Villanueva v. Villanueva

• Decision Date: 20 July 2021
• Docket Number: AC 43619
• Parties: Javier VILLANUEVA v. Rafael VILLANUEVA
• Court: Connecticut Court of Appeals

206 Conn.App. 36

260 A.3d 568

Javier VILLANUEVA

v.Rafael VILLANUEVA

AC 43619

Appellate Court of Connecticut.

Argued April 22, 2021

Officially released July 20, 2021

John R. Hall, for the appellant (defendant).

Mark M. Kratter, for the appellee (plaintiff).

Moll, Cradle and Clark, Js.

CRADLE, J.

In this case arising from a dispute between two brothers who operated a landscaping business together, the defendant, Rafael Villanueva, appeals from the judgment of the trial court, rendered after a court trial, in favor of the plaintiff, Javier Villanueva, and awarding the plaintiff damages in the amount of one half of the value of the business assets that the defendant maintained following the dissolution of that business. On appeal, the defendant claims that the court erred in finding that (1) an implied partnership existed between the parties, (2) the plaintiff provided credible evidence of his damages, and (3) the plaintiff's action was not barred by the statute of limitations. We affirm the judgment of the trial court.¹

The trial court set forth the following relevant facts. "In 2005, [the plaintiff] started a small landscaping company, known as Villanueva Landscaping, that mowed lawns and did some patching and sealing pavement driveways. [The defendant] started working for [the plaintiff] in 2007; [the defendant] worked for him initially as an employee, but as the business grew the brothers became de facto equal partners, sharing the profits, and the management of the business. No written partnership agreement was ever entered into by the brothers. The brothers split their duties, as over time, one crew did landscaping and the other did masonry and tree work. [The plaintiff] worked on increasing the customer base and supervised a masonry/tree crew in the field; [the defendant] took over as bookkeeper and was responsible for paperwork, but also supervised the landscaping crew. The business grew from approximately twelve to fifteen customers during the first years, to approximately fifty customers in 2009, when they purchased a customer list from another landscaper, to approximately eighty-five customers in 2014. The number of workers grew from [the plaintiff] in 2005, to the original crew of two, [the defendant] and [the plaintiff], in 2007, to seven workers divided into two crews of four and three by 2014.

"Although initially [the plaintiff] received customer payments, [the defendant] took over the back-office work, including all billing and banking. The business deposited revenues into two bank accounts at Webster Bank and Bank of America, controlled by [the defendant]. [The plaintiff] did not have a tax [identification] number so the business accounts were opened by [the defendant] and he was in charge of deposits and withdrawals. Funds were withdrawn from the accounts by both brothers as needed to pay their personal expenses rather than drawing a salary.² On May 24, 2011, [the defendant] formed Villanueva Landscaping, LLC, with himself as sole member. The reason [the plaintiff] was not made a member was that he lacked a tax [identification] number, but the business of the LLC was the continuation of Villanueva Landscaping and the brothers remained partners.

"Sometime in 2014, [the plaintiff] found himself locked out of the landscaping business as [the defendant], without warning, took all the customers, crew, tools, vehicles and equipment used in the landscaping side of the business, together with all [of] the cash in the accounts.³ [The defendant] left behind the masonry/tree equipment and vehicles. In 2014, landscaping fees represented 90 [percent] of the business income. The portion left to [the plaintiff], the masonry and tree work, represented 10 [percent] of revenues. Although [the defendant] referred to the business being ‘divided’ in early 2014, the credible evidence is that there was no discussion or agreement about splitting the business, but, rather [the defendant] imposed the division on [the plaintiff] when he took over the landscaping portion of the business as his own, along with the funds in the accounts."

By way of a one count complaint dated June 19, 2018, the plaintiff commenced this action alleging the breach of an "unwritten and unspoken implied contract" between the parties. In response, the defendant filed an answer and three special defenses. By way of special defense, the defendant alleged that the plaintiff's claim was barred by the three year statute of limitations for an oral contract pursuant to General Statutes § 52-581 and/or the three year statute of limitations for conversion pursuant to General Statutes § 52-577. The defendant also alleged that the plaintiff's claim was barred by the doctrine of laches and that he was entitled to a setoff by the plaintiff's "retention of certain of the business assets in which both parties had an interest."

On October 30, 2019, following a brief court trial at which both parties testified, the court filed a memorandum of decision, wherein it found that an implied partnership existed between the parties and that the defendant breached the terms of the implied partnership agreement. The court rejected the defendant's special defenses, and awarded damages to the plaintiff in the amount of $86,500, representing one half of the value of the partnership property that had been taken by the defendant. This appeal followed.

I

The defendant first contends that the court erred in finding an implied partnership agreement between the parties. We disagree.

"It is well settled that the existence of an implied in fact contract is a question of fact for the trier. ... Accordingly, our review is limited to a determination of whether the decision of the trial court is clearly erroneous. A finding of fact is clearly erroneous when there is no evidence in the record to support it ... or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. ... Because it is the trial court's function to weigh the evidence and determine credibility, we give great deference to its findings. ... In reviewing factual findings, [w]e do not examine the record to determine whether the [court] could have reached a conclusion other than the one reached. ... Instead, we make every reasonable presumption ... in favor of the trial court's ruling. ...

"With respect to implied in fact contracts, we have recognized that [w]hether [a] contract is styled express or implied involves no difference in legal effect, but lies merely in the mode of manifesting assent. ... A true implied [in fact] contract can only exist [however] where there is no express one. It is one which is inferred from the conduct of the parties though not expressed in words." (Citations omitted; internal quotation marks omitted.) Connecticut Light & Power Co. v. Proctor , 324 Conn. 245, 258–59, 152 A.3d 470 (2016).

Here, the court found that "there is strong evidence the parties were de facto partners." The court reasoned: "Although perhaps [the] plaintiff initially hired [the] defendant as an employee, the credible evidence is that, in later years, they regarded each other as partners compensated by withdrawals from the business accounts for personal expenses, which may be characterized as draws and distributions; not salary." The court further explained: "Although they divided their responsibilities between front office and back office, and by areas of the business, landscaping and paving, they acted as mutual agents and jointly managed the business and shared its profits. The LLC was formed to facilitate the business’ finances, banking and reporting but, as between themselves, the brothers remained general partners. Their joint purchase of real estate using corporate funds epitomized the informal understanding between the brothers. The informal nature of distributions and draws, and the absence of contrary credible proof, suggests they were equal partners. The totality of evidence satisfied the test for formation of a partnership ...."

The defendant argues that, "[w]hile the actions of the parties as found by the trial court in this matter would appear to provide a basis for finding an implied partnership agreement, such a finding cannot survive the plaintiff's own denial that any such agreement existed." Although the defendant accurately recounts the plaintiff's testimony denying the existence of a partnership agreement, the court's finding that, by his conduct, the plaintiff manifested an intent to operate the business alongside the defendant is amply supported by the record. We therefore conclude that the court's finding of an implied partnership was not clearly erroneous.

II

The defendant next claims that the court erred in concluding that the plaintiff provided credible evidence of his damages. We are not persuaded.

"Well established legal principles govern our review of damage awards. In an action for breach of contract, [t]he plaintiff has the burden of proving the extent of the damages suffered. ... Although the plaintiff need not provide such proof with [m]athematical exactitude ... the plaintiff must nevertheless provide sufficient evidence for the trier to make a fair and reasonable estimate. ... Our Supreme Court has held that [t]he trial court has broad discretion in determining damages. ... The determination of damages involves a question of fact that will not be overturned unless it is clearly erroneous. ... In ...