Opinion
No. CV-03-0405088
November 9, 2006
MEMORANDUM OF DECISION RE PUNITIVE DAMAGES
The plaintiffs have filed a motion for determination of punitive damages dated July 17, 2006, in the above-listed matter pursuant to a jury verdict in their favor which was rendered on October 20, 2005. The plaintiffs commenced this action to recover damages against the defendants, Willott, LLC, and William Squires and Lotte-Lill Squires on various allegations of breach of contract, negligent misrepresentation and intentional misrepresentation against one or more of the named defendants regarding a proposed sale of real property from the defendants to the plaintiffs. The defendants William Squires and Lotte-Lill Squires are husband and wife and are the principals of Willott, LLC.
The matter was tried before a jury, and on October 20, 2005, a verdict was rendered. Regarding the allegations of a breach of contract as to Willott, LLC only, the jury entered a verdict in behalf of the defendant finding that there was no contract for the purchase and sale of the subject property. As to the allegations regarding negligent misrepresentations as to William Squires and Lotte-Lill Squires only, the jury entered a plaintiffs' verdict, but as to each of these defendants, the jury awarded the plaintiffs no damages. As for the allegations of negligent misrepresentation as to Willott, LLC, the jury found in favor of the plaintiffs and awarded the plaintiffs damages totaling $11,149.50 as against Willott, LLC. The jury also found in favor of the plaintiffs as to the claims of intentional misrepresentation as against William Squires and Lotte-Lill Squires and awarded the plaintiffs damages in the amount of $5,574.75 as against each of these two defendants.
The total damages of $11,149.50 consisted of the following categories: Attorneys fee ($884.50); Phone installation ($75.00); Yellow Page advertising ($190.00); Bargained for Value of Property ($10,000.00).
The sum of $5,574.75 each, assessed against William Squires and Lotte-Lill Squires represents 1/2 of the total damages noted in footnote 1 and for the identical categories of damages.
In reaching its verdict on the various counts alleged against the defendants, the jury answered interrogatories submitted to it by the court in a form and number approved by the parties. The jury interrogatories form was divided into subsections regarding the various allegations of breach of contract, negligent misrepresentation, and intentional and fraudulent misrepresentations as they might have applied to each of the various defendants.
On April 13, 2006, the court issued a decision regarding the defendants' motion to set aside the verdict. Weinshel v. Willott, L.L.C., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV03 0405088 (April 13, 2006, Arnold, J.). The court, while rejecting several of the defendants' claims, did agree that the jury could not award damages for the loss of the "benefit of the bargain" when the jury found that no contract existed between the parties. Id. The court then reduced the verdict by the sum of $10,000 representing the sum that was awarded to the plaintiffs for the loss of the benefit of the bargain. The total award was thus reduced from $11,149.50 to the sum of $1,149.50. Id.
On May 1, 2006 the court granted the plaintiffs' motion to stay the 20-day time period set forth in the Court's Memorandum of Decision dated April 13, 2006, Weinshel v. Willott, L.L.C., supra, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV03 0405088 (April 13, 2006, Arnold, J.), until 20 days following the rendering of a decision as to the plaintiff's claim for punitive damages. On May 1, 2006, the court also issued an order extending the time for the filing of any appeal to twenty days after the Court renders a decision as to the Plaintiff's claim for a determination of the amount of Punitive Damages, as awarded by the jury in the above-captioned matter.
I The Claim
In this matter the plaintiffs at all times were represented by Attorney Jeanine Becker and Attorney Russell Collins of Klein and Becker, Attorneys at Law, L.L.C. Attorney Becker is a principal in the firm and Attorney Collins is an associate of the firm. Attorney Becker has been a practicing attorney for fifteen years and Attorney Collins has been practicing for five years. Attorney Becker is experienced in civil litigation and her billing rate, as submitted to the court, is $235 per hour. Attorney Collins has billed at a rate of $185 per hour.
The plaintiffs' counsel have submitted itemized client billing statements claiming that the total hours expended on litigation in this matter were 274.20 hours, for fees totaling $59,534.00. The plaintiffs have also claimed costs totaling $5,835.22. Fees and costs therefore, total $65,369.22. In addition to the above totals, the plaintiffs are claiming a separate category of fees in the amount of $2,688.00 in connection with the subject matter of this litigation for services provided by the attorneys in connection with the failed real estate transaction. This figure represents fees incurred as part of the real estate transaction, and the plaintiffs claim that this total is not a duplication of time included in the litigation of this case.
All costs claimed herein, are contained on plaintiff counsel's monthly billing statements to the plaintiffs. A separate bill of costs for the court's consideration and ruling has not been submitted, as of the date of this decision.
The plaintiffs also claim that they incurred legal fees and costs in seeking to enjoin the Webster Bank from transferring the subject real property, after foreclosure, so that the plaintiffs could continue to pursue their claim to specific performance of the alleged contract between the plaintiffs and the defendants. This claim for fees and costs is $5,093.45. The plaintiffs argue that these fees and costs directly flow from the defendants Squires' fraudulent misrepresentations that the Squires made regarding the non-disclosure of any Webster Bank interest in the subject real property.
The jury ultimately decided that no contract existed between the plaintiffs and the defendants.
Therefore, the plaintiffs seek a total award of punitive damages in the amount of $73,150.67, less taxable costs as may be allowed.
The defendants William Squires and Lotte-Lill Squires have objected to the court's determining punitive damages by virtue of the jury's finding on the Fourth Count of the Complaint alleging misrepresentation. The defendants argue that as the case was tried to the jury, the court has no power to award damages that are solely within the province of the jury. It is the defendants' position that the plaintiffs mistakenly advised the court that attorney fees were to be determined by the court, and as such, there was no evidence that was submitted to the jury as to attorney fees. The defendants contend that it was not their burden to correct this error at the time of trial. Therefore, the defendants conclude there cannot now be any award for any attorneys fees.
The issue was not raised in the defendants' Motion to Set Aside the Verdict and Judgment, dated October 28, 2005.
The defendants further argue that the actions of the defendants were not of such a serious nature as to warrant punitive damages in that the jury made no finding by clear and convincing evidence that the defendants exhibited a reckless indifference to the plaintiffs' rights or an intentional and wanton violation of those rights. Lastly, the defendants argue that the amount claimed, $73,150.67, bears no resemblance to the actual damages sustained, as found by the jury.
The total damages of $11,149.50 consisted of the following categories: Attorneys fee ($884.50); Phone installation ($75.00); Yellow Page advertising ($190.00); Bargained for Value of Property ($10,000.00) as noted in note 1 herein. The court later reduced the amount to $1,149.50, as discussed in section I of this opinion.
By permitting awards of punitive damages, but limiting such damages, a balance is struck as our rule provides for the payment of a victim's costs of litigation, which would be otherwise unavailable, while establishing a clear reference in arriving at the amount of the award. Our rule when viewed in light of the ever rising costs of litigation, also provides for some element of punishment and deterrence in addition to the compensation of the victim. MedValUSA Health Programs, Inc. v. Memberworks, Inc., 273 Conn. 634, 671-72, 872 A.2d 423 (2005).
Attorneys fees may be awarded as a component of punitive damages. However, "[t]o furnish a basis for recovery of such damages, the pleadings must allege and the evidence must show wanton or wilful malicious misconduct, and the language contained in the pleadings must be sufficiently explicit to inform the court and opposing counsel that such damages are being sought." (Citations omitted; internal quotation marks omitted.) Stohlts v. Gilkinson, 87 Conn.App. 634, 646, 867 A.2d 860 (2005), quoting Farrell v. Farrell, 36 Conn.App. 305, 311, 650 A.2d 608 (1994). "[T]o award punitive or exemplary damages, evidence must reveal a reckless indifference to the rights of others or an intentional and wanton violation of those rights . . . If the evidence discloses that a defendant was recklessly indifferent to the rights of a plaintiff, an actual intention to do harm to the plaintiff is not necessary." (Citations omitted; internal quotation marks omitted.) Id. at 648.
"Punitive damages do not need to be alleged explicitly in the complaint or included in the claims for relief as long as the pleadings give the defendant sufficient notice that he is being charged with aggravated conduct rather than mere negligence." Markey v. Santangelo, 195 Conn. 76, 78-79, 485 A.2d 1305 (1985).
"The amount of attorneys fees to be awarded rests in the sound discretion of the trial court and will not be disturbed on appeal unless the trial court has abused its discretion . . . Sound discretion, by definition, means a discretion that is not exercised arbitrarily or wilfully, but with regard to what is right and equitable under the circumstances and the law . . ." (Citation omitted; internal quotation marks omitted.) Rodriguez v. Ancona, 88 Conn.App. 193, 201, 868 A.2d 807 2005); Food Studio, Inc. v. Fabiola's, 56 Conn.App. 858, 865, 747 A.2d 7 (2000).
"It is well established that a trial court calculating a reasonable attorneys fee makes its determination while considering the factors set forth under rule 1.5 (a) of the Rules of Professional Conduct." Id. "These factors include the time and labor spent by the attorneys, the novelty and complexity of the legal issues, fees customarily charged in the same locality for similar services, the lawyer's experience and ability, relevant time limitations, the magnitude of the case and the results obtained, the nature and length of the lawyer-client relationship, and whether the fee is fixed or contingent." Id., quoting, Schoonmaker v. Brunoli, 265 Conn. 210, 259, 828 A.2d 64 (2003). Thus, when awarding attorneys fees, the court must consider all of the factors relevant to the reasonableness of attorneys fees in this case. Id.
Rule 1.5(a) of the Rules of Professional Conduct provides in relevant part: The factors to be considered in determining the reasonableness of a fee include the following:
(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) The likelihood, if made known to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) The fee customarily charged in the locality for similar legal services;
(4) The amount involved and the results obtained;
(5) The time limitations imposed by the client or by the circumstances;
(6) The nature and length of the professional relationship with the client;
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) Whether the fee is fixed or contingent.
The court's normal starting point for determining reasonable attorneys fees is a calculation of a so called "lodestar" figure which is arrived at by multiplying the number of hours reasonably expended in the litigation by a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1993, 76 L.Ed.2d 40 (1983). "The lodestar should be based on prevailing market rates, for comparable attorneys of comparable skill and standing in the pertinent legal community. Applications for fee awards should generally be documented by contemporaneously created time records that specify, for each attorney, the date, the hours expended, and the nature of the work done. Hours that are excessive, redundant, or otherwise unnecessary, are to be excluded, and in dealing with such surplusage, the court has discretion simply to deduct a reasonable percentage of the number of hours claimed as a practical means of trimming fat from a fee application. A prevailing party who is entitled to a fee award for his successful prosecution of successful claims is not entitled to a fee award for unsuccessful claims that were based on different facts and different legal theories." (Citations and internal quotation marks omitted). Kirsch v. Fleet Street, Ltd., Kirsch v. Fleet Street, Ltd., 148 F.3d 149, 172-73 (2nd Cir. 1998); Kaplan v. Gruder, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV96 033 43 08 S (May 25, 2000, Rush, J.).
III Plaintiff's Pleadings and Verdicts
This action was commenced by the plaintiffs by way of a two-count complaint against defendants, Willott, LLC, Lester Fradkoff and Prudential Connecticut Commercial Real Estate (Prudential). The First Count sounded in breach of contract as to all defendants, and the Second Count alleged negligent misrepresentation as to all defendants. The complaint was signed on July 25, 2003 and it bears the return date of August 26, 2003. On November 22, 2004, the court granted the plaintiffs' motion to cite William J. Squires and Lotte-Lill Squires as additional defendants and ordering that they be summoned to appear as defendants in this action on or before the second day following December 21, 2004. Thereafter, the plaintiffs filed an Amended Revised Complaint containing three counts. Count One alleged a breach of contract against Willott, LLC. Count Two alleged negligent misrepresentation "as to all defendants." Count Three alleged "misrepresentation" as to the defendants William J. Squires and Lotte-Lill Squires.
Fradkoff is a real estate agent employed by Prudential. He served as the real estate agent for Willott, LLC's sale of the subject property.
A Revised Complaint, also containing two counts against the same defendants was filed on September 16, 2003.
Despite the language "as to all defendants," Count Two contains no allegations or specific references to Mr. And Mrs. Squires, as individual defendants.
The Third Count does not specify if the plaintiffs' claims were allegations of negligent misrepresentation or claims of intentional misrepresentation.
On February 15, 2005, the plaintiff filed a Second Amended Revised Complaint. The First Count alleged breach of contract as to Willott, LLC. The Second Count alleged negligent misrepresentation "as to all defendants." However, once again, the Second Count never mentions Mr. And Mrs. Squires as individual defendants. The Third Count alleges "innocent misrepresentation" as to Fradkoff and Prudential. The Fourth Count alleges "misrepresentation" as to Ms. and Mrs. Squires. The Fifth Count alleges intentional interference with a business expectancy, as against Fradkoff and Prudential. A Sixth and final count, alleges a violation of the Connecticut Unfair Trade Practices Act by Fradkoff and Prudential.
Thereafter, the plaintiffs filed a Third Amended Revised Complaint, dated October 3, 2005. The First Count alleged a breach of contract as to Willott, LLC. The Second Count alleged negligent misrepresentation as to all defendants, Willott, LLC., Lester Fradkoff, William Squires and Lotte-Lill Squires. The Third Count alleges "innocent misrepresentation" as to Fradkoff and Prudential. The Fourth Count alleges intentional misrepresentation as against William J. Squires and Lotte-Lill Squires. The Fifth Count alleges intentional interference with a business expectancy, as against Fradkoff and Prudential. The Sixth Count alleges a violation of CUTPA, as against Fradkoff and Prudential.
This Third Amended Revised Complaint continued to make allegations against Fradkoff and Prudential, despite the fact that on February 22, 2005, the defendants Fradkoff and Prudential agreed to stipulate to a judgment against them and in favor of the plaintiffs in the amount of $15,000, in full satisfaction of all claims against them. Despite an objection by the plaintiffs, the court entered judgment against Fradkoff and Prudential on March 22, 2005.
The case against Willott, LLC, William J. Squires and Lotte-Lill Squires was tried before the jury on October 6, 7, 17, 18, 19 and October 20, 2005. The court once again restates the jury's verdict. Regarding the allegations of a breach of contract as to Willott, LLC only, the jury entered a verdict in behalf of the defendant finding that there was no contract for the purchase and sale of the subject property. As to the allegations regarding negligent misrepresentations as to William Squires and Lotte-Lill Squires only, the jury entered a plaintiffs' verdict, but as to each of these defendants, the jury awarded the plaintiffs no damages. As for the allegations of negligent misrepresentation as to Willott, LLC, the jury found in favor of the plaintiffs and awarded the plaintiffs damages totaling $11,149.50 as against Willott, LLC only. The jury then found in favor of the plaintiffs as to the claims of intentional misrepresentation that were made by the plaintiffs against William Squires and Lotte-Lill Squires only, and awarded the plaintiffs damages in the amount of $5,574.75 as against each of these two defendants. Thus, the plaintiff prevailed in five of the six counts alleged. However, as to Mr. And Mrs. Squires, as individuals, only four of these counts applied, and only the two counts regarding intentional misrepresentation are subject to an award of punitive/exemplary damages by virtue of the jury's responses to the interrogatories.
The court has reviewed the itemized billing statements of plaintiffs' counsel. As previously noted, the statements indicate that the total hours expended on litigation in this matter were 274.20 hours, for claimed fees totaling $59,534.00. They have also claimed costs totaling $5,835.22. Fees and costs therefore, total $65,369.22. The statements cover the time period from July 25, 2003 through April 28, 2006. The plaintiffs also claim that they incurred legal fees and costs in seeking to enjoin the Webster Bank from transferring the subject real property, after foreclosure, so that the plaintiffs could continue to pursue their claim to specific performance of the alleged contract between the plaintiffs and the defendants. This claim for fees and costs is $5,093.45. In addition to the above totals, the plaintiffs are claiming a separate category of fees in the amount of $2,688.00 in connection with the subject matter of this litigation for services provided by the attorneys in connection with the failed real estate transaction. This figure represents fees incurred as part of the real estate transaction. The plaintiffs seek an award of punitive damages in the total amount of $73,150.67.
The court has reviewed the documents and the pleadings contained in the court's file to ascertain the subject matter of the pleadings, so as to match the pleadings against the various defendants throughout the history of this litigation. In addition, the court has printed and reviewed the Case Detail summary prepared by the Judicial Department for the instant case and the property foreclosure cases regarding the Webster Bank. The review of all documents reveals that Mr. And Mrs. Squires first became defendants in the instant matter when they were cited in as defendants by order of the court dated November 22, 2004. This corresponds with an entry on plaintiff's counsel's billing statement dated November 1, 2004 which states: "Preparation of motion to cite; memorandum amended complaint." Prior to the entry dated November 1, 2004, all work performed by counsel for this claim was directed toward the other defendants, Fradkoff, Prudential and Willott, LLC. Prior to November 1, 2004, plaintiffs' counsel performed 122.45 hours of work. The court will not credit any of these charges against the defendants William J. Squires and Lotte-Lill Squires as individual defendants, as the verdicts which are the subject of punitive damages were rendered against Mr. and Mrs. Squires in their individual capacities.
Beginning with the billing entry of November 1, 2004, the court finds that plaintiffs' counsel performed 84.25 hours of labor for work directed against the three remaining defendants, Willott, LLC and Mr. and Mrs. Squires, prior to the receipt of the jury's verdict. Following the receipt of the verdict on October 20, 2006, plaintiffs' counsel performed 15 hours of labor through April 28, 2006. These services were directed at the defendants' motion to set aside the verdict; the plaintiffs' own motion to set aside the verdict; the plaintiffs' request for additur; and the plaintiffs' claim for punitive damages. All charges since November 1, 2004 were billed at the rate of $235.00, the rate being charged for the services of Attorney Becker. Thus, counsel has billed 99.25 hours at $235.00 per hour for a total of $23,323.75. Two of the six counts for which the jury rendered a verdict, involved the defendant Willott, LLC. Thus, the court further reduces this claim for an attorneys fee by one-third, in effect, reducing the total to a monetary sum of $15,549.17. The plaintiff prevailed on the two counts alleging negligent misrepresentation against William J. Squires, individually and Lotte-Lill Squires, individually. However, the jury awarded no damages to the plaintiffs regarding these counts. In addition, a verdict for negligent misrepresentation does not provide for an award of punitive/exemplary damages. Thus, the court further reduces the submitted counsel fees by 50% to a reduced figure in the amount of $7,774.58, representing an amount expended to achieve a favorable verdict on the remaining two counts alleging intentional (fraudulent) misrepresentation against William Squires, individually and Lotte-Lill Squires, individually.
In reviewing the court's computation of counsel fees in the amount of $7,774.58, the court shall consider, in addition to other factors, the harm inflicted on the plaintiffs and the deterrence from such future behavior by the defendants. However, the court must also consider, as well, the novelty and complexity of the legal issues; the magnitude of the case; and the results obtained. See Schoonmaker v. Brunoli, 265 Conn. supra, 259. The instant case did not involve novel or complex legal issues. The plaintiff's recovery was reduced by the court to a total of $1,149.50, a sum that does not represent a finding of such a degree of wanton or wilful malicious misconduct and reckless indifference to the plaintiffs' rights, as to justify a substantial award of punitive/exemplary damages, as claimed by the plaintiffs.
Nonetheless, the court is cognizant that the jury has found for the plaintiffs on counts alleging intentional misrepresentation as against each defendant, William J. Squires and Lott-Lill Squires. In response to the Jury Interrogatories, the jury indicated they also granted punitive damages to be awarded as against each of these defendants. Accordingly, the court respects the decision of the jury and awards the plaintiffs punitive/exemplary damages in the sum of $2,500.00 as against William Squires and $2,500.00, as against Lott-Lill Squires. The total award for punitive/exemplary damages is $5,000.
In awarding this sum, the court also rejects the plaintiffs' claims for counsel fees in the amount of $2,688.00 for services rendered by plaintiffs' counsel in connection with the failed real estate transaction. The jury specifically found that no contract for the purchase of the property existed between the plaintiffs and the defendant Willott, LLC, and the jury entered a verdict in behalf of Willott, LLC on the breach of contract count. No allegations of breach of contract were ever filed by the plaintiffs against the defendants William Squires and Lott-Lill Squires.
The plaintiffs also claim that they incurred legal fees and costs in seeking to enjoin the Webster Bank from transferring the subject real property, after foreclosure, so that the plaintiffs could continue to pursue their claim to specific performance of the alleged contract between the plaintiffs and the defendants. This claim for fees and costs is $5,093.45. The court also rejects this claim. The plaintiffs were unsuccessful in their efforts against Webster Bank. Additionally, the jury found that no contract for the sale of the subject property existed between the plaintiffs and Willott, LLC, and again, there were no allegations of a breach of contract made by the plaintiffs against Mr. and Mrs. Squires. As no contract existed, there is no basis for a claim of specific performance.
Weinshel v. Webster Bank, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV04 0411905.
IV Conclusion, Judgment and Orders
In its earlier decision, Weinshel v. Willott, L.L.C., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV03 0405088 (April 13, 2006, Arnold, J.), the court granted a remittitur in the amount of $10,000, as to the defendant Willott, LLC on the Second Count alleging negligent misrepresentation. It also ordered that a remittitur of $5,000 each, be granted as to the defendants William Squires and Lotte-Lill Squires regarding the Fourth Count alleging intentional misrepresentation. The total award for the plaintiffs as against Willott, LLC, as to the Second Count of the complaint, therefore, was reduced to $1,149.50. The total awards as against William Squires and Lotte-Lill Squires on Count Four are reduced to $574.75, as to each defendant. It was specifically noted that in accordance with the jury's response to interrogatory 32, the total damages of $1,149.50 were not to be duplicated or doubled in their amounts so as to award a multiple recovery by the plaintiffs.
The court also ordered that unless the parties accepted the verdict with the remittitur imposed by this court within 20 days of the date notice of that decision was mailed to the parties, the verdict would be set aside and a new trial would be ordered on all issues, including but not limited to damages. See Fazio v. Brown, 209 Conn. 450, 455-57, 551 A.2d 1227 (1988).
If an acceptance of the remittitur was filed, a judgment would enter in the amount of $1,149.50 for the plaintiffs, as against Willott, LLC, on the Second Count of negligent misrepresentation, and in the amount $574.75 as against William Squires and $574.75 as against Lotte-Lill Squires, both on the Fourth Count of intentional misrepresentation. Total damages due the plaintiffs from all defendants was not exceed the sum of $1,149.50.
Thereafter, on May 1, 2006, the court granted the plaintiffs' motion to stay the 20-day time period set forth in the Court's April 13, 2006 memorandum of decision until 20 days following the mailing of notice of the court's decision regarding the plaintiffs' claims for punitive damages.
The court confirms its decision of April 13, 2006, granting a remittitur and reducing the plaintiffs' award to $1,149.50, as against Willott, LLC, and to $574.75 as against William J. Squires and $574.75, as against Lotte-Lill Squires on the Fourth Count alleging intentional misrepresentation. The court by virtue of this decision, additionally awards the plaintiffs a sum of $2,500, as against William J. Squires as punitive damages and $2,500, as against Lotte-Lill Squires, as punitive damages for the reasons set forth herein.
The court further orders that unless the parties accept the verdict with the remittitur and the inclusion of punitive damages, within 20 days of the date notice of this decision is mailed to the parties, the verdict will be set aside and a new trial will be ordered on all issues, including but not limited to damages. See Fazio v. Brown, supra, 209 Conn. 455-57.
If an acceptance of the remittitur is filed, an amended judgment which now includes the aforementioned award of punitive damages, will enter in the amount of $1,149.50 for the plaintiffs, as against Willott, LLC, on the Second Count of negligent misrepresentation, and in the amount $3,074.75 as against William Squires and $3,074.75 as against Lotte-Lill Squires on the Fourth Count of intentional misrepresentation. Total damages due the plaintiffs from all defendants will not exceed the sum of $6,149.50 so as not to constitute a duplicate or double recovery for the plaintiffs. The court will consider the plaintiffs' request for an award of costs, at such time as the plaintiffs file a Bill of Costs and the defendants have an opportunity to respond.