Opinion
No. NHSP 085756
February 15, 2008
MEMORANDUM OF DECISION
This is a Motion to Open and Set Aside Judgment. In support of the motion, the plaintiff has alleged that its attorney, Thomas Sansone, and its Director of University Properties, David Newton, did not have the authority, actual or apparent, to agree to one of the terms of the stipulated judgment.
PROCEDURAL HISTORY
On May 17, 2006, the plaintiff filed the summary process action (eviction) seeking possession of the shed. The plaintiff alleged that any right or privilege the defendant had to possession of the shed no longer existed. On June 2, 2006, the defendant filed an answer and seven special defenses.
The shed (at times referred to as the rear room or hut) is a cinder block structure which has been attached to the rear of 266 College Street for approximately fifty years.
On June 14, 2006, the defendant filed a Motion to Stay the Summary Process action (eviction). In support of the motion, the defendant asserted that there was a need for judicial determination of the ownership and possessory interests of the parties to the "shed" and the walkway. On June 15, 2006, the plaintiff filed an objection to the motion. On June 19, 2006, the defendant filed supplemental special defenses.
The walkway (at times referred to as the passway) is the area at the rear of 1016-1020 Chapel Street and 266 and 268 College Street.
On July 10, 2006, there was a hearing scheduled on the Motion to Stay. Attorney Sansone and David Newton were present on behalf of the plaintiff. Attorney Krassner and Suzette Franco-Camacho (a member of the LLC) were present on behalf of the defendant. The parties met with the Housing Specialist (mediator) in an effort to negotiate an agreement. The hearing was rescheduled for August 10, 2006. Between July 10, 2006, and August 10, 2006, the parties continued the negotiations.
On August 10, 2006, the parties and the same representatives appeared for the hearing on the motion and continued negotiations at the courthouse. Later that morning, the parties appeared before the court and reported that they had reached an agreement. Attorney Sansone reported to the court (Doherty, J.) that they had reached an intricate stipulation which had effectively resolved the summary process action and not just the Motion for Stay. The court then canvassed Ms. Franco-Camacho and thanked the parties for reaching a complex and detailed agreement. The court also commented that it had required some concession and accommodation on both sides, accepted the agreement and entered judgment in accordance with the terms and conditions of the stipulation (defendant's exhibit #C).
Stipulation — Attachment #1 (plaintiff's exhibit #6).
On August 15, 2006, the plaintiff filed this Motion to Open and Set Aside the Judgment. The defendant objected.
The court conducted a hearing over several months (due to the conflicts in the schedules of counsel). The plaintiff presented two witnesses: 1) Bruce Alexander, Vice President for New Haven and state affairs and Campus Development; and 2) David Newton, Director of University Properties. Thirteen exhibits were admitted. The defendant presented six witnesses: 1) Attorney Krassner, counsel for the defendant; 2) Attorney Sansone, counsel for the plaintiff; 3) Attorney Yolen, counsel for Antonellis (previous owner of 266 College Street); 4) Attorney Robinson, Vice President and General Counsel for Yale; 5) John Rush, Director of Operations; and 6) Suzette Franco-Camacho, member of Out of the Box, LLC. Over seventy exhibits were admitted. (Some were later determined to be duplicates.)
The court also conducted a visit to the site.
FACTS
There has been an ongoing dispute concerning the shed and walkway at the rear of 266 College Street. There had also been a dispute concerning the Roomba lease. The following parties have been involved in the dispute: 1) Chapel Company, a subsidiary of Yale University; 2) Yale University, the plaintiff; 3) Out of the Box, LLC, the defendant; 4) Cutting Edge Concepts; 5) George Scarveles, representative and agent for Asimina Antonellis, individually and as trustee of the Testamentary Trust re: Konstantinos Antonellis (hereinafter Antonellis), (previous owners of 266 College Street); and 6) Joel Schiavone, previous owner of 1016-1020 Chapel Street.
Roomba was a restaurant operated at 1044 Chapel Street by Cutting Edge Concepts of which Suzette Franco-Camacho was a member.
In November 2001, Antonellis and Out of the Box, LLC entered into a ten year lease for the premises at 266 College Street. This lease included an option for successive renewals and an option to purchase.
The Camachos had leased premises at 1044 Chapel Street for Roomba. They first dealt with Joel Schiavone and then with the plaintiff after it had purchased several properties from Mr. Schiavone and FDIC in 2000. The defendant then had a lease with Yale to operate the restaurant, Roomba. Yale offered the first lease renewal in February 2003.
Mr. Newton stated that, over seven years, there were negotiations over license agreements. These included between Antonellis and Yale, Out of the Box, LLC and Yale and Antonellis, Yale and Out of the Box. The discussions over time included the Roomba lease, and the shed and the walkway at the rear of 266 College Street. The proposals ranged from as long as ten years to as short as one year.
Roomba was located approximately 200 yards across the walkway from the rear of 266 College Street. The parties were unable to come to a lease agreement and Roomba operated on a month-to-month lease for approximately two years until it closed on June 17, 2007, one month after the summary process action was filed.
Yale had previously brought an action to quiet title against Antonellis. That action was resolved when Antonellis gave a quit claim deed to Yale dated January 26, 2005.
In December 2004 there was a proposed license agreement between Yale and Antonellis concerning the use of the shed (defendant's exhibit #J). In June, 2005, there was another license agreement between Yale and Antonellis concerning the use of the shed for a term of seven years. The terms of the agreement extended to the tenant. The tenant was Out of the Box, LLC (plaintiff's exhibit #2).
Yale offered a license agreement in October, 2005 for use of the walkway to Arturo Camacho and Suzette Franco-Camacho as residents of 266 College Street (plaintiff's exhibit #3). In July 2006, after ownership had been transferred from Antonellis to the Camachos, Yale offered to Out of the Box, LLC a license for the use of the shed attached to the rear of 266 College Street (plaintiff's exhibit #9).
The parties had been negotiating over a license for the shed, walkway, and the Roomba lease for approximately four years. By letter dated July 9, 2004, Mr. Newton notified Suzette Franco-Camacho, in reference to the Roomba lease, that Yale had been having preliminary conversations with someone looking for a site for a boutique hotel and Yale had no idea when a portion of the surface parking lot would be developed. This is the lot behind the walkway and Sherman Alley where Roomba had been located. This letter also included an offer of a two-year extension on the lease. Mr. Newton described the contents as brainstorming and made a reference to a meeting which included Mr. Alexander (plaintiff's exhibit #7).
The licenses offered into evidence by both parties, except one, provided that notices to Yale should be sent to the Director of University Properties (Mr. Newton) and the office of Vice President and General Counsel (Attorney Robinson). The exception was the license for October, 2005, offered directly to Arturo Camacho and Suzette Franco-Camacho (plaintiff's exhibit #3). Prior to the sale of 266 Cottage Street, Yale had requested that Antonellis (landlord) get a waiver, in writing, from the defendant (tenant) of any claims concerning the shed. As early as July 9, 2004, Mr. Newton discussed the lease for Roomba and expressed concerns about the Camachos' plan to open a new restaurant at 266 College Street (plaintiff's exhibit #7). The second restaurant, Bespoke, opened in November, 2006.
The defendant exercised the option to purchase and Antonellis conveyed title on June 1, 2006. This did not appear to have resolved the issue of who had a right to possession of the shed and use of the walkway. Antonellis believed that she had a claim of adverse possession concerning the shed and a prescriptive easement concerning the walkway. The defendant also shared that belief. Therefore, there was an issue concerning the quit claim deed and what had been included in the lease and later the sale of 266 College Street.
There are several stores located at 1016-1020 Chapel Street and one at 268 College Street. These include Raggs, Seychelles, Elm City Fine Stationers, Wave and the Owl Shop. Each tenant has access at the rear of their leased premises to the walkway. No license had been offered concerning the use of the walkway at the rear of the premises of those stores.
The license agreement offered by Yale to Out of the Box, LLC in July, 2006 (after the filing of the summary process action) would have granted a license for a term of one year, August 1, 2006 to July 31, 2007 renewed automatically for successive one year periods. It also provided that either party could give written notice at least sixty days prior to the end of the one-year term of intention not to renew.
During the four years of negotiating over the walkway and the shed, there was a period when Yale did not permit the defendants to use the dumpster at the rear of the premises, and, at the direction of Mr. Newton, Mr. Rush had a gate erected at the rear door of 266 College Street. This effectively blocked the rear door for ingress or egress. This action affected the loan and delayed the opening of the restaurant. Yale referred to the structure as a gate and the defendants referred to it as a "spite fence." (Defendant's exhibit #D.) Mr. Newton stated that they had offered to renew the Roomba lease if the defendant gave up the claims to the shed and the walkway.
The stipulation gave possession to the plaintiff with a stay until August 9,2008. The plaintiff agreed to give a two-year license agreement (term would coincide with the stay) to be renewed annually, buteither party could terminate. If renewed and if the defendant stayed for more than seven years, the defendant would have to pay for the cost of removal of the shed. If the shed were removed prior to the seven years, the plaintiff would bear the cost. The defendant would not waive any claim to adverse possession as to the rear door and pathway.
The parties further agreed that there was no admission as to whether Yale had legal title or the right to possession. The defendant could pursue its claim to possession of the shed and access to the walkway. The plaintiff would not bring an action to quiet title against the defendant, but the defendant could bring such action.
If the defendant brought an action there is nothing in the agreement that precluded Yale from raising special defenses and/or filing a counterclaim or cross complaint.
As Mr. Newton stated, Mr. Alexander felt that Yale's rights had been relinquished forever and that they "gave too much and got too little." Attorney Sansone and Mr. Newton did not believe they had given up any rights, and Attorney Sansone saw the agreement as a two-year break from the long and arduous dispute.
Mr. Rush stated that the Motion to Open had been filed because Yale wanted the Camachos to give up any claim to the walkway.
DISCUSSION
C.P.B. § 17-4 provides that a judgment may be opened and set aside within four months. The plaintiff has alleged that Attorney Sansone and Mr. Newton did not have the authority, actual or apparent, to enter into one provision of the agreement, to wit: paragraph #3 where, during the two-year stay, the plaintiff could not bring a quiet title action (or related claim), only the defendant could.
The plaintiff further modified its claim, asserting that there was no authority for the agreement in its entirety, but the objection was only to paragraph #3. Furthermore, only Mr. Alexander could authorize the agreement.
Actual authority may be expressed or implied. "An attorney who is authorized to represent a client in litigation does not automatically have either implied or apparent authority to settle or otherwise to compromise the client's cause of action." Acheson v. White, 195 Conn. 211, 233 (1995); Coles v. Myers, 128 Conn. 223, 228 (1941).
Implied authority is actual authority, circumstantially proved; it is the authority which the principal intended his agent to possess. It is a fact to be proven by deductions or inferences from the manifestations of consent of the principal and from the acts of the principal and the agent.
Apparent authority is that semblance of authority that a principal, through its own acts or inadvertencies, causes or allows third persons to believe the principal's agent possesses. "The issue of apparent authority is one of fact to be determined based on two criteria; first, it must appear from the principal's conduct that the principal held the agent out as possessing sufficient authority to embrace the act in question or knowingly permitted the agent to act as having such authority, and second, the party dealing with the agent must have been acting in good faith reasonably believed, under all the circumstances that the agent had the necessary authority to bind the principal."Hudson United Bank v. Cinnamon Ridge Corporation et al, 81 Conn. App. 557, 573, 845 A2d 417 (2004).
"The lawyer-client relationship is one of agent-principal."Johnson v. Schmitz, 237 F. Supp. 2d 183 (Conn. 2002) "The nature and extent of an agent's authority is a question of fact for the trier where the evidence is conflicting or where there are several reasonable inferences which can be drawn." (Internal quotation marks omitted.)Maharishi School of Vedic Sciences, Inc. (Connecticut) v. Connecticut Constitution Associates Limited Partnership, 260 Conn. 598, 606, 799 A.2d 1027 (2002).
Attorneys at law are agents of their clients and can bind their clients in legal matters. Butler v. Butler, 1 Root 275 (Conn. 1791). The common law rule of agency is that the actions of an agent, who is acting for a disclosed principal, are, as a matter of law, actions of the principal. Rich-Taubman Associated v. Commissioner of Revenue Services, 236 Conn. 613, 620-21, 674 A.2d 805 (1996).
"Although the discussion to settle a case rests with the client, courts will presume that an attorney who enters into a settlement has the authority to do so. A client who seeks to set aside a settlement entered into by his attorney bears the burden of proving by affirmative evidence that the attorney lacked authority." In re Arther Management, Inc., 91 F.3d, 326, 329.
The plaintiff, Yale, has the burden of showing that Attorney Sansone was not authorized to enter into the agreement on August 10, 2006. Attorney Sansone has been a lawyer since 1985 and a partner at a major law firm since 1993. He has represented a variety of clients including lending institutions, small businesses, insurance carriers, utility companies and, recently, individuals. He has represented the plaintiff for approximately ten years.
Attorney Sansone was hired by Attorney Robinson, Vice President and General Counsel at Yale since 1986. He has been involved in the matter concerning the shed and the walkway from the beginning. This included negotiations between Chapel Company and Antonellis, Yale and Antonellis, Yale, Antonellis and Out of the Box, LLC, and Yale and Out of the Box, LLC.
The negotiations between Yale and Out of the Box, LLC continued after the filing of the summary process action and up until the settlement agreement on August 10, 2006. Subsequent to his filing the motion to set aside and vacate judgment, he continued to represent Yale, including filing a new action against the defendant for trespass.
During the many years of negotiations, Attorney Robinson, who hired Attorney Sansone, never gave any instructions to Attorney Sansone, never received any reports or updates on the negotiation, never made any inquiry about the negotiations and never read the stipulation. The by-laws, approved June 1, 2006, permitted delegation of authority, and Attorney Robinson gave Attorney Sansone free reign.
The plaintiff alleged that only Bruce Alexander could authorize the agreement. However, Mr. Alexander never saw the shed, met with Suzette Franco-Camacho once and encountered Arturo Camacho on the street once. There was voluminous correspondence, including letters and emails between Attorney Sansone and Attorney Krassner (defendant's attorney), Mr. Newton and Suzette Franco-Camacho, Mr. Newton and the representative of Antonellis and Attorney Krassner and the representative of Antonellis.
Suzette Franco-Camacho sent an email to Mr. Alexander. The date at the bottom reads October 27, 2006. However, it was never clarified when she had sent the email. The letter states at the beginning as follows: "I write to you at the risk of asking for your involvement on an issue that is most certainly below your concern." The substance of the letter was the easement concerning the walkway. She also referenced that Mr. Newton would offer a license for personal use from the residence as opposed to use from the restaurant. She further asked for everyone to step back and she requested ten minutes of his time (plaintiff's exhibit #5).
Mr. Alexander and Attorney Robinson delegated their authority. Mr. Newton had approximately fifty-five contacts with the defendants and Attorney Krassner had between fifty and one hundred contacts including in person and correspondence. These all involved the Roomba lease, the attached shed and the walkway. Mr. Newton and Attorney Sansone were involved in the negotiations over that time period.
Furthermore, Yale has continued to demonstrate its confidence in Attorney Sansone as he continues to represent it in new matters.
Mr. Newton forwarded a few of the numerous emails blind-copied to Mr. Alexander. Mr. Newton accompanied Attorney Sansone to court on July 10, 2006 and August 6,2006. Mr. Newton stated that he expected negotiations at court, and Attorney Sansone stated that he negotiated in good faith. He also stated that he believed he had the authority to settle the action.
The plaintiff presented conflicting evidence as to the lack of authority, exceeding the given authority and given authority for some of the agreement, but not all of it.
CONCLUSION
The court weighed the evidence (testimonial and documentary) and has assessed the credibility of the witnesses.
A stipulated judgment has been defined by our Supreme Court as a contract of the parties acknowledged in open court and ordered to be recorded by a court of competent jurisdiction, Gillis v. Gillis, 214 Conn. 336, 339, 572 A.2d 323 (1990), and it will not be set aside unless it is shown that the stipulation was obtained by fraud, accident or mistake. Bryan v. Reynolds, 143 Conn. 456, 460-61; 123 A.2d 192 (1956).
The parties had been involved in negotiations for over four years over the shed, walkway and Roomba lease. Attorney Sansone and Mr. Newton were involved in the negotiations during that time. Attorney Robinson and Mr. Alexander, by their actions or lack thereof, left the parties to believe that they were negotiating in good faith and Yale would be bound by the actions of its agent.
It is unclear whether Attorney Sansone failed to properly explain the agreement, or Mr. Alexander failed to understand it, or both. Attorney Sansone at the hearing first stated that he was authorized and then later stated that he was not authorized as to paragraph #3 of the agreement.
Most of the cases challenging authority of counsel to enter into an agreement arise when one party is seeking to enforce the agreement and has to prove that there was authority. In this case, the plaintiff moved to set aside the agreement and therefore had the burden of showing lack of authority.
It is well established that authority of an agent cannot be proved by declarations of the agent. Cole v. Myers, 128 Conn. 223 (1991). Likewise, lack of authority cannot be proved by declarations of the agent. Rather, it is the facts proven by deductions or inferences to be drawn.
Under the facts and circumstances of this case, the court concludes that the plaintiff failed to show that Attorney Sansone lacked authority. Instead, the evidence leads to the conclusion that Attorney Sansone had apparent authority to enter into the stipulation.
Accordingly, the Motion to Open and Set Aside is denied.
Attachment #1