2007 Ct. Sup. 7859 (Conn. Super. Ct. 2007)

From Casetext: Smarter Legal Research

WE 470 MURDOCK v. COSMOS REAL ESTATE

Connecticut Superior Court Judicial District of New Haven at Meriden

May 31, 2007

2007 Ct. Sup. 7859 (Conn. Super. Ct. 2007)

Opinion

No. NNI CV 05 4003327 S

May 31, 2007

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] NICOLA E. RUBINOW, JUDGE.

MEMORANDUM OF DECISION

This memorandum of decision resolves litigation arising from the efforts of the plaintiff, WE 470 Murdock, LLC (WE 470 Murdock) to purchase real property located at 470 Murdock Avenue in Meriden, Connecticut (the property or 470 Murdock). The plaintiff's claims are presented through a five-count amended complaint filed on December 7, 2006 (#127), directed against two defendants, Cosmos Real Estate, LLC (Cosmos Real Estate) and Asimina Begetis. The defendants filed an answer and special defenses to the plaintiff's amended complaint on January 2, 2007 (#130). After hearing and consideration of the parties' written and oral arguments, the court finds the breach of contract claims in favor of the plaintiff as to the defendant Cosmos Real Estate alone, and finds all other issues in favor of the defendants. Accordingly, the court has awarded such fair and just damages as are appropriate under the circumstances of this case.

I. PROCEDURAL HISTORY

The matter was originally brought to court through a complaint filed on June 7, 2005, naming Cosmos Real Estate and Asimina Begetis as defendants. On August 4, 2005, the defendants answered the complaint and submitted two special defenses. (#108.) On August 5, 2005, the plaintiff admitted the allegations as to the second special defense, but denied the allegations as to the first special defense (#109).

The matter was tried to the court over the course of four days in December 2006 and in January 2007, during which time the parties presented abundant evidence related to the specific, complex issues of fact and law raised by the pleadings, including the amended complaint and the defendants' response thereto. (#127, #130.) The evidence as to the plaintiff's first count addressed allegations of breach of contract for the sale of the property against Cosmos Real Estate and claims for consequential damages in excess of $109,353. Evidence related to the second count addressed allegations of breach of contract for the sale of the property against Asimina Begetis, and further allegations that as the plaintiff is a third-party beneficiary of Asimina Begetis's conduct in designating a member of Cosmos Real Estate to convey her one-half interest in the property, Asimina Begetis's breach of her agreement to convey her property interest caused Cosmos Real Estate to breach its agreement with the plaintiff. Evidence as to the third count was directed against both defendants, sounding in conspiracy to defraud the plaintiff and alleging, in summary, that Asimina Begetis acquiesced in allowing Cosmos Real Estate to hold itself out as the sole owner of the property; that Asimina Begetis represented to Cosmos Real Estate that she would honor her commitment to convey her interest in the premises; and that Asimina Begetis made false representations to Cosmos Real Estate that induced Cosmos Real Estate to breach its contract with the plaintiff. Evidence related to the fourth count addressed the plaintiff's allegations that Asimina Begetis engaged in tortious interference with the contractual relations between WE 470 and Cosmos Real Estate. As to the fifth count, the evidence was directed at the plaintiff's allegations that Asimina Begetis's negligent or intentional misrepresentation induced WE 470 to believe it was entering into a sale agreement with the actual owner of the property. The plaintiff prayed for the following relief: an order that Cosmos Real Estate specifically perform in accordance with the terms of the sale agreement at issue; the imposition of a constructive trust and an order compelling Asimina Begetis to convey her interest in the property to the corporate plaintiff; the issuance of a decree vesting the plaintiff with title to the property; the issuance of an injunction limiting the defendants' use of the property; the payment of money damages; the payment of attorney fees and costs; and such other and further equitable relief as may be required. (#127.)

The defendants' answer and response to the amended complaint raised several special defenses. As to the first count the defendants alleged that the plaintiff's recovery is limited to the value of the premium for a fee title insurance policy for $1,700,000 worth of real property. As to the second count, the defendants allege that the public record status of the property's ownership bars recovery, and further alleges that the plaintiff's cause of action must fail because the absence of a written contract for sale of real estate by Asimina Begetis violates Connecticut's statute of frauds. (#130.)

The parties proceeded to argument on January 9, 2007, having submitted thorough and detailed pre-argument briefs on December 28, 2006. (#128, #129.) On January 30 and 31, 2007, the parties filed their comprehensive and highly analytical post-trial briefs, which also have been of great assistance to the trial court. (#131, #132.)

II. FACTUAL FINDINGS

The court has thoroughly reviewed the evidence elicited through the direct and vigorous cross-testimony of the trial witnesses who included: a real estate agent; two executives from WE 470 Murdock, the plaintiff's attorney, the attorney for the Begetis family, Dina Begetis, and Asimina Begetis. Voluminous documentary and demonstrative evidence was also presented during the trial, consisting of: real estate contracts and amendments; business and legal correspondence; emails; invoices and checks representing payment; pleadings; interrogatories; and a deposition transcript. The court utilized the applicable legal standards in considering the totality of the evidence. Upon deliberation, the court credits the evidence establishing the following relevant facts that were proved at trial.

"It is an abiding principle of our jurisprudence that `[t]he sifting and weighing of evidence is peculiarly the function of the trier [of fact]. [N]othing in our law is more elementary than that the trier [of fact] is the final judge of the credibility of witnesses and of the weight to be accorded to their testimony. . . The trier has the witnesses before it and is in the position to analyze all the evidence. The trier is free to accept or reject, in whole or in part, the testimony offered by either party.' (Citations omitted; internal quotation marks omitted.) Smith v. Smith, 183 Conn. 121, 123, 438 A.2d 842 (1981). The determination of the credibility of the witnesses is a function of the trial court. . ." Welsch v. Groat, 95 Conn.App. 658, 664, 897 A.2d 710 (2006). "The [fact-finding] function is vested in the trial court with its unique opportunity to view the evidence presented in a totality of circumstances, i.e., including its observations of the demeanor and conduct of the witnesses and parties. . . `[i]t is the right and the duty of the [trier of fact] to draw reasonable and logical inferences from the evidence.' (Internal quotation marks omitted.). Russell v. Russell, 91 Conn.App. 619, 642, 882 A.2d 98, cert. denied, 276 Conn. 924, 925, 888 A.2d 92 (2005). `In considering the evidence introduced in a case, [triers of fact] are not required to leave common sense at the courtroom door. . . nor are they expected to lay aside matters of common knowledge or their own observations and experience of the affairs of life, but, on the contrary, to apply them to the facts in hand, to the end that their action may be intelligent and their conclusions correct.' (Internal quotation marks omitted.) In re Kristy A., 83 Conn.App. 298, 316, 848 A.2d 1276, cert. denied, 271 Conn. 921, 859 A.2d 579 (2004)." Welseh v. Groat, supra, 95 Conn.App. 666-67. "The probative force of conflicting evidence for the trier to determine. . ." (Internal quotation marks omitted; external citation omitted.) Anderson v. Whitten, 100 Conn.App. 730, 740 (2007).

Additional facts will be found throughout, as required.

The property at 470 Murdock is commercial in nature; a building upon the property contains approximately fifteen condominium units that may be used for office or industrial purposes. The parties have stipulated that the property is owned, in undivided half shares, by Asimina Begetis and by Cosmos Real Estate, LLC (Cosmos Real Estate) as tenants in common. Cosmos Real Estate is a limited liability corporation in which equal financial interests are held by Asimina Begetis's three daughters; Dina Begetis, Effie Begetis, and Iota Begetis. (Stipulation #122; Testimony of O'Hara, Dina Begetis, Asimina Begetis.) Formally, Dina Begetis works as the property manager for Cosmos Rentals, LLC (Cosmos Rentals), a management company that operates real estate owned jointly by Cosmos Real Estate and by Asimina Begetis. Dina Begetis is authorized to sign contracts on behalf of the members of Cosmos Rentals. (Testimony of Dina Begetis.) After the death of her father "Nick" Begetis, Dina Begetis has regularly conducted negotiations and entered into legal contracts on behalf of her sister-members of the LLC. (Testimony of O'Hara.) From time to time, Dina Begetis also acted on behalf of her mother Asimina Begetis, without Asimina Begetis's knowledge or consent, in negotiating and executing leases for tenants who seek to occupy condominium units at 470 Murdock. (Exhibit 63; Testimony of Dina Begetis.)

The condominium units at issue include numbers 1, 2 and 4-16. (Exhibit 15.)

Both Asimina Begetis and Dina Begetis are licensed real estate agents. (Testimony of Dina Begetis, Asimina Begetis.) Asimina Begetis resides in Connecticut, in Florida, and in Greece. Sometimes, Dina Begetis and her mother communicate in an amicable manner concerning both family and business dealings. (Exhibit 9; Testimony of O'Hara, Dina Begetis, Asimina Begetis.) More often, however, Asimina Begetis is overtly suspicious of and hostile toward her eldest daughter; in return, when dealing with her mother concerning business matters, Dina Begetis frequently feels "stressed out." The relationship between Dina Begetis and Asimina Begetis is most often discordant, at best, and they have many disagreements concerning business matters. (Testimony of Dina Begetis, Asimina Begetis.) When Dina Begetis needs to communicate with her mother, Asimina Begetis's companion Ray Bellman acts as a go-between; Dina Begetis speaks with Bellman on a daily basis. Effie Begetis sometimes acts as a similar conduit for transmitting information between Dina Begetis and Asimina Begetis. (Testimony of Dina Begetis.)

A. PROPOSED SALE OF 470 MURDOCK

For some time prior to early spring 2004, the owners of the property had been unsuccessful in leasing the majority of the condominium units; the lack of tenants and need of material repairs caused the owners to conclude that it was to their financial advantage to sell the property. (Exhibits 6, 9; Testimony of O'Hara, Dina Begetis, Asimina Begetis.) For that purpose, Dina Begetis and Asimina Begetis contacted Chris O'Hara (O'Hara), a senior vice President of Coldwell Banker Commercial National Realty Trust (Coldwell Banker), with whom the Begetis family had done business in the past. From his review of the tax records at the Meriden Town Hall, O'Hara knew that the property was owned in equal shares by Asimina Begetis and Cosmos Real Estate. Dina Begetis, Asimina Begetis, and O'Hara met and discussed and agreed upon a plan to market and sell the property. (Testimony of Dina Begetis, O'Hara.)

On March 1, 2004, O'Hara, Asimina Begetis and Dina Begetis knowingly executed an "Exclusive Sale Listing Agreement." (Exhibit 1, Testimony of O'Hara, Dina Begetis.) The listing agreement expressed the joint owners' intention to allow Coldwell Banker to market and sell the property "for a period commencing March 1, 2004 and ending midnight February 28, 2006. . . at a price of $2,500,000" and further set forth the terms, conditions and commissions related to the potential sale. (Exhibit 1, Testimony of O'Hara.) A sale price of $1,700,000 does not appear anywhere upon either the listing agreement or the schedule of sale and lease commissions. Moreover, the document contains no language expressing the parties' intention to sell the property at a "market price" or at "market value." (Exhibit 1.)

On a separate eponymous document, Asimina Begetis, Dina Begetis and O'Hara itemized the schedule of sale and lease commissions to be paid to the broker. (Exhibit 1.) The listing agreement clearly indicates the separate status of the two owners of the property as follows: the name "Cosmos Real Estate, LLC" is typed upon the form in the space allocated to "Owner," and is accompanied by the printed name and the signature of Dina Begetis as "President;" the name Asimina Begetis is printed in the space allocated to "Owner" as well, accompanied by her own signature. (Exhibit 1.) The schedule of sale and lease commissions also indicates that ownership status of "Cosmos Real Estate, LLC" and displays the legible signatures of Asimina Begetis and Dina Begetis on separate lines. (Exhibit 1.) Paragraph 9 of the listing agreement requires the owners "to cooperate. . . in bringing about a sale of the Property and to refer immediately to [O'Hara] all inquiries of anyone interested in the property" but makes no specific reference to anticipated modification of the sale price. (Exhibit 1.)

Thereafter, Asimina Begetis and Dina Begetis frequently communicated with O'Hara concerning the marketing of the property. On behalf of Dina Begetis and Asimina Begetis, O'Hara conducted some preliminary negotiations with a representative of Koenig Management and other interested persons. However, in the absence of agreement as to a purchase price, the property remained unsold. (Exhibit 3; Testimony of O'Hara.)

In April 2004, O'Hara contacted Adam Winstanley (Winstanley) concerning the availability of the property. Winstanley functions as the operating manager of Winstanley Enterprises, LLC (WE), a Massachusetts corporation involved with real commercial estate acquisition, leasing, construction management and property development. (Testimony of O'Hara, Winstanley, Green.) With long experience and expertise in the purchase and sale of such properties, Winstanley founded WE in 1990; his father and brother are his partners in WE, operating through the Winstanley Family Limited Partnership. To support WE's sophisticated business endeavors, WE has fifty-two employees under the supervision of a senior management team; through various legal subsidiaries, the company owns and operates approximately 4.7 million square feet of commercial property in the New England area. (Exhibit E; Testimony of O'Hara, Winstanley.)

O'Hara had worked with Winstanley on other occasions regarding acquisition of commercial properties. On behalf of WE, Winstanley visited the location in April of 2004; he identified the property as being depressed, and determined it was a "value added deal" in which WE should invest. Deciding to purchase, WE formed WE 470 Murdock LLC (WE 470), a Delaware limited liability corporation which would acquire the property. (Testimony of O'Hara, Winstanley, Olear.) Legal services regarding the formation of WE 470 were provided by WE's Connecticut attorney, Leslie Olear (Olear); she remained involved throughout the remainder of the transaction process. (Testimony of Winstanley, Olear; Exhibits 11-3, 12, 16, A.) At the time, Olear had been a commercial real estate attorney for almost twenty-five years, practicing with the law firm of Cohn, Birnbaum and Shea, P.C. (Cohn, Birnbaum.) Olear and Cohn, Birnbaum had represented WE and its various subsets for approximately fifteen years. (Testimony of Olear.)

Winstanley defined a "value added deal" as the purchase of a property that is troubled, vacant undermanaged or poorly managed. (Testimony of Winstanley.)

On April 15, 2004, O'Hara prepared and sent Winstanley a letter of intent ostensibly memorializing the agreement of " Seller: Cosmos Rentals, LLC" to transfer "Seller's interest" in the property to " Buyer: WE, LLC or its designees" in exchange for a total of $2,100,000.00. (Exhibit 11-3.) The April 15th letter described a "Contingency Period" of sixty days following the execution of the purchase and sale agreement within which WE 470 would conduct its due diligence regarding the status of the property, including investigation and confirmation of the status of the "title" for the property. (Exhibit 4.) Nowhere upon this letter is the ownership interest of Asimina Begetis or Cosmos Real Estate identified with relation to the property. This letter of intent was signed by O'Hara, but was never signed by either Asimina Begetis or any representative of Cosmos Real Estate; O'Hara did not have AB's authorization to send this letter to Winstanley. (Exhibit 4.)

Winstanley and O'Hara continued negotiations through late June 2004. (Exhibits 10, 11-1, 11-2, 11-3.) Winstanley determined that the property's depressed physical conditions and presence of only two tenants for the fifteen units warranted a lower tender offer. On June 28th, Winstanley prepared and sent to O'Hara a letter of intent indicating WE 470's willingness to pay " Seller: Cosmos Rentals, LLC" $2,050,000 in exchange for the property. (Testimony of Winstanley; Exhibit 11-3.) The June 28th letter largely mirrored the conditions and parties described in the April 14th letter with the exceptions of the price and one added criteria: the June 28th letter provided a " Leasing Contingency" that made WE 470's offer "[s]ubject to completion of the Mid-State VNA expansion as outlined in the marketing package. . ." (Testimony of Winstanley; Olear; Exhibits 4, 11-3.) The June 28th letter of intent remained unsigned by any party. (Testimony of Winstanley, Olear; Exhibits 11-3, 12, 16, A.)

Thereafter, Winstanley and O'Hara continued efforts related to purchasing the property. On July 15, 2004, Winstanley authorized O'Hara to tender an offer to purchase 470 Murdock for a further reduced price, due to the failure of the Mid-State VNA tenant to continue its occupancy. (Exhibit 12; Testimony of Winstanley, O'Hara.) On that date, Winstanley prepared and sent to O'Hara a letter of intent indicating WE 470's willingness to pay " Seller: Cosmos Rentals, LLC" $1,600,000 in exchange for the property. (Testimony of Winstanley; Exhibit 12.) The July 15th letter largely mirrored the conditions and parties described in the June 28th letter sent by Winstanley to O'Hara with the exceptions of the price and the deletion of the criteria related to the VNA. (Testimony of Winstanley; Exhibits 11-3, 12.) The July 15th letter remained unsigned by any party. (Testimony of Winstanley; Exhibit 11-3.) At the time, Winstanley assumed that the property at issue was owned by the designated seller, Cosmos Rentals, LLC. Despite his sophisticated involvement in commercial real estate matters, he conducted no research on his own concerning the status of the ownership of the property, but instead relied upon the information presented by O'Hara in the broker's letters of intent and the continued involvement of Olear. (Testimony of Winstanley; Exhibits 4, 12.) While O'Hara knew that the property was owned by Cosmos Real Estate and Asimina Begetis in equal shares, as previously discussed, the court credits the broker's testimony that he, on his own initiative, assumed that Dina Begetis was acting on behalf of all owners in conducting the negotiations for the sale of 470 Murdock. (Testimony of O'Hara.) However, there is insufficient evidence indicating that Dina Begetis, at any time, held herself out as her mother's designated representative for such purposes.

On July 8, 2004, anticipating purchase of the property, WE authorized O'Hara to present the Mid-State VNA with a ten-year lease proposal. As an experienced commercial landlord, Winstanley desired to utilize his own persuasive skills in an effort to persuade the tenant to remain at 470 Murdock. (Exhibit 66; Testimony of O'Hara.)

Winstanley and O'Hara again continued efforts related to the purchase and sale of the property. On October 4, 2004, Winstanley prepared and sent to O'Hara a letter of intent indicating WE 470's willingness to pay " Seller: Cosmos Rentals, LLC" $1,700,000 in exchange for the property. (Testimony of Winstanley; Exhibit 67.) With the exception of the proffered purchase price, the October 4th letter of intent largely mirrored the conditions and parties described in the other letters of intent. (Testimony of Winstanley; Exhibits 12, 67.) The October 4th letter of intent was electronically signed by Winstanley, and was signed by Dina Begetis as follows: "THE FOREGOING LETTER OF INTENT IS AGREED TO AND ACCEPTED BY: SELLER: Dina Begetis (Cosmos Rentals, LLC). TITLE: Property Manager/Member. DATE: 10/6/04. (Testimony of Winstanley; Exhibit 67.) Although no purchase and sale contract was yet in place, Winstanley then commenced the due diligence that is typical preparation for acquisition of this type of commercial property. (Testimony of Winstanley.)

Attorney Mark Sank (Sank) has been a member of the Connecticut bar since 1984. Since July 1998, Sank has represented the Begetis family in its real estate and business endeavors; he represented "Nick" Begetis and his family in the initial purchase and refinancing of the property. (Testimony of Sank.) On October 13, 2004, Sank sent Winstanley three copies of an "Agreement of Sale" (sale agreement) with a letter expressly referencing a transfer from a single designated party, "Cosmos Real Estate, LLC to Winstanley Enterprises, LLC, 470 Murdock Avenue, Units 1, 2 and 4-16, Meriden, CT." (Testimony of Winstanley; Exhibits 15, 16, A.) However, the terms of the sale agreement specifically referenced other parties to the transaction, designating WE 470 Murdock's agreement to tender of $1,700,000 to Cosmos Real Estate as consideration for the purchase of the 470 Murdock property. (Exhibits 16, A.) Paragraph 6(b) of the sale agreement contemplated the furnishment of a marketable title by "the Seller," designated on that contract as Cosmos Real Estate, without reference to Asimina Begetis. (Exhibits 16, A.) Also pertinent to the issues before the court, Paragraph 6(a) of the sale agreement provides as follows: "If. . . the Seller shall be unable to deliver. . . good and marketable title to the Premises. . . then the Seller shall be allowed a reasonable postponement of closing. . . within which to perfect title. if at the end of said time the Seller is still unable to deliver. . . a good and marketable title to said Premises. . . then the Buyer (i) may elect to accept such title as the Seller can convey, without modification of the purchase price, or (ii) may reject such title. Upon such rejection, all sums paid on account hereof, together with any expenses actually incurred by the Buyer for attorneys fees, nonrefundable fees of lending institutions, title search costs and inspection fees (the total cost of which shall not to [sic] exceed the cost of fee title insurance based on the amount of the purchase price) shall be paid to the Buyer without interest thereon. Upon receipt of such payment, this Agreement shall terminate and the parties hereto shall be released and discharged from all further claims and obligations hereunder." (Exhibits 16, A.) For purposes of this proceeding, prior to and during the course of the trial, the parties stipulated that the cost of title insurance for a $1,700,000 property is "$4,650.00, consisting of a $1,860.00 premium paid to the title insurance company and a payment of $2,790.00 to the title insurance agent (if there is one)." (#121.)

At trial, Sank clearly stated that he represented Dina Begetis and Cosmos Real Estate in the course of the transactions related to the sale and purchase of WE 470. Notwithstanding Sank's intimacy with the family's real estate transactions, however, there was insufficient evidence from which the court could determine to the extent to which Sank represented Asimina Begetis with regard to the sale of 470 Murdock at the time in question. (Testimony of Sank, Dina Begetis.)

Sank's correspondence, accompanying the transmittal of the sale agreement, specifically advised Winstanley that the sale agreement was being "delivered to you without benefit of review by my client." (Emphasis added.) (Exhibit 15.) These communications marked the first occasion on which Winstanley himself learned of the existence of an entity identified as "Cosmos Real Estate, LLC." Just like O'Hara, despite his accumulated years of experience and expertise in the acquisition of commercial properties, Winstanley did not acknowledge a distinction between "Cosmos Real Estate, LLC" and "Cosmos Rentals, LLC," the entity which had been identified as the "seller" in the serial letters of intent. Winstanley did not request his attorneys to investigate that relationship at the time, nor did Sank, WE, WE 470, or any representative thereof examine the municipal tax records as O'Hara had done to ascertain the actual ownership status of the property. (Testimony of Winstanley, O'Hara.)

In reaching this determination, the court acknowledges that in Paragraph 19 of the third count of the amended complaint, the plaintiff presented the judicial admission that "during the due diligence leading toward the closing. . . WE 470 discovered that [Cosmos Real Estate] owned only a one-half interest in the Premises, and that Asimina Begetis owned a one-half interest in the Premises." (#127.) See Duplissie v. Devino, 96 Conn.App. 673, 685, 902 A.2d 30, cert. denied, 280 Conn. 916, 908 A.2d 536 (2006). ("It is well established that `[a] party is bound by a judicial admission unless the court, in the exercise of its discretion, permits the admission to be withdrawn, explained or modified.' (Internal quotation marks omitted.) Levine v. Levine, 88 Conn.App. 795, 804, 871 A.2d 1034 (2005).") Despite the defendants' earnest contention as to the value of this admission, the complaint does not provide sufficient basis for concluding the date on which this information was made available to the plaintiff and/or to its attorney, thereby imputed to the plaintiff, as discussed infra. For this determination, the court relies on the totality of the evidence presented at trial.

However, on October 14, 2004, Winstanley sent Olear a copy of Sank's correspondence and the sale agreement. (Testimony of Winstanley; Exhibits 15, 16, A.) The first paragraph of the document clearly and unequivocally identifies two parties to the transaction, referencing an agreement "between COSMOS REAL ESTATE, LLC by Dina Begetis (c/o Mark Sank Associates, LLC, 666 Glenbrook Road, Stamford, CT 06906 (hereinafter referred to as the Seller, whether one or more), and WE 470, LLC, c/o Winstanley Enterprises LLC, 150 Baker Avenue Extension, Suite 303, Concord, MA 01742 (hereinafter referred to as the Buyer, whether one or more." (Exhibits 16, A.)

Winstanley had shared the October 4th letter of intent with Olear. Like Winstanley, Olear assumed, without confirmation, that Cosmos Rentals, LLC was the same entity as Cosmos Real Estate, LLC, albeit operating under another name. (Testimony of Olear.)

Thereafter, on or about November 22, 2004, Winstanley executed the sale agreement on behalf of "WE 470, LLC by: Winstanley Enterprises LLC Its Manager by: Adam D. Winstanley Its Manager." (Exhibits 16, A.) On or about that same date, Dina Begetis also executed the sale agreement, as follows: "COSMOS REAL ESTATE, LLC by: Dina Begetis Its member." (Exhibits 16, A.) Dina Begetis signed this contract voluntarily and of her free will, knowing that Cosmos Real Estate was not the sole owner of 470 Murdock; she fully understood that her mother Asimina Begetis owned fifty percent of the property. Information concerning the ownership status of the property was then openly and notoriously available to any examiner of the public record, including WE 470 through Winstanley, as described above. (Testimony of O'Hara.) However, taken as a whole and despite the availability of this information, the evidence is markedly insufficient to support the inference that in signing the sale agreement Dina Begetis in any way intended to mislead WE 470 or its representative into concluding that she was acting as an authorized agent for all owners of the property. Rather, the credible evidence supports the firm inference that Dina Begetis fully expected and hoped that Asimina Begetis would voluntarily enter into the contract for sale, to the advantage of the Begetis family, but without any anticipation of causing harm to the potential purchaser. (Testimony of Dina Begetis.)

In Paragraph 2 of their special defenses filed August 2, 2005, the defendants also alleged that "Title to 470 Murdock is a matter of public record." (#108.) In its reply to this special defense, filed August 5, 2005, the plaintiff admitted that the title to the subject property is a matter of public record. (#109.) The defendants raised like special defense through their pleading filed January 2, 2007 (#130) in response to the present amended complaint (#127). Although the plaintiff did not respond to the most recent special defenses, the court has considered its previous answer, within the parameters of legal effect of a judicial admission as described in footnote 8, herein. In view of the findings related to Olear's knowledge of this fact as of November 24, 2004, no further discussion of this aspect of the plaintiff's admission with regard to the public notice of the dual ownership is required when resolving the claims at issue.

Although Asimina Begetis's ownership interest in the property is not identified anywhere upon the sale agreement, the document clearly identifies WE 470's interest in and intent to duly inspect and perfect title to the property before completing the purchase. (Exhibits 16, A.) Paragraph 16 of the sale agreement clearly establishes WE 470's obligation to conduct due diligence to ascertain the status of the title to the property prior to the closing, stating: "This Agreement is contingent upon Buyer's due diligence review, including without limitation, review of all documentation [and] title. . . to the units being conveyed hereunder. . . Buyer shall deliver to Seller a copy of the Buyer's Reports promptly after its receipt of each of the same." (Emphasis added.) (Exhibits 16, A.) Moreover, the plaintiff's acknowledged significance of ascertaining the accuracy of the title to the property, prior to WE 470's purchase, is made clear through Paragraph 6(a) of the sale agreement, referenced above, which expressly contemplates the seller's inability to deliver a marketable title to the premises, and provides liquidated relief in such circumstances. (Exhibits 16, A.)

B. PLAINTIFF'S INCURRED EXPENSES

On or before November 24, 2004, when Olear obtained knowledge that the sale agreement had been entered into with only one-half of the owners, WE 470 incurred a number of charges for services related to its due diligence analysis of and/or procurement of the property. On November 5, 2004, WE 470 incurred charges of $471 for services provided by CSC in the course filing the paperwork necessary to establish the corporation that would purchase the property. (Exhibits 42, 43; Testimony of Green.) WE 470 incurred charges in the amount of $2411 for the title search that led to the title commitment referred to in Part II. A. (Exhibits B, 46; Testimony of Green.) WE 470 incurred a tax bill of $314 related to the formation and registration of its corporate entity in anticipation of purchasing the property. (Exhibit 54; Testimony of Green.) WE 470 incurred charges of $4,721.50 for attorneys fees and legal services associated with the pursuit of this property from October 18, 2004 through and including November 23, 2004. (Exhibit 59; Testimony of Winstanley, Olear.)

The court finds that the plaintiff entity, WE 470 Murdock LLC, incurred the charges described herein, notwithstanding the fact that invoices or bills may have been submitted to or paid by other organizations associated with WE and/or WE 470. (Testimony of Winstanley, Green.)

For professional services rendered from October 18, 2004 through May 31, 2005, Olear's law firm charged WE and/or WE 470 Murdock a total of $51,113.50. (Exhibit 59.) On November 7, 2005, WE 470 Murdock incurred charges of $63.00 for attorneys' services in responding to email and signing interrogatories, related to the present litigation. (Exhibit 59; Testimony of Winstanley.) Olear's law firm billed at an hourly rate for attorneys' and staff services provided to WE, in its various corporate forms, for professional assistance and costs related to the 470 Murdock purchase in its entirety, including the due diligence process. (Exhibits 32, 59, E; Testimony of Winstanley, Olear.) Olear billed for her services at a rate of approximately $300 per hour. Despite evidence to the contrary, and separate from the findings related to the causal relationship between those charges and any alleged conduct on the part of one or both of the defendants, the court finds the rate for Olear's charges and the rate of the other charges rendered by Olear's law firm to be reasonable under the circumstances of this case. (Exhibits 59, 71; Testimony of Olear, Green, Sank.)

In addition, following November 24, 2004, when Olear knew that WE 470 had entered into a sale contract with only one-half of the property's owners, the plaintiff incurred significant expenses in the continuing course of determining the condition of the land and structures at issue. (Exhibit 31; Testimony of Winstanley, Green.) Although able to provide cash for the purchase of the property on its own, on or about February 9, 2005, WE 470 entered into an agreement permitting it to secure access to funds provided by the Bank of America/Fleet National Bank. WE 470 or its representatives paid a fee of approximately $10,000 for this service; however, the evidence is insufficient to reasonably permit the court to ascertain what portion of that fee is related to the acquisition costs for the property, as opposed to the cost of the property's development after closing. Moreover, despite the abundant evidence of other costs incurred by WE 470 in the course of performing its analysis of the property at issue, that evidence is insufficient to permit the court to conclude that any of those other costs were incurred on or before November 24, 2004, when Olear knew that the sale contract had been executed by only Cosmos Real Estate, only one-half of the property's ownership. (Exhibit 31; Testimony of Green.)

In reaching this determination, the court notes that the "Revised Term Sheet" provided by the designated lender referenced not WE 470 as the borrower, but a "to-be-formed" entity whose ostensible purpose was acquisition and property improvement at 470 Murdock. The court further notes that the $10,000 deposit paid by WE 470 was directed at perfecting its stated intention to borrow up to $2,740,000 with regard to this property, notwithstanding the purchase price of $1,700,000 set forth on the sale agreement. (Exhibits 16, 32, A; Testimony of Winstanley; Green.) Because of the date on which WE 470 entered into this agreement for the lending institution, the court makes no findings concerning the portion of the loan that may have been attributable to the 470 Murdock property.

WE 470 incurred other expenses in the following categories on dates that were either unspecified, dates that followed November 24, 2004, or for which the evidence does not permit determination of the amount of charges attributable to services rendered on or prior to November 24, 2004: For services related to appraisal of the property, WE 470 incurred charges of $4,200. (Exhibit 58; Testimony of Green.) $15,281.25 for Bank of America's loan commitment fees associated with the financing described above. (Exhibit 31; Testimony of Green.) For services related to Bank of America's legal fees rendered from an unspecified start date through April 27, 2005, associated with the entirety of the financing referred to above, WE 470 incurred charges of $14,440. (Exhibit 57; Testimony of Green.) For services related to hazardous material assessment of the property, WE 470 incurred charges of $3,020. (Exhibits 55, 56; Testimony of Green.) For services related to environmental testing of the 470 Murdock site with an unspecified start date but rendered through January 13, 2005, Rizzo Associates charged $8,790. (Exhibit 52; Testimony of Green). For architectural services performed by Lazarus Sargeant, Ltd. in relation to this property, WE 470 was billed $1,472. (Exhibits 50, 51; Testimony of Green.) WE 470 was billed $5500 for professional services performed on unspecified dates between November 21 through December 18, 2004 in the course of determining the maintenance and repair needs related to the structures upon the property. (Exhibits 48, 49; Testimony of Green.) WE 470 was billed $4,500 for surveying the property on an unspecified date. (Exhibit 45; Testimony of Green.) In January and February 2005, WE 470 ordered and incurred expenses for corporate search services provided by CT Corporation in the amounts of: $176, $269 and $180. (Exhibits 33, 34, 35; Testimony of Green.) For a title search performed on February 10, 2005, WE 470 incurred charges of $119. (Exhibit 53; Testimony of Green.) In January and February 2005, WE 470 ordered and incurred expenses for corporate search services provided by CSC in the amounts of: $112, $78, $112, $60, $112, and $60. (Exhibits 36, 37, 38, 39, 40, 41, 44; Testimony of Green.) In March of 2005, WE 470 was billed $422 for additional title search services. (Exhibit 47; Testimony of Green.)

III. ADJUDICATION OF THE ALLEGATIONS OF THE COMPLAINT AND APPLICABLE SPECIAL DEFENSES A. FIRST COUNT BREACH OF CONTRACT BY COSMOS REAL ESTATE

In the first count, sounding in breach of contract against Cosmos Real Estate alone, the plaintiff essentially asserts that it entered into an agreement requiring this defendant to convey a warranty deed of the fee simple interest in the 470 Murdock property. The plaintiff further asserts that although it was ready, willing and able to tender full consideration due under the sale agreement and to perform all other obligations for which it was responsible, Cosmos Real Estate failed to convey the warranty deed as it was required to do. The plaintiff claims that Cosmos Real Estate's failure to tender the warranty deed constitutes a breach of contract; and that this defendant is therefore obligated to pay expenses actually incurred by way of attorneys fees, nonrefundable fees of lending institutions, title search costs and inspection fees; and that such consequential damages are in the amount of $109,353.03.

The plaintiff's prayer for relief also alleges that it incurred consequential damages of lost opportunity costs arising out of the human resources devoted by the plaintiff to due diligence and other activities in furtherance of the agreement. (#127.) However, the evidence was insufficient to support either such a claim or any related award of damages.

In its answer to the first count of the amended complaint, Cosmos Real Estate admits a number of the operative allegations, yet denies that it failed to convey the property, that the failure to tender the warranty deed constitutes a breach of contract, that the plaintiff demanded the Cosmos Real Estate to remit all expenses or that Cosmos Real Estate failed to remit the expenses despite the plaintiff's demand. In addition, in its special defense to the first count, Cosmos Real Estate asserts that Paragraph 6 of the sale agreement establishes that " damages are limited to the premium for a fee title insurance policy on the $1,700,000 purchase price ($1,860.00 premium paid to the title insurance company and omitting a payment of $2,790.00 to the title insurance agent)." (Emphasis added.) (#130.)

In its answer, filed on August 4, 2005, to the plaintiff's original complaint, Cosmos Real Estate admitted that it failed to convey the property (Paragraph 9, #108); and that its failure to tender the warranty deed to the property constituted a breach of contract. (Paragraph 10, #108.) Under the circumstances of this case, the court has determined to assess the effect of these judicial admissions by measuring them in the context of the evidence as a whole, as discussed in footnote 8. See Duplissie v. Devino, supra, 96 Conn.App. 685.

As the plaintiff has met its burden of proving the breach of contract as alleged, the court finds the first count against the defendant Cosmos Real Estate, but limits the award to the damages contemplated by the contract at issue. See Parts III. A. 2. and IV., herein.

1. Breach of Contract

In reaching this determination, the court has applied the fundamental principles of law to the facts as found in Part II. "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.) Chiulli v. Zola, 97 Conn.App. 699, 706-07, 905 A.2d 1236 (2006). "In order to form a binding and enforceable contract, there must exist an offer and an acceptance based on a mutual understanding by the parties. . . The mutual understanding must manifest itself by a mutual assent between the parties." (Internal quotation marks omitted.) Krondes v. O'Boy, 37 Conn.App. 430, 434, 656 A.2d 692 (1995). "In order for an enforceable contract to exist, the court must find that the parties' minds had truly met. . . If there has been a misunderstanding between the parties, or a misapprehension by one or both so that their minds have never met, no contract has been entered into by them and the court will not make for them a contract which they themselves did not make. . . [A]n agreement must be definite and certain as to its terms and requirements." (Internal quotation marks omitted.) Electrical Wholesalers, Inc. v. M.J.B. Corp., 99 Conn.App. 294, 302, 912 A.2d 1117 (2007). "The existence of a contract is a question of fact to be determined by the trier on the basis of all of the evidence." (Internal quotation marks omitted.) Id., 301.

"[W]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law." (Internal quotation marks omitted.) Gallogly v. Kurrus, 97 Conn.App. 662, 668, 905 A.2d 1245 (2006). "A contract is to be construed as a whole and all relevant provisions will be considered together. . . In giving meaning to the terms of a contract, [the Appellate Court] ha[s] said that [a] contract must be construed to effectuate the intent of the contracting parties. . . In ascertaining intent, [the court] consider[s] not only the language used in the contract but also the circumstances surrounding the making of the contract, the motives of the parties and the purposes which they sought to accomplish." (Citations omitted; internal quotation marks omitted.) Schlicher v. Schwartz, 58 Conn.App. 80, 85, 752 A.2d 517(2000). "The question is not what intention existed in the minds of the parties but what intention is expressed in the language used." (Internal quotation marks omitted.) Leonard Concrete Pipe Co. v. C.W. Blakeslee Sons, Inc., 178 Conn. 594, 598, 424 A.2d 277 (1979). "[T]o support contractual liability, the defendants' representations must be sufficiently definite to manifest a present intention on the part of the defendants to undertake immediate contractual obligations to the plaintiff." (Internal quotation marks omitted.) Burnham v. Karl Gelb, P.C., 50 Conn.App. 385, 389, 717 A.2d 811 (1998), aff'd, 252 Conn. 153, 745 A.2d 178 (2000).

"The statute of frauds requires contracts for the conveyance of realty to be in writing." McNeil v. Riccio, 45 Conn.App. 466, 470, 696 A.2d 1050 (1997). "The requirements of a memorandum of sale to satisfy the statute of frauds in this [s]tate are too well established to require extended consideration. It must state the contract between the parties with such certainty that the essentials of the contract can be determined from the memorandum itself without the aid of parol proof, either by direct statement or by reference therein to some other writing or thing certain; and these essentials must at least consist of the subject of the sale, the terms of it and the parties to it, so as to furnish evidence of a complete agreement." (Internal quotation marks omitted.) Gabriele v. Bruno, 85 Conn.App. 503, 507, 858 A.2d 273 (2004). "Connecticut's modern statute of frauds is codified at § 52-550. . . General Statutes § 52-550 (a) provides in relevant part that: `No civil action may be maintained. . . (4) upon any agreement for the sale of real property or any interest in or concerning real property unless the agreement. . . is made in writing and signed by the party, or the agent to the party, to be charged.'. . . 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).

Applying the foregoing principles of law to the facts as found in Part II. A., it is clear that Cosmos Real Estate entered into a written contract whose unequivocal terms denoted that defendant's agreement to convey its own title to the property located at 470 Murdock; thus, the statute of frauds is satisfied as to this defendant. See McNeil v. Riccio, supra, 45 Conn.App. 470. Insofar as there was an effective, enforceable contract between the plaintiff and Cosmos Real Estate, the evidence establishes, with certainty, this defendant's obligation to convey its interest in the property and its agreement to accept $1,700,000 in exchange therefor. As such, Exhibits 16 and A represent "evidence of a complete agreement" between the plaintiff and Cosmos Real Estate. Gabriele v. Bruno, supra, 85 Conn.App. 507.

In reaching this determination, the court notes that the parties raise no contest as to the authority of Dina Begetis to enter into contracts on behalf of Cosmos Real Estate. Dina Begetis's testimony, consistent with that of O'Hara, is sufficient to establish that she is the authorized agent for such purposes with regard to rental agreements for tenants who utilize the condominiums at 470 Murdock. See Wesley v. Schaller Subaru, Inc., 277 Conn. 526, 543-44, 893 A.2d 389 (2006). Without objection from any other members of the related LLC, the court is constrained to conclude that with regard to the transactions described in Part II., Dina Begetis also served as an agent duly authorized to bind Cosmos Real Estate to the sale agreement entered into on November 22, 2004. (Exhibits 16, A.) Dina Begetis has never denied her authority to enter into a contract for the sale of property owned by Cosmos Real Estate, and the court finds that she voluntarily and intentionally acted on behalf of the members of the same-named LLC for purposes of transferring its interest in the property to WE 470 Murdock, but no more, through entry into the sale agreement discussed in Part II. A.

Here then, on behalf of Cosmos Real Estate, Dina Begetis entered into a written contract for the conveyance of real estate. To that extent, the sale agreement represented by Exhibits 16 and A are valid and enforceable, without modification, as contemplated by the statute of frauds. See Battalino v. Van Patten, supra, 100 Conn.App. 164. That degree of enforceability does not however, belay the parties' continued controversy, as the court has clearly found that Cosmos Real Estate owned, and was thus able to convey, only one-half interest in 470 Murdock. Such limitations on Cosmos Real Estate's ownership thus limits the contract represented by the sale agreement entered into by Winstanley on behalf of the plaintiff.

"A person who contracts to convey full title to real property [while holding only an undivided one-half interest in the property] is not himself excused from performance, or immune from liability for breach, because of his inability to convey more than an undivided half interest in the property." Botticello v. Stefanovicz, 177 Conn. 22, 29-30, 411 A.2d 16 (1979). Botticello v. Stefanovicz, supra, involved an action by a lessee for specific performance of a contract for sale of real estate entered into by the lessee and a husband, the co-owner of the property, who held only an undivided one-half interest in that property. Id., 27-29. There, the court ruled, inter alia, that the lessee was entitled either to the husband's defective title or damages, but not to the specific performance as to the undivided one-half interest held by the wife; she was, instead, identified at law as a co-owner who neither ratified the contract of sale nor was in an effective agent/principal relationship with her husband with regard to this transaction that was thus rendered unenforceable as to her half-interest. Id., 29. Similarly, in Ianotti v. Ciccio, 219 Conn. 36, 45-46, 591 A.2d 797 (1991), the court found, that where a deed purporting to convey an easement is signed by only one of the two joint tenants, the deed is voidable by the nonconsenting cotenant, because one cotenant cannot not bind the other cotenant without his consent and because cotenancy is insufficient as a matter of law to establish an agency relationship. Id.

As discussed throughout Part II. A., the facts of this case make it abundantly clear that Cosmos Real Estate owned only a one-half interest in the property that WE 470 Murdock sought to purchase, and makes it further clear that this information was available to the plaintiff almost immediately following execution of the sale agreement on November 22, 2004. Knowledge of Cosmos Real Estate's limited ownership status was available to any person who examined the municipal tax records, where O'Hara found clear evidence of the fact that while the LLC owned a one-half interest, the other one-half interest was vested in Asimina Begetis. (Testimony of O'Hara.) Moreover, as a matter of law and as asserted by the special defense to the first count, "every person who takes a conveyance of an interest in real estate is conclusively presumed to know those facts which are apparent upon the land records concerning the chain of title of the property described in the conveyance. . . The law implies notice on the ground that it is conclusively presumed that a person will not purchase an interest in a piece of land without examining the condition of the record. Such an act would be required by common prudence." (Citation omitted; internal quotation marks omitted.) Lee v. Duncan, 88 Conn.App. 319, 326, 870 A.2d 1, cert. denied, 274 Conn. 902, 876 A.2d 12 (2005).

"[O]ne searching title to land is not bound to search the records at large, but is bound with only such facts as appear in the chain of title to the particular lot in question." Lee v. Duncan, supra, 88 Conn.App. 327.

Even if that evidence was not apparent to Winstanley through his own endeavors, or through the endeavors of other WE principals or employees, that evidence was available to the plaintiff's attorneys as of November 24, 2004, as fully discussed in Part II. A. See Lee v. Duncan, supra, 88 Conn.App. 326. It is axiomatic that "[t]he knowledge and admissions of an attorney are imputed to his client. . ." (Internal quotation marks omitted.) Friezo v. Friezo, 281 Conn. 166, 195, 914 A.2d 533 (2007) (finding plaintiff possessed imputed knowledge of her attorney regarding contents before she executed agreement). " The knowledge of an attorney is imputed to the client unless circumstances render it certain or probable that the attorney will disregard the duty to communicate the material facts to his clients." (Emphasis in original; internal quotation marks omitted.) Joyce v. State's Attorney, 84 Conn.App. 195, 200, 852 A.2d 841, cert. denied, 271 Conn. 923, 859 A.2d 578 (2004). The circumstances of this case, indicating Olear's continued involvement with the due diligence process, as discussed in Part II. A. and II. B., establish the alternate probability that the attorney would, in fact, inform her client of such circumstances as would materially affect the potential for effectuating the closing on the property. Thus, Olear's knowledge concerning the undivided one-half ownership of the property by Cosmos Real Estate and Asimina Begetis, as joint tenants in common, was unavoidably imputed to the plaintiff as of November 24, 2004. Friezo v. Friezo, supra, 281 Conn. 195; Joyce v. State's Attorney, supra, 84 Conn.App. 200.

As found in Part II., although she had been informed of Asimina Begetis's interest in the property as early as November 24, 2004, Olear never informed Winstanley that Cosmos Real Estate was only a partial owner of the real estate WE 470 wished to purchase. Through February 25, 2005, Olear continued her involvement with the transaction by referencing only Cosmos Real Estate as the seller of the property. (Exhibit 70.) Neither WE nor WE 470 was directly advised of the defect in their sales contract until after March 1, 2005, when Winstanley learned that the closing could not take place because Asimina Begetis, as a half-owner of the property, refused to execute the conveyance documents. (Testimony of Winstanley.)

Accordingly, the court finds that almost immediately after entering into the sale agreement on November 22, 2004, the plaintiff and its attorney were aware that they had executed a contract with only one-half of the owners of the property whose purchase was at issue. While Dina Begetis was bound to perform her portion of that contract, she could convey no more title than she actually held. Because Dina Begetis had contracted on behalf of her LLC to convey full title to the property, while holding only an undivided one-half interest in 470 Murdock, Cosmos Real Estate "is not. . . excused from performance, or immune from liability for breach, because of [its] inability to convey more than an undivided half interest. . ." Botticello v. Stefanovicz, supra, 177 Conn. 29-30. On the other hand, particularly given its access to the public record and/or its imputed knowledge of the ownership status of the property, the plaintiff is not entitled to any greater degree of specific performance as to the property than that which Cosmos Real Estate, though the conduct of Dina Begetis, bound itself to provide. Cosmos Real Estate simply cannot convey the undivided one-half interest held by Asimina Begetis, unless the plaintiff has established that Dina Begetis and/or Cosmos Real Estate was in an effective agent/principal relationship such that the sale agreement bound the non-signing party, as well. Id., 29; Ianotti v. Ciccio, supra, 219 Conn. 45-46. This is a burden the plaintiff has, however, failed to meet, as the evidence, taken as a whole, is insufficient to establish an agency relationship between Dina Begetis and Cosmos Real Estate on the one hand, and Asimina Begetis on the other. See Part III. B. 1., below.

The court declines to credit the testimony of Winstanley, who has long experience and great expertise in the field of commercial real estate development and acquisitions, to the effect that throughout the months in which he worked toward purchasing 470 Murdock, he relied on any representations by Dina Begetis that she was acting as the agent for all owners of the property at issue. Even if the court did credit Winstanley's testimony that he relied, to his detriment, upon Dina Begetis's misrepresentation that she was authorized to sell one hundred per cent of the 470 Murdock property, WE 470 could not prevail in this action because the knowledge of his attorney concerning the actual state of ownership is imputed to this plaintiff. As found in Part II., Olear knew more than three months prior to the extended closing date that Cosmos Real Estate was only a partial owner of the property her client intended to purchase. Again, that knowledge apparent through her receipt and transmission of the title search that clearly establishes the dual ownership status of Cosmos Real Estate and Asimina Begetis, and implicates the liquidated damages clause of the sale agreement, as discussed below. (Exhibits B, C, E.)

2. Special Defense — Liquidated Damages for Breach of Contract

As discussed, Cosmos Real Estate has asserted a special defense in an effort to limit any monetary recovery to be awarded should the plaintiff prevail on this first count of its complaint.

"`[F]acts must be 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. Practice Book § 10-50. . . The fundamental purpose of a special defense, like other pleadings, is to apprise the court and opposing counsel of the issues to be tried, so that basic issues are not concealed until the trial is underway.' (Citation omitted; internal quotation marks omitted.) Almada v. Wausau Business Ins. Co., 274 Conn. 449, 456, 876 A.2d 535 (2005)." McCann Real Equities v. David McDermott, 93 Conn.App. 486, 491, 890 A.2d 140 (2006). In effect, a special defense generally permits a defendant to prove that, notwithstanding any conduct on its part giving rise to liability, recovery must be limited as a matter of law. See Lamothe v. Midstate Medical Center et al., Superior Court, judicial district of New Haven at Meriden, Docket No. CV 05 4002893 (October 4, 2006, M. Taylor, J.) [ 42 Conn. L. Rptr. 139]. The party alleging a special defense bears the burden of proving the claims thus raised. Zhang v. Omnipoint Communications Enterprises, Inc., 272 Conn. 627, 645-46, 866 A.2d 588 (2005); McManus v. Roggi, 78 Conn.App. 288, 301, 829 A.2d 1275 (2003). Here, the plaintiff has met its burden of proving its allegations sounding in breach of contract as to Cosmos Real Estate in the first count. However, as this defendant has met its burden of proving its special defense, the court resolves this issue by limiting the damages to the amount previously agreed and stipulated to be awarded in the event of such a contractual breach as is alleged in the first count.

"`A provision for liquidated damages. . . is one the real purpose of which is to fix fair compensation to the injured party for a breach of the contract. In determining whether any particular provision is for liquidated damages or for a penalty, the courts are not controlled by the fact that the phrase liquidated damages or the word penalty is used. Rather, that which is determinative of the question is the intention of the parties to the contract. Accordingly, such a provision is ordinarily to be construed as one for liquidated damages if three conditions are satisfied: (1) The damage which was to be expected as a result of a breach of the contract was uncertain in amount or difficult to prove; (2) there was an intent on the part of the parties to liquidate damages in advance; and (3) the amount stipulated was reasonable in the sense that it was not greatly disproportionate to the amount of the damage which, as the parties looked forward, seemed to be the presumable loss which would be sustained by the contractee in the event of a breach of the contract. [ Berger v. Shanahan, 142 Conn. 726, 731-32, 118 A.2d 311 (1955)].' (Internal quotation marks omitted.) American Car Rental, Inc. v. Commissioner of Consumer Protection, 273 Conn. 296, 306-07, 869 A.2d 1198 (2005); see also 3 E. Farnsworth, Contracts (3d Ed. 2004) § 12.18, p. 305." Bellemare v. Wachovia Mortgage Corp., 94 Conn.App. 593, 612, 894 A.2d 335.

Here, the court finds that the damage that could have been suffered by WE 470 Murdock in the event of Cosmos Real Estate's failure to deliver the warranty deed was uncertain in amount, given the vagaries of the market for tenants at the building, the acknowledged need for repairs to the structures upon the property, and given Winstanley's characterization of the location as a "value added" purchase. Moreover, the sale agreement in and of itself establishes an expressed intent on the part of both WE 470 Murdock and Cosmos Real Estate to liquidate damages in advance, so that there was no great disproportion between the presumable loss and the potential for breach under the circumstances of this case. See Bellemare v. Wachovia Mortgage Corp., supra, 94 Conn.App. 612.

Rather, in this matter, the liquidated damages agreed to by the two parties as set forth in the sale agreement cannot be found to be unfair or unreasonable. (Exhibits 16, A.) As previously noted, both prior to and during the course of the trial, the parties stipulated that the cost of title insurance for a $1,700,000 property is "$4,650.00." (#121.) Clearly, the assignment of the value of the fee for the title insurance cannot be found to constitute a "penalty" to the breaching party. Id. Rather, limiting the award to WE 470 Murdock to the agreed-upon and stipulated amount of $4,650 allows the court to serve "the real purpose of [fixing] fair compensation to the injured party for a breach of the contract" at issue in this case. Id. WE 470's knowledge of Asimina Begetis's half-ownership interest in the property, actual albeit imputed from Olear's knowledge, effectively supersedes any deleterious effect that Dina Begetis's actions may have had upon the buyer's expenditure of time and money while engaged in the due diligence process. After the title commitment report was received on November 24, 2004, in electing to further engage in the due diligence process without first obtaining Asimina Begetis's formal assent to the sale agreement, WE 470, the commercial real estate acquisition and operation entity organized by and on behalf of WE, spent time and money at its own peril.

WE 470's $50,000 deposit with accrued interest was delivered to Winstanley on April 13, 2005. (Exhibits E; Testimony of Winstanley.)

In an effort to claim additional damages, the plaintiff unsuccessfully attempted to minimize the significance of its own knowledge of the defect in the sale agreement, as imputed through Olear. Instead, WE 470 would have the court focus upon Sank's purported role in obfuscating Asimina Begetis's unwillingness to sell the property, offering evidence of Sank's failure to advise Olear of the futility of their mutual efforts to effectuate the closing, thus suggesting that the plaintiff was somehow lured into expending time and resources after November 24, 2004 toward the fulfillment of a transaction whose viability was marred by the unwillingness of a half-owner to participate in the property's sale. (Testimony of Olear.) In like, and also unsuccessful, effort, the plaintiff at trial addressed O'Hara's confusion concerning the entity known as Cosmos Real Estate, LLC which had executed the listing agreement with him, and the entity known as Cosmos Rentals, LLC, whose name appeared on the various letters of intent that O'Hara exchanged with Winstanley, as described in Part II. However, the evidence firmly establishes that the responsibilities of assessing the propriety of entering into the sale agreement fell to the experienced, seasoned commercial property acquisition specialist, Winstanley, acting on behalf of WE and WE 470, and to the plaintiff's real estate attorneys.

In reaching this determination, the court acknowledges the implications of Paragraph 29 of the sale agreement, establishing that when Dina Begetis entered into the contract with Winstanley on WE 470's behalf, she was representing that to the best of her knowledge, she had "the full right and authority and [had] obtained any and all consents required to enter into this Agreement and to consummate or cause to be consummated the transactions contemplated hereby." (Exhibits 16, A.) The court has found, herein, that Cosmos Real Estate breached its contractual obligations to the plaintiff. However, any representations concerning Dina Begetis's authority to enter into the contract, as set forth in this provision, however, are otherwise superseded by the plaintiff's knowledge, imputed from Olear, that a half-owner of the property had not expressed her agreement to sell. Dina Begetis executed the sale agreement for Cosmos Real Estate, and was authorized to act as the agent of that LLC. There is no indication upon the sale agreement, however, that Asimina Begetis was in any way a party to the planned transaction. Upon learning of Asimina Begetis's interest in the property, through Olear's knowledge imputed to WE 470, the plaintiff could no longer reasonably rely upon any representations by Dina Begetis expressed pursuant to Paragraph 29. This conclusion is further supported by the evidence establishing that through a letter dated March 22, 2005, WE 470's attorneys claimed that "Cosmo Real Estate LLC is in default of its obligations pursuant to. . . the Agreement" for sale of the property, without extending any claim whatsoever toward the ownership interest maintained by Asimina Begetis, of which even their client, the plaintiff, was aware at the time. (Exhibit D; Testimony of Winstanley.)

B. SECOND COUNT: BREACH OP CONTRACT BY ASIMINA BEGETIS

In the second count, sounding in breach of contract against Asimina Begetis, the plaintiff alleges additional facts to support its claims that during the negotiations leading to the execution of the sale agreement, Cosmos Real Estate, through Dina Begetis and Sank, affirmatively represented that Cosmos Real Estate owned and/or controlled the entire interest in the property, even though Asimina Begetis owned one-half of that interest. Generally, in the second count, the plaintiff alleges that Asimina Begetis allowed Cosmos Real Estate to act as if she had agreed to convey her undivided one-half interest in the property, and that when she refused to authorize the sale, the plaintiff had already relied to its detriment on Asimina Begetis's earlier representations. The plaintiff has, however, failed to meet its burden of proving the operative allegations of this aspect of the complaint, and therefore cannot prevail against Asimina Begetis through this second count.

Specifically, the second count is based upon the plaintiff's corporate allegations that Asimina Begetis designated Cosmos Real Estate to act as her agent with respect to conveying or representing her interest in the 470 Murdock property, and/or that she allowed Cosmos Real Estate to so act on her behalf. The plaintiff does not contest the evidence that establishes, without question, the absence of Asimina Begetis's signature upon the sale agreement, or upon any of the letters of intent that were exchanged prior to the execution of the sale agreement by Winstanley on behalf of WE 470 and by Dina Begetis on behalf of Cosmos Real Estate, as fully described in Part II. A. To support its allegations of actual or apparent agency, instead, the plaintiff relies on evidence showing that Asimina Begetis acquiesced in allowing Dina Begetis to enter into leasing agreements for tenants of the condominiums upon the property, as found in Part II. A. The plaintiff also relies on the fact that Dina Begetis served as the plaintiff in a tax appeal filed with the Superior Court, ostensibly brought for the benefit of all owners of 470 Murdock, also as found in Part II. A. The evidence does not permit the court to draw the inferences the plaintiff promotes.

Notwithstanding the limits of those factual findings, however, the plaintiff further alleges that Asimina Begetis specifically acquiesced in the process through which Cosmos Real Estate, acting through Dina Begetis, the broker O'Hara and/or attorney Sank, held itself out as the being the owner of the property in its entirety. Cosmos Real Estate and Asimina Begetis deny these allegations, and the court concludes that the plaintiff has provided insufficient evidence upon this aspect of its claims can be sustained. Moreover, even if the plaintiff's evidence could support an inference that Cosmos Real Estate served as Asimina Begetis' actual or apparent agent with regard to the sale of 470 Murdock, the second count is defeated by operation of the special defenses requiring a written contract for this transaction, and establishing the plaintiff's superseding knowledge of the need for Asimina Begetis's signature upon any agreement for sale of the property at issue, thus vitiating any efforts to construct an unlawful, oral contract for conveyance of the property at issue or any damages that flow forward from November 24, 2004.

1. Agency, Apparent and Actual

In reaching its determination that there is insufficient basis for concluding that Dina Begetis conducted herself as the actual or apparent agent of Asimina Begetis with regard to the sale agreement, the court has carefully considered the evidence in its entirety, including the plaintiff's cross-examination of Asimina Begetis utilizing previously-recorded deposition testimony. The court has further relied upon the applicable principles of law in concluding that the plaintiff has not established, by a preponderance of the evidence, that Dina Begetis and/or Cosmos Real Estate, or any other person, functioned as Asimina Begetis's actual or apparent agent under the circumstances alleged.

"The burden of proving agency is on the party asserting its existence." Lee v. Duncan, 88 Conn.App. 319, 324, 870 A.2d 1 (2005). Agency "must be proven by a fair preponderance of the evidence." CT Page 7881 Botticello v. Stefanovicz, supra, 177 Conn. 26. "[A]gency is defined as the fiduciary relationship which results from manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. . . Thus, the three elements required to show the existence of an agency relationship include: (1) a manifestation by the principal that the agent will act for him; (2) acceptance by the agent of the undertaking; and (3) an understanding between the parties that the principal will be in control of the undertaking. . . The existence of an agency relationship is a question of fact. . . Some of the factors listed by the Second Restatement of Agency in assessing whether such a relationship exists include: whether the alleged principal has the right to direct and control the work of the agent; whether the agent is engaged in a distinct occupation; whether the principal or the agent supplies the instrumentalities, tools, and the place of work; and the method of paying the agent. . . In addition, an essential ingredient of agency is that the agent is doing something at the behest and for the benefit of the principal. . . Finally, the labels used by the parties in referring to their relationship are not determinative; rather, a court must look to the operative terms of their agreement or understanding." (Internal quotation marks omitted; emphasis added.) Wesley v. Schaller Subaru, Inc, supra, 277 Conn. 543-44. "An essential factor in an agency relationship is the right of the principal to direct and control the performance of the work by the agent." (Internal quotation marks omitted.) Lee v. Duncan, supra, 88 Conn.App. 324.

Taken as a whole, the elements requisite to establishing agency are simply absent from the evidence presented at trial concerning the nature and extent of the relationship between Asimina Begetis and her daughter Dina. The evidence fully establishes the discord between mother and daughter, such that third parties like Hellman and Effie Begetis were required to intercede in order to effectuate communication between Asimina Begetis and Dina Begetis. While Asimina Begetis fully participated in meetings with O'Hara, culminating in the written listing agreement proffering the property for sale at a cost of $2,500,000, the court has fully credited Asimina Begetis's testimony that she neither ever intended to sell the property for a price less than that. There is insufficient evidence from which, for instance, the court could reasonably infer that Asimina Begetis in any way authorized Dina Begetis or O'Hara to execute any of the letters of intent, referred to in Part II. A., either on behalf of Cosmos Real Estate, Cosmos Rentals, LLC, or herself. Viewing the evidence in its entirety, notwithstanding the plaintiff's vigorous argument to the contrary, there is simply insufficient basis for finding or inferring that any agency relationship existed between Asimina Begetis and Dina Begetis under the circumstances presented by the proposed sale of 470 Murdock. See Part II. A. Wesley v. Schaller Subaru, Inc., supra, 277 Conn. 543-44; Lee v. Duncan, supra, 88 Conn.App. 324.

Even if the principles of apparent agency are considered, as promoted by the plaintiff through its oral argument and trial briefs, the evidence is insufficient to permit the inference of such a relationship between Dina Begetis and Asimina Begetis insofar as sale of the property is concerned. The evidence fails to disclose even a circumstantial basis for discerning a nexus between Dina Begetis's conduct in executing the sale agreement, the obvious existence of Asimina Begetis's one-half interest in the property, and any supposed authority granted by Asimina Begetis enabling her daughter to impliedly act on her behalf with regard to the instant transaction. "[I]t is a general rule of agency law that the principal in an agency relationship is bound by, and liable for, the acts in which his agent engages with authority from the principal, and within the scope of the [agency relationship]. . . An agent's authority may be actual or apparent. . . Actual authority may be express or implied. . . Implied authority is actual authority circumstantially proved. It is the authority which the principal intended his agent to possess. . . Implied authority is a fact to be proven by deductions or inferences from the manifestations of consent of the principal and from the acts of the principal and [the] agent." (Citations omitted; internal quotation marks omitted; emphasis added.) Gordon v. Tobias, 262 Conn. 844, 849-50, 817 A.2d 683 (2003).

Using these principles of law, even if the evidence could support the inference that Winstanley, on behalf of WE 470, believed that Dina Begetis had the authority to bind Asimina Begetis to the sale agreement, the evidence is insufficient to establish that any acts or omissions by Asimina Begetis, as the principal, were competent to cause or allow the plaintiff to conclude that Asimina Begetis had consented to selling the property for $1,700,000, and or for the plaintiff to have relied upon such apparent authority as is alleged but unproven. "Apparent authority is that semblance of authority which a principal, through his own acts or inadvertences, causes or allows third persons to believe his agent possesses. . . Consequently, apparent authority is to be determined, not by the agent's own acts, but by the acts of the agent's principal. . . The issue of apparent authority is one of fact to be determined based on two criteria. . . First, it must appear from the principal's conduct that the principal held the agent out as possessing sufficient authority to embrace the act in question, or knowingly permitted [the agent] to act as having such authority. . . Second, the party dealing with the agent must have, acting in good faith, reasonably believed, under all the circumstances, that the agent had the necessary authority to bind the principal to the agent's action." (Internal quotation marks omitted.) Gordon v. Tobias, supra, 262 Conn. 850-51.

"It is well settled that a corporation can act only through its agents. . . Furthermore, it is a general rule of agency law that the principle in an agency relationship is bound by, and liable for, the acts in which his agent engages with authority from the principal, and within the scope of the agent's employment. . . Actual authority exists when an agent's] action [is] expressly authorized by resolution of the board of directors. . . [is impliedly authorized by the board of directors. . . or. . . although not authorized, [is] subsequently ratified by the board of directors." (Internal quotation marks omitted.) Hudson United Bank v. Cinnamon Ridge Corp., 81 Conn.App. 557, 572-73, 572, 845 A.2d 417 (2004). "Generally, a corporate vice president does not have the inherent authority to bind the corporation to notes or to contracts. . . A vice president, however, is sometimes entrusted with management of the business or a particular part of it, and in such a case he or she may bind the corporation by a contract within the scope of express or apparent authority." (Citation omitted; internal quotation marks omitted.) Id., 573-74. "[A]uthority in the agent of a corporation may be inferred from the conduct of its affairs, or from the knowledge of its directors and their neglect to make objection. . . [S]ilence, as well as affirmative acts, may imply an intent to ratify." (Citation omitted; internal quotation marks omitted.) Community Collaborative of Bridgeport, Inc. v. Ganim, 241 Conn. 546, 561-62, 698 A.2d 245 (1997).

Here, the plaintiff's arguments may be construed as submitting that Asimina Begetis's conduct constituted consent or ratification of the sale agreement, notwithstanding the fact that her signature never appears on the contract for transfer of real estate, as required by the statute of frauds. However, taken as a whole, once again, the evidence is insufficient to permit a finding that any acts or omissions by Asimina Begetis constituted ratification, as that term is utilized in our law. "As a general rule, [r]atification is defined as the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account. . . Ratification requires acceptance of the results of the act with an intent to ratify, and with full knowledge of all the material circumstances. . . In order to ratify the unauthorized act of an agent and make it effectual and obligatory upon the principal, the general rule is that the ratification must be made by the principal with a full and complete knowledge of all the material facts connected with the transaction to which it relates; and this rule applies, of course, to ratification by a corporation of an unauthorized contract or other act by its officers or agents, whether the ratification is by the stockholders or by the directors, or by a subordinate officer having authority to ratify." (Citation omitted; internal quotation marks omitted.) Community Collaborative of Bridgeport, Inc. v. Ganim, 241 Conn. 546, 561, 698 A.2d 245 (1997).

Notwithstanding the vigor of the plaintiff's argument, the evidence in this case provides no reasonable basis for concluding that, either before or after Cosmos Real Estate executed the sale agreement on November 22, 2004, Asimina Begetis ever, in any way, "accept[ed] the results of the act with an intent to ratify, and with full knowledge of all the material circumstances" attendant to that contract. Community Collaborative of Bridgeport, Inc. v. Ganim, supra, 241 Conn. 561; see also Gordon v. Tobias, supra, 262 Conn. 850-51. Asimina Begetis's credible trial testimony, referenced in Part II. A., clearly establishes the contrary conclusion; that this half-owner never agreed to any sale of the property for an amount less than the $2,500,000 figure established through the listing agreement. (Exhibit 1.)

Asimina Begetis's responsive pleadings are fully consistent with this determination. In her answer to the amended complaint, Asimina Begetis admits that she owns an undivided one-half interest in the property, but denies: that Cosmos Real Estate ever represented that it owned or controlled an undivided 100% interest; that she agreed with Cosmos Real Estate to convey her one-half interest to the plaintiff; that the plaintiff is a third-party beneficiary of the agreement between her and Cosmos Real Estate; or that she breached an agreement with Cosmos Real Estate causing it to breach its agreement with the plaintiff. (#130.) In addition, Asimina Begetis's assertion of her enumerated special defenses is further consistent with the lack of any evidence of condonation or ratification of acts by Cosmos Real Estate through Dina Begetis or any other agent, even if such representatives held themselves out as acting on Asimina Begetis's behalf with regard to the sale agreement, a finding not made by this court. As the plaintiff has failed to meet its burden of proof on the allegations that Asimina Begetis caused or allowed a contractual relationship to be established on her behalf, through any agent, with WE 470, and as the plaintiff has similarly failed to meet its burden of proving that Asimina Begetis caused or allowed that contractual relationship to be breached, either through her own conduct or by others acting on her behalf, the plaintiff cannot prevail on this second count. The court thus finds this issue in favor of the defendant Asimina Begetis.

Again, in Paragraph 2 of their special defenses filed August 2, 2005, the defendants specifically alleged that "Defendant Asimina Begetis did not execute the agreement between Plaintiff WE 470 Murdock and Defendant Cosmos Real Estate, LLC." (#108.) In its reply to this special defense, filed August 5, 2005, the plaintiff admitted that this allegation. (#109.) The defendants raised like special defense through their pleading filed January 2, 2007 (#130) in response to the present amended complaint (#127). Although the plaintiff did not respond to the most recent special defenses, the court has considered this aspect of its previous answer within the parameters of legal effect as described in footnote 8, herein. In view of the uncontroverted evidence establishing the absence of Asimina Begetis's signature upon the sale agreement, no further discussion of this aspect of the plaintiff's earlier admission is required.

2. Special Defenses — Lack of Written Contract, Statute of Frauds, and Effect of the Public Record

The court further finds that the defendant Asimina Begetis has met her burden of proving the special defenses she raised in response to the allegations of the second count, such that the plaintiff cannot succeed on the second count of his complaint, brought against Asimina Begetis alone, for these additional reasons. (#130.) See Lamothe v. Midstate Medical Center et al, supra, Docket No. CV 05 4002893 (October 4, 2006, M. Taylor, J.).

As a special defense, Asimina Begetis asserts that the absence of a written contract expressing her intention to sell the property effectively bars the plaintiff from compelling or obtaining a damage award based on her failure to transfer her interest in the 470 Murdock property. Such a written contract is a necessary criteria to successful pursuit of a claim against a landowner based on an ostensible failure to fulfill a promise to sell any interest in that land. Moreover, even if the plaintiff could succeed in establishing that Asimina Begetis had made an oral agreement to sell her interest in 470 Murdock; despite the plaintiff's emphatic argument to the contrary, no cause of action could be maintained against her based on a violation of an unwritten contract that failed to satisfy the statute of frauds. As fully discussed in Part III. A. 1., insofar as proposed sale of an interest in real estate is concerned, § 52-550(a)(4) establishes the existence of a written agreement as the threshold that must be crossed before suit can be brought for failure to comply with an ostensible promise to sell land. Thus, as previously explained, Sec. 52-550(a)(4) prohibits pursuit of a civil action, such as that brought against Asimina Begetis in the second count, ". . . unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged. . . upon any agreement for the sale of real property or any interest in or concerning real property." See also Battalino v. Van Patten, supra, 100 Conn.App. 164, citing § 52-550; Gabriele v. Bruno, supra, 85 Conn.App. 507. In the absence of any written contract or memorandum setting forth the essential terms and conditions by which Asimina Begetis bound herself to transfer her interest in 470 Murdock to the plaintiff in exchange for a payment of $1,700,000, no cause of action based on violation of an oral agreement can lawfully succeed against this defendant.

In reaching this determination, the court acknowledges that "[t]he primary purpose of the statute of frauds is to provide reliable evidence of the existence and the terms of the contract, the requirements of the statute can be met either by a single document or. . . by a series of related writings which, taken together, describe the essential terms and conditions of the contract. . . The memorandum of the contract need not be the contract itself. . . The memorandum need not be made at the time of the contract; it may be made and signed afterward. . . The moment written evidence of the contract. . . in whatever form, exists, the contract is taken out of the statute. . ." (Internal quotation marks omitted.) Electrical Wholesalers, Inc. v. M.J.B. Corp., supra, 99 Conn.App. 302-03.

Thus, as another special defense to the plaintiff's breach of contract claim in the second count of the complaint, Asimina Begetis reasserts the fact that the title to the subject property is a matter of public record, as found in Part II. A. The court has previously concluded that due examination of the public record would, in fact provide the plaintiff with actual notice of the fact that when it entered into an agreement with Cosmos Real Estate, it had contracted with only one-half of the ownership of the property at issue. As such, the plaintiff had effective notice that the sale agreement violated the spirit and letter of the statute of frauds.

As has aptly been stated, "under Connecticut law, land records are notice to the entire world of deeds recorded there." Chapman Lumber, Inc. v. Tager, Superior Court, judicial district of Litchfield, Docket No. CV 01 0086006 (August 22, 2003, Frazzini, J.) [ 35 Conn. L. Rptr. 402]. Moreover, in the past, the plaintiff had admitted that the title to the subject property was a matter of public record. At trial, however, the court permitted the plaintiff to proffer evidence and argument to counter and explain the impact, if any, of this admission. (#109.) See footnote 10.

Even if the evidence does not support the conclusion that the plaintiff had actual notice of Asimina Begetis's ownership interest in the property, through the effect of the land records, constructive notice was imputed to WE 470 as of November 24, 2004, through Olear's receipt of the title commitment as described in Part II. B. The land records serve to provide the plaintiff with constructive notice of Asimina Begetis's relationship to the property it sought to purchase, and a "plaintiff cannot plead ignorance of facts of which it is deemed to have had [constructive] notice." (Internal quotation marks omitted.) Metro Bulletins Corp. v. Soboleski, 30 Conn.App. 493, 501, 620 A.2d 1314 (1993). "[T]he legal doctrine that land records provide constructive notice of interests recorded there arises from General Statutes § 47-10, which provides that `no conveyance shall be effectual to hold any land against any other person but the grantor and his heirs, unless recorded on the records of the town in which the land lies.' Grantees in Connecticut take their interests in real property subject to claims on that property of which they have record notice." (Internal quotation marks omitted.) Id., 403. "The purpose of the recording system is to alert prospective purchasers to the status of the property and to provide security in land transactions." Cabinet Realty, Inc. v. Planning Zoning Commission, 17 Conn.App. 344, 350-51, 552 A.2d 1218, cert. denied, 210 Conn. 813, 556 A.2d 610 (1989). "Constructive notice is premised on the policy determination that under certain circumstances a person should be treated as if he had actual knowledge so that one should not be permitted to deny knowledge when he is acting so as to keep himself ignorant [even though a]ctual knowledge is superior to constructive notice." (Citation omitted; internal quotation marks omitted.) Cadlerock Properties Joint Venture, L.P. v. Ashford, 98 Conn.App. 556, 562, 909 A.2d 964 (2006). In other words, "[w]hatever in fact appeared upon the records, [the commercial property acquisition firm WE 470 was], so far as [the] legal title is concerned, conclusively presumed to know." (Internal quotation marks omitted.) Mortgage Electronic Registration Systems, Inc. v. White, 278 Conn. 219, 231, 896 A.2d 797 (2006).

Applying these legal principles to the facts as found in Part II. A., the court is constrained to conclude that the plaintiff had both actual and constructive notice of Asimina Begetis's obvious ownership interest in the 470 Murdock property. Nonetheless, the plaintiff entered into a written contract with Cosmos Real Estate representing only one-half of the undivided ownership of the property, and neither the plaintiff nor his attorney timely responded to the notice that Asimina Begetis's signature upon a written contract would be required before the closing could take place. Under these circumstances, the defendant Asimina Begetis has met her burden of proving the special defenses to the second count of the complaint, barring the plaintiff's recovery against her on the grounds there alleged.

3. Part Performance

The plaintiff has argued that notwithstanding the absence of a written contract establishing Asimina Begetis's promise to sell her interest in the property, the statute of frauds does not bar its cause of action because both Dina Begetis and WE 470 partly performed their obligations as contemplated by the sale agreement. The parties do not contest the facts establishing that after Cosmos Real Estate and WE 470 executed the sale agreement, the plaintiff tendered its deposit of $50,000 and commenced the due diligence process, thereby expending additional sums as found in Parts II. A and II. B. The evidence further establishes that through Sank and her sister Effie, Dina Begetis made efforts to secure Asimina Begetis's participation in the contract for sale of the property, as found in Part II. A. These efforts, however, do not fulfill the legal conditions precedent to "part performance" that overwhelms the statute of frauds' requirement for a written contract when enforcement of an agreement to sell real estate is at issue.

"[T]he elements required for part performance are: (1) statements, acts or omissions that lead a party to act to his detriment in reliance on the contract; (2) knowledge or assent to the party's actions in reliance on the contract; and (3) acts that unmistakably point to the contract. . . Under this test, two separate but related criteria are met that warrant precluding a party from asserting the statute of frauds. . . First, part performance satisfies the evidentiary function of the statute of frauds by providing proof of the contract itself. . . Second, the inducement of reliance on the oral agreement implicates the equitable principle underlying estoppel because `repudiation of the contract by the other party would amount to the perpetration of a fraud.'" (Internal quotation marks omitted; internal and external citations omitted.) Glazer v. Dress Barn, Inc., 274 Conn. 33, 62-63, 873 A.2d 929 (2005).

As discussed in Part III. B. 1., despite the plaintiff's claims to that such statements, acts or omissions were made by Dina Begetis, Cosmos Real Estate, their agents and/or Asimina Begetis, the evidence is insufficient to establish the existence of any such operative conduct as is contemplated by Glazer v. Dress Barn, Inc., supra, 274 Conn. 62-63. There is no question but that a contract for the sale of Cosmos Real Estate's interest in the property had been entered into by Dina Begetis on behalf of her LLC and by Winstanley on behalf of WE 470. However, none of the acts undertaken by the plaintiff, through payment of its deposit or involvement in the due diligence activities, operated to establish Asimina Begetis's acquiescence in the sale of her interest in the property. Id. As previously found, there is insufficient evidence from which the court could reasonably infer that Asimina Begetis knew of or assented to the conduct undertaken by WE 470 in reliance upon its erroneous assumption that it had entered into a sale agreement with all the owners of the property at issue. Id. Moreover, as fully discussed in Part II. A., even if the plaintiff had neither actual nor constructive knowledge of the need to engage Asimina Begetis in the execution of the sale agreement, through application of the information concerning her ownership status as was evident upon the public records, as soon as Olear knew of the role Asimina Begetis was obligated to play in perfecting the transaction, that knowledge was imputed to the plaintiff, and WE 470 further acted in reliance upon the imperfect contract at its own peril. Friezo v. Friezo, supra, 281 Conn. 195. Under these circumstances, any actions undertaken by the plaintiff cannot reasonably be assigned the status of "part performance" so as to obviate the application of § 52-550(a)(4), the statute of frauds, which precludes it from recovering against Asimina Begetis in this second count. Glazer v. Dress Barn, Inc., supra, 274 Conn. 62-63.

4. Claim by Putative Third-Party Contract Beneficiary

Another set of allegations in the second count of the complaint is based upon the premise that the plaintiff is a third-party beneficiary of a collusive agreement between these Asimina Begetis and Dina Begetis, acting for and on behalf of Cosmos Real Estate. The evidence uncontrovertedly establishes that Asimina Begetis never signed the sale agreement binding the WE 470 and Cosmos Real Estate to complete the property transfer. Nonetheless, through these relevant allegations brought in the second count, the plaintiff assumes the burden of proving that Asimina Begetis entered into an agreement authorizing Cosmos Real Estate to convey her one-half interest in that property to the plaintiff; that the plaintiff is a third-party beneficiary of this purported agreement between Cosmos Real Estate and Asimina Begetis; that Asimina Begetis breached her agreement to convey her undivided one-half interest in the property to the plaintiff; and that Asimina Begetis thereby caused Cosmos Real Estate to breach its agreement with the plaintiff; all to the detriment of the plaintiff which relied upon its supposed status as a third-party beneficiary of this purported agreement. Viewing the evidence in its entirety, the plaintiff has failed to meet its burden of proving the essential allegations of this aspect of the second count of the complaint. As such, WE 470 cannot prevail against Asimina Begetis based on its third-party beneficiary theory.

"The law regarding the creation of contract rights in third parties in Connecticut is. . . well settled. . . [T]he ultimate test to be applied [in determining whether a person has a right of action as a third party beneficiary] is whether the intent of the parties to the contract was that the promisor should assume a direct obligation to the third party [beneficiary] and. . . that intent is to be determined from the terms of the contract read in the light of the circumstances attending its making, including the motives and purposes of the parties. . . Although. . . it is not in all instances necessary that there be express language in the contract creating a direct obligation to the claimed third-party beneficiary. . . the only way a contract could create a direct obligation between a promisor and a third-party beneficiary would have to be. . . because the parties to the contract so intended." (Citations omitted; internal quotation marks omitted; emphasis added.) Dow Condon, Inc. v. Brookfield Development Corp., 266 Conn. 572, 580-81, 833 A.2d 908 (2003).

Utilizing these legal tenets in the context of the present litigation, for the plaintiff to prevail on this aspect of the second count, the court would first have to ascertain that Asimina Begetis entered into an obligation to sell her interest in the property at the price of $1,700,000; such a conclusion is not, however, supported by any reliable direct or circumstantial evidence presented at trial, as previously discussed. Dow Condon, Inc. v. Brookfield Development Corp., supra, 266 Conn. 580-81. To the contrary, as found in Part II. A. and Part III. B. 1., the court has fully credited Asimina Begetis's testimony to the effect that she never agreed to sell the property at issue for any price except $2,500,000, and further, that she never committed any acts or omissions that could reasonably be construed as authorizing Dina Begetis or any representative of Cosmos Real Estate to enter into an agreement to sell the property for $1,700,000. Id. Second, to find that the plaintiff was a third-party beneficiary of an agreement between Asimina Begetis and Dina Begetis under the foregoing principles of law, the court would have to conclude that Dina Begetis made a promise to the plaintiff establishing her ability to engage Asimina Begetis in the sale process. Id. This second element is not supported by the evidence adduced at trial, which is void of credible evidence related In any such promises, which instead establishes the rancorous and discordant nature of the relationship between Dina Begetis and her mother, minimizing and discounting the likelihood that such promise would ever have been made. The reasoned and logical inference from the totality of the circumstances establishes that Dina Begetis hoped and even expected that she could obtain her mother's acquiescence in selling the property at the price of $1,700,000, but not that she made a promise thereabout intending to enhance the status of the plaintiff as a third-party beneficiary of any contract between mother and daughter. Thus, the plaintiff cannot meet its burden of proving the elements intrinsic to establishing his status as a third-party beneficiary, under the circumstances of this case. Id.

The court has addressed this aspect of the plaintiff's allegations as set forth in the second count against Asimina Begetis in order to comply with the edicts of Practice Book § 64-1, requiring response to a litigant's legal claims. However, the court notes the significant potential that the plaintiff lacks standing to pursue his theory of third-party beneficiary status, given the factual context of the present litigation. See, e.g.,. Connecticut State Medical Society v. Oxford Health Plans (CT), Inc., 272 Conn. 469, 476-77, 863 A.2d 645 (2005); Tomlinson v. Board of Education, 226 Conn. 704, 718, 629 A.2d 333 (1993).

C. THIRD COUNT: CONSPIRACY TO DEFRAUD — BOTH DEFENDANTS

In third count of the amended complaint, based on civil conspiracy to defraud, the plaintiff presents highly detailed and specific allegations that, if proved, would ostensibly support this aspect of its legal claim against both defendants. The plaintiff specifically alleges: that Cosmos Real Estate's representation that it owned and/or controlled the entirety of the property was based on its agreement with Asimina Begetis that she would convey her one-half interest to the plaintiff; that Asimina Begetis was aware that Cosmos Real Estate represented that it had the power to convey the entire property; that Cosmos Real Estate and Asimina Begetis shared the same counsel; that Asimina Begetis acquiesced in Cosmos Real Estate holding itself out as the owner of the property in its entirety, and that she designated Cosmos Real Estate as its agent with respect to conveying her interest or representing her interest in the property in public proceedings; that during the due diligence process, the plaintiff discovered that Cosmos Real Estate and Asimina Begetis each owned a one-half undivided interest in the property; that Cosmos Real Estate represented to both its real estate broker and counsel that Asimina Begetis had said she would convey title to the property; that in reliance upon the agreement and representations made by Cosmos Real Estate, Dina Begetis, Pagioti Begetis, Efrosene Begetis and Asimina Begetis, the plaintiff spent substantial sums to further conveyance of the title; that thereafter, neither Cosmos Real Estate nor its members could convince Asimina Begetis to convey her interest in the property; that based on representations which Asimina Begetis knew to be false, Cosmos Real Estate was induced to breach its contract with the plaintiff; that Asimina Begetis and Cosmos Real Estate are negotiating to sell a portion of the property to a present tenant for an amount that is higher than that set forth in the sale agreement; and that the misrepresentations by Cosmos Real Estate and Asimina Begetis with respect to the proper title to the real estate represents a conspiracy to defraud the plaintiff with respect to its efforts to purchase the property.

In its answer to the third count of the plaintiff's amended complaint, Cosmos Real Estate and Asimina Begetis deny the plaintiff's allegations. As the plaintiff has failed to meet its burden of proving the underlying cause of action based on fraud, notwithstanding its allegations, the plaintiff cannot prevail on its claims of conspiracy to defraud. Litchfield Asset Management Corp. v. Howell, 70 Conn.App. 133, 140, cert. denied, 261 Conn. 911, 806 A.2d 49 (2002). Accordingly, the court finds this count in favor of the defendants.

The third count of the amended complaint is entitled "Conspiracy to Defraud — All Defendants." (#127.) In addressing the allegations raised in this count, the court remains aware that "[u]nder Connecticut law, technically speaking, there is no such thing as a civil action for conspiracy. The action is for damages caused by acts committed pursuant to a formed conspiracy rather than by the conspiracy itself. . . A claim of civil conspiracy, therefore, is insufficient unless based on some underlying cause of action. . . Consequently, for a plaintiff to recover on a conspiracy claim, the court must find the facts necessary to satisfy the elements of an independent underlying cause of action. . . More specifically, where the plaintiff is unable to establish the underlying cause of action for fraud, the cause of action for conspiracy to defraud must also fail." (Citations omitted; internal quotation marks omitted.) Litchfield Asset Management Corp. v. Howell, 70 Conn.App. 133, 140, cert. denied, 261 Conn. 911, 806 A.2d 49 (2002).

Conspiracy to defraud, such as the cause of action brought forward by the plaintiff, is generally classified as a tort claim. Beizer v. Goepfert, 28 Conn.App. 693, 702, 613 A.2d 1336, cert. denied, 224 Conn. 901, 615 A.2d 1044 (1992), cert. denied, 507 U.S. 973, 113 S.Ct. 1416, 122 L.Ed.2d 786 (1993). "The elements of a civil action for conspiracy are: `(1) a combination between two or more persons, (2) to do a criminal or an unlawful act or a lawful act by criminal or unlawful means, (3) an act done by one or more of the conspirators pursuant to the scheme and in furtherance of the object, (4) which act results in damage to the plaintiff.' (Internal quotation marks omitted.) Marshak v. Marshak, 226 Conn. 652, 665, 628 A.2d 964 (1993), overruled on other grounds by State v. Vakilzaden, 251 Conn. 656, 666, CT Page 7891 742 A.2d 767 (1999) (en banc). Thus, it is an essential element of the tort that the alleged conspirators have combined `to do a criminal act or an unlawful act or a lawful act by criminal or unlawful means.' (Internal quotation marks omitted.) Jones v. O'Connell, 189 Conn. 648, 662, 458 A.2d 355 (1983)." American Diamond Exchange, Inc. v. Alpert, 101 Conn.App. 83, 99-100, 920 A.2d 357 (2007). See also Litchfield Asset Management Corp. v. Howell, supra, 70 Conn.App. 139-40.

"Fraud involves deception practiced in order to induce another to act to [its] detriment, and which causes that detrimental action. . . The four essential elements of fraud are (1) that a false representation of fact was made; (2) that the party making the representation knew it to be false; (3) that the representation was made to induce action by the other party; and (4) that the other party did so act to [its] detriment." (Internal quotation marks omitted.) Whitaker v. Taylor, 99 Conn.App. 719, 729-30, 916 A.2d 834 (2007). "All of these ingredients must be found to exist. . . Additionally, [t]he party asserting such a cause of action must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which. . . we have described as clear and satisfactory or clear, precise and unequivocal." (Internal quotation marks omitted; external citation omitted.) Duplissie v. Devino, 96 Conn.App. 673, 681, 902 A.2d 30, cert. denied, 280 Conn. 916, 908 A.2d 536 (2006). "[T]he appropriate standard of proof for the party who seeks to prevail in a civil fraud action is clear and convincing evidence." Friezo v. Friezo, supra, 281 Conn. 196, citing Black v. Goodwin, Loomis Britton, Inc., 239 Conn. 144, 163, 681 A.2d 293 (1996). See also Dockter v. Slowik, 91 Conn.App. 448, 453-54, 881 A.2d 479, cert. denied, 276 Conn. 919, 888 A.2d 87 (2005); Ansell v. Statewide Grievance Committee, 87 Conn.App. 376, 383, 865 A.2d 1215 (2005).

"`Clear and convincing proof denotes a degree of belief that lies between the belief that is required to find the truth or existence of the [fact in issue] in an ordinary civil action and the belief that is required to find guilt in a criminal prosecution. . . [The burden] is sustained if evidence induces in the mind of the trier a reasonable belief that the facts asserted are highly probably true, that the probability that they are true or exist is substantially greater than the probability that they are false or do not exist.' Shelton v. Statewide Grievance Committee, 85 Conn.App. 440, 443-44, 857 A.2d 432, cert. granted on other grounds, 272 Conn. 914, 890 A.2d 104 (2004)." Ansell v. Statewide Grievance Committee, 87 Conn.App. 376, 383, 865 A.2d 1215 (2005). "[A]lthough the elements of fraud must be proved by clear and convincing evidence, damages may be proved by the preponderance of the evidence." Dockter v. Slowik, 91 Conn.App. 448, 453-54, 881 A.2d 479, cert. denied, 276 Conn. 919, 888 A.2d 87 (2005).

"A representation about a promise to do something in the future, when linked with a present intention not to do it, is a false representation. . . Accordingly, such a promise may constitute actionable fraud if it is blended with a misrepresentation of a material fact and an evasion of the very promise, after the promisee has performed." (Citation omitted; internal quotation marks omitted.) Duplissie v. Devino, supra, 96 Conn.App. 681. "In equity, as in law, misrepresentation, to constitute fraud, must be material. . . That is to say, the representation must prejudice the party relying upon it." (Internal quotation marks omitted.) McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 519, 890 A.2d 140, cert. denied, 277 Conn. 928, 895 A.2d 798 (2006).

Thus, to prevail on this third count then, the plaintiff must prove not only that one or both defendants engaged in fraud, but that they conspired to do so; and the plaintiff's proof must rise to the level of clear and convincing evidence as to the operative elements of the purported promise by the defendants to accomplish a future act. Friezo v. Friezo, supra, 281 Conn. 196; Black v. Goodwin, Loomis Britton, Inc., supra, 239 Conn. 163; Dockter v. Slowik, supra, 91 Conn.App. 453-54, Ansell v. Statewide Grievance Committee, supra, 87 Conn.App. 383. Applying the legal principles set forth herein to the allegations presented in the third count of the amended complaint, the plaintiff has the burden of establishing, by clear and convincing evidence, that either Cosmos Real Estate and/or Asimina Begetis engaged in a fraud by way of practicing deception in order to induce the plaintiff to act to his detriment, and by actually causing that detrimental action. Whitaker v. Taylor, supra, 99 Conn.App. 729-30. Essentially, the plaintiff must prove, by clear and convincing evidence, (1) that either Cosmos Real Estate and/or Asimina Begetis made a false representation to WE 470 or its agents; (2) that either Cosmos Real Estate and/or Asimina Begetis knew this representation was false when it was made; (3) that either Cosmos Real Estate and/or Asimina Begetis made the representation to induce WE 470 or its agents to engage in some action; and (4) that WE 470 or its agents took such actions to the detriment of the plaintiff. Id.

Viewing the evidence in its totality, and notwithstanding the tenor of the plaintiff's argument in support of this third count of the amended complaint, the court finds that there is insufficient evidence from which it could reasonably conclude that at any relevant time, either Cosmos Real Estate and/or Asimina Begetis or their agents falsely proffered or withheld any information to or from WE 470 or its agents in an effort to mislead or confuse the aspiring corporate purchaser into concluding that Cosmos Real Estate owned the property at issue in its entirety. There is no evidence whatsoever from which the court could conclude that Asimina Begetis engaged in such conduct. Any evidence related to the roles played by Dina Begetis, O'Hara and/or Sank in the negotiations leading up to and the execution of the sale agreement falls short of establishing, by clear and convincing evidence the essential elements of fraudulent conduct as contemplated by the applicable case law. See Friezo v. Friezo, supra, 281 Conn. 196; Black v. Goodwin, Loomis Britton, Inc., supra, 239 Conn. 163; Dockter v. Slowik, supra, 91 Conn.App. 453-54; Ansell v. Statewide Grievance Committee, supra, 87 Conn.App. 383. As found in Parts II. A and III. B., Dina Begetis had hope and expectation that her mother, Asimina Begetis, would acquiesce in the decision to sell 470 Murdock in exchange for the plaintiff's payment of $1,700,000. The evidence establishing this hope, however, even viewed in the context of the economic burden the property placed upon the Begetis family, does not support the conclusion that Dina Begetis executed the sale agreement in an effort to induce the plaintiff to engage in the expensive due diligence process, all to his detriment because Dina Begetis had reason to know that the sale could not take place. As such, the plaintiff cannot fulfill its burden of proof under this third count.

In reaching this conclusion, the court has considered the evidence establishing that, as set forth in Part II, on April 15, 2004, O'Hara sent Winstanley a letter of intent outlining the terms to which Cosmos Real Estate would agree for the plaintiff commercial real estate development company's acquisition of 470 Murdock. That letter of intent included clear reference to issues related to the buyer's satisfaction with the title to the property as a requisite criteria for sale. As such, WE and WE 470 were aware, six months prior to entering into the contract with Cosmos Real Estate, that issues concerning the status of the property's title would have to be addressed prior to closing the transaction. (Exhibits 4; Testimony of O'Hara.)

Moreover, there is insufficient evidence from which the court could reasonably conclude that at any relevant time, either WE 470 or its agents relied to their detriment upon information proffered or withheld by Cosmos Real Estate or Asimina Begetis or their agents in an effort to mislead or confuse the aspiring corporate purchaser into concluding that Cosmos Real Estate owned the property at issue in its entirety. Again, such evidence as may support a finding of this nature is insufficient to meet the clear and convincing standard required for proof of the allegations set forth in the third count. See Friezo v. Friezo, supra, 281 Conn. 196; Black v. Goodwin, Loomis Britton, Inc., supra, 239 Conn. 163; Dockter v. Slowik, supra, 91 Conn.App. 453-54; Ansell v. Statewide Grievance Committee, supra, 87 Conn.App. 383. Even if such proffer or withholding of information can possibly be inferred from the evidence presented at trial, and even if it can be further inferred that the aspiring corporate purchaser relied on such an occurrence notwithstanding its years of skill and experience in the acquisition of commercial real estate, the evidence clearly establishes that after November 24, 2004, any consequences of such conduct were governed by the fact that the plaintiff, through its attorney, knew the actual status of the ownership of the property. This knowledge supersedes the effect of any attempt to mislead or defraud by one or more of the named defendants, defeating an fundamental element of the cause of action sounding in fraud after that date.

The plaintiff may argue that because Dina Begetis and Asimina Begetis are licensed real estate agents, the evidence supports the claim that one or both engaged in knowing and misleading conduct directed at defrauding WE 470 into entering into the sale agreement, and thereby into incurring the monetary damages associated with the due diligence process. The argument must fail, as well for several reasons, including but not limited to the lack of the requisite clear and convincing evidence to establish such a claim. Here, the evidence is insufficient to establish that either Dina Begetis or Asimina Begetis acted in such a misleading or fraudulent manner with regard to negotiations leading up to the execution of the sale agreement that WE 470 was brought into the sale in some manner other than through standard business practices. Rather, as discussed in Part II., the court credits Winstanley's testimony that he willingly entered into the sale agreement, under all the circumstances because he wished to purchase the "value added" property at a price that was convenient for him.

On the other hand, the evidence is sufficient, however, to support the inference that acting on behalf of WE and WE 470, Winstanley determined to purchase, at a depressed price, a property that he designated, based on his experience in commercial real estate acquisitions, as a "value added deal," because it was troubled, vacant, undermanaged or poorly managed, for this reason, the plaintiff had reduced its June 28, 2004 offer to pay $2,050,000 in exchange for 470 Murdock, and so that by July 15, 2004, the plaintiff was only willing to pay $1,600,000 for the property, although by November 22, 2004, the plaintiff had increased its offer to $1,700,000. (Exhibits 11-3, 12, 16, A; Testimony of Winstanley, O'Hara.)

Moreover, while she was licensed as a real estate agent, Dina Begetis's experience in commercial transactions was largely limited to matter involving obtaining tenants for 470 Murdock, in her capacity as a member of Cosmos Rentals, LLC. Unlike WE and/or Winstanley, Dina Begetis did not have years of accumulated expertise in negotiations or contracts related to the purchase and sale of commercial real estate. Dina Begetis's conduct was likely due to an overly optimistic assumption concerning Asimina Begetis's willingness to recognize the economic realities and financial losses the family would continue to accrue if 470 Murdock remained unsold. Her conduct was likely spurred by her erroneous conclusions that by entering into the listing agreement with O'Hara, Asimina Begetis, also a real estate agent, indicated not only her willingness to sell 470 Murdock for $2,500,000, but that she also would be willing to sell 470 Murdock at a price that was lower than that identified in discussions with O'Hara. Her execution of the sale agreement on November 22, 2004 was likely due to her efforts at facilitating the business process of completing the sale of the property, further serving to encourage Asimina Begetis to join in the transaction so as to minimize the financial drain on the Begetis family, but without the necessary intent to mislead and defraud Winstanley and/or WE 470 into concluding that Dina Begetis was the authorized agent of all owners of the property. Taken as a whole, nonetheless, the evidence thus fails to reasonably support a finding that the plaintiff has met its burden of proving, by clear and convincing evidence, either any fraudulent conduct by Cosmos Real Estate and/or Asimina Begetis, or any conspiracy to engage in such conduct. Marshak v. Marshak, supra, 226 Conn. 665.

However, even if Cosmos Real Estate's and/or its agents conduct can be identified as meeting the legal criteria necessary to establish fraud, according to the legal standards set forth above, the plaintiff cannot show a causal relationship between this fraud and any detriment he may have endured, thus voiding a critical element of this cause of action. As discussed in Part III. A. 2., Olear's actual knowledge of Asimina Begetis's half-ownership interest in the property, imputed to the plaintiff, functionally supersedes any impact that any defendants' supposedly fraudulent and/or conspiratorial conduct may have had upon WE 470's engagement in the due diligence process after the title commitment report was received on November 24, 2004. Similarly, as the dual ownership of the property was evident from public records, as found in Part II. A., the plaintiff's election to expend funds in the course of the due diligence process, prior to accessing Asimina Begetis's concurrence in the sale agreement, was undertaken at its corporate risk. Under all these circumstances, the plaintiff cannot meet his burden of proving, by clear and convincing evidence, the allegations of conspiracy to defraud brought forth in the third count of the amended complaint.

D. FOURTH COUNT: TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS — ASIMINA BEGETIS

The fourth count of the amended complaint alleges that Asimina Begetis engaged in tortious interference with the contractual relations established between the plaintiff and Cosmos Real Estate. The court finds that the plaintiff has failed to meet its burden of proof on this issue, and thus resolves the fourth count in favor of the defendant Asimina Begetis. This conclusion does not, however, disturb the court's conclusion that the plaintiff has prevailed in count one of the amended complaint, brought against Cosmos Real Estate based on breach of contract claims.

"A cause of action sounding in tort for interference with another's business practices and opportunities has long been recognized in Connecticut. The law in this state forbids unjustifiable interferences with any man's right to pursue his lawful business or occupation and to secure to himself the earnings of his industry. Full, fair and free competition is necessary to the economic life of a community, but under its guise, no man can by unlawful means prevent another from obtaining the fruits of his labor. . . A successful action for tortious interference with business expectancies requires the satisfaction of three elements: (1) a business relationship between the plaintiff and another party; (2) the defendant's intentional interference with the business relationship while knowing of the relationship; and (3) as a result of the interference, the plaintiff suffers actual loss." (Citation omitted, internal quotation marks omitted; emphasis added.) American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 89-90.

Courts use the terms "tortious interference with business expectancy," "tortious interference with business practices and opportunities" and "tortious interference with contract/contractual relations" interchangeably. The Supreme Court case using the terms "tortious interference with contract rights" is Daley v. Aetna Life Casualty Co., 249 Conn. 766, 805-06, 734 A.2d 112 (1999), which provides in relevant part: "This court has long recognized a cause of action for tortious interference with contract rights or other business relations. . . [We have held, however, that] not every act that disturbs a contract or business expectancy is actionable. . . [F]or a plaintiff successfully to prosecute such an action it must prove that the defendant's conduct was in fact tortious. This element may be satisfied by proof that the defendant was guilty of fraud, misrepresentation, intimidation or molestation. . . or that the defendant acted maliciously. . . [A]n action for intentional interference with business relations. . . requires the plaintiff to plead and prove at least some improper motive or improper means. . . The plaintiff in a tortious interference claim must demonstrate malice on the part of the defendant, not in the sense of ill will, but intentional interference without justification." (Citations omitted; internal quotation marks omitted.) Id.

"Section 767 of 4 Restatement (Second) of Torts provides in relevant part: In determining whether an actor's conduct in intentionally interfering with a contract or a prospective contractual relation of another is improper or not, consideration is given to the following factors: (a) the nature of the actor's conduct, (b) the actor's motive, (c) the interests of the other with which the actor's conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (f) the proximity or remoteness of the actor's conduct to the interference and (g) the relations between the parties." (Internal quotation marks omitted.) American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 91 n. 4.

"Our case law has recognized that not every act that disturbs a business expectancy is actionable. [A] claim is made out [only] when interference resulting in injury to another is wrongful by some measure beyond the fact of the interference itself. . . Accordingly, the plaintiff must plead and prove at least some improper motive or improper means. . . [F]or a plaintiff successfully to prosecute such an action it must prove that. . . the defendant was guilty of fraud, misrepresentation, intimidation or molestation. . . or that the defendant acted maliciously. . . In the context of a tortious interference claim, the term malice is meant not in the sense of ill will, but intentional interference without justification. . . In other words, the [plaintiff] bears the burden of alleging and proving lack of justification on the part of the [defendant]. . . 4 Restatement (Second), Torts § 766B (1979) (test for intentional interference with prospective contractual relation is whether actor's behavior improper). Our Supreme Court has recognized that the legal theory of tortious interference with a business expectancy encompasses a broad range of behavior." (Citations omitted; internal quotation marks omitted.) American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 90-91. However, "[t]he tortuous interference claim [is] satisfied simply by the plaintiff's having demonstrated that the defendant intentionally interfered with its business relations without justification. . . In a tortious interference case. . . preponderance of the evidence is the appropriate burden of proof." (Citation omitted; internal quotation marks omitted.) American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 105.

"[T]he proper measure of damages in an action for tortious interference with a business expectancy is not the profit to the defendant but rather the pecuniary loss to the plaintiff of the benefits of the prospective business relation." American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 103. "Section 774A(1) of 4 Restatement (Second) of Torts provides: One who is liable to another for interference with a contract or prospective contractual relation is liable for damages for (a) the pecuniary loss of the benefits of the contract or the prospective relation; (b) consequential losses for which the interference is a legal cause; and (c) emotional distress or actual harm to reputation, if they are reasonably to be expected to result from the interference." (Internal quotation marks omitted.) Id., 103 n. 12

"[I]t is an essential element of the tort of unlawful interference with business relations that the plaintiff suffered actual loss. . . Thus, it must appear that, except for the tortious interference of the defendant, there was a reasonable probability that the plaintiff would have entered into a contract or made a profit. . . Such a determination is a question for the trier of fact, as is the question of whether the plaintiff has suffered an actual loss. . . If the question is whether the plaintiff would have succeeded in attaining a prospective business transaction in the absence of [the] defendant's interference, the court may, in determining whether the proof meets the requirement of reasonable certainty, give due weight to the fact that the question was made hypothetical by the very wrong of the defendant. . . DiNapoli v. Cooke, [ 43 Conn.App. 419, 428, 682 A.2d 603, cert. denied, 239 Conn. 951, 686 A.2d 124 (1996), cert. denied, 520 U.S. 1213, 117 S.Ct. 1699, 137 L.Ed.2d 825 (1997)] (plaintiff established actual loss for defendant's liability in tortious interference claim even if court could not calculate precise amount of that loss). Accordingly, an award of compensatory damages is not necessary to establish a cause of action for tortious interference as long as there is a finding of actual loss. . ." (Citations omitted; internal quotation marks omitted.) American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 97-98.

Using these measures, the court is constrained to conclude that the evidence, taken as a whole is insufficient to support the plaintiff's allegations that Asimina Begetis engaged in tortious interference with his business expectancies regarding the purchase and sale of the 470 Murdock property. American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 89-90. It is clear that a business relationship existed between Cosmos Real Estate, though Dina Begetis, and the plaintiff, acting through Winstanley. The existence of this business relationship satisfies, however, only the first of the three elements requisite to a successful cause of action founded on tortious interference with contractual relations. The evidence is insufficient, however, to establish either of the remaining two elements to this claim; as discussed in Parts II. A., III. A., III. B. and III. C., the evidence adduced at trial failed to establish either that Asimina Begetis interfered with the business relationship Cosmos Real Estate had established with the plaintiff; that she knew of this business relationship, and/or that if she knew and so interfered, she did so intentionally, to the detriment of WE 470. Id. Moreover, as fully discussed throughout this decision, even if Asimina Begetis intentionally interfered in its business relationship with Cosmos Real Estate, such interference caused the plaintiff to suffer no actual loss following November 24, 2004. Losses thereafter incurred resulted from superseding causes, discussed in Part III. A. 2. and throughout. Id., 89-90.

Moreover, the evidence is insufficient to permit the court to conclude that there was a reasonable probability that the plaintiff would have entered into a valid contract for the purchase of 470 Murdock, and/or that it would have made a profit through the acquisition of that "value added" commercial property, except for the purported tortious interference of Asimina Begetis in the business relationship between the plaintiff and Cosmos Real Estate. American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 97-98. Such a conclusion would require the court to ignore the other circumstances, as found in Part II., that early on indicated the flaws in the sale agreement, which affected only one-half of the owners of the 470 Murdock property. Such a conclusion would also require the court to impute knowing, intentional interference by Asimina Begetis into the contractual relationship established between Cosmos Real Estate and WE 470, an imputation the evidence in this case does not reasonably or logically permit given the credible testimony provided by the sole defendant to this fourth count. Accordingly, the court finds the fourth count in favor of the defendant, Asimina Begetis.

E. FIFTH COUNT: MISREPRESENTATION — ASIMINA BEGETIS

In fifth count, the plaintiff alleges that Asimina Begetis through both negligent and intentional misrepresentation induced the plaintiff to believe that it was entering into a purchase and sale agreement with the party who owned the entire interest in the property, and that the plaintiff in reliance thereon invested substantial sums in an effort to acquire the property. Here again, the plaintiff has failed to meet its burden of proof on the allegations brought forth in the fifth count of the complaint, so that the court finds this count in favor of the defendant Asimina Begetis, as well.

See footnote 39.

1. Negligent Misrepresentation

"[Connecticut courts have] long recognized liability for negligent misrepresentation. [The courts] have held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth. . . The governing principles are set forth in similar terms in § 552 of the Restatement Second of Torts [1979]: One who, in the course of his business, profession or employment. . . supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information." (Citation omitted; internal quotation marks omitted.) Glazer v. Dress Barn, Inc., supra, 274 Conn. 72-73. "Traditionally, an 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." Nazami v. Patrons Mutual Ins. Co., 280 Conn. 619, 626, 910 A.2d 209 (2006).

As discussed throughout, the evidence is insufficient to establish that Asimina Begetis made any misrepresentations of fact concerning her interest in marketing and/or selling 470 Murdock for any price less than $2,500,000. (Exhibit 1.) In the absence of evidence relating such misrepresentations, the plaintiff cannot prevail on the remaining elements of the cause of action alleged in the fifth count of the complaint. Nazami v. Patrons Mutual Ins. Co., supra, 280 Conn. 626. Moreover, even if the evidence could establish that Asimina Begetis knowingly or negligently made such a misrepresentation of fact and that the plaintiff reasonably relied thereon, the evidence would have to be devoid of other opportunities for the plaintiff to have cured its detrimental reliance, in order for it to recover under the theory alleged in the fifth count of the amended complaint. "There must be a justifiable reliance on the misrepresentation for a plaintiff to recover damages. . . The basic element of a claim for misrepresentation, however, is whether there was a misstatement. . . Without a misrepresenation, there can be no justifiable reliance." (Citations omitted; emphasis added.) Citino v. Redevelopment Agency, 51 Conn.App. 262, 275, 721 A.2d 1197 (1998). Here, the public records displayed the accurate status of the ownership of the property in question, vitiating any negative effect that could have flowed from any knowing misrepresentation that Asimina Begetis might have made, if such a knowing misrepresentation could possibly be discerned from the evidence taken as a whole. Moreover, Olear's knowledge of the status of the property's ownership superseded any detrimental effect that could possibly have flowed from such a knowing misrepresentation, had it occurred. Under these circumstances, the plaintiff cannot meet its burden of establishing a cause of action based on negligent misrepresentation of fact by Asimina Begetis. See Citino v. Redevelopment Agency, supra, 51 Conn.App. 275.

In reaching its determination on this issue, the court remains mindful that "falsity is an essential element of a negligent misrepresentation claim, and that [the plaintiff] bears the burden of demonstrating that the defendants made certain representations. . . that were in fact untrue. . . [The plaintiff] need not prove that the representations made by the defendants were promissory, but only that they contained false information." (Citations omitted.) Daley v. Aetna Life and Casualty, Co., 249 Conn. 766, 792-93, 734 A.2d 112 (1999). "Subsequent conduct may be prohibitive of whether a declarant knew or should have known a statement was false at the time it was made," although such conduct is not sufficiently established, on Asimina Begetis's part, by the evidence in this case. Glazer v. Dress Barn, Inc., supra, 274 Conn. 76.

2. Intentional Misrepresentation

In the fifth count, the plaintiff has also raised allegations of intentional misrepresentation against the defendant Asimina Begetis. "A cause of action for intentional misrepresentation is essentially a claim of fraud." Martinez v. Zovich, 87 Conn.App. 766, 778, 867 A.2d 149, cert. denied, 274 Conn. 908, 876 A.2d 1202 (2005). "Fraud and misrepresentation cannot be easily defined because they can be accomplished in so many different ways. They present, however, issues of fact. . . The party claiming fraud. . . has the burden of proof. . . Whether that burden has been met is a question of fact. . ." (Citation omitted; internal quotation marks omitted.) Phillips v. Phillips, 101 Conn.App. 65, 70 (2007). "The essential elements of a cause of action in [intentional fraudulent misrepresentation] are: (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 the false representation to his injury." (Internal quotation marks omitted.) Id., 71.

In addressing this aspect of the plaintiff's claims, the court incorporates and adopts the reasoning used in responding to the allegations of the third count of the complaint, based on theories of conspiracy to defraud. Here, as with the third count, the plaintiff cannot prevail as the evidence is insufficient to establish that Asimina Begetis made any material, intentionally false representation, as a statement of fact concerning the status of her ownership of the property, or concerning her willingness to sell the property at a price lower than $2,500,000. Phillips v. Phillips, supra, 101 Conn.App. 71. As the plaintiff is unable to establish this first, critical element of his purported cause of action sounding in intentional misrepresentation, he cannot here prevail.

Moreover, a thorough consideration of the evidence, as discussed throughout Parts III. B., C, and D, establish the lack of evidence from which the court could reasonably conclude that even if Asimina Begetis made such a statement of fact, it was untrue and knew it to be untrue; that it was made to induce the plaintiff to act upon it; and that the plaintiff did so act upon the false representation, all to its detriment. Id. Even if the evidence could be viewed in such a light as to sustain the plaintiff's burden of proving the first three elements of this cause of action in intentional misrepresentation, for the reasons set forth throughout this memorandum of decision, it was not any material, knowing conduct on Asimina Begetis's part that caused WE 470 to expend the total amount of $109,363 in due diligence costs, as superseding events led the plaintiff to engage in this conduct at its peril after November 24, 2004, when full knowledge was available to affirm that the sale agreement had been entered into with only one-half of the property's owners. Under these circumstances, the plaintiff cannot meet its burden of proof on this fifth count, which the court finds in favor of the defendant, Asimina Begetis, in its entirety.

IV. CONCLUSION — DAMAGES

When it became apparent that the transaction could not be concluded, Winstanley advised Olear to begin the process of recovering WE 470's transaction expenses, as contemplated by the sale agreement; Olear had commenced this process on March 1, 2005. (Exhibit 24; Testimony of Winstanley.) The plaintiff has consistently argued that it is entitled to a return of the total amount it expended in reliance upon what it perceives to be the defendants' broken promises; WE 470 here seeks an award of at least $109,353, representing those expenses which are itemized in Part II. B. The court has carefully considered the implications of those expenses, and the applicable principles of law regarding such damages as may be available to the plaintiff as the result of its success on the first count of the complaint. See Part III. A. 2.

In a case such as this, not-withstanding the vigor of the plaintiff's submissions on the issue of damages, "where there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law." (Internal quotation marks omitted.) Gallogly v. Kurrus, supra, 97 Conn.App. 668. See also, Keefe v. Norwalk Cove Marina, Inc., 57 Conn.App. 601, 610, 749 A.2d 1219, cert. denied, 254 Conn. 903, 755 A.2d 881 (2000) ("nonbreaching party has a duty to minimize any damages as a result of the breach").

At trial, the testimony of Winstanley credibly established that WE 470 is not willing to pay $1,700,000 for Cosmos Real Estate's interest in the property; at trial; neither WE, WE 470 nor any variant of that corporate entity desires to secure a one-half undivided interest in the property under any circumstances. (Testimony of Winstanley.) The court concludes that WE 470's position with regard to purchasing Cosmos Real Estate's one-half interest constitutes a rejection of the contract into which the plaintiff had entered with that defendant, thus implicating the clear and unequivocal language of the liquidated damages clause contained within the text of the sale agreement. (Exhibits 16, A.)

Notwithstanding the totality of the expenses incurred by the plaintiff in connection with its efforts to purchase 470 Murdock, the damages for Cosmos Real Estate's breach of the contract at issue are strictly liquidated by the sale agreement signed by Dina Begetis on behalf of that defendant and by Winstanley on behalf of WE 470 Murdock. As found in Parts II. B. and III. A. 3., the sale agreement establishes the extent and limits of WE 470's relief, designating those specific, liquidated damages to be awarded in the event that a party to the contract fails to honor its agreement to produce a marketable title. (Exhibits 16, A.)

As previously discussed, the parties have stipulated that the cost of title insurance for a $1,700,000 property is "$4,650.00, consisting of a $1,860.00 premium paid to the title insurance company and a payment of $2,790.00 to the title insurance agent. . ." (#121.) The plaintiff has rejected any opportunity to accept such title as the seller, Cosmos Real Estate, is able to convey, notwithstanding any potential modification of the purchase price. Thus, upon rejection, the terms of the sale agreement serve to quantify the amount of damages that may properly and lawfully be awarded to the plaintiff upon such breach. (Exhibits A, 16.)

As found in Part III. B., prior to November 24, 2004, the plaintiff incurred charges for corporate filings in the amount of $471; title search and commitment fees in the amount of $2,411; taxes upon formation of the LLC in the amount of $314; and attorneys fees in the amount of $4,722. Before his attorneys knew that he was engaged in a contract with only one-half the ownership of the property, then, the expenses related to the plaintiff's attempt to purchase the property totaled $7,918. Any other expenses incurred by the plaintiff after that date resulted from a failure to mitigate damages, as contemplated by Keefe v. Norwalk Cove Marina, Inc.; supra, 57 Conn.App. 610; and are not properly recoverable under the circumstances of this case.

Given this result, the court declines the opportunity to further review the circumstances under which WE 470 incurred additional attorneys fees following November 24, 2004, with or without the benefit of a written fee agreement. See footnote 22. See also Defendants' Trial Brief, filed December 28, 2006.

The amount of $4,722, representing the expense incurred prior to November 24, 2004, in and of itself exceeds the stipulated price of $4,650.00, representing the cost of title insurance for the property at the purchase price of $1,700,000. Without question, the amount of "expenses actually incurred by the Buyer for attorneys fees, nonrefundable fees of lending institutions, title search costs and inspection fees" accumulated between the commencement of sale negotiations and March 1, 2005, as itemized in Part III. B., significantly exceeds the stipulated cost of the fee title insurance at issue. As previously discussed throughout Part IV, however, the amount of this accumulated value after November 24, 2004 is inapposite to the award of damages in this case, however, given the circumstances under which those expenses were incurred.

See footnote 22.

Accordingly, having found that plaintiff has met its burden of proving that the defendant Cosmos Real Estate breached its contract as alleged in the first count, and having found that the amount of fee title insurance based on the purchase price of $1,700,000 is $4,650, and having found that this amount is the lesser of the amount of expenses accumulated by the plaintiff prior to November 24, 2004, the court here awards damages to the plaintiff in the amount of $4,650. The court finds no basis for awarding further relief as between the present parties.

WHEREFORE, the court finds for the plaintiff as to the defendant Cosmos Real Estate, alone, as to the First Count of the Amended Complaint (#127) and awards damages to the plaintiff in the amount of $4,650. The court finds the remaining counts in favor of the defendants. No fees or costs are awarded to either party, given the circumstances of this case.

CT Page 7909

CT Page 7911

WE 470 MURDOCK v. COSMOS REAL ESTATE

Opinion

MEMORANDUM OF DECISION

I. PROCEDURAL HISTORY

II. FACTUAL FINDINGS

A. PROPOSED SALE OF 470 MURDOCK

B. PLAINTIFF'S INCURRED EXPENSES

III. ADJUDICATION OF THE ALLEGATIONS OF THE COMPLAINT AND APPLICABLE SPECIAL DEFENSES A. FIRST COUNT BREACH OF CONTRACT BY COSMOS REAL ESTATE

1. Breach of Contract

2. Special Defense — Liquidated Damages for Breach of Contract

B. SECOND COUNT: BREACH OP CONTRACT BY ASIMINA BEGETIS

1. Agency, Apparent and Actual

2. Special Defenses — Lack of Written Contract, Statute of Frauds, and Effect of the Public Record

3. Part Performance

4. Claim by Putative Third-Party Contract Beneficiary

C. THIRD COUNT: CONSPIRACY TO DEFRAUD — BOTH DEFENDANTS

D. FOURTH COUNT: TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS — ASIMINA BEGETIS

E. FIFTH COUNT: MISREPRESENTATION — ASIMINA BEGETIS

1. Negligent Misrepresentation

2. Intentional Misrepresentation

IV. CONCLUSION — DAMAGES

WE 470 MURDOCK v. COSMOS REAL ESTATE

WE 470 MURDOCK v. COSMOS REAL ESTATE

Case Details

CitationsCopy Citation

Citations