153 Conn.App. 50
Conn. App. Ct.2014Background
- Plaintiff Lynne A. Thoma was employed by Oxford Performance Materials, Inc. beginning in February 2003.
- In June 2006 the parties executed an Executive Employment Agreement (first agreement) with a 24-month initial term and automatic 12-month renewals, including a 60-day termination notice and post-termination compensation if terminated without cause, plus a noncompete during employment and for six months thereafter.
- Later in June 2006 the defendant had the second agreement drafted (Non-competition, Proprietary Information and Inventions Agreement) which provided at-will employment and confined noncompetition to during employment (Section 1.2) but also contained an indefinite post-termination provision (Section 1.1) cross-referencing 1.2.
- The second agreement was executed on June 20, 2006, while Thoma’s salary was increased from $65,000 to $78,000 around July 1, 2006 under the first agreement.
- In November 2007 Thoma was terminated; she sued for breach of the first agreement and fraud; the trial court found the first agreement valid and the second unenforceable for lack of consideration, thus the first agreement controlled.
- On appeal, Oxford argued the second agreement superseded the first under a complete integration clause and lack of consideration for the first agreement’s rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the second agreement had valid consideration | Thoma argues second agreement lacked consideration and thus was unenforceable. | Oxford contends the second agreement was supported by consideration (e.g., released noncompete, investor prerequisites). | Second agreement lacked valid consideration; first agreement controlled. |
| Whether the noncompetition duration in the second agreement was ambiguous | Ambiguity favored Thoma; contra proferentem should apply to resolve. | Duration should be read to reconcile sections or give effect to 1.2. | Noncompetition duration was ambiguous. |
| If ambiguous, how should the ambiguity be resolved | Ambiguity resolved against drafter (contra proferentem) due to drafting role of defendant. | Court should consider other interpretive tools before contra proferentem. | Court properly applied contra proferentem; concluded no valid consideration for second agreement. |
| Whether plaintiff's continued employment constitutes consideration for the second agreement | Continued employment could be consideration; first agreement already guaranteed compensation upon termination without cause. | Continued employment, in the absence of a new benefit, cannot constitute valid consideration. | Continued employment did not constitute valid consideration for the second agreement. |
Key Cases Cited
- Viera v. Cohen, 283 Conn. 412 (Conn. 2007) (consideration standard; factual question review)
- Willamette Management Associates, Inc. v. Palczynski, 134 Conn. App. 58 (Conn. App. 2012) (consideration and contract modification; factual vs. legal questions)
- Connecticut National Bank v. Voog, 233 Conn. 352 (Conn. 1995) (general rule that promises require consideration)
- NSS Restaurant Services, Inc. v. West Main Pizza of Plainville, LLC, 132 Conn. App. 736 (Conn. App. 2011) (consideration in contract modification context)
- TD Bank, N.A. v. M.J. Holdings, LLC, 143 Conn. App. 322 (Conn. App. 2013) (modification requires new consideration)
- Martin Printing, Inc. v. Sone, 89 Conn. App. 336 (Conn. App. 2005) (definition of consideration; benefit/detriment delineation)
- Charette v. Waterbury, 80 Conn. App. 232 (Conn. App. 2003) (internal inconsistencies create ambiguity)
- Imperial Casualty & Indemnity Co. v. State, 246 Conn. 313 (Conn. 1998) (internal inconsistent language creates ambiguity)
- Dobuzinsky v. Middlesex Mutual Assurance Co., 49 Conn. App. 398 (Conn. App. 1998) (ambiguity and contract interpretation principles)
- Cruz v. Visual Perceptions, LLC, 311 Conn. 93 (Conn. 2014) (contra proferentem as last resort in interpretation)
- Levine v. Massey, 232 Conn. 272 (Conn. 1995) (integration and parol evidence considerations)
- Gorelick v. Montanero, 119 Conn. App. 785 (Conn. App. 2010) (application of contract interpretation principles)
- Neuhaus v. DeCholnoky, 280 Conn. 190 (Conn. 2006) (evidence and trial court interpretations)