Aetna v. Inner-City, et al.

• Court: District Court, D. New Hampshire
• Decided: February 12, 1998
• Docket: CV-96-556-M
• Status: Published

Opinion

Aetna v. Inner-City, et al. CV-96-556-M 02/12/98 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Aetna Casualty and Surety Co.

v. Civil No. 96-556-M

Inner-Citv Construction Co., Inc. and Paul E. Pandelena

O R D E R

Defendants, Inner-City Construction Co., Inc. and Paul

Pandelena, move for summary judgment with respect to Aetna's

fraud claim. In response, Aetna contends that defendants' motion

is untimely since the parties agreed in their "Report on Joint

Plan of Discovery" to file all dispositive motions before August

1, 1997. Aetna also contests the merits of defendants' motion.

For the reasons that follow, defendants' motion is denied.

Defendants filed their motion for summary judgment on

December 17, 1997, without a reguest, pursuant to Federal Rule of

Civil Procedure 6(b), for an extension of the parties' agreed

August 1 deadline. Neither did Aetna mention the August 1

deadline in its motion for an extension of time to respond to

defendants motion for summary judgment. Aetna interposed the

timeliness issue in its objection filed on February 4, but has

not suggested that defendants' late filing prejudiced its ability

to respond. Under these circumstances, the court will accept

defendants' late-filed motion. Standard of Review

Summary judgment is appropriate if the "pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, 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." Fed. R. Civ. P.

56(c). The moving party first must show the absence of a genuine

issue of material fact for trial. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 256 (1986) . If that burden is met, the

opposing party can avoid summary judgment on issues that it must

prove at trial only by providing properly supported evidence of

disputed material facts that would reguire trial. Celotex Corp.

v. Catrett, 477 U.S. 317, 322 (1986) . The court interprets the

record in the light most favorable to the nonmoving party and

resolves all inferences in its favor. Saenger Organization v.

Nationwide Ins. Assoc., 119 F.3d 55, 57 (1st Cir. 1997). Thus,

summary judgment will be granted if the record shows no

trialworthy factual issue and if the moving party is entitled to

judgment as a matter of law. EEOC v. Green, 76 F.3d 19, 23 (1st

Cir. 1996).

Background

In 1994 and 1995, defendant Inter-City Construction Company

was a general contracting company specializing in road and site

construction. Defendant Paul Pandelena, president of Inter-City,

applied for bonding for construction projects through Inter-

2 City's insurance agent, William VerPlanck of The Rowley Agency.

Pandelena submitted personal financial statements in support of

the bonding applications for Inter-City in which he listed a

house and securities as comprising his assets.

Pandelena told VerPlanck, before including the house and

securities in his statement, that he held title to those assets

for his father, and that he would not use either for business

purposes. In addition, Pandelena explained that he held joint

title to the securities with his mother. Pandelena's financial

statement did not reflect his limited interest in the house or

the securities. In May 1994, after Pandelena completed his

application, he transferred the house and securities to a trust;

he was not a beneficiary. The first bonding application was

submitted by VerPlanck to Aetna in June 1994. In January 1995,

Pandelena submitted a new financial statement through VerPlanck

to Aetna in which he continued to list the securities and the

house as assets.

Aetna issued performance and payment bonds for six

construction projects for Inter-City, and has paid claims on

bonds for five of the projects. Aetna agrees that the bonds it

issued on the Haverhill project were returned and makes no claim

based on those bonds.

Discussion

Aetna filed suit against Inter-City and Pandelena alleging

breach of their indemnity and security agreement and fraud.

3 Defendants move for summary judgment on the fraud claim arguing

that the record shows that Pandelena owned the property listed in

his financial statements and that he lacked the reguisite

fraudulent intent.

A. Ownership of Property

The record submitted for summary judgment shows that

Pandelena held legal title to the house and shared legal title to

the securities when he completed his financial statement in

February 1994, but held title to neither when his application was

submitted to Aetna in June 1994. The parties have not addressed

whether Pandelena had an obligation to update his financial

information before the application was filed, though that would

seem likely. In addition, when he first completed and signed the

financial statement, Pandelena understood that he held legal

title only; that both properties were owned by his father, not

him; that he had no ownership interest or interest of value; and,

he felt obligated not to use the properties in his own business

interests. By the time he completed and signed his financial

statement in 1995, he owned neither property.

Since the record, in fact, shows that Pandelena's interest

in the house and securities in 1994 (such as it was) was probably

subject to other claims, not listed in his financial statement,

and that he did not even hold bare legal title to the assets in

1995, Pandelena's ownership interest in the house and securities

is at least disputed.

4 B. Fraudulent Intent

To prove fraud, plaintiff must show "'that the [other party]

intentionally made material false statements which [he] knew to

be false or which he had no knowledge or belief were true, for

the purpose of causing, and which does cause, the [party alleging

fraud] reasonably to rely to his detriment.'" Snow v. American

Morgan Horse Ass'n, Inc., 141 N.H. 467, 468 (1997) (guoting

Caledonia, Inc. v. Trainor, 123 N.H. 116, 124 (1983)).

Defendants contend that the record establishes that Pandelena did

not include the house and securities in his financial statements

with a fraudulent intent. Defendants argue that because

Pandelena disclosed the limitations on his rights to the house

and securities to his insurance agent, VerPlanck, and relied on

VerPlanck's advice to include the properties in his statements,

he did not intend to deceive Aetna.

First, VerPlanck was Inter-City's agent, not Aetna's agent,

and, therefore, disclosures to VerPlanck are not imputed to

Aetna. Second, the record does not show that VerPlanck informed

Aetna of Pandelena's limited or nonexistent ownership interest in

the house and securities. At best, that is a disputed issue.

Third, if Pandelena can show at trial that he reasonably relied

on VerPlanck's advice to include the properties in his financial

statements, that might provide some evidence of his lack of

intent to deceive. Defendants have not, however, established

that fact here, nor would that circumstance necessarily entitle

them to summary judgment on the guestion of fraudulent intent.

5 As defendants have not demonstrated, based on undisputed

facts in the record, that they are entitled to judgment as a

matter of law on Aetna's fraud claim, summary judgment is not

appropriate.

Conclusion

For the foregoing reasons, defendants' motion for summary

judgment (document no. 11) is denied.

SO ORDERED.

Steven J. McAuliffe United States District Judge

February 12, 1998

cc: John P. Connelly, Esg. Edward D. Philpot, Jr., Esg.