Milford Bank v. Phoenix Contracting Group, Inc.
143 Conn. App. 519
Conn. App. Ct.2013Background
- Lina and James Barbara, officers of Phoenix Contracting Group, personally signed separate guarantees for a $500,000 revolving commercial line of credit from The Milford Bank; Phoenix also executed the promissory note.
- Phoenix defaulted; bank sued Phoenix and the Barbaras on contract and unjust enrichment theories; Phoenix was defaulted for failure to appear.
- At a two-day trial the court entered judgment for the bank: $530,507.03 (principal, interest, late fees) plus fees and costs, against Phoenix (by default) and against Lina and James on their guarantees.
- Defendants (self-represented) argued at trial and on appeal that (1) damages were not proven, (2) guarantees unenforceable (no meeting of minds; James lacked consideration), (3) trial court wrongly excluded certain hearsay evidence, and (4) court abused discretion by refusing a one-day continuance.
- Trial court found guarantees unambiguous, defendants’ claims of misunderstanding not credible (Lina an attorney; James an experienced businessman), admitted the bank’s computer-generated transaction printout as business records, and entered judgment on the guarantees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of damages evidence | Bank: computer-generated schedule and witness (keeper of records) established advances, payments, accrued interest and fees | Barbaras: printout lacked identification of who requested disbursals and detailed disbursement path; insufficient to establish damages | Court: Exhibit and testimony were business records providing objective basis; damages not clearly erroneous — affirmed |
| Enforceability — mutual assent (meeting of minds) | Bank: guarantees are clear, unambiguous, include merger/waiver clause, and were knowingly signed | Barbaras: bank rep told them personal assets were protected; so no mutual assent to personal liability | Court: written guarantees unambiguous and contained clause negating extraneous representations; trial court credibility findings supported; guarantees enforceable |
| Enforceability — consideration (James only) | Bank: guarantees recite they were for "good and valuable consideration" and bank would not have made loan without personal guarantees; James benefited indirectly via Phoenix's access to credit | James: gave no consideration for his guarantee | Court: written promise reciting consideration satisfies Restatement §88; plus benefit to James via Phoenix suffices — consideration found |
| Evidentiary exclusions & continuance | Bank: objections to exhibits and testimony properly sustained; case proceeded fairly | Barbaras: trial court wrongly excluded two documents and testimony of bank officer (party admission); refusal to postpone second day impeded defense | Court: exclusion of two documents harmless (foundation not laid or would be cumulative); exclusion of Kanoff statements should have been admitted as party admissions but was harmless because written guarantees were integrated and unambiguous; refusal to continue not an abuse — affirm judgment |
Key Cases Cited
- Shah v. Cover-It, Inc., 86 Conn. App. 71 (Conn. App. 2004) (damages are necessary element of breach; trial court has broad discretion in determining damages)
- Duplissie v. Devino, 96 Conn. App. 673 (Conn. App. 2006) (damages must be ascertainable with reasonable certainty; trial court’s factual findings reviewed for clear error)
- Silicon Valley Bank v. Miracle Faith World Outreach, Inc., 140 Conn. App. 827 (Conn. App. 2013) (computer-generated bank records admissible as business records to prove debt)
- Berkeley Federal Bank & Trust, FSB v. Ogalin, 48 Conn. App. 205 (Conn. App. 1998) (same — records may establish account balances)
- Tallmadge Brothers, Inc. v. Iroquois Gas Transmission Systems, L.P., 252 Conn. 479 (Conn. 2000) (integrated written contracts with merger clauses cannot be contradicted by extrinsic evidence)
- Bender v. Bender, 292 Conn. 696 (Conn. 2009) (trial court credibility findings entitled to deference)