Blumberg Assocs. Worldwide, Inc. v. Brown & Brown of Conn., Inc.

• Decision Date: 18 February 2014
• Docket Number: No. 18911.,18911.
• Court: Connecticut Supreme Court
• Parties: BLUMBERG ASSOCIATES WORLDWIDE, INC. v. BROWN AND BROWN OF CONNECTICUT, Inc., et al.

311 Conn. 123

84 A.3d 840

BLUMBERG ASSOCIATES WORLDWIDE, INC.

v.BROWN AND BROWN OF CONNECTICUT, Inc., et al.

No. 18911.

Supreme Court of Connecticut.

Argued March 13, 2013.

Decided Feb. 18, 2014.

Daniel J. Klau, Hartford, with whom, on the brief, was H. James Pickerstein, Southport, for the appellant (plaintiff).

Mark D. Alexander, with whom, on the brief, was John M. Tanski, Hartford, for the appellees (defendants).

ROGERS, C.J., and PALMER, ZARELLA, EVELEIGH and McDONALD, Js. ^*

PALMER, J.

This case requires us to determine when a reviewing court properly may raise and decide an issue that was not raised by the parties. The plaintiff, Blumberg Associates Worldwide, Inc., brought this action against the defendants, Brown and Brown of Connecticut, Inc. (Brown & Brown), and Brown and Brown, Inc. (parent company), alleging, inter alia, that the defendants had breached a contract between the parties by terminating the contract after the plaintiff failed to comply with a contract condition due to conduct by the defendants that prevented compliance by the plaintiff. After the trial court granted the defendants' motion for summary judgment and rendered judgment thereon, the plaintiff appealed to the Appellate Court, which affirmed the trial court's judgment. Blumberg Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc., 132 Conn.App. 85, 102, 30 A.3d 38 (2011). We then granted the plaintiff's petition for certification to appeal to this court on the issue of whether the Appellate Court properly had upheld the trial court's decision to grant the defendants' motion for summary judgment, albeit on grounds not raised by the defendants. See Blumberg Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc., 303 Conn. 923, 34 A.3d 395 (2012). The plaintiff contends that (1) the Appellate Court exceeded its authority by affirming the trial court's judgment on the basis of an issue that the defendants had neither raised in the trial court nor presented as an alternative ground for affirmance on appeal, namely, whether the plaintiff's claim that the defendants had prevented the plaintiff from complying with a contract condition failed as a matter of law because the allegedly hindering conduct occurred before the contract existed, and (2) if the Appellate Court properly raised that issue sua sponte, it incorrectly determined that the plaintiff's claim failed as a matter of law.

We conclude, with respect to the propriety of a reviewing court raising and deciding an issue that the parties themselves have not raised, that the reviewing court (1) must do so when that issue implicates the court's subject matter jurisdiction, and (2) has the discretion to do so if (a) exceptional circumstances exist that would justify review of such an issue if raised by a party, (b) the parties are given an opportunity to be heard on the issue, and (c) there is no unfair prejudice to the party against whom the issue is to be decided. Because each of these latter three conditions was satisfied in the present case, we reject the plaintiff's claim that the Appellate Court exceeded its authority in resolving the plaintiff's appeal on the basis of an issue that the defendants had not raised. We also conclude that the Appellate Court properly decided that issue. Accordingly, we affirm the judgment of the Appellate Court.

The opinion of the Appellate Court sets forth the following facts and procedural history. “Prior to February, 2004, the plaintiff operated as an affiliate of Blumberg Associates, Inc., a company engaged in the insurance business in Connecticut and throughout the northeastern United States. The plaintiff had been created in 1998 for the purpose of pursuing a business opportunity as an insurance provider to Subway restaurant franchisees. During the development of this business opportunity, Blumberg Associates, Inc., used the plaintiff for a variety of other purposes, including selling insurance to customers in other states.

“On or about February 1, 2004, the parent company purchased Blumberg Associates, Inc., pursuant to an asset purchase agreement. For the next two months, Blumberg Associates, Inc., continued to operate out of its business address at 433 South Main Street in [the town of] West Hartford. Thereafter, the parent company transferred all of the assets it had acquired from Blumberg Associates, Inc., to 375 Willard Avenue in [the town of] Newington, the business address of Brown & Brown. The insurance licensing files of the plaintiff were included among the assets physically transferred to 375 Willard Avenue.¹

“On March 19, 2004, Anne F. Pinto, an employee of Brown & Brown and former employee of Blumberg Associates, Inc., submitted, on behalf of Brown & Brown, an application for an insurance license to the [state Department of Insurance] (department). Along with the application, Pinto included a letter that requested that the department ‘change [its] records to reflect [the] new address' and then listed the address of 375 Willard Avenue in Newington. The letter was written on stationery with the letterhead of Blumberg Associates, Inc., and the plaintiff, and it did not identify specifically whose address should be changed [in] the department's records. On June 23, 2004, the department changed the address in its records for both Blumberg Associates, Inc., and the plaintiff to 375 Willard Avenue in Newington [even though the plaintiff's business address had not, in fact, changed].²

“Also in June, 2004, the plaintiff sought access to its licensing files [which] had been physically transferred to Brown & Brown. Brown & Brown denied having any licensing files belonging to the plaintiff. [Brown & Brown] also denied the plaintiff's request to conduct an inspection of [Brown & Brown's] business office to locate the files.

“In December, 2005, approximately two months prior to the expiration of the plaintiff's insurance license, the department mailed an insurance license renewal form (renewal notice) to the plaintiff at 375 Willard Avenue in Newington. According to the records of the department, the renewal notice subsequently was returned to the department as unable to forward.³ On January 31, 2006, the plaintiff's license expired.” (Footnotes altered.) Blumberg Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc., supra, 132 Conn.App. at 90–91, 30 A.3d 38.

“On July 19, 2006, the plaintiff and the defendants entered into a written contract entitled the ‘Subway Program Agreement.’ According to the contract, the plaintiff made introductions and facilitated communications that were instrumental in leading to Brown & Brown being designated as a gold standard insurance agent by Doctor's Associates, Inc. As a result of that designation, Brown & Brown was able to offer certain insurance services to Subway restaurant [franchisees]. As consideration for the plaintiff's facilitation services, Brown & Brown agreed to pay to the plaintiff a percentage of the commissions and fees that it received from selling insurance services to Subway restaurant franchisees.

“By letter dated February 26, 2008, the defendants notified the plaintiff that they were terminating the contract. The letter stated that Brown & Brown was entitled to terminate the contract for cause pursuant to § 4(b)(i)(B) of the contract upon ‘the loss or suspension of [the plaintiff's] resident insurance license in its state of domicile, if such loss or suspension is not cured within ninety (90) days of such loss or suspension....’ The letter went on to state that cause existed to terminate the contract pursuant to § 4(b)(i)(B) because the plaintiff's license in the state of Connecticut, its domicile, had been ‘canceled on January 31, 2006,’ and the ‘loss ... [had] not [been] cured within [ninety] days of that event.’ ⁴

“The plaintiff commenced the present action by way of a five count complaint filed on October 10, 2008. In the complaint, the plaintiff alleged: (1) breach of contract against Brown & Brown in count one; (2) unjust enrichment against Brown & Brown in count two; (3) quantum meruit against Brown & Brown in count three; (4) violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42–110a et seq., against Brown & Brown in count four; and (5) breach of guaranty against the parent company in count five.” (Footnotes altered.) Id., at 87–88. With respect to the count alleging breach of contract, the plaintiff claimed that (1) by failing to forward the renewal notice to the plaintiff, Brown & Brown had “breached the terms of paragraph 10 [of the contract], ‘[f]urther [a]ssurances' ... and caused the temporary suspension of [the plaintiff's] license,” ⁵ (2) the defendants' reason for terminating the contract did not “constitute a material, actionable breach of the [contract], and Brown & Brown therefore [had] breached the [contract],” (3) Brown & Brown's failure to pay the plaintiff revenues due under the contract constituted a breach of contract, and (4) Brown & Brown's failure to deliver certain financial information when due constituted a breach of contract.

“On January 22, 2009, the defendants filed a motion to strike all five counts of the complaint, which the court granted as to count four ... but denied as to the remaining counts.” ⁶Blumberg Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc., supra, 132 Conn.App. at 88, 30 A.3d 38. Thereafter, the defendants filed a motion for summary judgment on each of the surviving counts of the complaint. With respect to the plaintiff's breach of contract count, the defendants contended, inter alia, that Brown & Brown's alleged failure to forward the renewal notice to the plaintiff could not have resulted in a breach of the further assurances provision because it occurred more than eight months before the parties entered into the contract. In its opposition to the motion for summary judgment, the plaintiff did not expressly claim that there was a genuine...