The Connecticut Supreme Court is full of employment-related cases this month.
This next one is a bit more technical but it has some real-world implications — namely, do employers (or frankly, anyone who is sued) have some protection for vexatious lawsuits. The Court decision suggests that they don’t have as much as one might think.
In Bernhard-Thomas Building Systems, LLC v. Dunican, the Supreme Court was asked to decide whether a prejudgment remedy application is the same thing as a civil action. (A prejudgment remedy action allows a party to show "probable cause" to prevail in an actual lawsuit, and thus having the ability to "attach" — or more commonly known as a "lien" — on property.)
The answer to this question is important because if the court determined that it was the same thing, then the party who defeated the application could potentially bring a claim for vexatious litigation.
The Court determined that an prejudgment remedy (PJR) application is not a civil action for purposes of a subsequent claim for vexatious litigation.
What’s the background? Bernhard-Thomas Building Systems, LLC employed Chet Dunican
from April, 2002, until February, 2004, as an at-will employee. According to the decision, "On December 19, 2003, … Jacques J. Parenteau, an attorney representing Dunican filed an application for a prejudgment remedy on behalf of Dunican against [BTBS] in the amount
of $3.5 million in anticipation of a wrongful discharge litigation against the plaintiff. "
The Superior Court then held a hearing over the course of several days and on March 10, 2004, denied the application. Specifically, the court stated that it had applied the probable cause standard and concluded that Dunican had failed to sustain his burden with respect to any of his claims. . . .
The employer then brought a lawsuit that claimed, among other things, vexatious litigation and that it had expended substantial attorney’s fees in response to Dunican’s application. It sued both the former employee who had brought the lawsuit and the attorney. The lower court threw out the vexatious litigation claims leading to this appeal.
The Supreme Court reviewed the structure of PJR applications and found that they were fundamentally different than the act of bringing an actual "lawsuit".
The case has important ramifications for not only employment law cases, but all cases where a PJR is sought. The cost of litigation — even for a PJR — continues to be significant. If a PJR application is not a lawsuit, and yet the person defending the application has to spend money just like a lawsuit, shouldn’t there be a way to recover their fees and costs if the lawsuit is without merit? The Supreme Court seems to suggest no, leaving attorneys to think about other ways to protect their clients.
Is the result sensible here? Probably. The decision by the Court may be influenced by the fact that vexatious litigation claims — particularly against an attorney who brought the claim — are typically disfavored as a matter of public policy. By allowing PJR applications to be more immune from attack than normal complaints, the Court allows the process to play out.
And importantly, most of these PJR applications lead to lawsuits anyways, so it becomes a moot point later.