Town of Stratford v. Winterbottom

• Decision Date: 17 June 2014
• Docket Number: No. 35825.,35825.
• Citation: Town of Stratford v. Winterbottom, 151 Conn.App. 60, 95 A.3d 538 (Conn. App. 2014)
• Court: Connecticut Court of Appeals
• Parties: TOWN OF STRATFORD v. Edmund WINTERBOTTOM.

151 Conn.App. 60

95 A.3d 538

TOWN OF STRATFORD

v.Edmund WINTERBOTTOM.

No. 35825.

Appellate Court of Connecticut.

Argued March 7, 2014.

Decided June 17, 2014.

Michael S. Casey, Shelton, for the appellant(plaintiff).

Frank B. Cochran, New Haven, with whom was Edmund E. Winterbottom, self-represented, for the appellee(defendant).

LAVINE, BEAR and WEST, Js.^*

LAVINE, J.

This is one of three cases in which the plaintiff, the town of Stratford(town), sought to recoup a portion of the “cash-out” benefits paid to former employees that were authorized by the town's then mayor who terminated their employment.¹The town appeals from the judgment of the trial court rendered in favor of the defendant, Edmund E. Winterbottom, on the town's complaint and the defendant's counterclaim.On appeal, the town claims that the court erred by determining that (1) the town improperly reduced the defendant's salary, (2) the mayor has the unilateral power to modify an employee's monetary benefits, (3)the defendant may keep his “cash-out” in good conscience, and (4)the defendant was entitled to attorney's fees for bad faith litigation.²We affirm the judgment of the trial court.

The following facts and procedural history are relevant to our resolution of this appeal.On May 14, 2010, the town commenced this action, which sounded in three counts: money had and received, unjust enrichment, and conversion.³The town alleged that it and the defendant entered into an employment agreement (agreement) under which the town paid the defendant a salary and extended benefits in exchange for his services.On December 11, 2009, the then mayor, James R. Miron,⁴ terminated the defendant's employment, and the town paid the defendant accrued benefits consistent with the agreement.The town also alleged that it paid the defendant moneys in excess of that to which he was entitled, specifically $9744.56.Moreover, the town alleged that it was free from any moral or legal obligation to make the overpayment and that the defendant in equity and good conscience had no right to retain the overpayment.On January 27, 2010, the town demanded that the defendant return the overpayment, but he refused.

In response, the defendant filed an answer, special defenses and a counterclaim for breach of contract.He denied the town's allegations that he was overpaid, had no right in good conscience to retain the alleged overpayment, and had been unjustly enriched.He also pleaded three special defenses: accord and satisfaction, equitable estoppel or laches, and unclean hands.On October 19, 2012, the defendant amended his answer to plead a fourth special defense of collateral estoppel predicated on Stratford v. Castater, Superior Court, judicial district of New Haven, Docket No. CV–10–6011629–S, 2011 WL 1288675(March 15, 2011), aff'd, 136 Conn.App. 522, 46 A.3d 945, cert. denied, 307 Conn. 903, 53 A.3d 218(2012), a case in which the town alleged the same three causes of action and materially similar facts against another former town employee, Eric Castater.

Prior to trial, the parties stipulated to the following facts.The defendant was employed by the town as the director of human resources from May 12, 2008 through December 11, 2009.He was a salaried, full-time employee under a written, at-will, agreement that entitled him to benefits pursuant to policies incorporated in the agreement.The defendant's annual salary under the agreement was $90,884, and he was required to work 37.5 hours per week.The defendant worked directly under Miron, who was mayor from December 11, 2005 through December 12, 2009.Miron negotiated and signed the agreement, and terminated the defendant's employment.After he terminated the defendant's employment, Miron approved the categories and hours used to calculate the accrued benefits owed the defendant.The town paid the defendant benefits, which were referred to as a “cash-out.”The “cash-out” was calculated using a nominal hourly rate and was subject to withholding and other deductions.

The parties also stipulated that in the spring of 2009, the defendant made a monetary contribution to Miron's reelection campaign.When the town council (council) approved the town budget for July 1, 2009 through June 30, 2010, it denied Miron's proposed raise for the defendant and directed Miron to reduce the defendant's annual salary from $90,884 to $85,884.As a consequence of the reduction in the defendant's annual salary, the nominal hourly rate used to calculate his “cash-out” was reduced from $46.61 to $44.04.Moreover, a new town administration under Mayor John A. Harkins took office on December 14, 2009.In January, 2010, the town sent the defendant a W–2 form for 2009 that included his “cash-out” income for social security purposes and itemized deductions.On or about February 1, 2010, the defendant received a letter from Kevin Kelley, the assistant town attorney, notifying him that the town claimed a debt of $9744.56.

The court held the first day of trial on December 19, 2012, when it took evidence and heard arguments regarding the defendant's collateral estoppel special defense.The court recessed to consider the special defense, and the parties' stipulated facts.On January 30, 2013, the court issued a memorandum of decision in which it declined to apply the doctrine of collateral estoppel in this case.

The court heard evidence on the town's complaint and the defendant's counterclaim on March 5, 2013, along with the case of Stratford v. Wilson, Superior Court, judicial district of Fairfield, Docket No. CV–10–6010163–S, 2013 WL 3388652(June 10, 2013).The court issued its memorandum of decision on June 10, 2013.In its decision, the court stated that the issue raised by the town's complaint was whether Miron improperly computed some of the defendant's “cash-out” by including hours for perfect attendance, vacation days, professional development days, and sick days.The court found the value of the alleged overpayment to be $9744.56 and that the town wanted full reimbursement.The court stated that the claim alleged in the defendant's counterclaim was for wages wrongfully withheld due to the town's having reduced the defendant's salary by $3392.40 that resulted in a $848.10 underpayment of his “cash-out.”

The court made the following findings of fact pursuant to the parties' stipulation.The defendant was the town's human resources director from May 12, 2008 through December 11, 2009.Miron hired him pursuant to an at-will agreement that entitled the defendant to certain benefits, including a salary of $90,844 per year and a 37.5 hour work week.In setting the town's budget for July 1, 2009 through July 30, 2010, the council denied the raise for the defendant proposed by Miron and instead reduced his salary from $90,844 per year to $85,884 per year.The reduction in the defendant's salary caused his nominal hourly rate to be reduced from $46.61 to $44.04.

Miron lost his bid for reelection, and Harkins assumed office as the town's mayor on December 14, 2009.Prior to Harkins' taking office, the defendant accepted Miron's offer to terminate his employment.Due to the termination of his employment, the defendant was paid for accrued benefits in a “cash-out” that was included in his last paycheck.Miron personally approved the “termination notice” listing the categories and hours to be used in determining the defendant's “cash-out.”The value of the “cash-out” was calculated by using a nominal hourly rate and was subject to withholding and other deductions.The hourly rate used to calculate the defendant's “cash-out” was $44.04.

In January, 2010, under the Harkins administration, the town sent the defendant a W–2 form, which included the “cash-out” income for social security purposes along with appropriately itemized deductions.The assistant town attorney sent the defendant a letter dated January 27, 2010, informing him that the town claimed a debt of $9744.56.

In adjudicating the town's claim for money had and received, the court quoted the analysis of the court, Lager, J., in Stratford v. Castater,supra, Superior Court, Docket No. CV–10–6011629–S.Pursuant to Judge Lager's decision in Castater, the court stated that it “must first determine whether the cash-out payments were made by mistake by determining whether the mayor had the power to alter the cash-out amount under the town charter, and then, decide whether equity warrants the court invalidating this transfer of funds.”After construing various sections of the charter and the agreement, the court concluded that Miron did not exceed his authority and that the “cash-out” was not paid by mistake.

The court also considered whether the defendant had an equitable right to retain the “cash-out.”It found that, although the defendant, as the human resources director, had participated with Miron in calculating the “cash-outs” of others whose employment Miron had terminated, he did not participate in the calculation of his own “cash-out.”The court also found that, after Miron left office, the town provided the defendant with a W–2 form that included the “cash-out” as part of his wages, and that the defendant paid taxes on the “cash-out.”The court therefore concluded that the defendant had retained the “cash-out” in good conscience.

When it adjudicated the town's claim for unjust enrichment, the court again looked to Judge Lager's decision in Castater, noting that “because [Castater] had paid taxes on [the ‘cash-out,’]‘it would be inequitable to apply the doctrine of unjust enrichment against him to order restitution in the town's favor.’ ”Moreover, the court found that the town had failed to prove that the defendant was unjustly enriched.The court concluded that it would be inequitable to apply the doctrine of unjust enrichment to him.

As to the defendant's counterclaim, the court stated that the defendant was making a claim against the town for lowering his salary in...