Opinion
LLICV156012328S
09-03-2019
Litchfield County Auctions, Inc. v. John Brideau et al.
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Shaban, Dan, J.
MEMORANDUM OF DECISION
Shaban, J.
I
PROCEDURAL HISTORY AND FACTS
A
Procedural History
The plaintiff, Litchfield County Auctions, Inc. (LCA), has brought this action through its second amended complaint (#147) relative to its purchase of sixteen paintings known collectively as the "Savage Collection" whose ownership and possession was subsequently challenged by several parties. Those paintings remain in the custody of the plaintiff who now seeks a declaratory judgment as to the ownership rights to the paintings as well as other claims for relief amongst various defendants based on allegations of fraud, unjust enrichment, breaches of oral and written warranties, breach of contract and violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. A revised amended cross claim and counterclaim (#164) has been brought by the defendants Walter T. Crawford a/k/a Ted Crawford (Ted Crawford) and Julianna Crawford (collectively, the Crawfords) who also are also requesting a declaratory judgment in addition to alleging unjust enrichment, CUTPA violations, conversion and civil theft against various codefendants.
More specifically, LCA pleaded eight counts with the first count seeking a declaratory judgment as to all parties; John Brideau (Brideau), the Crawfords, Howard Godel (Godel), Godel & Company (Godel & Co.), Philip Bambino (Bambino), Nicholas Palma (Palma) and Steven Francia (Francia). The second count alleges fraud as to Godel, Godel & Co., Bambino, Palma and Francia. The third count sets forth a claim of unjust enrichment against Godel and Godel & Co. The fourth count alleges a breach of written warranty as to Palma. The fifth count alleges misrepresentations on the part of Bambino, Palma, and Francia that constitute a breach of oral warranty. The sixth count, which alleges breach of contract, and the seventh count, unjust enrichment, are directed at the same three defendants. The eighth count alleges a violation of CUTPA as to Godel, Godel & Co., Bambino, Palma and Francia.
The Crawfords pleaded five counts in their counterclaim and cross claims. The first count seeks a declaratory judgment against all parties. Counts two through five are addressed to Godel, Godel & Co., Bambino, Palma and Francia. The second count alleges unjust enrichment, the third count a violation of CUTPA, the fourth count conversion and the fifth count civil theft.
Godel and Godel & Co. collectively filed multiple special defenses to both LCA’s counts and those brought by the Crawfords including, but not limited to, lack of subject matter jurisdiction, unclean hands, failure to mitigate damages, equitable estoppel, and a failure to state a claim upon which relief could be granted.
Bambino, Palma and Francia were all defaulted for failure to plead by the Crawfords on February 5, 2019, which was the first day of trial. See orders #202.10, 203.10, 204.10.
The matter was tried to the court on February 5 and 6, 2019, and March 26 and 27, 2019. Thereafter, on May 17, 2019, LCA, the Crawfords and Godel and Godel & Co. filed post-hearing memoranda as directed by the court.
B
Facts
From the credible evidence presented at trial, the court finds the following facts. Eugene Savage (Savage) is the artist who produced the paintings that are at issue. These paintings, among others made by Savage, were inherited by Dorothy Ann Crawford upon Savage’s death in the late 1970s. Dorothy Ann Crawford was Savage’s sister and Ted Crawford’s mother. The paintings were gifted to the Crawfords prior to 1999 by Dorothy Ann Crawford. Pl. Exs. 6, 67. The sixteen paintings at issue are collectively known as the Savage Collection. Each individual painting is referenced by title and other identifier as follows:
1. Elow Pali, Hawaii Gavel No.: 3742286
2. View of Valley Gavel No.: 3742296
3. Waihia Bay Hawaii Gavel No.: 3742312
4. Near Holuala, Hawaii Gavel No.: 3742335
5. Kaianlio Hawaii Gavel No.: 3742345
6. Allegorical Scene with Figures Gavel No.: 3742323
7. Kapaa Hawaii Gavel No.: 3742340
8. Palm Trees Hawaii Gavel No.: 3742332
9. Hawaiian Landscape with Small Nude Gavel No: 3742301
10. Boulders in Clearing Gavel No.: 3742307
11. The Bathers Gavel No.: 3742328
12. Striding Nude Gavel No.: 3742349
13. Hawaiian Mountains & Sky Gavel No.: 3742291
14. Nude with Lei in Stream Gavel No.: 3742276
15. Nude Dancers in Landscape Gavel No.: 3742281
16. Waihia Bay Study Gavel No.: 3742318
Def. Ex. X; Pl. Exs. 41, 67.
During their ownership, the Crawfords, who live in Woodbury, Connecticut, sold various pieces of art they had inherited through art dealers and gave away others as gifts. Approximately six times from 2005 to 2009, the Crawfords consigned certain pieces of art to Brideau to sell on their behalf. Most of the pieces they owned did not have any documentation establishing ownership as much of the paperwork had been lost in a house fire years before. Though the testimony of Julianna Crawford was sometimes a bit inconsistent, the court finds credible her statements that the sixteen paintings listed above were at one point or another during this period given to Brideau to sell on behalf of the Crawfords. For example, they entered into an agreement with Brideau dated July 10, 2009, to have various pieces of art sold through him on their behalf. Pl. Exs. 9, 66. A number of the items listed in that agreement were from the Savage Collection.
The Crawfords specifically claim ownership of items 6, 9, 10, 11, 12, 14, 15 and 16 as referenced in Pl. Ex. 67. These paintings are also referenced in a January 31, 2015 letter to LCA which had a post-dated attachment dated February 1, 2015. Pl. Ex. 41. All but one of these paintings, the "Striding Nude" (#12), are referenced in the July 10, 2009 agreement between the Crawfords and Brideau. Pl. Exs. 9, 66. The court finds from the credible testimony of Julianna Crawford that the "Striding Nude" painting, though not referenced on the agreement, was also intended to be sold through Brideau at some point.
At some point following the submission of the sixteen paintings to Brideau, the Crawfords individually sold the paintings numbered 1 through 5, 7 and 8 to Brideau. Pl. Exs. 7, 41. The Crawfords continued to retain ownership of paintings numbered 6 and 9 through 16. Id. Several years then passed without any information being exchanged between the parties about the status of the paintings. It was not until late January 2015 that the Crawfords were alerted by Brideau that he had seen all sixteen items being offered by LCA both through an on-line auction and physical auction. Brideau explained to the Crawfords that he did not know how LCA had come into possession of the paintings and that he had advised, in person, Weston Thorn, who was the founder and co-owner of LCA, that LCA did not have any authority from him or the Crawfords to possess or auction the paintings and that they should be returned. After viewing the paintings online to confirm that these were the ones they had long ago given to Brideau, the Crawfords also called LCA’s president, Nick Thorn, and advised him that the Crawfords owned the paintings and wanted them returned to them. LCA then brought this action to clear title.
Julianna Crawford also testified that a few of the paintings acquired by Brideau may have been purchased jointly with another individual, Steve Motyka (Motyka). However, the testimony and overall evidence was vague as to which specific paintings may been involved and what degree of interest Motyka may have had in them. The potential interest of Motyka and its impact on the court’s ruling will be addressed below. See footnote 24 of this opinion. Though Julianna Crawford testified from her recollection that paintings numbered 1 through 8 were sold to Brideau and that the Crawfords retained items 9 through 16, a review of the documents submitted into evidence reflects their claim of ownership to be that as set forth in footnote 1 of this opinion. While finding her testimony credible and to the best of her recollection, the court finds the documentary evidence more reliable and hence has adopted that as the basis of the ownership claims of both the Crawfords as well as Brideau.
To say the path which the paintings took to come into LCA’s possession was through a complete lack of diligence by multiple parties, conflicting self-interests, questionable business practices and equally questionable personal choices and conduct would not be enough to fully characterize what transpired. Simply put, this is a tortured mess that even the best of laws are ill-equipped to clean up. By comparison, this case would make a Jackson Pollack painting look like a stellar example of linear geometry. To try to figure out this picture, the court begins by returning to the purported consignment of the paintings to Brideau by the Crawfords. Brideau’s efforts to sell the Savage Collection were unsuccessful for quite a period of time. As noted above, Brideau eventually purchased from the Crawfords seven of the paintings. In marketing the paintings, he offered all sixteen as a package for sale or further consignment. Ultimately, he elected to seek the assistance of John Lameray (Lameray), an individual who had bought and sold artwork during his lifetime. There was no evidence of a consignment agreement between them either written or oral. Sometime in November 2013, after having taken possession of the paintings from Brideau, Lameray brought them to Godel with whom he had occasionally done business in the past. Pl. Ex. 63R, pp. 19-22. Godel was the president of Godel & Co., which was located in New York City and was engaged in the business of buying and selling artwork. Although organized under New York law and located in Manhattan, the company does business in all fifty states. It specifically states on its website that the business has relationships with customers and art galleries in Connecticut. Godel himself testified that Godel & Co. does business in Connecticut and had records of doing so on a regular basis from 2006 well into 2016. Pl. Ex. 63R, pp. 10, 85.
Although Godel had a prior history of doing business with Lameray, by November 2013, he had become wary of him. He described Lameray and his brother, Damien Lameray, as "drug addicts who never had any money." In July or August 2012, Lameray took a painting by Frank Anderson (Anderson painting) from Godel & Co. as part of a business transaction. The painting was valued between $45,000 and $55,000, but Lameray never paid for it. Because of this, Godel had developed concerns about Lameray’s reliability and credibility. Id., pp. 37, 59, 114-15. Despite these concerns, at the time Godel took possession of the Savage Collection, he believed that they were owned by Lameray. Also, while it was Godel & Co.’s normal practice to receive proof of ownership and execute a consignment agreement, Godel did neither. Although Godel gave conflicting testimony as to whether there was a consignment agreement with Lameray, the court finds that Godel & Co., through Godel, accepted the Savage Collection on consignment.
During the trial there were some references to Damien Lameray as John Lameray’s son. The bulk of the testimony referred to him as his brother.
Godel gave differing answers as to the value of the Anderson painting between his deposition testimony and his trial court testimony, variously valuing it at $45,000, $50,000 and $55,000. E.g., Pl. Ex. 63R, pp. 37, 112.
At his deposition, Godel testified as follows:
Q: And when Mr. Lameray brought the paintings to you for consignment as you believed at the time, was there a consignment agreement?
A: Normally, there would have been. I assumed we have it somewhere in the documents.Pl. Ex. 63R, pp. 19-20. He further testified:
Q: Did you ask Mr. Lameray for any of that kind of documentation [proof of ownership].
A: No, I trusted him at the time.
Q: You trusted him at the time that you took the paintings on consignment ?
A: Correct . I would not have bothered to take them if there were issues.(Emphasis added.) Id., p. 59. Also, during his trial testimony, Godel stated he eventually returned the Savage collection to Lameray because he normally gave [unsold] paintings back to the person who had consigned them to the company. The transfer of the paintings is discussed further below.
Sometime between two to three months after receiving the Savage Collection on consignment, Godel received a call from Brideau who advised him that both he and the Crawfords had an ownership interest in the Savage Collection. Id., pp. 15, 19, 51. Despite being provided with this information, Godel made no effort to inquire further of either Brideau or the Crawfords as to their claim of ownership. Instead, he continued to hold on to the collection on the basis that they would be considered as collateral for the debt owed to him by Lameray for the Anderson painting. Godel acknowledged in both his deposition and trial testimony, however, that he did not know if he had the right to hold onto them and that he had not asked Lameray for any proof of ownership. Id., p. 60.
After having been made aware of the ownership claim by Brideau and the Crawfords, Godel was approached by Bambino who was not an art dealer, but had expressed an interest in buying the collection. Bambino had been told by Lameray in late 2013 that he could purchase some artwork for $25,000 from Godel and that he could then resell it and make some money. Though interested, Bambino was without the funds to purchase the paintings. As a result, he spoke to Palma and Francia over a period of time about possibly purchasing the Savage Collection so they could turn around and sell it for a profit. Neither Palma nor Francia were involved in the business of buying or selling artwork. Bambino eventually convinced Palma and Francia to let him borrow $15,000 and $10,000, respectively, for the purchase of the collection. The three of them orally agreed that any profit from the resale of the collection would be divided equally among them. Thus, Bambino, Palma and Francia agreed to enter into, and did enter into, a joint venture with the sole purpose of purchasing the Savage Collection and reselling it. Once the agreement was reached, Bambino contacted Lameray who told him that Godel was holding the paintings and would release them upon receipt of $25,000 but that Godel would only accept cash and would not take a check.
LCA argues that Bambino, Palma and Francia entered into a partnership. "[T]he similarities between joint ventures and partnerships ... are significant. Our case law has long recognized that a joint venture, also referred to as a joint adventure or joint enterprise, exists where two or more parties combine their property, money, efforts, skill or knowledge in some common undertaking ... Generally, joint ventures relate to a single transaction, whereas partnerships exist for a general business." (Citations omitted; emphasis added; internal quotation marks omitted.) Doe v. Yale University, 252 Conn. 641, 672-73, 748 A.2d 834 (2000). Because the court finds that Bambino, Palma and Francia combined their money and efforts for a single transaction, their arrangement constituted a joint venture. Many principles of partnership law are applicable to joint ventures. The differences between the two will be discussed further below.
Once the funds had been gathered, Bambino drove with Lameray and Palma to Godel & Co. in New York to purchase the paintings. Though no specific date was testified to, from the credible testimony provided, the court infers this was on or about November 15, 2013. Upon arrival, Bambino remained in the car while Palma and Lameray went to meet Godel in his office. At the meeting, Palma handed Godel $25,000 in cash in a paper bag. Cash transactions of this sort were "very rare" for Godel, but he stated that when it did happen he "usually spent it and it may or may not have been recorded on his books." Id., p. 99. This was done at a time that Godel was aware of the outstanding ownership claims of Brideau and the Crawfords to the Savage Collection. Godel accepted the cash and then delivered the paintings to Palma and Lameray who left with them. During the transaction, no paperwork or other documentation regarding the transfer was exchanged between the parties.
After the completion of the transaction, Palma and Lameray rejoined Bambino and they left to return home. During the trip back, Bambino inquired of Lameray and Palma whether they had obtained a bill of sale for the paintings. They had not. The next day, Palma called Godel requesting a bill of sale be completed for the transaction. He had assumed at the time of the transaction that Godel was the owner of the paintings since he took the money. Godel refused Palma’s request and informed him that he could not do so as he had never owned the paintings. Id., p. 66.
Bambino was a resident of Woodbury, Connecticut, and Palma was a resident of New Rochelle, New York, and later Bronx, New York. Pl. Ex. 37. Lameray was deceased at the time of trial and there was no testimony to establish his residency at the time of the events that are the subject of this matter. As to the other individual defendants, Brideau and Francia were Connecticut residents as were the Crawfords. Godel was a New York resident.
In any attempt to sell the paintings, Bambino knew the lack of a bill of sale would likely become an issue. Therefore, he too later tried to contact Godel by phone and in person to convince him to provide a bill of sale or some sort of receipt for the transaction. Sometime between three and six months after the purchase of the paintings from Godel in November 2013, Bambino went to New York to physically meet him in his office. In that meeting, Godel indicated that it would be a problem to execute a bill of sale because he did not give bills of sale for cash payments as he was not going to claim the $25,000 payment as income. Moreover, Godel stated to Bambino that no sale had taken place because Godel had never bought the paintings in the first place. Godel further claimed that even though he had given the paintings to Lameray and Palma after receiving the $25,000 cash payment, that payment had nothing to do with the Savage Collection. Rather, he claimed it was payment for the money still due Godel from Lameray for the Anderson painting. Godel expressly stated that he simply held the Savage Collection as collateral until he was paid for the Anderson painting. Once the $25,000 was received, he "released" the collateral to Lameray. Hence, in his eyes, there was no sale of the collection. As of the time Godel met with Bambino, Godel knew of the Crawfords’ and Brideau’s claims of ownership. Additionally, Lameray’s involvement with the whole affair ended with his death in June 2014. Def. Ex. Y.
Despite the lack of paperwork relative to the Savage Collection, Bambino approached LCA in the spring of 2014 to inquire of their interest in purchasing certain works of art from him. At this time, he had no knowledge that Brideau had contacted Godel about the claims of Brideau and the Crawfords to the collection. Specifically, Bambino first inquired by email on April 1, 2014, about LCA’s possible interest in a single large painting done by Augustus Tack (Tack painting). Pl. Ex. 33. Bambino then sent an April 9, 2014 email relative to LCA’s possible interest in the Savage Collection. Pl. Ex 65. There were several phone calls between Bambino and LCA following the emails. Eventually, Tom Curran (Curran) of LCA met with Bambino in April 2014, to view and discuss the paintings that Bambino stored in his home. Bambino indicated he was only interested in selling the paintings or putting them up for auction as opposed to placing them on consignment. Curran was not aware of any title issues relative to the paintings at the time of their discussions. Between April and September 2014, LCA did comparables to try and establish a price that it believed the paintings were worth. Based on those comparables, LCA agreed on September 12, 2014 to purchase both the Tack painting and the Savage Collection for a total of $25,000. Pl. Exs. 35, 36. Of this amount, Curran credibly testified that the Savage Collection was worth $24,000 and the Tack painting $1000.
This valuation of the Savage Collection was for the paintings as a group. Evidence of an itemized valuation for each of the paintings was found in Pl. Exs. 9 and 66, which are copies of the July 10, 2009 agreement between the Crawfords and Brideau. The estimates of value placed on the paintings in those exhibits are simply written notations entered next to each itemized painting. Given that the estimates are ten years old, regardless of the source, they are of little evidentiary value to the court. A better and more current itemized valuation that might be considered was given, without objection, by Curran of LCA who listed each painting and the range of value that each might bring at a sale. Though he was not qualified as an expert, he estimated that the paintings could collectively be worth between $25,400 to $38,600. Pl. Ex. 4.
Bambino then told LCA that he would like payment for the purchase broken down a specific way with Palma and Francia receiving the proceeds. Consistent with Bambino’s desires, a bill of sale was prepared by LCA to reflect that after the delivery of the Savage Collection, Palma, as the "seller," would receive $15,000. The document was dated September 18, 2014 and signed by Palma and LCA. Though he was not designated as a "seller" in the bill of sale, an additional $10,000 was to be paid to Francia upon LCA’s "receipt of a large painting by Tack." Pl. Ex. 37; Def. Ex. V. These amounts were consistent with the amount of money each had provided to Bambino for the purchase of the Savage Collection from Godel & Co. Bambino’s goal in selling the artwork to LCA was to be able to at least repay Palma and Francia even though he himself would net no funds from the transaction. The bill of sale further stated in relevant part, that: "AND the Seller [Palma] hereby covenants with the Buyer [LCA], its successors and assigns, that the Seller is the lawful owner of the Personal Property; that the Personal Property is free from all liens, encumbrances, security interests, leases and charges; the Seller has good right to sell the Personal Property as aforesaid; and that the Seller will forever warrant and defend the Personal Property against the claims and demands of all persons whomever." Pl. Ex. 37. The paintings were delivered and received as called for under the bill of sale. LCA then issued a check to Palma, dated September 18, 2014, for $15,000. At Palma’s request, however, the $10,000 due to Francia was instead issued to Bambino by two separate checks for $5000, which were dated October 23, 2014. Id. Bambino used the money to repay Francia the $10,000 he had borrowed from him.
In negotiating the sale, Bambino represented to LCA that he and Palma were partners. Although there is no reference to Bambino in the bill of sale, the document reflected this understanding with the wording that "[t]he person executing this document on behalf of the Seller [Palma] represents and warrants that he/she is duly authorized by valid partnership resolution to execute this Bill of Sale on behalf of the Seller." Pl. Ex. 37. The bill of sale executed by Palma and LCA was for a sale of the paintings rather than a consignment. With fifty years of experience in the art industry, Weston Thorn credibly testified he felt that in a sale, as opposed to a consignment, the risk of any cloud on title to the pieces of artwork was upon the purchaser. Even though LCA had not done business with Bambino, Palma or Francia before the sale, it was satisfied that Bambino was the owner of the paintings because he had physically kept them at his home and they were viewed there by Curran prior to the purchase. It had been the experience of Weston Thorn and Curran that if a potential seller offered works of art that were in their home, they were in fact the owners. Curran acknowledged that while LCA always checks the identification of individually offered art work, it does not always check the actual ownership of the items and did not do so in this case.
In late January and early February 2015, LCA placed the artwork on a public exhibition both online and physically in its store. Def. Ex. W. The Crawfords saw that the Savage Collection was being offered for auction on the LCA website between January 27, and February 4, 2015. Def. Ex. X. They immediately contacted Brideau who indicated that he "left the artwork in a gallery in New York and three guys stole them from the gallery in New York because somebody owed somebody money." Brideau then contacted LCA to tell it of the legal interest that both Brideau and the Crawfords had in the paintings. LCA took no immediate action because Weston Thorn did not believe Brideau due to past incidents where Brideau had not been truthful with him, had taken items from LCA without paying and, despite his claim, provided no documentation as to the ownership of the paintings. The Crawfords separately notified LCA of their ownership interest in certain paintings of the Savage Collection. By letter dated January 31, 2015, with attachments dated February 1, 2015, the Crawfords specifically identified eight paintings belonging to them and eight other paintings they acknowledged that they had previously sold to Brideau. The Crawfords demanded the paintings be returned to the "appropriate owners." Pl. Ex. 41.
Despite an issue as to the ownership of the paintings arising in the midst of bidding, LCA elected to allow the auction to be completed but notified the successful bidder that there was a cloud on the title to the paintings that needed to be resolved before they could be released. On February 7, 2015, LCA internally acknowledged that it did not have good title to the Savage Collection. Def. Ex. Y. To this end, LCA retained possession of the paintings having been presented with no proof of ownership by Brideau or the Crawfords. LCA then brought this action.
Also relevant to the issues before the court are conversations and correspondence that took place between various parties after the suit was commenced but before the operative second amended complaint was filed. , Following the service of the complaint in June 2015, but before the return date, Bambino wrote to Godel by email dated July 1, 2015: "Howard, before submitting a bill to Litchfield attorney, wouldn’t it be a smarter move to try and resolve this with Brideau, as he could have the summons dropped and no bill of sale would be needed. The deadline to answer is July 14. It would be the cleanest way to bring this to an end and avoid opening a can of worms. Please advise. Thanks Phil ..." Pl. Ex. 51. Following this email, Bambino and Godel had a series of telephone conversations. Bambino credibly testified that during these conversations, Godel stated that he did not issue bills of sale when given cash as payment for an item so he could avoid paying taxes, but that he could leave Bambino a sheet of blank letterhead from Godel & Co., on which Bambino could list the paintings, their value, and show Lameray as the seller. Notably, by the time of this conversation, Lameray had been deceased for approximately one year. The reasoning given by Godel for placing Lameray’s name as the seller was that with his death, there would be no one to corroborate any of the information as "dead men don’t tell tales." According to Godel, as long as the matter was not in court, Bambino could tell anybody anything he wanted to. He indicated to Bambino that he would leave the blank letterhead in an envelope with Nick Palma’s name on it. He further suggested to Bambino that someone else should write the information onto the letterhead so that it could not be identified as Bambino’s handwriting and thereby avoid any trouble. Godel also stated that if he was ever called to court to testify he would simply claim he couldn’t remember what transpired. He also asked that Bambino send him a copy of the letter when done so that if he was ever asked about it by a lawyer either in or out of court, he would know what was in the letter. Consistent with these conversations, Bambino thereafter traveled with Palma to Godel’s office in New York to pick up the letterhead. As instructed, they picked up an envelope that had Palma’s name on it in which there was a sheet of blank letterhead from Godel & Co. Pl. Ex. 2. After obtaining physical possession of the letterhead, Bambino never did anything further with it as he "didn’t want to commit fraud."
The original complaint had a return date of July 14, 2015. Ted Crawford, Bambino, Brideau and Francia were served on June 8, 2015. (#100.32.) Godel, Godel & Co. and Palma were served on June 9, 2015. (#101.) Julianna Crawford was served on September 14, 2016. (#128.)
Godel and Godel & Co. argue that any facts that arose after this suit was initiated, were in defense of this suit and, therefore, cannot form the basis of LCA’s CUTPA claim. Def.’s Post-trial Br. (#226), pp. 8-9. The Godel defendants rely on Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 155-56, 881 A.2d 937 (2005), cert. denied, 547 U.S . 1111, 126 S.Ct. 1913, 164 L.Ed.2d 664 (2006) for this proposition. In Ventres, our Supreme Court held that an allegation that a defendant engaged in an oppressive litigation tactic may not be used to substantiate a CUTPA claim because there is no authority that "defendant’s vigorous defense against a lawsuit may form the basis for a CUTPA claim in that very lawsuit." Id., 156. The court need not resolve this issue as the court will not be applying Connecticut law to the unfair trade practices claims. See part II H 2 of this opinion.
Several of these conversations were tape-recorded by Bambino. A transcript of the conversations was also done. At trial, Godel and Godel & Co., objected to the admission into evidence of these recordings and transcript on the ground that they had not given their consent to Bambino to record their conversation as required under Connecticut law, and was therefore illegal. The plaintiff and Bambino argued that New York law was applicable which allowed one party to record a conversation without the consent of the other party. The court sustained the objection as to both the tape-recording and the transcript on the ground that the call having been initiated in Connecticut by Bambino made it subject to Connecticut law. However, the court did allow the transcript to be used, not as substantive evidence, but for purposes of impeaching the testimony and refreshing the recollection of a witness. The facts set forth hereafter are those found credible based on the direct and cross examination of both Bambino and Godel.
The name on the envelope was misspelled as Nick "Palmer."
During his testimony in court, Godel was pressed on whether he made the statements attributed to him by Bambino. He stated that Bambino had come to his office in New York two to three times in an attempt to intimidate and bully him into providing a bill of sale. He acknowledged finally offering Bambino the blank letterhead to appease him but that it was of little concern to Godel as he had given him a twenty-year-old letterhead. Godel believed if the matter went forward in court, the letterhead would be thrown out because it was produced "after the fact," which the court takes to mean after the sale of the Savage Collection by Godel to Bambino. However, when asked if he had ever said the following to Bambino- that he did not do a bill of sale where there was a cash transaction so that it would not be on the books of the company (i.e., get taxed), that someone else should write out the bill of sale to show Lameray as the seller, that he should do so as "dead men don’t tell tales," that Bambino should let him know what was put on the letterhead so he would know in case anyone asked him about it, that he told Bambino what to say if anyone should ask about the bill of sale, and that if Godel was called to trial he would testify that he didn’t recall the transaction- he repeatedly answered that he "did not recall." Both as a raw number, and as a percentage of the number of times he was asked a question, Godel’s responses indicating that he could not recall anything, even after the attempts to refresh his recollection with a transcribed statement of his recorded conversations was preposterously high.
Among the few credible statements he did make was that Bambino, who the court finds hardly painted a pretty picture of himself in this affair, attempted to intimidate or bully Godel into providing a bill of sale. Also, that Godel didn’t know whether he had the right to hold on to the paintings after the issue arose as to the claims by Brideau and the Crawfords. Godel just knew that he wanted to be paid. The court also accepts Godel’s testimony that he never had any direct contact with the Crawfords or LCA and never had any contact with Brideau, either personally or through Godel & Co., until Brideau raised the ownership claim. Otherwise, the court finds little of Godel’s testimony credible. His testimony that he had no intent to sell or consign the Savage Collection and that the paintings were simply being held as collateral for the debt owed to Godel & Co. by Lameray for the Anderson painting is simply not believable. His acceptance of the $25,000 from Palma, who brought cash per Godel’s own instructions, and who had traveled with Lameray and Bambino specifically for the purpose of buying the collection, makes clear that the purpose of the transaction was to sell the paintings.
In addressing the complaint, counterclaim, cross claims and special defenses of the parties, other facts will be recited as necessary.
II
LCA’S COMPLAINT
A
Count One- Declaratory Judgment
1
Propriety of Declaratory Judgment
Declaratory judgment actions are governed by General Statutes § 52-29 and Practice Book § 17-55 which set the conditions for such an action. The party must have a legal or equitable interest by reason of danger of loss or of uncertainty as to the party’s rights. There must be an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement between the parties. Even if there is another form of proceeding that can provide relief to the party seeking redress, the court can allow the declaratory judgment action to proceed if the court is of the opinion a party should be allowed to do so. Practice Book § 17-55(3). The court finds that all the elements are met in this instance relative to LCA as it has a legal and equitable interest in the paintings through the potential loss of its financial interest in them, there is an actual bona fide and substantial question as to the ownership of the paintings and the court is of the opinion that although there are other forms of redress, it is in the interest of judicial economy to allow this count to proceed so as to resolve the competing adverse interests and claims to the paintings and provide practical relief to the complainant.
Section 52-29 provides in relevant part: "(a) The Superior Court in any action or proceeding may declare rights and other legal relations on request for such a declaration, whether or not further relief is or could be claimed. The declaration shall have the force of a final judgment."
2
Outcome Determinative Choice of Law
LCA concedes in its post-trial brief that because "the delivery of possession to Godel took place in New York and Godel is a New York art dealer, New York law applies to Godel & Co. as an art dealer and consignee." Pl.’s Post-trial Br. (#227), p. 21. "When the applicable law of a foreign state is not shown to be otherwise, we presume it to be the same as our own ... The threshold choice of law issue in Connecticut ... is whether there is an outcome determinative conflict between applicable laws of the states with a potential interest in the case. If not, there is no need to perform a choice of law analysis, and the law common to the jurisdiction should be applied." (Citation omitted; emphasis in original; internal quotation marks omitted.) Cohen v. Roll-A-Cover, LLC, 131 Conn.App. 443, 465-66, 27 A.3d 1, cert. denied, 303 Conn. 915, 33 A.3d 739 (2011) (defendants’ failure to indicate how application of other law would conflict with CUTPA rendered choice of law analysis inappropriate). Because LCA applies both Connecticut and New York law in its ownership analysis and concedes that New York law should apply to at least some of the conveyances at issue, the court will conduct the threshold choice of law inquiry to determine whether a true choice of law dispute exists. General Statutes § 42-116l(a) provides: "Whenever a consignor delivers or causes to be delivered a work of fine art to a consignee for the purpose of sale, or exhibition and sale, to the public on a commission, fee or other basis of compensation, the delivery to and acceptance thereof by the art dealer is deemed to be ‘on consignment’ and such consignee shall thereafter with respect to the said work of fine art be deemed to be the agent of such consignor." Section 41-116l further provides in subsection (b): "Whenever a consignor delivers or causes to be delivered a work of fine art to a consignee, such consignor shall give notice to the public by affixing to such work of fine art a sign or tag which states that such work of fine art is being sold subject to a contract of consignment, or such consignor shall post a clear and conspicuous sign in the consignee’s place of business giving notice that some works of fine art are being sold subject to a contract of consignment." Lastly, subsections (c) and (d) provide: "(c) The proceeds of the sale of a work of fine art shall be held in trust by the consignee for the benefit of the consignor. Such proceeds shall be applied first in payment of any amount due to the consignor. (d) Any provision of a contract or agreement whereby the consignor waives any of the provisions of this section or section 42-116m is void."
"Consignor" is defined as "an artist or any person, partnership, firm, association, limited liability company or corporation who delivers a work of fine art to an art dealer for the purpose of sale, or exhibition and sale, to the public on a commission or fee or other basis of compensation." General Statutes § 42-116k(c).
"Fine art" is defined in relevant part as "a work of visual art such as a painting ..." General Statutes § 42-116k(e)(1).
"Consignee" is defined as "an art dealer who receives and accepts a work of fine art from a consignor for the purpose of sale, or exhibition and sale, to the public on a commission or fee or other basis of compensation." General Statutes § 42-116k(d).
"Art dealer" is defined as "a person, partnership, firm, association, limited liability company or corporation other than a public auctioneer who undertakes to sell a work of fine art." General Statutes § 42-116k(b).
General Statutes § 42-116m provides: "Whenever a consignee accepts a work of fine art for the purpose of sale or exhibition and sale to the public on a commission, fee or other basis of compensation, there shall be a written contract or agreement between the consignor and consignee which shall include but not be limited to the following provisions: (a) That the proceeds of the sale of the work of fine art shall be delivered to the consignor at a schedule agreed upon by the consignor and consignee; (b) that the consignee shall be responsible for the stated value of the work of fine art in the event of the loss of or damage to such work of fine art while it is in the possession of such consignee; (c) that the work of fine art shall only be sold by the consignee for an amount at least equal to the amount agreed upon by the consignor in writing; (d) that the work of fine art may be used or displayed by the consignee or others only with prior written consent of the consignor and only if the artist is acknowledged in such use or display."
General Statutes § 42a-2-403 provides in relevant part: "(2) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business. (3) ‘Entrusting’ includes delivery and any acquiescence in retention of possession regardless of any condition expressed between the parties to the delivery or acquiescence and regardless of whether the procurement of the entrusting or the possessor’s disposition of the goods have been such as to be larcenous ..."
"Goods" is defined in relevant part as "all things ... which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid ..." General Statutes § 42a-2-105(1).
"Merchant" is defined as "a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill." General Statutes § 42a-2-104(1).
Connecticut law defines a "buyer in ordinary course of business" in relevant part as "a person that buys goods in good faith, without knowledge that the sale violates the rights of another person in the goods, and in the ordinary course from a person, other than a pawnbroker, in the business of selling goods of that kind. A person buys goods in ordinary course if the sale to the person comports with the usual or customary practices in the kind of business in which the seller is engaged or with the seller’s own usual or customary practices ... A buyer in ordinary course of business may buy for cash, by exchange of other property or on secured or unsecured credit, and may acquire goods or documents of title under a preexisting contract for sale. Only a buyer that takes possession of the goods ... from the seller ... may be a buyer in ordinary course of business. ‘Buyer in ordinary course of business’ does not include a person that acquires goods ... in total or partial satisfaction of a money debt." General Statutes § 42a-1-201(9).
"Good faith" is defined as "honesty in fact and the observance of reasonable commercial standards of fair dealing." General Statutes § 42a-1-201(20).
Turning to New York Law, N.Y. Arts & Cult. Aff. Law § 12.01(1)(a) (McKinney 2018) provides: "Whenever an artist or craftsperson, or a successor in interest of such artist or craftsperson, delivers or causes to be delivered a work of fine art, craft or a print of such artist’s or craftsperson’s own creation to an art merchant for the purpose of exhibition and/or sale on a commission, fee or other basis of compensation, the delivery to and acceptance thereof by the art merchant establishes a consignor/consignee relationship as between such artist or craftsperson, or the successor in interest of such artist or craftsperson, and such art merchant with respect to the said work, and: (i) such consignee shall thereafter be deemed to be the agent of such consignor with respect to the said work; (ii) such work is trust property in the hands of the consignee for the benefit of the consignor; (iii) any proceeds from the sale of such work are trust funds in the hands of the consignee for the benefit of the consignor; (iv) such work shall remain trust property notwithstanding its purchase by the consignee for his own account until the price is paid in full to the consignor; provided that, if such work is resold to a bona fide third party before the consignor has been paid in full, the resale proceeds are trust funds in the hands of the consignee for the benefit of the consignor to the extent necessary to pay any balance still due to the consignor and such trusteeship shall continue until the fiduciary obligation of the consignee with respect to such transaction is discharged in full; and (v) such trust property and trust funds shall be considered property held in statutory trust, and no such trust property or trust funds shall become the property of the consignee or be subject or subordinate to any claims, liens or security interest of any kind or nature whatsoever of the consignee’s creditors."
N.Y. U.C.C. Law § 2-403 (McKinney 2018) provides in relevant part: "(2) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business. (3) "Entrusting" includes any delivery and any acquiescence in retention of possession regardless of any condition expressed between the parties to the delivery or acquiescence and regardless of whether the procurement of the entrusting or the possessor’s disposition of the goods have been such as to be larcenous ..."
New York law defines a "buyer in ordinary course of business" in relevant part as "a person that buys goods in good faith, without knowledge that the sale violates the rights of another person in the goods, and in the ordinary course from a person, other than a pawnbroker, in the business of selling goods of that kind. A person buys goods in the ordinary course if the sale to the person comports with the usual or customary practices in the kind of business in which the seller is engaged or with the seller’s own usual or customary practices ... A buyer in ordinary course of business may buy for cash, by exchange of other property or on secured or unsecured credit, and may acquire goods or documents of title under a preexisting contract for sale. Only a buyer that takes possession of the goods ... from the seller ... may be a buyer in ordinary course of business. ‘Buyer in ordinary course of business’ does not include a person that acquires goods ... in total or partial satisfaction of a money debt." N.Y. U.C.C. Law § 1-201(b)(9) (McKinney 2018).
Illustrative is Joseph P. Carroll Ltd. v. Baker, 889 F.Supp.2d 593 (S.D.N.Y. 2012), a declaratory judgment action regarding title to a consigned painting, where the court held that the plaintiff, an art dealer, which purchased the painting from an art gallery to which the painting had been consigned, had full title to the painting because at the time of the purchase, the plaintiff was a buyer in the ordinary course of business. The court concluded that the plaintiff purchased the consigned painting from the gallery in good faith, without knowledge that the sale violated the consignor’s rights to the painting and that the sale comported with the usual or customary practices in the art industry. Id. Consequently, the court held, the art gallery transferred all of the consignor’s rights in the painting- i.e., full title- to the plaintiff.
Looking at the laws of both states, a careful examination of the relevant portions of Connecticut and New York law reveal two conclusions. First, the applicable provisions of the uniform commercial code (UCC) regarding sales is identical. Therefore, the court will apply Connecticut UCC law should it find that a sale occurred or purportedly occurred. Second, both Connecticut and New York law statutorily establish a consignment relationship as to the sale of fine art. Each state has different requirements to establish this relationship, however. Under Connecticut law, there must be a written agreement that includes provisions regarding: when and how any proceeds of a sale are to be returned to the consignor, a minimum stated value of the consigned artwork, the consignee is to be responsible for the stated value of the consigned art in the event of loss or damage, the art may only be sold for an amount agreed upon by the consignor and consignee, and that the work may be displayed by the consignee or others only with prior written consent of the consignor and only if the artist is acknowledged. General Statutes § 42-116m. Moreover, the consigned artwork must include some notice to the public that the artwork is, in fact, consigned. General Statutes § 42-116l . To the contrary, New York law only requires that an artist, craftsperson or successor in interest must deliver the art to a merchant of fine art for the purpose of sale or exhibition. N.Y. Arts & Cult. Aff. Law § 12.01(1)(a) (McKinney 2018). No written agreement is required. See id. Thus, it is markedly easier to establish a statutory consignment of fine art under New York law as opposed to Connecticut law. The existence of a consignment relationship could fundamentally alter the validity of one’s title to artwork if sold under a statutorily established consignment relationship or affect whether a party can prove specific causes of action, such as statutory theft. Accordingly, the court holds that there is an outcome determinative choice of law issue as to which party has good title to the individual artworks that comprise the Savage Collection.
3
Most Significant Relationship
In determining which state’s law should be applied, our Supreme Court has adopted the "most significant relationship" test from the Restatement (Second) of Conflict of Laws for both tort and contract issues. Western Dermatology Consultants, P.C. v. Vital Works, Inc., 322 Conn. 541, 153 A.3d 574 (2016) (tort); Macomber v. Travelers Property & Casualty Corp., 277 Conn. 617, 640, 894 A.2d 240 (2006) (contract). Our Supreme Court has recently adopted the "most significant relationship" test for equitable remedies as well. Reclaimant Corp. v. Deutsch, 332 Conn. 590, 599-601 (2019) (reclassifying unjust enrichment as equitable remedy for choice of law purposes). Neither our Supreme Court nor the Appellate Court has, however, considered what choice of law rules apply when determining whether movable personal property was validly conveyed. Because our Supreme Court has adopted the "most significant relationship" test for choice of law issues involving tort, contract and equitable claims, this court will apply that test to determine which state’s ownership law applies.
The most significant relationship test requires courts to weigh seven factors: "(a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied." Restatement (Second), Conflict of Laws § 6(2) (1971). To aid courts in determining the policies of interested states and assigning weight to each factor in § 6(2) the more specific factors of narrower, fact-specific Restatement (Second) sections should also be considered and analyzed prior to the application of the § 6(2) factors. See Western Dermatology Consultants, P.C. v. Vital Works, Inc., supra, 322 Conn. 559-60 (analyzing § 145(2) factors before § 6(2) factors to determine whether CUTPA or New Mexico law applied).
Section 244 of the Restatement (Second), Conflict of Laws provides in relevant part: "(1) The validity and effect of a conveyance of an interest in a chattel as between the parties to the conveyance are determined by the local law of the state which, with respect to the particular issue, has the most significant relationship to the parties ... (2) ... greater weight will usually be given to the location of the chattel, or group of chattels, at the time of the conveyance than to any other contact in determining the state of the applicable law." Section 245 of the Restatement (Second), supra, provides: "(1) The effect of a conveyance upon a pre-existing interest in a chattel of a person who was not a party to the conveyance will usually be determined by the law that would be applied by the courts of the state where the chattel was at the time of the conveyance." Section 247 of the Restatement (Second), Conflict of Laws provides: "Interests in a chattel are not affected by the mere removal of the chattel to another state. Such interests, however, may be affected by dealings with the chattel in the other state."
Collectively, § § 244, 245 and 247 place great emphasis on where chattel is located at the time of the chattel’s conveyance as well as the location of the corresponding transaction. With this in mind, the court turns to the § 6(2) factors. Here, both Connecticut and New York have an interest in whether the Savage Collection was validly conveyed between some of the parties and whether consignment relationships were established. Section 6(2)(a) therefore is accorded no weight. See Western Dermatology Consultants, P.C. v. Vital Works, Inc., supra, 322 Conn. 560-61 (if two states have an interest in disposition of an issue, then "the needs of the interstate and international systems, supports neither state’s law"). As to § 6(2)(b), Connecticut requires a written agreement with certain provisions for a consignment of fine art to be valid; General Statutes § 42-116m; which is far more demanding than New York law, which simply requires delivery and acceptance of fine art. N.Y. Arts & Cult. Aff. Law § 12.01(1)(a) (McKinney 2018). Relative to § 6(2)(c), both Connecticut and New York have specific statutes on the issue of the consignment of fine art, as discussed in part IIA(2) of this opinion. As to § 6(2)(d), if a transaction occurs entirely in one state, then this factor weighs in favor of applying the law of that state. Western Dermatology Consultants, P.C. v. Vital Works, Inc., supra, 561-62. Here, although each purchase/sale transaction occurred in a single state, the two transactions occurred in two different states. As to § 6(2)(e), property law favors the law of the jurisdiction where the property was conveyed, given the policy preferences expressed by § § 244, 245 and 247. Lastly, the importance of 6(2)(f) and (g) "should not be overemphasized ... because ... they are ancillary to the goal of providing rational, fair choice of law rules." (Citation omitted; internal quotation marks omitted.) Western Dermatology Consultants, P.C. v. Vital Works, Inc., supra, 562. Despite their ancillary importance, the final two factors also weigh in favor of applying the law of the state where the chattel was physically located and conveyed because this would lead to certainty and predictability and would be simple to determine which state’s law applies.
Based on the foregoing, the state that has the most significant relationship to each conveyance will depend on where the Savage Collection was physically located and where the corresponding transaction took place. There are five sets of conveyances and transactions: (1) the Crawfords to Brideau; (2) Brideau to Lameray; (3) Lameray to Godel and Godel & Co.; (4) Godel and Godel & Co. to Bambino, Palma and Francia; (5) Bambino, Palma and Francia to LCA.
Relative to the first conveyance from the Crawfords to Brideau, all three parties live in Connecticut. The Crawfords had physical possession of the Savage Collection in Connecticut prior to July 2009, when they transferred the paintings to Brideau for him to sell. Brideau likewise kept the paintings in Connecticut. Furthermore, the written agreement between the Crawfords and Brideau was executed in Connecticut. Some of the paintings were later sold to Brideau. As such, Connecticut law will apply to this conveyance.
For simplicity, the court treats the sale of some of the paintings to Brideau as part of the first transaction.
As to the second conveyance from Brideau to Lameray, Brideau specifically sought out Lameray’s help to sell the Savage Collection. At that time, Brideau had the Savage Collection in his possession, but did not distinguish which paintings he owned and which paintings were purportedly on consignment by the Crawfords. Brideau lived in Connecticut and the court infers from the facts found that this transaction took place in Connecticut. As such, Connecticut law applies to this conveyance.
Turning to the third conveyance from Lameray to Godel and Godel & Co., there is an immediate difference from the prior conveyances: Godel is a resident of New York and Godel & Co. is a business that is based in New York City, but which conducts business in all fifty states. As to this transaction, Lameray contacted Godel and Godel & Co. to seek their assistance in either buying the Savage Collection or selling it on behalf of Lameray. Lameray then brought the entire Savage Collection to Godel and Godel & Co. in New York and the paintings were then held there. Given that this entire conveyance occurred within the bounds of New York state, New York law will apply.
Next, Godel and Godel & Co. conveyed the Savage Collection to Bambino, Palma and Francia. Relative to this transaction, Bambino and Palma drove to Godel & Co.’s headquarters in Manhattan to give Godel $25,000 in cash for the collection. Bambino and Palma then physically acquired possession of the collection. Given that Bambino and Palma travelled into New York City, and the physical conveyance and exchange of money occurred in Godel & Co.’s place of business, New York law applies.
Lastly, the conveyance of the Savage Collection from Bambino, Palma and Francia to LCA took place in Connecticut. Additionally, Bambino’s solicitation of LCA’s interest in the sale, the viewing of the Savage Collection at Bambino’s home, the negotiation of the sale and delivery of the paintings and the issuance of the checks all took place in Connecticut. While the court recognizes that Palma was a resident of New York, he travelled to Connecticut to execute the bill of sale as the "seller" and physically delivered the paintings to LCA in Connecticut. As such, Connecticut law applies to the final conveyance.
4
Ownership of the Savage Collection
Having resolved the choice of law issue as to conveyances, the court can now turn to a determination of which party or parties own the Savage Collection. Beginning with the legal relationship between the Crawfords and Brideau, the Crawfords purportedly entered into a signed, written agreement with Brideau to consign the Savage Collection. Pl. Ex. 9. For this consignment agreement to be valid under Connecticut law, however, it must include the following provisions: (1) when and how any proceeds of a sale are to be returned to the consignor and a minimum stated value of the consigned artwork; (2) the consignee is to be responsible for the stated value of the consigned art in the event of loss or damage; (3) the art may only be sold for an amount agreed upon by the consignor and consignee; and (4) the work may be displayed by the consignee or others only with prior written consent of the consignor and only if the artist is acknowledged. General Statutes § 42-116m. A review of plaintiff’s exhibit 9 finds that it does not contain any of the required provisions. Additionally, "the Striding Nude" painting was not a part of this agreement; see footnote 2 of this opinion; and, as such, its consignment was not reduced to writing, also in violation of § 42-116m. The Crawfords, therefore, did not legally consign the Savage Collection to Brideau. Rather, Brideau was an agent entrusted with the sale of the Savage Collection on the Crawfords’ behalf. At some point after the conveyance of the Savage Collection to Brideau, the Crawfords individually sold seven of the Savage Collection paintings, numbered 1 through 5, 7 and 8, to Brideau. The Crawfords retained an ownership interest in the other nine Savage Collection paintings, numbered 6 and 9 through 16.
This may seem like a distinction without a difference. However, § 42-116m specifically requires that consignment agreements, whereby the consignee is to be compensated, be reduced to writing and include a handful of provisions. Because the requirements of § 42-116m are not met here, Brideau is not entitled to compensation for his services as a consignee but he still acted as the Crawfords’ agent. An agency relationship does not require compensation. See, e.g., Beckenstein v. Potter & Carrier, Inc., 191 Conn. 120, 132-33, 464 A.2d 6 (1983) (method of paying agent only one factor in assessing whether agency exists, but not necessary element for formation of relationship).
Relative to the second conveyance and corresponding transaction, Brideau eventually elected to seek Lameray’s assistance in selling the Savage Collection knowing that Lameray bought and sold artwork. As previously noted, there was no evidence of a consignment agreement between Brideau and Lameray. Moreover, there was no distinction by Brideau as to which of the paintings in the Savage Collection were owned by who. Regardless, Lameray became Brideau’s agent to sell paintings numbered 1 through 5, 7 and 8 on behalf of Brideau, as well as paintings numbered 6 and 9 through 16 on behalf of the Crawfords as their subagent.
In November 2013, Lameray brought the paintings to Godel and Godel & Co. in New York. Godel & Co., which is located in Manhattan, engages in the business of buying and selling fine art. Lameray, as an agent of Brideau and subagent for the Crawfords, (a successor in interest of an artist, Eugene Savage) delivered the Savage Collection to Godel & Co., through Godel, which accepted the collection. Based on the foregoing, a consignment relationship was statutorily created. N.Y. Arts & Cult. Aff. Law § 12.01(1)(a) (McKinney 2018). See also, footnote 5.
The fourth conveyance and corresponding transaction occurred in November 2013, which resulted in Godel and Godel & Co. conveying the Savage Collection to Bambino, Palma and Francia. Because Godel and Godel & Co. were merchants of fine art and had a consignment relationship with Lameray, Godel and Godel & Co. were, therefore, entrusted with the Savage Collection. N.Y. U.C.C. Law § 2-403 (McKinney 2018). A merchant entrusted with goods of the kind they ordinarily deal in has the power to transfer the entrusted goods to a buyer in the ordinary course of business. Id. Thus, the sale of the Savage Collection to Bambino, Palma and Francia would result in them having good title if, and only if, they were buyers in ordinary course of business, which is defined as the buying of goods from a merchant that deals in those kinds of goods in good faith, without knowledge that the sale violates the rights of another and the sale comports to the seller’s or business’ usual or customary practices. N.Y. U.C.C. Law § 1-201(b)(9) (McKinney 2018). Palma and Lameray were the only people present during the purchase transaction with Godel. At the time, Palma did not know of the adverse ownership claims of Brideau and the Crawfords. Only later did Bambino and Palma learn of the competing ownership claims to the collection. As such, Palma was buying fine art from an art dealer in good faith.
However, the sale of the Savage Collection to the joint venture of Bambino, Palma and Francia did not comport with the fine art industry’s, Godel & Co.’s nor Godel’s usual or customary practices. First, Godel himself testified that he never knew definitively whether he had the right to hold onto the Savage Collection. Nor did Godel request proof of ownership of the paintings from Lameray. Pl. Ex. 63R, p. 60. Relative to the sale to the joint venture, no paperwork was completed and no bill of sale was issued. Indeed, Godel stated some time later that he would not issue a bill of sale because he never owned the paintings. Yet, he eventually gave Bambino plain letterhead that was to potentially be used to fabricate a fraudulent bill of sale. Moreover, the paintings were paid for with $25,000 in cash, which Godel admitted was "very rare" for him but was nevertheless done so he could spend it and not record it on his books as income. Pl. Ex. 63R, p. 99. Based on the foregoing, the court finds that Bambino, Palma and Francia were not sold the paintings in the ordinary course of business and, as such, Godel and Godel & Co. were unable to transfer any rights they had in the Savage Collection with which they were entrusted. Accordingly, Bambino, Palma and Francia did not obtain good title to the Savage Collection. N.Y. U.C.C. Law § 2-403 (McKinney 2018).
Finally, turning to Bambino, Palma and Francia’s sale of the Savage Collection to LCA, because the members of the joint venture did not have good title to the Savage Collection, they could not confer good title to LCA. Moreover, even if they could have conferred good title to the Savage Collection to LCA, there were two problems. First, a person can only be a buyer in the ordinary course of business if they buy goods from a merchant who is in the business of dealing in those kinds of goods. General Statutes § 42a-1-201(9). Because Bambino, Palma and Francia established a joint venture and not a partnership, they were not in the business of selling fine art. Rather, their sale of fine art was limited to this sole transaction. See footnote 6 and part II F of this opinion. Second, LCA internally acknowledged on February 7, 2015, that it did not have good title to the Savage Collection. Def. Ex. Y. Therefore, the Crawfords retained title to paintings numbered 6, 9, 10, 11, 12, 13, 14, 15 and 16 while Brideau retained title to paintings numbered 1, 2, 3, 4, 5, 7 and 8.
The court enters a declaratory judgment on count one of LCA’s complaint in favor of the Crawfords and Brideau holding that: (1) the Crawfords are the lawful owners of paintings numbered 6, 9, 10, 11, 12, 13, 14, 15 and 16 of the Savage Collection; (2) Brideau is the lawful owner of paintings numbered 1, 2, 3, 4, 5, 7 and 8 of the Savage Collection.
As noted in footnote 2 of this opinion, Julianna Crawford testified that Brideau may have purchased some of the paintings jointly with Motyka. The court does not enter judgment as to Motyka for two reasons. First, LCA did not attach to its complaint a certificate stating that all interested persons have been joined as parties to this action or that they have been given reasonable notice of the action. Practice Book § 17-56 provides in relevant part: "(b) All persons who have an interest in the subject matter of the requested declaratory judgment that is direct, immediate and adverse to the interest of one or more of the plaintiffs or defendants in the action shall be made parties to the action or shall be given reasonable notice thereof ... The party seeking the declaratory judgment shall append to its complaint ... a certificate stating that all such interested persons have been joined as parties to the action or have been given reasonable notice thereof. If notice was given, the certificate shall list the names, if known, of all such persons, the nature of their interest and the manner of notice. (c) Except as provided in Sections 10-39 and 10-44, no declaratory judgment action shall be defeated by the nonjoinder of parties or the failure to give notice to interested persons. The exclusive remedy for nonjoinder or failure to give notice to interest persons is by motion to strike as provided in Section 10-39 and 10-44. (d) Except as otherwise provided by law, no declaration shall be binding against any persons not joined as parties. If it appears to the court that the rights of nonparties will be prejudiced by its declaration, it shall order entry of judgment in such form as to affect only the parties to the action." Second, even accounting for Julianna Crawford’s testimony, there was insufficient evidence to establish to what extent Motyka had a legal interest in the individual paintings. As such, this decision is not binding on Motyka and merely has some degree of precedential effect. "[A]n interested person who is not notified of the action is subject only to the stare decisis impact of the judgment. If the situation of an interested person is quite similar to that of one of the parties, then the stare decisis impact on the interested person may be strong, but, because of the similarity of interests, the existing parties are likely to have represented well the nonparty’s interests. If, on the other hand, the interested person’s circumstances are sufficiently different from those of the parties, the parties’ representation of the nonparty’s interests may have been weak, but the case will have less precedential effect on the interested person and any future action to which that person may be a party." Batte-Holmgren v. Commissioner of Public Health, 281 Conn. 277, 291, 914 A.2d 996 (2007).
B
Count Two- Fraud
In the second count of its complaint, LCA alleges fraud as to Godel, Godel & Co., Bambino, Palma and Francia. "The essential elements of an action in common-law fraud, as we have repeatedly held, are that: (1) a false representation was made as a statement of fact; (2) it was untrue and known to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon that false representation to his injury." (Internal quotation marks omitted.) Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 777, 802 A.2d 44 (2002). When there is a claim of false representation, "the plaintiff must prove the party to whom the false representation was made claims to have relied on that representation and to have suffered harm as a result of the reliance." Id., 777-78. Fraud must be proven by clear and convincing evidence. Simms v. Seaman, 308 Conn. 523, 549, 69 A.3d 880 (2013).
LCA has failed to establish by clear and convincing evidence that any of the defendants named in this count made any statements of fact to LCA that were known to them to be untrue at the time they made them or that LCA was induced to act on such statements causing it injury. There was credible testimony from Godel that he never had any contact with LCA. There was also credible testimony from Weston Thorn that he did not know Godel though he knew of Godel & Co. There was no testimony from anyone associated with LCA that they had communications with, or had representations made to them by, Godel or Godel & Co. Therefore, there were no statements, either written or oral, that constituted a fraudulent misrepresentation.
As to Francia, there was no evidence whatsoever that he had made any written or oral representations of any kind to LCA. Although his name was on the bill of sale drafted by LCA, that was based only on conversations LCA had with Bambino. LCA has failed to prove by clear and convincing evidence that Francia committed fraud.
As to Palma, there was no evidence that he made any oral statements to LCA that would constitute a fraudulent misrepresentation. There was, however, evidence of a written statement in the form of the bill of sale which was executed by Palma and LCA. In it, Palma made various representations as to the title and ownership of the paintings that were being sold. Pl. Ex. 37. These statements were made as warranties to LCA. Id. While Palma certainly was aware there was no bill of sale provided by Godel at that time they purchased the paintings, and that Godel refused to give one thereafter, he credibly testified that when he was present to give the $25,000 to Godel for the paintings, he did so with the understanding that Godel owned them. There was little direct evidence to indicate that prior to the sale of the paintings to LCA, Palma had knowledge that Brideau had contacted Godel to lay claim to the paintings on behalf of himself and the Crawfords. It was clear from the testimony that Palma was a fringe player in this whole affair whose only true involvement was to loan Bambino $15,000 toward the purchase of the Savage Collection and then to do whatever Bambino told him needed to be done to get his $15,000 back. That included having Palma sign the bill of sale with LCA even though it was Bambino who handled virtually all of the written and oral negotiations with LCA. While Bambino, Palma and Francia were joint venturers in the effort to sell the paintings, and therefore an inference might be made that Palma was aware of the claims of Brideau and the Crawfords at the time of the September 18, 2014 signing of the bill of sale with LCA, the court elects not to make this inference. LCA has failed to meet its burden of establishing by clear and convincing evidence that Palma committed fraud.
As to Bambino, his involvement with LCA is deeper than any of the other defendants. It was he who offered the paintings for sale to LCA through email communications and telephone conversations with LCA. Pl. Exs. 33, 65. It was Bambino who negotiated the sale to LCA. It was Bambino who personally met with Curran, LCA’s appraiser, in Bambino’s home where he physically held the paintings. In showing the paintings to Curran at his home and through his emails to LCA, Bambino telegraphed that he likely had an ownership interest in the paintings, despite his knowledge of the claims of Brideau and the Crawfords and that therefore there existed a title issue. But knowledge and nondisclosure of potential ownership claims as to the Savage Collection does not constitute a fraudulent misrepresentation. Indeed, there was no evidence that Curran ever directly asked whether Bambino knew of any ownership claims as to the Savage Collection. There was also no evidence that Bambino represented to Curran that he owned the paintings. At most, this could be a negligent omission, but LCA did not allege this cause of action. Therefore, LCA has not proven by clear and convincing evidence that Bambino committed fraud. Judgment enters for the defendants as to count two of LCA’s complaint.
C
Count Three- Unjust Enrichment
In the third count of its complaint, LCA alleges unjust enrichment as to the defendants Godel, and Godel & Co. When contract principles provide no remedy and justice requires that compensation be given for reliance on the supposed contract, the equitable doctrine of unjust enrichment provides for relief. New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451, 970 A.2d 592 (2009). Courts must examine the circumstances of the particular case to determine whether compensation is justified. Id. Thus, "[p]laintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs’ detriment." Id., 451-52.
As noted above in part II B of this opinion, Godel and Godel & Co. had no communications, dealings or transactions with LCA. They took nothing from LCA through contract or otherwise and gained no benefit at LCA’s expense. Godel and Godel & Co. are not liable to LCA under a theory of unjust enrichment.
Judgment enters for the defendants as to count three of LCA’s complaint.
D
Count Four- Breach of Warranty
1
Construction of Allegations
LCA styles the fourth count of its complaint as a breach of written warranty claim against Palma. This is problematic because based on the allegations and the law, LCA does not actually allege a breach of warranty claim. Instead, LCA has actually alleged an independent breach of contract claim separate and apart from count six, which also alleges breach of contract.
"Construction of the effect of pleadings is a question of law ..." Parker v. Ginsburg Development CT, LLC, 85 Conn.App. 777, 779, 859 A.2d 46 (2004). "[T]he labels placed on the allegations by the parties [are] not controlling." Ganim v. Smith & Wesson Corp., 258 Conn. 313, 348, 780 A.2d 98 (2001). General Statutes § 42a-2-313 provides in relevant part: "(1) Express warranties by the seller are created as follows: (a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise. (b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description." LCA alleged the following relevant facts. "If Palma was not the lawful owner or agent of the lawful owner, authorized to sell the Savage Collection ... or if he did not have good right to sell the Savage Collection, then he has breached the warranties and covenants of the bill of sale that he delivered to LCA." Pl. Second Amend. Compl. (#147), ¶51. "As part of the warranties and covenants of the bill of sale that Palma delivered to LCA, he undertook and agreed that he would forever warrant and defend LCA’s ownership of the Savage Collection against the claims and demands of all persons whomever." Id., ¶52. "Brideau and the Crawfords have asserted claims and demands adverse to LCA’s ownership of the Savage collection." Id., ¶53. "Palma has not undertaken to defend LCA’s ownership rights against such claims." Id., ¶54. LCA has been damaged by said breaches of Palma’s warranties and covenants." Id., ¶55.
Based on the foregoing, count four of LCA’s complaint actually alleges a breach of a contractual duty to defend the plaintiff from adverse claims of ownership as to the Savage Collection, as opposed to a breach of warranty. This is because for an express warranty to exist under Connecticut law, it must relate to some quality of the goods being sold by the seller. See General Statutes § 42a-2-313(1). A promise to defend a person against adverse claims does not pertain to a quality of some goods but, rather, a promise relative to the validity of a person’s claim to the goods. Accordingly, the court will treat count four as a breach of contract claim.
There is little practical difference to treating LCA’s breach of express warranty claim as a breach of contract claim under these facts because the measure of damages for both causes of action is the same. "The general rule in breach of contract cases is that the award of damages is designed to place the injured party, so far as can be done by money, in the same position as that which he would have been in had the contract been performed." (Internal quotation marks omitted.) Torosyan v. Boehringer Ingelheim Pharmaceuticals, Inc., 234 Conn. 1, 32, 662 A.2d 89 (1995). "The difference between the value of the goods delivered and that which they would have had if they had complied with the warranty is not the exclusive measure of damages in breach of warranty cases. The rule is more generous where special circumstances are present. In essence, the loss directly and naturally resulting is the measure of damages ... The damages awarded should essentially place the plaintiff in the same position as it would have been in if the defendant had fully performed its agreement." (Citations omitted.) Acme Pump Co. v. National Cash Register Co., 32 Conn.Supp. 69, 75, 337 A.2d 672 (1974) (cases relied upon by court of common pleas stand for breach of contract propositions); see Willow Springs Condominium Ass’n, Inc. v. Seventh BRT Development Corp., 245 Conn. 1, 61-62, 717 A.2d 77 (1998) (employing breach of contract measure of damages to determine propriety of damages award for breach of express and implied warranty claims). Therefore, even if count four alleges a breach of express warranty claim, the subsequent analysis on the merits will apply as will the damages analysis in part V A 1 of this opinion.
2
Merits
"The elements of a breach of contract claim are the formation of an agreement, performance by one party, breach of the agreement by the other party, and damages." (Internal quotation marks omitted.) CCT Communications, Inc. v. Zone Telecom, Inc., 327 Conn. 114, 133, 172 A.3d 1228 (2017).
"It is a fundamental principle of contract law that the existence and terms of a contract are to be determined from the intent of the parties ... The parties’ intentions manifested by their acts and words are essential to the court’s determination of whether a contract was entered into and what its terms were ... Ordinarily, the parties’ intent is a question of fact ... Where a party’s intent is expressed clearly and unambiguously in writing, however, the determination of what the parties intended ... is a question of law ... The intent of the parties as expressed in [writing] is determined from the language used interpreted in light of the situation of the parties and the circumstances connected with the transaction ... [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and ... the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the [writing] ... Where the language of the [writing] is clear and unambiguous, the [writing] is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity ... Similarly, any ambiguity in a [written instrument] must emanate from the language used in the [writing] rather than from one party’s subjective perception of the terms." (Citations omitted; internal quotation marks omitted.) Auto Glass Express, Inc. v. Hanover Ins. Co., 293 Conn. 218, 225-26, 975 A.2d 1266 (2009).
"The general rule in breach of contract cases is that the award of damages is designed to place the injured party, so far as can be done by money, in the same position as that which he would have been in had the contract been performed." (Internal quotation marks omitted.) Torosyan v. Boehringer Ingelheim Pharmaceuticals, Inc., 234 Conn. 1, 32, 662 A.2d 89 (1995). "There are no unbending rules as to the evidence by which [damages for breach of contract] are to be determined ... In making its assessment of damages for breach of [any] contract the trier must determine the existence and extent of any deficiency and then calculate its loss to the injured party." (Internal quotation marks omitted.) Chila v. Stuart, 81 Conn.App. 458, 467, 840 A.2d 1176, cert. denied, 268 Conn. 917, 847 A.2d 311 (2004).
The bill of sale executed by Palma contained the following specific language: "AND the Seller hereby covenants with the Buyer [LCA], its successors and assigns, that the Seller is the lawful owner of the Personal Property; that the Personal Property is free from all liens, encumbrances, security interest, leases and charges; the Seller has good right to sell the Personal Property as aforesaid; and that the Seller will forever warrant and defend the Personal Property against the claims and demands of all persons whomever ." (Emphasis added.) Pl. Ex. 37.
There is no question that LCA and Palma had an agreement, which was contained in the bill of sale. Furthermore, as evidenced by the plain and unambiguous language within the bill of sale, it is clear that the parties intended Palma, as the seller, to owe the buyer, LCA, a contractual duty to defend LCA’s ownership interest in the Savage Collection from adverse claims. This is a broad duty. In the insurance context, our Supreme Court has explained: "Under the well established ‘four corners’ doctrine, the duty to defend is broader than the duty to indemnify ... An insurer’s duty to defend is triggered if at least one allegation of the complaint falls even possibly within the coverage ... Indeed, [i]t is well established ... that a liability insurer has a duty to defend its insured in a pending lawsuit if the pleadings allege a covered occurrence, even though facts outside the four corners of those pleadings indicate that the claim may be meritless or not covered ... The obligation of the insurer to defend does not depend on whether the injured party will successfully maintain a cause of action against the insured but on whether he has, in his complaint, stated facts which bring the injury within the coverage. If the latter situation prevails, the policy requires the insurer to defend, irrespective of the insured’s ultimate liability ... In contrast to the duty to defend, the duty to indemnify is narrower: while the duty to defend depends only on the allegations made against the insured, the duty to indemnify depends upon the facts established at trial and the theory under which judgment is actually entered in the case ... Thus, the duty to defend is triggered whenever a complaint alleges facts that potentially could fall within the scope of coverage ..." (Internal quotation marks omitted.) Travelers Casualty & Surety Co. of America v. Netherlands Ins. Co., 312 Conn. 714, 739, 95 A.3d 1031 (2014).
A counterclaim may trigger this duty. See Cambridge Mutual Fire Ins. Co. v. Sakon, 132 Conn.App. 370, 375-81, 31 A.3d 849 (2011) (holding that allegations of counterclaim sufficient to trigger duty to defend in insurance contract), cert. denied, 304 Conn. 904, 38 A.3d 1202 (2012). A duty to defend, however, "cannot arise where the insured has not been served with a complaint." Thurlow v. Tilcor Title Ins. Co., Superior Court, judicial district of Windham, Docket No. CV-08-5002923-S (July 7, 2009, Riley, J.). "The insurer’s duty to defend the plaintiffs against a third party’s complaint is different than the insurer’s duty to bring affirmative litigation to clear a defect in title. In a situation where a defect exists but there is no adverse action brought against its insured, the title insurer may elect not to bring affirmative litigation, but rather to pay the amount of the insured’s loss." Id.
While Palma is an individual rather than an insurance carrier, the language of the bill of sale calling upon him to "defend the personal property against the claims and demands of all persons whomever" makes the same principles set forth in an insurance context applicable to him under these facts. LCA commenced the present lawsuit and requested a declaratory judgment, which could, and has, resulted in a judgment that LCA does not have good title to the Savage Collection. However, this did not trigger Palma’s duty to defend because LCA was not, at least initially, defending a claim, but was, instead, prosecuting a claim. A duty to defend is not a duty to prosecute unless there is a specific requirement in the agreement to take affirmative action to protect an interest. Indeed, the bill of sale does not contain any language requiring Palma, as the seller, or LCA, as the buyer, to take affirmative action to clear any cloud on the title to the Savage Collection. See Pl. Ex. 37.
The Crawfords did, however, allege a counterclaim seeking a declaratory judgment as to whether the Crawfords had good title to the Savage Collection. This counterclaim, which was originally filed on October 20, 2016 (#129), was the only adverse claim made against LCA relative to its title in the Savage Collection throughout the litigation of the present case. The Crawfords specifically alleged that they are the true and rightful owners of the Savage Collection and, more to the point, "dispute the claims of all other parties ..." Def. Rev. Cross Claim & Counterclaim (#164), ¶42 (first count). These allegations triggered Palma’s duty to defend LCA’s title to the Savage Collection.
The court’s file and the record reveals that Palma did not defend LCA from the Crawfords’ competing declaratory judgment count. Moreover, other than some limited testimony, Palma did not substantively participate in the litigation. Therefore, Palma is in breach of his contractual duty to defend LCA from adverse claims to the Savage Collection. However, while LCA suffered damages in that it had to bear the cost of litigating the adverse ownership claims from the date the Crawfords initially filed their declaratory judgment counterclaim against LCA, the court finds that the evidence submitted is insufficient to prove LCA’s damages with reasonable certainty. See part V A 1 of this opinion. Because damages are an essential element of a breach of contract claim, LCA has failed to prove this claim by a preponderance of the evidence. Judgment enters for Palma on count four of LCA’s complaint.
E
Count Five- Misrepresentations
The fifth count alleges misrepresentations on the part of Bambino, Palma and Francia, which purportedly constitute a breach of oral warranty. LCA does not indicate whether count five alleges a claim of fraudulent or negligent misrepresentation. The standard for fraudulent misrepresentation is set forth in part II B of this opinion. "[A]n action for negligent misrepresentation requires the plaintiff to establish (1) that the defendant made a misrepresentation of fact, (2) that the defendant knew or should have known was false, and (3) that the plaintiff reasonably relied on the misrepresentation, and (4) suffered pecuniary harm as a result." (Internal quotation marks omitted.) Seale v. GeoQuest, Inc., 189 Conn.App. 587, 591 n.5, 208 A.3d 326 (2019). Unlike a claim of fraudulent misrepresentation, the standard of proof for a negligent misrepresentation claim is that of a preponderance of the evidence. Rego v. Connecticut Ins. Placement Facility, 22 Conn.App. 428, 430, 577 A.2d 1105 (1990), rev’d on other grounds, 219 Conn. 339, 593 A.2d 491 (1991).
Regardless, LCA has not proved its claim whether it pleaded fraudulent or negligent misrepresentations on the part of Bambino, Palma and Francia because no evidence was submitted that Palma or Francia ever made any oral representations to LCA other than Palma’s instructions to LCA to issue the two $5000 checks to Bambino instead of Francia. As to Bambino, he certainly made oral representations to LCA, but there was insufficient evidence to establish that any representations he made were knowingly false or that he should have known they were false. Rather, LCA assumed Bambino owned the paintings based on Curran’s experience, the viewing of the paintings in Bambino’s home and LCA’s failure to request documentation as to the ownership of the paintings. LCA has failed to prove by a preponderance of evidence that Bambino, Palma or Francia made fraudulent or negligent misrepresentations that it relied upon to its detriment. Judgment enters for the defendants on count five of LCA’s complaint.
F
Count Six- Breach of Contract
1
Individual Liability
The sixth count claims a breach of contract against Bambino, Palma and Francia. The elements of a breach of contract action were previously set forth in part II D 2 of this opinion. The bill of sale that was signed and executed by Palma, on behalf of the joint venture with Bambino and Francia, provides in relevant part: "AND the Seller hereby covenants with the Buyer [LCA], its successors and assigns, that the Seller is the lawful owner of the Personal Property ; that the Personal Property is free from all liens, encumbrances, security interest, leases and charges; the Seller has good right to sell the Personal Property as aforesaid; and that the Seller will forever warrant and defend the Personal Property against the claims and demands of all persons whomever." (Emphasis added.) Pl. Ex. 37.
There is no question that LCA entered into an agreement with Palma. Id. It is clear that at the time of the execution of the bill of sale, Palma covenanted that he had good title to the Savage Collection. The court has determined that Bambino, Palma and Francia did not, in fact, have good title to the Savage Collection. As the "seller" under the bill of sale, Palma breached the contract with LCA because he was not the lawful owner of the Savage Collection nor did he have good right to sell the collection. Palma is, therefore, individually liable to LCA for a breach of contract under this count.
2
Joint Venture
Bambino, Palma and Francia were engaged in a joint venture and not a partnership when they agreed to purchase the Savage Collection and attempt to resell it for a profit. See footnote 6 of this opinion. Under the Uniform Partnership Act (UPA), "Partnership" is defined in relevant part as: "an association of two or more persons to carry on as co-owners a business for profit formed under section 34-314 ..." General Statutes § 34-301(12). General Statutes § 34-314(a) provides in relevant part that: "the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership."
"Person" is defined as "an individual, corporation, limited liability company, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision, agency or instrumentality, or any other legal commercial entity." General Statutes § 34-301(17).
"Business" is defined as "every trade, occupation and profession." General Statutes § 34-301(1).
"[T]he similarities between joint ventures and partnerships ... are significant. Our case law has long recognized that a joint venture, also referred to as a joint adventure or joint enterprise, exists where two or more parties combine their property, money, efforts, skill or knowledge in some common undertaking ... Generally, joint ventures relate to a single transaction, whereas partnerships exist for a general business ... [T]he relations and obligations of [a joint venture] in general are those which govern a partnership ... As in a partnership, the members of a joint venture undertake fiduciary duties to each other concerning matters within the scope of the joint venture ... [A] key distinction between a joint venture and a partnership is that, although mutual agency is required in order to have a partnership ... it is not required for the existence of a joint venture." (Citations omitted; internal quotation marks omitted.) Doe v. Yale University, 252 Conn. 641, 672-74, 748 A.2d 834 (2000).
"Connecticut courts have never settled upon a fixed definition of a joint venture, or laid out a finite list of the required elements of a joint venture. The existence of a joint venture in each case is a question of fact to be decided according to the terms of the parties’ agreement, the conduct of the parties, the nature of the undertaking, and other surrounding circumstances." Disorbo v. Krasdale Foods, Inc., Superior Court, judicial district of Hartford, Complex Litigation Docket, Docket No. X04-CV-14-6053488-S (October 31, 2016, Sheridan, J.). Some courts, however, have relied on 46 Am.Jur.2d, Joint Ventures, § 8, in holding that "[a] joint venture requires five elements, namely [1] two or more persons must enter into a specific agreement to carry on an enterprise for profit; [2] their agreement must evidence their intent to be joint venturers; [3] each must make a contribution of property, financing, skill, knowledge, or effort; [4] each must have some degree of joint control over the venture; and [5] there must be a provision for the sharing of both profits and losses." (Internal quotation marks omitted.) Schlierf v. Abercrombie & Kent, Inc., Superior Court, judicial district of Waterbury, Complex Litigation Docket, Docket No. X02-CV-05-5003467 (May 19, 2011, Shaban, J.).
See also Gibson v. Scap, supra, 960 F.Supp.2d 373, 381 (D.Conn. 2013); Durante v. Martinez, Superior Court, judicial district of New Haven, Docket No. CV-08-4043410-S (July 12, 2012, Corradino, J.T.R.); R.S. Silver Enterprises Co., Inc. v. Pascarella, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-06-5002499 (July 14, 2010, Jennings, J.T.R.).
*20 The court in Durante v. Martinez, Superior Court, judicial district of New Haven, Docket No. CV-08-4043410-S (July 12, 2012, Corradino, J.T.R.), discussed the fourth and fifth elements in detail: "The ‘control factor’ is not explicitly mentioned in the Connecticut cases the [Supreme] [C]ourt examined [in Doe v. Yale University, supra, 252 Conn. 672-74] ... To form a joint venture, there must not only be a joint interest in the objects and purposes of the undertaking but also either an express or implied right of each member of the joint venture to direct and control the other with respect to all aspects of the alleged enterprise. The mere sharing of an economic interest is not sufficient to form a joint venture, since there must be some evidence that the parties participate and have control over the enterprise. But ... there is authority to the effect that a joint venture may exist although the parties have unequal control of operations ... Connecticut cases in fact have found joint ventures in situations where one party contributes the finances to set up the enterprise which constitutes the joint venture and the other party manages or runs that enterprise or business operation ...
Requirement [five] concerns an agreement to share losses as a prerequisite for funding a joint venture ... The existence of an agreement between the alleged joint venturers to share in the profits and losses of the venture constitutes an essential element of a joint venture ... [I]n some jurisdictions the intention to share losses may be implied from an agreement to share in the profits. Lesser v. Smith, 115 Conn. 86, 90, 160 A. 302 (1932), seems to agree with this [because it held that] [i]n the absence of an agreement to the contrary, it will be presumed that the losses are to be shared in the same proportion as the profits." (Citations omitted; internal quotation marks omitted.)
A joint venture can arise in a variety of factual contexts. But, because "joint ventures are formed for a limited purpose rather than as an ongoing enterprise ... the general rule is that a joint venture continues until its purpose is fulfilled or rendered impracticable unless the parties expressly agree otherwise." (Citation omitted.) Investment Associates v. Summit Associates, Inc., 309 Conn. 840, 863-64, 74 A.3d 1192 (2013).
In Travis v. St. John, 176 Conn. 69, 73, 404 A.2d 885 (1978), the court held that because purported partners associated for the sole purpose of investing in a single parcel of real estate and because the record did not indicate any intention by the parties to carry on a trade, occupation or business or to create an agency relationship among themselves, a partnership was not formed under the Uniform Partnership Act. In Lesser v. Smith, supra, 115 Conn. 86, the court held that an investor who managed a pool of money to invest on behalf of pool members and receive a portion of the profits constituted a joint venture. In Dolan v. Dolan, 107 Conn. 342, 345-50, 140 A. 745 (1928), the Court held that where a former husband transferred most of his income to his wife so that she would manage the joint expenses of their household, they established a joint venture, which was subject to equal division upon dissolution of marriage. In Crosskey Architects, LLC v. D.R.D., Inc., Superior Court, judicial district of Hartford, Docket No. CV-08-6003120-S (October 25, 2010, Rittenband, J.T.R.), the court, after a bench trial, held that there was a joint venture between three entities in which one entity, on behalf of the three, solicited and hired an architect and issued checks for payments on specified construction projects.
In the present case, it is clear that Bambino, Palma and Francia did not form a partnership because they were not art dealers nor engaged in the business of buying and selling the paintings for profit and, as such, did not carry on "business" as defined by § 34-301(1). Bambino, Palma and Francia did, however, enter into a joint venture as all five elements of a joint venture are present in this case.
As to the first element, Bambino eventually convinced Palma and Francia to lend him $15,000 and $10,000, respectively, so the three of them could purchase the Savage Collection from Godel in an attempt to resell it for profit.
*21 As to the second element, although there was no express agreement to enter into a joint venture, the court finds that the three men came to a clear, mutual understanding that the collective $25,000 would be used to purchase the Savage Collection, which could then hopefully be sold for a profit. The transfer of $25,000 in cash to Bambino, Palma’s involvement in the purchase and sale transactions, along with Francia’s more limited involvement in the transaction with LCA is sufficient to indicate their intent to form a joint venture.
As to the third element, Palma and Francia financed $15,000 and $10,000, respectively, toward the purchase of the Savage Collection while Bambino set up the purchase of the paintings from Godel. Bambino also solicited and negotiated the sale of the Savage Collection and the Tack painting to LCA. As such, Bambino, Palma and Francia each contributed some financing, skill or effort to the venture.
As to the fourth element, there appears to be disparate degrees of control of the joint venture’s operation. Initially, Palma and Francia’s involvement in the joint venture was just the contribution of $15,000 and $10,000, respectively. Bambino was the one who negotiated the purchase of the Savage Collection from Godel. It was also Bambino who solicited and negotiated the sale of the Savage Collection and the Tack painting to LCA for $24,000 and $1000, respectively. Additionally, it was Bambino who received the two $5000 checks from LCA, which he then used to pay back Francia.
Palma was similarly active in the joint venture’s operation. Aside from his financial involvement, he drove with Bambino and Lameray to pick up the Savage Collection from Godel in New York City. It was Palma who delivered the $25,000 in cash to Godel. It was Palma who was designated as the "seller" in the bill of sale that he signed with LCA on "behalf of the partnership." Furthermore, Bambino held Palma out as a partner to Curran during the negotiations with LCA as to the sale of the Savage Collection. Additionally, Palma was issued a check for $15,000 by LCA once it received the paintings. Moreover, Palma gave directions to LCA to issue the two $5000 checks to Bambino instead of Francia.
Though Francia was less involved, he did participate financially with the $10,000 he provided. Also, the bill of sale with LCA called for Francia to be issued the final $10,000 due upon LCA’s receipt of the Tack painting from Francia, which he did deliver. This is evidence of having some level of control and membership in the purported "partnership."
These disparate degrees of control are not an issue for the fourth element because "Connecticut cases in fact have found joint ventures in situations where one party contributes the finances to set up the enterprise which constitutes the joint venture and the other party manages or runs that enterprise or business operation." (Internal quotation marks omitted.) Durante v. Martinez, supra, Superior Court, Docket No. CV-08-4043410-S. The court finds that Bambino, Palma and Francia had some degree of control over the venture, which satisfies the fourth element.
Finally, as to the fifth element, Bambino, Palma and Francia agreed to split any profit from the resale of the Savage Collection equally. While Bambino, Palma and Francia did not explicitly agree on how to split losses, our law presumes that an agreement to split profits equally is implicit evidence of a joint venture’s members’ intent to share losses equally as well. See Lesser v. Smith, supra, 115 Conn. 90; Durante v. Martinez, supra, Superior Court, Docket No. CV-08-4043410-S.
*22 While the court has determined that Bambino, Palma and Francia entered into a joint venture, it also finds that the joint venture was terminated when the Tack painting was delivered to LCA by Francia and the final $10,000 called for by the bill of sale was issued to Bambino, instead of Francia, by two separate checks for $5000 on October 23, 2014. The joint venture’s sole purpose was the resale of the Savage Collection, which was fulfilled on that date. Investment Associates v. Summit Associates, Inc., supra, 309 Conn. 863-64. Accordingly, any acts taken after that date by Bambino, Palma or Francia can no longer bind the others because once the joint venture’s purpose is fulfilled, they are no longer bound by most general principals of partnership law, such as joint and several liability. See id.
3
Joint and Several Liability of Joint Venture Members
"[T]he relations and obligations of [a joint venture] in general are those which govern a partnership." (Internal quotation marks omitted.) Doe v. Yale University, supra, 252 Conn. 673. In a partnership, partners are jointly and severally liable for contracts entered into by a partner in the ordinary course of business who has authority to enter into those agreements. General Statutes § 34-326(a); see Crosskey Architects, LLC v. D.R.D., Inc., Superior Court, judicial district of Hartford, Docket No. CV-08-6003120-S (October 25, 2010, Rittenband, J.T.R.); Blue Moon Market, LLC v. Old Saybrook Associates, Superior Court, judicial district of Middlesex, Docket No. CV-06-5001567-S (July 25, 2007, McWeeny, J.); Genn v. Santella, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-04-0200008-S (March 10, 2006, Jennings, J.); Kessler v. David T. Lerner, Inc., 15 Conn.Supp. 288 (1948).
In order to establish that the alleged contracting partner’s conduct occurred within the ordinary scope of the partnership’s business, a plaintiff must demonstrate that the wrongful acts "must have: (1) been the kind of thing a ... partner would do; (2) occurred substantially within the authorized time and geographic limits of the partnership; and (3) been motivated at least in part by a purpose to serve the partnership." (Internal quotation marks omitted.) Sheridan v. Desmond, 45 Conn.App. 686, 693, 697 A.2d 1162 (1997).
An authority to act on behalf of others concerns traditional concepts of agency authorization and, as such, an agent must have actual or apparent authority. Actual authority can be proved when the principal expressly authorizes the conduct or is ratified by the principal after the fact. It can also be proven circumstantially by deductions or inferences from the manifestations of consent of the principal. Ackerman v. Sobol Family Partnership, LLP, 298 Conn. 495, 508-09, 4 A.3d 288 (2010) (actual authority traditionally proven); Maharishi School Vedic Sciences, Inc. v. Connecticut Constitution Associates Ltd. Partnership, 260 Conn. 598, 607-08, 799 A.2d 1027 (2002) (implied authority, which is actual authority circumstantially proven). Apparent authority is shown when a principal causes a third person, in this case LCA, to believe the agent possesses authority and requires that (1) the principal’s conduct holds out the agent as possessing sufficient authority to take the act in question and (2) the third party must reasonably believe in good faith that the agent had authority to bind the principal. Ackerman v. Sobol Family Partnership, LLP, supra, 508-09.
"[A]lthough mutual agency is required in order to have a partnership ... it is not required for the existence of a joint venture." (Citations omitted.) Doe v. Yale University, supra, 252 Conn. 674. In defining "mutual agency" our Supreme Court has stated that: "there is a partnership between two or more persons whenever such a relation exists between them that each is as to all the others, in respect to some business, both principal and agent. If such a relation exists, they are partners; otherwise not. They are partners in that business in respect to which there is this relation; and as to any other business they are not partners. Partnership is but a name for this reciprocal relation." (Internal quotation marks omitted.) Hotchkiss v. DeVita, 103 Conn. 436, 445-46, 130 A. 668 (1925). While mutual agency is not required, a joint venture could certainly still have mutual agency between its members. See Doe v. Yale University, supra .
*23 Palma’s entering into and executing the bill of sale, in which he warranted he had good title to the paintings he was selling, was clearly within the ordinary scope of the joint venture. This is so because the purpose of the joint venture was to sell the Savage Collection at a profit and, as such, the only motivating factor for Palma to execute the bill of sale was to serve this goal. Thus, entering into a contract to do just that is "the kind of thing" a member of this joint venture would do. Additionally, the contract was entered into in Connecticut and executed during the time when the joint venture legally existed.
Palma also had apparent authority to execute the bill of sale and warrant that he had good title. This is because the joint venturers’ actions and representations, viewed collectively, implied that each member had authority to act on behalf of the joint venture. While Bambino contacted LCA first, he represented that he and Palma were "partners" during the negotiations of the sale of the Savage Collection. LCA reasonably believed in good faith that Palma had the authority to execute the bill of sale. This understanding was reflected with the wording that "[t]he person executing this document on behalf of the Seller [Palma] represents and warrants that he/she is duly authorized by valid partnership resolution to execute this Bill of Sale on behalf of the Seller." Pl. Ex. 37. Notably, despite Bambino negotiating the sale and storing the Savage Collection in his home, Palma was listed as the seller in the bill of sale. Payment for the Savage Collection and the Tack painting was bifurcated, with Palma to be paid $15,000 upon LCA’s receipt of the Savage Collection, which occurred. Palma directed the second payment of $10,000, which, according to the bill of sale was due to Francia instead be paid to Bambino, who, in turn, delivered those funds to Francia. This indicates the fungibility of money between the three joint venturers and is reflective of each member having the apparent authority to act on behalf of the joint venture.
The court finds that Palma, by having executed the bill of sale with LCA in the ordinary course of business and having expressly or impliedly indicated that he had the authority to do so, jointly and severally bound himself with Bambino and Francia as the members of the joint venture to the terms of the agreement.
Accordingly, judgment enters for LCA on count six of its complaint. The issue of damages will be addressed separately in part V A 1 of this opinion.
G
Count Seven- Unjust Enrichment
In the seventh count of its complaint, LCA alleges unjust enrichment as to Bambino, Palma and Francia. The elements regarding unjust enrichment were referenced in part II C of this opinion. "[L]ack of a remedy under [a] contract is a precondition for recovery upon unjust enrichment." Gagne v. Vaccaro, 255 Conn. 390, 401, 766 A.2d 416 (2001). Here, there does exist a written agreement in the form of a bill of sale which provides LCA with a remedy for the failure of the defendants to comply with its terms. The court has already found that Bambino, Palma and Francia are liable to LCA for a breach of contract. See part II F of this opinion. As such, LCA cannot sustain its unjust enrichment claim against Bambino, Palma and Francia. Judgment enters for the defendants on count seven of LCA’s complaint.
H
Count Eight- CUTPA
In the eighth count of its complaint, LCA alleges a violation of CUTPA as to Godel, Godel & Co., Bambino, Francia and Palma. LCA, however, has affirmatively raised an issue as to choice of law, arguing that CUTPA should apply and not New York unfair trade practices law. It is LCA’s burden to prove that there is an outcome determinative conflict between CUTPA and New York unfair trade practices law. Cohen v. Roll-A-Cover, LLC, supra, 131 Conn.App. 465-66.
1
Outcome Determinative Choice of Law
*24 Our Supreme Court has stated that "CUTPA imposes no requirement of a consumer relationship." (Internal quotation marks omitted.) Fink v. Golenbock, 238 Conn. 183, 215, 680 A.2d 1243 (1996). It is well settled under New York law that a claim that a defendant violated N.Y. Gen. Bus. Law § 349(h) (McKinney 2018) can only be maintained if there is an allegation of "consumer-oriented" deceptive conduct. Koch v. Acker, Merrall & Condit Co., 18 N.Y.3d 940, 941, 967 N.E.2d 675, 944 N.Y.S.2d 452 (2012). "The threshold requirement of consumer-oriented conduct is met by a showing that the acts or practices have a broader impact on the consumer at large in that they are ‘directed to consumers’ or ‘potentially affect similarly situated consumers’ ..." (Citation omitted.) Cruz v. NYNEX Information Resources, 263 A.D.2d 285, 290, 703 N.Y.S.2d 103 (N.Y.App.Div. 2000). "Consumer-oriented conduct does not require a repetition or pattern of deceptive behavior. The statute itself does not require recurring conduct. Moreover ... this law was intended to afford a practical means of halting consumer frauds at their incipiency without the necessity to wait for the development of persistent frauds ... Private contract disputes, unique to the parties, for example, would not fall within the ambit of the statute ..." (Citations omitted; internal quotation marks omitted.) Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 25, 647 N.E.2d 741, 623 N.Y.S.2d 529 (1995).
LCA states in its post-trial brief that if New York unfair trade practices law were to apply to count eight, then LCA would have "no remedy on the present facts." Pl.’s Post-trial Br. (#227), p. 25. Thus, LCA tacitly concedes that if New York law were to apply, then its CUTPA claim fails. Based on the foregoing, LCA has shown that there is an outcome-determinative choice of law issue relative to CUTPA that warrants a choice of law analysis as to whether Connecticut or New York law applies. The court must now make that determination.
2
Most Significant Relationship
As to tort choice of law issues, which includes CUTPA, our Supreme Court has abandoned the lex loci delicti doctrine in favor of the "most significant relationship" analysis set forth in § 6 and § 145 of the Restatement (Second) of Conflict of Laws. Western Dermatology Consultants, P.C. v. Vital Works, Inc., supra, 322 Conn. 551 n.9. The § 6(2) factors and how to apply those factors were previously set forth in detail in part II A 3 of this opinion.
To aid courts in determining the policies of interested states and assigning weight to each factor in § 6(2) in tort actions, § 145(2) of the Restatement (Second), supra, provides four additional factors that "are to be evaluated according to their relative importance with respect to the particular issue": (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. The application of these factors is relatively straightforward. See Western Dermatology Consultants, P.C. v. Vital Works, Inc., supra, 322 Conn. 559-60. The § 145(2) factors should be analyzed before the § 6(2) factors. Id., 559-62.
Turning first to the § 145(2) factors, the injury claimed by LCA was in Connecticut due to its inability to sell the Savage Collection because of the cloud on the title to the paintings. This action was brought in the Connecticut Superior Court. Thus, § 145(2)(a) weighs in favor of Connecticut. The Godel defendants consummated the sale of the Savage Collection and delivered it to Palma in New York; met with Bambino about the bill of sale while in New York, and after this lawsuit commenced, made available to Bambino blank letterhead which he picked up from Godel & Co.’s office in New York. Therefore, as to § 145(2)(b), the place where the conduct causing the injury occurred was New York. Godel and Godel & Co. were, at all times relevant to this case, located in New York. Godel’s residence and the company’s place of incorporation was New York. LCA was based in Connecticut. Because both parties are in different states, § 145(2)(c) is assigned no weight. LCA did not have any direct relationship with Godel or Godel & Co., so § 145(2)(d) is assigned no weight.
*25 With these factors in mind, the court next turns to the seven core factors of the most significant relationship test. In the present case, both Connecticut and New York have an interest in the disposition of the unfair trade practices issue, so § 6(2)(a) is to be accorded little to no weight as "the needs of the interstate and international systems, supports neither state’s law." Western Dermatology Consultants, P.C. v. Vital Works, Inc., supra, 322 Conn. 560-61. As to § 6(2)(b), our Supreme Court has stated that Connecticut has an interest in enforcing CUTPA because it is used to "ensure that local businesses do not engage in unfair trade practices in this state ..." (Emphasis added.) Id., 561. Here, however, Godel & Co. is not a local business. Rather, it is a New York business. Furthermore, while Godel & Co. does business in Connecticut, its involvement in this case was limited to transactions in New York. Therefore, Connecticut has no interest in applying CUTPA to protect its citizens for unfair trade practices that occurred in New York. The next factor, § 6(2)(c), weighs heavily in favor of applying New York law because New York has an interest in applying its unfair trade practices law to transactions and events that occur entirely within its borders. Id. Similarly, because Godel and Godel & Co.’s relationship with the parties was contained entirely within New York, § 6(2)(d) weighs in favor of applying New York law. Id., 561-62. The next factor, § 6(2)(e) is neutral and assigned no weight because both states have an interest in deterring tortious conduct. Id., 562. While § § 6(2)(f) and (g) are assigned little to no weight because they are ancillary to the goal of providing rational, fair choice of law rules, both factors do weigh in favor of applying New York law because when a party is exclusively based in one state and only interacts with the parties or property at issue in a case in that state, then applying that state’s law leads to certainty, predictability and ease in applying choice of law rules. Based on the foregoing, New York has the most significant relationship to the unfair trade practices claim against Godel and Godel & Co.
3
Application of New York Unfair Trade Practices Law
Under New York law, LCA’s count eight fails on two grounds. First, LCA specifically pleaded a CUTPA claim. Pl. Second Amend. Compl. (#147), ¶56 (count eight). Thus, LCA cannot recover under the New York statute, which is something it never pleaded. Second, the plaintiff cannot practically recover under its unfair trade practices claim because N.Y. Gen. Bus. Law § 349(h) (McKinney 2018) requires "consumer-oriented conduct," which is not present in this case as to Godel and Godel & Co., nor Bambino, Palma and Francia. LCA is not a consumer of these defendants’ fine art collection. Rather, LCA is a second-hand market buyer of the Savage Collection from the joint venture between Bambino, Palma and Francia. There was no direct relationship between LCA and Godel or Godel & Co.
Although LCA and the Crawfords attempted to amend their pleadings to include a count relative to the New York statute, the court denied the request as being untimely because both parties filed a request to do so after the first two days of trial. See #211, #212. The issue was not raised before the court until March 27, 2019, the final day of trial. The proceedings on March 26th and 27th had followed a seven-week suspension of the trial at the request of the parties following the first two days of trial on February 5th and 6th. Allowing the amendment would have required additional pleading, motion practice and discovery, which would have made the efficient management of the trial impossible. Moreover, the February 5, 2019 trial date was the fourth time the matter had been set down for trial as it had been continued on three previous occasions.
Because the defendants have prevailed on the post-trial choice of law issue, judgment enters for the defendants on count eight of LCA’s complaint.
III
THE CRAWFORDS’ COUNTERCLAIM AND CROSS CLAIMS
A
Count One- Declaratory Judgment
In their first count, the Crawfords seek a declaratory judgment as to all parties. The court has already set forth the standard for addressing whether a declaratory judgment count is appropriate in this case. See part II A 1 of this opinion. The court finds that all the elements are met as to the Crawfords because they have a legal and equitable interest in the paintings through the potential loss of title in them, there is an actual bona fide and substantial question as to the ownership of the paintings and the court is of the opinion that although there may be other forms of redress available to the Crawfords, it is in the interest of judicial economy to allow this count to proceed so as to resolve the competing adverse interests and claims and to provide practical relief. The court has also addressed the requisite choice of law analysis and analysis of the applicable state’s law to the conveyances. See part II A 2-4 of this opinion. The court incorporates the reasoning set forth in these subsections relative to the Crawfords’ declaratory judgment counterclaim as to LCA and their cross claim as to all of the codefendants. To reiterate, the Crawfords are the lawful owners of paintings numbered 6, 9, 10, 11, 12, 13, 14, 15 and 16, while Brideau is the lawful owner of paintings numbered 1, 2, 3, 4, 5, 7 and 8 of the Savage Collection.
*26 Accordingly, judgment enters for the Crawfords on count one of their cross claim and counterclaim.
B
Count Two- Unjust Enrichment
The Crawfords’ second count alleges unjust enrichment against Godel, Godel & Co., Bambino, Francia and Palma. The legal standard for unjust enrichment claims is set forth in part II C of this opinion.
As previously noted, the Crawfords had a consignment relationship with Godel and Godel & Co. The consigned paintings were then sold for $25,000 to Bambino, Palma and Francia. Godel and Godel & Co. thereby accrued a benefit. Godel and Godel & Co. owed the Crawfords as well as Brideau a fiduciary duty, as consignees, to set aside the $25,000 proceeds and transfer the money directly to the Crawfords and Brideau or, alternatively, to their agent(s). N.Y. Arts & Cult. Aff. Law § 12.01(1)(a) (McKinney 2018). Godel and Godel & Co. did not do this and, therefore, unjustly did not pay for the benefit they received from the consignment relationship. Therefore, Godel and Godel & Co. are liable for damages to the Crawfords.
As to Bambino, Palma and Francia, they have been defaulted for failure to plead. See orders #202.10, 203.10, 204.10. "General Statutes § 52-119 provides that [p]arties failing to plead according to the rules and orders of the court may be ... defaulted ... Section 10-18 of our rules of practice essentially mirrors that language." (Internal quotation marks omitted.) Bank of New York Mellon v. Talbot, 174 Conn.App. 377, 383, 165 A.3d 1253 (2017). "[A] default admits the material facts that constitute a cause of action, the entry of default conclusively determines the liability of a defendant ..." People’s United Bank v. Bok, 143 Conn.App. 263, 272, 70 A.3d 1074 (2013). Accordingly, Bambino, Palma and Francia are liable to the Crawfords for damages under a theory of unjust enrichment.
Judgment enters in favor of the Crawfords against all defendants on count two of their cross claim. The issue of the amount of damages due from the defendants shall be addressed separately in part V A 2 of this opinion.
C
Count Three- CUTPA
The third count alleges a CUTPA violation by Godel, Godel & Co, Bambino, Francia and Palma. Technically, no other party beyond LCA raised an issue with regard to choice of law as to CUTPA. However, it has already been shown to the court that there is an outcome determinative conflict between Connecticut and New York unfair trade practices law. The court has already determined that New York law has the most significant relationship to the transactions involving Godel and Godel & Co. Therefore, the court incorporates its determinations relative to choice of law from part II H of this opinion.
As such, the Crawfords’ CUTPA cross claim must fail as to Godel and Godel & Co. because they specifically pleaded a CUTPA claim and not an applicable New York cause of action. Def.’s Rev. Amend. Cross Claim & Counterclaim (#164), ¶43 (count three). Additionally, the Crawfords cannot practically recover as no consumer-oriented conduct occurred. N.Y. Gen. Bus. Law § 349(h) (McKinney 2018); Koch v. Acker, Merrall & Condit Co., supra, 18 N.Y.3d 941. As to Bambino, Palma and Francia, they have been defaulted for failure to plead. See orders #202.10, 203.10, 204.10. While the default is applicable to count three, which alleges a violation of a CUTPA claim, the court has determined that New York law applies, not CUTPA. Therefore, Bambino, Palma and Francia cannot be liable on that count based on the facts of the present case, regardless of the default for failure to plead.
*27 Judgment enters in favor of the defendants on count three of the Crawfords’ cross claim. Because New York law applies, the allegations of the complaint are insufficient on their face to make out a valid claim for the relief requested. Whitaker v. Taylor, 99 Conn.App. 719, 726-27, 916 A.2d 834 (2007).
D
Count Four- Conversion
The fourth count alleges conversion on the part of Godel, Godel & Co., Bambino, Francia, and Palma. "The tort of [c]onversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner’s rights." (Emphasis omitted; internal quotation marks omitted.) Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 43, 761 A.2d 1268 (2000). "To establish a prima facie case of conversion, [a] plaintiff ha[s] to demonstrate that (1) the material at issue belonged to the plaintiff, (2) that the defendants deprived the plaintiff of that material for an indefinite period of time, (3) that the defendants’ conduct was unauthorized and (4) that the defendants’ conduct harmed the plaintiff." Stewart v. King, 121 Conn.App. 64, 74 n.4, 994 A.2d 308 (2010). "The intent required for a conversion is merely an intent to exercise dominion or control over an item even if one reasonably believes that the item is one’s own." Plikus v. Plikus, 26 Conn.App. 174, 180, 599 A.2d 392 (1991). "Conversion may arise subsequent to an initial rightful possession." Suarez-Negrete v. Trotta, 47 Conn.App. 517, 521, 705 A.2d 215 (1998).
"A mere obligation to pay money may not be enforced by a conversion action ... 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 ... legal title to the money ... Accordingly, a claim for conversion may be brought when the relationship is one of bailor and bailee but not when it is one of debtor and creditor." (Citation omitted; internal quotation marks omitted.) Chiulli v. Chiulli, 161 Conn.App. 638, 653, 127 A.3d 1146 (2015). Conversion must be proven by a preponderance of the evidence. See Federal Deposit Ins. Corp. v. Napert-Boyer Partnership, 40 Conn.App. 434, 441, 671 A.2d 1303 (1996) ("In a civil action, the plaintiff has the burden of proving its case by a preponderance of the evidence"); Irovando v. Huntington, Superior Court, judicial district of Hartford, Docket No. CV-11-6022844-S (September 23, 2013, Sheridan, J.) ("The plaintiff’s burden to prove conversion is by a fair preponderance of the evidence").
Godel and Godel & Co. were the consignees of the Savage Collection. They held on to the collection as collateral for an unrelated debt and eventually sold it to Bambino, Palma and Francia for $25,000. Some of the proceeds of this sale were, legally, the property of the Crawfords, as consignors through their agent and sub-agent, while some of the proceeds belonged to Brideau. The transaction took place sometime on or about November 15, 2013. Godel and Godel & Co. never transferred the proceeds of the sale to the Crawfords or their agents nor to Brideau or his agent thereby depriving the Crawfords of the proceeds for an indefinite period of time. Godel and Godel & Co.’s conduct was unauthorized by New York law, as Godel and Godel & Co. owed a fiduciary duty to the consignors to relinquish the sale proceeds. N.Y. Arts & Cult. Aff. Law § 12.01(1)(a) (McKinney 2018). This is not a creditor-debtor relationship as the consignors have title to the proceeds of a consignment sale. Id. The failure to transfer the funds owed to the consignors resulted in the consignors’ loss of the sale proceeds. Based on the credible evidence before it, the court finds that the Crawfords have proven their conversion claim as to Godel and Godel & Co.
*28 As to Bambino, Palma and Francia, the court has previously noted they were defaulted for failure to plead as to this count. A default acts as an admission of the material facts of a cause of action so long as the allegations of the complaint are sufficient on their face to make out valid claim for the relief requested. Whitaker v. Taylor, supra, 99 Conn.App. 725-26. Under such circumstances, a plaintiff is normally entitled to at least nominal damages. Id., 726. However, a court may refuse to award damages where a complaint is legally insufficient because it fails to allege facts showing that the defaulted defendants acted consistent with the elements of the cause of action pleaded. Id., 732-33. In this case, a review of count four of the operative cross claim (#164) reveals the following. The act of conversion alleged is that Godel and Godel & Co. "converted the paintings by continuing to hold the paintings hostage for Lameray’s alleged unrelated debt." Def.’s Rev. Amended Cross Claim and Counterclaim ¶13. The complaint further alleges that following the institution of this action, Godel agreed to provide materials or assistance to Bambino or Palma to create a false bill of sale "with the goal of bringing an end to this litigation." Id., ¶29. Further, that such actions "constitute an unlawful conspiracy to commit fraud and overt acts in furtherance of said conspiracy." Id., ¶30. However, "Bambino and Palma did not follow through on the plan ... because they became nervous about engaging in criminal conduct." Id., ¶33. The complaint goes on to allege that "Mr. Godel and Godel & Co. are liable for the return of the funds they received in exchange for the Savage Collection." Id., ¶37. Incorporating these allegations into count four of their complaint, the Crawfords then allege that by (eventually) giving the paintings to Bambino, Palma and Francia, and by having kept the paintings as security for an (unrelated) debt, Godel and Godel & Co. deprived the Crawfords of their property indefinitely, that the actions of Bambino, Palma and Francia were unauthorized and that as a result they have suffered damages. Id., ¶¶42, 43, 44.
None of the allegations of conversion relate to their possession of the paintings or the sale of the paintings to LCA. The only allegation of conversion having occurred was through the actions of Godel and Godel & Co. The allegations related to Bambino, Palma and/or Francia were in the context of a possible conspiracy which was never brought to fruition and which involved actions after the conversion had taken place. The court finds no specific acts pleaded in count four as to Bambino, Palma and Francia that would support a legally sufficient cause of action for conversion as to those three defendants. Despite having been defaulted for failure to plead and thereby having liability conclusively determined, the court finds the evidence legally insufficient to support an award of damages as to these three defendants.
Judgment enters on count four of the cross claim in favor of the Crawfords. The issue of the amount of damages as to Godel and Godel & Co. shall be addressed separately in part V A 2 of this opinion.
E
Count Five- Civil Theft
The fifth count alleges civil theft (i.e., statutory theft) on the part of Godel, Godel & Co., Bambino, Palma, and Francia.
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." Our Supreme Court has interpreted the word "steals," as it is used in § 52-564, to mean larceny as defined under General Statutes § 53a-119. Mystic Color Lab, Inc. v. Auctions Worldwide, LLC, 284 Conn. 408, 418 n.14, 934 A.2d 227 (2007). Section 53a-119 provides in relevant part: "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." An owner is defined, for purposes of § 53a-119, as "any person who has a right to possession superior to that of a taker, obtainer or withholder." General Statutes § 53a-118(a)(5). Statutory theft is to be proven by a preponderance of the evidence. Stuart v. Stuart, 297 Conn. 26, 40, 996 A.2d 259 (2010).
"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.) Suarez-Negrete v. Trotta, supra, 47 Conn.App. 521.
In McCrae Associates, LLC v. Universal Capital Management, 746 F.Supp.2d 389, 396-98 (D.Conn. 2010) the court granted summary judgment in favor of a defendant, concluding that, even though the injury occurred in Connecticut, the factors in Restatement (Second), supra, § § 6 and 145 weighed heavily in favor of the application of Delaware law because the conduct that caused the injury, the alleged civil theft, occurred in Delaware. In Tuckerbrook Alternative Investments, LP v. Alkek & Williams, LTD, Superior Court, judicial district of Stamford-Norwalk, Complex Litigation Docket, Docket No. X08-CV-11-6010952-S (March 16, 2015, Genuario, J.), the trial court entered judgment in favor of three defendants on a § 52-564 civil theft claim concluding that there was no evidence that the conduct alleged to have violated § 52-564 took place in Connecticut, and, because the parties’ relationship and transactions were most closely associated with Delaware, that state’s law applied to the conduct at issue. There, however, no cause of action for statutory theft had been pled under Delaware law and consequently, none of the defendants could be held liable. Id.
*29 As discussed in part II A 3 of this opinion, the transactions between Lameray and Godel and Godel & Co., as well as the transaction between Godel and Godel & Co. and Bambino, Palma and Francia, took place exclusively in New York. This court has already determined that New York had the most significant relationship to those transactions. See part II A 3 of this opinion. Because New York law applies, the Crawfords cannot sustain their § 52-564 civil theft claim against Godel and Godel & Co. McCrae Associates, LLC v. Universal Capital Management, supra, 746 F.Supp.2d 398; Tuckerbrook Alternative Investments, LP v. Alkek & Williams, LTD, supra, Superior Court, Complex Litigation Docket, Docket No. X08-CV-11-6010952-S.
As to Bambino, Palma and Francia, the court has previously noted they were defaulted for failure to plead as to this count. A default acts as an admission so long as the default claim is legally sufficient. Whitaker v. Taylor, supra, 99 Conn.App. 725-26. Under such circumstances, a plaintiff is at least entitled to nominal damages. Id., 726. However, a court may refuse to award damages where a claim is legally insufficient because it fails to allege facts showing that the defaulted defendants possessed an intent to permanently deprive the plaintiff of the stolen property. Id., 732-33. In this case, a review of the operative cross claim (#164) finds that no facts are alleged relative to such an intent on the part of Bambino, Palma or Francia on the statutory theft count. Therefore, the count is legally insufficient for the court to enter a finding of liability, or even if there was liability, that an award of anything other than nominal damages would be appropriate relative to this count. Judgment enters in favor of the defendants as to count five of the cross claim.
IV
GODEL AND GODEL & CO. SPECIAL DEFENSES
Godel and Godel & Co. have raised seven special defenses (#199) as to counts one, two, three and eight of LCA’s complaint. They are essentially as follows: unclean hands, any loss was caused by a third party over which the defendants had no control, punitive damages are not recoverable against them, the plaintiff failed to mitigate its damages, estoppel, no claims have been made that are sufficient to pierce the corporate veil and the counts fail to state a claim against them.
As to the Crawfords, Godel and Godel & Co. raise eight special defenses (#200) as to all counts of their counterclaim and cross claims. Those eight defenses incorporate all of the seven special defenses raised above, plus an additional special defense that the Crawfords have no standing and therefore the court has no jurisdiction to hear their claim. All of the special defenses asserted by Godel and Godel & Co. fail to allege any facts. It is a defendant’s burden to allege facts that would make out a legally sufficient special defense. Almada v. Wausau Business Ins. Co., 274 Conn. 449, 456, 876 A.2d 535 (2005). "[F]acts [are] pleaded as a special defense when they are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action." (Internal quotation marks omitted.) Id. Because all of Godel and Godel & Co.’s special defenses allege nothing more than legal conclusions they are legally insufficient to defeat liability.
The issue of standing raised as to the Crawfords is an attack on subject matter jurisdiction that must be dealt with by the court whenever and however raised. Keller v. Beckenstein, 305 Conn. 523, 531-32, 46 A.3d 102 (2012). The Crawfords are classically aggrieved because they have a legal ownership interest in nine of the paintings from the Savage Collection and were damaged by Godel and Godel & Co.’s nonpayment to them of the proceeds of their sale on consignment. Furthermore, no party has submitted any credible evidence that would support any of the special defenses raised by Godel and Godel & Co. The court finds that the Crawfords do have standing to bring their cross claims and therefore the court does have jurisdiction over the matter.
V
DAMAGES
A
Compensatory Damages
1
LCA’s Damages
*30 LCA successfully proved most of count four, which is treated as a breach of contract claim as to Palma only, and all of count six, which is a separate breach of contract claim as to Bambino, Palma and Francia. "The general rule in breach of contract cases is that the award of damages is designed to place the injured party, so far as can be done by money, in the same position as that which he would have been in had the contract been performed." (Internal quotation marks omitted.) Torosyan v. Boehringer Ingelheim Pharmaceuticals, Inc., supra, 234 Conn. 32. "There are no unbending rules as to the evidence by which [damages for breach of contract] are to be determined ... In making its assessment of damages for breach of [any] contract the trier must determine the existence and extent of any deficiency and then calculate its loss to the injured party." (Internal quotation marks omitted.) Chila v. Stuart, supra, 81 Conn.App. 467. "It is axiomatic that the burden of proving damages is on the party claiming them ... When damages are claimed they are an essential element of the plaintiff’s proof and must be proved with reasonable certainty ... Damages are recoverable only to the extent that the evidence affords a sufficient basis for estimating their amount in money with reasonable certainty." (Internal quotation marks omitted.) American Diamond Exchange, Inc. v. Alpert, 302 Conn. 494, 510, 28 A.3d 976 (2011).
In count four of LCA’s breach of "warranty" claim, which has been construed as a separate breach of contract claim, LCA seeks damages relative to Palma’s failure to defend LCA against claims of ownership to the Savage Collection. At the conclusion of the trial, the court directed LCA and the Crawfords to file by May 10, 2019 an affidavit of attorneys fees relative to their respective clients. That date was later extended by motion to May 17, 2019. The court also made clear that if any party had an objection to the fees claimed by that date, a separate hearing would be held on the objection. No objections were filed by any party. LCA’s affidavit of attorneys fees claimed $2,389.15 in expenses and $72,619.45 in legal fees (#228). However, the affidavit failed to itemize the specific nature, date and time of the work done. Palma’s duty to defend arose as of October 20, 2016, when the Crawfords pleaded their declaratory judgment counterclaim. Even if one were to assume an award of such fees and expenses is allowable, without a full itemization relative to the fees and expenses incurred, the court is unable to make any determination as to what portion would be allocable to LCA’s defense of the Crawfords’ declaratory judgment claim as opposed to the expenses LCA incurred in pursuit of its own claims and addressing the defenses raised by the parties. There was insufficient evidence presented during the course of the trial to detail what expenses or fees were incurred by LCA relative to the defense of the adverse claims of ownership to the collection. To determine the existence and extent of any loss suffered, the plaintiff must prove such damages with reasonable certainty. American Diamond Exchange, Inc. v. Alpert, supra, 302 Conn. 510. LCA has failed to do so as to count four.
LCA failed to timely file its affidavit of attorneys fees as it was not filed until May 20, 2019 (#228).
Relative to LCA’s other breach of contract claim as to Bambino, Palma and Francia, which was pleaded as count six, the damages are found to be proven and are as follows: LCA paid $24,000 for the Savage Collection and $1000 for the Tack painting. The latter painting is not part of the dispute between the parties. By virtue of their payment for, and loss of, their ownership interest in the collection, LCA’s damages are $24,000 as to this count. Therefore, Bambino, Palma and Francia are jointly and severally liable to LCA for $24,000.
2
Crawfords’ Damages
The Crawfords successfully established liability as to their unjust enrichment (count two) and conversion (count four) cross claims as to Godel, Godel & Co, Bambino, Palma and Francia.
As to count two, "the measure of damages in an unjust enrichment case ordinarily is not the loss to the plaintiff but the benefit to the defendant." Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 285, 649 A.2d 518 (1994).
*31 As to count four, "[i]t is generally acknowledged that the measure of damages in a conversion matter is the value of the goods at the time they were converted, with interest from the date of the wrongful act ... Our Supreme Court has held that in the absence of a contract which fixes the terms of recovery in the event of conversion or loss, the market value of the object at issue shall serve to establish the measure of damages, with the addition of applicable interest." (Citations omitted; internal quotation marks omitted.) Steponaitis v. Stoughton, Superior Court, judicial district of Litchfield, Docket No. CV-00-0082383-S (January 31, 2002, Cremins, J.) (31 Conn.L.Rptr. 305, 307).
To determine damages, the court must establish the value of the paintings. The first evidence of valuation was found in the July 10, 2009 agreement between the Crawfords and Brideau. However, as noted in footnote 8 of this opinion, the court gives this little evidentiary weight in that the estimates are ten years old. Pl. Exs. 9, 66. While no expert testified as to the value of the paintings, there was no objection by any party to the admission of Curran’s testimony who credibly testified that at the time of LCA’s purchase, the Savage Collection was collectively worth anywhere from $25,400 to $38,600. Pl. Ex. 4. Curran’s estimate of the range of values for each painting, based on comparables, was done between April and September 2014. This was well less than a year after the November 15, 2013 transaction in which the collection was sold for $25,000 by Godel & Co. The court can infer from the timing of that sale and the LCA purchase for $24,000 that there was little fluctuation in the value of the paintings in the interim. The court finds the better and weightier evidence of the valuation of each painting to be the range of values provided by Curran in 2014. Pl. Ex. 4. Based on the range of values and the timing and price of the two transactions, the court finds the value of the individual paintings as of November 15, 2013 to be as follows:
1. Elow Pali, Hawaii: $2000
2. View of Valley: $2000
3. Waihia Bay Hawaii: $2000
4. Near Holuala, Hawaii: $1500
5. Kaianlio Hawaii: $1200
6. Allegorical Scene with Figures: $1500
7. Kapaa Hawaii: $2000
8. Palm Trees Hawaii: $2000
9. Hawaiian Landscape with Small Nude: $1200
10. Boulders in Clearing: $1000
11. The Bathers: $1000
12. Striding Nude: $2500
13. Hawaiian Mountains & Sky: $2000
14. Nude with Lei in Stream: $1500
15. Nude Dancers in Landscape: $1000
16. Waihia Bay Study: $1000
Total: $25,400
In any transaction, the bargained for purchase price of goods need not necessarily equal the actual value of the goods.
Paintings number 6 and 9 through 16, awarded to the Crawfords, constitute a total value of $12,700. Because the Crawfords have prevailed on multiple counts, the court must address the issue of duplicative recoveries from multiple parties. "The rule precluding double recovery is a simple and time-honored maxim that [a] plaintiff may be compensated only once for his just damages for the same injury ... Plaintiffs are not foreclosed from suing multiple defendants, either jointly or separately, for injuries for which each is liable, nor are they foreclosed from obtaining multiple judgments against joint tortfeasors ... The possible rendition of multiple judgments does not, however, defeat the proposition that a litigant may recover just damages only once ... Double recovery is foreclosed by the rule that only one satisfaction may be obtained for a loss that is the subject of two or more judgments." (Internal quotation marks omitted.) Haynes v. Yale-New Haven Hospital, 243 Conn. 17, 22 n.6, 699 A.2d 964 (1997).
*32 Under count two of the Crawfords’ unjust enrichment claim, the measure of damages is the value of the benefit retained by Godel and Godel & Co. from the proceeds of the New York transaction, which totaled $25,000 for all sixteen paintings. However, because the Crawfords’ paintings only constituted a portion of the Savage Collection, the court must balance the equities of the parties and the situation to determine where the loss should fall and in what amount. The claim of the Crawfords applies only to the paintings received by these defendants that were rightfully owned by the Crawfords. The value of those paintings was $12,700. In that respect, the court finds that an award to the Crawfords of the full value of the benefit to Godel and Godel & Co., under the facts of this case, would constitute a windfall for the Crawfords. Because they have already been awarded ownership of the nine paintings to which they have made a claim, a damage award equal to the value of the paintings would constitute a double recovery. Haynes v. Yale-New Haven Hospital, supra, 243 Conn. 22 n.6. Therefore, the court finds that net damages should be zero as to this count as the value of the benefit to Godel and Godel & Co., to the extent of the Crawfords’ interest in the Savage Collection, is offset by the return of the paintings to the Crawfords.
As to Bambino, Palma and Francia, the value of the benefit they obtained was the possession of the Savage Collection. Again, only a portion of the amount received by these defendants was applicable to the paintings owned by the Crawfords. Applying the same value and analysis above relative to any potential windfall, with the return of the nine paintings to the Crawfords, any damages due from these defendants on this count is offset by the return of the paintings. In exercising its discretion in this regard, the court has accounted for the potential impermissible double recovery. Id. Hence, the net damages are zero as to Bambino, Palma and Francia on count two.
As to count four of the Crawfords’ conversion cause of action, their claim pertains only to the extent of their interest in the converted property which was the $25,000 in proceeds received by Godel and Godel & Co. through the sale of the collection to Bambino, Palma and Francia. At the time of the sale, the Crawfords owned nine of the sixteen paintings, and Brideau owned the other seven. In a conversion claim, the measure of damages is the value of the goods at the time they were converted with interest from the date of the wrongful act. The court has found the overall value of the sixteen paintings on November 15, 2013 to be $25,400. The nine paintings belonging to the Crawfords are collectively valued at $12,700. Given the value of the Crawfords’ paintings at the time they were converted by Godel and Godel & Co., the court awards to the Crawfords $12,700, plus interest pursuant to General Statutes § 37-3a(a) at the annual rate of five percent (5%) from November 15, 2013. The total amount of interest due through September 3, 2019 is $3,685.32 with a per diem of $1.74. This brings the total damage award to $16,385.32. However, again, an equitable adjustment must be made to account for the return of the nine paintings to the Crawfords. Except for the statutory interest, the damages and the value of the paintings offset one another. Therefore, the net damages awarded against Godel and Godel & Co. is $3,685.32 as to count four.
While the court has found Brideau to have ownership of the other seven paintings, no money damages are awarded to him because he has not filed any claim in this action that would entitle him to such relief.
Section 37-3a(a) states in relevant part: "(a) Except as provided in sections 37-3b, 37-3c and 52-192a, interest at the rate of ten percent a year, and no more, may be recovered and allowed in civil actions ..."
As to Bambino, Palma and Francia, their liability on the conversion count is based on the fact that they have been defaulted for failure to plead. However, for the reasons set forth more fully in section III D above, no damages are awarded against these three defendants.
B
Punitive Damages
Both LCA and the Crawfords request punitive damages. "The purpose of awarding punitive damages is not to punish the defendant for his offense, but to compensate the plaintiff for his injuries." DeSantis v. Piccadilly Land Corp., 3 Conn.App. 310, 315, 487 A.2d 1110 (1985). An award of punitive damages is discretionary. Arnone v. Enfield, 79 Conn.App. 501, 522, 831 A.2d 260, cert. denied, 266 Conn. 932, 837 A.2d 804 (2003). "To furnish a basis for recovery of punitive damages, the pleadings must allege and the evidence must show wanton or wilful malicious misconduct, and the language contained in the pleadings must be sufficiently explicit to inform the court and opposing counsel that such damages are being sought ... If awarded, punitive damages are limited to the costs of litigation less taxable costs, but, within that limitation, the extent to which they are awarded is in the sole discretion of the trier." (Internal quotation marks omitted.) Label Systems Corp. v. Aghamohammadi, 270 Conn. 291, 335, 852 A.2d 703 (2004) (affirming punitive damages award for conversion claim).
*33 "Punitive damages are awarded when the evidence shows a reckless indifference to the rights of others or an intentional and wanton violation of those rights." (Internal quotation marks omitted.) Devitt v. Manulik, 176 Conn. 657, 663 n.3, 410 A.2d 465 (1979) (punitive damages standard in context of conversion claim). "[T]he flavor of the basic requirement to justify an award of punitive damages is described in terms of wanton and malicious injury, evil motive and violence." (Citation omitted.) Venturi v. Savitt, Inc., 191 Conn. 588, 592, 468 A.2d 933 (1983). "Recklessness is a state of consciousness with reference to the consequences of one’s acts ... It is more than negligence, more than gross negligence ... The state of mind amounting to recklessness may be inferred from conduct. But, in order to infer it, there must be something more than a failure to exercise a reasonable degree of watchfulness to avoid danger to others or to take reasonable precautions to avoid injury to them ... Wanton misconduct is reckless misconduct ... It is such conduct as indicates a reckless disregard of the just rights or safety of others or of the consequences of the action ... Whether the defendant acted recklessly is a question of fact ..." (Internal quotation marks omitted.) Wagner v. Our Lady of Mount Caritas, O.S.B., Inc., 157 Conn.App. 788, 802, 118 A.3d 103 (2015). A party must prove its punitive damages claim by a preponderance of the evidence. Whitaker v. Taylor, supra, 99 Conn.App. 735.
1
The Crawfords’ Punitive Damages
The Court finds that Godel did not initially intend to take the paintings from the Crawfords at the time they were consigned as he did not even know of their interest at that point. However, Godel’s subsequent actions, once coupled with the knowledge of the Crawfords’ claim to the Savage Collection, show Godel and Godel & Co. had an "evil motive" relative to the possession of the collection and the proceeds from the sale thereof.
As previously noted, some two to three months after receiving the Savage Collection on consignment, Brideau advised Godel that he, as well as the Crawfords, had ownership interests in the paintings. Pl. Ex. 63R, pp. 15, 19, 51. Despite having this information, Godel made no further effort to inquire as to the claims of ownership. Rather, despite the consignment arrangement with Lameray, he held onto the paintings without authorization as collateral for a separate debt Lameray owed him relative to the Anderson painting; a debt that had nothing to do with the Crawfords, Brideau or the Savage Collection itself. Godel acknowledged at trial that he was unsure of whether he had a right to do so. Not only did he not inquire further about the adverse ownership claims, he made no mention of the claims when he sold the paintings to Bambino, Palma and Francia. During this sale, he deliberately did not follow his normal sale procedures. Specifically, no bill of sale or other paperwork regarding the transfer was produced. The payment was made in cash, which Godel himself testified was "very rare." He specifically demanded the payment be made in cash and it was exchanged via a paper bag. Pl. Ex. 63R, p. 99. When these "very rare" transactions did occur, Godel credibly testified that he "usually spent it and it may or may not have been recorded on his books." Id. According to Bambino’s credible testimony, Godel had told him cash proceeds were spent and unrecorded so he and the company could avoid paying taxes. Furthermore, despite having a consignment agreement, Godel breached his fiduciary duty as a consignee when he spent this money instead of disbursing it to the Crawfords and Brideau or their agent(s).
Additionally, the evidence shows that Godel had a clear intent to lie about the whole affair. When Palma requested a bill of sale, Godel refused to create one. Godel took the position that he could not do so as he never owned the Savage Collection. Pl. Ex. 63R, p. 66. Subsequently, in his attempts to rebuff Bambino’s requests for a bill of sale, Godel then altered his position saying he had merely "released" the collection because he had been holding it as collateral for payment owed on the Anderson painting. Once Godel was served with the process that commenced the present case, and following communications with Bambino about the likelihood of litigation, Godel proposed to provide a blank letterhead from Godel & Co. to Bambino to possibly draft a fraudulent bill of sale. As to the blank letterhead, Godel specifically advised Bambino that: (1) Bambino should indicate Lameray as the seller because, in that he had been deceased for over one year at that point, "dead men don’t tell tales"; (2) someone other than Bambino should write the information onto the letterhead so that it could not be identified as Bambino’s handwriting and thereby avoid any trouble; and (3) Godel requested that Bambino provide him with a copy of the completed letterhead so he would know what was in the letter. Godel also stated that if he were ever called into court to testify as to these events, he would simply claim he couldn’t remember what transpired. True to his word, Godel did just that. Lastly, Godel stated to Bambino that as long as the matter was not in court, Bambino could tell anybody anything he wanted to about the transaction.
*34 Individually, Godel’s disregarding the Crawfords’ ownership claim, his own usual sale procedures and the intent to lie would not rise to the level of an "evil motive" that is sufficient to show a reckless disregard for the rights of the parties. Taken together, however, they are sufficient to establish that Godel, as president of Godel & Co., possessed an evil motive to profit financially at the expense of the Crawfords and Brideau (and anyone else for that matter). Godel and Godel & Co.’s actions show that they recklessly and wantonly disregarded the Crawfords’ rights in the Savage Collection.
Godel and Godel & Co.’s answers to paragraph 5 of the Crawfords’ cross claims admit that Howard Godel is the president of Godel & Co. Also, Godel is referred to as the president of Godel & Co. in their post-trial brief. Def.’s Post-trial Br. (#226), p. 20.
As noted above, at the conclusion of the trial the court directed LCA and the Crawfords to file an affidavit of attorneys fees relative to their respective clients. The Crawfords timely filed their affidavit (#224) without objection from any party though each party was given the right to a hearing if any objection was raised. The affidavit of Crawfords’ counsel claimed legal fees incurred in this litigation to be $45,403.50 along with costs of $426.55 for a total of $45,830.65. Although the affidavit is in summary form and is not itemized, it was timely filed and done so consistent with the court’s directive which sought to address the issue of fees and expenses claimed in the litigation.
While LCA’s affidavit was similar in form, the lack of specificity as to the fees claimed made it impossible for the court to make a reasoned determination as to what fees were allocable to the contractual failure of Palma to defend the adverse ownership claims against LCA. No similar barrier is present as to the Crawfords’ fee claim as no such allocation analysis is necessary.
This is a case that has spanned four years involving nine parties, four of whom were self-represented, multiple claims, two hundred and twenty-eight docket entries, detailed issues of law and fact, four days of trial and post-trial briefs. The Crawfords’ counsel has represented them since shortly after the time of service of the complaint upon Julianna Crawford in September 2016. The court finds that the conduct of Godel and Godel & Co. was more than gross negligence. It was conduct that indicated a reckless disregard of the rights of others or of the consequences of their actions. It was an intentional and wanton violation of the Crawfords’ rights through an evil motive. The Crawfords have established by a preponderance of the evidence their claim to punitive damages. The court awards the Crawfords $45,403.50 as punitive damages against Godel and Godel & Co.
Any claimed costs may be pursued through a bill of costs postjudgment.
2
LCA’s Punitive Damages
As to LCA, it has not successfully recovered in tort or equity against Godel or Godel & Co. While LCA has recovered in contract against Bambino, Palma and Francia, "[p]unitive damages are not ordinarily recoverable for breach of contract." (Internal quotation marks omitted.) L.F. Pace & Sons, Inc. v. Travelers Indemnity Co., 9 Conn.App. 30, 47, 514 A.2d 766, cert. denied, 201 Conn. 811, 516 A.2d 886 (1986). Therefore, LCA has failed to prove by a preponderance of the evidence its claim for punitive damages as to any defendant.
C
Piercing the Corporate Veil
Godel and Godel & Co. argue that no evidence was adduced that would be sufficient to pierce the corporate veil of Godel & Co. to hold Godel personally liable for any damages. Def.’s Post-trial Br. (#226), pp. 18-21. The Appellate Court has noted, however, that "[o]ur Supreme Court has affirmed the imposition of individual tort liability, without requiring the piercing of the corporate veil to hold a corporate officer personally liable for tortious conduct in which the officer directly participated ..." (Emphasis omitted; internal quotation marks omitted.) Cohen v. Roll-A-Cover, LLC, supra, 131 Conn.App. 469; see also Scribner v. O’Brien, Inc., 169 Conn. 389, 391, 403-04, 363 A.2d 160 (1975) ("Where ... an ... officer commits or participates in the commission of a tort, whether or not he acts on behalf of his ... corporation, he is liable to third persons injured thereby").
*35 As president of Godel & Co., Godel directly and personally participated in the conversion of the proceeds of the sale of the Savage Collection and unjustly enriched himself and the company by not holding the $25,000 proceeds in trust. Furthermore, Godel specifically stated that although cash transactions were "very rare," when they did happen, he usually spent all of the money, which may or may not have been recorded "on the books" to avoid paying taxes. Thus, the court finds it need not pierce the corporate veil to hold Godel personally liable for any damages arising from his tortious actions in converting the funds from the sale.
VI
GODEL AND GODEL & CO.’S MOTION FOR DISMISSAL PURSUANT TO PRACTICE BOOK § 15-8
Upon the completion of LCA’s case-in-chief, Godel and Godel & Co. moved for dismissal of LCA’s complaint and the Crawfords’ cross claims pursuant to Practice Book § 15-8. Following oral argument, the court reserved decision on the motion. Section 15-8 states that "[i]f, on the trial of any issue of fact in a civil matter tried to the court, the plaintiff has produced evidence and rested, a defendant may move for judgment of dismissal, and the judicial authority may grant such motion if the plaintiff has failed to make out a prima facie case. The defendant may offer evidence in the event the motion is not granted without having reserved the right to do so and to the same extent as if the motion had not been made."
"The standard for determining whether the plaintiff has made out a prima facie case, under Practice Book § 15-8, is whether the plaintiff put forth sufficient evidence that, if believed, would establish a prima facie case, not whether the trier of fact believes it ... For the court to grant the motion [for judgment of dismissal pursuant to § 15-8], it must be of the opinion that the plaintiff has failed to make out a prima facie case. In testing the sufficiency of evidence, the court compares the evidence with the allegations of the complaint ... In order to establish a prima facie case, the proponent must submit evidence which, if credited, is sufficient to establish the fact or facts which it is adduced to prove ... [T]he evidence offered by the plaintiff is to be taken as true and interpreted in the light most favorable to [the plaintiff], and every reasonable inference is to be drawn in [the plaintiff’s] favor." (Internal quotation marks omitted.) Moutinho v. 500 North Avenue, LLC, 191 Conn.App. 608, 620 (2019).
Having reserved decision on the motion, the court must now address the motion as to both LCA and the Crawfords. As to both, the court has exclusively reviewed only the evidence presented by LCA and the Crawfords upon the resting of their cases-in-chief without making any determination as to the weight or credibility of the evidence. None of the evidence presented by the parties following the court’s reservation of judgment on the motion has been relied upon by the court in entering its ruling. Gambardella v. Apple Health Care, Inc., 86 Conn.App. 842, 846-47, 863 A.2d 735 (2005).
As to both LCA and the Crawfords, taking the allegations and evidence as to the various counts of the complaint and cross claims to be true and in a light most favorable to them and drawing every reasonable inference in their respective favor, the court finds that the motion should be denied. The court notes that the Moutinho decision, which was issued after the conclusion of the presentation of evidence in this case, requires that a § 15-8 motion be decided prior to the commencement of the presentation of the defendants’ evidence. However, having heard argument, reserving judgment, and then acting on the motion following the conclusion of the evidence, no prejudice has come to the defendants in this case. Notably, there was considerable testimony from Godel prior to the motion being made as LCA had called him as an adverse witness in its case-in-chief. He was cross examined by all other counsel, as well as Bambino and Brideau, prior to LCA and the Crawfords resting their cases. Godel’s deposition testimony was also entered into evidence at that time. Pl. Ex. 63R. At the time of the motion, Godel and Godel & Co. essentially argued that the particular causes of action had not been proven. This is different than arguing that the plaintiff has failed to present enough evidence to make out a prima facie case. Though there was little evidence presented up to the time of the motion to support the allegations as to certain counts, it was sufficient to comport with the underlying allegations to make out a prima facie case. Once all of the evidence was presented to the court for a final decision, it was required to undertake a different analysis which allowed it to assess the credibility of the witnesses and give whatever weight it felt appropriate to the evidence presented. Id., 619-21 (identical procedural posture found to be harmless error). In conducting that later analysis, the conclusion that the defendant was not prejudiced by the court’s action is underscored by the fact that the court has found in favor of Godel and Godel & Co. on all counts of LCA’s complaint directed to them and on counts three and five of the Crawfords’ cross claims.
VII
CONCLUSION
*36 For the foregoing reasons, the court finds as follows.
As to LCA’s complaint :
Count one: judgment shall enter in favor of the Crawfords with respect to paintings numbered 6, 9, 10, 11, 12, 13, 14, 15 and 16, and Brideau as to paintings numbered 1, 2, 3, 4, 5, 7 and 8.
Counts two, three, four, five, seven and eight: judgment shall enter in favor of the defendants.
Count six: judgment shall enter in favor of LCA against Bambino, Palma and Francia who are jointly and severally liable to LCA in the amount of $24,000.
As to the Crawfords’ counterclaim and cross claims :
Count one: judgment shall enter in favor of the Crawfords with respect to paintings numbered 6, 9, 10, 11, 12, 13, 14, 15 and 16, and Brideau as to paintings numbered 1, 2, 3, 4, 5, 7 and 8.
Count two: judgment shall enter in favor of the Crawfords as to Godel, Godel & Co., Bambino, Palma and Francia in the amount of $12,700. Exercising the court’s equitable discretion to preclude a double recovery by the Crawfords, the damages shall be offset against the value of the paintings which are to be returned to the Crawfords. Therefore, the net damages due shall be reduced to zero as to this count.
Count three: judgment shall enter in favor of the defendants.
Count four: judgment shall enter in favor of the Crawfords as to Godel and Godel & Co., in the amount of $12,700 with statutory interest at the annual rate of five percent (5%) from November 15, 2013. Exercising the court’s equitable discretion to preclude a double recovery by the Crawfords, the damages shall be offset against the value of the paintings which are to be returned to them leaving an award of statutory interest in the amount $3,685.32 through September 3, 2019. It is further ordered as to this count that Godel and Godel & Co. shall pay to the Crawfords the amount of $45,403.50 in punitive damages.
Also, judgment shall enter against Bambino, Palma and Francia as to count four, but no damages are awarded as to those three defendants.
Count five: judgment shall enter in favor of the defendants.
So Ordered.