Adler v. Rosenthal
| Decision Date | 15 March 2016 |
| Docket Number | No. 36593.,36593. |
| Citation | 163 Conn.App. 663,134 A.3d 717 |
| Court | Connecticut Court of Appeals |
| Parties | Lawrence H. ADLER v. Edward M. ROSENTHAL. |
Hugh D. Hughes, New Haven, for the appellant-appellee (defendant).
William B. Wynne, East Hartford, with whom, on the brief was Heidi Zultowsky, for the appellee-appellant (plaintiff).
KELLER, MULLINS and SCHALLER, Js.
In this breach of contract action stemming from an agreement to form a law partnership, the defendant, Attorney Edward M. Rosenthal, appeals from the judgment of the trial court, following a hearing in damages, rendered in favor of the plaintiff, Attorney Lawrence H. Adler, and awarding him damages in the amount of $42,447.72, plus costs.1 On appeal, the defendant claims that the court (1) improperly denied his motion to dismiss the plaintiff's action, and (2) improperly awarded the plaintiff damages for lost profits. The plaintiff filed a cross appeal, in which he claims that the court erred by (1) not allowing him to amend his complaint to include a claim for paralegal time expended addressing the defendant's failure to join their contemplated law partnership, (2) failing to award him damages for time that he expended addressing the defendant's failure to join their contemplated law partnership, and (3) failing to award him damages for the cost he incurred by hiring an associate to replace the defendant. With respect to the defendant's appeal, we reverse the court's judgment in part, with respect to its award of lost profits, and remand the case to that court with direction to vacate that portion of its damages award. We affirm the judgment of the trial court in all other respects, including with respect to the plaintiff's cross appeal.
The following facts, as found by the trial court, and procedural history inform our review of the present appeal. In 2008, the plaintiff left his partnership position at a law firm and began to explore the possibility of starting his own law firm. In the plaintiff's efforts to start a new firm, he met with the defendant for the first time on July 14, 2008. During this meeting, the plaintiff proposed to the defendant that they enter into a partnership to start their own law firm. The defendant indicated that he was interested, but he did not formally agree to enter into a partnership at that time. In the following weeks, the plaintiff and the defendant communicated with each other and met several times to discuss the new law firm. Additionally, the plaintiff and the defendant looked for potential office space and discussed other matters with each other related to their own practices, including expected income, draws, and expenses.
On July 29, 2008, the plaintiff and the defendant met in Bushnell Park in Hartford and signed a one page "Prelim[in]ary Partnership Agreement" (preliminary agreement) to enter into a partnership in the business of practicing law. Pursuant to this preliminary agreement, the plaintiff and the defendant agreed to join their practices and to form a law firm called Adler Rosenthal, LLC, or some similar name. The plaintiff would hold an 80 percent interest in the firm, and the defendant would hold a 20 percent interest. Each partner would bring the files of all of his clients to the firm, and each partner would retain the files of his respective original clients. The plaintiff's work included mostly contingency cases with some hourly work, and the defendant's work included mostly contingency cases, as well as representing nursing homes, which he billed hourly. In addition to these clients, the defendant would contribute office furniture and equipment that he already owned, which the new firm would use. The defendant would assist the plaintiff with his contingency work.
The preliminary agreement provided that the initial draws would be paid weekly, with the plaintiff to receive $250,000 annually and the defendant to receive $110,000 annually. The profits after costs, expenses, loan repayments, and initial draws would be divided in the first year based upon the plaintiff's 80 percent ownership interest and the defendant's 20 percent ownership interest. After the first year, profit sharing would be determined annually on the basis of the ratio of the originated receipts that each partner brought into the firm during the prior year, subject to some adjustments. The preliminary agreement provided that each partner would use good faith and fair dealing with the other partner and the firm, and it further provided that each partner would use his best efforts to bring in new clients and to work adequate hours.
The preliminary agreement did not provide a start or end date, and it did not contain a termination provision. Notwithstanding the absence of these provisions, the preliminary agreement did provide as follows: The preliminary agreement also contained a provision stating that each partner promised to enter into a more detailed written partnership agreement "shortly" after their partnership commenced.
On the same day that the plaintiff and the defendant signed the preliminary agreement, they both went to the Office of the Secretary of the State and filed organizational documentation for the firm, named Adler and Rosenthal, LLC. The defendant and the plaintiff also agreed that they would begin the partnership on September 1, 2008. In preparation for the start date, the plaintiff and his wife, who also worked as the plaintiff's business manager, began to take steps to establish the new law firm. Specifically, the plaintiff and his wife, under the business name of Adler and Rosenthal, LLC, met with landlords to discuss potential office space, negotiated with payroll, telephone, and insurance companies, interviewed and negotiated with prospective staff members, put an advertisement in the yellow pages, set up e-mail accounts and a computer system, opened bank accounts, purchased office supplies, and arranged for a construction crew to construct an office space in East Hartford.
Two days before the contemplated start date of the new firm, on August 30, 2008, the plaintiff arranged for movers to go to the defendant's office in Avon to pick up his office equipment and furniture and move it to the new firm's office in East Hartford. On this date, the plaintiff called the defendant at his office several times to see if he needed assistance with moving his equipment and furniture. The defendant at first did not answer or respond to the plaintiff's calls. When he finally did answer the phone, he told the plaintiff that he had decided not to go through with the formation of the law partnership of Adler and Rosenthal, LLC. In response, the plaintiff told the defendant that he had breached their preliminary agreement and that he planned to sue the defendant as a result.
On December 24, 2008, the plaintiff filed an application for a prejudgment remedy, which the trial court, Aurigemma, J., denied on March 10, 2009. The plaintiff's complaint was dated April 17, 2009. On April 23, 2009, the plaintiff served the defendant with a writ of summons and complaint, which were returned to the court on April 30, 2009. In the four count complaint, the plaintiff pleaded causes of action sounding in breach of contract, detrimental reliance, negligent misrepresentation, and intentional misrepresentation.
The defendant filed a motion to dismiss the plaintiff's action on May 18, 2009. In his motion, the defendant claimed that the plaintiff's action should be dismissed because he failed to comply with General Statutes § 52–278j2
by not serving process and returning it to the court within thirty days of the court's denial of the plaintiff's prejudgment remedy application. The defendant also argued that the plaintiff had failed to comply with General Statutes § 52–45a3
in not designating a return date on the writ of summons and complaint. Subsequent to the defendant's filing his motion to dismiss, the plaintiff twice filed a request for leave to amend his writ of summons and complaint to include a proper return date.4 The first request was filed on May 19, 2009, to which the defendant filed an objection on June 9, 2009. The second request was filed on June 12, 2009, and the defendant filed an objection on June 19, 2009. On September 9, 2009, the trial court, Hon. Jerry Wagner, judge trial referee, denied the defendant's motion to dismiss, noting that § 52–278j
did not mandate dismissal of the action due to the fact that there was no prejudice to the defendant by the amendment of the return date.5
Between 2010 and 2012, the plaintiff filed several motions for default against the defendant for his failure to plead. Ultimately, on December 19, 2012, the court entered a default judgment against the defendant for his failure to file an answer to the plaintiff's complaint, as ordered by the court at a dormancy calendar hearing. The plaintiff then claimed the matter for a hearing in damages, which the court, Vacchelli, J., held over the course of two days, July 10, 2013, and October 22, 2013. The court heard testimony from the plaintiff and the defendant and admitted exhibits into evidence during this hearing.
On February 7, 2014, the court issued a...
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