158 Conn.App. 716
Conn. App. Ct.2015Background
- Perez and Carlevaro formed Antomari, LLC in 2009, each owning 50% and contributing equal capital.
- In late 2010 the parties agreed Perez would withdraw in exchange for $14,170.58; defendant emailed a signed "withdrawal agreement" and mailed a check but the withdrawal was never effectuated.
- Perez sued for breach of the withdrawal agreement, unjust enrichment, conversion, accounting, and sought indemnification (including attorney’s fees) under the withdrawal agreement.
- Carlevaro answered and counterclaimed; discovery disputes led to a court order requiring Carlevaro to produce discovery. Carlevaro failed to comply and a default and nonsuit were entered against her.
- At a damages hearing held in Carlevaro’s absence, the court found breach and awarded $14,170.58 plus prejudgment interest and awarded Perez $62,162 in attorney’s fees under the indemnification clause of the withdrawal agreement.
- On appeal the court affirmed liability and damages but questioned whether the indemnification clause authorized recovery of attorney’s fees for the parties’ dispute over the withdrawal agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the withdrawal agreement’s indemnification clause authorizes recovery of attorney’s fees for Perez’s claim against Carlevaro | Perez argued the indemnification clause covers costs (including attorney’s fees) arising from defendant’s conduct of the business, encompassing Perez’s losses and fees incurred enforcing the withdrawal agreement | Carlevaro argued the indemnity is limited to losses arising from defendant’s conduct of the business vis-à-vis third parties and does not cover claims between the members or breach of the withdrawal agreement itself | The indemnification clause is unambiguous and limited to losses "arising from [defendant’s] conduct of the business;" it does not provide for attorney’s fees for claims between the parties, so the award of fees was improper. |
Key Cases Cited
- Cruz v. Visual Perceptions, LLC, 311 Conn. 93 (2014) (contract ambiguity is a question of law reviewed de novo)
- 19 Perry Street, LLC v. Unionville Water Co., 294 Conn. 611 (2010) (if contract ambiguous, interpretation involves factual findings reviewed for clear error)
- Amoco Oil Co. v. Liberty Auto & Electric Co., 262 Conn. 142 (2002) (distinguishing indemnification claims from first-party loss claims; indemnity typically reimburses liability to third parties)
- Moran v. Morneau, 140 Conn. App. 219 (2013) (default admits material facts but does not relieve court of assessing legal sufficiency of pleaded claims)