LeBlanc v. New England Raceway, LLC

• Decision Date: 04 August 2009
• Docket Number: No. 29724.,29724.
• Citation: 976 A.2d 750,116 Conn.App. 267
• Court: Connecticut Court of Appeals
• Parties: Jeffrey J. LeBLANC et al. v. NEW ENGLAND RACEWAY, LLC, et al.

976 A.2d 750

116 Conn.App. 267

Jeffrey J. LeBLANC et al. v. NEW ENGLAND RACEWAY, LLC, et al.

No. 29724.

Appellate Court of Connecticut.

Argued March 16, 2009.

Decided August 4, 2009.

Richard J. Pascal, Norwich, for the appellants (plaintiffs).

Matthew D. Newman, Bridgeport, for the appellees (defendants).

FLYNN, C.J., and DiPENTIMA and FOTI, Js.

DiPENTIMA, J.

This contract dispute stems from an unsuccessful attempt to convert a dog racing track into a NASCAR¹ racetrack in Plainfield. The plaintiffs, Jeffrey J. LeBlanc and Diane M. LeBlanc, appeal from the judgment of the trial court rendered in favor of the defendants, New England Raceway, LLC, and its principal, Gene Arganese. On appeal, the plaintiffs claim that the court improperly (1) shifted the burden to them to prove that the defendants approved the changes made to the contract, (2) found that by signing a dual agency agreement the parties revoked the authority of the real estate agent to bind the defendants, (3) made or failed to make various findings of fact and (4) allowed the defendants to amend their answer to the plaintiffs' complaint. We disagree with the plaintiffs and, accordingly, affirm the judgment of the trial court.²

The court made the following findings of fact. In 2004, the defendants began to accumulate properties in the Plainfield area to acquire land for a proposed NASCAR raceway. The defendants approached the plaintiffs regarding the sale of their home, also located in Plainfield. The plaintiffs' home had a fair market value of $295,000. On May 12, 2004, the parties entered into a purchase and sale agreement in which the defendants agreed to purchase the plaintiffs' property. The contract was presented to the plaintiffs by real estate agent Sandra Corn, who had a dual agency agreement with the plaintiffs and the defendants. At that time, the contract had been signed by Arganese and had listed a sale price of $834,750. The plaintiffs made three changes to the contract prior to signing it. First, they increased the purchase price to $894,700. This price reflected the value of the property if the defendants obtained the zoning approvals necessary for building the proposed NASCAR racetrack. Corn spoke with Arganese, who approved the change over the telephone. Corn then initialed the change on the contract on Arganese's behalf. Second, the plaintiffs added the phrase, "but no later than [Dec]ember 31, 2005," to paragraph ten of the contract, which then provided that the closing would take place "within 60 days of all [zoning] approvals, but no later than [Dec]ember 31, 2005." (Emphasis added.) Finally, the plaintiffs added the phrase, "whichever is earlier," to paragraph eleven of the contract, which then provided that the plaintiffs would convey marketable title "on or before the 31[st] day of Dec[ember], 2005 or within 60 days of all [zoning] approvals, whichever is earlier." (Emphasis added.) Corn did not initial the last two changes, nor did she confer with Arganese regarding them.

The defendants were unable to obtain the necessary zoning approvals, and the sale did not take place. On May 10, 2006, the plaintiffs filed a four count amended complaint, alleging breach of contract and seeking specific performance. The plaintiffs also alleged that New England Raceway, LLC, is a mere shell and alter ego for Arganese and that it exists solely for his economic benefit. On October 17, 2006, the defendants filed an amended answer in which they admitted two of the plaintiffs' allegations and asserted five special defenses. The defendants claimed that because they did not obtain the necessary zoning approvals, the plaintiffs could not enforce the contract. On September 7, 2007, the defendants filed a second amended answer in which they denied all of the plaintiffs' allegations and again asserted five special defenses.

On March 4, 2008, after a court trial, the court rendered judgment in favor of the defendants. On March 17, 2008, the plaintiffs filed a motion for reconsideration and articulation. On March 24, 2008, the plaintiffs filed this appeal. Thereafter, the trial court denied the plaintiffs' motion for reconsideration and articulation.³

I

The plaintiffs first claim that the court improperly shifted the burden onto them to prove that Arganese, acting for the New England Raceway, LLC, approved the changes made to the May 12, 2004 contract. The plaintiffs argue that Arganese had a duty to read the contract in its entirety and that his knowledge of the contract is imputed to the defendants.

Whether a trial court applied the correct burden of proof is a question of law that we review de novo. Cadle Co. v. D'Addario, 268 Conn. 441, 455, 844 A.2d 836 (2004). It is well settled that the party seeking to establish the existence of an enforceable contract bears the burden of proving a meeting of the minds between the parties. Cheverie v. Ashcraft & Gerel, 65 Conn.App. 425, 439, 783 A.2d 474 (burden rests on plaintiff to prove meeting of minds to establish its version of claimed contract), cert. denied, 258 Conn. 932, 785 A.2d 228 (2001). Thus, the burden properly rested on the plaintiffs.

The plaintiffs rely on our Supreme Court's decision in Pacelli Bros. Transportation, Inc. v. Pacelli, 189 Conn. 401, 456 A.2d 325 (1983), in support of their proposition that if Arganese did not read the contract or ask Corn what it said, apart from the change in price, he therefore was satisfied with his knowledge of the contract's terms and is deemed to have assumed the risk of a mistake as to those terms. In particular, the plaintiffs rely on the court's recitation of the principle that "[w]here a party realizes he has only limited information upon the subject of a contract, but treats that knowledge as sufficient in making the contract he is deemed to have assumed the risk of the mistake. 1 Restatement (Second), Contracts § 154 [1981]." Pacelli Bros. Transportation, Inc. v. Pacelli, supra, at 408, 456 A.2d 325. A close reading of Pacelli Bros. Transportation, Inc., and an understanding of the context of the quoted language, however, defeat the plaintiffs' argument.

In Pacelli Bros. Transportation, Inc., the plaintiffs entered into a settlement with the defendant regarding the defendant's departure from the family business. Pacelli Bros. Transportation, Inc. v. Pacelli, supra, 189 Conn. at 403-406, 456 A.2d 325. The plaintiffs then learned that the defendant had misappropriated company funds, and they sought damages for fraud and unauthorized diversion of corporate assets. Id., at 402, 406, 456 A.2d 325. The court concluded that the principle from the Restatement was inapplicable because the plaintiffs, who suspected the defendant of dishonesty but had no knowledge of his misappropriation of funds, were entitled to assume that the defendant was correctly maintaining the company's finances. Id., at 408-409, 456 A.2d 325.

That principle similarly is inapplicable in the present case. The court found that Corn did not discuss the changes to the closing date with Arganese and that the plaintiffs failed to prove that Arganese approved those changes. Thus, it cannot be said that Arganese realized he had limited information regarding the subject of the contract and therefore had assumed the risk of mistake.

Accordingly, the court did not improperly shift the burden of proof regarding Arganese's approval of the contract to the plaintiffs.

II

The plaintiffs next claim that the court improperly found that by signing a dual agency agreement, the parties revoked the authority of Corn to bind the defendants contractually. As the defendants note in response, the court did not make a finding that the dual agency agreement revoked Corn's authority to bind the defendants. Instead, the court, relying in part on the existence of the dual agency agreement, concluded that Corn had no actual, apparent or implied authority to bind the defendants.

In its memorandum of decision, the court made the following findings: "Real estate agent Corn did not object to the proposed change in the closing date. At the time of the closing, she had a dual agency agreement and was acting for both parties, although her loyalties were clearly with the buyer." The court then concluded that "Corn had no actual authority to agree to the change in the closing date," that the plaintiffs "failed to prove that Arganese intended Corn to possess the authority to bind him to the significant change which was made in the closing date" and that "Corn, particularly in view of the dual agency agreement, had neither implied nor apparent authority to bind [the defendants]." We conclude that the court's findings are supported by the evidence in the record.

We first set forth the principles that guide our review. Our Supreme Court has stated that "[a]s a general rule, a principal may be bound to contracts executed by an agent if it is within the agent's authority to contract on behalf of that principal ... and the authority to enter into a specified contract includes the authority to make it in the usual form and with usual terms. ... The nature and extent of an agent's authority is a question of fact for the trier where the evidence is conflicting or where there are several reasonable inferences which can be drawn." (Internal quotation marks omitted.) Updike, Kelly & Spellacy, P.C. v. Beckett, 269 Conn. 613, 636, 850 A.2d 145 (2004); see Machado v. Statewide Grievance Committee, 93 Conn.App. 832, 839, 890 A.2d 622 (2006). Accordingly, we review the court's findings with regard to agency and an agent's authority under the clearly erroneous standard. Santa Fuel, Inc. v. Varga, 77 Conn.App. 474, 488-89, 823 A.2d 1249, cert. denied, 265 Conn. 907, 831 A.2d 251 (2003). "A finding of fact is clearly erroneous when there is no evidence in the record to support it ... or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction...