Opinion
No. CV 06-5001063
January 15, 2009
MEMORANDUM OF DECISION
The plaintiff, Fred Sinclair III (Sinclair herein) and the defendant, Brian Thomas (Thomas herein) operated several pizzerias under the name(s) "Plum Tomato" or "The Plum Tomato." These businesses were conducted through limited liability companies (LLCs); N.E.\C.T., LLC (Colchester LLC), Plum Tomato, LLC (Corporate LLC), N E Willi, LLC (Willimantic LLC), and N.E.\T.X. Investments, LLC (Groton LLC). These four LLCs are referred to in the Agreement as the "LLCs." Sinclair and Thomas each owned fifty per cent of these LLCs.
In August 2004, Sinclair and Thomas agreed to terminate their joint operation and ownership of the businesses. They executed a comprehensive Agreement to that effect. Agreement, dated August 10, 2004. Exhibit H. The four LLCs were parties to that Agreement. Brick Oven Creations, LLC ("Brick Oven") was also a party to the Agreement. The Agreement called for a closing on August 21, 2004. The closing occurred as scheduled.
Pursuant to the Agreement, Sinclair became the sole member/owner of N E Willi, LLC (Willimantic LLC). Thomas became sole member/owner of the other three LLCs, i.e., N.E.\C.T., LLC (Colchester LLC), Plum Tomato, LLC (Corporate LLC), and N.E.\T.X. Investments, LLC (Groton LLC).
Pursuant to the Agreement, Sinclair was to be paid $146,105.00, "payable as follows: $80,000 at the closing and $1,500 per month for forty-eight months in accordance with a promissory note substantially in the form attached hereto as Exhibit A (the 'Note')." Exhibit H, § 3.3, p. 3.
The Agreement provided for various undertakings of the parties to the Agreement. Those that are in contention are discussed later.
The closing did take place on August 21, 2004.
At the closing, Thomas executed and delivered the "Note" to Sinclair. The note was for $66,105, principal, a term of four years, to be paid by forty-eight monthly payments of $1,500, and interest at the annual rate of 4.25%. Exhibit 1. Other terms will be set forth where relevant.
Thomas made eleven monthly payments through August 2005. Thomas made three additional payments, namely $1,084.69 on January 6, 2006, $867.46 on January 27, 2006, and $962.08 on April 21, 2006. Exhibit 2.
Sinclair brought this action by a complaint dated May 13, 2006. The named defendants in the suit were Thomas, Plum Tomato, LLC and Thomas Investment Co., LLC.
The first count of the complaint was a straightforward suit on the promissory note. The second count of the complaint was withdrawn at the beginning of trial.
The defendant Thomas responded with a pleading styled Answer, Special Defenses, Setoff and Counterclaim dated July 31, 2006.
The case was assigned for trial on October 12, 2007. As of the time of trial, Sinclair had not filed a responsive pleading to Thomas' Answer, Special Defenses, Setoff and Counterclaim dated July 31, 2006. The court ordered Sinclair to file a responsive pleading. Sinclair did so on the morning of August 12, 2007 shortly after the trial began.
The case was tried. The court discusses and decides the claims of the parties.
First Count of the Complaint — Suit on the Promissory Note
The evidence is clear that the first eleven monthly payments were made. The eleventh payment was made on August 21, 2005. Using a standard amortization table, the court has determined that the unpaid principal balance as of August 22, 2005 was $51,931.17.
The next payment of $1,084.69 was made on January 6, 2006.
There were 138 days during the period August 22, 2005 to January 6, 2006. The interest for that period is calculated as follows:
$51,931.17 x .0425 x 138/365 = $834.45
The January 6, 2006 payment of $1,084.69 was more than sufficient to pay the interest of $834.45. The remainder of $1,084.69, $250.24, must be applied to reduce the principal. The unpaid principal balance is reduced by $250.24.
As of January 7, 2006, the unpaid principal balance was $51,680.93. ($51,937.17-250.24)
The next payment was $867.46 on January 21, 2006. The interest for the period January 7 to January 21, 2006, 15 days, is calculated as follows:
$51,680.93 x .0425 x 15/365 = $90.26
The January 21, 2006 payment of $867.46 is applied to accrued interest, $90.26, and the remainder, $777.20, to reduce principal. As of January 22, 2006, the unpaid principal balance was $50,903.73.
The next and final payment of $982.08 was made on April 21, 2006. There were 90 days in the period January 22 to April 21, 2006.
The interest for the period January 22 to April 21, 2006 is calculated as follows:
$50,903.73 x .0425 x 90/365 = $533.44
The $982.08 paid on April 21, 2006 was applied to interest, $533.44, and the remainder, $448.64, to reduce principal. As of April 22, 2006, the unpaid principal balance was $50,455.09.
During the period April 22, 2006 to January 15, 2009, there were 999 days.
The interest for the period April 22, 2006 to January 13, 2009 is calculated as follows:
$50,455.09 x .0425 x 999/365 = $5,869.03
As of January 15, 2009, the principal and interest due on the note, is —
Principal $50,455.09
Interest $5,869.03
$56,324.12
According to the note, Sinclair is entitled to collect "reasonable attorneys fees."
In accordance with the agreement made by the parties, the court has deferred the determination of all issues regarding attorneys fees.
Counterclaims and Setoff Claim
The court next addresses the claims made by Thomas in his counterclaim and his setoff claim.
Claim under § 18.7 for accounting fees incurred for activities prior to closing
Thomas has counterclaimed for one-half of the accounting fees "related to Business activities prior to the closing."
This counterclaim is predicated on § 18.7 of the Agreement. That section reads:
18.7 The parties will cooperate in allocating costs associated with their respective business activities before and after the closing. Accountant fees related to Business activities prior to the closing date will be split evenly between Thomas, Colchester LLC, Groton LLC and Corporate LLC on the one hand and Sinclair and Willimantic LLC on the other, allocated among them in each case as each sees fit; such fees may be invoiced post-closing.
According to that section, Thomas, and his then acquired LLCs, i.e., Colchester LLC, Groton LLC and Corporate LLC, were responsible for one-half the pre-closing accounting fees. The other half were to be paid by "Sinclair and Willimantic LLC . . . allocated among them in each case as each sees fit."
There is no evidence that as between them, Sinclair and Willimantic LLC allocated the entire responsibility for paying their one-half of the pre-closing accounting fees to Willimantic LLC.
Sinclair and Willimantic LLC agreed to pay "Thomas, Colchester LLC, Groton LLC and Corporate LLC on the one hand" one-half of the pre-closing accounting fees.
Under the general common-law rule, where two or more promisors [Sinclair and Willimantic LLC] enter into an agreement with a third party for one performance, there is a presumption that the promisors are contracting jointly in the absence of words of severance in the contract. 2 Williston, Contracts (3d Ed.) § 320; Restatement, 1 Contracts §§ 112, 113. Schubert v. Ivey, 158 Conn. 583, 587-88 (1969).
There are no "words of severance in the contract."
The Supreme Court explained the ramifications of "joint" versus "several" liability:
[T]he effect of a joint obligation, as distinguished from a several obligation, is that each joint promisor is liable for the whole performance. Schubert v. Ivey, supra, 158 Conn. 588.
Sinclair is liable for the whole performance.
Sinclair does not claim that he (Sinclair) or his Willimantic LLC have paid any of the pre-closing accounting fees.
It is uncontroverted that Thomas paid all the pre-closing accounting fees. Since Sinclair's and Willimantic LLC's responsibility for their one-half of the pre-closing accounting fees was joint and several, Sinclair is responsible to Thomas for same.
In his brief, Sinclair argues: "Moreover, a question exists as to whether Plaintiff allocated the entire share of accounting fees to Willimantic LLC as he sees fit, as permitted under the Agreement." Plaintiff's Reply to Defendants' Post-Trial Brief, November 29, 2007, p. 3. By this statement, Sinclair invites the court to engage in raw speculation. No legitimate question exists. There is no evidence Sinclair and Willimantic LLC made any allocation. If Sinclair had allocated the accounting fees to Willimantic LLC, he surely would have testified so. He did not, even though he was a witness at trial. The question Sinclair contrives does not exist.
The amount of this claim is $3,039. It is allowed in full.
The court finds and holds that Sinclair owes Thomas $3,039 for this claim.
Claim for 50% of Willimantic lease deposit
This counterclaim is based on the following provision of the Agreement:
18.10 Thomas shall pay to Sinclair 50% of any security deposit amount returned at the conclusion of the Colchester Lease. Sinclair shall pay to Thomas 50% of any security deposit amount returned at the conclusion of the Willimantic Lease. Agreement, p. Exhibit H.
Thomas relies on the second sentence of § 18.10.
The Colchester lease ended in June or July 2006. The security deposit of $7,500 was paid to Sinclair. He has not paid any of it to Thomas.
Apparently, Sinclair does not contest this claim. His post-trial brief does not mention it.
During his testimony, Sinclair suggested he did not pay Thomas one-half of the Willimantic security deposit because he (Sinclair) is entitled to "50% of any security deposit amount returned at the conclusion of the Colchester lease." But the Colchester lease is for 20 years and does not end until 2019. No fair reading of § 18.10 even hints that the payment to Thomas of one-half of the Willimantic security deposit was to await the end of the Colchester lease. If that were the intent it would, and should, have been stated in § 18.10 or elsewhere in the Agreement.
The court finds that Sinclair owes Thomas $3,750, being one-half the amount of the Colchester lease security deposit.
Expenses of credit card machine lease and various expenses for the Groton store
There are two parts of this portion of the Counterclaim. The first has to do with the rental expenses for a credit card machine used at the Willimantic location. The credit card machine had been at the Willimantic location prior to the closing, i.e., when Sinclair and Thomas were still "partners." The second involves certain expenses for the Groton location. The claim involves pre-closing expenses of the Groton location. Thomas claims he is entitled to be paid for these.
Willimantic Credit Card Machine Lease Expenses
This claim involves a credit card machine which was at the Willimantic location before and after the closing. Pursuant to the Agreement, Sinclair became the sole owner of Willimantic LLC, which operated the Plum Tomato restaurant in Willimantic. The credit card machine was not among the assets listed in the Agreement as belonging to Willimantic location. The evidence is unclear as to what person or entity was the lessee of the machine. After the closing, credit card receipts continued to be sent by the credit card company "to Mr. Thomas' location." The bookkeeper told Sinclair that the "receipts were going to Mr. Thomas' location. These receipts were turned over to the Plaintiff (Sinclair)." Sinclair was advised "he needed to change the name on the lease." Sinclair had the name changed as to who should be paid the receipts; he did not have the name changed regarding who was responsible for paying the credit card machine lease expenses.
Thereafter, Sinclair or one of his entities (LLCs) were paid the credit card receipts. "Mr. Thomas and his entities paid for the monthly rental and eventually bought the lease out to mitigate their damages." Thomas claims: "Pursuant to [16.2] [of the Agreement] and common law, Mr. Sinclair was individually responsible for all obligations arising after the closing." Defendants'/Counter Claimants' Post-Trial Brief, November 15, 2007, p. 4. "Therefore, the Defendants are owed the amount paid to keep the equipment operational and in the exclusive use of the Plaintiff." Op cit., pp. 4-5. The amount of this claim appears to be $1,168.99. Op. cit., p. 4.
It is not clear what person or entity was liable for the expenses related to the credit card machine. It had been used at the Willimantic location prior to the closing. It remained there after the closing and was used in the operation of the business of that location. Pursuant to the Agreement, Sinclair became the sole owner of Willimantic LLC. Neither Sinclair or Willimantic LLC paid the rent for the credit card machine or other expenses of the credit card machine. Thomas contends:
Pursuant to [§ ]16.2 [of the Agreement] and common law, Mr. Sinclair was individually responsible for all obligations arising after the closing. Here, he had exclusive control of the credit card machine, solely for his benefit. Mr. Thomas and his entities paid for the monthly rental and eventually bought the lease out to mitigate the their damages. Despite due demand, Mr. Sinclair failed pay [Sic.] the $1,168.99 incurred to maintain the credit card machine under Mr. Thomas and his entities name, that Mr. Sinclair maintained exclusive control over and, despite not being the owner changed only the deposit information so that he received all of receipts without paying for the equipment. Therefore, the Defendants are owed the amount paid to keep the equipment operational and in the exclusive use of the Plaintiff.
Defendants'/Counter Claimants' Post-Trial Brief, November 15, 2007, pp. 4-5.
The phrase, "Mr. Thomas and his entities" reveals a problem. Thomas claims "Mr. Thomas and his entities" paid the rent and other expenses for the credit card machine. "His entities" are not identified. Presumably, "his (Thomas') entities" means the LLCs Thomas owned exclusively after the closing. Besides Mr. Thomas, only two of his entities (LLCs) are parties to this suit, namely, Plum Tomato, LLC, and Thomas Investment Co. LLC.
This credit card machine claim is a part of the first count of the counterclaim. Thomas is the sole counter claimant in that Count.
The evidence does not show that Thomas paid all, or any, of the claimed post-closing expenses for the credit card machine. Thomas himself is vague on this. See, e.g.,"Mr. Thomas and his entities paid for the monthly rental and eventually bought the lease out to mitigate their damages."
Mr. Thomas' entities are limited liability companies. Since the closing, Thomas is the sole member of each of them. Our law regarding a member of limited liability company and the limited liability company is clear.
A limited liability company is a distinct legal entity whose existence is separate from its members. See Litchfield Asset Management Corp. v. Howell, 70 Conn.App. 133, 147, 799 A.2d 298, cert. denied, 261 Conn. 911, 806 A.2d 49 (2002). A limited liability company has the power to sue or be sued in its own name; see General Statutes §§ 34-124(b) and 34-186; or may be a party to an action through a suit brought in its name by a member. See General Statutes § 34-187. A member may not sue in an individual capacity to recover for an injury the basis of which is a wrong to the limited liability company. See Litchfield Asset Management Corp. v. Howell, supra, 70 Conn.App. 147; cf. Guarnieri v. Guarnieri, 104 Conn.App. 810, 819, 936 A.2d 254 (2007) (corporate shareholder may sue only on behalf of corporation through derivative suit). Wasko v. Farley, 108 Conn.App. 156, 170, cert denied, 289 Conn. 922 (2008).
Thomas is the sole counter claimant in the first count. Even if the evidence established that one or more of Thomas' LLCs paid the rent and expenses for the credit card machine, Thomas cannot recover the amount paid by the LLCs in this suit wherein he is the sole counter claimant (party). Wasko v. Farley, 108 Conn.App. 156, 170 (June 3, 2008).
The claim for the expenses of the credit card machine is denied.
Post-Closing Expenses of Groton Location
The second part of this claim is "for charges pertaining to the Groton operation pursuant to paragraph 16.2 [of the agreement]." Defendants'/Counter Claimants' Post-Trial Brief, November 15, 2007, pp. 3-4. It is for a part of the pre-closing expenses for the Groton location. This claim is against Sinclair alone. It is predicated on § 16.2 of the Agreement. Section 16.2 provides:
16. INDEMNIFICATION * * *
16.2 Sinclair, Willimantic LLC and Brick Oven each agrees to defend, indemnify and hold Thomas, Colchester LLC, Groton LLC, Corporate LLC and TIC LLC harmless from and against any and all liabilities of every nature and description (including reasonable attorneys fees), arising out of or relating to (i) any and all of Sinclair's, Willimantic LLC's and Brick Oven's activities and those of any successor after the Closing; (ii) any liabilities or obligations of Sinclair, Willimantic LLC and Brick Oven and those of any successor arising, paid or incurred after the closing; (iii) 50% of any and all non-contractual liabilities of every nature and description arising out of or relating to any and all of each of the LLCs' activities prior to the closing; (iv) the Willimantic lease and the performance of the duties and obligations of the lessee thereunder; and (v) any and all damages (as defined below) which may be imposed upon or incurred by Sinclair, Willimantic LLC or Brick Oven, their employees, officers, members, agents, successors and assigns, or any other party or parties (including, but not limited to, a governmental entity), arising out of or in connection with the breach of Sinclair of any representation or warranty or covenant set forth in this agreement. "Damages" means all liabilities, obligations, responsibilities, losses, damages, deficiencies, punitive damages, consequential damages, treble damages, costs and expenses (including, without limitation, all reasonable fees, disbursements and expenses of counsel), fines, penalties, restitution and monetary sanctions, interest, direct or indirect, known or unknown, absolute or contingent, past, present or future, resulting from any claim or demand, by any person, whether based in contract, tort, implied or express warranty, strict liability, joint and several liability, criminal or civil statute, as a result of Sinclair's, Willimantic LLC's or Brick Oven's (after the closing) ownership, licensing or operation of Sinclair's, Willimantic LLC's or Brick Oven's business or any properties owned, leased or operated by either of them. Excluded from this indemnification shall be those liabilities and damages arising from the ultra vires conduct of Thomas.
Agreement, p. 13-14. Exhibit H.
As its caption states, this is an indemnification provision.
Thomas' reliance on this indemnification provision to impose liability on Sinclair for these claims is misplaced. Our law is clear.
The logic and rationale underlying our indemnity case law are based on the premise that an action for indemnification is one in which one party seeks reimbursement from another party for losses incurred in connection with the first party's liability to a third party. Amoco Oil Company v. Liberty Auto Electric Co., 262 Conn. 142, 148 (2002).
Specifically, the concept of indemnity usually involves an indemnitor, A, and an indemnitee, B, who enter into a contract whereby A agrees to indemnify B for any money B becomes legally obligated to pay to a third party. Id., 149.
In "indemnity speak," Sinclair is a "first party" as is Thomas. Here, Thomas is not claiming that he (Thomas) has become legally obligated to pay a third party because of a failure of Sinclair. Thomas' counterclaim here is a first-party claim against Sinclair. Section 16.2 does not apply. See also, DeCarlo Doll, Inc. v. Chester, Superior Court, judicial district of Middlesex, Docket No. CV 07 5003058 (September 17, 2008, Holzberg, J.) (46 Conn. L. Rptr. 315); Connecticut Resource Recovery Authority v. Murtha Cullina, LLP, Superior Court, judicial district of Waterbury, Docket No. X02-CV02-174569 (May 23, 2006, Eveleigh, J.) (41 Conn. L. Rptr. 349); Connecticut Resource Recovery Authority v. Murtha Cullina, LLP, Superior Court, judicial district of Waterbury, Docket No. X02-CV02-0174569 (October 31, 2005, Eveleigh, J.) (40 Conn. L. Rptr. 239); Pinkert v. John J. Olivieri, P.A., No. 99-380-SLR, 2001 U.S. Dist. LEXIS 8133, at 20-21 (D.Del. May 24, 2001).
Thomas apparently does not rely on any other provision of the Agreement for this part of his counterclaim. Section 16.1 of the Agreement provides:
"16.1 Neither Sinclair nor Thomas assumes or agrees to assume and shall not acquire or take over any liability or obligation of any time [Sic.] or nature of the other party, direct, contingent or otherwise, except as otherwise expressly provided herein."
This section negates any imposition of liability via the Agreement.
Thomas is not entitled to recover from Sinclair for the various pre-closing expenses for the Groton location.
The claim for certain pre-closing expenses for the Groton location are denied.
Expenses related to sublease of equipment subleased by Thomas [Thomas Investment Company LLC, TIC LLC] to Brick Oven Creations LLC
TIC LLC, a Thomas entity, as lessee, had leased certain equipment used at the Willimantic store from Blue Chip Capital Corp. and other equipment from Financial Pacific Leasing, LLC. Equipment Lease Agreement. Exhibit J. Pursuant to the Agreement, Brick Oven Creations, LLC (Brick Oven), a Sinclair entity, was to sublease that equipment from TIC LLC. Agreement, § 7.1. Exhibit H, p. 5. TIC LLC, as lessor, and Brick Oven, as lessee, executed an Equipment Sublease Agreement. Exhibit I.
The sublease required Brick Oven to pay rental to TIC LLC. Equipment Sublease Agreement, ¶ 2. It also required Brick Oven to pay "all taxes and/or assessments, including sales and/or property taxes, levied on the equipment." Equipment Sublease Agreement, ¶ 3. Exhibit I. According to Thomas, "[n]either the rental payments nor the property taxes were paid by Brick Oven Creations." Defendants'/Counter Claimants' Post-Trial Brief, November 15, 2007, p. 5.
The claim just quoted from Thomas' brief appears to be partially inaccurate. Thomas himself testified that the $10 monthly rental was paid. Transcript of Proceedings, October 19, 2007 a.m., p. 15.
Thomas claims Sinclair is indebted to him (Thomas) for the amount of the unpaid rent and taxes. Thomas bases Sinclair's liability to him (Thomas) on § 7.1 of the Agreement. That provision says:
"Willimantic LLC, Brick Oven and Sinclair agree to defend, indemnify, and hold TIC LLC and Thomas harmless from any and all liabilities of every nature and description (including reasonable attorneys fees) arising out of or relating to the use of the Equipment and the performance of the duties and obligations of the Lessee under the Sublease." Agreement, August 10, 2004, § 7.1. Exhibit H, p. 4.
This is an indemnity provision. According to the quoted sentence, Thomas and/or TIC LLC were to be indemnified by Willimantic LLC, Brick Oven and/or Sinclair for the payment of the property taxes if Brick Oven, Lessee, did not.
Thomas Investment Companies, LLC (TIC LLC) is the lessee on the main Equipment Lease. Thomas, the individual, is not a party to the main Equipment Lease. Exhibit J.
The Equipment Sublease Agreement is between Thomas Investment Companies, LLC (Lessor) (TIC LLC) and Brick Oven Creations, (Lessee) (Brick Oven). Exhibit J. Thomas is not a party to the Equipment Sublease Agreement.
It does not appear that Thomas Investment Companies, LLC (TIC LLC) is a party or signatory to the Agreement. Exhibit H. However, TIC LLC is mentioned in the Agreement and appears to have some obligations thereunder. See Agreement, ¶¶ 4 and 7. Exhibit H, pp. 4 and 5.
The sole parties to the Equipment Sublease Agreement were TIC LLC, as lessor, and Brick Oven, as lessee. Nothing in either the main Equipment Lease or the Equipment Sublease Agreement establishes any obligation of Brick Oven to Thomas regarding the rental payments for the subleased equipment or to pay the property taxes on the subleased equipment.
Neither Brick Oven or Sinclair have any obligation which inures to Thomas' benefit, regarding the rental payments called for in the Equipment Sublease Agreement. Thomas is not a party to the main Equipment Lease. Therefore, neither Brick Oven or Sinclair have any indemnification obligation to Thomas for Brick Oven's claimed breaches of the Equipment Sublease Agreement.
It may be that Brick Oven is liable to TIC LLC for breaches of Equipment Sublease Agreement. But Brick Oven is not a party to this suit. And, this claim is a part of the first count of the counterclaim. Thomas is the sole counterclaimant in that count. TIC LLC is not a counterclaimant in the first count of the counterclaim. And, Thomas cannot recover for the damages suffered by TIC LLC. Wasko v. Farley, supra, 108 Conn.App. 170.
Thomas also claims that Sinclair's conduct amounts to a conversion of the equipment. Again, there is an obliteration of the distinction between Sinclair and "his" Brick Oven Creations, LLC (Brick Oven). And likewise, there is a failure to distinguish between Thomas and "his" LLC, TIC LLC. Thomas and TIC LLC are not one and the same. Thomas, as distinguished from TIC LLC, has no rights under the Equipment Sublease Agreement.
Thomas' claims for unpaid rental payments, for indemnification for unpaid property taxes, and for conversion are denied.
SETOFF
The fifth count of Thomas' counterclaim is actually a claim for a Setoff.
In March 2001, Thomas and Sinclair purchased a boat together. The purchase price was in the order of $65,000. Exhibit F. It was agreed all costs and expenses would be shared equally.
Sinclair "suggests that the ownership of the boat was the Plum Tomato, and not the individuals." Plaintiff's Reply to Defendants' Post-trial Brief, November 29, 2007, p. 5. The court rejects this suggestion. The court finds that Sinclair and Thomas were the purchasers and at all times the owners of the boat.
Sinclair and Thomas signed a Retail Installment Contract with the Liberty Bank to finance the bulk of the purchase price. Exhibit F. That contract was for a term of 15 years. The 180 monthly payments were $590.49.
Each month the monthly payment was paid with a check from one of the their jointly owned LLCs. Their accountant had each monthly payment charged to either Sinclair or Thomas. The monthly payments to Liberty Bank were charged for alternate months to either Sinclair or Thomas as income.
After the closing, Sinclair and Thomas made the monthly payments for alternate months.
Sinclair did not make the September 2005 payment to the Liberty Bank. When Thomas asked him to make his payments for alternate months, he (Sinclair) refused to do so telling Thomas to let the bank take the boat. Sinclair refused to make any more payments for the bank loan, maintenance and storage of the boat.
The Fifth Count of the Counterclaim reads:
1. The Plaintiff and the defendant Brian Thomas purchased a boat jointly and severally.
2. The Plaintiff has refused to pay his obligation or the maintenance for the boat and owes Brian Thomas more than $27,000.
3. As a result of his refusal to pay, the Plaintiff has breached his agreement and Brian Thomas has been damaged.
Answer, Special Defenses, Setoff and Counterclaim, July 31, 2006, pp. 5-6.
The Fifth Count of the Counterclaim is actually a claim for Setoff.
Sinclair has filed a Special Defense to the Setoff claim.
The fifth count is precluded by the Statute [Sic.] of Frauds, Connecticut General Statutes § 52-550(a), subsections (2), (5), and (6).
Answer, Special Defenses and Setoff to Counterclaim, October 12, 2007, p. 2.
Although, Sinclair has raised the statute of frauds as a defense to the setoff claim regarding the boat, he (Sinclair) has not briefed the issues raised with substantive discussion and/or citations of authorities. Just one sixteen-line paragraph is dedicated to the statute of frauds issues. The statute of frauds is a very complex topic. Especially in the context of this case, more extended treatment is vital to aid the court. Issues not adequately briefed need not be considered by the court. When issues are not briefed with substantive discussion and/or citation of authorities, they are deemed abandoned. Merchant v. State Ethics Commission, 53 Conn.App. 808, 818 (1999). This principle applies in the trial court. Connecticut Light Power Co. v. Department of Public Utility Control, 266 Conn. 108, 120 (2003).
Although the court holds that Sinclair has abandoned his statute of frauds claims, the court points out, without extended discussion, that they appear to be untenable.
Connecticut's statute of frauds provides in part:
No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged:
* * *
2) against any person upon any special promise to answer for the debt, default or miscarriage of another:
* * *
5) upon any agreement that is not to be performed within one year from the making thereof:
* * *
6) upon any agreement for a loan in an amount which exceeds fifty thousand dollars.
C.G.S. § 52-550(a).
With respect to the claim under subsection two involving the debt "of another," Sinclair has suggested Plum Tomato was the "other." The court has found that there was not "another;" Sinclair and Thomas were the purchasers and at all times the owners of the boat. Regarding subsection five, an agreement not to be performed within one year, our law is that to be within this subsection, the contract has to be such that "its terms are so drawn that it cannot by any possibility be performed fully within one year." Burkle v. Superflow Mfg. Co., Inc., 137 Conn. 488, 492 (1951). The agreement between Sinclair and Thomas regarding the joint ownership of the boat could be performed in a year or less. Finally, as to subsection six, the agreement between Sinclair and Thomas to own a boat together and to share the expenses equally is not an "agreement for a loan in an amount which exceeds fifty thousand dollars."
When Sinclair did not make the September 2005 bank payment and said he would not make any more payments for the boat, Thomas paid the September 2005 payment. Thomas paid all the monthly payments of $590.49 from September 2005 through October 2007. (26 x $590.49 = $15,352.74.) Thirteen of these payments rightfully should have been paid by Sinclair. Thomas may recover here $7,676.37 from Sinclair.
The court will hear the parties on the issues which have been deferred. If as of that time, evidence is offered that shows Thomas has continued to make monthly payments to Liberty Bank which Sinclair should have paid, the court will consider augmenting the setoff by the amount of those payments.
In addition to the Liberty Bank obligation, there are charges for storage of the boat, repair and maintenance charges and the like. Sinclair has refused to make any payments for the boat. The boat is stored at Boats, Inc. in Niantic. Boats, Inc. was owed $6,210.47 for storage, repairs and maintenance as of the time of trial. Sinclair and Thomas each should pay $3,105.23 of this. Neither Thomas or Sinclair have paid any of the amount they owe Boats, Inc. Thomas is not claiming Sinclair should pay him (Thomas) any part of the amount due Boats, Inc.; it is not part of the setoff claim.
Thomas also claims Sinclair's statements and actions regarding his obligations pertaining to the boat amount to an anticipatory breach of their agreement. The court finds there has been an anticipatory breach by Sinclair. Thomas claims he should be able to recover from Sinclair one-half of the amount now due Liberty Bank. There is no evidence that Thomas has paid Liberty Bank all that is now owed. Unless and until Thomas has paid all that is owed Liberty Bank, he cannot recover from Sinclair the one-half Sinclair should have paid.
SUMMARY
1. The court has held that Sinclair recover $56,324.12 from Thomas on the complaint. The court will hear the parties on Sinclair's claim for attorneys fees.
2. The court has held that Thomas recover $6,789 from Sinclair on the counterclaims.
3. The court has held that Thomas recover $7,676 from Sinclair on the setoff claim.
FURTHER PROCEEDINGS
An on the record hearing will be held on Tuesday, January 20, 2009 to address the issues including Sinclair's claim for attorneys fees, the Third and Fourth Counts of Thomas's Counterclaim, whether Attorney Morelli-Wolfe can continue to represent Sinclair if called as a witness, and, the scheduling of the trial on the deferred matters. Counsel should contact case flow for time for hearing on January 20, 2009.