Caron Collision, Inc. v. Jarish, No. CV 04-0833553 S (Conn. Super. 6/12/2006)
| Decision Date | 12 June 2006 |
| Docket Number | No. CV 04-0833553 S,CV 04-0833553 S |
| Court | Connecticut Superior Court |
| Parties | Caron Collision, Inc. v. Timothy Jarish et al. Opinion No.: 93922 |
The Plaintiff, Caron Collision, Inc., brings this action in six counts against the Defendants, Timothy Jarish and Karen Jarish. In the First Count of the Complaint, the Plaintiff claims conversion. The Plaintiff claims that the Defendant, Timothy Jarish, was an employee and officer of the Plaintiff, Caron Collision, Inc., and that his wife, Karen Jarish, was also an employee of the Plaintiff. The Plaintiff claims that in July 2002 the Defendants wrongfully and without authority removed assets of the corporation, including trucks, trailers, and construction equipment and have refused to return them. In the Second Count, the Plaintiff claims, based on the same facts, treble damages in accordance with General Statutes §52-564. In the Third Count, Plaintiff claims that the conversion of assets of the Plaintiff deprived it of its means to continue its business operations, which it had intended and expected to continue, which constituted a tortious interference with business expectancy. In the Fourth Count, the Plaintiff claims that the actions of the Defendants caused KF Properties, LLC to breach its contract with the Plaintiff and to substitute for the Plaintiff an unknown business entity to which one or both of the Defendants had an interest, which actions constituted a tortious interference with contract. In the Fifth Count, the Plaintiff claims a breach of fiduciary duty based on the facts previously alleged and, in addition, that the Jarishes, over a period of months and years, caused the Plaintiff to fail to meet contractual and legal obligations including a failure to pay rent and remit tax payments to municipal, state and federal authorities, as a result of which the Plaintiff owes significant sums which should have been paid from corporate revenues in the ordinary course, but were not. In the Sixth Count, the Plaintiff claims that the Defendants' wrongful actions constitute a violation of the Connecticut Unfair Trade Practices Act.
The Defendants appeared through counsel and filed an answer.
Trial on this matter was held on March 8, 9, and 13, 2006. At that time the court heard testimony from a certified public accountant, Michael Roy; the President of Caron Collision, Inc., David Caron; the brother of Timothy Jarish, who also worked for Caron Collision, Inc., Robert Jarish; both Defendants; and received fifteen exhibits. Simultaneous post-trial briefs were filed on March 31, 2006, and the Plaintiff filed a reply brief on April 13th and the Defendants filed a reply brief on April 17th.
Certain facts alleged by the Plaintiff in the Complaint have been admitted by the Defendants. The Defendants admit that Caron Collision, Inc. is a Connecticut corporation having a principal place of business in East Hartford, Connecticut. They also admit that Timothy Jarish is a natural person having a residence in South Windsor, Connecticut who was at all times relevant both an employee and an officer of the Plaintiff, Caron Collision, Inc. and that Karen Jarish is a natural person having a residence in South Windsor, Connecticut who is the spouse of the Defendant Timothy Jarish and who was at all times relevant an employee of the Plaintiff Caron Collision, Inc.
Based upon a preponderance of the evidence, the court finds the following additional facts.
Caron Collision, Inc., was formed in 1989. At that time a written shareholders agreement was executed by David Caron and Timothy Jarish which provided that Caron would be President and Jarish would be Secretary-Treasurer. Caron would own 300 shares of the company's stock and Jarish would have a right to purchase up to 150 shares at $1,000 a share over a five-year period.
Jarish contributed $80,000 to $90,000 to the business. Although the shares were never issued to Jarish, the tax returns signed by Caron indicated that he was a 50% owner of the corporation's common stock. The shareholders agreement provided that both would be paid an equal salary as co-managers of the business. The business of the corporation was essentially auto body work. The business was operated out of premises on Park Avenue, East Hartford, Connecticut which were owned by Caron and leased to the corporation. Jarish was to run the day to day operations of the corporation. Karen Jarish also worked at the business as well as Robert Jarish, Timothy's brother. Karen Jarish worked part-time at the business, answering phones, opening mail, and doing miscellaneous other duties. She did not have check writing authority, except on occasion as authorized by her husband. Nor did she keep the company's books. The company had a comptroller at another location. The principal source of revenue for the business was auto body work. In 1999 the business had a gross profit of $263,721 and in 2000 it was $339,639. The Defendant Jarish expanded the business to include sandblasting, truck painting, and a paving business, doing roads and driveways. Later the corporation moved into the area of doing site work, preparing ground to be paved, building foundations, laying pipes, etc. Different types of equipment are needed to do paving and site work. Such equipment was purchased by the corporation. Caron wanted the business to move in the direction of doing site work and away from the automotive and paving business. In the fall of 2000 there were discussions between Caron and the Jarishes about splitting the auto body business from the paving and site construction business. Caron planned to close the auto body business and continue the site construction business with Timothy Jarish and turn the paving business over to Timothy Jarish and his brother. In early 2001 Timothy Jarish moved the paving equipment to his uncle's property. Between January and March Caron and Jarish discussed an agreement to split up but a final agreement was never reached. In March of that year Caron and Jarish had a big argument regarding the future of the business because negotiations had stalled. Jarish offered to have the equipment auctioned off but Caron refused. Some time in the spring of 2001, the Defendant Jarish moved a number of pieces of paving equipment to another location in South Windsor where he was operating the business known as Jarish Paving & Construction. In April 2001 Jarish Paving & Construction was formed. Karen Jarish participated in the move of the business but thought the spilt was the result of a verbal agreement between her husband and Caron. Around that time certain paving equipment was transferred to Jarish to repay a loan Karen Jarish had made to the corporation, although Karen Jarish claims it was part of the split of the business and not to repay the loan.
In 2001 Caron Paving and Construction entered into a contract with KF Properties, LLC for $189,000 to do site work. Caron Collision started the KF Properties job in February 2001 but Jarish took over the job in May and began receiving payments on the contract. Payments from that job were used to pay Caron Collision bills and no profit was made by Jarish on the job.
Caron and Jarish attempted to work out a resolution of their disagreements, but were unable to do so, and in the fall of 2001 Caron demanded that the equipment Jarish took be returned. That equipment was used on three jobs to do site work either for Jarish Paving & Construction or as backup on jobs in which Jarish was employed by another company. In the fall of 2001 equipment belonging to Caron Collison was on a Jarish job site. In the winter of 2002-2003 Caron located some of the equipment, such as a John Deere 790 Excavator and a bobcat loader at another construction site. On some of the equipment there the Plaintiff's name was blocked out, although the phone number listed on the equipment was that of a Caron business, yet this same phone number appeared on a Jarish Paving & Construction truck.
The following is a chart of the items that the Plaintiff alleges Jarish took from the corporation, their current status (if known), and their value at the time of the taking:
1) Payloader (#24 on Ex. 5) returned in 2002 and $ 9,500
sold at 5/21/2004 IRS
auction
2) Bobcat (#30 on Ex. 5) returned $ 5,000
3) Plate Compactor (#32 on Ex. 5) Jarish has $ 500
4) Backhoe (#39 on Ex. 5) returned in 2002 $ 30,000
5) Curb Machine (#43 on Ex. 5) Jarish has $ 1,200
6) Used John Deere 550B Dozer
(#57 on Ex. 5.) returned and sold at $ 26,500
5/21/2004 IRS auction
7) Used John Deere 790 Excavator sold by Jarish at $ 25,000
(#58 on Ex. 5) auction in 2005
8) Atlis Chalineis Grader Jarish has $ 2,000
(#59 on Ex. 5)
9) Paving Box (#60 on Ex. 5) sold at 5/21/2004 IRS $ 5,000
auction
10) Sander for Snowplowing Jarish has $ 2,500
(#62 on Ex. 5)
11) Michigan 75 2 Yard Loader sold at 5/21/2004 IRS $ 15,000
(#66 on Ex. 5) auction
12) Sander (#70 on Ex. 5) $ 1,500
13) Paving Equipment (shovels, etc.) $ 1,200
(#71 on Ex. 5)
14) Trailer (#72 9n Ex. 5) Transferred to Jarish $ 600
4/26/01
15) Paving Rollers (#73 on Ex. 5) Jarish has $ 2,000
16) Ford Bronco (#74 on Ex. 5) Transferred to Jarish $ 3,000
17) 863 Bobcat Loader (#75 on Ex. 5) Jarish has $ 30,000
18) (2) Five Ton Trailers...To continue reading
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