Week of August 5, 2019
Welcome to our Supreme and Appellate Court summaries webpage. For the past 10 years, Edward McCreery has summarized hundreds of Connecticut appellate court decisions which highlighted important issues and developments in Connecticut law and provided practical pointers to litigants. Upon joining Pullman & Comley earlier this year, Ed asked me to take on the role of writing brief summaries of recent rulings in civil litigation decisions and condense often long and confusing decisions down to their basic elements. Pullman & Comley’s Appellate Practice Group, of which I am a member, includes experienced appellate advocates in almost every area of the law. Should you have a need to consult about a potential appeal, please email me at firstname.lastname@example.org or Ed McCreery at email@example.com. I hope you find these summaries helpful. – Daniel P. Scholfield
AC 40855 Stone v. Coast Swappers, LLC (entitlement to attorney’s fees awarded under CUTPA)
The Appellate Court holds that there is no general presumption of an entitlement to attorney’s fees under CUTPA, even where a trial court has found a CUTPA violation to be established. The case concerned a somewhat convoluted fact pattern, in which the plaintiff loaned money to his son-in-law, secured by a promissory note, so that his son-in-law could have the engine of his Mitsubishi Lancer Evolution modified by the defendant. The defendant accepted payment and had the engine modified by a third-party, only to determine thereafter that it could not put the modified engine back into the car without additional parts and labor above what had already been paid for. The son-in-law decided not to pay for the additional parts, and also not to repay his father-in-law. To top it all off, he also divorced the plaintiff’s daughter. The plaintiff, apparently disagreeing with all of that, obtained a judgment against his former son-in-law for the amount of the promissory note (plus interest), and used it to secure a lien on the Mitsubishi Lancer, which at the time was still sitting at the defendant’s shop. A short while later, the defendant filed a Notice of Intent to Sell the vehicle to recover money it claimed it was owed for storage and some other work it had performed. Around the same time, the (now former) son-in-law filed bankruptcy. The defendant received a notice of the bankruptcy, which included notice of the plaintiff’s lien against the vehicle. Plaintiffs’ counsel and defense counsel then spent some time trying to resolve the dispute, but could not do so, leading the defendant to simply sell the car at auction. The Plaintiff, in return, filed a single count lawsuit against the defendant claiming a violation of CUTPA for failing to provide the plaintiff, as a lienholder, with statutory notice required before the car was sold.
The trial court found that the plaintiff established a CUTPA violation and awarded compensatory damages, but nevertheless refused to award punitive damages or attorney’s fees because the plaintiff had not “proven the evil motive or malice necessary” to demonstrate an entitlement to the same. The plaintiff appealed, asserting that there is a presumption in favor of attorney’s fees wherever a CUTPA violation is found. The Appellate Court disagreed, concluding that there is no presumption of attorney’s fees under CUTPA because the decision to award attorney’s fees under CUTPA is discretionary, and that a presumption in favor of attorney’s fees would be contrary to that discretion. The Appellate Court also noted that to the extent the plaintiff raised public policy concerns regarding the manner in which CUTPA was supposed to accomplish its goal of encouraging private attorneys general through the award of attorney’s fees, that was a problem for the Legislature to address.
This decision seems to have future implications for those cases where a party claims a “per se” violation of CUTPA due to one of the various statutes that designate certain acts, whether malicious or not, as automatic CUTPA violations. It would seem that, under this decision, the award of damages under those statutes should now be limited unless the plaintiff can separately prove evil motive or malice in violating the statute.
AC 41276 1916 Post Road Associates, LLC v. Mrs. Green’s of Fairfield, Inc. (Scope of Personal Guarantees)
In this decision, Pullman & Comley’s very own Robert Hinton successfully defended the trial court’s grant of summary judgment in favor of United Natural Foods, Inc. after the trial court agreed that a guarantee United Natural Foods issued as to a commercial lease did not apply to an optional additional lease-term elected by the tenant.
In 1996 the Plaintiff gave a 15-year lease of commercial property to another company known as Sweetwater Associates, Inc. A short while after taking possession, Sweetwater assigned the lease to Natural Retail Group, Inc., at which time United Natural Foods issued a guarantee of payment if Natural Retail Group should fail to pay its rent. Several years later, Natural Retail assigned the lease to a company known as Mrs. Green’s of Fairfield, Inc., and United Natural Foods issued a letter confirming that its prior guarantee would remain in effect. Later still, the shareholders of Mrs. Green’s decided to sell their entire interest in the business to a company known as Planet Organic Health Corp. As part of that sale, United Natural Foods issued a second letter to the plaintiff again confirming that it’s guarantee remained in effect. Around the same time, and in any event shortly before Mrs. Green’s was sold to Planet Organic, Mrs. Green’s exercised an option to extend the lease for an additional 5-year term. Mrs. Green’s then failed to pay rent during the additional 5-year term and was evicted by the plaintiff, but the plaintiff was unable to re-rent the property. This caused the plaintiff to sue United Natural Foods on the guarantee to collect unpaid rent.
The trial court granted summary judgment in favor of United Natural Foods, concluding that the guarantee United Natural Foods issued back when Natural Retail assumed the lease expired at the end of the original 15-year term, and did not apply to the elective 5-year term. On appeal, the plaintiff argued that summary judgment should not have been granted, because there was a dispute of fact concerning whether the two letters United Natural Foods issued to confirm its guarantee either extended the guarantee to the new 5-year term, or constituted new personal guarantees of the same.
The Appellate Court agreed with United Natural Foods’ argument that there was no language in either of the two Letters indicating that the Letters were meant to expand the prior guarantee or create a new one. That was significant, the Court reasoned, because a personal guarantee is distinct from the contract it is related to. As the Court put it, guarantees “are between different parties, they may be executed at different times and by separate instruments, and the nature of the promises and the liability of the promisors different substantially” from the contract the guarantee relates to. Accordingly, in the absence of a statement in either Letter of an intent to guarantee a lease-extension, the guarantee terminated when the original lease expired.
Congratulations to Bob for his great work!