Falcigno v. Falcigno

• Decision Date: 13 August 2018
• Docket Number: CV126033535S
• Court: Superior Court of Connecticut
• Parties: David FALCIGNO v. Stephen FALCIGNO

David FALCIGNO v. Stephen FALCIGNO

No. CV126033535S

Superior Court of Connecticut, Judicial District of New Haven, New Haven

August 13, 2018

UNPUBLISHED OPINION

Corradino, Judge trial Referee

A.

The court will first briefly discuss the factual background of the case. It will then try to discuss in more detail the legal issues involved including the claims made by the plaintiff and their requirements. It will then apply this discussion of legal issues to the complicated facts of this case which were developed in a lengthy court trial.

The plaintiff and the defendant are brothers, in the 1970s the father and a partner each acquired a fifty percent ownership interest in Statewide Meats & Poultry, Inc., which was involved with the wholesale distribution of meats. When the father passed away, the plaintiff David Falcigno and another brother each received a twenty percent share in the father’s half-interest, the defendant received a sixty percent share in the half-interest. When the partner of the father died in 2001, his fifty percent interest was purchased by Statewide and the plaintiff, and Richard Falcigno, the other brother then each had a twenty percent interest in Statewide and the defendant had a sixty percent interest in Statewide.

Between 2001 and August 12, 2011, the defendant had according to the plaintiff’s brief at pages 2 and 3, "sole control of Statewide and was president and majority shareholder of Statewide. He controlled all policies, business practices and the day to day operations of Statewide."

On October 9, 2009, the plaintiff sold his twenty percent share of Statewide to the defendant for the claimed amount of $250,000. The plaintiff also claims that "during the discussions and negotiations for the defendant’s purchase of the plaintiff’s twenty percent share, the defendant orally promised the plaintiff that if Statewide became profitable, did not go bankrupt, and were to sell in the future, then the defendant would ‘cut (the plaintiff) back in’ and the plaintiff would receive full compensation for his twenty percent share of Statewide from the proceeds of any future sale of Statewide, less the payment of $250,000," paragraph 48 of June 14, 2013 revised complaint.

The revised complaint further alleges that, "66. On or about August 12, 2011, less than two years after the purchase of the plaintiff’s twenty percent share, the defendant sold Statewide to a division of Sysco Corporation for $8,000,000."

There are other claims of self-dealing set forth in the complaint but the gravamen of the plaintiff’s claim is that as a result of the defendant’s breach of fiduciary duty, fraudulent concealment and misrepresentation and negligent misrepresentation, the plaintiff was deprived of what he was entitled to as a result of the August 12, 2011 sale to Sysco and he should have received $1,008,302 as his share of the proceeds of the eight million dollar sale. For a variety of reasons, the plaintiff sets forth in his brief, which the defendant contests, the plaintiff argues that the parole evidence rule should not apply to bar any monetary claim by the plaintiff that exceeds the $200,000 contract price set forth in the October 9, 2009 agreement he entered into to sell his shares to his brother, the defendant. This is only a very brief rendition of the controlling facts in this case and the court will develop those facts when it discusses the applicability of the legal claims made in this case.

B.

The original and revised complaint asserted ten counts against the defendant. A motion for summary judgment was filed by the defendant and granted in part. There are now five claims at issue; (1) Breach of Contract, (2) Fraudulent Concealment/Non-Disclosure, (3) Fraudulent Misrepresentation, (4) Negligent Misrepresentation, (5) Breach of Fiduciary Duty.

The court will first discuss the law as it applies to these various causes of action and then apply that discussion to the facts of this case which were developed at trial.

Breach of Contract

"The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party, and damages." Chiulli v. Zola, 97 Conn.App. 699, 706-07 (2006); Seligson v. Brower, 109 Conn.App. 749, 753 (2008). As Seligson points out whether there has been a breach of contract, is ordinarily a question of fact.

On the question of ambiguity in contract language, the court in Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 13-14 (2008) said: "A contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself ... Accordingly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party’s subjective perception of the terms ... When the language of a contract is ambiguous, the determination of the parties’ intent is a question of fact." The court then went on to says that ... "in construing contracts, we give effect to all the language included therein, as "the law of contract interpretation ... militates against interpreting a contract in a way that renders a provision superfluous."

O’Connor v. Waterbury, 286 Conn. 732, 743 (2008) after making the foregoing quotation from Ramirez went on to refer to the language in Montoya v. Montoya, 280 Conn. 605 612 (2006) to the effect that "if a contract is unambiguous within its four corners, intent of the parties is a question of law requiring plenary review ... Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity."

The court will now discuss the parol evidence rule and how it may affect the determination of contractual rights and obligations.

The applicability of the parol evidence rule can determine whether a written contract between parties and its terms is conclusive on the rights and claims of the parties. An early case said the following:

... when the parties deliberately put their engagements into writing, in such terms as import a legal obligation, without any uncertainty as to the object or extent of such engagement, it is conclusively presumed that the whole engagement of the parties and the extent and manner of their understanding, was reduced to writing. After this, to permit oral testimony, or prior or contemporaneous conversations, or circumstances, or usages [etc.], in order to learn what was intended, or to contradict what is written, would be dangerous and unjust in the extreme. Glendale Woolen Co. v. Protection Ins. Co., 21 Conn. 19, 37 (1851).

A more recent case Heyman Associates No. 1 v. Ins. Co. Of Pennsylvania, 231 Conn. 756, 779-81 (1995) lays out the doctrine as it operates in our state more completely.

The parol evidence rule does not of itself, therefore, forbid the presentation of parol evidence, that is, evidence outside the four corners of the contract concerning matters governed by an integrated contract, but forbids only the use of such evidence to vary or contradict the terms of such a contract. Parol evidence offered solely to vary or contradict the written terms of an integrated contract is, therefore, legally irrelevant. When offered for that purpose, it is inadmissible not because it is parol evidence, but because it is irrelevant. By implication, such evidence may still be admissible if relevant (1) to explain an ambiguity appearing as the instrument; (2) to prove a collateral oral agreement which does not vary the terms of the writing; (3) to add a missing term in a writing which indicates on its face that it does not set forth the complete agreement; or (4) to show mistake or fraud ... These recognized exceptions are, of course, only examples of situations [in which] the evidence (1) does not vary or contradict the contract’s tetras, or (2) may be considered because the contract has been shown not to be integrated, or (3) tends to show that the contract should be defeated or altered on the equitable ground that relief can be had against any deed or contract in writing founded in mistake or fraud.

Also see Schilberg Integrated Metals v. Continental Casualty Co. 263 Conn. 245, 277-78 (2003).

In the 29a Am.Jur.2d article on Evidence at Section 1104, the parol evidence rule is spelled out in great detail. pp 450-52.

The parol-evidence rule generally precludes the use of extrinsic evidence to vary or contradict the terms of an unambiguous and integrated contract. Indeed, where a contract is integrated, no extrinsic evidence of prior or contemporaneous agreements will be admissible to change alter, or contradict the contractual writing. In other words, where the parties have concluded a valid integrated agreement with respect to a particular subject matter, the parol evidence rule precludes the enforcement of inconsistent prior or contemporaneous agreements. Thus, the parol-evidence rule generally prohibits the introduction of evidence that tends to alter an integrated written document.

A contract that appears to be a complete and unambiguous statement of the parties’ contractual intent is presumed to be an integrated writing for purposes of the parol-evidence rule. In other words, the courts apply a rebuttable presumption that a writing which on its face appears to be an integrated agreement is what it appears to be. Parol evidence may be necessary to determine if the integration rule applies. An express integration clause is not necessary to a determination that an agreement is integrated. Under the parol-evidence rule, neither oral testimony nor prior written agreements are admissible to explain or vary the terms of a fully integrated written contract.

...