Blumberg Associates Worldwide Inc. v. Brown

• Decision Date: 15 November 2011
• Docket Number: No. 32539.,32539.
• Court: Connecticut Court of Appeals
• Parties: BLUMBERG ASSOCIATES WORLDWIDE, INC.v.BROWN AND BROWN OF CONNECTICUT, INC., et al.

132 Conn.App. 85

30 A.3d 38

BLUMBERG ASSOCIATES WORLDWIDE, INC.

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

No. 32539.

Appellate Court of Connecticut.

Argued May 23, 2011.Decided Nov. 15, 2011.

Daniel J. Klau, Hartford, with whom was Harold James Pickerstein, for the appellant (plaintiff).John M. Tanski, with whom, on the brief, were William M. Rubenstein, Denise V. Zamore and Mark D. Alexander, Hartford, for the appellees (defendants).BISHOP, ROBINSON and ESPINOSA, Js.^*ROBINSON, J.

The plaintiff, Blumberg Associates Worldwide, Inc., appeals from the summary judgment rendered by the trial court in favor of the defendants, Brown & Brown of Connecticut, Inc. (Brown & Brown), and Brown & Brown, Inc. (parent company). On appeal, the plaintiff claims that (1) summary judgment was improper because there are genuine issues of material fact as to (a) whether certain conduct of Brown & Brown constituted a prevention of performance and (b) whether the defendants waived their right to enforce a provision in the parties' contract that required any waiver of a provision of the contract to be in writing; (2) the court interpreted the complaint too narrowly and, therefore, improperly declined to consider whether an issue of material fact existed as to whether Brown & Brown had breached the contract in bad faith; and (3) the court abused its discretion in refusing to allow the plaintiff to amend its complaint after the defendants' motion for summary judgment had been granted. We affirm the judgment of the trial court.

Viewed in the light most favorable to the plaintiff; see, e.g., Martinelli v. Fusi, 290 Conn. 347, 350, 963 A.2d 640 (2009); the pleadings, affidavits and other proof submitted reveal the following facts and procedural history. 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 franchises.¹ 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 90 days of that event.” ²

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. 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.³

On January 29, 2010, the defendants filed a motion for summary judgment with respect to counts one, two, three and five of the plaintiff's complaint. The court issued a memorandum of decision granting the motion. After the court issued its decision, the plaintiff filed a motion to open the judgment in order to amend its complaint to include a claim for breach of the implied covenant of good faith and fair dealing (implied covenant), which the court denied. ⁴ This appeal followed. Additional facts will be set forth as necessary.

I

The plaintiff first claims that summary judgment was improper because there are genuine issues of material fact as to (1) whether certain conduct of Brown & Brown constituted a prevention of performance that excused the plaintiff's failure to maintain its insurance license and (2) whether the defendants waived their right to enforce a provision of the contract that required any waiver of a contract provision to be in writing.

The applicable standard of review is well settled. “Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the 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. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.... The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law.... The test is whether the party moving for summary judgment would be entitled to a directed verdict on the same facts.... Our review of the trial court's decision to grant the [defendants'] motion for summary judgment is plenary.” (Internal quotation marks omitted.) Allstate Life Ins. Co. v. BFA Ltd. Partnership, 287 Conn. 307, 312, 948 A.2d 318 (2008).

A

The plaintiff first contends that there is a genuine issue of material fact as to whether certain conduct of Brown & Brown constituted a prevention of performance. We disagree and conclude that the court properly determined that the plaintiff's reliance on the doctrine of prevention as a defense to summary judgment fails as a matter of law, albeit on a basis different from the one relied on by the trial court.

The following additional facts are relevant to the plaintiff's claim. 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 West Hartford. Thereafter, the parent company transferred all of the assets it had acquired from Blumberg Associates, Inc., to 375 Willard Avenue in 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.⁵

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 insurance department of the state of Connecticut department). Along with the application, Pinto included a letter that requested that the department “change [their] records to reflect our 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 on 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.⁶

Also in June, 2004, the plaintiff sought access to its licensing files that had been physically transferred to Brown & Brown. Brown & Brown denied having any licensing files belonging to the plaintiff. It also denied the plaintiff's request to conduct an inspection of its 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.⁷ On January 31, 2006, the plaintiff's license expired.

In count one of the complaint, sounding in breach of contract, the plaintiff alleged that by failing to forward the renewal notice to the plaintiff, Brown & Brown breached the terms of paragraph ten of the party's agreement “and caused the temporary suspension of the [plaintiff's] [l]icense.” ⁸The plaintiff also alleged that the defendants breached the contract by terminating the agreement on grounds that did not amount to a material breach by the plaintiff or for cause as defined by the agreement, by failing to pay the plaintiff the agreed upon percentage of the commissions and fees and by failing to deliver related financial statements.

In seeking summary judgment, the defendants argued, inter alia, that the plaintiff's allegations of breach of contract failed as a matter of law because the undisputed facts established that Brown & Brown's termination of the contract, and, consequently, its refusal to continue to provide financial...