United States: Connecticut Appellate Court Reaffirms Vitality Of Standalone Equitable Cause Of Action For Discovery

Discovery in this State aims for full and fair disclosure—even before a substantive dispute hits the docket. Nestled in the Practice Book chapter on discovery and depositions is a subsection governing responses "to complaints in the nature of bills of discovery in equity." Conn. Prac. Book § 13‑18. Given this provision, the curious practitioner may ask what exactly "bills of discovery in equity" are. In Nowak v. Environmental Energy Services, 218 Conn. App. 516 (2023), the Appellate Court provided some answers.

There, the executor of a minority shareholder's estate brought a proceeding in equity to obtain corporate records bearing on whether the entity's controlling shareholder had breached fiduciary duties. After holding an evidentiary hearing, the trial court ordered the records disclosed.

Before that judgment was entered, however, the corporation separately filed an unrelated lawsuit against the estate—which then impleaded the controlling shareholder, asserted a claim for breach of fiduciary duty, and served discovery requests that substantially overlapped with the demands in the initial action.

The Appellate Court nonetheless affirmed the equitable disclosure order. Relying on precedent, that court emphasized that the "power to enforce discovery is one of the original and inherent powers of a court of equity." It added that a party may invoke this authority to seek "information relating to a civil action that already has been, or has yet to be, brought." And it reiterated that such freestanding discovery requests "should be granted unless there is some well-founded objection."

As the court recited, to be entitled to pre‑suit discovery, an applicant must show that (1) the information sought is material and necessary to another action about to be brought, (2) probable cause supports the prospective cause of action, and (3) other means of obtaining the information are inadequate.

The Appellate Court in Nowak concluded that the plaintiff had established probable cause to support the prospective claims listed in the bill of discovery. This conclusion rested on a close examination of each claim's elements. The court also pointed to expert testimony by the plaintiff's forensic accountant that "red flags" in the corporation's available reporting warranted further discovery to assess the extent of any wrongdoing.

Under the circumstances, the court found other means of obtaining the information to be inadequate. Among the alternatives were seeking to enforce discovery demands in the later‑filed civil case or bringing a statutory action to inspect the corporation's books and records. That these remedies were technically available did not foreclose an equitable bill of discovery that could otherwise furnish "the relief sought conveniently, effectively and completely." Evidence showed that the controlling shareholder had excluded the plaintiff from business meetings and ignored prior requests for records, and the plaintiff had struggled to obtain discovery in the parallel civil case.

There are at least two takeaways from Nowak.

The first is that garnering pre‑suit discovery requires a clear factual predicate. Nowak is replete with caveats to this effect. It cautions that applicants should not deem this equitable device "an open invitation to delve into the defendant's affairs," for the "ransacking of any information and material which the defendant may possess," based on the "mere suspicion" of wrongdoing.

The Nowak plaintiff cleared these hurdles by presenting relatively detailed financial testimony by an accountant, while demonstrating that the corporation had stymied alternative investigative steps.

The second takeaway is that, despite everything just written, the equitable action for discovery remains alive and well in Connecticut. If pursued in a targeted manner, this procedure may have its advantages, filling investigative gaps without exposing a party to reciprocal discovery or claims (unless, as in Nowak, the discovery petition boomerangs into a parallel civil lawsuit).

Indeed, just last month, a party filed a proceeding seeking a bill of discovery for information to aid a possible tort case against a candidate in this year's Bridgeport mayoral primary. That docket is accessible here. Win or lose, such an example only reinforces the ongoing vitality of this procedural device, which should reside in every litigator's toolkit.

Check for new developments on our Connecticut litigation blog, Treble Trouble.