Onthank v. Onthank

• Decision Date: 20 July 2021
• Docket Number: AC 43949
• Citation: 260 A.3d 575,206 Conn.App. 54
• Parties: John B. ONTHANK v. Pierce ONTHANK et al.
• Court: Connecticut Court of Appeals

206 Conn.App. 54

260 A.3d 575

John B. ONTHANK

v.Pierce ONTHANK et al.

AC 43949

Appellate Court of Connecticut.

Argued May 24, 2021

Officially released July 20, 2021

Pierce Onthank and Susan Onthank, self-represented, the appellants, with whom, on the brief, was John B. Kaiser, Cambridge (defendants).

John B. Onthank, self-represented, the appellee (plaintiff).

Moll, Clark and Eveleigh, Js.

MOLL, J.

The self-represented defendants, Pierce Onthank and Susan Onthank,¹ appeal from the judgment of the trial court, rendered following a bench trial, in favor of the self-represented plaintiff, John B. Onthank, on count one of his second revised complaint asserting a breach of contract claim.² On appeal, the defendants claim that the court erred in (1) rejecting their special defense asserting that the contract at issue—a promissory note—was unenforceable because the plaintiff did not provide them with a notice of default in strict compliance with the terms of the note and, thus, failed to satisfy a condition precedent to the enforcement thereof, and (2) awarding the plaintiff damages on the breach of contract claim because the court improperly declined to credit them $120,000 to account for the purported value of one million shares of stock transferred to the plaintiff. We disagree and, accordingly, affirm the judgment of the trial court.

The trial court found the following facts. In June, 2009, the defendants executed several documents, including a loan agreement and a promissory note, relating to a $300,000 loan from the plaintiff to the defendants. The one year fixed term loan was made to assist the defendants in purchasing a home in Wilton. The loan agreement required, inter alia, the execution of a mortgage on the Wilton property in favor of the plaintiff. Although the defendants made payments to the plaintiff between 2009 and 2016, the defendants still owed the plaintiff a substantial amount on the loan in September, 2016, around which time it was discovered that a valid mortgage in favor of the plaintiff had not been recorded on the Wilton land records.

On November 18, 2017, the plaintiff commenced this action. On September 20, 2018, the plaintiff filed a second revised complaint (i.e., the operative complaint). The plaintiff's four count second revised complaint asserted the following claims against the defendants: (1) breach of contract (count one); (2) unjust enrichment (count two); (3) statutory theft (count three); and (4) fraud (count four). In support of his claims, the plaintiff alleged, inter alia, that the defendants had failed to repay him the $300,000, plus interest, that he had loaned to them. On March 21, 2019, the defendants filed an answer and special defenses. Relevant to this appeal, the sixth special defense directed to the breach of contract claim asserted in general terms that the plaintiff neither alleged nor established that he had fulfilled every condition precedent to suing on the promissory note. In their answer, the defendants admitted to having borrowed the money from the plaintiff, but generally denied the substantive allegations of wrongdoing.³ On April 3, 2019, the plaintiff filed a reply to the defendants’ special defenses.

The matter was tried to the trial court, Hon. Kenneth B. Povodator, judge trial referee, on August 1 and 2, 2019. During trial, the plaintiff withdrew count four of his second revised complaint sounding in fraud. Thereafter, the parties submitted posttrial briefs.

On January 30, 2020, the court issued its forty-six page memorandum of decision. With respect to the plaintiff's breach of contract claim, the court concluded that the promissory note was "prima facie enforceable" and that the defendants breached the note by nonpayment of the full principal amount as of the one year anniversary of the loan (i.e., the maturity date). The court proceeded to reject all of the defendants’ special defenses to the breach of contract claim,⁴ including the sixth special defense, which the court construed as alleging that the plaintiff failed to comply with a condition precedent to the enforcement of the note by not providing the defendants with a notice of default in strict compliance with the terms of the note. The court found in favor of the plaintiff on count one and awarded the plaintiff $388,530.76 in compensatory damages, with per diem interest of $61.64.

With respect to the plaintiff's unjust enrichment claim, because the plaintiff prevailed on the breach of contract claim, the court rendered judgment for the defendants on the unjust enrichment claim on the ground that it was a legally inconsistent, alternative theory of liability. The court further concluded that, in the event that its judgment in the plaintiff's favor on the breach of contract claim was later reversed, judgment should enter in favor of the plaintiff on count two.⁵

With respect to the plaintiff's claim of statutory theft, the court rendered judgment in the defendants’ favor. This appeal followed.⁶ Additional facts and procedural history will be set forth as necessary.

I

The defendants first claim that the trial court erred in concluding that they breached their contract with the plaintiff. Specifically, the defendants contend that the court improperly rejected their sixth special defense asserting that the plaintiff did not strictly comply with the notice of default provision of the promissory note, thereby failing to satisfy a condition precedent to its enforcement. They contend that the court improperly construed the notice provision and found it satisfied under the circumstances of this case. The plaintiff claims, inter alia, that the trial court properly concluded that he substantially complied with the notice provision. We agree with the plaintiff.

We begin our analysis by setting forth the relevant standard of review and applicable legal principles. "A promissory note is nothing more than a written contract for the payment of money, and, as such, contract law applies." (Internal quotation marks omitted.) Fidelity Bank v. Krenisky , 72 Conn. App. 700, 707, 807 A.2d 968, cert. denied, 262 Conn. 915, 811 A.2d 1291 (2002). "In construing a contract, the controlling factor is normally the intent expressed in the contract, not the intent which the parties may have had or which the court believes they ought to have had. ... Where ... there is clear and definitive contract language, the scope and meaning of that language is not a question of fact but a question of law. ... In such a situation our scope of review is plenary ...." (Internal quotation marks omitted.) Aurora Loan Services, LLC v. Condron , 181 Conn. App. 248, 265, 186 A.3d 708 (2018). "Under the plenary standard of review, we must decide whether the court's conclusions are legally and logically correct and supported by the facts in the record." (Internal quotation marks omitted.) Estela v. Bristol Hospital, Inc., 179 Conn. App. 196, 207–208, 180 A.3d 595 (2018).

The following additional facts, as found by the trial court, and procedural history are relevant to our consideration of the defendants’ claim. The loan agreement required the defendants to execute a mortgage in favor of the plaintiff on the Wilton property. The defendants attempted to comply with this requirement by filing a copy of the loan agreement and the note on the land records, but the filing lacked even a property description and did not constitute a mortgage in favor of the plaintiff. Furthermore, a number of liens subsequently were placed on the Wilton property, including by the Internal Revenue Service (IRS) with respect to tax liabilities. Accordingly, any subsequently filed encumbrance would be behind the IRS lien and the first mortgage, leaving the plaintiff with little or no protection.

Although the defendants made payments to the plaintiff totaling $148,678 between 2009 and 2016, the defendants still owed the plaintiff a substantial amount on the loan in September, 2016, at which time the plaintiff declared a default. By way of background, the parties’ promissory note provided that certain enumerated events of default "shall not occur until [the defendants] are first sent a notice of the default or deficiency by certified mail, postage prepaid or personal delivery , whereupon [the defendants] shall have the opportunity to cure the default or deficiency within five (5) days of the date of the notice. For purposes hereof, the date of the notice shall be deemed to be the earlier of the date of the receipt of the notice of default by [the defendants] and the date which is the third business day after the date the notice is deposited, postage prepaid, in the United States Mail addressed to [the defendants], whether or not said notice is received." (Emphasis added.)

On September 9, 2016, Susan sent an e-mail to the plaintiff explaining that she had seen a spreadsheet that he had sent calculating the amount owed on the promissory note and that she and Pierce "clearly ha[d] no other choice but to give [the plaintiff] the [Wilton] house." In that e-mail, Susan also asked the plaintiff to "move forward and send the certified letter."

In a letter dated September 12, 2016, the plaintiff explicitly declared a default (default notice). The plaintiff wrote in relevant part that "[a]s I have exhausted my efforts to contact either of you by phone or resolve this via [e-mail], I am exercising my rights under our agreement and am declaring this loan in ‘Default’ under the [terms of the promissory note] ...." In the default notice, the plaintiff further explained that he was sending it because the promissory note was "in breach and not being met or upheld in the spirit of" the parties’ agreement. The court found that the defendants actually had received the default notice.

In support of their sixth special defense, the defendants maintained that the plaintiff failed to comply with the provision that a notice of default be sent "by certified mail, postage prepaid or personal delivery,"...