Opinion
HHDCV106011975S.
11-05-2012
Barton MANAKER v. Edward ROSENFIELD et al.
UNPUBLISHED OPINION
WOODS, J.
The plaintiff, Barton Manaker, brought this action to collect profits claimed to be due and owing from the development of commercial real estate. In an amended complaint dated December 8, 2011, the plaintiff alleged counts for breach of contract and a declaratory judgment as to the defendant, Edward Rosenfield.
The plaintiff claims a breach of an alleged oral agreement between the parties for the sale and development of said real estate. The defendant has denied the existence of a contract between the parties. Further, the defendant has alleged special defenses arguing that any agreement that might have existed between the parties is unenforceable pursuant to the statute of frauds. The defendant also asserts that the plaintiff's lawsuit is void for vagueness and is barred under the statute of limitations. This matter was tried before this court on the issue of liability only on December 8, 2011, December 9, 2011, and December 15, 2011.
At trial, the plaintiff testified to the following: For approximately twenty-eight years he operated car dealerships at 260 West Main Street, Avon. In 1990, due to financial problems the plaintiff's bank called his loans on the property. The plaintiff was forced to close the business in 1991 and in 1992 he listed said property for sale
The plaintiff originally listed the property for sale for four million dollars, but because of a lack of serious interest from potential buyers the price on the property was reduced to $1.75 million. In January 1992, the bank withdrew a foreclosure action because of environmental contamination on the property caused by vandalism. As a result, the bank gave the plaintiff control over the sale of the real estate.
In January 1992, the plaintiff was introduced to the defendant by his real estate agent. Soon thereafter the parties had the first of a number of meetings to discuss the sale and purchase of the plaintiff's property. Like the plaintiff, who was an experienced businessman, the defendant was also a sophisticated businessman who owned a number of supermarkets. The defendant eventually sold his supermarkets and entered the real estate business where he bought and developed commercial shopping centers and office buildings.
The plaintiff testified that throughout 1992 he had a number of meetings with the defendant. It was during these meetings that the plaintiff informed the defendant that he could help introduce the defendant to people around the town. The plaintiff testified that it was during this time that the defendant accepted the plaintiff's offer to use his influence to help develop the project.
In May 1992, the plaintiff set up a meeting at Brown Thompson's restaurant in Hartford to reach an agreement regarding the sale of the property. The plaintiff testified that at this meeting the plaintiff informed the defendant that due to the aforementioned environmental concerns about the property the bank granted control of the property to the plaintiff. At this meeting an agreement was discussed whereby the defendant would pay the plaintiff twenty-five percent of the net profits from the development of the property after the defendant secured a twenty percent return on his investment. The plaintiff testified that at that meeting the parties agreed that the plaintiff would assist the defendant in getting the price for sale of the property reduced and that the plaintiff would make introductions to town officials and contiguous property owners.
The plaintiff alleges that in July 1992 the parties met with their counsel to draft an agreement. At trial the plaintiff's attorney, Joel Grafstein, testified regarding an unsigned draft consulting agreement that he prepared which refers to the aforementioned percentage breakdown testified to by the plaintiff.
In response, the defendant testified that he did not remember the July 1992 meeting, or the alleged unsigned draft consulting agreement. He further testified that while he had discussions with the plaintiff, he never engaged in detailed negotiations regarding the percentage calculations testified to by the plaintiff.
The plaintiff claims that following the July 1992 meeting he introduced the defendant to his abutting property owners and negotiated with the bank to reduce the price of the property. The plaintiff also testified that through 2004 the parties remained in contact with each other on matters pertaining to the project. The plaintiff and his wife testified that in 1994 in Florida the defendant told the plaintiff that he should look at this project as his retirement. The defendant testified that he does not remember making that statement to Mr. and Mrs. Manaker. Subsequently, through the years the defendant provided the plaintiff with financial projections, tax statements, figures and calculations pertaining to the project.
Exhibit 20 is the letter written by the defendant to the plaintiff inviting him to call the defendant to discuss his future role in the project. The defendant said that he wrote the letter to the plaintiff only with the intention of getting money to the plaintiff if he did well enough. The defendant testified that at that time he did not have an agreement with the plaintiff.
In response to the plaintiff's testimony, the defendant testified that although he had many meetings and even became friends with the plaintiff he said he never " came to any clear understanding" with him. The defendant did not remember ever before seeing Exhibit 5, which is the letter purported to reflect an agreement between the parties.
The defendant testified that he never had detailed discussions with the plaintiff about the definition of net profits, calculating the twenty-five percent profit claimed by the plaintiff or the twenty percent that the plaintiff was to receive. Further, the defendant had no recollection of any discussions about bringing in other partners or members, or about discussing profits and losses resulting from the development of the project.
The defendant further testified that while he negotiated with the plaintiff to arrive at a figure for the purchase of the property, he also negotiated directly with the bank. The defendant also testified that the difference between the price he was to originally pay for the property of $1,250,000 and the final price of $500,000 was due to the cost to the defendant of cleaning up the environmental problems in the property and did not result from any negotiations with the plaintiff.
The defendant testified that he had no discussions with the plaintiff about making him a partner, member or consultant. He testified that he knew how to develop, manage and hire people. He said he did not need any help from the plaintiff in developing the property.
I
Breach of Contract
The threshold question is whether the parties entered into a contract. The plaintiff argues that the parties entered into an agreement wherein, the plaintiff would assist the defendant with purchasing 260 West Main Street, Avon at a favorable price and assist the defendant in developing his business through the plaintiff's contacts and relationships with contiguous business owners. In return, once the defendant's business achieved a twenty percent return on his investment, he would pay the plaintiff twenty-five percent of his profits. The plaintiff argues that the contract was agreed to by the parties in a meeting at Brown Thompson's restaurant in addition to other conversations around that time. The defendant counters that the evidence demonstrates that the parties never had a meeting of the minds as to the terms of the contract.
" The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." (Internal quotation marks omitted .) Meyers v. Livingston, Pulda, Meiklejohn & Kelly, P.C., 134 Conn.App. 785, 790, 41 A.3d 674, cert. granted on other grounds, 305 Conn. 920, 47 A.3d 881 (2012). " The existence of a contract is a question of fact to be determined by the trier on the basis of all of the evidence." (Internal quotation marks omitted.) Hawley Avenue Associates, LLC v. Russo M.D. & Associates Radiology, P.C., 130 Conn.App. 823, 829, 25 A.3d 707 (2011). " In order for an enforceable contract to exist, the court must find that the parties' minds had truly met ... If there has been a misunderstanding between the parties, or a misapprehension by one or both so that their minds have never met, no contract has been entered into by them and the court will not make for them a contract which they themselves did not make. [A]n agreement must be definite and certain as to its terms and requirements ... [N]umerous Connecticut cases require definite agreement on the essential terms of an enforceable agreement ... [Furthermore, ] [w]hether a term is essential turns on the particular circumstances of each case." (Citations omitted; internal quotation marks omitted.) Hawley Avenue Associates, LLC v. Russo M.D. & Associates Radiology, P.C., supra, 130 Conn.App. at 829.
In defining an essential term, the Restatement (Second) of Contracts notes that: " The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy ... The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance." Restatement (Second) Contracts § 33. In the comment thereto it is noted that, " [i]f the essential terms are so uncertain that there is no basis for deciding whether the agreement has been broken, there is no contract."
In the present case, the court first notes that the plaintiff cannot say with certainty when the contract was formed. There is testimony, which the plaintiff relies on in its post-trial brief, that the agreement was formed during a meeting at Brown Thompson's restaurant in May 1992. However, the complaint states that the agreement was formed in July 1992. And there was also testimony that the agreement was made simply, " prior to the closing in December of 1993." In an analogous case, the court held that, " [a]s a fundamental matter, the plaintiff has failed to establish when the parties reached a mutual understanding as to all of the terms the plaintiff claims were contained in the parties' agreement ... The court finds this to be a significant deficiency in the plaintiff's case. The fact that the plaintiff's primary witness and key negotiator on this project could not specify when the parties reached a mutual understanding on the essential terms of the agreement undermines [the plaintiff's] credibility and lends support to the defendant's view that the parties never had a mutual understanding on essential terms." Danziger Homes, Inc. v. Wasserman, Superior Court, judicial district of Danbury, Docket No. CV 08 5008894 (September 28, 2011, Cobb, J.). This court applies that analysis to the facts of the present case. The lack of clarity as to when the meeting of the minds was alleged to have taken place undermines the plaintiff's case.
Even if the court were to assume that any contract formation was complete by the May 2012 meeting at Brown Thompson's, the agreement fails to establish all of the essential terms of the agreement as is required to form a meeting of the minds. As the plaintiff testified and the defendant argues in their brief, there was an intention between the parties to reduce any understanding to a written agreement. Subsequent to the meeting at Brown Thompson's, the plaintiff attempted to do so by drafting a proposed agreement, admitted at trial as Exhibit 5. The defendant does not remember this proposed agreement and neither party claims that the agreement was signed by the parties. While later codification or clarification of the details discussed at Brown Thompson's would not frustrate contract formation at the restaurant, in this case, the unsigned draft illuminates the fact that many essential terms were not defined in the meeting at Brown Thompson's.
Significantly, Exhibit 5 contains definitions for the terms " net profit" and " return on investment." The defendant never agreed to these definitions and there is no evidence that the definitions were discussed at Brown Thompson's. In a complex deal such as the one proposed in the present case, the definition of the terms which will serve to trigger crucial aspects of the alleged contract are essential in demonstrating that the parties truly had a meeting of the minds. Without a definition of when the contract would be performed or breached, there can be no contract. The lack of detail in the conversations demonstrates that the discussions were preliminary and not final.
Further evidence of the preliminary nature of the meeting at Brown Thompson's is found in the plaintiff's then-counsel's notes from a meeting held near the time the plaintiff drafted Exhibit 5. While the plaintiff alleges that the terms agreed to included twenty-five percent of the net profits from the development of the property after the defendant secured a twenty percent return on his investment, his lawyer's notes from the July 1992 meeting indicate only generalities regarding a " share in profits" and " 25 profit after reasonable return of investment." This is further evidence that the Brown Thompson's meeting was only preliminary and the essential terms including the definition of " net profit" and " return on investment, " as well as the percentage that the plaintiff would receive and the point at which he would receive it, were left undefined. This vagueness provides further evidence that there was no meeting of the minds.
The foregoing, including the definitions of the terms " net profit" and " return on investment, " the percentage that the plaintiff would receive and the point at which he would receive it, are all essential to determining whether a contract was formed and performed or breached. There is no evidence before the court to determine that the parties had a meeting of the minds on these terms, nor is there clarity as to when the terms, essential or otherwise were agreed to. This, along with the fact that both parties expressed an intent to reduce this complex agreement to writing and yet never agreed to any written contract, leave the court with the conclusion that these parties engaged in preliminary discussions about a potential deal, but never had a meeting of the minds on the contract alleged by the plaintiff. Based on the forgoing, the court concludes that no contract was formed and enters judgment in favor of the defendant.
The court need not discuss the defendant's further arguments or special defenses of statute of frauds or statute of limitations because each relies on a contract that the court deems was never formed. Further, the court need not address the special defenses of vagueness.
II
Conclusion
The court finds based on the facts before it that no contract was entered into between the parties, and, therefore, judgment is found for the defendant.
SO ORDERED.