Opinion
No. CV-07-5010509-S
December 18, 2009
MEMORANDUM OF DECISION
The plaintiff, General Paving Construction Corp., Inc., commenced this action by service of writ, summons and complaint on A. Niro Landscape Contractors, Inc., d/b/a Niro Landscape Contractors, Inc., Peter Niro and Anthony Niro (defendant), on May 4, 2007. The plaintiff's five-count third revised complaint, dated January 25, 2008, alleges the following facts:
In June 1999, the plaintiff requested to be placed on a "bid list" for providing snow removal services at the Pratt Whitney plants in East Hartford and Wiligoos. Pratt Whitney informed the plaintiff that the successful bidder would also be required to supply landscaping services at those locations. On July 22, 1999, the plaintiff and the defendant entered into a joint-venture or oral partnership agreement (agreement) whereby the plaintiff would perform all snow removal and the defendant would perform all landscaping services at those locations. Under the agreement, the defendant was to submit a bid, which was prepared in part by the plaintiff, on behalf of itself and the plaintiff "when [Pratt Whitney] placed such contracts out to bid." (Complaint, Count one, ¶ 4.) If the bid resulted in a contract, the plaintiff would be paid for its snow removal services and the defendant would receive all revenue for landscaping services performed under the contract.
In November 2006, Pratt Whitney placed a snow removal and landscaping contract out to bid and the defendant submitted a successful bid on behalf of itself and the plaintiff, pursuant to the terms of the agreement. The defendant negotiated two contracts with Pratt Whitney. The first had an express term of November 1, 2007, to May 31, 2010; Niro Affidavit, Ex. 1); and the second had an express term of January 17, 2007, to May 31, 2007. (Niro Affidavit, Ex. 4). In order to perform its portion of the Pratt Whitney contracts, the plaintiff placed over one million dollars of its snow removal equipment on the Pratt Whitney premises and committed the required number of employees to the job.
On January 19, 2007, and thereafter, the defendant usurped performance of the snow removal services portions of the Pratt Whitney contracts, which prevented the plaintiff from performing and receiving payment on the contracts and resulted in a breach of the parties' agreement. Count one alleges breach of contract on this ground.
Count two alleges that the defendant breached its fiduciary duty to the plaintiff pursuant to General Statutes § 34-338 and the common law of partnerships by retaining all of the profits from the Pratt Whitney contract.
Count three alleges that the defendant committed fraud when it represented to the plaintiff that their agreement would apply to the 2006 Pratt Whitney contract in the event that the defendant was the successful bidder, and, therefore, there was no need for the plaintiff to submit its own bid because the defendant was submitting a bid on the plaintiff's behalf. In reliance on these representations, the plaintiff (1) did not submit its own competitive bid, (2) placed over one million dollars of snow removal equipment at the Pratt Whitney locations and committed the required number of employees to the job, and, (3) did not pursue other snow removal contracts during the same period as the Pratt Whitney contract. Subsequently, the defendant did not allow the plaintiff to perform or receive payment for snow removal services. The defendant did not intend to honor its agreement with the plaintiff and it knew or should have known that the plaintiff would rely on the defendant's misrepresentations about the 2006 Pratt Whitney contract, all to the plaintiff's financial detriment.
Count four alleges that the defendant committed statutory theft under General Statutes §§ 52-564 and 53a-119. It alleges that on or about February 2, 2007, the defendant appropriated the assets of the parties' joint venture/partnership, which was formed under their 1999 agreement, with the intention of permanently depriving the plaintiff of these assets and concomitant joint profits.
Count five alleges that the defendant violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110 et seq., when it conducted the acts alleged in the complaint.
The defendant filed a motion for summary judgment on counts three, four and five of the third revised complaint, as well as on the portions of all five counts related to the November 1, 2007, to May 31, 2010 Pratt Whitney contract, on May 22, 2009, along with a supporting memorandum of law. The plaintiff filed a motion in opposition to the motion for summary judgment and supporting memorandum of law on July 28, 2009. The defendant filed a reply brief on September 28, 2009. The plaintiff filed a subsequent reply on October 9, 2009. The parties were heard at short calendar on October 13, 2009.
I STANDARD OF REVIEW
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law . . . The test is whether the party moving for summary judgment would be entitled to a directed verdict on the same facts." (Internal quotation marks omitted.) Allstate Life Ins. Co. v. BFA Ltd. Partnership, 287 Conn. 307, 312, 948 A.2d 318 (2008).
"[S]ummary judgment is ordinarily inappropriate where an individual's intent and state of mind are implicated . . . The summary judgment rule would be rendered sterile, however, if the mere incantation of intent or state of mind would operate as a talisman to defeat an otherwise valid motion." (Internal quotation marks omitted.) Chadha v. Charlotte Hungerford Hospital, 97 Conn.App. 527, 539, 906 A.2d 14 (2006).
II STATUTE OF FRAUDS: COUNTS ONE, TWO, THREE, FOUR AND FIVE
The threshold issue raised by the defendant is whether the joint venture/oral partnership agreement that the parties allegedly entered in 1999 is enforceable under the statute of frauds as to the Pratt Whitney contract that the defendant entered into for the terms of November 1, 2007, to May 31, 2010. The defendant argues that because an oral agreement that cannot be completed within one year is unenforceable under the statute of frauds, the plaintiff's alleged joint venture/oral partnership agreement cannot be enforced as to a three-year contract. The plaintiff argues that an oral partnership agreement of an indefinite character is not within the statute of frauds.
The defendant does not appear to be challenging the enforceability of the Pratt Whitney contract with the express term of January 17, 2007, to May 31, 2007; (Niro Affidavit, Ex. 4.); in the present motion for summary judgment. For example, the defendant's proposed order only seeks judgment on the portions of each of the five counts "relating to the 2007-2010 Contract." (Def's Mot. Sum. J., p. 4.) Therefore, the court only addresses the enforceability of the Pratt Whitney contract with the express term of November 1, 2007, to May 31, 2010.
General Statutes § 52-550 provides in relevant part: "No civil action may be maintained unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged . . . (5) upon any agreement that is not to be performed within one year from the making thereof . . ."
"It is axiomatic that [w]here the time for performance is definitely fixed at more than one year, the contract is, of course, within the statute [of frauds]. Our most apposite precedent, however, comports with the majority view that a contract of indefinite duration is not subject to the one year provision of the statute of frauds. Under the prevailing interpretation, the enforceability of a contract under the one year provision does not turn on the actual course of subsequent events, nor on the expectations of the parties as to the probabilities. Contracts of uncertain duration are simply excluded; the provision covers only those contracts whose performance cannot possibly be completed within a year." (Citations omitted; internal quotation marks omitted.) Jacobs v. Thomas, 26 Conn.App. 305, 311-12, 600 A.2d 1378, cert. denied, 221 Conn. 914 (1991).
The defendant has submitted the following evidence to show that the parties' joint venture/oral partnership agreement is unenforceable under the statute of frauds as to the Pratt Whitney contract that the defendant entered into for the term of November 1, 2007, to May 31, 2010. Roger Tabshey, the plaintiff's vice president, testified in his March 11, 2009 deposition that the joint venture/oral partnership agreement, which was formed in 1999, applied to the three-and-one-half year proposal to performing snow plowing and landscaping services at the Pratt Whitney facilities from 1999 to 2003. According to Tabshey, in "mid-1999," the parties met at the plaintiff's office and "started discussing the pricing that we were going to submit . . . and talked about the partnership . . . [and] how it was going to work; that we were partners in this deal, and . . . [the defendant] would do the landscaping for the contract, and we would do the snow plowing for the contract." (Tabshey Depo., p. 20.) Tabshey further testified that the "scope" of the joint venture/oral partnership was "that [the defendant] was going to do the landscaping portion of that contract, and [the plaintiff was] going to do the snow-plowing portion." (Tabshey Depo, p. 34.) The parties memorialized this agreement through a letter, composed by Tabshey; (Def's Ex. 1); which stated: "In the event that [the defendant's] company is low bidder for the snow plowing contract at [Pratt Whitney] for the 3-1/2-year period commencing October 1, 1999, [the defendant] agree[s] to subcontract the snow plowing portion of the contract to [the plaintiff]. And [the plaintiff] agree[s] to perform snow plowing on [the defendant's] behalf." The defendant successfully bid on this contract, and under their agreement, the plaintiff performed snow removal at the Pratt Whitney locations for those three-and-one-half years. (Tabshey Depo., p. 36.)
The defendant also points to the plaintiff's response to the defendant's first set of interrogatories and requests for production, dated August 23, 2007. The defendant asked the plaintiff to "[i]dentify any and all contracts and agreements" between the plaintiff and the defendant. In response, the plaintiff identified three agreements: "(1) Unintegrated written contract dated July 22, 1999 with an agreed term of three and one half years, wherein the parties each submitted necessary information to complete the bid for a Pratt Whitney snow removal/landscaping contract. (2) Oral agreement to continue joint venture for years 2003 to 2006. (3) Oral agreement to continue joint venture for 2007."
Based on this evidence, the defendant argues that the alleged joint venture/oral partnership agreement falls within the statute of frauds because it was an agreement that could not be performed within one year but was for a particular duration. The agreement was limited in scope to the three and one-half-year period of the Pratt Whitney contract, which lasted from 1999 through 2003. By its plain terms, then, the defendant argues that this agreement did not extend past 2003. Therefore, the parties' continuation of their joint venture/oral partnership agreement after 2003 was not grounded in an enforceable contract because it constituted an unwritten promise to perform services that would require more than one year to complete, including the Pratt Whitney contract for the period of November 1, 2007, to May 31, 2010. On this ground, the defendant argues that the court should enter summary judgment on the portion of each count that are based on the oral agreement to perform snow plowing services in those three years.
To counter this evidence, the plaintiff has submitted the sworn and certified affidavit of Roger Tabshey, which was notarized on July 16, 2009. In his affidavit, Tabshey stated that other than the July 22, 1999 letter, "[t]here has been no other written agreement between parties. Our oral agreement . . . was of an indefinite duration." (Tabshey Affidavit, ¶ 19.) "Our agreement was to continue so long as there were contracts with [Pratt Whitney]." (Tabshey Affidavit, ¶ 15.) The plaintiff argues that because there is a genuine issue of material fact as to whether the joint venture/oral partnership agreement was indefinite, the defendant's motion for summary judgment must be denied as to the statute of fraud's ground.
"Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact . . . [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law." (Internal quotation marks omitted.) Bayer v. Showmotion, Inc., 292 Conn. 381, 409, 973 A.2d 1229 (2008). Thus, where no definitive contract language is controlling, "the intent of the parties to the contract is a question of fact in need of determination by the trier of fact." Richter v. Danbury Hospital, 60 Conn.App. 280, 290, 759 A.2d 106 (2000).
Here, the oral agreement between the parties contains no definite language indicating that the agreement was for a defined term. In fact, the parties have offered conflicting evidence about what they intended the scope of the agreement to be. Notably, Tabshey has not offered a "self-serving statement which contradicts the affiant's own deposition testimony as well as the clear language of the documents." Saccente v. LaFlamme, Superior Court, judicial district of Tolland, Docket No. CV01 00756730 (July 11, 2003, Scholl, J.) ( 35 Conn. L. Rptr. 174). Rather, his affidavit appears to add new information that was not elicited from Tabshey in the course of his deposition and through the request for admissions. Tabshey testified in his deposition that the July 22, 1999 letter memorialized the joint venture/oral partnership agreement between the parties. He testified that this agreement concerned the three and one-half year Pratt Whitney contract for the years 1999 through 2003. The plaintiff also stated in response to the request for admissions that the July 22, 1999 letter pertained to the three and one-half-year Pratt Whitney contract for the years 1999 through 2003. The plaintiff has submitted an affidavit from Tabshey, however, where he testifies that the parties had an oral agreement that would continue as long as there were Pratt Whitney contracts to bid upon. This affidavit raises a genuine issue of material fact that precludes summary judgment for the defendant on the ground of statute of frauds, as a contract for an indefinite period falls within an exception to the statute.
III FRAUD: COUNT THREE
The defendant argues that summary judgment should enter on count three because the plaintiff has not alleged or presented evidence to show that it was injured by the defendant's alleged fraud. The plaintiff argues that it was injured when the defendant deprived it of the benefits of the agreement, including the revenues it would have earned if it were permitted to perform the snow removal services promised to it under the agreement.
"Fraud consists in deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed . . . The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment." (Internal quotation marks omitted.) Weinstein v. Weinstein, 275 Conn. 671, 685, 882 A.2d 53 (2005). "In the ordinary case, [injury] means that the plaintiff must sustain a substantial pecuniary loss." Beik v. Thorsen, 169 Conn. 593, 594, 363 A.2d 1030 (1975).
According to the third revised complaint, the plaintiff's alleged injuries resulted from being unable to independently bid on the Pratt Whitney contract and from not pursuing other third-party snow removal contracts. The defendant argues that any injuries resulting from these causes are speculative and fall short of the "substantial pecuniary loss" needed to support a fraud claim. See Beik v. Thorsen, 169 Conn. 593, 594, 363 A.2d 1030 (1975). Furthermore, the defendant argues that there is no casual connection between its alleged fraudulent conduct and the plaintiff's alleged pecuniary loss. See Glazer v. Dress Barn, Inc., 274 Conn. 33, 78, 873 A.2d 929 (2005).
First, the defendant contends that there is no evidence that the plaintiff would have been able to successfully bid, on its own, for the Pratt Whitney contracts. Therefore, it could not have suffered injury based on the defendant's allegedly fraudulent representations that the parties would bid together on the contracts. The plaintiff's evidence does not rebut this conclusion.
Second, the defendant argues that the evidence contradicts the plaintiff's allegation that it did not pursue other snow removal contracts in reliance on the defendant's representations. The plaintiff's interrogatory responses show that it did bid on at least ten other snow removal projects between August and December 2006. Thus, the defendant's representations did not, in practice, prevent the plaintiff from pursuing other opportunities.
Therefore, the defendant's motion for summary judgment is granted as to count three because there is no casual connection between the defendant's alleged fraudulent conduct and the plaintiff's alleged pecuniary loss.
IV STATUTORY THEFT: COUNT FOUR
The defendant argues that the court should enter summary judgment on count four because the plaintiff has not set forth evidence supporting a claim for statutory theft. In particular, the defendant contends that the plaintiff has presented no evidence showing that the defendant deprived it of any property right. The plaintiff argues that the defendant was acting in the role of a trustee and its act of depriving the plaintiff of the revenues of the snow removal operation constituted statutory theft.
General Statutes § 52-564 provides: "Any person who steals any property of another, or knowingly receives and conceals stolen property, shall pay the owner treble his damages." "Statutory theft under § 52-564 is synonymous with larceny under General Statutes § 53a-119 . . . Pursuant to § 53a-119, [a] person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or [withholds] such property from an owner . . . Conversion can be distinguished from statutory theft as established by § 53a-119 in two ways. First, statutory theft requires an intent to deprive another of his property; second, conversion requires the owner to be harmed by a defendant's conduct. Therefore, statutory theft requires a plaintiff to prove the additional element of intent over and above what he or she must demonstrate to prove conversion." (Internal quotation marks omitted.) Deming v. Nationwide Mutual Ins. Co., 279 Conn. 745, 771, 905 A.2d 623 (2006).
"[A]n action for conversion of funds may not be maintained to satisfy a mere obligation to pay money . . . It must be shown that the money claimed, or its equivalent, at all times belonged to the plaintiff and that the defendant converted it to his own use . . . Thus, [t]he requirement that the money be identified as a specific chattel does not permit as a subject of conversion an indebtedness which may be discharged by the payment of money generally . . . A mere obligation to pay money may not be enforced by a conversion action . . . and an action in tort is inappropriate where the basis of the suit is a contract, either express or implied . . . Consistent with this rule, in our case law sustaining a cause of action wherein money was the subject of the conversion or theft, the plaintiffs in those cases at one time had possession of, or legal title to, the money." (Citations omitted; internal quotation marks omitted.) Deming v. Nationwide Mutual Ins. Co., supra, 279 Conn. 772.
The defendant argues that the plaintiff seeks to recover amounts owed to it on a contract, rather than money that it once possessed but the defendant converted to its own use. This claim essentially sounds in breach of contract. Furthermore, the defendant argues that there is no evidence that the joint venture/partnership had any shared assets. In particular, Tabshey testified in his deposition that the two companies did not pool any assets and did not acquire any assets together. (Tabshey Affidavit, pp. 34-35.) Therefore, the defendant argues that the court should enter summary judgment on the statutory theft count.
The plaintiff argues that the Pratt Whitney contracts were income-producing assets that the defendant was holding in trust on the plaintiff's behalf. In support of this proposition, the plaintiff offers cases where courts have found that partners shared an "implied trust." In Plum Trees Lime Co. v. Keller, 92 Conn. 1, 10, 101 A. 509 (1917), our Supreme Court upheld the enforcement of an implied trust between a lessee and a lessor. In that case, the lessee had built numerous improvements on the land and obtained an insurance policy that was in the lessor's name by mistake. Id., 9. After a fire, the insurer made payment to the lessor, and the lessee sued to recover the proceeds. Id., 5. The court found that the lessor was holding the insurance payments in trust for the lessee, as the lessee intended to protect its own improvements and not the lessor's property. Id., 10. The plaintiff also attempts to analogize its situation to cases about the misappropriation of an estate's assets by an executor; Lintgeris v. Lintgeris, Superior Court, judicial district of Waterbury, Docket No. CV 08 5008846 (June 3, 2009, Sheedy, J.); and of misappropriation of client funds by an attorney. Statewide Grievance Committee v. Ankerman, Superior Court, judicial district of Hartford, Docket No. CV 00 0802379 (August 22, 2001, Peck, J.). None of these cases deal with a partnership dispute. Furthermore, in each case, a party had converted the other party's property to its own use. In the present case, there is no evidence that the defendant has converted any of the plaintiff's assets. Rather, the plaintiff alleges "a mere obligation to pay money." (Internal quotation marks omitted.) Deming v. Nationwide Mutual Ins. Co., supra, 279 Conn. 772. Such an allegation is insufficient to state a claim for statutory theft. Therefore, the defendant's motion for summary judgment on count four is granted.
V CUTPA: COUNT FIVE
Finally, the defendant contends that the plaintiff has failed to provide sufficient evidence to support a claim under CUTPA. The plaintiff argues that the defendant violated CUTPA by breaching its fiduciary duty to its partner or its fellow joint venturer by wrongfully appropriating the Pratt Whitney contracts and the revenues from those contracts.
"[General Statutes §] 42-110b(a) provides that [n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [co]mpetitors or other businesspersons] . . . All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." (Internal quotation marks omitted.) Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 154-55, 881 A.2d 937 (2005).
The plaintiff argues that because there is sufficient evidence for a jury to find that the defendant violated the statutory theft statute, § 52-564, and the larceny statute, § 53a-119, then the plaintiff has established a violation of public policy and demonstrated unscrupulous or oppressive conduct. As the court discussed with regard to count four, the defendant has rebutted the plaintiff's statutory theft and larceny claims by demonstrating that the plaintiff's action sounds in breach of contract rather than conversion. Because the partnership did not hold any of the plaintiff's assets, it cannot be subject to a conversion action. Therefore, count five must also fail because the defendant has demonstrated that there is no genuine issue of material fact as to its liability under CUTPA.
VI CONCLUSION
For the foregoing reasons, the court GRANTS the defendant's motion for summary judgment as to counts three, four and five of the third revised complaint and DENIES summary judgment as to the portions of the remaining counts of this complaint related to the Pratt Whitney contracts that the defendant entered into for the express term of November 1, 2007, to May 31, 2010.