Tallmadge Brothers v. Iroquois Gas Transmission Sys.

• Decision Date: 15 March 2000
• Citation: 746 A.2d 1277,252 Conn. 479
• Court: Connecticut Supreme Court
• Parties: (Conn. 2000) TALLMADGE BROTHERS, INC., ET AL. v. IROQUOIS GAS TRANSMISSION SYSTEM, L.P. (SC 16201)

746 A.2d 1277 (Conn. 2000)

TALLMADGE BROTHERS, INC., ET AL. v. IROQUOIS GAS TRANSMISSION SYSTEM, L.P.

(SC 16201)

Connecticut Supreme Court

Argued December 2, 1999

March 15, 2000

James R. Fogarty, with whom was Carolyn A. Collins, for the appellant-appellee (defendant). Thomas M. Cassone, with whom, on the brief, were Lawrence M. Lapine, Robert S. Bello and Christopher T. Coburn, for the appellees-appellants (plaintiffs).

McDonald, C. J., and Borden, Norcott, Katz and Peters, Js.

Peters, J.

OPINION

The dispositive issue in this appeal is whether a general release and merger clause contained in contracts between commercial parties operates to preclude any future claims of contractual liability against the party for whose benefit the general release was executed. We conclude that, under the circumstances of this case, the unambiguous language of the parties' contracts precludes any such claims of liability. Accordingly, we reverse the judgment of the trial court.

The plaintiffs, Tallmadge Brothers, Inc. (Tallmadge Brothers), and Robert J. Sabo, filed a ten count complaint against the defendant, Iroquois Gas Transmission System, L.P. The complaint contained, inter alia, claims for detrimental reliance, breach of contract, unfair trade practices, trespass and fraudulent misrepresentation. Subsequent to the filing of the plaintiffs' complaint, the parties agreed, pursuant to General Statutes §§ 52-425,¹ to submit their case to a committee of the Superior Court, which would hear evidence, find facts and offer its legal recommendations to the court. The committee, former Superior Court Judge Nicholas A. Cioffi, recommended a finding in favor of the plaintiffs on the breach of contract counts and damages awards in the amount of $282,345 for Tallmadge Brothers and $54,000 for Sabo. Thereafter, the trial court, Lewis, J., modified the committee's findings and awards. The court rendered a judgment in favor of the plaintiffs in the amount of $3,203,852 for Tallmadge Brothers, and $355,388 for Sabo. The defendants appealed and the plaintiffs cross appealed from the judgment to the Appellate Court, and we transferred the case to this court pursuant to General Statutes §§ 51-199 (c) and Practice Book §§ 65-1.

The record reveals the following relevant facts. The plaintiffs operate shellfisheries in Long Island Sound, from which they harvest oysters and clams.² Tallmadge Brothers, holds perpetual franchises³ to approximately 20,000 acres of shellfish grounds throughout Long Island Sound, and Sabo has a contractual interest in 163 acres of shellfish grounds. The defendant is the owner and operator of the Iroquois Natural Gas Transmission Pipeline (pipeline), which runs from the Canadian border, through New York and Connecticut, across Long Island Sound, to its terminus on Long Island.

In 1986, the defendant met with the plaintiffs and state and federal officials to discuss its proposal to build the pipeline across shellfish grounds operated by Tallmadge Brothers,⁴ and the possible impact that pipeline construction might have on the plaintiffs' shellfisheries.⁵ Negotiations among the parties did not resume in earnest until January, 1990, at which time Sabo expressed his desire that the pipeline be moved from his shellfish grounds to those of Tallmadge Brothers. In the latter part of 1990, employees of the defendant and the plaintiffs conducted samplings of the shellfish grounds that lay in the various possible paths of the pipeline in order to determine the shellfish density in those areas. In November, 1990, the coastal resources management division of the state department of environmental protection issued, pursuant to federal environmental regulations, a consistency certification letter, which stated that "the proposed [pipeline is] consistent with Connecticut's federally-approved coastal management program, subject to strict adherence to the following conditions as agreed to by [the defendant] and the [d]department of [e]nvironmental [p]rotection."⁶

On December 6, 1990, the parties held a meeting attended by, among others, Sabo, Hillard Bloom, the president of Tallmadge Brothers, and Ross Milne, the defendant's representative during the course of the negotiations. At that meeting, Milne informed all present that the pipeline would be constructed in a 200 foot corridor across Long Island Sound, and that within that corridor "there would be a 100% devastation of shellfish . . . ." Although the parties anticipated that there would be incidental damage caused by the pipeline construction beyond that 200 foot area, they were unable to agree as to the likely extent of that incidental destruction. Subsequent to that meeting, the defendant sent to various contractors bid packages, for the construction of the pipeline. In those packages the defendant described the work area as being 300 feet wide, and the construction specifications called for the dragging of a heavy smoothing beam along a 300 foot wide corridor.⁷ The plaintiffs were not informed about the discrepancy between the width of the work area described in the bid packages and that represented to them by the defendant in their negotiations.

On January 30, 1991, the parties held another meeting, at which the defendant offered Tallmadge Brothers $1,704,540 and Sabo $757,000 as compensation for the expected damage from the pipeline construction.⁸ The defendant subsequently increased these amounts slightly, to $1,730,768 for Tallmadge Brothers, and $769,231 for Sabo, and, in addition, promised to pay damages to be calculated after postconstruction testing of the shellfisheries. Alternatively, the defendant offered the plaintiffs double those amounts as a full and final settlement for all damage caused by, or incident to, construction.

Between February 5 and March 1, the parties exchanged a series of draft settlement contracts. During this period, Tallmadge Brothers was represented by Attorney Joseph Richichi and the defendant was represented by Attorney Anthony Fitzgerald. Sabo did not retain the services of counsel. In the usual manner of commercial negotiations, each party attempted to word the contracts in the manner most favorable to its respective interests.

On February 25, Sabo and the defendant executed the final settlement agreement that is at issue in this case.⁹ Tallmadge Brothers and the defendant did the same on March 1.¹⁰ As compensation for a complete release of the defendant from any and all liability "incident to the construction of the Pipeline," Tallmadge Brothers received $3,661,536, and Sabo received $1,538,462.

Construction of the pipeline began on March 1, 1991, and continued into May of that year. In May, Bloom and Sabo each noticed that the smoothing beam was being dragged well outside the 200 foot work area described in the portion of the settlement agreements restricting the plaintiffs' shell-fishing during the construction period. On May 16, Richichi mentioned to Fitzgerald that the defendant was exceeding the scope of the work area. Fitzgerald then spoke with the defendant, and in that conversation learned, for the first time, of the discrepancy between the size of the work area as defined by the restriction on the plaintiffs' shell-fishing activities, and the size of the work area as specified in the agreement between the defendant and its contractors. Fitzgerald also learned at that time that the larger work area was required by federal and state agencies for environmental reasons.

In March, 1993, the plaintiffs filed the ten count, amended complaint that is the operative complaint for the purposes of this appeal. The complaint alleges, on behalf of both Tallmadge Brothers and Sabo: (1) detrimental reliance by the plaintiffs on the guarantees made by the defendant; (2) breach of contract; (3) unfair trade practices under the Connecticut Unfair Trade Practices Act (CUTPA); General Statutes §§ 42-110a et seq.; (4) trespass onto portions of the plaintiffs' shellfisheries that the defendant had no authority to enter; and (5) fraudulent misrepresentation. In response, the defendant filed an answer and special defenses, in which it asserted, as its main special defense, that the plaintiffs' claims were precluded by the general release provision in each of the settlement agreements, and the plaintiffs' acceptance of the liquidated damages as full and final settlement "for all damages which might occur during construction of the pipeline . . . ." The defendant also filed a counterclaim against the plaintiffs.¹¹

In March, 1996, the parties jointly agreed to submit the case for trial to a committee of the Superior Court, as provided for by §§ 52-425. See footnote 1 of this opinion. The parties selected former Judge Cioffi to be the committee, and authorized him: (1) to hear evidence and make a report of his factual findings; and (2) to make a "`recommendation to the Court as to the conclusions of law to be applied [to the facts found] . . . .'" After a lengthy trial, the committee issued its findings of fact and a suggested opinion. In response to motions to correct filed by all parties, the committee heard additional evidence relating to the extent of the plaintiffs' damages and thereafter issued amended findings and an amended opinion.

The crux of the committee's findings and opinion was its conclusion that "[t]he written contract between the parties [does] not express the entire understanding or the intention of the parties. Those terms understood but not contained in the written contract were that the actual construction area for the pipeline was a 200 foot corridor (100 feet on each side of the actual transmission pipe); that construction would be confined to this 200 foot corridor; and that the only other damage that would be done to the plaintiffs' shellfish beds would be occasioned by siltation and the construction barges' anchors and cables." As a consequence of these findings, the committee concluded that "there should be a...