137 Conn. App. 766
Conn. App. Ct.2012Background
- Daoud and Cook operated separate financial practices and formed a 50/50 LLC (W & N, LLC) to own a two-story building and share expenses.
- The building housed their practices and downstairs tenants; two upstairs offices were used by the parties and a downstairs space was rented to third parties.
- In 2005 an arbitration award required Daoud to use reasonable commercial efforts to rent any space not being used by her and to share net rental profits with Cook every six months.
- After the award, Daoud expanded her use of the building and did not remit fair market rent to the company for the additional spaces.
- Cook moved to compel compliance with the arbitration award and for damages; a court hearing in 2011 found Daoud had not complied and awarded damages totaling $131,400.
- Daoud appeals, challenging (1) fiduciary-duty implications, (2) interpretation of the phrase not being used by her, (3) modification concerns, and (4) the damages award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the court improperly rely on fiduciary-duty analysis? | Daoud argues fiduciary-duty analysis was not at issue and should not support damages. | Cook contends fiduciary duty informs the meaning of reasonable efforts. | Fiduciary duty served as interpretive context, not the damages basis. |
| Did the court properly interpret 'not being used by her'? | Daoud claims it referred only to space vacant at arbitration time. | Cook contends it reasonably refers to space not being used at the time of award. | Interpretation as space not used at the time of the award was proper. |
| Did the court modify the arbitration award by its interpretation? | Daoud argues the court modified the award by reinterpreting terms. | Cook argues the court merely enforced and construed the award as intended. | The court's interpretation effectuated the award, not a modification. |
| Was the damages award properly supported? | Daoud contends there was no evidence of fair market rental value. | Cook asserts the record supports fair market values and the court’s calculation. | Damages were properly supported by the record and independent valuation by the court. |
Key Cases Cited
- Pergament v. Green, 32 Conn. App. 644 (1993) (fiduciary-duty theories not sole basis for contract breach)
- Mitchell v. Mitchell, 31 Conn. App. 331 (1993) (courts may analyze beyond asserted theories; ultimate judgment stands)
- Sosin v. Sosin, 300 Conn. 205 (2011) (court may interpret judgment by examining surrounding circumstances)
- Aldin Associates Ltd. Partnership v. Healey, 72 Conn. App. 334 (2002) (court may enforce arbitration award; postjudgment orders permissible)
- New Haven v. AFSCME, Council 15, Local 530, 106 Conn. App. 691 (2008) (court may not substitute arbitrator's judgment; interpretation must reflect award)
- Ridgeway v. Ridgeway, 180 Conn. 533 (1980) (value of property may be established by non-professional appraisal)
- Young v. Vlahos, 103 Conn. App. 470 (2007) (fair market rental value can be proven by testimony)