author: Foti, J.

text:
    South Farms Associates Limited Partnership v. J. William Burns, Commissioner of Transportation
    (12078)
    Foti, Laveey and Freedman, Js.

      Argued March 29
    decision released July 5, 1994

      William H. Champlin III, with whom, on the brief, was Kristine D. Ragaglia, for the appellant (substitute plaintiff).

      Robert T. Morrin, assistant attorney general, with whom, on the brief, were Richard Blumenthal, attorney general, Kenneth N. Tedford, and Lawrence T. Widem, assistant attorneys general, for the appellee (defendant).
   Foti, J.

This is an appeal by the substitute plaintiff, Martin W. Hoffman (hereinafter plaintiff), the trustee in bankruptcy for the plaintiff, South Farms Associates Limited Partnership (South Farms), brought pursuant to General Statutes § 51-197a from the assessment of damages for the total taking of its property by eminent domain pursuant to General Statutes §§ 13a-73 (b) and 13b-23. The defendant, the commissioner of transportation, determined the value for the purpose of the taking to be $433,500. South Farms made timely application to the Superior Court, pursuant to General Statutes § 13a-76, for a reassessment of damages. Thereafter, the court, pursuant to General Statutes § 52-434a (b), referred the condemnation appeal to a panel of three state trial referees. The trial referees agreed that the defendant had undervalued the property taken and awarded the plaintiff an amount of $1,233,000 in compensation, plus interest and an appraisal fee.

The plaintiff claims that the trial referees improperly valued the property by failing to consider the effect on market value of the most advantageous and probable use of the property and in assessing the property at a value for the general use of commercial development. The plaintiff argues that after the trial referees found that there was a reasonable probability that the zone change and wetland permits necessary for commercial development would be obtained, it should have valued the property for the specific use demonstrated by the evidence to be the highest and best use of the property — the proposed development of a suite hotel and two office buildings. We affirm the judgment of the trial referees.

The trial referees’ memorandum of decision and the record reveal the following facts. South Farms purchased the subject property on August 5, 1988, for $380,000. The property is an irregularly shaped parcel of vacant land situated in the town of Newington consisting of open and wooded sections with low rolling topography. The property spans approximately 29.9 acres, approximately twenty acres of which is classified as wetlands and the remainder is uplands. The property was taken together with all appurtenances including an easement approximately fifty-one feet wide to pass and repass over the lands of Ginsburg Properties Group, Inc., and McDonald’s Corporation. This easement is located in the towns of Newington, New Britain and Farmington and provides access to Route 71.

The subject property is located in a class B business zone. Permitted uses include retail stores, banks, personal and business services, business and professional offices, and the like. Special exceptions include restaurants, theaters and similar places of entertainment, motor vehicle sales and service, and other specified uses. The maximum building height allowed is thirty-five feet, two stories. The land to the west and fronting on the east side of Route 71 is zoned commercial development (CD).

The plaintiff's site development plan proposed for the site a mixed use project, Quadrangle Corporate Center. The proposal included a five-story hotel and conference center containing 231,653 square feet with 262 suites, and two multistory office buildings, each with approximately 160,000 square feet. Parking for the project was to be provided in a two level garage the top level of which would serve as a deck on which the three buildings were to be located. On February 22, 1989, Radisson Hotel Corporation conditionally committed itself to a possible franchise operation of the suite hotel, stating: “Once all city approvals are in place and financing is imminent, we should move to get the application submitted to our franchise committee for their approval.”

The development was to be constructed on the highland area located on the southern portion of the subject property, occupying approximately 9.2 of the total 29.9 acres. It was estimated that the hotel would occupy approximately 3.86 acres, 42 percent, and the office development 5.34 acres, 58 percent. According to the proposed plans, the project was located entirely outside the wetlands area, except for an access bridge connecting the complex to Route 71 via the easement over the land of McDonald’s Corporation.

On November 9, 1988, the plaintiff applied to the Newington town plan and zoning commission for reclassification of the subject property to CD zone. On the date of the scheduled hearing, the application was withdrawn because the required site development plan did not accompany the application. A neighboring landowner, however, completed an application and received such a zone change, from B to CD, for the adjoining land.

In June, 1989, the plaintiff, through one of its general partners, received the first indication of the defendant’s interest in the condemnation of the property from the Army Corps of Engineers in connection with the central Connecticut expressway project. Thereafter, it received an official notice of intent to condemn, which was followed by two state appraisals and the commencement of eminent domain proceedings. The taking map is dated July, 1989. Having been given this notice of intended condemnation, the plaintiff ceased further development activity. Bankruptcy followed.

The trial referees heard seventeen days of testimony and viewed the subject property in the presence of trial counsel. Four appraisers testified, two for the plaintiff and two for the defendant. Ail agreed, and the trial referees concurred, that the sales comparison approach was the best valuation method. They did not agree, however, on the highest and best use or fair market value of the property at the time of the taking.

The defendant’s first appraiser, a department of transportation employee, stated that in his opinion the subject property was “nonbuildable” and that its highest and best use was as open space. He set damages for the taking at $433,500. The defendant’s second appraiser, a private appraiser, calculated damages at $600,000 and indicated that development might be an alternative use, subject to obtaining the proper permits. The plaintiff’s two appraisers estimated damages at $5,250,000 and $6,600,000, respectively, and were of the opinion that the highest and best use of the property was as a quality hotel and two office buildings of the size proposed by the plaintiff.

The crucial issue in this matter, as the plaintiff argues, is whether the trial referees correctly stated the law, when they stated in the memorandum of decision: “The true issue is, not the value of the property for the specific use which would be permitted if a zone change was made, but the value of the property as zoned at the time of the taking as it is affected by the probability of a change. Greene v. Burns, [221 Conn. 736, 745, 607 A.2d 402 (1992)].” The plaintiff agrees with the second portion of that statement, but asserts that the law requires the court to consider the value of the property under the development plan proposing the highest and best use. The plaintiff contends that the trial referees rejected the defendant’s argument that value should be based on open space use, accepted and credited the evidence concerning zone change and permits, and heard evidence of the highest and best use of the property for a specific development plan, the hotel and office complex. The plaintiff contends that no general use was defined by the evidence. Accordingly, the plaintiff argues that by failing to value the land in accordance with the specific development plan, the trial referees reached “a speculative and unsupported valuation” for the property for an unknown and general commercial development use. The plaintiff asserts that, because the trial referees did not consider the highest and best use, a remand is required with direction to apply the proper standard of valuation. We do not agree.

The plaintiff is entitled to be paid just compensation, as the owner of land taken by condemnation. Leverty & Hurley Co. v. Commissioner of Transportation, 192 Conn. 377, 380, 471 A.2d 958 (1984). “The amount that constitutes just compensation is the market value of the condemned property when put to its highest and best use at the time of the taking.” Greene v. Burns, supra, 221 Conn. 745. The probability of a zone change that could affect the price may properly be considered in the determination of the fair market value. Transportation Plaza Associates v. Powers, 203 Conn. 364, 375, 525 A.2d 68 (1987). “[T]he true issue is, not the value of the property for the use which would be permitted if a change in zone was made, but the value of the property as zoned at the time of the taking as it is affected by the probability of a change. Budney v. Ives, [156 Conn. 83, 89, 239 A.2d 482 (1968)].” Greene v. Burns, supra, 745. The trial referees’ statement of the law, identical to that cited except for the addition of the word “specific” to describe the use, is a correct and accurate statement of the law, as set forth in Budney v. Ives, supra, 89, and recently employed by our Supreme Court in Greene v. Burns, supra, 745.

The concept of highest and best use, chiefly employed by appraisers as a starting point in estimating the value of real estate, concerns the use that will most likely produce the highest market value, greatest financial return, or the most profit from use of that property. Robinson v. Westport, 222 Conn. 402, 405-406, 610 A.2d 611 (1992). “The questions of the highest and best use of property and of the reasonable probability of a zone change are . . . questions of fact for the trier. . . . We will not disturb the court’s findings on those issues unless they are clearly erroneous.” (Citations omitted.) Greene v. Burns, supra, 221 Conn. 748.

It is clear from our review of the record that the trial referees considered all of the evidence and determined that the highest and best use was commercial development. In a thorough and well reasoned memorandum of decision, the panel decided the optimum use of the property by considering which use was physically possible, legally permissible, financially feasible and maximally productive. See 7 P. Nichols, Eminent Domain (3d Ed. Rev. 1994) § 4.04 (4). The referees specifically referred to the “economic feasibility of the proposed project” and found “that except for the taking, it was reasonably probable that the zone of the subject property would have been reclassified from business B to commercial development, and further that the highest and best use of the property was for commercial development as permitted by this zone classification.” The trial referees also found that it was “reasonably probable that local, state and federal wetlands permits would issue, at least conditionally, for the development of the uplands portion of the subject site.” There was sufficient evidence presented to support the factual determinations of the trial referees. The trial referees’ finding that the highest and best use of the property was commercial development was not clearly erroneous.

In determination of the fair market value, the trial court in a condemnation appeal hears the matter de novo; DeLucia v. Burns, 11 Conn. App. 439, 443, 527 A.2d 1234, cert. denied, 205 Conn. 803, 531 A.2d 935 (1987); and makes an independent determination of value and fair compensation in light of all the circumstances, the evidence, the trial court’s general knowledge and the court’s viewing of the premises. Minicucci v. Commissioner of Transportation, 211 Conn. 382, 388, 559 A.2d 216 (1989). The trial court may accept opinions of witnesses as to valuation, but it is not bound to do so as a matter of law; Birnbaum v. Ives, 163 Conn. 12, 21-22, 301 A.2d 262 (1972); an award in such a matter need not be within the parameters as set by testimony of experts. Bowen v. Ives, 171 Conn. 231, 239, 368 A.2d 82 (1976). The trial court has the right to accept as much of the testimony of the experts and the recognized appraisal methods employed by them as it finds applicable. Carol Management Corp. v. Board of Tax Review, 228 Conn. 23, 36, 633 A.2d 1368 (1993). The general knowledge of the trial referees, their viewing of the property and the evidence presented properly contributed to their determination of the fair market value of the property. The referees were free to consider comparable sales of land and to determine independently the fair market value. Robinson v. Westport, supra, 222 Conn. 410.

The trial referees’ memorandum of decision sufficiently articulated the basis for the award. Evidence of special development costs was factored into the economic feasibility of the proposed project; the trial referees determined that the highest and best use of the property was commercial development as permitted by the zone reclassification. The trial referees were not required to specify what that commercial development might include, or further define commercial development.

While the trial referees did not specify the valuation method used or specific factors considered in determining the fair market value, they did state that “the sales comparison approach is the best valuation methodology in this instance,” endorsing the method used by all of the appraisers. Since no one method of valuation is controlling in the trier’s determination of just compensation; Laurel, Inc. v. Commissioner of Transportation, 180 Conn. 11, 37-38, 428 A.2d 789 (1980); the trial court need not necessarily specify a valuation method used. Nor is the court required to set forth specific factors that were considered in arriving at that determination. The trial court’s decision is reviewable only if it is apparent that it misapplied, overlooked, or gave a wrong or improper effect to any test or consideration that it was that court’s duty to regard. Greenfield Development Co. v. Wood, 172 Conn. 446, 451, 374 A.2d 1084 (1977).

“[T]he trial referee[s] viewed the premises, heard all the evidence presented by the parties, studied the appraisal reports and made [their] own independent determination of value. ‘On appeal, it is the function of this court to determine whether the decision of the trial court is clearly erroneous.’ Pandolphe’s Auto Parts, Inc. v. Manchester, 181 Conn. 217, 221, 435 A.2d 24 (1980).” Minicucci v. Commissioner of Transportation, supra, 211 Conn. 388. The trial referees’ valuation of the property was not clearly erroneous.

The judgment is affirmed.

In this opinion the other judges concurred.

       Judgment entered in the amount of $1,233,000, less the $433,500 previously paid, for a net amount of $799,500.

       The property is part of a distinct commercial district in Newington the zoning classification of which has been changed frequently over the years as the surrounding area developed. In the early 1950s, the portion of Route 71 frontage in Newington was given a business B classification. This was changed in 1964 to special development district and the zoned area increased from seven to forty-five acres. Uses were restricted primarily to hotels, convention centers and business offices. In 1984, the designation was amended to commercial development. This change also instituted more restrictive land use and new provisions for site plan review. In January, 1986, the zone of a small portion of the land fronting on the highway was downgraded to business B to permit a small shopping center. At the same time, the zoning commission also reclassified the rear land as business B, including the subject property.

       In fact, five appraisers testified in this matter although the fifth, Russell Hunter, was not noted in the trial referees’ memorandum of decision. Hunter testified briefly that he had conducted two appraisals of the subject property, on October 23, 1987, and on July 1, 1988, both yielding $275,000 as the estimated value of the property. His opinion of the highest and best use of the property at that time was for general commercial use. On cross-examination, Hunter admitted that he was not surprised that the property had sold for 30 percent more than his estimate in August, 1988, less than two months later, and that he had no opinion as to the value of the property at the time of the taking in September, 1989.


source: Caselaw Access Project

author: Freedman, J.

license: Public Domain

text:
    Ronald M. Hedberg v. Pantepec International, Inc.
    (12253)
    O’Connell, Foti and Freedman, Js.
    Argued March 21
    decision released July 5, 1994

      L. Page Heslin, with whom, on the brief, were Mark R. Carta and Mary E. Sehifferli, for the appellant (plaintiff).

      Richard J. Buturla, for the appellee (defendant).
   Freedman, J.

The plaintiff, Ronald M. Hedberg, appeals from the judgment of the trial court rendered in favor of the defendant, Pantepec International, Inc. (Pantepec). On appeal, Hedberg claims that the trial court improperly (1) failed to apply the “business judgment rule” to the board of directors’ decision approving his written employment agreement because (a) the board’s adoption of the written employment agreement was not a defensive mechanism and (b), in applying the test set forth in Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946, 955 (Del. 1985), the trial court improperly found that the written employment agreement was not a reasonable response to the perceived threat to Pantepec, and (2) failed to find that Pantepec violated the Connecticut Unfair Trade Practices Act; General Statutes § 42-110a et seq.; by refusing to honor Hedberg’s agreement. We reverse the judgment of the trial court.

The trial court found the following facts. The parties agreed that their claims are governed by Delaware law. Pantepec, a Delaware corporation publicly traded on the Boston stock exchange, is an investment company engaged in exploring and investigating oil and gas properties. Hedberg, who holds a doctorate in petroleum geology, worked as a consultant for Pantepec for several years before being elevated, in February, 1985, to serve as president and director. Shortly after Hedberg became president, he and Pantepec entered into an agreement setting forth the terms of Hedberg’s employment. The terms were summarized in a letter dated March 25, 1985. There was no provision for any fixed term of employment, no restriction on termination for good cause, nor any safeguards for Hedberg’s benefit in the event of a change of control of Pantepec.

On November 6, 1985, the board of directors voted to increase Hedberg’s compensation from $30,000 per year for which he devoted one third of his time to $60,000 per year for which he would devote two thirds of his time. The rest of his benefits remained the same as described in the March 25,1985 letter. In 1987, Pantepec’s board of directors consisted of Hedberg, Harold Hansen, and Frederick Hemming. Soon thereafter, Pantepec hired Rudolph Bremser as corporate treasurer and vice-president. Bremser was not a party to a written employment contract. From 1987 to the time of trial, Pantepec never had more than two employees, Hedberg and Bremser.

Between 1987 and 1989 Pantepec actively tried to locate merger partners. In February, 1989, Robert A. Levinson, a New York investor with an expertise in the textile industry, approached Pantepec and advised the board of directors that he felt that it was not to Pantepec’s benefit to continue to limit Pantepec’s activities to oil and gas investments and that they should turn control over to him. Levinson presented no particular plans for the future of Pantepec, and the directors were concerned that if he took over the company he did not have the requisite expertise to obtain fair value for Pantepec’s oil and gas investments. The directors refused, and Levinson put up a slate of his own directors and solicited proxy votes from the shareholders. Immediately thereafter, both Hedberg and Bremser met with Pantepec’s attorney and relayed Levinson’s ultimatum. The attorney inquired into whether either Hedberg or Bremser had written employment agreements.

On May 22,1989, while proxies were being received, the board of directors held a telephone meeting to discuss, inter alia, drafts of employment agreements for Hedberg and Bremser. The drafts had been mailed to each director prior to the meeting. All three directors approved Bremser’s agreement and, with Hedberg abstaining, the other two directors approved Hedberg’s agreement. Hedberg’s agreement, governing his employment with Pantepec for twenty-four months, limited Pantepec’s right to terminate Hedberg to “good cause,” allowed Hedberg to terminate his services under certain conditions, and, in the case of his termination by Pantepec for other than good cause, allowed for severance pay and continuation of benefits for either twelve months or for the remainder of the term of his agreement, whichever is greater. Hedberg signed his employment agreement the following day.

On May 24,1989, at Pantepec’s annual meeting, the shareholders voted on the incumbent slate and Levinson’s slate. The vote was so close that the meeting was continued for a recount. On June 15, 1989, the board announced that Levinson’s slate had won. On that same day, Levinson asked Hedberg to sign an agreement abrogating his employment agreement. Hedberg refused. Levinson made statements to the effect that unless Hedberg signed the abrogation agreement, he would no longer be employed in any capacity. On June 16,1989, Levinson advised Hedberg by letter that he did not believe Hedberg’s employment agreement was valid, and further, that its terms constituted a breach of the former board of directors’ fiduciary duties to Pantepec.

Hedberg continued to perform services for Pantepec until June 29,1989, when Levinson notified Hedberg, by letter, that his employment was terminated. Pantepec did not pay Hedberg the severance pay or any of the other benefits set forth in his employment agreement.

Hedberg filed suit against Pantepec for breach of his employment agreement. The trial court found that Hedberg’s employment agreement was a defensive mechanism, entered into in reaction to the proxy contest, and that it was not entitled to the deference of the “business judgment rule” because Hedberg had failed to meet his burden under the second prong of the test set forth in Unocal Corp. v. Mesa Petroleum Co., supra, 493 A.2d 955. Because the employment agreement was an unreasonable response to the perceived threat, it was invalid and voidable; thus, Hedberg could not prevail on his claim.

I

Hedberg claims that the trial court improperly failed to apply the “business judgment rule” to the board of directors’ decision approving his written employment contract. We agree.

“Under Delaware law the business and affairs of a corporation are managed by and under the direction of its board of directors. See 8 Del. C. § 141 (a). In performing their duties the directors owe fundamental fiduciary duties of loyalty and care to the corporation and its shareholders. Guth v. Loft, Inc., 5 A.2d 503, 510 (Del. 1939); Aronson v. Lewis, 473 A.2d 805, 811 (Del. 1984). Subject to certain well defined limitations, a board enjoys the protection of the business judgment rule discharging its responsibilities. The rule creates a presumption ‘that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation.’ Aronson v. Lewis, [supra] 812.” Polk v. Good, 507 A.2d 531, 536 (Del. 1986).

“The business judgment rule is available to directors even where they are responding to a takeover threat. In those circumstances, however, there is an ‘omnipresent specter that a board may be acting primarily in its own interest. . . .’ Unocal Corporation v. Mesa Petroleum Co., [supra, 493 A.2d 954]. As a result, before the business judgment rule will be applied in this context, the directors must establish ‘reasonable grounds for believing that a danger to corporate policy and effectiveness existed’ and the defensive measure chosen by the board must be ‘reasonable in relation to the threat posed.’ Id., 955.” Shamrock Holdings, Inc. v. Polaroid Corp., 559 A.2d 257, 269-70 (Del. Ch. 1989). This is the Unocal test.

“Once the directors make the above showings, the burden shifts back to the defendants who have the ultimate burden of persuasion to show a breach of the directors’ fiduciary duties. [Unocal Corp. v. Mesa Petroleum Co., supra, 493 A.2d 958]; Moran v. Household Intern, Inc., 500 A.2d 1346, 1356 (Del. 1985).” Buckhorn, Inc. v. Ropak Corp., 656 F. Sup. 209, 227 (S.D. Ohio), aff’d without opinion, 815 F.2d 76 (6th Cir. 1987).

A

Hedberg argues that the board’s adoption of the written employment agreement was not a defensive mechanism taken in response to a takeover threat. The trial court, therefore, should not have reviewed its adoption under the Unocal test, but, rather, should have applied the business judgment rule in reviewing the board’s adoption of the agreement and presumed that the actions of the board were taken for the benefit of the corporation. We are not persuaded.

Hedberg argues that because the board’s decision to approve the written employment agreements was considered prior to Levinson’s notice to Pantepec of his interest in the corporation, it was not a defensive mechanism. Hedberg refers us to Buckhorn, Inc. v. Ropak Corp., supra, 656 F. Sup. 209, for support. In Buckhorn, the federal District Court reviewed particular amendments to the employment contract of an executive under the “business judgment rule” despite the fact they were made after a specific takeover threat to the company. Id., 215-18, 233-34. The court stated: “Whereas the evidence clearly demonstrates that these measures were contemplated by the directors prior to the tender offer and were unrelated to change of control, the Court believes that it is appropriate to apply the traditional business judgment rule.” Id., 234.

Here, the trial court found “that the employment agreement at issue was unmistakably a defensive mechanism, entered into in reaction to the proxy contest.” In making this finding, the trial court relied on the testimony of Hansen, one of the two directors who approved Hedberg’s employment agreement, who testified that the purpose of the employment agreement was to protect the shareholders by assuring that there would be a knowledgeable person in charge in case of a change of directors.

The determination of this question is purely a question of fact. Both Delaware law and Connecticut law are clear that only if the trial court’s findings of fact are clearly erroneous will we reverse the trial court’s judgment. See Marine v. State, 624 A.2d 1181, 1190 (Del. 1993), citing Levitt v. Bouvier, 287 A.2d 671, 673 (Del. 1972); see also Ballato v. Board of Education, 33 Conn. App. 78, 89-90, 633 A.2d 323 (1993), cert. denied, 228 Conn. 923, 638 A.2d 37 (1994). In light of Hansen’s testimony, we cannot conclude that the trial court’s finding, that the written employment agreement was a defensive mechanism, was clearly erroneous.

The trial court, therefore, properly found that the adoption of the written employment agreement was a defensive mechanism and, therefore, properly reviewed its adoption under the Unocal test.

B

Hedberg also argues that under Unocal, the trial court improperly found that the written employment agreement was not a reasonable response to the perceived threat to Pantepec. Specifically, he claims that the trial court incorrectly interpreted the agreement as permitting Hedberg to terminate the agreement and his services immediately upon a change of control of Pantepec.

With respect to the first prong of the Unocal test, the trial court found that Pantepec’s directors felt the Levinson proxy challenge was a danger. Prior to the challenge, Pantepec had been engaged exclusively in oil and gas investments. In addition, it was a small company with only one employee, Hedberg, having any ongoing knowledge of its substantive business. If Hedberg were summarily fired, it was reasonable to believe that Pantepec would suffer. Further, Levinson had not outlined his plans for the company other than to indicate that it should get out of oil and gas investments. Such plans suggest that Levinson would rapidly dispose of the company’s related assets. Thus, the trial court found that Hedberg had met the first prong of the Unocal test, in that the board of directors had reasonable grounds for believing that Levinson’s proxy challenge posed a threat to Pantepec.

In addressing the second prong of Unocal, the trial court acknowledged that, although a board of directors enters into obligations with an employee as a defensive mechanism potentially affecting the options of subsequent boards, that does not in and of itself make the obligations unfair. Shamrock Holdings, Inc. v. Polar oid Corp., supra, 559 A.2d 276. It also agreed that, as long as the defensive mechanism benefits the corporation and is fair, it is valid. Id. Nonetheless, the trial court found that Hedberg had failed to meet the second prong because the written employment contract was not reasonable in relation to the threat posed by Levinson.

The trial court, in making this determination, relied on the language of the employment agreement itself. The trial court found that, according to the terms of the agreement, “if the pending proxy contest resulted in the election of Levinson’s board, Hedberg was not obligated to provide services other than for a one month period after giving notice, and the corporation was obligated to pay severance pay for up to twenty-three months. Since the terms of the agreement entitled Hedberg to the same compensation and benefits for twenty-three months whether or not he chose to continue to work for Pantepec, the agreement was not reasonably calculated to achieve the continuity that director Hansen testified was the reason for its creation. Instead, the agreement protected Hedberg, an officer and director, at the expense of the corporation without even attempting to secure the stated advantage of continuity and expertise for the company.”

In Delaware, “[t]he correct interpretation of language in a contract, although ‘analytically a question of fact, is treated as a question of law both in the trial court and on appeal.’ Klair v. Reese, 531 A.2d 219, 222 (Del. 1987) [citing, 1 Restatement (Second), Contracts § 212, comment d (1981); 4 W. Jaeger, Williston on Contracts § 616 (3d Ed. 1961)].” Watkins v. Beatrice Co., 560 A.2d 1016, 1021 (Del. 1989). “An appellate court will make its own interpretation of the contractual language, since it is in as good a position as the trial court to do so. . . .If the interpretation of the trial court rests not on its reading of the agreement but on findings of fact concerning evidence beyond the four corners of the contract (‘extrinsic evidence’) or on inferences drawn from those findings, the appellate court will defer to the trial court’s interpretation unless the findings are not supported by the record or the inferences and deductions are either not supported by the record or not the product of an orderly or logical deductive reasoning process.” (Citations omitted.) Klair v. Reese, supra, 222. In Connecticut, while the interpretation of a contract is generally a question of fact, when the language of a contract is capable of only one interpretation the court need not look outside the four corners of the contract or make any findings of fact and, therefore, the interpretation of the contract involves only questions of law. Gurliacci v. Mayer, 218 Conn. 531, 567, 590 A.2d 914 (1991); Bowman v. 1477 Central Avenue Apartments, Inc., 203 Conn. 246, 257, 524 A.2d 610 (1987). Because, in both Delaware and Connecticut, the interpretation of a contract not involving any findings of fact is treated as a question of law, we need not address whether the standard of review is a procedural or a substantive issue in order to determine which state’s standard applies.

Our review of the language of the contract does not support the trial court’s findings. Nowhere does the agreement provide that Hedberg may terminate his employment and receive severance pay and benefits simply on the change of control of Pantepec. The agreement provides that Hedberg may terminate his employment for “good reason.” The agreement then defines what good reason includes. In the case of a change of control of the company, there is good reason for termination in seven different situations. Each requires an affirmative action by the company, after the change in control, that adversely impacts Hedberg’s compensation or responsibilities. Only then would Hedberg have good reason to terminate his employment and to collect severance pay and benefits.

We conclude that the trial court’s finding that the written agreement allowed Hedberg to terminate the agreement on a change of control was improper. Because we conclude that the trial court found that the written employment agreement was an unreasonable response to the threatened takeover, based on an improper interpretation of the language of the contract, we reverse the judgment of the trial court and remand this matter for a new trial.

II

Hedberg’s final claim is that the trial court improperly failed to find that Pantepec violated the Connecticut Unfair Trade Practices Act by refusing to honor Hedberg’s written employment agreement. Since this issue was not addressed by the trial court and, in light of our disposition of the first issue in this matter, we need not address this issue at this time.

The judgment is reversed and the case is remanded for a new trial.

In this opinion the other judges concurred.

       The trial court’s memorandum of decision gives 1987 as the date of Hedberg’s promotion to president and director. Our review of the exhibits, however, makes it clear that it was 1985. This appears to be simply a typographical error.

       Wo need not address whether the standard of review is a procedural or a substantive issue and thereby determine which state’s standard applies. Under both states’ law, a question of fact is reviewed under the clearly erroneous standard. Compare Ballato v. Board of Education, 33 Conn. App. 78, 89-90, 633 A.2d 323 (1993), cert. denied, 228 Conn. 923, 638 A.2d 37 (1994), with Marine v. State, 624 A.2d 1181, 1190 (Del. 1993), citing Levitt v. Bouvier, 287 A.2d 671, 673 (Del. 1972).

       The relevant language of the agreement provides: “Termination by Employee. Employee may terminate his employment hereunder upon thirty (30) days’ prior written notice to Company for Good Reason. For the purposes of this Agreement, 'Good Reason’ shall mean (A) any removal of Employee from, or any failure to re-elect Employee to, his position as President and Secretary, except in connection with termination of Employee’s employment for cause, (B) failure by Company to comply with Section 3 hereof in any material respect, or (C) failure of Company to obtain the assumption of this Agreement by any successor as contemplated in Section 9 hereof.
      “In case of a ‘change of control’ (as hereinafter defined) of Company, ‘Good Reason’ shall also mean:
      “(i) an adverse change in Employee’s status or position(s) as an executive officer of Company as in effect immediately prior to the change in control, or the assignment to Employee of any duties or responsibilities which, in Employee’s reasonable judgment, are inconsistent with such status or position(s), or any removal of Employee from, or any failure to reappoint or reelect Employee to, such position(s) (except in connection with the termination of employment for cause or disability or as a result of Employee’s death or by Employee other than for Good Reason);
      “(ii) a reduction by Company in Employee’s base compensation as in effect immediately prior to the change in control;
      “(in) the failure by Company to continue in effect any Plan (as hereinafter defined) in which Employee is participating at the time of the change in control of Company (or Plans providing Employee with at least substantially similar benefits) other than as a result of the normal expiration of any such Plan in accordance with its terms as in effect at the time of the change in control, or the taking of any action, or the failure to act, by Company which would adversely affect Employees’ continued participation in any of such Plans on at least as favorable a basis to Employee as is the case on the date of the change in control or which would materially reduce Employee’s benefits in the future under any of such Plans or deprive Employee of any material benefit enjoyed at the time of the change in control. ‘Plan’ shall mean any compensation plan such as an incentive, stock option or restricted stock plan or any employee benefit plan such as a thrift, pension, profit sharing, medical, disability, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of Company intended to benefit employees;
      "(iv) the failure by Company to provide and credit Employee with the number of paid vacation days to which Employee is then entitled hereunder immediately prior to the change in control;
      “(v) Company’s requiring Employee to be based anywhere other than where Employee’s office is located immediately prior to the change in control except for required travel on Company’s business to an extent substantially consistent with the business travel obligations undertaken on behalf of Company prior to the change in control;
      “(vi) any purported termination by Company of Employee’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of this Section 5 and Section 8 of this Agreement; or “(vii) any refusal by Company to continue to allow Employee to attend to matters or engage in activities not directly related to the business of Company which, prior to the change in control, Employee was permitted by the Board to attend to or engage in.”


author: Schaller, J.

text:
    Joanne Anderson v. Paul J. Schieffer et al.
    (11442)
    Dupont, C. J., and O’Connell and Schaller, Js.
    Argued March 1
    decision released June 1, 1994

      Thomas W. Calkins, with whom was Mitchell M. Berger, for the appellants-appellees (defendants).

      Mary Piscatelli Brigham, with whom, on the brief, was Jeffrey J. Tinley, for the appellee-appellant (plaintiff).
   Schaller, J.

The defendants appeal from the judgment of the trial court awarding damages to the plaintiff on counts of failure to pay wages, unjust enrichment and breach of contract, in relation to her supervision of the construction and sale of houses in two subdivisions owned by the defendants. The defendants claim that the trial court improperly (1) failed to grant their motion to dismiss, (2) found that the plaintiff was employed by the defendants as an “on-site residential superintendent or custodian” pursuant to General Statutes § 20-329 (a) and allowed the plaintiff to recover for services rendered to the defendants, and (3) awarded double damages and attorney’s fees. The plaintiff filed a cross appeal, claiming that the trial court improperly (1) awarded only nominal damages for services rendered with regard to four houses that were not complete at the time of her termination, (2) failed to award attorney’s fees with respect to her claims concerning the incomplete houses, and (3) denied her motion to open the judgment. We affirm the judgment of the trial court.

The trial court found the following facts. Paul Schieffer owned property in the town of Prospect that was subsequently divided into building lots. The plaintiff, a licensed real estate salesperson, worked for a licensed real estate broker that obtained the listings on various lots owned by the defendants. Although the plaintiff sold several undeveloped lots, she suggested to Schieffer that it might be more profitable for him to develop the land before selling it. Schieffer agreed, and the plaintiff worked with him to choose contractors, to secure buyers, and to close deals.

The parties failed to provide listing agreements for the developed properties, and the real estate broker with whom the plaintiff had previously been associated no longer obtained any commissions on sales. During this period, the plaintiff was a regular employee of the defendants, thus exempting her, pursuant to General Statutes (Rev. to 1985) § 20-329, from certain prereqisites to the collection of a commission for the sale of real estate set forth in General Statutes § 20-325a. Despite the plaintiffs exempt status, the parties executed an employment contract on May 21, 1986, in order to avoid any semblance of impropriety.

The employment contract provided, in part, that the plaintiff “is now and has been engaged in the business of managing real estate, including the supervision of construction and hiring of sub-contractors” and that she is to “supervise the construction and sale of houses” for Schieffer. In addition, the contract provided that the relationship “may be terminated by either party hereto, at any time upon notice given to the other; but the rights of the Employee to any commission which accrued prior to said notice, shall not be divested by the termination of this contract.” Compensation for the plaintiff was to be calculated upon a commission of 6 percent.

The employer-employee relationship terminated on January 13,1988. At that time, the plaintiff had been involved in the supervision of construction and sale of eight developed lots. By January 13, 1988, the house on lot 80 had been virtually completed and a contract for sale in the amount of $305,000 had been executed. The house on lot 95 lacked only carpeting, and a contract for $227,000 had been executed. That contract, negotiated by the plaintiff, was rescinded and the lot eventually sold for the higher price of $275,000. The plaintiff also obtained contracts for the house on lot 23 for $235,000, and the house on lot 20 for $250,000.

The four other lots contained houses built on speculation. By January 13,1988, construction of the houses on lots 21, 88, 89, and 90 was 50 percent completed. The plaintiff had not secured any contracts for the sale of these lots.

The trial court determined that the plaintiff was entitled to the entire 6 percent commission on the completed houses for which she had obtained buyers (lots 80, 95, 20 and 23). With regard to lot 95, the trial court computed the commission on the basis of the price in the contract that the plaintiff had secured, rather than the actual, higher sale price. After deducting amounts of money that the plaintiff had received on account of her services, the trial court found that the plaintiff was entitled to $49,020. Pursuant to General Statutes § 31-72, the trial court doubled the damages to $98,040.

With regard to the four incomplete houses built on speculation, the trial court noted that the plaintiff was entitled to payment for the reasonable value of her services. The trial court determined, however, that it could award only nominal damages because the plaintiff had not presented any evidence of the reasonable value of her services. As a result, the trial court awarded $100 for each house, for a total of $400. The trial court refused to double these damages.

The plaintiff also sought compensation for attorney’s fees of two law firms she retained. The trial court stated that the plaintiff was entitled to attorney’s fees applicable only to the amount of damages awarded with regard to the four completed houses. While the plaintiff claimed attorney’s fees totaling $49,782.35, the trial court concluded that a reasonable award for attorney’s fees was approximately 50 percent of the fees, or $24,800.

I

The Defendants’ Appeal

A

The defendants first contend that the trial court improperly denied their motion to dismiss for lack of subject matter jurisdiction. The following additional facts are necessary to a resolution of this issue. The defendants filed a motion to dismiss on April 25,1991, claiming that the plaintiff had failed to allege anywhere in her complaint that she was exempt, pursuant to § 20-329 (a), from certain requirements for the sale of real estate pursuant to § 20-325a. In her complaint, the plaintiff clearly presents facts to support an allegation that she was a regular employee of the defendants. Such regular employment is an exemption pursuant to § 20-329 (a) as it existed prior to October, 1987. The problem arises because the plaintiff did not allege language to satisfy § 20-329 (a) as amended in October, 1987, by Public Acts 1987, No. 87-319, namely, that she was a regular employee who was an “on-site residential superintendent or custodian.” The trial court reserved its decision, and, ultimately, denied the motion in its memorandum of decision.

The defendants conceded in their brief that the proper mechanism for challenging the alleged deficiencies in the complaint was a motion to strike. See McCutcheon & Burr, Inc. v. Berman, 218 Conn. 512, 526-28, 590 A.2d 438 (1991). The defendants nonetheless assert that the trial court should have considered their motion to dismiss as a motion to strike and then granted the motion to strike. “[A] motion to dismiss is not designed to test the legal sufficiency of a complaint in terms of whether it states a cause of action. That should be done, instead, by a motion to strike; see Baskin’s Appeal from Probate, 194 Conn. 635, 640, 484 A.2d 934 (1984); the practical difference being that if a motion to strike is granted, the party whose pleading is stricken is given an opportunity to replead in order to avoid a harsh result. Id.; see also Practice Book § 157.” Pratt v. Old Saybrook, 225 Conn. 177, 185, 621 A.2d 1322 (1993).

Had the trial court considered the motion to dismiss as a motion to strike, the plaintiff still would have had the opportunity to plead over to correct any deficiencies pursuant to Practice Book § 157. The plaintiff could have amended the complaint to include facts to support an allegation that she was an “on-site residential superintendent or custodian.” Because we conclude that the amendment to § 20-329 (a) concerning “on-site residential superintendents or custodians” was not intended to be applied retroactively, the plaintiff needed to assert only that she was a regular employee of the owner or lessor. These facts were alleged properly in the complaint and found by the trial court.

B

Our discussion now turns to whether the trial court improperly applied the amended provision of § 20-329 (a). The employer-employee relationship began prior to the 1987 amendment to § 20-329 (a), but the trial court applied the amended provision. Public Acts 1987, No. 87-319. As amended, § 20-329 (a) exempts various individuals from real estate licensing requirements. In part, it exempts an owner’s or lessor’s regular employees who are “on-site residential supervisors or custodians.” Pursuant to § 20-325a, those individuals granted exempt status under § 20-329 (a) are also exempt from the provision of § 20-325a, which prohibits unlicensed and certain licensed real estate salespersons from bringing actions to recover commissions earned during real estate transactions. Prior to the enactment of Public Acts 1987, No. 87-319, the exemption provision of § 20-329 (a) referred merely to the regular employees of an owner or lessor. The issue, therefore, is whether the plaintiff had to be merely a regular employee or a regular employee who was an on-site residential superintendent or custodian. We must now examine whether the legislature intended the amendment set forth in Public Acts 1987, No. 87-319, to apply retroactively to existing employer-employee relationships.

“Our Supreme Court has consistently expressed reluctance to ‘construe statutes retroactively where the statutes [e]ffect substantial changes in the law, unless the legislative intent clearly and unequivocally appears otherwise.’ State v. Lizotte, 200 Conn. 734, 741, 517 A.2d 610 (1986); Rudewicz v. Gagne, 22 Conn. App. 285, 288, 582 A.2d 463 (1990).” (Emphasis added.) DeAlmeida v. M.C.M. Stamping Corp. 29 Conn. App. 441, 450, 615 A.2d 1066 (1992). “General Statutes § 55-3 provides that [n]o provision of the general statutes, not previously contained in the statutes of the state, which imposes any new obligation on any person or corporation, shall be construed to have a retrospective effect. The obligations referred to in the statute are those of substantive law; Nagle v. Wood, 178 Conn. 180, 186, 423 A.2d 875 (1979); and [legislation which limits or increases statutory liability has generally been held to be substantive in nature. Little v. Ives, 158 Conn. 452, 457, 262 A.2d 174 (1969). [W]e have uniformly interpreted § 55-3 as a rule of presumed legislative intent that statutes affecting substantive rights shall apply prospectively only. Darak v. Darak, 210 Conn. 462, 467, 556 A.2d 145 (1989); Westport v. State, 204 Conn. 212, 219, 527 A.2d 1177 (1987).” (Internal quotation marks omitted.) Fulco v. Norwich Roman Catholic Diocesan Corp., 27 Conn. App. 800, 803-804, 609 A.2d 1034 (1992), appeal dismissed, 226 Conn. 404, 627 A.2d 931 (1993).

On the other hand, “[procedural statutes and rules of practice ordinarily apply ‘retroactively to all actions whether pending or not at the time the statute [or rule] became effective, in the absence of any expressed intent to the contrary.’ Mulrooney v. Wambolt, 215 Conn. 211, 216-17, 575 A.2d 996 (1990); Citizens Against Pollution Northwest, Inc. v. Connecticut Siting Council, 217 Conn. 143, 151, 584 A.2d 1183 (1991).” Rosick v. Equipment Maintenance & Service, Inc., 33 Conn. App. 25, 30, 632 A.2d 1134 (1993). Where an amendment “in effect construes and clarifies a prior statute [it] must be accepted as the legislative declaration of the meaning of the original act. Tax Commissioner v. Estate of Bissell, 173 Conn. 232, 246, 377 A.2d 305 (1977); Lee v. Board of Education, 181 Conn. 69, 75, 434 A.2d 333 (1980).” Shelton v. Commissioner of Environmental Protection, 193 Conn. 506, 514, 479 A.2d 208 (1984). Such a clarifying amendment, thus, would be applied retroactively. In sum, “[u]nless the amendment is procedural in impact, is intended to clarify the original intent of an earlier statute, or specifically contains a provision to the contrary, it is presumed that legislation is intended to operate prospectively. Mulrooney v. Wambolt, [supra, 215 Conn. 216]; Board of Education v. Freedom of Information Commission, 210 Conn. 590, 594-95, 566 A.2d 592 (1989); Darak v. Darak, [supra, 210 Conn. 467-68].” Caron v. Inland Wetlands & Watercourses Commission, 25 Conn. App. 61, 64, 592 A.2d 964 (1991), aff’d, 222 Conn. 269, 610 A.2d 584 (1992).

We must also examine the language of the amended statute. In analyzing the statutory language, we employ the standard rales of statutory construction. “To determine the collectively expressed legislative intent, we look first to the language of the statute itself. If that language is plain and unambiguous, we go no further. . . . If, however, the statute is ambiguous, e.g., either opaque or susceptible to alternative conflicting interpretations, we will seek guidance from ‘extrinsic aids,’e.g., the legislative history. . . .” (Citations omitted.) Sanzone v. Board of Police Commissioners, 219 Conn. 179, 187, 592 A.2d 912 (1991).

On its face, the language at issue in § 20-329 (a) clearly concerns substantive, rather than procedural, issues. The amendment narrows the types of employer-employee relationships that provide an employee with an exemption from the requirements of § 30-325a. In addition, the amendment is not an effort to clarify the language of the earlier version of the statute. The legislature did not enact the amendment, for example, in response to conflicting interpretations of the statute by the courts; see Shelton v. Commissioner of Environmental Protection, supra, 193 Conn. 514-15; but rather, enacted this section to signal a change or break from what was previously codified. We conclude that the legislature, in enacting language that provides a completely different standard for the types of employees who are exempt from the requirements of § 20-325a, did not intend to clarify existing language.

We now address whether the legislature intended to create a retroactive amendment. The issue here is whether the amended statute contains a provision that specifically notes that the amendment is to operate retroactively. There is no clear or unequivocal language on the face of the amendment to the statute that would require retroactive application. See Aetna Life & Casualty Co. v. Braccidiferro, 34 Conn. App. 833, 849, 643 A.2d 1305 (1994), quoting Moore v. McNamara, 201 Conn. 16, 22, 513 A.2d 660 (1986) (as rule of construction, legislation to be applied prospectively absent clear intent to contrary). The legislature stated simply that those regular employees who “are employed as on-site residential supervisors or custodians” are exempt. Clearly, this provision applies to employer-employee relations entered after the enactment of the amendment. The statute contains no language indicating that the amendment should apply to existing employer-employee relations.

We conclude, therefore, that the legislature did not intend the October, 1987 amendment to § 20-329 (a) to apply to employer-employee relationships already in existence at the time of its passage. As a result, we need not address the defendants’ claims that the trial court improperly found that the plaintiff was an “on-site residential superintendent or custodian.”

C

The defendants’ final claim concerns the trial court’s award of double damages and attorneys’ fees pursuant to General Statutes § 31-72. Section 31-72 “provides for a discretionary award of double damages, with costs and reasonable attorney’s fees, to employees who are successful in actions against their employers for wages due.” Crowther v. Gerber Garment Technology, Inc., 8 Conn. App. 254, 264, 513 A.2d 144 (1986). Our Supreme Court previously has held that such awards for double damages are “inappropriate in the absence of the trial court’s finding of bad faith, arbitrariness or unreasonableness. . . .” (Citations omitted, internal quotation marks omitted.) Sansone v. Clifford, 219 Conn. 217, 229, 592 A.2d 931 (1991).

The trial court made an explicit finding that the defendants’ “failure to pay with respect to the four completed properties demonstrated bad faith, arbitrariness and unreasonableness.” (Emphasis added.) The trial court’s finding was based on more than the mere breach of contract. See Crowther v. Gerber Garment Technology, Inc., supra, 8 Conn. App. 264. The court stated that the amount of compensation due the plaintiff was readily “liquidated by application of simple arithmetic and there was no justification for withholding her commission.” We conclude that the trial court did not abuse its discretion in awarding double damages pursuant to § 31-72.

II

The Plaintiff’s Cross Appeal

A

The plaintiff first claims that the trial court improperly awarded only nominal damages for the work that she performed on the four uncompleted houses. The plaintiff claimed at trial that, because these houses were 50 percent completed, she was entitled to one half of the agreed upon 6 percent commission, namely a 6 percent commission on each house.

“It is axiomatic that the burden of proving damages is on the party claiming them. . . . When damages are claimed they are an essential element of the plaintiff’s proof and must be proved with reasonable certainty. . . . Damages are recoverable only to the extent that the evidence affords a sufficient basis for estimating their amount in money with reasonable certainty. ...” (Citations omitted; internal quotation marks omitted.) Expressway Associates II v. Friendly Ice Cream Corp. of Connecticut, 218 Conn. 474, 476-77, 590 A.2d 431 (1991).

The trial court found that the plaintiff had supervised the construction on these lots, and that the plaintiff was entitled to the reasonable value of her services with regard to the uncompleted houses, but noted that the plaintiff had not presented any evidence with regard to the value of her services. Our independent review of the record indicates likewise. Because the plaintiff failed to provide the trial court with a sufficient basis for determining the amount of damages owed to her, the trial court’s conclusion on this issue was correct.

B

The plaintiff next claims that the trial court improperly calculated the award of attorney’s fees. The plaintiff presented evidence that she had employed two different law firms, the bills of which totaled $49,782.36. In its memorandum of decision, the trial court stated that “[t]he plaintiff is only entitled to an award of fees applicable to the amount doubled, and not to the balance.” The “balance” would have included the damages awarded on the four uncompleted houses. The trial court thus awarded attorney’s fees with regard to the claims involving the four completed houses, but not the four uncompleted houses.

Section 31-72 provides that the court may award “reasonable attorney’s fees.” “[I]n an action for wages brought pursuant to General Statutes § 31-72, awards for double damages and attorney’s fees are inappropriate in the absence of the trial court’s finding of bad faith, arbitrariness or unreasonableness. . . .’’(Citations omitted; emphasis added; internal quotation marks omitted.) Sansone v. Clifford, supra, 219 Conn. 229. The trial court found that, with regard to the four uncompleted houses, it could “make no such finding” that the defendants’ failure to pay demonstrated bad faith, arbitrariness and unreasonableness. We conclude that the trial court properly declined to award attorney’s fees related to those houses.

C

The plaintiff contends, finally, that the trial court improperly failed to grant her motion to open the judgment. In her motion to open the judgment, the plaintiff requested that the trial court award (1) interest, (2) full attorney’s fees based on her total claim for damages, and (3) an amount equivalent to the reasonable value of her services on the four incomplete houses. Since we have already addressed the issues of attorney’s fees and nominal damages, we examine the motion to open the judgment with regard only to interest.

“A motion to open and vacate a judgment filed during the four months after which judgment was rendered is addressed to the court’s discretion, and the action of the trial court will not be disturbed on appeal unless it acted unreasonably and in clear abuse of its discretion. See Manchester State Bank v. Reale, 172 Conn. 520, 523-24, 375 A.2d 1009 (1979); State v. Fahey, 147 Conn. 13, 15, 156 A.2d 463 (1959). In determining whether the trial court abused its discretion, this court must make every reasonable presumption in favor of its action. State v. Bitting, 162 Conn. 1, 11, 291 A.2d 240 (1971); E. M. Loew’s Enterprises, Inc. v. Surabian, 146 Conn. 608, 612, 153 A.2d 463 (1959). Celanese Fiber, Division of Celanese of Canada, Ltd. v. Pic Yarns, Inc., [184 Conn. 461, 466-67, 440 A.2d 159 (1981)]. Acheson v. White, 195 Conn. 211, 214-15, 487 A.2d 197 (1985).” (Internal quotation marks omitted.) Crozier v. Zaboori, 14 Conn. App. 457, 461, 541 A.2d 531 (1988).

The trial court denied the motion to open without explanation. “The burden of securing an adequate record for appellate review of an issue presented on a cross appeal rests with the cross appellant. Niles v. Niles, 9 Conn. App. 240, 249, 318 A.2d 932 (1986). The plaintiff in this case did not seek to have the trial court articulate its decision pursuant to Practice Book § 4051. . . .” Goold v. Goold, 11 Conn. App. 268, 285, 527 A.2d 696, cert. denied, 204 Conn. 810, 528 A.2d 1156 (1987). As a result, we cannot ascertain why the trial court denied the motion to open. In view of the inadequate record, we decline to review this claim.

The judgment is affirmed.

In this opinion the other judges concurred.

       The defendants are Paul J. Schieffer and Paul J. Schieffer, Inc. Paul J. Schieffer, Inc., was formed in May, 1986.

       General Statutes § 20-329 (a) provides in pertinent part: “The provisions of this chapter concerning the licensure of real estate brokers and real estate salesmen shall not apply to any person who as owner or lessor performs any of the acts enumerated in section 20-311, with reference to property owned, leased or sought to be acquired or leased by him, or to his regular employees who are employed as on-site residential superintendents or custodians, with respect to the property so owned or leased or sought to be acquired or leased when such acts are performed in the regular course of, or as an incident to, the management of such property and the investment therein . . . .” (Emphasis added.)

       General Statutes (Rev. to 1985) § 20-329 provides in pertinent part: “This chapter shall not apply to any person who as owner or lessor performs any of the acts enumerated in section 20-311 with reference to property owned, leased or sought to be acquired or leased by him, or to his regular employees, with respect to the property so owned or leased or sought to be acquired or leased when such acts are performed in the regular course of, or as an incident to, the management of such property and the investment therein . . . .” (Emphasis added.)

       General Statutes § 20-325a provides: “(a) No person who is not licensed under the provisions of this chapter, and who was not so licensed at the time he performed the acts or rendered the services for which recovery is sought, shall commence or bring any action in any court of this state, after October 1,1971, to recover any commission, compensation or other payment in respect of any act done or service rendered by him, the doing or rendering of which is prohibited under the provisions of this chapter except by persons duly licensed under this chapter.
      “(b) No person, licensed under the provisions of this chapter, shall commence or bring any action in respect of any acts done or services rendered after October 1,1971, as set forth in subsection (a), unless such acts or services were rendered pursuant to a contract or authorization from the person for whom such acts were done or services rendered. To satisfy the requirements of this subsection any such contract or authorization shall (1) be in writing, (2) contain the names and addresses of all the parties thereto, (3) show the date on which such contract was entered into or such authorization given, (4) contain the conditions of such contract or authorization and (5) be signed by the owner or an agent authorized to act on behalf of the owner only by a written document executed in the manner provided for conveyances in section 47-5, and by the real estate broker or his authorized agent.
      “(c) The provisions of this section shall not apply to any person excepted from the provisions of this chapter by section 20-329 with respect to any acts performed by him which are included in such exception.”

       General Statues § 31-72 provides in pertinent part: “When any employer fails to pay an employee wages in accordance with the provisions of sections 31-71a to 31-71Í . . . such employee . . . may recover, in a civil action, twice the full amount of such wages, with costs and such reasonable attorney’s fees as may be allowed by the court . . .

       See footnote 2.

       See footnote 4.

       The defendants’ original claim in their motion to dismiss, that a failure to comply with General Statutes § 20-325a creates a jurisdictional problem, is unavailing. Our Supreme Court has previously stated that “fi]n asserting that a failure to comply with General Statutes § 20-325a (b) creates a jurisdictional problem, the defendants rely primarily on the portion of the statute that provides: ‘No person . . . shall commence or bring any action . . . .’We note that similar language is found in the statute of frauds; General Statutes § 52-550; and in the statute of limitations for tort actions set forth in General Statutes § 52-577. Neither of those statutes creates a jurisdictional bar. See Seipold v. Gibbud, 110 Conn. 392, 395, 148 A. 328 (1930) (statute of frauds); Orticelli v. Powers, 197 Conn. 9, 15-16, 495 A.2d 1023 (1985) (§ 52-577).” McCutcheon & Burr, Inc. v. Berman, supra, 218 Conn. 527 n.16. Similarly, an alleged failure to comply with § 20-325a (a), which also begins by providing that “[n]o person . . . shall commence or bring any action,” does not create a jurisdictional bar.

       Practice Book § 157 provides: “Within fifteen days after the granting of any motion to strike, the party whose pleading has been stricken may file a new pleading; provided that in those instances where an entire complaint, counterclaim or cross complaint has been stricken, and the party whose pleading has been so stricken fails to file a new pleading within that fifteen-day period, the court may upon motion enter judgment against said party on said stricken complaint, counterclaim or cross complaint.”

       See footnote 5.


author: Dupont, C. J.

text:
    P and L Properties, Inc. v. Schnip Development Corporation et al.
    (12439)
    Dupont, C. J., and Landau and Speak, Js.
    Argued March 24
    decision released June 3, 1994

      Kenneth A. Votre, for the appellant (plaintiff).

      Thomas W. Witherington, with whom, on the brief, was Jill Hartley, for the appellees (defendants).
   Dupont, C. J.

The plaintiff appeals from the judgment that followed the trial court’s granting of the defendants’ motion to strike the fourth count of the plaintiff’s second amended complaint. Prior to the judgment that is the subject of this appeal, an earlier motion to strike had been directed at a revised amended complaint.

In March, 1991, the plaintiff commenced an action against one defendant, Schnip Development Corporation (Schnip), based on an alleged breach of contract for the sale of real property. The plaintiff contends that in August, 1989, the plaintiff and Schnip entered into a purchase and sale agreement in which the plaintiff agreed to sell and Schnip agreed to buy certain property located in New Haven. According to the plaintiff, Schnip breached the contract by failing to tender the purchase price on the closing date of February 1,1991.

In August, 1991, the plaintiff filed a revised amended complaint that named four additional defendants, referred to as the limited partnership defendants. The revised amended complaint added a fourth count, alleging fraudulent conveyance, and a fifth count, alleging a violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq., against both Schnip and the limited partnership defendants. In the fourth count, the plaintiff alleged the following facts. In September, 1989, Schnip and the city of New Haven entered into a development agreement. Under the agreement, Schnip agreed to redevelop an area within New Haven. Subsequently, the New Haven board of aldermen approved a land disposition agreement under which the city agreed to convey certain property to Schnip for redevelopment. In October, 1989, Schnip assigned and transferred its rights and obligations arising from the development agreement and the land disposition agreement with respect to certain property to the limited partnership defendants. The plaintiff claimed that Schnip’s assignment of its rights under the agreements was fraudulent because the assignment deprived Schnip of sufficient property to satisfy its obligations to the plaintiff.

On October 10,1991, the defendants moved to strike the fourth and fifth counts of the plaintiff’s revised amended complaint on the ground that the counts failed to state claims on which relief could be granted. The trial court granted the motion on November 9, 1992, finding that the factual allegations of the fourth and fifth counts failed to establish causes of action for fraudulent conveyance and unfair trade practice, respectively. The plaintiff then filed a second amended complaint on November 20,1992, alleging a fraudulent conveyance claim in the fourth count. On December 12,1992, the defendants moved to strike the fourth count of the second amended complaint on the ground that its factual allegations were the same as those made in the revised amended complaint. On February 9, 1993, the trial court granted the motion because the fourth count was “essentially the same pleading” as the stricken fourth count of the revised amended complaint.

On February 26, 1993, the plaintiff moved for judgment on the fourth count of the second amended complaint pursuant to Practice Book § 4002 (b). On April 20, 1993, the trial court granted the motion and rendered judgment on the fourth count in favor of the defendants. The plaintiff appealed from this judgment on May 7, 1993.

After a trial court has sustained a motion to strike a complaint or a portion of the complaint, the plaintiff has two options. “He may amend his pleading, or he may stand on his original pleading, allow judgment to be rendered against him, and appeal the sustaining of the [motion to strike]. . . . The choices are mutually exclusive. The filing of an amended pleading operates as a waiver of the right to claim that there was error in the sustaining of the [motion to strike] the original pleading. . . . When a [motion to strike] is sustained and the pleading to which it was directed is amended, that amendment acts to remove the original pleading and the [motion to strike] thereto from the case. The filing of the amended pleading is a withdrawal of the original pleading.” (Citations omitted; internal quotation marks omitted.) Royce v. Westport, 183 Conn. 177, 178-79, 439 A.2d 298 (1981); Good Humor Corp. v. Ricciuti, 160 Conn. 133, 135-36, 273 A.2d 886 (1970). “The choice is left to the plaintiff, but once he files an amended pleading the ruling on the [motion to strike] ceases to be an issue. The rule is a sound one, as it serves to prevent the prolongation of litigation.” Good Humor Corp. v. Ricciuti, supra, 136.

In this case, the plaintiff chose the first option by filing its second amended complaint after the trial court sustained the motion to strike the fourth and fifth counts of the revised amended complaint. By filing the second amended complaint, the revised amended complaint was removed from the case, and the plaintiff waived the right to claim that the trial court improperly sustained the motion to strike the fourth count of the revised amended complaint. The plaintiff, however, does not claim that the trial court improperly sustained the motion to strike the fourth count of the revised amended complaint but, rather, contends that the trial court improperly sustained the second motion to strike the fourth count of the second amended complaint.

When the allegations of an amended complaint appear to be the same in substance as those of an earlier complaint that was stricken, the defendant may challenge the amended complaint by filing a request to revise; Royce v. Westport, supra, 183 Conn. 180-81; or a second motion to strike. See Jensen v. Nationwide Mutual Ins. Co., 158 Conn. 251, 263-64, 259 A.2d 598 (1969). “The request to revise is a [request] for an order directing the opposing party to revise his pleading in the manner specified.” Royce v. Westport, supra, 180. Although the request to revise may not ordinarily be used to substantively challenge a pleading, it may be used to delete “ ‘otherwise improper allegations’ ” from a complaint. Id. The motion to strike, on the other hand, challenges the legal sufficiency of the pleading by testing whether the complaint states a cause of action on which relief can be granted. Amore v. Frankel, 228 Conn. 358, 372, 636 A.2d 786 (1994).

Although the pleadings generally serve different functions, either may be used when the amended complaint merely restates the original cause of action that was previously stricken. See Royce v. Westport, supra, 183 Conn. 180; Good Humor Corp. v. Ricciuti, supra, 160 Conn. 135; Jensen v. Nationwide Mutual Ins. Co., supra, 158 Conn. 264. If the plaintiff here has in fact merely restated the original cause of action, the defendant would prevail on either pleading. In this case, the allegations of the second amended complaint are essentially the same as those of the revised amended complaint. The plaintiff has failed to change its allegations or to provide different facts in its amendment. Since the second amended complaint merely reiterated claims previously disposed of by the trial court, the motion to strike the second amended complaint was properly sustained.

The judgment is affirmed.

In this opinion the other judges concurred.

       Lee Parcel 1 Associates Limited Partnership, Lee Parcel 2 Associates Limited Partnership, Lee Parcel 6 Associates Limited Partnership, and Lee Parcel 6A Associates Limited Partnership are the additional defendants.

       We need not discuss the allegations of the fifth count. See footnote 4 and accompanying text.

       The term defendants refers to both Sehnip and the limited partnership defendants.

       The fifth count of the revised amended complaint is not a subject of this appeal because the plaintiff did not replead it nor did the plaintiff obtain a judgment as to the fifth count after the trial court granted the defendants’ motion to strike. See Practice Book § 4002.

       Practice Book § 4002 (b) provides in pertinent part: “When fewer than all of the counts of a complaint . . . have been stricken, the trial court may, upon motion pursuant to this subsection, render judgment upon such stricken counts if (1) such counts are directed against a party against whom no relief is sought in the remaining counts of such pleading . . . .” In this case, no relief is sought against the limited partnership defendants in the remaining counts of the second amended complaint. Although the defendant Schnip is a party against whom relief is sought in the remaining counts of the pleading, we conclude that the judgment against all of the defendants, following the motion to strike the fourth count as to all of the defendants, is an appealable final judgment. See Practice Book § 4002 (a); Zeller v. Mark, 14 Conn. App. 651, 652 n.2, 542 A.2d 752 (1988).

       The plaintiff could have tested the legal sufficiency of its allegations to support a cause of action after the first motion to strike was granted by moving for judgment on the fourth and fifth counts and then appealing from the judgment rendered against it. See Practice Book § 4002 (b).

       We note that our Supreme Court indicated in a footnote in People’s Bank v. Horesco, 205 Conn. 319, 321-22 n.5, 533 A.2d 850 (1987), that when the amended pleading contains substantially the same allegations as those stricken from the original pleading, the challenging party should file a request to revise, not a second motion to strike. The discussion in the footnote relied on Good Humor Corp. v. Ricciuti, supra, 160 Conn. 135, which does not prevent the use of a motion to strike in this situation, but did not consider Jensen v. Nationwide Mutual Ins. Co., supra, 158 Conn. 264, which affirmed a trial court’s decision to sustain a second demurrer (a motion to strike) under these circumstances. Thus, Good Humor Corp. and its progeny and Jensen may be reconciled with People’s Bank by concluding that the challenging party may file either a motion to strike or a request to revise when claiming that the amended pleading restates the allegations that were previously stricken from the original pleading.