Opinion
No. (X02) CV 00-0169075-S
July 7, 2003
Ruling on Plaintiffs' Posttrial Motions
I. Motion for Interest
In Tang v. Bou-Fakhreddine, 75 Conn. App. 334, 815 A.2d 1276 (2003), the Appellate Court held that prejudgment interest pursuant to General Statutes § 37-3a is appropriate only when "the essence of the action itself involves the wrongful withholding of money due and payable to the plaintiff." Id., 349. The court finds, and the plaintiffs do not dispute, that this action does not qualify for prejudgment interest under this standard. The plaintiffs instead argue that Tang is contrary to Supreme Court authority and is distinguishable on the facts. The Tang decision, however, contains the most recent, and probably the most thorough, discussion of the topic of prejudgment interest under General Statutes § 37-3a. Tang v. Bou-Fakhreddine, supra, 75 Conn. App. 346-50. The earlier Supreme Court cases addressing prejudgment interest, unlike Tang, do not focus on the precise issue here of the type of contract action that qualifies for prejudgment interest. See West Haven Sound Development Corp. v. City of West Haven, 207 Conn. 308, 320-23, 541 A.2d 858 (1988). See also Foley v. Huntington Co., 42 Conn. App. 712, 739-42, 682 A.2d 1026, cert. denied, 239 Conn. 931, 683 A.2d 397 (1996) (discussing Supreme Court cases). Further, although Tang obviously involved different facts, none of these factual differences renders its clear legal holding inapplicable or distinguishable. Accordingly, the court follows Tang and denies the motion for prejudgment interest.
In pertinent part, § 37-3a provides:
Except as provided in Sections 37-3b, 37-3c and 52-192a, interest at the rate of ten per cent a year, and no more, may be recovered and allowed in civil actions or arbitration proceedings under chapter 909, including actions to recover money loaned at a greater rate, as damages for the detention of money after it becomes payable.
The Supreme Court has held that General Statutes § 37-3a authorizes an award of postjudgment interest. See O'Leary v. Industrial Park Corp., 211 Conn. 648, 653, 560 A.2d 968 (1989). There is no authority limiting postjudgment interest to a particular type of contract action, as in the case of prejudgment interest. Indeed, once a judgment for the plaintiff enters in any contract action, the defendant's failure to pay the judgment could be seen as "the detention of money after it becomes payable" so as to satisfy General Statutes § 37-3a.
In this case, the court has found, and reiterates here, that there is no merit to any of the issues that the defendant raised in its various posttrial motions. The court knows of no other arguably valid issue that the defendant might raise on appeal. Because the defendant therefore has no sound basis to detain the money that is now payable to the plaintiffs as a result of the verdict, the court orders the defendant to pay the plaintiff postjudgment interest at the maximum rate of 10% a year. See Sears, Roebuck Co. v. Board of Tax Review, 241 Conn. 749, 765-66, 699 A.2d 81 (1997).
II. Motion for Attorneys Fees and Litigation Expenses
The jury found that the plaintiffs are entitled to punitive damages on count five, the breach of contract count. In Connecticut, common-law punitive damages consist of reasonable attorneys fees plus other nontaxable disbursements reasonably necessary to prosecuting the action. See Berry v. Loiseau, 223 Conn. 786, 832, 614 A.2d 414 (1992).
The plaintiffs also seek to secure their award of attorneys fees and expenses, without increasing it, under counts one and four, the counts arising under the Connecticut Unfair Trade Practices Act ("CUTPA"). General Statutes § 42-110d (g) provides: "In any action brought by a person under this section, the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery." The only criteria suggested by the statute for an award is that the plaintiffs receive a "recovery," which the jury clearly ordered in this case. The cases do not suggest any other criteria, leaving it within the trial court's discretion. See Jacques All Trades Corp. v. Brown, 57 Conn. App. 189, 197, 752 A.2d 1098 (2000). For these reasons, the court anchors its award of attorneys fees and expenses on the two CUTPA counts in addition to the breach of contract count.
Dress Barn argues that the plaintiffs must have a written fee statement and contingency agreement in conformance with Rules 1.5(b) and (c) of the Connecticut Rules of Professional Conduct in order to obtain attorneys fees under CUTPA. Assuming without deciding the validity of this argument, the plaintiffs have produced letters that satisfy the rules in question.
The plaintiffs seek an award of $1,894,780.50 in attorneys fees and $510,029.17 in expenses, for a total of $2,404,809.67 plus interest. Dress Barn objects to numerous components of the plaintiffs' fees and expenses as excessive. The court has carefully reviewed all of these objections and will address the meritorious ones specifically. As for the remainder of the objections, it suffices to say that this case was long and complex, and expenses such as jury consultants, graphics development, scanning of documents to create a data base, and rental of office space in Waterbury, although luxuries to trial lawyers in smaller cases, were reasonable litigation expenses in a case of this nature. While some of the items, such as jury consultation and rental of office space, benefitted only the plaintiffs, other items, such as the graphics displays, the organized presentation of exhibits and documents, and the availability of bench copies benefitted the court and, when applicable, the jury.
The quality of the plaintiffs' legal work was very high. In particular, the court valued the advocacy of Attorney Peter Wang for his ethical propriety, preparation, organization, clarity, tone, persuasiveness, and relative brevity. Without detracting in any way from Mr. Wang's high degree of professionalism, however, the court believes that his request to be reimbursed at rates ranging from $425 to $525 per hour is excessive. The. ability of Mr. Wang to raise his rates approximately $25 per year is one that the market apparently will bear, but the court will not impose this sort of windfall on Dress Barn. The affidavit of Attorney James K. Robertson, an experienced trial lawyer in the Waterbury area, states that his standard hourly rate for complex litigation is $350 per hour. Relying on this affidavit, the court adjusts Mr. Wang's rate to the same rate of $350 per hour. This adjustment, applied through the last bill dated June 17, 2003, results in a deduction from the plaintiffs' request in the amount of $107,985.
Dress Barn asks for a 30% gross percentage reduction on the fees of over $1.5 million billed by Tyler, Cooper Alcorn, LLP, as well as the elimination or reduction of other expenses, to adjust for unreasonable billing. It is true that some of the plaintiffs' other expenses were not reasonably necessary or are at least questionable. The attendance of two persons at depositions, the billing for one expert who did not testify, the billing of the expert economist who did testify in the amount of $217,723.46, and the practice of the opposing attorneys to buy each other lunch and then bill it to their clients all strike the court as expenses that could have been avoided or at least reduced. On the other hand, Dress Barn, as a result of its style of advocacy, is directly responsible for many of what it alleges were excessive hours billed by the plaintiffs' attorneys. In particular, Dress Barn's refusal to accept the logical consequences for its defense of the fact that it intentionally invoked attorney-client privilege throughout the course of discovery, along with the fact that in its posttrial motions it continued to raise this issue and numerous other issues that the court had already thoroughly considered and rejected, resulted in the unnecessary expenditure of time by the plaintiffs' lawyers. Balancing these considerations, the court believes that an across the board reduction of 10%, in the amount of $240,481, is appropriate. See New York State Association for Retarded Children v. Carey, 711 F.2d 1136, 1146 (2d Cir. 1983).
With total deductions of $348,466, the plaintiffs' fee and expense award is $2,056,343.67. The court declines to award interest on this amount in the absence of any binding authority compelling it to do so.
III. Motion for Punitive Damages
While there was sufficient evidence as a matter of law to support the jury's verdict on all counts, including its finding of punitive damages on the breach of contract alleged in count five, the court, sitting as finder of fact on the punitive damages issue in counts one and four alleging violations of CUTPA, finds that defendant Dress Barn did not act out of an intentional desire or plan to cripple the plaintiffs, as they allege, or with reckless indifference to whether it would injure the plaintiffs. See Gargano v. Heyman, 203 Conn. 616, 622, 525 A.2d 1343 (1987). Rather, the court finds that, with respect to the financing issue, Dress Barn acted based on its belief that there was no binding obligation to provide financing unless Dress Barn could have adequate security, which it did not have at the time it withdrew from the financing arrangements. With regard to the acquisition issue, the central fact is that, under the letter of intent, Dress Barn had no obligation to enter into an acquisition agreement or even to negotiate one with the plaintiffs. Thus, while Dress Barn clearly drove a hard bargain in its negotiations, it was legally free to do so. The court views Dress Barn's conduct during the negotiation stage as stemming not from a desire to injure the plaintiffs, or in conscious disregard of the risk of doing so, but rather from a strong desire to maximize its own profits.
It is fair to say that much of what happened in this case stems from a misunderstanding between the parties because the financing agreement was not in writing. Dress Barn deserves its share of the blame for not fulfilling its promise to put the terms of the agreement into written form. Further, the court believes that Elliot Jaffe is legally and morally wrong in his maxim that "if it ain't writ, it ain't said." Nonetheless, the court remains baffled by the fact that, despite the wealth of legal advice received by the plaintiffs and the extraordinary rates charged, at least at present, by the plaintiffs' legal team, the plaintiffs apparently never received any legal advice that the safer course would be to avoid committing resources towards a new deferred billing program until the parties put their proposed $4 million loan agreement into writing. The plaintiffs and their legal advisors should have known that, without a written contract, a dispute could more easily arise concerning the terms of the agreement, with the attendant risks of nonperformance by the defendant and subsequent litigation. Thus, while the plaintiffs may or may not have been legally correct that there was a binding contract between the parties, the plaintiffs, in committing resources without a written agreement, made a somewhat risky and imprudent decision that contributed to their economic downfall. Thus, not all of the fault for what happened can be placed on Dress Barn.
This case is not one in which a large corporation repeatedly defrauded a series of innocent, individual consumers. Rather, the plaintiffs and their officers were sophisticated business people. And Dress Barn's conduct, however characterized, occurred during the course of essentially a single transaction. Based on all these considerations, the jury's verdict of $30 million, coupled with over $2 million in attorneys fees and the postjudgment interest ordered in this ruling, although compensatory in one sense, also represents sufficient punishment for Dress Barn's deeds. The plaintiffs' motion for an additional award of punitive damages under CUTPA is denied.
IV. Conclusion
For the foregoing reasons, the court grants the plaintiffs' motion for postjudgment interest, grants the motion for attorneys fees and expenses in the amount of $2,056,343.67, and denies the remainder of the plaintiffs' motions.
It is so ordered.
Carl J. Schuman
Judge, Superior Court