Squillante v. Capital Region Development AuthoritySquillante v. Capital Region Development Authority
Case Information
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APPENDIX DAVID SQUILLANTE ET AL. CAPITAL REGION DEVELOPMENT AUTHORITY* Superior Court, Judicial District of Hartford File No. CV-16-6070594-S Memorandum filed July 18, 2018 Proceedings Memorandum of decision on defendant’s motion for summary judgment. Motion granted .
Matthew S. Carlone , for the plaintiffs.
Benjamin C. Jensen , for the defendant. *3 Opinion
NOBLE, J.
The question presented by the motion for summary judgment of the defendant, the Capital Region Develop- ment Authority (CRDA), is whether, in the absence of disputed material facts, CRDA is entitled to judgment as a matter of law on the breach of contract, promissory estoppel, and negligent misrepresentation claims asserted by the plaintiffs, David Squillante (Squillante) and DJS45, LLC (DJS45). The court finds that no enforceable agreеment was created between the parties and holds that judgment should enter on all three claims in favor of CRDA.
FACTS The following facts and procedural history are rele- vant to this decision. This action was commenced by service of process on CRDA on July 26, 2016. The opera- tive complaint is the amended complaint dated Novem- ber 14, 2017 (complaint), which asserts in three counts, respectively, claims of breach of contract, promissory estoppel, and negligent misrepresentation. Squillante is the sole member of DJS45, a limited liability company. CRDA is a quasi-municipal corporation created by stat- ute, [1] whose purpose is to ‘‘stimulate new investment within the capital region’’ and ‘‘encourage residential housing development.’’ General Statutes § 32-602 (a) (1) and (3). Squillante formed DJS45, which thereafter purchased a five-story commercial building located at 283-291 Asylum Street in Hartford (property). Squillante opened a restaurant in the ground floor of the property and sought financing for the renovation and conversion of the upper four floors into residential apartments. Beginning in early 2013, Squillante engaged in conversa- tions with representatives of CRDA about potential financing that resulted in the execution of a letter dated May 10, 2013 (letter). CRDA ultimately withdrew the offer to provide financing. The plaintiffs assert that the letter constitutes a binding contract, evinces a promise to provide financing upon which the plaintiffs reason- ably relied, and contains misrepresentations upon which the plaintiffs relied to their detriment.
In particular, the letter provides that CRDA was ‘‘pleased to provide you with the terms and conditions under which CRDA will extend financial assistance for the conversion of 283-91 Asylum Street (the ‘Project’) into a mixed use residential project. The terms set forth below are intended to be a preliminary outline of gen- eral business terms of the potential project and are expressly subject to the completion of CRDA due dili- gence investigation including the provisions of neces- sary documents as outlined below and the securing of complete financing for the Project. This letter is not intended to create any legal liability for CRDA and is to serve as an explanation of assistance to be provided *4 by CRDA.’’ (Emphasis added.) The letter was signed by Squillante, on behalf of DJS45, and Michael Freimuth, executive director of the CRDA, on its behalf. The letter proposed a construction loan for an unspecified amount not more than $575,000 and then a permanent loan of an also unspecified amount, but no more than $518,000 for a twenty year term at 1.5 percent.
Several terms and various contingencies remained unresolved. Because CRDA was only funding a portion of the project, the amount that it would actually lend depended upon (a) the amount of funding DJS45 was able to secure from private lenders, and (b) the amount of state historic tax credits to be awarded. [2] The letter specified that DJS45 ‘‘must present a final development budget and project application that will be incorporated into a formal Assistance Agreement between CRDA and Sponsor. Sponsоr shall be responsible for the payment of all necessary and appropriate costs associated with this transaction, whether or not a closing takes place . . . .’’ The formal assistance agreement was never exe- cuted. Other terms were not identified by the letter, including dates for completion of any obligations. The letter provided that DJS45 ‘‘shall be responsible for any costs above the budget outlined in this letter to complete the Project in accordance with the plans and specifications finally approved by CRDA. [DJS45] will provide a guaranty or payment and performance bonds to the benefit of CRDA by a credit worthy entity approved by CRDA for the completion of the Project in a lien free state.’’ While CRDA’s board of directors had approved the terms and conditions of the letter, ‘‘such approval [was] contingent on the approval of the State of Connecticut Bond Commission. In the event that such approval is [not] obtained or any time CRDA determines in its discretion that such approval is not likely to be obtained with a reasonable period of time, CRDA may terminate this proposal.’’ Finally, the letter informed DJS45 that, ‘‘[a]lthough not an exhaustive list, CRDA may request and [DJS45] shall provide the follow- ing: аppraisals, title searches, covenants, insurance cer- tificates, plans and specifications, evidence of financ- ing, permits and approvals, contractor agreements, surveys, environmental clearance, final budget and final application.’’
On June 21, 2013, the state of Connecticut bond com- mission (commission) voted to approve the allocation of up to $575,000 for the CRDA’s proposed loan to DJS45. On September 17, 2013, CRDA sent DJS45 a template of the formal assistance agreement identified in the letter. Section 3.9 of the assistance agreement, titled ‘‘Payment and Performance Bоnd,’’ provided that ‘‘[DJS45] shall provide CRDA with Payment and Perfor- mance Bonds with respect to each Contractor that enters into a Major Contract with [DJS45] . . . .’’ On December 4, 1993, CRDA sent DJS45 a ‘‘closing check- list’’ identifying various items that needed to be pro- *5 vided. Item 33 included bonds from the general contrac- tor and the subcontractors.
Although the plaintiffs now assert that the require- ment of performance and payment bonds, rather than simply a personal guarantee, was a material breach of the contract embodied in the letter, this claim is negated by communications between Freimuth and Squillante. On January 7, 2014, Freimuth wrote to Squillante in an е-mail that there were ‘‘a variety of issues outstanding. I have attached the closing check list for the project that was sent to your attorney in early December and little has been done to advance the items on the list. I hear that your contractor cannot get bonded which is a non-starter . . . .’’ The e-mail inquired about the tim- ing-out of an initial lender agreement and the lack of a fully executed commitment from the permanent lender. Freimuth indicated that they needed to consummate the deal because the ‘‘funds are now very ‘old’ and pressure is on to return them for other deals. If we do not bring this to conclusion in the next [forty-five to sixty] days, I will have little choice but to reallocate the funds.’’
Squillante replied to CRDA on January 7, 2014, repre- senting that ‘‘[t]here are no issues with any of your concerns . . . . Also my contractor can get bonding, he was just looking not to incur the expense.’’ DJS45 never obtained the performance or payment bonds. On July 25, 2014, the commission voted to reallocate the proposed funding for the project and CRDA revoked its approval of the application without prejudice. This action followed.
On October 23, 2017, CRDA filed its motion for sum- mary judgment asserting that the letter was not a legally enforceable contract. Rather, in its view, the letter was an agreement to agree. Moreover, even if it was an enforceable agreement, the plaintiffs never performed because they never obtained permanent financing or provided performance bonds. CRDA asserts that it never made a clear and definite promise to the plaintiffs for a loan such that the second count asserting a promis- sory estoppel claim fails. Finally, the negligent misrep- resentation claim fails, in the view of CRDA, because it was commenced outside of the limitation period pro- vided by General Statutes § 52-584 and because CRDA did not make any misrepresentations.
The plaintiffs object on the grounds that material questions of fact exist as to whether the letter was intended to be a binding contract, and whether there was any breach thereof by CRDA. The second count sounding in promissory estoppel survives summary judgment, in the estimation of the plaintiffs, because the letter provided for a personal guarantee ‘‘or’’ a pay- ment and performance bond. As to their negligent mis- representation claim, the plaintiffs observe that § 52- 584 is inapplicable here, and the misrepresentation in *6 the present case is that of providing financing if the plaintiffs provided a guarantee ‘‘or’’ payment and perfor- mance bond.
LEGAL STANDARD
The legal standard governing summary judgment
motions is well settled. ‘‘Summary judgment is a method
of resolving litigation when pleadings, affidavits, and
any other proof submitted show that there is no genuine
issue as to any material fact and that the moving party
is entitled to judgment as a matter of law . . . . The
motion for summary judgment is designed to eliminate
the delay and expense of litigating an issue when there is
no real issue to be tried . . . . However, since litigants
ordinarily have a constitutional right to have issues of
fact decided by a jury . . . the moving party for sum-
mary judgment is held to a strict standard . . . of dem-
onstrating his entitlement to summary judgment.’’ (Cita-
tion omitted; footnote omitted; internal quotation marks
omitted.)
Grenier
v.
Commissioner of Transportation
,
DISCUSSION With the governing legal standard in mind, the court now addresses the breach of contract, promissory estoppel, and negligent misrepresentation claims in turn.
I
COUNT ONE: BREACH OF CONTRACT
The court finds that CRDA has established a lack of
any genuine issue of material fact as to the absence of an
enforceable agreement. Specifically, the letter provided
merely the contours of a potential deal that might, when
reduced to a subsequent writing, result in a binding
contract. ‘‘The elements of a breach of contract claim
are the formation of an agreement, performance by one
party, breach of the agreement by the other party, and
damages . . . . The interpretation of definitive con-
tract language is a question of law . . . .’’ (Citation
omitted; internal quotation marks omitted.)
CCT Com-
munications, Inc. Zone Telecom, Inc.
,
‘‘Under established princiрles of contract law, an
agreement must be definite and certain as to its terms
and requirements.’’ (Internal quotation marks omitted.)
Perricone
v.
Perricone
,
In accordance with these principles, the court consid- ers the first Fowler factor and concludes that the letter was in the nature of an ‘‘agreement to agree,’’ rather than an enforceable contract, because essential terms had yet to be agreed upon. The letter was self-described as ‘‘ a preliminary outline of general business terms of the potential project and are expressly subject to the completion of CRDA due diligence investigation including the provisions of nеcessary documents as outlined below and the securing of complete financing for the Project. This letter is not intended to create any legal liability for CRDA and is to serve as an explanation of assistance to be provided by CRDA.’’ (Emphasis added.) By its very language, it identified itself as merely setting out the framework of a future contract, the formal assistance agreement, whose terms were yet to be agreed upon. These terms include the contents of the final development budget and the proj- ect application that were to be incorporated in the assis- tance agreement as well аs the unidentified terms of the assistance agreement. Additionally, the letter con- templated final approval by CRDA of as yet undrafted ‘‘plans and specifications.’’ Finally, CRDA provided a nonexhaustive list of additional agreements, the terms of which were not specified, that the plaintiffs would be required to provide, including but not limited to ‘‘covenants’’ and ‘‘contractor agreements.’’ The disposi- tive case law compels the conclusion that these yet to be determined agreements and terms renders the letter unenforceable as an ‘‘agreement to agree.’’
The plaintiffs suggest that Connecticut Parking Ser- vices, LLC Hartford Parking Authоrity , Superior Court, judicial district of Hartford, Docket No. CV-11- 6018221-S (April 2, 2013), provides the court with an example of contract language that articulated an intent not to create a contractual obligation, which was ulti- mately found by the court to present questions of fact upon which summary judgment was denied. The reli- ance on this case is misplaced. In Connecticut Parking Services, LLC , language in a request for proposal that the parties would ‘‘enter into negotiations, which may ultimately lead to a contract ’’ was raised by the defen- dant as an indication that the request for proposal was not an enforceable contract document. (Emphasis in original; internal quotation marks omitted.) Id. The court denied summary judgment in favor of the defen- dant on the grounds that the language had to be consid- ered in the context of other language specifying that the terms in the request for proposal, in combination with other documents, represented the contract docu- ments. Id. This case may be distinguished because a final agreement, to which the request for proposal was attached, was actually reached. In the present case it is undisputed that a formal assistance agreement between CRDA and DJS45 was never consummated.
The court therefore grants summary judgment to CRDA on the first count of the cоmplaint because the defendant has established the absence of material facts relative to the lack of essential terms, making the letter unenforceable.
II
COUNT TWO: PROMISSORY ESTOPPEL
The defendant also claims entitlement to summary
judgment on the second count, which asserts liability
against the CRDA for promissory estoppel. ‘‘[U]nder
the doctrine of promissory estoppel [a] promise which
the promisor should reasonably expect to induce action
or forbearance on the part of the promisee or a third
person and which does induce such action or forbear-
ance is binding if injustice can be avoided only by
enforcement of the promise. . . . A fundamental ele-
ment of promissory estoppel, therefore, is the existence
of a clear and definite promise which a promisor could
reasonably have expected to induce reliance.’’ (Internal
quotation marks omitted.)
McClancy Bank of
America, N.A.
,
The promise which the plaintiffs seek to enforce is none other than the act of extending a loan in an amount in excess of $500,000. The letter, however, premised the financing on a number of contingencies which, in the aggregate, rendered the prоmise to loan $500,000 or more tentative, rather than definite. These included CRDA’s due diligence investigation, agreement of the terms, execution of a formal assistance agreement, the plaintiffs’ obtaining permanent financing, and the exe- cution of other unspecified documents. Simply put, there was no definite promise to loan the plaintiffs over $500,000, and, accordingly, summary judgment as to this claim is appropriate.
The plaintiffs assert that the promise upon which they relied was for the extension of the loan upon the provision of either a guarantee or a payment and perfor- mance bond. In the рlaintiffs’ view, the later insistence by CRDA on an onerous payment and performance *10 bond for each of [their] contractors from an insurance company with a Best Rating of A- VII or, alternatively, that each of the plaintiffs’ contractors provide the same is different from what was indicated in the letter, which provided for a guarantee preferred by the plaintiffs ‘‘or’’ a performance and payment bond, works an injustice and caused them injury. [3] This ignores that this was only one of many contingencies that were required to be met before a loan was made. Moreover, the letter employed the disjunctive ‘‘оr’’ between the two possibil- ities of the provision of a guarantee and a payment and performance bond without articulating which of the parties were permitted to elect the manner in which CRDA would be assured of the completion of the project in a lien free state. There is nothing in the record before the court which demonstrates that the plaintiffs exer- cised any diligence to determine the truth of which or lacked any reasonably available means of acquiring this knowledge. See Chotkowski State , supra, 240 Conn. 268. Summary judgment is therefore granted as to the second count.
III COUNT THREE: NEGLIGENT MISREPRESENTATION
The last theory of liability upon which summary judg-
ment is sought is that contained in the third count of
negligent misrepresentation. The elements of an action
for negligent misrepresentation are ‘‘(1) that the defen-
dant made a misrepresentation of fact (2) that the defen-
dant knew or should have known was false, and (3) that
the plaintiff reasonably relied on the misrepresentation,
and (4) suffered pecuniary harm as a result.’’ (Internal
quotation marks omitted.)
Coppola Construction Co.
Hoffman Enterprises Ltd. Partnership
, 309 Conn.
342, 351-52,
CRDA asserts that the plaintiffs’ action is barred by the statute of limitations. The following additional infor- mation is required [for a] discussion of this argument. The CRDA’s motion for summary judgment was filed on October 23, 2017, and raised the bar of the statute of limitations. On November 14, 2017, the plaintiffs filed a request for leave to amend the complaint pursuant to Practice Book § 10-60(a) (3) and alleged that the plaintiffs would be required to obtain payment and per- formance bonds for each of [their] contractors from an insurance company licensed to do business in Connecti- cut with a ‘‘ ‘Best Rating of A- VII’ ’’ or, in the alternative, each of the plaintiffs’ contract[or]s would be required to obtain similar bonding. The defendant is alleged to have failed to provide the plaintiffs with the necessary information in a commercially reasonable time, includ- ing form agreements and closing checklist when it had a duty to disclose the material facts within a commer- cially reasonable time after the plaintiffs’ receipt of the letter. Thereafter, on March 5, 2018, the plaintiffs amended their first special defense to . . . allege that *11 the applicable statute of limitations is tolled by the course of conduct doctrine.
In the plaintiffs’ view, the applicable statute is § 52- 584, which applies to negligence actions seeking dam- ages for injury to the person or real or personal prop- erty. [4] Section 52-584 contains both a discovery and repose limitation wherein applicable actions are barred two years from the date of discovery of injury but in no event more than three years from the act or omission complained of. The [defendant] claim[s], and the court agrees, that, to the contrary, the applicable statute of limitations is that of General Statutes § 52-577, which provides that: ‘‘[n]o action founded upon a tort shall be brought but within three years from the date of the act or omission complained of.’’
The court is mindful that, in
Lombard
v.
Edward J.
Peters, Jr., P.C.
,
This court aligns itself with that body of case law
that holds that the dispositive issue relative to which
of the two statutes applies is the nature of the injury
claimed. See, e.g.,
Teal Associates, LLC Alfin
, Supe-
rior Court, judicial district of Hartford, Complex Litiga-
tion Docket, Docket No. X04-CV-12-6028814-S (Septem-
ber 5, 2014) (§ 52-584 applies only to actions to recover
damages for injury to person or property);
Evans
v.
Province
, Docket No. CV-07-600855,
Section 52-577 is an occurrence statute which runs
from the date of the defendant’s conduct, not the date
that the plaintiff first discovered the injury. See
Watts
Chittenden
,
The plaintiffs, however, assert that the limitation period is tolled by the continuing conduct doctrine as alleged in their special defense. Moreover, the plaintiffs *12 remark that ‘‘the defendant, which of course has the burden of proving the absence of any issue of material fact, completely fails to address the continuing course of conduct doctrine, and accordingly summary judg- ment should be denied.’’ Entry No. 147, p. 3. The plain- tiffs, who presumably relied on the CRDA’s lack of аrgument as to the continuing course of conduct doc- trine, themselves provided no analysis of why the limita- tions should be extended by the doctrine.
The plaintiffs misapprehend the nature of the shifting
burden attendant to the tolling of [a] statute of limita-
tions. ‘‘Typically, in the context of a motion for summary
judgment based on a statute of limitations special
defense, a defendant . . . meets its initial burden of
showing the absence of a genuine issue of material
fact by demonstrating that the action had commenced
outside of the statutory limitation period. . . . Then,
if the plaintiff claims the benefit of a provision that
operates to extend the limitation period, the burden
. . . shifts to the plaintiff to establish a disputed issue
of material fact in avoidance of the statute. . . . In
these circumstances, it is incumbent upon the party
opposing summary judgment to establish a factual pred-
icate from which it can be determined, as a matter of
law, that a genuine issue of material fact [as to the
timeliness of the action] exists.’’ (Citations omitted;
internal quotation marks omitted.)
Doe
v.
West Hart-
ford
,
In evaluating the continuing course of conduct doc-
trine in the context of a summary judgment motion the
court must determine whether there is a genuine issue
of material fact with respect to whether ‘‘the defendant:
(1) committed an initial wrong upon the plaintiff; (2)
owed a continuing duty to the plaintiff that was related
to the alleged original wrong; and (3) continually
breached that duty.’’ (Internal quotation marks omit-
ted.)
Flannery Singer Asset Finance Co., LLC
, 312
Conn. 286, 313,
IV
CONCLUSION For the foregoing reasons summary judgment is granted in favor of the defendant, CRDA, on all three counts of the plaintiffs’ complaint.
* Affirmed. Conn. App. , A.3d (2021).
[1] See General Statutes § 32-600 et seq.
[2]
The letter provided that ‘‘CRDA assistance is contingent on the Sponsor
successfully securing permanent financing from other sources [in the
amount of $1,055,000] to reduce the CRDA construction loan assistance
and to fully fund the Project’s сosts.’’ It also contemplated the award of a
Connecticut Historic Tax credit in the amount of $195,131.
[3]
The plaintiffs’ November 14, 2017 amended complaint added the hereto-
fore not included allegations that the defendant failed to provide the plaintiffs
with necessary information in a commercially reasonable time including
the form agreements until September, 2013, and the closing checklist until
December, 2013, including the additional condition of the type of bonding
required. These new allegations implicate only the manner in which CRDA’s
later conduct deviated from the original promise sought to be enforced and
do not affect the analysis herein.
[4]
General Statutes § 52-584 provides: ‘‘No action to recover damages for
injury to the person, or to real or personal property, caused by negligence,
or by reckless or wanton misconduct, or by malpractice of a physician,
surgeon, dentist, podiatrist, chiropractor, hospital or sanatorium, shall be
brought but within two years from the date when the injury is first sustained
or discovered or in the exercise of reasonable care should have been discov-
ered, and except that no such action may be brought more than three years
from the date of the act or omission complained of . . . .’’
defendant.
Rocco Garrison
,