Bongiorno v. J & G Realty, LLC

Full title: George BONGIORNO et al. v. J & G REALTY, LLC et al.

Court: Superior Court of Connecticut

Date published: Mar 12, 2019

No. FSTCV126014465S (Conn. Super. Ct. Mar. 12, 2019)

Opinion

FSTCV126014465S

03-12-2019

George BONGIORNO et al. v. J & G REALTY, LLC et al.

Hon. Kevin Tierney, J.T.R.

UNPUBLISHED OPINION

OPINION

Hon. Kevin Tierney, J.T.R.

"My father set this up. Michael Weinshel is the accountant. And we— to be honest with you— we’re kind of in a damned if you do, damned if you don’t, position. We’re not changing anything that my father set up until after this whole thing is settled." Direct testimony of the individual defendant, Frank R. Bongiorno, on the twelfth day of this eighteen-day court trial.

This litigation commenced by the filing of a June 15, 2012 complaint (# 100.30). This litigation involves three generations of the Bongiorno family as well as multiple Bongiorno entities that own or owned commercial real property, businesses, and related investments principally located on the west side of Stamford, Connecticut. Those assets, acquired by generations of efforts by the Bongiorno family, were at issue in this court trial.

The operative complaint is the July 5, 2018 Second Amended Complaint (# 140.00). The two remaining plaintiffs in this litigation are Marie Bongiorno and her daughter, Bridjay Capone. The operative complaint is one hundred eight pages and contains seventy-two separate counts. The counts are organized in the following categories: (1) oppression of a minority member/shareholder interest, (2) breach of fiduciary duty, (3) fraud, (4) statutory theft pursuant to General Statutes § 52-564, (5) violation of General Statutes § 42-110(b)(a) et seq. (CUTPA), (6) unjust enrichment, (7) dissolution, winding up and distribution of all assets by the plaintiff, Bridjay Capone, as against the defendant, J & G Realty, LLC, (8) dissolution, winding up and distribution of all assets by the plaintiff, Bridjay Capone, as against the defendant, 24 Ardmore Street, LLC and (9) dissolution, winding up and distribution of all assets by the plaintiff, Bridjay Capone, as against the defendant, 305 West Avenue, LLC. The pleadings addressed to the original complaint and the amended complaints themselves occupied the following numbers: # 100.30, # 105.00, # 166.00, # 183.00, # 212.00, # 220.00, # 221.00, # 222.00, # 228.00, # 230.00, # 232.00, # 234.00, # 236.00, # 238.00, # 248.00, # 271.00, # 300.00, # 315.00, # 330.00, # 334.00, # 336.00-# 345.00, # 348.00-# 355.00, # 374.00, # 416.00, # 417.00, # 428.00, # 430.00, and # 440.00.

To those seventy-two counts all of the defendants, appearing by the same attorney, have filed a July 25, 2018 Answer and Special Defenses (# 445.00). The thirteen Special Defenses are res judicata, collateral estoppel, laches, statute of limitations General Statutes § 52-577, statute of limitations General Statutes § 52-584, prior dismissal of all claims of Marie Bongiorno by court order, statute of limitations General Statutes § 42-110b(f), statute of frauds General Statutes § 52-550, forgiveness of loans, statute of limitations General Statues § 52-581, res judicata by a separate court order, collateral estoppel by a separate court order, and dismissal for lack of standing by separate court order. The pleadings were closed (# 446.00). No party claimed this matter for a jury trial. The first day of the court trial was May 31, 2018 and the evidence concluded on July 24, 2018, the eighteenth day of trial. The parties filed post-trial memoranda in accordance with the court established briefing schedule.

George Bongiorno was born on January 18, 1930 and remained a lifelong resident of Stamford, Connecticut. He was self-employed in the food sales business. Along with his brother, John Bongiorno, they opened the highly successful west side neighborhood supermarket called Bongiorno’s Supermarket in 1957. They later created and built a retail gasoline sales business, a car wash and Bongiorno’s Maxi Discount Liquor near the supermarket. Together the two brothers made many successful real estate purchases in Stamford, Connecticut. George purchased real estate elsewhere in the United States. George Bongiorno was survived by his wife, a co-plaintiff, Marie Palmer Bongiorno, one of the two plaintiffs in this litigation and four children; daughters, co-plaintiff, Bridjay Capone, and Michele B. Nizzardo, and sons, John Bongiorno, Jr. aka John Bongiorno and individual defendant, Frank R. Bongiorno. On his death on March 13, 2016, he was survived by his wife, the above four children, his nine grandchildren, and eight great grandchildren.

Although he was originally a named plaintiff in this litigation, with the assistance of his attorney, Wayne R. Keeney, Attorney Keeney withdrew George Bongiorno from this litigation immediately after he filed his appearance on May 6, 2013 (# 149.00). In addition to the withdrawal of the former plaintiff, George Bongiorno, from this litigation, a number of the entities have been removed as party defendants, including the Bongiorno Family Limited Liability Company, Bongiorno Children’s Joint Venture # 3, JGBBNS Realty, LLC, Three Hundred Seventeen West Avenue, L.L.C., 317 West Avenue, LLC, and Weselleck, LLC (# 430.00). Also removed from this litigation were the individual defendants, John Bongiorno, Jr. and Michele B. Nizzardo (# 417.00). Two individual defendants remain in this litigation. They are Frank R. Bongiorno, who is the co-manager of the defendants, J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC and one of the two real property managers. The second individual defendant remaining in this litigation is Maurice A. Nizzardo, husband of Michele B. Nizzardo. He is the other co-manager of the defendants, J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC and the second of the two real property managers. The two remaining individual plaintiffs are Marie Bongiorno and her daughter, Bridjay Capone. The two plaintiffs at trial were and are represented by Peter V. Lathouris Law Office, LLC. Remaining as entity defendants at trial were the three LLCs that the plaintiff, Bridjay Capone, is claiming a twenty-five (25.0%) percent membership interest; J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC. Those three are commonly referred to in this Memorandum of Decision as "the three LLCs." The remaining five entity defendants are those against whom the plaintiffs claim damages but do not claim an ownership interest. Those remaining five entity defendants are owned or partially owned by other members of the Bongiorno family including the individual defendants, Frank R. Bongiorno and Maurice A. Nizzardo. These five defendant entities that remain as of trial are Harxter Realty, LLC, Enterprise Park, LLC, Bongiorno Gas Island, LLC, Glenbrook Center, LLC, and Bongiorno Brothers, a general partnership. The originally named defendant, Bongiorno Supermarket, Inc., remained a defendant at trial but was not represented by counsel of record. The evidence at trial disclosed that the supermarket was sold in 2004, then became a Bongiorno tenant and closed its operations as of July 31, 2006. The two remaining individual defendants and the remaining defendant business entities other than Bongiorno Supermarket, Inc. were and are represented at trial by attorney Mark F. Katz.

The following legal precepts were applied by this court in rendering this Memorandum of Decision.

"Fraud involves deception practiced in order to induce another to act to her detriment, and which causes that detrimental action ... The four essential elements are (1) that a false representation of fact was made; (2) that the party making the representation knew it to be false; (3) that the representation was made to induce action by the other parties; and (4) that the other party did so act to her detriment." Carr v. Fleet Bank, 73 Conn.App. 593, 595 (2002). Specific acts of fraud must be pleaded, and the mere allegation that a fraud had been perpetrated is insufficient. Maruca v. Phillips, 139 Conn. 79, 81 (1952). The first three elements of fraud must be proven by clear and convincing evidence. Chase Manhattan Mortgage Corporation v. Machado, 83 Conn.App. 183, 188 (2004). "Fraud by nondisclosure, which expands on the first three of these four elements, involves the failure to make a full and fair disclosure of known facts connected with a matter about which a party has assumed to speak, under circumstances in which there is a duty to speak." Pospisil v. Pospisil, 59 Conn.App. 446, 450, cert. denied, 254 Conn. 940 (2000). Some allegations of fraud are addressed to the claimed lack of authority of the January 22, 2012 transfer documents from George Bongiorno to his four children and the failure to notify each children of that transfer as soon as it was made.

"Any person who steals any property of another, or knowingly receives and conceals stolen property, shall pay the owner treble his damages." Gen. Stat. § 52-564. This statute is commonly known as statutory theft. The plaintiffs’ claim for relief claims treble damages in accordance with this statute. "Statutory theft under General Statutes § 52-564 is synonymous with larceny as provided in General Statutes § 53a-119." Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 44 (2000).

"Pursuant to § 52-119, a person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or withholds such property from an owner." Suarez-Negrete v. Trotta, 47 Conn.App. 517, 521 (1998). A claim for money owed on a debt is not sufficient by itself to establish a cause of action for statutory theft. Deming v. Nationwide Mutual Insurance Company, 279 Conn. 745, 772 (2006). "In order to establish a valid claim of statutory theft for money owed, a party must show ownership or the right to possess specific, identifiable money, rather than the right to the payment of money generally." Mystic Color Lab, Inc. v. Auctions Worldwide, LLC, 284 Conn. 408, 421 (2007); Macomber v. Travelers Property and Casualty Corp., 261 Conn. 620, 650 (2002). It is sufficient for the plaintiff to prove his case by a fair preponderance of the evidence and the plaintiff is not bound to prove his case beyond a reasonable doubt. Munson v. Atwood, 30 Conn. 102, 103 (1861); Stuart v. Stuart, 297 Conn. 26, 43-44, fn.11 (2010).

In the event that a plaintiff is claiming treble damages under the Gen. Stat. § 52-564, that plaintiff is required to prove those allegations and damages by clear and convincing evidence. Suarez-Negrete v. Trotta, supra, 47 Conn.App. 520; Schaffer v. Lindy, 8 Conn.App. 96, 105 (1986). The essential elements a plaintiff must prove to obtain treble damages for the civil action of statutory theft are the same as the elements to prove larceny: (1) an intent to do the act complained of, (2) the act was done wrongfully, and (3) the act was committed against an owner. Kosiorek v. Smigelski, 138 Conn.App. 695, 713 (2012).

Unjust enrichment applies wherever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract ... 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 ... With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard ... 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 benefitted, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of the payment was to the plaintiffs’ detriment.

Vertex, Inc. v. Waterbury, 278 Conn. 557, 573 (2006).

The standard of proof in an ordinary civil case is the preponderance of the evidence standard, which is the standard in claims of unjust enrichment. Freeman v. Alamo Management Company, 221 Conn. 674, 678 (1992).

The plaintiff is claiming that the individual defendants, Frank R. Bongiorno and Maurice A. Nizzardo, breached their fiduciary duty. "It is well settled that a fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other ... Not all business relationships implicate the duty of a fiduciary ... In particular instances, certain relationships, as a matter of law, do not impose upon either party the duty of a fiduciary." Macomber v. Travelers Property and Casualty Corporation, supra, 261 Conn. 640; Carson v. Allianz Life Insurance Company of North America, 184 Conn.App. 318, 331 (2018).

The elements which must be proved to support a conclusion of breach of fiduciary duty are: (1) [t]hat a fiduciary relationship existed which gave rise to ... a duty of loyalty ... an obligation ... to act in the best interests of the plaintiff, and ... an obligation ... to act in good faith in any matter relating to the plaintiff; (2) [t]hat the defendant advanced his or her own interests to the detriment of the plaintiff; (3) [t]hat the plaintiff sustained damages; [and] (4) that the damages were proximately caused by the fiduciary’s breach of his or her fiduciary duty." (Emphasis omitted; internal quotation marks omitted.) Rendahl v. Peluso, 173 Conn.App. 66, 100 (2017).

Once a fiduciary relationship is found to exist, the burden of proving fair dealing properly shifts to the fiduciary ... Furthermore, the standard of proof for establishing fair dealing is not the ordinary standard of fair preponderance of the evidence, but requires proof either by clear and convincing evidence, clear and satisfactory evidence or clear, convincing and unequivocal evidence ... Proof of a fiduciary relationship, therefore, generally imposes a twofold burden on the fiduciary. First, the burden of proof shifts to the fiduciary and second, the standard of proof is clear and convincing evidence ... the standard of proof is clear and convincing evidence ... Such burden shifting occurs in cases involving claims of fraud, self-dealing or conflict of interest.

Heaven v. Timber Hill, LLC, 96 Conn.App. 294, 303 (2006); Papallo v. Lefebvre, 172 Conn.App. 746, 754 (2017).

The burden shifting of the higher standard of proof, clear and convincing evidence, only occurs if the plaintiff first provides evidence that the fiduciary engaged in fraud, self-dealing and/or conflict of interest. Stuart v. Stuart, 112 Conn.App. 160, 177 (2009). Without that proof, the fiduciary only has to prove that the fiduciary’s conduct was fair and equitable by a preponderance of the evidence, not clear and convincing evidence. Id., 177; Murphy v. Wakelee, 247 Conn. 396, 399 (1998). It is therefore the plaintiff’s burden to demonstrate fraud, self-dealing and/or conflict of interest.

The plaintiffs argue in their post-trial briefs that burden shifting to the defendants, Frank R. Bongiorno and Maurice A. Nizzardo, as fiduciary managers of the LLC, places upon them the burden to show fair dealing in all financial transactions "by clear and convincing evidence." The plaintiffs claim that the two individual defendants have failed to demonstrate by clear and convincing evidence the fair dealing of each and every financial transaction they engaged in and therefore this court must find that the plaintiffs have sustained their burden of proof as to damages. The plaintiffs have not furnished any legal authority to the effect that the violation of the fiduciary duty and the failure of the fiduciary to show fair dealing by clear and convincing evidence automatically entitles the plaintiffs to a specific dollar amount of damages. A parallel is drawn in the case of spoliation of evidence wherein the trier of fact may draw an inference that the destroyed evidence would be unfavorable. Surrells v. Belinkie, 95 Conn.App. 764, 770-71 (2006); Beers v. Bayliner Marine Corporation, 236 Conn. 769, 777-79 (1996). "Pursuant to Beers, a party suffering from spoliation cannot build an underlying case on the spoliation inference alone; for an underlying claim to be actionable, the party must also possess some concrete evidence that will support the underlying claim." Perez v. Metropolitan District Commission, 186 Conn.App. 466, 477 (2018). The plaintiffs still have a burden to prove the amount of damages with some specificity, even if the elements of breach of fiduciary duty have been shown. The plaintiffs must provide "some independent concrete evidence." Id., 478. "... a party may not rely on mere speculation or conjecture as to the true nature of the facts ..." Id., 476.

The plaintiffs both claim breach of fiduciary duty and seek an award of damages as a result of that breach. The plaintiffs do not point to specific dollar denominated transactions to bolster their monetary damage claim. Instead they rely on a general claim for damages without a specific dollar amount for each breach of fiduciary duty. See plaintiffs’ September 24, 2018 Post-Trial Brief # 447.00 at pages 33-35 for Bridjay Capone’s damage claims and pages 51-52 for Marie Bongiorno’s damage claims. During the trial, on numerous occasions, this court requested the plaintiffs to produce specific dollar amounts and dates of occurrence of their claimed mismanagement of the real property, to no avail. The plaintiffs’ response to that request was met with the following in-court argument; we have demonstrated that the defendants owe a fiduciary duty and now the defendants have to prove good faith by clear and convincing evidence and it is now the defendants’ burden to prove that each item in the tax returns is not mismanagement by clear and convincing evidence.

No case law supports that theory of proof of damages. The court gives an example of how burdensome this requirement would be with one theoretical simple repair bill incurred, paid and set forth as any expense deduction in a tax return. According to the plaintiffs the defendants to satisfy their burden by clear and convincing evidence would have to prove the check issued, provide a copy of the check, the entry on the check register, the bank statement stating that the check cleared, the invoice paid, the estimates obtained, correspondence, and all other supporting documents obtained by the real property managers for that one repair bill. This level of proof would continue with each and every expense listed, each and every deposit made and each and every entry in the forty-two tax returns for the three LLCs that were before this court, all contained in three large binders. In effect the plaintiffs are substituting its proof of a dollar amount of damages, with the inference of damages, created by the lack of the above mentioned supporting information. Further, in effect, that would burden the defendants to prove a negative, usually an intellectual impossibility.

"While it is true that it is within the province of the jury to accept or reject a defendant’s testimony, a jury in rejecting such testimony cannot conclude that the opposite is true." Novak v. Anderson, 178 Conn. 506, 508 (1979). The level of proof of damages required by the plaintiffs of the defendants in the above cited scenario "would lead to a bizarre and unworkable result." Ventura v. East Haven, 330 Conn. 613, 627 (2019).

Cases have held that the burden shifting framework that has been applied to partnership disputes involving breach of fiduciary duty applies to limited liability companies and limited partnerships. Papallo v. Lefebvre, supra, 172 Conn.App. 754-55; Oakhill Associates v. D’Amato, 228 Conn. 723, 726-27 (1994); Konover Development Corp. v. Zeller, 228 Conn. 206, 229-30 (1994).

In this case the individual defendants, Frank R. Bongiorno and Maurice Nizzardo, in their post-trial memorandum of law have conceded as managers of the LLCs, they have a fiduciary duty to the members of the LLC including the plaintiff, Bridjay Capone (# 448.00, pages 1-2). "The court finds that a manager of a manager-managed LLC owes a fiduciary duty to the LLC and its members." Kasper v. Valluzzo, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV07-5004383 S (December 23, 2011, Tierney, JTR). The three LLCs are manager-managed limited liability companies. Those two individual defendants dispute that they owe a fiduciary duty to a nonmember of the LLC or to a person who holds only an economic interest or transferee interest in the LLC. They dispute that they owe a fiduciary duty to any of the real property owners, directly or indirectly, or the LLCs and its members, by reason of their position as real property managers. They further claim that no burden shifting has occurred since there is no evidence of fraud, self-dealing or conflict of interest in their capacity as managers of the LLCs.

In this case the plaintiffs are claiming that the individual defendants, Frank R. Bongiorno and Maurice A. Nizzardo, violated their fiduciary duty as the co-managers of the three LLCs. The operating agreements offered into evidence in this case set forth the standard for any lawsuit to be filed by a member against a manager. Ex. 24, 39 and 40. Such a lawsuit can be filed and a manager can be held liable only for "gross negligence" or "willful misconduct." (See Section 8.06 of the three operating agreements, Ex. 24, 39 and 40.) The statutes contain a lesser standard for a manager’s liability. Therefore there appears to be two different standards before this court: (1) The statutory rule of "an ordinary prudent person standard by a fiduciary," or (2) Section 8.06 of the operating agreements where the LLC’s manager’s liability can only be based on "willful misconduct" or "gross negligence?"

The court has determined that the standards in each of the three operating agreements before this court are identical and are contained in "Section 8.06 Nonliability of Manager for Acts or Omissions in Official Capacity." Ex. 24, Second Amended Operating Agreement of J & G Realty, LLC dated March 31, 2004, Ex. 39, Operating Agreement of 305 West Avenue, LLC dated November 1, 2014 and Ex. 40, Operating Agreement of 24 Ardmore Street, LLC dated November 1, 2014. The entirety of Section 8.06 is:

Section 8.06 Nonliability of Manager for Acts or Omissions in Official Capacity

(a) Managers shall not have any liability to the Company or to any Member for any loss suffered by the Company which arises out of any action or inaction of any Manager if the Manger, in good faith, determined that such course of conduct was in the best interests of the Company, and such course of conduct did not constitute gross negligence or willful misconduct of the Manager. Each Manager shall be indemnified by the Company against any losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by him in connection with the Company, provided that the same were not the result of gross negligence or willful misconduct on the part of the Manager.

(b) Managers shall not be liable to the Members because any taxing authority disallows or adjusts income, deductions or credits on the Company tax returns or items of tax preference arising from or relating thereto.

"An operating agreement may: (1) Eliminate or limit the personal liability of a member or manager for monetary damages for breach of any duty provided for in section 34-141; and (2) provide for indemnification of a member or manager for judgments, settlements, penalties, fines or expenses incurred in a proceeding to which an individual is a party because such individual is or was a member or manager." Gen. Stat. § 31-143 (repealed effective July 1, 2017).

The pre-July 1, 2017 statutes establish a standard for a manager. "A member or manager shall discharge his duties under section 34-140 and the operating agreement, in good faith, with the care an ordinary prudent person in a like position would exercise under similar circumstances and in the manner he reasonably believes to be in the best interests of the limited liability company, and shall not be liable for any action taken as a member or manager, or any failure to take such action, if he performs such duties in compliance with the provisions of this section." Gen. Stat. § 34-141(a) (repealed effective July 1, 2017).

The post-July 1, 2017 statutes define the manager’s duties to the LLC and the members in more carefully defined language. Those statutory sections are too large to be quoted in this Memorandum of Decision. They are found in Gen. Stat. § 34-255h, subsections (a), (b), (c), (d) and (g), applicable to the duties of managers in a manager-managed LLC. This court believes that the salient standard section applicable to the conduct of managers is contained in Gen. Stat. § 34-255h(c)(1).

The above post-July 1, 2017 statutory section reconfirms the "good faith" and "ordinarily prudent person" standard found in the pre-July 1, 2017 statutes:

A member of a member-managed limited liability company shall discharge the duties of such member as a member, including duties as a member of a committee of the members of the limited liability company: (A) In good faith; (B) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (C) in a manner the member reasonably believes to be in the best interests of the limited liability company.

General Statutes § 34-255h(c)(1).

Although this section seems to apply to any member-managed limited liability company, the later section of the statute makes this Section (c) applicable also to the conduct of managers in a manager-managed limited liability company. Gen. Stat. § 34-255h(i)(1). The court believes that the two statutory standards governing the conduct of a manager in a manager-member LLC did not change with the July 1, 2017 statutory modifications. The court finds that the ordinary prudent person standard did not change after July 1, 2017 despite the modest language changes in the two above cited statutes.

The court will apply both the "gross negligence"/"willful misconduct" and "ordinary prudent person" standards in examining the conduct of the defendants, Frank R. Bongiorno and Maurice A. Nizzardo, co-managers of the three LLCs that are all manager-managed limited liability companies.

CUTPA provides: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. Gen. Stat. § 42-110b(a). It is well settled that in determining whether a practice violates CUTPA we have adopted the criteria set out in the cigarette rule by the Federal Trade Commission for determining when a practice is unfair; (1) Whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law or otherwise ... (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, competitors or other business persons ... All three criteria do not need to be satisfied to support a finding of unfairness."

Naples v. Keystone Building and Development Corporation, 295 Conn. 214, 227 (2010), Papallo v. Lafebvre, supra, 172 Conn.App. 766.

The Federal Trade Commission has since reviewed the "cigarette rule" standards and has replaced it with the "substantial injury test." Artie’s Auto Body, Inc. v. The Hartford Insurance Company, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number X08 CV03-0196141 S (October 14, 2010, Jennings, JTR) . The Connecticut legislature has chosen not to amend General Statutes § 42-110b(a) to dovetail with the new standards adopted by the Federal Trade Commission. When CUTPA became Connecticut’s statutory law, the legislature adopted the "cigarette rule." Neither party in this litigation briefed the new standards adopted by the Federal Trade Commission. There has been commentary by Justices of our Supreme Court concerning the legislature’s inaction in the face of new standards adopted by the Federal Trade Commission. Recent trial court decisions have continued to apply the "cigarette rule." This court will apply the "cigarette rule" since none of the parties have briefed nor argued the new Federal Trade Commission standards.

We note that we recently have recognized that a question exists as to whether the cigarette rule remains the guiding rule utilized by the Federal Trade Commission. See American Car Rental, Inc. v. Commissioner of Consumer Protection, 273 Conn. 296, 305 n.6, 869 A.2d 1198 (2005). In the present case, however, neither party has raised or briefed this issue or asked us to reconsider our law in this area, and, accordingly, we will wait to consider this question until it has been presented to us for determination.

Votto v. American Car Rental, Inc., 273 Conn. 478, 484, fn.3 (2005).

The majority of Superior Courts do not apply CUTPA to intra business affairs. Leisure Resort Technology, Inc. v. Trading Cove Association, Inc., Superior Court, judicial district of Middlesex at Middletown, Docket Number CV00-0091880 (October 13, 2000, Gordon, J.). "The majority of Superior Court case law holds that CUTPA is inapplicable to the internal workings of partnerships. Although there are decisions to the contrary, the reasoning of these majority decisions is persuasive on the court. Since all of the defendants’ allegations of the plaintiff’s ‘unfair and deceptive acts and practices’ occurred within the confines of the partnership, the threshold facts sufficient to constitute a CUTPA claim have not been alleged." Diette v. Dental Group of Norwalk, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number CV97-0158747 (February 27, 1998, Lewis, J.) "Superior Courts have taken the view that CUTPA does not apply to: employer/employee relations and to the purchase and sale of securities; ... the internal business affairs and workings of partnerships; ... intracompany disputes among shareholders; ... disputes between officers and shareholders; ... or to participants in a joint adventure." Sector Management, Inc. v. Taurus Advisory Group, Inc., Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number CV 96-0154033 (April 15, 1998, D’Andrea, J.). An intercorporate conflict is not actionable under CUTPA. Metcoff v Lebovics, 123 Conn.App. 512, 519 (2010).

"In the absence of aggravating unscrupulous conduct, mere incompetence does not by itself mandate a trial court to find a CUTPA violation." Naples v. Keystone Building and Development Corporation, supra, 295 Conn. 229.

"A claimant under CUTPA must possess at least some type of consumer relationship with the party who allegedly caused the harm to him or to her." Jackson v. R.G. Whipple, Inc., 225 Conn. 705, 727 (1993).

The plaintiff, Marie Bongiorno, is claiming that the individual managers have engaged in oppressive conduct decreasing her right to receive her economic interest as a transferee member. In addition the plaintiff, Bridjay Capone, claims that her right to receive income from the three LLCs as a full member has also been subjected to same oppressive conduct. The pre-July 1, 2017 LLC statutes do not provide for oppressive conduct. In the past Connecticut LLCs were judged by corporate law. Ward v. Gamble, Superior Court, judicial district of Hartford, Docket Number CV 08-5017829 S (July 23, 2009, Prescott, J.) . "The court agrees with the defendants and concludes that the foregoing principles of corporate law apply to limited liability companies." Newlands v. NRT Associates, LLC, Superior Court, judicial district of Fairfield at Bridgeport, Docket Number CV 08-4027098 S (March 25, 2010, Tyma, J.) . Gen. Stat. § 33-896(a)(1) supports the dissolution of a corporation and outlines the elements of and types of oppressive conduct. Although there is sparse law in Connecticut, Judge Satter authored a 2008 decision on the subject. DeVivo v. DeVivo, Superior Court, judicial district of Hartford at Hartford, Docket Number CV 98-0581020 (May 8, 2008, Satter, JTR). Judge Satter ruling on Gen. Stat. § 33-896, held that "oppression in the context of a dissolution suit suggests a lack of probity and fair dealing in the affairs of a company to the prejudice of some of its members, or a visible departure from the standards of fair dealing and a violation of fair play as to which every shareholder who entrusts his money in a company is entitled to rely." The post-July 1, 2017 LLC statute on dissolution used the word in item (5)(B): "have acted or are acting in a manner that is oppressive and was, is, or will be directly harmful to the applicant." No definition of "oppressive" is contained in Title 613a effective July 1, 2017.

The plaintiff, Bridjay Capone, has alleged three counts seeking the dissolution, winding up and distribution of the affairs of the three stated limited liability companies J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC. The evidence before this court, the defendants’ testimony and the defendants’ post-trial memorandum all concede that Bridjay Capone is a member in those three LLCs to which she is seeking dissolution, winding up and distribution. A member has standing to seek the winding up of the affairs of a limited liability company, Gen. Stat. § 34-170(a)(3) (repealed July 1, 2017); Gen. Stat. § § 34-206 - 34-16 (repealed July 1, 2017); Styslinger III v. Brewster Park, LLC, 321 Conn. 312, 314 (2016); Gen. Stat. § § 34-267, - 34-267g (effective July 1, 2017).

"Our common law does not recognize LLCs, which were first created by statute in Connecticut in 1993. Public Acts 1993, No. 93-267." ... "The provisions of the act relating to winding up an LLC’s affairs inextricably link the winding up process to a dissolution, and therefore must be read together with the statutes governing the dissolution of an LLC." Styslinger III v. Brewster Park, LLC, supra, 321 Conn. 318. "Reading the winding up and dissolution statutes together, the act creates a clear progression from dissolution to winding up the affairs, demonstrating that a winding up is not an independent event, but an integral part of the dissolution process. Once an event of dissolution occurs, the LLC winds up its affairs, distributes its assets, and then terminates its business operations." Id., 318; Mukon v. Gollnick, 151 Conn.App. 126, 131-32 (2014). Therefore the plaintiff has the obligation to prove an event of dissolution.

The pre-July 1, 2017, statute, Gen. Stat. § 34-206, provides three methods for dissolving a limited liability company; (1) any event of dissolution specified in the LLC’s articles of organization or operating agreement; (2) a vote to dissolve by a majority of the LLC’s members; or (3) the entry of a decree of judicial dissolution under General Statutes § 34-207. "Under § 34-207, only a member or someone on the member’s behalf may apply for a decree of dissolution, and a decree may enter only if the court determines that ‘it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement." Id., 318-19: Gen. Stat. § 34-207. The plaintiff is also relying on another pre-July 1, 2017 statute: "if one or more of the members or managers of the limited liability company have engaged in wrongful conduct or upon other cause shown." Gen. Stat. § 34-208(a)(2); Reig v. Amore II, A L.L.C., Superior Court, judicial district of Waterbury, Docket Number CV02-016899 S (April 3, 2002, West, J.) .

The post-July 1, 2017 statute, Gen. Stat. § 34-267, list six enumerated events that can cause a limited liability company to be dissolved. Item (2) is not relevant since a majority of the members have not consented the dissolution. Item (3) is not relevant since all three LLCs have members. Item (6) is not relevant since there has been no forfeiture by the Secretary of State. Item (1) states: "An event or circumstance that the operating agreement states causes dissolution." Item (4) requires proof to the Superior Court that the conduct of all or substantiality all of the company’s activities and affairs are unlawful or it is not reasonably practicable to carry on the company’s activities and affairs. Item (5) requires proof to the Superior Court that the managers have acted, are acting, or will act in a manner that is illegal or fraudulent or have acted or are acting in a manner that is oppressive and was, is or will be directly harmful to the applicant member of the LLC. The plaintiffs’ reliance on Gen. Stat. § 34-372(5) and Gen. Stat. § 33-896(a)(1)(B) and (D) are not applicable since the LLCs are not governed by the partnership statutes or corporate statutes after July 1, 2017. Only Gen. Stat. § 34-267 is applicable for LLCs after July 1, 2017.

The plaintiff, Marie Bongiorno, was found by a prior trial court to have no membership interest in certain Bongiorno entities, one of which is J & G Realty, LLC. The other two defendant LLCs, 24 Ardmore Street, LLC and 305 West Avenue, LLC, were not part of the Motion to Dismiss decided on May 30, 2014 by Judge Truglia (# 183.00). She now claims in this current trial that she has received an assignment of George Bongiorno’s membership interest in the entities in question including that of J & G Realty, LLC, in accordance with Gen. Stat. § 34-101(13). As such Marie Bongiorno claims that she has an economic interest in the defendant, J & G Realty, LLC and a right "to receive distributions of the limited liability company’s assets, ..." Gen. Stat. § 34-101(13). "An assignee is a passive recipient of the economic benefit of a membership interest and is barred by the act from participating in the management of the LLC’s business or exercising any right of membership unless and until the assignee is admitted as a member" ... Styslinger III v. Brewster Park, LLC, supra, 321 Conn. 321. "The act expressly provides that ‘an assignment of a limited liability company membership interest does not dissolve the limited liability company or entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member ...’ General Statutes § 34-170(a)(3)." Id., 321. In this regard the court has before it the operating agreements of the three LLCs in question and will discuss those terms and conditions later on in this Memorandum of Decision. Ex. 24, Ex. 39, Ex. 40. As stated this cause of action was commenced in June 2012. Chapter 613 including Gen. Stat. § § 34-100 through 34-242 were repealed effective July 1, 2017. See Public Acts 2016, No. 16-97 § 110. "We refer in this opinion to the statutory provisions in effect at the time of the alleged breach of contract and statutory theft." Bongiorno v. Capone, 185 Conn. 176, 197, fn.14 (2018). Therefore this court will discuss later on in this Memorandum of Decision whether the pre-July 1, 2017 statutes, Gen. Stat. § § 34-100 through 34-242, are applicable and what portions of the new statutes would be applicable for events that occurred after July 1, 2017.

The defendants have raised the issue as to whether or not one or both plaintiffs have standing to file lawsuits against the limited liability company. "A limited liability company is a distinct legal entity whose existence is separate from its members ... A limited liability company has the power to sue or to be sued in its own name." Bongiorno v. Capone, supra, 185 Conn.App. 199. "A member or manager, however, may not sue in an individual capacity to recover for an injury based upon a wrong to the limited liability company ... A member or manager of a limited liability company is not a proper party to a proceeding by or against a limited liability company solely by reason of being a member or manager of the limited liability company, except where the object of the proceeding is to enforce a member’s or manager’s right against or liability to the limited liability company or as otherwise provided in an operating agreement" ... Padawer v. Yur, 142 Conn.App. 812, 817-18 (2013); Wasko v. Farley, 108 Conn.App. 156, 170 (2008); Channing Real Estate, LLC v. Gates, 326 Conn. 123, 137-38 (2017).

"Thus, to recover for a wrong to the LLC, it is settled that a member must assert an LLC’s claim derivatively, not individually." Horse Tavern Builders, LLC v. Pizzino, Superior Court, judicial district of Fairfield at Bridgeport, Docket Number FBT CV 15-6049934 S (August 8, 2016, Kamp, J.) .

In Connecticut, in order for shareholders of a corporation to bring a direct or personal action against the corporation or its directors, the shareholder must allege an injury that is separate and distinct from that suffered by other shareholders or the corporation itself. If the injury is not separate and distinct, the shareholder is required to bring a shareholder derivative suit alleging injuries to the corporation or to the shareholders collectively. Although this rule is well-established with respect to corporations, there is a dearth of Connecticut authority as to whether it applies to limited liability companies ("LLCs"). Therefore, this case raises important questions regarding the applicability of this rule to members of a LLC, specifically where one member of the LLC seeks to sue, among others, the other two members of the LLC for mismanagement and misappropriation of the LLC’s assets. For the reasons set forth below, the court concludes that the plaintiff in this case may not maintain a direct action against the majority members, but instead is obligated to assert his claims in a derivative suit.

Ward v. Gamble, Superior Court, judicial district of Hartford, Docket Number CV08-5017829 S (July 23, 2009, Prescott, J.).

It is axiomatic that a party must have standing to assert a claim in order for the court to have subject matter jurisdiction over the claim ... Standing is the legal right to set judicial machinery in motion ... Standing requires no more than a colorable claim of injury; a [party] ordinarily establishes ... standing by allegations of injury ... [I]f the injuries claimed by the plaintiff are remote, indirect or derivative with respect to the defendant’s conduct, the plaintiff is not the proper party to assert them and lacks standing to do so. [When], for example, the harms asserted to have been suffered directly by a plaintiff are in reality derivative of injuries to a third party, the injuries are not direct but are indirect, and the plaintiff has no standing to assert them ...

Scarfo v. Snow, 168 Conn.App. 482, 497 (2016).

The individual defendants claim that Marie Bongiorno is not a member of J & G Realty, LLC, 24 Ardmore Street, LLC or 305 West Avenue, LLC and never was. George Bongiorno was member of J & G Realty, LLC and Marie Bongiorno claims that on October 21, 2010 he assigned his interests in J & G Realty, LLC to Marie Bongiorno. Ex. 8, Ex. 9. The defendants argue that the terms and conditions of the Second Amended Operating Agreement of J & G Realty, LLC do not permit the LLC to admit Marie Bongiorno as a member. Ex. 24. The defendants are contesting the validity of this J & G Realty, LLC assignment and other October 2010 assignments to Marie Bongiorno and the execution of those documents. Assuming that the assignments are valid, the defendants offer an alternate position, that Marie Bongiorno is a transferee member of J & G Realty, LLC. As a transferee member she receives only an economic interest in J & G Realty, LLC and does not have the right to participate in its management. The defendants argue that the transferee member has no right to vote, no right to become the property manager, no right to inspect the books and records, and no right to conduct any aspect of the LLC business. Kasper v. Valluzzo, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV07-5004383 S (December 23, 2011, Tierney, JTR). The defendants further claim that, a transferee member holds only an economic interest and is only entitled to revenue distributions when they have been made and their percentage distribution of the LLC’s assets upon the dissolution of the entire limited liability company. Faienza v. T-N-B Marble-N-Granite, LLC, Superior Court, judicial district of Hartford, Docket Number HHD CV17-6082028 (March 26, 2018, Sheridan, J.) ; Bricklin v. Stengol Corporation, 1 Conn.App. 656, 667 (1984); City Line Distributors, Inc. v. Savin Rock Roasting Co., III., Inc., Superior Court, judicial district of New Haven, Docket Number NNH CV 11-5033731 S (November 18, 2014, Nazzaro, J.). This economic interest upon transfer also applies to partnerships. Courts recognize the status of a transferee partner who does not have the right to participate in its management but is entitled to revenue distributions when made and their percentage ownership in the assets upon dissolution. Kasper v. G & J Partnership, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV 07-5004956 S (December 23, 2011, Tierney, JTR).

That completes the general discussion of the seven separate legal theories advanced by the plaintiffs in their seventy-two-count Second Amended Complaint dated July 5, 2018 (# 440.00), the operative complaint in this litigation. This court will now discuss in general terms the legal basis of the thirteen Special Defenses filed by all of the defendants on July 25, 2018 (# 445.00).

The First Special Defense claims that Marie Bongiorno’s claims are barred by the doctrine of res judicata because her claims were dismissed on May 30, 2014 in a Memorandum of Decision on file in this docket (# 183.00). The dismissal was confirmed on appeal. Bongiorno v. J & G Realty, LLC, 162 Conn.App. 430, cert. denied, 320 Conn. 924 (2016).

The doctrine of res judicata holds that an existing final judgment rendered upon the merits without fraud or collusion, by a court of competent jurisdiction, is conclusive of causes of action and of facts or issues thereby litigated as to the parties and their privies in all other actions in the same or any other judicial tribunal of concurrent jurisdiction ... Claim preclusion (res judicata) and issue preclusion (collateral estoppel) have been described as related ideas on a continuum.

[C]ollateral estoppel, or issue preclusion ... prohibits the relitigation of an issue when that issue was actually litigated and necessarily determined in a prior action between the same parties or those in privity with them upon a different claim. (Citations omitted; internal quotation marks omitted.) Powell v. Infinity Ins. Co., 282 Conn. 594, 600, 922 A.2d 1073 (2007).

"Unlike collateral estoppel, under which preclusion occurs only if a claim actually has been litigated, [u]nder the doctrine of res judicata, or claim preclusion, a former judgment on a claim, if rendered on the merits, is an absolute bar to a subsequent action on the same claim ... [or any claim based on the same operative facts that] might have been made ... [T]he appropriate inquiry with respect to [claim] preclusion is whether the party had an adequate opportunity to litigate the matter in the earlier proceeding ..." (Emphasis in original; internal quotation marks omitted.) Connecticut National Bank v. Rytman, 241 Conn. 24, 43-44, 694 A.2d 1246 (1997). "[R]es judicata prevents reassertion of the same claim regardless of what additional or different evidence or legal theories might be advanced in support of it." (Internal quotation marks omitted.) Wheeler v. Beachcroft, LLC, 320 Conn. 146, 157-58, 129 A.3d 677 (2016).

Smith v. BL Companies, Inc., 185 Conn.App. 656, 663-64 (2018).

Generally, for res judicata to apply, four elements must be met: (1) the judgment must have been rendered on the merits by a court of competent jurisdiction; (2) the parties to the prior and subsequent actions must be the same or in privity; (3) there must have been an adequate opportunity to litigate the matter fully; and (4) the same underlying claim must be at issue.

Smith v. BL Companies, Inc., supra, 664.

"[A]pplication of the doctrine can yield harsh results especially in the context of claims that were not actually litigated ... The decision of whether res judicata should bar such claims should be based upon a consideration of the doctrine’s underlying policies, namely, the interests of the defendant and of the courts in bringing litigation to a close ... and the competing interest of the plaintiff in the vindication of a just claim." (Citation omitted; internal quotation marks omitted.) Wheeler v. Beachcroft, LLC, supra, 320 Conn. 158. The purposes of res judicata are "promoting judicial economy, minimizing repetitive litigation, preventing inconsistent judgments and providing repose to parties." Weiss v. Weiss, 297 Conn. 446, 465 (2010).

Res judicata is enforced on public policy grounds. "These underlying purposes are generally identified as being (1) to promote judicial economy by minimizing repetitive litigation, (2) to prevent inconsistent judgments which undermine the integrity of the judicial system; and (3) by providing repose by preventing a person from being harassed by vexatious litigation." Powell v. Infinity Insurance Company, 282 Conn. 594, 601 (2007).

The Second Special Defense states: "Marie Bongiorno is collaterally estopped from maintaining any of her claims, because her claims were dismissed, on May 30, 2014" by a Memorandum of Decision docketed in this litigation as pleading # 183.00.

"Although res judicata and collateral estoppel often appeared merge into one another in practice, analytically they are regarded as distinct." Weiss v. Weiss, supra, 297 Conn. 458-59. "Because res judicata and collateral estoppel are judicially created rules of reason that are enforced on public policy grounds ... we have observed that whether to apply either doctrine in any particular case should be made based upon a consideration of the doctrine’s underlying policies, namely, the interests of the defendant and of the courts in bringing litigation to a close ... and the competing interest of the plaintiff in the vindication of a just claim." Weiss v. Weiss, supra, 297 Conn. 460.

"The doctrines of res judicata and collateral estoppel protect the finality of judicial determinations, conserve the time of the court, and prevent wasteful relitigation. Res judicata or claim preclusion prevents a litigant from reasserting a claim that has already been decided on the merits. Collateral estoppel, or issue preclusion, prevents a party from relitigating an issue that has already been determined in a prior suit." Gionfriddo v. Gartenhaus Café, 15 Conn.App. 392, 401 (1988). "For an issue to be subject to collateral estoppel, it must have been fully and fairly litigated in the first action. It must also have been actually decided and the decision must have been necessary to the judgment." Virgo v. Lyons, 209 Conn. 497, 501 (1988).

The Third Special Defense alleges the equitable defense of laches although it does so in the context of the three-year general tort statute of limitation, Gen. Stat. § 52-577. "The defense of laches, if proven, bars a plaintiff from seeking equitable relief ... First, there must have been a delay that was inexcusable, and, second, that delay must have prejudiced the defendant." (Internal quotation marks omitted.) ... The burden is on the plaintiff alleging laches to establish that defense ... The mere lapse of time does not constitute laches ... unless it results in prejudice to the opposing party ... as where, for example, the opposing party is led to change his position with respect to the matter in question." Caminis v. Troy, 112 Conn.App. 546, 552 (2009). In theory the defense of laches can be found to have been proven even though the underlying comparable statute of limitations has not yet run. Rossman v. Morasco, 115 Conn.App. 234, 256 (2009). Laches is an equitable defense and not is applicable to an action of law seeking monetary relief. Cadle Company v. Ogalin, 175 Conn.App. 1, 9 (2017).

The court notes that the mention of the three-year statute of limitations for general torts. Gen. Stat. § 52-577, is not applicable to the equitable defense of laches. That statute of limitations, Gen. Stat. § 52-577, has been pleaded as the Fourth Special Defense.

The Fourth Special Defense claims that all of the plaintiffs’ claims are barred by the applicable statute of limitations, General Statutes § 52-577, because each of the alleged events occurred more than three years prior to the commencement of this litigation. Gen. Stat. § 52-577 states as follows: "No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of." This is the general tort statute of limitations. "Section 52-577 is a statute of repose in that it sets a fixed limit after which the tortfeasor will not be held liable and in some cases will serve to bar an action before it accrues." (Internal quotation marks omitted.) Rosenfield v. Rogin, Nassau, Caplan, Lassman & Hirtle, LLC, 69 Conn.App. 151, 159 (2002). "Section 52-577 is an occurrence statute, meaning that the time period within which a plaintiff must commence an action begins to run at the moment the act or omission complained of occurs." Rosenfield v. Rogin, Nassau, Caplan, Lassman & Hirtle, LLC, supra, 69 Conn.App. 158. "... we have concluded that the history of that legislative choice of language precludes any construction thereof delaying the start of the limitation period until the cause of action has accrued or the injury has occurred." Fichera v. Mine Hill Corporation, 207 Conn. 204, 212 (1988). "The relevant date of the act or omission complained of, as that phrase is used in § 52-577, is the date when the negligent conduct of the defendant occurs and not the date when the plaintiffs first sustain damage." Farnsworth v. O’Doherty, 85 Conn.App. 145, 148-49 (2004).

The statute of limitations for statutory theft in violation of Gen. Stat. § 52-564 is the general three-year statute of limitations for torts under § 52-577. Certain Underwriters at Lloyd’s, London v. Cooperman, 289 Conn. 383, 408 (2008); Gen. Stat. § 52-577 is an occurrence statute. Valentine v. LaBow, 95 Conn.App. 436, 445, fn.8 (2006).

In the Fifth Special Defense, the defendants allege: "All of the plaintiffs’ claims sounding in negligence are barred by the applicable statutes of limitations, § 52-584 ..." § 52-584 is the general statute of limitations for negligence or malpractice for injury to person or property. It states: "No action to recover damages for injury to the person, or to real or personal property, caused by negligence, or by reckless or wanton misconduct, ... shall be brought but within two years from the date when the injury is first sustained or discovered or in the exercise of reasonable care should have been discovered, and except that no such action may be brought more than three years from the date of the act or omission complained of, except that a counterclaim may be interposed in any such action any time before the pleadings in such action are finally closed." The Fifth Special Defense invokes the two-year statute of limitations, which itself contains an additional third year for a statute of repose. The two years in § 52-584 does not start to run until "the plaintiff discovers or should discover through the exercise of reasonable care, that he or she has been injured and that the defendant’s conduct caused such injury." Champagne v. Raybestos-Manhattan, Inc., 212 Conn. 509, 521 (1989). The two-year constraint of § 52-584 is an accrual or discovery limitation statute, that is it starts when the plaintiff discovers or should have discovered his injury. McDonald v. Haynes Medical Laboratory, Inc., 192 Conn. 327, 333 (1984). That portion of Gen. Stat. § 52-584 that states three years, is a statute of repose beyond which no cause of action can be commence, even if the injury was not discovered until the three years passed. The three repose period is an absolute bar. Rosato v. Mascardo, 82 Conn.App. 396, 402 (2004).

The Sixth Special Defense claims that the Superior Court lacks subject matter jurisdiction to hear any of Marie Bongiorno’s claims because her claims have been-dismissed for lack of standing by reason of the Memorandum of Decision in this litigation (# 183.00). Generally the lack of subject matter jurisdiction must be raised by a Motion to Dismiss and is not appropriate as a separately plead Special Defense. In this regard the parties have agreed to place this matter on trial. The plaintiffs therefore have waived the right to attack the viability of the Sixth Special Defense. The court believes that the First and Second Special Defenses of res judicata and collateral estoppel adequately address this issue contained in the Sixth Special Defense.

The Seventh Special Defense invokes the statute of limitations Gen. Stat. § 42-110g(f) for the ten CUTPA counts, Count Forty through and including Count Forty-Nine. Gen. Stat. § 42-110g authorizes the filing of an action for damages by any person who has suffered an ascertainable loss of money or property, real or personal. This statute, which created the cause of action, also contains a section that is a statute of limitations. "An action under this section may not be brought more than three years after the occurrence of a violation of this chapter." Gen. Stat. § 42-110g(f). The Supreme Court found that this CUTPA statute of limitations is an occurrence statute since the language specifically states "occurrence of a violation." Fichera v. Mine Hill Corporation, supra, 207 Conn. 213.

The Eighth Special Defense invokes the statute of frauds, Gen. Stat. § 52-550, in regard to the alleged "loans" for a variety of reasons set forth in that statute.

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: (1) Upon any agreement to charge any executor or administrator, upon a special promise to answer damages out of his own property; (2) against any person upon any special promise to answer for the debt, default or miscarriage of another; (3) upon any agreement made upon consideration of marriage; (4) upon any agreement for the sale of real property or any interest in or concerning real property; (5) upon any agreement that is not to be performed within one year from the making thereof; or (6) upon any agreement for a loan in an amount which exceeds fifty thousand dollars.

General Statutes § 52-550(a).

Specifically in the Eighth Special Defense, without citing those subsections therein, the defendants are invoking subsection (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 be performed within one year from the making thereof" and (6) "upon any agreement for a loan in an amount which exceeds fifty thousand dollars."

The Ninth Special Defense states in its entirety: "In the event that the plaintiffs were able to prove that any of such said loans were actionable, plaintiffs’ claims are barred because all of such said loans were forgiven by the holder(s)." This is a factual issue to be determined. No legal citation is needed for this Ninth Special Defense.

The Tenth Special Defense is also related to the claim of "loans" and states that the plaintiffs’ claims are barred by the statute of limitations, Gen. Stat. § 52-581, in that there was no writing to memorialize said "loans" and that such cause of action accrued more than three years before any claim by plaintiffs was instituted relating to such "loans." "No action founded upon any express contract or agreement which is not reduced to writing, or of which some note or memorandum is not made in writing and signed by the parties to be charged therewith or his agent, shall be brought but within three years after the right of action accrues." Gen. Stat. § 52-581(a).

The Eleventh Special Defense claims that the plaintiff, Bridjay Capone’s, claims against Harxster Realty, LLC, Enterprise Park, LLC, Glenbrook Center, LLC, and Bongiorno Gas Island, LLC are barred by the doctrine of res judicata because of August 24, 2015 Memoranda of Decision on file in this litigation (# 230.02, # 232.02, # 234.02, and # 236.02). The legal precepts guiding this Eleventh Special Defense have already been discussed concerning the First Special Defense.

The Twelfth Special Defense alleges that the plaintiff, Bridjay Capone, is collaterally estopped from maintaining any of her claims against Harxster Realty, LLC, Enterprise Park, LLC, Glenbrook Center, LLC, and Bongiorno Gas Island, LLC by reason of August 24, 2015 Memoranda of Decision on file in this litigation (# 230.02, # 232.02, # 234.02, and # 236.02). Further discussion on the subject of collateral estoppel is not needed in this Twelfth Special Defense since the legal precepts have already been discussed concerning the Second Special Defense.

The Thirteenth Special Defense claims that the plaintiff, Bridjay Capone’s, claims against Harxster Realty, LLC, Enterprise Park, LLC, Glenbrook Center, LLC, and Bongiorno Gas Island, LLC have been dismissed pursuant to August 24, 2015 Memoranda of Decision on file in this litigation (# 230.02, # 232.02, # 234.02, and # 236.02). This court has already discussed those legal precepts in the Sixth Special Defense in regards to Marie Bongiorno’s claim that have been dismissed by a prior Memorandum of Decision on file as a pleading on this case.

A limited liability company commonly referred to as a LLC was created by statute. "An LLC is a distinct type of business entity that allows its owners to take advantage of the pass-through tax treatment afforded to partnerships while also providing them with limited liability protection common to corporations." Styslinger v. Brewster Park, LLC, 321 Conn. 312, 317 (2016). The LLC was first created by the Connecticut Legislature effective October 1, 1993, P.A. 93-267; Id., 317. That Public Act was codified as Gen. Stat. § § 34-100 to 34-242. Not all activities of an LLC were covered by these statutes, so courts applied partnership law and corporate law when there was no relevant statute covering the LLC’s activities then before the court. Bischoff v. Boar’s Head Provision Company, Inc., 436 F.Supp.2d, 626, 630 (S.D. New York 2006); Ward v. Gamble, Superior Court, judicial district of Hartford, Docket Number HHD CV 08-5017829 (July 23, 2009, Prescott, J.). Newlands v. NRT Associates, LLC, Superior Court, judicial district of Fairfield at Bridgeport, Docket Number FBT CV 08-4027098 (March 25, 2010, Tyma, J.) Although the evidence before this court was not clear what was the first relevant date of the plaintiffs’ fault allegation, the parties have agreed that the LLCs are subject to the above mentioned 1993 statutes until July 1, 2017.

On July 1, 2017 the above statutes were repealed and Connecticut adopted its version of the Uniform Limited Liability Company Act. "Section 34-243 to 34-283d inclusive may be cited as the ‘Connecticut Limited Liability Company Act.’" Gen. Stat. § 34-243; P.A. 16-97. That July 1, 2017 Act was further amended by P.A. 17-108. A technical correction was also made by P.A. 17-48. Both of these Public Acts were effective on July 1, 2017.

The plaintiffs argue that the acts of commission and omission of the defendants in regards to the LLCs should be adjudicated by the former statutes created by P.A. 93-267 Gen. Stat. § § 34-100 to 34-242 up to and including June 30, 2017 and then by Gen. Stat. § 34-243 to 34-283d from and after July 1, 2017. Although this is somewhat confusing to the parties, their duties, obligations and expectations as well as the trial court in considering the myriad of claims in this seventy-two-count operative complaint, such a legal position has support in trial court decisions. Barton v. Town of Stonington et al., Superior Court, judicial district of New London, Docket Number KNL CV 18-5018150 (October 10, 2018, Murphy, J.) . "Although No. 16-97 of the 2016 Public Acts repealed § 34-187(a)(1), the repeal was effective on July 1, 2017. The complaint, as best that court can tell, appears to allege harm before that date. Accordingly, § 34-187(a)(1) governs this action." Id.

This action commenced by the filing of a "Complaint for Judicial Dissolution and Winding Up of Limited Liability Companies, Partnerships, Corporation and for Appointment of Receiver," dated June 15, 2012 (# 100.30). The Return of Service is dated June 18, 2012 (# 101.00).

The current plaintiffs, Marie Bongiorno and Bridjay Capone, were original plaintiffs. The three current defendant LLCs, J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC, were original defendants. The two current individual defendants, Frank R. Bongiorno and Maurice A. Nizzardo, were original defendants. The original June 15, 2012 complaint was in nine counts and alleged full membership status on the behalf of Marie Bongiorno and Bridjay Capone and management status on behalf of Frank R. Bongiorno and Maurice A. Nizzardo in the three named LLCs. The original complaint alleged that the two managers "wrongfully transferred and misappropriated additional monies and assets for their own benefit and to the substantial detriment of plaintiffs": (# 100.30, FIRST COUNT, paragraph 7). These identical allegations appear in all nine counts of the original complaint. These same allegations, fleshed out in more detail, appear in the current operative complaint, the Second Amended Complaint dated July 5, 2018, that is now before this court (# 440.00).

The Federal income tax returns for these three LLCs were offered into evidence, each in a separate large loose leaf binder. The tax returns were filed on a calendar year basis, January first to December thirty-first. Exhibit 67 contained the tax returns for 24 Ardmore Street, LLC for the years 2005 through and including 2017. Exhibit 68 contained the tax returns for 305 West Avenue, LLC for the years 2007 through and including 2017. Exhibit 69 contained the tax returns for J & G Realty, LLC for the years 2000 through and including 2017. All of the above forty-two Federal income tax returns for the three LLCs included the respective form K-1s for each LLC member in those three trial court exhibits. Additional complete tax returns for three other entities were also offered in evidence; Ex. 76, the non-appearing defendant, Bongiorno Supermarket, Inc.; Ex. 77, the appearing defendant, Bongiorno Gas Island, LLC; and Ex. 79, the appearing defendant, Bongiorno Brothers, a general partnership. A one-page form 1065 for the appearing defendant, Enterprise Park, LLC, each for the years 2009, 2010 and 2011 were also in evidence. Ex. 84.

During trial, most of the evidence of alleged wrongdoing, was supported by questions relating to the figures and categories in the above three sets of Federal income tax returns. A vast majority of those tax returns are for the period preceding July 1, 2017. Only one Federal income tax return was filed for each LLC for the period after July 1, 2017, the three 2017 Federal income tax returns. Each income tax return was filed for a calendar year beginning in each January ending each December. Nowhere in those three 2017 Federal income tax returns is there any allocation of events, income, expenses, deductions, and credits after July 1, 2017. The monetary evidence before this court of any financial breaches after July 1, 2017 was missing from this trial. No doubt rent was received and management fees were paid from and after July 1, 2017 but no evidence was offered as to the amounts from and after July 1, 2017. The three Federal income tax returns for 2017 failed to allocate and differentiate pre-July 1, 2017 finances from post-July 1, 2017 finances. This court has insufficient evidence, likewise, to do the same. This court, confronted by the very limited evidence of post-July 1, 2017 finances will not apply the Connecticut Limited Liability Company Act, in this Memorandum of Decision. Gen. Stat. § § 34-243 to 34-283d. This court will apply the dissolution and winding up statutes, both pre-July 1, 2017 and post-July 1, 2017, to those three Counts. The court will apply to the member record disclosure issues, the pre-July 1, 2017 and post-July 1, 2017 statutes, to those claims.

The Plaintiffs’ Reply to Defendants’ Post-Trial Brief dated October 19, 2018 (# 449.00) outlines eight separate transactions and events which have benefitted the named defendant entities and two individual defendants, Frank R. Bongiorno and Maurice A. Nizzardo, to the detriment of the two plaintiffs, Marie Bongiorno and Bridjay Capone. Quoting from page 3 of that Reply Brief the following are the eight "suspicious transactions" outlined therein; (1) awarding management fees, (2) paying legal fees of other entities and other members, (3) paying real estate commissions to managers, (4) failing to provide distributions despite showing impressive profits, (5) failing to collect rents from M & F Carwash, LLC and Bongiorno Gas Island, LLC, (6) failing to collect loans due from Bongiorno Brothers, LLC, (7) failing to provide Capone with access to the books and records of the entities, and (8) failing to disclose transfers of membership interest from George Bongiorno to his children (# 449.00, page 3).

The court after listening to the testimony, reviewing all the trial documents and the post-trial filings made by all parties, makes the following findings of fact and legal conclusions.

The court trial of this case commenced on May 31, 2018 ended on the eighteenth day of trial on July 24, 2018. There were originally three plaintiffs. George Bongiorno withdrew as a plaintiff early on in the litigation leaving Marie Bongiorno and her daughter, Bridjay Capone, as the original plaintiffs who continued on with the trial. Two of the children, issue of George Bongiorno and Marie Bongiorno, Michele B. Nizzardo and John Bongiorno, Jr., were removed as individual defendants by the plaintiffs (# 417.00, # 428.00). Fifteen separate entities including a corporation, a general partnership, a joint venture, and multiple LLCs were originally sued and named as defendants. Six were later removed from this litigation (# 430.00). The corporation, Bongiorno Supermarket, Inc., was a non-appearing defendant. This lawsuit was finally litigated against seven LLCs, one general partnership and two individuals, Frank R. Bongiorno and Maurice A. Nizzardo.

Income tax returns for each of those three defendant entities with some going back to the year 2000 were offered as exhibits at trial and testified to by various individual plaintiffs and defendants and by Michael Weinshel, the accountant who prepared those income tax returns.

On June 28, 2016 the plaintiffs disclosed their expert witness, Michael R. Blezard, who is both a Certified Public Accountant (CPA) and a Certified Valuation Analyst (CVA) (# 316.00). Mr. Blezard’s expertise is in forensic accounting. He was hired specifically to review the business and financial records of J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC, the three entities in which the plaintiff, Bridjay Capone, was admittedly a twenty-five percent member.

On May 23, 2016 the individual defendants, Frank R. Bongiorno and Maurice Nizzardo, by their counsel of record agreed "that there was no need for a court order because Defendants were willing to comply with C.G.S. § 34-144 et seq. and allow Plaintiffs’ accountant, Michael Blezard, to inspect and copy the records of J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC" (# 322.00). On the first day of trial May 31, 2018, this court conducted an extensive pre-evidence discussion of administrative matters and specifically inquired of the attorneys whether there was outstanding discovery based upon pleadings in the file or any other outstanding discovery issues that would be faced by the court during trial. No notice of those discovery issues was furnished to this court from the plaintiffs on May 31, 2018 nor on the second day of trial, June 1, 2018. This court’s trial notes indicate that on each and every day of trial prior to the commencement of testimony, the court made inquiry of the parties on the record as to whether or not there were outstanding discovery based upon either pleadings in the file or other issues relating to discovery that need to be resolved. The court cannot recollect any matters revolving around the lack of discovery that prevented Michael R. Blezard nor any plaintiff or their counsel of record from performing inspection of the records of the three LLCs mentioned above. Neither Michael R. Blezard nor any other accountant or forensic expert testified on behalf of the plaintiffs. The plaintiffs at trial in documentary evidence and in testimonial evidence did not itemize in dollar fashion the monetary claims that they were making in this lawsuit. Markedly the post-operative briefs filed by the plaintiffs did not specify any dollar amount for the damages being sought (# 447.00, pages 33-35, 51-52, # 449.00, pages 3, 12).

The three LLCs in which Bridjay Capone holds a twenty-five (25.0%) percent membership interest, are J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC. Bridjay Capone owns no interest in any of the other Bongiorno entities including those defendant entities in this lawsuit. As further indicated in the earlier portion of this Memorandum of Decision, George Bongiorno and his brother John Bongiorno operated a successful retail business known as Bongiorno Supermarket. They acquired the real property upon which the supermarket was located along with the supermarket parking lot. They acquired additional real property in the immediate neighborhood for investment purposes and to expand their real estate investment operation. At some point the Bongiorno Supermarket business was sold in 2004 and as of August 2006 was no longer being operated at the real property owned by the Bongiorno family. That real property later was converted to other retail uses by the Bongiornos.

J & G Realty, LLC owns the real property at 281 West Avenue and 288 West Avenue, Stamford, Connecticut. 288 West Avenue is the former Bongiorno Supermarket location. After August 2006 the supermarket building was demolished and two new buildings were constructed on the lot. One building, the larger of the two, is now occupied by PetSmart, a nationally known provider of pet supplies, and by a retail store entitled Bongiorno’s Maxi Discount Liquor. The liquor store went out of business a number of months ago and that portion of the building is vacant and is in the process of being leased for another retail use. In addition on that lot is a stand-alone building located in the middle of a parking lot now occupied by Starbucks Coffee under a long-term lease.

281 West Avenue, also owned by J & G Realty, LLC, is occupied by four retail businesses. The first is a gasoline sales business purveying Gulf Oil products with no motor vehicle repair operation associated with it. That business is owned by the defendant, Bongiorno’s Gas Island, LLC. In a separate building, also located at 281 West Avenue, is a carwash owned by the, M & F Carwash, Inc. Testimony referred to this business as a foam wash carwash business. M & F Carwash, Inc. is owned by the defendants, Frank R. Bongiorno and Maurice A. Nizzardo. M & F Carwash, Inc. is and never was a party in this litigation. The third business operated at 281 West Avenue is a large residential trailer, which is the administrative office for the various Bongiorno family entities including that of J & G Realty, LLC. The fourth business operated at 281 West Avenue are three former truck trailers, which currently store equipment from the former Bongiorno Supermarket as well as office furniture and supplies servicing the other Bongiorno businesses. The truck trailers are storage facilities only.

J & G Realty, LLC owns three other parcels of real property. They are not near nor contiguous with 281 and 288 West Avenue. 14 Diaz Street is located in a mixed residential/commercial area on the other side of I-95 in Stamford. It is improved with a house and a garage. The Bongiorno family was raised in the Diaz Street house. The house is fully rented. The garage was originally occupied by George Bongiono’s father in which he operated his baking business. For years thereafter the garage was used as a storage facility for Bongiorno’s supermarket. The house tenant claims use of the driveway that accesses the garage. The land area is less than 6, 000 square feet. Ex. 33, THIRD TRACT, Ex. 34, THIRD TRACT.

140 Guinea Road, Monroe, Connecticut is a 500-600-square-foot land-locked parcel of vacant land. It is not used at this time. Real estate taxes are the only expense. The lot is not rented or otherwise improved. No other facts were furnished on this parcel. Frank R. Bongiorno testified that the highest and best use for 140 Guinea Road would be to sell it to an adjacent property owner. In his opinion the sales price would be in the $ 500 range.

76 Ball Pond Road, Danbury is a vacant parcel of approximately 6 acres. After its purchase by George Bongiorno, the inland wetlands regulations were enacted. The land is wet. It is essentially a peat bog that was characterized by Frank R. Bongiorno as a swamp. J & G Realty, LLC pays real estate taxes on 76 Ball Pond Road. In his opinion, the donation of the land to a conservation agency would be the best result for this parcel.

*20 24 Ardmore Street, LLC owns the real property and the building constructed thereon located at 24 Ardmore Street, Stamford, Connecticut. Some evidence was offered indicating that the highway on which this lot is located may be also known as Ardmore Road. The only tenant for that large building is FedEx, which runs its delivery services and offices from that building. FedEx was formerly named Federal Express and may now be FedEx Corporation. All witnesses referred to the tenant as FedEx. The 44, 000 to 48, 000-square-foot building is used as a warehouse/garage/truck terminal by FedEx. The building has 2, 200 square feet of office space also used by FedEx. There is a 78-space underground parking garage also used by FedEx. The FedEx lease is currently under negotiation. FedEx is a long-standing tenant of this real property.

The third LLC entity is 305 West Avenue, LLC. It owns commercial real estate at 305 West Avenue, Stamford, Connecticut. That property was formerly used as a parking lot serving the Bongiorno supermarket customers. In 2008 a one-story retail building was constructed by 305 West Avenue, LLC. The building is approximately 13, 000 square feet. There are currently three tenants in this three-unit retail building including the national franchise, Advance Auto Parts. Ex. 2, two building photographs, ; Ex. 3, one aerial photograph. Each tenant has a written lease. The building at 305 West Avenue, LLC is fully occupied. There are no other structures or improvements on the lot other than a paved parking area servicing the retail building.

The advancement by the Bongiorno family in the food market business culminated in the eventual sale of Bongiorno’s Supermarket to a large national food retailer in 2004. The supermarket was a joint venture between George Bongiorno and his brother, John Bongiorno, that started in 1957. John Bongiorno had no children. According to the evidence before this court, John Bongiorno had agreed with George Bongiorno that John would leave his assets upon his death equally to the four surviving children of George Bongiorno; Michele, Frank, Bridjay, and John, Jr. John Bongiorno passed away suddenly on April 3, 2003 and left a will that did not leave his interests in the Bongiorno investments equally to the four children of George Bongiorno. With the assistance of Frank R. Bongiorno and Maurice A. Nizzardo, who both signed certain personal guarantees of a large mortgage to the Estate of John Bongiorno, George Bongiorno was able to negotiate with John Bongiorno’s widow a resolution.

The assets of the Estate of John Bongiorno were purchased in March 2004 for $ 5, 295, 178. This transaction was based on a January 29, 2004 Purchase Agreement signed by the Estate of John Bongiorno and Wilma Bongiorno, its temporary executrix, the four children of George Bongiorno, Bongiorno Supermarket, Inc., Bongiorno Brothers, J & G Realty, LLC, George Bongiorno, and Maurice A. Nizzardo. There were five separate transactions, each a conveyance with a different price and payment terms set forth in the January 29, 2014 Purchase Agreement. Ex. 4, See Tab, Purchase Agreement. See December 16, 1983 one-page agreement. Ex. 83. The Greenwich Probate Court approved the estate settlement terms and the Purchase Agreement.

The five transactions were: (1) All of John Bongiorno’s stock in the supermarket, his fifty percent ownership interest, would be conveyed to Bongiorno Supermarket, Inc. for $ 1, 250, 000 paid by certified check at the closing, (2) John Bongiorno’s fifty percent interest in Bongiorno Brothers, a general partnership, would be conveyed to Frank R. Bongiorno, Maurice A. Nizzardo and John A. Bongiorno aka John Bongiorno, Jr. for $ 1, 075, 000 paid by certified check at the closing; (3) John Bongiorno’s fifty percent interest in Bongiorno Gas Island, LLC would be conveyed to Frank R. Bongiorno and Maurice A. Nizzardo for $ 175, 000 paid by certified check at the closing. The real property on which Bongiorno Gas Island, LLC operated would continue to be owned by J & G Realty, LLC; (4) Other real properties interests of the Estate of John Bongiorno would be conveyed to the four children of George Bongiorno and Maurice A. Nizzardo for $ 225, 000 payable by certified check at the closing. The legal descriptions, locations and addresses of those other real property interests were not contained in the Purchase Agreement nor in SCHEDULE C, thereof, and; (5) John Bongiorno’s fifty percent membership interest in J & G Realty, LLC was sold for $ 2, 570, 178 paid by a promissory note secured by mortgages on the real property owned by J & G Realty, LLC at 281 West Avenue, 288 West Avenue, 305 West Avenue, and 24 Ardmore Street, Stamford, Connecticut. The $ 2, 570, 178 promissory note required thirty-two equal quarterly payments of $ 110, 312.50 and was to be amortized at 8.0% annual interest to be paid in full in eight years. The four children, Maurice A. Nizzardo, and J & G Realty, LLC guaranteed this note. On March 31, 2004 Wilma Bongiorno, Executrix of the Estate of John Bongiorno executed assignments to each of the four Bongiorno children of a twelve one-half (12.5%) percent membership interest in J & G Realty, LLC. Ex. 38.

*21 The five above mentioned transactions totaled the agreed upon settlement of $ 5, 295, 178. The plaintiff, Marie Bongiorno, was not part of this transaction, guarantee or payment obligation. Marie Bongiorno did witness George Bongiorno’s signature on some of the settlement documents. Ex. 4.

According to the J & G Realty, LLC tax returns before this court, George Bongiorno and his brother, John Bongiorno each owned an undivided fifty (50.0%) percent of the membership interest in J & G Realty, LLC. Ex. 69, Tax returns for the years 2000, 2001 and 2003. John Bongiorno died in 2003. The 2003 tax return in form K-1 shows George Bongiorno at fifty (50.0%) percent and Wilma Bongiorno, Executrix of the Estate of John Bongiorno at fifty (50.0%) percent. After the settlement with the Estate of John Bongiorno in March 2004, the form K-1 for the year 2004 for J & G Realty, LLC shows George Bongiorno fifty (50.0%) percent and Frank Bongiorno, John A. Bongiorno (aka John Bongiorno, Jr.), Michele B. Nizzardo, and Bridjay Bongiorno Capone, each at twelve and one-half (12.5%) percent. The four children of George Bongiorno first acquired an interest in the real property at issue in this litigation in 2004 as a result of the above described settlement of the Estate of John Bongiorno. See form K-1 in Exhibit 69 for the years 2000, 2001, 2002, 2003, and 2004. The form K-1 for J & G Realty, LLC 2004 tax return shows the interest of the Estate of John Bongiorno as of that year to be 0.000% (zero).

Each form K-1 from 2005 through 2011 shows that some twelve and one-half (12.5%) ownership interest in J & G Realty, LLC for each of the four Bongiorno children. Ex. 69. In 2012 a transfer of George Bongiorno’s fifty (50.0%) percent membership interest in J & G Realty, LLC occurred. Ex. 20. As a result the form K-1 issued for 2012 reflected that change. George Bongiorno gifted to his four children each a twelve and one-half (12.5%) interest in J & G Realty, LLC, bringing the member status from 2012 to the current date of twenty-five (25.0%) percent for each of the four Bongiorno children. Each form K-1 in evidence before this court for J & G Realty, LLC for the years 2012 through and including 2017 reflect that twenty-five (25.0%) interest. Exhibits 41, 42, 43, 44, 45, and 69.

305 West Avenue, LLC and 24 Ardmore Street, LLC were both founded in 2004, after the settlement of the Estate of John Bongiorno. J & G Realty, LLC had the title to the real property now owned by 305 West Avenue, LLC and 24 Ardmore Street, LLC so the settlement of the Estate of John Bongiorno transferred an equal twelve and one-half (12.5%) percent share in those two parcels of real property to the four Bongiorno children on March 31, 2004. Ex. 4, Ex. 38. After the March 2004 settlement with the Estate of John Bongiorno, George Bongiorno conveyed his fifty (50.0%) percent interest in the above two LLCs equally to his four children. The fact is also verified by the form K-1s before this court. Each child owned a twenty-five (25.0%) interest in and to 305 West Avenue, LLC and 24 Ardmore Street, LLC from 2004 to date. Ex. 67, Ex. 68.

This resulted in the above three LLCs, J & G Realty, LLC, 305 West Avenue, LLC and 24 Ardmore Street, LLC, being owned twenty-five (25.0%) percent each by the above named four Bongiorno children. Bridjay’s five (5.0%) percent share in Uncle John’s will eventually became a twenty-five (25.0%) percent share. Bridjay’s share of the post-settlement assets increased more than the pre-settlements of Frank R. Bongiorno and Michele B. Nizzardo. Ex. 83. Michele B. Nizzardo received a percentage interest, by reason of Uncle John’s will and the later Estate settlement. Her husband, Maurice A. Nizzardo, executed the mortgage loan guarantee but he himself did not receive any assets in the settlement of the Estate of John Bongiorno. Michele B. Nizzardo did not receive additional assets as a result of the settlement of the Estate of John Bongiorno, nor did Frank R. Bongiorno.

Although the two brothers, George Bongiorno and John Bongiorno, had co-managed the real property investments as well as Bongiorno’s Supermarket, Inc., both Frank R. Bongiorno and Maurice A. Nizzardo had worked in the supermarket for many years. Eventually Frank R. Bongiorno and Maurice A. Nizzardo took over the operation of the supermarket and started to manage a portion of the real property. After John Bongiorno’s April 3, 2003 death, Frank R. Bongiorno and Maurice A. Nizzardo became the co-property managers of the real property assets in early 2004. They were experienced real property investors and real property managers having years before purchased, owned, and managed a shopping center in the northern section of Stamford owned by the defendant, Glenbrook Center, LLC. The shopping center is called the Glenbrook Shopping Center.

The plaintiffs’ first damage claim is "awarding management fees" in that Frank R. Bongiorno and Maurice A. Nizzardo have been charging management fees and those management fees for past years should be divided equally between the four members of the three LLCs with Bridjay Capone receiving her one-quarter share. See page 33 of this Memorandum of Decision as stated, no dollar amount of this claim was furnished to this court (# 447.00, pages 33-35, 51-52). In their Post-Trial Brief, the plaintiffs argue; "that they have demonstrated actual damages" (# 447.00, page 32, lines 11-12). In fact no dollar amounts were stated. When asked at trial, how much did the defendant, Frank R. Bongiorno, receive from J & G Realty, LLC since June 2012, the plaintiff, Marie Bongiorno, responded: "I have no idea." "Q. How much do you claim that they received that was improper and in any way questionable prior to June 2012. A. No idea." The court has examined each of the forty-two tax returns for the three LLCs in evidence. Ex. 67, 68 and 69. Each showed a business deduction for tax purposes essentially on Form 8825 as an attached Statement indicating "management fees." The amount of those fees paid for the real property management fees was somewhat vague since legal fees and accounting fees were also included in the same line item in the tax returns. There was inadequate evidence before this court to accurately determine the dollar amount of the management fees paid to the two individual defendants by each entity for each year. In this court’s opinion, such information should have been made available to the court by Michael Blezard and/or Michael Weinshel. That information was not provided to this court.

Both Frank R. Bongiorno and Maurice A. Nizzardo testified that the management fees that they charged were solely as real property managers for the commercial real property. These real property management fees were based upon the gross rent received each year with each manager receiving two (2.0%) percent of the gross rent. They both testified that they did not charge or receive a management fee as the co-managers of each LLC, and that none of the fees received were for their duties as managers of the three LLCs. The court finds that testimony credible. The court finds that the only management fees that were paid were to the two real property managers for the management of this large commercial investment over multiple real properties in the western side of Stamford. The court finds that the real property management fee charged and paid were four (4.0%) percent of the gross rents, divided between the defendants, Frank R. Bongiorno and Maurice A. Nizzardo, equally.

As to the issue of standing, there is no evidence that the defendants, Frank R. Bongiorno and Maurice A. Nizzardo, ever received a distribution that was not made equally to the other LLC members other than the one-time 2005 entry mentioned on page 54 in this Memorandum of Decision. The real property management fees and real estate commissions paid are not considered a "distribution" by this court since they are payment for services rendered. The court heard evidence of two unequal distributions made by or on behalf of J & G Realty, LLC: Bridjay Capone received along with her husband, Joseph Capone, $ 87, 000 cash to pay taxes on an LLC K-1 distribution when no other member of the LLC received any cash distribution. Marie Bongiorno received the benefit of a low or no rent charge for many months of her occupancy in the rental space for her business, Bongiorno Maxi Discount Liquor at 288 West Avenue. Neither distribution was made to any other member of J & G Realty, LLC.

Attorney Mary Badoyannis represented the plaintiff, Marie Bongiorno. Early on in her representation, attorney Badoyannis had the opportunity to examine the tax returns for the three LLCs. As part of her due diligence, she made inquiry of other real property management companies for commercial real property management services in the Stamford, Connecticut area. Her investigation revealed that every single one of those real property management firms charged as a fee a percentage of the gross rents collected. The smallest percentage that she was able to obtain after discussing with many property managers was seven and one-half (7.50%) percent of the annual gross rent. That 7.5% firm, Pyramid Realty charged extra fees arranging for repairs. There was no evidence before this court that Frank R. Bongiorno and Maurice A. Nizzardo ever charged and received any more than two percent of the gross rental each year for the real property management, for a total real property management fee per year of four percent. There is no evidence that they charged extra property management fees for repairs, capital improvements and tenant fixups. There was evidence that George Bongiorno agreed that Frank and Maurice should be paid a management fee in 2004 after the supermarket sold and more active management of the various parcels of real property was needed.

Those two individuals defendants were the managers of the LLCs, each of which is a manager-managed LLC. There was no evidence that Frank R. Bongiorno and Maurice A. Nizzardo ever charged or was paid any fee whatsoever as the manager of each of these manager-managed LLC. The court finds that the fees that Frank R. Bongiorno and Maurice A. Nizzardo charged were only in their capacity as real property managers. There was no evidence that anyone else performed any real property management duties for any of the LLCs or that any other real property management company or individuals were ever paid for any management services other than Frank R. Bongiorno and Maurice A. Nizzardo. "Any Member who renders services to the Company, shall be paid reasonable compensation for such services as determined by the Managers." Ex. 24, Section 5.06. The plaintiffs fail to distinguish between fees charged by the LLC managers and the fees charged by the two real property managers. This is misleading since the plaintiffs offered no evidence that Frank R. Bongiorno and Maurice A. Nizzardo ever charged and or was paid a fee as manager of the three LLCs.

Frank R. Bongiorno and Maurice A. Nizzardo took over active real property management of J & G Realty, LLC early in 2004 after the conclusion of the purchase of assets from the Estate of John Bongiorno. The supermarket business was sold to national retailer, Stop and Shop, who was in the process of constructing a new and larger area supermarket just north of I-95 on the West Side of Stamford. During the construction of their new facility, Stop and Shop continued to operate the supermarket at 288 West Avenue and paid rent to J & G Realty, LLC. The rental payments from Stop and Shop ceased in August 2006 when the new Stop and Shop supermarket was occupied and in business. At that time 305 West Avenue was vacant land and used as an additional parking lot to support the supermarket. As property managers, the two individual defendants demolished the existing supermarket building and constructed two new buildings on the 288 West Avenue lot, which buildings are occupied by Starbucks Coffee, PetSmart and the former liquor store. As real property managers the two individual defendants constructed the three-tenant building at 305 West Avenue. During this time they had to arrange for demolition of the supermarket building, obtain environmental clearance, prepare and gain City approval of the building plans, comply with zoning, arrange for the construction of the three buildings, arrange financing of both construction and permanent mortgages, marketing, and leasing out of the new buildings. All of these substantial efforts were included within their two (2.0%) percent annual real property management fee. When there was no rent, there was no management fees charged since the fee was a percentage of the gross rents. There were few vacancies in these commercial units even during the height of the recent real estate recession. "I know that Mr. Bongiorno, Frank Bongiorno and I, are going to do all what is the best financial interests of the three LLCs" stated Maurice A. Nizzardo on direct during this trial.

Although the management fees were included in each of the three LLC’s income tax returns in evidence, in the main most of the management fees were contained within the line item that included accounting and legal fees. Frank R. Bongiorno testified credibly his real property management fees did not exceed two (2.0%) percent and Mr. Nizzardo’s real property management fees did not exceed two (2.0%) percent. He also testified credibly that neither was paid a fee as the manager of the three manager managed LLCs. There was insufficient evidence before this court to determine the exact amount of management fees paid for the real estate property management to Frank R. Bongiorno and Maurice A. Nizzardo. The amount of the gross rents for each LLC was not clearly presented to this court.

The plaintiffs’ claim that the two individual defendants are obligated to return their real property management fees to the three LLCs must fail. The plaintiffs conflate two forms of management fees. The plaintiff, Marie Bongiorno, hired an attorney who determined that the real property management fees actually charged was just over fifty percent of the lowest competitive quote her lawyer’s investigation revealed. There was no evidence before this court that the multimillion dollar real property investment of those three LLCs should be maintained by a real property manager who every day must deal with collecting rent, arranging for repairs, marketing, maintenance, construction, renting to new tenants with and without brokers, and dealing with national and international businesses as tenants for no fee or salary whatsoever. At a minimum, no evidence supporting that absurd economic proposal was offered at trial.

The second damage claim is the "paying legal fees of other entities and other members." Throughout this litigation, attorney Mark F. Katz has been the sole attorney representing Frank R. Bongiorno and Maurice A. Nizzardo, the two real property managers and the two managers designated for the three manager-managed LLCs in question. In addition attorney Katz has filed an appearance for each of the defendant entities. He has continued to represent both the defendant entities and the two individual defendants throughout this litigation.

An unsuccessful motion to disqualify attorney Katz was filed in this litigation on August 3, 2012 (# 104.00). It was assigned by the court for a December 18, 2012 hearing. The motion was not prosecuted thereafter. A second motion to disqualify attorney Katz was filed on May 15, 2013 (# 150.00). The motion was not heard. On March 11, 2015 a third motion to disqualify attorney Katz was filed in this state court litigation (# 241.00). On May 5, 2015 this court heard the motion and denied the requested relief that attorney Katz no longer be permitted to represent any defendant in this litigation (# 241.01).

This entire case was referred to the Hon. Alan Nevas, who conducted arbitration proceedings in a docket number F13-AF-610. On August 8, 2014 Judge Nevas issued an order denying a Motion to Disqualify attorney Katz filed by the plaintiffs, Marie Bongiorno and Bridjay Capone. A transcript of the August 8, 2014 was furnished to this court in regards to a later filed Motion to Disqualify attorney Katz.

On July 6, 2016 the plaintiffs, Marie Bongiorno and Bridjay Capone, commenced a separate civil action against attorney Katz for legal malpractice, breach of fiduciary duty and aiding and abetting others in their breach of fiduciary duty. Stamford Superior Court, FST CV16-602883 S. The attorneys of record in this current litigation represented the parties in that new civil lawsuit. A Request to Revise was granted in which the aiding and abetting count was made more specific naming each of the two plaintiffs individually aiding and abetting each of the individual defendants, Frank R. Bongiorno, Maurice A. Nizzardo, Michele B. Nizzardo and John Bongiorno, Jr. The operative complaint then became ten counts. Attorney Katz filed a counterclaim for abuse of process. After the pleadings were closed attorney Katz filed a February 15, 2017 Motion to Dismiss (# 125.00). A multi-day hearing was held in May 2017 by another judge. On November 2017 the Motion to Dismiss was granted in a seventeen-page Memorandum of Decision (# 125.03). The trial judge, Lee, J., noted at the beginning of his Memorandum of Decision: "The action arises in connection with a bitter and protracted family feud over the rights to commercial property on the West Side of Stamford, Connecticut and interests in various businesses accumulated over the years by the brothers John and George Bongiorno" (# 125.03, page 1).

Disqualification of counsel is a remedy that serves to "enforce the lawyer’s duty of absolute fidelity and to guard against the danger of inadvertent use of confidential information." Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corporation, 518 F.2d 751, 754 (2d Cir. 1975). In disqualification matters, however, we must be "solicitous of a client’s right freely to choose his counsel"; Government of India v. Cook Industries, Inc., 569 F.2d 737, 739 (2d Cir. 1978); mindful of the fact that a client whose attorney is disqualified may suffer the loss of time and money in finding new counsel and "may lose the benefit of its longtime counsel’s specialized knowledge of its operations." Id. The competing interests at stake in the motion to disqualify, therefore, are: (1) the defendant’s interest in protecting confidential information; (2) the plaintiffs’ interest in freely selecting counsel of their choice; and (3) the public’s interest in the scrupulous administration of justice. Goldenberg v. Corporate Air, Inc., 189 Conn. 504, 507, 457 A.2d 296 (1983), overruled in part, Burger & Burger, Inc. v. Murren, 202 Conn. 660, 522 A.2d 812 (1987).

Bergeron v. Mackler, 225 Conn. 391, 397-98 (1993).

"A central dimension of the attorney-client relationship is the attorney’s duty of [e]ntire devotion to the interest of the client ... The Connecticut Supreme Court reasoned that it must take care not to adopt rules which interfere with the attorney’s duty of robust representation of the interests of his or her client ... The duty of entire devotion to the client is not limited to litigation matters as transactions involving contractual negotiations do involve parties with adverse interests." (Citations omitted; internal quotation marks omitted.) First American Title Ins. Co. v. Martucci, Superior Court, judicial district of Windham, Docket No. CV 10 6002278 (December 14, 2011, Vacchelli, J.) .

In balancing the above three interests, the most weight is given to the plaintiffs’ interest in freely selecting counsel of their choice. Matza v. Matza, 226 Conn. 166, 174 (1993); State v. Peeler, 265 Conn. 460, 470 (2003). The defendants, both entities and individuals, are facing drastic financial consequences including the dissolution of a successful multi-million dollar real estate investment portfolio. They are facing a claim of treble damages, attorney fees, refunding of real property management fees paid for years past, payment of rent arrears, real punitive damages under CUTPA, and other monetary claims. They certainly need counsel to represent both the defendant entities and individual defendants. The choice of attorney Katz as their counsel must be respected. It is the defendant’s choice. For each entity and each individual to hire separate counsel is financial suicide. The plaintiffs chose to file a lawsuit against the entities in which they claim a financial interest and sue the managers of that real property. No sufficient legal authority has been demonstrated to this court that the named individual defendants should represent themselves pro se or that the LLC entities should hire counsel, who will not be paid. The plaintiffs may even be claiming that one or more of the defendant entities should not pay for its own attorney.

The plaintiffs appear to argue that they can sue the defendants, and before it is determined whether that lawsuit is valid, the defendants LLCs cannot expend any of its funds for attorney fees because Bridjay Capone owns one-quarter of those funds. Win or lose in the lawsuit, the plaintiff’s position is that she is entitled to receive as a distribution one-quarter of the LLC funds needed to pay attorney fees to defend her lawsuit. This position is illogical and finds no support in the operating agreement, the LLCs statutes or case law.

No documentary or testimonial evidence was provided that funds from the three LLCs were used to pay attorney fees for other entities or other individuals. The two individual defendants and the three LLCs have always been named defendants in this litigation and attorney Katz has always represented them in this litigation.

Several attempts were made concerning taking the deposition of attorney Katz with a result of those depositions unknown to this court. Attorney Katz was not called as a witness in this trial. His deposition transcript was not offered into evidence in this trial. None of the plaintiffs testified as to the amount of attorneys fees that they have incurred as plaintiffs in this litigation. None of the plaintiffs’ attorneys testified as to the amount of fees that they have charged. Neither the plaintiffs nor their attorneys offered to testify consistent with Rules of Professional Conduct Rule 3.7(a)(2), which permits such testimony. The plaintiffs did not hire and did not call any expert witness on the subject of attorneys fees. No documentary proof was offered at trial stating that any defendant entity paid "legal fees of other entities and other members."

The third damage claim is "paying real estate commissions to managers." The operating agreement for each of the LLCs in evidence contains no prohibition for the payment of real estate commissions to any member of the LLC or the managers of the LLC. "Any Member who renders services to the Company shall be paid reasonable compensation for such services as determined by the Managers." Exhibits 24, 39 and 40 at Section 5.06. Each of the real properties in question is a commercial venture with multiple tenants occupying large square footage of commercial space. Some of the current tenants have a commercial presence nationally and internationally. There was no evidence before this court that it would be unreasonable under those circumstances to hire the services of a commercial real estate broker for the purpose of obtaining tenants, evaluating prospective tenants, establishing lease terms, negotiating the terms and conditions of leases, and maximizing the income to the LLCs. In this regard the evidence discloses that Maurice A. Nizzardo received certain real estate commissions for some of the leases. There was no evidence that Frank R. Bongiorno was ever paid a real estate commission. There was no evidence produced by any party concerning the real estate broker’s or real estate salesmen’s license that Maurice A. Nizzardo may have held during the period a real estate commission was paid. Joseph Capone testified that Maurice A. Nizzardo was in the real estate business. "Any person who engages in the business of a real estate broker or real estate salesperson without obtaining a license as provided in this chapter shall be fined not more than one thousand dollars or imprisoned not more than six months or both, and shall be ineligible to obtain a license for one year from the date of conviction of such offense, except that the commission or Commissioner of Consumer Protection may grant a license to such person within such one-year period upon application after hearing on such application." Gen. Stat. § 20-325. "It is undisputed that it is a criminal offense to act as a real estate broker without a license." Winer v. Ceslik, 66 Conn.App. 842, 843 (2001).

"No person who is not licensed under the provisions of this chapter, and who was not so licensed at the time the person performed the acts or rendered the services for which recovery is sought, shall commence or bring any action in any court in this state, after October 1, 1971, to recover any commission, compensation or other payment with respect to any act done or service rendered by the person, the doing or rendering of which is prohibited under provisions of this chapter except by persons duly licensed under this chapter." Gen. Stat. § 20-325a(a). The prohibition on that statute prevents an unlicensed broker or salesperson from instituting an action in court to collect a real estate commission. There is no evidence in this case that that statute is applicable to these events and that Maurice A. Nizzardo had to file a lawsuit against the LLCs in order to be paid a real estate commission.

In addition the Connecticut General Statutes contain exceptions concerning the payment of commissions to real estate brokers and real estate salespersons. Those prohibitions shall not apply to: "Any person who as owner or lessor performs any of the acts enumerated in section 20-311, with reference to property owned, leased or sought to be acquired or leased by the person, or to the person’s regular employees who are employed as on site residential superintendents or custodians, with respect to the property so owned or leased ..." This is the first of five statutory exceptions contained in Gen. Stat. § 20-329. At all times that Maurice A. Nizzardo was paid a real estate commission for obtaining a commercial rent paying tenant for one of the Bongiorno properties, he was operating as the real property manager hired by the real property owners and at all times was acting as the duly authorized representative of the owner.

Although there was no itemization of the specific transactions, there appeared to be four occasions in which Maurice A. Nizzardo shared a real estate commission for obtaining a rent paying tenant. There was credible testimony that the total real estate commission that the landlord would be obligated to pay by hiring a real estate broker would be five (5.0%) percent of the gross rent. Mr. Nizzardo received a commission of one-half of that total, two and one-half (2.5%) percent. Based upon the normal real estate commission contracts, the total of the five (5.0%) percent commission is due by the property owner to the real estate broker, whether there is one broker involved, two brokers or more than two brokers involved. The sharing of the five (5.0%) percent commission between other brokers does not inure to the detriment of the owners of the real property, who are contractually obligated to pay the five (5.0%) percent real estate commission. No contract for any real estate commission was offered in evidence before this court. No evidence was offered that any of the real estate commissions paid exceeded five (5.0%) percent.

The fourth damage claim is "failing to provide distributions despite showing impressive profits." In support of this claim the tax returns for the three LLC entities and the form K-1s attached to those tax returns to each of the four members of the LLCs were offered in evidence. Ex. 67, Ex. 68 and Ex. 69. The court has examined each of the form K-1s for the years in question for each of these three LLC entities. The court finds that each amount of the profit listed in each form K-1 attributable to each member, was exactly one-quarter of the total profit of each LLCs. Each of the other entity’s form K-1s were identical, except for a one dollar rounding here and there. The only major difference was a one-time distribution to Michele B. Nizzardo and Frank R. Bongiorno in 2005 by J & G Realty, LLC of $ 12, 630, which this court finds was an accounting error. This sum was the real property management fee of four percent of the gross rent for 2005. This error was never repeated. The statute of limitation for that 2005 error has long since passed. Each of the LLCs was a tax pass-through entity, meaning that the LLC did not pay income taxes but did have the obligation to file an information tax return and issue a form K-1 to each member distributing the taxable profits, losses, capital gains, and dividends to each of the members. The members then were responsible for placing the form K-1 in their personal income tax returns and paying the appropriate Connecticut and Federal income taxes thereon. In this regard there was extensive testimony from the plaintiff, Bridjay Capone, and her husband, Joseph Capone, that at no time did they receive any distributions from any of the LLCs in the form of cash and yet each of the form K-1s that they received indicated a taxable profit upon which they had to pay income taxes to the state and federal government. On one occasion in 2005 the Capones were able to obtain from George Bongiorno certain funds in the approximate cash amount of $ 87, 000 to assist the Capones in paying their income taxes for the previous year, 2004. No other LLC member ever received a similar cash distribution.

There was no evidence developed before this court that any of the form K-1s that were issued to each of the four members were inaccurate. In this court’s opinion each of the form K-1s contains the same information, the same numbers, and the same entries for each of the three LLCs for each of the four members of the LLCs. There was no evidence that the LLCs paid any cash to any member, whether a managing member or a regular member, that was not paid to the other members, except for the above mentioned $ 87, 000. LLCs by definition are pass-through entities and the member’s income taxes are paid by the members themselves, not the LLC. Scarfo v. Snow, 168 Conn.App. 482, 499 (2016).

It appears to this court that the Capones do not have an understanding of the tax consequences of investing in depreciable rental real property that is subject to an amortized mortgage requiring payments of principal over a period of time. The evidence discloses that Frank R. Bongiorno and Maurice A. Nizzardo have such an understanding. Both testified that the profits of the business although not distributed in cash, actually increase the net assets of each of the members by the amount of profit since in effect it is an increase in the equity ownership of the real property generally by reason of the mortgage principal being reduced. Rents are taxed. Mortgage interest is deductible. Loan interest may be deductible. Loan principal payments are not deductible. Mortgage principal payments are not deductible on income taxes.

When commercial real property is acquired, bookkeeping losses are allowed pursuant to the IRS regulations for depreciation. That depreciation is taken as a tax loss even though no cash is actually lost in the transaction. That depreciation offsets the reduction of principal paid on the initial mortgage. The mortgage principal and interest is paid from the rents received from the commercial tenants. This rent is taxable income. The mortgage interest is deductible on the LLC income tax return. The payment of the mortgage principal is not tax deductible. In the early stages of a real estate investment the depreciation is substantial and may very well result in tax losses even though the commercial venture is developing an actual cash profit. The amount of money paid on the mortgage loan is mainly paid for interest with very little paid to the amortized principal in the early years of the mortgage loan. After a number of years the principal portion of the mortgage increases and the depreciation ends. The rental payments made reduce the mortgage principal and therefore increase the equity in the real property to the owners. There is then no equivalent depreciation to offset that increase in equity. There may be insufficient cash to distribute to the members since that cash is required to pay down the mortgage loan principal pursuant to the terms of the mortgage note and mortgage deed. The real estate investment under those conditions is profitable. The equity in the real property is increasing to each of the owners. The owner’s assets are increasing but because of the effect of the tax code the owners are incurring an immediate tax obligation on profits that they have not received in cash. The court refers to this situation as "phantom income." Lane v. Lane, Superior Court, judicial district of Fairfield at Bridgeport, Docket Number FBT FA 07-4021308 S (April 27, 2009, Pinkus, J.). Nickel v. Nickel, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST FA 12-4023163 S (May 2, 2014, Heller, J.). "Phantom income is an accounting term given to income generated by the LLC (limited liability company) or LP (limited partnership) that hasn’t been distributed to the members. It’s called ‘phantom’ income because it exists on paper. It’s taxable income and you pay tax on it, even though there is no cash that comes to you." www.ustaxaid.com, January 8, 2013.

An explanation of this so called "phantom income" is contained in a 2016 Memorandum of Decision. R.D. Clark & Sons et al. v. James Clark et al., Superior Court, Judicial District of Hartford, docket number HHD CV 14-6050218 (August 25, 2016, Shortall, JTR) . The Clark case was family litigation concerning the operation of the business known as R.D. Clark & Sons, Inc. The defendant, James Clark, claimed to be the victim of oppressive conduct on the part of the other members of the corporation and outlined his concerns of a similar phantom income claim. R.D. Clark & Sons, Inc. was a S corporation in which footnote 1 of the Memorandum of Decision stated: "that profits and losses can pass through to the shareholder’s personal tax return. Consequently, the business is not taxed itself. Only the shareholders are taxed." No doubt similar form K-1s were issued to the Clark family by the corporation. In that case the Clark corporation distributed some portion of the profit in cash to the shareholders to cover their income tax liabilities on their share of the corporation’s profits. "The corporation had a practice for many years of providing shareholders with funds to pay the federal income tax liabilities incurred by them as a result of the pass-through of the corporate profits to them." The cash distributed was sufficient to pay the income taxes based upon the individual’s bracket. In one of the years the corporation lost money and no such cash payments were made. In the case of the Clark family the disputes between the family resulted from the fact that in 2014 the shareholder complaining oppression received no cash while the other shareholders received cash. The trial court found that this action distributing cash to some of the shareholders but no cash to the other shareholders was an act of oppressive conduct toward this one shareholder and the court entered orders accordingly.

In this Bongiorno case this court carefully examined each of the tax returns for the three LLC entities and compared each of the form K-1s contained in those tax returns. The court listened carefully to find out whether there was any evidence whatsoever that any of the members including Frank R. Bongiorno and Michele B. Nizzardo’s husband, Maurice A. Nizzardo, received any cash distributions from the LLCs for any purpose whatsoever including the payment of their income tax obligations. The court neither heard or saw any such evidence of unequal distribution of the profit.

The financial records of the three LLCs appear simple; a checking account for each LLC, monthly bank statements and the check register information. The accountant who prepaid those tax returns, Michael Weinshel, confirmed that fact in his trial testimony. The income is simple and is based solely on written leases. These are seven rent paying tenants in the three LLCs. Some tenants may pay rent electronically. In any event the yearly income deposits for the three LLCs cannot exceed eighty-four entries. Although no closing documents were furnished to the court, testimony at trial indicated that the mortgage refinances conducted by the three LLCs were infrequent and were each shown in a detailed closing statement. Many of the leases were net, either single, double or triple net, with the tenant paying either real estate taxes, liability and fire insurance, and utilities, or a combination of these three expenses. Thus the expenses for all three LLCs could easily be determined from the minimum checks necessary to pay those expenses. There was no evidence that any of the three LLCs hired or paid any employees, which would have required withholding, social security, unemployment compensation, benefits, and the like. There was no evidence that any of the three LLCs owned any vehicles, loading trucks or heavy mechanical equipment. All in all, it appeared to this court that the financial records of the three LLCs would be simple and easily examined by the plaintiffs’ counsel and/or experts hired by the plaintiffs. No evidence to the contrary was furnished to this court.

There was no evidence that either Frank R. Bongiorno or Maurice A. Nizzardo ever engaged in the following in regard to the funds of the three LLCs: operating a home office, charging for transportation, payment of personal home utilities, business travel, convention expenses, meals, entertainment, petty cash, cash to family members, gifts to family members, home repairs, home maintenance, home improvements, payment of personal expenses, and donations made in the name of Frank R. Bongiorno and/or Maurice A. Nizzardo. All income was in the form of rent paid by check or electronically. There was no opportunity for cash skimming. There was no evidence or even a claim that Frank and/or Maurice skimmed cash. All income is deposited and verified by the examination of bank statements. Only one month of bank statements was in evidence. Michael Weinshel compared all of the deposits with each monthly bank statement and never noticed any irregularities. No such irregularities were brought to the attention of this court.

There was no evidence furnished to this court that anything other than the above "phantom income" scenario occurred. The opportunity for the plaintiffs to present information to this court was made available since the accountant who prepared the tax returns testified. All the tax returns were offered into evidence and all the LLC’s books and records have been examined by Michael R. Blezard, a forensic accounting expert hired by the plaintiffs.

The fifth damage claim is: "failing to collect rents from M & F Carwash, LLC and Bongiorno Gas Island, LLC." The real property at 281 West Avenue is across the street from 288 West Avenue. 288 West Avenue was the former location of the original Bongiorno Supermarket when the supermarket was in business. John and George Bongiorno purchased 281 West Avenue and built a gasoline station without car servicing facilities to further attract business to the supermarket. Upon the closing of the Bongiorno Supermarket, the gasoline service station business now is a stand-alone operation. The gas business is owned by Bongiorno Gas Island, LLC, one of the named defendants. Bongiorno Gas Island, LLC is owned by Frank R. Bongiorno and Maurice A. Nizzardo as its only two members. Neither plaintiffs have claimed an ownership interest in Bongiorno Gas Island, LLC. The evidence discloses that the carwash operation is in a separate building also located on 281 West Avenue. It is owned by M & F Carwash, LLC, which is not and has never been a named defendant in this lawsuit. Neither plaintiffs have claimed an ownership interest in M & F Carwash, LLC. The evidence discloses that M & F Carwash, LLC is owned by Frank R. Bongiorno and Maurice A. Nizzardo as its only two members.

As stated in the first paragraph of this Memorandum of Decision, Frank R. Bongiorno and Maurice A. Nizzardo have been operating both the carwash and the gasoline business in the same fashion that George Bongiorno operated. When George Bongiorno established and built both car servicing businesses, family members of the extended Bongiorno family received gasoline and oil services as well as carwashes without making any payments. For years M & F Carwash, LLC and Bongiorno Gas Island, LLC paid expenses and utilities incurred by J & G Realty, LLC without the requirement of any reimbursement by J & G Realty, LLC. In addition there are two other occupants of the property at 281 West Avenue. The first is the office trailer in which J & G Realty, LLC conducts its management business. The three LLCs are managed from that office trailer. There are maintenance costs and utility bills that have to be paid for the office trailer. They have not been paid for by the three LLCs but paid for by either Bongiorno Gas Island, LLC or by M & F Carwash, LLC. Neither J & G Realty, LLC nor any of the two other LLCs have paid rent for the use of the office trailer located at 281 West Avenue. In addition there is the fourth business being conducted at 281 West Avenue; the storage of supplies in truck trailers for various other Bongiorno businesses. No rental charges have been made by either Bongiorno Gas Island, LLC or M & F Carwash, LLC to any of the three LLCs for the three storage truck trailer. The court will discuss this fifth damage claim in more detail later in this Memorandum of Decision.

The sixth damage claim is: "failing to collect loans due from Bongiorno Brothers, LLC." No documents submitted in evidence even as much as suggested the terms and conditions of any such loan or loans. Exhibit 11 only refers to loans made by George Bongiorno personally and not by any entity; "all right, title and interest in any and all loans made by me to any entity or person." Ex. 11, first page, first paragraph. The tax returns that are before the court are entity tax returns. No personal tax returns of George Bongiorno were offered that mentioned any "loans." The "loans" first appeared in various entity income tax returns immediately after the closing of Bongiorno Supermarket in 2004. Schedule L lists "other current assets." The Schedule Ls for J & G Realty, LLC for the years 2000, 2001, 2002, and 2003 contain no mention of loans anywhere let alone on line 6 for "other current assets." The court finds that the entries on Schedule L did not affect the amount of taxable or distributable income of the LLC. See Ex. 69, J & G Realty, LLC tax return for the year 2004, Statement 4, Schedule L. George Bongiorno was alive and was managing the supermarket, the buyout of the Estate of John Bongiorno and the real property investments at the time when "loans" first appeared in an entity tax return.

No explanation was given as to when Bongiorno Brothers was created as a partnership, what real property it may have owned, what real property it may have owned on or after June 2012 when this lawsuit was filed, who are the partners in Bongiorno Brothers, what are its current assets, and what are the organization and agreement documents kept by Bongiorno Brothers. There was no evidence that Bongiorno Brothers has the income or assets to be responsible for these "loans." No minutes or meeting notes reflecting these "loans" were offered as kept by either Bongiorno Brothers or the three LLCs. The 2012 to 2017 tax returns show virtually no income, no distribution to the parties and a negative capital account for the parties. Ex. 79. No security instruments in evidence reflect these claimed "loans." Neither Frank R. Bongiorno nor Michael Weinshel ever saw any documentary proof of these "loans" or their terms other than the tax returns. No deductions from taxable income for any of these claimed "loans" are in the tax returns. Ex. 67, 68 and 69. The "loans" did not appear to affect the taxable income of the three LLCs and appear in the various entity tax returns for information only. The "loans" are not referenced in any of the form K-1s.

There was no evidence that Frank R. Bongiorno and/or Maurice A. Nizzardo ever had anything to do with arranging for these "loans" appearing on the three LLC’s tax returns. Michael Weinshel and George Bongiorno were responsible for creating those "loans." Frank and Maurice continued this accounting practice with the understanding that these "loans" were uncollectable and merely accounting or bookkeeping entries. Frank and Maurice followed the practice originated by George Bongiorno and Michael Weinshel years before.

Bongiorno Supermarket, Inc. (BSI) sold the supermarket business but not the real property on which the supermarket business had been located. That real property was owned by J & G Realty, LLC. When the supermarket was sold in 2004, BSI had no income but it had accrued substantial tax losses, probably over $ 2, 000, 000. Michael Weinshel used various techniques to move income into BSI after 2004 in order to shield that income from federal and state taxes by using the $ 2, 000, 000 of tax losses. No tax regulations were offered to this court supporting mismanagement.

According to trial testimony from the family accountant, Michael Weinshel, the Bongiorno supermarket prior to its 2004 sale had been the repository for the payment of various expenses more properly allocated to the other Bongiorno entities and Bongiorno family members. For example, medical insurance premiums and medical payments for all Bongiorno family members was a major component of supermarket payments even though most family members were not employed by BSI or any Bongiorno entity. The supermarket possessed a large asset, tax losses that could be used to offset income. Since the supermarket was no longer in business after 2004 and did not own real estate, Michael Weinshel and George Bongiorno used "loans" to offset the tax losses that remained on the books of Bongiorno Supermarket, Inc. Those unused and accrued tax losses were large and could have approached or exceeded $ 2, 000, 000. There is no evidence that any tax return filed after 2004 was ever audited or questioned by either the federal or state taxing authorities. The tax returns before this court for Bongiorno Supermarket, Inc. show that the corporation first sustained tax losses in the fiscal year March 1, 2003 to February 29, 2004. The losses on that tax return were $ 413, 157. Ex. 76, first page, line 30, 2003 Form 1020. The following year the losses were $ 386, 522. Ex. 76, first page, line 30, Form 1020. The next year the losses were $ 471, 076. Ex. 76, first page, line 30, Form 1020. By this time the supermarket was no longer in business having been sold to Stop and Shop, which was operating a Stop and Shop market of that same location, paying rent to J & G Realty, LLC, the building’s owners. The intercompany Bongiorno "loans" did not appear in the tax returns filed by Bongiorno Supermarket, Inc. for the years 2000, 2001, 2002, and 2003. In the 2004 Bongiorno Supermarket, Inc. tax return small loans appeared for Harxter Realty, JGBBNS, Enterprise Park, Weselleck and BCJV. They totaled $ 12, 366. One large "loan" appeared in the amount of $ 580, 000 under the description "Loan-Bongiorno Bros." This entry at the beginning of the year on March 1, 2004 was $ 580, 000 and of the end of the Bongiorno Supermarket, Inc. fiscal year $ 580, 000. Ex. 76. There is no line item for interest due charged or collected on this $ 580, 000 "loan." No terms of this $ 580, 000 "loan" are in the 2004 tax return. It is listed as an asset in Schedule L, Line 6 "other current assets" in the separate Statement 6, Ex. 76.

The 2004 tax return for Bongiorno Brothers appears to be prepared on a calendar year basis. Ex. 79. That tax return from 2004 does not list the $ 580, 000 "loan" from Bongiorno Supermarket, Inc. on its Schedule L or in any separate Statement. There is a reference in Schedule L, Statement 2 in Bongiorno Brother’s 2005 tax return for "Loan rec. Bongiorno Supermarket Beginning of Year $ 38, 518 End of Year $ 26, 185." The court cannot reconcile those two vastly different treatments of supposedly the same indebtedness and asset. No other documents or testimony at trial addressed that large lack of consistency. The court can only conclude that the information contained in the tax returns concerning the various inter-entity, "loans" is at best suspect and not appropriate for this court to base a damage award thereon.

When the supermarket was in business it employed George Bongiorno, Frank R. Bongiorno and Maurice A. Nizzardo but none of the other individuals parties in this litigation. Bongiorno Supermarket, Inc. (BSI) paid many personal family expenses for the entire Bongiorno family including stable hands for the Bagnall Road, Stamford property and attendants for the Gulf gasoline station. BSI also paid the premium for a "catastrophic type" medical insurance policy issued by Anthem Blue Cross Blue Shield. Ex. 70. This medical insurance policy covered George and Marie Bongiorno, their four children and their spouses and their grandchildren. A large deductible of $ 10, 000 for the children and their spouses and $ 5, 000 for each grandchild was annually applied to all medical, laboratory and hospital claims. The premises were $ 13, 208.64 per month. BSI paid these premiums and the deductibles for the entire Bongiorno family. No contract for those BSI medical and insurance payments was presented to this court. In effect, these payments for medical insurance premiums and deductibles amounted to over $ 200, 000 per year. After 2004 BSI had no income or assets with which to make these payments. Funds from the other Bongiorno entities were deposited to the BSI account to fund the payments of the above employees and Bongiorno family medical coverage. George Bongiorno set up this procedure and the remainder of the Bongiorno family, including the two real property managers, continued with this family arrangement without change after George Bongiorno relinquished his control of the family investments and businesses. See Exhibit 75 for a more detailed description of these medical insurance issues written one year after this lawsuit was commenced.

Michael Weinshel, the accountant who prepared the tax return that contains "loans," testified that they are really not loans and they were never meant to be paid back. They were bookkeeping expenses for tax purposes and never meant to be paid back. Other than the quick mention in Ex. 12, the only documents of these "loans" were in the various LLC tax returns. There was no evidence that these "loans" reduced the taxes that would be due on account of income generated by the three LLCs.

Despite the ample concern about the legality and viability of those "loans," the plaintiffs provided no documents that verified the actual existence of any loans that would be able to be enforced by a court proceeding. No promissory note was produced. No memorandum of the loan terms was provided. No check, cash deposits, receipts, bank deposits, or monthly bank statements were provided supporting the existence, terms and amounts of any loans. No correspondence or emails regarding the loan or loan terms were provided. No writing, other than the tax returns, mentioned the "loans." No statement of interest paid or created, if any, was provided in evidence before this court. The "loans" appeared in a number of the tax returns indicating that they were not intended to be repaid "within one year from the making thereof." Gen. Stat. § 52-550(a)(5). The "loans" exceeded fifty thousand dollars. Gen. Stat. § 52-550(a)(6). Despite extensive investigation of those "loans" by attorney Mary Badoyannis on behalf of Marie Bongiorno, Marie Bongiorno could not identify any loans that were created by either Frank R. Bongiorno and Maurice A. Nizzardo.

The only evidence was the inclusion of "loans" in the entity income tax returns before this court, testimony of George Bongiorno’s compliance in using "loans" to take advantage of the supermarket tax losses and Michael Weinshel’s testimony. Attorney Mary Badoyannis investigation determined that this BSI tax loss was the reason for these "loans." Attorney Badoyannis has no knowledge of whether the plaintiffs’ forensic expert, Michael Blezard ever opined that Frank R. Bongiorno or Maurice A. Nizzardo ever wrongfully took funds from any Bongiorno entity. In this court’s opinion, no court could enforce these "loans" against any individual or entity. The court finds that these "loans" are not enforceable in any court of law. Gen. Stat. § 52-550(a)(2), (5) and (6).

The seventh damage claim is "failing to provide Capone with access to the books and records of the entities." The plaintiff, Bridjay Capone, is a member of the three LLCs. She is entitled to access to the books and records in accordance with Gen. Stat. § 34-144(c) (pre-July 1, 2017) and Gen. Stat. § 34-255 (post-July 1, 2017). A discovery order was entered on November 21, 2012 in this litigation. "By agreement, all parties are ordered not to hide or destroy any records dating from calendar years 2006 through 2012 including bank records, accounting ledger, accounting documents, tax returns and appraisals. This order applies to all records in existence as of 11/1/12" (# 118.86), Ex. 78. A motion was made in this litigation for such access in 2016. The parties appeared in open court. Frank R. Bongiorno and Maurice A. Nizzardo, by counsel of record, agreed to provide Bridjay Capone with access and to permit Michael R. Blezard to equally have access to inspect the books and records of all the entities in accordance with the statute (# 322.00). No similar request was made after July 1, 2017 under Gen. Stat. § 34-255i. On June 3, 2010 attorney Mary Badoyannis, representing Marie Bongiorno, took the deposition of the accountant, Michael Weinshel, and during that deposition she had access to a large amount of the business books and records. Ex. 23, page 8. Attorney Badoyonnis testified in detail as to her financial investigation of the Bongiornos over five trial days before this court. Attorney Badoyannis was provided extensive documentation of the various Bongiorno entities prior to her July 13, 2011 letter to Maurice A. Nizzardo. Ex. 29. The Michael Weinshel deposition was not offered in evidence in this trial.

The three operating agreements before this court contain identical language on the Member’s right of inspection of the books and records of the LLC. Section 11.02 is titled: "Access to Required Records." "... any member may inspect and review the Required Records ..." Section 11.02(c). Other than reasonable advance notice to the LLC, the business hours limitation and member’s obligation for the payment of any requested copies, the operating agreement contains no limitation on the inspection or number of inspections or the limitation for attorney and experts to assist in the Member’s inspection. "Required Records" means those records that Section 34-144 of the Act requires the company to maintain. Section 2.01(x). The operating agreement was not amended after July 1, 2017 to incorporate Gen. Stat. § 34-255i.

During the summer of 2016 extensive pleadings and documents were filed concerning the plaintiffs, their attorneys and the plaintiffs’ expert’s inspection of the books and records of the three LLCs. The court entered a June 6, 2016 order based on a Gen. Stat. § 34-144 inspection (# 299.01). The court entered another order on July 11, 2016 specifically ordering the Gen. Stat. § 34-144 inspection by the two plaintiffs, their attorney, Peter Lathouris, and their forensic expert, Michael R. Blezard (# 317.01). A detailed July 30, 2016 Michael R. Blezard preliminary inspection report was submitted to this court at an August 26, 2016 hearing on a Motion for Contempt (# 322.00) as to the Gen. Stat. § 34-144 inspection. The defendants filed a detailed thirty-nine-page Objection on August 17, 2016 (# 323.00). At the August 26, 2016 court hearing on the above inspection issue, the court denied the relief requested in considerable detail (# 322.01). Michael R. Blezard testified at the August 26, 2016 three-hour hearing. The court’s detailed oral decision issued on August 26, 2016 took fifteen minutes to recite on the record. No further inspection request was filed by the plaintiffs or on behalf of the plaintiffs’ expert Michael R. Blezard. The defendants filed a Motion in Limine on May 31, 2018 alleging that no report or inspection results have been issued by Michael R. Blezard (# 435.00). No in limine order entered and the court permitted Michael R. Blezard to testify at trial (# 435.01). The plaintiffs did not offer the testimony of Michael R. Blezard at trial. At the beginning of each of the eighteen trial days, this court asked counsel as to whether there were any outstanding discovery issues based on pleadings in the file that needed to be heard and decided. In addition this court made inquiry daily at the beginning of the trial day, if there were any other discovery matters that needed to be resolved. The plaintiffs made no claim of lack of discovery during the trial. Until the plaintiff’s Post-Trial Brief dated September 24, 2018 was filed, this court was not aware that there was a continuing claim that Bridjay Capone and her experts were denied discovery in the form of lack of access to the books and records of the three LLC entities (# 147.00, pages 21-22).

The eighth damage claim is "failing to disclose transfers of membership interests from George Bongiorno to his children." No legal authority has been furnished to this court for this obligation, who has this obligation and what is the resulting damage to the plaintiffs. Is there an obligation for a person who transfers by gift to formally notify any other person or entity of that transfer? During the settlement of the Estate of John Bongiorno in 2004 the four children, Bridjay Capone, Michele B. Nizzardo, Frank R. Bongiorno, and John Bongiorno, each received a membership interest in J & G Realty, LLC. Each signed the 2004 Purchase Agreement and other settlement documents. Ex. 4. This court has heard no evidence that that 2004 transaction was unknown to any of those four members. Exhibit 20 transferred to each of the four children George Bongiorno’s twelve and one-half (12.50%) percent in J & G Realty, LLC. It is dated January 22, 2012.

Each of the three LLCs is a manager-managed LLC. Each of the three LLCs files tax returns. Each of the tax returns contains a form K-1 addressed to each of the members. A copy of form K-1 was addressed to each of the members and sent to them for the filing of their personal income tax return. Each form K-1 indicated the now twenty-five percent membership interest that each individual owns in J & G Realty, LLC by reason of the January 22, 2012 transfer and the 2004 settlement transfer. This court finds that the tax returns themselves disclose the transfer of the membership interest by George Bongiorno in 2012 in J & G Realty, LLC to his four children. Ex. 69, 2012 tax return, form K-1 issued to Bridjay Capone. The transfer documents for 24 Ardmore Street, LLC and 305 West Avenue, LLC were not before this court. The tax returns for those two entities along with the respective form K-1s were in evidence. Ex. 67 for 24 Ardmore Street, LLC from 2005 through and including 2017. Ex. 68 for 305 West Avenue, LLC for 2007 through and including 2017. Both were formed in 2004. Both demonstrate a twenty-five (25%) membership interest for Bridjay Capone for all of those years in those two LLCs.

Bridjay Capone is claiming that her responsibility for paying income taxes on the "phantom income" of the three LLCs was caused by her receipt from George Bongiorno of his remaining interest in J & G Realty, LLC in January 2012, Ex. 20, and in prior years for the other two LLCs. Although her assets increased substantially, possibly by more than one million dollars, she claims the failure of the LLC’s managers to inform her formally of the transfers breached their fiduciary duty by non-disclosure. The plaintiff, Bridjay Capone, has not tendered her shares in any LLC back to the Estate of George Bongiorno or to any other Bongiorno family member. Her Post-Trial Brief claims: "Due to the failure of the defendants to disclose these material facts, Bridjay was not given a choice as to whether she wanted to accept an increase in her membership interest and, as a result, an increase in her tax liability" (# 447.00, page 23). At best this is a speculative claim. At trial and before trial, Bridjay Capone made no effort to renounce her increased shares in the three LLCs she received from George Bongiorno. Her claim is not supported by any legal authority. Her claim is not supported by credible testimony that she would give up possibly a million dollars in real property ownership to avoid tens of thousands of dollars of income taxes, that is supported by an equal increase in those very assets she is trying to convince this court, is a breach of the fiduciary duty owed to her as a member of the three LLCs.

The plaintiff, Marie Bongiorno, claims that she has been deprived of the following economic benefits: payments made in the past on her behalf by various Bongiorno entities, "cut off from her customary standard of living" (# 149.00, page 11), "prevented from getting spousal support during the adjudication of her husband’s will" (# 449.00, page 11), "stopping payment of Marie’s car lease" (# 447.00, page 46), "stopping payment of Marie’s American Express bill" (# 447.00, page 46), "failing to pay for George’s medical expenses" (# 447.00, page 46), and the Brighton Garden’s nursing home bill for George Bongiorno, Ex. 70, Ex. 71, Ex. 72, Ex. 73. No case law, statute, provision of an operating agreement, or written contract was proved to this court justifying the obligation of a defendant LLC to pay the above listed expenses. Those claims are not even addressed in the operative complaint (# 440.00).

A Bongiorno Family Global Settlement Agreement dated July 2011 was offered at trial. Ex. 27. It was not signed by any person. There was no evidence that this settlement was ever considered to be in full force and effect. In June 2012 Marie Bongiorno commenced this lawsuit. The Global Settlement Agreement has never sought to be enforced by the pleadings in this lawsuit. There was no evidence that Marie Bongiorno was ever employed by the three LLCs or Bongiorno Supermarket, Inc. She was a homemaker and was so full time after the birth of the first child in 1957. There was some brief testimony that Marie Bongiorno did some work in the market before 1957, but that most likely was before the creation of Bongiorno Supermarket, Inc.

No employment contract was offered where Marie Bongiorno was entitled to be paid for the above claimed expenses. The three LLCs were created formally and each had its own operating agreement. The type of expenses claimed herein for which Marie Bongiorno is seeking damages are not contained in any of the operating agreements. There was no evidence that any of the other members of the LLC received the type of payments outlined and claimed by Marie Bongiorno in this section of the Memorandum of Decision.

The court concludes that these payments were in the nature of gifts made by children on behalf of their mother. This lawsuit has no count seeking to enforce the Bongiorno Family Global Settlement Agreement of July 2011. The evidence leads this court to conclude that no settlement of any nature was reached in 2011 or at any other time. Exhibit 27 demonstrates attempts by the parties to try to agree but itself is not evidence that any settlement of any nature was reached. It is of interest that the listing of the eight categories of damages sought by Marie Bongiorno did not include the nonpayment of the above listed personal expenses in her dollar damage claim (# 149.00, pages 3-4).

For all of the above reasons, this court rejects the attempt by the plaintiff, Marie Bongiorno, to seek reimbursement of personal type expenses from the defendants in this litigation as listed in page 71 of this Memorandum of Decision.

The First Special Defense invokes the doctrine of res judicata against the claims by Marie Bongiorno. Upon the institution of this lawsuit Marie Bongiorno claimed that she was a member of J & G Realty, LLC, Bongiorno Brothers and Bongiorno Gas Island, LLC and she presented certain transfer documents to support that claim. The defendants filed a Motion to Dismiss which was duly heard by the court. The Motion to Dismiss was addressed to all claims by Marie Bongiorno based upon her standing as a member of those entities and J & G Realty, LLC. She did not make a claim of membership status in 24 Ardmore Street, LLC and 305 West Avenue, LLC nor were those two LLCs part of the Motion to Dismiss. On May 30, 2014 the motion was granted (# 183.00) and Marie Bongiorno’s standing status was rejected by the court. An appeal was taken. The appeal was denied and a petition for cert. was denied. Bongiorno et al. v. J & G Realty, LLC et al., 162 Conn.App. 430, cert. denied, 320 Conn. 924 (2016).

The evidentiary hearing on the above Motion to Dismiss was conducted by Truglia, J. over four days: March 11, 2014, April 1, 2 and 4, 2014. At that hearing, the alleged transfer documents from George Bongiorno to Marie Bongiorno were placed in evidence. Those October 2010 transfer documents were offered in this trial. Ex. 5-11. Judge Truglia found, for various reasons, that those documents failed to establish that Marie Bongiorno was a member of the entities including J & G Realty, LLC. Those same documents and supporting testimony offered at the Motion to Dismiss hearing were offered before this court in an attempt to establish that Marie Bongiorno has an economic interest in the three LLCs. Both claims were based on the same documents, the same testimony, the same evidence, and the same facts. Marie Bongiorno testified in both proceedings.

The Second Amended Operating Agreement of J & G Realty, LLC was also before Judge Truglia. Ex. 24. Judge Truglia noted the non-compliance with certain Articles and Sections of that J & G Realty, LLC operating agreement, sufficient to render the purported transfer from George Bongiorno to Marie Bongiorno void. Those same Articles and Sections were presented to this court at trial. Ex. 24, Article XII, Section 12.02(a); Article XII, Section 12.02(c). The lack of consent of the managers, the lack of notice to the LLC of the transfer, the lack of the transfer in the records of the LLC, and the retention of the original transfer documents in the files of attorney Mary Badoyannis for years during the period when she was the attorney for Marie Bongiorno, were all found by Judge Truglia. Similar evidence and documentation was furnished to this court. The status of non-voting membership interest was before this court as well as before Judge Truglia. See Ex. 24. Article XII, Section 12.01(a), (b) and (c). He found that J & G Realty, LLC had no non-voting membership interests in 2010 or thereafter. The court notes that the language of the operating agreement for 24 Ardmore Street, LLC and 305 West Avenue, LLC is identical to the operating agreement before Judge Truglia. Ex. 24, Ex. 39, Ex. 40.

After cert. was denied by the Connecticut Supreme Court in 2012, Marie Bongiorno modified and amended her complaint. She is no longer claiming that she is or was a member of the three entities. She is now claiming that she had received a transfer of membership interest in the three entities, J & G Realty, LLC, Bongiorno Brothers and Bongiorno Gas Island, LLC, and that she now possesses the status as an economic transferee instead of being a full-fledged member of each of the above entities. She then reinstituted the same claims as outlined at the beginning of this Memorandum of Decision seeking money damages against the two individual real property managers as well as the defendant LLCs.

"Generally, for res judicata to apply, four elements must be met: (1) the judgment must have been rendered on the merits by a court of competent jurisdiction; (2) the parties to the prior and subsequent action must be the same or in privity; (3) there must have been an adequate opportunity to litigate the matter fully; and (4) the same underlying claim must be at issue." Smith v. BL Companies et al., 185 Conn.App. 656, 664 (2018); Wheeler v. Beachcroft, LLC, 320 Conn. 146, 156-57 (2016). Both the Motion to Dismiss and this trial were conducted in the same court, the Superior Court, judicial district of Stamford/Norwalk at Stamford. In the previous ideation of this lawsuit in which the Motion to Dismiss was granted and in this current trial, Marie Bongiorno was a plaintiff. Frank R. Bongiorno and Maurice A. Nizzardo were individual defendants and each of the entities that it is the subject of this trial were also party defendants when the Motion to Dismiss was heard and decided. The claim for damages made in the first complaint that was subject of the Motion to Dismiss is identical to the claim for damages currently pending before this court. Marie Bongiorno was represented by counsel in both proceedings.

This court has read Judge Truglia’s May 30, 2014 fourteen-page Memorandum of Decision granting the defendant’s Motion to Dismiss (# 166.00) addressed to the then claims made by the plaintiff, Marie Bongiorno. The Motion to Dismiss was granted. At that time Marie Bongiorno had a claim of member ownership in J & G Realty, LLC seeking its dissolution and winding up, and damage claims against other two Bongiorno entities and what she alleged were "Jane Doe" entities alleged to be owned and/or controlled by one or more of the individual defendants. After four days of testimony, and reviewing the exhibits, Judge Truglia made certain findings eventually granting in its entirety all of Marie Bongiorno’s claims in her nine counts. That decision was upheld on appeal on January 19, 2016. Bongiorno et al. v. J & G Realty, LLC et al., 162 Conn.App. 430 (2016). The petition for certifications was denied, 320 Conn. 924 (2016).

In the Memorandum of Decision (# 183.00) Judge Truglia discussed the same October 2010 transfer documents from George Bongiorno to Marie Bongiorno that are before this court. He noted that they "were never delivered to any representative of the Businesses, but were retained in Attorney Badyonnis’ files" (# 183.00, page 4). The first time the managers of J & G Realty, LLC learned of these documents was during 2013 discovery, approximately one year after this litigation commenced.

In addition to the above findings, Judge Truglia also found "that the allegations of mismanagement of the Businesses as set forth in the complaint affected each of the Businesses as a whole, and did not set forth claims of direct injury to Marie Bongiorno that are personal, separate and distinct from the other members or partners, or from the Businesses themselves. Therefore, Marie Bongiorno’s claims can only be brought under Connecticut law as a derivative claim. See, e.g., Smith v. Snyder, 267 Conn. 456, 461-62 (2004)" (# 183.00, page 9).

Judge Truglia also found "credible the testimony of defendant, Maurice A. Nizzardo that J & G Realty, LLC has no non-voting membership interests, or at least did not have any non-voting membership since 2004" (# 183.00, page 10).

Thereafter Marie Bongiorno amended her complaint framing it in her newly claimed status as a transferee member who is the owner only of an economic interest in J & G Realty, LLC, Bongiorno Gas Island, LLC and Bongiorno Brothers, a partnership. The Revised Complaint was filed on May 5, 2016 (# 300.00). This Revised Second Complaint was not a derivative action. The damage claims made by Marie Bongiorno essentially remained the same except for Marie Bongiorno’s removal of her dissolution and winding up counts. The Appellate Court confirmed Judge Truglia’s findings when it stated: "Accordingly, in June 2012, when the plaintiff commenced the underlying action, she did not have an ownership interest in any of the defendant businesses and the court properly granted the motion to dismiss." Id., 438. Marie Bongiorno first brought the October 2010 transferee economic interest claim to the attention of this court in an October 18, 2014 pleading (# 208.00), well more than two years after she commenced this litigation.

The court now turns to the four elements of res judicata. The court finds that the judgment on the Motion to Dismiss had been rendered on the merits by a court of competent jurisdiction and confirmed by the Appellate Courts with cert. denied by the Supreme Court. It was a final appealable judgment entertained, reviewed, and ruled on by two appellate courts. State v. Curcio, 191 Conn. 27, 81 (1983). Element one has been met. The court finds that element number two has been met since the parties to the prior and subsequent actions are the same. The court finds that element number three has been met. Marie Bongiorno was represented by two lawyers in the first proceeding, one of which testified before this court in the trial in chief. There was an adequate opportunity to litigate the matter fully. The plaintiff had the opportunity to amend her pleadings prior to the Motion to Dismiss or to file a pleading in the alternative, or to file both claims, or to seek bifurcation trying one issue before the other issue. Smith v. BL Companies, Inc., supra, 185 Conn.App. 666. "Therefore, the plaintiff had the opportunity to litigate the matter fully in the prior action." Smith v. BL Companies, Inc., supra, 185 Conn.App. 666.

The court finds that the fourth element of res judicata applies: "The same underlying claim must be at issue." This requires the court to apply the transactional test. "Under the transactional test, res judicata extinguishes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose ... What factual grouping constitutes a transaction, and what groupings constitute a series, are to be determined pragmatically, giving weight to such considerations as to whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage ... Even though a single group of facts may give rise to rights for several different kinds of relief, it is still a single cause of action." Wheeler v. Beachcroft, LLC, supra, 320 Conn. 159-60; Smith v. BL Companies, Inc., supra, 185 Conn.App. 666-67. This court finds that the factual allegations giving rise to this second Marie Bongiorno complaint and the first Marie Bongiorno complaint that was dismissed are nearly identical. In both cases, the plaintiff, Marie Bongiorno, seeks redress for injuries that she has sustained at the hands of the two real property managers as well as J & G Realty, LLC, Bongiorno Brothers and Bongiorno Gas Island, LLC for essentially the same violations of legal duties and obligations. The only difference is the status of Marie Bongiorno in the first portion of this lawsuit in which she claimed that she was a member or partner of those three entities and in this second portion of this lawsuit she claims that she has an economic transferee interest in the same three entities. Both require the same evidence, the same transfer documents, the same witnesses, and the same operating agreements. The differing in Marie Bongiorno’s status is not a determining factor in applying the res judicata transaction test. The fourth element of res judicata has been met.

"Application of the doctrine can yield harsh results, especially in the context of claims that were not actually litigated ... The decision of whether res judicata should bar such claims should be based upon a consideration of the doctrine’s underlying policies, namely, the interests of the defendant and of the courts in bringing litigation to a close ... and the competing interest of the plaintiff and the vindication of a just claim ... The purposes of res judicata are ‘promoting judicial economy, minimizing repetitive litigation, preventing inconsistent judgments and providing repose to parties.’" Weiss v. Weiss, 297 Conn. 446, 465 (2010); Smith v. BL Companies, Inc., supra 185 Conn.App. 669.

Marie Bongiorno has offered in this trial various documents in an attempt to show that George Bongiorno transferred to her his full membership interest in the three entities. The defendants claimed in the hearing on the Motion to Dismiss that the transfer was ineffective since the terms and conditions of each operating agreement in a number of areas were not abided by, the transfer was void and the transfer documents were retained by Marie Bongiorno’s lawyer. The defendants claim that the transfer was void and failed to give Marie Bongiorno a membership or partnership interest. That position was adopted by Judge Truglia in granting the Motion to Dismiss and this position was confirmed by our appellate courts (# 183.00, Ex. 62, 162 Conn.App. 430, 320 Conn. 924 (2016)).

The plaintiff, Marie Bongiorno, is now claiming at trial that she received only an economic interest in the three transfers. The defendants also claim that the transfers were ineffective to create an economic interest in J & G Realty, LLC because no effort at all was made to comply with any of the terms of conditions of the transfer of membership rights contained in the operating agreement. Ex. 24, Sections 1.03, 1.05, Article VIII, Sections 12.02a, 12.03b, 12.20a. Those transfer documents for all three entities were then held by Marie Bongiorno’s private attorney, Mary Badyonnis, who did not transmit those documents to the LLCs or partnership, its managers, its partners or any of the other members or any accountant or lawyer for the LLCs (# 183.00, page 10). Marie Bongiorno now claims that the post-July 1, 2017 statute strengthen her claim that she now possesses an economic interest in all three entities, J & G Realty, LLC, Bongiorno Brothers and Bongiorno Gas Island, LLC.

"A limited liability company is a distinct legal entity whose existence is separate from its members." Scarfo v. Snow, 168 Conn.App. 482, 497 (2016). The operation of a limited liability company is set forth by the terms and conditions of its operating agreement. Herein, the operating agreement for three LLCs were identical to one another and were in evidence before this court. Ex. 24, Ex. 39, Ex. 40. A transfer of a membership interest in the operating agreement needs to follow certain formalities including the written consent by the LLC’s managers since the LLCs are a manager-managed LLC, notice sent to the LLC of the transfer and the transfer noted in the LLC records. See Ex. 24, Section 12.02 Voting Units. The defendants offered evidence that none of those conditions were met and therefore Marie Bongiorno did not become a member of J & G Realty, LLC nor did she become an economic transferee of that LLC. That first issue was tried in the Motion to Dismiss and confirmed on appeal.

The outline of creating an economic interest in a partnership by an incomplete transfer is instructive to the same transfer situation in an LLC (# 183.00).

The defendants agree that a partner may convey an interest in the partnership without the other partner’s consent. Gen. Stat. § 34-347. Under those circumstances, the defendants argue that the transferee receives only an economic interest in the partnership and does not have the right to participate in its management. Thus the transferee partner has no right to vote, no right to become the property manager, no right to inspect books and records, and no right to conduct any aspect of the partnership business. They further claim that by the authority of Gen. Stat. § 34-348(a)(3) a transferee partner holds only an economic interest and is only entitled to revenue distributions when made and their percentage ownership of the partnership assets upon the dissolution of the entire partnership.

Kasper v. G & J Partnership, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV 07-5004956 S (December 23, 2011, Tierney, JTR).

The post-July 1, 2017 statute included the transferee rights to distributions without the right to participate in the management or conduct of the company’s activities and affairs. Gen. Stat. § 34-259a(a).

A typical situation is the attempted transfer of an LLC membership interest but a failure to obtain the necessary consent of the members but otherwise the transfer would meet the terms and conditions of the documents necessary for a membership transfer. Since the consent of all the members was not obtained, the transfer of membership interest was not formerly adopted and is not effective as far as the LLC is concerned. The contractual transfer from the member to the newly purported member is legally effective. As a result of that failed transfer, the transferee obtains only an economic interest and is referred to as an economic transferee. That person is not a member. An economic transferee is entitled to receive his or her percentage share of the LLC upon its sale or dissolution and is entitled to receive the percentage share in all cash distributions. Brennan v. Brennan Associates, Superior Court, judicial district of New Haven, Docket Number X10 NNH CV 05-4015873 S (August 16, 2006, Munro, J.); Kasper v. Valluzo, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket Number FST CV 075004383 S (December 23, 2011, Tierney, JTR).

It is upon this basis that Marie Bongiorno has brought her current claims in this litigation as the transferee of an economic interest.

This court finds that it is not necessary for this court to determine whether or not the plaintiff, Marie Bongiorno, possesses an economic interest in the three entities in order for this court to decide all counts of this complaint alleged by Marie Bongiorno against each and every one of the defendant entities as well as the individual defendants, Frank R. Bongiorno and Maurice A. Nizzardo. The court finds the issues against Marie Bongiorno in all of her counts against all of the defendants for the following reasons: (1) Marie Bongiorno is prevented by res judicata from litigating this claim as an economic transferee of the three entities, J & G Realty, LLC, Bongiorno Brothers and Bongiorno Gas Island, LLC, since she had the opportunity to litigate the claim earlier and the claim that was litigated was denied on the merits and affirmed by our appellate courts; (2) There was no proof of any financial distribution that has or had been made to any of the members of the two LLCs or any partner in Bongiorno Brothers after the date of the alleged transfer to Marie Bongiorno; (3) There is no dissolution of any of the three entities that has taken place and therefore an economic transferee is not entitled to share in that distribution, and (4) Marie Bongiorno has no standing to make these claims against the three entities since those claims would be common to all individual members and partners.

Despite that finding, the parties expect that the court will make a finding on the viability of the October 2010 documents from George Bongiorno to Marie Bongiorno. Ex. 5-11.

The court makes the following additional findings and legal conclusions therein:

(1) The Second Amended Operating Agreement of J & G Realty, Inc. amended as of March 31, 2004 contains terms discussing all forms of membership including the alleged Non-voting Units. Section 1.02(c).

(2) There was no evidence that Marie Bongiorno assented to the Second Amended Operating Agreement.

(3) There was no evidence that Marie Bongiorno signed the Second Amended Operating Agreement or any other version of the Operating Agreement.

(4) There was no evidence that Marie Bongiorno complied with Article XII as required by Section 1.02(c).

(5) "No person may become a Member of the Company without first assenting to and signing this Agreement." Section 1.02(a).

(6) "The company is obligated not to ... accord Member status to, any Person who has not first assented to and signed this Agreement." Section 1.02(b).

(7) There was no evidence that the Managers consented to the admission of Marie Bongiorno as a Member.

(8) "Additional Members shall be admitted only upon the consent of the Managers." Section 1.03.

(9) "Acceptance of new members shall be completed by amendment of this operating agreement at the time of admission of any new member(s), who shall be required to execute the amendment, indicating their acceptance of the representative rights, liabilities and duties imposed under this operating agreement." Section 1.05.

(10) There was no evidence that the Second Amended Operating Agreement was amended upon the alleged transfer claim of Marie Bongiorno on or about October 2010.

(11) There was no evidence that Marie Bongiorno ever executed any amendment to any operating agreement of J & G Realty, LLC.

(12) The Second Amended Operating Agreement defines a Member both as a voting and a non-voting member. Section 2.01(q).

(13) Non-voting Membership Interest is discussed in Section 2.01(m) including a "Members economic interest in Profits."

(14) Non-voting Units are discussed and defined in Section 5.01.

(15) The rights of Non-voting Units to "sharing of profits and losses and with respect to distribution" is set forth in Section 5.01(b).

(16) "Non-voting Units are transferable only as provided in Section 12.01." Section 5.01(c).

(17) "Voting Units are transferable only as provided in Section 12.02." Section 5.01(c).

(18) Both types of Membership Units can only be transferred "with the written consent of the Managers." Section 12.01(a) and Section 12.02(a).

(19) Both types of Membership Unit can only be transferred only when the Company has received notice." Section 12.01(a) and Section 12.02(a).

(20) No evidence of such notice by Marie Bongiorno to the LLC was presented to this court.

(21) Both types of Membership Units can only be transferred when it "has noted the Transfer in the Required Records." Section 12.01(a) and Section 12.02(a).

(22) No evidence of such noted transfer in the Required Records of the Marie Bongiorno transfer was provided to this court.

(23) "A Transfer made in violation of Section 12.01(a) will be treated as an Invalid Transfer pursuant to Section 12.07." Section 12.01(c).

(24) "A Transfer made in violation of Section 12.02(a) will be treated as an Invalid Transfer pursuant to Section 12.07." Section 12.02(c).

(25) "Notwithstanding Section 12.01(a), a Member may, without consent, freely transfer Non-voting Units to a Family Member." Section 12.03(c).

(26) The court finds that George Bongiorno owned Voting Units, not Non-voting Units.

(27) J & G Realty, LLC had never issued Non-voting Units.

(28) The claimed Section 12.03(c) Family Member transfer of October 2010 to Marie Bongiorno was ineffective because: (a) George Bongiorno only owned Voting Units, (b) J & G Realty, LLC never issued Non-voting Units, (c) Marie Bongiorno did not "notify the Company in writing within thirty (30) days prior to the transfer" as required by Section 12.03(b).

(29) There was no notice issued by Marie Bongiorno to the LLC that listed the name of the Transferring Member, and the Member’s interest to be transferred and "the name and address of the Family Member" as required by Section 12.03(b).

(30) Judge Truglia confirmed the failure of Marie Bongiorno to comply with the transfer terms and conditions of the Second Amended Operating Agreement of J & G Realty, LLC in his Memorandum of Decision (# 183.00).

(31) The Appellate Court in confirming and the Supreme Court in denying cert. approved Judge Truglia’s findings.

(32) This court read the entire transcript of the hearing on the Motion to Dismiss held by Judge Truglia and this court agrees with those findings in # 183.00. Ex. 63-66.

(33) No documents were submitted to this court demonstrating compliance with the procedures, execution and delivery, as set forth in Section 12.06(a) and (c).

(34) "Any purported transfer of any interest held by a Member that is not permitted by this Article XII shall be null and void and of no effect whatever." Section 12.07(a).

(35) The court finds that the purported transfer of George Bongiorno’s membership interest in J & G Realty, LLC to Marie Bongiorno on October 12, 2010 is found to be null and void.

(36) George Bongiorno executed a Commercial Lease Agreement from J & G Realty, LLC to Marie Liquors, D/B/A Bongiorno Maxi Discount Liquor on February 1, 2013, in his capacity as a member of J & G Realty, LLC. Ex. 14.

(37) George Bongiorno executed transfer documents conveying his remaining fifty (50.0%) percent of his membership interest in and to J & G Realty, LLC on January 22, 2012, with twelve and one-half (12.5%) percent being transferred to each of his four children. Ex. 20.

(38) The execution of these two documents demonstrate to this court that George Bongiorno never intended to convey and transfer any membership interest in J & G Realty, LLC to Marie Bongiorno in October 2010.

(39) The October 2010 executed transfer documents in and to J & G Realty, LLC, Bongiorno Brothers and Bongiorno Gas Island, LLC were kept in the files of Mary Badyonnis, attorney of law for over two years from and after October 2010.

(40) The executed transfer documents were never delivered to the Managers of J & G Realty, LLC, the managers of Bongiorno Gas Island, LLC or the partners of Bongiorno Brothers.

(41) George Bongiorno estate plan always contemplated having his four children acquire his assets in equal shares.

(42) George Bongiorno engaged in a sophisticated gifting program to convey his taxable assets equally to his four children thereby saving considerable state and federal taxes on his death.

(43) No distributions were ever made to Marie Bongiorno by J & G Realty, LLC, Bongiorno Brothers and for Bongiorno Gas Island, LLC and after October 12, 2010.

(44) Attorney Mark F. Katz notified Marie Bongiorno’s attorney, Mary Badyonnis, by letter on January 28, 2010 that any transfer by George Bongiorno to Marie Bongiorno of certain assets would be treated being void. Ex. 17.

(45) George Bongiorno had been represented by attorney Mark F. Katz for years prior to and after October 2010 and attorney Katz was not involved in the October 2010 transaction.

(46) On December 29, 2004 George Bongiorno gifted to each of his four children a 12.5% interest in 305 West Avenue, LLC and 24 Ardmore Street, LLC, which transfer documents were witnessed by Marie Bongiorno and acknowledge by attorney Mark F. Katz. Ex. 36, Ex. 37. The formality of that December 29, 2004 transaction was not followed by the October 2010 claimed transfers.

(47) No partnership documents were furnished to this court for Bongiorno Brothers other than the tax returns from 2000 through and including 2017. Ex. 79.

(48) Those tax returns were all filed on Form 1065 in which the income was passed through to the partners, each of whom received a form K-1 for that tax year. Ex. 79.

(49) According to the 2009 Bongiorno Brothers tax return its partners were George Bongiorno 50%, Frank Bongiorno, Maurice Nizzardo and John A. Bongiorno, each 16 2/3%. Ex. 79.

(50) The 2010 complete tax return for Bongiorno Brothers was not before this court but the 2010 K-1 issued to George Bongiorno still showed that he was a 50% partner, even after the proposed October 2010 transfer to Marie Bongiorno.

(51) The form K-1 for Bongiorno Brothers for the year 2011 through and including 2015 were identical to the form K-1s issued for 2009. Marie Bongiorno was not issued a K-1 for three years and did not appear in the Bongiorno Brothers tax returns.

(52) The form K-1 for Bongiorno Brothers was in the same percentage, but due to George Bongiorno’s death, his 50% K-1 was issued in the name of the Estate of George Bongiorno, not in the individual name of Marie Bongiorno of the tax years of 2016 and 2017.

(53) No LLC documents were furnished to this court for Bongiorno Gas Island, LLC other than the tax returns from 2004 through and including 2017. Ex. 73.

(54) All tax returns of Bongiorno Gas Island, LLC were filed on form 1065 as a pass-through with form K-1s issued for each member.

(55) The form K-1s for 2009 were George Bongiorno 50%, Maurice Nizzardo 25% and Frank Bongiorno 25%.

(56) In 2010 no complete tax return was before this court but George Bongiorno’s K-1 show 50% in his name.

(57) The form K-1s for Bongiorno Gas Island, LLC for the year 2011 through and including 2016 all show 50%, 25% and 25% to the same three members as in 2019. Marie Bongiorno is not on those tax returns.

(58) The 2016 and 2017 Bongiorno Gas Island, LLC tax returns show that 50% interest now in the name of the Estate of George Bongiorno with Frank Bongiorno and Maurice Nizzardo continuing to own each a 25% membership interest in the LLC.

(59) Marie Bongiorno testified that George Bongiorno on behalf of J & G Realty, LLC signed the Marie Liquors, LLC lease on Feburary 1, 2013 and he owned a 50% interest in J & G Realty, LLC in February 2013.

(60) Attorney Mary Badoyannis, on behalf of Marie Bongiorno, wrote a December 22, 2011 letter discussing the possible transfer of George Bongiorno’s 50% interest in J & G Realty, LLC, thus conceding the invalidity of the October 2010 transfer. Ex. 25.

(61) The Second Amended Operating Agreement for J & G Realty, LLC contains a definition "Membership Interest" that including both full membership and those that are only an "economic" "interest," ‘Interest’ or ‘Membership Interest’ means a Member’s entire ownership interest in the company, including such Member’s economic interest in Profits."

(62) Since economic interests aka transferee interests are included in the definition of Membership Interest, the failure to fulfill each of the notice, assenting amendment, and signature process of the Second Amended Operating Agreement voids the purported economic interest aka transferee interest in accordance with Sections 1.02(a), 1.02(c), Section 1.03, Section 1.04, Section 1.05, Section 2.01, and Article XII of Exhibit 24.

(63) Marie Bongiorno is not making a claim that she possesses an economic interest aka transferee interest in either 305 West Avenue, LLC or 24 Ardmore Street, LLC.

(64) On January 22, 2012 George Bongiorno executed a Gift Certification conveying his fifty (50.0%) percent interest in J & G Realty, LLC to his four children in four equal shares of twelve and one-half (12.5%) percent, which was signed, witnessed and acknowledged. Ex. 60, Ex. 82.

(65) A Notice to J & G Realty, LLC with George Bongiorno’s signature but undated as to month and day, stated: "It is my intention to gift an equal share of my fifty percent equity interest in J & G REALTY, LLC to each of my named children, so as to divest myself of my equity interest in J & G REALTY, LLC." Ex. 61, Ex. 82.

(66) Marie Bongiorno reported no income from those four claimed entities for the years 2010, 2011 and 2012 (# 183.00, pages 9-10), Ex. 62, Ex. 65, page 14.

(67) Judge Truglia found that the purported October 2010 transfer of George Bongiorno’s fifty (50.0%) percent membership interest in Bongiorno Gas Island, LLC was void and that Marie Bongiorno was not a member of that LLC. (# 183.00, pages 12-13), Ex. 62.

(68) This court adopts that finding of Judge Truglia in this Memorandum of Decision.

(69) Judge Truglia found that the purported October 2010 transfer of George Bongiorno’s fifty (50.0%) percent partnership interest in Bongiorno Brothers was void and that Marie Bongiorno was not a partner thereof. (# 183.00, page 13), Ex. 62.

(70) This court adopts Judge Truglia’s finding in this Memorandum of Decision.

(71) Gen. Stat. § 42a-3-308(c) was not specifically pleaded in the operative complaint and thus the validity of George Bongiorno’s signature or any documents is not properly contested in this litigation.

(72) Marie Bongiorno alleged in June 2012 in this lawsuit that George Bongiorno still owned a membership interest in J & G Realty, LLC (# 100.30, page 3).

There are eight "suspicious transactions" set forth on pages 33-34 of this Memorandum of Decision that support the plaintiffs’ damage claims. The plaintiff, Marie Bongiorno, is not claiming damages and redress as to (7) access to books and records, and (8) failure to disclosure transfer of membership. She is also not claiming the dissolution and winding up of the three LLCs. This court has examined claims (1) through (6) and concludes that none of these claims, damages and/or "suspicious transactions" are "separate and distinct" as to Marie Bongiorno. These claims, damages and "suspicious transactions" are common to all of the members of the three entities. The court finds that the plaintiff, Marie Bongiorno, has no standing to raise and litigate these six damage claims against the defendants. No derivative action has been brought by any of the three entities. This current litigation is not a derivative action maintained by any of the three entities. This finding was also made by Judge Truglia on May 31, 2014 (# 183.00, page 9) and this decision was confirmed on appeal. Bongiorno v. J & G Realty, LLC, supra, 162 Conn.App. 435.

This court finds the issues on the following counts for the two individual defendants and the defendant entities as against the claims being made by the plaintiff, Marie Bongiorno: Counts Eight, Nine, Fifteen, Sixteen, Seventeen, Eighteen, Nineteen, Thirty, Thirty-One, Thirty-Two, Thirty-Three, Thirty-Four, Thirty-Five, Thirty-Six, Thirty-Seven, Thirty-Eight, Thirty-Nine, Forty-Five, Forty-Six, Forty-Seven, Forty-Eight, Forty-Nine, Sixty, Sixty-One, Sixty-Two, Sixty-Three, Sixty-Four, Sixty-Five, Sixty-Six, Sixty-Seven, Sixty-Eight, and Sixty-Nine.

The court finds that the plaintiff, Bridjay Capone, owns a twenty-five (25%) percent membership interest in J & G Realty, LLC, 24 Ardmore Street, LLC and 305 West Avenue, LLC. She acquired twelve and one-half (12.50%) percent in J & G Realty, LLC in the 2004 settlement of the Estate of John Bongiorno. Ex. 4, Purchase Agreement, Ex. 38. She acquired the remaining twelve and one-half (12.50%) percent in J & G Realty, LLC in a January 2012 transfer from George Bongiorno. Ex. 20.

The form K-1s issued to Bridjay Capone for J & G Realty, LLC show the increase in her percentage ownership from zero percent to twelve and one-half (12.50%) percent and then to twenty-five (25.0%) percent. Ex. 69, 2003 to 2004 tax returns K-1s, 2012 tax return K-1. The form K-1s issued to Bridjay Capone for 305 West Avenue, LLC and 24 Ardmore Street, LLC all show her twenty-five (25%) percent interest in all tax returns before this court, a 25% ownership interest she held in both of those two LLCs for well over ten years. Of the eight "suspicious transactions" filed on pages 33-34 of this Memorandum of Decision, all but (7) inspection of books and records, are common to all of the members of the three LLCs. None of these claims, damages and "suspicious transactions" are "separate and distinct" as to the plaintiff, Bridjay Capone, except for the inspection of books and records in claim (7). The court finds that the plaintiff, Bridjay Capone, has no standing to maintain this lawsuit against any of the defendants given it is not a derivative action. The court finds that the plaintiff, Bridjay Capone, has standing to maintain the claims that she has brought as to issue (7) relating to the inspection of the books and records of the three LLCs for which she has a twenty-five (25.0%) percent interest. Wiederman v. Halpert, 178 Conn.App. 783, 797-98 (2017). In addition as a member Bridjay Capone has the right to seek the dissolution and winding up of the three LLCs as alleged in Count Seventy, Count Seventy-One and Count Seventy-Two.

The court has before it ten counts alleging violations of CUTPA. That CUTPA litigation has been in this lawsuit throughout the pleadings and the discovery stage through the hiring of experts. It was in this lawsuit throughout the commencement of the trial on May 31, 2018 and throughout the eighteen days of trial. It was in this lawsuit when this court commenced its independent research on the CUTPA claim. It was in this lawsuit until the plaintiffs filed their September 24, 2018 Post-Trial Brief (# 447.00). On page 1 of that Post-Trial Brief the plaintiffs state as follows: "Moreover, Plaintiffs hereby expressly abandon all claims sounding in statutory theft and breach of the Connecticut Unfair Trade Practices Act as alleged in the Second Amended Complaint (Docket Entry No. 440.00)." This court finds the issues for all of the defendants as against both plaintiffs as to the ten counts of the operative complaint alleging violation of the Connecticut Unfair Trade Practices Act for the following reasons: (1) All of the claims made in this case arise out of an intercorporate or intercompany dispute between family members and their respective entities; (2) The plaintiffs have failed to sustain their burden of proof to show an "ascertainable loss of money or property" as required by Gen. Stat. § 42-110(g)(a); (3) The plaintiffs have failed to sustain their burden of proof that there was egregious conduct engaged in by either the defendant entities or the individual defendants; (4) Neither plaintiff has standing to raise those CUTPA issues, and (5) The plaintiffs by its authorized counsel of record on September 24, 2018 in its Post-Trial Brief (# 447.00) abandoned all claims sounding in the breach of Connecticut Unfair Trade Practices Act, even though a withdrawal of those counts has not yet been filed.

The court finds that the plaintiffs have failed to show that Frank R. Bongiorno and Maurice A. Nizzardo engaged in any act of fraud, self-dealing or conflict of interest. The court finds that the burden has not shifted to the two fiduciaries, to demonstrate the evidence by the clear and convincing standard. The court finds that the individual defendants, Frank R. Bongiorno and Maurice A. Nizzardo, have sustained their burden of proof to show that they dealt fair and equitably with the LLCs and its members under both the ordinary prudent person standard and the gross negligence standard.

This court finds the issues for all of the defendants as against both plaintiffs as to the twenty counts Count Twenty through and including Count Thirty-Nine, sounding in statutory theft in violation of Gen. Stat. § 52-564 for the following reasons: (1) There is no proof of any specified identified monetary damages sustained by any of the individual plaintiffs; (2) There was no specific dollar amount that has been set forth as the subject of the so-called larceny since a general monetary claim cannot support a claim for statutory theft; (3) No specific personal property or real property has been identified as being the subject of the statutory theft, (4) Neither plaintiff has standing to raise those statutory theft issues, and (5) The plaintiffs authorized their counsel of record on September 24, 2018 in their Post-Trial Brief (# 447.00) to abandon all claims sounding in statutory theft, even though a withdrawal of those counts has not yet been filed.

The plaintiffs are now claiming that the 2012 transfer of the three LLCs by George Bongiorno to his four children was invalid because of the signature discrepancy. No specific signature pleading is in the file to that end. Gen. Stat. § 42a-3-308. No claim for relief by the plaintiff seeks such a remedy. John A. Bongiorno was a transferee and was not named as a party defendant at trial. The court has no legal authority to enter a declaratory judgment as to the validity of George Bongiorno’s signature on the 2012 gift documents. This issue is trial by ambuscade (# 440.00 referencing all seventy-two counts). Bridjay Capone has judicially admitted the validity of the transfers (# 440.00, paragraph 10).

The plaintiff, Bridjay Capone, as the member of the three LLCs has filed three counts seeking dissolution of each of the three LLCs: Count Seventy, J & G Realty, LLC, Count Seventy-One, 24 Ardmore Street, LLC and Count Seventy-Two 305 West Avenue, LLC. Those claims are rejected by this court since the plaintiff has failed to sustain her burden of proof.

There is no deadlock in the three LLCs. Three of the four members of each of the three LLCs were defendants in this litigation. Saunders v. Firtel, 293 Conn. 515, 537 (2009).

As a factual allegation in support of her dissolution and winding up counts, the plaintiff, Bridjay Capone alleges: "The conduct of all or substantially all of Defendant ... activities and affairs are unlawful and/or it is not reasonably practicable to carry on the business in conformity with its operating agreement, articles of organization and/or the interests of the members" (# 440.00, pages 104-05). The three operating agreements were in evidence. No "articles of organization" were placed in evidence. The plaintiff then cited in her operative complaint only the pre-July 1, 2017 dissolution statutes, Gen. Stat. § 34-207 and Gen. Stat. § 34-208(c)(2). She did not amend her complaint after July 1, 2017 to include the post-July 1, 2017 statutes. The court has already stated the elements of those two pre-July 1, 2017 statutes in this Memorandum of Decision. The operating agreements contain only two provisions for dissolution in Article XIV, Section 14.01 Termination: (1) the unanimous decision of the Members to dissolve the LLC or, (2) the sole Member of the LLC being a Dissociating Member. This dissolution provision is identical in each of the three operating agreements. Ex. 24, Ex. 39, and Ex. 40.

This court has discussed in detail the claim of mismanagement alleged by the plaintiffs and has found no support for those claims in this trial. It would serve no useful purpose to set forth these findings again in this dissolution and winding up section of this Memorandum of Decision.

The court finds that no event of dissolution has occurred as set forth in the operating agreement. The court finds that the plaintiff, Bridjay Capone, has failed to satisfy the proof required for the dissolution and winding up of the three LLCs. The court finds insufficient evidence that "it is not reasonably practicable to carry on the business in conformity with its operating agreement ... or the interests of the members." The court finds that neither Frank R. Bongiorno as member or manager of the three LLCs and Maurice A. Nizzardo as manager of the three LLCs has engaged in any "unlawful conduct or after course shown."

There was limited evidence of the current fair market value of the real property and the equity in the real property at issue after consideration of the mortgage balances. The evidence did disclose that the real estate investment is viable and continues to be viable. One estimate of valuation by Frank R. Bongiorno in 2017 estimated the fair market value of the three parcels at $ 28, 000.00 without considering 281 West Avenue. Bridjay Capone failed to show how the alleged mismanagement of the LLC in light of this high market value is sufficient to warrant dissolution of the LLCs.

The plaintiffs have failed to even establish any technical monetary errors such as a simple check misdeposit, overpayment of even one bill, the nonpayment of even one business bill, or any "hanky panky" in managing each of the LLCs. The issues on the three dissolution and winding up counts are found for each of the three named LLC defendants as alleged by the plaintiff, Bridjay Capone, in Counts Seventy, Seventy-One and Seventy-Two (# 140.00).

The only concrete evidence of Frank R. Bongiorno and Maurice A. Nizzardo failing to collect rent due to J & G Realty, Inc. was as to the liquor store commonly known as Bongiorno’s Maxi Discount Liquor. There were at least three lawsuits filed concerning the liquor store and its management involving the plaintiff, Marie Bongiorno, and her LLC, Marie Liquors, LLC.

George Bongiorno created the liquor store when Bongiorno Supermarket was in operation and named it Bongiorno Maxi Discount Liquor. The liquor store occupied part of the land at 288 West Avenue, also occupied by Bongiorno’s Supermarket. Multiple lawsuits were filed concerning the liquor store including but not limited to an August 5, 2012 confrontation, two lawsuits over accounting services, payment of rental arrears and/or reasonable use and occupancy, and summary process eviction. Although this current lawsuit contains no specific allegations surrounding the liquor store, there are allegations of mismanagement directed toward the liquor store’s landlord, the defendant, J & G Realty, LLC, and the eviction order of Judge Rodriguez rendered on August 11, 2017 after trial in J & G Realty, LLC v. Marie’s Liquors, LLC d/b/a Bongiorno’s Maxi Discount Liquor, Superior Court, judicial district of Stamford/Norwalk, Housing Session at Norwalk, Docket Number NWH CV13-5001134 S. Ex. 13. This document was offered on the second day of trial during the plaintiff’s, Marie Bongiorno’s direct examination by her lawyer. The plaintiff wanted the court to take judicial notice of the eviction action. During the eviction action that latest four years, the Housing Session entered an order of use and occupancy at $ 3, 500 per month, which was paid, until the eviction action concluded.

Marie Bongiorno testified that the only owners of the liquor store were George Bongiorno, Marie Bongiorno and her LLC Marie’s Liquors, LLC J & G Realty, LLC claimed actual rent, not in the use and occupancy amount, but $ 9, 200 per month. At some time thereafter the liquor store vacated the premises at 288 West Avenue, Stamford. The $ 9, 200 monthly rent claimed by J & G Realty, LLC was based on the next door tenants’ rent, PetSmart, on a square footage basis.

The court finds that the real property managers have pursued reasonable and prompt collection efforts for the non-paid rent of the liquor store. Ex. 13. See Exhibit 14 for Marie Bongioro’s attempt to reduce the liquor store rent to $ 1.00 per month for years by the preparation of a lease between J & G Realty, LLC and Marie’s Liquor, LLC.

The counts of unjust enrichment are catch all claims for plaintiffs’ monetary damage claims in the event that they are not successful in either their claim of fraud, or breach of fiduciary duty. This court has already found that the individual real property managers and managers of the three LLCs, Frank R. Bongiorno and Maurice A. Nizzardo, have not engaged in any untoward conduct, have not committed fraud and have not violated any duties that they have to the real property nor their duties to the members or the LLCs. The court finds the issues of unjust enrichment for each of the defendants. Counts Fifty-Eight and Count Fifty-Nine, will be further separately discussed in this Memorandum of Decision.

As to the breach of fiduciary duty counts, the court finds that the two individual LLC managers, Frank R. Bongiorno and Maurice A. Nizzardo, have a fiduciary duty to the plaintiff, Bridjay Capone, as a member of the three LLCs. They have no fiduciary duty to the plaintiff, Marie Bongiorno. The three operating agreements contain the following provisions: "Managers must discharge their duties in good faith, with the care of ordinary prudent person in a like position would exercise under similar circumstances and in a manner the Manager reasonably believe to be in the best interest of the Company." Ex. 24, 39 and 40, Section 8.05(a). "Managers shall not have any liability to the Company or to any Member for any loss suffered by the Company which arises out of any action or inaction of any manager if the Manager in good faith, determined that such course of conduct was in the best interests of the Company, and such course of conduct did not constitute gross negligence or willful misconduct of the Manager." Ex. 24, 39 and 40, Section 8.06(a). Although the Operating Agreements indicate that they are not responsible for any money damages unless it is "gross negligence, or willful misconduct" those claims appears to be belied by the General Statutes that indicates that this fiduciary duty claim is based on the "ordinary prudent person" standard. Gen. Stat. § 34-141(a) (repealed July 1, 2017) and Gen. Stat. § 34-255h(c)(1) (effective July 1, 2017). The court finds based on the facts found earlier in this Memorandum of Decision, that neither individual defendants have violated their fiduciary duty under any of the above three standards, both before and after July 1, 2017.

As already stated this court cannot find as a matter of fact that there was any financial misdealings by Frank R. Bongiorno or Maurice A. Nizzardo in any fashion whatsoever. The only criticism, which the court has already mentioned, was Frank R. Bongiorno’s testimony where he indicated that he is going to follow exactly what was set up by his father until this litigation is finished. The plaintiffs have failed to sustain their burden of proof as to the counts alleging fraud and oppression.

There was little, if any testimony or documents conveying the defendants Harxter Realty, LLC, and/or Enterprise Park, LLC receiving any funds from any of the three LLCs. The only testimony in regards to Bongiorno Brothers was that contained in the tax returns as "loans." No documents were provided as to Bongiorno Brothers receiving funds from the three LLCs and no testimony in support of that claim was offered. The only evidence of funds paid was that paid to the defendants, Glenbrook Center, LLC. Stop and Shop vacated in August 2007 and stopped paying rent. 305 West Avenue was still a vacant lot. The two new buildings at 288 West Avenue had not been constructed. The other income from the other tenants was not sufficient to pay the $ 110, 000 quarterly mortgage payment to the Estate of John Bongiorno. Glenbrook Center, LLC loaned J & G Realty, LLC sufficient funds to make those mortgage payments for a few years. That loan was repaid to Glenbrook Center, LLC by J & G Realty without interest. Other than those loan repayments, there was no evidence of funds paid by the three LLCs to any other defendant entity as claimed by the plaintiffs in this litigation. The plaintiffs have failed to sustain their burden of proof regardless of the legal theory advanced.

The need for a reserve of cash in managing rental real estate was demonstrated by two facts in evidence. Both situations were caused by the fact that there are only a small number of tenants occupying the property owned by the three LLCs. The loss of rent from one tenant has a larger adverse effect than if the properties were occupied by multiple tenants, such as in an apartment complex. The first example was the loss of rent when Stop and Shop vacated the former supermarket building in 2007 and stopped paying rent. The only way the $ 110, 312.50 quarterly mortgage payments to the Estate of John Bongiorno could be made was a loan from Glenbrook Center, LLC. At least six quarterly payments were made by Glenbrook Center, LLC. Those cash needs of $ 660, 000 should have been met by accumulated cash. The second is the repairs due on the FedEx building in the $ 700, 000 range requiring the landlord hold $ 1, 400, 000 on deposit. Both demonstrate the prudent accumulation of cash by a landlord with a small number of tenants.

The status of 281 West Avenue was not carefully presented to this court at trial in any meaningful detail. The street level photographs conflicted with the aerial photographs depicting the rear property line. Ex. 2, Ex. 3. There was no survey, no metes and bounds legal description, no real estate appraisal showing the property’s fair market value, no City of Stamford assessor field cards, no real estate broker’s listing, and no statement by any owner as to the fair market value of the real property provided to this court at trial. The deeds offered in evidence did not clarify the legal description of the lot nor verify the exact size of the lot at 281 West Avenue. Ex. 32. Since a post-1972 road widening, survey adjustments may have been made to the original 4, 350-square-foot lot. No detailed description of the building and improvements on 281 West Avenue was provided to this court. Yet the plaintiffs continue to complain that the defendants, Frank R. Bongiorno and Maurice A. Nizzardo, have violated their fiduciary duty concerning the management of 281 West Avenue.

The property is a truncated triangular shape with its narrowest section facing West Avenue. That portion facing West Avenue in 1972 was 36 feet and may now be narrower due to the post-1972 road widening by the City of Stamford. There appears to be no vehicular access to the site from West Avenue. The property widens out along the two parallel streets, Baxter Avenue and Ardmore Street. Directly across Baxter Avenue is the raised elevation of I-95. The rear of the lot may be bounded by a fence that divides 281 West Avenue from the Subaru dealership located on Harvard Avenue. The court could not verify the exact location of the rear property line adjacent to the Subaru dealership. The lot is essentially level.

There are a number of buildings and improvements on the lot, most of which were not fully identified at trial as to size, who constructed them and the uses thereof. Starting on West Avenue and proceeding to the Subaru fence, there are the following.

A large stand-alone sign, several stories in height on which is displayed gasoline prices and advertisements for the Gulf full service gasoline station and the car wash.

Adjacent to the sign is a one-story building with no windows or vehicular access. The building has one door located on the gasoline pump side of the building and another door facing Ardmore Street. Frank R. Bongiorno testified that this building is used to store oil and other minor automotive supplies. The building appears to have no formal customer access. The evidence did not describe restroom facilities nor any retail store for automotive supplies or a convenience store. Although no dimensions were furnished to the court, the square shaped one-story building appears to be 600 square feet in size.

The gasoline island is covered by a roof over the pumping area with four pumps and a small cashier’s glass sided kiosk. The pump area is improved with a concrete apron with almost all of the remaining lot covered in asphalt paving.

To the rear of the lot is a one-story building with vehicle through access. This is the car wash, advertised on the sign as Foam Wash. A tall sign advertising the price of Gulf gasoline is next to the car wash along with a utility box. The building appears to be 1, 500 square feet in addition to an awning covering the entering vehicles. Frank R. Bongiorno testified to 1, 680 square feet but stated that figure is not verified. There does not appear to be pedestrian/customer access to the interior of the carwash building.

Immediately next to the car wash building is a contractor’s trailer approximately 400 square feet in size. It appears to be serviced by utilities from the car wash building. A number of witnesses referred to that improvement as the "trailer." It is the main office of J & G Realty, LLC and the two other LLCs in which the business is conducted. The court assumes that the interior of the trailer is finished with office equipment such as telephone, computer, printers, fax, desks, conference area, storage, file cabinets, and copy machine. The presence of toilet facilities and kitchen is unknown to the court. The trailer is serviced by an air conditioning system and heater. Stairs lead to the one door with windows on either side of the door.

On the opposite side of the lot parallel to Ardmore Street are three truck trailers. The middle one contains the logo of "Bon Giorno Super Market." Testimony of Maurice A. Nizzardo and Frank R. Bongiorno revealed that those truck trailers have been stored on 281 West Avenue for many years and were and are used for supplies, old desks, machinery, and other equipment necessary to maintain the real property owned by the three LLCs. At least one truck trailer appears to be refrigerated. There was no evidence that any of these truck trailers are connected to utilities.

To the far rear of the lot is a one-story small aluminum shed with one door, no windows and electrical power running to the shed. There was no testimony about the use of the shed or what person, persons, entity, or entities use the shed. It may be that the shed is actually on the Subaru dealership property. See Ex. 3, one aerial photograph.

The defendant, Bongiorno’s Gas Island, LLC, was purchased by Frank R. Bongiorno and Maurice A. Nizzardo to be owned solely by them at the time of the 2004 settlement of the Estate of John Bongiorno. Both the carwash and gasoline station businesses were located directly across the West Avenue from the supermarket and were created and built by George and John Bongiorno decades ago to draw customers to the supermarket, pharmacy and liquor store.

The court now turns to a more detailed discussion of the damage aspect of this litigation involving the car wash and gasoline station being located on real property owned by the defendant, J & G Realty, LLC. The court finds that no rent has been paid to J & G Realty, LLC by the occupants of the triangular real property known as 281 West Avenue, Stamford, CT. There was some evidence that rent was charged and allowed to accrue. Some testimony had the rent at $ 1, 000 a month and other testimony was $ 3, 000 a month. The period of rent accrual was not made clear to this court. The court has described in some detail the current buildings, improvements and uses of that real property. The court now turns to the issue of whether it is appropriate for this court to find damages based on these findings.

No financial evidence was offered to this court as to the amount of rent that would be reasonable to be paid by M & F Car Wash, Inc. in addition to rent being paid by Bongiorno Gas Island, LLC. There was no evidence of the exact amount of expenses incurred by J & G Realty, LLC’s occupancy of 281 West Avenue that were paid by Frank R. Bongiorno, Maurice A. Nizzardo, M & F Car Wash, Inc. and/or Bongiorno Gas Island, LLC. The Bongiorno Gas Island, LLC tax returns for the years 2005 through and including 2017 show rent of $ 36, 000. The 2004 tax return shows rent of $ 22, 000. There was no evidence that this rental amount was not reasonable under the rather complicated circumstances of the joint occupancy by various Bongiorno entities of 281 West Avenue. No real estate expert or real estate broker offered any opinion as to the fair market value or reasonable rental for 281 West Avenue. The financial evidence involving 281 West Avenue was non-existent.

In a real estate damage dispute including a gasoline purveyor, the court restated the general rule that damages need not be proven with "mathematical certainty." Message Center Management, Inc. v. Shell Oil Products Company, 85 Conn.App. 401, 421 (2004). The plaintiff has the burden to prove damages to a "reasonable certainty." Id., 423. "A damages theory may be based on assumptions as long as those assumptions are reasonable in light of the record evidence." Id., 424; Beverly Hills Concepts, Inc. v. Schatz & Schatz, Ribicoff & Katkin, 247 Conn. 48, 63-64 (1998).

The court finds that the plaintiffs have failed to sustain their burden of proof as to damages for the failure to collect rent on behalf of J & G Realty, LLC for the car wash and gasoline station occupancy of 281 West Avenue, Stamford, Connecticut. The evidence produced proved the occupancy of the property, the assumption that a reasonable rent was due by the occupants to J & G Realty, LLC and the non-payment of formal cash rental payments. The plaintiff did not establish with reasonable certainty that the expenses for J & G Realty, LLC’s partial occupancy of 281 West Avenue paid by the car wash and gasoline station did not approximate the fair market rent due by the car wash and gasoline station or that other entities owed rent for their partial rent of the storage facilities.

The following would have been of assistance to this court in order to determine the fair market rent for the premises by the various occupants: A survey showing the square footage of the lot, the various zoning requirements for the lot, the probability of a building or structure being built on the lot taking into account zoning side yards and the narrow triangular shape of the lot, the possible environmental contamination of the site because of its automotive uses, the exact size of the current buildings and improvements on the site, the exact rear boundary line with the Subaru dealership, the real estate taxes charged by the City of Stamford, the utilities used by the office trailer, the reasonable rental value of the storage facility used by J & G Realty, LLC, an expert’s opinion as to the highest and best use of the lot, the possible use of the property by the current tenant of 24 Ardmore Street, FedEx, located directly across the street from 281 West Avenue, the use of the property by the next door neighbor, the Subaru dealership, the sale of the parcel to the adjacent property owner, Harxter Realty, LLC, and the possibility of the conveyance of title to 281 West Avenue, LLC to the plaintiff, Bridjay Capone, as partial resolution of her continuing claims to 25% of the three LLCs.

The court finds that any award of monetary damages for the non-payment of rent by the car wash and gasoline station occupants to J & G Realty, LLC is speculative and would be based on conjecture. Leisure Resort Technology, Inc. v. Trading Cove Associates, 277 Conn. 21, 35 (2006); Narumanchi v. DeStefano, 89 Conn.App. 807, 815 (2005).

Where the trier of fact has found that the plaintiff has suffered a technical legal injury, the plaintiff is entitled to at least nominal damages. Lyons v. Nichols, 63 Conn.App. 768, 765, cert. denied, 258 Conn. 906 (2001). "Nominal damages are recoverable where there is a breach of a legal duty or the invasion of a legal right and no actual damages result or where, as here, such damages are not proven." Bruno v. Whipple, 186 Conn.App. 299, 317 (2018). "Nominal damages are usually fixed at one cent, one dollar or some similar small amount ... While no exact standard has been fixed or to what amount should be given as nominal damages, it must be ‘insubstantial, ’ a few cents or dollars." Hartford v. International Association of Firefighters, Local 760, 49 Conn.App. 805, 816, fn. 7, cert. denied, 247 Conn. 920 (1998).

The plaintiffs have no standing to sue, and this is not a derivative lawsuit by the LLC. The court has determined that the damages, if any, would be sustained by all the members and if damages were to be awarded based on the evidence before this court would be nominal as to 281 West Avenue, Stamford, Connecticut. The court finds the issues in Count Fifty-Eight and Count Fifty-Nine in favor of all of the defendants as against the claims of the plaintiff, Bridjay Capone.

The court heard no evidence that the managers of the three LLCs have scheduled a duly called meeting at which all members will be in attendance in which the following subjects can be discussed by the members: the terms and conditions of Frank A. Bongiorno’s and Maurice A. Nizzardo’s employment as real property managers, along with their duties and obligations, their right to collect any real estate commissions, a written lease between M & F Carwash, Inc. and J & G Realty, LLC, a written lease between Bongiorno Gas Island, LLC and J & G Realty, LLC, the use of Quick Book system, the use of a double entry bookkeeping system, the possible quarterly cash distributions to each member to offset their personal income tax obligations, the amount of cash and capital kept on hand for major repairs, building costs required by tenants, building updates, and temporary loss of tenant’s rent, the scheduling of a formal annual meeting of each of the LLCs, or even a negotiation among the members for a possible buyout of any one member’s interest in the LLCs, and/or the conveyance to a member of a portion of the real property, subject to a mortgage being taken back on the real properties in lieu of all of or a portion the twenty-five percent membership interest.

"It is the sound public policy of Connecticut to encourage parties to settle their disputes and to avoid protracted litigation." Monti v. Wenkert, 287 Conn. 101, 125 (2008); R.T. Vanderbilt Company, Inc. v. Hartford Accident and Indemnity Company, 171 Conn.App. 61, 174 (2017). It is this court’s hope to avoid perpetual litigation among the Bongiorno family. First Connecticut Capital, LLC v. Homes of Westport, LLC, 112 Conn.App. 750, 762, 766 (2009), Connecticut National Mortgage Company v. Knudsen, 323 Conn. 684, 687 (2006).

The court hereby restates the decision rendered in this Memorandum of Decision and finds the issues on all counts, Count One through and including Count Seventy-Two in favor of all of the defendants including the entity defendants and the defendants, Frank R. Bongiorno and Maurice A. Nizzardo, as against the claims by the plaintiffs, Marie Bongiorno and Bridjay Capone. Helt v. Helt, 91 Conn. 219, 224-25 (1916).

The clerk may tax costs.