Coady v. Martin

• Court: Connecticut Court of Appeals
• Writing for the Court: PETERS, J.
• Citation: Coady v. Martin, 65 Conn. App. 758, 784 A.2d 897 (Conn. App. 2001)
• Decision Date: 25 September 2001
• Docket Number: (AC 20738)
• Parties: JAMES M. COADY ET AL. v. GREGORY MARTIN ET AL.

65 Conn. App. 758

784 A.2d 897

JAMES M. COADY ET AL. v. GREGORY MARTIN ET AL.

(AC 20738)

Appellate Court of Connecticut.

Argued May 29, 2001.

Officially released September 25, 2001.

Spear, Mihalakos and Peters, Js. Charles D. Houlihan, Jr., for the appellants-appellees (plaintiffs).

Richard P. Weinstein, with whom, on the brief, was Nathan A. Schatz, for the appellees-appellants (named defendant et al.).

Opinion

PETERS, J.

This case primarily concerns the enforceability of a written agreement between two entrepreneurs who decided to use the concept of "Ebbets Field" as a trademark and logo¹ that might serve as a marketing device for a variety of projects, principally in the greater Hartford region. Whether such an agreement is enforceable depends upon whether its terms demonstrated an agreement, in law and in fact, on all essential issues in dispute. The trial court held that the agreement did not do so. We agree.

The plaintiffs, James Coady and Joanne Coady, filed a revised complaint charging the defendants, Gregory G. Martin, Thomas Heaney and Michael O'Keefe, with breach of fiduciary duty, breach of contract, violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., and fraud.² The defendants responded with a denial, special defenses and a counterclaim. The court rendered a judgment in favor of the defendants. It concluded that the defendant Martin had no fiduciary duty to the plaintiff, James Coady, and that the agreement between the parties was unenforceable for lack of an essential term and for lack of consideration. It therefore held against the plaintiffs on their complaint and in favor of the defendant Martin's request for injunctive relief to bar the plaintiffs from using the name "Ebbets Field." The plaintiffs have appealed.

FACTUAL AND PROCEDURAL HISTORY

The relevant factual background for this litigation begins one year or more before the disputed agreement was signed in 1996 by the plaintiff James Coady and the defendant Martin. It is undisputed that, during the preagreement period, there were discussions among all the parties, with the exception of the plaintiff Joanne Coady, about possible development projects.³ Also, the defendant Martin filed the appropriate documentation with the secretary of the state to establish that he had formed a limited liability corporation under the name of Ebbets Field Ventures, LLC (company). Although many of the issues raised by the plaintiffs concerned rights in the company, the company was not named as a defendant.

The court found that, in 1996, the plaintiff James Coady, the defendant Martin and the company entered into a written membership and subscription agreement. Under that agreement, the plaintiff James Coady received a 50 percent interest in the company from the defendant Martin. The agreement acknowledged that, at "a later date," the defendants O'Keefe and Heaney would each be issued a "Membership Interest [in the company] in a lesser proportion." Prior to the agreement, the parties were unable to settle the precise percentage of the equity in the company to which these defendants were entitled because of their prior performance. Each of them had participated in discussions of the uses to which the Ebbets Field trademark and logo might be put.

The court made findings about the relationship between the company and the plaintiffs. Although the plaintiff Joanne Coady sent $15,700 to the Coady Capital Account at the company, she was never considered to be a part of the group that might invest in the company. She was neither a third party beneficiary nor an assignee of whatever interest the plaintiff James Coady might have had. Although the operating agreement filed with the secretary of the state stated methods for assigning the rights of any member in the company, "[t]hese requirements were never met by anyone."

The plaintiff James Coady's interest in the company similarly was not established. He "never owned any part of the [company] and he never lent it any money." He never promised to put anything into the company, and never did so. Although the plaintiffs' original complaint had been filed in August, 1997, "[a]s late as August, 1999, he denied that he owned any interest in the [company]." The court implicitly found the testimony of the plaintiff James Coady to be unpersuasive.⁴ Indeed, the trial court expressed its doubt about the reliability of the plaintiff James Coady's testimony.⁵

In light of these findings, the court concluded that the controversy between the parties was primarily based on the viability of the 1996 membership agreement between the plaintiff James Coady and the defendant Martin. The court held that this agreement was defective because of the unresolved dispute about "what the percentage of the ownership would be among the four parties mentioned in the [a]greement." Without resolving that issue, the parties had not come to "a meeting of the minds." In addition, the court held that the agreement was unenforceable because of the absence of consideration to support it.

In light of its findings, the court did not address the plaintiffs' claims of a CUTPA violation or of fraud. Although the court initially did not rule on the plaintiffs' claim that the defendant Martin owed them a fiduciary duty that had not been fulfilled, after reargument, the court expressly found the absence of any fiduciary duty to the plaintiffs.⁶ Accordingly, the court rendered judgment in favor of the defendants on the plaintiffs' complaint and enjoined the plaintiffs, in perpetuity, from using the Ebbets Field trademark and logo or near equivalents thereof.

The plaintiffs' appeal from the judgment of the court raises four separate issues. They argue that the judgment should be set aside because the court (1) improperly failed to address their claim for relief for breach of the fiduciary duty that the defendant Martin owed to the plaintiff James Coady, (2) improperly held the membership agreement between the plaintiff James Coady and the defendant Martin to be unenforceable, (3) abused its discretion in failing to grant their motion for sanctions because of the late disclosure of a transcript of a tape recording and (4) improperly failed to enforce an offer for restitution that was contained in pleadings filed by the defendant Martin.⁷ Our standard of review of the plaintiffs' claims is well established. The court's findings of fact are reversible only if they are clearly erroneous. State v. Colvin, 241 Conn. 650, 656, 697 A.2d 1122 (1997). The court's conclusions of law are reversible only if they are legally and logically incorrect in light of the facts found. Id. The court's discretionary rulings are reversible only if they manifest an abuse of the court's discretion. State v. Cooper, 227 Conn. 417, 427, 630 A.2d 1043 (1993). Applying these principles to the circumstances of this case, we are not persuaded by any of the plaintiffs' claims of impropriety.

FIDUCIARY DUTY

The plaintiffs claim that the judgment should be set aside because the court allegedly gave short shrift to their argument that the defendant Martin owed them a fiduciary duty regardless of the enforceability of the written agreement to which the plaintiff James Coady and the defendant Martin had subscribed in 1996. This argument is untenable.

It is inaccurate for the plaintiffs to assert that the judge did not rule on this count of their complaint. The memorandum of decision entitled "Re articulation, sanctions and reargument," states categorically that "[t]he court cannot find that the defendants or any of them had any fiduciary obligation to [the] plaintiffs." Contrary to the view espoused by the plaintiffs, the court's finding about the nonexistence of a fiduciary obligation obviated the need to discuss a possible breach of that obligation. Although the plaintiffs asked the court to articulate its holding on other issues, they failed to ask for clarification on the issue of fiduciary duty.

It is inconsistent for the plaintiffs, on appeal, to claim a breach of fiduciary duty independently of the written agreement when, at trial, they took a diametrically opposite position. Paragraph nineteen of their complaint states: "Martin has breached his obligation to the Company and [to the] Plaintiff to operate the business of the Company in accordance with the fiduciary duties he assumed under the Amended Operating Agreement." (Emphasis added.) After the court had announced its decision at the end of the trial, the plaintiffs filed a motion for reargument in which they again characterized the alleged fiduciary relationship as having been "based upon the written agreement." (Emphasis added.)

Even if we were nonetheless to address the plaintiffs' argument on its merits, the plaintiffs could not succeed. The plaintiffs' appellate brief alleges that the plaintiff James Coady and the defendant Martin were engaged in a joint venture that imposed fiduciary obligations upon the defendant Martin. We disagree.

The plaintiffs may well be right about the law of joint ventures; Doe v. Yale University, 252 Conn. 641, 672-73, 748 A.2d 834 (2000); but they fail to point out any factual finding that would support the joint venture theory in this case. The court was not asked to find, and did not find, the existence of a joint venture. Although the plaintiffs have cited evidence that would support their present argument, that does not suffice. This court has no authority to find facts to supplement the record at trial. Lupien v. Lupien, 192 Conn. 443, 445, 472 A.2d 18 (1984); C. Tait & E. Prescott, Connecticut Appellate Practice and Procedure (3d Ed. 2000) § 8.10 (a), p. 308.

For the procedural and substantive reasons previously discussed, the trial court properly rejected the plaintiffs' claim of breach of fiduciary duty. Its factual findings were not clearly erroneous and its legal conclusions were sound.

THE MEMBERSHIP AGREEMENT

The...