193 Conn.App. 507
Conn. App. Ct.2019Background
- In 2006 Kelly sold his oral‑surgery practice to Kurtz and the parties executed a Purchase & Sale Agreement, an Operating Agreement (50/50 members of DOMSA) and, in 2009, a Supplementary Agreement that allowed Kelly to work a reduced part‑time schedule of his choosing and to retire at will (but by age 80). Kurtz would become manager after paying the final installment.
- In August–September 2013 tensions rose: Kurtz hired an associate without Kelly’s affirmative vote, told Kelly to retire by mid‑September, paid the final installment, and soon after had the office locks changed. Kelly believed he was terminated and ceased working at DOMSA.
- Kelly sued on multiple theories (breach of the three agreements, breach of the covenant of good faith, invasion/misappropriation of name, tortious interference, CUTPA, unjust enrichment, etc.). A jury returned verdicts for Kelly on most claims and awarded roughly $3.15M (with punitive findings). The trial court later granted in part the defendants’ motion to set aside portions of the verdict, dismissed two Operating Agreement claims for lack of standing, and entered judgment for $2,150,000. Both sides appealed; appeals were consolidated.
- Key contested legal points included: (1) sufficiency of evidence that Kelly was terminated or prevented from working a schedule of his choosing (Supplementary Agreement); (2) whether separate damages for breach of contract and breach of the implied covenant were permissible; and (3) whether Kelly proved ascertainable damages for claims of name misappropriation, tortious interference, CUTPA, and unjust enrichment.
- The Appellate Court affirmed: it upheld the verdicts on the Supplementary Agreement claims; it affirmed setting aside awards for name misappropriation, tortious interference, CUTPA and unjust enrichment for failure to prove ascertainable/actual loss or because recovery would duplicate contract relief; and it affirmed dismissal of the Operating Agreement claims for lack of standing.
Issues
| Issue | Kelly's Argument | Kurtz's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for breach of the Supplementary Agreement (wrongful termination / denial of chosen schedule) | Evidence (recorded meeting, statements about changing hours, lockout, staff testimony) shows Kurtz effectively terminated or prevented Kelly from working his chosen schedule | No formal termination; evidence supports an alternative interpretation (offer to continue employment); contract language limits schedule right to member status | Affirmed: jury could reasonably find breach; trial court did not abuse discretion in denying motion to set aside |
| Alleged inconsistency between damages for breach of contract and breach of implied covenant (same facts) | The claims are distinct: breach damages and separate damages for bad‑faith breach (implied covenant) | Awards are inconsistent/duplicative because based on same events | Affirmed: court harmonized answers — separate legal harms may be awarded where bad faith is separately proven |
| Invasion of privacy / misappropriation of name — damages | Use of Kelly’s name on sign/website/cards produced commercial benefit and harmed Kelly; evidence of referral calls and use of cards supports damages | No proof any patients came because of the continued use of Kelly’s name or that defendants gained commercial benefit | Reversed (set aside): Kelly failed to prove commercial benefit or identifiable damages; award lacked evidentiary basis |
| Tortious interference with business expectancies — damages | Defendants diverted patients and referrals, causing measurable revenue loss | No proof of actual/ascertainable loss; any alleged lost earnings duplicate contract damages for wrongful termination | Reversed (set aside): plaintiff failed to prove actual loss; court prevented double recovery |
| CUTPA claim — ascertainable loss and applicability | Defendants’ deceitful conduct (non‑disclosure, misappropriation, diversion) was an unfair trade practice causing loss | Intracorporate employment dispute not amenable to CUTPA; no ascertainable loss shown | Reversed (set aside): plaintiff failed to show ascertainable loss (and intracorporate character further undermined claim) |
| Unjust enrichment (alternative to contract) | Defendants were unjustly enriched by squeezing Kelly out and diverting patients | Kelly already recovered contract damages; unjust enrichment recovery would duplicate relief | Reversed (set aside): unjust enrichment unavailable where plaintiff recovered for the contractual wrong |
| Standing to assert Operating Agreement claims | Kelly: he suffered personal injury from nondisclosure (Medicaid settlement) and from unauthorized hiring | Kurtz: alleged harms were derivative of injury to DOMSA; Kelly lacked a direct, special injury | Affirmed dismissal: Kelly lacked standing—harms were derivative of LLC’s loss, not a distinct personal injury |
Key Cases Cited
- Kumah v. Brown, 160 Conn. App. 798 (standard and deference on trial court's decision to set aside a jury verdict)
- Carrol v. Allstate Ins. Co., 262 Conn. 433 (appellate review of sufficiency and deference to jury verdict)
- Levine v. 418 Meadow St. Assocs., LLC, 163 Conn. App. 701 (trial court's role in evaluating motions to set aside verdict)
- Doe v. Hartford Roman Catholic Diocesan Corp., 317 Conn. 357 (weight of concurrence between judge and jury)
- American Diamond Exchange, Inc. v. Alpert, 302 Conn. 494 (proof of damages: reasonable certainty and objective basis required)
- Landmark Investment Group, LLC v. CALCO Constr. & Dev. Co., 318 Conn. 847 (CUTPA: ascertainable loss and proximate‑cause requirement)
- Marinos v. Poirot, 308 Conn. 706 (ascertainable loss under CUTPA explained)
- Padawer v. Yur, 142 Conn. App. 812 (LLC as separate entity; limits on individual suits for derivative injuries)
- Horner v. Bagnell, 324 Conn. 695 (unjust enrichment is unavailable where contract remedy exists)
- Rowe v. Goulet, 89 Conn. App. 836 (rules against double recovery and duplicative damages)
- Villages, LLC v. Longhi, 187 Conn. App. 132 (elements of tortious interference with business expectancies)