BARRY SAUNDERS ET AL. v. BURTON FIRTEL ET AL.; BARRY SAUNDERS v. BURTON FIRTEL ET AL.; BARBUR ASSOCIATES, LLC v. ADCO MEDICAL SUPPLIES, INC.
(SC 18309)
Supreme Court of Connecticut
September 22, 2009
293 Conn. 515
Rogers, C. J., and Norcott, Vertefeuille, Zarella and McLachlan, Js.
Argued April 21—officially released September 22, 2009
Jonathan S. Bowman, with whom was Rachel A. Pencu, for the appellees (plaintiff Barry Saunders et al.).
Opinion
ZARELLA, J. This appeal1 arises out of three separate actions2 initiated by the plaintiff, Barry Saunders,3 against the defendants, Burton Firtel, Adco Medical
The trial court‘s memorandum of decision and the record reveal the following relevant facts and procedural history. The plaintiff and Firtel began a profitable business relationship and a strong personal friendship in the mid-1980s. Prior to Firtel‘s involvement with the plaintiff, Firtel had formed Adco, a pharmaceutical sales company, as a Connecticut corporation in or about 1970. Firtel was the sole owner of Adco. Prior to the plaintiff‘s involvement with Firtel, the plaintiff had been employed as a sales representative for a medical supply company known as General Medical Corporation, where he had obtained extensive training and sales experience.
In 1986, following a successful initial joint venture, the plaintiff and Firtel sought to formalize their business relationship. The plaintiff joined Adco and obtained a 49 percent shareholder interest in the company, and Firtel retained a controlling 51 percent interest. In September, 1986, the plaintiff and Firtel executed a document entitled “Operational Agreement Regarding Adco Corporation,” which was signed by Firtel as president of Adco and by Firtel and the plaintiff, individually. The agreement provided that the plaintiff “desire[d]” to become a stockholder of Adco, “and to be employed by [Adco] . . . .”
Paragraph eight of the agreement set forth the respective duties of the parties and the compensation that they would receive. That paragraph provides in relevant part: “The parties agree that they shall each devote such of their time and efforts to the business of [Adco] as shall be reasonably necessary. [The plaintiff] acknowl-
The agreement also assigned control of the board of directors to Firtel, through an appointment process, which provided: “There shall be a [b]oard of [d]irectors initially consisting of Firtel and [the plaintiff]. PROVIDED, HOWEVER, the parties agree that Firtel may elect to increase the number of directors to three . . . in which event two . . . of said [d]irectors shall be selected by Firtel and one . . . of said [d]irectors shall be selected by [the plaintiff].”
Following the execution of the agreement, Firtel continued to hold the position of president of Adco, and the plaintiff was appointed vice president and secretary.9 From 1986 through July, 2004, the plaintiff was “in charge of virtually all of Adco‘s day-to-day operations.” During each of the years between 1986 and 2003, Adco paid expenses incurred by both Firtel and the plaintiff, in addition to their salaries.10 These expenses included medical and health expenses, automobile expenses, professional services and other related expenses.
Sometime after 2000, the plaintiff became disenchanted with the business arrangement. In March, 2003,
On May 19, 2004, the plaintiff, through his attorney, formally advised Firtel that operating Adco in accordance with the 1986 agreement no longer was acceptable. The plaintiff offered to submit the dispute to arbitration and indicated an intention to file an action seeking to terminate the business relationship if an agreement could not be reached. Two months later, Firtel, acting in his capacity as president and majority stockholder of Adco, responded by terminating the plaintiff‘s employment via a July 23, 2004 memorandum. The plaintiff did not perform any work for Adco after July, 2004. He received no salary from Adco in 2004, and since the July 23, 2004 memorandum, the plaintiff has not been compensated by Adco either in the form of salary or most fringe benefits.
Meanwhile, in July, 1999, during what the trial court referred to as their “era of good feeling,” the plaintiff and Firtel had formed Barbur, a limited liability company in which each owns a 50 percent interest. Barbur owns certain real estate located in Hamden, where Adco conducts its business. Barbur leases its property to Adco pursuant to an oral month-to-month lease. Prior to 2004, Adco paid Barbur an annual rent of $18,000. The lease obligated Adco to pay taxes, insurance and maintenance on the property.
Following the plaintiff‘s termination from Adco, he initiated the three actions that later were consolidated for trial. The first action included, inter alia, his statutory claim for unpaid wages.11 The second action sought the judicial dissolution of Barbur12 and the third action, which is not at issue in this appeal, consisted of a summary process action commenced by the plaintiff on behalf of Barbur against Adco. The trial court found in favor of the plaintiff on his unpaid wages claim, awarded him double damages pursuant to
I
The defendants first claim that the trial court improperly awarded wages to the plaintiff pursuant to
A
The defendants first claim that
This claim “raises a question of statutory construction, which is a [question] of law, over which we exercise plenary review.” (Internal quotation marks omitted.) Weems v. Citigroup, Inc., 289 Conn. 769, 778, 961 A.2d 349 (2008); see also R.C. Equity Group, LLC v. Zoning Commission, 285 Conn. 240, 248, 939 A.2d 1122 (2008) (“[b]ecause the interpretation of a statute, as well as its applicability to a given set of facts and circumstances, involves a question of law . . . our review . . . is plenary” [internal quotation marks omitted]). “The process of statutory interpretation involves the determination of the meaning of the statutory language as applied to the facts of the case, including the question of whether the language does so apply. . . .
“When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. . . . In seeking to determine [the] meaning [of a statute],
The defendants claim that, even though
After comparing the statutory language and the chapters in which the statutory provisions are located, we conclude that
B
The defendants next claim that the trial court improperly calculated the amount of wages awarded to the plaintiff for 2004 by failing to prorate the plaintiff‘s award on the basis of the number of months that he had worked in that year. The plaintiff responds that the trial court‘s calculation of wages was properly supported by the evidence adduced at trial. We agree with the plaintiff.
The following additional facts are necessary to our resolution of this claim. The trial court found that both the plaintiff‘s employment with Adco and the 1986 agreement were terminated on July 23, 2004, as a consequence of Firtel‘s memorandum to the plaintiff. The
We begin by setting forth our standard of review of a trial court‘s assessment of damages. “[A] trial court is vested with broad discretion in determining whether damages are appropriate. . . . Its decision will not be disturbed . . . absent a clear abuse of discretion.” (Internal quotation marks omitted.) Smith v. Snyder, 267 Conn. 456, 466, 839 A.2d 589 (2004).
With this deferential standard in mind, we cannot conclude that the trial court abused its discretion in awarding the plaintiff wages in the amount of $50,126. The court based its calculation of damages on the agreement between the parties, which provided for equal compensation for Firtel and the plaintiff. The agreement did not provide for the proration of compensation; rather, the evidence revealed that, historically, Adco had paid Firtel and the plaintiff on an annual basis, at the end of each year. Moreover, the trial court had no basis on which it could determine how or if this annual salary could or should be prorated, as no evidence on this issue was presented at trial. Nevertheless, the trial court was cognizant that the plaintiff should not receive compensation “for the period of time during which he was not an Adco employee.” In light
C
The defendants also claim that the trial court improperly awarded the plaintiff double damages pursuant to
Section 31-72 “provides for ‘a discretionary award of double damages, with costs and reasonable attorney‘s fees, to employees who are successful in actions against
In the present case, the trial court‘s memorandum of decision is silent with respect to whether Adco acted with “bad faith, arbitrariness or unreasonableness“; Ravetto v. Triton Thalassic Technologies, Inc., supra, 285 Conn. 724; in refusing to pay the wages due to the plaintiff. The court simply found that Adco‘s refusal was “wilful” and that the plaintiff should recover double damages under
“Additionally, we have defined the term differently depending on the context. See, e.g., Dubay v. Irish, 207 Conn. 518, 533, 542 A.2d 711 (1988) (wilful misconduct requires design to injure); DeMilo v. West Haven, 189 Conn. 671, 678-79, 458 A.2d 362 (1983) (wilful destruction of bridge means intentional destruction of bridge and intent to cause injury); State v. Gotsch, 23 Conn. Sup. 395, 398-99, 184 A.2d 56 (1962) (wilful commonly means intentional, as opposed to accidental, but in penal statute it means with evil intent); Guest v. Administrator, 22 Conn. Sup. 458, 459, 174 A.2d 545 (1961) (wilful breach of rule means deliberate violation done purposely with knowledge as opposed to result of thoughtlessness or inadvertence).” Doe v. Marselle, supra, 236 Conn. 851-52 n.8. The term wilful also has been described as including “not only the mere exercise of the will in failing to comply with the statute [in question], but also an intention to do an act that he knows, or ought to know, is wrongful or forbidden by law . . . .” Ballentine‘s Law Dictionary (3d Ed. 1969).
Correspondingly, the term wilful has been used to describe conduct deemed highly unreasonable or indicative of bad faith. See CFM of Connecticut, Inc. v. Chowdhury, 239 Conn. 375, 395, 685 A.2d 1108 (1996) (“[t]o determine whether the bad faith exception applies, the court must assess whether there has been substantive bad faith as exhibited by, for example, a party‘s . . . wilful violations of court orders” [internal quotation marks omitted]), overruled in part on other grounds by State v. Salmon, 250 Conn. 147, 154-55, 735
Because the term wilful is subject to multiple meanings, we cannot ascribe to the trial court a particular definition of wilful as used in its memorandum of decision. Reviewing some of the court‘s explicit findings, we conclude that it is likely that the court used the term to mean highly unreasonable, but it also is possible that it used the term in a more benign sense. We can state, however, that the trial court did not articulate a legal standard when it made the factual finding that Adco‘s failure to pay wages was “wilful.” It is unclear, therefore, from the court‘s memorandum of decision, whether the court implicitly found bad faith, arbitrariness or unreasonableness in awarding the plaintiff double damages16 or whether the court incorrectly applied a different standard in making its award.17
this conduct that requires articulation because of the multiple meanings ascribed to the word wilful in our case law.
Furthermore, the concurrence and dissent‘s suggestion that the trial court applied the wrong legal standard is belied by the next sentence in the trial court‘s memorandum of decision, in which that court stated: “The award of double damage[s], or attorney‘s fees is a matter of discretion. Commissioner of Labor v. Wall, 69 Conn. App. 450, 461, 794 A.2d 1094, cert. denied, 260 Conn. 938, 802 A.2d 90 (2002).” The pinpoint citation to Commissioner of Labor v. Wall, supra, 461, states: “[Section] 31-72 provides for the discretionary award of double damages and attorney‘s fees in unpaid wage cases. Our case law has established that such an award is appropriate where there is evidence of bad faith, arbitrariness or unreasonableness.” (Emphasis added.) This is the exact legal standard that the concurring and dissenting opinion contends that the trial court did not apply. We see no reason to assume that the trial court applied a standard different from the standard applied in a case that was cited in its decision.
II
The defendants’ final claim is that the trial court improperly ordered the dissolution of Barbur pursuant to
presentation of the issues raised or for the proper presentation of questions reserved. The trial judge shall file the decision on the motion with the appellate clerk. . . .”
We begin with our standard of review. “[When] the factual basis of the court‘s decision is challenged we must determine whether the facts set out in the memorandum of decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous. . . . We also must determine whether those facts correctly found are, as a matter of law, sufficient to support the judgment. . . . Although we give great deference to the findings of the trial court because of its function to weigh and interpret the evidence before it and to pass upon the credibility of witnesses . . . we will not uphold a factual determination if we are left with the definite and firm conviction that a mistake has been made. . . . In applying the clearly erroneous standard of review, [a]ppellate courts do not examine the record to determine whether the trier of fact could have reached a different conclusion. Instead, we examine the trial court‘s conclusion in order to determine whether it was legally correct and factually supported. . . . This distinction accords with our duty as an appellate tribunal to review, and not to retry, the proceedings of the trial court.” (Citation omitted; internal quotation marks omitted.) Wyszomierski v. Siracusa, 290 Conn. 225, 237-38, 963 A.2d 943 (2009).
Applying the appropriate standard of review, we conclude that the trial court‘s order of dissolution is well supported by the evidence. The trial court made the following relevant factual findings in its memorandum of decision, all of which support the conclusion that it was not reasonably practicable to carry on the business of Barbur in conformity with its 1986 agreement: (1) the plaintiff and Firtel each own 50 percent of Barbur; (2) Firtel unilaterally lowered the rental payments for the property owned by Barbur in 2004 and the years following the plaintiff‘s termination from Adco; (3) during this period, Firtel unilaterally arranged for a $5000 loan from Barbur to Adco, a company which he controls; (4) Firtel, acting alone, authorized the repair of the floor of the premises located on Barbur‘s property at a cost of $8480; (5) Firtel did not equally compensate the plaintiff for distributions made on behalf of Barbur until December, 2007, after the trial of this action had commenced; and (6) since July 23, 2004, the plaintiff and Firtel have ceased to have any business or personal relationship.22
After reviewing the evidence in the present case, we conclude that the trial court‘s findings are not clearly
The judgments are affirmed.
In this opinion NORCOTT, VERTEFEUILLE and MCLACHLAN, Js., concurred.
ROGERS, C. J., concurring and dissenting. I agree with parts I A and B and part II of the majority opinion. I respectfully dissent, however, from my colleagues’ conclusion in part I C that the trial court‘s memorandum of decision lacked clarity in setting forth the legal basis for its award of double damages.
In its memorandum of decision, the trial court awarded the plaintiff Barry Saunders1 double damages, pursuant to
The majority concludes that the defendants’ claim is not reviewable because the record is inadequate to demonstrate which standard the trial court actually used. In reaching its conclusion, the majority declares that the trial court‘s memorandum of decision is ambiguous because the definition of the term “wilful” varies according to the context in which it is used, and, therefore, the trial court could have made a finding of bad faith despite using the term wilful.3
This court, however, has stated explicitly that, in the context of
Because the trial court, in awarding double damages to the plaintiff, unambiguously found that Adco wilfully refused to pay the plaintiff‘s wages, but failed to decide whether Adco had acted in bad faith, I would reverse the judgment of the trial court only as to its award of statutory double damages, and remand the case to that court for a determination of whether Adco‘s conduct demonstrated bad faith and, if so, whether statutory double damages may be awarded.
