Blumberg Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc. et al. (2010)

MEMORANDUM OF DECISION

The court heard argument on March 22, 2010 concerning the defendants' motion for summary judgment.   After considering the parties' arguments, the court issues this memorandum of decision.   For the reasons set forth below, the motion is granted.

I

BACKGROUND

In its complaint, first count, which is premised on breach of contract, the plaintiff, Blumberg Associates Worldwide, Inc. (BAW), alleges that it is a Connecticut corporation, located in West Hartford, Connecticut.   BAW alleges that, on July 19, 2006, it entered into an agreement with Brown & Brown of Connecticut, Inc. (Brown & Brown) and its parent, Brown & Brown, Inc. (Parent), entitled “Subway Program Agreement,” a copy of which is attached to the complaint as Exhibit A (Agreement).

In the Agreement, the Subway Program (Program) means any insurance program whereby Brown & Brown offers to Subway restaurant franchisees certain insurance policies which they are required or permitted to buy.   In the section entitled “Background,” the parties acknowledged that BAW made introductions and facilitated communications which were instrumental in leading to Brown & Brown's participation concerning the Program.   BAW further alleges that Brown & Brown's participation in the Program has provided and continues to provide significant revenue to Brown & Brown.

The Agreement provides for compensation to BAW for its facilitation services with respect to the Program, commencing with the Commission Effective Date, which was January 1, 2006.   See Agreement, ¶ 3;  complaint, first count, ¶¶ 9-11.

BAW also alleges that, on or about February 26, 2008, Brown & Brown and Parent sent BAW a letter, which referred to the Agreement, and which stated that “this letter shall serve as notice that Brown & Brown is terminating the Agreement for Cause, as defined under Section 4(b)(i)(B) of the Agreement.”   See complaint, first count, ¶ 12.   In the letter, Brown & Brown and its Parent state that “Cause” “includes the loss or suspension of BAW's resident insurance license in its state of domicile, if such loss or suspension is not cured within ninety (90) days of such loss or suspension.”   See complaint, first count, ¶ 14.   The plaintiff attached a copy of the letter to the complaint as Exhibit B. See complaint, first count, ¶ 12.   In paragraph 4(b)(i)(B), page 6, the Agreement provides that “Cause” includes “the loss or suspension of BAW's resident insurance license in its state of domicile, if such loss or suspension is not cured within ninety (90) days of such loss or suspension ․”

BAW further alleges that “[t]he loss or suspension of BAW's license referred to in the Letter did not occur on or after July 19, 2006, the date the parties entered into the Agreement.”   See complaint, first count, ¶ 18.   Rather, as alleged in the complaint, first count, paragraph 15, in the letter, Brown & Brown and its Parent stated that BAW's resident insurance license was cancelled on January 31, 2006.

BAW also alleges that, prior to receiving the letter, it had no knowledge that its license was suspended (see complaint, first count, ¶ 25) and that “[u]pon receiving the Letter and learning of the suspension of its License, BAW took the necessary procedural steps to have its License reinstated;  the License was reinstated within ninety (90) days of the Letter and is in full force and effect ․” See complaint, first count, ¶ 24.   BAW asserts that its license was reinstated as of May 15, 2008.

Concerning receipt from the Connecticut Insurance Department (Department) of a license renewal notice, BAW alleges, on information and belief, that, in June 2004, Brown & Brown and/or its Parent changed BAW's address at the Department from its West Hartford, Connecticut address to the same address of Brown & Brown in Newington, Connecticut, without BAW's authorization, knowledge or consent.   BAW alleges that, until its investigation subsequent to receiving the letter, it had no knowledge of the change of its address at the Department.   BAW also claims that Brown & Brown and/or its Parent received a November 2005 license renewal notice from the Department concerning BAW's license, but did not forward the renewal notice to BAW, did not contact the Department to advise them of the address error, and did not return the notice to the Department.   As a result, BAW claims that Brown & Brown breached the “Further Assurances” terms of the Agreement, paragraph 10, and caused the temporary suspension of BAW's license.   See complaint, first count ¶¶ 27-36.

In the first count, paragraphs 37-38, BAW asserts that the grounds cited by the defendants in the letter as “Cause” for terminating the Agreement do not constitute a material, actionable breach of the Agreement and do not constitute “Cause” for termination;  therefore, Brown & Brown has breached the Agreement.   BAW claims that Brown & Brown has failed to pay monies to BAW when due, and failed to deliver required financial information.

In the second count, BAW reiterates the allegations of the first count and claims that Brown & Brown has been unjustly enriched.   In the third count, based on substantially the same allegations, BAW seeks to recover based on quantum meruit.   BAW's fourth count, which was premised on the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq.  (CUTPA), was stricken.   See memorandum of decision, dated July 14, 2009 (# 110).   In the fifth count, based on a guaranty, BAW alleges that Brown & Brown's Parent is liable for and obligated to BAW for the damages incurred by BAW.

The defendants seek summary judgment on the first, second, third, and fifth counts of the complaint.   As to the first count, they contend that they are entitled to judgment because the Agreement was properly terminated and because BAW's failure to maintain its Connecticut license amounts to a prior breach of the Agreement.   As to the second and third counts, the defendants assert that they cannot be sustained since they are solely based on the same subject matter that forms the basis of the breach of contract claim in the first count and the enforceable Agreement, which expressly set forth the terms of the parties' agreement, precludes recovery based on unjust enrichment or quantum meruit.   As to the fifth count against the Parent, they argue that it may not stand once the court has entered judgment for Brown & Brown on the underlying claims.

In response, BAW contends that disputed issues of material fact preclude summary judgment.   In particular, BAW lists:  (1) whether the defendants exercised their discretion to terminate the Agreement in bad faith;  (2) whether the defendants deprived BAW of physical access to its insurance license files, of which the defendants had possession;  (3) whether the defendants changed BAW's business address with the Connecticut Department of Insurance to the defendants' business address, and then failed to forward critical notices regarding the renewal and subsequent expiration of BAW's license;  (4) whether the defendants knew, or reasonably should have known, when they executed the Agreement in July 2006 that BAW's Connecticut license had expired;  and (5) whether the defendants knew by no later than early 2007 that BAW's license had expired.

Certain material facts are undisputed.   On January 31, 2006, prior to the execution of the Agreement, BAW lost its Connecticut insurance producer license.   The Agreement was entered into on July 19, 2006.   By letter dated February 26, 2008, Brown & Brown informed BAW that Brown & Brown was terminating the Agreement for cause, as defined in the Agreement.   BAW was issued a new license on May 15, 2008.   Additional references to the facts are set forth below.

II

STANDARD OF REVIEW

“Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  (Internal quotation marks omitted.)  Southwick At Milford Condominium Association, Inc. v. 523 Wheelers Farm Road, Milford, LLC, 294 Conn. 311, 318, 984 A.2d 676 (2009).   “The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue.”  (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 11, 938 A.2d 576 (2008).

“Only evidence that would be admissible at trial may be used to support or oppose a motion for summary judgment.   See Practice Book [§ 17-46].”   Home Ins. Co. v. Aetna Life & Casualty Co., 235 Conn. 185, 202-203, 663 A.2d 1001 (1995).   However, the Supreme Court has stated that parties may “knowingly waive ․ compliance with the procedural provisions of the Practice Book relating to motions for summary judgment.”  (Footnote omitted.)  Krevis v. Bridgeport, 262 Conn. 813, 824, 817 A.2d 628 (2003).   Also, the Supreme Court has stated, “[w]e previously have afforded trial courts discretion to overlook violations of the rules of practice and to review claims brought in violation of those rules as long as the opposing party has not raised a timely objection to the procedural deficiency.”  Schilberg Integrated Metals Corp. v. Continental Casualty Co., 263 Conn. 245, 273, 819 A.2d 773 (2003).

Here, Brown & Brown objected to certain of the exhibits presented by BAW. Since, as discussed below, there is no material issue of fact in dispute, the court need not consider these objections.

III

DISCUSSIONABreach Of Contract

Brown & Brown contends that the Agreement permitted it to terminate based on the loss or suspension of BAW's resident insurance license in Connecticut, since such loss or suspension was not cured within ninety days of such loss or suspension.   BAW argues that termination was allowed only in situations involving the loss or suspension of BAW's license after the effective date of the Agreement.

At the top of page 1 of the Agreement, BAW is identified as a Connecticut corporation.   The first sentence of the section entitled “Background” states that “BAW and Brown & Brown are each licensed insurance producers.”   See Agreement, p. 1. In paragraph 9(b), concerning “Notices,” the parties agreed to send notices to BAW at a West Hartford, Connecticut address.   The central provision at issue, concerning termination for cause, paragraph 4(b)(i), page 6, provides that, “during the Term hereof,” Brown & Brown may terminate “this Agreement for Cause,” and that “Cause” includes two grounds, the second of which is set forth in subparagraph (B):  “the loss or suspension of BAW's resident insurance license in its state of domicile, if such loss or suspension is not cured within ninety (90) days of such loss or suspension ․” It is undisputed that BAW's state of domicile is Connecticut.

The Agreement, paragraph 11(b), page 12, contains a merger clause, which states, “This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.”

In its decision on the motion to strike, concerning termination for cause, the court stated, at pages 8-9, “[a]s applied to the alleged facts, the Agreement is ambiguous, since the intent of the parties is not clear and certain from the language of the contract itself ․ It is not clear that the parties intended that an event which occurred before the inception of the Agreement would amount to a material breach by BAW and to cause for termination.   A question of fact exists as to whether the parties intended that a triggering event for a termination for cause had to occur during the Agreement's term or whether they intended that the ongoing status of having a suspended license, which pre-dated the inception of the Agreement, was cause for termination.”  (Citations omitted.)   The court concluded that this issue of fact may not be resolved on a motion to strike.

1. Law Of The Case

BAW argues that this ruling is the law of the case.   It asserts that Brown & Brown offered no parol evidence with respect to the issue.   BAW also states, at page 24 of its memorandum of law, that “BAW has no recollection of discussing this specific issue with the Defendants.”   Rather than asserting that the meaning of the Agreement presents an issue of fact to be resolved by the finder of fact, BAW claims that the ambiguity identified must be resolved by reference to rules of contract interpretation.   See BAW's memorandum, p. 24.

The court's decision concerning the motion to strike necessarily was based on the standard of review applicable thereto.”[A] motion to strike is essentially a procedural motion that focuses solely on the pleadings ․ It is, therefore, improper for the court to consider material outside of the pleading that is being challenged by the motion.”  (Internal quotation marks omitted.)  Tracy v. New Milford Public Schools, 101 Conn.App. 560, 566, 922 A.2d 280, cert. denied, 284 Conn. 910, 931 A.2d 935 (2007).   In contrast, as explained above concerning the standard of review, on a motion for summary judgment the evidentiary record presented by the parties is considered.

2. Contract Interpretation

“[W]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law.”   (Internal quotation marks omitted.)  Garcia v. City of Hartford, 292 Conn. 334, 341, 972 A.2d 706 (2009).  “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 transaction ․ [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and ․ the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract.”  (Internal quotation marks omitted.)  Bayer v. Showmotion, Inc., 292 Conn. 381, 409-10, 973 A.2d 1229 (2009).

“[W]hen the parties have deliberately 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 understanding, was reduced to writing ․ Under this rule, the unambiguous terms of a written contract containing a merger clause may not be varied or contradicted by extrinsic evidence ․ There are, however, several exceptions to this rule.   Specifically, evidence extrinsic to an integrated contract may be introduced:  ․ to explain an ambiguity appearing in the instrument [.]”  (Citation omitted;  internal quotation marks omitted.)  Perricone v. Perricone, 292 Conn. 187, 194-95, 972 A.2d 666 (2009).   Here, it is obvious that the parties intended to set forth the whole of their engagement in the Agreement, which, as stated above, contains a merger clause.   BAW does not contend otherwise.

“Although the parol evidence rule prohibits the introduction of evidence that varies or contradicts an exclusive written agreement ․;  that rule does not bar the use of extrinsic evidence to aid in the interpretation of contractual language ․ To the contrary, extrinsic evidence is always admissible to explain an ambiguity appearing in the instrument.”  (Citations omitted;  internal quotation marks omitted.)  Hare v. McClellan, 234 Conn. 581, 596-97, 662 A.2d 1242 (1995).

“The primary rule of construction is to ascertain the intention of the parties.   This is done not only from the face of the instrument, but also from the situation of the parties and the nature and object of their transactions.”  Webster Bank v. Oakley, 265 Conn. 539, 547, 830 A.2d 139 (2003), cert. denied, 541 U.S. 903, 124 S.Ct. 1603, 158 L.Ed.2d 244 (2004).   If, following the application of the primary rules of construction, the meaning of a contract is still unclear, “resort to the secondary rules of contract interpretation is appropriate and may help to determine or clarify a contract's meaning.”  (Footnote omitted.)   11 S. Williston, Contracts (4th Ed. Lord 1999) (Williston) § 32:8, p. 439.¹

The agreement at issue is commercial in nature.   The record before the court on summary judgment includes numerous exhibits reflecting the close involvement of counsel for sophisticated commercial parties in an extensive drafting process, in which drafts of the termination provision language were exchanged for over a year.   See Brown & Brown's Exhibit Q (Email message from BAW's counsel, Mark Wallman, to Matthew Blumberg, including Email message and draft agreement from Thomas Donegan, Brown & Brown's counsel).   This evidence shows that counsel heavily negotiated the termination language, by adding, deleting and revising it, before it eventually became the provision at issue, quoted above.   In fact, Wallman listed the termination provision as one of the major outstanding issues as of March 2005.   See Brown & Brown's Exhibit U, p. BAW 00610.   It is evident that the parties considered the grounds for termination as central to their Agreement.

Where, as here, “the contract ․ at issue [is] commercial in nature and [was] made by sophisticated commercial parties with the advice of counsel during an extensive drafting process ․, those factors ․ raise a presumption of definitiveness that, in this case, has not been rebutted by any other evidence in the record.”  Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 496-97, 746 A.2d 1277 (2000).

The evidentiary record shows that Brown & Brown bargained for the right not to deal with an unlicensed entity.   This is illustrated by the various drafts of the termination provision which were exchanged.   For example, in July 2005, Brown & Brown proposed that “Cause” for termination would include “the loss or suspension of BAW's license to write insurance in the State of Connecticut.”   See Brown & Brown Exhibit R, pp.   BAW 00768-BAW 00769.   This continued in August 2005, when a revised draft called for a cure period of thirty days.   See Brown & Brown Exhibit S, p. BAW 00805.   Other drafts ensued, in which loss or suspension of BAW's license was continued to be included as a ground for termination by Brown and Brown.

BAW's draft of May 2006 proposed that “Cause” for termination would include “the loss or suspension of BAW's resident insurance license in its state of domicile, if such loss or suspension is not cured within ninety (90) days of such loss or suspension, provided BAW's rights hereunder have not been assigned to another entity with an insurance license.”  (Emphasis in original.)   See Brown & Brown's Exhibit X, p. BAW 01005.   In the Agreement, this provision was further revised, to include a reference to paragraph 11(d), concerning assignment.   It is evident that the parties to the Agreement intended that, from the Agreement's inception, BAW would be licensed in Connecticut, its state of domicile.

After negotiating extensively for the right to terminate if BAW became unlicensed in its state of domicile, it would make no sense, if BAW was unlicensed in Connecticut at the Agreement's inception, and remained so for the requisite ninety days, that Brown & Brown had no right to terminate.   In view of the specific attention paid to this issue in the parties' intensive contract negotiations, in which each side's counsel was directly involved, such a reading, which would have permitted BAW to remain so unlicensed for an indeterminate time after inception of the Agreement, would not accord with the court's obligation to “accord the language employed in the contract a rational construction based on its common, natural and ordinary meaning and usage as applied to the subject matter of the contract.”  (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., supra, 285 Conn. 13.   Instead, it would render [this part of] the termination provision superfluous.  “[T]he law of contract interpretation ․ militates against interpreting a contract in a way that renders a provision superfluous.”   (Internal quotation marks omitted.)  Isham v. Isham, 292 Conn. 170, 182, 972 A.2d 228 (2009).   All parties were on notice that BAW's failure to maintain its Connecticut license for more than 90 days during the term of the Agreement meant that Brown & Brown could terminate it.

In view of this determination, there is no need to resort to secondary rules of construction.   BAW's argument, that ambiguity in the Agreement should be construed against Brown & Brown since the termination provision was inserted into the Agreement for its benefit, is therefore unpersuasive.

This argument is unpersuasive for other reasons as well.   As BAW notes and concedes, paragraph 11(e) of the Agreement, pages 13-14, provides that the parties agreed that the rule of judicial interpretation which construes an ambiguity in a contract against its drafter is not to be applied here.²

In Connecticut, this secondary rule of contract interpretation, see Williston, Chapter 32, page 389, often termed by its Latin wording, “contra proferentem,” has been explained as “the doctrine ․ whereby ambiguities in a contract are construed against the party who had drafted the contract ․ The premise behind the rule is simple.   The party who actually does the writing of an instrument will presumably be guided by his own interests and goals in the transaction.   He may choose shadings of expression, words more specific or more imprecise, according to the dictates of these interests ․ A further, related rationale for the rule is that [s]ince one who speaks or writes, can by exactness of expression more easily prevent mistakes in meaning, than one with whom he is dealing, doubts arising from ambiguity are resolved in favor of the latter.”   (Internal quotation marks omitted.)  David M. Somers & Associates, P.C. v. Busch, 283 Conn. 396, 405 n.10, 927 A.2d 832 (2007).

Earlier, the Supreme Court summarized the rule in Sturman v. Socha, 191 Conn. 1, 9, 463 A.2d 527 (1983), stating that “[i]t is generally accepted ․ that when two or more meanings may fairly be given to language in a contract, the language is to be construed against the one who drew it;  ․ and, likewise, the language of a contract is typically construed most strongly against the party whose language it is and for whose benefit it was inserted.”  (Citation omitted.)   Thus, the supplying of the language and for whose benefit it was inserted are linked within the rule, and are not separate concepts.

As the Appellate Court later explained, this rule of interpretation embodies only a single “principle,” which includes the essential element of construing against the drafter.   See Dainty Rubbish Service, Inc. v. Beacon Hill Ass'n., Inc., 32 Conn.App. 530, 533, 630 A.2d 115 (1993); ³  Eastern Bus Lines, Inc. v. Board of Education, 7 Conn.App. 581, 584-85, 509 A.2d 1071 (1986).

In several of the earlier decisions cited by BAW, the Supreme Court, in applying the rule, expressly relied on the fact that the language emanated from the party against whom it was construed.   See Kunian v. Development Corp. of America, 165 Conn. 300, 314, 334 A.2d 427 (1973) (“terms were included on the defendant's purchase order and contracts are construed against the party which drew them.”);  Collins v. Sears, Roebuck & Co., 164 Conn. 369, 376, 321 A.2d 444 (1973) (“Language supplied by the defendant must be construed most strongly against it.”);  Beach v. Beach, 141 Conn. 583, 593, 107 A.2d 629 (1954) (“It is their language and was inserted for their benefit.   It must be construed most strongly against them.”).

Only in the oldest case cited by BAW, New Haven Water Co. v. New Haven, 106 Conn. 562, 579, 138 A. 99 (1927), where the court stated that “several canons of construction are applicable,” does language appear which does not involve the drafter.   The court stated:  “[s]ince this phrase of the contract was inserted for the benefit of the water company, its language must be construed most strongly against the company.”

However, the court's reference is dicta, since, in the next paragraph it relied on a different secondary rule of construction and stated, “Applying the rule, ejusdem generis to this phrase, the Federal income and capital stock taxes cannot be brought within it.   These taxes were not in existence when this contract was made and there is nothing in the record to indicate that the parties anticipated the subsequent enactment of legislation creating these new modes of taxation.   Moreover, the history of these taxes makes it clear that the parties to the contract never could have intended to include these taxes within this phrase.   A Federal income tax had been declared unconstitutional.   A constitutional amendment, proposed and enacted subsequent to the making of this contract, made the enactment of the income tax in 1909 possible.   The capital stock tax of 1916 was enacted as a substitute for the corporation tax of 1909.   Both taxes were, in 1902, foreign to the thought and business of the country;  neither was within the contemplation of these parties.”  (Emphasis in original.)  Id., 579.

Later in New Haven Water Co. v. New Haven, supra, 106 Conn. 580, the court stated that “[t]he practical construction of the parties, for so long a period, of this part of the contract, which involved the yearly or oftener payment of two additional taxes, is most persuasive evidence of the true construction to be given this phrase.”   Thus, ultimately, the court did not base its decision on the concept that an ambiguity should be construed against the party for whose benefit the language was inserted.   BAW has cited no decision where such a concept, alone, separate from language emanating from the drafter, was applied to resolve an ambiguity.

Finally, invoking the rule of contra proferentem here would be improper since it is only to be used as a last resort, when other rules of interpretation do not resolve the question of what was meant.   See Weinberg v. Valente, 79 Conn. 247, 250, 64 A. 337 (1906) (contra proferentem is rule “of last resort.”).   More recently, in Montoya v. Montoya, 91 Conn.App. 407, 420-21, 881 A.2d 319 (2005), reversed on other grounds, 280 Conn. 605, 909 A.2d 947 (2006), Justice (then-Judge) Schaller explained, “The rule of contra proferentum is generally said to be a rule of last resort and is applied only where other secondary rules of interpretation have failed to elucidate a contract's meaning ․ [The rule is applied] only when ․ the court must choose between two or more reasonable meanings ․ After the court has examined all of the other factors that affect the search for the parties' intended meaning ․ and the only remaining question is which of two possible and reasonable meanings should be adopted, the court will often adopt the meaning that is less favorable in its legal effect to the party who chose the words.   This technique is known as ‘contra proferentem.’  ․ The ․ rule has been described as being applicable only as a last resort, when other techniques of interpretation and construction have not resolved the question of which of two or more possible meanings the court should choose.   One court wrote that the rule is a tie breaker when there is no other sound basis for choosing one contract interpretation over another.   The rule is not applicable at all if only one reasonable meaning is possible ․ [The rule] directs the court to choose between two or more possible reasonable meanings on the basis of their legal operation, i.e., whether they favor the drafter or the other party.”   (Citations omitted;  emphasis in original;  internal quotation marks omitted.)

As explained above, BAW's proposed reading, that termination was allowed only in situations involving the loss or suspension of BAW's license after the effective date of the agreement is, in view of the record, not a reasonable one.

3. Bad Faith

BAW also argues that disputed factual issues preclude summary judgment here because the fact-finder could find that Brown & Brown exercised its “discretion to terminate” the Agreement in bad faith.  (Emphasis in original.)   See BAW's memorandum, p. 1, 15-17.   In reply, Brown & Brown objected to consideration of this argument, on the grounds that the complaint does not allege breach of the covenant of good faith and fair dealing and that BAW was improperly raising new allegations in opposition to a motion for summary judgment.   The court outlined above the allegations which are set forth in BAW's complaint.   Breach of the duty of good faith and fair dealing is not alleged.   Termination in bad faith is not alleged.

A claim of a breach of the duty of good faith and fair dealing is a separate cause of action.   See Macomber v. Travelers Property & Casualty Corp., 261 Conn. 620, 637-39, 804 A.2d 180 (2002).  “To recover for breach of the duty of good faith and fair dealing, the plaintiffs had to allege and prove that the defendant[s] engaged in conduct design[ed] to mislead or to deceive ․ or a neglect or refusal to fulfill some duty or some contractual obligation not prompted by an honest mistake as to one's rights or duties ․” (Emphasis in original;  internal quotation marks omitted.)  Miller v. Guimares, 78 Conn.App. 760, 773, 829 A.2d 422 (2003).

“[A] plaintiff may not allege one cause of action and recover upon another.”   (Internal quotation marks omitted.)  Tolbert v. Connecticut General Life Insurance Co., 257 Conn. 118, 127, 778 A.2d 1 (2001).  “It is axiomatic that a plaintiff may rely only upon what he has alleged [and] the right of a plaintiff to recover is limited to the allegations of his complaint ․ What is in issue is determined by the pleadings and these must be in writing ․ [P]leadings have their place in our system of jurisprudence.   While they are not held to the strict and artificial standard that once prevailed, we still cling to the belief, even in these iconoclastic days, that no orderly administration of justice is possible without them ․ The purpose of a complaint ․ is to limit the issues at trial, and such pleadings are calculated to prevent surprise ․ A plaintiff's right to recover has traditionally been limited to the allegations of his complaint, and a plaintiff may not allege one cause of action and recover upon another.”  (Emphasis in original;  internal quotation marks omitted.)  Mercer v. Cosley, 110 Conn.App. 283, 295 n.9, 955 A.2d 550 (2008).

Since BAW has not alleged bad faith termination of the Agreement by Brown & Brown in its complaint, and since Brown & Brown has objected to BAW's raising the issue in opposition to the motion for summary judgment, the court may not consider this issue as raising a material issue of fact.

4. Waiver and Estoppel

BAW also argues that there are disputed facts, that, if resolved in its favor, would show that Brown & Brown waived their discretionary right to terminate the Agreement based on the loss or suspension of BAW's license, or that it was estopped from exercising that right.   BAW argues that it has presented evidence to show that Brown & Brown knew or reasonably should have known about the status of BAW's license when the Agreement was executed in July 2006 and no later than early 2007.   BAW contends that by executing and performing the Agreement with such knowledge, it waived its option to terminate based on the loss or suspension of BAW's license.   At page 22 of its memorandum, BAW notes that the status of BAW's license was a matter of public record.

In addition, as stated above, BAW argues that the evidence it presented concerning the deprivation of physical access to its insurance license files, the change of its business address, and the receipt by Brown & Brown of notices regarding the renewal and subsequent expiration of BAW's license, all create material issues of fact.

In reply, Brown & Brown asserts that the language of the Agreement prohibits waiver in the absence of a writing signed by both parties and that it first learned that BAW was unlicensed just before it terminated the Agreement in early 2008.   As to estoppel, Brown & Brown contends that it is inapplicable here as a matter of law.

“Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms.”  Afkari-Ahmadi v. Fotovat-Ahmadi, 294 Conn. 384, 390, 985 A.2d 319 (2009).   Non-waiver clauses in agreements are enforceable.   See Webster Bank v. Oakley, supra, 265 Conn. 549-51.

Paragraph 11(j) of the Agreement, page 14, unambiguously provides, “[t]his Agreement may not be amended, or any provision waived, except by an instrument in writing signed on behalf of each of the parties.”   BAW has presented no evidence of such a writing, signed by the parties, in which Brown & Brown waived its right to terminate based on the loss or suspension of BAW's license.   Accordingly, in the face of this clear contractual language, the evidence on which BAW relies for its waiver argument does not create a material issue of fact.   The evidence concerning when Brown & Brown allegedly learned that BAW had become unlicensed is immaterial.⁴

As to estoppel, “[u]nder our well-established law, any claim of estoppel is predicated on proof of two essential elements:  the party against whom estoppel is claimed must do or say something calculated or intended to induce another party to believe that certain facts exist and to act on that belief;  and the other party must change its position in reliance on those facts, thereby incurring some injury ․ It is fundamental that a person who claims an estoppel must show that he has exercised due diligence to know the truth, and that he not only did not know the true state of things but also lacked any reasonably available means of acquiring knowledge.”  In re Michaela Lee R., 253 Conn. 570, 604, 756 A.2d 214 (2000).

The evidence presented by BAW is insufficient, as a matter of law, to create a material issue of fact concerning estoppel.   First, BAW has presented no evidence to show that Brown & Brown did or said anything to induce BAW to believe that BAW was licensed.   Second, since, as BAW concedes, its license status was a matter of public record, it is clear that BAW had reasonably available means of acquiring knowledge as to the status of its license, such as by contacting the Connecticut Department of Insurance.

Similarly unavailing is BAW's reference to law concerning hindrance or prevention of performance as support for its estoppel argument.   In Dow & Condon, Inc. v. Garden Main Street, LLC, Superior Court, judicial district of Hartford at Hartford, Docket No. HHD CV 08 5020258 (July 15, 2009, Bentivegna, J.), the court quoted 13 S. Williston, Contracts (4th Ed.2000) § 39:12, p. 551, where the treatise provides, “[i]n short, under the doctrine of prevention, where a party to a contract is the cause of the failure of the performance of the obligation due him or her, that party cannot in any way take advantage of that failure ․” As explained above, since BAW's license status was a matter of public record, as a matter of law, no conduct by Brown & Brown caused BAW not to be able to know the status of its own license.   BAW may not avoid its own responsibility to maintain its own license by claiming estoppel.

Brown & Brown presented evidence to show that all payments due to BAW through the date of termination were paid and that all financial information due to BAW through that date was provided.   BAW does not dispute these contentions.   Also, the alleged conduct which forms the basis of BAW's claim that Brown & Brown breached the “Further Assurances” provision of the Agreement, paragraph 10, page 12, involving the alleged failure by Brown & Brown to forward the November 2, 2005 license renewal notice to BAW, as a matter of law, does not amount to a breach of contract.   No contractual duty existed at that time.   As discussed, the parties did not enter into the Agreement until several months later, in July 2006.

Thus, the undisputed facts show that BAW's license was cancelled on January 31, 2006 and not reinstated within ninety days thereafter.   BAW's license was not reinstated until May 2008.   Brown & Brown was contractually entitled to terminate the Agreement in February 2008.   Under these circumstances, Brown & Brown has shown that it is entitled to judgment as a matter of law as to the first count.⁵

B

Unjust Enrichment and Quantum Meruit

As discussed above, the second and third counts are based on unjust enrichment and quantum meruit, and incorporate essentially the same factual allegations on which BAW bases its breach of contract claim in the first count.   Brown & Brown contends that, since these claims are based on the same subject matter which forms the basis of BAW's breach of contract claim, they fail as a matter of law.

BAW argued in its memorandum that, since it may plead in the alternative, it would be premature to grant summary judgment as to those claims.  “Parties routinely plead alternative counts alleging breach of contract and unjust enrichment, although in doing so, they are entitled only to a single measure of damages arising out of these alternative claims ․ Under this typical belt and suspenders approach, the equitable claim is brought in an alternative count to ensure that the plaintiff receives some recovery in the event that the contract claim fails.”  (Citations omitted;  internal quotation marks omitted.)   Stein v. Horton, 99 Conn.App. 477, 485, 914 A.2d 606 (2007).

At oral argument, in response to a question by the court, BAW's counsel agreed that, if the court determined that Brown & Brown was entitled to judgment based on the parties' express contract, BAW's other claims in the second and third counts could not be maintained.   This is consistent with Connecticut decisional law.  “[P]roof of an operative contract [is] incompatible with recovery on an unjust enrichment theory.  Meaney v. Connecticut Hospital Ass'n., Inc., 250 Conn. 500, 517, 735 A.2d 813 (1999) (‘express contract between the parties precludes recognition of an implied-in-law contract governing the same subject matter’ [internal quotation marks omitted] ).”  Vertex v. Waterbury, 278 Conn. 557, 570 n.12, 898 A.2d 178 (2006).   Also, “[a] party may not recover the reasonable value of services rendered, pursuant to the doctrine of quantum meruit, when the actions for which it seeks relief were governed by an express contract.”  David M. Somers & Assoc., P.C. v. Busch, supra, 283 Conn. 408.   Since the parties here had an operative contract, recovery may not be had on unjust enrichment or quantum meruit theories which are based on claims of breach thereof.

C

Guaranty

As discussed above, in the fifth count, BAW alleges that Brown & Brown's Parent is liable based on its guaranty of Brown & Brown's performance.   Since the allegations against the Parent are premised on finding Brown & Brown liable, and since, as set forth above, the court has found that Brown & Brown is entitled to judgment on the first, second and third counts, and previously, judgment entered on the fourth count (based on the court's decision on the motion to strike), the fifth count cannot stand alone.

CONCLUSION

For the foregoing reasons, the defendants' motion for summary judgment is granted.   Judgment may enter for the defendants.   It is so ordered.

BY THE COURT

ROBERT B. SHAPIRO

JUDGE OF THE SUPERIOR COURT

FOOTNOTES

FN1. The Supreme Court cites Williston's treatise as authority.   See New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451, 970 A.2d 592 (2009)..  FN1. The Supreme Court cites Williston's treatise as authority.   See New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451, 970 A.2d 592 (2009).

FN2. Paragraph 11(e) provides:  “this Agreement is the result of the joint efforts and negotiations of the parties hereto, with each party being represented, or having the opportunity to be represented, by legal counsel of its own choice, and no singular party is the author or drafter of the provisions hereof.   Each of the parties assumes joint responsibility for the form and composition of each and all of the contents of this Agreement and each party agrees that this Agreement shall be interpreted as though each of the parties participated equally in the composition of this Agreement and each and every provision and part hereof.   The parties agree that the rule of judicial interpretation to the effect that any ambiguity or uncertainty contained in an agreement is to be construed against the party that drafted the agreement shall not be applied in the event of any disagreement or dispute arising out of this Agreement.”.  FN2. Paragraph 11(e) provides:  “this Agreement is the result of the joint efforts and negotiations of the parties hereto, with each party being represented, or having the opportunity to be represented, by legal counsel of its own choice, and no singular party is the author or drafter of the provisions hereof.   Each of the parties assumes joint responsibility for the form and composition of each and all of the contents of this Agreement and each party agrees that this Agreement shall be interpreted as though each of the parties participated equally in the composition of this Agreement and each and every provision and part hereof.   The parties agree that the rule of judicial interpretation to the effect that any ambiguity or uncertainty contained in an agreement is to be construed against the party that drafted the agreement shall not be applied in the event of any disagreement or dispute arising out of this Agreement.”

FN3. Therein, the court explained, “While interpretation and construction are generally regarded as synonyms and used interchangeably, it is not only possible, but desirable to draw a distinction.   The word ‘interpretation’ is used with respect to language itself;  it is the process of applying the legal standard to expressions found in the agreement in order to determine their meaning.  ‘Construction,’ on the other hand, is used to determine, not the sense of the words or symbols, but the legal meaning of the entire contract ․” (Internal quotation marks omitted.)   Id., 534 n.5..  FN3. Therein, the court explained, “While interpretation and construction are generally regarded as synonyms and used interchangeably, it is not only possible, but desirable to draw a distinction.   The word ‘interpretation’ is used with respect to language itself;  it is the process of applying the legal standard to expressions found in the agreement in order to determine their meaning.  ‘Construction,’ on the other hand, is used to determine, not the sense of the words or symbols, but the legal meaning of the entire contract ․” (Internal quotation marks omitted.)   Id., 534 n.5.

FN4. At oral argument, BAW contended that such a clause may be waived by conduct.   No authority was cited for this contention.   Accordingly, the court need not consider it.   See Taylor v. Mucci, 288 Conn. 379, 383 n. 4, 952 A.2d 776 (2008).Also, as stated above, “the law of contract interpretation ․ militates against interpreting a contract in a way that renders a provision superfluous.”  (Internal quotation marks omitted.)  Isham v. Isham, supra, 292 Conn. 182.   The court “decline[s] to reduce [this] provision ․ to [an] effective nullit[y].”  Goldberg v. Hartford Fire Insurance Co., 269 Conn. 550, 562, 849 A.2d 368 (2004)..  FN4. At oral argument, BAW contended that such a clause may be waived by conduct.   No authority was cited for this contention.   Accordingly, the court need not consider it.   See Taylor v. Mucci, 288 Conn. 379, 383 n. 4, 952 A.2d 776 (2008).Also, as stated above, “the law of contract interpretation ․ militates against interpreting a contract in a way that renders a provision superfluous.”  (Internal quotation marks omitted.)  Isham v. Isham, supra, 292 Conn. 182.   The court “decline[s] to reduce [this] provision ․ to [an] effective nullit[y].”  Goldberg v. Hartford Fire Insurance Co., 269 Conn. 550, 562, 849 A.2d 368 (2004).

FN5. Accordingly, the court need not consider the defendants' argument that BAW's breach of the Agreement precludes recovery of contract damages..  FN5. Accordingly, the court need not consider the defendants' argument that BAW's breach of the Agreement precludes recovery of contract damages.

Shapiro, Robert B., J.