141 Conn. App. 528
Conn. App. Ct.2013Background
- Plaintiff and defendant each owned 50% of Anwalt, LLC; Premises at 2 Corporate Drive, Trumbull.
- May 31, 2007 closing: plaintiff sells his 50% interest to defendant for $1.75 million under a buyout agreement.
- Clause 2(b) provides a contingent addition to purchase price if a transfer to a Non-Wolczek Person occurs within one year with a whole property value over $3.5 million.
- March 19, 2008: Corporate Drive (defendant’s affiliated entity) enters into a Vaughn purchase agreement to sell the premises for $5.5 million; Vaughn’s entity is not a Wolczek family member.
- July 1, 2008: Vaughn closes the sale; within one year of the buyout, the defendant is deemed to have triggered the contingency.
- Plaintiff obtains summary judgment on breach, seeks $1 million, prejudgment interest, fees, offer-of-compromise interest, costs, and postjudgment interest; trial court awards $1 million damages, fees, $264,172.69 offer-of-compromise interest, costs, and 8% postjudgment interest; judgment affirmed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the contingency clause unambiguous? | Salce argues the clause unambiguously triggers on Vaughn entry within one year. | Wolczek contends the clause is ambiguous and depends on actual closing date. | Unambiguous; clause interpreted as triggering on the Vaughn entry within one year. |
| How are damages calculated under the contingency clause? | Damages equal one-half of the excess of the whole value over $3.5M, based on the $5.5M sale price. | Argues it used wrong timing; expression of risk that sale may not close. | Damages properly calculated as $1,000,000 (half of $5.5M–$3.5M) at the time of transfer. |
| Is 8% postjudgment interest proper? | Interest rate requested was 10%, but 8% is within discretion. | Questions the rate given but suggests potential for prejudgment interest. | 8% postjudgment interest affirmed as within trial court’s discretion. |
Key Cases Cited
- Murtha v. Hartford, 303 Conn. 1 (Conn. 2011) (contract interpretation and ambiguity principles)
- Zappone Co. v. Mark, 197 Conn. 264 (Conn. 1985) (equitable conversion transfers title concepts)
- New England Yacht Sales, Inc. v. Commissioner of Revenue Services, 198 Conn. 624 (Conn. 1986) (definition of ‘transfer’ and ownership interests)
- Reid v. Landsberger, 123 Conn. App. 260 (Conn. App. 2010) (real property duties during executory contracts)
- Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479 (Conn. 2000) (ambiguous contract interpretation standard;Sophisticated parties presumption)
- Levine v. Massey, 232 Conn. 272 (Conn. 1995) (contract interpretation and ambiguity guidance)
- Alstom Power, Inc. v. Balcke-Durr, Inc., 269 Conn. 599 (Conn. 2004) (contract interpretation and intent)