Johnson v. Vita Built, LLC, 217 Conn.App. 71

Plaintiffs (Ray and Indre Johnson) hired Vita Built and Vita Design to redevelop and sell a Westport property; parties executed a construction contract, a fee reduction letter, and a February 2019 "Additional Fee and Profit Sharing Agreement."
Section 7 of the 2019 agreement states the Owner, Architect and Builder "will share in all Profits (as hereinafter defined) and all losses," defines "Profits" as a net-profit calculation using a prioritized "waterfall" of enumerated deductions, but does not define "losses" or explain allocation of losses.
The house sold for less than listed price, producing a negative net-profit calculation (a loss); plaintiffs sought recovery from defendants for their share of the loss and filed a prejudgment remedy (PJR) application to attach defendant assets.
Defendants counterclaimed for breach (seeking payment of $126,000 in reinstated fees) and filed their own PJR; the trial court denied plaintiffs' PJR, granted defendants' PJR, finding the contract unambiguous (no loss‑sharing obligation) and alternatively that extrinsic evidence favored defendants.
On appeal, the court of appeals held Section 7 is ambiguous about whether parties intended to share losses, found the trial court relied on a clearly erroneous factual finding (that defendants’ larger fees had been placed at risk), reversed the grant of defendants’ PJR, and remanded for a new PJR hearing.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the 2019 agreement unambiguously excludes sharing losses	Section 7 explicitly says parties "share in all ... losses" → language creates ambiguity that requires extrinsic evidence	Agreement defines "Profits" and uses the waterfall to distribute "funds," so reasonable reading limits sharing to profits only and allocates loss risk to Owner	Agreement is ambiguous as to loss sharing; trial court erred treating it as unambiguous
Whether trial court properly relied on extrinsic evidence and factual findings to find probable cause for defendants' counterclaim	Trial court misfound that defendants had placed $268,000 of fees at risk (they had been paid); that factual error tainted the court’s extrinsic‑evidence analysis	There is other extrinsic evidence supporting defendants’ view that loss sharing was not intended	Trial court relied on a clearly erroneous factual finding and gave no clear indication it credited other extrinsic evidence; appellate court reversed defendants' PJR and remanded for a new hearing
Whether a prejudgment remedy for defendants was supported by probable cause	No probable cause given contractual ambiguity and erroneous factual findings	There was probable cause that defendants would prevail on their counterclaim for $126,000	Appellate court not confident in trial court's probable‑cause assessment; reversed PJR grant and remanded

Cruz v. Visual Perceptions, LLC, 311 Conn. 93 (2014) (standard for contract ambiguity and plenary review of legal interpretation)
Valencis v. Nyberg, 160 Conn. App. 777 (2015) (prejudgment remedy probable‑cause standard and appellate deference)
EH Investment Co., LLC v. Chappo, LLC, 174 Conn. App. 344 (2017) (rules on integration, merger clauses, and parol evidence)
Pandolphe’s Auto Parts, Inc. v. Manchester, 181 Conn. 217 (1980) (focus on both the trial court’s conclusion and its method when applying clear‑error review)
Zhou v. Zhang, 334 Conn. 601 (2020) (parol evidence is a substantive contract‑law rule with limited exceptions)
TIE Communications, Inc. v. Kopp, 218 Conn. 281 (1991) (permitted uses of extrinsic evidence: explain ambiguity, prove collateral agreements, add missing terms, or show mistake/fraud)
Levco Tech, Inc. v. Kelly, 214 Conn. App. 257 (2022) (appellate review scope when contract interpretation raises legal questions)