Sonepar Distributors New England v. Kobyluck Construction Co. (2010)

MEMORANDUM OF DECISION RE:  OBJECTIONS TO FINDING OF FACT

In this case, the plaintiff Sonepar Distributors of New England has filed an objection to a report of the fact finder (Londregan, ATR) with regard to a report filed with the court on January 14, 2010.

The plaintiff challenges the fact finder's conclusions that service charges or prejudgment interest should not be awarded under the circumstances of this case.   The plaintiff claims that service charges should be awarded because the defendant's credit agreement with the plaintiff expressly called for these charges to be assessed in the event of default.

Standard of Review

“While the reports of [attorney trial referees] ․ are essentially of an advisory nature, it has not been the practice to disturb their findings when they are properly based upon evidence, in the absence of errors of law, and the parties have no right to demand that the court shall redetermine the fact[s] thus found ․” “A reviewing authority may not substitute its findings for those of the trier of the facts.   This principle applies no matter whether the reviewing authority is the Supreme Court ․ the Appellate Court ․ or the Superior Court reviewing the findings of ․ attorney trial referees ․ This court has articulated that attorney trial referees and fact finders share the same function ․ whose determination of the facts is reviewable in accordance with well established procedures prior to the rendition of judgment by the court ․

“Although it is true that when the trial court reviews the attorney trial referee's report the trial court may not retry the case and pass on the credibility of the witnesses, the trial court must review the referee's entire report to determine whether the recommendations contained in it are supported by findings of fact in the report ․

“Finally, we note that, because the attorney trial referee does not have the powers of a court and is simply a fact finder, [a]ny legal conclusions reached by an attorney trial referee have no conclusive effect ․ The reviewing court is the effective arbiter of the law and the legal opinions of [an attorney trial referee], like those of the parties, though they may be helpful, carry no weight not justified by their soundness as viewed by the court that renders judgment ․ Where legal conclusions are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts found by the ․ referee.”  (Citations omitted;  internal quotation marks omitted.)  Alliance Partners, Inc. v. Oxford Health Plans, Inc., 263 Conn. 191, 201-02, 819 A.2d 227 (2003).

The attorney trial referee found that Sonepar Distributors New England opened a credit account for the defendant Kobyluck Construction Company (Finding of Fact # 2).   This credit account included a provision allowing for a service charge at the rate of 1.5 percent per month on unpaid balances.  “Payment is due net 30 days from the date of invoice ․ will add a service charge of 1 1/2% (18% per annum) to all invoices that are more than 60 days past due except where prohibited by law.   Such service charge will accrue with respect to any invoice from the date such invoice is due.   Customer hereby agrees to pay same ․ The undersigned further agrees to pay all expenses, including court costs, legal and administrative expenses, and attorney fees paid or incurred ․” The attorney trial referee further found that on April 9, 2009, an invoice was sent from the plaintiff to the defendant for the sum of $14,118.75.   The attorney trial referee further found that the defendant had not made any payments on the invoice from that date.

The attorney trial referee concluded that the award of service charges or interest in this case was within the discretion of the trier of fact and that the “the hearing officer could not find a distinction between this case law, which arises under General Statutes 37-3a as opposed to a claim for interest pursuant to a written contract” (ATR Conclusion no. 6).   Based upon this review of the case law and the finding that “the retention of payment was not willful by the defendant” the attorney trial referee declined to award service charges at the rate of 1.5% per month.  (ATR conclusions 2 and 7.) Finally the attorney trial referee concluded that although “the contract for credit between the plaintiff and the defendant contains the provision for attorneys fees;  the court should decide the reasonableness of the hourly rate set forth in Trial Exhibit No. 6.” (ATR conclusions 8).

This court finds that in this case where the parties had an express agreement providing for service charges in the event of nonpayment of invoices, is distinct from a situation where there is no agreement as to any interest payments.   In this case, a commercial credit agreement is more akin to a promissory note.   Specifically, with regard to the analysis of whether or not interest is an element of damages in collection on a promissory note, the courts have determined that interest is due and payable.   See Guaranty Bank and Trust Co. v. Dowling, 4 Conn.App. 376, 385-6 (1985).

The court enters the following orders:

The report of the attorney trial referee is accepted to the extent that it determines that there is due from the defendant to the plaintiff the sum of $14,097.05.   Further, the plaintiff is due service charges on that unpaid balance at the rate of 1.5 percent per month from April 9, 2009 through the date of the hearing before the attorney trial referee, November 12, 2009.   The sum is calculated at the rate of $7.05 per day interest for a period of 217 days, or $1,529.53.   The clerk may tax costs in this case in favor of the plaintiff.

The court further notes that in accordance with the report of the attorney trial referee that the plaintiff has filed a motion for determination as to the reasonableness of its request for attorneys fees.  (Motion No. 120).   The court orders the defendant to file any objection it has to the requested award of attorneys fees on or before June 15, 2010.   The court will thereafter render its decision with regard to the attorneys fees.

The Court,

Cosgrove, J.

Cosgrove, Emmet L., J.