Opinion
No. CV 065002935
July 1, 2011
MEMORANDUM OF DECISION RE MOTION TO ENFORCE SETTLEMENT AGREEMENT
Introduction
This matter arose out of a real estate development project entered into by brothers Domenic and Alfonso Cammarota and related entities through whom the project was carried out. Principally, Domenic Cammarota alleges that Alphonso Cammarota diverted profits from the project which were, at least in part, due and owing to Domenic Cammarota. It is further alleged that Alphonso Cammarota was able to successfully divert these funds due to the negligence of People's United Bank, where Alphonso Cammarota allegedly opened accounts through which the funds flowed. Before this court, is the motion of defendant People's United Bank for summary enforcement of a settlement agreement with the named plaintiffs Domenic Cammarota and 3404 Madison Avenue, Inc. The court initially heard testimony on the motion on February 9, 2011. Thereafter, this court held that a clear and unambiguous settlement agreement had been reached as of June 9, 2010. Upon hearing the court's ruling, the plaintiffs asserted that if their former attorney entered into such an agreement, he did so without the plaintiffs' authorization. The court heard additional testimony as to this issue on May 31, 2011. The court has received post-hearing briefs, has reviewed those briefs and the cases cited therein. The court has reviewed the exhibits that were entered into evidence as well. For the reason set forth below, the motion to enforce the settlement agreement is granted.
Factual Findings
The court includes herein factual findings previously made and read into the record. The court does not include its analysis of the evidence.
In June 2010, Domenic Cammarota and 3404 Madison Avenue, Inc. were represented by Attorney James Nugent. By this time, the matter had been the subject of various settlement discussions and mediations.
On the morning of June 9, 2010, Attorney Nugent advised counsel for People's Bank, Attorney Wood, that the plaintiffs were agreeable to a settlement payment of $35,000.00. Attorney Wood sent a confirming e-mail at 9:58 a.m. Within hours, Attorney Nugent's office sent a draft agreement to Attorney Wood. In substance it is one page. It contains a release of claims and acknowledges consideration therefore. Simultaneously, Attorney Wood was taking the steps necessary to obtain the settlement proceeds. She had requested and subsequently received a W-9 from Attorney Nugent on June 18, 2010. Eventually, she received word that the check was ready, which she communicated to Attorney Nugent on July 9, 2010. Upon notifying Attorney Nugent that the funds were ready to be sent, Attorney Nugent notified Attorney Wood, on July 12, 2010, that his clients did not wish to settle the case.
Attorney Wood immediately took the position by reply email on July 12, 2010, that the case was already settled. Attorney Nugent did not respond to this email. On July 13, 2010, Attorney Nugent moved to withdraw as counsel for Domenic Cammarota and 3404 Madison Avenue, Inc. In his motion he stated:
The court takes judicial notice of the pleadings in this file.
1. An irreconcilable conflict has recently arisen in this case as between the Plaintiffs and counsel which prohibits counsel from proceeding further. Although further disclosure of the details of this conflict would force counsel to reveal confidential and privileged communications between counsel and the Plaintiffs, the facts of this conflict give rise to the likelihood and expectation that counsel will be called to testify as a witness in connection with these recent events giving rise to and causing this conflict.
On August 23, 2010, approximately 5-6 weeks later, and following the filing of the instant motion, in his memorandum of law in support of the motion to withdraw, he stated:
First, as set forth in the Motion to Enforce Settlement Agreement filed by People's Bank, a significant rift has developed between the Plaintiffs and their counsel in this respect. Within the limits imposed by the attorney client privilege, Plaintiffs counsel can state that numerous discussions were held between the Plaintiffs and counsel, an extremely clear understanding and decision was reached about how to proceed, that decision was communicated by Plaintiffs' counsel to counsel for People's Bank and that accordingly the settlement documents were generated. Thereafter, for reasons never explained or identified by the Plaintiffs, a completely different decision was reached. This latter decision was reached notwithstanding and irrespective of counsels' repeated advice, consultation and recommendations. This unexpected new decision has placed Plaintiffs' counsel in an irreconcilable conflict and now is or may be forced to testify at a hearing at to matters which are apparently in conflict with the current preferences of the Plaintiffs on this issue . . . Moreover, the plaintiff should be allowed to obtain new counsel to present their arguments as to why the settlement should not be enforced.
(Emphasis added).
It is clear to this court that as of June 9, 2010 and in the several weeks thereafter, Attorney Nugent was of the belief that, and had communicated to Attorney Wood, the case by his clients against People's United Bank was settled. Additional facts will be set forth below.
Discussion
The plaintiffs assert that the settlement agreement was entered into by Attorney Nugent without authority, actual or apparent. People's United Bank counters that Attorney Nugent had actual authority to settle the case, and if not actual authority, apparent authority to do so.
"The nature and extent of an agent's authority is a question of fact for the trier where the evidence is conflicting or where there are several reasonable inferences which can be drawn [therefrom]." (Internal quotation marks omitted.) Updike, Kelly Spellacy, P.C. v. Beckett, 269 Conn. 613, 636, 850 A.2d 145 (2004) . . . With respect to the governing legal principles, `it 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 agent's employment . . . An agent's authority may be actual or apparent.
Ackerman v. Sobol Family Partnership, LLP, 298 Conn. 495, 508 (2010).
Actual Authority CT Page 14677
Actual authority may be express or implied. See Czarnecki v. Plastics Liquidating Co., 179 Conn. 261, 268 (1979). "Implied authority is actual authority circumstantially proved. It is the authority which the principal intended his agent to possess." Maharisi School of Vedic Sciences, Inc., v. Connecticut Constitution Associates Limited Partnership, 260 Conn. 598 (2002), quoting, Czarnecki v. Plastics Liquidating Co., supra., 179 Conn. at 268. "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." Id. at 608, quoting, Connecticut National Bank v. Giacomi, 242 Conn. 17, 70 (1997).
Our Supreme Court has expressly stated that "[a]n attorney who is authorized to represent a client in litigation does not automatically have either implied or apparent authority to settle or otherwise to compromise the client's cause of action." Acheson v. White, 195 Conn. 211, 213 n. 4 (1985). See also, Yale University v. Out of the Box, LLC, 118 Conn.App. 800 (2010).
With these principles in mind, the evidence in this case leads to one conclusion. At the time the settlement agreement was reached, Attorney Nugent had actual authority from the plaintiffs to settle the litigation on the terms previously found by the court.
Attorney Nugent testified that he believed he had the plaintiffs' authority to communicate an agreement to settle the case for $35,000.00. The evidence overwhelmingly supports that belief. As previously found, upon learning from Attorney Nugent that the plaintiffs would settle the case for $35,000.00, Attorney Wood sent a confirming email on June 9, 2010 at 9:58 a.m. Thereafter, at 1:23 p.m., Attorney Nugent's office sent a draft settlement agreement. The following day, June 10, 2010, at 5:10 p.m. Attorney Nugent sent the draft agreement to Mr. Cammarota. In that email he identified the document as "the version of the settlement agreement for all parties to sign." At 9:43 p.m. Mr. Cammarota sent an email to Attorney Nugent in which he advised that the agreement needed to be fixed to reflect that Mr. Cammarota is the sole Director (presumably referring to plaintiff 3404 Madison Avenue, Inc.). Mr. Cammarota's response is most probative for what it does not say. Attorney Nugent's email and the settlement agreement make very clear trial an agreement had been reached and communicated to People's United Bank. Mr. Cammarota expresses no concern, surprise, disagreement or disfavor other than to suggest a minor change to the language of the settlement agreement. The only reasonable and logical inference to be drawn from this exchange is that Mr. Cammarota had, in fact, authorized the settlement.
This conclusion is further supported by the later exchange between Attorney Nugent and Mr. Cammarota. On June 21, 2010, Mr. Cammarota told Attorney Nugent, via an email, that he did not wish to settle with Peoples United Bank. In response, Attorney Nugent sent a lengthy rebuke to his client, which began: "Domenic, That terse statement is quite an insult to me, after you told me very distinctly that you approved the settlement and that you intended to go ahead with it . . ." The remainder of the email discusses the inevitable motion to enforce settlement that would follow, the need for Attorney Nugent to withdraw in the event of such a motion, and other related matters. In response, Mr. Cammarota acknowledges his prior agreement to settle the case. He writes: "Jim, I was not looking to insult anyone. in making a choice on accepting 35k, you explained that a memorandum work (sic) against my case. please explain how the Lester desision (sic) works against me. thanks. Domenic." It is clear from these exchanges that Mr. Cammarota had agreed to the settlement, but thereafter, changed his mind. It also appears that the issue may have resolved, at that time, in favor of the settlement. "A subsequent change of heart, sometimes referred to as `buyer's remorse,' will not invalidate a settlement agreement to which all parties unambiguously agreed at the time the agreement was made." Larry Pitt v. Housing Alternatives for the Retarded Today, LLC, judicial district of New Haven, Dkt. No. CV 06 5005223 (January 29, 2009, Silbert, J.). See also, Pinette v. Petosa, judicial district of New Britain, Dkt. No. CV 06 5000722, (March 21, 2007, Silbert, J.).
This email is consistent with the pleadings ultimately filed by Attorney Nugent in connection with his motion to withdraw. See, supra.
The evidence is not conclusive as to the plaintiffs' position thereafter. The intent not to settle was not communicated to Attorney Wood until July 12, 2010. It is not clear whether the matter was resolved and again raised, or whether, as of June 21, 2010, Mr. Cammarota had changed his mind for good. Neither is dispositive of whether the agreement made on June 9, 2010 was made with the clients' authority.
The court's conclusion is further supported by the presumption that Attorney Nugent complied with the Code of Professional Responsibility, Rule 1.2, to include the obligation that an attorney shall abide by the client's decision whether to settle a matter. See, Ackerman v. Sobol Family Partnership, supra, 198 Conn. at 513.
To the extent Mr. Cammarota testified that he never agreed to settle the matter for $35,000.00, his testimony is not credible in light of the evidence outlined above.
The motion to enforce the settlement agreement is granted.
SO ORDERED