Sullo Investments, LLC c. Moreau ( 2014 )

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SULLO INVESTMENTS, LLC v. MARCI MOREAU
(AC 35866)
DiPentima, C. J., and Beach and Bear, Js.*
Submitted on briefs March 14—officially released July 1, 2014
(Appeal from Superior Court, judicial district of
Hartford, Schuman, J.)
Patrick W. Boatman filed a brief for the appellant
(defendant).
Mario R. Borelli filed a brief for the appellee
(plaintiff).
Opinion
BEAR, J. The defendant, Marci Moreau, appeals from
the judgment of the trial court rendered in favor of the
plaintiff, Sullo Investments, LLC, regarding the defen-
dant’s liability as guarantor on a promissory note that
her father-in-law, Aurelien Moreau, executed in favor
of the plaintiff. On appeal, the defendant claims that
the court erred because (1) it determined the intent of
the parties to the note and guarantee on the basis of
extrinsic evidence and not the language of those docu-
ments, in violation of the parol evidence rule; (2) the
note was not supported by consideration; and (3) her
special defense of lack of consideration was admitted
due to the plaintiff’s failure to reply to it in timely
fashion.1 We affirm the judgment of the trial court.
The following facts and procedural history are rele-
vant to our resolution of the present appeal. In 2006, the
defendant and her husband, Michael Moreau, formed a
limited liability company, Sauce, LLC, as part of their
plan to open a restaurant called Sauce. Michael Moreau
‘‘took the steps to actually start the restaurant.’’ Sauce,
LLC, decided in November, 2006, to lease property
located at 124 Hebron Avenue in Glastonbury as the
premises for the restaurant. Shortly thereafter, in late
2006 or early 2007, Michael Moreau began to talk to
Joseph Sullo about purchasing restaurant equipment
from one of Sullo’s companies, Classic Restaurant Sup-
ply, LLC (Classic). After Michael Moreau made an
unsuccessful attempt to finance the purchase with a
loan from Sovereign Bank, Sullo agreed to finance the
purchase through a loan from the plaintiff, another one
of Sullo’s companies.
The plaintiff sought to put a second mortgage on the
Moreaus’ residence in order to secure the loan. A title
search conducted by the plaintiff’s attorney at the time
revealed that there was little to no equity in the resi-
dence, however, and it decided against proceeding with
the loan. By that time, in approximately August, 2007,
the Moreaus were ‘‘well into the project.’’ Michael
Moreau conveyed to Sullo that he was ‘‘desperate’’ to
secure the loan because the restaurant was ‘‘supposed
to open in . . . two months . . . .’’ He and Sullo then
began to talk about the possibility of securing the loan
instead with a mortgage on the residence of Aurelien
Moreau, Michael Moreau’s father.
Michael Moreau subsequently approached Aurelien
Moreau and asked him to cosign a loan for the purchase
of restaurant equipment. Aurelien Moreau agreed to do
so, and he executed a note in favor of the plaintiff on
September 20, 2007, and an open-ended mortgage deed
in favor of the plaintiff on September 27, 2007. These
two documents were part of a set of documents
e-mailed from the plaintiff’s attorney at the time to
Michael Moreau on September 20, 2007. Also included
in the set of documents was a guarantee, which the
defendant and Michael Moreau executed on September
26, 2007.
The note was in the amount of $255,000. The parties
stipulated before trial that ‘‘Aurelien Moreau did not
personally receive payment of any part of the principal
amount of the Note.’’ Instead, the plaintiff ‘‘advanced
[the amount] to Classic . . . on behalf of Sauce, LLC
. . . for the purchase of restaurant equipment and sup-
plies for a restaurant owned and operated by Sauce,
LLC.’’ All of the payments on the note that the plaintiff
received were made by Sauce, LLC, with checks signed
by both Michael Moreau and the defendant. According
to Sullo, these payments amounted to ‘‘the first ten
[thousand dollars] . . . [and] then after . . . little
dribs and drabs.’’ Sauce, LLC, eventually stopped mak-
ing payments in late 2008, portending the restaurant’s
closure in late September, 2009. After the closure, the
plaintiff sold the restaurant equipment for approxi-
mately $46,000 to the owners of the next restaurant to
occupy the premises at 124 Hebron Avenue.
The first filing in the present action was the plaintiff’s
application for a prejudgment remedy on May 23, 2012,
to which the plaintiff attached a proposed complaint.
The operative complaint, filed on August 15, 2012, is
identical to the proposed complaint and alleges that
the defendant2 is liable under the guarantee for the
amount of the note, as well as for interest, costs, and
fees incurred by the plaintiff in both the present action
and the plaintiff’s simultaneously commenced foreclo-
sure action against Aurelien Moreau. We note with
respect to the foreclosure action that the parties agreed
to consolidate it with the present action on July 18, 2012,
and that the court rendered a judgment by stipulation in
favor of the plaintiff on June 10, 2013. Sullo Invest-
ments, LLC v. Moreau, Superior Court, judicial district
of Hartford, Docket No. CV-11-6026789-S (June 10,
2013).3
The defendant filed her answer and two special
defenses on August 30, 2012. Her first special defense
is that the note and therefore her obligation as guarantor
are unenforceable for want of consideration because
the plaintiff has never lent money to Aurelien Moreau.
The defendant’s second special defense is that the plain-
tiff must adjust any obligation that she may have as
guarantor to reflect the sale of the restaurant equipment
to the new tenants of the premises formerly occupied
by Sauce, LLC. The plaintiff did not file a reply to the
defendant’s answer and special defenses, but denied
them orally during closing argument at trial.
The parties tried the matter to the court on May 29
and June 6, 2013. On June 6, 2013, the court orally
rendered its decision in favor of the plaintiff. It subse-
quently issued an order on July 1, 2013, in which it
referenced its June 6, 2013 oral decision, noted the
parties’ agreement concerning the amount of damages,
attorney’s fees and costs, and rendered judgment in
favor of the plaintiff and against the defendant in the
amount of $295,010.38. This appeal followed. Additional
facts and procedural history will be set forth as nec-
essary.
I
The defendant first claims that the court’s holding
that she is liable as guarantor is contingent upon its
erroneous finding that the parties to the note and guar-
antee intended for Sauce, LLC, to receive the loan pro-
ceeds in order to purchase restaurant equipment, even
though the language in both documents clearly states
that the parties intended for only Aurelien Moreau to
receive the loan proceeds. There are two prongs to the
defendant’s claim. First, the defendant argues that the
court could not have made its finding on the basis of
the language in the note or guarantee, and, therefore,
the court violated the parol evidence rule by considering
extrinsic evidence that contradicted or varied such lan-
guage. Even if we determine that the parol evidence
rule does not apply, the defendant further argues that
the court nonetheless erred with respect to its finding
of intent because the evidence at trial demonstrated
that Aurelien Moreau was unaware of the transaction’s
bona fide terms. We are not persuaded.
A
Because the parol evidence rule is a rule of substan-
tive contract law the defendant’s claim involves a ques-
tion of law to which we afford plenary review. See Conn
Acoustics, Inc. v. Xhema Construction, Inc., 88 Conn.
App. 741, 745, 870 A.2d 1178 (2005). ‘‘The rule is prem-
ised upon the idea that when the parties have deliber-
ately put their engagements into writing, in such terms
as import a legal obligation, without any uncertainty
as to the object or extent of such engagement, it is
conclusively presumed, that the whole engagement of
the parties, and the extent and manner of their under-
standing, was reduced to writing. After this, to permit
oral testimony, or prior or contemporaneous conversa-
tions, or circumstances, or usages [etc.], in order to
learn what was intended, or to contradict what is writ-
ten, would be dangerous and unjust in the extreme.
. . .
‘‘The parol evidence rule does not of itself, therefore,
forbid the presentation of parol evidence, that is, evi-
dence outside the four corners of the contract concern-
ing matters governed by an integrated contract, but
forbids only the use of such evidence to vary or contra-
dict the terms of such a contract. Parol evidence offered
solely to vary or contradict the written terms of an
integrated contract is, therefore, legally irrelevant.
When offered for that purpose, it is inadmissible not
because it is parol evidence, but because it is irrelevant.
By implication, such evidence may still be admissible
if relevant (1) to explain an ambiguity appearing in the
instrument; (2) to prove a collateral oral agreement
which does not vary the terms of the writing; (3) to
add a missing term in a writing which indicates on its
face that it does not set forth the complete agreement;
or (4) to show mistake or fraud. . . . These recognized
exceptions are, of course, only examples of situations
where the evidence (1) does not vary or contradict the
contract’s terms, or (2) may be considered because the
contract has been shown not to be integrated, or (3)
tends to show that the contract should be defeated or
altered on the equitable ground that relief can be had
against any deed or contract in writing founded in mis-
take or fraud.’’ (Citations omitted; emphasis in original;
internal quotation marks omitted.) TIE Communica-
tions, Inc. v. Kopp, 218 Conn. 281, 288–89, 589 A.2d
329 (1991).
The court held with respect to the issue of intent the
following: ‘‘The note specifically states that . . . ‘[t]he
mortgage is part of a commercial transaction’ . . .
[a]nd that . . . ‘[t]he monies are not to be used for
personal, family or household purposes’ . . . . There
is nothing misleading about this language. If [the par-
ties] did not understand that clear language, they could
have consulted a lawyer. . . . [Aurelien] Moreau testi-
fied, as [the plaintiff’s attorney] just notes, not only
then but on other occasions, that he understood that
he would not be getting any money, and that instead
the proceeds would go to Sauce [LLC], either in money
or equipment. So the defendants, who are educated
people, with some experience with mortgages and busi-
ness, actually understood the basic purpose of the
loan.’’
The defendant’s argument requires us to accept her
erroneous interpretation of the note and guarantee as
providing that the parties to both documents intended
for only Aurelien Moreau to receive the loan proceeds.
We decline to do so. ‘‘The intent of the parties as
expressed in a contract is determined from the language
used interpreted in the light of the situation of the
parties and the circumstances connected with the trans-
action. . . . [T]he intent of the parties is to be ascer-
tained by a fair and reasonable construction of the
written words . . . .’’ (Internal quotation marks omit-
ted.) Prymas v. New Britain, 122 Conn. App. 511, 517,
3 A.3d 86, cert. denied, 298 Conn. 915, 4 A.3d 833 (2010).
None of the language used or words written in the note
or guarantee, however, expressly or implicitly states
that the parties intended for only Aurelien Moreau to
receive the loan proceeds. In contrast, as observed by
the court, the note expressly states that ‘‘[t]he [m]aker
warrants and represents that the [l]oan is for business
or investment purposes . . . that the transaction of
which th[e] [m]ortgage is a part is a ‘commercial trans-
action’ as defined by the statutes of the [s]tate of Con-
necticut . . . [and that] [m]onies now or in the future
to be advanced to or on behalf of [the] [b]orrower
are not and will not be used for personal, family or
household purposes.’’
The defendant acknowledges as much by crafting her
interpretation of the note and guarantee on the basis
of what they do not state. Specifically, the defendant
asserts with respect to the note the following:
‘‘[N]owhere in the note does it state that Aurelien
Moreau intended to borrow $255,000 for the benefit of
. . . Sauce, LLC, or that such monies would be for-
warded for the benefit of Sauce, LLC, and/or [Michael
Moreau], without previous authority and/or consent in
writing.’’ She further asserts with respect to the guaran-
tee: ‘‘Nowhere in the language of the guarant[ee] does
it indicate that the loan proceeds were to be used for
the benefit of Sauce, LLC, for the purchase of restaurant
equipment. Nor did it indicate that Aurelien Moreau
was obtaining the loan for the benefit of Sauce, LLC.’’
We note in response that our well established standards
provide that we interpret contracts on the basis of the
language used, not omitted, therein. The defendant’s
argument thus fails because the court could not have
violated the parol evidence rule where the evidence
upon which it relied could not have contradicted or
varied terms not present in either the note or guarantee.
B
The defendant’s collateral argument that the court
nonetheless erred because the evidence at trial did not
support the court’s finding of intent also fails. Again,
the defendant challenges the court’s finding of intent
on the ground that the evidence demonstrated Aurelien
Moreau’s lack of awareness regarding the transaction’s
bona fide terms. ‘‘[T]he determination of what the par-
ties intended to encompass in their contractual commit-
ments is a question of the intention of the parties, and
an inference of fact. As an inference of fact, it is not
reversible unless the trial court could not reasonably
have arrived at the conclusion that it reached.’’ Bead
Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266,
274–75, 439 A.2d 314 (1981). The plaintiff’s attorney
engaged in a lengthy colloquy with Aurelien Moreau at
trial in which Aurelien Moreau repeatedly affirmed that
he understood the transaction’s bona fide terms,4 even
though he previously testified that he had not known
in September, 2007, that he had ‘‘voluntarily given a
$255,000 mortgage on [his] home.’’ Furthermore, Aure-
lien Moreau stated at both the beginning and end of
his trial testimony that he understood that he was
‘‘cosign[ing] in case something happen[ed] and [to] pro-
vide some funds for [Michael Moreau].’’ We accordingly
hold that the court in the present action reasonably
could have arrived at the conclusion that it reached on
the issue of intent, given the totality of the evidence
at trial.5
II
The defendant also claims that the court erred
because there was no consideration to support the note
and therefore the guarantee, invalidating her obligation
thereunder.6 Specifically, the defendant argues that con-
sideration did not flow between the plaintiff and Aure-
lien Moreau because the former did not pay the loan
proceeds to the latter, even though the loan proceeds
were the benefit for which Aurelien Moreau bargained.
We are not persuaded.
‘‘It almost goes without saying that consideration is
[t]hat which is bargained-for by the promisor and given
in exchange for the promise by the promisee . . . .
We also note that [t]he doctrine of consideration does
not require or imply an equal exchange between the
contracting parties. . . . Consideration consists of a
benefit to the party promising, or a loss or detriment
to the party to whom the promise is made. . . .
Whether an agreement is supported by consideration
is a factual inquiry reserved for the trier of fact and
subject to review under the clearly erroneous stan-
dard.’’ (Internal quotation marks omitted.) Martin
Printing, Inc. v. Sone, 89 Conn. App. 336, 345, 873 A.2d
232 (2005). ‘‘The conclusion drawn from the facts so
found, i.e., whether a particular set of facts constitutes
consideration in the particular circumstances, is a ques-
tion of law . . . and, accordingly, is subject to plenary
review.’’ (Internal quotation marks omitted.) Milford
Bank v. Phoenix Contracting Group, Inc., 143 Conn.
App. 519, 529, 72 A.3d 55 (2013).
The court held with respect to the issue of consider-
ation the following: ‘‘The defendants claim that there
was no consideration in the underlying note; however,
the note explicitly provides that the creditor would loan
$255,000. In any event, the consideration does not have
to be specified in the note. Here, Aurelien Moreau’s
consideration was the benefit of helping his son finance
the purchase of restaurant equipment, so there was
consideration for the note. I find that it was valid, and
that the defendant . . . is bound by it. Well, in fact,
Aurelien Moreau is bound by it, and [the defendant] is
bound as guarantor of a valid note.’’
The defendant’s characterization of the loan proceeds
as the benefit for which Aurelien Moreau bargained
necessarily relies upon her interpretation of the note
as stating the parties’ intent for only Aurelien Moreau
to receive the loan proceeds, which we already have
deemed untenable in part I A of this opinion. Further-
more, the defendant does not cite to any relevant bind-
ing authority to support her proposition that contract
law requires the consideration supporting the note to
have flowed from the plaintiff to Aurelien Moreau in
the form of loan proceeds. Given (1) the trial court’s
factual findings on the issue of intent, which we have
held to be not erroneous,7 and (2) our nonspecific, well
established definition of consideration, which this court
has held to apply to nonfinancial bargained-for benefits;
see Deutsch Bank National Trust Co. v. DelMastro, 133
Conn. App. 669, 679-–81, 38 A.3d 166, cert. denied, 304
Conn. 917, 40 A.3d 783 (2012); we conclude that the
trial court did not err in holding that the consideration
underlying the note was the benefit that Aurelien
Moreau received in helping Michael Moreau purchase
the restaurant equipment.8
III
The defendant’s final claim is that the court erred in
holding that there was consideration to support the
note because her first special defense regarding the
lack of consideration was admitted under our rules of
practice by virtue of the plaintiff’s failure to reply to it
in timely fashion.9 This claim is without merit.
This claim requires us ‘‘to interpret the scope of [cer-
tain] rules of practice; accordingly, we are presented
with a question of law over which our review is ple-
nary.’’ Zirinsky v. Zirinsky, 87 Conn. App. 257, 269,
865 A.2d 488, cert. denied, 273 Conn. 916, 871 A.2d 372(2005). Practice Book § 10-50 provides in relevant part:
‘‘Facts which are consistent with [the plaintiff’s] state-
ments [of fact] but show, notwithstanding, that the
plaintiff has no cause of action, must be specially
alleged. . . .’’ See also Fidelity Bank v. Krenisky, 72
Conn. App. 700, 705, 807 A.2d 968, cert. denied, 262
Conn. 915, 811 A.2d 1291 (2002). The admission of a
special defense accordingly entails the admission of the
facts pleaded therein. To this end, we note that the rule
of practice upon which the defendant relies, Practice
Book § 10-19, further provides in relevant part that
‘‘[e]very material allegation in any pleading which is
not denied by the adverse party shall be deemed to be
admitted . . . .’’ Assuming arguendo that the defen-
dant is correct in positing that the plaintiff’s failure to
file a timely reply prompts the application of the rule,
the plain language of the rule establishes its effect to
be the admission of the allegations contained in the
defendant’s special defenses.
The defendant declares in her first special defense
that Aurelien Moreau’s obligation under the note and
her obligation under the guarantee are ‘‘unenforceable
for want of consideration.’’ These are legal conclusions
and not factual allegations, however, because ‘‘[t]he
sufficiency of consideration is a question of law based
upon the evidence . . . .’’ Middlebury v. Steinmann,
189 Conn. 710, 716 n.3, 458 A.2d 393 (1983). The plain
and unambiguous language of Practice Book § 10-19
does not apply to legal conclusions. Cf. Birchard v.
New Britain, 103 Conn. App. 79, 85, 927 A.2d 985 (‘‘[a]
judicial admission dispenses with the production of
evidence by the opposing party as to the fact admitted,
and is conclusive upon the party making it’’ [emphasis
added; internal quotation marks omitted]), cert. denied,
284 Conn. 920, 933 A.2d 721 (2007). The defendant has
not cited to any authority that establishes otherwise.
Furthermore, the allegations in the first special defense
that the plaintiff has never lent money to Aurelien
Moreau were before the court as uncontroverted facts
at trial because the parties had stipulated to them
beforehand. The defendant’s claim thus fails on multiple
levels: theoretically, because the rule of practice upon
which she relies does not apply, and practically,
because the allegations that she argues should have
been before the court as judicial admissions were
before it as stipulated facts.
The judgment is affirmed.
In this opinion the other judges concurred.
* The listing of judges reflects their seniority status on this court as of
the date that this case was submitted.
1
The defendant’s statement of the issues provides for a fourth issue of
whether the court erred in finding that the plaintiff ever made any loan to
Aurelien Moreau. The defendant has not briefed this issue for this court,
however, and we therefore decline to address it because ‘‘[w]e are not
required to review claims that are inadequately briefed,’’ let alone claims
that are not briefed at all. (Internal quotation marks omitted.) Paoletta v.
Anchor Reef Club at Branford, LLC, 123 Conn. App. 402, 406, 1 A.3d 1238,
cert. denied, 298 Conn. 931, 5 A.3d 491 (2010).
2
Michael Moreau is not a defendant in the present action.
3
‘‘Appellate courts may take judicial notice of files of the trial court in
the same or other cases.’’ Stuart v. Freiberg, 142 Conn. App. 684, 687 n.3,
69 A.3d 320, cert. granted on other grounds, 310 Conn. 921, 77 A.3d 142 (2013).
4
The following colloquy occurred between the plaintiff’s attorney and
Aurelien Moreau:
‘‘Q. You understood at that time that he needed someone to provide
additional backing for him in order to . . . obtain the loan, in other words
to cosign for the loan?
‘‘A. I cosigned with him. . . .
‘‘Q. Yes, okay. And you understood that you would not personally be
receiving any money from that loan. Correct?
‘‘A. Yes.
‘‘Q. And . . . you understood at the time that the restaurant, Sauce, LLC,
would be receiving the money for that loan?
‘‘A. Yes.
‘‘Q. And at the time that you signed [the note], you weren’t under . . .
threat of force, were you?
‘‘A. No.’’
5
Because we have determined that the evidence at trial was sufficient
for the court to have reasonably arrived at the conclusion that it reached
on the issue of intent, we need not address the defendant’s perplexing
contention that Aurelien Moreau could not have understood the transaction’s
bona fide terms due to Michael Moreau’s status as the plaintiff’s agent at
all relevant times.
6
The defendant does not claim that her guarantee lacked consideration,
nor could she reasonably do so in light of the following language of the
guarantee: ‘‘Guarantor hereby waives and agrees not to assert or take advan-
tage of any defense based upon . . . [t]he consideration for this Guaranty
(or lack or inadequacy thereof) . . . .’’
7
We also note the following exchange between the defendant and the
plaintiff’s attorney during her trial testimony:
‘‘Q. So you understood that Sauce, LLC, was receiving the benefit of that
arrangement in order to be able to purchase the equipment. Correct?
‘‘A. If it’s a benefit, yes.’’
8
In light of the court’s finding of consideration for the note, and our
affirmance thereof, we need not decide whether the language of the guaran-
tee set forth in footnote 6 of this opinion applies to bar the defendant’s
argument that the note lacks consideration sufficient to provide consider-
ation for the guarantee.
9
Even though the defendant refers to both of her special defenses in
making this claim, we address only her first special defense. We do so
because none of the defendant’s claims on appeal implicate the issue underly-
ing her second special defense, which is whether she has a right to reduce
any obligation that she may have under the guarantee by virtue of the sale
of the restaurant equipment.