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Yavarone v. Jim Moroni's Oil Service

Connecticut Superior Court, Judicial District of Middlesex at Middletown
Feb 18, 2005
2005 Ct. Sup. 3378 (Conn. Super. Ct. 2005)


No. CV-03-0102318-S

February 18, 2005


Procedural History

The Complaint of the plaintiff, Elizabeth Yavarone contains two counts. Count One is entitled "To Dissolve LLC and Appoint A Receiver" and Count Two alleges fraud. On November 20, 2003, the defendant, James ("Jim") Moroni, filed a Counterclaim against Yavarone containing five counts — conversion/theft, fraud, tortious interference with business expectancy, breach of fiduciary duty, and violation of the Connecticut Unfair Trade Practices Act (CUTPA). The Counterclaim sought temporary and permanent injunctive relief damages, punitive damages, costs, and attorneys fees. Simultaneously, the defendant filed a Motion for Prejudgment Remedy seeking to attach the plaintiff's assets in the amount of $100,000 and to dissolve the ex-parte prejudgment remedy obtained by the plaintiff.

A hearing was held before the undersigned on February 2 and 4, 2004 with regard to the parties' motions for prejudgment attachments. The Court granted the defendant's Motion to Dissolve the Ex-Parte Prejudgment Remedy and granted his Motion for Prejudgment Remedy to attach the plaintiff's home in the amount of $100,000.

Thereafter, the defendant received permission and impleaded as third-party defendants Lawrence ("Lenny") Moroni, Klingner Family Fuel, LLC and Kurt Klingner. The Third-Party Complaint against Lenny Moroni contains four counts — conversion/theft, fraud, tortious interference with business expectancy, and violation of the Connecticut Unfair Trade Practices Act (CUTPA) and stems from the same acts alleged in the defendant's Counterclaim against Elizabeth Yavarone.

The trial commenced on August 4, 2004. At that time, the Third-Party Complaint against Klingner Family Fuel, LLC and Kurt Klingner were severed from this action. At the end of the second day of trial, the plaintiff rested her case and the defendant moved for a directed verdict as to both counts. The plaintiff conceded that she had failed to make out a prima facie case as to the Second Count (fraud) and a directed verdict entered in the defendant's favor on that count.

Trial continued on October 19 and 20, 2004, with the defendant presenting his case on the Counterclaim and Third-Party Complaint against Lenny Moroni.


After trial the court finds the following facts. The plaintiff and the defendant formed Jim Moroni's Oil Service, LLC, a Connecticut limited liability company (hereinafter "Company") engaged in the home heating oil business, in January 2001 and were its only members, each contributing fifty (50) percent. The Third-Party defendant, Lawrence (Lenny) Moroni, is the husband of Elizabeth Yavarone. Yavarone, rather than Lenny, was a member of the company because Lenny did not wish to have any assets in his name in order to avoid the claims of his creditors. While Lenny and Jim did virtually all of the work for the Company, Yavarone received a weekly draw from the Company which she used for the benefit of herself, Lenny and their family, while Lenny received no draw from the Company. With respect to all affairs of the Company, Lenny Moroni was Yavarone's agent and at all times acted on her behalf with her authority, consent and knowledge.

Through most of the tenure of the Company, the distribution of responsibility was as follows: Elizabeth Yavarone answered the phones and dispatched the work, Lenny Moroni delivered the oil and did basic service calls, and Jim Moroni was responsible for all major service and installation work and all air conditioning work.

By the fall of 2002, Jim Moroni noticed that the amounts contained in the Company's bank account appeared to fall short of the amounts that should be there based on the amount of business generated by the Company. He initially blamed this problem on the Company's bookkeeper and decided to take over the books for the Company. In rectifying the books of the Company, Jim Moroni learned that Lenny Moroni, and possibly Elizabeth Yavarone, were depriving the Company of money. Jim Moroni attempted to discuss these concerns and the financial health of the Company with Yavarone and Lenny Moroni on a number of occasions. In the winter of 2003, Jim Moroni stopped paying draws to the members and each member was asked to make additional contributions to the Company to cover expenses.

As of March 30, 2003, the Company's bank account had a balance of approximately $30,000 when it should have had approximately $130,000. The Company had received loans from Jim Moroni in the amount of $40,000 and from Liz Yavarone in the amount of $10,000 and it had also received approximately $80,000 from people who purchased their heating oil in advance on a so-called "buy-ahead" basis. Thereafter, the Company continued to receive and spend the second half of the 2003-04 buy-ahead money. Notwithstanding the poor financial health of the Company, in April 2003 Yavarone repaid herself her $10,000 loan and took another $3,000 "loan" from the Company.

In approximately April 2003, the parties had a business meeting at Aleia's restaurant with Kurt Klingner. Over dinner, an agreement was reached whereby the Company would sell Mr. Klingner/Klingner Family Oil, LLC the oil truck for $10,000 down, repayment of the balance of the remaining loan ($39,000) and a final payment of $10,000. Mr. Klingner would take possession of the truck soon thereafter and would deliver the Company's oil for the summer when he would make the final payment and title would be transferred. In exchange, the Company would help Mr. Klingner with service and installation work. In addition, all accounts above the Portland bridge would be given to Mr. Klingner in exchange for $.03 per gallon delivered to said accounts. The parties believed this to be an advantageous deal that would allow the Company to purchase a bigger truck at the same monthly rate.

Soon after Mr. Klingner took possession of the truck, however, the relationship between the brothers deteriorated. Jim Moroni attempted to call off the sale of the truck to Klingner. However, at the point at which he attempted to call it off, Klingner had already made one or more payments for the truck. Due to the rift between Jim and Lenny Moroni, Klingner never received the customers for which he agreed to pay $.03 per gallon, and therefore, he does not owe the Company those amounts.

Believing that Lenny Moroni was diverting money, Jim Moroni made inquiries about outstanding receivables of the Company and learned that Lenny Moroni had been forging his name to Company checks (or asking that checks be made out to him or Yavarone personally) and cashing them at Walt's Market. Jim Moroni presented evidence that Lenny and Yavarone missapropriated checks and cash of the Company totaling $17,784.59. Lenny Moroni admitted that he pocketed approximately $25,000 per year of the Company's money. He claimed that he gave one-half to Jim Moroni. However, the court finds that Lenny gave none of those amounts to Jim. Yavarone knew about these misappropriations of funds and benefitted from them. The court finds that for the two and one-half years that the company was in business, Lenny and Yavarone misapproprated $62,500.

By June/July 2003, the relationship between the parties had deteriorated to a point beyond repair and the parties started to operate independently of the other. Lenny Moroni had started soliciting customers for his own personal buy-ahead contracts and not reporting them to the Company from early in the spring of 2003. In June 2003, Yavarone and Lenny Moroni instructed Klingner to make his $5,000 check dated June 25, 2003 for oil used on the Company's account out to Yavarone, personally despite the fact that all previous checks had always been made payable to the Company.

Similarly, by early July 2003, Jim Moroni was working independently from the Company. Fearing that Yavarone would withdraw all money in the Company account, which included his $30,000 loan, Jim Moroni repaid himself the loan and opened a new account. Thereafter, he made deposits back into the Company's account to cover certain checks and contacted all of the Company creditors and made good on all debts, expending a total of $14,418.98 of his own funds.

During the same period, Elizabeth Yavarone and Lenny Moroni kept as many of the Company's assets as possible. They instructed Klingner to take and/or took themselves as much oil as possible from the Company's account with Sach Distributors, thereby depleting the reserve account ($15,000.00). They instructed Klingner to make checks for that oil to Yavarone personally. Yavarone and Lenny Moroni also retained a $10,000 payment for the sale of the oil delivery truck and entered into the Company's office and post office box and removed records and documents therefrom without permission.

By early August 2003, both parties had formed new business entities. Jim Moroni had opened Jim Moroni's Oil and Mechanical Service, LLC and Yavarone/Lenny Moroni had formed Moroni Son Oil. On September 1, 2003, the members of the Company agreed to and filed Articles of Dissolution with the Connecticut Secretary of State. In February 2004, Jim Moroni hired a certified public accountant to do a final accounting of the Company and to complete the Company's taxes. Jim Moroni deposited his own funds into the Company's bank account to cover this expense. However, Yavarone wrote a check to herself in the amount of $1,380.92, depleting the account. As a result of Yavarone's depletion of the account, the check to the accountant bounced and the defendant had to pay to pay the accountant's fee and the bank's fees from his own personal funds. The final affairs of the Company have been wrapped up and the entity no longer exists.

The parties jointly bought a boat called the Sea Angel for $5,000. Thereafter, the boat was refurbished at the Company's expense of over $15,000 including the installation of a new engine. In February 2004 Lenny Moroni sold the boat for a price of $6,500. Lenny failed to give any of the proceeds of the sale to Jim Moroni. Therefore, he owes Jim Moroni $3,250 for the boat.

Jim Moroni has claimed that the Company stored equipment and supplies in Yavarone and Lenny Moroni's garage and that he provided the Company with a repair van full of tools and equipment. After the break-up and upon demand, Lenny Moroni returned the van, but failed to return any of the tools and equipment. The court finds that the value of the equipment and tools in the van and the garage was $15,000.

The parties are in agreement that Jim Moroni's Oil Service, LLC had buy-ahead contracts to deliver approximately 128,000 gallons of oil in the 2003-04 winter season. Left without an oil truck, Jim Moroni used his life savings and borrowed from friends and on credit to start his new business and make good on the Company's debts. He delivered more than his half (over 65,000 gallons) of oil on the buy-ahead contracts. Thereafter, in February 2004, Jim Moroni turned over the obligation to deliver the remaining oil owed to customers of the Company to Elizabeth Yavarone and Lenny Moroni and gave them a computer print out of the status of all buy-ahead contracts by customer and made available the accompanying delivery tickets to evidence those transactions. The plaintiff and Lenny Moroni failed to present any evidence of the amount of oil that they delivered to the Company's buy-ahead customers.

The court finds that Jim Moroni has honored his obligations to the Company's customers and that the responsibility of delivering the remaining oil rests solely with Elizabeth Yavarone. Due to her failure to present evidence of those oil deliveries, the court cannot find that Elizabeth Yavarone has honored her obligations to the Company's customers.

Jim Moroni does not seek damages for his deliveries to the customers of the Company, hoping that Yavarone has delivered to her half of the Company's customers, leaving both parties having incurred equal expense. However, he seeks injunctive relief mandating that Elizabeth Yavarone fulfill the remaining obligations owed to the Company's customers.

Lenny Moroni has told customers such as Vic Fetter, and Dr. Feroletto, that Jim Moroni is dishonest and incompetent. He has also written on oil tickets given to mutual customers that Jim Moroni was out of business or, as he told Mr. Fetter, was in Texas with his girlfriend living on the customer's money. Lenny Moroni has told people that Jim Moroni had signed the back of the checks cashed at Walt's Market and pocketed their money. The foregoing statements were known to be untrue when they were made.

Lenny Moroni, on behalf of himself, Yavarone and Moroni Son Oil Co., LLC sent a number of registered letters dated August 11, 2004 to customers of the Company claiming that "there were some inaccuracies in [Jim Moroni's] booking," that "you are due for oil NOW" and then instructing those customers to contact Jim Moroni on his cell number "to deliver the remainder of your pre-paid oil from last year." At the time of this letter, Liz Yavarone and Lenny Moroni knew that Jim Moroni had delivered more than his half of the buy-ahead oil. This letter was intended to further injure the defendant's reputation and interfere with his future business.

Discussion of the Law and Ruling

In Count One of her Complaint, the plaintiff seeks to dissolve the Company and to appoint a receiver. There is no dispute that the Company was dissolved by agreement in September 2003, final tax returns were filed in April 2004 and, the affairs of the Company have been settled. Jim Moroni has produced to the plaintiff the Company's computer-generated financial reports, has produced and/or made available supporting materials such as bank statements, cancelled checks, invoices, delivery tickets and other bills.

Even though the Company has already been dissolved, the plaintiff seeks an accounting, in essence, in order to recover damages she claims that she has sustained by delivering one-half of the oil to the Company's buy-ahead customers. She did not introduce any evidence to support those damages. This failure appeared to be caused by her position that the proper vehicle for determining those damages is an accounting, with the determination of damages to be made, apparently, by a court-appointed receiver.

After the plaintiff rested her case on Count One and Two, and during the defendant's presentation of evidence on the counterclaims, the plaintiff then attempted to introduce evidence of the oil deliveries she had allegedly made to the "buy-ahead" customers of the Company. The defendant objected because this evidence had been requested in discovery, but not produced and because the evidence should have been admitted during the plaintiff's case in chief. The objection was sustained.

The remedy of an accounting has been traditionally recognized in Connecticut and Connecticut General Statutes §§ 52-401 through 52-405 represent the present form of the statutory codification of this remedy. Zuch v. Connecticut Bank Trust Co., 5 Conn.App. 457, 460-61, 500 A.2d 565 (1985). Those statutes are primarily concerned with the procedure to be followed after the trial court has determined that an accounting is due. The statutes provide little guidance as to what must be alleged to state a claim. Section 52-401 simply provides: "In any judgment or decree for an accounting, the court shall determine the terms and principles upon which such accounting shall be had."

"An `accounting' is defined as an adjustment of the accounts of the parties and a rendering of a judgment for the balance ascertained to be due. An action for an accounting usually invokes the equity powers of the court, and the remedy that is most frequently resorted to . . . is by way of a suit in equity." 1 Am.Jur.2d 609, Accounts and Accounting § 52 (1994)." Id. at 462.

In order to invoke the remedy of an account, typically, the plaintiff must allege that she made a demand for an accounting and that one was refused. As the Connecticut Appellate Court stated in Zuch, supra, at 461:

The general rule is that a prior demand by the plaintiff for an accounting and a refusal by the defendant to account is a prerequisite to the commencement of an action for an accounting. See 1 Am.Jur.2d, Accounts and Accounting §§ 46, 47. The plaintiff must allege such a demand in his pleadings, with failure to do so resulting in dismissal of the action. Id.; see also 1 C.J.S., Accounting § 38(a)(4); 143 A.L.R. 1211.

See also Chiarelli v. Pentino, 100 Conn. 686, 690 (1924); Connecticut Civil Practice Forms, Form 604.5. The purpose of such requirements is to prevent useless litigation. Zuch, supra, citing Edgerton v. Armour Co., 94 F.Sup. 549, 557 (S.D.Cal. 1950). In this case, the plaintiff's Complaint lacks any allegation of a demand and refusal to provide an accounting. The plaintiff has had complete access to the financial documents of the Company and a final accounting of the Company has been prepared by a licensed certified public accountant, the final tax returns of the Company have been filed and the affairs of Company have been settled. "An accounting is not available in an action where the amount due is readily ascertainable." Id., 610-11, § 54.

The plaintiff is not entitled to an accounting for the reasons set forth above. In addition, she cannot use the vehicle of an accounting and expect a court-appointed accountant to review the oil deliveries she has made after the dissolution of the company and award her damages for those deliveries. That determination was for the court. Even if the plaintiff had presented evidence of her oil deliveries, the court probably would have awarded no damages. Jim Moroni delivered oil to half the Company's customers who had paid for it in advance. Elizabeth Yavarone, as a 50% member of the Company, had an obligation to do the same. Any delay in delivery which might have resulted in Yavarone paying more for oil could not be recovered from Jim Moroni.

The defendant's Counterclaim against Yavarone contains five counts — conversion/theft, fraud, tortious interference with business expectancy, breach of fiduciary duty, and violation of the Connecticut Unfair Trade Practices Act (CUTPA). The third-party complaint against Lenny Moroni makes the same claims as the Counterclaim, except does not contain a count for breach of fiduciary duty.

The defendant seeks to recover from Elizabeth Yavarone for all conduct of Lenny Moroni because Lenny was at all times acting as her agent. Yavarone is directly liable for her own acts of negligence. She is also vicariously liable for the negligence of her agent, Lenny Moroni. Connecticut courts have accepted the Restatement (Second) Agency definition of the agency relationship. Section 1 states that "Agency is the fiduciary relation which results from the 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." See Beckenstein v. Potter Carrier, Inc., 191 Conn. 120, 132, 464 A.2d 6 (1983). "Under the doctrine of respondeat superior, `[a] master is liable for the wilful torts of his servant committed within the scope of the servant's employment and in furtherance of his master's business.' Pelletier v. Bilbiles, 154 Conn. 544, 547, 227 A.2d 251 (1967)." Glucksman v. Walters, 38 Conn.App. 140, 144, 659 A.2d 1217, cert denied, 235 Conn. 914, 665 A.2d 608 (1995). "It refers to those acts which are so closely connected with what the servant is employed to do, and so fairly and reasonably incidental to it, that they may be regarded as methods, even though quite improper ones, of carrying out the objectives of the employment. W. Prosser W. Keeton, Torts (5th Ed. 1984) § 70, p. 502." (Internal quotation marks omitted.) Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 505, 656 A.2d 1009 (1995).

"Vicarious liability is based on a relationship between the parties, irrespective of participation, either by act or omission, of the one vicariously liable, under which it has been determined as a matter of policy that one person should be liable for the act of the other. Its true basis is largely one of public or social policy under which it has been determined that, irrespective of fault, a party should be held to respond for the acts of another . . ." (Citations omitted; emphasis added; internal quotation marks omitted.) Alvarez v. New Haven Register, Inc., 249 Conn. 709, 720-21, 735 A.2d 306 (1999).

In this case, there is ample evidence of an agency relationship between Elizabeth Yavarone and Lenny Moroni. They worked together as a "team" on behalf of the Company, earning a single draw from the Company as compensation. Yavarone was aware of Lenny Moroni's side dealings and that Lenny Moroni was depositing and/or funneling Company funds through her personal bank account. She knew and approved of Lenny Moroni's pocketing of money from weekend and night calls. Yavarone asked customers to write checks to her personally and deposited these funds into her own account. She benefitted from Lenny Moroni's actions and is vicariously liable for those actions.

The tort of "[c]onversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner's rights." (Internal quotation marks omitted.) Wellington Systems, Inc. v. Redding Group, Inc., 49 Conn.App. 152, 169, 714 A.2d 21, cert. denied, 247 Conn. 905, 720 A.2d 516 (1998). Similarly, "[s]tatutory theft under [General Statutes] § 52-564 is synonymous with larceny [as provided in] General Statutes § 53a-119 . . . Pursuant to § 53a-119, [a] person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or [withholds] such property from [the] owner." (Citations omitted; internal quotation marks omitted.). Suarez-Negrete v. Trotta, 47 Conn.App. 517, 520-21, 705 A.2d 215 (1998). Connecticut General Statutes § 52-564 provides, in relevant part: "Any person who steals any property of another, or knowingly receives and conceals stolen property, shall pay the owner treble his damages."

Lenny Moroni admitted both at the prejudgment remedy hearing and at trial that he forged the defendant's name to the back of checks that were the property of the Company. He also admitted that he had instructed some of the Company's customers (including Dr. Feroletto) to make out checks to either him personally or to Yavarone. Further, Lenny Moroni admitted that he kept all money from service calls done on nights and weekends and that he personally received cash or checks meant for the Company which amounted to $25,000 per year. Yavarone was aware of Lenny Moroni's practices and condoned them.

The Connecticut Supreme Court has held that the essential elements of an action in common-law fraud are as follows: (1) a false representation was made as a statement of fact; (2) it was untrue and known to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon that false representation to his injury. Barbara Weisman, Trustee v. Kaspar, 233 Conn. 531, 539, 540, 661 A.2d 530 (1995); Billington v. Billington, 220 Conn. 212, 217, 595 A.2d 1377 (1991); Kilduff v. Adams, Inc., 219 Conn. 314, 329, 593 A.2d 478 (1991); Maturo v. Gerard, 196 Conn. 584, 587, 494 A.2d 1199 (1985). Fraud by nondisclosure, which expands on the first three of these four elements, involves the failure to make a full and fair disclosure of known facts connected with a matter about which a party has assumed to speak, under circumstances in which there is a duty to speak. A lack of full and fair disclosure of such facts must be accompanied by an intent or expectation that the other party will make or will continue in a mistake, in order to induce that other party to act to her detriment. Gelinas v. Gelinas, 10 Conn.App. 167, 173, 522 A.2d 295 (1987).

In this case, it is clear that Elizabeth Yavarone and Lenny Moroni intentionally and purposefully failed to disclose their actions to Jim Moroni. They instructed customers to write checks to them personally and cashed checks made out to the Company through third parties, such as Walt's Market. They kept Company funds from the sale of the Company's oil truck, depleted the Company's account with Sach Distributors and refused to turn over the funds received from Klingner for the truck and oil. Elizabeth Yavarone and Lenny Moroni's failure to disclose to Jim Moroni that they were not in fact sharing all of the receipts of the Company with him deprived Jim Moroni of his rightful share in the Company business.

In Solomon v. Aberman, 196 Conn. 359, 364-65, 493 A.2d 193 (1985), the Supreme Court acknowledged a cause of action for "tortious interference with contract rights or other business relations." The Court stated: "The essential elements of such a claim include . . . the existence of a contractual or beneficial relationship and that the defendant(s) `knowing of that relationship, intentionally sought to interfere with it; and, as a result, the plaintiff claimed to have suffered actual loss.'" Id.

In this case, the defendant has proven these elements as to both Yavarone and Lenny Moroni. They were aware of the terms of Company's Operating Agreement and that Jim Moroni was a 50% member thereof. Yavarone and Lenny Moroni intentionally and purposefully interfered with the Company and James Moroni by diverting funds and stealing money from the Company, asking Klingner to make checks payable to Yavarone personally, and by soliciting customers to enter into contracts with Yavarone and/or Lenny Moroni personally. As a result of these actions, the defendant has been injured.

Count Four of the defendant's Counterclaim seeks damages arising out of the plaintiff's breach of her fiduciary duty to the Company. Connecticut General Statutes § 34-141(e) provides:

Unless otherwise provided in writing in the articles of organization or the operating agreement, every member [of a limited liability company] and manager must account to the limited liability company and hold as trustee for it any profit or benefit derived by that person, without the consent of more than one-half by number of the disinterested managers or the majority in interest of the disinterested members, from (1) any transaction connected with the conduct or winding up of the limited liability company or (2) any use by the member or manager of its property, including, but not limited to, confidential or proprietary information of the limited liability company or other matters entrusted to the person as a result of his status as a member or manager.

This appears to confirm that like a partner in a partnership, see Spector v. Konover, 57 Conn.App. 121, 127, 747 A.2d 39 (2000), a member of a limited liability company has a fiduciary duty to the other members. The conduct of Liz Yavarone, or her agent, Lenny Moroni, described above, in misappropriating funds of the Company and in interfering with the business of the Company constitute a breach of fiduciary duty.

"No person shall engage in . . . unfair or deceptive acts or practices in the conduct of any trade or commerce." Connecticut General Statutes § 42-110b(a). "Any person who suffers any ascertainable loss of money or property . . . as a result of the use or employment of a method, act or practice prohibited by Section 42-110b, may bring an action . . . to recover actual damages"; Connecticut General Statutes § 42-110g(a); and may recover attorneys fees and punitive damages as well. See General Statutes §§ 42-110g(d). "[I]n determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfaimess; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers [competitors or other business persons], . . . All three criteria do not need to be satisfied to support a finding of [a violation of CUTPA]." Hartford Electric Supply Co. v. Allen-Bradley Co., 250 Conn. 334, 367-68, 736 A.2d 824 (1999).

Elizabeth Yavarone and Lenny Moroni's acts interfering with Jim Moroni's business by making untrue statements about him to customers constituted unfair trade practices and did injure the defendant.

The defendant is hereby awarded $19,864.50 damages for fraud and tortious interference with his contractual relationship with the Company caused by Lenny Moroni and Elizabeth Yavarone and for breach of fiduciary duty by Yavarone and her agent, Lenny Moroni. This amount is composed of $15,229, which Jim Moroni paid to wind up the business of the Company, $3000 taken from the Company by Yavarone as a loan just prior to the break-up of the Company, $10,000 of Company equipment and supplies stored in the Yavarone/Moroni garage, $6500 for the sale of the Sea Angel, and $5000 for the tools and equipment in the truck given to the Company by Jim Moroni. These amounts total $39,729. Jim Moroni, being a 50% member in the company is entitled to 50% of the foregoing as damages, or $19,864.50.

The defendant is also awarded $140,465.13 for theft and conversion by Yavarone and Lenny Moroni. This amount is composed of $1,380.92, the check cashed by Yavarone which depleted the Company's account of fees with which to pay the accountant, plus bank fees for insufficient funds, $4,762.50 oil delivered by Jim Moroni to make good on money diverted by Lenny Moroni and Elizabeth Yavarone, $62,500 diverted by Lenny Moroni over the two and one-half years during which the Company was in business ($25,000 per year), $10,000 retained by Elizabeth Yavarone from the sale of the oil truck to Kurt Klingner, $15,000 for oil taken by Lenny Moroni on the Company's account, totaling $93,643.42. Half of that amount, or $46,821.71, is the portion of the stolen amount which belonged to Jim Moroni. When that amount is trebled, it results in a figure of $140,465.13.

As a result of Yavarone/Lenny Moroni's unfair trade practices described above, Jim Moroni lost 50 customers. Jim and Lenny Moroni agreed at trial that the value of a customer is between $300-400, representing the cost of advertising to obtain a new client. Therefore, Jim Moroni has suffered damages in the amount of $17,500. The defendant seeks to recover for his future loss of income based on the unfair trade practices. However, he did not prove that actual loss by a preponderance of the evidence.

The defendant also seeks to recover punitive damages under CUTPA. In order to award punitive or exemplary damages, evidence must reveal a reckless indifference to the rights of others or an intentional and wanton violations of those rights. Collens v. New Canaan Water Co., 155 Conn. 477, 489, 234 A.2d 825 (1967). The basic requirement to justify an award of punitive damages is described in terms of wanton and malicious injury, evil motive and violence. Triangle Sheet Metal Works, Inc. v. Silver, 154 Conn. 116, 128, 222 (1966). Venturi v. Savitt, Inc., 191 Conn. 588, 592, 468 A.2d 933 (1983). The actions of Elizabeth Yavarone through her agent, Lenny Moroni, rise to this level. Lenny made untrue verbal and written statements about Jim Moroni to customers with the express intent of putting Jim out of business. The court awards the defendant $50,000 in punitive damages under CUTPA.

The award of attorneys fees is also allowed under CUTPA at the court's discretion. Tanpiengco v. Tasto, 72 Conn.App. 817, 820, 806 A.2d 1080 (2002). The defendant has submitted evidence of the amount of his counsel fees and the court awards him $40,000.

In addition to monetary damages, the defendant also seeks a permanent injunction prohibiting Elizabeth Yavarone or Lenny Moroni from discussing this lawsuit, or making any derogatory comments about Jim Moroni or any business with which he is associated. The party seeking injunctive relief bears the burden of proving facts which will establish irreparable harm as a result of that violation. Silitschanu v. Groesbeck, 208 Conn. 312, 318, 543 A.2d 737 (1988). The issuance of an injunction constitutes extraordinary relief. The court has awarded monetary damages to the defendant for past unfair trade practices. While the effects of those practices, i.e. defamatory statements, on the defendant's business, are difficult to prove, they are not impossible to prove. The court has awarded the defendant damages for his loss of customers caused by the unfair practices. Thus, Jim Moroni has an adequate remedy at law. In addition, the court hesitates to enjoin conduct which is already illegal, libel and slander, for fear that the order of injunction might not be as broad as the law of defamation.

The defendant also seeks a mandatory injunction requiring Elizabeth Yavarone and Lenny Moroni to deliver their half of the buy-ahead oil. There was evidence that they had already done so. The court has found that Jim Moroni has fulfilled his responsibilities for oil delivery under the Operating Agreement of Jim Moroni's Oil Service, LLC. Therefore, Yavarone and Lenny Moroni are responsible for the remaining oil deliveries and must hold Jim Moroni harmless for all claims relating thereto. Based on the foregoing the court declines to order the extraordinary remedy of a mandatory injunction against Elizabeth Yavarone and Lenny Moroni.

In summary, judgment may enter in favor of James Moroni on the counterclaim against Elizabeth Yavarone and the third-party complaint against Lenny Moroni in the amount of $267,829.33.

By the court,

Aurigemma, J.

Summaries of

Yavarone v. Jim Moroni's Oil Service

Connecticut Superior Court, Judicial District of Middlesex at Middletown
Feb 18, 2005
2005 Ct. Sup. 3378 (Conn. Super. Ct. 2005)
Case details for

Yavarone v. Jim Moroni's Oil Service

Case Details


Court:Connecticut Superior Court, Judicial District of Middlesex at Middletown

Date published: Feb 18, 2005


2005 Ct. Sup. 3378 (Conn. Super. Ct. 2005)

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