Opinion
No. CV 06-500 11 85 S
October 6, 2006
MEMORANDUM OF DECISION RE PLAINTIFF'S PREJUDGMENT REMEDY DATED JUNE 22, 2006
A hearing was held on August 8, 2006 on plaintiff's request to attach the real and personal property of the defendant. The parties have both briefed the issues concerning the hearing and the court has reviewed the briefs.
The court finds the plaintiff is a Delaware corporation with a business address in Oxford, Connecticut. The defendant is a Delaware corporation with its principal place of business in Norristown, Pennsylvania. The plaintiff is in the business of manufacturing and supply of ball-bearing products while the defendant distributes ball-bearing products.
On or about July 31, 2000 the plaintiff and the defendant entered in a contact known as the Amended Agreement. (Plaintiff's Ex. 2.) The parties had previously entered into a asset-purchase agreement in 1997.
Pursuant to the agreement the plaintiff would manufacture the ball-bearings and the defendant would distribute the ball-bearings. Pursuant to provision #4 of the Amended Agreement for each 12-month period commencing March 1st the defendant was required to purchase from the plaintiff a minimum amount of ball-bearings. The contract minimum amount was subject to adjustment from term to term. If the defendant failed to purchase the contract minimum amount in any given term, the defendant would pay cash to the plaintiff for the shortfall.
The plaintiff alleges the defendant breached the Amended Agreement by failing to purchase from the plaintiff the contractually required minimum amount of ball-bearing products for 2004 and 2005. The defendant argues that upward and downward adjustments under the agreement are permanent and therefor no monies are due to the plaintiff.
The amended agreement is silent as to whether upward adjustments are permanent and downward adjustments are temporary.
Michael Gostomski, the plaintiff's agent for negotiating the amended agreement, testified the parties specifically discussed and understood the upward adjustments to be permanent and downward adjustment to be temporary, i.e. applicable only in the year they occurred. This interpretation was supported by Douglas Werner, senior product manager of the plaintiff corporation.
The plaintiff did acknowledge and accept a downward adjustment to the contract minimum for 2001.
"Probable cause for purposes of the PJR statutes is a flexible common sense standard that does not demand that a belief be corrected or more likely true than false . . . In acting on a prejudgment remedy motion, the trial court must evaluate the arguments and evidence produced by both parties to determine whether there is probable cause to sustain the validity of the Plaintiff's claim . . . Civil probable cause constitutes a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a person of ordinary caution, prudence and judgment, under the circumstances, in advancing the action." Weicker v. Granatowski, 2003 WL 22133810 (Sep. 2, 2003, Levin, J.) Probable cause has been defined as a bona fide belief in facts essential under the law for the action and such as would lead a reasonable, prudent person to entertain such belief Dufraineu v. CHRO, 236 Conn. 250, 261 (1996).
It is not necessary for the plaintiff to prove its case by a preponderance of the evidence at this probable cause hearing.
The court does find, by the minimum burden required, that the downward adjustment to the contract base amount that occurred in 2001 applied only to that year. The defendant fell short of the minimum purchase obligation for the years 2004 and 2005 resulting in loss profits to the plaintiff. The lost profits for 2004 are $817,476.00 and for 2005 are $1,006,840.00.
The court has considered and rejects, based on the evidence presented at this hearing, the plaintiff's claim to include in its attachment current receivables, loss profits for 2006 and consequential damages.
The plaintiff's motion is granted in the amount of $1,824,316.00.