Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co.

• Court: Connecticut Supreme Court
• Writing for the Court: Before PETERS; BORDEN
• Citation: Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 649 A.2d 518 (Conn. 1994)
• Decision Date: 08 November 1994
• Docket Number: No. 15004,15004
• Parties: HARTFORD WHALERS HOCKEY CLUB v. The UNIROYAL GOODRICH TIRE COMPANY et al.

Page 518

649 A.2d 518

231 Conn. 276

HARTFORD WHALERS HOCKEY CLUB v. The UNIROYAL GOODRICH TIRE COMPANY et al.

No. 15004.

Supreme Court of Connecticut.

Argued Sept. 28, 1994.

Decided Nov. 8, 1994.

Michael D. O'Connell, Hartford, for appellants (named defendant et al.).

Daniel H. Kennedy, Jr., Rocky Hill, for appellee (plaintiff).

Before PETERS, C.J., and CALLAHAN, BORDEN, BERDON and NORCOTT, JJ.

BORDEN, Associate Justice.

The defendants appeal ¹ from the judgment rendered by the trial court in favor of the plaintiff after a court trial. The plaintiff, Hartford Whalers Hockey Club, sued the defendants, The Uniroyal Goodrich Tire Company (Uniroyal) and Uniroyal, Inc., ² for amounts allegedly owed for advertising during the 1987-88 hockey season. The plaintiff asserted two theories of recovery against the defendants: (1) express contract between the plaintiff and the defendants based upon the apparent authority of the defendants' agent, Brass City Tire Company, Inc. (Brass City); and (2) unjust enrichment. The trial court rejected the theory of express contract, but rendered judgment in favor of the plaintiff on the theory of unjust enrichment.

The defendants claim that the trial court improperly concluded that: (1) any benefit accorded to the defendants was unjust; and (2) the plaintiff had established the extent of the benefit to the defendants. We affirm the judgment of the trial court.

The trial court found the following facts, which the defendants do not challenge in this appeal. ³ The plaintiff is a limited partnership that owns and operates a National Hockey League franchise in Hartford. Uniroyal is a New York partnership that manufactures Uniroyal brand tires, and Uniroyal, Inc., is a dissolved corporation. Before the 1986-87 hockey season, the plaintiff's broadcast marketing consultant, Richard Chmura, attempted to obtain advertising business from Uniroyal. A representative of Uniroyal directed him to contact Richard Owen, Uniroyal's account manager for Connecticut, who maintained an office on the premises of Brass City, which was Uniroyal's Connecticut distributor. Thereafter, Chmura made a presentation to Owen and Ralph Giusto, the president of Brass City. Owen told Chmura to submit the presentation in writing to Young and Rubicam, Uniroyal's advertising agency, and informed him that approval of any advertising would be given by Frank Davis of Young and Rubicam.

Chmura negotiated a contract for advertising for the 1986-87 season with Davis. In accordance with Davis' instructions, Chmura sent the contract to Davis for execution. Furthermore, at Davis' instruction, the contract was divided into two parts. Both parts listed "Uniroyal Tires" as the advertiser. One part, in the amount of $26,000, was signed by Davis of Young and Rubicam. The other, in the amount of $34,000, was signed by Giusto of Brass City. Pursuant to Owen's instruction, Chmura sent all the invoices for the advertising to Young and Rubicam, which paid the invoices and was in turn reimbursed by Uniroyal. The advertising provided by the plaintiff for Uniroyal for the 1986-87 season consisted of radio advertising during the broadcasts of the plaintiff's games and print advertising including color advertisements in the plaintiff's yearbook and in Goal Magazine. It also included merchandising services, which consisted of tickets to hockey games, "VIP Nights," at which the plaintiff provided dinner and game tickets for twenty-five people, and "Skybox Nights," at which the plaintiff provided seats in the plaintiff's skybox for various games.

In May, 1987, Chmura contacted Owen about renewing the Uniroyal advertising contract for the 1987-88 hockey season. Chmura met again with Owen and Giusto, and they agreed that the radio and print advertising of the 1986-87 season would be duplicated for the 1987-88 season, and that Uniroyal would also have advertisements on one of the boards that surround the ice, which are known as dasher boards. At Owen's request, Chmura sent the first draft of the contract to Davis at Young and Rubicam and, after discussion among Chmura, Owen and Davis, also sent the final draft for Davis to sign. Davis then told Chmura that he could not sign the contract because Uniroyal was considering a change of its advertising agency. At Owen's instruction, Chmura sent the contract to Giusto at Brass City for execution and, on July 30, 1987, Giusto signed the contract in his capacity as president of Brass City.

Thereafter, Chmura received from Young and Rubicam the artwork and wording for the dasher board advertising, which contained the name "Uniroyal" and the words "Royal Care Tire and Service Group." Young and Rubicam also provided Chmura with the Uniroyal advertisement to be placed in the plaintiff's yearbook and in Goal Magazine. Those advertisements took up full pages and contained a picture of three tires above the words "Star Performers" in large red letters. Underneath those words was the phrase "The Official Tire of the Hartford Whalers." The advertisements also described the qualities of Uniroyal tires that make them "star performers" and contained instructions to call the nearest Uniroyal dealer. The Goal Magazine advertisement also contained a listing of Uniroyal dealers.

During the 1987-88 hockey season, which began in September, 1987, forty hockey games were broadcast on television in the Hartford area and in other states. The Uniroyal dasher board was visible to the television audiences for approximately two and one-half minutes per game. The plaintiff customarily charged $1500 for twenty seconds of television advertising time during its games.

At Owen's direction, Chmura sent the invoices for the 1987-88 season advertising to Young and Rubicam. In November, 1987, Chmura and Owen met with Edward O'Neill, Uniroyal's sales development manager. Despite Uniroyal's claim at trial that, at that meeting, Owen and O'Neill had told Chmura that Uniroyal disavowed any responsibility for the 1987-88 contract, the trial court specifically found credible Chmura's contrary testimony, that it was not until March, 1988, when the season was nearly over, that Uniroyal disavowed responsibility and informed Chmura that Brass City was solely liable for payment.

Uniroyal sold its tires through dealers, including Brass City, which also sold other brands of tires. Uniroyal had a program in Connecticut whereby it gave its dealers advertising credits tied to tire sales, and those credits were used by the dealers to pay for advertising by the plaintiff and others. Owen and O'Neill never informed Chmura either of the existence of this program or of their awareness, prior to the execution of the 1987-88 contract, that Brass City might not receive sufficient credits to pay for Uniroyal's advertising with the plaintiff under the 1987-88 contract.

The trial court rejected the plaintiff's claim that Uniroyal was liable to the plaintiff on a theory of express contract because Brass City had apparent authority to contract on behalf of Uniroyal. The trial court determined that the plaintiff had failed to establish Brass City's apparent authority. In the trial court's view, the plaintiff's knowledge of the relationship between Uniroyal and Brass City, combined with the unwillingness of Owen to sign the contract on Uniroyal's behalf, imposed a duty of further inquiry on Chmura regarding Giusto's authority to bind Uniroyal. That conclusion is not before us in this appeal.

The trial court determined, however, that the plaintiff was entitled to judgment on the basis of unjust enrichment. In this regard, the trial court found that Uniroyal had derived a benefit from the radio, print and dasher board advertisements that reached a large audience in Connecticut and in other states where the plaintiff's hockey games had been broadcast. The trial court also found that the value of the television advertising of the Uniroyal dasher board alone far exceeded the contract amount sought by the plaintiff. The trial court further found that Uniroyal had derived a benefit from the merchandising services provided under the contract to Uniroyal's employees and tire dealers. The trial court, moreover, found that neither Uniroyal nor Brass City had paid the plaintiff for the advertising and merchandising services provided by the plaintiff.

With respect to the measurement of the benefit derived by Uniroyal, the trial court found that the value of the advertisements to Uniroyal was at least consistent with the value agreed to by Brass City, namely, the contract price. The court also found that Uniroyal, rather than Brass City, had received a benefit from the fact that persons in other states or outside Brass City's territory saw or heard the advertisements, and that the advertising campaign had referred to all Uniroyal tires, not just those distributed by Brass City, as "The Official Tire of the Hartford Whalers."

Accordingly, the trial court rendered judgment for the plaintiff on the theory of unjust enrichment in an amount equal to the contract price, namely $75,031.60, plus prejudgment interest. This appeal followed.

The defendants first claim that, "[a]s a matter of law, any purported benefit accorded to the [defendants] cannot be deemed 'unjust' in equity, in that the trial court already [had] found that the plaintiff had the ability and, indeed, the obligation to protect itself by inquiring as to the authority and identity of the party to its contract." Thus, the defendants argue, "[t]o allow the plaintiff in these circumstances to recover in unjust enrichment is a contradiction of the finding that the plaintiff could not recover under express contract." We are not persuaded.

"Unjust enrichment applies wherever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract. 5 S. Williston, Contracts (Rev.Ed.) § 1479. A right of recovery under the doctrine...