Vissa v. Pagano

• Decision Date: 17 April 2007
• Docket Number: No. 26494.,26494.
• Citation: 919 A.2d 488,100 Conn.App. 609
• Court: Connecticut Court of Appeals
• Parties: Robert J. VISSA, Jr., et al. v. Alan R. PAGANO.

919 A.2d 488

100 Conn.App. 609

Robert J. VISSA, Jr., et al. v. Alan R. PAGANO.

No. 26494.

Appellate Court of Connecticut.

Argued January 10, 2007.

Decided April 17, 2007.

David M. Wallman, Stamford, for the appellants (plaintiffs).

Andrew P. Nemiroff, with whom, on the brief, was Eric R. Posmantier, Greenwich, for the appellee (defendant).

SCHALLER, McLACHLAN, and STOUGHTON, Js.

McLACHLAN, J.

The plaintiffs, Robert J. Vissa, Jr., and Pagano Seafood, Inc.,¹ appeal from the judgment of the trial court rendered following a hearing in damages before an attorney trial referee (referee). On appeal, the plaintiffs claim that the court improperly (1) rendered judgment affirming the recommendation of the referee to award damages in favor of the individual plaintiff and not the plaintiff corporation, (2) rendered a judgment of damages without shifting the burden of proof to the defendant, Alan R. Pagano, to demonstrate why a constructive trust should not be imposed in favor of the plaintiff corporation, and (3) permitted the defendant to retain assets and profits belonging to the plaintiff corporation that the defendant misappropriated in a fiduciary capacity. We conclude that the plaintiffs have failed to furnish us with an adequate record to review their claims. Accordingly, we affirm the judgment of the trial court.

This case has a convoluted history, spanning approximately the last fifteen years. In February, 1992, the individual plaintiff, a lobsterman by trade, and the defendant, a fish merchant, formed the plaintiff corporation, a wholesale seafood business. The company began operating in Norwalk in March, 1992, with the individual plaintiff and the defendant each contributing equally to the venture.

The business relationship between the parties turned sour in September, 1992, when the defendant informed the individual plaintiff that he no longer wanted to do business as Pagano Seafood, Inc. On September 9,1992, the defendant paid himself a salary of $5000, and the next day he continued to operate the business as a sole proprietorship called "Pagano's."²

On October 13, 1994, the defendant paid $36,888.98 to the individual plaintiff, which, according to the defendant, represented the individual plaintiff's capital contributions to the start-up of the business, along with interest through January, 1992. On September 18, 1998, the plaintiffs filed a five count complaint against the defendant, alleging breach of contract, misappropriation, unjust enrichment, breach of fiduciary duty, breach of an agreement to arbitrate and violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. The plaintiffs' third count, which alleged, in part, unjust enrichment, was brought ostensibly as a shareholder derivative action by the individual plaintiff on behalf of the plaintiff corporation.

On April 16, 1999, the defendant filed a motion for summary judgment as to all counts. On September 29, 1999, the court issued a memorandum of decision, finding that the majority of the plaintiffs' claims were barred by the statute of limitations and granting the motion for summary judgment as to all but the portion of the third count that alleged unjust enrichment.³ With respect to the unjust enrichment cause of action, the court found that the allegations were sufficient to state a derivative claim for unjust enrichment in that the complaint alleged that the defendant caused the operation of the business to be taken over by a competitor, the defendant, and that the plaintiff corporation suffered a detriment as a result.

On November 18, 1999, the defendant moved again for summary judgment on the grounds that the plaintiffs had not stated adequately a claim for unjust enrichment and that the claim was barred by the statute of limitations. On May 1, 2000, the court issued a memorandum of decision denying the motion for summary judgment. Subsequently, the court referred the case to the referee for trial pursuant to General Statutes § 52-434(a)(4) and Practice Book § 19-2A.

On November 7, 2000, and January 25, 2001, the referee conducted a trial on the liability phase of the case.⁴ On August 13, 2001, the referee issued a report on the issue of liability, finding in favor of the individual plaintiff on the unjust enrichment claim, concluding, "I find in favor of the plaintiff, Robert J. Vissa, Jr., on the issue of liability." (Emphasis added.) The plaintiffs did not object to the liability report.⁵

On September 23, 2003, the parties came before the referee for the damages phase. According to the referee, the individual plaintiff contended that he was entitled to the value of 49 percent of the business of the company that the defendant formed upon splitting with the individual plaintiff, as of January 2, 2001. The defendant argued that the measure of damages should be the difference between the amount that the defendant had already paid to the individual plaintiff, i.e., the $36,888.98, paid on October 13, 1994, representing the individual plaintiff's capital contributions, and the actual value of those assets in September, 1992. Each side presented expert testimony on the issue of damages.

On August 2, 2004, the referee issued a report, siding with the defendant. Specifically, the referee determined that it would not be equitable to award any part of the increased value of the defendant's business to the individual plaintiff because the individual plaintiff neither contributed to the success of the enterprise since 1992 nor bore any risk of loss in the business. Accordingly, the referee found that the individual plaintiff was entitled to $17,501.02, which reflected the difference between the amount already paid by the defendant to the individual plaintiff and the value of the business as of September 30, 1992, with interest.

On August 20, 2004, the plaintiffs, pursuant to Practice Book § 19-14, filed an objection to the referee's report and recommendations. On April 2, 2005, the court issued a memorandum of decision affirming the referee's decisions. With respect to damages, the court found no material error in the referee's report or other sufficient reason to render the report unacceptable. Accordingly, the court adopted the referee's recommendations and rendered judgment in favor of the individual plaintiff in the amount of $34,127. This appeal followed.

I

The plaintiffs first claim that the court improperly affirmed the referee's determination awarding damages to the individual plaintiff, without regard to the plaintiff corporation. The plaintiffs argue that because the only matter before the court was a shareholder derivative action brought by the individual plaintiff on behalf of the plaintiff corporation, the court's damages award to only the individual plaintiff was improper.⁶ Essentially, the plaintiffs argue that the court improperly rendered a judgment of damages in favor of the wrong plaintiff. Because the record is inadequate to permit appellate review, we decline to reach the merits of this claim.⁷

To ensure proper appellate review of a claim, "[i]t is incumbent upon the appellant to take the necessary steps to sustain its burden of providing an adequate record for appellate review.... [A]n appellate tribunal cannot render a decision without first fully understanding the disposition being appealed.... Our role is not to guess at possibilities, but to review claims based on a complete factual record developed by a trial court." (Internal quotation marks omitted.) Stutz v. Shepard, 279 Conn. 115, 125-26, 901 A.2d 33 (2006). "[A]n articulation is appropriate where the trial court's decision contains some ambiguity or deficiency reasonably susceptible of clarification.... [P]roper utilization of the motion for articulation serves to dispel any . . . ambiguity by clarifying the factual and legal basis upon which the trial court rendered its decision, thereby sharpening the issues on appeal." (Internal quotation marks omitted.) Stone-Krete Construction, Inc. v. Eder, 289 Conn. 672, 685-86, 911 A.2d 300 (2006).

Here, beginning with the complaint, the record is replete with ambiguity with respect to the identity of the party plaintiffs seeking relief. The complaint does not reference the plaintiff corporation until the operative third count, which contains no heading.⁸ In relevant part, that count states, "Plaintiff Pagano Seafood, Inc. brings this action by Robert Vissa, a stockholder therein." The fifth count of the complaint identifies two plaintiffs, the individual plaintiff and the plaintiff corporation. The prayer for relief in the complaint begins, however, in the singular, seeking relief only for "the [p]laintiff...."

This ambiguity continues in the referee's report on liability. In that report, the referee framed the issue by stating that "[t]he only remaining cause of action in the plaintiffs' case is a derivative claim of unjust enrichment, which is found in count three of the plaintiff's original complaint. The issue is whether the defendant, Mr. Pagano, to the detriment of the plaintiff Mr. Vissa, obtain[ed] something of value to which he was not entitled ...." (Citation omitted; emphasis added; internal quotation marks omitted.) The referee concludes the report by finding "in favor of the plaintiff, Robert J. Vissa on the issue of liability." (Emphasis added.)

The report of the referee on damages begins by noting that in the prior decision on liability, the referee "found in favor of the plaintiff on his unjust enrichment claim." (Emphasis added.) Throughout that report, the referee discussed only the individual plaintiff, without reference to the plaintiff corporation as a party plaintiff, and without indication that the individual plaintiff had brought the action in his capacity as a shareholder on behalf of the plaintiff corporation. Neither the liability report nor the damages report provides a discussion regarding the referee's factual or legal bases for awarding...