Alliance Partners, Inc. v. Oxford Health Plans, Inc.

• Decision Date: 22 April 2003
• Docket Number: (SC 16903)
• Citation: 263 Conn. 191,819 A.2d 227
• Court: Connecticut Supreme Court
• Parties: ALLIANCE PARTNERS, INC., ET AL. v. OXFORD HEALTH PLANS, INC.

263 Conn. 191

819 A.2d 227

ALLIANCE PARTNERS, INC., ET AL. v. OXFORD HEALTH PLANS, INC.

(SC 16903)

Supreme Court of Connecticut.

Argued February 13, 2003.

Officially released April 22, 2003.

Sullivan, C. J., and Norcott, Katz, Vertefeuille and Zarella, Js.

Eric D. Grayson, for the appellants (plaintiffs).

Kenneth W. Gage, for the appellee (defendant).

Opinion

KATZ, J.

The plaintiffs, Alliance Partners, Inc. (Alliance), and Carson Crane, Inc. (Carson), appeal¹ from the judgment of the trial court rendered in favor of the defendant, Oxford Health Plans, Inc. (Oxford). Carson, a real estate broker licensed in Connecticut and engaged in the business of providing advice and consultation to tenants seeking commercial real estate to lease, and Alliance, a company that was not licensed as a real estate broker in Connecticut but which also engaged in work similar to that of Carson, brought this action against Oxford, a health maintenance organization doing business in Connecticut, for money allegedly owed in connection with the plaintiffs' representation of Oxford when it leased certain real estate. Pursuant to Practice Book § 19-2A, the case was referred to an attorney trial referee who, after a trial, issued a report recommending judgment for Oxford. Thereafter, the report was accepted by the trial court, which rendered judgment thereon for Oxford. Although on appeal the plaintiffs raise several claims of trial court impropriety, the dispositive issue is whether the plaintiffs have presented this court with an adequate record for review of the judgment of the trial court rendered in accordance with the report issued by the attorney trial referee. We conclude that the plaintiffs have failed in this regard, and, accordingly, we affirm the judgment of the trial court.

The record discloses the following relevant facts and procedural history. In 1992, Oxford retained Carson and Alliance to locate office space in Norwalk. The parties agreed that Carson and Alliance would look to the owner of any property involved for a commission and they then would assign the commission to Oxford, which thereafter would remit 35 percent of the commission to Carson and 35 percent to Alliance. Thereafter, the plaintiffs located property in Norwalk that was owned by Prudential Insurance Company of America (Prudential). On June 24, 1993, Carson, Alliance, Oxford and Prudential signed a "Commission Agreement and Release Agreement" that set forth a base commission, and contained provisions for future renewals or extensions of the lease and options to expand the amount of space involved. Specifically, the agreement distinguished between the base commission and any prospective commissions that might arise from the extension of the Norwalk lease at its expiration or from the expansion of space occupied by Oxford during the term of the lease. According to the agreement, Oxford would compensate the plaintiffs "collectively in accordance with [a separate] [r]epresentation [a]greement² unless, at the time [of] any such [r]enewal or [e]xpansion commission is payable, [Oxford] has employed another licensed real estate broker to represent [Oxford] in the transaction for which a [r]enewal or [e]xpansion [c]ommission is payable."

While that transaction was ongoing, Oxford began looking for "back office" space and retained Alliance and Carson in connection with this endeavor. Initially, Oxford signed a statement that Carson was representing it, but, thereafter, on February 3, 1993, Oxford entered into separate letter agreements with Alliance and Carson, confirming that both had been retained as Oxford's representative. Pursuant to the letters, Alliance and Carson agreed that they would "look to the owner, landlord or sublessee for our compensation. If [Oxford] pays any consulting fees, at the close of the transaction [Oxford] will receive those fees back plus a portion of the fee, as outlined in the attached agreement.³ In addition, [Alliance and Carson] will bill [Oxford] for any travel expenses [in]curred during the transaction." On April 20, 1993, Oxford signed another letter stating that it had retained Alliance "exclusively" to represent its real estate interests in the search for the back office space.

In April, 1994, Oxford obtained office space in Nashua, New Hampshire, pursuant to a five year lease, which contained an option for Oxford to expand its space during the term of the lease, as well as an option to extend the lease for two additional five year periods.⁴ According to the lease, and consistent with the letter of April 20, 1993, Alliance was "the sole and only broker" with whom Oxford had dealt.⁵

In the fall of 1994, Oxford decided to handle its real estate needs in-house and attempted to "buy out" Carson and Alliance from any obligations remaining with respect to the Nashua and Norwalk leases. In a letter dated December 20, 1994, Oxford acknowledged that, although the landlord had not paid a commission on the Nashua lease, Oxford owed Alliance for expansion space already taken in New Hampshire. Oxford calculated the commission due on the basis of 4 percent of the rent it had paid.⁶ Oxford agreed to pay Carson, but only in connection with the Norwalk property.

Thereafter, Alliance and Carson brought an action for breach of contract and unjust enrichment against Oxford for "fees/commissions" they allegedly were owed in connection with certain expansions and extensions of the lease for the property in Nashua.⁷ By consent of the parties, the case was tried before an attorney trial referee. Prior to proceedings on the matter, Oxford filed a motion in limine to exclude, inter alia, any evidence of an offer to compromise. The referee ruled on the motion during the proceedings, concluding that a letter dated October 5, 1994, from Robert M. Smoler, Oxford's executive vice president of operations, to Joseph V. DiScala, Carson's managing partner, was inadmissible as an offer of compromise.

Thereafter, the attorney trial referee issued his report, concluding that, although the property in issue was located in New Hampshire, Connecticut law governed the transactions. The referee further concluded that the plaintiffs had failed to establish their claims under the applicable law. In support of this conclusion, the referee made a series of factual findings. He first found that Alliance and Carson had not submitted evidence "of the hours spent working on [Oxford's] behalf, or of the value of [their] services," concluding that, "[t]he only proof of damages was in the nature of real estate brokers' commissions."⁸ The referee then found that, under the terms of the contract, only Alliance was entitled to recover and that such recovery "would be solely for real estate commissions earned on the original lease and certain expansions under the original lease. It is not entitled to compensation for extensions, specifically the 1999 extension, which it concedes it did not negotiate.. . . There was no contract with Carson as a matter of fact, and therefore it has no contract cause of action."⁹ The attorney trial referee further found "as a matter of fact that Alliance did all of the relevant work, and that as a result, Carson factually has no unjust enrichment claim."

The attorney trial referee also concluded that Alliance was barred from recovery by General Statutes (Rev. to 1991) § 20-325a,¹⁰ because it had failed to prove that it was a licensed real estate broker. See McCutcheon & Burr, Inc. v. Berman, 218 Conn. 512, 520, 590 A.2d 438 (1991) (requirements of § 20-325a [b] are mandatory rather than permissive and statute is to be strictly construed). The referee further concluded that Alliance could not "circumvent the statutory plan and recover on an unjust enrichment theory. To allow recovery on. . . the [plaintiffs'] legal theories in the present case would nullify § 20-325a and emasculate the state's real estate licensing system. . . . Once again, I find as a matter of fact that Alliance did all of the relevant work, and that as a result, Carson factually has no unjust enrichment claim. . . . I believe that [§] 20-325a bars recovery in quantum meruit to the extent [that the] plaintiffs seek damages for what are essentially real estate broker activities. Secondly, in assessing the equity of [the] plaintiffs' claim, it is well to remember that Oxford has already paid [the] plaintiffs over $700,000 on these transactions. A claim that it has been unjustly enriched in light of that amount of money rings hollow. . . . [T]o the extent [the] plaintiffs seek commissions for the extension in June, 1999, it is clear all the work was done by [the brokerage firm of] Cushman and Wakefield, and that Alliance conveyed no benefit on [Oxford]." (Citations omitted; internal quotation marks omitted.) See footnote 6 of this opinion. Finally, with regard to nonbrokerage services, such as investigating the out-of-state location, the referee found that "Alliance totally failed to submit any proof from which a trier of fact could determine the value of those services.. . . Here there was no evidence at all. There were no records of hours of work performed, no estimate of reasonable hourly rates, and no proof of the value [of] the services to Oxford. To assign any value based upon this record would be pure speculation, and impermissible." (Citation omitted.)

Following the report by the attorney trial referee, the parties filed objections with the trial court. Thereafter, the trial court issued a memorandum of decision, summarily stating that "[h]aving reviewed the attorney trial referee's report as well as the posttrial memoranda of counsel, the court sustains the decision of the referee in favor of [Oxford]." The plaintiffs moved for reconsideration, which the trial court granted. The court entertained oral argument on the motion and thereafter issued a second decision, "declin[ing] to vacate the previous order accepting the [referee's] report." This appeal...