Opinion
No. CV 09-5026121-S
April 6, 2011
MEMORANDUM OF DECISION MOTION FOR SUMMARY JUDGMENT
On January 8, 2009, the plaintiffs, Christopher Stock and his wife, Judith Stock, filed a two-count complaint against the defendant, Environmental Systems Products, Inc. (ESP), alleging intentional and negligent misrepresentation. The plaintiffs were residents of Chicago, Illinois, when, in July 2005, Christopher Stock became an employee of ESP, which has its principal offices in East Granby. ESP required that Christopher Stock relocate to Connecticut. The plaintiffs allege that ESP also required that Judith Stock relocate with their children and represented that the company was financially healthy and that Christopher Stock's job was secure. The plaintiffs and their two children moved to Connecticut in June 2007. Four months later, on October 29, 2007, Joseph Hendrix, ESP vice president of human resources, told Christopher Stock he was being terminated. The termination was a result of ESP's deteriorating financial condition. The plaintiffs allege that ESP knew about its financial problems prior to their relocation but concealed this information and failed to exercise reasonable care in communicating accurate information regarding ESP's financial condition.
On the same day that Hendrix told Christopher Stock that he was being terminated, Hendrix gave Christopher Stock a severance agreement to review and sign. Before Christopher Stock signed the severance agreement, he told Hendrix that ESP still needed to reimburse him for his outstanding travel expenses. Hendrix told Christopher Stock that ESP would reimburse him once he submitted an expense report. On November 2, 2007, Christopher Stock executed the severance agreement, which provides, in consideration for regular salary payments of twenty-six weeks, vacation payments and health benefits, a release of all claims against ESP. The severance agreement does not address travel expenses but it does contain a merger clause stating that the writing contains the entire agreement and supercedes all prior written and oral agreements. Christopher Stock read and understood the severance agreement and ESP paid him 26 weeks of severance. The plaintiffs allege that ESP has failed to reimburse Christopher Stock for his travel expenses and that this failure renders the severance agreement and its release provision unenforceable.
On February 22, 2010, the defendant filed a motion for summary judgment as to the entire complaint (No. 110). The defendant filed a memorandum of law in support appended to which is the following evidence: excerpts from depositions of Christopher Stock, dated October 6, 2009, October 13, 2009 and November 23, 2009 (Exhibit A); excerpts from the deposition of Judith Stock, dated October 13, 2009 (Exhibit B); an e-mail exchange between Christopher Stock and Michael Kozlowski, ESP senior vice president of marketing and consumer relations (Exhibit C, No. 134); pre-employment e-mails between Christopher Stock and various ESP employees (Exhibit D); a signed ESP employment offer and acceptance letter, dated July 5, 2005, and excerpts of the ESP policies and procedures manual regarding the relocation of management employees (Exhibit E); an e-mail from Kozlowski to ESP customers, suppliers and vendors, dated July 18, 2005 (Exhibit F); Christopher Stock's employment application and resume, dated July 11, 2005, (Exhibit G); three real estate purchase and sales contracts (Exhibits H, I and J); an e-mail from John Ruth, president and former chief executive officer of ESP, regarding the refinancing of ESP, dated March 31, 2006 (Exhibit K); a memorandum from Ruth to Christopher Stock informing him of a salary increase and future retention bonus, dated January 3, 2007 (Exhibit L); an e-mail from Christopher Stock regarding sales strategy, dated February 12, 2007 (Exhibit M); a letter from the Arizona Department of Environmental Quality requesting ESP audits, dated May 23, 2007 (Exhibit N); an e-mail from Ruth informing certain employees that Arizona rejected its proposal, dated July 26, 2007, and a letter from the Arizona Department of Air Quality informing ESP that it would not use its services (Exhibit O); a severance agreement, dated October 30, 2007, and signed by Christopher Stock on November 2, 2007 (Exhibit P); and the affidavit of Ruth, dated February 11, 2009 (Exhibit Q).
On April 6, 2010, the plaintiffs filed a memorandum in opposition (No. 118), which is accompanied by the following evidence: the defendant's answers and responses to objections to the plaintiffs' first request for production, dated February 1, 2010 (Exhibit A); the affidavit of Christopher Stock, dated April 6, 2010 (Exhibit B); and the affidavit of Judith Stock, dated April 6, 2010 (Exhibit C). The defendant filed a reply memorandum on April 8, 2010 (No. 121). On December 3, 2010, the plaintiffs filed a supplemental memorandum in opposition (No. 131), which is accompanied by the following evidence: excerpts from the deposition of Ruth, dated October 13, 2010 (Exhibit A); an excerpt from the deposition of Kozlowski, dated October 13, 2010 (Exhibit B); excerpts from the deposition of Scott Haftman, ESP chief financial officer, dated November 2, 2010 (Exhibit C); and excerpts from the deposition of Hendrix, dated October 25, 2010 (Exhibit D). The matter was heard at short calendar on December 13, 2010.
SUMMARY JUDGMENT STANDARD/CLAIMS OF PARTIES
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled of judgment as a matter of law." (Internal quotation marks omitted.) Sherman v. Ronco, 294 Conn. 548, 553-54, 985 A.2d 1042 (2010). "Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45]." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
"A motion for summary judgment shall be supported by such documents as may be appropriate, including but not limited to affidavits, certified transcripts of testimony under oath, disclosures, written admissions and the like." Practice Book § 17-45. "[Section 17-46] sets forth three requirements necessary to permit the consideration of material contained in affidavits submitted in a summary judgment proceeding. The material must: (1) be based on personal knowledge; (2) constitute facts that would be admissible at trial; and (3) affirmatively show that the affiant is competent to testify to the matters stated in the affidavit." (Internal quotation marks omitted.) Barrett v. Danbury Hospital, 232 Conn. 242, 251, 654 A.2d 748 (1995).
In his memorandum of law in support of the motion for summary judgment, the defendant argues that Judith Stock lacks standing because her claims are derivative of those of Christopher Stock and that there is no genuine issue of material fact that Christopher Stock released all claims against ESP when he signed the severance agreement. Further, the defendant contends that there is no genuine issue of material fact that it did not make any intentional or negligent misrepresentations to the plaintiffs.
In response, the plaintiffs argue that Judith Stock has standing because her claims are not derivative of those of Christopher Stock. While the plaintiffs originally argued that summary judgment should not be decided because they did not have the opportunity to complete discovery, the plaintiffs'"supplementary memorandum" reflects that they have since completed the discovery necessary to oppose the motion for summary judgment. The plaintiffs also argue that the release executed by Christopher Stock does not bar his claims. More specifically, the plaintiffs argue that the defendant promised to reimburse Christopher Stock for his travel expenses in exchange for his promise to sign the severance agreement and that the defendant breached its promise, thus rendering the release unenforceable. Assuming, arguendo, that the release bars Christopher Stock's claims, the plaintiffs argue that it does not bar those of Judith Stock because she never signed the release and that there are genuine issues of material fact regarding whether the defendant intentionally and/or negligently misrepresented the health of ESP and the stability of Christopher Stock's job.
I JUDITH STOCK LACKS STANDING
The defendant, in support of its motion for summary judgment, argues that Judith Stock lacks standing because her claims are derivative of those of Christopher Stock. "Standing . . . implicates a court's subject matter jurisdiction, which may be raised at any point in judicial proceedings." Stamford Hospital v. Vega, 236 Conn. 646, 656, 674 A.2d 821 (1996). "[O]nce the question of lack of jurisdiction of a court is raised, [it] must be disposed of no matter in what form it is presented . . . and the court must fully resolve it before proceeding further with the case." (Internal quotation marks omitted.) Figueroa v. C S Ball Bearing, 237 Conn. 1, 4, 675 A.2d 845 (1996). The court will treat the defendant's challenge to Judith Stock's standing as a motion to dismiss because that is "[t]he proper procedural vehicle for disputing a party's standing . . ." Cadle Co. v. D'Addario, 268 Conn. 441, 445 n. 5, 844 A.2d 836 (2004) (the Supreme Court treated a motion for summary judgment based on a lack of standing as a motion to dismiss).
"In ruling upon whether a complaint survives a motion to dismiss, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Dyous v. Psychiatric Security Review Board, 264 Conn. 766, 773, 826 A.2d 138 (2003). "[I]f the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss . . . [or] other types of undisputed evidence . . . the trial court, in determining the jurisdictional issue, may consider the supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint . . . Rather, those allegations are tempered by the light shed on them by the [supplementary undisputed facts] . . . If affidavits and/or other evidence submitted in support of a defendant's motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusion with counteraffidavits . . . or other evidence, the trial court may dismiss the action without further proceedings . . . If, however, the defendant submits either no proof to rebut the plaintiff's jurisdictional allegations . . . or only evidence that fails to call those allegations into question . . . the plaintiff need not supply counteraffidavits or other evidence to support the complaint, but may rest on the jurisdictional allegations therein." (Citations omitted; emphasis in original; internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 651-52, 974 A.2d 669 (2009). "[A]ffidavits are insufficient to determine the facts unless . . . they disclose that no genuine issue as to a material fact exists." (Internal quotation marks omitted.) Id., 651 n. 14. In addition, in this, as in other contexts, "[i]t is well settled that statements of counsel are not evidence." (Internal quotation marks omitted.) Temlock v. Temlock, 95 Conn.App. 505, 517, 898 A.2d 209, cert. denied, 279 Conn. 910, 902 A.2d 1070 (2006).
"A motion to dismiss may . . . raise issues of fact and would, therefore, require a . . . hearing [to determine the facts] . . . [A]ffidavits are insufficient to determine the facts unless, like the summary judgment, they disclose that no genuine issue as to a material fact exists . . . When issues of fact are disputed, due process requires that an evidentiary hearing be held with the opportunity to present evidence and to cross-examine adverse witnesses . . . Moreover, a court cannot make a critical factual finding based on memoranda and documents submitted by the parties." (Citations omitted; internal quotation marks omitted.) Coughlin v. Waterbury, 61 Conn.App. 310, 315, 763 A.2d 1058 (2001).
The defendant argues that Judith Stock's claims arise solely out of Christopher Stock's employment relationship with the defendant and that her connection to ESP is indirect and necessarily derivative of the direct relationship between the defendant and Christopher Stock. The defendant also argues that because Christopher Stock's claim is barred by the signed release, so too is Judith Stock's derivative claim. The plaintiff counters that Judith Stock has standing because her claims do not arise from Christopher Stock's employment relationship and because misrepresentations were directed to her.
To have standing, "there must be a colorable claim of a direct injury to the plaintiff, in an individual or representative capacity." Ganim v. Smith Wesson Corp., 258 Conn. 313, 346, 780 A.2d 98 (2001). "[T]he doctrine that one may not sue for injuries only indirectly caused by a defendant's conduct has deep roots in our common law." Id., 348. "[I]f the injuries claimed by the plaintiff are remote, indirect or derivative with respect to the defendant's conduct, the plaintiff is not the proper party to assert them and lacks standing to do so. [When], for example, the harms asserted to have been suffered directly by a plaintiff are in reality derivative of injuries to a third party, the injuries are not direct but are indirect, and the plaintiff has no standing to assert them." (Internal quotation marks omitted.) Cambodian Buddhist Society of Connecticut, Inc. v. Planning Zoning Commission, 285 Conn. 381, 393-95, 941 A.2d 868 (2008).
In Ganim, the Supreme Court "identified three policy factors to guide courts in their application of the general principle that plaintiffs with indirect injuries lack standing to sue." Ganim v. Smith Wesson Corp., supra, 258 Conn. 353. "First, the more indirect an injury is, the more difficult it becomes to determine the amount of . . . damages attributable to the wrongdoing as opposed to other, independent factors. Second, recognizing claims by the indirectly injured would require courts to adopt complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts, in order to avoid the risk of multiple recoveries. Third, struggling with the first two problems is unnecessary where there are directly injured parties who can remedy the harm without these attendant problems." Id.
The plaintiffs allege in their complaint that they sold their house in Chicago and relocated to Connecticut in reliance on the defendant's representations that it was a financially healthy company and that Christopher Stock's employment was secure, when in fact, neither representation was true. The defendant, in support of its motion, submitted the deposition testimony of Judith Stock (Exhibit B) in which she testified that she never communicated or corresponded with anyone at ESP regarding relocation, Christopher Stock's employment at ESP or the financial condition of the company. Judith Stock also testified that what limited information she knew about such topics, she received through a third person, Christopher Stock. Further, Judith Stock testified that she had no employment relationship or other direct contact with ESP.
The plaintiffs have submitted no relevant evidence to dispute these facts, except the affidavit of Judith Stock, which contains only conclusory allegations that ESP's representations to her husband about his having a secure future were designed to be passed on to her and that she was forced to leave Chicago. Such an affidavit is insufficient to determine that a genuine issue as to a material fact exists. An examination of the Ganim factors reveals that it would be difficult to determine the amount and apportionment of damages owed to Judith Stock because no direct relationship existed between her and ESP and that Christopher Stock is the proper party to remedy the alleged harm. Any injuries that Judith Stock suffered as a result of moving to Connecticut "are in reality derivative of injuries to [Christopher Stock], the injuries are not direct but are indirect, and [she] has no standing to assert them." Ganim v. Smith Wesson Corp., supra, 258 Conn. at 348. Therefore, Judith Stock lacks standing and cannot as a matter of law state a cause of action upon which relief can be granted.
II THE COURT SHOULD DECIDE THE DEFENDANT'S MOTION
As a threshold matter, the court must determine whether it should decide the defendant's motion for summary judgment. Practice Book § 17-47 provides: "Should it appear from the affidavits of a party opposing the motion that such party cannot, for reasons stated, present facts essential to justify opposition, the judicial authority may deny the motion for judgment or may order a continuance to permit affidavits to be obtained or discovery to be had or may make such other order as is just." A party contending that it needs to conduct discovery to respond to a motion for summary judgment is required to "show by affidavit precisely what facts are within the exclusive knowledge of the moving party and what steps he has taken to attempt to acquire these facts." Dorazio v. M.B. Foster Electric Co., 157 Conn. 226, 230, 253 A.2d 22 (1968). "A party opposing a summary judgment motion . . . on the ground that more time is needed to conduct discovery bears the burden of establishing a valid reason why the motion should be denied or its resolution postponed, including some indication as to what steps that party has taken to secure facts necessary to defeat the motion . . . The trial court has wide discretion under [§ 17-47] to determine whether the party seeking additional time to conduct discovery already has had a sufficient opportunity to establish facts in opposition to the summary judgment motion . . ." (Citations omitted.) Peerless Ins. Co. v. Gonzalez, 241 Conn. 476, 489, 697 A.2d 680 (1997).
The plaintiffs originally argued in their memorandum in opposition that summary judgment should not be decided because the defendant has stymied their discovery efforts and the plaintiffs had not yet deposed Kozlowski, Hendrix, Haftman or anyone else. In support of this argument, the plaintiffs attached the defendant's answers and responses to objections to the plaintiffs' first request for production, dated February 1, 2010 (Exhibit A). Since it is now evident that the plaintiffs have been able to complete the discovery necessary to oppose the motion as reflected in their supplemental memorandum in opposition, filed almost eight months after their initial memorandum, which is accompanied by excerpts from the depositions of Ruth, Kozlowski, Haftman and Hendrix, this is now a nonissue. Accordingly, there is no longer a reason to delay a decision on the defendant's motion for summary judgment.
To be consistent, this memorandum will continue to refer to the "plaintiffs" even though the only plaintiff remaining is Christopher Stock.
The plaintiffs filed a motion for extension of time to reply to the defendant's motion for summary judgment on March 23, 2010 (No. 114). Therein, they stated that they still needed to take the depositions of Kozlowski, Ruth, Hendrix and Haftman. However, on March 30, 2010, the plaintiff withdrew this motion indicating that the parties had reach a resolution on their own (No. 116).
III THE RELEASE BARS CHRISTOPHER STOCK'S CLAIMS
The next issue before the court is whether there is a genuine issue of material fact that the plaintiffs released all claims against ESP. The law in Connecticut regarding releases and contract interpretation is well settled. Muldoon v. Homestead Insulation Co., 231 Conn. 469, 482, 650 A.2d 1240 (1994). "[A] release, being a contract whereby a party abandons a claim to a person against whom that claim exists, is subject to [the] rules governing the construction of contracts." (Internal quotation marks omitted.) Id. "Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact . . . [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law." (Internal quotation marks omitted.) Montoya v. Montoya, 280 Conn. 605, 613, 909 A.2d 947 (2006).
The plaintiffs in the present case essentially ask this court to look outside the four walls of the severance agreement in order to conclude as a matter of law that the release in the severance agreement is unenforceable. The plaintiffs argue that the severance agreement was not a stand alone contract, because it was "intertwined with a simultaneous promise by ESP to reimburse [Christopher Stock] for his outstanding expenses." This promise was allegedly made in exchange for Christopher Stock's promise to sign the severance agreement. Without relying on any relevant legal authority, the plaintiffs argue that a breach of ESP's promise to reimburse Christopher Stock for his travel expenses renders the severance agreement and its release provision unenforceable. After reviewing the sum total plaintiffs' briefs, arguments and affidavits, it appears that the plaintiffs are asking this court to read into the severance agreement additional consideration that was not originally provided therein, specifically, repayment of Christopher Stock's travel expenses.
See e.g. affidavit of Christopher Stock, dated April 6, 2010 (Plaintiff's Exhibit B, ¶ 25) ("I signed the severance agreement upon the belief and understanding that I would be reimbursed for my expenses. ESP's promise to pay me this money was a quid pro quo of my promise in the severance agreement not to sue ESP").
"[W]hen the parties have deliberately put their engagements into writing, in such terms as import a legal obligation, without any uncertainty as to the object or extent of such engagement, it is conclusively presumed, that the whole engagement of the parties, and the extent and manner of their understanding, was reduced to writing. After this, to permit oral testimony, or prior or contemporaneous conversations, or circumstances, or usages [etc.], in order to learn what was intended, or to contradict what is written, would be dangerous and unjust in the extreme." (Internal quotation marks omitted.) Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 502, 746 A.2d 1277 (Conn. 2000).
"In order for the bar against the introduction of extrinsic evidence to apply, the writing at issue must be integrated, that is, it must have been intended by the parties to contain the whole agreement . . . and to be a final expression of one or more terms of [the] agreement." (Citation omitted; internal quotation marks omitted.) Id., 503. "The general rule of contract law remains that a [merger] clause . . . is likely to conclude the issue of whether the agreement is completely integrated." (Internal quotation marks omitted.) Id., 504. Courts have only called into question the conclusive evidence of a merger clause when it occurs in the "context of unequal bargaining power between the parties, fraud, duress, or contracts in contravention of public policy." Id.
The relevant writing in the present case is the clear and unambiguous signed severance agreement. The agreement provides that Christopher Stock, in consideration for twenty-six weeks of severance pay, accrued vacation time and health benefits, would release all claims against ESP. The release, contained paragraph one of the severance agreement, provides in relevant part: "Except as to such rights or claims as may be created by or under this Agreement, you hereby release and forever discharge ESP . . . from all causes of action or claims of any kind that you ever had, now have or hereafter can, shall, or may have, in contract, tort or otherwise, for, upon or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the date hereof, including specifically any claims of discrimination that you may claim in connection with your employment or the termination thereof . . ."
The severance agreement also contains a merger clause in paragraph seven, which provides as follows: "This agreement contains the entire agreement between the parties with respect to the subject matter contemplated herein and supersedes all previous negotiations, commitments, agreements or understandings, whether written or oral, of any nature whatsoever. This Agreement may not be modified other than in writing and signed by both parties."
The plain language of the merger clause supports a conclusion that the terms of the contract were fully integrated. The plaintiffs have not alleged that the merger clause occurred in the context of unequal bargaining power, fraud, or duress; nor have they alleged that the contract is in contravention of public policy. To the contrary, Christopher Stock, in his deposition testimony, acknowledged that he spoke to an attorney prior to signing the agreement, read it in its entirety, understood its terms, and agreed to its terms when he signed it. Christopher Stock also testified that he understood that he had seven days to revoke the agreement after its execution and that he understood the merger clause in paragraph seven. Accordingly, oral testimony, or prior or contemporaneous conversations, or circumstances, are inadmissible in order to learn what was intended or to vary the terms of the severance agreement. Therefore, the court concludes that it cannot read into the severance agreement a benefit that was not included, namely, payment of Stock's outstanding travel expenses, which is what the plaintiffs ask this court to do.
Once an agreement is shown to be integrated, extrinsic evidence may only be introduced "(1) to explain an ambiguity appearing in the instrument; (2) to prove a collateral oral agreement which does not vary the terms of the writing; (3) to add a missing term in a writing which indicates on its face that it does not set forth the complete agreement; or (4) to show mistake or fraud . . . These recognized exceptions are, of course, only examples of situations where the evidence (1) does not vary or contradict the contract's terms, or (2) may be considered because the contract has been shown not to be integrated; or (3) tends to show that the contract should be defeated or altered on the equitable ground that relief can be had against any deed or contract in writing founded in mistake or fraud." (Internal quotation marks omitted.) Perricone v. Perricone, 292 Conn. 187, 194-95, 972 A.2d 666 (2009).
The plaintiffs have not alleged that the agreement is ambiguous, that it indicates on its face that it is not the entire agreement or that there was mistake or fraud. To the extent that a collateral agreement as to travel expense reimbursement exists, there is no evidence that the two issues, that is, the existence of a travel expense obligation and the severance agreement, were ever tied together in a legally significant way. A collateral agreement is, by definition, that which falls outside the "scope" of the original contract. Perricone v. Perricone, supra, 197 n. 8. Therefore, .any collateral agreement relative to travel expenses has no bearing on the enforceability of the severance agreement. See, e.g., Perricone v. Perricone, supra, 198 n. 8 (extrinsic evidence admissible only to show an "entirely separate and distinct agreement between the two parties"); Buffalo Builders Supply Co. v. Reeb, 247 N.Y. 170, 175, 159 N.E. 899 (1928) ("Breach of a collateral agreement is not in itself ground for the rescission of a contract"). Accordingly, there is no genuine issue of material fact that Christopher Stock released all claims against ESP.
It is noted that the ESP employment offer and acceptance letter, dated July 5, 2005, and signed by Christopher Stock (Exhibit E), outlined compensation, vacation, and travel and other benefits. With regard to travel, it provided in part: "We will reimburse you for all customary and reasonable travel and business expenses incurred by you on our behalf." That this distinction was made between compensation and benefits on the one hand, and expenses on the other addressed in a separate sentence, arguably supports an interpretation that expenses are a collateral issue not addressed by the severance agreement and bears no relationship to it.
CONCLUSION
For all the foregoing reasons, the defendant's motion for summary judgment is hereby granted. The court does not have subject matter jurisdiction over Judith Stock and there is no genuine issue of material fact that Christopher Stock released all claims against the defendant.