Keefe v. Norwalk Cove Marina, Inc.

• Decision Date: 09 May 2000
• Docket Number: (AC 18261)
• Court: Connecticut Court of Appeals
• Parties: HARRY V. KEEFE, JR. v. NORWALK COVE MARINA, INC., ET AL.

57 Conn. App. 601

749 A.2d 1219

HARRY V. KEEFE, JR. v. NORWALK COVE MARINA, INC., ET AL.

(AC 18261)

Appellate Court of Connecticut.

Argued January 11, 2000.

Officially released May 9, 2000.

Lavery, Landau and Dupont, Js.¹ John J. Ryan, with whom, on the brief, was Nancy D. Gallagher, for the appellant-appellee (named defendant).

Brendan J. O'Rourke, for the appellee-appellant (plaintiff).

Opinion

LAVERY, J.

The named defendant, Norwalk Cove Marina, Inc. (marina), appeals from the judgment of the trial court awarding damages in a breach of contract case. On appeal, the marina claims that the trial court improperly found that a valid contract existed between the parties. It specifically argues that the contract lacked consideration and that the agreement violated the statute of frauds. The plaintiff, Harry V. Keefe, Jr., in his cross appeal, contends that the court improperly (1) failed to award him maintenance, transportation and cost of sale expenses arising from the contract, (2) awarded a $30,000 setoff for moneys withheld and (3) found that the defendant James Gardella, an officer of the marina, was not personally liable for the debts of the corporation. We affirm in part and reverse in part the judgment of the trial court.

The trial court found the following facts. In the fall of 1993, the plaintiff read an advertisement in a trade magazine about an Azimut motor yacht (yacht) that was being built in Italy. The plaintiff flew to Italy, met with the manufacturer, Vitelli, and agreed to purchase the yacht for $1,725,000. Vitelli advised the plaintiff that the marina was its dealer and agent in the United States, and would be responsible for coordinating the purchase and shipment of the yacht to the United States and for performing any warranty work on the yacht. The marina and Gardella played no role in the negotiations for the purchase, which were conducted directly between the plaintiff and the manufacturer in Italy. The marina, at the plaintiffs request, shipped certain items to Italy for installation on the yacht. In June, 1994, the Italian manufacturer paid the marina a $300,000 commission in connection with the plaintiffs purchase of the yacht.

The plaintiff and Gardella first met in February, 1994, to discuss the purchase of the yacht and the trade-in of the plaintiffs own motor yacht, a 1991 model fifty-two foot Hatteras (Hatteras). In April, 1994, the plaintiff and the marina signed a written agreement. The agreement provided that the sale price of the yacht was $1,725,000 plus optional equipment and transportation charges. The agreement also provided that the marina was giving the plaintiff an "allowance" for the used boat trade-in, which totaled $653,900. This trade-in figure was used by the plaintiff to calculate and pay the Connecticut sales tax on the yacht. The sales tax was thus based on the sales price of $1,725,000 less the allowance of $653,900 for the trade-in.

The April, 1994 agreement did not fully reflect what actually occurred in the transaction. The plaintiff paid the Italian manufacturer the full purchase price without deducting the trade-in allowance, and the marina never took title to the Hatteras or paid the plaintiff any money. The plaintiff withheld $30,000 from the purchase price pending certain alterations and changes to the yacht. When those were completed, the plaintiff refused to pay the $30,000. After the Hatteras was brought to the marina, from April, 1994, until October, 1995, the marina used its best efforts to sell the Hatteras, including advertising and displaying it at several trade shows. The marina performed some minor repairs on the Hatteras, but overall it was in good working order when it arrived at the marina. In the meantime, the market for yachts the size of the Hatteras took a downturn, and the marina was not successful in selling the Hatteras. In October, 1995, the plaintiff, with the permission of the marina, sent the Hatteras to Florida, where it was listed with a broker at $775,000. The Hatteras ultimately sold for $525,000 in April, 1996. The plaintiff netted $480,000 after paying a sales commission of $40,000 and a survey adjustment of $4200. The plaintiff incurred costs of approximately $56,000 in transporting the Hatteras to Florida and docking it there for six months until the boat was sold, as well as the costs of labor, taxes, fuel and insurance.

In his complaint, the plaintiff alleged that the defendants had breached the parties' agreement by failing to pay him the trade-in allowance of $653,900 for the Hatteras and by failing to pay him interest on that amount from the date of the agreement.² The defendants filed a counterclaim for damages in the amount of $30,000 arising from the plaintiffs failure to pay for alterations made to the yacht prior to its shipment from Italy. At trial, Gardella testified that the defendants had agreed only that they would use their best efforts to sell the Hatteras and that they would pay the plaintiff whatever the boat sold for. According to Gardella, the figure of $653,900 was only an estimate of the anticipated sales price. The court found that the defendants had agreed to a trade-in allowance of $653,900. It also found that the plaintiff was entitled to recover the difference between that guaranteed trade-in price and the eventual gross sales price of the Hatteras. The court rejected the plaintiff's claim that he should receive the difference between the trade-in allowance and the net amount he received, that he was entitled to a credit for the expenses that he incurred in connection with selling the boat in Florida, and that he was entitled to interest on the $653,500 trade-in allowance. On the counterclaim, the court found that the plaintiff had breached the agreement by refusing to pay the defendants $30,000 for alterations to the yacht. The court awarded the plaintiff the sum of $128,900, which is the difference between the trade-in allowance for the Hatteras and its eventual sales price, less $30,000 for work done on the yacht, for a total judgment of $98,900. The court rendered judgment against the marina only, having found that Gardella acted as an officer of the marina at all pertinent times and that there was no basis on which to hold him individually liable.

I

"As an appellate court, our review of trial court decisions is limited to determining whether their legal conclusions are legally and logically correct, supported by facts set out in the memorandum of decision. Pandolphe's Auto Parts, Inc. v. Manchester, 181 Conn. 217, 221-22, 435 A.2d 24 (1980). Harris Calorific Sales Co. v. Manifold Systems, Inc., 18 Conn. App. 559, 563, 559 A.2d 241 (1989). Whether a contract or a subsequent modification exists is a question of fact for the court to determine. [Harris Calorific Sales Co. v. Manifold Systems, Inc., supra, 563]; see also Three S. Development Co. v. Santore, 193 Conn. 174, 177-78, 474 A.2d 795 (1984); Randolph Construction Co. v. Kings East Corp., 165 Conn. 269, 277, 334 A.2d 464 (1973); Thermoglaze, Inc. v. Morningside Gardens Co., 23 Conn. App. 741, 745, 583 A.2d 1331, cert. denied, 217 Conn. 811, 587 A.2d 153 (1991). If the factual basis of the court's decision is challenged, our review includes determining whether the facts set out in the memorandum of decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous.... Harris Calorific Sales Co. v. Manifold Systems, Inc., supra, 563." (Internal quotation marks omitted.) New England Rock Services, Inc. v. Empire Paving, Inc., 53 Conn. App. 771, 775, 731 A.2d 784, cert. denied, 250 Conn. 921, 738 A.2d 658 (1999).

A

The marina argues that the court improperly found consideration in an agreement where none existed. We disagree.

"The doctrine of consideration is of course fundamental in the law of contracts, the general rule being that in the absence of consideration an executory promise is unenforceable. In defining the elements of the rule, we have stated that consideration consists of a benefit to the party promising, or a loss or detriment to the party to whom the promise is made. . . . An exchange of promises is sufficient consideration to support a contract." (Citations omitted; internal quotation marks omitted.) Osborne v. Locke Steel Chain Co., 153 Conn. 527, 530-31, 218 A.2d 526 (1966).

Simply put, the agreement between the plaintiff and the marina is enforceable because consideration does exist. The marina received the benefit of a $300,000 commission for the sale of the yacht to the plaintiff, when in fact it did very little to consummate the deal, as the plaintiff dealt primarily with the manufacturer. In exchange for this consideration, the plaintiff received a promise from the marina that it would guarantee a sale "trade-in" price of no less than $653,900 on the ultimate sale of the Hatteras. He also received a credit that reduced the Connecticut sales tax that otherwise would be due.

The fact that the marina never took title to the Hatteras throughout the transaction does not affect this result. The agreement between the parties, not just as reflected in the agreement, but as fully contemplated by them, did not require that the marina take possession or title of the Hatteras. As the court stated in its memorandum of decision: "In reality, the plaintiff paid the manufacturer in Italy the full purchase price without any credits, and the defendants never took title to the Hatteras or paid the plaintiff any money. The defendants, however, prepared the April [1994 written] agreement, which provided for a specific trade-in allowance for the Hatteras, as if the Hatteras had in fact been traded in, and the sales tax was calculated on the difference between that figure and the total purchase price. The agreement did not require that the defendants take title to the Hatteras or provide for what would happen if the Hatteras was...