.” (Citations omitted; emphasis in original; internal quotation marks omitted.) Scrivani v. Vallombroso, 99 Conn. App. 645, 651-52,916 A.2d 827, cert. denied, 282 Conn. 904, 920 A.2d 309 (2007).

In paragraph thirty-seven of count nine, the plaintiff alleges that he “has suffered damages as a result of [the defendant’s] conduct, including but not limited to damage to his professional reputation, loss of prospective economic advantage, loss of future earnings, and diminished value in the professional marketplace.” With this allegation, it can be seen that the plaintiff alleges that he suffered specific damages “as a result” of the defendant’s acts that are prohibited under CUTP A. The “as a result of” phrasing tracks the language of§ 42-1 10g (a) and that used by the Appellate Court in Scrivani. At the motion to strike stage, the plaintiff need only allege causation in order to have a legally sufficient cause of action. The plaintiff here alleges that he suffered specific harm “as a result of’ the defendant’s alleged violation of CUTPA; that sufficiently alleges the causation element. See, e.g. Myers v. Ocean Trace Development, Superior Court, judicial district of Fairfield, Docket No. CV 00 0375476 (May 3, 2002, Gallagher, J.) (stating that the plaintiffs “adequately allege causation by alleging that [they] suffered damages ‘as a result’ of the defendants’ recklessness”). Accordingly, this court denies the defendant’s motion to strike count nine.

FOOTNOTES

1.   As Heidell, Pittoni, Murphy & Bach, LLP is the only defendant that is a party to the motion to strike that is presently before the court, it alone will be referred to as “the defendant” is this memorandum.

2.  After the plaintiff filed the request for leave to file this amended complaint, the defendant filed an objection. This objection was overruled by the court, Jennings,      JTR., on September 22, 2010. Another defendant in this case later filed a request to revise this amended complaint, to which the plaintiff filed an objection. All of the plaintiffs objections were sustained by the court, Karazin, JTR., on October 14, 2010.

3.  The various counts will be addressed in the order that they are raised in the defendant’s two memoranda of law in support of its motions to strike, even though this is not the numerical order set forth in the amended complaint.


FINRA Arbitrators are Immune from Civil Liability When Making Decisions within Their Jurisdiction

FINRA Arbitrators are Immune from Civil Liability When Making Decisions within Their Jurisdiction

Richard Sacks, d/b/a Investors Recovery Service, v. Dean Dietrich and Teri Coster Boesch, 663 F.3d 1065 (9th Cir. 2011)

In a case before the Ninth Circuit, Richard Sacks (“Sacks”), doing business as Investor Recovery Services, appealed a United States District Court ruling dismissing his claims of intentional and negligent interference with contract and negligent interference with prospective economic advantage against Financial Industry Regulatory Authority (“FINRA”) arbitrators Dean Dietrich and Teri Coster Boesch (“the challenged arbitrators”). The Ninth Circuit affirmed the United States District Court for the Northern District of California ruling that Sacks’s claims were barred by arbitral immunity.

Sacks entered into a written contract with a client to represent him in a FINRA securities arbitration proceeding. In order to submit his dispute to FINRA, Sacks’s client signed a FINRA submission agreement. On behalf of his client, Sacks submitted a Statement of Claim, paid filing fees and requested a hearing. FINRA appointed a panel of three arbitrators, including the challenged arbitrators, to hear and decide the claims of Sacks’s client.

After two telephone hearings, the respondents in the arbitration moved to have Sacks disqualified on the grounds that he was ineligible under FINRA Rule 13208, which disallows representation by a person who is not an attorney and who is also “currently suspended or barred from the securities industry in any capacity.” Sacks was not an attorney and was barred from the securities industry in 1991. In his response to the motion to disqualify, Sacks objected to the arbitration panel’s consideration of the issue arguing that the panel did not have the authority to make a decision on his client’s representation and that he had not contracted with the panel to make any such decision. However, Sacks disputed neither the fact that he was not an attorney nor the fact that he had been barred from the securities industry. The challenged arbitrators signed an order disqualifying Sacks from representing his client. The third arbitrator did not join in the order.

Sacks filed a complaint in state court against the challenged arbitrators alleging that, by preventing him from representing his client, the challenged arbitrators exceeded their authority under his client’s FINRA submission agreement, FINRA rules and state law. The challenged arbitrators removed the case to federal district court. The district court ruled that Sacks’s claims were barred by arbitral immunity, granted the challenged arbitrators’ motion to dismiss and entered judgment dismissing all claims with prejudice. Sacks appealed.

The doctrine of arbitral immunity aims to protect decision makers from undue influence and the decision making process from reprisals by dissatisfied litigants. Wasyl, Inc. v. First Boston Corp., 813 F.2d 1579, 1582 (9th Cir.1987). The doctrine only applies to claims that effectively seek to challenge the decisional act of an arbitrator or an arbitration panel. More specifically, it limits arbitrators’ immunity to “civil liability for acts within their jurisdiction arising out of their arbitral functions in contractually agreed upon arbitration hearings.” Id. at 1582.

Sacks argued that the doctrine of arbitral immunity was inapplicable to bar his claims because the challenged arbitrators exceeded their jurisdiction. The first basis for this argument was that FINRA rules and applicable law prevented the challenged arbitrators from deciding a representational issue. Specifically, Sacks argued that FINRA Rule 13208 itself did not give arbitrators the authority to prohibit him from representing his client. However, the appellate court determined that, taken as a whole, FINRA rules and applicable law dictate that the challenged arbitrators were acting within their jurisdiction. FINRA Rule 13413 grants the arbitration panel authority to interpret and determine the applicability of FINRA rules and provides that “[s]uch interpretations are final and binding upon the parties.” There was no issue regarding Sacks’s lack of qualification under FINRA Rule 13208 because it was undisputed that he was not an attorney and had been barred from the securities industry. Therefore, the challenged arbitrators did not exceed their authority in issuing the disqualification order.

The second basis for Sacks’s argument that the challenged arbitrators exceeded their authority is that he could not be bound by the arbitration panel because he was not a party to the arbitration agreement. The appellate court determined that Sacks was still bound by the arbitration agreement under ordinary contract and agency principles. When Sacks’s client submitted his claim to FINRA, the FINRA arbitrators had jurisdiction to issue binding interpretations of FINRA rules. Therefore, because the challenged arbitrators acted with full authority under the client’s arbitration agreement, they could not be subject to suit by a party representative.

The appellate court determined that the arbitrators were acting within their jurisdiction and Sacks’s claims arose out of a decisional act. Therefore, the district court properly applied the doctrine of arbitral immunity to bar Sacks’s claims. The appellate court affirmed the district court rulings.

Should you have any questions relating to FINRA or arbitration issues, please do not hesitate to contact Attorney Joseph C. Maya in the firm’s Westport office in Fairfield County, Connecticut at 203-221-3100 or at JMaya@Mayalaw.com.

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