192 Conn.App. 378
Conn. App. Ct.2019Background
- Crosskey Architects (plaintiff) provided architectural services to projects run by a network of POKO entities controlled by Kenneth and Richard Olson; multiple invoices went unpaid.
- The Olsons operated many interrelated LLCs: POKO Partners, LLC and POKO Management Corp. sat atop the structure; companies shared an office, staff, equipment, and centralized payroll.
- Plaintiff performed work on four projects (POKO office, Reservoir, Morningside Drive, Capehart); some projects failed or were transferred into single-purpose entities; defendants asserted Crosskey worked "on spec."
- Trial court found breach of contract on three projects and quantum meruit on the Reservoir project, awarded damages totaling the invoiced amounts, pierced the corporate veil under the identity theory and held the Olsons personally liable, and awarded prejudgment interest under Conn. Gen. Stat. § 37-3a.
- Defendants appealed, challenging veil piercing, the quantum meruit recovery for the Reservoir project, the damage valuation, and the award of statutory prejudgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court properly pierced the corporate veil under the identity rule | Crosskey argued the Olsons effectively ran the entities as one enterprise and misused corporate form to avoid creditors | Olsons argued court misapplied identity test, relied only on control, and failed to require lack of legitimate business purpose | Affirmed — court reasonably found unity of control and other factors satisfying identity rule; lack of legitimate purpose is not a required element of identity test |
| Whether plaintiff was entitled to quantum meruit for Reservoir project | Crosskey argued defendants requested and used services, so unjust enrichment occurred even though unsigned contract existed | Olsons argued services only created a speculative future opportunity (no benefit) and parties were "on spec," so no recovery | Affirmed — court credited testimony and found an implied-in-fact contract; defendants received a benefit from requested services and quantum meruit recovery was appropriate |
| Whether damages valuation for quantum meruit was supported by record | Crosskey relied on the unsigned contract price and invoices as reasonable value of benefit | Olsons pointed to testimony that services were "on spec," ambiguous contracting party, and lack of agreement on price | Affirmed — court found contract price evidenced reasonable value; invoice and fee breakdown supported the award |
| Whether prejudgment interest under § 37-3a could be awarded on quantum meruit claim | Crosskey sought § 37-3a interest on withheld, liquidated sum | Olsons contended § 37-3a inapplicable to restitution/quantum meruit and unliquidated claims | Affirmed — court held quantum meruit restitution can fall within § 37-3a when sum is liquidated; award was within trial court discretion |
Key Cases Cited
- Commissioner of Environmental Protection v. State Five Industrial Park, Inc., 304 Conn. 128 (2012) (piercing corporate veil is fact question; standards for disregarding corporate entity)
- Mirjavadi v. Vakilzadeh, 310 Conn. 176 (2013) (legal standard determination reviewed plenarily)
- Naples v. Keystone Building & Development Corp., 295 Conn. 214 (2010) (describes instrumentality and identity tests for veil piercing)
- Angelo Tomasso, Inc. v. Armor Construction & Paving, Inc., 187 Conn. 544 (1982) (control/influence over corporate affairs is key factor for veil piercing)
- Zaist v. Olson, 154 Conn. 563 (1967) (formulation of identity rule to disregard corporate separateness)
- Gagne v. Vaccaro, 255 Conn. 390 (2001) (explains quantum meruit as restitutionary remedy to prevent unjust enrichment)
- Walpole Woodworkers, Inc. v. Manning, 307 Conn. 582 (2012) (contract price may be evidence of reasonable value in restitution)
- Costello v. Hartford Institute of Accounting, Inc., 193 Conn. 160 (1984) (distinguishes liquidated vs. unliquidated sums for interest purposes)
- Chapman Lumber, Inc. v. Tager, 288 Conn. 69 (2008) (scope and review of § 37-3a prejudgment interest; discretionary equitable determination)
- Nation Electrical Contracting, LLC v. St. Dimitrie Romanian Orthodox Church, 144 Conn. App. 808 (2013) (upheld § 37-3a interest in an unjust enrichment/restitution context)