Opinion
No. CV-04-0833143-S
January 2, 2007
MEMORANDUM OF DECISION ON POST-VERDICT MOTIONS OF PLAINTIFFS AND DEFENDANTS (#226, #227, #228 AND #229)
I. PROCEDURAL BACKGROUND
This case involves the dissolution of a law firm and illustrates why law partners should have an agreement setting forth what should transpire in the event of a breakup. When the defendant, Attorney Donald Baillie, ("Baillie"), decided to leave the plaintiffs' law firm of Fazzone, Baillie, Ryan and Seadale, LLC, ("FBRS"), late in 2003 or early in 2004, his partners, Attorneys Anthony Fazzone, ("Fazzone"), and Joanne Ryan, ("Ryan"), according to Baillie, did not take it in stride. They rejected his proposal to effectuate the division of the firm, demanded he remain a month later than he had planned and refused to consider negotiations or mediation unless Baillie agreed to pay them $200.00 on every real estate closing his new law firm handled for the next several years. According to Fazzone and Ryan, Baillie improperly dug in his heels. Since he owns one-third of the building which housed the office of FBRS, he refused to leave the office space he and the employees exiting with him occupied, and on or about April 1, 2004, he hung up new signs declaring the coexistence of his two newly-formed entities, the law firm of Baillie, Hall Hershman, P.C. ("BHH"), and Associated Title Closing Company, P.C., ("Associated"). Both sides hired lawyers.
This lawsuit was commenced by the plaintiffs on April 1, 2004. Plaintiffs Fazzone, Ryan, FBRS and Approved Attorney Title Closing Company, LLC ("Approved") sued Baillie and his new entities, BHH and Associated for breach of fiduciary duty, conversion and statutory theft, trespass, misuse of computer information in violation of General Statutes § 53a-251(e) and the violation of the Connecticut Unfair Trade Practices Law, (CUTPA) (General Statutes § 42-110a et seq.) Baillie counterclaimed, alleging that plaintiffs failed to pay him the value of his interests in FBRS and Approved in violation of General Statutes § 34-159b. He also claimed unjust enrichment and a violation of CUTPA on the part of the plaintiffs.
On July 18, 2006, after a lengthy trial, the jury awarded the plaintiffs a total of $148,169.00 in damages: $86,914.00 for breach of fiduciary duty, $60,255.00 for conversion (it rejected the statutory theft claim), and $1.00 on the trespass claim. The jury found for the defendants on the misuse of computer information and CUTPA claims. Although the jury found the defendants had misused computer information and violated CUTPA, it found the plaintiffs had failed to prove the computer misuse caused actual damages to the plaintiffs or unjust enrichment to the defendants. On the CUTPA claim, the jury found the plaintiffs had failed to prove any ascertainable loss.
See the jury's responses to the Interrogatories and Verdict Forms on the plaintiffs' complaint and the defendant Baillie's counterclaim.
On the counterclaim of the defendant, Donald Baillie, the jury found a violation of § 34-159b and awarded him $209,650.00 in damages. The jury found for the plaintiffs on the defendant's unjust enrichment and CUTPA claims.
On July 27, 2006, the defendants filed a Motion for Directed Verdict or to Set Aside the Verdict, or, alternatively, for Remittitur and/or Additur pursuant to Practice Book §§ 16-35 and 16-36 and General Statutes §§ 52-225, 52-228 and 52-228b. The defendants seek a directed verdict, or a setting aside of the jury verdict reached in plaintiffs' favor on the breach of fiduciary duty, conversion and trespass claims of the complaint. (Counts 1, 2 and 3.) In the alternative, the defendants move for remittiturs on the jury's awards on the plaintiff's breach of fiduciary duty and conversion counts, claiming both awards are unreasonably high. Defendant Baillie also moves for an additur on the amount of damages awarded to him on the first count of his counterclaim, claiming the amount awarded is "unreasonably low."
At the close of plaintiffs' evidence, the defendants moved for a directed verdict on plaintiffs' conversion, statutory theft and computer-related offense claims. At the close of defendants' evidence, defendants moved for a directed verdict on plaintiffs' breach of fiduciary duty claim as it related to Baillie's usurpation of plaintiffs' corporate opportunity. All these motions were denied.
On July 28, 2006, the plaintiffs filed a Motion for Additur and/or a Motion to Set Aside the Verdict in Part and Order a New Trial. Plaintiffs, pursuant to General Statutes § 52-228b, move that additurs be ordered on their breach of fiduciary and trespass claims (Counts 1 and 3), including damages in the nature of attorneys fees on the trespass count in the amount of $11,082.50. Plaintiffs also move that the jury's verdict on their CUTPA claim (Count 5) be set aside and that judgment be directed in their favor for nominal damages. In the alternative, plaintiffs move that the jury's verdict on the trespass and CUTPA counts be set aside and a new trial ordered on said counts, limited to the issue of damages in the case of the trespass claim.
Both plaintiffs and the defendants, on July 28, 2006, also moved for an order of set off pursuant to §§ 52-228b, 52-139 and 52-142, Practice Book § 16-35 and principles of equitable set off so that an effective judgment may enter in this matter only in the net amount by which the defendant's recovery on his counterclaim exceeds the plaintiff's recovery, after the court's consideration of the parties' post-verdict motions.
As defendants note in their motion for set off, "the Court's ruling on defendants' pending Motion for Directed Verdict or to Set Aside Verdict, or Alternatively Motion for Remittitur and Additur, dated July 27, 2006 may alter the amounts awarded to the parties and respectfully request that the Court factor in the appropriate amounts when calculating the set off.
On August 15, 2006, the plaintiffs filed an objection to all of the defendants' post-trial motions. The defendants, on August 25, 2006 filed an objection to plaintiffs' post-trial motions. On September 18, 2006, the defendants filed a reply to the plaintiffs' objection.
Oral argument was held before the court on all post-trial motions on November 2, 2006.
Plaintiffs also filed and argued a motion dated October 26, 2006 for an award of their expert witness fees, which they subsequently withdrew on November 3, 2006.
II FACTUAL BACKGROUND
The jury could have reasonably found the following facts. Baillie and Fazzone had practiced together, in partnership with other individuals in various permutations, for over a quarter of a century. Since the mid-nineties, Baillie had developed nationally recognized expertise in the real estate relocation business and by late 2003, was the principal rainmaker in the firm of Fazzone, Baillie, Ryan and Seadale. The firm's office was located at One Town Center in Cheshire. In the past few years, Baillie had brought in 80 to 90% of the real estate business, and 60-70% of the other business of the firm. Baillie and Fazzone had agreed to set up Approved in 1995 as an investment for the two of them, contemplating the possibility of later selling the business. They invested in Approved out of the proceeds of FBRS. Baillie primarily created Approved to handle the relocation closings, originated all its clients and managed all aspects of this business. The relationships with the client relocation companies were Baillie's. A satellite office of Approved was opened in Florida when an employee decided to move there. The majority of the firm's employees concentrated in the relocation closing field. Baillie wanted to continue to expand this area of the practice to a multi-state operation. He also wanted to open another office in Avon. Fazzone and Ryan were cautious — too cautious as far as Baillie was concerned. Although Baillie was bringing in the greatest proportion of business to the firm of FBRS, his equity interest in the firm was 45%, equal to Fazzone's. Ryan's interest was 10%. These three individuals split the firm's profits differently: Fazzone and Baillie received 40%, each; Ryan received 20%. The profits generated by Approved were paid over to FBRS, and all three partners shared in those in accordance with the above percentages. Baillie felt that the other two were not "beating the bushes" for clients the way he was. Baillie never signed a non-compete agreement with either FBRS or Approved, and no relocation company ever signed a contract with Approved that would require them to continue to use Approved for any period of time.
Attorney Seadale had left the firm to join the ministry before Baillie announced his departure.
On January 29, 2004, Baillie notified his partners, Fazzone and Ryan, of his intent to dissociate from the law firm of FBRS effective March 1, 2004. On or about February 12, 2004, Baillie indicated to Fazzone that he would like to buy out Fazzone's interest in Approved, to which Fazzone did not agree. Subsequently, and prior to his dissociation from Approved and FBRS, Baillie advised Fazzone and Ryan of his intent to create a new entity that would be known as Associated Attorney Title Closing, (as opposed to Approved Attorney Title Closing, but still "AATC"), and the new law firm of Baillie, Hall Hershman, both of which would open for business upon Baillie's dissociation. After some discussion, Fazzone and Ryan persuaded Baillie to remain one more month and terminate his association with FBRS and Approved effective April 1, 2004.
After partnering with Fazzone for 28 years, Baillie saw better opportunities if he went out on his own. The jury could have reasonably found that his decision to leave FBRS and Approved was not made on or about January 29, 2004, but rather, contemplated and planned for at least several months before that. Some of the details of this planning process were not disclosed to Fazzone and Ryan. For example, the lone Florida employee of Approved was told to locate and open a new office site before Fazzone was advised of Baillie's planned departure. Baillie had discussions and communications with relocation companies and attended meetings in Florida, where Approved had a satellite office, to expand their ability to do closings statewide. He also started discussions to expand the relocation business into other New England states. His attendance at meetings and discussions with potential relocation clients took place while he was at FBRS and Approved, and certain expenses were billed to FBRS. In December of 2003, he notified First American Title, in an updated application for that company's approved attorney list, that "for the time being I will be the only one authorized to sign." (Exhibit 15.)
Before or immediately after Baillie announced his departure, he notified and solicited a substantial number of FBRS and Approved's employees, including lawyers and paralegals, to join his two new entities. He organized these new entities with the help of several of these employees, he also hired and trained several new employees for the new entities, who occupied the offices and used the facilities of FBRS and Approved, (although Baillie paid their salaries himself), before March 31, 2004. Baillie and some of the employees of FBRS and Approved used the employee time, phones, email, data, offices and equipment of FBRS and Approved to set up BHH and Associated. Baillie directed FBRS employees to advertise his new entities on emails emanating from the offices of FBRS and Approved. These emails, announcements and at least one newspaper advertisement suggested that FBRS was becoming BHH, with the slogan, "same people, same offices, new name." He used the FBRS Christmas list to facilitate some of these contacts. The sole employee of Approved in Florida opened a new office location and on April 1, Associated took over that office completely, including the files, equipment and phones. On April 1, BHH and Associated were fully operational — with new signs installed, a website and brochures. The brochures were based on brochures promulgated by FBRS, which Baillie and Ryan had helped create. The logo on the sign for Associated was nearly identical to the Approved logo. Baillie refused to move out of the space the former employees of FBRS and Approved had occupied at One Town Center in Cheshire, of which he, along with Fazzone and others, was a part owner. Baillie's offer to pay FBRS 60% of certain overhead expenses was rejected by the plaintiffs. This created a difficult, commingled situation for approximately six and a half months, from April 1 to Columbus Day of 2004. During that time period, BHH and Associated continued to use many of the plaintiffs' office facilities and amenities.
Eventually, the plaintiffs obtained a court order that Baillie vacate the premises.
III THE PARTIES' CLAIMS
At trial, the plaintiffs argued that they should be compensated for Baillie's misuse of their overhead expenses and employee time, both before April 1, 2004 and for the six and a half month time period BHH and Associated remained at One Town Center after Baillie's dissociation. Plaintiffs also claimed the defendants deprived them of the assets, business and corporate opportunity of Approved.
Baillie claimed that he breached no fiduciary duty to FBRS or Approved; that he merely prepared to compete, and that Approved was never going to continue to exist without him, the key man and the driving force of the business. He claimed the bulk of the preparations were done by an office manager and bookkeeper he hired and paid out of his own pockets, and that the work of other employees was done in such a manner that they never neglected their duty to FBRS or Approved. He further claimed that FBRS never paid him anything for his 45% share of that law firm, which he spent years building, and that he also was entitled to 50% of the fair value of his interest in Approved, although he claimed Approved was worth very little after his departure. He maintained that FBRS could prove no loss of assets, clientele or business before or after his departure.
IV STANDARD OF REVIEW
Applicable Factors For Directed Verdict, Setting Aside a Verdict, Additur and Remittitur
Litigants have a constitutional right to have factual issues resolved by a jury. Seals v. Hickey, 186 Conn. 337, 350, 441 A.2d 604 (1982). The constitutional right of a trial by jury includes the right to have issues of fact as to which there is room for reasonable difference of opinion among fair-minded men [and women] passed upon by the jurors and not by the court. Caciopoli v. Acampora, 30 Conn.App. 327, 332, 620 A.2d 191 (1993). "A trial court should direct a verdict for [the moving party] if viewing the evidence in the light most favorable to the [non-movant], a jury could not reasonably and legally reach any other conclusion than that the [moving party] is entitled to prevail. In assessing the evidence, the court should weigh both direct and circumstantial evidence, including all reasonable inferences to be drawn therefrom." (Citations omitted.) Harewood v. Carter, 63 Conn.App. 199, 202, 772 A.2d 764 (2001). See also Boyce v. Allstate Ins. Co., 236 Conn. 375, 382, 673 A.2d 77 (1996). If the trial court "finds the verdict to be so clearly against the weight of the evidence in the case as to indicate that the jury did not correctly apply the law to the facts in evidence in the case, or were governed by ignorance, prejudice, corruption or partiality, then it is [her] duty to set aside that verdict and to grant a new trial." (Internal quotation marks omitted.) Schroeder v. Triangulum Associates, 259 Conn. 325, 330, 789 A.2d 459 (2002). Generally speaking, "[a] court is empowered to set aside a jury verdict when, in the court's opinion, the verdict is contrary to the law or unsupported by the evidence." (Internal quotation marks omitted.) O'Connor v. Board of Education, 90 Conn.App. 59, 64, 877 A.2d 860, cert. denied, 275 Conn. 912, 882 A.2d 675 (2005).
A motion for judgment notwithstanding the verdict and a motion for a directed verdict are governed by the same considerations, as a motion for judgment notwithstanding the verdict is a renewal of the motion for a directed verdict. Cruz v. Drezek, 175 Conn. 230, 232, 397 A.2d 1335 (1978); Wood v. Bridgeport, 216 Conn. 604, 607, 583 A.2d 124 (1990). Such motions should be granted if the evidence establishes, as a matter of law, that the party who had obtained the verdict could not and was not entitled to prevail. Gesualdi v. Connecticut Co., 131 Conn. 622, 627, 41 A.2d 771 (1945); Yeske v. Avon Old Farms School, 1 Conn.App. 195, 205, 470 A.2d 705 (1984).
Basically, a verdict should be set aside and a new trial ordered or judgment directed only if the court finds that the jury could not reasonably and legally have reached its conclusion. Bond Brook Association v. Norwalk, 198 Conn. 660, 667, 504 A.2d 1047 (1986); Message Center Management, Inc. v. Shell Oil Products Co., 85 Conn.App. 401, 415-16, 857 A.2d 936 (2004). A trial court "should not set aside a verdict where it is apparent that there was some evidence upon which the jury might reasonably reach their conclusion." Jackson v. Water Pollution Control Authority, 278 Conn. 692, 702, 900 A.2d 498 (2006). Ultimately the decision to set aside a verdict entails the exercise of a broad legal discretion that, in the absence of clear abuse, will not be disturbed. Judson v. Brown, 98 Conn.App. 381, 382, 908 A.2d 1142 (2006).
As to the issue of additur, in making a decision on whether the amount of damages awarded are inadequate, the court must begin its analysis "not on the assumption that the jury made a mistake, but, rather, on the supposition that the jury did exactly what it intended to do." (Internal quotation marks omitted.) Smith v. Lefebre, 92 Conn.App. 417, 421, 885 A.2d 1232 (2005), quoting Wichers v. Hatch, 252 Conn. 174, 188-89, 745 A.2d 195 (2000) (en banc). With respect to remittitur, the court's power to order one should be exercised "only when it is manifest that the jury have included items of damage which are contrary to law, and not supported by proof, or contrary to the court's explicit and unchallenged instructions." Tomczuk v. Alverez, 184 Conn. 182, 188, 439 A.2d 935 (1981). In this context, the court must recognize that "[t]he amount of damages awarded is a matter peculiarly within the province of the jury . . ." (Citation omitted.) Weiss v. Bergen, 63 Conn.App. 810, 813, 779 A.2d 195, cert. denied, 258 Conn. 908, 782 A.2d 1254 (2001). The court may conduct a review of the evidential underpinnings of the verdict to ensure that the award is reasonably supported by the evidence. Johnson v. Chaves, 78 Conn.App. 342, 832 A.2d 70 (2003); Wichers v. Hatch, supra, 252 Conn. 189. See also Padron v. Lopez, Superior Court, judicial district of New Britain at New Britain, Docket No. HHB CV 054003291S (May 24, 2006, Shaban, J.).
The granting of a new trial likewise rests within the discretion of a trial court. "The basic question that the court must address in considering a motion for a new trial is whether, on all the evidence, an injustice has been done and whether it is probable that on a new trial a different result would be reached." (Citations omitted.) Ginsbury v. Cadle Co., 61 Conn.App. 388, 392-93, 764 A.2d 210 (2001).
"The only practical test to apply to a verdict is whether the award of damages falls somewhere within the necessarily uncertain limits of fair and reasonable compensation in the particular case, or whether the verdict so shocks the sense of justice as to compel the conclusion that the jury [was] influenced by partiality, mistake or corruption." (Internal quotation marks omitted.) Wood v. Bridgeport, supra, 216 Conn. 611; Childs v. Bainer, 235 Conn. 107, 114, 663 A.2d 398 (1995).
V DISCUSSION
In this case, the plaintiffs introduced 228 exhibits; the defendants introduced 42. There were conflicting appraisals and opinions from both expert and fact witnesses as to the value of the limited liability corporations, FBRS and Approved, including the value of their assets, work in progress, and accounts receivable. The parties also introduced tax returns, expense invoices, payroll records and numerous other documents reflecting valuations and business expenses. From the outset, it should be noted that despite the enormous volume of evidence presented to this jury on proof of losses, or lack thereof, neither side requested interrogatories be submitted to the jury that would have required the jury specify the financial calculations it used to reach the damage awards. The interrogatories submitted to the jury simply inquired as to its findings on whether or not the causes of actions had been proven and whether they found unspecified damages or losses proven. As such, the court does not know precisely how the jury calculated its ultimate damage awards.
A. The Verdict of $86,914.00 On Plaintiffs' Breach of Fiduciary Claim (Count 1)
The plaintiffs were required to prove at trial, by a fair preponderance of the evidence, that they incurred actual financial harm as a result of Baillie's breach of fiduciary duty. There were four areas in which the plaintiffs claimed to have suffered damages: The defendants' use of the plaintiff law firm's employees and offices to arrange and facilitate the creation of his new entities, BHH and Associated, solicitation of plaintiffs' clients, solicitation of plaintiffs' employees and usurpation of the logo, licenses, property, business and profits of Approved. The misappropriation of a business opportunity is a subcategory of breach of fiduciary duty. Plaintiff has the burden of proving that there is a fiduciary relationship and that there was a corporate opportunity from which the defendant benefitted. Katz Corp. v. T.H. Canty Co., 168 Conn. 201, 208, 362 A.2d 975 (1975). The court has reviewed the evidence and finds that there were certain expenses Baillie charged to the law firm which the jury could have reasonably and logically concluded were connected to a contemplated and at least in part, secretive usurpation of the business of Approved, in which plaintiff Fazzone had a one-half interest, while Baillie still worked for FBRS and Approved. The jury could have reasonably and logically concluded that Baillie did more than make mere "preparations to compete" and in fact, breached his fiduciary duty to FBRS and Approved. In addition, the jury was able to consider competing evidence offered by both sides' experts on the value of Approved as of March 31, 2001 and could have reasonably and logically awarded the plaintiffs a sum of money for the value of Fazzone's one-half interest, as well as for the loss of future profits, for a time period they deemed reasonable, as a result of Baillie's usurpation of Approved's future business and transfer of it to BHH or Associated. Therefore, there was a factual basis for an award for the lost corporate opportunity to Fazzone and Approved. The court finds the amount awarded to the plaintiffs on the breach of fiduciary count, modest in comparison to the large sum demanded by the plaintiffs, "falls somewhere within the necessarily uncertain limits of fair and reasonable compensation" in this particular case. Ham v. Greene, 248 Conn. 508, 536, 729 A.2d 740 (1999); Schettino v. Labara, 82 Conn.App. 445, 448, 844 A.2d 923 (2004). The court agrees with the defendants that plaintiffs' effort to increase the jury's award to 100% of FBRS's overhead for the employees who agreed to join BHH and a flat 60% of its total asset overhead in the two months preceding Baillie's resignation is unwarranted, as neither Baillie nor the other FBRS employees devoted all of their efforts, loyalties and energies to the development of Baillie's new entities during that time period.
The court will note its disagreement with the plaintiffs' expansive interpretation of the holding in Oakhill Associates v. D'Amato, 228 Conn. 723, 638 A.2d 31 (1994) and plaintiffs' exception to its instructions on damages under their first count. The court, as indicated in rulings during the trial, which are a matter of record, disagrees with plaintiffs' position that the defendant has the burden of proving that plaintiffs incurred no damages where the defendant has breached his fiduciary duty. The court agrees with the defendants that the plaintiffs must prove their damages for a breach by a fair preponderance of the evidence. See News America Marketing In-Store, Inc. v. Marquis, 86 Conn.App. 527, 535, 862 A.2d 837 (2004), aff'd., 276 Conn. 310 A.2d (2005).
The verdict on the breach of fiduciary count does not shock the court's sense of justice or compel the court to conclude that the jury was influenced by partiality, mistake or corruption. The court finds that the jury reasonably and legally reached its conclusion based on the evidence submitted at trial, and therefore, the award for breach of fiduciary duty is not contrary to the law or the evidence. Accordingly, on the first count of the plaintiffs' complaint, breach of fiduciary duty, the defendants' motions to set aside or direct the verdict, and for a remittitur, and the plaintiffs' motion for an additur are all DENIED.
During their deliberations, the jurors asked for a computer so they could produce a spreadsheet to assist them in determining their ultimate findings. This request was granted by agreement. After the verdict was rendered, it was agreed the court would instruct the jurors to destroy whatever spreadsheet, if any, they had produced to assist their deliberations.
B. The Verdict of $60,255.00 on the Plaintiff's Conversion Claim (Count 2)
The defendants claim that the jury verdict on the plaintiffs' conversion claim should be set aside, or alternatively, the court should direct a verdict in their favor or order a remittitur because plaintiffs presented no evidence that they either were harmed by the defendants' use of their property or evidence of the value of the defendants' use of that property. To establish a prima facie case of conversion, the plaintiffs had to demonstrate that (1) the property at issue belonged to the plaintiffs; (2) that the defendants deprived the plaintiffs of that property for an indefinite period of time; (3) that the defendants' conduct was unauthorized; and (4) that the defendants' conduct harmed the plaintiffs. See New America Marketing In-Store, Inc. v. Marquis, supra, 86 Conn.App. 527; Discover Leasing, Inc. v. Murphy, 33 Conn.App. 303, 309, 635 A.2d 843 (1993). Plaintiffs' evidence, taken as true, established that the defendants utilized numerous items constituting part of the plaintiffs' overhead expenses for a limited period of time without plaintiffs' authorization and also converted some of plaintiffs' real estate closing files, from which defendants collected fees. The plaintiffs claim they are entitled to a flat 60% of the fair market value of FBRS's furniture and equipment because defendants misappropriated and used this personal property for the approximately six months that defendants shared the premises with FBRS.
The court instructed the jury that although a plaintiff is entitled to the market value of any personal property that was permanently converted at the time of the conversion, a plaintiff is only entitled to the value of the loss of the use of that property when the property was only used for a period of time to the exclusion of the plaintiff and without authorization. The plaintiffs requested that the court instruct the jury to consider awarding damages for the conversion of the following: FBRS and Approved's desks, chairs, computers, work stations, copiers, fax machines, software and files. The court agrees with the defendants that, with the exception of certain real estate files, the plaintiffs did not prove a permanent conversion or damage of their property by the defendants, only an unauthorized use for six months. Considering the limited period of time that the defendants were alleged to have used that property, the evidence that the plaintiffs had no further use for the furniture or computers, the evidence that when they attempted to sell the furniture and the computers, the defendants only obtained $4,375.00 for the used furniture and nothing for the used computers, the court finds the jury really had no reasonable or legal basis to award the plaintiff's damages for the permanent conversion of the desks, chairs, computers or work stations. This conclusion is buttressed by the fact that the jury found no statutory theft had occurred. "A conversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner's rights." Redding Group, Inc. v. Wellington Systems, Inc., 49 Conn.App. 152, 169, 714 A.2d 21, cert. denied, 247 Conn. 905, 720 A.2d 905 (1998). Damages for conversion are intended to place a plaintiff in the fiscal position he would have been in had the conversion not been committed. See R. Newman J. Wildstein, Tort Remedies in Connecticut, § 14-3, pp. 195-96 (1996).
However, with respect to the value of the defendants' unauthorized use of copiers, software, storage facilities, fax machines and other overhead costs, the jury did have evidence as to the monthly or annual cost of many of these items, as well as evidence that the defendants continued to use these office amenities, belonging to FBRS and Approved, for six and a half months, longer in the case of some of Approved's Florida assets, without reimbursing FBRS or Approved. Moreover, the jury had evidence that Baillie even offered to pay the plaintiffs 60% of the cost of overhead while his newly formed entities remained at One Town Center in Cheshire. The jury also had evidence of utility and maintenance charges for those six months, generated in part by the use of the computers, copiers, faxes, and work stations by the defendants' employees. (See Plaintiffs' Exhibit 286).
In addition, the jury had evidence that BHH and/or Associated absorbed existing files originated by FBRS and Approved in both Connecticut and Florida into their new entities after April 1, 2004, and generated closing fees from those files for which plaintiffs were not reimbursed. The parties represented contrary evidence on the value of the fees generated on these files and the jury was free to accept all, part of none of their respective explanations. FBRS and Approved claimed BHH and Associated owed them approximately $100,000.00 on files they took with them after deducting a 50% overhead expense. (See Plaintiffs' Exhibit 207.) BHH and Associated claimed they only owed a net of $7,798.93 to FBRS and Approved on these files after applying a downward escalating formula, which the jury was free to reject, and deducting an 85% overhead. (See Defendants' Exhibit QQQ.) In determining what BHH and Associated may have converted in overhead costs and what BHH and Associated may have owed FBRS and Approved for converted files that generated fees collected by BHH and Associated, the jury could reasonably and legally calculate the amount of damages awarded on this claim.
"Where from the nature of the case the amount of damages cannot be proven with exactitude, all that can be required is that the evidence, with such certainty as the nature of the case may permit, lay a foundation which will enable the trier to make a fair and reasonable estimate . . . The mere difficulty in the assessment of damages is not a sufficient reason for refusing damages where the right to them has been established." (Citation omitted.) Holmes v. Freeman, 1 Conn. Cir.Ct. 336, 341 (1962). Accordingly, on the second count of the plaintiffs' complaint, conversion, the defendants' motions to set aside or direct the verdict, and for a remittitur, and the plaintiff's motion for an additur are all DENIED.
C. The Verdict of $1.00 on Plaintiffs' Trespass Claim (Count 3)
Plaintiffs request that the jury's award of $1.00 in nominal damages on the third count of the plaintiff's complaint, trespass, be set aside, or, in the alternative, that the court order an additur of $42,022.71 plus attorneys fees. The defendants request that the verdict on this count be directed in their favor as contrary to law, as there was no evidence that FBRS exclusively leased the rental space upon which it claims the defendants trespassed.
The elements of common law trespass are well established. A plaintiff must show "ownership or possessory interest in property; the physical invasion, entry or intrusion by defendant which affects the plaintiff's possessory rights; intent to do that which causes the invasion and a direct injury to the plaintiff's property." Caltabiano v. Jimmo, Superior Court, judicial district of Middlesex, Docket No. 67609 (May 5, 1995, Higgins, J.), quoting Avery v. Spicer, 90 Conn. 576, 579, 98 A.135 (1916).
In reviewing the demonstrative evidence as to the amount of space that BHH and Associated occupied after April 1, 2001, consisting of several sketches and plans of the floor space delineating where three separate law firms, FBRS, the law firm Nuzzo Roberts and BHH shared or did not share space, the jury could have reasonably and logically concluded that FBRS did exclusively occupy a portion of such space. The jury could have concluded further that when BHH and Associated employees did not vacate that portion of the space after April 1, 2004, a trespass occurred. Thus, the defendants' motion to direct the verdict or direct a verdict in their favor on the trespass count must be denied.
However, plaintiffs' request for an additur or a new trial due to the award of only nominal damages must be rejected. Even if there was a value for the use of the premises upon which defendants' trespassed, plaintiffs did not present sufficient proof of the dollar amount of this value with any degree of reasonable certainty. "Rental or usable value is, in an action for damages resulting from a trespass to real property, the amount for which the property in question could have been rented on the market." 75 Am.Jur.2d, Trespass, § 135. When a party prevails on a trespass claim, it is "entitled to damages based on the lost use value of the property [trespassed upon] and any harm caused by the trespass during the time of the defendants' occupation." Robert v. Scarlata, 96 Conn.App. 19, 24, 899 A.2d 666 (2006); Durkin Village Plainville, LLC v. Cunningham, 97 Conn.App. 640, 661, 905 A.2d 640 (2006).
There was no evidence that the premises could have been divided in such a way that a third party would have been willing to sublet the premises or, if so, what rent a third party would be willing to pay. There was also no evidence that the plaintiffs intended or could have sublet the portion occupied by BHH and Associated for six months. See Kass v. Cooley Dickinson Hospital, Inc., 2006 WL 1555942*5 (Mass.Land Ct., June 8, 2006) (declining to award plaintiff any sum for the rental value of land constituting eight parking spaces upon which defendant trespassed in absence of any evidence that plaintiff intended to rent this space to the public and in view of plaintiff's speculative testimony as to the potential rental amounts for the spaces.) The potential rental value of this space, situated between two other occupying law firms, was speculative. Further complicating plaintiffs burden on the trespass claim was the absence of any evidence as to what percentage portion of the premises used by BHH was also used by Nuzzo Roberts, the dollar amount of Nuzzo Roberts' monthly rent, and any evidence as to whether this rent was applied to reduce FBRS' overall monthly rental obligation. FBRS was not prevented from using 60% of its office space from April 1 through Columbus day given FBRS' continued ability during that time to use the conference rooms, the lounge and other areas common to both BHH and Nuzzo Roberts. There also was no evidence that the employees of BHH and Associated damaged any of the portion of the premises they occupied until Columbus Day of 2004.
Accordingly, although the jury could have reasonably and legally found there was a trespass on the part of the defendants, for the reasons stated above, it also could have reasonably concluded that the plaintiffs failed to prove specific, ascertainable damages for the trespass and followed the court's instruction to award only nominal damages if such were the case.
Some damages necessarily follow any wrongful invasion of another's property. This necessary damage is actual as distinguished from the mere nominal damage involved . . . in some casual and inoffensive tort; . . . but it is nominal as distinguished from any specific damage suffered and proved. In a case like this some damage results from the mere invasion of the plaintiff's rights, and its amount, not being determinable by proof, must be comparatively small and in that sense nominal. (Internal quotations marks and citations omitted.) Kelly v. Ivler, 187 Conn. 31, 45-6, 450 A.2d 817 (1982); Buika v. Gioele, Superior Court, judicial district of Litchfield at Litchfield, Docket No. CV 97-73570S (July 2, 1999, DiPentima, J.).
The plaintiffs also are not entitled to attorneys fees as actual damages on their trespass claim because such an award would run afoul of the American rule. See Marsh, Day Calhoun v. Solomon, 204 Conn. 639, 652-53, 529 A.2d 702 (1987) ("The general rule of law known as the `American rule' is that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception. This rule is generally followed throughout the country. Connecticut adheres to the American rule.") Plaintiffs fail to cite a statutory or contractual foundation for an award of attorneys fees under the circumstances of this case.
The only possible legal basis upon which plaintiffs could recover attorneys fees under their trespass claim is if they had claimed and the jury found that defendants' alleged trespass was wanton and malicious. During the trial, however, plaintiffs clearly agreed to withdraw their claim of a wanton and malicious trespass, and agreed that the jury could be instructed to ignore evidence of any attorneys fees incurred by plaintiffs in pursuing an injunction for any purpose. For all of these reasons, plaintiffs' request for an award of attorneys fees incurred in seeking an injunction as additional damages on the trespass count is DENIED.
On the third count of the plaintiffs' complaint, trespass, therefore, the plaintiffs' motions to set aside the verdict or for an additur and the defendants' motions to set aside or direct a verdict are all DENIED.
D. The Verdict in Favor of the Defendants on Plaintiffs' Connecticut Unfair Trade Practices (Count 5)
The plaintiffs seek to have the court direct or set aside the verdict in favor of the defendants on plaintiffs' CUTPA claim because they assert that if the jury found a breach of fiduciary duty and conversion, it necessarily must find an ascertainable loss upon determining there was a CUTPA violation. This is not the case. The jury could have found that conduct other than the defendants' actions constituting breach of fiduciary duty and conversion constituted the CUTPA violation.
A defendant's mere act of conversion, without more, does not automatically give rise to liability under CUTPA. See Leaksealers, Inc. v. Connecticut National Bank, Superior Court, judicial district of Hartford/New Britain at Hartford, Docket No. CV 92-05 17952, (June 20, 2005, Hennesey, J.); Fielding v. Spinnato, Superior Court, judicial district of New Britain at New Britain, Docket No. CV 97-0081056S (December 14, 2001, Shapiro, J.). The jury could have reasonably and legally concluded that the acts of conversion demonstrated were not unfair or deceptive under any of the three prongs of the "cigarette rule." The evidence here does not support the same conclusions reached in Halloran v. Spillane's Service Center, Inc., 41 Conn.Sup. 484, 587 A.2d 176 (1990), where the defendant towing company was not only found to have engaged in conversion but was also found to have engaged in practices that were "ruthless," "violent" and "oppressive," causing "substantial injury" to consumers. The jury in this case could have reasonably concluded, based upon the evidence, that the circumstances surrounding defendants' temporary use of plaintiffs' personal property and conversion of closing files failed to demonstrate an unfair or deceptive practice under the first two prongs of the Cigarette Rule or a "substantial injury" under the third prong because defendants made no effort to mislead plaintiffs regarding their use of these assets, but rather, notified plaintiffs of their intent to use them after April 1, 2004 and even offered to pay some amount of reimbursement. The evidence produced at trial provided the jury with a reasonable basis for concluding that the conversion was not coupled with acts that amounted to an unfair or deceptive trade practice under CUTPA. Although a jury may find that a common-law tort or statutory violation may have been committed, it's additional focus on the circumstances surrounding the tortious act may reasonably lead it to conclude that no CUTPA violation has occurred. See Francoline v. Klatt, 26 Conn.App. 203, 211, 600 A.2d 8 (1991).
"It is well settled that in determining whether [an act or] practice violates CUTPA [our Supreme Court] has adopted the criteria set out in the `cigarette rule' by the federal trade commission for determining when [an act or] 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 — whether, in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers [competitors or other businessmen] . . . All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." (Citations omitted; internal quotations marks omitted.) Normand Josef Enterprises, Inc. v. Connecticut National Bank, 230 Conn. 486, 522, 646 A.2d 1289 (1994).
Similarly, the jury could have reasonably found no ascertainable loss under CUTPA in spite of its award of damages for breach of fiduciary duty. Again, a breach of fiduciary duty "can constitute an unfair trade practice, but does not necessarily do so." Cavolick v. DeSimone, Superior Court, judicial district of New Britain at New Britain, Docket No. X03 CV99 0501611S (July 30, 2003, Aurigemma, J.). See also Ostrowski v. Avery, 243 Conn. 355, 378-79, 703 A.2d 117, 129 (1997). It is impossible to know what conduct alleged by the plaintiffs as a breach of fiduciary duty was relied upon by the jury in awarding damages and it was well within the jury's discretion to conclude that none of these acts by defendants were combined with any misleading or deceptive behavior, or that the degree to which any of the three prongs of the cigarette rule may have been met by the alleged breaches of fiduciary duty was insufficient to support imposition of liability under CUTPA. The evidence showed that the defendants after January 29, 2004, primarily went about their preparations for BHH and Associated out in the open and in most instances, with advance notice to plaintiffs of precisely what they intended to do.
Even though the jury found acts of conversion and breach of fiduciary duty, [t]o justify a finding of unfairness, the claimed injury must satisfy three tests. It must be substantial; it must not be outweighed by any countervailing benefits to consumers or competition that the practice produces; and it must be an injury that consumers themselves could not reasonably have avoided . . . This test is equally applicable when a business person or competitor claims substantive injury. (Emphasis in original; citations omitted.) A-G Foods, Inc. v. Pepperidge Farms, Inc., 216 Conn. 200, 216, 579 A.2d 69 (1990).
In addition, some of the conduct upon which plaintiffs' CUTPA count was premised actually occurred after Baillie was no longer a member of FBRS or Approved and thus after he no longer owed any fiduciary duty to those entities. With respect to those activities, there was a legitimate basis for the jury's conclusion that the defendants had violated CUTPA but failed to prove they had suffered any ascertainable loss. For example, the jury could have found that an April 12 advertisement in the newspaper that arguably referred to BHH as merely a name change by FBRS, the mailing and e-mailing of similarly misleading announcements, the use of the Christmas list of clients and other contacts, and the posting of FBRS brochures on the BHH website after April 1, 2003 were all unfair and/or misleading, but resulted in no ascertainable loss to the plaintiffs. (In fact, the website posting accidentally gave on-line viewers of these brochures a referral back to FBRS.) Ryan admitted in her testimony that she could point to no specific client lost as a result of any of these activities.
Given the fact that there are a variety of reasonable bases capable of being inferred from the evidence that show no inconsistency between the jury's simultaneous award of actual damages for breach of fiduciary duty and conversion and its finding of no ascertainable loss for a violation of CUTPA, the verdict on the fifth count of the plaintiffs' complaint should not be set aside, nor should judgment be directed in favor of the plaintiffs in the amount of $1.00 in nominal damages. The jury properly followed the court's instruction (and accompanying interrogatory) that a finding of no ascertainable loss would result in a verdict for the defendants as plaintiffs would not be entitled to any award for damages without such a loss. The plaintiffs had to establish that they suffered an ascertainable loss of income or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by the Act. "Loss" has been held "synonymous with deprivation, detriment and injury." Hinchcliffe v. American Motors Corp., 184 Conn. 607, 613, 440 A.2d 810, 814 (1981).
The plaintiffs' motions, as directed to the CUTPA count, are all DENTED.
E. The Defendant's Motion for Additur on Count 1 of the Counterclaim, the Violation of General Statutes § 34-159b
On the first count of the counterclaim, the jury awarded defendant Baillie $209,650.00 as a fair value for his interests in FBRS and Approved, both limited liability companies, as of the date he withdrew as a member. See General Statutes §§ 34-159b. As to this value, the plaintiffs offered evidence, through the testimony of an expert and other fact witnesses, suggesting that the amount owed Baillie was far less than what was ultimately awarded by the jury, and Baillie offered similar, contrary evidence of an amount owed to him much higher than what was ultimately awarded. In both instances, the jury could have reasonably and fairly concluded that in some respects, the parties' competing evidence as to value was overblown or underestimated and at times, self-serving. It is the jury that is the ultimate arbiter of fact, including the amount of a damages award. "In arriving at the value of property, no one method is controlling, and there is no rule of law that any particular method of valuation must be followed. It is a matter of opinion based on all the evidence and, at best, is one of approximation . . . The trier may accept or reject the testimony of an expert offered by one party or the other in whole or in part." Richard v. A. Waldman Sons, Inc., 155 Conn. 343, 348, 232 A.2d 307 (1967). Additur is proper only where the jury could not reasonably have concluded as it did as a matter of law. "A mere doubt of the adequacy of the verdict is an insufficient basis for such action . . . A conclusion that the jury exercised merely poor judgment is likewise insufficient." Wichers v. Hatch, supra, 252 Conn. 187. An award of additional damages by additur is appropriate only where the jury was required to award such additional damages because such damages are supported by uncontroverted testimony. Snell v. Beamon, 82 Conn.App. 141, 147 n. 2, 842 A.2d 1167 (2004). Here, because, as noted in Wichers, the jury's award falls "somewhere within the necessarily uncertain limits of just damages" authorized by the conflicting evidence, defendant Baillie's motion for additur on the first count of the counterclaim is DENIED.
F. Set Off
Both parties agree that their Motions for Order of Set Off should be granted and that the court should order a set off in this matter, as the jury's total award to the plaintiffs ($147,170.00) is less than its total award to the defendant Baillie ($209,650.00). Accordingly, the court hereby orders a set off and orders that a net effective judgment shall enter in favor of the defendant, Donald Baillie, in the amount of $62,480.00.
VI CONCLUSION
The court finds that the jury reasonably and legally reached its conclusions based on the evidence submitted at trial, and, therefore, its verdict is not contrary to law or the evidence. For all of the foregoing reasons, all post-trial motions filed by the plaintiffs and the defendants are DENIED with the exception of their mutual Motions For Set Off which are GRANTED. A net effective judgment shall enter in favor of the defendant, Donald Baillie, in the amount of $62,480.00.