Rossman v. Morasco, No. 27290.

• Decision Date: 23 June 2009
• Docket Number: No. 27970.,No. 27290.,No. 28442.
• Citation: 115 Conn.App. 234,974 A.2d 1
• Court: Connecticut Court of Appeals
• Parties: Robert J. ROSSMAN v. Patricia MORASCO et al.

974 A.2d 1

115 Conn.App. 234

Robert J. ROSSMAN v. Patricia MORASCO et al.

No. 27290.

No. 27970.

No. 28442.

Appellate Court of Connecticut.

Argued February 5, 2009.

Decided June 23, 2009.

Paul A. Sobel, Bridgeport, for the appellant in AC 27290 and AC 27970 and the appellee in AC 28442 (plaintiff).

Michael S. Lynch, Shelton, for the appellees in AC 27290 and AC 27970 (named defendant et al.) and for the appellant in AC 28442 (defendant Guardian Alarm Services, Inc.).

BISHOP, BEACH and ROBINSON, Js.

BEACH, J.

These are consolidated appeals. The plaintiff, Robert J. Rossman, brought an action arising from a business dispute with the defendants Guardian Alarm Services, Inc. (Guardian Alarm), Tracy Emro, Jerome Terracino and Thomas Terracino and Patricia A. Morasco, Jerome Terracino's son and wife, respectively. Guardian Alarm brought a counterclaim against the plaintiff. The jury found in favor of the plaintiff on his claim that Jerome Terracino had breached his fiduciary duty to him but found that the breach did not proximately cause any damages. The jury found the plaintiff liable on the counts of Guardian Alarm's counterclaim alleging unjust enrichment, tortious interference and a violation of General Statutes § 42-110a et seq., the Connecticut Unfair Trade Practices Act (CUTPA). In AC 27290 and AC 27970, the plaintiff claims that the trial court abused its discretion by (1) denying his motion to set aside the verdict, (2) denying his motion for judgment notwithstanding the verdict, (3) denying his motion in limine and (4) granting Guardian Alarm's motions for punitive damages and for attorney's fees on its counterclaim alleging a violation of CUTPA. In AC 28442, Guardian Alarm claims that the court improperly denied its posttrial motion for a constructive trust. We affirm the judgment of the trial court.

The following facts, as reasonably could have been found by the jury, and procedural history are relevant to our resolution of these consolidated appeals. This action arose out of a business dispute between the plaintiff and his uncle, Jerome Terracino. They owned Guardian Systems, Inc. (Guardian Systems), a company that sold and serviced security systems. The plaintiff owned a 25 percent interest in Guardian Systems, and Jerome Terracino owned a 75 percent interest. By the end of 1996, the plaintiff and Jerome Terracino disagreed about the way in which Guardian Systems should be run, and there was considerable friction between them. The plaintiff formed his own company in April, 1997; this company changed its name to United Alarm Services, Inc. (United Alarm), in September, 1997. In March, 1997, Jerome Terracino removed the plaintiff as an officer and director of Guardian Systems, though the plaintiff remained a 25 percent shareholder. Emro, Jerome Terracino and Thomas Terracino became the officers and directors of Guardian Systems.

Jerome Terracino was the president.

On August 29, 1997, Jerome Terracino held an emergency corporate meeting. He had notified Thomas Terracino, Emro and Morasco, but not the plaintiff, of this meeting. At that meeting, the sale of all Guardian Systems' assets to Guardian Alarm was proposed and ultimately approved. Guardian Systems retained a 25 percent ownership in Guardian Alarm, and the other 75 percent was owned by Morasco, who, in exchange, was to contribute $5000 in cash and was to be obligated to loan additional moneys. Before the end of 1997, the plaintiff decided not to wait any longer to settle his differences with Jerome Terracino and began to escalate his efforts to solicit customers to switch accounts from Guardian Alarm to United Alarm.

In March, 2000, the plaintiff brought a multiple count complaint against the defendants. In December, 2004, the plaintiff filed a second amended complaint in which he alleged breach of fiduciary duty, theft, conversion, unjust enrichment and a violation of CUTPA as to all defendants. The defendants subsequently filed a motion to strike, which the court granted as to the counts alleging theft and conversion. On May 25, 2000, the defendants filed a counterclaim against the plaintiff. The counts ultimately submitted to the jury, all alleged by Guardian Alarm only, were claims of tortious interference, a violation of CUTPA and unjust enrichment.¹

Following trial, the jury answered interrogatories and returned a verdict. The jury found in favor of all the defendants on the plaintiff's claims of unjust enrichment and violation of CUTPA, and found in favor of Thomas Terracino and Emro on the plaintiff's claims of breach of fiduciary duty. It found in favor of Morasco, Guardian Alarm, Thomas Terracino and Emro on the plaintiff's claims of "substantial assistance or encouragement to [Jerome Terracino] in the breach of [his] fiduciary dut[y]." The jury found in favor of the plaintiff only as to the claim that Jerome Terracino had breached his fiduciary duty to the plaintiff, but the jury found that the breach did not proximately cause the plaintiff any damages. With respect to Guardian Alarm's counterclaim, the jury found the plaintiff liable on all three counts and awarded total damages of $125,000.

In August, 2005, the plaintiff filed a motion to set aside the verdict and a motion for judgment notwithstanding the verdict. The court denied both motions. Pursuant to General Statutes §§ 42-110b et seq. and 42-110g (d), respectively, of CUTPA, Guardian Alarm subsequently filed a motion for punitive damages in the amount of $150,000 and motion for an award of attorney's fees in the amount of $84,887. The court granted the motions and awarded $25,000 in punitive damages and $42,539.18 in attorney's fees and costs.

The count of Guardian Alarm's counterclaim that alleged a constructive trust was left to the court's determination.² In October 2005, following trial, Guardian Alarm filed a motion for an order imposing a constructive trust. Guardian Alarm sought resolution of the count of its counterclaim alleging a constructive trust. It requested the court to impose on the plaintiff and United Alarm a constructive trust over the alarm monitoring accounts then with the plaintiff and United Alarm but which had previously been accounts of Guardian Alarm. The court denied Guardian Alarm's motion.

These appeals followed. Additional facts will be set forth as necessary.

I

AC 27290, AC 27970

A

The plaintiff first claims that the court abused its discretion in denying his motion to set aside the verdict.³ The plaintiff argues that it was inconsistent for the jury to have found that Jerome Terracino breached his fiduciary duty to the plaintiff but that Thomas Terracino and Emro did not. The jury found in favor of the plaintiff on his breach of fiduciary duty claim against Jerome Terracino but awarded zero damages. The plaintiff also argues that the jury could not reasonably have found that Jerome Terracino's conduct did not cause the plaintiff any damages. We disagree.

We begin by setting forth our standard of review. "The standard of review governing our review of a trial court's denial of a motion to set aside the verdict is well settled. The trial court possesses inherent power to set aside a jury verdict which, in the court's opinion, is against the law or the evidence.... [The trial court] should not set aside a verdict where it is apparent that there was some evidence upon which the jury might reasonably reach [its] conclusion, and should not refuse to set it aside where the manifest injustice of the verdict is so plain and palpable as clearly to denote that some mistake was made by the jury in the application of legal principles.... Ultimately, [t]he decision to set aside a verdict entails the exercise of a broad legal discretion ... that, in the absence of clear abuse, we shall not disturb." (Internal quotation marks omitted.) Embalmers' Supply Co. v. Giannitti, 103 Conn.App. 20, 32-33, 929 A.2d 729, cert. denied, 284 Conn. 931, 934 A.2d 246 (2007).

It was not inconsistent for the jury to have found that Jerome Terracino breached his fiduciary duty but that Thomas Terracino and Emro did not breach theirs.⁴ During deliberations, the jury asked the court for clarification on the question of whether Guardian Systems was legally obligated to notify the plaintiff, as a minority shareholder, of the August 29, 1997 meeting. In response, the court instructed that a sale of assets that leaves a corporation without significant continuing business activity requires the approval of the majority of shareholders, and, if such approval is to be sought at a meeting, the corporation shall notify each shareholder.⁵ On the basis of this additional instruction, and the evidence presented at trial, the jury could have concluded that Jerome Terracino, the president of Guardian Systems, assumed responsibility for the notification and actually did the notifying. He had an obligation to notify the plaintiff of the August 29, 1997 meeting at which the sale of all of Guardian Systems assets to Guardian Alarm was proposed and ultimately approved. The evidence presented at trial revealed that on the morning of August 29, 1997, Jerome Terracino called an emergency corporate meeting and notified Thomas Terracino, Emro and Morasco of this meeting but did not notify the plaintiff of the meeting. The jury, therefore, reasonably could have found that Thomas Terracino and Emro did not violate any duties they owed to the plaintiff in connection with the August 29, 1997 transaction but that Jerome Terracino breached his fiduciary duty by not notifying the plaintiff of the meeting.⁶

The plaintiff also argues that the jury could not reasonably have found that Jerome Terracino's conduct did not cause the plaintiff any damages. On the basis of our review of the record, we conclude that the jury reasonably could have found that Jerome Terracino's breach of fiduciary duty did not cause the plaintiff any damages.⁷ The jury could have determined that Jerome Terracino's...