text:
    REGENCY SAVINGS BANK v. WESTMARK PARTNERS ET AL.
    (AC 19683)
    Lavery, C. J., and Spear and Cretella, Js.

      Argued March 28
    officially released August 1, 2000

      Scott D. Rosen, for the appellant (plaintiff).

      Thomas L. Kanasky, Jr., for the appellees (defendants).
   Opinion

LAVERY, C. J.

The plaintiff, Regency Savings Bank, appeals from the judgment of the trial court sustaining the defendants’ objection to a motion for deficiency judgment arising out of a mortgage foreclosure action. The plaintiff contends that the court improperly concluded that certain defendants were not liable for any portion of the deficiency pursuant to a guarantee agreement. We reverse the judgment of the trial court.

The following facts are relevant to this appeal. On June 30,1987, CGI Danbury Associates Limited Partnership (CGI) executed a $3.5 million promissory note to Society for Savings (Society) and secured the note with a mortgage deed to a parcel of land in Danbury (property). CGI also granted to Society a security interest in various other collateral. Subsequently, CGI desired to convey the property to the named defendant, Westmark Partners (Westmark). Society permitted the conveyance. In exchange, Westmark agreed to assume all of the obligations of CGI, the original borrower, under the note. In addition, two members of the Westmark partnership, Monroe Markovitz and Jesse S. Weissberg (guarantors), agreed to guarantee payment of the note. On February 18,1988, agreements effecting this transaction were executed by the parties. In 1996, Society assigned its interest in the note to the plaintiff.

Payment on the note ceased on July 1, 1997, and the plaintiff exercised its option to declare the entire balance due. The plaintiff commenced this action on October 7,1997, to foreclose the mortgage that secured the note guaranteed by the guarantors. The court rendered a judgment of strict foreclosure in favor of the plaintiff on August 31, 1998.

At the time of the judgment, the court found that the mortgage debt was $3,573,731.83. The court further found that the value of the property was $2.3 million. On October 20, 1998, the plaintiff filed a motion for a deficiency judgment against Westmark and the guarantors. On November 30, 1998, the defendants filed an objection, which the court sustained. The plaintiff appealed. Other facts will be discussed where they are relevant to issues in this appeal.

“Where there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law.” (Internal quotation marks omitted.) Bank of Boston Connecticut v. Schlesinger, 220 Conn. 152, 158, 595 A.2d 872 (1991). Accordingly, this court’s review of the contract and its accompanying guarantee is plenary. Days Inn of America, Inc. v. 161 Hotel Group, Inc., 55 Conn. App. 118, 124, 739 A.2d 280 (1999).

This appeal focuses on the question of what extent, if at all, the guarantors are liable for a deficiency judgment. The guarantors contend that they are protected from a deficiency judgment by language in the note that states, “In any action brought by the Lender with respect to the Loan naming the Borrower or any Parties as a defendant, the Lender shall not, except as specifically provided above, enforce a judgment for money damages against the Borrower or any Parties obtained by deficiency judgment or otherwise.”

The plaintiff focuses on language in the guarantee signed by Marlcovitz and Weissberg, and contends that it defines the plaintiffs right to recover from them. The guarantee states that “each of the undersigned Guarantors . . . unconditionally guarantees by this agreement . . . the payment and performance from or by the Borrower of any and all obligations from the Borrower to the Lender . . . The guarantee defines “obligations” to include “the Loan evidenced by the Note.” The guarantee also states that the liability of Markovitz and Weissberg is unconditional and absolute. The guarantee states that “the liability of the Guarantor hereunder is direct and unconditional and may be enforced without requiring the Lender first to resort to any other right, remedy or security . . . .” The guarantee also provides that foreclosure or disposition of the property does not affect the liability of the guarantors. The note protects the borrower against a deficiency judgment. The guarantee, on the other hand, does not afford the guarantors such protection, although it does limit their liability.

“A contract must be construed to effectuate the intent of the parties, which is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction. . . . [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and . . . the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract.” (Internal quotation marks omitted.) Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 498, 746 A.2d 1277 (2000).

In short, a guarantee is a promise to answer for the debt, default or miscarriage of another. Superior Wire & Paper Products, Ltd. v. Talcott Tool & Machine, Inc., 184 Conn. 10, 20-21 n.8, 441 A.2d 43 (1981); see also Ted Spangenberg Co. v. Peoples Natural Gas, Division of Northern Natural Gas Co., 305 F. Sup. 1129, 1135 (S.D. Iowa 1969), aff'd, 439 F.2d 1260 (8th Cir. 1971). It is simply a species of contract. AALCO Plumbing Supply Co. v. John L. Henson Plumbing Co., 464 S.W.2d 10, 12 (Mo. 1971). The contract of guarantee is no doubt an agreement separate and distinct from the contract between the lender and the borrower. Alling Paper Co. v. Massinin, 31 Conn. Sup. 154, 156, 325 A.2d 533 (1974); see also Graybar Electric Co. v. Opp, 138 Ga. App. 456, 457, 226 S.E.2d 271, amended, 140 Ga. App. 481, 231 S.E.2d 494 (1976). When two agreements, however, are connected by reference and subject matter, both are to be considered in determining the real intent of the parties. Massaro v. Savoy Estates Realty Co., 110 Conn. 452, 459, 148 A. 342 (1930). “Where . . . the signatories execute a contract which refers to another instrument in such a manner as to establish that they intended to make the terms and conditions of that other instrument a part of their understanding, the two may be interpreted together as the agreement of the parties.” Batter Building Materials Co. v. Kirschner, 142 Conn. 1, 7, 110 A.2d 464 (1954). Accordingly, we read the note, mortgage deed and subsequent guarantee together for purposes of interpreting their provisions.

The court interpreted the documents as follows: The note and mortgage deed state that the borrower is not obligated to pay a deficiency judgment; the guarantors are required to meet only the obligations of the borrower; therefore, the guarantors are not obligated to satisfy a deficiency judgment that is not an obligation of the borrower.

We cannot agree with the trial court’s conclusion. Such an interpretation would render the guarantee a nullity. The guarantee would have no force and effect. See South End Plaza Assn., Inc. v. Cote, 52 Conn. App. 374, 378, 727 A.2d 231 (1999). We cannot conclude that Society, when it allowed the original borrower to convey the property to Westmark, would have done so in exchange for a guarantee that is virtually meaningless. Our Supreme Court long ago noted the improbability that either party to an agreement “would intend or consciously enter into an agreement which is unfair and inequitable to himself . . . .” Peoples v. New England Lumber & Box Co., 107 Conn. 724, 726, 142 A. 387 (1928).

The court’s conclusion is not in accord with this court’s well settled reluctance to “conclude that a contractual provision constitutes a meaningless gesture by the parties. . . . The rules of construction dictate giving effect to all the provisions of a contract, construing it as a whole and reconciling its clauses. . . . Where two clauses which are apparently inconsistent may be reconciled by a reasonable construction, that construction must be given, because it cannot be assumed that the parties intended to insert inconsistent and repugnant provisions.” (Internal quotation marks omitted.) Warner Associates v. Logan, 50 Conn. App. 90, 95, 718 A.2d 48 (1998).

This case is similar to Federal Deposit Ins. Corp. v. Singh, 977 F.2d 18, 20 (1st Cir. 1992), in which a partnership in 1985 executed a promissory note to a bank, with the note being guaranteed by the individual partners. Two years later, a new note was substituted and, among other changes, contained an assurance that the bank would look solely to its collateral for satisfaction of the obligations of the debt and not to the personal assets of any partner. Id. In addressing the conflict between the second note and the guarantee, the United States Court of Appeals for the First Circuit rejected the partners’ “unremitting effort to overshadow the Guaranty by a single-minded focus on the 1987 Note’s non-recourse provision”; id., 22; stated that rendering the guarantee nugatory would contradict well settled law that directs courts to give effect to each provision of an agreement where feasible and enforced the guarantee. Id., 22-23.

It is an abiding principle of equity jurisprudence that parties should be placed in situations in which they agreed to be placed. OCI Mortgage Corp. v. Marchese, 56 Conn. App. 668, 683, 745 A.2d 819, cert. granted on other grounds, 253 Conn. 903, 753 A.2d 937 (2000), citing Atwood v. Vincent, 17 Conn. 575, 582 (1846). The guarantors agreed to guarantee the note and specifically limited their liability as set forth in footnote 4. This guarantee occurred in consideration for Society’s allowing the property to be conveyed to Westmark, without the acceleration of the mortgage note. We will not allow the guarantors to receive the benefit of their bargain, but escape its risks when they arise. See Iamartino v. Avallone, 2 Conn. App. 119, 126, 477 A.2d 124, cert. denied, 194 Conn. 802, 478 A.2d 1025 (1984). We therefore conclude that the defendants’ objection to the motion for deficiency judgment should have been overruled.

The judgment is reversed and the case is remanded for further proceedings on the plaintiffs motion for a deficiency judgment.

In this opinion the other judges concurred.

       The defendants are Westmark Partners, Monroe Markovitz in his individual capacity, Monroe Markovitz and Gloria Weissberg as executors of the estate of Jesse S. Weissberg, Elcom Company, Inc., and Ford Motor Credit Company.

       The defendants in question are Monroe Markovitz in his individual capacity, and Monroe Markovitz and Gloria Weissberg as executors of the estate of Jesse S. Weissberg.

       The plaintiffs brief notes that Society had no obligation to permit the conveyance, as it would have constituted a default under the governing agreement. Society also waived any default under the mortgage in connection with the conveyance and further waived any prepayment fees in connection with the conveyance.

       The amount guaranteed was limited to the total of the last twelve months of monthly installments of principal and interest due on the note prior to the lender’s acceleration.

       See footnote 4.


source: Caselaw Access Project

author: HENNESSY, J.

license: Public Domain

text:
    JULIE BLEUER v. JAMES BLEUER
    (AC 18623)
    Schaller, Hennessy and Mihalakos, Js.
    Argued March 2
    officially released August 1, 2000

      Thomas C. C. Sargent, for the appellant (defendant).

      China Anne Pasquini, with whom, on the brief, was David Eric Ross, for the appellee (plaintiff).
   Opinion

HENNESSY, J.

In this appeal, the defendant, James Bleuer, challenges the financial orders issued by the trial court incident to a judgment of dissolution rendered in an action brought by the plaintiff, Julie Bleuer. The defendant claims that the court improperly (1) found that his earning capacity was $100,000 per year, and (2) valued the family business and thus improperly allocated property under General Statutes § 46b-81.

The court found the following facts. On June 2,1973, the plaintiff and the defendant were married in Darien. During their marriage, the parties owned and operated a successful garden center and landscape business known as Casa Verde Gardens, Inc. (Casa Verde Gardens). The plaintiff managed the bookkeeping and handled the retail portion of the business. The defendant ran the landscape portion of the business, including installation and design. The business generated all the income for the family. Marital difficulties, present from the start of the marriage, worsened and the marriage broke down irretrievably. Subsequently, in 1996, the defendant began diverting funds from the family business to his own accounts and made other efforts to destroy the business. By January, 1998, the business was forced to close.

The court dissolved the marriage, finding the defendant at fault for its breakdown, and entered the following orders relevant to this appeal. In lieu of alimony, the marital home was awarded to the plaintiff, subject to a mortgage and a home equity loan, and Casa Verde Gardens was awarded to the defendant, subject to its liabilities. Other personal assets, such as IRA accounts, were distributed to the parties. In sum, the court ordered a property distribution of 80 percent to the plaintiff and 20 percent to the defendant based, in part, on the finding that the defendant’s annual earning capacity was $100,000. Additional factual findings by the trial court will be set forth as necessary to resolve the issues on appeal.

I

The defendant first claims that the court could not reasonably have found that his annual earning capacity was $100,000. The defendant argues that the court’s conclusion “was unsupported either by arithmetic or even a rudimentary logical analysis.” We disagree.

“The standard of review in family matters is that this court will not disturb the trial court’s orders unless it has abused its legal discretion or its findings have no reasonable basis in fact. ... It is within the province of the trial court to find facts and draw proper inferences from the evidence presented.” (Internal quotation marks omitted.) Werblood v. Birnbach, 41 Conn. App. 728, 730, 678 A.2d 1 (1996). “[E]very reasonable presumption will be given in favor of the trial court’s ruling, and ‘[njothing short of a conviction that the action of the trial court is one which discloses a clear abuse of discretion can warrant our interference.’ ” Burton v. Burton, 189 Conn. 129, 138, 454 A.2d 1282 (1983), quoting Trunik v. Trunik, 179 Conn. 287, 290, 426 A.2d 274 (1979).

In a marital dissolution proceeding, the court may base financial awards on earning capacity rather than actual earned income of the parties. See, e.g., Venuti v. Venuti, 185 Conn. 156, 161, 440 A.2d 878 (1981), Miller v. Miller, 181 Conn. 610, 611-12, 436 A.2d 279 (1980); Schorsch v. Schorsch, 53 Conn. App. 378, 386, 731 A.2d 330 (1999). While there is “no fixed standard” for the determination of an individual’s earning capacity; Yates v. Yates, 155 Conn. 544, 548, 235 A.2d 656 (1967); it is well settled that earning capacity “is not an amount which a person can theoretically earn, nor is it confined to actual income, but rather it is an amount which a person can realistically be expected to earn considering such things as his vocational skills, employability, age and health.” Lucy v. Lucy, 183 Conn. 230, 234, 439 A.2d 302 (1981). When determining earning capacity, it also is especially appropriate for the court to consider whether the defendant has wilfully restricted his earning capacity to avoid support obligations. See Miller v. Miller, supra, 612; Schmidt v. Schmidt, 180 Conn. 184, 189-90, 429 A.2d 470 (1980); Whitney v. Whitney, 171 Conn. 23, 28, 368 A.2d 96 (1976); Tobey v. Tobey, 165 Conn. 742, 749, 345 A.2d 21 (1974); Yates v. Yates, supra, 548-49; Schorsch v. Schorsch, supra, 386; Carey v. Carey, 29 Conn. App. 436, 440, 615 A.2d 516 (1992); Hart v. Hart, 19 Conn. App. 91, 95, 561 A.2d 151, cert. denied, 212 Conn. 813, 565 A.2d 535 (1989).

In this case, sufficient evidence was before the court to support its determination that the defendant’s earning capacity was $100,000. The record indicates that the court took into account the defendant’s actual income, age, health, experience and talent, as well as his efforts to reduce his earning capacity.

With respect to the defendant’s actual earnings during the marriage, we acknowledge that it was difficult for the trial court to arrive at a precise number because the parties had filed joint tax returns. It is clear, however, from the testimony and from the financial records submitted at trial that during the marriage the parties received an average combined gross income of $112,617.33. This figure includes the parties’ salaries and benefits received from the business, such as automobile and personal expenses. More importantly, evidence indicates that upward of $100,000 of the parties’ combined income was attributable to the defendant. The defendant’s own testimony and a comparison of the financial records from the landscape and retail portions of the business support the court’s conclusion that the defendant was the driving force behind Casa Verde Gardens.

Income tax records also indicated that the defendant earned $90,705.10 in 1996. Although income tax records from 1997 show that the defendant earned $7128, we do not examine the record on appeal to determine whether the trial court could have reached a different result. See Leo v.Leo, 197 Conn. 1, 4, 495 A.2d 704 (1985). That court is in an especially advantageous position to assess the credibility of the witnesses. Id. Given that 1997 was the same year that the defendant diverted funds from Casa Verde Gardens, we defer to the court’s judgment with respect to the credibility of the defendant and conclude that it was not an abuse of discretion for the court to disregard that evidence as to his 1997 income.

As the court recognized, the unique character of Casa Verde Gardens made it unlikely that the defendant could replicate its success. Other evidence, however, supports an earning capacity of $100,000. The defendant’s business endeavor during 1997, which provided only landscaping services, grossed $161,881 and yielded a net of $45,000 for the defendant. As the plaintiff pointed out at trial, that represents a promising profit margin of 28 percent. The defendant also received horticultural awards for landscape design, he published articles in horticultural magazines and, by his own testimony, had a reputation with affluent clientele. Finally, the court found that the defendant had diverted funds from and systematically destroyed Casa Verde Gardens as a business enterprise.

In light of the defendant’s moderate success in the landscape business in 1997, his experience and talent as a landscape designer and business owner, his significant role in operating Casa Verde Gardens and his ultimate role in destroying the stream of income that it generated, we conclude that the court’s valuation of an earning capacity of $100,000 per year is supported by the record and did not constitute an abuse of discretion.

II

The defendant also claims that the court abused its discretion by ordering a distribution of assets on the basis of an erroneous valuation of the parties’ family business. We disagree.

It is well established that, in a dissolution action, the court may distribute marital property unevenly. See, e.g., Werblood v. Birnbach, supra, 41 Conn. App. 735-36; Siracusa v. Siracusa, 30 Conn. App. 560, 567, 621 A.2d 309 (1993); Damon v. Damon, 23 Conn. App. 111, 113, 579 A.2d 124 (1990). General Statutes § 46b-81 (a) provides in relevant part that a court “may assign to either the husband or wife all or any part of the estate of the other. ... (c) In fixing the nature and value of the property, if any, to be assigned, the court, after hearing the witnesses, if any, of each party . . . shall consider the length of the marriage, the causes for the . . . dissolution of the marriage . . . the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates.” Although the court must consider all of the statutory criteria when determining the appropriate property distribution, it need not give equal weight to or explicitly address each factor. See Burns v. Burns, 41 Conn. App. 716, 725-26, 677 A.2d 971, cert. denied, 239 Conn. 906, 682 A.2d 997 (1996); Savage v. Savage, 25 Conn. App. 693, 701, 596 A.2d 23 (1991). Moreover, our courts have held, and the defendant does not dispute, that the trial court is not required, as a matter of law, to separately value each asset. See Bornemann v. Bornemann, 245 Conn. 508, 531, 752 A.2d 978 (1998); Puris v. Puris, 30 Conn. App. 443, 449, 620 A.2d 829 (1993).

The defendant claims that the court compensated the plaintiff twice by awarding property to her on the basis of the destruction of her earning capacity and the destruction of the business. In support of his position, the defendant relies on Ehrenkranz v. Ehrenkranz, 2 Conn. App. 416, 420-21, 479 A.2d 826 (1984), in which this court held that the trial court’s award was mathematically flawed in that lump sum alimony and the defendant’s one-half interest in the marital home were awarded to the plaintiff on the basis of the defendant’s net worth, which had been improperly calculated on the basis of the value of the marital home. The defendant argues that the award in this case is similarly inconsistent. We disagree.

The defendant’s position that the court improperly valued the family business and, therefore, improperly distributed property is without merit. The court stated that it did not know what the value of the business was, but knew that “it netted $95,000 a year in its last year of reasonable operation.” From that statement, it is clear that the court did not distribute property on the basis of the valuation of the business. Rather, it distributed property to the plaintiff because the defendant destroyed whatever value the business might have had. Section 46b-81 explicitly provides that the court may consider both the parties’ future opportunities for earning income and their contribution to the preservation of their respective estates. It is clear from the court’s memorandum of decision, its clarification of that decision and the judgment that the court gave proper consideration to the various statutory criteria when distributing the marital assets.

Other evidence provides additional support for the court’s findings with respect to property distribution. Testimony supports the court’s conclusion that the breakdown of the marriage was “directly related to the [the defendant’s] verbal, emotional and physically threatening abuse.” The court also considered that the plaintiff was given sole custody of the parties’ three minor children, each of whom presented significant challenges as a result of the defendant’s abuse. The court functions as a trier of fact when assessing the parties’ estates for purposes of distribution. See Bornemann v. Bornemann, supra, 245 Conn. 531. As a result, the court may reject or accept testimony as it finds applicable. Id. It is not our role as an appellate court “to retry the facts of the case, substitute our judgment for that of the trial court, or articulate or clarify the trial court’s decision.” Puris v. Puris, supra, 30 Conn. App. 449. Where, as here, the court acted within the guidelines provided in § 46b-81 and reasonably could conclude as it did, we will not disturb its judgment.

The judgment is affirmed.

In this opinion the other judges concurred.

       In support of his position, the defendant argues (hat in 1994, 1995 and 1996, the parties were paid combined wages of $76,691, $83,685 and $96,116 plus benefits, respectively. Because the parties shared the salaries equally and only placed a greater share in the defendant’s paycheck for tax purposes, the defendant submits that at most, his earning capacity was $48,058. The defendant also rejects the court’s determination of earning capacity on the basis of the net earnings of the landscape portion of the business in 1997. The defendant claims that the court based its conclusion on the gross profit of the landscape business without deducting business expenses, such as labor. In that year, the defendant claims, he netted $45,000.


author: PETERS, J.

text:
    OUTDOOR DEVELOPMENT CORPORATION v. TOM MIHALOV, SR.
    (AC 19183)
    Schaller, Zarella and Peters, Js.
    Argued June 6
    officially released August 1, 2000

      William J. Wenzel, with whom, on the brief, was Sheila A. Denton, for the appellant (plaintiff).

      Dion Moore and Alan Neigher, with whom was Ann Marie Willinger, for the appellees (defendants).
   Opinion

PETERS, J.

This appeal arises out of a landowner’s repudiation of a lease permitting the tenant to construct and maintain an outdoor advertising sign on the landowner’s property. It is no longer contested that the repudiation was a breach of the lease. The principal issue before us is whether the trial court properly determined the amount of lost profits that the breach entitled the tenant to recover from the landlord.

The plaintiff, Outdoor Development Corporation, brought a multicount action against the defendants, Tom Mihalov, Sr. (Mihalov), and Murphy, Inc. (Murphy), in which the plaintiff sought recovery for Mihalov’s repudiation of a ten year lease authorizing the plaintiff to construct a billboard at 1945 State Street Extension in Bridgeport. The plaintiff also sought recovery from Murphy, which had been the tenant immediately antecedent to the plaintiffs lease and which allegedly had persuaded Mihalov to repudiate the plaintiffs lease. The counts against Murphy charged it with tortious interference with Mihalov’s lease of his property to the plaintiff. Murphy filed a counterclaim against the plaintiff claiming that the plaintiff tortiously had interfered with Murphy’s contract with Mihalov.

The parties agreed to a court trial and stipulated that the trial should be bifurcated, with separate hearings on the issues of liability and of damages. At the end of the hearing on liability, the court concluded that the plaintiff had proven only counts one and two of its complaint, in which it sought damages from Mihalov for breach of contract. It further concluded that Murphy had not proven its counterclaim. At the end of the hearing in damages, in which the plaintiff sought to recover its out-of-pocket expenses and future lost profits, the court ordered Mihalov to pay damages only for the plaintiffs lost profits. It found that these damages amounted to $29,500.

The plaintiffs appeal raises three issues. According to the plaintiff, the court improperly (1) calculated lost profits, (2) excluded the plaintiffs documentary rebuttal evidence and (3) permitted Muiphy, after its exoneration in the liability phase of the hearing, to present evidence in the damages phase. We are not persuaded by any of the plaintiffs claims.

I

LOST PROFITS

We review the plaintiffs challenge to the court’s award of damages in accordance with well established standards. “[W]e undertake a two-part analysis. First, we ascertain whether the trial court’s underlying factual findings were clearly erroneous. State v. Torres, 197 Conn. 620, 625, 500 A.2d 1299 (1985); Pandolphe’s Auto Parts, Inc. v. Manchester, 181 Conn. 217, 221, 435 A.2d 24 (1980). . . . Second, in light of the facts found by the trial court, we determine whether the [trial court] was correct in [its legal conclusions]. . . . The trial court’s conclusions must stand unless they are legally and logically inconsistent with the facts.” (Internal quotation marks omitted.) State v. Donahue, 251 Conn. 636, 642, 742 A.2d 775 (1999).

The plaintiff asks us to reverse the court’s finding of damages on two grounds. First, the plaintiff asserts that the court’s assessment of its annual future lost profits was based on an improper legal standard. Second, the plaintiff claims that the corn! should have awarded it damages for more than five years. We disagree.

A

Calculation of Annual Lost Profits

The plaintiff sought damages for its lost profits on the theory that its damages ought to reflect the proposition that the breach of its lease deprived it of the opportunity to earn profits without regard to fixed costs. Analogizing to the provisions of General Statutes § 42a-2-708; see Bead Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266, 277-78, 439 A.2d 314 (1981); the plaintiff maintained that its damages should have included a recovery for overhead or should have excluded any calculation of its fixed costs. That principle was applicable, according to the plaintiff, because, over all, the fixed costs attributable to its billboard business would not have been increased by its performance of the Mihalov lease. The plaintiff argues that the court improperly assessed its damages by accepting an analysis that deducted fixed costs from the profits that, but for Mihalov’s breach, the plaintiff could have been expected to earn. The plaintiff continues to press this argument on appeal.

Under the circumstances of this case, the plaintiffs argument founders not on a principle of law but on the lack of factual support. To prevail, the plaintiff was required to provide to the court credible evidence quantifying the amount of damages that, on its theory, it would be entitled to recover. The court found that the plaintiff had failed to do so.

The plaintiff presented its evidence on damages through the testimony of Bruce A. Barrett. On the basis of that testimony, the court found that the plaintiff corporation is one of several entities owned by members of the Barrett family. Since 1963, Barrett Outdoor Communications, Inc., has been engaged in the business of outdoor billboard advertising. In 1992, the Barretts decided that Barrett Outdoor Communications, Inc., would continue to build and manage the billboards and that the plaintiff would be incorporated separately to find suitable real estate and to make suitable arrangements with those owning the sites. The two companies continued, however, to operate as one integrated family business that organized its finances so as to provide income to members of the family. For example, in 1995, the plaintiff, organized as a subchapter S corporation, paid substantial salaries to its officers at the same time that the corporation reported an overall loss to the Internal Revenue Service. For similar family reasons, the plaintiff paid substantial management fees to Barrett Outdoor Communications, Inc.

Because of this family oriented corporate structure, the court expressed serious reservations about the weight of the evidence offered by Barrett. The weight to be given to Barrett’s testimony was further diminished by the fact that, as he acknowledged, he had no training in accounting principles and had based his analysis of the plaintiffs lost profits on a calculation that did not conform to generally accepted accounting principles.

On this record, the court determined that “the better and weightier evidence on the issue of damages” was the evidence offered by Ray LaLuna, Murphy’s expert, on behalf of Mihalov. LaLuna deducted from the profits that the plaintiff likely would have realized the expenses that, in his view, the plaintiff would have incurred. He based his figures on profits and expenses actually incurred by Murphy in its use of the Mihalov property. His analysis of net profits did not differentiate between fixed costs and direct costs. Whether or not this analysis was analytically correct, the plaintiff never offered persuasive evidence to the court, either in its case-in-chief or on cross-examination, to establish the specific amount of fixed costs that, in its view, should have been added back to arrive at a figure that would have made the plaintiff whole. Even now, on appeal, the plaintiffs brief does not close this evidentiary lacuna.

It was the plaintiffs burden to establish the amount of its damages, and it failed to do so. If the court had rejected the Murphy figures as insufficiently probative, the court would have been hard put to find an eviden-tiary foundation for any award of damages. In light of the probative evidence before the court, we are persuaded that it properly assessed the damages to which the plaintiff was entitled to an annual amount of $5900 per year.

B

The Duration of the Annual Award

The court found that, despite the ten year term of the lease, the plaintiff was entitled to recover damages only for five years. It reasoned that any further award would be too speculative in light of “the competitive nature of the industry, the ongoing uncertainty regarding [Mihaiov’s] continued ownership of the real estate, and the disputes about zoning and permit issues.” The plaintiff argues that it should have been allowed recovery at least for the ten year initial term of its lease of the Mihalov property. We disagree.

The plaintiffs contention in this regard is encumbered by the same difficulties as his argument with respect to the base figure of $5900 per year. The court’s conclusion was based on findings of fact. Although the plaintiff disputes the inferences that the court drew from the evidence presented on behalf of Mihalov, we are not persuaded that the findings of fact were clearly erroneous. See State v. Donahue, supra, 251 Conn. 642. We conclude that the judgment of the trial court on this issue must be affirmed.

II

EXCLUSION OF DOCUMENTARY EVIDENCE OFFERED ON REBUTTAL

At the conclusion of the evidence presented on behalf of Mihalov, the plaintiff, in rebuttal, attempted to recall Barrett to introduce further documentary evidence in support of its claimed right to recover lost profits. The proposed evidence would have reconfigured the LaLuna evidence presented by Murphy in light of the method of analysis proposed by Barrett in his testimony in chief. The plaintiff argues that the court improperly excluded the plaintiffs evidentiary proffer. We disagree.

The court held that the proffered rebuttal evidence should be excluded for two reasons. First, it found that, because of Barrett’s limited qualifications to formulate financial analyses, the plaintiff had not demonstrated a proper basis for the admissibility of the evidence. Second, it found that the proffer was not true rebuttal because the plaintiff could have introduced the evidence earlier, either in its own presentation or in cross-examination of the expert evidence offered by LaLuna on behalf of Mihalov. In the latter regard, the court noted expressly that, once the plaintiff had access to the underlying financial data, the plaintiff should and could have anticipated the contents of that expert evidence.

The admission of rebuttal evidence ordinarily is within the sound discretion of the trial court. In considering whether a trial court has abused its discretion, appellate courts view such a trial court ruling by making every reasonable presumption in favor of the decision of the trial court. State v. Canty, 223 Conn. 703, 715-16, 613 A.2d 1287 (1992); State v. Cepeda, 51 Conn. App. 409, 439, 723 A.2d 331, cert. denied, 248 Conn. 912, 732 A.2d 180 (1999).

We are persuaded that the plaintiff has failed to demonstrate an abuse of discretion by the trial court in this case. The court repeatedly expressed its doubts about the probative value of Barrett’s testimony. Assessment of the weight to be given to conflicting evidence was a judgment call that the trial court was entitled to make. D’Angelo v. McGoldrick, 239 Conn. 356, 365, 685 A.2d 319 (1996); Temple v. Meyer, 208 Conn. 404, 407, 544 A.2d 629 (1988). Similarly, the trial court was in abetter position than is this court to assess the plaintiffs ability, earlier in the trial, to have presented the evidence belatedly offered on rebuttal. Accordingly, we affirm the court’s exclusion of the plaintiffs rebuttal evidence.

Ill

FAILURE TO PRECLUDE EVIDENTIARY PRESENTATION BY MURPHY

At the end of the liability phase of this bifurcated trial, the court exonerated Murphy from any legal responsibility for the injury caused to the plaintiff by Mihalov’s breach of contract.

Nonetheless, over the plaintiffs objection, the court permitted Murphy to participate in the damages phase of the trial and to offer evidence of damages through the expert witness, LaLuna.

The court overruled the plaintiffs objection for two reasons. It found that Murphy’s participation would not prejudice the rights of the plaintiff and that such participation was justified by Murphy’s possible liability under an indemnification agreement between it and Mihalov.

On appeal, the plaintiff renews his objection to Murphy’s participation. It is hornbook law that appellate courts do not undertake plenary review of challenges to a trial court’s evidentiary rulings. “[T]he trial court has broad discretion in ruling on the admissibility of evidence. . . . The trial court’s ruling on evidentiary matters will be overturned only upon a showing of a clear abuse of the court’s discretion.” (Citations omitted; internal quotation marks omitted.) State v. Sullivan, 244 Conn. 640, 646, 712 A.2d 919 (1998); State v. Coleman, 241 Conn. 784, 789, 699 A.2d 91 (1997); Potter v. Chicago Pneumatic Tool Co., 241 Conn. 199, 259, 694 A.2d 1319 (1997). This standard of review applies not only to evidentiary rulings about particular evidentiary proffers but also to rulings about the qualifications of the person through whom the evidentiary proffer is made. State v. McClendon, 248 Conn. 572, 585-86, 730 A.2d 1107 (1999) (qualifications of expert witness); State v. Kemp, 199 Conn. 473, 476, 507 A.2d 1387 (1986) (same).

The plaintiff has failed to demonstrate any abuse of discretion in the court’s ruling permitting Murphy to participate in the hearing on damages. Significantly, the plaintiffs objection targets only the auspices under which LaLuna’s testimony was offered. It does not challenge the admissibility of LaLuna’s testimony had he been called by Mihaiov and thus makes no argument to refute the court’s finding of lack of prejudice. It does not deny the existence of an indemnification agreement between Mihaiov and Muiphy.

We conclude that the court did not abuse its discretion in allowing Murphy to participate in the hearing on damages. On the record before it, the court properly rejected the arguments of the plaintiff to the contrary.

The judgment is affirmed.

In this opinion the other judges concurred.

       The lease gave the plaintiff the option to renew it for another ten year term.

       The plaintiff alleged that Mihalov wrongfully had terminated the lease agreement and that this conduct not only was a breach of contract but also a violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq.

       The plaintiff alleged that Muiphy had tortiously interfered with the plaintiffs contract with Mihalov and that such conduct violated the Connecticut Unfair Trade Practices Act, General Statutes 8 42-110a et seq.

         No appeal has been taken from the court’s judgment with respect to liability.

       The court rejected the plaintiffs claim for recovery of its out-of-pocket expenses on the ground that the plaintiff had failed to establish that it, rather than a related corporate entity, had paid the expenses. The plaintiff has not. appealed from the denial of these expenses.

       On numerous occasions, our Supreme Court has “drawn upon provisions of the Uniform Commercial Code as a source of analogy for the emergent common law. See, e.g., New England Savings Bank v. Lopez, 227 Conn. 270, 281-82, 630 A.2d 1010 (1993) (real property); Hospital of St. Raphael v. New Haven Savings Bank, [205 Conn. 604, 610-11, 534 A.2d 1189 (1987)] (passbook savings account); Barco Auto Leasing Corp. v. House, 202 Conn. 106, 114, 520 A.2d 162 (1987) (automobile leasing agreement); New England Yacht Sales, Inc. v. Commissioner of Revenue Services, 198 Conn. 624, 630, 504 A.2d 506 (1986) (transfer of title of personal property); Olean v. Treglia, 190 Conn. 756, 762, 463 A.2d 242 (1983) (real property); Conference Center Ltd. v. TRC, 189 Conn. 212, 225, 455 A.2d 857 (1983) (real property).” Nor

        mand Josef Enterprises, Inc. v. Connecticut National Bank, 230 Conn. 486, 501, 646 A.2d 1289 (1994).

       A subchapter S corporation is a flow through entity. All of the earnings of such a company must be reported as individual income by its stockholders. The corporation files federal tax returns only for informational purposes. See Ruscito v. F-Dyne Electronics Co., 177 Conn. 149, 162, 411 A.2d 1371 (1979); Davenport v. Quinn, 53 Conn. App. 282, 296, 730 A.2d 1184 (1999).

       As far as we can tell, the plaintiff does not, on appeal, challenge the court’s assessment of the probative value of Barrett’s testimony.

       The plaintiff argues that the court placed on it too heavy an evidentiary burden to prove its damages with reasonable certainty. The plaintiff asserts that the court mistakenly relied too heavily on the strictures articulated in Beverly Hills Concepts, Inc. v. Schatz & Schatz, Ribicoff & Kotkin, 247 Conn. 48, 65-67, 717 A.2d 724 (1998). This criticism of the court is not supported by the court’s findings. Although it is arguable that the court mistakenly found that the plaintiff was a new business, it nonetheless concluded that the plaintiff had established the likelihood of future profits with sufficient reasonable certainty to satisfy the test of Beverly Hills Concepts, Inc. Unlike the new business whose lost profits were at issue in Beverly Hills Concepts, Inc., the plaintiffs business in this case had not been entirely unprofitable throughout its corporate existence. See id., 63.

       Although the plaintiff implies that it was prejudiced by the alleged failure to disclose the name of Murphy’s expert witness in a timely fashion, it has not briefed any such issue on appeal.

       At the hearing on the proffer of surrebuttal evidence, the plaintiffs counsel conceded that the financial documents on which LaLuna relied had been available to the plaintiff during the presentation of its case-in-chief.

       Elsewhere during the trial, the court noted that the bifurcation of the trial was for the convenience of the court and that it was not a “formal” bifurcation.


author: PER CURIAM.

text:
    STATE OF CONNECTICUT v. MOHAMMED ALI
    (AC 18424)
    Lavery, C. J., and Landau and Hennessy, Js.
    Argued May 31
    officially released August 1, 2000

      Joseph S. Elder, for the appellant (defendant).

      James M. Ralls, assistant state’s attorney, with whom, on the brief, were James E. Thomas, state’s attorney, and Vicki Melchiorre, senior assistant state’s attorney, for the appellee (state).
   Opinion

PER CURIAM.

The defendant, Mohammed Ali, appeals from the judgment of conviction, rendered after a jury trial, of sexual assault in the first degree in violation of General Statutes § 53a-70 (a) (1), sexual assault in the second degree in violation of General Statutes § 53a-71 (a) (2) and unlawful restraint in the second degree in violation of General Statutes § 53a-96. On appeal, the defendant has, essentially, attacked the factual findings of the trial court.

After a careful review of the record, we conclude that the court did not abuse its discretion when it found that the victim’s capacity or competency to testify was “minimally credible” and denied the defendant’s post-trial motion for psychological testing of the victim. See State v. Weinberg, 215 Conn. 231, 241-45, 575 A.2d 1003, cert. denied, 498 U.S. 967, 111 S. Ct. 430, 112 L. Ed. 2d 413 (1990); State v. James, 211 Conn. 555, 563-65, 560 A.2d 426 (1989). Additionally, the court’s conclusion that the victim was competent to testify is supported by the evidence, and the court’s related underlying factual findings are not clearly erroneous. See State v. Hydock, 51 Conn. App. 753, 764, 725 A.2d 379, cert. denied, 248 Conn. 921, 733 A.2d 846 (1999). We therefore conclude that the court did not abuse its discretion and that its decision conforms to the applicable law.

The judgment is affirmed.


text:
    STATE OF CONNECTICUT v. MILAN CAIS
    (AC 19468)
    Landau, Spear and Freedman, Js.
    Argued April 24
    officially released August 1, 2000

      Richard C. Marquette, special deputy public defender, for the appellant (defendant).

      Joy K. Fausey, deputy assistant state’s attorney, with whom, on the brief, were John T. Redway, state’s attorney, and John Cashmon, assistant state’s attorney, for the appellee (state).
   Opinion

PER CURIAM.

The defendant, Milan Cais, appeals from the judgment of conviction, rendered after a trial to the court, of interfering with an officer in violation of General Statutes § 53a-167a. The defendant claims that the evidence was insufficient to prove beyond a reasonable doubt that he had the requisite intent to interfere with a police officer. We affirm the judgment of the trial court.

On July 16,1998, state police Trooper Michael Gignac “red-tagged” a van in East Haddam at the Connecticut Fish Ladder Roadway. On July 16, 1998, East Haddam Constable Richard Patchell went to the Fish Ladder Roadway at Gignac’s request to check on certain criminal mischief that had been observed in the area and to determine whether the van was still parked there. Patchell found the van with the red tag partially ripped away and informed Gignac. Patchell then called for a tow truck to remove the van.

While waiting for the tow truck, Patchell saw the defendant approach the van from a wooded area. A conversation ensued between Patchell and the defendant in which Patchell told the defendant that he must move the van if it was, in fact, his. The defendant then left.

While Patchell was completing the paperwork for the towing of an abandoned vehicle, he looked up and saw the van moving away. Patchell stopped the van after it had gone about ten or fifteen feet and went to the driver’s side window. At that time, several employees of the department of environmental protection arrived in a state vehicle. The defendant became agitated at the approach of the state vehicle and began rolling up the window while Patchell’s arm was still inside. The defendant then moved the van while Patchell’s arm was pinned by the window. Patchell sprayed the defendant with capstun, a form of Mace, causing the defendant to leave his vehicle and ran away. Patchell caught up to the defendant and tackled him, but the defendant was able to get away by lunging his body up and down and kicking at Patchell. Patchell again tackled the defendant and eventually handcuffed him.

The defendant claims that the evidence was insufficient to support his conviction because the court should have believed his version of the events rather than the state’s three witnesses. The defendant’s testimony was that his actions were involuntary as a result of the pain he experienced from the capstun spray and not intentional interference with Patchell. The defendant testified that he tried to flee because he thought that Patchell was “out of control.”

We employ a two part standard in reviewing sufficiency of the evidence claims. First, we examine the evidence in the light most favorable to upholding the conclusion of the fact finder. Second, we determine whether the trier of fact reasonably could have found the defendant guilty beyond a reasonable doubt on the basis of the evidence and the reasonable inferences therefrom. State v. DeCaro, 252 Conn. 229, 239, 745 A.2d 800 (2000). The defendant asks us to modify this standard by factoring in our assessment of the credibility of the witnesses. We decline the invitation because such a modification is beyond our power, as it is contrary to Supreme Court precedent. See State v. Bailey, 56 Conn. App. 760, 762, 746 A.2d 194 (2000). It also would fly in the face of the axiomatic legal principle that the credibility of witnesses is a matter for the trier of fact. See, e.g., State v. Osborn, 41 Conn. App. 287, 291, 676 A.2d 399 (1996) (exclusive province of trier of fact to determine credibility of witnesses).

We also reject the defendant’s claim that the evidence is insufficient when reviewed pursuant to the traditional two part test. We disagree with the defendant’s claim that the only conclusion that the court could have drawn from the evidence is that his actions were completely involuntary and that they were caused by Patchefl’s spraying him with the capstan. We note that even before the capstan was used, the defendant had rolled up the window on Patchell’s arm while trying to retrieve the vehicle’s registration and other documents in the van. The defendant, with Patchell’s aim pinned by the window, moved the van. We conclude that the evidence was sufficient to convict the defendant of interfering with an officer.

The judgment is affirmed.

       General Statutes § 53a-167a (a) provides: “Aperson is guilty of interfering with an officer when he obstructs, resists, hinders or endangers any peace officer or fireman in the performance of his duties.”

       “Red-tagging” means placing a red sticker on an apparently abandoned vehicle. The tag contains a notice warning the owner that the vehicle will be towed unless it is removed within twenty-four hours.


author: SPEAR, J.

text:
    STATE OF CONNECTICUT v. EUGENE JOSE MARRERO
    (AC 19512)
    Schaller, Spear and Zarella, Js.

      Argued May 2
    officially released August 1, 2000

      Del Atwell, special public defender, for the appellant (defendant).

      Richard F. Jacobson, special assistant state’s attorney, with whom, on the brief, was Gerard P. Eisenman, for the appellee (state).
   Opinion

SPEAR, J.

The defendant, Gerard Jose Marrero, appeals from the judgment of the trial court finding him in violation of the terms of his probation. The defendant claims that the court improperly (1) failed to state the standard that it used in finding him in violation of probation, (2) found him in violation of probation even though he had not been convicted of any crime and (3) ordered him to serve the balance of his previously suspended sentence. We affirm the judgment of the trial court.

The following facts are relevant to this appeal. On July 19, 1996, the defendant was convicted of robbery in the second degree in violation of General Statutes § 53a-135 (a) (2). He received a total effective sentence of ten years imprisonment, execution suspended after three years, followed by three years probation. On September 12,1998, after serving approximately two years in prison, the defendant was released and began his period of probation. The conditions of the defendant’s probation provided that he (1) submit to substance abuse treatment, (2) submit to random drug testing, (3) become employed or attend school, (4) have no contact with the victim and (5) possess no weapons or associate with anyone with a weapon.

On December 6, 1998, the defendant was arrested and charged with possession of a sawed-off shotgun in violation of General Statutes § 53a-211 and threatening in violation of General Statutes § 53a-62. Subsequently, the defendant was arrested and charged with violating his probation pursuant to General Statutes § 53a-32. After a hearing, the court found that the defendant had violated the terms of his probation. The court then ordered the defendant committed to the custody of the commissioner of correction for the balance of his original sentence. This appeal followed.

I

The defendant first claims that the court improperly failed to articulate the standard that it used to conclude that he had violated a term of his probation. He asserts, without any supporting authority, that the court’s omission requires a reversal of the judgment. We disagree.

“It is important to recognize that a claim of error cannot be predicated on an assumption that the trial court acted incorrectly. . . . Rather, we are entitled to assume, unless it appears to the contrary, that the trial court . . . acted properly, including considering the applicable legal principles.” (Citations omitted; internal quotation marks omitted.) Rosenblit v. Danaher, 206 Conn. 125, 134, 537 A.2d 145 (1988).

In Rosenblit, our Supreme Court stated that “it is presumed, unless the contrary appears, that judicial acts and duties have been duly and regularly performed, the presumption of regularity attending the acts of public officers being applicable to judges and courts . . . .” (Internal quotation marks omitted.) Id., quoting Brookfield v. Candlewood Shores Estates, Inc., 201 Conn. 1, 6, 513 A.2d 1218 (1986). Further, in State v. Torres, 35 Conn. App. 107, 110, 644 A.2d 384 (1994), we presumed that the trial court “correctly followed the rule set out by this court” as to the proper standard of proof for a violation of probation proceeding even though the court had not articulated the standard of proof that it had used in revoking the defendant’s probation. We, therefore, conclude that this claim is without merit.

II

The defendant’s second claim is that the state failed to prove a violation of the condition of probation requiring that the defendant not violate any criminal law. The defendant claims, on the basis of a statement made by the trial court, that this condition requires that any violation of probation be based on a conviction of a crime. According to the defendant, this condition formed the basis for the court’s finding of a violation of probation, and evidence showing only an arrest was not sufficient to prove that such a violation had occurred. This claim also fails.

The information charged the defendant with a violation of probation pursuant to § 53a-32, with no further specification. One of the conditions of the defendant’s probation was that he not possess any weapons. The probation officer testified, without challenge, that the violation of probation charge was based on the defendant’s possession of a weapon. Also, there is nothing in the record before us that shows that the court’s finding that the defendant had violated the terms of his probation was based on a condition that he not be convicted of a crime. The defendant bases this contention primarily on the court’s statement during the hearing asking counsel: “Don’t you have in here anymore that the defendant shall be—would be in violation if convicted of any state or federal law if on probation?” The court, however, simply asked a question and in no way imposed a burden on the state to prove that the defendant had been convicted of a crime to establish a violation of probation.

Moreover, the court stated at the hearing that the disposition of the probation revocation proceeding did not depend on whether the defendant was convicted of the underlying criminal charges. The defendant’s counsel remarked to the court: “Well, the problem is, from the mitigation standpoint, Your Honor, is that charge is still pending in the lower court.” (Emphasis added.) The court responded: “It doesn’t have a thing to do with a violation of probation. If you have somehow given this man some hope that that case has some bearing on this violation, you are to straighten it out because it doesn’t. This is conduct that is prohibited by the terms of his probation, and whether that case is disposed of tomorrow by some action of the state’s attorney’s office or not has no bearing on what happens here.” (Emphasis added.) The court clearly rejected any notion that a conviction of a crime was required here.

Ill

The defendant’s last claim is that the court abused its discretion in determining that the beneficial purposes of probation were no longer being served and, consequently, in imposing the entire unexecuted portion of the sentence. In support of this claim, the defendant asserts only that it was an abuse of discretion to impose this sentence because no violation of probation was proven. In light of our conclusion in part I of this opinion that a violation of probation was proven, this claim must also fail.

The judgment is affirmed.

In this opinion the other judges concurred.

       General Statutes § 53a-211 (a) provides in relevant part: “A person is guilty of possession of a sawed-off shotgun . . . when he owns, controls or possesses any sawed-off shotgun that has a barrel of less than eighteen inches or an overall length of less than twenty-six inches . . . .”

       At the time the trial court in Torres rendered its decision, the standard of proof applied in probation revocation proceedings was the reasonable satisfaction standard. Subsequently, our Supreme Court held that the standard of a fair preponderance of the evidence is the appropriate standard in probation revocation proceedings. State v. Davis, 229 Conn. 285, 295, 641 A.2d 370 (1994).

       In his reply brief, the defendant improperly attempts to raise a new issue concerning his psychiatric problems that was neither presented to the court nor argued in his original brief. This violates the well established principle that issues may not be raised for the first time in a reply brief. Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 593 n.26, 657 A.2d 212 (1995); Benedetto v. Benedetto, 55 Conn. App. 350, 355 n.2, 738 A.2d 745 (1999), cert. denied, 252 Conn. 917, 744 A.2d 437 (2000). The defendant acknowledged this principle and then proceeded to violate it. We do not consider this issue.


author: ZARELLA, J.

text:
    YELLOW PAGE CONSULTANTS, INC. v. OMNI HOME HEALTH SERVICES, INC.
    (AC 18734)
    Mihalakos, Zarella and Pellegrino, Js.

      Argued April 5
    officially released August 8, 2000

      Linda L. Morkan, with whom, on the brief, were Frank F. Coulom, Jr., and Andrea Barton Reeves, for the appellant-appellee (plaintiff).

      Sebastian N. Giuliano, with whom was Nella R. Rafala, for the appellee-appellant (defendant).
   Opinion

ZARELLA, J.

The plaintiff in this contract action, Yellow Page Consultants, Inc., appeals from the judgment rendered after a trial to the court in favor of the defendant, Omni Home Health Services, Inc. On appeal, the plaintiff claims that the trial court improperly (1) disregarded undisputed evidence in arriving at factual findings, (2) decided the case on the basis of a counterclaim that alleged fraud, which had been dismissed, and (3) ruled that there was no meeting of the minds and, therefore, no valid contract between the parties. The defendant cross appeals, claiming that the court improperly denied recovery on its counterclaim that alleged violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., in view of the court’s finding that the plaintiff misled the defendant and withheld information from it. On the defendant’s cross appeal, we affirm the judgment of the trial court. On the plaintiffs appeal, we reverse the judgment and remand the case for a new trial.

The following facts and procedural history are relevant to the resolution of this appeal. The plaintiff is a consulting company doing business with companies interested in reducing the cost of advertising in yellow page directories. In an August, 1993 letter to the defendant, the plaintiff indicated that it had “several ideas that will result in significant savings in your yellow page advertising.”

In 1994, the plaintiff entered into a consulting agreement with the defendant to develop and implement a more appropriate yellow pages advertising strategy for the defendant in exchange for 50 percent of the savings generated over a three year period. The agreement was signed by the defendant’s vice president, Guy J. Tommasi, Jr., and the plaintiffs president, David Ford. The agreement provided that if the defendant did not experience any savings during the term of the three year agreement, it would not owe anything to the plaintiff. Additionally, the agreement provided that the defendant could accept or reject any of the plaintiffs suggestions. The plaintiff initially performed on the agreement, and the defendant paid in full for the first year of the contract. The first year of savings resulted from recommendations by the plaintiff, such as switching from a larger three-eighths page display to a smaller two inch column listing.

In January, 1995, during the second year of the agreement, Tommasi sent a letter to Southern New England Telephone Company, indicating that the plaintiff was the defendant’s consultant. With the letter, Tom-masi enclosed an outline of the listings that the defendant wanted in the various directories. Also in January, 1995, the plaintiff sent the defendant a letter that documented the defendant’s savings, as it had done in the first year of the agreement. In March and April of 1995, the defendant sent payments totaling approximately half of the $18,949 it owed the plaintiff under the agreement on the basis of a total savings of $35,754. The defendant refused to make any further payments.

The plaintiff subsequently commenced this action by way of a complaint dated June 5,1996, alleging that the defendant breached a contract with the plaintiff. The defendant filed an answer, which admitted the existence of the agreement, and a special defense alleging nonrenewal for the second and third years of the agreement. In addition, the defendant filed three counterclaims alleging breach of contract, fraud and violations of CUTPA. The case was tried in April, 1998. At the end of the evidence, the court dismissed the breach of contract and fraud counts of the counterclaim.

In June, 1998, the court issued its memorandum of decision, finding against the plaintiff on its complaint and against the defendant on its special defense and CUTPA claims. In its memorandum of decision, the court concluded that the plaintiff had violated its duty to disclose to the defendant information on how to reduce the directory advertising expense. Additionally, the court found that the plaintiff had not shown the “customer ways to save money,” as was required under the automatic renewal provision of the agreement. The court’s memorandum of decision discussed the legal principles of fraud and indicated that the plaintiff did not “sustain its burden of proof in regard to the existence of a legal contract.” In addressing the defendant’s special defense and CUTPA counterclaim, the court indicated only that the defendant had not met its burden of proof. This appeal and cross appeal followed.

While this appeal was pending, the plaintiff filed a motion requesting an articulation of the court’s conclusion that no legal contract existed and the basis for its finding that the plaintiff had committed fraud despite the dismissal of the defendant’s fraud counterclaim. The court denied the motion, and the plaintiff subsequently filed a motion for review. This court granted the motion for review and ordered the trial court to articulate the basis for its conclusion that no “legal contract” existed. The court thereafter articulated that due to the plaintiffs failure to disclose to the defendant the method by which savings would be generated, “There was never a meeting of the minds in regard to this ‘contract.’ ” Fraud was not mentioned in the articulation. The defendant did not seek articulation from the court with respect to the decision on the special defense and CUTPA counterclaim.

The plaintiff claims that the court improperly ruled that no legal contract existed because of alleged fraud on the part of the plaintiff and that there was no “meeting of the minds.” We agree.

First, we set forth our standard of review. “If the factual basis of the court’s decision is challenged, our review includes determining whether the facts set out in the memorandum of decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous.” (Internal quotation marks omitted.) Keefe v. Norwalk Cove Marina, Inc., 57 Conn. App. 601, 606, 749 A.2d 1219, cert. denied, 254 Conn. 903, 755 A.2d 881 (2000). “With regard to the trial court’s factual findings, the clearly erroneous standard of review is appropriate.” Empire Paving, Inc. v. Milford, 57 Conn. App. 261, 265, 747 A.2d 1063 (2000). “The trial court’s legal conclusions are subject to plenary review. [W]here the legal conclusions of the court are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts set out in the memorandum of decision .... [T]he interpretation of the contract is a matter of law and our review is plenary.” (Citation omitted; internal quotation marks omitted!) Id.

The court’s finding that no legal contract existed on the basis of the plaintiffs fraudulent conduct is not supported by the record for two reasons. Practice Book § 10-50 requires that “[f]acts which are consistent with [the plaintiffs] statements but show, notwithstanding, that the plaintiff has no cause of action, must be specially alleged. Thus . . . fraud . . . must be specially pleaded . . . .” The defendant did not interpose any special defenses to the contract of fraud in the inducement and therefore, pursuant to our rules, cannot attempt to prove fraud in the avoidance of the contract. See Connecticut National Bank v. N. E. Own II, Inc., 22 Conn. App. 468, 475, 578 A.2d 655 (1990). Parties must accept the outcome of their bargain; they cannot rely on the court to rescue them from decisions they may later regret. See Angelo Tomasso, Inc. v. Armor Construction & Paving, Inc., 187 Conn. 544, 560-61, 447 A.2d 406 (1982). The only allegation of fraud before the court was the defendant’s counterclaim, which was dismissed by the court at the end of the evidence. Neither side claimed fraud in the inducement.

The court in its articulation also stated that no “legal contract” existed because there was no “meeting of the minds.” This issue of the meeting of the minds was not raised by the defendant in its pleadings at trial or in its posttrial brief. In fact, in its answer, the defendant admitted the existence of a contract and filed no special defense in avoidance of the contract.

“Pleadings have their place in our system of jurisprudence. While they are not held to the strict and artificial standard that once prevailed, we still cling to the belief, even in these iconoclastic days, that no orderly administration of justice is possible without them. . . . The purpose of the complaint is to limit the issues to be decided at the trial of a case and is calculated to prevent surprise. . . . It is fundamental in our law that the right of a [party] to recover is limited to the allegations in his complaint. ... A [party] may not allege one cause of action and recover on another. Facts found but not averred cannot be made the basis for a recovery. (Citations omitted; internal quotation marks omitted.) Moore v. Sergi, 38 Conn. App. 829, 841-42, 664 A.2d 795 (1995). The court is not permitted to decide issues outside of those raised in the pleadings. In the present case, the court improperly held that there was no meeting of the minds because the issue did not appear in any of the pleadings. Additionally, it is well established jurisprudence that the pleadings serve to “frame the issues before a trial court.” Doublewal Corp. v. Toffolon, 195 Conn. 384, 390, 488 A.2d 444 (1985). In the present matter, the plaintiff alleged in the complaint dated June 5, 1996, that the parties entered into a contract. In its answer dated August 29, 1996, the defendant admitted to entering into the contract.

The defendant did not seek an articulation of the court’s denial of recovery on the CUTPA counterclaim. Therefore, we have no basis to review the defendant’s cross appeal. Additionally, we decline to afford review due to an inadequate record. “It is the responsibility of the [cross] appellant to provide an adequate record for review. ...” Practice Book § 61-10.

On the appeal, the judgment is reversed and the case is remanded for a new trial; on the cross appeal, the judgment is affirmed.

In this opinion the other judges concurred.

       The total amount of savings in the first year was $34,404, and the defendant paid the plaintiff its share of the savings in February and March of 1994.

       The plaintiff claimed breach of contract and sought compensatory damages, attorney’s fees, interest and costs.

       The court’s memorandum of decision did not address the dismissal of these claims short of the statement, “The court dismissed counts one and two of the counterclaim.”
      At trial, the defendant’s counsel admitted to not having provided sufficient evidence of fraud to support either the breach of contract or fraud counterclaims. He stated, “[T]here were no fraud representations proved on the first or second count, Your Honor. I don’t know that I would make a major issue out of that.”

       The plaintiff raises additional issues that we need not consider, as this issue is dispositive of its appeal.

       The complaint stated in relevant part:

        “4. On or about January 19, 1994, the plaintiff and the defendant entered into a consulting agreement whereby the plaintiff agreed to provide consulting services in consideration of defendant’s promise to pay the plaintiff 50% of any yearly savings over a three-year period on defendant’s yellow page advertising expenses.”
      The defendant’s answer stated in relevant part:
      “4. The defendant admits the allegations of Paragraph 4 of the Plaintiffs Complaint, with the exception of the allegation that the subject contract was for three years, which allegation is denied.” (Emphasis added.)


author: PELLEGRINO, J.

text:
    GEORGE A. THOMPSON, TRUSTEE v. DAVID ORCUTT ET AL.
    (AC 19769)
    Schaller, Pellegrino and Dupont, Js.

      Argued March 28
    officially released August 8, 2000

      Clifton E. Thompson, for the appellant (plaintiff).

      Bruce S. Beck, for the appellees (named defendant et al.).
   Opinion

PELLEGRINO, J.

The plaintiff, George A. Thompson, trustee, appeals from the judgment rendered in favor of the defendants David Orcutt and Sandra Orcutt in this action to foreclose a mortgage securing a debt. He claims that the trial court improperly determined, on the basis of the doctrine of unclean hands, that he was not entitled to equitable relief. We reverse the judgment of the trial court.

The following facts and procedural history are relevant to our resolution of this appeal. The plaintiff commenced this action against the defendants to foreclose on a mortgage that secured a note, the original balance of which was $25,000. The note was signed by the defendant David Orcutt as president of Alpha Equipment Sales & Rentals, Inc., and by the defendants individually and severally. The note was secured by a mortgage (Thompson mortgage) on property owned by the defendants known as 95 Greenwood Drive in Manchester, which mortgage was the subject of the foreclosure action. Although the plaintiff claimed that he was the trustee of that mortgage for himself and Jack L. Rosen-blit, a business associate, no written trust agreement existed.

The mortgaged premises were subject to three encumbrances superior to the Thompson mortgage: A first mortgage to the New Haven Savings Bank in the amount of $60,000, a second mortgage in favor of the Connecticut Bank and Trust Company in the amount of $35,000 and a lien in favor of Northeast Financial Services (Northeast). The principals of Northeast were the plaintiff and Rosenblit, and the debt securing the mortgage to Northeast was paid prior to the creation of the Thompson mortgage, although it had not been released.

In January, 1992, the plaintiff filed a voluntary petition in bankruptcy in the United States Bankruptcy Court for the District of Connecticut, listing as an asset a one-half interest in the Thompson mortgage. The bankruptcy court appointed John J. O’Neil, Jr., as trustee in bankruptcy of the plaintiffs estate. While the bankruptcy matter was pending, O’Neil determined, by comparing the value of the premises with the amounts of the prior encumbrances, that the Thompson mortgage was worthless. On the basis of his determination that the debt was uncollectible, O’Neil abandoned it as an asset of the plaintiffs estate.

In their answer to the foreclosure complaint, the defendants admitted the existence of the debt, and the execution of the loan agreement and mortgage deed, but filed a special defense asserting that the plaintiff was “guilty of unclean hands” insofar as he had induced the bankruptcy trustee to abandon the debt. The court applied the doctrine of unclean hands in denying the relief sought by the plaintiff and in rendering judgment in favor of the defendants. The court also ordered the plaintiff to provide a release of the Northeast hen.

The issue before this court is whether the trial court properly applied the doctrine of unclean hands. We conclude that it did not.

Whether the clean hands doctrine can be applied in this case is an issue of law, and, therefore, our review is plenary. See Gladysz v. Planning & Zoning Commission, 57 Conn. App. 797, 801, 750 A.2d 507 (2000). “When . . . the trial court draws conclusions of law, [the scope of our appellate] review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.” (Internal quotation marks omitted.) Id.

Our jurisprudence has recognized that those seeking equitable redress in our courts must come with “clean hands.” “The doctrine of unclean hands expresses the principle that where a plaintiff seeks equitable relief, he must show that his conduct has been fair, equitable and honest as to the particular controversy in issue.” Bauer v. Waste Management of Connecticut, Inc., 239 Conn. 515, 525, 686 A.2d 481 (1996). “[F]or a complainant to show that he is entitled to the benefit of equity he must establish that he comes into court with clean hands. . . . The clean hands doctrine is applied not for the protection of the parties but for the protection of the court. ... It is applied ... for the advancement of right and justice.” (Internal quotation marks omitted.) McCarthy v. McCarthy, 55 Conn. App. 326, 335, 752 A.2d 1093 (1999), cert. denied, 252 Conn. 923, 752 A.2d 1081 (2000). “One who seeks to prove that he is entitled to the benefit of equity must first come before the court with clean hands. . . . The party seeking to invoke the clean hands doctrine to bar equitable relief must show that his opponent engaged in wilful misconduct with regard to the matter in litigation. . . . The trial court enjoys broad discretion in determining whether the promotion of public policy and the preservation of the courts’ integrity dictate that the clean hands doctrine be invoked.” (Citations omitted; internal quotation marks omitted.) Polverari v. Peatt, 29 Conn. App. 191, 202, 614 A.2d 484, cert. denied, 224 Conn. 913, 617 A.2d 166 (1992).

This doctrine has been asserted successfully in foreclosure actions where the wrong related to the subject matter of the litigation. Boretz v. Segar, 124 Conn. 320, 323-24, 199 A.2d 548 (1938); see also DeCecco v. Beach, 174 Conn. 29, 35, 381 A.2d 543 (1977). The plaintiff argues, and we agree, that the wrong committed was with respect to the bankruptcy proceeding and not the mortgage transaction, and, therefore, the doctrine of clean hands should not bar recovery here. This view is consistent with the decision of our Supreme Court in Orsi v. Orsi, 125 Conn. 66, 69-70, 3 A.2d 306 (1938). In that case, the court stated: “The maxim [that he who comes into equity must do so with clean hands] only applies to the particular transaction under consideration, for the court will not go outside the case for the purpose of examining the conduct of the complainant in other matters or question his general character for fair dealing. The wrong must be done to the defendant himself and must be in regard to the matter in litigation. ” (Internal quotation marks omitted.) Id., quoting Lyman v. Lyman, 90 Conn. 399, 406, 97 A. 312 (1916).

The defendants admit that they signed the loan agreement, and they do not question either the making of the loan or the amount due. In this case, the wrong found by the court on which it based its conclusion that the plaintiff did not have clean hands was with regard to the bankruptcy matter, not the Thompson mortgage that is the subject matter of the present litigation. No evidence was offered establishing any impropriety by the plaintiff with regard to the Thompson mortgage. The wrong alleged and found by the trial court to exist in this case concerned the plaintiffs misleading O’Neil into believing that there was no equity in the mortgaged premises to satisfy the debt owed by the defendants.

There was no fraud or deception with regard to the mortgage transaction at issue in this litigation. The defendants should not benefit from any wrong committed by the plaintiff on the bankruptcy court because to allow them to do so would have the effect of penalizing the creditors of the plaintiffs bankruptcy estate, the entities entitled to this asset. Accordingly, we conclude that the court improperly applied the doctrine of unclean hands in rendering judgment in favor of the defendants.

The judgment is reversed and the case is remanded for further proceedings.

In this opinion the other judges concurred.

       The plaintiff brought this action against a number of other lienholders on the property being foreclosed. We refer in this opinion to the defendants David Orcutt and Sandra Orcutt as the defendants.

       Alpha Equipment Sales & Rentals, Inc., was not made a party to this action.

       The trial court granted the defendants’ motion to join O’Neil as a party plaintiff in the present case. Although the trial court found in its memorandum of decision that O'Neil did not file an appearance, the record reveals that O’Neil filed an appearance on February 23, 1998. He was defaulted, however, for failure to appear a.t trial.

       The plaintiff, by his failure to respond to the defendants’ requests to admit, is deemed to have admitted that O’Neil abandoned the debt because the prior unreleased encumbrances exceeded the value of the mortgaged properly. See Practice Book § 13-23.

       The plaintiff also asserts on appeal that the trial court improperly (1) found that there was no trust agreement between the plaintiff and Rosenblit, (2) ordered the plaintiff to release the Thompson mortgage note, (3) ordered the plaintiff to provide the defendants with a valid release of a hen in favor of Northeast, (4) found Rosenblit guilty of unclean hands, (5) overlooked the appearance of O’Neil and (6) ordered the plaintiff to release the Thompson mortgage to the defendants. In light of our resolution of the plaintiffs claim concerning unclean hands, we need not address his other claims.
      We also do not consider the doctrine of judicial estoppel, or whether that doctrine should be recognized in Connecticut. Although it could have potentially been raised as an alternate ground for affirming the judgment of the trial court, it was not briefed or discussed by the parties. Accordingly, because the parties did not have the opportunity to address it, we decline to consider it. See Lynch v. Granby Holdings, Inc., 230 Conn. 95, 99, 644 A.2d 325 (1994) (parties improperly deprived of opportunity to brief issue where court addressed issue sua sponte); see also Sheff v. O’Neill, 238 Conn. 1, 87, 678 A.2d 1267 (1996) (Borden, J., dissenting).

       This doctrine is also known as the doctrine of clean hands, and we use these terms interchangeably in this opinion.

       The trial court discussed the public interest exception to the rule that the wrong must be done to the party against whom relief is sought. The defendants urge us to apply that exception to the facts of this case. We conclude, however, on the basis of the circumstances of this case, that the representations made to the federal court in the bankruptcy proceeding do not involve a public interest so great as to necessitate application of the exception here. Accordingly, we will not apply the exception under the circumstances of this case.

       If there is equity in the mortgaged premises, O’Neil could petition the bankruptcy court to exercise its powers to open the bankruptcy case. See 11 U.S.C. § 350.