Opinion
FSTCV146023480
01-06-2016
UJA Federation of Greenwich, Inc. dba UJA Greenwich v. Posh N.Y. Events LLC et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
A. William Mottolese, Judge Trial Referee.
The plaintiff seeks recovery from the defendants of all sums paid for catering a planned fundraising event which the defendants never performed. The allegations include conversion, unjust enrichment, breach of implied covenant of good faith and fair dealing, fraud and violation of G.S. § 42-110g(c), CUTPA. In addition to a refund with interest, the plaintiff seeks punitive damages under CUTPA and attorneys fees. The defendants are POSH Events, LLC (" Posh"), Samuel Friedman and Prime Experience, Inc. (" Prime"). On June 6, 2015 Prime was defaulted for failure to appear and so as to it, the trial was a hearing in damages. The court will deal first with the defaulted defendant, Prime.
PRIME
The defaulted defendant has not pled a notice of defense pursuant to P.B. § 17-34, 17-35. Thus the procedure in such a case is that which is delineated in Whitaker v. Taylor, 99 Conn.App. 719, 725-27, 916 A.2d 834 (2007).
" A default admits the material facts that constitute a cause of action . . . and entry of default, when appropriately made, conclusively determines the liability of a defendant . . . If the allegations of the plaintiff's complaint are sufficient on their face to make out a valid claim for the relief requested, the plaintiff, on the entry of a default against the defendant, need not offer evidence to support those allegations . . . Therefore, the only issue before the court following a default is the determination of damages."
Thus, the court must examine whether the allegations set forth in each count of the Plaintiff's complaint are sufficient on their face to make out a valid claim for the relief requested Id. at 725-27.
In making this assessment the court is able to go directly to the " Fifth Cause of Action--Violation of CUTPA" because that count, if sufficiently pled, will afford the plaintiff recovery of compensatory, punitive damages and attorneys fees.
A plaintiff is entitled to a single measure of damages. MD Drilling & Blasting, Inc. v. MLS Construction, LLC, 96 Conn.App. 798, 804, 902 A.2d 686 (2006).
To establish liability for a conduct that constitutes an unfair trade practice under CUTPA, a plaintiff must establish that the defendant's conduct meets at least one of the three following criteria set forth by the " Cigarette Rule": (1) it offends public policy as established by statutes, common law or other established concept of unfairness; or (2) it is immoral, unethical, oppressive or unscrupulous; or (3) it causes substantial injury to consumers, competitors or other business persons. See Edmands v. CUNO, Inc., 277 Conn. 425, 450 n.16, 892 A.2d 938 (2006).
The court concludes that the allegations of the " Fifth Cause of Action" satisfy the requisite elements of a CUTPA violation.
CUTPA permits recovery of punitive damages and attorneys fees as well as compensatory damages. Mead v. Burns, 199 Conn. 651, 666 n.8, 509 A.2d 11 (1986). Courts generally award punitive damages in amounts equal to actual damages or multiples of the actual damages. Perkins v. Colonial Cemeteries, Inc., 53 Conn.App. 646, 649, 734 A.2d 1010 (1999). The record reveals that the planned affair would have cost the plaintiff $16,892 (Ex. 14) had the defendants performed but eventually cost $21,050 (Ex. 20). Although this defendant's subsequent conduct may fairly be characterized as willful the court finds no basis for the award of multiple damages. Thus, the sum of $4,158 is awarded as compensatory/punitive damages against this defendant ($21,050 - $16,892). The court finds no support in the evidence for " lost labor and opportunity costs" caused by unproductive time and unmade donations.
Under the CUTPA claim the plaintiff is entitled to recover reasonable attorneys fees. Under the rubric of " reasonable" the court may take into consideration a multiplicity of factors including the nature and complexity of the cause, its general knowledge of the breadth of legal services required in similar cases and the hourly rate charged by attorneys in cases of the same general class. Gill v. Petrazzuoli Bros, Inc., 10 Conn.App. 22, 30-35, 521 A.2d 212 (1987). While under § 42-110g(d) the amount of the recovery may not be considered in determining reasonableness, the court may give consideration to the simplicity of the case. The present case is basically a collection case and nothing more. The issues are uncomplicated. Accordingly, counsel is awarded trial time (7 hours) at the rate of $500 per hour and non-trial time at the rate of $350 per hour. Associate counsel's rate of $225 per hour cannot be approved as Danielle Sullivan is designated as " admission pending." Her time may be compensated at the rate approved for a Connecticut paralegal of $100 per hour. Therefore, principal counsel is awarded $28,910 for trial time and $3,500 for non-trial time for a total of $32,410 in attorneys fees.
FRIEDMAN and POSH
The liability of the remaining defendants, Friedman and Posh must be adjudicated in the conventional fashion beginning with a threshold determination of the nature of the relationship between Posh, Friedman and Prime. At the outset it is noted that the plaintiff makes no attempt in its complaint to characterize the relationship as a partnership, joint venture or agency. On the other hand, through their special defenses, these defendants assert that: (1.) Friedman is not individually liable and (2.) imply that neither defendant acted as a principal in their relationship with the plaintiff.
First, it is clear from the evidence that while Friedman called himself a master party planner or events planner, he was the owner of a substantial percentage of Posh, LLC and a director of the LLC. Posh and Prime had no relationship before this transaction. The plaintiff made initial contact with Prime in order to engage Prime to produce the event in question. Prime then engaged Posh to plan the event. After the initial meeting with Prime and Posh all of the plaintiff's dealings were through Posh and not Prime. When it came time to make payments on account, the checks were made out to Prime ($5,000 on 12/9/13; $4,121.15 on 1/27/14). Friedman testified that he was a consultant to Prime but considered himself a representative of Prime. In his words, he was " the creative director and Prime was the producer." The plaintiff's primary witness, Pam Ehrenkranz believed that Friedman was Prime's agent.
" Agency is defined as '" the fiduciary relationship which results from manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act . . ." Restatement (Second), 1 Agency § 1.' McLaughlin v. Chicken Delight, Inc., 164 Conn. 317, 322, 321, 321 A.2d 456 (1973). Thus, the three elements required to show the existence of an agency relationship include: (1) a manifestation by the principal that the agent will act for him; (2) acceptance by the agent of the undertaking; and (3) an understanding between the parties that the principal will be in control of the undertaking. Restatement (Second), 1 Agency § 1, comment b (1958). Botticello v. Stefanovicz, 177 Conn. 22, 25, 411 A.2d 16 (1979); Beckenstein v. Potter & Carrier, Inc., 191 Conn. 120, 132-33, 464 A.2d 6 (1983)." (Alternate citations omitted.) Gordon v. Bridgeport Housing Authority, 208 Conn. 161, 184, 544 A.2d 1185 (1988).
The facts support an agency relationship between Posh and Prime. From the beginning, the plaintiff's representative, Pam Ehrenkranz understood Friedman (acting for Posh) to be Prime's agent. This is reinforced by the clear evidence that only Prime was obligated to supply the catering services, food and materials which were designed and specified by Posh. Moreover, although both payment checks were delivered to Posh, Posh in turn delivered them to Prime because they were made payable to Prime. The fact that Prime and not Posh was in control is reinforced by the fact that Friedman subsequently asked Prime to refund the money without success.
Having concluded that the Posh-Prime relationship was that of principal and agent, it remains to be determined what was the legal relationship of the plaintiff to Posh and Prime. Prior to February 27, 2014 the parties had orally agreed to all of the specifications for the party as well as the price. Shortly before that date the plaintiff informed the defendants that the location of the party would be changed from a home to a country club setting. The defendants determined that such a change in location would necessitate an increase in price by $1,750. On that date the plaintiff notified Posh that the additional $1,750 could not be approved. Accordingly, the agreement was terminated, the plaintiff hired someone else to cater the party and thereafter requested a refund. Prime has ignored all demands for a refund.
Notably, the plaintiff has not sued for breach of contract but has sought recovery on the basis of breach of a covenant of good faith and fair dealing and alternatively, unjust enrichment.
Breach of Implied Covenant of Good Faith and Fair Dealing
" To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith . . . Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive . . . Bad faith means more than mere negligence; it involves a dishonest purpose; De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424, 432-33, 849 A.2d 382 (2004)"; (Citations omitted; emphasis added; internal quotation marks omitted.) TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn.App. 340, 348, 70 A.3d 156 (2013).
The plaintiff does not sufficiently allege a claim for breach of the covenant of good faith and fair dealing because there is no allegation that either Friedman or Posh engaged in bad faith. Conduct characterized as " conscious, deliberate and unfairly frustrated" does not rise to this level.
Unjust Enrichment
The plaintiff next alleges that Friedman and Posh have been unjustly enriched.
" A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another . . . Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy . . . Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs' detriment . . ." Jo-Ann Stores, Inc. v. Property Operating Co., LLC, 91 Conn.App. 179, 880 A.2d 945 (2005). The evidence is uncontested that neither Friedman nor Posh received any portion of the sum which the plaintiff demands, that sum being held under the exclusive control of Prime. Unjust enrichment does not lie.
Conversion
'[C]onversion is an unauthorized assumption and exercise of the right of ownership over goods belonging to another, to the exclusion of the owner's rights.' Discover Leasing, Inc. v. Murphy, supra, 309, citing Devitt v. Manulik, 176 Conn. 657, 660, 410 A.2d 465 (1979). In addition, conversion requires that the owner be harmed as a result of the unauthorized act. Devitt v. Manulik, supra, 660. Conversion may arise subsequent to an initial rightful possession. Maroun v. Tarro, 35 Conn.App. 391, 396, 646 A.2d 251, cert. denied, 231 Conn. 926, 648 A.2d 164 (1994). (Alternate citations omitted.) Suarez-Negrete v. Trotta, 47 Conn.App. 517, 521, 705 A.2d 215 (1998).
While the evidence shows that the two checks in question were physically delivered to Posh, Posh turned them over to Prime who has wrongfully withheld them notwithstanding Posh's request that the sum which they represent be refunded. There was no evidence that either Friedman or Posh exercised any ownership or control over the funds but they were deposited to and have been retained by Prime from the beginning. The plaintiff has failed to prove conversion against these two defendants.
Fraud
Fraud, or intentional misrepresentation, consists of the following elements: " (1) that a false representation was made as a statement of fact; (2) that it was untrue and known to be untrue by the party making it; (3) that it was made to induce the other party to act on it; and (4) that the latter did so act on it to his injury." Updike, Kelly & Spellacy P.C. v. Beckett, 269 Conn. 613, 643, 850 A.2d 145 (2004).
The plaintiff argues that Posh's demand for an additional $1,750 when the party location was changed constituted " extortion." Extortion is defined as " getting money from someone by violence, threats, or misuse of authority." Webster's New World Dictionary, 2d. Coll. Ed. at 496. There was no evidence that even came close to proving that these defendants committed extortion.
Secondly, the plaintiff argues that these defendants promised to refund the money and their failure to do so constitutes fraud. While there was testimony that Prime promised to refund the money there was no evidence that either Friedman or Posh lied or misrepresented that they would refund the money because neither had control of the funds and the court credits Friedman's testimony that he tried to prevail upon Prime to make the refund but they never did.
CUTPA
Very simply, for the same reasons the court has found no evidence to support the allegations of conversion, fraud or breach of the implied covenant of good faith and fair dealing against these defendants, the court finds that neither Friedman nor Posh engaged in deceptive practices. There is nothing unscrupulous, immoral or unfair about demanding additional compensation for catering an event at a changed location when that change necessitates the incurring of additional expense by the producer. There was ample evidence that the additional charge was incurred primarily because the new location necessitated that a rabbi inspect and " kosherize" the kitchen of the new facility and that the chef and his staff prepare the kitchen for that purpose. Unfortunately, neither Friedman nor Posh explained this to the plaintiff until the trial.
In conclusion, the court finds Prime liable pursuant to the default and that the amount of damages were uncontested. The court further finds that Friedman acted on behalf of Posh in dealing with the plaintiff and not as an individual and that in doing so, Posh acted as Prime's agent. Accordingly, judgment may enter for the plaintiff and against Prime for the following: $9,142.15 refund; $4,150 compensatory/punitive damages; $32,410 attorneys fees and paralegal fees of $4,610.
Finally, in its prayers for relief the plaintiff seeks prejudgment interest but does not address the issue in its brief. Because the court has found that the base sum was wrongfully withheld thereby causing financial harm to the plaintiff, prejudgment interest is awarded on all but the attorney's and paralegal fees at the statutory rate of 10% from May 20, 2014, the date of the formal demand for refund. G.S. § 37-3a.
Posh has interposed a counterclaim for " significant cost and expense in preparing for the event." Posh offered no evidence at trial to support this allegation. Judgment may enter for the plaintiff on the counterclaim.