Opinion
NNHCV186079251S
05-31-2019
Peter PANARONI, Jr. v. James DOODY, III
UNPUBLISHED OPINION
OPINION
SYBIL V. RICHARDS, JUDGE
The court is presented with two, competing summary judgment motions from the parties. For the following reasons, the court grants the plaintiff’s motion for summary judgment and denies the defendant’s motion.
PROCEDURAL HISTORY
The present action arises from a real estate dispute between the plaintiff. Peter Panaroni, Jr., and the defendant, James Doody, III, trustee of the Mary Y. Doody Revocable Trust. In his complaint filed on March 16, 2018, the plaintiff alleges that in December of 2017, the parties agreed to and signed a purchase and sale agreement whereby the defendant would sell to the plaintiff the property known as 60 Harding Street, Branford, Connecticut, with the closing to occur on or before February 28, 2018. Despite the plaintiff’s willingness and ability to close on the property and receiving $20,000, the defendant has refused to complete the sale. In his two-count complaint against the defendant, the plaintiff alleges breach of contract and seeks, among other remedies, specific performance.
Another defendant, Federal National Mortgage Association (Fannie Mae), is included in the plaintiff’s complaint. The plaintiff alleges, and Fannie Mae admits, that it has an interest in the property by virtue of a mortgage assignment. The plaintiff makes no other claims against Fannie Mae. Fannie Mae has filed no substantive materials, and is not considered for the purposes of the parties’ motions for summary judgment and this memorandum.
The plaintiff seeks specific performance; a decree vesting him with title to the property; an injunction restraining the defendant from conveying, encumbering, or disposing of the property; money damages; attorneys fees; and court costs.
On August 12, 2018, the defendant filed an answer denying many of the plaintiff’s allegations. Although the defendant admits to the agreement, he claims the parties never agreed to a specific closing date due to then-ongoing foreclosure proceedings regarding the property. The defendant also included a special defense claiming that by failing to fully pay the deposit, the plaintiff breached the agreement and the defendant’s actions have been warranted.
See Federal National Mortgage v. Doody, Superior Court, judicial district of New Haven, Docket No. CV-14-6049727-S.
The defendant also claimed as a special defense improper service of process. Prior to filing his answer, the defendant raised this issue in a motion to dismiss filed on May 8, 2018. It was denied by the court. Panaroni v. Doody, Superior Court, judicial district of New Haven, Docket No. NNH-CV-18-6079251-S (July 2, 2018, Richards, J.).
On February 5, 2019, the defendant filed a motion for summary judgment, along with an affidavit and a memorandum in support, reasserting that the plaintiff has failed to pay the deposit and breached the agreement. Section 4 of the agreement requires an initial deposit of $10,000 followed by a $20,000 additional deposit "due upon Seller’s Acceptance" of the agreement, for a total deposit of $30,000. The defendant alleges the plaintiff has only deposited $20,000 and has refused to pay the outstanding $10,000. Pursuant to Section 14 entitled "Buyer’s Default," the defendant argues the plaintiff has materially breached the express terms of the contract and therefore he is entitled to retain any deposits and terminate the agreement, which he did by written notice on August 12, 2018. The plaintiff filed an objection to the defendant’s motion on March 19, 2019 relying on arguments laid out in his motion for summary judgment.
On March 7, 2019, the plaintiff filed a motion for summary judgment, along with a memorandum in support, on several grounds: (1) the plaintiff complied with the purchase and sale agreement; (2) the contract did not state "time was of the essence"; (3) the parties agreed to a modification, which was also breached by the defendant, and (4) the defendant had no intention of selling the property but only convert the deposit money for personal gain.
In his memorandum, the plaintiff alleges the following additional facts. After signing the agreement, the plaintiff learned that the property was the subject of foreclosure proceedings. The plaintiff avers that he was reluctant to pay the additional deposit without further assurances from the defendant, which were not received. Nevertheless, the plaintiff delivered a check for the additional deposit amount on January 12, 2018 to the escrow agent named in Section 27 of the agreement. The defendant rejected the check and the escrow agent. The check was returned to the plaintiff on January 15, 2018. The plaintiff asked the defendant to name a replacement escrow agent but the defendant did not answer.
The plaintiff further alleges that after continued discussions, the parties came to an agreement, which was memorialized in a letter signed by the defendant on February 1, 2018. In this letter, the defendant agreed to complete the closing on February 8, 2018, or no later than February 28, 2018. The letter states that "in consideration" for this, the plaintiff would pay $10,000, which the plaintiff paid and the defendant accepted. Despite receipt of these funds, the defendant failed to close on either date. Additionally, the plaintiff deposed the defendant on February 1, 2019, and the defendant testified that he was unwilling to sell the property until the resolution of the foreclosure action, which concluded in the defendant’s favor on June 29, 2018. Claiming to be in full compliance with the agreement and the modification, the plaintiff seeks summary judgment in his favor.
On March 22, 2019, the defendant filed an objection and raised a number of issues. He claims the plaintiff knew of the foreclosure action as early as October 2017. The defendant also claims the additional deposit check sent to the escrow agent was from "JTC Trucking, LLC" and not the plaintiff. Finally, the defendant disputes the effect of the February 1 agreement, claiming to have never waived the additional deposit. The defendant reiterates that the plaintiff has an outstanding deposit balance, and argues he was correct in terminating the agreement.
The defendant’s motion for summary judgment was taken on the papers by the court on April 1, 2019. The plaintiff’s motion for summary judgment was heard by the court at short calendar on April 22, 2019.
LEGAL STANDARD
"In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact ... [T]he moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ... As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ... When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ... Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) State Farm Fire & Casualty Co. v. Tully, 322 Conn. 566, 573, 142 A.3d 1079 (2016).
"A material fact is a fact that will make a difference in the result of the case ... The facts at issue are those alleged in the pleadings." (Internal quotation marks omitted.) Morrissey-Manter v. Saint Francis Hospital & Medical Center, 166 Conn.App. 510, 517, 142 A.3d 363, cert. denied, 323 Conn. 924, 149 A.3d 982 (2016). Moreover, "[a] genuine issue has been variously described as a triable, substantial or real issue of fact ... and has been defined as one which can be maintained by substantial evidence ... Hence, the genuine issue aspect of summary judgment procedure requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred." (Internal quotation marks omitted.) Rickel v. Komaromi, 144 Conn.App. 775, 790-91, 73 A.3d 861 (2013).
DISCUSSION
I
THE CLOSING DATE
In the present case, the defendant admits to entering into a purchase and sale agreement with the plaintiff for the property. Nevertheless, the defendant argues: (1) the parties never agreed to a closing date because of then-pending foreclosure proceedings, and (2) even if they did, they were precluded from closing because of the proceedings. Upon review of the record and relevant documents, the court disagrees.
"The rules governing contract formation are well settled. To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties." (Internal quotation marks omitted.) Geary v. Wentworth Laboratories, Inc., 60 Conn.App. 622, 627, 760 A.2d 969 (2000). "It is a fundamental principle of contract law that the existence and terms of a contract are to be determined by 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." (Internal quotation marks omitted.) Auto Glass Express, Inc. v. Hanover Ins. Co., 293 Conn. 218, 225, 975 A.2d 1266 (2009). "[T]he mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous ... In contrast, a contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself ... [A]ny ambiguity in a contract must emanate from the language used by the parties ... The contract must be viewed in its entirety, with each provision read in light of the other provisions ... and every provision must be given effect if it is possible to do so ... If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous." (Citations omitted; internal quotation marks omitted.) Cruz v. Visual Perceptions, LLC, 311 Conn. 93, 103, 84 A.3d 828 (2014).
Nowhere within the agreement can it be read, expressly or impliedly, that the closing date will be determined following the conclusion of foreclosure proceedings. Rather, the agreement’s language is clear and unambiguous. On page three of the agreement, which bears the defendant’s initials, Section 10 states the closing date shall be "on or before February 28, 2018. Unless otherwise stated herein, [the plaintiff] shall receive exclusive possession and occupancy with keys on [this date]." Section 24 of the agreement states: "This agreement contains the entire agreement between [the parties] concerning this transaction and supersedes any and all previous written or oral agreements concerning the Property." If the defendant intended to withhold a closing date, that intention did not manifest in the agreement to which he signed.
The defendant’s argument that foreclosure proceedings precluded him from selling the property is similarly without merit. "Both by common-law rule and by statute, a mortgagee in Connecticut is deemed to have taken legal title under the execution of a mortgage on real property ... Nonetheless, the mortgagee’s legal title is a defeasible fee subject to [an equitable] right of redemption which persists until it is extinguished by an action of foreclosure ... Even after the initiation of a foreclosure action, the mortgagee’s title does not become absolute until all eligible parties have failed to exercise their rights to redeem the property." New Milford Savings Bank v. Jajer, 244 Conn. 251, 256 n.11, 708 A.2d 1378 (1998); see also Barclays Bank of New York v. Ivler, 20 Conn.App. 163, 166, 565 A.2d 252, cert. denied, 213 Conn. 809, 568 A.2d 792 (1989). The defendant, as mortgagor and thus retaining equitable title to his property, was entitled to exercise his right to redeem at any time during foreclosure proceedings up to and until his law day. One way the defendant could have exercised this right was by selling the property and using the proceeds to satisfy his debt.
Accordingly, the court concludes that the parties were not precluded from closing on the property and that the purchase and sale agreement established a closing date on or before February 28, 2018.
II
THE ADDITIONAL DEPOSIT
The defendant argues the plaintiff’s failure to pay the full deposit constitutes a material breach, an argument raised both as a special defense and in his motion for summary judgment. In his objection to the plaintiff’s motion, the defendant also claims that even if an additional deposit check was sent to the escrow agent, it was from "JTC Trucking, LLC" and not the plaintiff, and therefore the plaintiff never actually attempted to pay. The court disagrees.
"Proof of a material fact by inference need not be so conclusive as to exclude every other hypothesis. It is sufficient if the evidence produces in the mind of the trier a reasonable belief in the probability of the existence of the material fact ... In short, the court, as fact finder, may draw whatever inferences from the evidence or facts established by the evidence it deems to be reasonable and logical." (Citations omitted; internal quotation marks omitted.) Lyme Land Conservation Trust, Inc. v. Platner, 325 Conn. 737, 756, 159 A.3d 666 (2017).
Section 4 of the agreement requires the plaintiff to pay an initial deposit of $10,000, which was paid and accepted, as well as an additional deposit of $20,000. On January 12, 2018, the plaintiff, through his attorney, delivered a $20,000 check for the additional deposit to the escrow agent named in Section 27 of the agreement. In a letter accompanying the check, plaintiff’s counsel specifically referenced the property, the purchase and sale agreement, the requirement of an additional deposit, its amount, and further expressed the plaintiff’s willingness and ability to close.
On January 15, 2018, the escrow agent returned the $20,000 check to plaintiff’s counsel. In an accompanying letter, the escrow agent wrote: "I am returning the check you sent to me in the amount of $20,000 from JTC Trucking, LLC as [the defendant] tells me that he is representing himself in this transaction at this time and that I am not authorized to accept any deposits on my behalf." Also on January 15, 2018, plaintiff’s counsel wrote to the defendant, asking him to agree to a replacement escrow agent and informing him that plaintiff’s counsel would hold the additional deposit in his firm’s trust account until the parties can agree to a replacement escrow agent. The defendant did not respond.
After a diligent search, the court could not find- and the defendant did not provide- any authority barring a third party from paying a deposit required by a contract to which they are not a signatory. Therefore, the court concludes that the check being "from JTC Trucking, LCC" does not prevent it from being a valid attempt by the plaintiff to pay the deposit.
The language of the January 12 and 15 letters support this conclusion. The letter to the escrow agent referenced the property, the agreement, the additional deposit, and its amount. In the letter returning the check, the escrow agent writes that the defendant "is representing himself in this transaction." (Emphasis added.) Informed by this language, the purpose of the check and the intent of the parties is clear. Accordingly, the court concludes, regardless of the relationship between the plaintiff and JTC Trucking, the delivery of the check to the escrow agent on January 12, 2018 was a valid attempt to pay the additional deposit pursuant to the agreement.
III
BREACH OF CONTRACT
"The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." (Internal quotation marks omitted.) Seligson v. Brower, 109 Conn.App. 749, 753, 952 A.2d 1274 (2008). "In order to establish that the [defendant] anticipatorily breached the contract, the plaintiff must be able to show that it would have been able to perform its obligations on the date set for performance." Land Group, Inc. v. Palmieri, 123 Conn.App. 84, 93, 1 A.3d 234 (2010).
"An anticipatory breach of contract occurs when the breaching party repudiates his duty before the time for performance has arrived ... Its effect is to allow the non-breaching party to discharge his remaining duties of performance, and to initiate an action without having to await the time for performance ... The manifestation of intent not to render the agreed-upon performance may be either verbal or nonverbal ... and is largely a factual determination in each instance." (Citations omitted; internal quotation marks omitted.) Pullman, Comley, Bradley & Reeves v. Tuck-It-Away, Bridgeport, Inc., 28 Conn.App. 460, 465, 611 A.2d 435, cert. denied, 223 Conn. 926, 614 A.2d 825 (1992).
In the present case, the parties agreed to a purchase and sale agreement which specified a time for performance: the closing date, February 28, 2018. Prior to this date, the plaintiff attempted to fulfill his obligations to pay the deposits. The initial deposit was paid and accepted on or about December 21, 2017. The plaintiff attempted to pay the additional deposit on January 12, 2018 but was prevented from doing so by the defendant’s rejection of the escrow agent and subsequent failure to agree to a replacement. Despite this, the plaintiff continued to express his willingness and ability to close.
The court is not persuaded by the defendant’s defenses and counter-arguments, which are addressed above. The parties agreed to a closing date, were not barred from moving forward by pending litigation, and the plaintiff’s attempted payment was valid. Accordingly, the court finds that the defendant materially breached the purchase and sale agreement by wrongfully rejecting the plaintiff’s additional deposit and failing to agree to a replacement escrow agent.
IV
THE ALLEGED AMENDMENT
On February 1, 2018, the defendant sent the plaintiff a letter stating: "Per our telephone conservation today and in accordance with the Purchase & Sale Agreement dated 12/21/17, we have agreed to use our best efforts to complete the closing for this property on Thursday, 8 February 2018; provided, however, that pursuant to & in accordance with the Agreement, the closing will occur no later than 28 February 2018. In consideration of the foregoing, [the plaintiff has agreed to pay $10,000 to the defendant]. Failure to do so will render this letter null & void." This letter is signed by the defendant; it is not signed by the plaintiff. It is undisputed that on February 1, 2018, the plaintiff paid the defendant $10,000.
The plaintiff argues the February 1st letter was a valid amendment of the original agreement. The defendant raised several counterarguments: (1) the letter was not an amendment and no amendment has ever been agreed to; (2) the $10,000 payment was a partial additional deposit; and (3) even if there was an amendment, he never waived his right to collect the full additional deposit.
Section 24 of the purchase and sale agreement states in relevant part: "Any extensions or modifications of this Agreement shall be in writing signed by the parties." Nevertheless, "contract modification is a question of fact ... and may be effectuated expressly by mutual promises ... or may be implied in fact from the parties’ conduct." (Citations omitted.) McKenna v. Woods, 21 Conn.App. 528, 532, 574 A.2d 836 (1990). Additionally, our Supreme Court recognizes that "[a] written contract can be modified by a subsequent parol agreement if that is the intention of the parties ... [It does not] make any difference that the original written contract provided that it should not subsequently be varied except by writing." Joseph General Contracting, Inc. v. Couto, 317 Conn. 565, 577, 119 A.3d 570 (2010). "Attempted oral modifications of prior existing valid contracts have been held to be subject to the statute of frauds, unless partial performance takes the oral modification out of the statute of frauds." (Citations omitted; internal quotation marks omitted.) Battalino v. Van Patten, 100 Conn.App. 155, 164, 917 A.2d 595 (2007).
The February 1st letter is not signed by the plaintiff and would be invalid under the terms of the agreement. The plaintiff’s payment of $10,000 may constitute partial performance, and thus support the alleged modification’s validity. Nevertheless, having already concluded that the defendant breached the purchase agreement renders it invalid. See Pullman, Comley, Bradley, & Reeves v. Tuck-It-Away, Bridgeport, Inc., supra, 28 Conn.App. 465. Therefore, the court need not consider whether the February 1st letter is modification, but rather, if it constitutes a new contract entirely.
"[A]n offer can be accepted by the rendering of a performance only if the offer invites such an acceptance ... Such a contract where the offeror invites acceptance of his promise ... by performance is a unilateral contract." (Citations omitted; internal quotation marks omitted.) TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 322, 331, 71 A.3d 541 (2013); 1 Restatement (Second), Contracts § 53(1) (1981). The February 1st letter included express language that failure to pay $10,000 would render it null and void, thereby inviting performance on the part of the plaintiff. On February 1st, by paying $10,000, the plaintiff accepted the defendant’s offer and forming a valid contract. Accordingly, by failing to close on either February 8th or on or before February 28th, the court concludes that the defendant also breached the February 1st agreement.
V
DAMAGES
The plaintiff, having attempted to perform his obligations but rebuffed by the defendant, has requested specific performance with respect to the property along with money damages.
"It is settled law ... that in an action for specific performance the plaintiff has the burden of proving all of the essential elements of his cause of action and the burden is primarily on him to show his right in equity and good conscience to the relief sought." Cutter Development Corporation v. Peluso, 212 Conn. 107, 114-15, 561 A.2d 926 (1989). "A party cannot recover on a contract unless he has fully performed his obligations under it, has tendered performance, or has some legal excuse for not performing." Ravitch v. Stollman Poultry Farms, Inc., 165 Conn. 135, 149, 328 A.2d 711 (1973).
"[T]he specific performance remedy is a foist of injunctive decree in which the court orders the defendant to perform the contract ... The availability of specific performance is not a matter of right, but depends rather upon an evaluation of equitable considerations ... The determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court ... In balancing equities, the court is not bound by a formula but is free to fashion relief molded to the needs of justice." (Citations omitted; internal quotation marks omitted.) Gager v. Gager & Peterson, LLP, 76 Conn.App. 552, 560-61, 820 A.2d 1063 (2003). "[W]hen the specific performance of a contract is sought ... courts will look to the substance of the agreement and the real understanding of the parties, whether expressed in the written contract or not, and will never decree the specific performance of a contract when its enforcement will defeat the primary object of the agreement and the real understanding of the parties." Clowes v. Miller, 74 Conn. 287, 295, 50 A. 728 (1901). "[T]he equities on both sides must be taken into account ... An equity court wisely considers the relative positions of the parties and makes a decree that does substantial justice to all." Gager v. Gager & Peterson, LLP, supra, 76 Conn.App. 560 n.9.
CONCLUSION
For the foregoing reasons, the court denies the defendant’s motion for summary and grants the plaintiff’s motion for summary judgment.