Opinion
No. X10 UWY 05 4010222.
December 8, 2006.
MEMORANDUM OF DECISION
The parties have appeared before the court to argue the status of the above litigation. This court disposed of all of the outstanding counts by summary judgment and by memorandum of decision after trial. As a result of that decision, the plaintiff Thomas Brennan has been ordered dissociated from the partnership Brennan Associates pursuant to Conn. General Statutes § 34-355(5). The plaintiff has appealed that decision. That appeal is pending. The defendants had initially filed a motion to dismiss that appeal claiming there was no final judgment from which to appeal. That motion was withdrawn and therefore is no longer pending.
The defendants argue that this court should proceed to what it refers to as the damages phase of this matter: that the court should enter whatever discovery orders are necessary and schedule and hear the matter as to the buy-out to be paid to the plaintiff pursuant to § 34-362. The defendants point out that the parties have already appraised the plaintiff's interest in the partnership and exchanged appraisals and thus they know what their respective positions are on the value of the plaintiff's interest. The defendants remind the court that the remedy of dissociation is essentially equitable, that equity abhors actions in half, or less, than whole, and that once the court has acted in equity, it must act completely to ensure full justice.
The plaintiff argues that the parties and the court are bound by the statutory mandates of the complete provisions of § 34-362, and, that the parties must comply with the mandates thereof regarding offer, acceptance or rejection and right of the dissociating partner to seek court relief. Specifically the plaintiff points out that the statute provides only the dissociated partner with a right of action for determination by the court of the buyout prices (and set offs, interest and attorney fees). The statute provides that the action must be commenced as follows: "[i]f no agreement for the purchase of a dissociated partner's interest is reached within one hundred twenty days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the dissociated partner the amount the partnership estimates . . ." § 34-362(e). Thereafter, a dissociated partner may maintain an action against the partnership, as long as it is commended within 120 days after the partnership has tendered the above-described payment. Then the court shall determine the buyout price of the plaintiff's interest with setoffs and interest considered. § 34-362(i). The plaintiff argues that this is the only statutory remedy available and therefore the legislature gave no statutory right of action to the defendants.
In response, the defendants argue that the plaintiff is judicially estopped from this argument since his pleadings have invoked the general broad equity power of the court until he perceives it is not in his interest to do so any longer.
There are no cases on point regarding this matter.
At the outset, the court notes that the defendants' pleadings sought the remedy of judicial dissociation. That has been accomplished (subject to the outcome of the appeal of course). The defendants' claim for relief after an order of dissociation was for an order "that the Company cause Brennan's interest in the Company to be purchased for a buyout price determined pursuant to Conn. Gen. Stats. § 34-372.
On the record, all counsel agreed that the statutory citation was a typographical error and that the defendants intended to cite to 34-362.
At the inception of the trial on this matter, in a colloquy on the order of proof and the presentation of evidence, the following was stated on the record.
THE COURT: So taking you each at your words of what would make the most sense, it still would seem that I would defer to tradition and allow the plaintiff to proceed on its count, and the defendants will go from there. The only thing that remains after that, then, is the ancillary issues. MS. CASPER [PLAINTIFF'S ATTORNEY]: I did not address the issue of valuation, Your Honor. Valuation could come into this case in several different ways, depending on what equitable remedies the Court chooses to impose. One argument for keeping valuation in the trial is I believe it then gives the Court more latitude in terms of fashioning the remedies that are appropriate on the various claims and counterclaims. Severing is not the worst idea in the world in that, you know, obviously the testimony of the experts is totally separate from the other trial testimony, but I would leave it to the Court's discretion . (Trial transcript, May 1, 2006, p. 17-18).
THE COURT: . . . some of what we're characterizing as valuation or damages questions are really very discreet. And while I may hear some things here that are relevant to that, I think I can segment that out, and I think that I will. But I would ask your permission, counsel, that anything that I find relevant from the hearing we're going to have now to bring to that issue as I may need it, that I do so, so we don't have to duplicate some evidence. MR. ROONEY: Your Honor, I view it more in the order of segmenting the proof and not —- THE COURT: Right. Mr. Rooney: So I would certainly have no problem with the Court accepting the record on what's called the merits into the hearing in damages. THE COURT: Remedies. Yeah. MR. ROONEY: Sure. MS. CASPER: I would agree, Your Honor. (Ibid, p. 18-19).
The defendants argue that if the court does find that the provisions of § 34-362 apply as argued by the plaintiff, then in the above colloquy and pleadings, the plaintiff has thus submitted the § 34-362 valuation decision to the court. Defendants argue that as a result of the plaintiff's agreements above on the record, the plaintiff is estopped from taking a contrary position at this point. Commentaries on the Revised Uniform Partnership Act (RUPA) do not discuss the issue before the court at any length. Perhaps it was not controversial at the time of drafting. Commentators (as well as the official commentary) indicated that the dissociation provisions that are embodied in § 34-362 (both at to determination of buyout price) and the provisions for `getting there' are applicable to all dissociations, including those occurring pursuant to § 34-355(5).
Weidner and Larson, the Reporters for the RUPA, wrote an article analyzing its provisions, "The Revised Uniform Partnership Act: The Reporters' View," in which they observed, "If negotiations break down, RUPA requires the partnership to pay the estimated amount due to the departing partner, pending final determination of the buyout price . . ." The reporter then detailed the specific 120-day provisions embodied in section 701(e) of RUPA and further stated, "Those provisions, unprecedented in the RUPA, are based upon the dissenters' rights provisions in corporate statutes." 49 Bus. Law 13 (November 1993).
The statute immediately previous, § 34-357 provides that if the partnership is not being dissolved and wound up, then § § 34-362 to 34-366 apply. That comprehensive language does not support the defendant's narrow view that the only portion of § 34-362 to be considered is the first part where the means of calculating the buy out price is stated. Further, in considering the Reporters' views on the purpose of these provisions, it is clear that a dissociated partner was to be protected in the buy out procedure from the control of the remaining partners and partnership.
Therefore, the court must go on to consider whether the plaintiff has acquiesced into an immediate court hearing as to valuation as a result of his representations though counsel to the court.
In discussing the section 701 buyout provisions Ribstein writes, "Although RUPA provides that the partnership "shall cause" the purchase of the interest, and the Comment provides that the "buyout is mandatory" RUPA does not identify this as a nonwaivable provision. Courts could hold that the buyout right is a fundamental aspect of the power to dissociate, or that only termination of liability and authority is fundamental, or that waivers of the right are enforceable subject to good faith interpretation principles." Larry E. Ribstein, " RUPA: not ready for primetime, "49 Bus. Law 45, 64 (November 1993).
Ribstein goes on to note that the buyout provisions of section 701 are the counterpart of the old UPA provisions for a buyout of a dissociated partner after a technical dissolution. Id. at 66. This, of course, is a different stated purpose for the mechanics and substance of the RUPA buy out provisions from that offered by the Reporters.
The defendants would have the court accept that the plaintiff's counsel's statements constitute a waiver. A waiver in this context is strikingly similar to a judicial admission. "For a factual allegation to be held to be a judicial admission, the fact admitted should be one within the speaker's particular knowledge and one about which the speaker is not likely to be mistaken. "A party's testimony should be deemed a judicial admission only as to those facts that are `peculiarly within his own knowledge and as to which he could not be [mistaken . . .'] Pedersen v. Vahidy, 209 Conn. 510, 520, Page 729 552 A.2d 419 (1989)." C. Tait, Connecticut Evidence (3d Ed. 2001) § 8.16.3(b), p. 589. "A conclusive judicial admission, to be binding, must be one of fact and not a conclusion or an expression of opinion. Courts require the statement relied upon as a binding admission to be clear, deliberate and unequivocal." 4 Jones on Evidence (7th Ed. 2000) § 27:33, p. 526 n. 45. That view was put succinctly by the Illinois Appellate Court in Elliot v. Industrial Commission, 303 Ill.App.3d 185, 187, 707 N.E.2d 228 (1999): "Judicial admissions are defined as deliberate, clear, unequivocal statements by a party about a concrete fact within that party's knowledge." Mamudvoski v. Bic Corp., 78 Conn.App. 715, 728-29, 829 A.2d 47 (2003).
Certification was granted, 266 Conn. 915, 833 A.2d 467 (2003); subsequently, the appeal was dismissed as improvidently granted, 271 Conn. 297; 857 A.2d 328 (2004).
Similarly, for a waiver of statutorily provided rights of process, the waiver must be deliberate, clear and unequivocal. "Waiver consists of the intentional abandonment or voluntary relinquishment of a known right." Statewide Grievance Committee v. Brown, 67 Conn.App. 183, 188, 786 A.2d 1140 (2001), cert. denied, 259 Conn. 919, 791 A.2d 568 (2002)." Suffield Development v. National Loan In., 97 Conn.App. 541, 565, 905 A.2d 1214 (2006).
It is not unlike the waiver of a jury trial which must be knowingly, voluntarily and intelligently made. While a jury trial is a fundamental right guaranteed by the Connecticut constitution, it too can be waived. "The right to a jury trial is a right which, like other rights, may be waived but . . . it is a right the waiver of which is not to be inferred without reasonably clear evidence of the intent to waive. See Leahey v. Heasley, 127 Conn. 332, 336, 16 A.2d 609." LR Realty v. Connecticut National Bank, 246 Conn. 1, 10, 715 A.2d 748 (1998).
The statements of counsel to the plaintiff do not refer the statutory provisions of § 34-362 and do not clearly state that plaintiff is waiving a right. The statute provides that the dissociated partner initiates the buyout provisions by a written demand for payment, and subsequently initiates the cause of action (within the time limitations provided) against the partnership if he is dissatisfied with the buyout price (and setoffs), funds tendered by the partnership for the buyout or lack of response to the demand from the partnership, whichever the case may be. There is no way for the court to infer from the statements of plaintiff's counsel on the record that there was a clear and unequivocal waiver of those rights; indeed they are not even referenced by plaintiff's counsel in her comments. There is nothing in her statements that can lead the court to conclude that these rights of the plaintiff herein described were known by him. Instead, they appeared to be a misapprehension of the statutory provis ions; No waiver was expressly stated and none will be inferred by the court.
With this determination, the court concludes that there is no further practical relief the court can grant on the defendants' counterclaim for dissociation. Accordingly, final judgment shall enter in accordance with the court's previous rulings.