Opinion
FSTCV166028185S
11-21-2017
U.S. BANK NATIONAL ASSOCIATION v. John J. DIMENNA, Jr.
UNPUBLISHED OPINION
OPINION
POVODATOR, J.
Background
The defendants Merritt, Kelly and DiMenna were the three principal members of Seaboard Realty, LLC (generally referred to as Seaboard Realty or Seaboard), a Stamford-based real estate company which maintained a portfolio of commercial and residential properties. Defendant DiMenna was, in practice, generally responsible for the day-to-day operations of Seaboard. He also generally was responsible for locating investment properties and obtaining/arranging debt financing for the properties to be purchased. The moving defendants, defendants Merritt and Kelly (hereafter sometimes simply referred to as the defendants) were less directly involved in the ongoing business, but were often involved in raising capital through investors and otherwise played a role, if less prominently, in corporate affairs. In a formal sense, Seaboard Realty’s commercial and residential properties were managed by Seaboard Property Management, Inc., a corporation owned and controlled by defendant DiMenna.
On or about March 28, 2013, a purchase and sale agreement was entered into by Seaboard Realty to purchase property located at 300 Main Street in Stamford, Connecticut. The purchase was accomplished in large part by the assumption of an $11,500,000 mortgage and note held by the Plaintiff.
Seaboard Realty created 300 Main Street Associates, which was incorporated in Delaware, to take title to the property, and had three members: Seaboard Residential, LLC (" Seaboard Residential"), which owned a 90% interest in 300 Main Street Associates; 300 Main Street Member Associates, LLC, which owned a 9% interest in 300 Main Street Associates; and 300 Main Management, Inc., which owned a 1% interest in and served as the managing member of 300 Main Street Associates. Seaboard Realty acted as the managing member of 300 Main Street Member Associates and Seaboard Residential, and held a twenty-five percent ownership interest in each entity.
In dispute is the contention of the moving defendants that although defendant DiMenna advised them that the transaction to acquire 300 Main Street included the assumption of the $11,500,000 mortgage, he never told them that the lender was requiring their personal guarantees. The moving defendants contend that they would never have agreed to purchase the property had they known that their personal guarantees were required. More directly, they claim that they never executed the guaranty documents, notwithstanding their purported (seemingly notarized) signatures.
The defendants also contend that 300 Main Street Associates was represented by the law firm of Berkowitz, Trager & Trager, LLC (" BTT") with respect to this transaction, and that they (the moving defendants) were not involved in the negotiation of the purchase and sale or the note and mortgage assumption, and had no contact or communications with BTT about the transaction. There were two attorneys from BTT who worked on the 300 Main Street transaction, Steven Siegelaub and Elizabeth Brower, and attorney Siegelaub is claimed to have confirmed that he had no communications with the moving defendants regarding this transaction, and had not spoken with them for years prior to the transaction.
The purchase of the property was completed on September 10, 2013. The defendants contend that defendant DiMenna did not provide any of the closing documents, including the guaranty, to the moving defendants. Based on the document itself, the guaranty was purportedly signed by the moving defendants on July 22, 2013, several weeks before the closing. As already mentioned, the moving defendants claim that the signatures on the guaranty are not their signatures, and they further claim that they did not authorize anyone to sign the guaranty on their behalf.
Following the purchase of the property, 300 Main Street Associates made a number of distributions (about nine) between October 2013 and October 2015 to the members of Seaboard Residential and 300 Main Street Member Associates. The distributions received by Seaboard Realty as a result of its membership interests in Seaboard Residential and 300 Main Street Member Associates were distributed 50% to DiMenna, 25% to Merritt and 25% to TLK Partners, LLC (an entity created by defendant Kelly such that it received distributions that otherwise would have gone to him personally).
While the scope of financial machinations is unclear and perhaps in dispute, it is relatively clear, and undisputed for purposes of these motions, that Mr. DiMenna engaged in financial improprieties (involving this project and other properties) leading to the filing of bankruptcy proceedings involving these entities (and others) and this project (among others)- in turn resulting in a consolidated bankruptcy case, In re Newbury Common Associates, LLC, D.N. 15-12507 (LSS), pending in the United States Bankruptcy Court for the District of Delaware.
Over time, the extent of irregularities and improprieties became more apparent, including some claimed admissions by Mr. DiMenna of wrongdoing. Numerous lawsuits have been commenced, asserting claims against the moving defendants and others, whereby parties claiming to have been financially harmed have sought to recover from allegedly responsible parties (other than, or in addition to, defendant DiMenna).
The defendants have moved for summary judgment claiming that they did not guaranty the obligations that the plaintiff seeks to enforce, and that they were not unjustly enriched. The plaintiff has cross moved for summary judgment as to its claims based on the claimed existence of a guaranty signed by the moving defendants and based on a claim of unjust enrichment.
Legal Standards
The court will not recite the well-established standards for summary judgment except as required in a particular context. The court will note its somewhat standard observation of the asymmetry between trial and summary judgment. A plaintiff has a burden of proof- usually, preponderance of the evidence- at trial, but a defendant seeking summary judgment on that same claim has the burden of proving, effectively to a certainty (no material issue of fact), that the plaintiff does not have any right to relief under the claim being advanced. Thus, not only is there a higher burden of proof, but there also is the often conceptually difficult obligation to prove a negative.
In this case, there is a further layer of asymmetry due to the existence of cross motions. For a defendant to prevail on summary judgment, he must either negate an essential element of a plaintiff’s cause of action or establish the applicability of a cognizable complete defense (to the requisite level of absence of material issue of fact). For the plaintiff to prevail, it must establish every essential element of its claim and must negate every defense applicable to that claim, all to that same standard of absence of material issue of fact, in order to prevail.
Discussion
I. The defendants’ motion
A. Guaranty issues
In moving for summary judgment, the defendants assert that " [t]here is clear, undisputed evidence that the Defendants did not have any knowledge of the Guaranty and that they did not sign the Guaranty." They rely upon their own assertions that they did not sign the documents, and further advance the contention of a handwriting expert that the signatures were not those of the defendants.
Subtle distinctions can make a difference. The defendants contend that the persons who ostensibly notarized the defendants’ signatures never actually did so with the defendants present. More accurately: At least on some occasions, the language used by those individuals referred to a lack of recollection of instances where the defendants were present (and actually signing) when the signatures were being notarized. A lack of recollection is not an affirmation of negation; it may approach negation but is at least somewhat equivocal, not negating the possibility that the non-recalled event may have occurred.
If a witness does not recall an event happening, that might be persuasive evidence (at trial) that the event did not occur but it would not be without some level of ambiguity/uncertainty; it does not establish the affirmative of the negative proposition (that the event did not happen). A cardinal rule of summary judgment jurisprudence is that the evidence is to be construed in favor of the non-moving party, which has an inherent corollary that the non-moving party is entitled to the benefit of all reasonable/favorable inferences. The distinction between " it never happened" and " I don’t recall it ever happening" is that the latter formulation leaves open the possibility of the event having occurred, and the non-moving party is entitled to the benefit of that open-ended quality.
Further, there is the issue of the inherent significance of a notarized document. The defendants may well be able to inflict mortal injury to the plaintiff’s claim that there is guaranty-based liability, including discrediting the existence of notarized signatures, but there remains the undisputed fact that the signatures appearing on the document reflect that they were notarized. The act of notarization, in and of itself, constitutes a form of authentication of the signatures being notarized. Evidence that the notarizations did not take place concurrent with the signatures being affixed (i.e., in the presence of the notary) may undermine the weight to be given to the signatures but does not negate the existence of those notarized signatures. It establishes the parameters of a material issue of fact.
An acknowledgment before a notary public " serves to authenticate the instrument by furnishing formal proof, through the action of the public official taking acknowledgment, that the instrument was actually executed by the person whose signature appears on it." Commercial Credit Corp. v. Carlson, 114 Conn. 514, 517, 159 A. 352 (1932). Given such strong indication that the signature on the affidavit was genuine, we cannot find that the trial court abused its discretion in crediting Siedlarz-Jones’ authentication testimony and in admitting the adjustable rate note. Webster Bank v. Flanagan, 51 Conn.App. 733, 738-39, 725 A.2d 975, 980 (1999).
Here, the evidentiary challenge to the notarization procedure actually followed might necessitate elimination of the characterization of " strong" as a modifier (in the quoted passage), but the notarized nature of the signatures is at least some indication that the signatures were genuine or authorized. This is analogous to the situation in habeas corpus cases in which a defendant relies upon the fact that a witness who testified adversely at trial subsequently recants his/her testimony: " [A] jury would not be required, as a matter of law, to credit [the witness’] recantation" Gould v. Commissioner of Correction, 301 Conn. 544, 569, 22 A.3d 1196, 1211 (2011), absent some indication of impossibility associated with the earlier testimony.
The defendants rely on 73-75 Main Ave., LLC v. PP Door Enterprise, Inc., 120 Conn.App. 150, 167, 991 A.2d 650, 660 (2010), and the analysis in that decision does support the contentions being advanced. There are distinctions, however. In 73-75 Main, the court was addressing the totality of evidence presented at trial, not the asymmetric burden of summary judgment where there is a further compounding factor that the non-moving party has no burden of presenting evidence until the moving party has established, at least on a prima facie level, the absence of a material issue of fact. In the current case, the issue is not merely an unidentified (and non-testifying) witness but rather an identified notary who notarized (at least facially) the signatures now being disavowed. The court cannot weigh evidence, and while the defendants rely on the perhaps overwhelming evidence that the signatures were not theirs, there remains the facial self-authenticating quality of notarized signatures. The analysis in 73-75 Main provides no basis for total disregard of the presence of notarized signatures. (Note that the notaries do not claim that the notary-signatures were not theirs- they are not contesting the validity or authenticity of their signatures, but instead are casting doubt on the notarization process with the presumption (requirement) that the documents were signed in their presence (immediately before the notary notations were affixed).)
The defendants attempt to refute the claim that they ratified the guaranty, even if they did not initially sign it. They contend that the plaintiff cannot establish the elements for such a claim:
In fact, the Plaintiff cannot even satisfy the first essential element for proof of ratification, which is that the action allegedly ratified was done for the Defendants. See Restatement (Second), 1 Agency, § 82, comment a (1958). It defies logic to suggest that personal guarantees for $11,500,000 somehow were ‘for’ the Defendants or benefited them in some way. On the contrary, the Guaranty exposed the Defendants to grave financial consequences.
This argument proves too much, effectively negating virtually all guaranties executed by the principal(s) of a business entity. (Are the principals not likely to be the prime candidates for signing a guaranty of a business entity’s debt?) The defendants were not complete strangers to the activities of the Seaboard entities and investments, akin to an individual who may not have any inkling of what is being done by his/her spouse. The spousal cases cited by the defendants, in this regard, are clearly distinguishable, as a spouse often is a total stranger to the subject transaction and enterprise. Here, particularly given the existence of a history including guaranteed transactions, at least some of which are not claimed to have been anything but bona fide, and the role played by the defendants in the enterprise as a whole, there is no compelling reason to apply the analog of an " innocent spouse" approach to whether a guaranty is " for" the benefit of the guarantor.
The court notes that it does not need to analyze the plaintiff’s claims of ratification and equitable estoppel in great detail, since they only come into possible operation if the defendants were to establish the invalidity of their signatures to the requisite level of proof (no material issue of fact), and since they have not done so, it is not essential to consider whether the moving defendants have negated ratification and estoppel to the requisite level of proof.
Ratification and equitable estoppel are discussed in some detail in connection with the plaintiff’s motion, since ratification or equitable estoppel, if adequately proved, would provide the plaintiff with an alternate basis for establishing liability.
The issue is not the strength of the defendants’ arguments but whether they are conclusive, eliminating any material issue of fact. The defendants have not reached that level with respect to their attempted negation of any possible liability as guarantors.
B. Unjust Enrichment
The court again returns to its starting point of asymmetry, with particular emphasis on the conceptually difficult obligation to prove a negative. A claim based on a " legal" theory typically has a limited number of generally-well-defined elements that must be established; an equitable claim of unjust enrichment is based on consideration of all pertinent equitable considerations which can vary from case to case. In order to negate a claim of unjust enrichment, the moving party must conclusively negate any possible equitable basis for a recovery. While the notion of a benefit or enrichment might be perceived to be a relatively discrete element, everything else relating to a balancing of the equities and any claim of unjustness would seem to defy boundary-drawing.
Thus, in connection with the discussion of unjust enrichment, the defendants argue (at page 25) that " [t]he Plaintiff has no evidence that monies from the operation of the Property were used to pay distributions to investors in Seaboard Residential and 300 Main Street Member Associates." The plaintiff need not refute that statement (i.e., offer any evidence) unless and until the defendants establish the negative statement in an affirmative sense. The plaintiff has no burden of offering evidence until the defendants establish that there is undisputed evidence (no material issue of fact) that no " monies from the operation of the Property were used to pay distributions to investors in Seaboard Residential and 300 Main Street Member Associates." Therefore, if, as the defendants contend, the financial trail is muddied if not totally indecipherable because of what Mr. DiMenna did, e.g., " transferring funds from one entity that had cash to another that needed it, " it may be a difficult burden for the plaintiff to unravel such conduct at trial, but it is the defendants’ burden to establish the negative here, in an affirmative sense, if they seek the benefit of summary judgment.
In discussing cases such as Geriatrics, Inc. v. McGee, No. HHBCV155016441S, 2017 WL 715756, (Conn.Super.Ct. Jan. 11, 2017) , and citing specific provisions in the Restatement (Third), Restitution and Unjust Enrichment (2011), the defendants are attempting to particularize a concept that in large measure defies line-drawing.
A pervasive problem, affecting reliance on this cited case and others identified by the parties, is that trial court decisions after a trial on the merits may identify applicable principles but shed little or no light on how they can be applied- if at all- in the context of summary judgment.
A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit [that] has come to him at the expense of another ... With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case [in which] the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard ... Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy ... Recovery [for unjust enrichment] is proper if the defendant was benefited, the defendant did not [perform in exchange] for the benefit and the failure [to perform] operated to the detriment of the plaintiff ... [I]t is contrary to equity and good conscience for the defendant to retain a benefit which has come to him at the expense of the plaintiff. (Internal quotation marks and citations, omitted.) Hospital of Central Connecticut v. Neurosurgical Associates, P.C., 159 Conn.App. 87, 96-97, 121 A.3d 750, 756 (2015).
In discussing language that they quote from the Restatement, the defendants state:
The commentary to § 48 is consistent with Connecticut law regarding unjust enrichment. Particularly, in order to establish unjust enrichment, a plaintiff must prove not only that the defendant received a benefit, but that " the defendant did not pay for the benefit and the failure of payment operated to the detriment of the plaintiff." Russell v. Russell, 91 Conn.App. 619, 637, cert. denied, 276 Conn. 924 (2005) (internal quotation marks omitted). Thus, for an indirect benefit to constitute unjust enrichment, the defendant must not have paid for the benefit and the benefit must be at the expense of the plaintiff.
There does not appear to be any doubt as to whether the defendants received benefits, to the extent there may have been distributions of funds associated with the 300 Main Street project- but when and how did they pay for such benefits, especially if the distributions contained funds that should not have been subject to distribution in the regular course of the enterprise? Is there at least a factual issue as to whether any such distributions may have deprived the debtor entity of the ability to repay its debt to the plaintiff? And to the extent that defendant Kelly did not directly benefit, is any indirect benefit to him at least a factual issue? (Or is unjust enrichment to be so readily circumvented, by allowing creation and transfer of interests to a nominally-separate entity, such as the TLK entities identified and described in the defendants’ brief?)
Defendant Kelly does not deny receipt of any benefit, but rather emphasizes the indirectness of the benefit and its modest amount: " With respect to Kelly any benefit is even more remote. The only monies he received from 300 Main Street Associates flowed through Seaboard Realty to TLK Partners, LLC. Kelly Aff. ¶ 13. Additionally, he received a minimal sum of money as a 0.24% owner of TLK Seaboard Investments, LLC, an entity which made an investment of $540,000 in 300 Main Street Member Associates, all of which was lost due to the bankruptcy." The modest and/or indirect amounts claimed to have been received do not refute unjust enrichment but seem to go to the question of " how much" which is a merits-based inquiry.
Focusing on the language quoted from the defendants’ brief relating to payment for benefits: Have they established, to the requisite level of proof (no material issue of fact), that they did pay for the distributions? And, to the extent that some of the distributions likely were improper if not illegal, are they claiming that they have established that they paid for improper/illegal distributions? (Or do they claim that they have they proven that none of the distributions were tainted?)
The defendants also seem to overstate the implications of payment for a benefit. It is not simply a matter of whether any consideration was paid, but can also encompass whether the amount paid was commensurate with the benefit contemplated. If a buyer pays $5.00 instead of $500 due to a misplaced decimal point or because additional services (not originally contemplated) were provided, there may well have been a payment for the benefit received, but that would not necessarily preclude a claim of unjust enrichment.
The defendants attempt to rely on the fact that the plaintiff did not advance any funds, directly, as a result of the transaction by which the obligor for whom the guarantees allegedly were provided became the obligor:
The Plaintiff did not advance any money to 300 Main Street Associates. That entity simply assumed an existing note and mortgage and paid the note until July 2015 when it stopped making payments. See [amended complaint] at ¶ 50 (Entry 122.00). The Plaintiff received what it was entitled to until July 2015 and any distributions made prior to that date cannot be to the Plaintiff’s detriment.
If the debtor had been drained of all liquid and " liquidatable" assets prior to July of 2015 (particularly if by virtue of distributions, some or all of which may have been improper), would that conduct not have been to the detriment of the creditor left with a drained (insolvent) debtor which, not surprisingly, could not make any payments thereafter? Would that not at least arguably constitute a detriment? How does this become an issue subject to resolution via summary judgment, based on the record before the court?
The defendants have identified issues that may exist, but have not established any defense or fatal flaw to the requisite level of absence of material issue of fact. The defendants have not established that, as a matter of law, they are entitled to judgment on the guaranty claims and they have not established that, as a matter of law, they are entitled to judgment on the unjust enrichment claim.
II. The plaintiff’s Motion
As noted at the outset, the burden on the plaintiff is, in a sense, substantially higher than that on the defendants, with respect to summary judgment. Not only must the plaintiff establish the validity of its claims, to the requisite level of certainty (no material issue of fact), but it also must negate any possible defenses, to a similar level of certainty. Given that procedural backdrop, it is not clear why the plaintiff starts with arguing that the notarized signatures on the documents, alone, presumptively entitles the plaintiff to summary judgment- the record is replete with references to the claims (and supporting evidence) that the moving defendants did not actually sign the documents notwithstanding the notarization, which would appear to create an insurmountable factual issue (insurmountable for purposes of summary judgment). Simplistically: If, as already discussed above, there is a material factual issue relating to the signatures on the guaranty documents, how is that any less of a material factual issue when the reverse position is articulated by the plaintiff?
The plaintiff then argues that notwithstanding any possible factual issue as to authenticity of signatures, the plaintiff is entitled to judgment based on ratification and/or equitable estoppel. Although the plaintiff accurately cites cases describing the concepts of ratification and equitable estoppel, there is a paucity of analysis as to how the court can address such issues via summary judgment.
For example, on page 25 of its brief, the plaintiff states that " a party’s intent to ratify a transaction can be inferred from the party’s conduct." The plaintiff fails to explain how it is possible to draw a permissible inference without impermissibly treading into factfinding. The court is required to view the evidence in a light most favorable to the non-moving party, which precludes drawing inferences against the non-moving party.
See, e.g., Buell Industries, Inc. v. Greater New York Mutual Insurance Co., 259 Conn. 527, 558, 791 A.2d 489 (2002) (" We acknowledge that [o]n summary judgment the inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion." (Internal quotation marks and citation, omitted.))
The citation to trial court decisions such as the recent decision in HSBC Bank SA, N.A. v. D ’Agostino, 2015 WL 3797990, Judicial District of Stamford-Norwalk, Stamford, FSTCV096002754S (May 21, 2015), may be helpful in terms of the underlying principles, but is of no value with respect to applicability of those principles in the present summary-judgment context- it was a decision based on a trial on the merits. A memorandum of decision relating to a trial requires the court to weigh the evidence and draw inferences as appropriate; those are forbidden activities in the context of summary judgment. The plaintiff does not point to an explicit act of ratification, and reliance on merely-permissible inferences, adverse to the non-moving party, is an inadequate basis for summary judgment.
Less directly, the same flaws apply to the claim of equitable estoppel. Although the principle of equitable estoppel does not inherently invoke the drawing of inferences, the argument made by the plaintiff relating to authority of purported agents- actual or apparent- does appear to rely on inferences. Thus, on page 28 of its brief, the plaintiff cites authority for the proposition that " whether the principal intended that the agent have authority may be inferred from ‘prior dealings or an ongoing relationship.’ " There may well be numerous if not countless bases for inferring authority, but the premise of drawing an inference favorable to the moving party, rather than viewing the facts in a manner favorable to the non-moving party, is contrary to summary judgment jurisprudence.
The reliance on cases such as 73-75 Main Ave., LLC v. PP Door Enterprise, Inc., 120 Conn.App. 150, 991 A.2d 650 (2010), is again overstated; similar to the earlier observation relating to cases cited for ratification, the case may be informative as to the underlying principles but does not address the ability to utilize the principles in the summary judgment context. (The relevant discussion in 73-75 Main was in the context of a discussion of the sufficiency of the evidence to support the court’s findings, with the court reversing the judgment as to one defendant based on inadequate evidence.)
Further, to the extent that there is an element of equity inherent in equitable estoppel- that it is somehow inequitable to allow a party to avoid the consequences of misleading behavior- that implicates a weighing of facts or balancing of equities, which is essentially a factfinding-type function (in addition to the inferences that would need to be drawn, given the limited if not non-existent direct, relevant conduct of the moving defendants). Summary judgment requires a determination by the court that, based on the undisputed facts, the moving party is entitled to judgment as a matter of law. However compelling the circumstances may appear to be to the plaintiff, and however compelling they may be in reality, the court does not believe that the plaintiff has established that no rational factfinder could find otherwise than in favor of the plaintiff, based upon the record before the court.
The other claim advanced by the plaintiff is unjust enrichment. A claim of unjust enrichment necessarily implicates a weighing of equities and facts, something that cannot be undertaken in the context of summary judgment. As quoted earlier:
A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit [that] has come to him at the expense of another ... With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case [in which] the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard ... Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy ... Recovery [for unjust enrichment] is proper if the defendant was benefited, the defendant did not [perform in exchange] for the benefit and the failure [to perform] operated to the detriment of the plaintiff ... [I]t is contrary to equity and good conscience for the defendant to retain a benefit which has come to him at the expense of the plaintiff. (Internal quotation marks and citations, omitted.) Hospital of Central Connecticut, supra .
Given the breadth and flexibility of the doctrine, and the required determination of whether " it is contrary to equity and good conscience for the defendant to retain a benefit which has come to him at the expense of the plaintiff, " there is necessarily a weighing of evidence (all circumstances and conduct), an impermissible exercise in the context of summary judgment.
There is a further " legal" impediment to seeking summary judgment on a claim of unjust enrichment in a situation such as this. Unjust enrichment only applies when there is no controlling contract- the theories are generally/essentially mutually exclusive; Hylton v. Gunter, 157 Conn.App. 358, 364-65 (2015). In Hylton, the court quoted language from a Supreme Court decision: " Indeed, lack of a remedy under the contract is a precondition for recovery based upon unjust enrichment." Gagne v. Vaccaro, 255 Conn. 390, 401, 766 A.2d 416, 424 (2001). If " lack of a remedy under the contract is a precondition for recovery based upon unjust enrichment, " then absent establishment of that precondition, the plaintiff would/could not be entitled to recover.
Even if not truly a precondition (in a technical sense), necessarily implicit in any judgment of unjust enrichment is a determination that there is no controlling contract, a position directly contrary to the position actually advanced by the plaintiff. It appears to be indisputable that there is a factual issue as to the existence of a controlling contract (the disputed guarantees), and it does not appear that for purposes of this motion, the plaintiff is willing, in effect, to abandon the guarantee claims in favor of a judgment based on unjust enrichment. In other words, the court does not understand how it can grant summary judgment on an unjust enrichment claim while preserving the plaintiff’s right to pursue contract-based claims in the same proceeding, with the potential for inherently-contradictory judgments.
For all of these reasons, the plaintiff’s motion for summary judgment also must be denied.
Conclusion
Although far from a universal truth, the existence of cross motions for summary judgment often is an indication that neither party is entitled to summary judgment, for the simple reason that each party’s motion tends to establish factual issues that preclude granting the other party’s motion; cf. Valente v. Securitas Security Services, USA, Inc., 152 Conn.App. 196, 201, 96 A.3d 1275 (2014) (initial motion for summary judgment was denied; subsequent cross motion for summary judgment was granted).
Although not formally acknowledged, it is effectively undisputed that there is a dispute as to the validity of the signatures of the moving defendants on the guarantee documents that form the basis of the plaintiff’s contract claim. Particularly given notarized signatures, the court cannot treat the defendants’ proffer of denials and testimony of a handwriting expert as conclusive. The denials and expert testimony might be sufficient for purposes of meeting an evidentiary burden at trial; see, e.g., State v. Seeley, 326 Conn. 65, 74 (2017); but in light of the self-proving quality of notarized signatures, they cannot eliminate the factual-issue quality of the defendants’ position. The plaintiff’s claims of ratification and equitable estoppel necessarily rely upon inferences, and the court cannot rely- effectively conclusively- on permissible inferences that are unfavorable to the non-moving party. (The defendants’ denials of ratification and equitable estoppel do not eliminate the permissible inference quality of the plaintiff’s contentions in these respects.)
Conceptually, the court has difficulty with the notion of deciding unjust enrichment claims by way of summary judgment, given the need to balance and weigh the equities arising from the overall circumstances and conduct of the parties. To the extent that the defendants rely upon the absence of any benefit, they have not demonstrated such to the necessary level of certainty (no material issue of fact); at most, they have identified the difficulty that the plaintiff may encounter in proving that they were benefited, and the extent to which they were benefited. For purposes of summary judgment, the burden on the defendants would be to establish the negative proposition, and the likely difficulty in untangling financial transactions and the commingling of funds allegedly done by defendant DiMenna does not affirmatively establish that negative proposition. (They also must establish that it would not be unfair to deny the plaintiff relief, under the circumstances.) Conversely, to the extent that the plaintiff claims entitlement to relief under the theory, there is the impermissible need to weigh and balance the circumstances and equities, compounded by the claimed existence of contractual rights controlling the situation, which also is a matter of factual dispute (with the perhaps bizarre observation that it is the plaintiff which is arguing for the existence of a contract which would thereby preclude recovery under this theory).
For all these reasons, then, the court denies both motions for summary judgment.