Parente v. Pirozzoli

• Decision Date: 01 February 2005
• Docket Number: No. 24916.,24916.
• Parties: Andrew PARENTE v. Mario PIROZZOLI, Jr.
• Court: Connecticut Court of Appeals

866 A.2d 629

87 Conn.App. 235

Andrew PARENTE v. Mario PIROZZOLI, Jr.

No. 24916.

Appellate Court of Connecticut.

Argued October 25, 2004.

Officially released February 1, 2005.

Robert L. Hirtle, Hartford, for the appellant (defendant).

Campbell D. Barrett, with whom were Kevin W. Hadfield, certified legal intern, and, on the brief, Jonathan P. Budlong and C. Michael Budlong, Simsbury, for the appellee (plaintiff).

LAVERY, C. J., and FLYNN and MIHALAKOS, Js.

Opinion

LAVERY, C. J.

The defendant, Mario Pirozzoli, Jr., appeals from the judgment of the trial court finding him in breach of a partnership agreement and awarding $138,000 in damages to the plaintiff, Andrew Parente. The defendant claims on appeal that the court lacked jurisdiction to enforce the agreement between the parties because the purpose of that agreement was to violate the law. We conclude that the agreement is unenforceable because it is contrary to public policy and, accordingly, reverse in part the judgment of the trial court.

The following facts, as found by the court, and procedural history are relevant to the defendant's appeal. Sometime in 1992, the owners of the Speak Easy Cafe in Berlin approached the plaintiff and offered him the opportunity to run that establishment. The plaintiff had known one of the owners and had leased space adjacent to the establishment since the mid-1970's. He was interested and decided to pursue the opportunity. The plaintiff and the owners reached an agreement whereby the plaintiff would purchase all of the liquor in stock, pay weekly rent and allow the owners to generate revenue from the amusement machines they kept in the establishment. According to the testimony of one of the owners, which the court credited, the plaintiff was the only person with whom the owners negotiated and the only one they would have allowed to operate the establishment. Because the plaintiff previously had been convicted of a felony, he was not able to secure a liquor license. The plaintiff asked the defendant to join him in the undertaking because the latter would be able to get the license. In April, 1993, the parties agreed to work together in some form of joint venture. Because of the plaintiff's felony conviction, all of the legal documentation associated with the business, including a real estate lease and the incorporation papers, was in the defendant's name only. The business was incorporated as Centerfolds, Inc., on June 8, 1993, with the defendant as owner, and the parties began running the establishment in July, 1993. They generally had divided responsibility for the duties involved with the business.

At about that time, the plaintiff's attorney drafted a comprehensive partnership agreement to govern the parties' relations. That agreement, however, was never signed. A less comprehensive agreement¹ was prepared in early 1995 and was executed by the parties.² In August, 1998, the defendant, without consulting the plaintiff, formed a holding company and caused the company to purchase the real estate on which the establishment was located. In April, 1999, the plaintiff's involvement in the day-to-day operation of the business ceased. For a few months thereafter, the defendant sent the plaintiff weekly checks in the amount of $750 that included the notation "buyout."

On January 25, 2000, the plaintiff filed a four count complaint, alleging breach of contract, unjust enrichment, breach of implied contract and conversion. As to the breach of contract count, he averred that the parties owned equal shares of Centerfolds, Inc., by virtue of the 1995 partnership agreement, that the agreement provided for the equal division of profits from the parties' joint business venture, and that the defendant had breached the agreement by denying the plaintiff access to the premises and his fair share of the business' profits since May, 1999. The defendant's answer set forth only general denials of the plaintiff's allegations.

A trial to the court was held on October 22 and 30, 2003. The defendant in his posttrial brief argued, inter alia, that the agreement between the parties was illegal and unenforceable insofar as its purpose was to circumvent the state liquor control statutes.³ The court declined to consider the defendant's argument, noting in its written conclusions of law that illegality is a special defense that, pursuant to Practice Book § 10-50, must be specially pleaded, and that the defendant had not done so. It thereafter concluded that the 1995 partnership agreement constituted a valid contract between the parties and, according to its terms, the plaintiff was entitled to 50 percent of the value of the ongoing business, which value the court found to be $300,000. Accordingly, the court rendered judgment in favor of the plaintiff in part in the amount of $138,000.⁴ This appeal followed.

On appeal, the defendant argues that the court improperly enforced the 1995 partnership agreement because it was an illegal contract. According to the defendant, the matter raises a question of the court's subject matter jurisdiction and, therefore, his failure to specially plead illegality did not amount to a waiver of the court's consideration of that issue. In response, the plaintiff claims that the court correctly found that the defendant had waived the defense by failing to specially plead it. According to the plaintiff, the court, "[c]onsistent with well established legal principles... was required to disregard the defendant's illegality argument and, thus, there is no error." He further contests the defendant's claim that the matter implicated the court's subject matter jurisdiction.

I

As an initial matter, we must determine whether the court properly decided that the defendant's illegality argument could not be addressed because it had not been specially pleaded. After a review of the applicable law, we conclude that the court abused its discretion in declining to consider that claim.⁵

A trial court's decision to decline to review a claim that has not been pleaded specially as required by the rules of practice is reviewable under a deferential standard. See Schilberg Integrated Metals Corp. v. Continental Casualty Co., 263 Conn. 245, 273-74, 819 A.2d 773 (2003). "[W]hen a party properly objects to a violation of the rules of practice, the trial court may disregard the improperly raised claim if doing so is not an abuse of discretion." Id.

Our rules of practice require certain matters to be raised as special defenses, including "illegality not apparent on the face of the pleadings...." Practice Book § 10-50. "`The purpose of requiring affirmative pleading is to apprise the court and the opposing party of the issues to be tried and to prevent concealment of the issues until the trial is underway.'" (Internal quotation marks omitted.) Sivilla v. Philips Medical Systems of North America, Inc., 46 Conn.App. 699, 704, 700 A.2d 1179 (1997), quoting Westport Taxi Service, Inc. v. Westport Transit District, 235 Conn. 1, 24, 664 A.2d 719 (1995). Nevertheless, when a matter required to be specially pleaded by a party is fully litigated at trial without objection from the opposing party, the latter's objection to the special pleading requirement is deemed to have been waived. See Sivilla v. Philips Medical Systems of North America, Inc., supra, at 704-705, 700 A.2d 1179.

Relying on that principle, our Supreme Court has refused to find improper in a trial court's consideration of an unpleaded special defense that was first argued by the defendant in its posttrial brief when the evidence relied on in support of that defense was introduced at trial by the plaintiff in support of its claim. See Web Press Services Corp. v. New London Motors, Inc., 203 Conn. 342, 349, 525 A.2d 57, following remand, 205 Conn. 479, 533 A.2d 1211 (1987). The court noted that in introducing the evidence, the plaintiff did not request any limitation on its use, and the defendant did not object to its introduction. Id. Essentially, by introducing the evidence itself, the plaintiff effectively waived any objection to the defendant's reliance on it in support of a special defense. See id.; see also Sidney v. DeVries, 18 Conn.App. 581, 587, 559 A.2d 1145 (1989) (holding that defendant waived objection to plaintiff's failure to plead special defense to counterclaim when evidence plaintiff relied on "was not objected to by the defendant and was, in part, introduced by the defendant"), aff'd, 215 Conn. 350, 575 A.2d 228 (1990); Nygren v. Potocek, 14 Conn.Supp. 405, 407 (1946) (finding assignment agreement illegal, although illegality not pleaded by defendant, when plaintiff needed to establish agreement's validity in order to recover), aff'd, 133 Conn. 649, 54 A.2d 258 (1947). In short, as the United States District Court for the District of Connecticut has explained in applying an analogous federal rule of pleading, "[f]ailure to plead matter which constitutes an affirmative defense does not ... preclude a party from taking advantage of the opposing party's proof, if such proof establishes the defense." (Internal quotation marks omitted.) Lomartira v. American Automobile Ins. Co., 245 F.Supp. 124, 129 (D.Conn.1965), aff'd, 371 F.2d 550 (2d Cir.1967), quoting 2 J. Moore, Federal Practice (2d Ed.1964) ¶ 8.27[3], p. 1853.

Those holdings are applicable here. At trial, it was the plaintiff, not the defendant, who first introduced evidence pertaining to the need for a separate partnership agreement and to explain why the plaintiff, an alleged coowner, was not named on any of the documents associated with the business. For example, the plaintiff called his former attorney, David P. Mester, as a witness. On direct examination, Mester testified as to the reason the plaintiff wanted a partnership agreement with the defendant, repeatedly indicating that the plaintiff could not be connected to the liquor permit due to his criminal record.⁶ The plaintiff also called Thomas...