Boccanfuso Bros., Inc. v. O'Keefe Cadillac Oldsmobile, Inc. (2011)

MEMORANDUM OF DECISION

The issues to be determined concern post-judgment matters.   The plaintiff brought an action against the defendants O'Keefe Cadillac Oldsmobile, Inc. d/b/a Curran Cadillac–Pontiac–GMAC Truck (”O'Keefe) and T.W. Curran & Sons, LLC (“Curran”) seeking to recover the balance due on a promissory note executed by O'Keefe and a limited guarantee agreement executed by Curran.   The parties stipulated to a judgment in favor of the plaintiff and against O'Keefe in the amount of $237,500, which represented the principal balance due on the note, and against Curran in the amount of $100,000, which represented the principal balance due on the limited guarantee.   The plaintiff claims that it is entitled to (1) prejudgment interest under the note from O'Keefe;  (2) prejudgment interest and $350 in attorneys fees from Curran pursuant to Practice Book § 17–14 and General Statutes § 52–192a(c) premised on Curran's failure to accept the plaintiff's offer of compromise in the amount of $100,000;  (3) attorneys fees in the amount of $9,067.50 against O'Keefe based upon the provision for the recovery of such fees in the note;  and (4) post-judgment interest against both O'Keefe and Curran pursuant to § 37–3a(a).   Curran submitted a memorandum of law in opposition to the claims made against it by the plaintiff.   A memorandum was not submitted on behalf of O'Keefe to the plaintiff's claims against it.

The plaintiff seeks prejudgment interest and attorneys fees against O'Keefe pursuant to the provisions of the note.   The note provides for the payment of attorneys fees incurred by the plaintiff in the collection of the note and guarantee.   The note also provides that in the event the plaintiff exercised its option to accelerate payment of the note, interest on the principal balance shall be computed at the rate of eight percent per annum greater than the prime rate in effect at the time that the option is exercised.¹  In view of the foregoing, the plaintiff is awarded attorneys fees against O'Keefe in the amount of $9,067.50 ² and prejudgment interest through March 28, 2011 against O'Keefe in the amount of $23,684.38.

The plaintiff claims prejudgment interest and $350 in attorneys fees from Curran pursuant to Practice Book § 17–14 and General Statutes § 52–192a(c) premised on Curran's failure to accept O'Keefe's offer of compromise in the amount of $100,000.   For the reasons hereinafter discussed, the court denies those claims of the plaintiff.

The offer of compromise is embodied in § 52–192a.   Subsection (c) provides, in relevant part, that “[a]fter trial the court shall examine the record to determine whether the plaintiff made an offer of compromise which the defendant failed to accept.   If the court ascertains from the record that the plaintiff has recovered an amount equal to or greater than the sum certain specified in the plaintiff's offer of compromise, the court shall add to the amount so recovered eight per cent annual interest on said amount ․ The court may award reasonable attorneys fees in an amount not to exceed three hundred fifty dollars, and shall render judgment accordingly.”  General Statutes § 52–192a(c).³

“Our courts have consistently held that prejudgment interest is to be awarded by the trial court when a valid offer of judgment is filed by the plaintiff, the offer is rejected by the defendant, and the plaintiff ultimately recovers an amount greater than the offer of judgment after trial ․ Moreover, an award of interest under § 52–192a is mandatory, and the application of § 52–192a does not depend on an analysis of the underlying circumstances of the case or a determination of the facts ․ The statute is admittedly punitive in nature ․ It is the punitive aspect of the statute that effectuates the underlying purpose of the statute and provides the impetus to settle cases ․ The purpose of § 52–192a is to encourage pretrial settlements and, consequently, to conserve judicial resources ․” (Emphasis added;  citations omitted;  internal quotation marks omitted.)  Cardenas v. Mixcus, 264 Conn. 314, 321, 823 A.2d 321 (2003).

The plain meaning of the statute provides that the interest analysis under the offer of compromise statute is performed by reviewing the record after trial.⁴  The fact that “after trial” is the triggering event for the court's review of the record evinces the spirit and intent of the offer of compromise statute to promote pretrial settlements.   In the present case, the parties entered into a stipulated judgment ⁵ that resolved their dispute prior to a trial on the merits.   The issues to be resolved are post-judgment in nature.   Therefore, the statute is inapplicable and the plaintiff is not entitled to claim interest or attorneys fees under it.   In view of the foregoing, the plaintiff's claim for prejudgment interest and attorneys fees against Curran based on Curran' s failure to accept the plaintiff's offer of compromise under § 52–192a(c) is denied.⁶

The plaintiff seeks an award against O'Keefe and Curran of post-judgment interest pursuant to § 37–3a(a).   That statute provides, in pertinent part, that “interest at the rate of ten per cent a year, and no more, may be recovered and allowed in civil actions ․ including actions to recover money loaned at a greater rate, as damages for the detention of money after it becomes payable.”

The plaintiff claims that neither O'Keefe nor Curran dispute that they are indebted to the plaintiff in the principal amounts due and “[t]here is no evidence of any defense or other facts that justify the detention by the defendants of these amounts admittedly and justly due to the plaintiff.   It should also be noted that there have been no payments at all made by either [d]efendant during the pendency of this action.”

The plaintiff filed requests to admit against both O'Keefe and Curran, both of whom failed to respond to the requests.   By rule of practice, therefore, the requests are deemed to be admitted.⁷

The following has been established in the present action:  O'Keefe signed a promissory note wherein it agreed to pay to the plaintiff the amount of $400,000;  Curran signed a limited guarantee of the note in the amount of $100,000;  O'Keefe defaulted on the note by failing to make the payment due on February 5, 2009, and has not made any payments to the plaintiff since that date;  O'Keefe owes to the plaintiff the principal balance of $237,500;  Curran has not made any payments to the plaintiff under its limited guarantee;  Curran owes to the plaintiff the principal balance of $100,000;  and despite demand, neither O'Keefe nor Curran have paid to the plaintiff the balance due and owing to the plaintiff under their respective instruments.

“This court previously has determined that an award of postjudgment interest is authorized by § 37–3a ․ This statute has been construed “to make the allowance of interest depend upon whether the detention of the money is or is not wrongful under the circumstances ․ The allowance of interest as an element of damages is, thus, primarily an equitable determination and a matter lying within the discretion of the trial court ․” (Citations omitted;  internal quotation marks omitted.)  Ulrich v. Fish, 112 Conn.App. 837, 843–44, cert. denied, 292 Conn. 909 (2009).

In view of the foregoing, the court concludes that the plaintiff has failed to prove that O'Keefe and Curran wrongfully detained the money owed to the plaintiff.   As demonstrated by the issues to be decided, O'Keefe and Curran have disputed, and continue to dispute, the payment to the plaintiff of prejudgment and post-judgment interest, and attorneys fees and costs.   The parties agreed to enter into a stipulated judgment in the principal amounts due under the note and guarantee, and to have the remaining issues be determined by the court.   Based on the parties' dispute, the court cannot directly or inferentially find from the record that the detention of the monies by O'Keefe and Curran was wrongful.   Therefore, the plaintiff's request for post-judgment interest against O'Keefe and Curran is denied.

Additionally, as discussed above, Curran's guarantee provides that its maximum obligation is $100,000.   As was the situation with prejudgment interest, the award to the plaintiff of post-judgment interest against Curran under the circumstance of this action would improperly exceed its maximum obligation under its limited guarantee.

In view of the foregoing, the court orders the following:

1.  In addition to the stipulated judgment in the amount of $237,500, O'Keefe shall pay to the plaintiff attorneys fees in the amount of $9,067.50 and prejudgment interest through April 5, 2011 in the amount of $24,100.78 (per diem in the amount of $52.05);

2.  The court rejects the plaintiff's claim pursuant to § 52–292a for prejudgment interest and attorneys fees against Curran;  and

3.  The court rejects the plaintiff's claim pursuant to § 37–3a for post-judgment interest against O'Keefe and Curran.

TYMA, J.

FOOTNOTES

FN1. For the sake of simplicity, the plaintiff claims interest at the rate of eight percent per annum from the date of the service of the complaint on December 28, 2009.   There has been no objection to such a calculation..  FN1. For the sake of simplicity, the plaintiff claims interest at the rate of eight percent per annum from the date of the service of the complaint on December 28, 2009.   There has been no objection to such a calculation.

FN2. The court finds the attorneys fees set forth in plaintiff's counsel affidavit to be reasonable..  FN2. The court finds the attorneys fees set forth in plaintiff's counsel affidavit to be reasonable.

FN3. Practice Book § 17–18 mirrors the language in General Statutes § 52–192a(c) in providing, in pertinent part, that “[a]fter trial the judicial authority shall examine the record to determine whether the plaintiff made an offer of compromise which the defendant failed to accept.   If the judicial authority ascertains from the record that the plaintiff has recovered an amount equal to or greater than the sum certain specified in that plaintiff's offer of compromise, the judicial authority shall add to the amount so recovered 8 percent annual interest on said amount ․”.  FN3. Practice Book § 17–18 mirrors the language in General Statutes § 52–192a(c) in providing, in pertinent part, that “[a]fter trial the judicial authority shall examine the record to determine whether the plaintiff made an offer of compromise which the defendant failed to accept.   If the judicial authority ascertains from the record that the plaintiff has recovered an amount equal to or greater than the sum certain specified in that plaintiff's offer of compromise, the judicial authority shall add to the amount so recovered 8 percent annual interest on said amount ․”

FN4. Section 1–2z of the General Statutes, entitled the “Plain Meaning Rule, provides that “the meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes.   If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered.”.  FN4. Section 1–2z of the General Statutes, entitled the “Plain Meaning Rule, provides that “the meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes.   If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered.”

FN5. “A stipulated judgment constitutes a contract of the parties acknowledged in open court and ordered to be recorded by a court of competent jurisdiction ․ A stipulated judgment allows the parties to avoid litigation by entering into an agreement that will settle their differences once the court renders judgment on the basis of the agreement ․ A stipulated judgment, although obtained through mutual consent of the parties, is binding to the same degree as a judgment obtained through litigation.”  (Citations omitted;  internal quotation marks omitted.)  Wallerstein v. Stew Leonard's Dairy, 258 Conn. 299, 310, 780 A.2d 916 (2001).  “A judgment rendered in accordance with ․ a stipulation of the parties is to be regarded and construed as a contract.”  (Internal quotation marks omitted.)  Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 97 Conn.App. 541, 555, 905 A.2d 1214, cert. denied, 280 Conn. 942, 943, 912 A.2d 479 (2006).   The fact that the stipulated judgment was entered into by the parties at the time that they appeared for trial does not affect the court's conclusion that General Statutes § 52–192a does not apply.   There was not a trial on the merits within the meaning of the statute.   If the court were to accept the plaintiff's claim, then Curran would be punished for promoting judicial efficiency by settling the case prior to a trial on the merits of the note and guarantee and having the court resolve the post-judgment issues..  FN5. “A stipulated judgment constitutes a contract of the parties acknowledged in open court and ordered to be recorded by a court of competent jurisdiction ․ A stipulated judgment allows the parties to avoid litigation by entering into an agreement that will settle their differences once the court renders judgment on the basis of the agreement ․ A stipulated judgment, although obtained through mutual consent of the parties, is binding to the same degree as a judgment obtained through litigation.”  (Citations omitted;  internal quotation marks omitted.)  Wallerstein v. Stew Leonard's Dairy, 258 Conn. 299, 310, 780 A.2d 916 (2001).  “A judgment rendered in accordance with ․ a stipulation of the parties is to be regarded and construed as a contract.”  (Internal quotation marks omitted.)  Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 97 Conn.App. 541, 555, 905 A.2d 1214, cert. denied, 280 Conn. 942, 943, 912 A.2d 479 (2006).   The fact that the stipulated judgment was entered into by the parties at the time that they appeared for trial does not affect the court's conclusion that General Statutes § 52–192a does not apply.   There was not a trial on the merits within the meaning of the statute.   If the court were to accept the plaintiff's claim, then Curran would be punished for promoting judicial efficiency by settling the case prior to a trial on the merits of the note and guarantee and having the court resolve the post-judgment issues.

FN6. Even if the court agreed with the plaintiff that General Statutes § 52–192a applies under the circumstances, the terms of Curran's limited guarantee establish its maximum obligation at $100,000.   The award to the plaintiff of prejudgment interest and attorneys fees in accordance with that statute would be in excess of that maximum limit.   The case of Boxed Beef Dist. v. Rexton, 7 Conn.App. 555, 509 A.2d. 1060 (1986) is instructive on the extent of Curran's limited guarantee.   In that matter, the plaintiff, a meat wholesaler, brought an action against the named defendant corporation and two individual guarantors relating to the defendant corporation's purchase from the plaintiff on open account of meat products.  Id., 556.   The trial court rendered judgment in favor of the plaintiff, and one of the guarantors appealed from that judgment.  Id. On appeal, the defendant guarantor claimed that the trial court erred in awarding to the plaintiff interest and costs above the $20,000 maximum amount set forth in the guarantee.   That document stated, in capital letters, that “THIS GUARANTEE SHALL BE FOR A MAXIMUM OF $20,000.”  Id., 558.   The Appellate Court agreed with the defendant guarantor that the trial court erred and reasoned as follows:  “Similarly, the costs of suit incurred by the plaintiff in obtaining its judgment against the [defendant] corporation and the [defendant guarantor] cannot be added to [the defendant guarantor's] indebtedness if doing so would exceed the limit placed upon his guaranty.   The terms of the guaranty included ․ the costs of collection.   That same guaranty, however, specifically limited [the defendant guarantor's] liability to $20,000.   Thus, by the express terms of the guaranty, costs of collection are subject to the limitation in the guaranty since no distinction with respect to the maximum obligation is made between the principal debt and the costs of collection.   If we were to conclude that the costs of collection were not subject to the limitation, any argument made in support of that conclusion could be applied with equal force to the limitation on the principal debt.”  Id., 560.   The guarantee in the present action is set forth in capital letters and provides that “[N]OTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE GUARANTOR'S LIABILITY HEREUNDER SHALL NOT EXCEED $100,000 (THE “LIABILITY CAP”).”   As in Boxed Beef, there is no distinction in terms of Curran's maximum obligation between the $100,000 amount of the principal debt and other amounts such as statutory interests and fees.   Because Curran's liability under the guarantee is limited to the amount of $100,000, the plaintiff's claim for interest and attorneys fee over that amount, pursuant to § 52–192a, is denied..  FN6. Even if the court agreed with the plaintiff that General Statutes § 52–192a applies under the circumstances, the terms of Curran's limited guarantee establish its maximum obligation at $100,000.   The award to the plaintiff of prejudgment interest and attorneys fees in accordance with that statute would be in excess of that maximum limit.   The case of Boxed Beef Dist. v. Rexton, 7 Conn.App. 555, 509 A.2d. 1060 (1986) is instructive on the extent of Curran's limited guarantee.   In that matter, the plaintiff, a meat wholesaler, brought an action against the named defendant corporation and two individual guarantors relating to the defendant corporation's purchase from the plaintiff on open account of meat products.  Id., 556.   The trial court rendered judgment in favor of the plaintiff, and one of the guarantors appealed from that judgment.  Id. On appeal, the defendant guarantor claimed that the trial court erred in awarding to the plaintiff interest and costs above the $20,000 maximum amount set forth in the guarantee.   That document stated, in capital letters, that “THIS GUARANTEE SHALL BE FOR A MAXIMUM OF $20,000.”  Id., 558.   The Appellate Court agreed with the defendant guarantor that the trial court erred and reasoned as follows:  “Similarly, the costs of suit incurred by the plaintiff in obtaining its judgment against the [defendant] corporation and the [defendant guarantor] cannot be added to [the defendant guarantor's] indebtedness if doing so would exceed the limit placed upon his guaranty.   The terms of the guaranty included ․ the costs of collection.   That same guaranty, however, specifically limited [the defendant guarantor's] liability to $20,000.   Thus, by the express terms of the guaranty, costs of collection are subject to the limitation in the guaranty since no distinction with respect to the maximum obligation is made between the principal debt and the costs of collection.   If we were to conclude that the costs of collection were not subject to the limitation, any argument made in support of that conclusion could be applied with equal force to the limitation on the principal debt.”  Id., 560.   The guarantee in the present action is set forth in capital letters and provides that “[N]OTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE GUARANTOR'S LIABILITY HEREUNDER SHALL NOT EXCEED $100,000 (THE “LIABILITY CAP”).”   As in Boxed Beef, there is no distinction in terms of Curran's maximum obligation between the $100,000 amount of the principal debt and other amounts such as statutory interests and fees.   Because Curran's liability under the guarantee is limited to the amount of $100,000, the plaintiff's claim for interest and attorneys fee over that amount, pursuant to § 52–192a, is denied.

FN7. Practice Book § 13–23 provides that an admission request is deemed to be admitted if the party against whom it is directed files an answer or objection to the particular request.  Practice Book § 13–24 provides that “[a]ny matter admitted ․ is conclusively established ․”.  FN7. Practice Book § 13–23 provides that an admission request is deemed to be admitted if the party against whom it is directed files an answer or objection to the particular request.  Practice Book § 13–24 provides that “[a]ny matter admitted ․ is conclusively established ․”

Tyma, Theodore R., J.