311 Conn. 123
Conn.2014Background
- Blumberg Associates Worldwide (plaintiff) alleged Brown & Brown (defendants) terminated a 2006 Subway Program Agreement after plaintiff’s Connecticut insurance license lapsed on January 31, 2006. Plaintiff claimed defendants had hindered renewal by failing to forward a renewal notice and by transferring licensing files.
- The parties executed the written contract on July 19, 2006; the alleged hindering acts (address change, nonforwarding of mail, physical transfer of files) occurred earlier in 2004–2006.
- At trial defendants moved for summary judgment; they argued the alleged acts predated the contract so could not breach contractual duties. Plaintiff relied on the prevention doctrine (defendants’ conduct excused plaintiff’s nonperformance) in opposition.
- Trial court granted summary judgment for defendants, rejecting prevention, waiver, estoppel and bad-faith claims; it also concluded forwarding the renewal notice (if it occurred) predated the contract and could not breach the further-assurances clause.
- The Appellate Court sua sponte ordered supplemental briefing on whether precontract conduct can support a prevention claim; it held prevention cannot be based on conduct occurring before contract formation and affirmed. Plaintiff sought and received certification to appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May an appellate court raise and decide an issue sua sponte that the parties did not raise below? | Appellate Court exceeded authority by deciding an issue defendants never advanced below. | Appellate Court may raise unpreserved issues (especially with supplemental briefing) and the issue was preserved/closely related. | Appellate courts may raise unpreserved issues: must do so for subject-matter jurisdiction; otherwise only in discretion when exceptional circumstances exist, parties are given chance to be heard, and no unfair prejudice. Appellate Court did not abuse discretion here. |
| Was the prevention doctrine applicable when the allegedly hindering conduct occurred before contract formation? | Prevention doctrine (and related equitable principles) excuses nonperformance even if hindering conduct predated the contract; Dohanyos supports application to precontract conduct. | Prevention is rooted in the implied covenant of good faith, which presupposes an existing contract; precontract conduct cannot give rise to that contractual duty. | Prevention doctrine applies only to conduct that violates a duty created by the contract (or a duty supplied by law after contract formation). Precontract conduct cannot, as a matter of law, support a prevention defense; Appellate Court decision affirmed. |
| Was plaintiff unfairly prejudiced by the Appellate Court ordering supplemental briefing and denying leave to reply? | Plaintiff would have pursued different arguments/evidence at trial and would have raised other theories if on notice; thus suffered prejudice. | Plaintiff had opportunity to argue prevention in trial court; no colorable showing that it would have proceeded differently or that the defendants’ raising of the timing defense would have altered available remedies. | No unfair prejudice shown. Plaintiff’s speculative assertions about alternative litigation strategies were insufficient. Supplemental briefing satisfied fairness requirement. |
| Do substitute equitable doctrines (e.g., disproportionate forfeiture, estoppel) alter the timing rule for prevention? | Even if prevention fails, equity (Restatement §229, estoppel) could excuse nonoccurrence to avoid forfeiture. | Those are distinct remedies; plaintiff did not preserve or press them at summary judgment; they do not transform prevention into a precontract remedy. | Court did not decide the merits of other equitable remedies here but held plaintiff had not pursued them timely; prevention remains unavailable for precontract hindrance. |
Key Cases Cited
- United States National Bank of Oregon v. Independent Ins. Agents of America, Inc., 508 U.S. 439 (1993) (a court may identify and apply proper governing law even if parties did not raise it)
- Singleton v. Wulff, 428 U.S. 106 (1976) (appellate courts have discretion to resolve issues not passed on below in appropriate circumstances)
- State v. Sanchez, 308 Conn. 64 (2013) (plain error doctrine is a rule of reversibility; standards for invoking plain error are exacting)
- Macomber v. Travelers Prop. & Cas. Corp., 261 Conn. 620 (2002) (duty of good faith and fair dealing presupposes an existing contract and does not apply to preformation conduct)
- Dohanyos v. Prudential Ins. Co., 952 F.2d 947 (6th Cir. 1992) (discussed by parties as a case applying prevention/estoppel in an insurance delivery/acceptance context; Court distinguishes its factual/legal scope)