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April 8, 2013

Welcome to our Supreme and Appellate Court summaries webpage.  On this page, I provide abbreviated summaries of decisions from the Connecticut appellate courts which highlight important issues and developments in Connecticut law, and provide practical practice pointers to litigants.  I have been summarizing these court decisions internally for our firm for more than 10 years, and providing relevant highlights to my municipal and insurance practice clients for almost as long.  It was suggested that a wider audience might appreciate brief summaries of recent rulings that condense often long and confusing decisions down to their basic elements.  These summaries are limited to the civil litigation decisions based on my own particular field of practice, so you will not find distillations of the many criminal and matrimonial law decisions on this page.  I may from time to time add commentary, and may even criticize a decision’s reasoning. Such commentary is solely my opinion . . . and when mistakes of trial counsel are highlighted because they triggered a particular outcome, I will try to be mindful of the adage . . . “There but for the grace of God . . ..”  I hope the reader finds these summaries helpful. – Edward P. McCreery

Posted April 8, 2013

  • AC33458- Dept. of Transportation v. White Oak Corp.

Contractor sued the state for balance owed on two problem-plagued bridge projects, demanding arbitration under C.G.S. § 4-61(b), and seeking over $100 million in wrongful termination damages.  While the arbitration was proceeding, the State sought an injunction claiming that the contractor failed to comply with the requirements of C.G.S. § 4-61.  The Trial Court ruled that the contractor had complied with the notice requirements, holding that it was sufficient to list a single claimed amount for damages without segregating out each element of damage and its cause so long as all he was claiming was wrongful termination damages.

While the arbitration was proceeding, the contractor filed a second claim, this time asserting delay damages in addition to the wrongful termination damages.  That became an issue in ancillary proceedings where the Supreme Court ruled that C.G.S. § 4-61 only allows one claim, and the contractor cannot make a second follow-up claim for delay damage due to the doctrine of sovereign immunity. 

Nonetheless, the arbitration panel proceeded to rule on both damage claims and held that while the contractor had failed to prove that it was wrongfully terminated, it was entitled to $8 million in delay damages.  On a motion to set aside the arbitration award, the second Trial Court held that the prior ruling in which the contractor had given adequate notice of all damages claimed was law of the case, and upheld the arbitration award.

On appeal, the Appellate Court reversed and held that the arbitrators applied an improper legal standard.  The issue is not whether the submission was restricted or unrestricted, but rather, whether the arbitration was within the narrow and limited exception to sovereign immunity set forth in C.G.S. § 4-61. …i.e.,….did the arbitration panel exceed its powers. 

Contrary to the claims of the contractor’s attorney, the arbitrators did not have the right to decide their own jurisdiction.  The suggestion that the State waived sovereign immunity and to have the arbitration panel decide the issue of jurisdiction was belied by the constant and repeated objections by the State’s Attorney that the panel had no jurisdiction to consider delay damages based on the Supreme Court’s prior ruling.  The arbitrators, by concluding they could determine their own jurisdiction, and by ignoring the prior Trial Court’s ruling that the contractor’s original demand was limited to termination damages, exceeded their authority.  Arbitrators cannot conclusively determine their own jurisdiction or authority to make an award not within the scope of the submission of the parties. 

The decision ends by citing the trial court transcript where the trial judge asked counsel, “So what happens if you can’t prove wrongful termination with respect to your other (delay) damage claims?”, ounsel replied, “Then I suppose we will be in a lot of trouble at that point ….”  The Judge then replied, “Yeah . . . then you’re dead in the water.”,  to which the contractor’s attorney replied, “Your Honor, I don’t disagree with your perception.”  The Appellate Court ended its decision by stating: “We concur” with that exchange.  Ha ha.

  •   AC24387- Little Mountains Enterprises, Inc. v. Groom

Defendant agreed to sell “two building lots to the buyer.  In representing that they were two building lots, the defendant had relied upon the opinion of the town’s ZEO.  After the buyer bought the property, the town refused to issue permits claiming a subdivision application would be required.  Without telling the defendant seller, the buyer claims it spent $250,000 thereafter obtaining subdivision approval.  The buyer-plaintiff then turned around and sued the defendants, claiming breach of contract and negligent / innocent misrepresentation.  The trial court found a breach of contract for failure to convey two approved building lots.  But for failing to notify the defendants, and not giving them an opportunity to fix the problem for less cost, the Trial Court only awarded $77,000 in damages.  The plaintiff appealed, claiming the cost to cure the problem was the proper measure of damages.

The Appellate Court held that while not necessarily all costs to cure are recoverable as damages, liability for damages to put the buyer in the same condition they would have been is appropriate even in a case of innocent misrepresentation as occurred here.  But when the cost to repair (or put someone in the same position) grossly exceeds the diminution of value, in totally innocent situations, the proper test of damages should be the diminution of value.

Here, the plaintiff presented no evidence as to the difference in value of the premises as sold and as warranted, and without that evidence, the Court could not determine whether the plaintiff’s proposed damage claim amounted to economic waste.  Lacking such evidence, the Court picked a number out of its own hat, as if the plaintiff sought to rescind the contract.  Plaintiff had not elected to rescind the contract.  Rescission and restitution are alternate damages.  It is the plaintiff’s choice which remedy to pursue.  There is no authority for the Trial Court to force the non-breaching party to choose rescission.  The matter was remanded for further proceedings on damages.  In a footnote, the Court noted that the burden is on the plaintiff to present evidence that their damages are reasonable, implying that the burden would also be upon the plaintiff to prove that their claimed damages do not grossly exceed the diminution of fair market value.  If I were the defendants, however, I would play it safe and disclose an expert on that latter issue anyway.

The plaintiff and the defendant involved in a long-term relationship, but not married, bought property as joint tenants with rights of survivorship, with a handwritten partnership agreement to split the property in a 55% - 45% in the event of a sale.  Rather than a sale, the defendant argued that the Trial Court should have ordered the defendant to buy out the plaintiff.  The Trial Court indicated that it could not do that unless one of the parties held a minimal interest.  On appeal, the Court noted that a party has an absolute right to a partition.  No person can be compelled to remain the owner with another that they do not want to be bound with.  When a physical partition is not feasible, a sale shall be ordered.  Normally, joint tenants can only be dispossessed by physical partition of the land or by partition in sale.  A Court may order a buyout of one owner by the other only when the former has a minimal interest in the property.  That was not the case here with substantial joint tenancy interests.  See: C.G.S. § 52-500(a).

 

The facts and holdings of any case may be redacted, paraphrased or condensed for ease of reading.  No summary can be an exact rendering of any decision, however, so interested readers are referred to the full decisions.  The docket number of each case is a hyperlink to the Connecticut Judicial Department online slip opinion.  ©2013 Pullman & Comley, LLC. All Rights Reserved.

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