On October 16, 2012, the Connecticut Superior Court denied motions to dismiss filed by separate defendants in response to an amended complaint filed by our client, a 1031 Exchange Company. Each defendant (one a large banking institution and the other, a top nationwide law firm) filed motions seeking to have the suit dismissed on, among others, the grounds of forum non conveniens and improper venue. The amended complaint alleged that both the bank and the law firm violated multiple laws by withholding evidence in a prior civil suit filed against our client, who assists with Section 1031 like kind exchanges. As a result of the alleged withholding of key evidence, our client was held liable in Massachusetts state court for a substantial amount of money for improperly trading funds that were to be conservatively invested for its Section 1031 clients. Instead of assisting our client with the conservative investment strategy, the bank in question allegedly encouraged our client to engage in risky trading of the funds. Not only did the bank allegedly encourage the risky trading when it knew it should not have, but, their attorneys, with the bank’s aid, allegedly withheld the evidence needed to exculpate our client. Because the evidence was allegedly withheld and some of it was allegedly destroyed, our client was held liable in Massachusetts state court for the risky trading and a judgment entered against it. The alleged actions of our client led to criminal trials in Massachusetts and ultimately, two convictions, which have subsequently been overturned. Had the bank not allegedly encouraged our client to make such risky trades when the bank was allegedly aware that the invested funds were to be conservatively traded and had the bank and its law firm not allegedly concealed and destroyed evidence, our client would not have been found liable to the 1031 investors for certain damages and no criminal trials would have ensued. Thus, the amended complaint asserted twenty causes of action against the bank and the law firm, which causes of action include indemnification, contribution, unjust enrichment, intentional spoliation of evidence, breach of fiduciary duty and many others.
The case is pending on the Connecticut Superior Court’s Complex Litigation Docket. In his opinion, Judge William Bright, when considering all of the elements needed for a forum non conveniens dismissal, noted that Connecticut would indeed be a proper forum for this action despite the years of litigation that took place in Massachusetts between the parties. Finally, Judge Bright found defendants’ contention that venue is inappropriate unpersuasive. Thus, after a decade of litigation in Massachusetts against the 1031 exchange, the bank and the law firm, our client now has the opportunity to litigate in Connecticut, its home state, and can take discovery of various parties that it has not been able to for the years in question.
