Opinion
No. CV06-4020637S
June 6, 2007
MEMORANDUM OF DECISION RE PLAINTIFF'S MOTION FOR TEMPORARY INJUNCTION
The plaintiff Branford Paint Center, which is owned by Joyce and Daniel Peterson, has been in operation for the past 32 years. For much of that time, the plaintiff has distributed Pittsburgh Paints, which are products produced by the defendant PPG Architectural Finishes, Inc. In 2000, the plaintiff signed a written distributorship agreement, which the defendant later executed in 2001. That agreement included, inter alia, a provision that allowed either party to terminate the agreement at any time without cause effective 90 days after written notice is mailed to the other party. The agreement also included a paragraph stating that the plaintiff "recognizes and agrees that it distributes the Products as an independent contractor; it is not a franchisee, employee, or agent of PPG and agrees that it will not represent its relationship as otherwise." The agreement further provided that any lawsuits that might arise out of the agreement "shall be brought exclusively in a court of competent jurisdiction in the Commonwealth of Pennsylvania, Allegheny County."
The plaintiff, through its counsel, protested the defendants' efforts to terminate the agreement. The defendant thereupon brought an action in the United States District Court for the western district of Pennsylvania. That court is located in Pittsburgh, which in turn is part of Allegheny County, consistent with the agreement's venue requirements. That action sought a declaration that PPG's notice to terminate effectively ended the dealer agreement; that Pennsylvania law governed the resolution of the parties' dispute; and that the plaintiff was not entitled to any of the protections provided by the Connecticut Franchise Act. Although there is no dispute that the plaintiff was properly served, was aware of the Pennsylvania action and of PPG's intent to seek a judgment, the plaintiff did not file an appearance and allowed a default judgment to enter against it. The court, Hon. David Stewart Cercone, thereupon granted PPG's request for a declaratory judgment and held:
(1) PPG's notice dated December 5, 2005 effectively terminated the March 29, 2000 agreement between PPG and defendant, Branford Paint Center, Inc. ("Branford"), which appointed Branford as a non-exclusive dealer authorize [sic] to sell PPG's products;
(2) Pursuant to the March 29, 2000 agreement between the parties, Pennsylvania law governs the terms of the agreement; and
(3) The Connecticut Franchise Act does not apply to the relationship between PPG and Branford.
Judgment entered accordingly on March 2, 2007.
The plaintiff thereupon filed the instant lawsuit, contending that PPG's actions terminating the agreement were unlawful in that they violated the Connecticut Franchise Act (Count I); violated the Connecticut Unfair Trade Practices Act (Count 2); breached the contract between the parties (Count 3); and constituted a basis for equitable relief grounded on the claim that it reasonably relied upon a continued supply of paint from PPG and that PPG discontinued that supply "without notice" (Count 4).
PPG removed the case to the United States District Court for the district of Connecticut and then sought to have it transferred to the District Court for the Western District of Pennsylvania. The plaintiff, however, stipulated to an amount in controversy less than $75,000, the threshold for diversity litigation in the Federal Court. The matter was remanded to this court, rendering PPG's transfer request moot.
At trial, the plaintiff presented testimony from Joyce and Daniel Peterson, husband and wife, who have owned Branford Paint for 32 years. They described at some length the history of their relationship with the defendant and the events leading up to the purported termination notice. Although they carry several lines of paint, it is clear that they valued their relationship with Pittsburgh Paints promoted. their products aggressively through a wide variety of advertising techniques, and viewed Pittsburgh Paints as one of their most significant product lines, if not the most significant. The Petersons contend that they have been irreparably harmed by PPG's actions and that they have no adequate remedy at law.
This court concludes that it need not reach the issues of irreparable harm or the lack of an adequate remedy at law. Indeed, the court concludes that it is not permitted to reach these issues because the plaintiff's right, or the lack of same, to the relief it seeks has already been determined by the Federal District Court in Pennsylvania, and that decision has preclusive effect on the plaintiff's efforts to relitigate those questions in this court.
"Claim preclusion, sometimes referred to as res judicata, and issue preclusion, sometimes referred to as collateral estoppel, are first cousins. Both legal doctrines promote judicial economy by preventing relitigation of issues or claims previously resolved . . . The concepts of issue preclusion and claim preclusion are simply related ideas on a continuum, differentiated, perhaps by their breadth, and express no more than the fundamental principle that once a matter has been fully and fairly litigated, and finally decided, it comes to rest . . ." The subtle difference between claim preclusion and issue preclusion has been so described: [C]laim preclusion prevents a litigant from reasserting a claim that has already been decided on the merits . . . [I]ssue preclusion, prevents a party from relitigating an issue that has been determined in a prior suit . . . Under claim preclusion analysis, a claim — that is, a cause of action — includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose . . . Moreover, claim preclusion prevents the pursuit of any claims relating to the cause of action which were actually made or might have been made." (Citations omitted; internal quotation marks omitted.) Lasalla v. Doctor's Associates, Inc., 278 Conn. 578, 589-90, 898 A.2d 803 (2006).
"The doctrine of res judicata holds that an existing final judgment rendered upon the merits without fraud or collusion, by a court of competent jurisdiction, is conclusive of causes of action and of facts or issues thereby litigated as to the parties and their privies in all other actions in the same or any other judicial tribunal of concurrent jurisdiction . . . If the same cause of action is again sued on, the judgment is a bar with respect to any claims relating to the cause of action which were actually made or which might have been made." (Citations omitted.) McCue v. Birmingham, 88 Conn.App. 630, 635, 870 A.2d 1126 (2005). In McCue, the trial court concluded that the same claim at issue in the second action was also at issue in the first action. Id., 636. The judgment in the first action was rendered on the merits, and the parties had an opportunity fully and fairly to litigate the same claims and issues in the first action that the plaintiffs were attempting to litigate in this second action. Id., 636. In affirming the trial court's granting of the defendant's motion for summary judgment based on res judicata, the Appellate Court held that: "[E]ndless litigation leads to confusion or chaos . . . A cause of action is that single group of facts that is claimed to have brought about an unlawful injury to the plaintiff and that entitles the plaintiff to relief . . . Even though a single group of facts may give rise to rights to several different kinds of relief, it is still a single cause of action." Id., 636.
Here, three issues critical to the plaintiff's ultimate claim in this case . . . whether Pennsylvania law applies, whether the Connecticut Franchise Act applies, and whether the defendant's termination notice effectively ended the agreement between the parties . . . were all determined conclusively and adversely to the plaintiff in the United States District Court for the western district of Pennsylvania. It is true that the plaintiff here (the defendant in the Pennsylvania case) did not participate in the litigation, but it is also clear that it was properly served, knew about the proceeding and its opportunity to participate, specifically elected not to appear in that case despite being advised by PPG of its intent to move forward to seek the entry of a judgment, and permitted judgment to enter against it by default. Under these circumstances, in which Branford Paint had "an opportunity fully and fairly to litigate the same claims and issues in the first action" but elected not to do so, PPG is entitled to rely on the Pennsylvania court's resolution of those issues. "We agree with the settled law in the federal system and in almost every state: a judgment of a court having jurisdiction of the parties and of the subject matter operates as res judicata in the absence of fraud or collusion even if obtained by default, and is just as conclusive an adjudication between the parties of whatever is essential to support the judgment as when rendered after answer and complete trial." (Citations omitted.) Slattery v. Maykut, 176 Conn. 147, 157, 405 A.2d 76 (1978). There has been no claim here of fraud or collusion, and because the issues decided in the Pennsylvania case are central to plaintiff's claims in this case, PPG is also entitled to preclude the plaintiff from attempting to relitigate those issues and thus pursue its principal claims in this litigation. See, also, Thomas v. Connecticut Linen, 1995 Conn. Super. LEXIS 1320 at 18-19.
Thus, even though the plaintiff did not contest PPG's allegations in the Pennsylvania litigation, the issues critical to the outcome of its claims in this case were actually litigated and necessarily determined by the Pennsylvania court. "An issue is actually litigated if it is properly raised in the pleadings or otherwise, submitted for determination, and in fact determined . . . An issue is necessarily determined if in the absence of a determination of the issue, the judgment could not have been validly rendered . . . If an issue has been determined, but the judgment is not dependent upon the determination of th[at] issue, the parties may relitigate the issue in a subsequent action." Cumberland Farms, Inc. v. Groton, 262 Conn. 45, 58 n. 17, 808 A.2d. 1107 (2002).
Because the questions of whether PPG's "termination letter" effectively terminated the agreement between it and the plaintiff, whether Pennsylvania law governed the agreement between the parties, and whether the Connecticut Franchise Act applied to the relationship between the parties, have all already been determined adversely to the plaintiff, the plaintiff is precluded from relitigating those issues here. Based on the Pennsylvania court's determination of those issues, this court therefore concludes that the plaintiff has not established that it is likely to prevail at trial or that it has a clear right to the relief it seeks.
For these reasons, the application for a temporary injunction is denied.