Opinion
No. CV07-5006345S
August 6, 2010
MEMORANDUM OF DECISION
Plaintiff is a foreign corporation doing business both in Italy (where located) and in the states; it sold component parts of fiber optic cables (biconic connectors) to the defendant, a Massachusetts corporation doing business at the relevant time in Naugatuck, Connecticut. It is claimed the defendant owes $60,300.97 for parts sold and delivered but for which payment was not made. The matter was tried to the court on March 23, 2010. Post-trial memoranda were filed by the parties on July 19, 2010.
The governing complaint is the Amended Complaint of February 2, 2008, the First Count of which alleges a breach of contract (¶ 8) and the Second Count of which alleges a cause of action for unjust enrichment. While the allegations of that Second Count appear to state a cause of action for negligent misrepresentation (specifically, that the defendant falsely represented he would pay for the goods when he knew or should have known the plaintiff would be reasonably induced to rely upon the representation and that the plaintiff did in fact rely on the representation (¶¶ 8-10, 11), the plaintiff — neither at trial nor in his trial brief — has asserted the same. The defendant has asserted two (2) special defenses — the statute of limitations (otherwise unspecified) and the acts of some other third party. The court ignores the second special defense because no third party action was claimed either at trial or in the defendant's post-trial brief.
The Third Count of that Complaint (asserting a quasi-contract) was withdrawn by plaintiff in the post-trial brief.
The Second Count (¶ 11) also alleges, "[T]he plaintiff was induced to allow the defendant to expunge the funds from the trust." This allegation bears no relation to this case.
To prevail on a breach of contract claim, the plaintiff must prove four (4) elements: a) the formation of an agreement whose terms are definite; b) performance by one party; c) breach of the agreement by the opposing party; and d) damages directly and proximately caused by the defendant's breach. McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 503-04 (2006); see also National Market Share, Inc. v. Sterling National Bank, 392 F.3d 520, 526 (2nd Cir. 2004). The evidence adduced at trial established all elements of a claim for breach of contract. The task then is to identify the applicable statute of limitations and determine whether that statute had expired when the instant action was brought on November 6, 2007.
The parties' dealings encompassed thirty-five (35) transactions memorialized by invoices spanning the period from July 31, 2000-April 30, 2002 (Def. Exh. B); only four (4) such invoices are the subject of this action — specifically, Invoice #3286 under date of September 28, 2000, for the amount of $18,800, Invoice #3774 dated July 24, 2001, in the amount of $12,000, Invoice #5384 dated October 19, 2001, for $24,000 (The parties agree partial payment of $11,419.03 was made regarding this invoice and that the amount alleged yet unpaid is therefore $12,580.97.), and Invoice #6832 dated December 31, 2001, for the amount of $16,920.
The defendant claims the applicable limitations period for this oral contract count is three (3) years under Connecticut General Statute § 52-581. While the defendant "does not dispute that transactions involving the sale of goods are governed by a four-year statute pursuant to the Connecticut Uniform Commercial Code" (UCC), it does dispute that the "Code's four-year statute of limitations applies to the allegations set forth in the pleadings." Trial brief, at 3. By that, the defendant explains that, because the complaint nowhere references that the claim is brought under the UCC and because the plaintiff's claim that the meeting of the parties in Boston in December of 2003 (to discuss unpaid invoices) constituted an oral modification and demonstrated a continuing course of conduct which tolled the statute (which the defendant disputes), the three-year statute would have expired when the action was brought. Id., at pp. 3-4.
Section 52-581(a) reads, "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 party to be charged therewith or his agent, shall be brought but within three years after the right of action accrues."
The plaintiff was required to state a cause of action (here, breach of contract) and facts to establish the same. That the cause of action arose under the UCC does not require stating because the UCC constitutes a proof method of determining the limitations period as opposed to stating a cause of action.
The court is not persuaded that the "UCC does not govern oral contracts" as the defendant notes in his brief. Connecticut General Statute § 52-581(b) specifically reads, "This section shall not apply to causes of action governed by Article 2 of title 42a." Article 2 of Title 42a is the Connecticut UCC-Sales. It is a tenet of statutory construction that, in construing a statute, we are required to consider the statute as a whole with a view toward reconciling its parts in order to obtain a sensible and rational overall interpretation. Sweetman v. State Elections Enforcement Commission, 249 Conn. 296, 307 (1999). "Contract for sale," as defined in Connecticut General Statute § 42a-2-106, does not require a written contract (likely because, in the world of daily commerce, formal written agreements lack the immediacy provided by order forms and confirmations). Sections 42a-2-204 and 42a-2-206 employ language sufficiently broad to embrace oral contracts. "A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." Section 42a-2-204(1). "[A]n order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods . . ." Section 42a-2-206(1)(b). Section 42a-2-201 implicitly recognizes the same by requiring only a writing "sufficient to indicate that a contract for sale has been made between the parties and signed by the parties against whom enforcement is sought or by his authorized agent or broker" so as to satisfy the requirements of the statute of frauds. Connecticut General Statute § 42a-2-725(1) provides a four-year statute of limitations re the breach of any contract for sale. The cause of action accrues at the time of breach. Connecticut General Statute § 42a-2-725(2). Additionally, our Second Circuit has found the UCC applicable to an oral agreement. See Old Country Toyota Corp. v. Toyota Motors Distributors, Inc., 966 F.Sup. 167, 170 (1977).
The court does not, however, find any support for the plaintiff's assertion that a Connecticut court has concluded the same since no language either in SFP Tisca v. Robin Hill Farm, Inc., 1999 WL 546978 (Conn.Super.) [ 25 Conn. L. Rptr. 99], or in SFP Tisca v. Robin Hill Farm, Inc., 244 Conn. 721 (1998) (which remanded the case to the trial court) clearly so provides.
The court finds applicable to all of the parties' transactions the four-year statute. The breach of the agreement to pay any invoice occurred when, within thirty (30) days of shipment of these fiber optic connectors, payment was not made. See Plaintiff's Exhs. 2, 4, 6, 8, and "Morning Session" trial testimony of Claudio Mega (plaintiff), at p. 31, lines 3-7. Since the last issued invoice (among the four invoices in dispute) — #6832 — is dated 12/31/01 and since breach would have occurred no later than January 31, 2002 (thirty days after the invoices became due and payable), the contract limitations period with regard to all four disputed invoices expired on January 31, 2006, almost two years prior to commencement of this action.
The plaintiff has, however, alleged the parties' continued business dealings tolled the limitations period of the UCC (as just above referenced). Specifically, the claim is that the meeting between the parties (Mega Stranberg) in Boston on December 4 of 2003 to discuss the outstanding payments led to an agreement by Stranberg that the account would be made current and that this alleged "agreement" together with e-mails between the parties on the same subject and acceptance of partial payment of $11,591.03 applicable to Invoice #5348 constituted a continuing cause of conduct that acted to toll the date of breach until December 4, 2003, at the earliest. Trial brief, at p. 6. That would of course bring commencement of the action on November 6, 2007, within the four-year statutory period of the UCC. Alternatively, the plaintiff urges the court to conclude the six-year limitations period of Connecticut General Statutes § 52-576 applies and that that would extend the limitations period to December 4, 2009.
The testimony cited as authority for this alleged promise does not establish such promise to pay.
Connecticut General Statute § 52-576(a) provides, "No action for an account, or on any simple or implied contract, or any contract in writing, shall be brought but within six years after the right of action accrues." Troubling is counsel's failure to cite subsection (c) of this statute which provides, "The provisions of this section shall not apply to . . . any cause of action governed by Article 2 of Title 42a." As plaintiff has argued throughout most of its brief, this breach of contract claim is governed by Article 2 of Title 42a. Section 52-576 is not applicable.
Nor is the continuing course of conduct theory applicable here. Under the modern formulation of this doctrine, "[T]o support a finding of a `continuing course of conduct' that may toll a statute of limitations there must be evidence of a breach of duty that remained in existence after commission of the original wrong related thereto. That duty must not have terminated prior to commencement of the period allowed for bringing an action for such a wrong . . . Where we have upheld a finding that a duty continued to exist after the cessation of the `act or omission' relied upon, there has been evidence of either a special relationship between the parties giving rise to such a continuing duty or some later wrongful conduct of a defendant related to the prior act." (Citations omitted.) Blanchette v. Barrett, 229 Conn. 256, 275 (1994). Because of the "special relationship" component, the majority of the cases considering this doctrine arise in the tort arena — specifically, in malpractice cases — as was Blanchette, supra, which involved a patient with a breast lump and whose family physician, following a negative mammogram, failed further to diagnose, monitor, or treat what was later determined to be breast cancer. See also West v. St. Vincent's Medical Center, 252 Conn. 363 (2000); Cross v. Hutterlocker, 185 Conn. 390 (1981). There is, however, precedent for the application of the rule in non-tort cases. See e.g., Handler v. Remington Arms Co., 144 Conn. 316 (1957) (applying continuing course of conduct doctrine to toll limitations period on the basis of continuing duty to warn of defective cartridge by manufacturer). In application, this doctrine is "conspicuously fact-bound." Blanchette, supra, at 276.
The facts here do not warrant the application of this doctrine. There is no "special relationship" between these parties that differs from any other seller-buyer relationship. There were no circumstances which required the sharing of confidential information or the application of specialized skills or knowledge. There clearly was no fiduciary relationship. Moreover, there was no "later wrongful conduct of a defendant related to the prior act." Zielinski v. Kotsoris, 279 Conn. 312, 322 (2006). The evidence does not support the plaintiff's allegation that the defendant, at the December 2003, Boston meeting, affirmatively agreed to make payment and, even if one were to assume he so agreed yet failed to pay, that wrongful conduct differs not in type or degree from the original wrongful conduct. The duty — and breach thereof — is not "related to the prior act" ( Id., at 322); it is the same prior act of non-payment. Meeting in Boston did not eventuate in the defendant's assumption of any obligation he did not already have. (He did not, for example, agree to pay interest on the outstanding amount.) Nor was this a sale coupled with a continuing duty to warn as in the weapons/ammunition cases in which the doctrine has been applied. Under these facts, to extend the duty owed by the defendant would be an impermissible intrusion upon the policy of limiting liability to claims brought within a reasonable period. The Boston meeting was a separate and discrete act unlike the close, long-term relationships upon which the continuing course of treatment doctrine typically rests. Finally, the rationale reflected in the doctrine's application is that, during an ongoing relationship, lawsuits are premature because specific tortious acts or omissions may be difficult to identify and may yet be remedied. The tortious act(s) here were separate acts occurring on specific dates — thus, easily identifiable events.
Nor does the Third Count's cause of action for unjust enrichment afford the plaintiff a remedy he otherwise does not have.
Unjust enrichment is a very broad and flexible doctrine, the basic principle of which is that it is contrary to equity and good conscience for a defendant to retain a benefit that has come to him at the expense of the plaintiff. National CSS, Inc. v. Stamford, 195 Conn. 587, 597 (1985). The doctrine's three (3) basic requirements are that: (1) the defendant was benefited; (2) the defendant unjustly failed to pay the plaintiff for the benefits; and (3) the failure of payment was to the plaintiff's detriment. Gagne v. Vaccaro, 255 Conn. 390, 409 (2001). With no other test than whether it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another, it is for the court to determine whether, under a particular set of circumstances, it is "just or unjust, equitable or inequitable, conscionable or unconscionable" to permit a defendant to retain a benefit which has come to him at the expense of another. Id., at 403-09. It is a highly fact-intensive inquiry. Id., at 409. The remedy applies whenever justice requires compensation be given for property or services rendered under a contract and no remedy is available under the contract. Vertex, Inc. v. City of Waterbury, 278 Conn. 557, 573 (2006); 12 S. Williston, Contracts (3d. Edition, 1970) § 1479, p. 272. That lack of contract remedy is a precondition for recovery under this doctrine. Schreiber v. Connecticut Surgical Group, P.C., 96 Conn.App. 731, 740 (2006). It is generally recognized that the six-year statute of limitations applies to such claims. Corbett v. Petrillo, 2008 Conn.Super. LEXIS 476 (J.D. of New Haven) (February 29, 2008). That statute had run for two (2) of the four (4) disputed claims when this action was commenced; "it had not expired with regard to Invoice #5348 or #6832." The evidence supports a finding the defendant received all of the items shipped under these invoices. Stranberg's testimony was that he did not receive the items on those invoices and that he stopped doing business with the plaintiff because he was experiencing "quality issues" with the product. His testimony was not credible. Not only was he unable to produce any documentation of the alleged quality issues but he also testified he had no recollection of discussing the unpaid invoices with the plaintiff either at the Boston meeting or prior thereto. AT, p. 19, lines 10-16. That meeting occurred one and one-half (1-1/2) years after shipment of the last order (on 4/30/02) and there was no other reason for Mr. Mega to travel from Italy for such meeting because any "quality control issue" that might have earlier existed was no longer relevant in December of 2003. Stranberg's credibility was significantly compromised by his having previously served time for corporate tax evasion (a felony), his admission to having used corporate funds to remodel his private residence, and by a plea of guilty by the defendant company (of which he was President) to publishing a false test report in 1999. Mega testified the defendant had offered various reasons at divers times for not being current on payments, only one of which reasons was Stranberg's claim of non-receipt of certain items (MT, Mega, p. 33, lines 16-17) and/or lost paperwork ( id., lines 18-19). Mega's response to such claims was to ship the items again. Id., at line 21. Mega was entirely credible. The court finds the defendant, to plaintiff's detriment, was enriched by his receipt of the connectors (likely on multiple occasions in view of Mega's testimony regarding double shipments).
The statute expired for Invoice #3286 on October 28, 2006; it ran on August 24, 2007, for Invoice #3774.
The measure of damages in an unjust enrichment case ordinarily is not the loss to the plaintiff but the benefit to the defendant. Ramondetta v. Armenta, 97 Conn.App. 151, 165, citing to Hartford Whalers Hockey Club v. Uniroyal Goodrich Fire Co., 231 Conn. 276, 285 (1994). The contract price is, however, evidence of the benefit conferred. United Coastal Industries, Inc. v Clearheart Construction Co., 71 Conn.App. 506, 511 (2002).
The amount due and owing on Invoice #5348 is $12,480.97 (Mega acknowledged receipt of partial payment of $11,519.03 toward the principal sum of $24,000); $16,920 remains unpaid on Invoice #6832 — for a total of $29,400.97. Documented costs of $808.90 are added. If the full amount of $30,209.87 is not paid within thirty (30) days of the date of this decision, post-judgment interest shall accrue as of the date of this decision at the rate of 10% per annum as per Connecticut General Statute § 37-3a.
Plaintiff seeks reimbursement of the cost of Mr. Mega's trip to Boston under Connecticut General Statute § 42-a-7-210. The statute has no relevance to this case and the costs are not otherwise recoverable. Attorney fees are not awarded both because not requested in the Amended Complaint's Prayer for Relief and because inappropriate. No contractual or statutory basis was properly asserted at trial or by post-trial submission and Connecticut adheres to the American Rule (Attorney fees are not permitted to successful party absent such contractual or statutory basis).
Judgment for plaintiff enters this date in that amount.