Gordon v. Indusco Management Corp.

• Decision Date: 24 January 1973
• Citation: 164 Conn. 262,320 A.2d 811
• Parties: Thomas GORDON v. INDUSCO MANAGEMENT CORPORATION.
• Court: Connecticut Supreme Court

Page 811

320 A.2d 811

164 Conn. 262

Thomas GORDON v. INDUSCO MANAGEMENT CORPORATION.

Supreme Court of Connecticut.

Jan. 24, 1973.

Frank W. Murphy, Norwalk, with whom, on the brief, were Abraham D. Slavitt and Robert A. Slavitt, norwalk, for appellant (defendant).

Jules Lang, Norwalk, with whom, on the brief, were George J. Lepofsky and Melvin J. Silverman, Norwalk, for appellee (plaintiff).

Before HOUSE, C.J., and SHAPIRO, LOISELLE, MacDONALD and BOGDANSKI, JJ.

LOISELLE, Associate Justice.

The plaintiff brought an action to recover damages for breach of contract and the court rendered judgment for the plaintiff and awarded damages. The defendant has appealed from this judgment.

The facts found by the court necessary to dispose of the claims of the parties, can be summarized as follows: The plaintiff had acquired an area distributorship franchise in a fast-food operation called Heap Big Beef with the exclusive right to sublicense, establish and control all 'Heap Big Beef' restaurants in Fairfield County. Such outlets were to be established within certain time limitations. On March 13, 1968, the plaintiff entered into a contract with the defendant for the erection and leasing of a building in the Danbury shopping center. The plaintiff required this building to establish a first outlet as a showcase or pilot operation from which to open further outlets. In addition, the opening of an outlet would assist the plaintiff to obtain the financial backing he needed to build additional units and to attract potential licensees for such units. On the execution of the lease, the plaintiff gave the defendant a deposit of $10,000. The contract called for a building costing $40,000 to be completed within ninety days after the submission of construction bids by contractors obtained by the defendant. A successful bid for the construction of the proposed building was approved by the parties on June 5, 1968, after the plaintiff agreed to pay additional costs over the $40,000 previously agreed on. The defendant never constructed the building. Further facts found by the court will be referred to in the discussion of the various claims raised by the parties.

The defendant assigns error in the finding and attacks the court's failure to find material facts as set forth in twenty-one paragraphs of the draft finding. To secure an addition on this ground the defendant must refer in its brief to some part of the appendix, the pleadings or an exhibit properly before us which discloses that the plaintiffs admitted the truth of the fact or that its validity was conceded to be undisputed. Walsh v. Turlick, 164 Conn 75, 77, 316 A.2d 759; Stoner v. Stoner, 163 Conn. 345, 347, 307 A.2d 146.

Only one of these requested additions merits discussion. ¹ The defendant seeks to include in the finding the fact that the plaintiff intended to hire another person to manage his outlet at the Danbury location. This paragraph was not included by the court in its finding but is admitted by the plaintiff, as is shown by the defendant's appendix. This fact is material to the issue of damages and will be added to the finding.

The defendant further asserts in its assignment of errors that the court erred in finding eight paragraphs of the finding without evidence. These claims have not been briefed and accordingly are considered abandoned. Stoner v. Stoner, supra; Martin v. Kavanewsky, 157 Conn. 514, 516, 255 A.2d 619.

The defendant claims that it returned the plaintiff's deposit of $10,000 and that acceptance by the plaintiff of this return before the complaint was amended operated as a rescission of the contract and lease agreement. The complaint was amended sixteen days after it was filed by deleting a prayer for rescission. The finding is silent as to whether the deposit was returned although the appendix does refer to the return of the deposit at some unstated time. In any event the court's unattacked finding states that '(t)he defendant offered to return the plaintiff's lease deposit a number of times prior to the institution of suit, but the plaintiff refused, advising the defendant that he had a great deal invested in the venture and wanted performance of the provisions of the lease.' A definite election to rescind a contract is final and operates as a waiver of any claim for damages for any breach of the contract. A rescission is effective when, in addition to a restoration of a status quo, an intention on the part of both parties that the contract be rescinded exists. Stern & Co. v. International Harvester Co., 148 Conn. 527, 532, 172 A.2d 614; Haaser v. A. C. Lehmann Co., 130 Conn. 219, 221, 33 A.2d 135; O'Keefe v. St. Francis Church, 59 Conn. 551, 561, 22 A. 325. Such intention is a matter of fact for the trier, whether court or jury, to ascertain. Stern & Co. v. International Harvester Co., supra; Finlay v. Swirsky, 98 Conn. 666, 671, 120 A. 561; Woodbridge Ice Co. v. Semon Ice Cream Corporation, 81 Conn. 479, 484, 71 A. 577; Glen Alden Corporation v. Duvall, 240 Md. 405, 215 A.2d 155; 1 Black, Rescission and Cancellation (2d Ed.) § 6; 17 Am.Jur.2d, Contracts, § 482. It is clear from the findings of the court that the plaintiff at no time before the action was brought intended to cancel or rescind the contract. Relying strongly on the fact that the complaint, before amendment, prayed for a rescission, the defendant claims that his tender of the $10,000 deposit and acceptance of this tender by the plaintiff constituted an effective rescission of the contract. In the action before us the plaintiff included in the complaint additional counts seeking substantial damages for the alleged breach of the contract. This court has noted that prompt institution of the suit was relevant evidence that the plaintiff did not mean to abandon his rights under the contract. The reasoning of the court in Haaser v. A. C. Lehmann Co., supra, 130 Conn. 222, 33 A.2d 136, is applicable: 'If the plaintiffs could prove the allegations of their complaint, they had a perfect claim for damages and it is highly improbable that they would have intentionally and unnecessarily destroyed this claim.' See also 12 Williston, Contracts (3d Ed. Jaeger), p. 212, § 1469. The court was not in error in refusing to find a rescission of the contract.

In an assignment of error the defendant argues that the contract between the parties executed on March 13, 1968, was modified on June 5, 1968, and that the ninety-day time period in which the premises were to have been constructed was waived by the modification. The defendant asserts that the modification afforded him a reasonable time to construct the proposed building. 'Parties to an existing contract may, by a subsequent contract, alter any term of their original one. O'Loughlin v. Poli, 82 Conn. 427, 432, 74 A. 763; Bristol & Plainville Tramway Co. v. Eveline, 89 Conn. 382, 393, 94 A. 290.' Taft Realty Corporation v. Yorkhaven Enterprises, Inc., 146 Conn. 338, 342, 150 A.2d 597, 599; 17 Am.Jur.2d, Contracts, § 465.

Paragraph 40 of the original agreement between the parties provided that a structure would be completed by the defendant within ninety days after the submission of construction bids by contractors and obligated the defendant to pay up to the amount of $40,000 for the cost of construction. On June 5, 1968, the agreement was modified to the extent that the parties agreed that the cost of the building was to be $45,000. The plaintiff, the defendant, and David Katz & Sons, whose relationship to the defendant is not revealed by the finding, exchanged promises and agreed that the plaintiff would pay one-half of the excess cost of construction over $40,000 and David Katz & Sons would pay the remaining half. The mutual promises were sufficient consideration to bind the parties to the modification. Taft Realty Corporation v. Yorkhaven Enterprises, Inc., supra; Finlay v. Swirsky, 103 Conn. 624, 631, 131 A. 420.

The defendant's claim is that on June 5, 1968, there remained only seven days to complete the building under the time period provided in the original contract and consequently since a building could not be erected within seven days it was implicit in the modification of the contract that the parties agreed to waive the ninety-day term. The original contract did not, as the defendant claims, require that a structure be built ninety days after the signing of the contract, but rather provided for completion of the structure within ninety days after the submission of bids by contractors. The finding is silent regarding when bids were submitted but it is clear that at least one bid was submitted on or before June 5, 1968, and a ninety-day period commencing June 5, 1968, would have expired prior to September 9, 1968, the date of the writ. The unattacked findings indicate that once the bid was approved on June 5, 1968, it was anticipated that the building would be completed within ninety days. The plaintiff at all times expressed a sense of urgency to the defendants and communicated the importance the plaintiff attached to adhering to the time schedule agreed on for the erection of the building. The original contractual time requirements for construction were not waived and the claim of waiver cannot be sustained.

In its brief the defendant argues that since a delay occurred in obtaining a building permit from the Danbury planing commission, it became impossible to complete a building within the stipulated time period and as a result the contract became voidable. The defendant further claims that on the return of the deposit at the time of the institution of the present action seeking a rescission the agreement was rendered 'void.' The short answer to this argument is that, as previously stated, no rescission was found by the trial court. The defendant's argument that the action of the Danbury planning commission prevented performance of the contract within the stated time period is not persuasive in light of the...