author: PETERS, C. J. BERDON, J.,

text:
    BARBARA WATERS v. EDMUND AUTUORI ET AL. EDWARD HADIGIAN ET AL. v. ARTHUR ANDERSEN AND COMPANY ET AL. RONALD CHRISTOFORO ET AL. v. ARTHUR ANDERSEN AND COMPANY ET AL. VINCENT F. TRIPODINA v. ARTHUR ANDERSEN AND COMPANY ET AL. ARMAND AUDETTE ET AL. v. EDMUND AUTUORI ET AL. THOMAS MURTHA v. ARTHUR ANDERSEN AND COMPANY ET AL. DONALD REILLY v. ARTHUR ANDERSEN AND COMPANY ET AL. ARMAND AUDETTE ET AL. v. ARTHUR ANDERSEN AND COMPANY ET AL. CHRISTINE SIRACUSA ET AL. v. COLONIAL REALTY ET AL. STEVEN LIEBMAN v. EDMUND AUTUORI ET AL. ROBERT CALNEN v. EDMUND AUTUORI ET AL. RONALD CORRENTI v. EDMUND AUTUORI ET AL.
    (15190)
    Peters, C. J., and Callahan, Borden, Berdon and Norcott, Js.

      Argued January 10
    officially released May 7, 1996

      Richard A. Bieder, with whom were Joel Faxon and, on the brief, Lillian C. Gustilo, for the appellants (plaintiffs).

      William H. Narwold, with whom were Charles D. Ray, Michael R. Young, pro hac vice, and, on the brief, Louis A. Craco, pro hac vice, Stacey E. Paradise, pro hac vice, and Richard I. Miller, pro hac vice, for the appellee (defendant American Institute of Certified Public Accountants).
   PETERS, C. J.

The dispositive issue in this appeal is whether the promulgation of professional accounting standards is sufficient, by itself, to impose upon the promulgating professional organization a duty of care to an unknown third party who relies on the opinion of a certified public accountant claiming to have followed those standards. The plaintiff Barbara Waters (plaintiff) brought this action against the defendant American Institute of Certified Public Accountants (AICPA), and others, on behalf of herself and as a representative of a class of persons who had lost the money they had invested in a limited partnership. The plaintiff sought damages for the AICPA’s allegedly negligent promulgation of professional accounting standards. Alleging a failure to state a claim upon which relief can be granted, the AICPA moved to strike those counts of the plaintiffs second amended complaint that were directed toward it. The trial court granted the motion to strike and rendered partial judgment in favor of the AICPA. The plaintiff appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c). We affirm the judgment of the trial court.

In an appeal from a judgment following the granting of a motion to strike, we must take as true the facts alleged in the plaintiffs complaint and must construe the complaint in the manner most favorable to sustaining its legal sufficiency. Sassone v. Lepore, 226 Conn. 773, 780, 629 A.2d 357 (1993); Michaud v. Wawruck, 209 Conn. 407, 408, 551 A.2d 738 (1988). Accordingly, we assume as true the following facts as alleged in the plaintiffs second amended complaint. The AICPA is a national professional organization of certified pub-lie accountants. One of the purposes of the AICPA is the promotion and maintenance of professional accounting practices. In furtherance of this purpose, the AICPA has promulgated professional accounting standards. The bylaws of the AICPA require its members to adhere to its standards in the performance of their duties. The AICPA recognizes that the accounting profession has responsibilities to the public as well as to its clients.

In November, 1986, the plaintiff purchased a partnership interest in Colonial Potomac Limited Partnership (Colonial Potomac). Colonial Potomac had solicited the purchase of partnership interests by distributing various marketing documents to potential investors. Colonial Potomac’s marketing documents included financial reports prepared by Kostin and Company (Kostin), an accounting firm that is a member of the AICPA. The financial reports, which included forecasts of Colonial Potomac’s expected future economic performance, contained a statement that, in preparing these forecasts, Kostin had followed standards promulgated by the AICPA. The plaintiff, in deciding to invest in Colonial Potomac, relied on information provided in the financial reports prepared by Kostin. The plaintiff eventually lost the money she had invested in Colonial Potomac.

The plaintiffs complaint alleged that Kostin, in one of two ways, had prepared unreasonable financial forecasts for use in Colonial Potomac’s marketing documents. Kostin had either failed to follow AICPA standards or, if it had followed the standards, the standards themselves had been negligently promulgated.

On the latter theory, count twenty-six of the complaint alleged that the AICPA owed a duty of care to the plaintiff and had violated that duty by its negligent promulgation of standards that it knew, or should have known, would invite reliance by third parties such as the plaintiff and would thereby create an unreasonable risk of harm to them. Count twenty-six further alleged that the AICPA’s negligent promulgation of standards had caused the plaintiff to suffer economic harm and emotional distress. Count twenty-seven of the complaint alleged that the plaintiff had suffered emotional distress as a result of the negligence of all of the defendants.

The AICPA moved to strike counts twenty-six and twenty-seven of the plaintiffs second amended complaint to the extent that they alleged claims against it. The trial court granted the AICPA’s motion on the grounds that: (1) the AICPA owed no duty of care to the plaintiff; and (2) the plaintiff had failed to allege the elements necessary to establish a claim against the AICPA for negligent infliction of emotional distress. The trial court first determined that, under existing case law from Connecticut trial courts and from courts in other jurisdictions, a certified public accountant owes a duty of care to a third party only if the accountant and the third party are in privity or have a “relationship sufficiently intimate to be equated with privity.” The trial court then concluded that the AICPA did not owe a duty of care to the plaintiff under these principles of accountant liability, and that “[t]he law cannot be expanded to create a duty on the part of the AICPA, as the promulgator of professional standards, that is broader than the duty owed under Connecticut law by the practitioners who are expected to conform to [those standards].” In striking count twenty-seven as against the AICPA only, the trial court further concluded that the plaintiffs complaint was devoid of any allegations indicating how the AICPA should have realized that its promulgation of standards would create an unreasonable risk of causing emotional distress that might result in “illness” or “bodily harm” to the plaintiff. After its denial of the plaintiffs motion for reconsideration, the trial court rendered partial judgment in favor of the AICPA. This appeal followed.

The plaintiff claims that the trial court improperly concluded that the AICPA did not owe her a duty of care, as a matter of law, and thus improperly struck counts twenty-six and twenty-seven of her complaint as against the AICPA. The plaintiff has not alleged either a privity relationship or a statutory basis that could possibly impose a duty of care to her on the part of the AICPA. Rather, the plaintiff claims that the AICPA owed her a duty of care solely because it had promulgated professional accounting standards that had been followed by Kostin, upon whose financial reports she had relied in deciding to invest in Colonial Potomac. We disagree with the plaintiff that the AICPA’s promulgation of standards establishes a cognizable duty of care owed by the AICPA to her.

“The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint ... to state a claim upon which relief can be granted. In ruling on a motion to strike, the court is limited to the facts alleged in the complaint. The court must construe the facts in the complaint most favorably to the plaintiff.” (Citations omitted; internal quotation marks omitted.) Novametrix Medical Systems, Inc. v. BOC Group, Inc., 224 Conn. 210, 214-15, 618 A.2d 25 (1992). If facts provable in the complaint would support a cause of action, the motion to strike must be denied. Westport Bank & Trust Co. v. Corcoran, Mallin & Aresco, 221 Conn. 490, 496, 605 A.2d 862 (1992). In order to reverse the judgment of the trial court, therefore, this court must find that the allegations of the plaintiffs complaint, if proven, would constitute negligence by the AICPA. RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 384, 650 A.2d 153 (1994).

The claims asserted by the plaintiff against the AICPA are grounded solely in negligence. There can be no actionable negligence, however, unless there exists a cognizable duty of care. Id., 384-85; Frankovitch v. Burton, 185 Conn. 14, 20, 440 A.2d 254 (1981). Whether a duty of care exists is a question of law to be decided by the court. Shore v. Stonington, 187 Conn. 147, 151, 444 A.2d 1379 (1982). The starting point of our analysis, therefore, is an examination of the allegations in the plaintiffs complaint to determine whether, if proven, they establish a cognizable duty of care.

We have often observed that “[t]he law does not recognize a ‘duty in the air.’ ” Id., 151; Gordon v. Bridgeport Housing Authority, 208 Conn. 161, 171, 544 A.2d 1185 (1988). The plaintiff invokes principles of foreseeability as the basis for her contention that the AICPA owed her a duty of care. Specifically, the plaintiff claims that the AICPA owed her a duty of care because “it was foreseeable that persons relying on reports required to be prepared pursuant to the AICPA’s standards would be injured if [the] AICPA negligently promulgated such standards . . . .” We disagree with the plaintiffs assumption that foreseeability is the fulcrum of duty. Even if it were foreseeable to the AICPA that an investor such as the plaintiff would rely on financial reports claimed to have been prepared in accordance with professional accounting standards that the AICPA had promulgated, we are unpersuaded that the AICPA owed the plaintiff a duty of care.

In predicating the existence of a duty of care on principles of foreseeability, the plaintiff misconstrues the concept of duty as our case law has delineated it. “Duty is a legal conclusion about relationships between individuals, made after the fact, and imperative to a negligence cause of action. The nature of the duty, and the specific persons to whom it is owed, are determined by the circumstances surrounding the conduct of the individual.” (Internal quotation marks omitted.) RK Constructors, Inc. v. Fusco Corp., supra, 231 Conn. 385. Because foreseeability is a necessary component of duty, the absence of foreseeability forecloses the existence of a duty of care. Id., 385-86; Frankovitch v. Burton, supra, 185 Conn. 20-21. The converse is not, however, true: the conclusion that a particular injury to a particular plaintiff or class of plaintiffs possibly is foreseeable does not, in itself, create a duty of care. As we recently stated in RK Constructors, Inc. v. Fusco Corp., supra, 386: “Many harms are quite literally ‘foreseeable,’ yet for pragmatic reasons, no recovery is allowed. ... A further inquiry must be made, for we recognize that duty is not sacrosanct in itself, but is only an expression of the sum total of those considerations of policy which lead the law to say that the plaintiff is entitled to protection. . . . While it may seem that there should be a remedy for every wrong, this is an ideal limited perforce by the realities of this world. Every injury has ramifying consequences, like the ripplings of the waters, without end. The problem for the law is to limit the legal consequences of wrongs to a controllable degree.” (Citations omitted; internal quotation marks omitted.) Thus, foreseeability is not commensurate with duty, and proof of foreseeability does not establish the existence of a duty of care.

In light of these principles, we conclude that the allegations in the plaintiffs complaint fail to establish a duty of care owed by the AICPA to the plaintiff. The plaintiff has alleged no privity of contract or statutory duty upon which to premise a duty of care. See Burns v. Board of Education, 228 Conn. 640, 646, 638 A.2d 1 (1994); Coburn v. Lenox Homes, Inc., 186 Conn. 370, 375, 441 A.2d 620 (1982). Although the AICPA’s literature recognizes a responsibility on the part of the accounting profession to its clients and to the public, we are persuaded that such an acknowledgment cannot reasonably be interpreted as an assumption by the AICPA of any particular duty of care to persons such as the plaintiff.

We note, at the outset, that the standards promulgated by the AICPA are, on their face, insufficient to establish a duty of care. The AICPA has promulgated ten generally accepted auditing standards that outline the objectives governing the quality of services to be performed by certified public accountants when they examine their clients’ financial statements and render opinions thereon. These generally accepted auditing standards, however, lack specificity and set forth only a broad framework of due professional care to which accountants are expected to adhere. See footnote 6; see generally R. Kay & D. Searfoss, Handbook of Accounting and Auditing (2d Ed. 1989) pp. 5-6 through 5-7. In light of the level of generality at which these standards operate, they cannot establish a basis for the imposition of a duty of care to third parties.

To the extent that the allegations in the plaintiffs complaint can be construed to allege Kostin’s reliance on AICPA standards that, although as yet unspecified, are more particularized than the generally accepted auditing standards; see generally R. Kay & D. Searfoss, supra, p. 5-12; we are persuaded that even more particularized standards do not support the imposition of a duty of care on the AICPA. We reach this conclusion guided by two well reasoned federal cases that have considered and rejected the proposition that the AICPA owes to third parties a duty of care based solely on its promulgation of specific professional accounting standards.

In the first of these cases, Appalachian Power Co. v. American Institute of Certified Public Accountants, 177 F. Sup. 345 (S.D.N.Y.), aff'd, 268 F.2d 844 (2d Cir.) (per curiam), cert. denied, 361 U.S. 887, 80 S. Ct. 158, 4 L. Ed. 2d 121 (1959), public utility companies sought to enj oin the AICPA from publishing a proposed opinion letter that recommended the use of certain accounting procedures. The plaintiffs alleged that the publication of the opinion letter would have a detrimental effect on their financial statements. The United States District Court dismissed the plaintiffs’ complaint on the ground that any adverse effect to them would be “collateral, not direct, an effect which incidentally flows from a justifiable act.” Appalachian Power Co. v. American Institute of Certified Public Accountants, supra, 177 F. Sup. 351. The United States Court of Appeals for the Second Circuit affirmed the judgment of the District Court. Noting that “every professional body accepts a public obligation for unfettered expression of views and loses all right to professional consideration, as well as all utility, if its views are controlled by other criteria than the intellectual conclusions of the persons acting,” the Court of Appeals concluded that the AICPA’s publication of the opinion letter involved no breach of duty owed by the AICPA to the plaintiffs. Appalachian Power Co. v. American Institute of Certified Public Accountants, supra, 268 F.2d 845.

The second case similarly concluded that the AICPA does not owe to third parties a duty of care based solely on its promulgation of professional accounting standards. In Credit Union National Assn., Inc. v. American Institute of Certified Public Accountants, Inc., United States District Court, Docket No. 86-C-712-S (W.D. Wis. Feb. 25, 1987), vacated in part on other grounds, 832 F.2d 104 (7th Cir. 1987), an individual credit union and an association of credit unions sought to enjoin the AICPA from publishing an audit and accounting guide that characterized deposits in credit unions as liabilities rather than equities. The plaintiffs alleged that the AICPA owed them a duty of care not to publish a guide that would lead accountants to reclassify the plaintiffs’ deposits and thus cause them to suffer financial injury. In its decision dismissing the plaintiffs’ complaint, the United States District Court, while recognizing that accountants might owe the plaintiffs a duty of care, expressly rejected any claim that the AICPA owed the plaintiffs a duty that would be breached by the publication of the guide. Id., 7.

The decisions in Appalachian Power Co. and Credit Union National Assn., Inc., support our conclusion that, in this case, the promulgation of professional accounting standards imposed on the AICPA no duty of care to the plaintiff. Like the plaintiff in this case, the plaintiffs in Appalachian Power Co. and Credit Union National Assn., Inc., were third parties that allegedly had suffered indirect harm from the AICPA’s promulgation of professional accounting standards. Stressing the intervening role of certified public accountants in applying AICPA standards, the courts in both cases concluded that no duty of care arose from the AICPA’s promulgation of those standards. See Appalachian Power Co. v. American Institute of Certified Public Accountants, supra, 268 F.2d 845; Credit Union National Assn., Inc. v. American Institute of Certified Public Accountants, Inc., supra, 7-8. We too are persuaded that the intended audience of the standards promulgated by the AICPA is the professional who applies them. The standards provide a framework for what ultimately is the opinion of the certified public accountant. That opinion is formulated and expressed in light of the accountant’s professional judgment and discretion. Any liability arising from the standards, therefore, would be premised on an accountant’s application of AICPA standards in his or her exercise of professional judgment rather than on the standards themselves. Accordingly, the promulgation of the standards is not a basis for imposing a duty of care to the plaintiff on the part of the AICPA.

While unable to distinguish the holdings of these federal cases, the plaintiff urges us to disregard these decisions and to rely instead on the terms of § 324 A of the Restatement (Second) of Torts as interpreted by the Supreme Court of Alabama in King v. National Spa & Pool Institute, Inc., 570 So. 2d 612 (Ala. 1990), on appeal after remand sub nom. King v. S.R. Smith, Inc., 578 So. 2d 1285 (Ala. 1991). The plaintiff argues that, pursuant to the principles of law contained in § 324 A, the voluntary promulgation of professional accounting standards by the AICPA required the AICPA to assume a cognizable duty of care to third parties such as herself. We disagree that § 324 A and decisions premised upon § 324 A are applicable in the circumstances of this case.

By its plain language, § 324 A recognizes a cause of action arising out of the rendering of services only for negligence that causes “physical harm” to a “third person or his things.” See footnote 8. The Restatement defines “physical harm” as “the physical impairment of the human body, or of land or chattels.” (Emphasis added.) 1 Restatement (Second), Torts § 7 (3) (1965); see also id., § 15 (defining “bodily harm” as “any physical impairment of the condition of another’s body, or physical pain or illness”). The claim asserted by the plaintiff against the AICPA is a claim for commercial loss based on her lost investment expectations. Such a claim does not fall within the confines of “physical harm” as that term is used in § 324 A. See, e.g., Sound of Market Street, Inc. v. Continental Bank International, 819 F.2d 384, 392 (3d Cir. 1987); Devine v. Roche Biomedical Laboratories, Inc., 637 A.2d 441, 447-48 (Me. 1994), on appeal after remand, 659 A.2d 868 (Me. 1995); Clinical Perfusionists, Inc. v. St. Paul Fire & Marine Ins. Co., 336 Md. 685, 702-703, 650 A.2d 285 (1994).

The Restatement’s express limitation on the type of injury that may constitute “physical harm” within § 324 A is fully in accordance with our own case law. Recently, in Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 583-84, 657 A.2d 212 (1995), we recognized a clear distinction between commercial loss and property loss. In light of this distinction, we construed the phrase “damage to property” in General Statutes § 52-572h (b) to refer only to damage to or the loss of use of tangible property and not to encompass losses that are purely commercial. Id. Because, properly construed, the term “physical harm” in § 324 A, does not include nonfulfillment of commercial expectations, that section cannot provide a basis for holding the AICPA hable to compensate the plaintiff for her commercial loss.

In the absence of a claim of “physical harm,” § 324 A cannot furnish a basis of recovery for the plaintiffs claim of emotional distress. Without alleging any such physical harm, the plaintiffs complaint alleges only that she suffered emotional distress that “exposed [her] to the risk of illness or bodily harm.” (Emphasis added.) Section 324 A cannot logically be construed to permit recovery for emotional distress unaccompanied by any physical impairment without contravening the express limitation on liability contained in that section itself. All the cases that premise liability on § 324 A, including King v. National Spa & Pool Institute, Inc., supra, 570 So. 2d 613-14, have involved claims of personal injury or property damage. Despite the plaintiffs argument to the contrary, we are persuaded that these cases neither advance nor support an interpretation of § 324 A that encompasses negligence that causes emotional distress without more. Accordingly, because the injuries claimed by the plaintiff do not fall within the ambit of § 324 A, that provision does not support the plaintiffs claim that the AICPA owed her a duty of care.

The conclusion that the plaintiff has not stated a cognizable cause of action in the circumstances of this case finds support not only in existing analogous precedents, but also in cogent reasons of public policy. It is axiomatic that we must consider such policy concerns as are relevant because “[i]t is a fundamental assumption of jurisprudence that rules of law have an impact on the manner in which society conducts its affairs.” Maloney v. Conroy, 208 Conn. 392, 403-404, 545 A.2d 1059 (1988); see Shore v. Stonington, supra, 187 Conn. 152-53. It is not difficult to envisage the consequences that would ensue if the voluntary promulgation of professional accounting standards were held to impose on the AICPA a duty of care to a third party who neither is specifically identifiable nor has any relationship with the AICPA aside from reliance on the professional opinion of a certified public accountant who allegedly relied on published AICPA standards. In effect, the AICPA would be at risk of being called upon to defend its standards in any dispute challenging the propriety of the professional services of an AICPA member. In the face of such broad exposure, at least to the costs of litigation and possibly to liability for damages, the AICPA and other similarly situated professional organizations might well curtail their laudable and salutary efforts to broaden and strengthen professional standards. We are persuaded that this chilling effect would benefit no one — not; the members of professional organizations, not their clients and not the public at large. The plaintiff has identified no countervailing benefit that would warrant the imposition of liability upon the AICPA in the form of a duty of care in the promulgation of professional accounting standards in the alleged circumstances of this case.

We conclude, therefore, that the allegations in the plaintiffs complaint, even taken as true and construed in a light most favorable to the plaintiff, fail to establish a duty of care owed by the AICPA to the plaintiff based solely on its promulgation of professional accounting standards. The only connection between the plaintiff and the AICPA is that the plaintiff, in deciding to invest in Colonial Potomac, allegedly relied on the financial reports prepared by Kostin and that Kostin, in turn, allegedly had prepared those reports in conformity with standards promulgated by the AICPA. We are persuaded that these allegations fail to provide a nexus between the AICPA’s promulgation of professional accounting standards, on the one hand, and the plaintiff and the disappointment of her commercial expectations, on the other hand, that is sufficient to impose a duty of care on the AICPA.

We thus concur in the judgment of the trial court that the AICPA, as a matter of law, did not owe to the plaintiff a duty of care based solely on its promulgation of professional accounting standards. Although we reach this result for reasons that differ from those upon which the trial court relied, we conclude that the trial court properly granted the motion to strike those counts of the plaintiff’s complaint that asserted claims against the AICPA. See PaineWebber, Inc. v. American Arbitration Assn., 217 Conn. 182, 188, 585 A.2d 654 (1991); Ivey, Barnum & O’Mara v. Indian Harbor Properties, Inc., 190 Conn. 528, 532, 461 A.2d 1369 (1983).

The judgment is affirmed.

In this opinion CALLAHAN, BORDEN and NORCOTT, Js., concurred.

BERDON, J.,

dissenting. This class action brought by the plaintiff, Barbara Waters (plaintiff), is one of twelve class actions wherein damages are sought for thousands of investors as a result of a massive fraud perpetrated against them by the now defunct Colonial Realty Company (Colonial). All twelve class actions, involving different real estate investment limited partnership agreements organized by Colonial, named as a defendant the American Institute of Certified Public Accountants (AICPA), a professional regulatory body that establishes professional and auditing standards (standards) for its member certified public accountants and accounting firms. Also named as defendants were the individual certified public accounting firms that prepared the respective financial projections and forecasts of the expected economic performance (financial forecasts) for the various Colonial investments. These financial forecasts were used to promote the investments and entice investors such as Waters to invest in the limited partnerships organized by Colonial.

The defendant Kostin and Company (Kostin) was the certified public accounting firm that prepared the financial forecasts for Colonial Potomac Limited Partnership, the particular limited partnership in which Waters invested. Kostin, like the other certified public accounting firms employed by Colonial, stated in its financial forecasts that they were prepared in accordance with the standards established by the AICPA. The plaintiff alleges that the individual certified public accounting firms were negligent in preparing the financial forecasts upon which the investors relied because they did not follow the standards established by the AICPA, or in the alternative, if the accounting firms did follow the AICPA’s standards, the AICPA was negligent in promulgating such standards. In each class action, the AICPA moved to strike the counts of the complaint directed against it, arguing that, as a matter of law, it owed no duty to the individual investors. By agreement of the parties in each of the class actions, the decision in the plaintiffs case would apply to the other eleven actions. The trial court subsequently granted the AICPA’s motion to strike. Judgment was rendered in favor of the AICPA in each case and this appeal was taken by all of the plaintiffs. In my view, the plaintiffs claim with respect to the AICPA’s alleged negligence is legally sufficient.

I agree with the majority that a legal duty of care is not created merely because an injury is foreseeable, but that “the absence of foreseeability forecloses the existence of a duty of care.” Rather, the pivotal consideration in determining whether a legal duty exists is “ ‘the fundamental policy of the law, as to whether the defendant’s responsibility should extend to such results.’ W. Prosser & W. Keeton, [Torts (5th Ed. 1984)] § 43, p. 281.” RK Constructors, Inc. v. Fusco, 231 Conn. 381, 386, 650 A.2d 153 (1994). Additionally, it is pertinent in this case to note that through their conduct, individuals may voluntarily assume a legal duty. W. Prosser & W. Keeton, supra, § 56, p. 378 (“idea of voluntary assumption of a duty by affirmative conduct runs through a variety of cases . . . [m]ost of the decisions have involved only pecuniary loss”); see also 2 Restatement (Second), Torts § 324 A (1965).

My analysis begins by clarifying the principal claim against the AICPA, which is set forth in the twenty-sixth count of the plaintiffs complaint. Contrary to the majority’s characterization, under this count, the plaintiff sought damages against the AICPA only in the alternative. Essentially, the plaintiff alleges that either Kostin or the AICPA acted negligently. Consequently, if the fact finder concludes that Kostin was negligent in preparing its financial forecast because it failed to follow the standards established by the AICPA, then the plaintiff does not seek damages against the AICPA. If, however, the fact finder concludes that Kostin was not negligent in rendering the financial forecasts because it followed the standards of the AICPA, then the plaintiff seeks damages against the AICPA, alleging that it negligently promulgated those standards.

Under the allegations of the plaintiff’s complaint, not only is it foreseeable that an investor would be harmed if the standards employed were negligently promulgated, but public policy requires that the AICPA be held accountable for its conduct. The AICPA, in its statement of purpose, voluntarily assumes “to assist in the maintenance of standards for entry into the profession” and “to develop and improve accounting education.” Indeed, as the majority concedes, “the AICPA’s literature recognizes a responsibility on the part of the accounting profession to its clients and to the public . . . .’’In an effort to accomplish those objectives, the AICPA publishes a two volume manual that sets forth detailed standards, elaborations and illustrations for conducting an audit that is used to prepare financial statements that are relied upon by investors. Although the standards promulgated by the AICPA are employed by member accounting firms, they are clearly established to benefit the clients of the member firms, e.g., the plaintiff and her class. The AICPA requires its members, such as Kostin, to comply with its standards. Moreover, the AICPA requires its members to certify on their financial forecasts that, in preparing the document, the AICPA’s standards were complied with. Consequently, it is reasonable for an individual who received a financial forecast concerning Colonial’s investments to expect that the standards employed by Kostin in drafting the forecast were properly promulgated. For these reasons, the AICPA has a duty to act reasonably when promulgating standards so as not to mislead innocent investors.

In support of its position, the majority relies on two federal court opinions, of which the authoritative value of each with respect to the issue of duty is highly suspect. In Appalachian Power Co. v. American Institute of Certified Public Accountants, 177 F. Sup. 345 (S.D.N.Y.), aff'd, 268 F.2d 844 (2d Cir.) (per curiam), cert. denied, 361 U.S. 887, 80 S. Ct. 158, 4 L. Ed. 2d 121 (1959), “[o]n a theory of prima facie case of tort, [several public utility companies sought] to enjoin [the AICPA] from distributing to its members and others a letter to the effect that [the AICPA] considered] certain accounting procedures improper.” Id., 268 F.2d 845. The United States District Court’s opinion focused on whether the AICPA committed an intentional tort against the plaintiffs, not on whether the AICPA had a duty to investors to promulgate professional standards in a nonnegligent fashion. Id., 177 F. Sup. 349-51. Duty is an element of negligence, but is not an element of an intentional tort. Id.; W. Prosser & W. Keeton, supra, § 30. In affirming the District Court, the Court of Appeals for the Second Circuit stated: “We think the courts may not dictate or control the procedures by which a private organization expresses its honestly held views.” Appalachian Power Co. v. American Institute of Certified Public Accountants, supra, 268 F.2d 845. Although the Court of Appeals stated that “[the AIC-PA’s] action involves no breach of duty owed by them to the plaintiff,” the court, in its one page per curium opinion, did not engage in any analysis of the issue that faces us today. Id. Moreover, the Court of Appeals never held that the AICPA did not owe a duty of care to third parties who rely on financial statements drafted pursuant to its standards in the context of an action based upon negligence. Similarly, in Credit Union National Assn., Inc. v. American Institute of Certified Public Accountants, United States District Court, Docket No. 86-C-712-S (W.D. Wis. February 25, 1987), vacated in part on other grounds, 832 F.2d 104 (7th Cir. 1987), the United States District Court was faced with an issue significantly different than the one presently before us. In that case, the plaintiffs challenged the AICPA’s right to circulate an opinion letter to its members regarding the best method by which to classify savings accounts held in a credit union. Although, in passing, the District Court stated that there is not “an evident duty of care on the part of the AICPA toward credit unions which is breached by the publication of the [manual]”; id., 7; the Court of Appeals for the Seventh Circuit viewed the District Court’s opinion narrowly: “The [District Court] thought that the plaintiffs’ claim of injury depended on too many speculative steps.” Credit Union National Assn., Inc. v. American Institute of Certified Public Accountants, supra, 832 F.2d 106. Because the Court of Appeals affirmed the District Court’s dismissal for lack of a case or controversy, the District Court’s decision is devoid of any discussion of whether the AICPA had a legal duty to act reasonably in issuing its standards. Id., 108.

The AICPA argues before this court that although it does not owe a duty to innocent investors, “[s]uch a conclusion does not . . . leave the [AICPA] unaccountable to anyone.” The AICPA, however, never informs the court to whom it owes that duty. If the AICPA owes a duty to act reasonably when promulgating standards, then that duty must be owed to the innocent investors who act in reliance on financial forecasts that are prepared in accordance with those standards.

The majority’s decision does a great injustice to the victims of Colonial’s fraud. This injustice is clearly demonstrated when the legal standard of care expected of Kostin is applied in this case. Generally, an individual is expected to act as “a reasonable person under the same or similar circumstances” would act. W. Prosser & W. Keeton, supra, § 37, p. 236. In order to determine how a reasonable professional should act in a particular situation, professional standards of conduct may be admitted into evidence. C. Tait & J. LaPlante, Connecticut Evidence (2d Ed. 1988) § 8.7.1 (“if the issue is the proper conduct of a particular business or profession not within the common knowledge of the jury, evidence of the state of the art or the usual practice or custom of others in such field may be proved”). Consequently, Kostin may introduce the AICPA standards into evidence to prove that it acted reasonably, even if those standards may have been negligently promulgated. Monroe v. Hughes, 31 F.3d 772, 774 (9th Cir. 1993) (“an accountant’s good faith compliance with Generally Accepted Accounting Principles and Generally Accepted Auditing Standards discharges the accountant’s professional obligation to act with reasonable care”). But, according to the majority in this case, the promulgator of the standards used to exculpate Kostin is free of any accountability. In other words, an accounting firm, such as Kostin, may be shielded from liability because of the AICPA standards, but the AICPA, according to the majority, owes no duty to investors to act in a reasonable manner when issuing professional standards, despite the fact that the public is invited to value and derive confidence from those standards. The logic of such a conclusion eludes me.

The majority asserts that public policy justifies its decision not to recognize a duty on the part of the AICPA to the investing public. If held accountable for their actions, the majority believes that professional associations, such as the AICPA, “might well curtail their laudable and salutary efforts to broaden and strengthen professional standards. ” I do not believe that holding an association accountable for its actions will induce such a harsh result. The public would be better served by simply requiring professional associations who choose to promulgate professional standards and invite the public to value and rely on documents that have been prepared in accordance with those standards, to act in a reasonable manner so as not to injure innocent persons.

It may very well be, and I have no reason to believe otherwise based upon the state of the pleadings and the record before us, that the AICPA has acted in a nonnegligent manner. If that is clearly the case, then the AICPA could be relieved of the litigation, short of a full trial, by simply moving for summary judgment on that ground.

In sum, I am of the opinion that, under the allegations of this complaint, the AICPA owed a duty to the plaintiff and the other individuals who invested in the limited partnerships of Colonial in reliance on the financial forecasts drafted pursuant to the AICPA standards because: (1) the AICPA specifically assumed a duty to the investors; (2) the AICPA requires member certified public accounting firms, such as Kostin, to employ its standards when preparing financial forecasts; (3) such standards were promulgated for the benefit of the investors; (4) the AICPA requires members, such as Kostin, to state in their financial forecasts that the forecast was prepared in accordance with AICPA standards; and (5) it was reasonably foreseeable that, if the standards were negligently promulgated, investors, such as the plaintiff, could suffer substantial financial losses.

Accordingly, I respectfully dissent.

       The plaintiff named as defendants, in addition to the AICPA, thirty-eight individuals, three banks, three accounting firms, three partnerships, two corporations, two law firms and the Federal Deposit Insurance Corporation.

       The AICPA was named as a defendant in twelve separate class actions, each of which involved claims arising from investments in failed limited partnerships. By agreement of the parties to these twelve actions, the AICPA moved to strike all counts against it in the plaintiffs complaint. The parties agreed that the ruling of the trial court on that one motion would apply to all twelve actions. The trial court rendered judgments granting the AICPA’s motion to strike as against the plaintiff in this case and as against the plaintiffs in the other eleven actions. The plaintiffs from the twelve actions appealed jointly from the judgments of the trial court.

       The AICPA contends, as an alternate ground for affirmance of the trial court’s judgment, that the statute of limitations bars the plaintiffs claims. Because we conclude that the trial court properly determined that the AICPA owed no duty of care to the plaintiff as a matter of law, we need not address the issue of whether a statute of limitations defense may properly be raised in a motion to strike.

       We need not decide in 1his case whether the plaintiff and her injuries were foreseeable to the AICPA because we conclude that the AICPA did not owe the plaintiff a duty of care, regardless of foreseeability. We nevertheless note that the plaintiff does not claim that she herself relied on, or was even familiar with, any of the professional accounting standards promulgated by the AICPA. Rather, the plaintiffs complaint alleges that the financial reports prepared by Kostin contained a statement that it had followed AICPA standards, and that the plaintiff relied on Kostin’s statement when she decided to invest in Colonial Potomac. The complaint further alleges that the plaintiff was a member of a class of third persons who the AICPA knew or should have known would rely on its standards. Thus, the plaintiff was foreseeable to the AICPA, if at all, only as a member of a general and indefinite class of persons.

       The plaintiffs complaint fails to specify the AICPA standards upon which Kostin allegedly relied when it prepared Colonial Potomac’s financial reports.

       The generally accepted auditing standards, as approved and adopted by the membership of the AICPA, are as follows:

        “General Standards

      “1. The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor.
      “2. In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors.
      “3. Due professional care is to be exercised in the performance of the audit and the preparation of the report.

        “Standards of Field Work

      “1. The work is to be adequately planned and assistants, if any, are to be properly supervised.
      “2. A sufficient understanding of the internal control structure is to be obtained to plan the audit and to determine the nature, timing, and extent of tests to be performed.
      “3. Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit.

        “Standards of Reporting

      “1. The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles.
      “2. The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.
      “3. Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated in the report.
      “4. The report shall either contain an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefor should be stated. In all cases where an auditor’s name is associated with financial statements, the report should contain a clear-cut indication of the character of the auditor’s work, if any, and the degree of responsibility the auditor is taking.” 1 AICPA, Professional Standards § 150.02, pp. 81-82 (June 1, 1995).

       The District Court ultimately held that the plaintiffs’ claim against the AICPA based on an alleged breach of duty of care failed for a lack of a justiciable case or controversy. The United States Court of Appeals for the Seventh Circuit affirmed the District Court’s denial of injunctive relief and dismissal of the complaint on that ground. Credit Union National Assn., Inc. v. American Institute of Certified Public Accountants, Inc., supra, 832 F.2d 107-108.

       Section 324 A of the Restatement (Second), Torts (1965), provides: “Liability to Third Person for Negligent Performance of Undertaking
      “One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if:
      “(a) his failure to exercise reasonable care increases the risk of such harm, or
      “(b) he has undertaken to perform a duty owed by the other to the third person, or
      “(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.”

       General Statutes § 52-572h provides in relevant part: “Negligence actions. Doctrines applicable. Liability of multiple tortfeasors for damages. . . .
      “(b) In causes of action based on negligence, contributory negligence shall not bar recovery in an action by any person or his legal representative to recover damages resulting from personal injury, wrongful death or damage to property if the negligence was not greater than the combined negligence of the person or persons against whom recovery is sought including settled or released persons under subsection (n) of this section. . .

       The Restatement (Second) of Torts, § 324 A (1965), provides: “One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if (a) his failure to exercise reasonable care increases the risk of such harm, or (b) he has undertaken to perform a duty owed by the other to the third person, or (c) the harm is suffered because of reliance of the other or the third person upon the undertaking.” (Emphasis added.)
      Comment (b) to § 324 A provides: “This Section applies to any undertaking to render services to another, where the actor’s negligent conduct in the manner of performance of his undertaking, or his failure to exercise reasonable care to complete it, results in physical harm to the third person or his things. It applies both to undertakings for consideration, and those which are gratuitous.” (Emphasis added.)

       For the purpose of this dissent, I focus on the twenty-sixth count of the complaint wherein it alleges in part: “562 At all times relevant to this lawsuit, [the] defendant Kostin stated that they followed and relied on the technical Standards and/or Guidelines promulgated by or under authorization from AICPA, or the Council [of American Certified Public Accountants], and publicly acclaimed such use and reliance, as suggested by the AICPA standards, by stating that the Colonial Potomac Limited Partnership projections and/or forecasts were compiled in accordance with AICPA Standards, and that such compilation was in conformance with Guidelines for presentation of a compilation established by the AICPA.
      “563 If [the] Defendant Kostin properly followed and/or used such AICPA Standards and/or Guidelines, as set forth in the preceding paragraph, then such Standards and/or Guidelines were negligently promulgated and did not reasonably protect [tire] plaintiff.
      “564 [The] Defendant AICPA, although it knew or should have known that its Standards and/or Guidelines, if defective as alleged in the preceding paragraph, would create an unreasonable risk of harm to third parties who relied on such Standards and/or Guidelines, permitted its Standards and/or Guidelines to be published, and therefore used by its members, without indicating, and/or requiring its members to indicate, the danger to which the third parties would expose themselves.”

       This manual covers a number of topics: United States auditing standards; attestation standards; accounting and review services; code of professional conduct; bylaws; consulting services; quality control; peer review; tax practice; and personal financing planning.

       Nowhere in the record is it indicated that the AICPA sought to have the plaintiff specify the standards that she claims were negligently promulgated. Consequently, we have before us general allegations that encompass all of the AICPA standards and guidelines.

       In an introductory comment in its manual, the AICPA states that it “requires adherence to the applicable generally accepted auditing standards promulgated by [it]. . . . [M]embers [must] be prepared to justify departures from [the AICPA’s Statements on Auditing Standards]. ” 1 AICPA Professional Standards (1995) p. 51.
      Additionally, rule 202 of the Rules of Conduct of the Code of Professional Conduct of the American Institute of Certified Public Accountants provides: “A member who performs auditing, review, compilation, management consulting, tax, or other professional services shall comply with standards promulgated by bodies designated by Council [of American Certified Public Accountants].” 2 AICPA Professional Standards (1995) § 202.1, p. 4571.

       The AICPA manual, under its discussion of the fourth standard of reporting (“[t]he report shall either contain an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed”); 1 AICPA Professional Standards (1995) § 508.04, p. 651; provides that a basic element of an auditor’s standard report is “[a] statement that the audit was conducted in accordance with generally accepted auditing standards.” Id., § 508.08, p. 652.

       “The plaintiffs predicate the validity of their complaint upon the doctrine of ‘prima facie tort.’ . . . [One of the essential elements of this cause of action requires that tjhere must be an intent to injure [the] plaintiff, at least to the extent of infliction of wrongful harm upon [the] plaintiff without just cause or excuse.” (Emphasis in original.) Appalachian Power Co. v. American Institute of Certified Public Accountants, supra, 177 F. Sup. 349.

       The Court of Appeals stated: “There are so many links, each problematic, that it is impossible to trace concrete injury to the AICPA’s decision to classify shares as ‘liabilities’ in the [manual]. We do not know whether accountants will treat shares as liabilities or instead choose to treat them as equity and explain why; we do not know whether either treatment as liabilities or explanations for departures will produce adverse consequences for credit unions and, if so, what the causes of those consequences may be. The plaintiffs want us to resolve a dispute — what is the ‘right’ accounting treatment of shares — without any clear understanding of the consequences either way or any clear link between choice and consequence.” Credit Union National Assn., Inc. v. American Institute of Certified Public Accountants, supra, 832 F. Sup. 107.


source: Caselaw Access Project

author: KATZ, J.

license: Public Domain

text:
    JANE DOE v. DORIS MARSELLE ET AL.
    (15312)
    Callahan, Borden, Berdon, Norcott and Katz, Js.
    Argued March 21-
    officially released May 7, 1996

      Susan Garten, with whom, on the brief, was Ana Mari Bermudez, for the appellant (plaintiff).

      Andrew J. O’Keefe, with whom were Kathryn M. Cunningham and, on the brief, Maureen Sullivan Din-nan, for the appellee (defendant Dionisio C. Flores).

      Ben A. Solnit, Brian O’Donnell and Philip D. Tegeler filed a brief for the Connecticut Civil Liberties Union Foundation et al. as amici curiae.
   KATZ, J.

The dispositive issue on appeal is whether in order to state a cause of action under General Statutes § 19U-590 for a violation of General Statutes § 19a-583 (AIDS statute), the confidentiality provision of chapter 368x, entitled “AIDS Testing and Medical Information,” a plaintiff must allege that the person who violated that provision intended to engage in the prohibited conduct and intended to produce the resulting injury. We conclude that a wilful violation of § 19a-583 requires only a knowing disclosure of confidential human immunodeficiency virus (HIV) related information.

The following facts are undisputed. The plaintiff, Jane Doe, was a patient of the defendant Dionisio C. Flores, a surgeon, to whom, during the course of her treatment, she disclosed that she was infected with HIV. A surgical assistant employed by Flores, the named defendant Doris Marselle, after learning of the plaintiffs condition from her medical chart and from personal discussions with the plaintiff, consulted Flores regarding her intention to disclose the plaintiffs HIV status to Marselle’s sons who were illegal drug users and who had friends in common with the plaintiff. Flores authorized Marselle to make the disclosures provided that she not identify the plaintiff by name.

When the plaintiff learned that Marselle had told at least three other individuals in the community that she was HIV positive, the plaintiff, who had never authorized the disclosures, brought a multicount complaint against Flores and Marselle alleging that they each had: (1) violated the confidentiality provisions of § 19a-583 by intentionally disclosing her HIV status (first count); (2) violated the Connecticut Unfair Trade Practices Act (CUTPA); General Statutes § 42-110b; based upon a breach of confidentiality and Flores’ false representations to her that her HIV status would be kept confidential (third and fourth counts); and (3) negligently inflicted emotional distress by disclosing her HIV status (sixth count). Additionally, the plaintiff alleged that Flores had been negligent in failing to instruct his employees regarding their obligation to comply with General Statutes § 19a-581 et seq. (second count), and that Marselle had intentionally inflicted emotional distress by wilfully disclosing the confidential medical information (fifth count).

Flores filed an “objection” to the complaint, challenging the sufficiency of the plaintiffs claims against him. Treating the objection as a motion to strike, the trial court ordered all counts against Flores stricken and rendered judgment in his favor. Following the trial court’s denial of her motion for articulation, the plaintiff appealed to the Appellate Court. Thereafter, the plaintiff filed a second motion for articulation, which the Appellate Court granted. Pursuant to that order, the trial court set forth its reasons for striking the complaint. As to the first count, the court stated that the plaintiff had failed to state a cause of action under § 19a-590 because the allegations set forth in the pertinent four paragraphs of the first count did not contain the word “wilfully” and there were no allegations of an intent to injure that would allow the court to conclude that Flores’ action had been wilful. Additionally, because § 19a-590 authorizes an action only for wilful, as opposed to negligent, conduct and because the plaintiff had not alleged that Flores had intended to injure her when he authorized the disclosure, the trial court granted Flores’ motion to strike the second and sixth counts. Finally, the court concluded that in the absence of an allegation of wilful conduct the plaintiff had failed to state a claim under CUTPA and, accordingly, it granted Flores’ motion to strike the third and fourth counts.

In her appeal to the Appellate Court, the plaintiff argued that the term “wilful” in § 19a-590 means “intentionally” as opposed to “accidentally” and that the trial court; improperly had defined the term to mean intending to injure. Doe v. Marselle, 38 Conn. App. 360, 366, 660 A.2d 871 (1995). The Appellate Court disagreed, concluding that in order to establish a violation of § 19a-590, the plaintiff must allege that both the action and the resulting injury had been intended. Id., 367-68. In the Appellate Court’s view, because the plaintiff had failed to do so, the trial court properly rendered judgment for Flores. Id., 370. Additionally, although it did not decide whether § 19a-581 et seq. is the exclusive remedy for an unauthorized disclosure of confidential HIV-related information, the Appellate Court affirmed the trial court’s judgment as to the remaining counts. Id., 370-71. Relying on the fact that the plaintiff had incorporated the first count into each of the other counts against Flores, the court reasoned that because the first count had failed to state a cause of action upon which relief could be granted, the counts into which the same allegations had been incorporated must similarly fail. Id., 371.

Thereafter, the plaintiff petitioned this court for certification. We granted certification limited to the following questions: (1) “Did the Appellate Court correctly conclude that the second amended complaint did not allege a wilful violation of General Statutes § 19a-583 (a)?”; and (2) “Did the Appellate Court properly decide that the plaintiffs negligence, negligent infliction of emotional distress and Connecticut Unfair Trade Practices Act (CUTPA) counts had been properly stricken?” Doe v. Marselle, 235 Conn. 915, 665 A.2d 606 (1995). Because we answer both certified questions in the negative, we reverse.

“Because our fundamental objective in construing a statute is to ascertain and give effect to the apparent intent of the legislature; Fleming v. Garnett, 231 Conn. 77, 91-92, 646 A.2d 1308 (1994); State v. Metz, 230 Conn. 400, 409, 645 A.2d 965 (1994); we will not undertake an examination of [§ 19a-590] with blinders on regarding what the legislature intended [it] to mean. Frillici v. Westport, 231 Conn. 418, 431, 650 A.2d 557 (1994). Accordingly, our analysis of [§ 19a-590] is not limited solely to the words of the statute. Instead, we must also look ... to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter. State v. Metz, supra, 409; Fleming v. Garnett, supra, 92.” (Internal quotation marks omitted.) Derwin v. State Employees Retirement Commission, 234 Conn. 411, 420, 661 A.2d 1025 (1995); accord Covelli v. Commissioner of Revenue Services, 235 Conn. 539, 555, 668 A.2d 699 (1995) (Katz, J., dissenting).

A thorough examination using all these factors is especially important in the present case because, although “our initial guide [to interpreting a statute] is the language of the statute itself’; HUD/Barbour-Waverly v. Wilson, 235 Conn. 650, 656, 668 A.2d 1309 (1995); the particular term in issue is a word of many meanings. “Wilful” has been defined many ways, and the applicable definition often turns on the specific facts of the case and the context in which it is used. Screws v. United States, 325 U.S. 91, 101, 65 S. Ct. 1031, 89 L. Ed. 1495 (1945). Consequently, in construing its meaning, we are guided by the language of § 19a-590, both alone and in the context of the AIDS statute, as well as the underlying legislative purpose of the harm at which it is directed. We pay particular' attention to “the societal [problem] which the legislature sought to address ... in determining the true meaning of the statute.” State v. Parmalee, 197 Conn. 158, 161-62, 496 A.2d 186 (1985).

The AIDS statute was designed and intended to combat the AIDS epidemic, beginning with protecting confidentiality. The legislation imposes certain requirements on the testing and treatment of persons who may be HIV positive or who have AIDS. These requirements relate principally to the areas of informed consent for HIV testing and confidential treatment of HIV-related information, and are aimed at helping health care providers to identify those people with the disease, to treat them and to educate them in an attempt to put an end to the epidemic in our state, which, at the time this legislation was under consideration, had the ninth highest number of AIDS cases per capita in the nation and the highest percentage of AIDS cases in children. 32 H.R. Proc., Pt. 31, 1989 Sess., pp. 10,776-77. As one of the bill’s sponsors, Representative Benjamin N. DeZinno, Jr., explained, the bill was intended to “protect the confidentiality of data related to AIDS, requires informed consent for tests for the AIDS virus, and allows for notification of partners of those that are so infected.” Id., p. 10,775. He explained that in order to “wipe out or hope to wipe [out] this horrible epidemic disease in our lifetime . . . [w]e have to start with protecting the confidentiality . . . [b]ecause people will not step forward for testing and treatment of AIDS unless they know that a positive result will not become public information. I think that’s very important. Now unfortunately, there is widespread discrimination against the AIDS victim, and many people would rather [forgo] treatment, than risk being stigmatized.” Id., p. 10,776.

Beth Weinstein, chief of the AIDS section for the then department of health services, now the department of public health and addiction services (department), along with James Hadler, a physician and the chief of the epidemiology section of the department, testified that the department had proposed “this critical legislation . . . [to] provide us with the tools to continue fighting the AIDS epidemic in Connecticut. If passed, it will protect the confidentiality of AIDS information and will require informed consent for the test for the virus which causes AIDS. . . . The AIDS epidemic has magnified many problems in the existing health care system. Among the most glaring is the lack of protection [in] current Connecticut statutes for informed consent and disclosure of information. Although this problem goes beyond AIDS, we feel it is most important to solve it for AIDS because of the sensitivities regarding the disease.” Conn. Joint Standing Committee Hearings, Public Health, Pt. 3, 1989 Sess., p. 766. Weinstein explained how this legislation was necessary to encourage confidential testing and to allow medical providers to provide proper follow-up treatment. “In most of the sites that the department funds for counseling and testing for the AIDS virus, anonymous testing is done, largely because we don’t have confidentiality protection. However, anonymous testing has limitations. Counselors have no ability to follow-up with clients to provide support for behavior change, additional counseling, public health services, social services or medical assistance. Voluntary testing in which the identity of the person tested [is] known will only be widely accepted if there is specific protection in the statutes.” Id., p. 767. Weinstein concluded her testimony by emphasizing that confidentiality is essential “to protect people from the discrimination that often comes with the knowledge that a person has AIDS or HIV infection” and to help eliminate the stigma that often accompanies AIDS. Id., pp. 768-69.

In order to accomplish the aforementioned goals, disclosure of confidential HIV-related information is prohibited except in very limited and discrete circumstances. General Statutes § 19a-583 (a) (1) through (12). Even health care providers or persons who engage in occupational therapy who have had significant exposure to HIV infection are not entitled to this information unless they satisfy the rigid criteria listed in § 19a-583 (a) (7). See footnote 11. Similarly, employees of mental health hospitals operated by the department of mental health and correctional facilities operated by the department of correction are not entitled to this information even when the patient or inmate poses a significant risk of transmission unless the infection control committee of the hospital or the medical director and chief administrator of the correctional facility first determine that such disclosure is likely to prevent or reduce the risk of transmission and that no reasonable alternatives exist that will achieve the same goal and preserve the confidentiality of the information. See General Statutes § 19a-583 (a) (8) and (9).

A person who does not fall within these exceptions may petition the court for disclosure; however, a court order may be issued only when the moving party demonstrates a clear and imminent danger to the health of another or the public health and further demonstrates a compelling need for the test results that cannot be accommodated by other means. In assessing compelling need, the court must weigh, among other things, the need for disclosure against the privacy interest of the test subject and the public interest that may be disserved by disclosure that deters future testing or that may lead to discrimination. See General Statutes § 19a-583 (a) (10). Finally, even when disclosure is authorized, the AIDS statute strictly limits the terms of that disclosure. See General Statutes § 19a-585. In short, the drafters of this legislation “crafted the bill very carefully to give protection while also enabling those who care for people with AIDS and HIV infection to have access to information needed for the patient’s care.” Conn. Joint Standing Committee Hearings, Public Health, Pt. 3, 1989 Sess., p. 767.

Keeping this legislative history in mind, coupled with the elaborate statutory safeguards imposed against disclosure of HIV-related information, it is difficult to presume a definition of wilful that would make permissible the unauthorized disclosure of a person’s HIV-related information except in the extreme situation where the person disclosing the information actually intends to injure the protected individual. We have noted that as part of its attempt to foster an increase in medical treatment for people with AIDS and HIV infection, the legislature created the AIDS statute to correct the problems, such as the lack of confidentiality, that have stood in the way of this goal. A definition of wilful that would require a plaintiff to prove that confidentiality was breached with the intent to cause injury would do nothing to advance the laudable goals of the legislation’s sponsors. Indeed, were we to apply the definition of wilful proposed by Flores and adopted by the Appellate Court, a patient who is HIV positive, knowing that he or she could obtain redress for a violation of the confidentiality provisions in only the most egregious circumstances, would have no confidence that his or her status or test results would be zealously protected. This lack of confidence, in turn, would create a disincentive for that person to submit to testing. Additionally, because General Statutes § 19a-582 (b) (4) requires that pretest counseling include “an explanation of the confidentiality protections afforded confidential HIV-related information, including the circumstances under which and classes of persons to whom disclosure of such information may be required, authorized or permitted by law,” the lack of protection resulting from a definition of wilful that requires an evil intent would be more likely to eviscerate the purpose of the statute and consequently undermine the public health strategy against AIDS that prompted the legislation. It is not our practice to construe a statute in a way to thwart its purpose or lead to absurd results; Sutton v. Lopes, 201 Conn. 115, 121, 513 A.2d 139, cert. denied, 479 U.S. 964, 107 S. Ct. 466, 93 L. Ed. 2d 410 (1986); or in a way “that fails to attain a rational and sensible result that bears directly on the purpose the legislature sought to achieve.” Fairfield Plumbing & Heating Supply Corp. v. Kosa, 220 Conn. 643, 651, 600 A.2d 1 (1991). Consequently, we cannot endorse a definition of wilful that would allow virtually any disclosure of confidential HIV-related information.

Moreover, to limit the definition of wilful to the case of a medical provider who intended to cause the patient injury, as Flores argues, would be to provide a cure for which there is no disease. No one speaking on behalf of the legislation identified a problem with medical providers seeking to sabotage the ability of their AIDS patients to obtain good medical care. Nor has Flores argued that such a problem exists. Because we do not presume that the legislature enacted legislation that was devoid of purpose; Perille v. Raybestos-Manhattan-Europe, Inc., 196 Conn. 529, 542, 494 A.2d 555 (1985); we will not interpret wilful as Flores has proposed.

Rather, we interpret wilful to mean a knowing disclosure of confidential HIV-related information. Contrary to the Appellate Court’s assertion, this interpretation does not render the term superfluous. Had the term wilful not been used, persons would be hable for inadvertent disclosures or nonvolitional acts. By establishing liability only for wilful violations, the legislature indicated that inadvertent violations would not be actionable.

Confirmation of our decision can be found by returning to the language of § 19a-590 itself, which the plaintiff suggests we compare with § 19a-591b, which was included in the 1991 amendments to the AIDS statute and which provides that manufacturers of an AIDS vaccine shall be liable to research subjects for civil damages for any injury that was caused by “gross negligence or reckless, wilful or wanton misconduct.” As used in this context, wilful is similar to the concept of intentional injury adopted by the Appellate Court in this case. Section 19a-590 is, however, devoid of any suggestion of recklessness, wantonness, misconduct or other improper motive. The plaintiff argues, therefore, that it is more logical to construe wilful to apply simply to a knowing violation of the statute’s nondisclosure requirements. We agree. As we have stated many times, “[w]here a statute, with reference to one subject contains a given provision, the omission of such provision from a similar statute concerning a related subject . . . is significant to show that a different intention existed.

. . . That tenet of statutory construction is well grounded because [t]he General Assembly is always presumed to know all the existing statutes and the effect that its action or non-action will have upon any one of them.” (Citations omitted; internal quotation marks omitted.) In re Ralph M., 211 Conn. 289, 306-307, 559 A.2d 179 (1989); see also Plourde v. Liburdi, 207 Conn. 412, 416, 540 A.2d 1054 (1988) (“ ‘[t]he use of different words [or the absence of repeatedly used words in the context of] the same [subject matter] must indicate a difference in legislative intention’ ”). Had the legislature intended more than a knowing violation of the statute’s nondisclosure requirements, it would have used the language of § 19a-591b.

Finally, Flores argues that even if wilful means knowing, the allegations do not state a cause of action under § 19a-590 against him. We disagree. The complaint alleges that Flores “affirmatively authorized” the disclosure with the sole proviso that Marselle not disclose the plaintiffs actual name. That disclosure clearly falls within the definition of “confidential HIV-related information” set forth in § 19a-581 (8). See footnote 2. Moreover, Marselle was the “employee and agent” at all times relevant to the complaint. Flores’ assertion that the plaintiff must specifically allege her reliance on the doctrine of respondeat superior ignores what we have often stated is our “responsibility to construe the complaint in the manner most favorable to sustaining its legal sufficiency.” (Internal quotation marks omitted.) Mahoney v. Lensink, 213 Conn. 548, 567-68, 569 A.2d 518 (1990).

Flores concedes that the trial court’s decision striking the remaining four counts against him can be affirmed only if we define a wilful disclosure of HIV-related information as requiring an intent to engage in the prohibited conduct and an intent to produce the resulting injury. Because we have defined a wilful violation of § 19a-590 as solely a knowing violation, however, we reverse the judgment of the trial court as to all counts against Flores.

The judgment is reversed and the case is remanded for further proceedings according to law.

In this opinion the other justices concurred.

       General Statutes § 19a-590 provides: “Liability for violations. Any person, except as otherwise provided in this chapter, who wilfully violates any provision of this chapter shall be hable in aprivate cause of action for injuries suffered as a result of such violation. Upon a finding that an individual has been injured as a result of such violation, damages shall be assessed in the amount sufficient to compensate said individual for such injury.”

       General Statutes § 19a-583 provides in relevant part: “Limitations on disclosure of HIV-related information, (a) No person who obtains confidential HIV-related information may disclose or be compelled to disclose such information . . . .”
      General Statutes § 19a-58I (8) defines “confidential HIV-related information” as “any information pertaining to the protected individual or obtained pursuant to a release of confidential HTV-related information, concerning whether a person has been counseled regarding HIV infection, has been the subject of an HIV-related test, or has HIV infection, HIV-related illness or AIDS, or information which identifies or reasonably could identify a person as having one or more of such conditions, including information pertaining to such individual's partners . . . .”

       General Statutes § 42-110b provides in relevant part: “Unfair trade practices prohibited. Legislative intent, (a) No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”

       Flores had moved to strike the complaint. By agreement of the parties, the complaint was stricken and the plaintiff thereafter filed an amended complaint that is the subject of this appeal.

       The claims against Marselle were not the subject of this “objection.” In December, 1995, the action against Marselle was withdrawn leaving Flores, therefore, as the sole remaining defendant.

       The reasons provided in the trial court’s order were limited: the first count was stricken because there was no allegation of wilfulness; the second and sixth counts were stricken because § 19a-581 et seq. is the exclusive remedy for the alleged conduct; and the third and fourth counts were stricken because CUTPA is not applicable to this case.

       The trial court examined the following paragraphs in determining the sufficiency of the allegations: “16. After her conversation with [the plaintiff], Ms. Marselle consulted Dr. Flores concerning her intention to disclose [the plaintiffs] HIV status to Ms. Marselle’s sons, who she knew to be illegal drug users and acquaintances of friends of [the plaintiff].
      “17. At no time did Dr. Flores inform the defendant Marselle of the statutory prohibition against releasing any information which would identify [the plaintiff] as HIV positive. In fact, Dr. Flores affirmatively authorized Ms. Marselle’s illegal disclosure, with the sole proviso that [the plaintiffs] actual name not be used in identifying her.
      “18. In May, 1991, [the plaintiff] learned that the defendant Marselle had intentionally disclosed [the plaintiffs] HIV status to at least three other individuals in the community who knew [the plaintiff]. Ms. Marselle never asked for or received [the plaintiff’s] permission to make these disclosures.
      “19. When [the plaintiff] confronted the defendant Marselle about her unauthorized disclosures, Ms. Marselle admitted telling other persons about [the plaintiffs] HIV status. She also told [the plaintiff] that she had obtained Dr. Flores’ permission to make the disclosures.”
      In her first complaint, which the plaintiff agreed to have stricken, she had alleged that Marselle had received Flores’ permission to make the disclosures but had not alleged that Flores had authorized those disclosures.

       Black’s Law Dictionary (6th Ed. 1990) demonstrates the varied ways that wilful has been defined ranging from “voluntary; knowingly; deliberate . . . [¡Intending the result which actually comes to pass; designed; intentional; purposeful; not accidental or involuntary” to “[premeditated; malicious; done with evil intent, or with a bad motive or purpose, or with indifference to the natural consequences.”
      Additionally, we have defined the term differently depending on the context. See, e.g., Dubay v. Irish, 207 Conn. 518, 533, 542 A.2d 711 (1988) (wilful misconduct requires design to ipjure); DeMilo v. West Haven, 189 Conn. 671, 678-79, 458 A.2d 362 (1983) (wilful destruction of bridge means intentional destruction of bridge and intent to cause injury); State v. Gotsch, 23 Conn. Sup. 395, 398-99, 184 A.2d 56 (1962) (wilful commonly means intentional, as opposed to accidental, but in penal statute it means with evil intent); Guest v. Administrator, 22 Conn. Sup. 458, 459, 174 A.2d 545 (1961) (wilful breach of rule means deliberate violation done purposely with knowledge as opposed to result of thoughtlessness or inadvertence).

       We pay particular attention to statements of the legislators who sponsored the bill. Manchester Sand & Gravel Co. v. South Windsor, 203 Conn. 267, 275, 524 A.2d 621 (1987).

       Studies in the medical literature indicate that fear of discrimination discourages people from seeking appropriate care. See K. Siegel, M. Levine, C. Brooks & R. Kern, “The Motives of Gay Men for Taking or Not Taking the HIV Antibody Test,” 36 Social Problems 368, 378-79 (1989) (people avoid HIV testing in part because they fear discrimination if their illness or sexual behavior become known); R. Weitz, “Anonymity in Testing for HIV Antibodies Desired Option,” 81 Am. J. Pub. Health 1213 (1991) (fear of discrimination based on illness or on having been tested). As one recent nationwide study found, people are more likely to undergo HIV testing if they believe that their test results will remain private. K. Phillips, “The Relationship of 1988 State HIV Testing Policies to Previous and Planned Voluntary Use of HIV Testing,” 7 J. Acquired Immune Deficiency Syndromes 403, 405 (1994).

       General Statutes § 19a-583 provides in relevant part: “Limitations on disclosure of HIV-related information, (a) No person who obtains confidential HIV-related information may disclose or be compelled to disclose such information, except to the following:
      “(1) The protected individual, his legal guardian or a person authorized to consent to health care for such individual;
      “(2) Any person who secures a release of confidential HIV-related information;
      “(3) A federal, state or local health officer when such disclosure is mandated or authorized by federal or state law;
      “(4) A health care provider or health facility when knowledge of the HIV-related information is necessary to provide appropriate care or treatment to the protected individual or a child of the individual or when confidential HIV-related information is already recorded in a medical chart or record and a health care provider has access to such record for the purpose of providing medical care to the protected individual;
      “(5) A medical examiner to assist in determining the cause or circumstances of death;
      “(6) Health facility staff committees or accreditation or oversight review organizations which are conducting program monitoring, program evaluation or service reviews;
      “(7) A health care provider or other person in cases where such provider or person in the course of his occupational duties has had a significant exposure to HIV infection, provided the following criteria are met: (A) The worker is able to document significant exposure during performance of his occupation, (B) the worker completes an incident report within forty-eight hours of exposure, identifying the parties to the exposure, witnesses, time, place and nature of the event, (C) the worker submits to a baseline HIV test within seventy-two hours of the exposure and is negative on that test for the presence of the AIDS virus, (D) the patient’s or person’s physician or, if the patient or person does not have a personal physician or if the patient’s or person’s physician is unavailable, another physician or health care provider has approached the patient or person and sought voluntary consent to disclosure and the patient or person refuses to consent to disclosure, except in an exposure where the patient or person is deceased, (E) the worker would be able to take meaningful immediate action as defined in regulations adopted pursuant to section 19a-589 which could not otherwise be taken, (F) an exposure evaluation group determines that the criteria specified in subparagraphs (A), (B), (C), (D) and (E) of this subdivision are met and that a worker has a significant exposure to the blood of a patient or person and the patient or person or the patient’s or person’s legal guardian refuses to consent to release of the information. No member of the exposure evaluation group who determines that a worker has sustained a significant exposure and authorizes the disclosure of confidential HIV-related information nor the health facility, correctional facility or other institution nor any person in a health facility, correctional facility or other institution who relies in good faith on the group’s determination and discloses the result shall have any liability as a result of his action carried out under this section, unless such persons acted in bad faith. If the information is not held by a health facility, correctional facility or other institution, a physician not directly involved in the exposure has certified in writing that the criteria specified in subparagraphs (A), (B), (C), (D) and (E) of this subdivision are met and that a significant exposure has occurred;
      “(8) Employees of hospitals for mental illness operated by the department of mental health if the infection control committee of the hospital determines that the behavior of the patient poses a significant risk of transmission to another patient of the hospital. Disclosure shall only be allowed if it is likely to prevent or reduce the risk of transmission and no reasonable alternatives exist that will achieve the same goal and also preserve the confidentiality of the information. Such ‘reasonable alternatives’ include counseling the patient concerning behaviors that pose a risk of transmission and other efforts to prevent or address the behaviors that pose a significant risk of transmission without disclosing the patient’s HIV status or other confidential HIV-related information. Disclosure shall be limited to as few employees as possible and only to those employees with a direct need to receive the information to achieve the purpose authorized by this subdivision;
      “(9) Employees of facilities operated by the department of correction to provide services related to HIV infection or if the medical director and chief administrator of the facility determine that the behavior of an inmate poses significant risk of transmission to another inmate or has resulted in a significant exposure of another inmate of the facility. Such a disclosure shall only be made if it is specifically required to enable the inmate to receive such services or is likely to prevent or reduce the risk of transmission and no reasonable alternatives exist that will achieve the same goal and also preserve the confidentiality of the information. Such ‘reasonable alternatives’ include counseling the inmate concerning behaviors that pose a risk of transmission or other efforts to prevent or address the behaviors that pose a significant risk of transmission without disclosing the patient’s HIV status or other confidential HIV-related information. Disclosure shall be limited to as few employees as possible and only to those employees with a direct need to receive the information to achieve a purpose authorized by this subdivision . . .
      “(11) Life and health insurers, government payers and health care centers and their affiliates, reinsurers, and contractors, except agents and brokers, in connection with underwriting and claim activity for life, health, and disability benefits; and
      “(12) Any health care provider specifically designated by the protected individual to receive such information received by a life or health insurer or health care center pursuant to an application for life, health or disability insurance.
      “(b) No person, except the protected individual, his legal guardian or a person authorized to consent to health care for such individual, to whom confidential HIV-related information is disclosed may further disclose such information, except as provided in this section and sections 19a-584 and 19a-585.”

       General Statutes § 19a-583 (a) provides in relevant part: “No person who obtains confidential HIV-related information may disclose or be compelled to disclose such information, except to the following . . .
      “(10) Any person allowed access to such information by a court order which is issued in compliance with the following provisions: (A) No court of this st ate shall issue such order unless the court finds a clear and imminent danger to the public health or the health of a person and that the person has demonstrated a compelling need for the test results which cannot be accommodated by other means. In assessing compelling need, the court shall weigh the need for disclosure against the privacy interest of the test subject and the public interest which may be disserved by disclosure which deters future testing or which may lead to discrimination. (B) Pleadings pertaining to disclosure of confidential HIV-related information shall substitute a pseudonym for the true name of the subject of the test. The disclosure to the parties of the subject’s true name shall be communicated confidentially, in documents not filed with the court. (C) Before granting any such order, the court shall provide the individual whose test result is in question with notice and a reasonable opportunity to participate in the proceedings if he is not already a party. (D) Court proceedings as to disclosure of confidential HIV-related information shall be conducted in camera unless the subject of the test agrees to a hearing in open court or unless the court determines that a public hearing is necessary to the public interest and the proper administration of justice. (E) Upon the issuance of an order to disclose test results, the court shall impose appropriate safeguards against unauthorized disclosure, which shall specify the persons who may have access to the information, the purposes for which the information shall be used, and appropriate prohibitions on future disclosure . . .

       General Statutes § 19a-585 provides in relevant part: “Requirements for disclosure of HIV-related information, (a) Whenever confidential HIV-related information is disclosed it shall be accompanied by a statement in writing, whenever possible, which includes the following or substantially similar language: ‘This information has been disclosed to you from records whose confidentiality is protected by state law. State law prohibits you from making any further disclosure of it without the specific written consent of the person to whom it pertains, or as otherwise permitted by said law. A general authorization for the release of medical or other information is NOT sufficient for this purpose.’ An oral disclosure shall be accompanied or followed by such a notice within ten days.
      “(b) Except for disclosures made to a federal, state, or local health officer when such disclosure is mandated or authorized by federal or state law or to persons reviewing information or records in the ordinary course of ensuring that a health facility is in compliance with applicable quality of care standards or any other authorized program evaluation, program monitoring or service review, a notation of all such disclosures shall be placed in the medical record or with any record of an HIV-related test result of a protected individual, who shall be informed of such disclosures upon request; provided for disclosures made to governmental agents requiring information necessary for payments to be made on behalf of patients or clients pursuant to contract or law, such notation need only be entered at the time the disclosure is first made.”

       The legislature’s concern for discrimination against people with AIDS is well founded. In a 1993 poll, 35.7 percent of the respondents said they were “afraid” of people with AIDS, 27.7 percent were “disgusted” and 27.1 percent were “angry.” G. Herek & X Capitanio, “Public Reactions to AIDS in the United States: A Second Decade of Stigma,” 83 Am. J. Pub. Health 574, 575 (1993). More than one in five Americans (20.4 percent) would avoid an office job if they had to work with a man with AIDS, and nearly one half (47.1 percent) would avoid a neighborhood grocery store if the owner had AIDS. Id. Feelings of hostility translate into acts of discrimination against people infected with HIV. In lawsuits across the country, people have alleged discrimination based on HIV status in housing, employment and access to public accommodations, as well as in education and health care. See L. Gostin, Jr., “A National Review of Court and Human Rights Commission Decisions, Part II: Discrimination," 263 J. Am. Med. Assn. 2086 (1990) (listing nearly 150 lawsuits and other complaints stemming from such alleged discrimination).

       Our interpretation of wilful is consistent with the construction of similar language contained in other statutes whose wilful violation has been held to involve nothing more than the knowing commission of the acts they proscribe, without regard to recklessness, intent to injure or other improper motive. It is noteworthy that some of these statutes, like the AIDS statute, were designed to promote the public health and safety. See, e.g., A. Schonbek & Co. v. Donovan, 646 F.2d 799, 800 (2d Cir. 1981) (wilful violation of rules promulgated under Occupational Safety and Health Act requires intentional disregard of, or plain indifference to, legal requirement); Duffy v. Poulos Bros. Construction Co., 225 Ill. App. 3d 38, 46, 587 N.E.2d 1038 (1991) (wilful violation of Illinois Structural Work Act where defendant knew or should have known of dangerous condition).

       Whether Marselle was indeed acting within the scope of her employment and whether Flores knew that Marselle’s disclosure “reasonably could” allow those in receipt of the information to identify the plaintiff are questions that must be determined by a fact finder.