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Appellate Court Notes:  Week of September 16

Welcome to our Supreme and Appellate Court summaries webpage.  On this page, I provide abbreviated summaries of decisions from the Connecticut appellate courts which highlight important issues and developments in Connecticut law, and provide practical practice pointers to litigants.  I have been summarizing these court decisions internally for our firm for more than 10 years, and providing relevant highlights to my municipal and insurance practice clients for almost as long.  It was suggested that a wider audience might appreciate brief summaries of recent rulings that condense often long and confusing decisions down to their basic elements.  These summaries are limited to the civil litigation decisions.  I may from time to time add commentary, and may even criticize a decision’s reasoning. Such commentary is solely my own personal opinion.. Pullman & Comley’s Appellate Practice Group of which I am a member includes experienced appellate advocates in almost every area of the law.  Should you have a need to consult about a potential appeal,  please email me at emccreery@pullcom.com I hope the reader finds these summaries helpful. – Edward P. McCreery

Posted September 16, 2015 

Supreme Court Advance Release Opinions:

  • SC19253 - RBC Nice Bearings, Inc. v. SKF USA, Inc.

[An important decision on contract waiver but one all attorneys should recall from the UCC or Contracts course we took during Law School]

Trial Court had found that the plaintiff had waived the contractual requirement that the defendant purchase a minimum dollar amount of  bearings from the plaintiff each year.  The Appellate Court reversed, holding that even if the evidence was sufficient to find the plaintiff had waived the minimum purchase requirement as to certain years of the contract, the Trial Court had incorrectly concluded that the waiver continued into the last contract year, as it should be very difficult to prove a prospective waiver of contract rights, especially with a no oral/conduct modification clause in the contract.

On further appeal by the defendant, the Supreme Court reversed, holding that there was sufficient evidence to support the Trial Court’s finding that the plaintiff waived the minimum purchase requirement on a continuing basis right through the last year.  The agreement was entered into in 1997, with an eight year term providing exclusive distributorship to the defendant, with a requirement that it purchase at least $9 million of product each year.  When that did not become a reality, the parties renegotiated the contract for a minimum purchase of $6 million of product a year.  Three years later, the defendant fell behind on the $6 million purchase, with a continuing shortfall that added up to $2 million over the next three years.  The plaintiff undertook no steps to enforce its minimum purchase requirement, while at the same time, negotiating reduced purchase orders.

The plaintiff then started internal discussions on how to terminate the relationship with the distributor so they could eliminate the middle man and sell directly to their customers.  An internal e-mail instructed the staff to only sell enough to the defendant that would not leave excess inventory in their hands, but do not end the contract yet, this year: “. . . play nice!  But let’s reserve our claim.”  The defendant did not know that the plaintiff was conspiring to terminate their relationship.  During the last year of their relationship, the plaintiff started issuing more formal notices of shortfalls in the purchase order of defendants, but continued to sell them product before unilaterally terminating the agreement.  Plaintiff then sued the defendant distributor for failure to meet its contractual obligations for the minimum purchase obligations in each year of the amended contract.

The Supreme Court noted that the issue of waiver is a question of fact.  This transaction was governed by the Uniform Commercial Code, which makes multiple references to the term “Waiver,” but never defines the term.  Thus, the Court concluded it had to look to Connecticut’s Common Law on Contracts for when a waiver occurs.  Under C.G.S. § 42a-1-303(f), if a party continues to perform under a contract despite a material breach by the other party, and without warning the contract is coming to an end, this shall be deemed a waiver.  Repeated failures to perform followed by repeated acquiescence may be deemed a waiver of the right to insist upon future compliance as well.

The Appellate Court got off track when it considered the issue of modification, because that requires the action of both parties.  Waiver, on the other hand, may be effectuated by one single party.  For all of the years in question here, the defendant failed to satisfy its minimum purchase requirements, and yet the plaintiff opted to continue doing business with the defendant and forbear from issuing a shortfall invoice or demand that the contract be terminated.  This continuing conduct extended into the last year of the contract, such that the defendant could reasonably have interpreted the plaintiff’s course of conduct in the prior years to assume the plaintiff would not require strict compliance in the last year of the contract.  Once a continuing waiver is established, the obligee does not have to show evidence on the part of the plaintiff of repeated new intent to waive its rights.  The waiver, persists until the oblige (plaintiff here) demonstrates that it retracted its waiver with respect to an ongoing contract.

The Appellate Court thus appeared to go off track when it suggested there should have been fresh evidence of a new waiver in the last year of the contract.  In fact, the Trial Court found that the waiver was continuing through all contract years.  The Appellate Court should have focused on whether there had ever been a retraction in the sixth year of the ongoing waiver.

Further, although the Trial Court made a finding of an attempt to orally modify the agreement, and the Appellate Court correctly said an oral modification was barred by the agreement, the attempt at modification was still relevant to the issue of “waiver.”  It showed the plaintiff’s intent to waive the requirement of the original minimum purchase order going forward.  Waiver can be established by a lower demonstration of assent than required to prove modification.  It is also of no moment that suddenly in the last year of the contract, the plaintiff started sending demands that the defendant comply with the contractual purchase requirements.  Constant demands for or complaints about non-compliance do not preclude a finding of waiver when the obligee (plaintiff) nevertheless continued to acquiesce in the obligor’s noncompliance, and performed under the contract.  This is particularly true here, where the evidence was that the plaintiff was intentionally giving the defendant mixed signals because they intended to terminate the contract prematurely and use the shortfalls as a pretext.

The Appellate Court also concluded that advanced waivers should be frowned upon as a matter of public policy.  This was based upon an incorrect finding that the plaintiff had nursed along the relationship trying to help out the defendant, until it finally concluded the recalcitrant defendant would not hold up its side of the bargain.  The problem with this conclusion by the Appellate Court is that the Trial Court had rejected that same factual issue.  Therefore, the underpinnings of the Appellate Court’s conclusions are not sustainable.  But this decision recognized that as a matter of public policy, there should be a mechanism whereby parties who desire to maintain a contract can accommodate an obligor’s repeated nonperformance without permanently waiving their rights.

The plaintiff here would argue that mechanism should be a requirement that the defendant prove by clear and convincing evidence a continuing waiver.  The UCC however does require clear and convincing evidence to establish a binding oral modification of a written contract.  [NOTE: That is an important rule right that, especially when the Connecticut Courts keep allowing oral modifications of written contracts.]  ....................so why on earth would we impose that heightened standard for proof of waiver?  Especially when it can be undertaken by a unilateral decision by the obligee.  Further, such a rule would allow an unscrupulous oblige (plaintiff) to “ride the fence” and tolerate noncompliance so long as it suited the obligee, leaving it free to exercise its full contractual remedies without advance notice, as it sees fit.  Again, that is especially true here, where the plaintiff’s president’s e-mail instructed the director of business to “play nice” by pretending to continue business as usual with the defendant. 

The Court then said the answer to this issue is also found in the UCC under Section 42(a)-1-308(a), which states, “a party can avoid prejudice to their rights by issuing a ‘explicit reservation of rights’ utilizing words such as ‘without prejudice’, ‘under protest’, or the like.  A reservation of rights under the UCC must be clearly stated so there is no doubt as to its meaning.”  The plaintiff could have done that in this instance easily each year.

  • SC19371 - Freedom of Information Officer, Dept. of Mental Health & Addiction Services v. Freedom of Information Commission
  • SC19371 Concurrence - Freedom of Information Officer, Dept. of Mental Health & Addiction Services v. Freedom of Information Commission

[Murder & Mayhem in Connecticut!]

Citizen made a demand upon the Connecticut Department of Mental Health for records of a deceased patient from the period of 1924 to 1962, who had been convicted for the arsenic poisoning of a fellow resident of her nursing home which, in turn, formed the basis of the play and 1941 movie, “Arsenic and Old Lace.”  The Court agreed with the Connecticut Department of Mental Health that the records sought were exempt from disclosure as mental health records, and it did not matter that the patient was deceased.  The FOIC’s decision to the contrary was reversed.

The Commission incorrectly concluded that the medical and dental records of the deceased patient were not privileged communications under C.G.S. § 52-146(d)(2).  But the plain language of that Section exempts all communications and records from disclosure.  Medical and dental records clearly are communications and records for the purposes of C.G.S. § 52-146(e).  While the records were not direct communications between the patient and a psychiatrist, the Statute clearly also includes records relating to the diagnosis and treatment of a patient’s mental condition.  The broad veil of secrecy recognized by Statute and case law created by this psychiatrist-patient privilege also supports the ruling that these more generic records are exempt from disclosure as well.

Justices McDonald and Palmer partially Concurred and partially Dissented, noting that the patient was a notorious serial killer, and perhaps “America’s deadliest murderess.”  Here, records were sought from the Department regarding the murderer’s thirty-eight year involuntary commitment in the Connecticut State Mental Hospital were for an article on how the State has historically handled its mentally ill convicts.  The dissenting Justices recognized that one might ordinarily expect that records held by mental health treatment facilities would, as a general matter, not be subject to public record requests, but suggested it’s not that simple 

The Dissent would have protected only the actual communications between psychiatrist and patient, and potentially even those records that referred to it, but generic medical information, physical examinations and dental records should have been disclosed, they argued.  They agreed that all the records containing psychiatric diagnosis should have been redacted, and the FOIC was wrong to conclude otherwise.  They argue the majority had a statutory duty to parse out the various types of records and should not have painted their decision which such a broad brush. [NOTE, a disturbing comment by the Dissent was that even a letter to an insurance company paying the medical bills relating to the psychiatric diagnosis should have been turned over as it lost its privilege by being transmitted to a non-patient.  There is no citation for authority to this sloppy comment because it can have consequences to attorney communications with insurance companies about their insureds. Very unfortunate comment.]

Equally, they disagree with the Majority’s conclusion that the release of any of a patient’s records that identify the patient as a psychiatric patient would violate the Act.  That is an overly broad rule to impose they said, where, as here, this was a famous murderess well-known to the public as a psychiatric patient.

The Dissent went on to address the second issue the Majority did not reach, and that was whether or not the release of such medical records might constitute an invasion of personal privacy, which is another exemption under FOIA.  They concluded that exemption does not apply here, because the patient died fifty years ago leaving no family members.  Even if there was a concept of an invasion of privacy for a deceased person, there was a legitimate public interest in her murder spree that outweighs that.  Persons who commit crimes or are accused of it are persons of “public interest.”  The average person would not be offended by the release of this information, and HIPAA does not prohibit it because it has a fifty year statute of limitations.


The facts and holdings of any case may be redacted, paraphrased or condensed for ease of reading.  No summary can be an exact rendering of any decision, however, so interested readers are referred to the full decisions.  The docket number of each case is a hyperlink to the Connecticut Judicial Department online slip opinion.  Copyright 2015 Pullman & Comley, LLC. All Rights Reserved.

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