Opinion
No. CV 09 5014205
October 20, 2010
MEMORANDUM OF DECISION
On April 27, 2009 the plaintiff (Reed Equipment) and the defendant (Aiudi Sons) signed a three-month lease for a piece of equipment to be used in Aiudi Sons' concrete and cement business. Whether or not that lease set the terms for the defendant's use of the equipment was the subject of a trial to this court conducted on June 9 and June 15, 2010. This memorandum of decision sets out the court's findings of the material facts, based on its assessment of the credibility of the witnesses and the weight to be accorded their testimony and the exhibits that were introduced, as well as the court's conclusions of law as to the issues argued by the parties at trial and in their post-trial briefs.
In addition to reviewing notes made during the trial, the court has listened to the testimony of the witnesses via the recording system in place at the New Britain courthouse.
While the parties, and particularly Aiudi Sons, have raised many issues of law, they recognize in their post-trial briefs that the case turns on issues of credibility. For, while the parties agree on many of the facts, they have distinctly different versions of what was the agreement between them.
Aiudi Sons' answer raises five special defenses, and its counterclaim asserts five separate causes of action against Reed Equipment.
Once the issues of credibility are decided, the resolution of the case is governed by common-law contract principles. Therefore, it is not necessary for the court to determine whether Connecticut or New Hampshire law governs.
It is undisputed that in early April 2009 Elmo Aiudi, on behalf of Aiudi Sons, contacted Geoffrey Morrow, a salesman for Powerscreen Connecticut (Powerscreen), looking to lease a "three deck screening plant" (screener), a piece of machinery which separates sand from stone, for use in his business. Powerscreen did not have on hand the type of screener desired by Mr. Aiudi, and Mr. Morrow located one owned by Reed Equipment, a company unaffiliated with Powerscreen but with which Powerscreen had previously done business, at a job site in Massachusetts. The screener was inspected by Mr. Aiudi and his son, in the presence of Mr. Morrow, who explained to them its operation. After Mr. Aiudi was satisfied that the screener would meet his needs, Mr. Morrow had it delivered to the premises of Aiudi Sons in Plainville on April 21, 2009. It remained there until July 31, 2009, when Reed Equipment removed it.
The screener did require different screens than those with which it was equipped in order to do what Aiudi Sons needed done. Mr. Morrow obtained the proper screens from another Powerscreen customer; those screens were installed by a Reed Equipment employee when the screener was set up on Aiudi Sons' premises.
Mr. Morrow testified that, from the beginning of his dealings with Mr. Aiudi, he was told by Mr. Aiudi that he wished to lease the screener for three months, perhaps with an option to buy. Mr. Morrow communicated those terms to Douglas King, general manager of Reed Equipment, who was agreeable to such an arrangement. Mr. Morrow denied ever telling Mr. Aiudi he could rent the screener for one month.
It was Mr. King who had advised Mr. Morrow that he had the type of screener desired by Mr. Aiudi. It was also Mr. King who dealt with Mr. Aiudi over the lease. He testified that he always understood that the rental was to be for three months, and, at about the same time as the screener was delivered to Aiudi Sons on April 21, he delivered to its premises a written lease agreement reflecting that understanding and a per month rental price of $18,000. Mr. Aiudi was not present when he delivered the lease, and Mr. King was told by one of Mr. Aiudi's sons that only he could sign it. On his second visit to the premises Mr. King met with Mr. Aiudi, but the latter informed him that he had not yet read the lease. On his third visit, Mr. King testified, he met with Mr. Aiudi, who read and signed the lease in Mr. King's presence; Mr. King also signed the lease at that time. Mr. King testified that these three visits took place within a few days of each other; so, according to him, Mr. Aiudi had the lease for four or five days, maybe a week, before he signed it.
The executed lease is in evidence. Its term was from April 27, 2009, less than a week after the screener was delivered to the Aiudi Sons plant, to July 27, 2009. Exhibit 3, ¶ 1. The monthly rental is set at $18,000. Id., ¶ 2.
See exhibit 3.
Mr. King requested a check for the first month's rental when the lease was signed. He acceded to Mr. Aiudi's request to defer payment, however, because, according to Mr. Aiudi, "cash was tight." It was not until May 19 that he received half ($9,000) of the agreed-upon monthly rental. Although he sent out monthly invoices, he received no further payments until July 9, when another $9,000 check dated May 19 appeared in the mail. This check noted that it was the "final" payment for rental of the power screener. It was marked "Void" and returned by Reed Equipment on July 6, 2009, accompanied by a letter from Mr. King reminding Mr. Aiudi of Aiudi Sons' obligations under the rental contract.
Thus, Mr. Morrow and Mr. King tell of a straightforward transaction in which Mr. Morrow brought together Mr. Aiudi, who needed a screener for three months, and Mr. King, who had one available for that period. The transaction concluded in the execution by these parties of a rental agreement for that period, at a monthly rent of $18,000. Mr. Aiudi tells quite a different tale.
While he agrees that he contacted Mr. Morrow in his search for a screener, the agreement with Mr. Morrow was that he would try Reed Equipment's screener for a month and, if it worked out, he "would go further." The screener was delivered to Aiudi Co.'s plant with that understanding, he said. Mr. Aiudi testified that, when Mr. King appeared with the written lease, he told Mr. King he hadn't read it. Mr. King assured him it was the "standard contract" with some "lawyer's language" and that it reflected the deal Mr. Aiudi claims he had with Mr. Morrow, i. e., the one-month trial lease. Mr. Aiudi further testified that he looked only at the rental amount in paragraph 2 of the lease and not the term of the lease in paragraph 1 because he had not agreed and would not have agreed to a three-month lease. He acknowledges that he signed the lease, but maintains that his contract was an oral contract, entered into with Mr. Morrow as Reed Equipment's agent, for a one-month trial rental, and Mr. King duped him into signing the three-month lease.
In his post-trial submissions defense counsel repeatedly refers to Mr. Aiudi as an "elderly gentleman." While Mr. Aiudi testified that he is eighty-two years old and had a stroke about three years before this trial (and, therefore, about two years before this transaction), it was clear to the court from its observations at trial that Mr. Aiudi's mental faculties and business acumen are still sharp, and he is not the kind of man who is easily duped.
Thus, Mr. Aiudi describes what his counsel labels a "bait and switch" tactic employed by Reed Equipment and Mr. Morrow as its agent. That version of events, however, relies entirely on the veracity of Mr. Aiudi, a witness whose testimony the court does not find credible. Rather, the court accepts the testimony of Mr. Morrow and Mr. King, which contradicts Mr. Aiudi's testimony on every material point.
The court's assessment of the relative credibility of these witnesses is based on its observations of their demeanor while testifying as well as the likelihood of the stories they told. Mr. Aiudi's testimony fails on a number of crucial points. It is incredible, as claimed by Mr. Aiudi, that a screener as large as the one rented by Aiudi Sons, would have been trucked from Massachusetts to Plainville for purposes of a one-month trial rental. It is more credible that Mr. Aiudi made this deal for a three-month rental of the screener because, as he testified, this was a busy time of year for Aiudi Sons, when they were stockpiling material before the summer came.
There is a photograph in evidence (exhibit 26b) of a screener that, while not identical to the one leased by Aiudi Sons, is the same model and is representative of the leased screener.
It is equally incredible that Mr. Aiudi, in business for sixty-four years, expects parties with whom he contracts to read him the terms of their contract, especially in light of his testimony that he expects parties to whom he presents his firm's standard contracts to read them before they sign. Mr. Aiudi testified that the screener he rented performed poorly under wet conditions, and that he complained frequently to Mr. King. The absence of any record of such complaints further damages his credibility. Finally, although Aiudi Sons received monthly invoices which clearly billed for the months of May 27 to June 26 and June 27 to July 26, Mr. Aiudi never contacted Mr. King or any other representative of Reed Equipment to remind them that the agreement was only for a one-month trial, from April 27 to May 26. Even when Mr. King wrote to Mr. Aiudi on July 28, 2009, notifying him of Reed Equipment's intention to pick up the screener, Mr. Aiudi failed to correct the following statement in Mr. King's letter: "As you are aware, you entered into a lease agreement with Reed Equipment on April 27, 2009 for the rental of a portable screener for a term of 3 months." The first letter making the claim that the lease term was for one month was dated July 24, 2010 but not mailed till August 6, after the lease term had ended and the screener had been removed from Aiudi Sons' premises. It was signed by Mr. Aiudi's daughter, Sandra DiVincenzo, who testified at trial that she was not involved in the formation of the contract and had no personal knowledge of the contract terms.
Exhibits 5 and 8.
Conversely, the court found the testimony of Mr. Morrow and Mr. King consistent and credible. It was corroborated by the conduct of Mr. King, who prepared a lease contract reflecting the three-month term suggested to Mr. Morrow by Mr. Aiudi, sent monthly invoices indicating the amount due for each month and complained of non-payment during the lease term. His deviations from the lease requirement that monthly rentals be paid in advance were to accommodate Aiudi Sons and do not evidence the existence of only a one-month trial lease, and his declination of his option to terminate the lease early was motivated by his unrealized hope that, if he accommodated Aiudi Sons, he might obtain future business.
Because the statements and actions of Mr. Morrow and Mr. King were consistent with each other and consistent with the existence of a three-month lease term, it is not necessary for the court to resolve the questions of agency briefed by the parties.
See exhibit 7.
The court does not credit Mr. Aiudi's testimony that Mr. King told him he could keep the screener beyond the one month Mr. Aiudi claims was agreed to in order to make up for lost usage due to operational problems with the screener.
The court finds that Mr. Aiudi, knowingly and intentionally, entered into a lease contract, obligating Aiudi Sons to lease the screener from Reed Equipment for a three-month term, from April 27 to July 26, 2009, at a monthly rental of $18,000, as reflected by exhibit 3, the written lease. Aiudi Sons has breached the lease contract and is in default by its failure to pay the agreed-upon rental for two-and-a-half months, in the amount of $45,000. It has further breached the lease contract and is in default by its failure to return the screener to Reed Equipment at the termination of the lease, causing Reed Equipment to incur $1,996 in removal and transport costs. Exhibit 3, ¶ 3. Interest is due at 18% per year on the overdue rental payments. Id., ¶ 4. The court has reviewed the interest computation appended to Reed Equipment's post-trial brief and finds that interest is due on the $45,000 in unpaid rent, in the amount of $8,259.41.
The lease contract provides for Aiudi Sons to pay "all costs and expenses (including attorneys fees) incurred by reason of the occurrence of any event of default and the exercise of [Reed Equipment's] remedies with respect thereto." Id., ¶ 10. Reed Equipment claims attorneys fees in the amount of $15,912. Aiudi Sons is entitled to an evidentiary hearing on the reasonableness of those fees. Ottaviani v. Pechi, 16 Conn.App. 705, 709 (1988). Therefore, by no later than Friday, October 29, 2010, counsel for Aiudi Sons shall advise the civil case flow office at the New Britain Superior Court whether or not it desires such a hearing. If such a hearing is requested, it will be held at 2:00 PM on Monday, November 8, 2010. Counsel whose fees are claimed in the updated affidavit of attorneys fees appended to Reed Equipment's post-trial memorandum shall be present and available for examination by counsel for Aiudi Sons. After the court has determined the amount of attorneys fees to which Reed Equipment is entitled, judgment will enter in its favor on count one of the complaint.
Because the allegations underlying all of the counts of Aiudi Sons' counterclaim depend on the testimony of Elmo Aiudi, and the court has found that testimony not credible, Aiudi Sons has failed to meet its burden of proof on those allegations, and judgment enters for Reed Equipment on the counterclaim.