267 Conn. 456 | Conn. | 2004
Lead Opinion
Opinion
The defendants, Bettina Snyder, Donald Snyder and CS Industries, LLC (CS Industries),
The following facts and procedural history are relevant to this appeal. In October, 1999, the plaintiffs brought an action against the defendants alleging, inter alia, that the named defendant, Charles Snyder,
Thereafter, the plaintiffs moved for a default judgment on the basis of the defendants’ repeated failure to comply with discovery orders. The trial court granted the plaintiffs’ motion and rendered judgment in their favor on the issue of liability. Subsequently, the trial court held a hearing on damages at which three witnesses testified. Vincent Sorrentino, Smith’s agent and husband, testified on behalf of the plaintiffs. David Veilleux, a certified public accountant, testified on behalf of the plaintiffs with respect to the common stock value of Lectron as of December, 1998. And Bettina Snyder, a former employee of Lectron and current employee of CS Industries, testified on behalf of the defendants.
The trial court set forth the following findings of fact in its memorandum of decision. “The plaintiffs protected their suppliers, customers, pricing schemes and processes, and treated them as proprietary information. The defendants kept [a] competing venture secret from the plaintiffs. Specifically, the defendants, while in the plaintiffs’ employ: (1) started a competing business, (2) utilized fraudulent means to misappropriate the plaintiffs’ most productive and efficient machine, (3) [discouraged] the plaintiffs’ existing customers by over-quoting jobs, (4) disrupted the plaintiffs’ cash flow by not sending out bills, (5) altered the plaintiffs’ company records to prevent the plaintiffs from being able to rehire employees who had been laid off, and (6) solic
The trial court concluded that the plaintiffs were entitled to damages under common law, the Uniform Trade Secrets Act, General Statutes § 35-50 et seq., and CUTPA. The trial court awarded the plaintiffs the following: (1) $235,000 in compensatory damages on the basis of the defendants’ violation of the common law, CUTPA and the Uniform Trade Secrets Act; (2) $40,000 in punitive damages under the Uniform Trade Secrets Act; (3) $40,000 in punitive damages under CUTPA; and (4) $20,000 in attorney’s fees.
I
Prior to addressing the defendants’ claims on appeal, we address the issue of whether the individual shareholder plaintiffs, Smith and Tartagni, have standing.
“Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved. . . . The fundamental test for
“Since at least the middle of the [nineteenth] century, it has been accepted in this country that the law should permit shareholders to sue derivatively on their corporation’s behalf under appropriate conditions. . . . [I]t is axiomatic that a claim of injury, the basis of which is a wrong to the coiporation, must be brought in a derivative suit, with the plaintiff proceeding secondarily, deriving his rights from the corporation which is alleged to have been wronged.” (Citation omitted; internal quotation marks omitted.) Fink v. Golenbock, 238 Conn. 183, 200, 680 A.2d 1243 (1996).
“[I]n order for a shareholder to bring a direct or personal action against the corporation or other shareholders, that shareholder must show an injury that is separate and distinct from that suffered by any other shareholder or by the corporation.” Id., 201. It is commonly understood that “[a] shareholder—even the sole shareholder—does not have standing to assert claims alleging wrongs to the corporation.” Jones v. Niagara, Frontier Transportation Authority, 836 F.2d 731, 736
We conclude, therefore, that Smith and Tartagni lacked standing to bring this action in their individual capacities because the allegations in the plaintiffs’ complaint, if true, demonstrate that Lectron was harmed, but that no specific shareholder sustained an injury separate and distinct from that suffered by any other shareholder or by the corporation. Accordingly, the individual claims of Smith and Tartagni must be dismissed.
II
The defendants’ first claim on appeal involves the trial court’s determination that the plaintiffs were entitled to compensatory damages. The trial court’s award of compensatory damages was based on its conclusion that the defendants had violated the common-law theory of misappropriation of trade secrets, which is codified in Connecticut’s Uniform Trade Secrets Act, the common-law theory of misappropriation of property, and CUTPA.
The defendants claim that, to the extent that the trial court’s award of damages was based on its conclusion that the defendants had violated the Uniform Trade Secrets Act, it was improper because there was insuffi
General Statutes § 35-51 (d) defines a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data or customer list that: (1) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (Emphasis added.)
The trial court found that Lectron protected information about its suppliers, customers, pricing schemes and processes, and treated it as proprietary information. The court concluded that the defendants improperly had appropriated this information. Our review of the transcript from the damages hearing reveals that there was sufficient evidence to support the trial court’s factual findings. At the damages hearing, for example, Sorrentino specifically was asked, “[D]id you keep your customers—who your customers were and your pricing scheme, and things of that nature—did Lectron . . . treat that information as confidential?” Sorrentino responded, “Yes, we did.” Sorrentino also testified that Bettina Snyder and Donald Snyder, among others, were aware that such information was confidential. Thus,
The defendants claim, however, that there was no evidence to support a finding that the defendants actually misappropriated trade secrets or nontrade secret property. We disagree. General Statutes § 35-51 (b) defines misappropriation as: “(1) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (2) disclosure or use of a trade secret of another without express or implied consent by a person who (A) used improper means to acquire knowledge of the trade secret; or (B) at the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was (i) derived from or through a person who had utilized improper means to acquire it; (ii) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, including but not limited to disclosures made under section 1-210, sections 31-40j to 31-40p, inclusive, or subsection (c) of section 12-62; or (iii) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or (C) before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.”
The trial court’s determination that the defendants misappropriated trade secrets was based on its finding that the defendants had “solicited [Lectron’s] customers and diverted them to the defendants’ new business venture [namely, CS Industries].” First, the allegations of the plaintiffs’ complaint support the trial court’s factual determination, and it is well settled that “[t]he entry of a default constitutes an admission by the defendant of the truth of the facts alleged in the complaint.” DeBlasio v. Aetna Life & Casualty Co., 186 Conn. 398, 400, 441 A.2d 838 (1982). The plaintiffs alleged in their com
The trial court also determined that the defendants had violated the common-law theory of misappropriation of nontrade secret property by using fraudulent means to misappropriate Lectron’s most productive and efficient machine. Similarly, the trial court’s determination. is supported by the pleadings and by evidence adduced at the hearing in damages. The plaintiffs alleged in their complaint that several of the defendants arranged to remove an electron beam welder from the premises of Lectron so that it could be reinstalled at the premises of CS Industries. There was also testimony at the damages hearing that the defendants started a competing business, namely, CS Industries, and utilized fraudulent means to misappropriate the plaintiffs’ most productive and efficient machine.
The allegations contained in the plaintiffs’ complaint, which are deemed to be established conclusively, and the evidence adduced at the damages hearing, therefore, demonstrate that there was ample support for the trial court’s determination that Lectron was entitled to damages under the common law and the Uniform Trade Secrets Act.
Ill
The defendants also claim on appeal that, even if the trial court properly determined that the plaintiffs were entitled to damages, the amount of compensatory dam
A
First, the defendants claim that the trial court’s award of compensatory damages was improper. The defendants claim that the trial court improperly calculated compensatory damages because it: (1) failed to consider that the individual shareholder plaintiffs did not have a 100 percent interest in Lectron, a fact that should have served to reduce the compensatory damages award; and (2) failed to deduct the proper amount of the proceeds from the sale of various pieces of Lectron’s equipment.
On the basis of our earlier conclusion that the individual shareholder plaintiffs lack standing in the present matter; see part I of this opinion; we need not address the first part of the defendants’ claim. This issue is moot in light of our decision to direct the trial court to render judgment dismissing the action as to Smith and Tartagni.
In support of the second part of their claim regarding compensatory damages, the defendants assert that the trial court improperly reduced the compensatory damages award by $15,000 instead of $127,000 to reflect the proceeds of the sale of Lectron’s equipment. The defendants contend that the trial court failed to consider evidence adduced at the damages hearing that Lectron received $127,000 for the sale of the equipment.
Although the defendants correctly note that Sorrentino testified at the damages hearing regarding the pro
Moreover, because the defendants elected not to file a motion for articulation to illuminate further the basis for the compensatory damages award, this court can only speculate as to how and why the trial court arrived at that sum. We repeatedly have stated that it is the appellant’s responsibility to provide an adequate record for review. E.g., Walton v. New Hartford, 223 Conn. 155, 164-65, 612 A.2d 1153 (1992). Thus, in light of the discretion afforded the trial court in determining the amount of damages to be awarded and in crediting or discrediting the testimony of witnesses, we conclude that the trial court’s award of compensatory damages was proper. See Bieluch v. Bieluch, supra, 199 Conn. 555-56.
B
The defendants next contend that the trial court improperly awarded punitive damages under CUTPA because an award of such damages under CUTPA requires evidence that the defendants demonstrated a reckless indifference to the rights of the plaintiffs. In the present case, the trial court’s finding of reckless indifference was premised on the defendants’ breach
We have stated that when “two or more persons unite in an act which constitutes a wrong to another, intending at the time to commit it, or in doing it under circumstances which fairly charge them with intending the consequences which follow, they incur a joint and several liability for the acts of each and all of the joint participants. . . . Whe[n] . . . the evidence supports the conclusion that there was concerted action, each participant is . . . liable for the entire injury caused by the concerted action.” (Citation omitted; internal quotation marks omitted.) Lamb v. Peck, 183 Conn. 470, 472-73, 441 A.2d 14 (1981).
In their complaint, the plaintiffs alleged that Charles Snyder breached his fiduciary duties to Lectron as an officer and director. The plaintiffs further alleged in their complaint that the remaining defendants conspired with Charles Snyder in the breach of his fiduciary duties. As we have discussed previously in this opinion, the entry of the default judgment conclusively established the facts alleged in the plaintiffs’ complaint. Our decision in Lamb and the allegations in the plaintiffs’ complaint, therefore, inform our conclusion that the remaining defendants in the present case are jointly and severally liable for Charles Snyder’s breach of his
C
The defendants next claim that the trial court improperly awarded $40,000 in punitive damages under the common law because the plaintiffs had failed to plead punitive damages, which the defendants contend is required under Connecticut law. See Associated Investment Co. Ltd. Partnership v. Williams Associates IV, 230 Conn. 148,161 n.16, 645 A.2d 505 (1994). The defendants claim alternatively that, even if it is assumed that an award of common-law punitive damages is merited, the award was improper because common-law punitive damages are limited to the plaintiffs’ litigation expenses, and there was no evidence in the present case concerning the plaintiffs’ litigation expenses. See Waterbury Petroleum Products, Inc. v. Canaan Oil & Fuel Co., 193 Conn. 208, 236, 238, 477 A.2d 988 (1984) (common-law punitive damages limited to expense of litigation less taxable costs).
Our review of the trial court’s memorandum of decision reveals, however, that the trial court awarded punitive damages under the Uniform Trade Secrets Act rather than under common law. The punitive damages provision of that act, namely, General Statutes § 35-53 (b), provides: “In any action brought pursuant to subsection (a) of this section,
D
Finally, the defendants claim that the trial court abused its discretion in awarding $20,000 in attorney’s fees. Specifically, the defendants claim that the award of attorney’s fees was improper because no evidence was presented to establish the reasonableness, nature and extent of the attorney’s fees incurred by the plaintiffs during the course of the litigation. We reject the defendants’ claim under the particular circumstances of this case.
The trial court was vested with discretion to award reasonable attorney’s fees under both CUTPA and the Uniform Trade Secrets Act. General Statutes § 42-1 lOg (d) provides in relevant part that, in any action in which a person alleges damages resulting from an unfair trade practice prohibited by § 42-110b of CUTPA, “the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneys’fees based on the work reasonably performed by an attorney and not on the amount of recovery. ...” (Emphasis added.) Additionally, General Statutes § 35-53 (b), one of the provisions comprising Connecticut’s Uniform Trade Secrets Act, provides in relevant part: “[I]f the court finds wilful and malicious misappropriation, the court may award punitive damages in an
Notwithstanding the conclusive establishment of liability occasioned by the default of the defendants in the present case, “the plaintiff must still prove . . . how much of the judgment prayed for in the complaint he is entitled to receive.”
We long have held that there is an “undisputed requirement that the reasonableness of attorney’s fees and costs must be proven by an appropriate evidentiary showing." (Emphasis added.) Hartford Electric Light Co. v. Tucker, 183 Conn. 85, 91, 438 A.2d 828, cert. denied, 454 U.S. 837, 102 S. Ct. 143, 70 L. Ed. 2d 118 (1981); accord Barco Auto Leasing Corp. v. House, 202 Conn. 106, 121, 520 A.2d 162 (1987); see also Appliances, Inc. v. Yost, 186 Conn. 673, 680-81, 443 A.2d 486 (1982); Stelco Industries, Inc. v. Cohen, 182 Conn. 561, 567-68, 438 A.2d 759 (1980). We also have noted that “courts have a general knowledge of what would be reasonable compensation for services which are fairly stated and described"-, (emphasis added; internal quotation marks omitted) Shapero v. Mercede, 262 Conn. 1, 9, 808 A.2d 666 (2002); and that “[c]ourts may rely on their general knowledge of what has occurred at the proceedings before them to supply evidence in support of an award of attorney’s fees.” (Internal quotation marks omitted.) Andrews v. Gorby, 237 Conn. 12, 24,
The weight of authority indicates that more than the trial court’s mere general knowledge is required for an award of attorney’s fees. See, e.g., Miller v. Kirshner, 225 Conn. 185, 201, 621 A.2d 1326 (1993); Barco Auto Leasing Corp. v. House, supra, 202 Conn. 120-21; Appliances, Inc. v. Yost, supra, 186 Conn. 681; Stelco Industries, Inc. v. Cohen, supra, 182 Conn. 567-68; Lebowitz v. McPike, 151 Conn. 566, 568, 201 A.2d 469 (1964); but see Bizzoco v. Chinitz, 193 Conn. 304, 310-11, 476 A.2d 572 (1984).
For example, in Appliances, Inc. v. Yost, supra, 186 Conn. 679, the terms of a promissoiy note provided for an award of reasonable attorney’s fees. The trial court nevertheless determined that the parties had failed to provide sufficient evidence for an award of attorney’s fees. Id. We disagreed, concluding that “some evidentiary material did exist for the court to consider on that issue”; id., 681; including a supplemental brief filed by the plaintiff in which the plaintiff itemized the attorney’s services. Id. We noted that “[t]hese materials, combined with the court’s own general knowledge, could serve to provide a basis for the court to decide the right to and amount of reasonable attorney’s fees.” (Emphasis added; internal quotation marks omitted.) Id.
In Piantedosi v. Floridia, 186 Conn. 275, 440 A.2d 977 (1982), the defendant claimed that the trial court improperly awarded attorney’s fees because it did not base its award on “factual evidence in the transcript, such as expert witness testimony.” Id., 279. We rejected the defendant’s contention, concluding that the trial
Moreover, in Hartford Electric Light Co. v. Tucker, supra, 183 Conn. 86-87, the defendant appealed from the judgment of the trial court awarding, inter alia, attorney’s fees to the plaintiff. The defendant challenged the constitutionality of a statute that allowed for the plaintiff’s recovery of “reasonable attorney’s fees and costs . . . .” (Internal quotation marks omitted.) Id., 91. We rejected the defendant’s contention that the statute authorizing the plaintiffs recovery of attorney’s fees was “devoid of standards,” concluding that “[t]he defendant’s constitutional protection from excessive awards [was] to be found in the undisputed requirement that the reasonableness of attorney’s fees and costs must be proven by an appropriate evidentiary showing.” (Emphasis added.) Id.
In Miller v. Kirshner, supra, 225 Conn. 199, the defendant, Hal Kirshner, claimed that there was insufficient evidence to support an award of attorney’s fees. “During the trial on financial issues, the plaintiff [Mary Miller] submitted a sworn affidavit indicating that she owed counsel $20,000 at the time of trial and attached a supporting itemization. [Kirshner] argued that [Miller] was barred from seeking attorney’s fees because she had failed to produce expert testimony that the fees were reasonable. In its memorandum of decision on financial issues, the trial court awarded [Miller] $7000 in attorney’s fees. The court stated that ... [it had] a general knowledge of what would be a reasonable fee under
“[On appeal, Kirshner] claim[ed] that the trial court improperly [had] awarded attorney’s fees without conducting a hearing to consider evidence from an expert witness with respect to the reasonableness of the hours and monetary amount of the fees requested. [Kirshner did] not claim that he was not permitted to introduce evidence regarding the unreasonableness of the fees requested, but that [Miller had] failed to produce evidence, through an expert witness, of their reasonableness. [Kirshner] argue [d], therefore, that without a proper evidentiary foundation, an award of attorney’s fees could not be made.” (Internal quotation marks omitted.) Id., 199-200.
We disagreed with Kirshner and concluded that “[t]he trial court properly relied on the financial affidavit before it and, on its general knowledge and involvement with the entire trial to ascertain a reasonable attorney’s fee.” (Emphasis added.) Id., 201. Thus, the trial court possessed documentary evidence regarding attorney’s fees and based its award on that evidence in addition to its own general knowledge of what constituted a reasonable attorney’s fee. See id.
In Shapero v. Mercede, 262 Conn. 1, 808 A.2d 666 (2002), we reviewed the Appellate Court’s conclusion that there was insufficient evidence upon which to base a finding of attorney’s fees because the plaintiff attorney, Paul D. Shapero, had produced no evidence to establish either his rate of compensation or the prevailing rates in the legal community. We stated that “[t]he Appellate Court did not consider, however, whether there was other evidence that could have supported the fee award.” Id., 6.
Shapero testified that he had worked 100 hours on the matter. Id., 3. “[T]he referee based her finding that
“The referee’s evidentiary findings with regard to [Shapero’s] experience and reputation, and the novelty and complexity of the legal issues addressed in the course of his work on behalf of [his client], ha[d] not been challenged and [were] therefore binding on this court.” (Internal quotation marks omitted.) Id., 8-9.
In Shapero, we concluded the court’s “general knowledge [of what constitutes a reasonable attorney’s fee] and the referee’s unchallenged findings relevant to the value of the plaintiffs services provided sufficient support for the challenged finding that $275 per hour was an appropriate measure of the value of those services.” Id., 10. Thus, as in numerous other cases, there was additional evidence in Shapero to support the trial court’s award of attorney’s fees.
In Shapero, we distinguished cases that the Appellate Court had relied on in reversing the trial court’s award of attorney’s fees. See id., 6-7 n.3. We noted that “[t]he
Thus, as our case law demonstrates, to support an award of attorney’s fees, there must be a clearly stated and described factual predicate for the fees sought, apart from the trial court’s general knowledge of what constitutes a reasonable fee. Although we have been careful not to limit the contours of what particular factual showing may suffice, our case law demonstrates that a threshold evidentiary showing is a prerequisite to an award of attorney’s fees.
Notwithstanding the existence of numerous cases establishing this evidentiary burden, some confusion exists in our case law regarding the nature and extent of this evidentiary burden. See Resurreccion v. Normandy Heights, LLC, 76 Conn. App. 642, 650, 820 A.2d 1116 (acknowledging confusion relating to evidentiary burdens associated with awards of attorney’s fees), cert. denied, 264 Conn. 917, 826 A.2d 1159 (2003).
We acknowledge that the dissent’s interpretation of our holding in Bizzoco, namely, that the trial court’s general knowledge of the reasonableness of the attorney’s fees as well as the court’s access to the file and knowledge of the proceedings before it was alone sufficient to warrant an award of attorney’s fees, is a reasonable interpretation of that case. Nevertheless, we believe, on the basis of the weight and persuasiveness of our case law on this issue, decided both before and after Bizzoco, that the trial court’s general knowledge of the file in a particular case, by itself, is an insufficient
Accordingly, when a court is presented with a claim for attorney’s fees, the proponent must present to the court at the time of trial or, in the case of a default judgment, at the hearing in damages, a statement of the fees requested and a description of services rendered.
In addition, as a matter of good policy, our holding today establishes a paradigm within which all parties must act when pursuing a claim for attorney’s fees. Perhaps, even more importantly, our holding eliminates the undesirable burden imposed upon the courts when a party seeks an award of attorney’s fees predicated solely upon a bare request for such fees. Parties must supply the court with a description of the nature and extent of the fees sought, to which the court may apply its knowledge and experience in determining the reasonableness of the fees requested.
Under the circumstances of this case, however, we affirm the trial court’s award of $20,000. We reach this conclusion because the defendants did not oppose or otherwise take any action in response to the plaintiffs’ request for $25,000 in fees in their post-damages hearing brief.
The judgment is reversed with respect to the trial court’s award of damages and attorney’s fees to the plaintiffs Patricia Smith and Carol Tartagni and the case is remanded to the trial court with direction to render judgment dismissing the action as to those two plaintiffs. The judgment is otherwise affirmed.
In this opinion SULLIVAN, C. J., and NORCOTT and PALMER, Js., concurred.
We note that the operative complaint in the present action also named Charles Snyder, Advanced Vacuum Resources, Inc., and Gary LaChapelle as defendants. At the damages hearing, however, the plaintiffs proceeded against only Bettina Snyder, Donald Snyder and CS Industries.. We refer to Bettina Snyder, Donald Snyder and CS Industries as the defendants throughout this opinion.
The defendants appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-1.
We note that the operative complaint and certain other court documents refer to Patricia Smith as Patricia Moore. For ease of reference, we refer to her as Patricia Smith.
See footnote 1 of this opinion.
We raise this issue of standing sua sponte as it implicates our subject matter jurisdiction. See, e.g., Ardmare Construction Co. v. Freedman, 191 Conn. 497, 498 n.4, 467 A.2d 674 (1983).
We note that “[t]he entry of a default constitutes an admission by the defendant of the truth of the facts alleged in the complaint.” DeBlasio v. Aetna Life & Casualty Co., 186 Conn. 398, 400, 441 A.2d 838 (1982). Thus, the defendants cannot challenge the determination of liability in the present case because liability was deemed to be established conclusively. Accordingly, our review of the defendants’ claims is limited to whether the trial court properly awarded damages and whether the amount of damages awarded was proper.
We note that the plaintiffs did not allege in their complaint that the defendants had violated the Uniform Trade Secrets Act. The defendants do not claim on appeal, however, that the trial court’s award of damages was improper inasmuch as the plaintiffs failed to allege a violation of the Uniform Trade Secrets Act in their complaint. See Practice Book § 10-3.
We note that the defendants’ only challenge in connection with the trial court’s award of damages under CUTPA is to its award of punitive damages, which we discuss in part III of this opinion.
The trial court cited Blum, Shapiro & Co. v. Searles & Houser, LLC, Superior Court, judicial district of Hartford, Docket No. CV-99-0586283-S (August 11, 1999), for the proposition that a breach of fiduciary duties may constitute reckless indifference.
Subsection (a) of § 35-53 authorizes an award of damages for the “misappropriation" of trade secrets as described in subsection (b) of § 35-51.
At the very least, a default judgment entitles the plaintiff to nominal damages. DeBlasio v. Aetna Life & Casualty Co., supra, 186 Conn. 401.
In Lebowitz v.McPike, supra, 151 Conn. 567-68, we held that the plaintiff, who had brought an action to collect on a note executed by the defendants, was not entitled to attorney’s fees, after a trial on the issues, despite a term in the note providing for such fees. We concluded that “[t]he judgment did not include any allowance for attorneys’ lees, since no evidence was introduced concerning them." (Emphasis added.) Id., 568.
Of course, courts must enforce statutory limits on attorney’s fees; e.g., General Statutes § 42-150aa (b); and recognize self-executing terms of contractual provisions that call for an award of a set percentage of attorney’s fees upon the occurrence of a certain event. Cf. Stelco Industries, Inc. v. Cohen, supra, 182 Conn. 567-68.
We have recognized the right of parties, at trial, to litigate fully the reasonableness of the fees requested. See Barco Auto Leasing Corp. v. House, supra, 202 Conn. 121. In Barco Auto Leasing Corp., the defendants sought to introduce into evidence affidavits in support of their request for attorney’s fees. Id. The plaintiff objected to the admission of one affidavit and claimed that the defendants were required to offer expert testimony to establish the value of reasonable fees. Id. The trial court did not allow the admission of the affidavits in evidence but, instead, included them in the case file. Id. Thereafter, the court directed the parties to raise any claims or objections to the award of attorney’s fees in their briefs. Id. Upon these facts, we held that the court “denied the [party against whom attorney’s fees were sought] the undisputed right to litigate fully the reasonableness of the attorney’s fees sought . . . .” Id.
See footnote 14 of this opinion.
We underscore the fact that the defendants do not challenge the reasonableness of the amount that the trial court awarded in attorney’s foes.
Concurrence Opinion
concurring and dissenting. I agree with, and join, all of the majority opinion, except pait III D. In that part, the majority (1) announces a new rule governing the awarding of attorney’s fees, but (2) declines to apply that rule to the present case, and (3)
I
I first address the award of attorney’s fees, and explain why I think it was properly made, both procedurally and substantively, under our existing case law. Although the defendants, former employees of the plaintiff corporation, had been defaulted and the trial was limited to a hearing in damages, the record of this case, including the trial court’s factual findings and the defendants’ claims in both the trial court and this court, demonstrates that the hearing in damages involved claims going to liability as well as damages. As a result of that contested hearing in damages, over which the trial court presided, the court awarded the plaintiffs: (1) $235,000 in compensatory damages under both the Connecticut Unfair Trade Practices Act (CUTPA) and the Connecticut Uniform Trade Secrets Act (trade secrets act); (2) $40,000 in punitive damages under the trade secrets act; (3) $40,000 in punitive damages under CUTPA; and (4) $20,000 in attorney’s fees.
I agree with the general standard set forth by the majority for the award of attorney’s fees. “[W]e have repeatedly held that courts have a general knowledge of what would be reasonable compensation for services which are fairly stated and described. . . . Piantedosi v. Floridia, 186 Conn. 275, 279, 440 A.2d 977 (1982).
First, the trial court had presided over the entire contested hearing in damages, resulting in a successful award of a total of $235,000 in compensatory damages, and $80,000 in punitive damages based on the defendants’ reckless, willful and malicious conduct toward the plaintiffs. Thus, it had firsthand knowledge of the length, difficulty and complexity of that proceeding, as well as the degree of its success. In addition, immediately prior to the commencement of the hearing in damages, the very same trial court entertained the defendants’ motion to open the very default that had led to the hearing in damages. In opposing the motion,
Eighteen months prior to the hearing in damages, the plaintiffs’ attorney had first sought discovery, and continued to seek discovery over the ensuing months. The defendants did not file any objection, yet they failed to comply with the discovery requests. Specifically, the defendants flagrantly had refused to comply.
It was on this state of the record that the court considered the defendants’ motion to open the default. The court denied the motion, and proceeded immediately to the hearing in damages. Thus, although the preceding representations were not offered to the court in specific connection with the plaintiffs’ ultimate request for attorney’s fees, the court certainly was entitled to take them into account in connection with that request.
This entire record—the hearing before the court on the defendants’ final motion to open the default, the hearing in damages, and the trial court file—is more than ample to surmount any reasonable requisite procedural or evidentiary threshold so as to justify the court’s award of attorney’s fees. Thus, the majority’s suggestion that the only evidence to support an award of attorney’s
Indeed, Bizzoco v. Chinitz, supra, 193 Conn. 310-11, is directly on point. In that case, the promissory note signed by the defendant “expressly authorized the recovery of a reasonable attorney’s fee.” Id., 310.
The majority’s concession that my reading of Bizzoco is “reasonable,” is, although generous, also disingenu
In addition, I note that the defendants do not claim that the award of $20,000 in attorney’s fees was unreasonable in amount. Indeed, given the total award of $335,000, including $80,000 in punitive damages for reckless, willful and malicious conduct by the defendants, the fee award amounts to slightly less than 6 percent of the total award of damages. That strikes me as eminently reasonable in amount, based on the factors set forth by this court in Andrews v. Gorby, supra, 237 Conn. 24 n.19. See footnote 2 of this opinion.
In this connection, furthermore, I also note that at no time did the defendants attempt in the trial court to challenge the award, either as to its evidentiary basis or as to the reasonableness of its amount. When the plaintiffs filed their posttrial brief requesting $25,000 in attorney’s fees, the defendants did not ask the court to postpone any such award until they had an opportunity to challenge it, they did not suggest to the court that the plaintiffs should present documentation or evidence to support the award, and they did not ask for a hearing on the award. When the court made the award, they did not ask the court for an articulation of its evidentiary basis. Had the defendants done any of these things, it is clear to me from this record that both the plaintiffs and the court could have and would have made explicit
I agree that, as we have stated previously, it is the better practice for attorneys seeking fees to keep and produce time records, and I also agree that is the better practice for such attorneys, when they file a request for such fees, to enter into the record, in some appropriate form, a specific statement of the basis for the request. See Miller v. Kirshner, supra, 225 Conn. 201. That does not mean, however, as the majority now holds, that a failure to make such a specific entry deprives the trial court of an evidentiary basis to render an unchallenged award based on it’s the court’s own firsthand knowledge of the case before it and of the file available to it.
II
This brings me to the majority opinion and my reasons for disagreeing with it. As a predicate, it is necessary to summarize what I perceive to be its reasoning.
I begin by noting that the majority opinion is a paradigmatic example of the tail wagging the dog.
The majority opinion rests on the following chain of reasoning: (1) the weight of our case law requires more than the trial court’s general knowledge of the proceedings before it and of the reasonable value of legal services; (2) there must be a clearly stated and described factual predicate for the fees sought, apart from the court’s general knowledge of what constitutes a reasonable fee, and that “a threshold evidentiary showing is a prerequisite for an award of attorney’s fees” (emphasis added); (3) therefore, the party seeking the fees “must present to the court at the time of trial or, in the case of a default judgment, at the hearing in damages, a statement of the fees requested and a description of services rendered,” thus leaving “no doubt about the burden on the party claiming attorney’s fees,” and giving the other party “an opportunity to challenge” that request; (4) this holding will eliminate “the undesirable burden imposed upon the courts when a party seeks an award of attorney’s fees predicated solely upon a bare request for such fees”; (5) consequently, parties now “must supply the court with a description of the nature and extent of the fees sought, to which the court may apply its knowledge and experience in determining the reasonableness of the fees requested”; but (6) none of this applies to the present case because the defendants took no action to challenge the plaintiffs’ request for fees and, therefore, the award must be upheld. This chain of reasoning is fundamentally flawed.
I do not, of course, advocate such a result in the present case, because in my view the plaintiffs must prevail on the basis of our existing case law. I merely point this out as an example of the self-contradictory nature of the majority’s reasoning.
Furthermore, the majority appears to divide the requisite showing for an award of attorney’s fees into two parts, namely: (1) a sufficient evidentiary basis; and (2) a “statement”—presumably by the party’s counsel— “of the fees requested and a description of services rendered.” (Emphasis added.) Under the majority opinion, however, the second part apparently will satisfy the first part. But why? It is settled law that statements of counsel do not ordinarily constitute evidence. Cologne v. Westfarms Associates, 197 Conn. 141, 153, 496 A.2d 476 (1985); Celentano v. Zoning Board of
If, however, as seems more likely, the majority instead means that a “threshold evidentiary showing”; (emphasis added); does not really mean “evidence,” but just the formal statement of counsel that the majority now requires, then the majority has elevated form over substance to Everestian heights, particularly as applied to this record. There can be little doubt that the trial court, as well as the defendants, knew full well the basis of the plaintiffs’ request for attorney’s fees, without a formal separate statement of that basis. To mix the metaphor even more, the tail that is wagging the dog is little more than a stump. Furthermore, on this understanding of the majority’s meaning, it has rendered wholly superfluous our numerous statements that “[cjourts may rely on their general knowledge of what has occurred in the proceedings before them to supply evidence in support of an award of attorney’s fees.” (Emphasis added; internal quotation marks omitted.) Miller v. Kirshner, supra, 225 Conn. 201; Andrews v. Gorby, supra, 237 Conn. 24.
The other links in the majority’s chain of reasoning are similarly flawed. The majority elaborately describes the facts of the cases from which it draws the lesson that the weight of our case law requires more than the court’s general knowledge of the proceedings and of the reasonable value of legal services, namely, that weight of authority requires a separate statement of the fees requested and services rendered. See Shapero v. Mercede, supra, 262 Conn. 1; Miller v. Kirshner, supra, 225 Conn. 185; Appliances, Inc. v. Yost, supra, 186 Conn. 673; Piantedosi v. Floridia, supra, 186 Conn. 275; Hartford Electric Light Co. v. Tucker, 183 Conn. 85, 438 A.2d 828 (1981). It is true that in each of these cases, in which we affirmed the award of fees, there was in
Finally, the majority justifies its new rule on the basis that it will eliminate “the undesirable burden imposed upon the courts when a party seeks an award of attorney’s fees predicated solely upon a bare request for such fees.” This justification falls of its own weight. First, I am unaware of any such “burden,” undesirable or desirable. Certainly, neither the majority nor the defendants in this case have presented any evidence thereof; indeed, the defendants have never even claimed that to be the case. Furthermore, the trial court in this case did not seem at all burdened by the plaintiffs’ claim for fees, and had no apparent difficulty making an eminently reasonable award. Certainly this trial court was, as will be any of our trial courts, aware of the option of requesting supplemental briefing, itemizing the legal services rendered, if it determined that it needed more than it already had before it in order to make an intelligent award of attorney’s fees. See
I would, therefore, affirm the award of $20,000 in attorney’s fees to the plaintiffs.
This award was a reduction from the $25,000 requested by the plaintiffs.
“Rule 1.5 of the Rules of Professional Conduct, entitled ‘Fees,’ provides in pertinent part: ‘(a) A lawyer’s fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
“ ‘(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
“ ‘(2) The likelihood, if made known to the client, that the acceptance of 1he particular employment will preclude other employment by the lawyer;
“ ‘(3) The fee customarily charged in the locality for similar legal services;
“ ‘(4) The amount involved and the results obtained;
“ ‘(5) The time limitations imposed by the client or by the circumstances;
“ ‘(6) The nature and length of the professional relationship with the client;
“ ‘(7) The experience, reputation, and ability of the lawyer or lawyers performing the services; and
“ ‘(8) Whether the fee is fixed or contingent. . . .’ ” Andrews v. Gorby, supra, 237 Conn. 24 n.19.
The plaintiffs’ counsel represented to the court, without objection from the defendants, that he had “taken two depositions with [the defendants] where I sat across the table from them, and they told me how they’ve made no attempt [to obtain or disclose] the [requested] discovery materials.”
The hearing in damages took place at the end of June, 2001. The plaintiffs’ counsel’s objection, dated December 26, 2000, provided the following: two depositions had been commenced, both with substantial production requests, which were “almost completely ignored,” with no objections filed, and that the defendants “simply chose not to produce the requested documents”; the defendants had filed objections to the plaintiffs’ interrogatories and production requests “long after the deadline for compliance,” and used the late filed objections as a basis for opening a default; the trial court had opened the default, but imposed costs on the defendants, advising both counsel to work out the objections or place them on a calendar; thereafter both counsel reviewed all the discovery requests and the defendants’ counsel agreed to comply with them, an agreement that was confirmed in writing by the plaintiffs’ counsel’s letter, which was attached; and because the original discovery requests had been filed on December 2,2000, the plaintiffs had been unsuccessfully seeking discovery for one year.
Curiously, the majority neglects to mention this entire proceeding in its discussion of the award of attorney’s fees. Indeed, the majority does not even give any weight to the fact that the trial court had just completed hearing and deciding the hearing in damages, which covered both liability
The prayer for relief in the original complaint included a request for attorney’s fees. Thus, it was apparent from the very beginning that such an award was at least a possibility, and the defendants have never claimed surprise regarding the request.
In evaluating whether a trial court’s award of an attorney’s fee is based on sufficient evidence in the record, I can perceive no legitimate basis for distinguishing between a note calling for a reasonable fee and a statute calling for a reasonable fee. Indeed, I do not read the majority opinion to suggest otherwise.
Lest I be accused, by virtue of the length of this opinion, of the same thing, I point out that, because I disagree with the majority’s reasoning, I am compelled to add my tale to the story in order to explain that disagreement.