Opinion
X08FSTCV156025380
03-22-2018
Robert RUSSO, Executor et al. v. Brett W. THORNTON et al.
UNPUBLISHED OPINION
REVISED MEMORANDUM OF DECISION RE DEFENDANTS’ MOTION TO SET ASIDE JURY VERDICT (# 249)
On March 16, 2018, the court issued a previous memorandum of decision with respect to this motion. The court vacated that decision on March 19, 2018.
Charles T. Lee, J.
This matter comes before the court on defendants’ motion to set aside the jury’s verdict as an improper quotient verdict and as excessive. As more fully set forth below, the motion is denied as to the former ground, but granted as to the latter.
Background
The case was commenced on or about May 15, 2015 by Attorney Robert Russo as executor of the Estate of Thomas F. Thornton, and by Home Dental Care, Inc. and Thornton International, Inc. against Mr. Brett Thornton, who is the late Mr. Thomas Thornton’s son, and two companies controlled by him, ProxySoft Worldwide, Inc. and ProxySoft Direct, Inc. The operative complaint contains eight counts against Mr. Thornton including (1) breach of fiduciary duty, (2) statutory theft (Gen. Stat. § 52-564), (3) conversion, (4) breach of the Connecticut Uniform Trade Secrets Act (Gen. Stat. § § 35-50 et seq.), (5) tortious interference with contract and business expectancies, (6) violation of the Lanham Act (15 U.S.C. 1125(a), (7) seeking various injunctive relief, and (8) violation of the Connecticut Unfair Trade Practices Act (Gen. Stat. § § 42-110 et seq.). Counts Three, Four and Five were also asserted against ProxySoft Worldwide, Inc. and ProxySoft Direct, Inc. All counts arise out of Mr. Thornton’s alleged diversion of corporate opportunities to his ProxySoft entities away from Thornton International while acting as its president, as well as theft of assets and unfair competition.
The first five counts were tried to a jury commencing on October 11, 2017 and concluding on October 25, 2017. The Lanham Act, injunctive relief and CUTPA counts were reserved for trial to the court. The case was submitted to the jury late in the day of October 25, 2017. The jury deliberated for a short period of time and resumed on October 26, 2017. In late morning, the foreperson reported that the jury was unable to reach a unanimous verdict, and the court directed them to continue to deliberate. The jury continued to do so for the rest of the day, and on Friday, October 27. The jury resumed its deliberations, on Tuesday, October 31. The jury returned its verdict at 12:15 on October 31, 2017.
The jury awarded damages against Mr. Thornton as follows: breach of fiduciary duty, $1,721,000; statutory theft, $185,000; conversion- zero; breach of trade secrets act- zero; tortious interference with contract and business expectancies, $1,316,000; for a total award of $3,592,000. The jury also authorized recovery of attorneys fees as punitive damages under the conversion count. It did not award any damages against the ProxySoft entities. The verdict was taken according to Connecticut procedure, with the jury interrogatories and verdict forms being read aloud twice after review by the court and the members of the jury confirming that what had been read was their verdict. No party requested individual polling of the members of the jury. The court then thanked the jury for their service and discharged them.
I. The Motion to Set Aside the Verdict as an Improper Quotient Verdict
On November 6, 2017, defendants filed a timely motion to set aside the jury verdict alleging that it was an improper quotient verdict, was not supported by the evidence and not properly calculated, and was excessive. The motion was supported by an affidavit drafted by defendants’ counsel and signed by Juror No. 5, who had apparently approached defendants’ counsel in the hall after conclusion of the trial.
In order to protect the privacy of the members of the jury, the court will refer to them by their juror numbers. Juror No. 3 was excused at the beginning of the trial. At the close of the trial, Alternate No. 3 was chosen by lot to serve as Juror No. 7. See Hurley v. Heart Physicians, P.C., 298 Conn. 371, 401 n.14 (2010) (approving use of initials to protect privacy of jury).
The affidavit stated that Juror No. 5 was one of two jurors who did not believe that Mr. Thornton was at fault and that she had voted repeatedly against any award of damages. The affidavit further stated that " The eventual result was not a unanimous verdict based on the evidence we heard. Instead, it was based on an unspoken agreement made between the jurors on the fourth day of deliberation ... There was no unanimity, ever." The affidavit states that a spreadsheet was created containing lines for each count and boxes for each juror’s assessment of damages for each count. Juror No. 5 and another juror specified zeroes for each count. The proposed damages for each count were then added up and divided by six, which was used for the verdict. The affidavit also claims that " No vote was taken on the ultimate result, then or ever- but the spreadsheet wound up being the basis for the verdict that was submitted to the court." The jury discarded the spreadsheet.
On November 20, 2017, plaintiffs submitted an objection to the motion to vacate the jury verdict, asserting that the jury’s verdict was not an improper quotient verdict, was supported by sufficient evidence and reserved the right to address the claim of excessiveness. The plaintiffs also submitted an affidavit, drafted by plaintiffs’ counsel, from the jury foreperson, Juror No. 6. Her affidavit recounted in detail the course of the jury’s deliberations, in which all members participated. On the morning of the third day, Friday October 27th, Juror No. 5 suggested that a spreadsheet be prepared as an exercise to see where everyone stood. When this was completed, the figures were averaged and listed on the spreadsheet. Juror No. 6 said there was no prior agreement that these numbers would become the jury’s verdict. All agreed that they would be a good basis for discussion. The rest of Friday was spent discussing answers to the jury interrogatories, but no agreement was reached.
On Tuesday morning, October 31, 2017, the jury considered that they could report an inability to reach agreement, but no one wanted to do so. The affidavit continued that " The amounts set forth in the jury’s final verdict were the result of a combination of our discussions and the averaging exercise, which included damage numbers and items that were not agreed to by all of the jurors and which were not included in our final verdict." Juror No. 6 then filled out the interrogatories and the verdict forms, after checking with the jurors " to make sure everyone was in final agreement and understood what we were doing. All of the jurors were in agreement and none voiced any opposition or disagreement with the answers to any of the jury interrogatory questions or to the amounts." Juror No. 6 indicated that, before notifying the clerk that the jury had reached a verdict, she " double checked" with the other members of the jury, including Juror No. 5. All were in agreement, and no one voiced any opposition or disagreement.
Because of the divergence of the two affidavits, which were prepared by opposing counsel, the court determined that it was necessary to hear the testimony under oath of each of the jurors, with the court conducting the initial examination and counsel pursuing follow-up questions, following the procedure used by the court in Korhonen v. Dudanowicz, 43 Conn.Supp. 28, 31 (Super.Ct. 1993, Satter, S.T.R.) . Counsel were instructed to avoid questions as to how the amounts in the verdict were calculated to avoid an improper impeachment of the verdict in violation of Section 16-34 of the Practice Book. The six jurors voluntarily returned to court and were examined under oath on November 21, December 1 and December 7, 2017. The parties submitted additional memoranda on January 18, 2018, and a hearing was held on defendants’ motion on January 30, 2018.
P.B. 16-34 provides, " Upon an inquiry into the validity of a verdict, no evidence shall be received to show the effect of any statement, conduct, event or condition upon the mind of a juror nor any evidence concerning mental processes by which the verdict was determined. Subject to these limitations, a juror’s testimony or affidavit shall be received when it concerns any misconduct which by law permits a jury to be impeached."
Discussion
The impropriety of a verdict arrived at by arithmetic averaging, or a " quotient" verdict, has been recognized by Connecticut courts since early times. In Warner v. Robinson, 1 Root 194, 195 (1790), after inquiry of the jury, the court found facts constituting a quotient verdict and granted the motion in arrest of the verdict, concluding that " in trials nothing is to be left to hazard or chance." In Haight v. Hoyt, 50 Conn. 583, 585 (1883), the court strongly condemned the quotient verdict, holding " This mode of arriving at a verdict is reprehensible, to say the least, for it is hardly possible that an honest result could thus be obtained."
In the leading modern case, McNamee v. Woodbury Congregation of Jehovah’s Witnesses, 193 Conn. 15, 17 (1984) (McNamee I ), our Supreme Court defined a quotient verdict as follows, " A ‘quotient verdict’ is defined as follows: ‘When members of a jury agree (1) that each juror will specify the figure which he recommends and that all the figures will be added together and the sum divided by the number of jurors, and (2) that all the jurors will be bound by, and accept as their verdict, the quotient thereby obtained; a verdict reached in pursuance of such an agreement is a quotient verdict.’ Annot., 8 A.L.R.3d 339. As a general rule, quotient verdicts are invalid. The foremost objection is that a verdict is supposed to be based, not upon chance, but upon discussion, deliberation, reasoning and collective judgment." " To these two elements, the Supreme Court in McNamee I, supra, added a third, namely ‘that the actual verdict as reported by the jury was solely the result of the agreement and averaging procedure.’ " Korhonen v. Dudanowicz, 43 Conn.Supp. 28, 31 (Super.Ct. 1993, Satter, S.T.R.). Applying these factors in Korhonen, the court reasoned:
Here, the jury verdict is not an invalid quotient verdict because (1) although the jurors averaged the amount they determined to be just compensation for each day of the plaintiff’s suffering, they did not agree in advance to be bound by that figure, (2) each of the jurors stated that the amount arrived at by averaging was itself a fair figure that they all readily accepted, and, (3) the actual verdict was not solely the result of the averaging procedure. In addition to the per diem amount for suffering, the jurors had to determine the number of days the plaintiff suffered. In making that determination, they considered all the evidence and deliberated together. The final verdict, thus, was not based only on averaging, but on the jury’s collective reasoning and judgment. Consequently, it was not an illegal quotient verdict. Id.
In a subsequent proceeding in the McNamee proceedings, our Supreme Court said:
In the context of deciding a motion to set aside a verdict for jury misconduct, the credibility of the jurors and the weight accorded their testimony becomes of vital importance. Once a jury reaches a unanimous verdict, such a verdict will not be lightly set aside merely because one of its members has second thoughts upon reflection after trial. Here, however, the court had the opportunity to observe the jurors during trial and to examine them at a post-trial hearing.">McNamee v. Woodbury Congregation of Jehovah’s Witnesses (McNamee II ), 194 Conn. 645, 647-48 (1984). These considerations led the court to conduct the examination under oath of the six jurors. The court summarizes their testimony as follows.
Findings of Fact
Having reviewed the six transcripts of the jurors’ testimony, the court finds substantial consistency in the jurors’ recollection of their decision-making process. Accordingly, the court makes the following findings of fact:
1. Late on Wednesday afternoon, October 25, 2017, the jury retired to consider its verdict. It elected Juror No. 6 to serve as the foreperson.
2. The jury conducted a straw poll to learn where its members stood as to defendants’ liability and damages. To the expressed surprise of all members of the jury, four members supported recovery against the defendants and two did not believe defendants should be held liable. A brief discussion followed, and the jury adjourned for the day.
3. The following morning, Thursday, October 26, 2017, the jury discussed the merits of the case. After several hours’ discussion, which became emotional, the jury sent out a note indicating that it was unable to reach a unanimous verdict.
4. The jury was brought into the courtroom, and the court encouraged the jury to keep working. It read them the " Chip Smith" charge, which provides that each juror must make their own decision but that they should also listen to, and respect, the other members’ thoughts. (See Civil Jury Instruction 2.9-9.) The court also directed the jury to carefully consider all of the evidence that had been sent into the jury room.
5. The jury returned to its deliberations and divided up the evidence between them. One juror, for example, focused on the valuation by plaintiffs’ economic expert of Thornton International. Another juror reviewed the voluminous requests for admissions, which were not discussed during trial, and others examined the other, extensive evidence. The jurors discussed their findings and conclusions with each other, but Jurors Nos. 1 and 5 remained firm in their opposition to a plaintiffs’ verdict.
6. On Friday, October 27, 2017, the discussions continued. At mid-day, Juror No. 5 suggested that she prepare a spreadsheet on which each juror’s position as to damages under each count could be listed. The jury agreed to do this, and Juror No. 5 prepared a spreadsheet. All the jurors agreed in their subsequent testimony that the spreadsheet was an " exercise" to help determine where everyone stood and to see if there were any areas of agreement. As part of the process, each juror first wrote down their own damage assessments on scratch paper. The jurors then took turns stating their positions and explaining their reasoning. Juror Nos. 1 and 5 listed zero damages for all counts. The other members of the jury agreed with Jurors No. 1 and 5 to award zero damages for conversion and theft of trade secrets, although some jurors had initially suggested damages for one or both categories. Juror No. 5 placed the jurors’ numbers in the appropriate boxes on the spreadsheet. Discussion continued.
7. At some point, Juror No. 5 suggested that they calculate the average of the columns for each count. The other jurors agreed to do this, and the foreperson requested that the jury be provided with a calculator. The averages for each count were then calculated and placed on the spreadsheet by adding up each juror’s proposed damage amount, including the zeroes from Jurors No. 1 and 5, and dividing by six. Jurors No. 1 and 5 indicated that they felt it was a good basis for discussion, although there was no agreement that the averages would be used as the damage figures on the verdict form. As it was late in the day, the jury adjourned until the following Tuesday, October 31, 2017.
8. On Tuesday morning, Juror No. 7 said that he had been thinking about the case over the weekend and felt that he could not agree to any figures lower than the averages. He stated that if the jury was unable to accept those numbers, they should report a deadlock to the court. Juror No. 5 indicated, on the contrary, that she wanted to finish the process and that they should start filling out the interrogatories and verdict forms. In the process of filling out the forms, the jury agreed that no damages would be assessed against the ProxySoft companies. Additionally, the jury agreed to award punitive damages under the conversion count in the amount of attorneys fees only. Some jurors had wanted to award additional punitive damages, but agreed to forego them.
9. The foreperson went through each question of the interrogatories, which was discussed by the jury, and filled out a draft copy of the interrogatories, having requested an additional blank copy earlier. The damage figures used for breach of fiduciary duty and tortious interference were the averages for those counts as calculated on Friday, although the numbers were rounded to the nearest thousand. With respect to statutory theft, the jury agreed on the value of Thornton International misappropriated by Mr. Brett Thornton, and trebled the amount pursuant to General Statutes § 52-564. The foreperson then transferred the answers to the final copy of the interrogatories, asking if each member of the jury was in agreement with the answer. No juror indicated any such objection. Jurors 1 and 5 each testified that they wanted to end the process and essentially remained silent. The foreperson then transferred the damage numbers to the plaintiffs’ verdict form and again asked if there was any disagreement in the group. Hearing none, she knocked on the door of the jury room to indicate to the clerk that the jury had reached its verdict.
10. The jury then came into the jury box. The foreperson indicated that they had reached a verdict. The clerk brought the interrogatories and the plaintiff’s verdict form to the court for its review. The court reviewed the documents as to forth, and the clerk read them twice to the jury, asking them each time if this was their verdict. Upon the first reading, Juror Nos. 1 and 5 did not answer audibly. Upon the second reading, the court instructed them that they needed to do so. Juror Nos. 1 and 5 then confirmed audibly that they agreed with the verdict. The verdict was accepted, and the jury was discharged with the court’s thanks.
11. Prior to her testimony, Jury No. 5 had conferred with defendants’ counsel in connection with the preparation of her affidavit in support of the instant motion to set aside the verdict. Subsequently, Juror No. 5 spoke with Juror No. 1, prior to her testimony in this proceeding.
Analysis
As discussed above, our Supreme Court in McNamee I, supra, held that a verdict would be deemed an improper quotient verdict where (1) the jurors agree to specify their figures, and that the figures would be added together and the sum divided by the number of jurors; (2) they agree to be bound by, and accept as their verdict, the number so obtained; and (3) the actual verdict rendered was solely the result of the agreement and averaging procedure.
Based on the facts found above, the court finds that the defendants have not satisfied their burden of proof that the verdict in this case was an improper quotient verdict. First, it is apparent that the jurors initially supplied their figures for inclusion in the spreadsheet merely as an exercise to clarify everyone’s position. There was no agreement at the time the figures were provided that they would be added together and averaged. Second, when the average was performed, there was no agreement that anyone would be bound by it. Again, the average was calculated to assist in the jury’s deliberation. Finally, the verdict was not solely the result of the averaging process. The zero damages awarded in the conversion and tortious interference counts were the result of discussion and not arithmetic. The basis for the statutory theft award was the result of discussion and agreement, not averaging. The decisions to limit punitive damages to attorneys fees and not to impose liability on the ProxySoft entities were also the result of discussion and not averaging. Finally, the verdict was the result of several days of intense discussion and argument.
Defendants’ motion implies that the verdict cannot be considered unanimous because Jurors No. 1 and 5 testified that they merely acquiesced in the verdict and did not accept it. The court rejects this contention for several reasons. Factually, the jurors were presented on Tuesday morning, the last day of deliberations, with the choice of advising the court that they had reached an impasse or returning a verdict. There is no dispute that all jurors chose the latter alternative.
Second, Jurors No. 1 and 5 affirmed in open court that they accepted the verdict. That fact puts an end to the inquiry. As our Supreme Court held in State v. Gary, 273 Conn. 393, 417 (2005), " It is clear, however, that the claim that the jury as a whole misapplied the law of specific intent and the claim that [a juror] improperly acquiesced in the opinions of his fellow jurors during deliberations cannot properly be characterized as claims of jury misconduct. These are precisely the types of matters that inhere in the verdict itself and into which the court is not permitted to inquire. See Josephson v. Meyers, supra, 180 Conn. [302] at 310-11, 429 A.2d 877 [1980] (court may not consider evidence that juror misunderstood instructions of court or that juror was unduly influenced by statements of fellow jurors)." As stated by our Supreme Court in McNamee II, supra, " In the context of deciding a motion to set aside a verdict for jury misconduct, the credibility of the jurors and the weight accorded their testimony becomes of vital importance. Once a jury reaches a unanimous verdict, such a verdict will not be lightly set aside merely because one of its members has second thoughts upon reflection after trial" ; McNamee v. Woodbury Congregation of Jehovah’s Witnesses, 194 Conn. 645, 648 (1984); see Hurley v. Heart Physicians, P.C., 298 Conn. 371, 398 (2010) (" [T]he jurisprudence of this state ... provides that it is the juror’s final answer that controls" ); Ferris v. Hotel Pick Arms, Inc., 147 Conn. 72, 74 (Conn. 1959) (" [T]he final assent of the jurors, given after the verdict has been read aloud by the clerk, accepted and ordered recorded by the court, and read aloud a second time by the clerk makes the verdict. Watertown Ecclesiastical Society’s Appeal, supra, 46 Conn. [230] 233 [1878]" ).
The rationale for the exclusion of evidence amounting to post-verdict juror remorse is strong. Permitting a juror to impeach a verdict to which he or she agreed in open court could encourage bribery or even physical coercion by unsuccessful defendants interested in reversing a negative outcome. Such conduct could render terrible harm to our cherished system of trial by jury.
As a result of the foregoing, on the law and the facts, the court denies the defendants’ motion to set aside the verdict as an improper quotient verdict.
II. The Motion to Set Aside the Verdict as Excessive
Defendants’ initial brief in support of their motion to set aside the verdict set forth three grounds: (1) that the verdict was an improper quotient verdict, (2) that it was against the weight of the evidence because it must have been calculated incorrectly, and (3) that it was excessive. However, after the jurors testified, defendants submitted two briefs dated January 18, 2018 addressing the first and third grounds set forth above, and not explicitly addressing the second ground of improper calculation. Accordingly, the court will address herein the arguments set forth in defendants’ second January 18, 2018 brief " in support of motion to set aside as excessive" (Docket No. 265). The court notes that this reformulated argument incorporates most of the previous assertions about improper calculation.
As stated above, the jury awarded damages under three counts: One, breach of fiduciary duty, $1,721,000; Two, statutory theft, $555,000 ($185,000 trebled); and Five, interference with contracts and business expectancies, $1,316,000; for a total award of $3,592,000. Defendants claim that this verdict is duplicative because the elements of damages for breach of fiduciary duty and tortious interference are the same, here the destruction of Thornton International, although the elements of liability are different. Defendants concede that the two awards differ by $405,000.
Further, defendants correctly note that the court instructed the jury to deduct from the damages for the diversion of funds the amount of $1,113,762, which Mr. Brett Thornton returned to plaintiffs after commencement of this lawsuit. Indeed, each damage interrogatory repeated the instruction to take into account the $1,113,762 with respect to any award for the first and fifth counts. Accordingly, if that amount is added back into the amounts awarded under the first and fifth counts, they become $2,834,762 (Count One) and $2,429,762 (Count Five), for a total of $5,264,524 for Counts One and Five. Because the maximum evaluation of Thornton International provided by plaintiffs’ expert, Mr. John Leask, CPA, was $4,565,000 as of the date of Mr. Thomas Thornton’s death, February 4, 2014, defendants claim the verdict is excessive. Defendants assert that the proper valuation date is as of January 1, 2015, when the company’s estimated value was $2,520,000. Disregarding the award under Count One and subtracting the $1,113,762 refund amount, defendants seek a remittitur to $1,406,238.
Although the defendants do not challenge the award for statutory theft, they fail to include it in their proposed verdict amount. If that award of $555,000 is included, the proposed verdict amount would be $1,961,238.
Plaintiffs assert that it is improper to inquire or speculate into the method the jury used to calculate the damages. Further, plaintiffs argue that the aggregate verdict of $3,592,000 is reasonable given their damage expert’s upper valuation of the company at $4,565,000.
Discussion
" In determining whether to order remittitur, the trial court is required to review the evidence in the light most favorable to sustaining the verdict. Wochek v. Foley, 193 Conn. 582, 587, 477 A.2d 1015 (1984). Upon completing that review, ‘the court should not interfere with the jury’s determination except when the verdict is plainly excessive or exorbitant ... The ultimate test which must be applied to the verdict by the trial court is whether the jury’s award falls somewhere within the necessarily uncertain limits of just damages or whether the size of the verdict so shocks the sense of justice as to compel the conclusion that the jury [was] influenced by partiality, prejudice, mistake or corruption ... The court’s broad power to order a remittitur should be exercised only when it is manifest that the jury [has] included items of damage which are contrary to law, not supported by proof, or contrary to the court’s explicit and unchallenged instructions.’ (Internal quotation marks omitted.) Mahon v. B.V. Unitron Mfg., Inc., supra, 284 Conn. [645] at 661-62, 935 A.2d 1004 [2006]." Saleh v. Ribeiro Trucking, LLC, 303 Conn. 276, 281 (2011).
A plaintiff may recover damages for the same loss only once. Haynes v. Yale-New Haven Hospital, 243 Conn. 17, 23 (1997). " Duplicate recoveries must not be awarded for the same underlying loss under different legal theories. Although a plaintiff is entitled to allege alternative theories of liability in separate claims, he is not entitled to recover twice for harm growing out of the same transaction, occurrence or event." (Citation omitted). Catalina v. Nicolelli, 90 Conn.App. 219, 225 (2005).
Analysis
The defendants argue that the damages awarded for Count One (breach of fiduciary duty) and Count Five (tortious interference) are duplicative and, therefore, that the total verdict must be set aside as excessive or a remittitur ordered eliminating the duplication. The court agrees for the following reasons:
1. The Court Instructed the Jury That it Must Avoid Duplication in its Verdict
The concern that damages for Count One and Count Five might be duplicative was raised at the charging conference. The charge to the jury, as presented to the jury on October 25, 2017, provides (at page 30):
Finally, you will be asked in the jury interrogatories, which I will show you very shortly, to specify an appropriate damage amount for each claim where you find that liability has been established. However, you must honor a very basic principle in our law and that is " that a litigant may recover just damages only once." As a result, with respect to Mr. Thornton and ProxySoft, you will find a space in the interrogatories for you to enter a damage amount which is fair and reasonable for the entire case, and which is not duplicative of any particular act or loss.
Question No. 22 was the last question within the jury interrogatories and states:
In the event you awarded damages on more than one count above, what is the total amount of damages you award in this case, taking into consideration that the plaintiffs may only recover once for any particular act or loss?
A. As to Brett Thornton $_____
B. As to ProxySoft Worldwide, Inc. $_____
The jury filled in Line A as to Mr. Thornton with $3,592,000 and filled in a zero on Line B with respect to ProxySoft Worldwide.
Finally, Item 6 on the plaintiffs’ jury form is labeled " Entire, Non-Duplicative Award of Damages." The jury inserted the amount of $3,592,000, which is the arithmetic sum of the awards for Count One- breach of fiduciary duty ($1,721,000), Count Two- statutory theft ($555,000), and Count Five- interference with contracts and business expectancies ($1,316,000) (also referred to as tortious interference). As a result, it is clear that the jury did not make any reduction to eliminate duplication of damage awards for the component counts in the total award against Mr. Thornton.
2. The Damage Awards for Count One and Count Five Contain Duplication
The jury charge advised the jury that it must find four elements in order to award damages for tortious interference, including that plaintiffs suffered actual loss. Actual loss was defined at pages 25-26 of the charge as:
D. Actual Loss
If you find that the defendants tortiously interfered with the plaintiffs’ contracts and/or business expectancies, then you must decide if the plaintiffs have proven that they suffered an actual loss as a result of that interference. The plaintiffs must prove that but for the tortious interference, there was a reasonable probability that the plaintiffs would have continued or entered into a contract and/or business relationship with or made a profit from the sale of its products to its existing customers. The mere possibility of entering into a contract or making a profit is not enough. However, the plaintiffs need not prove the specific amount of the loss in order to establish that they suffered an actual loss.
See American Diamond Exchange, Inc. v. Alpert, 101 Conn.App. 83, 103 (2007) (" [T]he proper measure of damages in an action for tortious interference with a business expectancy is not the profit to the defendant but rather the pecuniary loss to the plaintiff of the benefits of the prospective business relation" ). Damages for tortious interference are based on the loss of the benefits of a business relationship, past and future, and can include diversion of past business and loss of future business. Mr. Thornton’s refund of $1,113,762 represented the amount of past business diverted. Accordingly, the actual amount awarded under Count Five was compensation for the loss of future business, i.e., $1,316,000.
With respect to breach of fiduciary duty, the jury charge advised the jury (at page 16) that it should determine if plaintiffs proved, by a preponderance of the evidence, that Mr. Thornton’s breach of fiduciary duty, which was admitted, caused the plaintiffs’ damages. At page 27, the charge provides further:
Damages for Breach of Fiduciary Duty- Special Considerations
Even if you do not find proof of specific damages suffered by the plaintiffs, the law allows you, if you find that the defendant was proven to be radically unfaithful to his trust or willfully breached his fiduciary duty of loyalty, to award as damages the forfeiture of the salary and benefits the defendant received during the period of time of their breach of fiduciary duty.
This component of the charge is based on Section 205 of the Restatement 3rd of Trusts, which provides that the measure of damages for breach of fiduciary duties is the amount required to restore the value of what was lost by the breach, and to prevent the fiduciary from benefitting personally from the breach. Thus, damages for fiduciary duty may include two components, i.e., the damages caused by the breach itself and an amount sufficient to prevent the fiduciary from benefitting personally from the breach.
Plaintiffs claimed that Mr. Thornton’s breach of fiduciary duty in diverting its business to the ProxySoft entities caused the destruction of Thornton International (TI). In order to monetize the damages from the collapse of Thornton International, plaintiffs’ damage expert, Mr. John M. Leask, CPA, evaluated the fair market value of the company’s common stock as of the date of Mr. Thomas Thornton’s death, February 5, 2014, as of January 1, 2015, and as of April 30, 2015. The expert’s report (Trial Exhibit 36) concluded, " However, because all of TI’s customers appear to have been lost to Proxysoft (sic) by April 30, 2015 through the actions of Brett Thornton, unless TI is successful in the current litigation against him and his companies and its customers return to TI, once these assets have been spent and/or distributed TI will have no value." In short, the loss of its customers is what caused the total loss of value of the company. Because the loss of customers is precisely the basis for damages for tortious interference with contract or business expectancies, this element is shared by the awards for damages under Count One and Count Five, and must be eliminated. Alfano v. Insurance Center of Torrington, 203 Conn. 607, 611 (1987) (affirming remittitur to eliminate duplication of damages); Carmichael v. Stonkus, Superior Court, judicial docket of New Britain, Docket No. CV 04 4001761 (August 13, 2010, Swienton, J.) (2010 WL 3584419) (ordering remittitur because of duplication of damages awarded under theories of fraud, conversion and statutory theft).
As discussed above, the award for breach of fiduciary duty may also include as damages the salary earned by the fiduciary during the period of the breach. Here, based on the evidence at trial, the jury would have been justified in finding that Mr. Thornton diverted hundreds of thousands of dollars from the family company, repeatedly concealed his defalcations, and so was " radically unfaithful to his trust or willfully breached his fiduciary duty of loyalty." Accordingly, there was sufficient evidence for the jury to include as damages for fiduciary duty, some or all of Mr. Thornton’s substantial six-figure salary for 2014 and part of 2015, accounting for the difference of $405,000 between its awards under Count One and Count Five.
As a result, the court finds substantial evidence supporting the jury’s award of $1,721,000 for breach of fiduciary duty as alleged in Count One. It finds that the award under Count Five of $1,316,000 for tortious interference with contract and business expectancies is duplicative of the damages under Count One and must be set aside as a matter of law pursuant to General Statutes § § 52-218a and 52-228b.
Accordingly, the court grants the motion for remittitur in the amount of $1,316,000 and reduces the damages awarded in the verdict to the total of the damages awarded for Count One (breach of fiduciary duty) and for Count Two (civil theft), or $2,276,000 (two million two hundred seventy-six thousand dollars).
The court rejects the defendants’ argument that the jury must have failed to give Mr. Thornton credit for his refund of $1,113,762 in its awards under Counts One and Five because it runs afoul of Practice Book Section 16-34, which provides " [N]o evidence shall be received ... concerning mental processes by which the verdict was determined." See Josephson v. Meyers, supra, 180 Conn. at 310-11 (court may not consider evidence that juror misunderstood instructions of court or that juror was unduly influenced by statements of fellow jurors). Despite the court’s ruling that questions of the jurors inquiring into the calculation of the damages were improper, defendants’ counsel succeeded on one occasion in asking a question about the deduction. Juror No. 5 answered, " I believe everyone had that number in mind because it was specifically part of the question, of each question." Transcript of 11/21/17 Hearing at 42, lines 18-20. Accordingly, there is no evidence, improper or otherwise, that the jury failed to take Mr. Thompson’s refund into consideration. ---------
Conclusion
Based on the foregoing, the court denies the defendants’ motion to set aside the verdict as an improper quotient verdict, and grants the motion for remittitur of $1,316,000 to the amount of $2,276,000 for the reasons stated above. Pursuant to General Statues § 52-228b, the plaintiffs shall have thirty days to accept the remittitur by filing an appropriate writing with the clerk’s office. Absent acceptance by the plaintiffs, the court will order a new trial, limited to the issue of the amount of damages only.