Opinion
No. CV X06 08 4016022 S
October 26, 2010
MEMORANDUM OF DECISION ON THE DEFENDANTS' MOTIONS FOR JUDGMENT NOTWITHSTANDING THE VERDICT, TO SET ASIDE THE VERDICT AND FOR REMITTITUR
TABLE OF CONTENTS Page
STATEMENT OF THE CASE 1
DISCUSSION 4
Defendants' Motion for Judgment Notwithstanding the Verdict and Motion to Set Aside the Verdict
A. Economic Loss Doctrine As to Counts Seven and Fifteen 6
B. Common Law Duty of Care And The Burden of Proof on Apportionment Claim As to Counts Seven and Nine 14
C. Plaintiff's Justifiable Reliance on Tranzon's Representations As to Count Nine 17
D. Sufficiency of The Evidence and Adequacy of The Court's Charge On Ulbrich's Breach of Warranty Claim Under Count Twelve 18
E. Sufficiency of The Evidence and Adequacy of The Court's Charge on Ulbrich's CUTPA Claim Under Count Fifteen 21
Defendants' Motion for Remittitur
A. The Sufficiency of The Evidence And Adequacy of The Court's Charge on The Jury's Damages Award 31
CONCLUSION 36
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STATEMENT OF THE CASE
This case was tried to a jury on the sixth amended complaint filed by the plaintiffs Frederick Ulbrich ("Ulbrich") and Ulbrich Properties, LLC ("Ulbrich Properties"), against the defendants TD Banknorth and Tranzon Auction Properties. In count seven against Banknorth and in count nine against Tranzon, the plaintiffs alleged negligent misrepresentation. In count twelve, Ulbrich alleged breach of warranty of title against Banknorth. In count fifteen, Ulbrich alleged that Banknorth violated the Connecticut Unfair Trade Practices Act, General Statutes §§ 42-110a et seq. ("CUTPA"). In their answer filed on April 20, 2010, the defendants generally denied the substantive claims of the complaint and asserted four special defenses.The jury found in favor of the plaintiffs on all counts and awarded damages of $462,000. Because the jury found that Banknorth violated CUTPA, the court scheduled supplemental proceedings for the court's consideration of attorneys fees, costs and punitive damages. See General Statutes § 42-110(g).
The court notes that in regard to the plaintiffs' negligence claim against Banknorth asserted in count seven, the jury addressed Banknorth's contributory negligence and apportionment claims by attributing 80% of the negligence to Banknorth, 10% to Marasutti, and 10% to the Groth entities. The jury determined that the plaintiffs had not committed contributory negligence as alleged by Banknorth and found against Banknorth on its contributory negligence defense. As to the plaintiffs' negligence claim asserted against Tranzon in count nine, the jury addressed Tranzon's contributory negligence and apportionment claims by attributing 10% of the negligence to Ulbrich, 70% to Tranzon, 10% to Morasutti, and 10% to the Groth entities.
Pending before the court is the defendants' motion for judgment notwithstanding the verdict, motion to set aside the verdict and motion for remittitur. For the following reasons, the motion for judgment notwithstanding the verdict and the motion to set aside the verdict are denied. The defendants' motion for remittitur is denied and the plaintiffs' objection to this motion is sustained, except that the parties have leave to be heard further on the defendants' claim that they are entitled to a remittitur based on their fourth special defense alleging a right to a set-off.
The parties' dispute emanates from a foreclosure action initiated by Banknorth to recover on a debt owed by two entities, Mountainside Corporation and The Groth Family Limited Partnership. The property subject to the foreclosure was located in Wallingford and Meriden, Connecticut, and included a resort and special events facility. The foreclosure court appointed the defendant Bruno Morasutti as the committee to conduct the sale. Thereafter, the court authorized the committee to retain Tranzon to market the property and conduct the sale. Banknorth noticed a secured party auction sale of the personal property serving as collateral for the debt to be held at the same time and place as the committee's auction of the real estate.
Ulbrich was the successful bidder at the sale. After the court's approval of the sale, Ulbrich received a committee deed of the real property. He also received bills of sale from Banknorth transferring tangible and intangible personal property to him. The real and personal properties were subsequently transferred to Ulbrich Properties.
The plaintiffs allege that they failed to receive all the personal property that they were entitled to receive as part of the auction. The evidence indicated that after the foreclosure auction it was determined that much of the personal property at the site was not owned by the debtors, but was either leased by them or owned by an entity named Festivals, Inc. Specifically as to the defendant Banknorth, count seven of the complaint alleges the following:
The defendant bank was negligent and careless not to ascertain the true status of the ownership of the personal property, and failed to properly investigate same. Further, the bank was negligent in causing personalty to be sold, although not a part of its security. The bank knew that the buyers would rely on the description of property being sold at public auction and plaintiffs did so rely, all to the special loss and damage of the plaintiffs herein. Still further, defendant and its agents . . . knew of conflicting claims to said personal property, and in fact knew that it lacked a definite list of personal property, yet caused an auction to be held, knowing plaintiffs would rely and did so rely and failed to disclose the conflicting claims to personal property, all to the plaintiffs' special loss and damages.
Sixth Amended Complaint, Seventh Count, ¶ 33.
As to the defendant Tranzon Auction Properties, the ninth count alleges the following:
The defendant Tranzon Auction Properties acted as the auctioneer and prepared the auction marketing memorandum which was utilized by bidders in regard to said auction. The defendant Tranzon was negligent and careless in preparing the auction marketing memorandum and conducting said auction by failing to identify the owners of said personal property what personal property was included in the auction and misleading the prospective bidders, including the plaintiffs, who were damaged as a result of defendant's negligence and carelessness. Further, the defendant Tranzon knew it lacked sufficient information regarding the ownership of the personal property and conducted said auction without disclosing the full and complete information to bidders, all to the plaintiffs' special loss and damages.
Sixth Amended Complaint, Ninth Count, ¶ 33.
The court will provide additional information about the evidence and the parties' claims or defenses as necessary below.
DISCUSSION I
A verdict will be set aside and judgment directed only if the jury could not reasonably and legally have reached its conclusion. Stewart v. Cendant Mobility Services Corp., 267 Conn. 96, 102, 837 A.2d 736 (2003). "The basic question which the trial court has to decide is whether upon all the evidence an injustice has been done." (Citations omitted; internal quotation marks omitted.) Burr v. Lichtenheim, 190 Conn. 351, 355, 460 A.2d 1290 (1983). A motion for a new trial is addressed to the sound discretion of the trial court and will not be granted except on substantial grounds or prejudicial error. Id. The court must view the evidence offered at trial in the light most favorable to sustaining the verdict. Gaudio v. Griffin Health Services, 249 Conn. 523, 534, 733 A.2d 197 (1999) (a court "must determine, in the light most favorable to sustaining the verdict, whether the totality of the evidence, including reasonable inferences therefrom, supports the jury's verdict").
Moreover, the law is well established that the court's consideration of both the motion to set aside the verdict and the motion for remittitur is guided by the parties' constitutional right to have factual disputes determined by the jury. The constitutional right of a party to have damages decided by the jury "is one obviously immovable limitation on the legal discretion of the court to set aside a verdict, since the constitutional right of trial by jury includes the right to have issues of fact as to which there is room for a reasonable difference of opinion among fair-minded men passed upon by the jury and not by the court." Gladu v. Sousa, 52 Conn.App. 796, 800, 727 A.2d 1286, (1999), aff'd, 252 Conn. 190, 745 A.2d 798 (2000). Consequently, in evaluating the adequacy of a jury's verdict, the court cannot substitute its discretion for that of the jury simply because the court would consider or weigh the evidence differently. Mere doubt about the adequacy of the verdict or the jury's exercise of its judgment is an insufficient basis to order an additur. Wochek v. Foley, 193 Conn. 582, 587, 477 A.2d 1015 (1984). On the other hand, "it is the court's duty to set aside the verdict when it finds that it does manifest injustice, and is . . . palpably against the evidence." (Internal quotation marks omitted.) Malmberg v. Lopez, 208 Conn. 675, 679-80, 546 A.2d 264 (1988).
II Defendants' Motion for Judgment Notwithstanding the Verdict and Motion to Set Aside Verdict A Economic Loss Doctrine As to Counts Seven and FifteenBanknorth moves for judgment notwithstanding the jury's verdict as to the plaintiffs' claims based on negligence and CUTPA as asserted in counts seven and fifteen of the complaint arguing that these claims are barred by the economic loss doctrine. The court reserved decision on this argument when Banknorth raised it as part of its motion for summary judgment. Banknorth reasserted this argument in its motion for directed verdict made at the close of the evidence. This motion for directed verdict was denied. In its present motion for judgment, Banknorth again argues that the economic loss doctrine bars the negligence and CUTPA claims. Banknorth has not advanced anything new to persuade the court that its arguments should now be accepted.
The economic loss doctrine is a judicially created principle which prohibits recovery in tort when the claim only seeks to recover economic losses and arises from a contract between the parties. Our Supreme Court in Flagg Energy Dev. Corp. v. Gen. Motors Corp., 244 Conn. 126, 709 A.2d 1075 (1998), discussed the economic loss doctrine. Flagg involved the plaintiffs' claims for economic losses caused by defective engines sold by the defendant to the plaintiff. The trial court granted the defendant's motion to strike the plaintiff's claims based on misrepresentation and CUTPA. In affirming the lower court decision, the Supreme Court addressed the economic loss doctrine stating, "We agree with the holdings of cases in other jurisdictions that commercial losses arising out of the defective performance of contracts for the sale of goods cannot be combined with negligent misrepresentation." Id., 153.
The court notes that many jurisdictions apply a more narrowly defined economic loss doctrine limiting the rule to situations where a defect in a product, sold under the provisions of Article 2 of the Uniform Commercial Code, causes damages to the product itself. See, e.g., Bussian v. Daimler Chrysler Corp., 411 F.Sup.2d 614 (M.D.N.C. 2006):
The rationale for the economic loss rule is that the sale of goods is accomplished by contract and the parties are free to include, or exclude, provisions as to the parties' respective rights and remedies, should the product prove to be defective.
However, where a defective product causes damage to property other than the product itself, losses attributable to the defective product are recoverable in tort rather than contract. As this Court has recently recognized, tort concepts of safety and risk apply when a manufacturer negligently produces products that are dangerous to people or other property, and the manufacturer is responsible for injuries caused by his negligence. However, this rationale does not apply where a manufacturer's products simply fail to meet the business needs of his customers.
(Citations omitted; internal quotation marks omitted.) Id., 625-26 (construing North Carolina law.) The District Court in Bussian discusses Flagg Energy Dev. Corp. v. Gen. Motors Corp., supra, 244 Conn. 126, as a case that applies the economic loss doctrine to damages emanating from a defective product itself. Bussian v. DaimlerChrysler Corp., supra, 411 F.Sup.2d 626-27.
The scope and application of the Supreme Court's decision in Flagg have caused much division and dispute among the trial courts. This controversy is generated primarily by the apparent conflict between two out-of-state cases cited with approval in Flagg: Duquesne Light Co. v. Westinghouse Electric Corp., 66 F.3d 604, 618 (3d Cir. 1995) and Princess Cruises, Inc. v. General Electric Co., 950 F.Sup. 151, 155 (E.D.Va. 1996); and two prior Connecticut Supreme Court decisions not discussed in Flagg: Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 579, 657 A.2d 212 (1995) ("The [plaintiffs] were not barred from pursuing a negligence claim solely because they also might have had a breach of contract claim"); D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 218-19, 520 A.2d 217 (1987) ("If the plaintiff's complaint otherwise contains the necessary elements of negligent misrepresentation, it survives a motion to strike even though [other counts] grounded in promissory estoppel must fall").
In addressing this apparent conflict and applying the holding of Flagg, the trial court decisions are split. Most Superior Court cases hold that Flagg applies the economic loss doctrine broadly to preclude tort claims seeking economic losses emanating from any contractual transactions involving commercial or "sophisticated" parties. This court has found the minority view more persuasive, concluding that Flagg applies the economic loss doctrine more narrowly to preclude tort claims seeking economic losses in cases involving the sale of goods governed by the provisions of the Uniform Commercial Code. State v. Maximus, Inc., Superior Court, Complex Litigation Docket at Waterbury, Docket No. X06 CV 07 5011488 (April 1, 2009; Stevens, J.) ( 47 Conn. L. Rptr. 642). As expansively discussed by this court in Maximus, the Supreme Court's decision in Flagg should not be read as overruling sub silento its long-standing precedent, as expressed in cases such as Williams Ford, Inc. v. Hartford Courant Co., supra, 232 Conn. 559, holding that a common-law duty of care may emanate from a contractual relationship:
CT Page 21257
We recently pointed out that negligence may be the outgrowth of precedent contractual relationship, but that it may also arise in situations where there is no thought of any such underlying relationship . . . In other words, the particular facts which bring two persons into a relationship to each other are not necessarily controlling, but the true test is, speaking generally, being in that relationship, are the circumstances such that one, in the performance of some act within the scope of that relationship, unless he uses proper care, is likely to do injury to the person, property or rights of the other . . . It is in this sense that negligence grows out of contracts as nuisance may grow out of negligence . . . Where there is a precedent relationship, all that is necessary to furnish a basis for an action of negligence is that there be present the elements necessary to establish such a cause of action, and if that is so, that that relationship is one of contract is not sound reason why the action should not lie.
(Citations omitted.) Dean v. Hershowitz, 119 Conn. 398, 408-09, 177 A. 262 (1935); accord Johnson v. Flammia, 169 Conn. 491, 496, 363 A.2d 1048 (1975) ("A party may be liable in negligence for the breach of a duty which arises out of a contractual relationship"); Sasso v. Ayotte, 155 Conn. 525, 529, 235 A.2d 636 (1967) (same).
As compared to the facts presented in Flagg, the transaction between Ulbrich and Banknorth is not controlled by the provisions of Article 2 of the UCC governing the sale of goods, but by the provisions of Article 9 governing a secured creditor's disposition of collateral. The warranty provisions of Article 2 are made applicable to the parties' transaction solely as provided by Article 9. See General Statutes §§ 42a-9-610(d) and (e) (concerning the existence and disclaiming of warranties in a contract for the sale of collateral). Thus, the precise issue raised by Banknorth's argument is whether the economic loss doctrine as recognized by the Supreme Court in Flagg should be extended beyond the sale of goods under Article 2 and applied to contracts involving the disposition of collateral under Article 9. The court answers this question negatively.
A key consideration underpinning the rationale of the economic loss doctrine is that when parties to a contract are free to negotiate the terms of their bargain and allocate the risks, the law of contracts should be applied, rather than the law of torts, in order to determine the parties' respective responsibility for economic losses. See Flagg Energy Dev. Corp. v. Gen. Motors Corp., supra, 244 Conn. 153, quoting Princess Cruises, Inc. v. General Electric Co., supra, 950 F.Sup. 155 ("The parties are sophisticated corporations familiar with the type of services rendered, and the consequences of a mechanical failure likely to result from a failure to perform the contract as promised. The parties were free to allocate the risks, insure against potential losses, and adjust the contract price as they deemed most wise. This Court sees no reason to extricate the parties from their bargain"). In an auction sale of collateral, there is no real bargaining opportunity for the parties to negotiate the terms of the contract or an adjustment of the sale price in order to allocate any risks for potential losses. A buyer at an auction sale must submit his bids based on the terms of the sale and the condition of the property as offered. As the defendants concede, an auction sale of collateral has characteristics more similar to a caveat emptor transaction than a typical, negotiated sales transaction under Article 2.
Moreover, Article 2 provides extensive regulation of the sale of goods, including specific provisions regarding the remedies for nonperformance by a buyer or seller. See General Statutes §§ 42a-2-701 — 42a-2-725. On the other hand, Article 9 primarily concerns the relationship or obligations between the secured creditor and the debtor regarding the disposition of collateral. See General Statutes §§ 42a-9-610 — 42a-9-628. Article 9 addresses the relationship or obligations between the secured creditor and the buyer of collateral in a comparatively limited fashion. See General Statutes §§ 42a-9-610, 42a-9-617.
Additionally, one of the grounds articulated by the court in Flagg to support its holding that the misrepresentation claims were unavailable under the facts of that case was that the provisions of Article 2 operated to displace these common-law claims. Flagg Energy Dev. Corp. v. Gen. Motors Corp., supra, 244 Conn. 154-55; see General Statutes §§ 42a-1-103, 42a-2-721. The court concluded that "the intent of § 42a-2-721 is to make actions for fraud or misrepresentation presumptively inconsistent with post-acceptance claims for breach of warranty." Id., 155.
General Statutes § 42a-1-103(b) provides the following:
Unless displaced by the particular provisions of this title, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress coercion, mistake, bankruptcy, and other validating or invalidating cause supplement its provisions.
General Statutes § 42a-2-721 provides the following:
Remedies for material misrepresentation or fraud include all remedies available under this article for nonfraudulent breach. Neither rescission or a claim for rescission of the contract for sale nor rejection or return of the goods shall bar or be deemed inconsistent with a claim for damages or other remedy.
In the present case, Banknorth moved for summary judgment arguing that the provisions of Article 9 (§§ 42a-9-610(d) and (e)) displaced common-law claims. The court disagreed and concluded that the provisions of Article 9 do not displace common-law claims asserted by a buyer of collateral against the secured creditor:
General Statutes §§ 42a-9-610(d), (e) and (f) provide the following:
(d) A contract for sale, lease, license or other disposition includes the warranties relating to title, possession, quiet enjoyment and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.
(e) A secured party may disclaim or modify warranties under subsection (d):
(1) In a manner that would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition; or (2) By communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.
(f) A record is sufficient to disclaim warranties under subsection (e) if it indicates "There is no warranty relating to title, possession, quiet enjoyment or the like in this disposition" or uses words of similar import.
[The court] rejects the defendants' contention that the common law is displaced by the provisions of General Statutes §§ 42a-1-103 (b) and 42a-9-610(d) and (e). Section 42a-9-610(d) provides that a contract for sale of collateral includes warranties "which by operation of law accompany a voluntary disposition of property of the kind subject to the contract;" and § 42a-9-610(e) provides that such warranties may be disclaimed by the secured creditor "in a manner that would be effective to disclaim . . . warranties in a voluntary disposition of property of the kind subject to the contract of disposition." Section 42a-9-610(f) provides that disclaimers of warranties may be acquired by broad rather than specific language. As indicated by the language of these provisions, and as reflected in the official commentary, these provisions do not appear structured to displace the common law by creating or imposing either warranties or disclaimers, but merely appear to acknowledge the applicability of such warranties or disclaimers in accordance with existing law.
Ulbrich v. Groth, Superior Court, Complex Litigation Docket, Judicial District of Waterbury, Docket No. CV X06 08 4016022 S, Ruling on Motion for Summary Judgment (May 18, 2010; Stevens, J.); accord Ennis Management v. Ennis Property Mgmt., Superior Court, judicial district of New Haven at New Haven, Docket No. CV 06 5006341 (Nov. 17, 2009; Robinson, A., J.) (Article 9 does not preempt other remedies); see also Official Commentary, Uniform Commercial Code, § 9-610, ¶ 11: "Law other than this Article determines whether such other warranties apply to a disposition under this section. Other law also determines issues relating to disclaimer of such warranties;" Jacobs v. Healey Ford-Subaru, Inc., CT Page 21260 231 Conn. 707, 652 A.2d 496 (1995) (alternative remedies are not displaced by the UCC absent express mandate or clear conflict).
In summary, the economic loss doctrine does not appear to bar negligence claims asserted by a buyer of collateral against a secured party because, as compared to the parties of a sales transaction under Article 2, the underlying rationale of this doctrine is inapposite, Article 9 fails to provide either extensive regulation of an agreement transferring collateral or specific remedies for a violation of such an agreement, and Article 9 does not statutorily displace common-law remedies.
Furthermore, Banknorth's reliance on Flagg to contend that the economic loss doctrine precludes Ulbrich from asserting a CUTPA claim is even more. dubious. As previously stated, the economic loss doctrine is a judicially created rule limiting the use of tort remedies for the recovery of economic damages emanating from the parties' contract. CUTPA, however, is not a common-law tort. CUTPA is a statutory cause of action enacted by the legislature to combat unfair trade practices. The elements of this cause of action are well-established and statutorily defined: a CUTPA action may be maintained by a person who suffers an ascertainable loss of money or property caused by the use of an "unfair method of competition" or an "unfair or deceptive" act in the conduct of any "trade or commerce." See General Statutes §§ 42-110b(a), 42-110g(a). The provisions of CUTPA are to be broadly construed consistent with the statute's remedial purposes. See General Statutes § 42-110b(d).
There is nothing in CUTPA precluding its application solely because a plaintiff seeks to recover economic losses caused by unfair trade practices when such losses emanate from a contractual relationship with the defendant. Indeed, CUTPA violations ordinarily involve pecuniary or economic losses and may arise from a contract between the parties. In Flagg, the application of the economic loss doctrine to preclude a CUTPA claim was coupled with a finding that Article 2 operated to displace other remedies in a case where the losses were premised on a defective product. Thus, Flagg is distinguishable because in the present case, there is no displacement of other remedies by the UCC and Ulbrich's damages are not associated with losses caused by a defective product sold under Article 2. Cf. Bussian v. DaimlerChrysler Corp., supra, 411 F.Sup.2d 627 (unfair trade practice claims are barred by the economic loss doctrine in cases "involving allegations of a defective product where the only damage alleged is damage to the product itself"). The court should be hesitant to superimpose a judicially created restriction, such as the economic loss rule, onto a statutory cause of action, such as CUTPA, because in accordance with the separation of powers doctrine, a fundamental principle of statutory construction is that a court, in the absence of constitutional concerns, should refrain from limiting or modifying the express provisions of an unambiguous statute. See Delgado v. J.W. Courtesy Pontiac, 693 So.2d 602 (Fla.App.Dist., 1997) (declining to apply the economic loss rule to Florida's unfair trade practices statute).
The general rule is that a breach of contract claim will support a CUTPA action when the claim is associated with aggravating, unethical or unscrupulous acts amounting to unfair or deceptive conduct. "[T]he same facts that establish a breach of contract claim may be sufficient to establish a CUTPA violation." Lester v. Resort Camplands International, Inc., 27 Conn.App. 59, 71, 605 A.2d 550 (1992).
Consequently, although Banknorth points to language in Flagg that seemingly supports its broad construction of the economic loss doctrine, for the reasons discussed above, the court concludes that the holding of Flagg should be limited to its facts absent further clarification from the Supreme Court. See State v. Maximus, Inc., supra.
B Common-Law Duty of Care and The Burden of Proof on Apportionment Claim As to Counts Seven and Nine
In regard to the negligence claims asserted in counts seven and nine, the defendants argue that the court gave an erroneous jury instruction regarding a secured party's duty of care under Article 9. More specifically, the defendants claim that the jury's verdict on these counts should be set aside and judgment should enter in their favor because "[t]he obligations of the Article 9 secured party seller are limited by statute and there is no express or implied duty of care owed to the buyer of goods at auction." Defendants' Motion to Set Aside Verdict, p. 8. The defendants do not cite any authority for this proposition and the court has located none. Moreover, as discussed above, the court rejects Banknorth's contention that Article 9 displaces common-law remedies. The jury was appropriately charged that as a general rule, a person who sells property has a duty to exercise reasonable care to properly identify the property being sold and not to misidentify property as being part of the sale when it is not. See generally Lombard v. Edward J. Peters, Jr., P.C., 252 Conn. 623, 634, 749 A.2d 630 (2000).
The defendants also contend that the court gave an erroneous instruction concerning the burden of proof on their apportionment claim. The following additional information is relevant to this argument. During the trial, the court asked defense counsel whether in addition to the defendants' contributory negligence claim against the plaintiffs, were the defendants also asserting a claim of apportionment under General Statutes § 52-572(f). This question was answered affirmatively and the defendants maintained that any finding of negligence against them required the jury to consider whether any negligence should also be attributed to the following settled or released parties: Bruno Morasutti, Kelly Groth, James Groth and certain entities associated with the Groths. Consequently, the court instructed the jury that if a defendant were found negligent, the jury was required to consider that defendant's claim that the plaintiffs' injuries were caused by Ulbrich's own negligence or by the negligence of Morasutti or the Groths. The jury was instructed that this contributory negligence claim as to Ulbrich and this apportionment claim as to Morasutti and the Groths were defenses for which the defendants bore the burden of proof by a preponderance of the evidence.
General Statutes § 52-572h provides the following:
The jury or, if there is no jury, the court shall specify: (1) The amount of economic damages; (2) the amount of noneconomic damages; (3) any findings of fact necessary for the court to specify recoverable economic damages and recoverable noneconomic damages; (4) the percentage of negligence that proximately caused the injury, death or damage to property in relation to one hundred percent, that is attributable to each party whose negligent actions were a proximate cause of the injury, death or damage to property including settled or released persons under subsection (n) of this section; and (5) the percentage of such negligence attributable to the claimant.
During the charge conference, the parties agreed that the alleged negligence associated with Kelly Groth and James Groth could be referred or attributed to the collective conduct of Kelly and James Groth, the Groth Family Limited Partnership, Mountainside Corporation and Festivals, Inc. ("the Groths" or "the Groth Entities").
The defendants argue that this instruction was erroneous because they do not bear the burden of proving an apportionment claim under § 52-572h(f). According to the defendants, even though they are insisting that the jury must consider whether any negligence found against them should be attributed to Morasutti or the Groths, "[t]he plaintiffs have the burden of proving the proportionate share of damages that may be recovered from each party. The statute does not shift the burden of proof to the defendant simply because there are multiple parties." Defendants' Motion to Set Aside Verdict, p. 10. The court rejected the defendants' argument during the charge conference and now reiterates this position.
The plaintiffs have released or settled their claims against Morasutti and the Groths, and therefore, there is neither a practical interest nor a legal requirement for them to make further claims against them. The defendants are seeking to reduce their liability for damages based on the negligence attributable to these released or settled parties. See General Statutes § 52-572h(n). Consequently, they must bear the burden of producing evidence to support such a determination. It makes no sense to place the burden on the plaintiffs to prove that these settled or released parties were negligent in order to accomplish a reduction of the defendants' liability for damages. As held by the Appellate Court in Baxter v. Cardiology Associates of New Haven, 46 Conn.App. 377, 699 A.2d 271 (1997), the issue of apportionment under § 52-572h(n) does not arise automatically, but must be raised and proven by the party claiming it. "[T]he party claiming apportionment had a duty to advise the court and the plaintiff that it intended to claim apportionment and by so doing it assumed the burden of proving the negligence of the released person.") Id., 383.
The court also notes that even if the defendants did not bear the burden of proof on their apportionment claim, any error was harmless since the jury's finding of apportionment indicates the jury's conclusion that this burden was met.
C Plaintiff's Justifiable Reliance on Tranzon's Representations As to Count Nine
Tranzon moves for directed verdict on count nine of the complaint contending that the plaintiffs have failed to prove justifiable reliance, an essential element of their negligent misrepresentation claim. Specifically, Tranzon contends that the plaintiffs cannot meet their burden of proving justifiable reliance in light of the written disclaimers contained in the auction brochures prepared by Tranzon and Ulbrich's own course of dealing with the Groths.
"Traditionally, an action for negligent misrepresentation requires the plaintiff to establish (1) that the defendant made a misrepresentation of fact (2) that the defendant knew or should have known was false, and (3) that the plaintiff reasonably relied on the misrepresentation, and (4) suffered pecuniary harm as a result." Nazami v. Patrons Mutual Ins. Co., 280 Conn. 619, 626, 910 A.2d 209 (2006).
Although the defendants' arguments about their disclaimers of warranties will be discussed further below, Tranzon's legal argument concerning justifiable reliance appears to be that as a matter of law "[t]he written disclaimers contained in the auction brochure negate plaintiffs' ability to justifiably rely on information in the brochure." Defendants' Motion for Judgment Notwithstanding the Verdict, p. 6. Contrary to Tranzon's position, under Connecticut law, contractual disclaimers do not negate claims for negligent misrepresentation when the buyer is unaware of the true or complete condition or ownership of the property. See Hull v. Fonck, 122 Conn.App. 286, 291-93, 999 A.2d 775 (2010); Martinez v. Zovich, 87 Conn.App. 766, 771-78, 867 A.2d 149, cert. denied, 274 Conn. 908, 876 A.2d 1202 (2005).
As to Tranzon's factual arguments, it is sufficient to state that based on the evidence as a whole and with a view of sustaining the verdict, the court cannot find that the jury erred in its verdict against Tranzon. There was evidence in the record that the plaintiffs were aware of and relied on information provided by Tranzon concerning personal property purportedly subject to the auction and this evidence supported the plaintiffs' claims of justifiable reliance. Tranzon's arguments present disputed factual issues appropriately within the province of the jury to consider, weigh and evaluate. The defendant has not presented a sufficient basis to disturb the jury's determination.
D
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Sufficiency of The Evidence and Adequacy of The Court's Charge On Ulbrich's Breach of Warranty Claim Under Count Twelve
As previously stated after the foreclosure auction, Banknorth gave the plaintiffs two bills of sale, one for tangible and one for intangible property. In count twelve of the complaint, the plaintiffs allege that most of this personal property, including the contents of the facility buildings, was not owned by the debtors, and therefore was not subject to Banknorth's lien interests. Sixth Amended Complaint, ¶ 26. Count twelve further alleges that "[a]t no time did the bank disclaim ownership of the property conveyed to the plaintiffs, all to the plaintiffs' special loss and damage, thereby breaching the warranties of title and the provisions of Connecticut General Statutes § 42a-2-312." Id., ¶ 33. The essence of Ulbrich's claim is that Banknorth purported to convey certain personal property of the events facility but failed to do so. The jury found in favor of Ulbrich and against Banknorth on count twelve alleging breach of the warranty of title.In its motion for judgment on count twelve, Banknorth reasserts arguments made during the trial. For example, Banknorth focuses on the language of the statutory warranty providing that "the goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge." General Statutes § 42a-2-312(1)(b). Banknorth claims that the statutory warranty provision as applied in this case is exculpatory because the evidence indicates that Ulbrich "knew of the existence of Festivals," an entity claiming ownership of much of the personal property. This argument fails for many reasons. First, the extent of Ulbrich's knowledge is a factual issue, and contrary to the banks' contention, the court must evaluate the jury's verdict based on the entirety of the record, and not by focusing either solely or primarily on the evidence favoring the bank's position.
Additionally, Banknorth's argument focuses only on one section of the warranty statute, § 42a-2-312(1)(b). See n. 13. Ulbrich's claim is not merely that he was sold personal property that was subject to a "security interest or other lien or encumbrance;" see General Statutes § 42a-2-312(1)(b); but also that Banknorth sold property that it could not rightly transfer because it did not have good title. See General Statutes § 42a-2-312(1)(a). This implied statutory warranty of title "makes provision for a buyer's basic needs in respect to a title which he in good faith expects to acquire by his purchase, namely, that he receive a good, clean title transferred to him also in a rightful manner so that he will not be exposed to a lawsuit in order to protect it." Pacific Sunwear v. Olaes Enterprises, 167 Cal.App.4th 466, 84 Cal.Rptr.3d 182 (2008), quoting Official Code to UCC 2-312, Comment 1.
For similar reasons, the court rejects Banknorth's alternative argument that the statutory warranty was excluded because the circumstances gave Ulbrich "reason to know" that Banknorth was "purporting to sell only such right or title" as it may have had. See General Statutes § 42a-2-312(2). Again, the disputed issues regarding Ulbrich's knowledge presented matters for the jury's consideration. Furthermore, it does not appear that the crucial issue here involves the bank selling property to Ulbrich under circumstances indicating that the bank was only selling a limited "right or title" in the transferred property. Ulbrich's claim more accurately involves the bank purportedly selling property in which it had no "right or title," and therefore, could not legally transfer.
In its motion to set aside the verdict, Banknorth also claims that the court improperly imposed "a common law duty of care and common law duty of disclaimer under an Article 9 transaction." This claim is without basis. The defendant concedes that the implied statutory warranty of § 42a-2-312 applied to the parties' transaction. The court explained the existence of this implied warranty to the jury as well as the seller's right to disclaim this warranty. The jury also was charged about its responsibility to consider Banknorth's special defense alleging that the disclaimers made by Banknorth were sufficient to disclaim any implied warranty of title as claimed by Ulbrich. Consequently, the jury's task was to determine whether under the particular circumstances of this case, the disclaimers that were made by Banknorth were sufficient to avoid the implied warranty of title as claimed by Ulbrich. Banknorth asserts no meritorious reason why the jury's finding of liability on count twelve should be disturbed.
The court's instructions to the jury on count twelve of the complaint claiming breach of implied warranty of title under General Statutes § 42a-3-312 stated the following in relevant part: "Our law recognizes that when a person sells property, the person impliedly warrants that it has title or ownership to the property being sold and that it has the lawful authority to transfer ownership of the property to the buyer. A person who purports to sell something impliedly warrants that it has the right and title in the thing being sold. A sale implies an ownership in the thing sold and a transfer of that ownership to another."
Moreover, the law of Connecticut allows a creditor, such as TD Banknorth, who is selling goods, to disclaim warranties of title regarding property sold at an auction. A bidder of an auction is required to know the terms of the auction and is required to do his own "due diligence" to investigate the nature and status of the property based on this knowledge prior to the auction sale.
In its special defenses, TD Banknorth alleges that it made disclaimers sufficient to disclaim the warranty of title that would otherwise apply to its sale of personal property as alleged by Ulbrich. In the bills of sale executed between the bank and Ulbrich transferring personal property to him, TD Banknorth stated that "it makes no warranties or representations of any kind whatsoever, express or implied, with respect to the collateral, and the assets are sold `as is' and `where is.' Tranzon also made disclaimers to the bidders in the auction brochure and orally during the auction."
E Sufficiency of The Evidence and Adequacy of The Court's Charge On Ulbrich's CUTPA Claim Under Count Fifteen
In count fifteen of the complaint, Ulbrich alleges that Banknorth's conduct involved unfair or deceptive acts or practices in violation of CUTPA. The fifteenth count incorporated the substantive allegations of the previous counts claiming negligence and breach of warranty. Thus, the plaintiffs alleged that the bank was "negligent and careless" not to ascertain or investigate the true ownership status of the personal property subject to the auction and in "causing personalty to be sold, although not part of its security." Sixth Amended Complaint, Count 15, ¶ 33. The plaintiffs further alleged that the bank knew the following: that the buyers would rely on the description of the property being sold at the auction; that there were conflicting claims to this property; and that it did not have a "definite list of personal property." Id. Despite being aware of these facts, Banknorth "caused an auction to be held knowing that plaintiffs would rely" on the property description provided by the bank or its agents. Id. At no time did the bank disclaim ownership of the property purportedly sold as part of the auction and conveyed by the bills of sale. Complaint, Count 15, ¶ 34. Finally, the CUTPA count makes the following additional allegation not explicitly alleged elsewhere in the complaint: "[t]he defendant bank was aware that the plaintiffs believed and had reason to believe that they were buying a fully operational facility, completely equipped with personal property to carry on said business. At no time between the auction and the closing did the defendant bank reveal that there were conflicting claims to the tangible and intangible personal property." Complaint, Count 15, ¶ 37.
As previously stated, the jury found in favor of Ulbrich and against Banknorth on Ulbrich's CUTPA claim. At the defendant's request, the jury was asked, "Did the plaintiff prove by a fair preponderance of the evidence that defendant TD Banknorth engaged in conduct that was an unfair or deceptive act or practice?" The jury answered this question affirmatively.
Banknorth argues that the jury's verdict against it on the CUTPA count should be set aside and that judgment should enter in its favor. According to Banknorth, the court improperly charged the jury regarding the criteria necessary to prove a CUTPA violation and that the correct considerations indicate that Ulbrich's CUTPA claims fail.
"It is well settled that in determining whether an act or practice violates CUTPA we have adopted the criteria set out in the "cigarette rule" by the federal trade commission for determining when an act or practice is unfair: (1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — whether, in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, competitors or other businessmen.
"All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three. Thus, a violation of CUTPA may be established by showing either an actual deceptive practice; or a practice amounting to a violation of public policy. Furthermore, a party need not prove an intent to deceive to prevail under CUTPA . . . The question of whether an action or practice can be the basis of a CUTPA action depends upon all the circumstances of the particular case." (Citations omitted; internal quotation marks omitted.) Jacobs v. Healey Ford-Subaru, Inc., supra, 231 Conn. 725-26.
To support its motions contesting the jury's verdict, Banknorth makes the following contentions: that "a mere claim of negligence will not satisfy the first and third [prongs] of the cigarette rule;" that "there is no CUTPA violation when the sole basis of the claim is the defendant's negligence and the jury determines that the plaintiff was contributory negligent;" the plaintiff must prove that "he could not have avoided the injury"; and that the most important of the three criteria of the "cigarette rule" is "unjustified consumer injury." Defendants' Motion to Set Aside Verdict, p. 8. Indeed, Banknorth opines that the "cigarette rule" has been abandoned in that an "unjustified consumer injury test" is the determinative factor for determining a CUTPA violation, and the "immoral and unscrupulous activity inquiry" no longer applies. Defendants' Motion For Judgment Notwithstanding the Verdict, pp. 11-12.
The defendant's arguments emanate from a cursory and superficial focus on certain statements made in court decisions concerning CUTPA, but the court finds it unnecessary to address all of the defendants' claims. The jury's verdict on Ulbrich's CUTPA claim may be upheld if the record is sufficient to support a finding on any one of the three criteria of the "cigarette rule." Jacobs v. Healey Ford-Subaru, Inc., supra, 231 Conn. 725 ("All three criteria do not need to be satisfied to support a finding of unfairness"). The second prong of the "cigarette rule" is met because the evidence clearly supports a finding that Banknorth's conduct was "immoral, unethical, oppressive or unscrupulous."
This case does not squarely present the question whether simple negligence may satisfy the second prong because the facts of this case, examined fully with a view of upholding the jury's verdict, establish that Banknorth's conduct involved more than a mere breach of a common-law standard of care. The evidence fairly supports the allegations of count fifteen of the complaint. Banknorth decided to conduct the auction of the personal property appreciating and understanding that it did not know exactly what items of personal property were covered by its security interest. Moreover, the bank's agents or representatives knew that there was information indicating the existence of conflicts about the debtors' ownership of all the personal property on the site. The bank did not disclose these issues to the foreclosure court or to the prospective bidders. The bank was uninterested in postponing the auction to address or resolve these issues because it wanted to avoid the time and cost of any delay and it wanted an expeditious liquidation of the secured property. The bank's very cavalier attitude toward the transaction appears to have been that the bidders "should beware" to do their own due diligence to determine what personal property was being sold (even though the bank itself had no idea what exactly was being sold). The bank sought to cover or protect itself by a notice of secured party sale indicating that the bank was only selling whatever interests that the debtors had in the property, although the bank did not know and decided to make no effort to determine what those interests were. The bank also sought to cover or protect itself by its general disclaimer that the property was being sold "as is" and "where is." The bank's view of the transaction was that the successful bidder and the debtors could sort out the ownership issues themselves after the sale and closing, which they ultimately were required to do through protracted and expensive litigation. The evidence supports the conclusion that Banknorth's conduct was consciously or deliberately deceptive and unscrupulous satisfying the second prong of the "cigarette rule."
The costs incurred by Ulbrich as part of this litigation with the debtors and other parties, as well as the lost value of the personal property purportedly sold as part of the auction, formed the elements of Ulbrich's damages, undermining any claim by Banknorth that Ulbrich failed to satisfy the ascertainable loss requirement of General Statutes § 42-110g(a).
Moreover, simply because a plaintiff relies on a defendant's actions to assert a "negligence" claim does not, as a matter of law, establish that the second prong cannot be met. The controlling consideration is the factual circumstances of the conduct, not the label placed on the underlying cause of action, because either negligent or "innocent" misrepresentations may be accomplished through unethical or unscrupulous means. Compare A-G Foods, Inc. v. Pepperidge Farm, Inc., 216 Conn. 200, 579 A.2d 69 (1990) (defendant's negligent supervision of employee insufficient to satisfy the second prong) with Web Press Services Corp. v. New London Motors, Inc., 203 Conn 342, 363, 525 A.2d 57 (1987) ("we conclude that knowledge of falsity, either constructive or actual, need not be proven to establish a violation of CUTPA"); and Prishwalko v. Bob Thomas Ford, Inc., 33 Conn.App. 575, 583, 636 A.2d 1383 (1984) ("It is not a prerequisite of a CUTPA violation to prove that a car dealer intended to deceive when an odometer reading is not accurate").
Banknorth appears to argue that even if the second prong of the "cigarette rule" is met, a CUTPA claim must fail if a plaintiff is found to have committed contributory negligence. A close reading of the appellate cases on this issue indicate they do not support this proposition, particularly when, as previously discussed, the evidence establishes that the defendant's actions involved more than mere negligence. Under Connecticut statute, contributory negligence alone is not a complete bar to a negligence claim in light of the comparative negligence doctrine. General Statutes 52-572h(b). Under common law, contributory negligence is not a bar to a claim of fraudulent misrepresentation, and intent to deceive, a necessary element of such a claim, is not an element of a CUPTA claim. See Prishwalko v. Bob Thomas Ford, Inc., supra, 33 Conn.App. 583. Consequently, it would be highly anomalous, and inconsistent with a liberal construction of the statute, to conclude that the mere existence of contributory negligence is a complete bar to a CUTPA claim as claimed by the defendant.
Additionally, the jury found against Banknorth on its contributory negligence claim against the plaintiffs. See n. 4. Contrary to Banknorth's position, contributory negligence sufficient to affect a CUTPA claim must be connected to the parties' conduct involving this same claim; contributory negligence that is separate or distinct is insufficient.
In any event, at least under the second prong of the "cigarette rule," causation is governed by the general principles of proximate cause. The established law of proximate cause is that a plaintiff's negligence does not necessarily exonerate the defendant from responsibility for its own wrongful acts because the defendant's conduct can be a proximate cause of an injury even when it is not the only cause, provided that the defendant's conduct contributed materially to the production of the injury, and therefore, was a substantial factor in bringing about the injury. Consequently, the fact that a plaintiff's conduct contributed to his injury does not necessarily mean that a defendant's conduct was not also a substantial factor in causing the injury, and therefore, sufficient to establish liability. The causation issue under the third prong of the "cigarette rule" contrasts to this general rule of causation because among the elements of the third prong is a requirement that there be a consumer injury that the consumer "could not reasonably have avoided." See A-G Foods, Inc. v. Pepperidge Farm, Inc., supra, 216 Conn. 216. If a plaintiff commits contributory negligence, then it may be fair to conclude that he could reasonably have avoided the injury. Id. The jury was fully charged on these legal issues regarding proximate cause and the "cigarette rule," and none of the jury's findings on these issues undermine its CUTPA finding against Banknorth.
Satisfaction of the third prong of the "cigarette rule" requires a consumer injury that is substantial, not outweighed by countervailing benefits to consumers or competitors, and could not have been reasonably avoided by the consumers themselves. A-G Foods, Inc. v. Pepperidge Farm, Inc., supra, 216 Conn. 216.
To support its contention that CUTPA relief is unavailable to a plaintiff committing contributory negligence, Banknorth relies on the following statement from A-G Foods, Inc. v. Pepperidge Farm, Inc., supra, 216 Conn. 200: "In addition, because the jury found that the plaintiff was 40 percent negligent the plaintiff has not proved that it `could not reasonably have avoided' any injury." Id., 217. This statement in A-G Foods, however, is not directed to the second prong, but is directed to the third prong of the "cigarette rule." As just explained, the third prong requires a finding of a substantial consumer injury, and an explicit element of this prong is that the consumer injury must be one that the consumer "could not reasonably have avoided." Id., 216-17. In A-G Foods, the court indicates that this element of the third prong, involving reasonable avoidance by a plaintiff, is not met when forty percent of the plaintiff's injury may be attributed to its own negligence. Accord Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 579, 657 A.2d 212 (1995) ("[B]ecause the jury found that [the defendants] were 10 percent contributorily negligent, [the defendants] have not proved that `they could not reasonably have avoided' any injury" as required under the third prong).
Similarly, Banknorth's reliance on Williams Ford, Inc. v. Hartford Courant Co., supra, 232 Conn. 559, is misplaced. Banknorth is correct that in referring to A-G Foods, the Supreme Court in Williams Ford states that "there is no CUTPA violation when the sole basis of the claim is the defendant's negligence and the jury determines that the plaintiff was contributorily negligent." Williams Ford, Inc. v. Hartford Courant Co., supra, 232 Conn. 591. However, a close consideration of the holding in Williams Ford indicates that this statement cannot be construed literally with the breadth that Banknorth maintains.
The defendant in Williams Ford argued that "negligence alone does not sustain a claim under CUTPA, either as a general matter or on the facts of this case." Id., 590. The Supreme Court agreed with the defendant only so far as concluding that " under the facts of this case, no CUTPA violation has been proved . . ." (Emphasis added.) Id. Thus, the court held that the second prong was not satisfied because in this particular case "[t]he record does not support a conclusion that [the defendant's] negligence constituted an `immoral, unethical, oppressive or unscrupulous' practice." Id., 592-93. Consequently, read fully and correctly, the holding in Williams Ford does not stand for the broad proposition that negligent acts can never satisfy the second prong of the "cigarette rule" when contributory negligence may be present, but that negligence cannot satisfy the second prong unaccompanied by facts establishing that the conduct constituted an "immoral, unethical, oppressive or unscrupulous" practice. Cf. Naples v. Keystone Building Development, 295 Conn. 219, 227 990 A.2d 326 (2010) ("In the absence of aggravating unscrupulous conduct, mere incompetence does not by itself mandate a trial court to find a CUTPA violation"). Again, as in A-G Foods, the actual application of contributory negligence in Williams Ford is directed specifically to the third prong of the "cigarette rule," not the second prong.
Moreover, it is again noted that in the present case, the evidence indicates that Banknorth's conduct involved more than mere negligence, and the jury did not find that Ulbrich's activities with Banknorth involved any contributory negligence on his part. Additionally, as previously stated, in the Prishwalko v. Bob Thomas Ford, Inc., supra, 33 Conn.App. 575, the Appellate Court reversed a trial court decision striking a CUTPA claim and held that even an "innocent misrepresentation" may support a CUTPA violation.
Banknorth also maintains that the court's instructions to the jury regarding the second prong were deficient because the instructions failed to advise explicitly that an unjustified consumer injury is the most important factor and the "primary focus of CUTPA." Defendants' Motion to Set Aside Verdict, pp. 8-9. This position forms the basis of the defendant's additional insinuation that the "cigarette rule" has been abandoned in favor of an "unjustified consumer injury test." Defendants' Motion For Judgment Notwithstanding the Verdict, pp. 11-12.
There are cases referring to statements from the federal trade commission that an unjustified consumer injury is the primary focus and most important factor in determining an unfair trade practice. See, e.g., A-G Foods, Inc. v. Pepperidge Farm, Inc., supra, 216 Conn. 216. Although the courts are guided by federal law in construing CUTPA; see General Statutes § 42-110b(c); our legislature departed significantly from the federal act when providing for a private right of action and civil remedies for unfair or deceptive trade practices. Banknorth appears to appreciate that an instruction informing the jury that the third prong of the "cigarette rule" is the "primary focus and most important of the three factors" would be inconsistent with Connecticut law that "[a]ll three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." Jacobs v. Healey Ford-Subaru, Inc., supra, 231 Conn. 725. The court's jury instructions were consistent with this settled law describing the "cigarette rule." The bank's proposed instruction would be inconsistent with the charge based on this law, and therefore, confusing to the jury.
Certainly, there is no Connecticut case law supporting Banknorth's position that the "cigarette rule" has been abandoned in favor of an "unjustified consumer injury test." Indeed, all the defendants' arguments emphasizing the singular importance of a "consumer injury" are inconsistent with the rule that CUPTA should be broadly construed to accomplish its remedial purposes, as well as the General Assembly's amendment of the statute to provide that proof of a "public interest or public injury shall not be required in any action" seeking relief for a CUTPA violation. General Statutes § 42-110g(a). Prior to this amendment, the Supreme Court had held that unfair or deceptive acts under CUTPA were limited to acts implicating a public interest. See Ivey, Barnum O'Mara v. Indian Harbor Properties, Inc., 190 Conn. 528, 536-37, 461 A.2d 1369 (1983) ("Under guiding federal law, allegedly deceptive acts or practices which arise out of a private controversy are actionable only if the acts or practices have a potential effect on the general consuming public"). "The public interest requirement of a private action under CUTPA was eliminated by the legislature by a 1984 amendment to the statute. See Public Acts 1984, No. 84-468, 2, 4 (effective June 8, 1984); General Statutes 42-110g, 2-110m." Lembo v. Schlesinger, 15 Conn.App. 150, 155, 543 A.2d 780 (1988).
In summary, the court finds no merit to any of Banknorth's arguments contesting the jury's verdict that its conduct constituted an unfair or deceptive trade practice in violation of CUTPA.
III Defendants' Motion for Remittitur A The Sufficiency of The Evidence And Adequacy of The Court's Charge on The Jury's Damages Award
As previously stated, the jury awarded damages in favor of the plaintiffs in the amount of $462,000. In all of their motions, particularly their motion for remittitur, the defendants raise numerous arguments contesting the jury's damages award. The law regarding the motion for remittitur may be summarized as follows.
Although the trial court has broad legal discretion in this area, it is not without its limits. Litigants have a constitutional right to have factual issues resolved by the jury. This right embraces the determination of damages when there is room for a reasonable difference of opinion among fair-minded persons as to the amount that should be awarded. The amount of a damage award is a matter peculiarly within the province of the trier of fact, in this case, the jury. Similarly, the credibility of witnesses and the weight to be accorded to their testimony lie within the province of the jury.
Furthermore, the size of the verdict alone does not determine whether it is excessive. The only practical test to apply to a verdict is whether the 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.
Thus, in ruling on the motion for remittitur, the trial court was obliged to view the evidence in the light most favorable to the plaintiff in determining whether the verdict returned was reasonably supported thereby. A conclusion that the jury exercised merely poor judgment is an insufficient basis for ordering a remittitur . . . The plaintiff need not prove damages with mathematical exactitude; rather, the plaintiff must provide sufficient evidence for the trier to make a fair and reasonable estimate. A generous award of . . . damages should be sustained if it does not shock the sense of justice.
The fact that the jury returns a verdict in excess of what the trial judge would have awarded does not alone establish that the verdict was excessive. The court should not act as the seventh juror with absolute veto power. Whether the court would have reached a different result is not in itself decisive. The court's proper function is to determine whether the evidence, reviewed in a light most favorable to the prevailing party, reasonably supports the jury's verdict.
Johnson v. Chaves, 78 Conn.App. 342, 826 A.2d 1286 (2003), cert. denied, 266 Conn. 911, 832 A.2d 70 (2003).
The defendants' arguments are extensively directed to the adequacy of the evidence presented by a document marked as exhibit P-125. This exhibit was offered by the plaintiffs and marked as a full exhibit absent objection. This document is entitled "Confidential Financing Memorandum" and is dated April 2006. It was prepared by Lakeside Advisors Group, LLC, which is a consulting firm engaged by the debtor Mountainside to find potential investors for the debtor's business. The memorandum lists items of property purportedly owned by Mountainside, including machinery and equipment used by Mountainside in the operation of the events facilities. The document also ascribes monetary values to these items. To supplement the information contained in this memorandum, the plaintiffs offered evidence about what items of property were used in the business and located at the site, and what items of property the plaintiffs did and did not receive as part of the sale. The plaintiffs claim that the totality of this evidence provides a reasonable basis for the jury to determine that the plaintiffs reasonably expected to receive but did not receive property as part of the auction having a value of approximately $413,000.
The plaintiffs also made a claim of approximately $49,000 for attorneys fees. These fees were incurred by the plaintiffs in defense of their ownership claims of the property premised on Banknorth's bills of sale but contested by the debtors and other parties.
These figures total the $462,000 awarded by the jury. The defendants assert that exhibit P-125 contains hearsay and lacks sufficient foundation and reliability to allow the jury to consider it as part of the jury's determination of damages. Although not conceding even the sufficiency of the evidence regarding the plaintiffs' $49,000 attorneys fee claim, the defendants insist that this $49,000 for attorneys fees is the only amount that could have been awarded by the jury.
The court notes that the defendants did not submit a proposed written jury instruction regarding exhibit P-125. The record reflects that toward the end of the charge conference, the defendants' counsel moved in limine for the court to issue an order limiting the use of the document by plaintiffs' counsel and to instruct the jury that the document could not be used in its evaluation of damages. The court denied the defendants' motion, explaining that the document was marked as a full exhibit and the court could not conclude that it was without any probative value to warrant an order precluding its consideration by the jury. The court now reiterates that conclusion.
There is a significant difference between considering the admissibility of proffered evidence and considering the relevance of admitted evidence. The defendants' present objections to exhibit P-125 concern its credibility and not its admissibility because the document was marked as a full exhibit absent objection. For example, the fact that the memorandum is dated April 2006 does not mean that the values expressed in it have no probative value whatsoever to the property values seven months later when the auction occurred. In short, the concerns raised by the defendants are issues properly within the province of the jury. The defendants did not request an instruction directed to the jury's evaluation of the specific facts pertaining to the accuracy or credibility of the document. They only moved orally to preclude any consideration of the document by the jury on the issue of damages. The defendants' counsel was free to point out any deficiencies or infirmities regarding the document or the plaintiffs' use of it during closing argument.
Viewing the evidence in its totality, the court cannot conclude that exhibit P-125 provided evidence that was so weak, disconnected or speculative that the jury should have been precluded from any consideration of it. In the absence of such a conclusion, the general rule is that after a document is admitted absent objection, the evidence may properly be considered by the jury for whatever value or weight the jury decides in determining the facts at issue. CT Page 21276 National Publishing Co. v. Hartford Fire Ins. Co., 94 Conn.App. 234, 237-38, 892 A.2d 261 (2006) (foundational objections to evidence on damages "should have been made prior to the expert's testimony on damages, not at the end of the case; once admitted without objection, the testimony was properly considered by the jury"); McDermott v. Calvary Baptist Church, 68 Conn.App. 284, 293, 791 A.2d 602 (2002), aff'd, 263 Conn. 378, 819 A.2d 795 (2003) (Citations omitted; internal quotation marks omitted.) ("Evidence admitted without objection remains evidence in the case subject to any infirmities due to its inherent weaknesses. Such evidence is available for whatever it is worth upon its face. Its value is, however, limited to its natural probative effect"); State v. Hickey, 23 Conn.App. 712, 718, 584 A.2d 473, cert. denied, 217 Conn. 809, 585 A.2d 1233, cert. denied, 501 U.S. 1252, 111 S.Ct. 2894, 115 L.Ed.2d 1058 (1991) ("Testimony admitted without objection enters the case as part of the evidence and may be considered by the jury"); Derderian v. Derderian, 3 Conn.App. 522, 528, 490 A.2d 1008, cert. denied, 196 Conn. 810, 811, 495 A.2d 279 (1985) ("Hearsay evidence admitted because no objection was voiced can be considered to prove the matters in issue for whatever its worth on its face").
The defendants also argue that the verdict is against the evidence and excessive. These arguments also are premised on the defendants' claim that the jury should have been allowed to consider exhibit P-125. For the reasons discussed above, these arguments are similarly rejected.
One issue remains for consideration. In the defendants' written response to the plaintiffs' objection to the motion for remittitur, the defendants for the first time refer to their fourth special defense. In this special defense, the defendants allege that they are entitled to a "set-off" based on money received by the plaintiffs from the settlement of their claims against other parties to this action. The defendants "demand" an evidentiary hearing on this set-off claim. In a pre-trial ruling dated June 1, 2010, issued on the plaintiffs' motion in limine, the court stated that this special defense would "be addressed by the court as part of any post-verdict motions as appropriately filed." See General Statutes § 52-216a; Mauro v. Yale-New Haven Hospital, 31 Conn.App. 584, 627 A.2d 443 (1993). Because this special defense concerning the set-off was not raised in the motion itself but in the defendants' reply memorandum, the issue has not been fully addressed by the parties. Therefore, the court will give the parties an opportunity to be heard further on the defendants' fourth special defense as it pertains to their motion for remittitur.
CONCLUSION
Therefore, the defendants' motion to set aside the verdict and motion for judgment notwithstanding the verdict are denied and the plaintiffs' objections to these motions are sustained. The defendants' motion for remittitur is denied and the plaintiffs' objection to this motion is sustained, except that the parties have leave to address further the defendants' claim that they are entitled to a set-off or a remittitur based on the allegations of their fourth special defense.
So ordered this 25th day of October 2010.