Biller Associates v. Peterken

849 A.2d 847, 269 Conn. 716, 2004 Conn. LEXIS 236
CourtSupreme Court of Connecticut
DecidedJune 22, 2004
DocketSC 16387
StatusPublished
Cited by38 cases

This text of 849 A.2d 847 (Biller Associates v. Peterken) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Biller Associates v. Peterken, 849 A.2d 847, 269 Conn. 716, 2004 Conn. LEXIS 236 (Colo. 2004).

Opinion

Opinion

PALMER, J.

Rule 1.15 (b) of the Rules of Professional Conduct provides: “Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.” The primary issue presented by this certified appeal is whether the Appellate Court properly affirmed the judgment of the trial court with respect to the trial court’s determination that, under rule 1.15 (b), Ridgely W. Brown, an attorney for the defendants, William H. Peterken and Jill Peterken,1 owed a fiduciary duty to the plaintiff, Biller Associates, in connection with the disbursement of certain funds that Brown had come to possess in representing the Peterkens. We conclude that rule 1.15 (b) itself does not create a fiduciary relationship between an attorney and a third party and, therefore, contrary to the determination of the Appellate Court, the rule did not give rise to a fiduciary relationship between Brown and Biller Associates. We also [718]*718conclude that the facts otherwise do not support a finding that Brown owed a fiduciary duty to Biller Associates. We therefore reverse that portion of the judgment of the Appellate Court that is predicated upon its conclusion that Brown owed Biller Associates such a duty.

The following relevant facts and procedural history are set forth in the opinion of the Appellate Court. “On July 9, 1991, a fire occurred on the Peterkens’ property in Higganum. Later that day, the Peterkens hired Biller [Associates], a public insurance adjusting firm doing business in Connecticut since 1959, to survey and estimate the loss to the Peterkens’ property. That night, an estimate was agreed to by [Biller Associates] and the Peterkens, and a public insurance adjusting contract (employment contract) was signed.

“The Peterkens’ damaged property then was inspected by law enforcement officials, who discovered the presence of accelerants at the site of the fire. Throughout the inspection, William Peterken was uncooperative. [Biller Associates] also determined that the Peterkens’ property insurance was higher than originally believed. On the basis of these facts, the fire was determined to be ‘suspicious,’ and William Peterken was deemed the prime suspect in an arson investigation. As a result, Middlesex Mutual Assurance Company (insurance company), which had been negotiating a settlement with the Peterkens, refused to pay for the loss.

“The Peterkens then retained Brown to represent them in an action against the insurance company. Brown successfully negotiated a settlement agreement with the insurance company before trial. While facts still existed [to indicate] that William Peterken may have started the fire, the insurance company agreed to a settlement and paid for the loss.

[719]*719“In the settlement agreement with the insurance company, Brown used and relied on the proof of loss and property damage calculations previously prepared by [Biller Associates], Unbeknownst to [Biller Associates], however, Brown settled the insurance claim conditioned on the agreement of the insurance company to exclude [Biller Associates’] name from any settlement checks or drafts. The employment contract specifically provided that the Peterkens pay to [Biller Associates] 10 percent of the amount recovered. The Peterkens received their insurance money, but refused to pay [Biller Associates] for its services.

“[Biller Associates] subsequently brought a five count action against the Peterkens and Brown. In the first count of its complaint, [Biller Associates] alleged that the Peterkens breached the employment contract and failed to pay [Biller Associates] in full for its services. In the four counts against Brown, [Biller Associates] alleged breach of fiduciary duty, violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., conversion and tortious interference with [Biller Associates’] contractual relationship with the Peterkens. The Peterkens filed a counterclaim for emotional distress. [After a court trial] [t]he court rendered judgment in favor of [Biller Associates] on its breach of contract claim against the Peterkens and for [Biller Associates] on the Peterkens’ counterclaim. The court also rendered judgment for [Biller Associates] against Brown on the [fourth count of the complaint, namely, the count alleging] breach of fiduciary duty .... The court rendered judgment for Brown on the tortious interference and CUTPA counts, and dismissed the count sounding in conversion. The court calculated the fee owed to [Biller Associates] as $33,351.16 plus interest in the amount of $15,529.29. The Peterkens and Brown . . . filed [separate] appeals [in the Appellate Court], which thereafter were consoli[720]*720dated.”2 Biller Associates v. Peterken, 58 Conn. App. 8, 10-11, 751 A.2d 836 (2000).

The Appellate Court affirmed the judgment of the trial court. With respect to Biller Associates’ breach of fiduciary duty claim against Brown, the Appellate Court stated: “[A] valid and enforceable employment contract existed between the Peterkens and [Biller Associates]. A provision in the employment contract mandated that the Peterkens assign to [Biller Associates], out of the proceeds, 10 percent of the amount recovered from the insurance settlement, thereby providing an irrevocable assignment. The [trial] court found that Brown, acting on the Peterkens’ behalf, had knowledge that an employment contract existed between the Peterkens and [Biller Associates], settled with the insurance company and intentionally excluded [Biller Associates] from any settlement checks and drafts to enable his client to avoid paying [Biller Associates]. Rule 1.15 (b) of the Rules of Professional Conduct provides that '[u]pon receiving funds or other property in which a . . . third person has an interest, a lawyer shall promptly notify the client or third person . . . [and] a lawyer shall promptly deliver to the . . . third person any funds . . . that the . . . third person is entitled to receive . . . .’ Here, Brown disregarded the clause in the employment contract, which entitled [Biller Associates] to 10 percent of the amount received under the settlement agreement, and failed to notify or [to] deliver the money owed to [Biller Associates]. Brown, therefore, violated rule 1.15 (b), and the court properly found that he breached his fiduciary duties as an attorney representing the Peterkens.” Biller Associates v. Peterken, supra, 58 Conn. App. 18-19.

[721]*721We granted Brown’s petition for certification limited to the following question: “Did the Appellate Court properly conclude that, based on rule 1.15 (b) of the Rules of Professional Conduct, [Brown] breached his fiduciary duties to [Biller Associates] as an attorney representing the [Peterkens]?”3 Biller Associates v. Peterken, 254 Conn. 914, 759 A.2d 506 (2000). We answer the certified question in the negative.

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Cite This Page — Counsel Stack

Bluebook (online)
849 A.2d 847, 269 Conn. 716, 2004 Conn. LEXIS 236, Counsel Stack Legal Research, https://law.counselstack.com/opinion/biller-associates-v-peterken-conn-2004.