217 Conn.App. 622
Conn. App. Ct.2023Background
- Circulent, Inc. (plaintiff) sued The Hatch and Bailey Company (defendant) for breach of two contracts: a Managed Technologies Services (MTS) agreement and a Disaster Recovery-as-a-Service (DRaaS) agreement. Counts for other services and tortious interference were withdrawn before trial.
- The MTS agreement (unsigned) covered three years (Oct. 16, 2017–Oct. 31, 2020) at $3,875.39/month. The DRaaS agreement (signed Dec. 19, 2017) was disputed as to term; plaintiff says 3 years (box on form marked "3 years"), trial court found 1 year (Mar. 1, 2018–Feb. 28, 2019).
- Key accounting evidence: Exhibit 5 (billing statement, Dec. 31, 2018–May 10, 2021) and Exhibit 13 (accounts receivable/aging summary). Those exhibits and testimony showed payments stopped after May 2019 and outstanding balances remained.
- Trial court (trial to the court) found the defendant had "tendered payments in full" and did not untimely terminate either agreement, and rendered judgment for defendant on counts 1 (DRaaS) and 2 (MTS).
- The defendant later conceded it had not proven payment on the MTS agreement in a motion to reargue; the trial court denied reargument. Circulent appealed, arguing the trial court made clearly erroneous factual findings about payment and the DRaaS term.
- The Appellate Court reversed and remanded for a new trial on counts one and two, concluding the trial court made clearly erroneous and harmful findings (both as to payment under the MTS and the term/payment under the DRaaS).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did defendant pay the MTS agreement in full? | Exhibits 5 and 13 and testimony show payments stopped after May 2019; defendant did not pay through term. | Conceded it did not prove payment but claimed other evidence supported nonbreach. | Trial court’s finding that defendant paid in full was clearly erroneous; error was harmful; new trial on MTS count. |
| What is the term of the DRaaS agreement (1 year v. 3 years)? | Written DRaaS form shows "3 years" and CEO testified to a three‑year term. | Trial court found one year; defendant later acknowledged parties agreed to three years but argued payment was shown. | Trial court’s one‑year finding was clearly erroneous; evidence supports three‑year term; requires new trial on DRaaS count. |
| Did defendant pay the DRaaS agreement in full? | Payments after Dec. 1, 2020 were applied to oldest outstanding invoices; defendant did not pay in full over the three‑year term. | Points to certain invoices in Exhibit 5 and argues those show payment in full. | Trial court’s payment finding depended on erroneous one‑year term and is unsupported for three years; error undermines confidence and requires new trial. |
| Were the trial court’s erroneous factual findings harmless? | The erroneous findings underpinned the court’s conclusions of no breach; they are not harmless and undermine fact‑finding. | Asserts alternative grounds to affirm (e.g., plaintiff’s alleged material breach). | Errors were harmful and required a new trial; appellate court declined to consider alternative grounds not decided below. |
Key Cases Cited
- Downing v. Dragone, 184 Conn. App. 565 (Conn. App. 2018) (standard for reviewing factual findings)
- NRT New England, LLC v. Longo, 207 Conn. App. 588 (Conn. App. 2021) (clearly erroneous standard described)
- David M. Somers & Associates, P.C. v. Busch, 283 Conn. 396 (Conn. 2007) (presumption in favor of trial court’s factual findings)
- Osborn v. Waterbury, 197 Conn. App. 476 (Conn. App. 2020) (clearly erroneous findings that are intertwined with conclusions may require new trial)
- Autry v. Hosey, 200 Conn. App. 795 (Conn. App. 2020) (new hearing required when errors undermine confidence in fact‑finding)
- United Concrete Products, Inc. v. NJR Construction, LLC, 207 Conn. App. 551 (Conn. App. 2021) (decision resting on clearly erroneous factual finding mandates new trial)
- State v. Juan J., 344 Conn. 1 (Conn. 2022) (appellate courts generally will not consider alternative grounds not decided below)
- Hartford v. McKeever, 314 Conn. 255 (Conn. 2014) (record inadequate for review when trial court fails to make requisite factual findings)