Opinion
No. CV-05-4004400S
October 9, 2007
MEMORANDUM OF DECISION
The plaintiff, Kerry Flaherty, has brought this action by way of a three-count complaint dated February 28, 2005; in the First count claiming a Breach of Contract, in the Second Count an Unjust Enrichment to the defendant and in the Third Count detrimental reliance on the terms of his hire as Fire Chief. The plaintiff is the former Fire Chief of the Borough of Naugatuck.
The plaintiff was hired as a firefighter by the Borough of Naugatuck on October 24, 1976. He was promoted to Lieutenant in 1988 and then to Second Assistant Chief in 1995, all members of the collective bargaining unit, Local 1219, International Association of Firefighters. After his appointment to Chief on February 15, 1996, he was no longer a member of the Union or covered under its Collective Bargaining Agreement. He was covered under the terms of employment by the Personnel Policy Manual for Non-Union Employees. He retired on March 9, 2002.
When he became chief he did not sign any written contract with the Board of Mayor and Burgesses. He claims he was told that he would continue to receive his prior union benefits. He continued to pay into his pension at the same rate as before he became chief and was awarded several of the benefits he had received under the union contract such as education expenses and clothing allowance. In fact, he testified he received all his prior benefits with the exception of how a sick pay was calculated at the time of his retirement to determine what his lump sum payment would be with such benefit also becoming a portion of his pension calculation. He claims that the Borough paid him at the rate of 7 hours a day (up to 90 days) instead of 12 hours per day that he was entitled to under union contract and further failed to calculate his pension pursuant to a 12-hour per day rate.
Extensive briefs have been filed, but this court concludes that the operative facts are virtually agreed upon and the law virtually conclusive.
To better understand his position some additional facts need to be stated. As a firefighter in Naugatuck, the average weekly hours shall not exceed 42 hours per week on an annual basis on the following rotation; 3 days of 9 hours each day, 3 days off, 3 days at 15 hours per day and 3 days off. Those within the bargaining unit are paid at 12 hours per day for sick days. Obviously that was arrived at by averaging the work day of 9 hours and the work day of 15 hours. When the plaintiff became Chief he continued to be eligible for sick days at the rate of 7 hours per day. That was based on the 35-hour work week of a chief based on a five-day work week of 7 hours per day.
It is obvious that having a sick day determined at 12 hours per day provides a higher payoff figure than one calculated at 7 hours per day. It's just as obvious that the Fire Chief's salary is considerably higher than that of a firefighter. When offered the job of Fire Chief these were factors to be considered. There are pluses and minuses to be considered and weighed.
The logic of paying sick pay at the rate of 12 hours per day for employees working equal 9-hour and 15-hour shifts is as obvious as not paying someone on the basis of a 12-hour day who only works a 7-hour day. The Borough continued to provide sick days to the plaintiff and factored that into his retirement, but it did not do it on the illogical basis of a 12-hour day. If that was a deal breaker for the plaintiff when he took the job, he should have either declined the position or contracted with the proper authority for the 12-hour sick day payout. He did neither.
The plaintiff's argument that because he continued to be paid the same union benefits for items such as uniform allowance and educational expenses after becoming chief that he should be paid for sick days at the 12-hour per day simply makes no sense. Uniform and education are fixed expenses that apply to everyone and are not based on hours of work. Sick days have a direct relationship to hours worked per day and that is exactly how the defendant read it and calculated it.
The Borough's practice has been to provide the Fire Chief, as well as other management personnel, the same pension benefits as under the applicable collectively bargained agreement. Those benefits, however, are calculated based on their annualized salary as exempt non-union management personnel working their designated work week. Pursuant to the Borough's charter, the affairs of the Borough shall be managed by the Board of Mayor and Burgesses. The mayor and burgesses "shall have the control and management of all property, both real and personal, belonging to said borough, all the finances thereof, and no debt or liability which may become a charge against said borough shall be created or contracted, except by their authority . . ." The mayor and each burgess has one vote, unless there is a tie in which case the mayor is entitled to cast an additional tie-breaker vote. The charter grants the mayor and burgesses full power and authority to organize and continue a fire department and to appoint the officers of said fire department. The charter also grants the mayor and burgesses full power and authority to prescribe the powers, duties, and compensation of the Borough's fire department employees. The Mayor and Board of Burgesses never made any agreement with the plaintiff for a 12-hour sick day.
Evidence in the case established that Naugatuck has never compensated retiring Fire Chiefs on the basis of 12-hour sick days, but on the basis of a 7-hour day. (See Testimony of Comptroller Wayne McAllister.) Defendant's Exhibit C prepared by the Naugatuck Finance Department, Defendant's Exhibit F, the plaintiff's own memorandum to the accounting department and Defendant's Exhibit I, a Fire Department report for accounting all reflected the identical formula (sick leave bank multiplied by the employees per diem for a seven-hour day.) In light of these exhibits and all the evidence it is clear that Fire Chiefs in Naugatuck are routinely compensated in this manner and the plaintiff knew it.
The issues in this case are controlled by the case of Fennell v. City of Hartford, 238 Conn. 809 (1966). This case was utilized by the court in granting several of the defendant's Motions in Limine.
In Fennell v. City of Hartford, 238 Conn. 809 (1996), the Connecticut Supreme Court held that because public policy requires it, absent actual authority as set out in the Town Charter, contractual promises made by town employees are void as a matter of law. The plaintiffs in Fennell were three City of Hartford retired police officers who sought damages and other relief as a result of the defendants' alleged improper refusal to pay them all retirement and pension benefits to which they believed they were entitled. See Id. at 811. Specifically, the plaintiffs claimed that certain language in the pension manual that lump sum payments for accrued sick time were to be included in the calculations for plaintiffs' pensions — constituted an implied contract, notwithstanding that the Hartford Charter, which addressed the municipal employees' retirement fund, contained no such provision. See Id. at 811, 816-17. It is critical to note that the manual was created and disseminated by the police commission, not the Common Council; however, the Hartford Charter provided that "except as otherwise provided in this charter all powers vested in the City shall be exercised by the court of common council . . ." See Id. at 817. Pursuant to that charter, the power to amend the city's municipal employees' retirement fund rested solely with the city council. Id.
The Supreme Court reviewed general principals regarding municipal charters and municipal corporations and their employees and laid the bedrock foundation for municipal contract law.
It has been well established that a city's charter is the fountainhead of Municipal powers . . . The charter serves as an enabling act, both creating power and prescribing the form in which it must be exercised . . . Agents of a city, including its commissions, have no source of authority beyond the charter . . . In construing a city charter, the rules of statutory construction generally apply . . .
Id. at 813, quoting Stamford Ridgeway Assoc. v. Bd. Of Representatives, 214 Conn. 407, 423 (1990).
The Court went on to state:
The officer, body or board duly authorized must act on behalf of the municipality, otherwise a valid contract cannot be created. Generally the power to make contracts on behalf of the municipality rests in the council or governing body . . . Generally, no officer or board, other than the common council, has power to bind the municipal corporation by contract, unless duly empowered by statute, the charter, or authority conferred by the common council, where the latter may so delegate its powers . . . It follows that agents of a city, including its commissions, have no source of authority beyond the charter. Their powers are measured and limited by the express language in which authority is given or by the implication necessary to enable them to perform some duty cast upon them by express language. All who contract with a municipal corporation are charted with notice of the extent of . . . the powers of municipal officers and agents with whom they contract, and hence it follows that if the . . . agent had in fact no power to bind the municipality, there is no liability on the express contract . . . Thus, every person who deals with a municipal corporation is bound to know the extent of its authority and the limitations of its powers.
(Internal citations omitted; emphasis supplied.) Fennell, 238 Conn. at 813-14; see also Kenney v. Old Saybrook, 237 Conn. 135, 145-46 (1996). The necessity of such a rule is mandated by public policy.
Courts have consistently refused to give effect to government fostered expectations that, had they arisen in the private sector, might well have formed the basis for a contract or an estoppel . . . We believe that absent a clear legislative indication, we are loath to attribute an intent to the legislature to draw down the public fisc in favor of those with no substantive entitlement thereto.
(Internal citations omitted.) Fennell, 238 Conn. at 816; see also John J. Brennan Constr. Corp., Inc. v. Shelton, 187 Conn. 695, 704 (1982) ("A plaintiff is charged as a matter of law with knowledge of mechanisms by which a municipal employee may bind a city to its promises and is thus bound to know the extent of an officials authority and limitations.")
The Fennell Doctrine has been applied equally to breach of implied contract, as indicated in Fennell itself, detrimental reliance, and unjust enrichment cases. See Vollemans v. Town of Wallingford, 2007 Conn.Super. 1645 (Conn.Super.), reargument denied, 2007 Conn.Super. 1785 (Conn.Super.) (applying Fennell to promissory estoppel claim); Biello v. Town of Watertown, 2006 Conn.Super. LEXIS 173 (Conn.Super.) (applying Fennell to unjust enrichment claim). It precludes a finding for the plaintiff in the instant case.
Assuming, arguendo, that plaintiff's claims are not barred by Fennell, his claims still fail because he has failed to prove any of the Three Counts of his Complaint by a preponderance of the evidence. In Count One the fifth paragraph is the heart of his claim. It claims that "Prior to being hired as chief, and during his tenure as chief with the Borough of Naugatuck, the defendant contracted with the plaintiff that he would lose no benefits and would have the same benefits as a union member. He simply hasn't proved that.
In order to prevail on a claim of breach of contract, plaintiff must prove four elements: (a) formation of a contract; (b) performance by a party; (c) breach of the agreement by the opposing party; and (d) damages caused directly by the breach. McCann Real Equities Series XXII, LLC, v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 503 (2006). Plaintiff's claim fails because he did not prove by a preponderance of the evidence that he actually had a contract with the defendants entitling him to be paid 12, versus 7, hours for every day of unused accrued sick time.
It is well settled that, in Connecticut, to form a valid and binding contract, there must be offer, acceptance and consideration:
The rules governing contract formation are well settled. To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties . . . To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties . . . If the minds of the parties have not truly met, no enforceable contract exists . . . An agreement must be definite and certain as to its terms and requirements . . . So long as any essential matters are left open for further consideration the contract is not complete. A contract requires a clear and definite promise. A court may, however, enforce an agreement if the missing terms can be ascertained, either from the express terms or by fair implication. Thus, an agreement, previously unenforceable because of its indefiniteness, may become binding if the promise on one side of the agreement is made definite by its complete or partial performance.
(Internal quotation marks and citations omitted.) Geary v. Wentworth Labs., Inc., 60 Conn.App. 622, 627 (2000); see also Stewart v. Cendant Mobility Serv. Corp., 267 Conn. 96, 104 (2003) (noting that a contract must be supported by consideration to be binding).
Plaintiff offered no evidence that an unambiguous offer was made by someone with authority to make it, that he unequivocally accepted the offer, or there was any "meeting of the minds," or that the "agreement" was supported by consideration. First and foremost, the person making the offer, when acting on behalf of an employer, must have the authority to do so. Under Fennell, the promisor must have had either actual or express authority for the offer to be binding on the defendants and no one had such authority. See City of Bridgeport v. Kasper Group, Inc., 278 Conn. 466, 497 (2006).
The Second Count realleges paragraphs 1 through 9 of the First Count and in substance claims that as a result of only paying the plaintiff for accumulated sick days at 7 hours per day instead of 12 hours per day it has been unjustly enriched. The court disagrees.
Unjust enrichment is an equitable remedy used to compensate a party to a contract when action on the contract is unavailable.
Unjust enrichment applies wherever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract . . . A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another . . . With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard . . . Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy . . . [A] plaintiff seeking recovery for unjust enrichment must prove (1) that the defendants were benefitted, (2) that the defendants unjustly did not pay the plaintiff for benefits, and (3) that the failure of payment was to the plaintiff['s] detriment.
Vertex, Inc. v. City of Waterbury, 278 Conn. 557, 573 (2006).
After becoming chief, the plaintiff was no longer working a 15-hour/9-hour shift (and was instead working a 7-hour shift) the value of his sick bank decreased. Plaintiff clearly recognized this during his tenure as Chief, as was demonstrated by Defendant's Exhibits K, J, H and G. The evidence adduced at trial demonstrates that plaintiff clearly knew of this change in process, and never once objected. First, he saw the exact same formula used for retiring Chief Shepley, and indeed voted to approve that formula. Second, he authorized the 7-hour per day calculation in the October 1999 memo (Defendants' Exhibit G). Third, there is ample evidence that the Chief's staff sent the underlying data about sick leave to the Accounting Department, which in turn generated the documents. The defendants relied on that computation when setting the actuarial assessment of future exposure to the pension fund. Plaintiff said not a word for the entire six-year period of his employment as Chief.
The sick leave was not unjustly withheld from plaintiff, as evidenced by the fact that Mr. Flaherty's payout was nearly identical to that accumulated before he left the union. Further, there is nothing unjust about the process, since Flaherty could have contracted for a change in benefits, filed an internal grievance, or brought this issue to the Burgesses. He took none of these steps.
The Third Count realleges paragraphs one through 13 of the Second Count. His final claim is that in reliance on his contract of hire and the defendant's acquiescence he did not demand payment at twelve hours per day for all sick days at the time of his hire as Fire Chief.
Detrimental reliance or promissory estoppel can only be imposed to ensure justice when a "contract" is made without consideration:
Under the law of contract, a promise is generally not enforceable unless it is supported by consideration . . . [The Connecticut Supreme Court] has recognized, however, the development of liability in contract for action induced by reliance upon a promise, despite the absence of common-law consideration normally required to bind a promisor . . . [U] nder the doctrine of promissory estoppel [a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promise . . . and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise . . . fundamental element of promissory estoppel, therefore, is the existence of a clear and definite promise which a promisor could reasonably have expected to induce reliance.
(Citations omitted; internal quotation marks omitted.) Stewart, 267 Conn. 104. "[A] promisor is not liable to a promisee who has relied on a promise if, judged by an objective standard, he had no reason to expect any reliance at all." D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 213 (1987). Moreover, plaintiff must prove that "the [defendant] [did] or [said] something that is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief; and the [plaintiff], influenced thereby, . . . actually change[d] his position or [did] some act to his injury [that] he otherwise would not have done." Fander v. Commissioner of Revenue Services, 281 Conn. 719, 726 (2007).
In the instant case, plaintiff failed to offer any evidence of an unequivocal promise, or that the plaintiff actually changed his position to his detriment. First, as explained in detail above, the nature of the "promise" was equivocal — there is nothing in the "promise" that states exactly what the terms of the union contract were to which the plaintiff would be entitled as Chief of Police. Certainly no one specifically promised that sick days would accumulate on the basis of 12-hour days. Nor did the plaintiff offer any other evidence that could possibly define the extent of the "promise." Second, plaintiff was actually precluded from offering statements made by Mayor Rado absent foundation comporting with Fennell, but offered no further testimony that any Naugatuck agent made a "clear and definite promise" re sick time calculation or that the promisor would have reasonably expected Flaherty's reliance on the promise.
Third, plaintiff failed to offer any evidence that he "changed his position" based on any representation. The best plaintiff could muster was the weak — and self-serving — statement that it was his "understanding" that he would be paid at 12 hours. Fourth, plaintiff was precluded from offering any speculative evidence that (a) he would have attempted to cash out his sick leave prior to becoming Chief or (b) that Naugatuck would have honored the request.
Defendants are clearly entitled to a verdict in their favor on this count.
CONCLUSION
WHEREFORE, for all those reasons enunciated in this memorandum, Judgment shall enter for the defendants on all counts.