Daniel Altmann v. Isaac Halpert (2012)

MEMORANDUM OF DECISION

FACTUAL BACKGROUND

These matters involve an unsuccessful real estate venture and were tried to the court on January 24 and 25, 2012.

Thereafter, briefs were filed, the last of which was received March 27, 2012.

Daniel Altmann, the father of Isaac Altmann, was a successful French businessman living in Paris when, at his son's suggestion, he agreed to invest eighty thousand dollars ($80,000.00) to be used in the purchase of (not then identified) real estate.   His son (not a party) was, in 2005, living in the city where he attended a yeshiva and was part of an orthodox Jewish community.   His friend and sometimes roommate, Yitzchok (“Isaac”) Thomas (a defendant here), had some real estate experience though he had no formal training and held no license.   Both young men wanted to become involved in local realty activities and, in fact, the plaintiff father wished the same for his son.   With no additional information and without any formal agreement between the plaintiff and either defendant, Daniel Altmann wired the above sum to the trust account of a Waterbury lawyer (Weisman—not a party) in September and October of 2005.   Weisman's client was defendant Thomas;  he was unaware of Thomas' plan to buy a house, rehab it and then to sell (or “flip”) the property for profit as he was unaware the plaintiff was the source of funding.   Neither the plaintiff nor his son had prior knowledge of Thomas' purchase of the property on October 10, 2005, or of his having formed a limited liability company (142 Bishop, LLC—here “LLC”) in whose name the property was held.   The property was purchased for $54,707.73 and the remaining funds were used to pay closing fees and sale-related costs, the hiring of a renovation contractor (Chase Builders) to whom Thomas paid $15,000, and to pay Thomas himself seven thousand six hundred fifty-seven dollars and fifty-six cents ($7,657.56).   Exh. 4. It was not until mid-January 2006, that Isaac Altmann learned in a phone call from Thomas that the contractor had “stolen” some of the plaintiff's money.¹  At that time, neither Altmann knew of the purchase of any property or hiring of a contractor and it was not until two weeks later that the plaintiff learned the use to which his money had been put and that some of it was missing.

Plaintiff's repeated attempts to contact Thomas were unsuccessful.  (He was apparently then in Israel.)   And he was similarly rebuffed by Weisman in his effort to learn where his money went or how it was used since Weisman believed his only client was Thomas.²  Despite Thomas having told Isaac Altmann he would sue the contractor to recover the lost funds, there is no evidence he has since filed any lawsuit, registered any complaint, or initiated any investigation regarding the “missing” funds.   Nor was either Altmann made aware that, sometime in early 2006 (after the purchase), Thomas had conversations with defendant Halpert, who was Thomas' landlord, mentor, and a sometimes business partner in other realty ventures.   The plaintiff concedes it was then that Thomas told Halpert of the plaintiff's role in the property purchase and of the contractor's alleged theft of some of Altmann's money (P. 4 of Altmann's post-trial brief.).   He then told Halpert of the need to pay back the plaintiff's money (Id.) and Halpert agreed to resolve Thomas' problem but he required Thomas to assign him the interest Thomas had in the LLC. Thomas did that and Judah Liberman, a business friend of Halpert's, became the LLC's sole “member.”   On or about April of 2006, Halpert financed Thomas' trip to Israel where Daniel Altmann tracked him down in the summer of 2006.   Altmann did not testify that Thomas then gave him any information regarding Halpert's involvment in either the property or the LLC—nor has Thomas subsequently brought any legal action against Halpert.

Altmann retained his present legal counsel in October of 2006 and it was only thereafter that he learned his money had been used to form the LLC which had purchased 144 Bishop Street.   On or about October 9, 2008, the plaintiff brought these two actions which were later consolidated for trial, at which time the parties agreed the actions be heard by a court (despite the case against Halpert having originally been claimed to a jury).   Also relevant is that plaintiff had earlier brought suit against the LLC and Weisman.  (The claims against Weisman were later withdrawn.)   A default judgment in the amount of $80,318.00 was entered by Agati, J. in that action;  that judgment has not been satisfied.

As against defendant Halpert, the only remaining counts sound in piercing the corporate veil and CUTPA,³ to which no special defenses were asserted.   As against Yitzchok Thomas, the asserted claims are for breach of contract, breach of fiduciary duty, statutory theft, conversion, unjust enrichment, and CUTPA.⁴  Thomas filed two special defenses, the first of which claimed insufficiency of service of process;  Thomas filed a motion to dismiss the action on that basis, which motion was later denied.   His second special defense, which incorporates various allegations directed to the plaintiff and to Halpert, does not assert any legally cognizable cause of action nor do those special defenses conform to this state's pleading requirements.   The defendant appears not to address them in the post-trial brief filed on his behalf (here to be later addressed).   The special defenses are here dismissed sua sponte.   Thomas also asserted a counterclaim sounding in malicious prosecution, essentially claiming the plaintiff solicited his testimony against Halpert at trial and suggested it would be advantageous to Thomas if Thomas were a party-plaintiff in this action—thus, Thomas' counterclaim.   Thomas has stated Altmann “did not pursue these options any further” (“Counter Complaint” of Jan. 9, 2009, P. 5, Plaintiff Exh. 5) but instead “with malice” and “without probable cause” initiated these legal proceedings.  Id. ¶ 5, 6. The counterclaim is legally insufficient because, inter alia, it makes no assertion the plaintiff promised not to pursue Thomas at trial even though Thomas had asserted a counterclaim against Halpert.   The counterclaim is also dismissed sua sponte.

As Against Isaac Halpert

The court begins by addressing a claim made by Halpert's counsel in his post-trial brief—a claim with which the court agrees.

The plaintiff's post-trial brief frequently implies—if not “states—that, in a prior PJR hearing before Gormley, J., Halpert testified falsely.   It is both relevant and instructive that, in finding the LLC (the only defendant then) was not unjustly enriched as Altmann claimed, the court nowhere in his five-page memorandum denying the PJR, made any assessment—favorable or unfavorable—of Halpert's credibility and, since Halpert did not testify in the trial before this court, this court cannot assess his truthfulness—or lack thereof.   The court is provided no information with regard to plaintiff's efforts to procure Halpert's testimony here and his counsel correctly stated Halpert had no obligation to appear at trial;  thus, no adverse inference can be drawn from his absence.   Also relevant, however, is that, since Halpert did appear before Gormley, J., plaintiff's counsel had the opportunity to—and did—cross examine him.   To argue therefore that Halpert's prior testimony was false either because Thomas said so before this court (when this court had every opportunity to assess Thomas' credibility) or that this court should conclude Halpert's prior testimony was false because Halpert had not then produced documents requested in discovery is neither helpful nor dispositive since counsel had available to him the means to compel discovery prior to the PJR hearing.

What is also made clear by Judge Gormley's memorandum of decision is that:  1) the elements of the unjust enrichment claim against the LLC were not established “by even the probable cause standard” (Exh. 9, P. 5);  and 2) the plaintiff's conduct in wiring $80,000 to Thomas' account without securing any lien or security interest in the LLC, without placing any limitations, establishing any terms to be satisfied before release of the funds, and imposing no time limits regarding when the money was to be released was “reckless, stupid, and unjustified.”  Id. at p. 4. The court continued, “All he had to do was write a short note to Weisman” (upon the transfer of the money) “to not disperse without further contact with him.   He did nothing.”   Id. The court noted Halpert had paid Thomas $80,000 for his interest in the LLC and had invested another $46,000 of his (Halpert's) own money in property improvements.  Id. Judge Gormley's decision provides absolutely no basis to believe he concluded Halpert's testimony was unreliable and to assert otherwise is, at best, “disconcerting” to this court whose obligation it was to examine all trial exhibits before adjudicating this matter.

A. Piercing the Corporate Veil (Count One)

Plaintiff has asserted that on June 20, 2008, Agati, J. entered a default judgment against the LLC in the amount of $80,318.00 (Exh. 14), that the LLC and Halpert are one and the same, and that Halpert therefore owes the plaintiff that sum.   The default was for failure to appear;  there was neither a trial on the merits nor—apparently—a hearing.   Default judgments entered under such circumstances need therefore be viewed distinct from judgments entered on the merits—particularly where, as here, the claim advanced in Count One has not previously been the subject of court scrutiny.

“A corporation is a separate legal entity, separate and apart from its stockholders.”  State v. Radzvilowicz, 47 Conn.App. 1, 18, cert. denied, 243 Conn. 955 (1997).   That principle also is applicable to limited liability companies and their members.  Connecticut General Statute § 34–133.   Nevertheless, “[c]ourts will ․ disregard the fiction of a separate legal entity to pierce the shield of immunity afforded by the corporate structure in a situation in which the corporate entity has been so controlled and dominated that justice requires liability to be imposed on the real actor ․ [Our Supreme Court has] affirmed judgments disregarding the corporate entity and imposing individual stockholder liability when a corporation is a mere instrumentality or agent of another corporation or individual owning all or most of its stock.”  (Citations omitted;  internal quotation marks omitted.)  Tomasso, Inc. v. Armor Constr.   & Paving, Inc., 187 Conn. 544, 552–53 (1982).

“The concept of piercing the corporate veil is equitable in nature” and courts should pierce “only under exceptional circumstances.”  Id. at 557.   It is clear that “the key factor in any decision to disregard the separate corporate entity is the element of control or influence exercised by the individual sought to be held liable over corporate affairs.”  Id., at 556–57.

“When determining whether piercing the corporate veil is proper, our Supreme Court has endorsed two tests:  the instrumentality test and the identity test.   The instrumentality rule requires, in any case but an express agency, proof of three elements:  (1) Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own;  (2) that such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or a dishonest or unjust act in contravention of plaintiff's legal rights, and (3) that the aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.”  (Citations omitted;  internal quotation marks omitted.)  Mountview Plaza Assoc., Inc. v. World Wide Pet Supply, Inc., 76 Conn.App. 627, 632–34 (2003).   The determination of whether the requirements of the instrumentality and identity rules were met is a question of fact to be reversed only if found to be clearly erroneous.  Miller v. Guimaraes, 78 Conn.App. 760, 771–72 (2003), citing to Davenport v. Quinn, 53 Conn.App. 282, 302 (1999).

The plaintiff's treatment of this count in his post-trial brief consists of one (of twenty) pages and references therein a statement by Halpert's counsel at the PJR hearing that “Halpert and the LLC “ ․ were one ․ the same essentially.”   Exh. 8, at 81, lines 3–5.   He argues that statement constitutes an admission under § 8–3(1)(A)(C) of this state's evidence code—though surely it cannot be asserted that Attorney Drouin's statement was “against” his client there.   More to the point, in that same earlier proceeding, Altmann elicited from Halpert the statement the LLC (the only party defendant then) was not the “partnership” Halpert had with Judah Liberman at the time of the PJR hearing.   The “partnership” with Liberman, Halpert noted, was constituted after the property had been purchased by an LLC in which only Thomas was a member whereas the LLC at the time of the hearing had only Liberman as a member.   Exh. 8, pp. 91–92, lines 22–3.   Alternatively, counsel here noted the LLC (then with Thomas as the only member) existed “separately” from the owners or members thereof.   See Id., P. 95, lines 24–26;  P. 96, lines 25–26 (“An LLC is an equal being unto itself;  it exists separately from people”);  P. 99, lines 8–9.   Is that to be construed as an admission that, as regards the LLC purchased by Halpert from Thomas, that business entity ought be treated as separate and distinct from the LLC which existed when only Thomas was a member?   How reconcile these arguments with the statement on P.19 of counsel's post-trial brief that it “would be improper to treat the LLC as separate from Halpert or as a separate entity when Halpert himself did not treat it this way, (sic) and in the LLC action successfully persuaded Judge Gormley not to treat it this way.” ⁵

That Halpert failed to produce documents in discovery does not authorize this court to pierce the corporate veil so as to hold Halpert liable.   It is so, as stated on P. 12 of counsel's post-trial brief, that Halpert was a principal of the LLC “until its very last days”;  yet, it ignores entirely that, when 144 Bishop Street was purchased by the LLC, Halpert was not then a member and no evidence has been offered to establish he provided any amount since.  (In point of fact, the plaintiff, who had no dealings with Halpert at any time, voluntarily wired the funds to Weisman who was Thomas' lawyer.)   There was no evidence that, with regard to such purchase, Halpert and the LLC then existing were somehow “fused” (one being the instrumentality of the other).   Halpert—if he were then ever a member of the LLC (Papers filed with the state list only Liberman as a member)—did not become one until after the October 10, 2005, purchase.   Nor, under the “identity” test, would this conclusion differ since the LLC, to the date of purchase, was controlled entirely by Thomas.⁶

The claim of Count One fails in the absence of any evidence that, on the date the property was purchased, the LLC (as purchaser) and Halpert were “one” under either the instrumentality or identity rule.

The second claim against Halpert is grounded on the Connecticut Unfair Trade Practices Act (herein, CUTPA).

CUTPA provides in relevant part that “[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”  General Statutes § 42–110b(a).  “Connecticut courts, when determining whether a practice violates CUTPA, will consider (1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise—whether, in other words, it is within at least the penumbra of some common-law, statutory, or other established concept of unfairness;  (2) whether it is immoral, unethical, oppressive, or unscrupulous;  (3) whether it causes substantial injury to consumers (or competitors or other businessmen) ․ Thus, a violation of CUTPA may be established by showing either an actual deceptive practice ․ or a practice amounting to a violation of public policy.”  (Citation omitted;  internal quotation marks omitted.)  Kenney v. Healey Ford–Lincoln–Mercury, Inc., 53 Conn.App. 330 (1999).

This count asserts Halpert, “while engaged in trade or commerce principally in the business of real estate speculation,” ⁷ used the LLC as a sham to enrich himself while wrongfully avoiding payment of the LLC's debts—specifically, the earlier default judgment entered by Agati, J. It further asserts Halpert failed to observe proper “corporate formalities” in conducting LLC business (without elucidation here or evidence offered at trial), “aggregated LLC funds with other of Halpert's investments,” backdated corporate documents, and used funds for his own benefit.   No evidence was offered to establish the violations alleged and, assuming solely for the purpose of adjudicating this claim, there was the proffer of evidence Halpert did misuse the LLC structure, there can be no finding (given the date of the property purchase and the date Halpert purchased the LLC) that the claimed violation of both the statute and public policy directly caused “ascertainable loss” to the plaintiff.

Plaintiff asserts Halpert's conduct was “unfair” in not paying to Thomas, as Thomas is alleged to have testified, the $80,000 for Thomas' interest in the LLC. (Yet the lynchpin of the plaintiff's argument is that Altmann—not Thomas—is owed that sum.)   Thomas, who did not testify in the PJR hearing, testified in this action and gave conflicting statements in response to Attorney Stevens' questions.   He conceded he got the benefit of Altmann's money but then later stated Halpert benefitted because he (Halpert) “got my money” and “ended up with the property.”   In response to the final question posed by Altmann's counsel, he said he “gave” his interest in the LLC to Halpert (for Halpert's providing for his escape to Israel?);   yet, he confessed to Attorney Stevens that “nothing was done in writing.”   There cannot be recovery under CUTPA without evidence of a causal nexus to establish that Halpert's alleged wrongful conduct and violation(s) of public policy caused Altmann's loss of $80,000.

Having sued Halpert, it was plaintiff's obligation to make every effort to obtain his testimony here.   While a New York resident, Halpert did real estate transactions in Waterbury and was known in the community.   The court is not informed of any efforts to procure his testimony either by deposition or at trial.   He did testify in the PJR hearing and, when cross examined by plaintiff's counsel then, he testified he had not been made aware of Altmann's potential claim and that, had he known of it, he would not have purchased the LLC or 144 Bishop Street.   Plaintiff's Exh. 8 pp. 80, 86.   His further testimony to plaintiff's counsel was that he did not learn any information about Altmann's potential claim until the middle of 2006—after the purchase by Thomas.  Id., at P. 87.   That testimony is credible for multiple reasons.   Why would Halpert—an experienced investor—have purchased the LLC if he knew of Altmann's claim?   Why would Halpert not simply have left Thomas (whom Halpert refused to describe as a “friend”—see Exh. 8, P. 86) to pick up his own debris?

Ultimately there is no evidentiary basis to conclude Altmann's loss was the proximate result of any action by Halpert.   It was not Halpert who took Altmann's money and who purchased 144 Bishop Street in the name of an LLC whose only member was Thomas.   It was not Halpert who deprived Altmann of his expectations.   If, as Altmann argues, Halpert failed to pay Thomas for the latter's interest in both the LLC and the property (or rewarded Thomas by paying for Thomas to abscond to Israel), that is not to assert an actionable tort against Altmann whose loss had already occurred at the hands of another.   Halpert owed no duty to Altman and no causation is established by hope or by speculation.

Judgment for this defendant hereby enters as to CV08–4018098S.

As Against Yitzchok Thomas

This pro se defendant asked for and received permission to file a post-trial brief.   A nine (9) page submission appears to bear his signature “c/o Al H. Thomas & Associates Law Offices” at a Memphis, Tennessee, address.   The defendant is a sometimes resident of Memphis and the court believes the law firm referenced is that of the defendant's father.   It cannot be determined who in fact wrote the brief.   No law is cited and there are only generic statements referable to trial testimony (without specific reference either to such testimony or to exhibits) nor is there any treatment of the specific causes of action alleged as against him.

The defendant has stated fourteen (14) “Findings of Fact”—some to include “Alternative Facts.”   His position is, prior to the plaintiff's wiring of funds as earlier described, he and his friend, Isaac Altmann (son of the plaintiff and not a party), agreed to form a partnership “which would purchase and renovate property under the primary management of Defendant Thomas and auxiliary management of Isaac Altmann.”   Brief, at 1.⁸ Although neither Altmann would hold title to the property, Isaac Altmann was to act as his father's “agent” and Isaac Altmann “approved” the purchase of 142 Bishop Street “before Plaintiff wired the funds.”  Id. at 2. He alleges that, prior to the Plaintiff's wiring of the $80,000 to Weisman, Weisman had a conversation with the Plaintiff.  (Id., at 3.⁹ ) and that Weisman disbursed the funds with the Plaintiff's consent.   He asserts he acted “with authority” when he transferred his interest in the LLC he had formed to own the property on the basis of Isaac Halpert's promise to hold the LLC in trust for him and that he never received any consideration for the transfer of the LLC ownership to Halpert.  Id. Finally, he states he had authority to use partnership funds to purchase property in his name and to hold it in trust for the partnership (Id.).   He avers that the testimony of both Altmanns with regard to his authority to purchase and renovate the property, the agreement of the three to be “partners,” and the time when the Plaintiff first learned of the purchase was inconsistent (though his was not).  Id., at 3–4.

The crux of his argument is as follows:

The only credible conclusion is that Altmann did authorize Attorney Weisman to disburse the funds in 2005 but Altmann doesn't remember the conversation seven years later, (sic) Altmann did not realize the legal import of his conversation and that it amounted to an authorization to disburse, (sic) or Altmann is lying.   Brief, at 7.

Seven (7) causes of action are pled as against this defendant.¹⁰

A. Breach of Contract 11

The only “contract” alleged in Plaintiff's complaint is oral.   Whether written or oral, express or implied, an agreement—if it is enforceable—must be definite and certain as to its essential terms and requirements, and it must be supported by valuable consideration, the essence or consideration of which is a benefit or detriment that has been bargained for and exchanged for the promise made.   See 1A. Corbin, Contracts (Rev. Ed.1996) § 4.1 p. 525;  J. Calamari and J. Petrillo, Contracts (3rd Ed.1987) § 4–2 pp. 187–90.   The alleged agreement that Thomas would help Plaintiff to invest in Waterbury properties with Plaintiff “having a beneficial interest in such properties or in the entities that owned them” with the understanding that Plaintiff's funds “would only be used in accordance with” the parties' “arrangement” (Complaint, Paragraph 20) is too vague and indefinite to constitute an enforceable contract.   There was no identification of the property to be purchased, the price of purchase, an agreement to renovate, the cost of renovation, the formation of an LLC, the time within which the property would be purchased, the location of the property to be purchased, whether it would consist of unimproved land or contain a residence and, if so, whether that residence would be a single-family or multifamily home, the age of the residence, etc.;   in fact, the parties cannot even agree whether, prior to purchase, the Plaintiff was to be informed of and to approve the property.   At best, there was an agreement to later agree on the purchase of property;  at worst, there was only an agreement to loan Thomas $80,000, which money would be used for the benefit of both Thomas and Altmann.

There can be no recovery under this count.

B. Statutory Theft

The claim here is that Thomas took Altmann's money with the specific intent to deprive Altmann permanently of the full amount—and that he did so.   Treble damage are sought under Connecticut General Statute § 52–564.   That statute reads, “Any person who steals any property of another, or knowingly receives and conceals stolen property, shall pay the owner treble damages.   The standard of proof applicable to statutory theft is by a preponderance of the evidence.”  Stuart v. Stuart, 297 Conn. 26, 44 (2010).   Statutory theft under § 52–564 is “synonymous with larceny [as defined in] General Statute § 53a–119.”  Id. at 41.  Section 53a–119 reads in relevant part:  “A person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or withholds such property from an owner.”   Larceny includes but is not limited to eighteen (18) sub-categories.¹²  None of the sub-categories applies to the circumstances posed by the parties in this matter.

Statutory theft differs from conversion in that the former requires an intent to deprive another of his property;  it requires a plaintiff to prove the additional element of intent over and above what is required to prove conversion.  Whitaker v. Taylor, 99 Conn.App. 719, 732 (2007).   The Plaintiff offers no factual allegation to support a finding Thomas—either when he persuaded Isaac Altmann to procure money from his father or when he purchased 142 Bishop Street—”intended to deprive Altmann permanently” of his money.   Counsel argues such intent can be found by virtue of the property having been purchased before Altmann was told by Thomas of the latter's intent to purchase this property.   That, however, ignores that Altmann ever placed upon Thomas the obligation to obtain his permission before purchasing any property.   The evidence at trial was contradictory on this point and, though Thomas was himself often not credible on a variety of issues, it is a stretch of this court's credibility to accept that, if in fact one of the conditions of Altmann's loan was that he be advised and approve of the specific property, he (who is many years older than Thomas and an experienced and successful businessman with his own lawyer with whom he could have consulted) did nothing to reduce that agreement to writing before he wired the funds.   This court doesn't doubt Altmann was not so advised before the closing but cannot premise a finding of an intent by Thomas to permanently deprive the Plaintiff of his money when it is as easily explained by Thomas' own inexperience in not reducing to contract the terms Altmann now insists were pre-requisites to his underwriting of the purchase.   It is just as likely that Thomas intended, once having renovated the property (which was not completed), to re-sell at sufficient profit to return to Altmann his investment while permitting himself (and Isaac Altmann) to share in the remaining profit.   Thomas' intent to purchase this property without providing Altmann prior notice of such purchase is an insufficient basis to find the requisite intent required to establish statutory theft given the inconsistent trial testimony and the Plaintiff's failure to reduce the agreement to writing.

C. Conversion

This cause of action is distinguished from statutory theft in that conversion does not require proof of an intent to deprive another of property.   It does, however, require the owner of the property to be harmed.   The tort requires “some unauthorized act which deprives another of his property permanently or for an indefinite time;  (sic) some unauthorized assumption and exercise of the powers of the owner to his harm.   The essence of the wrong is that the property rights of the plaintiff have been dealt with in a manner adverse to him, inconsistent with his right of dominion and to his harm.”  Label Systems Corp. v. Aghamodammadi, 270 Conn. 291, at 329 (2004), citing to Aetna Life & Casualty Co. v. Union Trust Co., 230 Conn. 779, 790–91 (1994).   To establish a prima facie case of conversion, the plaintiff had to establish that:  (1) the Plaintiff gave $80,000 to Thomas;  (2) Thomas deprived the Plaintiff of the money for an indefinite period of time;  (3) Thomas' conduct was unauthorized;  and (4) Thomas' conduct harmed the Plaintiff—all of which elements are here satisfied.   The money was wired to Weisman as Thomas' agent and, while under Thomas' control, the Plaintiff was deprived of its use.   The authority to use the funds to purchase 142 Bishop Street, to form an LLC of which only Thomas was a member (and then to transfer the LLC to Halpert/Liberman), and to hire a renovation contractor without Altmann's knowledge or authority deprived Altmann of his property.   The tort is established.

D. Unjust Enrichment

This tort is an equitable doctrine, the basis of which is that “in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another ․ With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard.”  Gagne v. Vaccaro, 255 Conn. 390, 408–09 (2001).   This remedy is not available when there is a remedy available pursuant to contract.  Schreiber v. Connecticut Surgical Group, P.C., 96 Conn.App. 731, 740 (2006);  5 Williston, Contracts (Rev.Ed.) § 1479.   The measure of damages in an unjust enrichment case is ordinarily not the loss to the plaintiff but the benefit to the defendant.  Ramondetta v. Amenta, 97 Conn.App. 151, 165, citing to Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 285 (1994).

Upon the wiring of $80,000 to Weisman (Thomas' agent), Thomas received the benefit of it entirely.   He paid neither to the Plaintiff nor to his son Isaac any of the benefit received.   Plaintiff thus prevails on this count also.

E. CUTPA

The elements of this tort have already been stated here in reference to the co-defendant.   Count VI of the complaint adequately pleads facts which demonstrate the requirements established in Ventres v. Goodspeed Airport, LLC., 275 Conn. 105, 155 (2005), cert. denied, U.S. 126 S.Ct. 1913, 164 L.Ed.2d 664 (2006);  see also S.M.S. Textile Mills, Inc. v. Brown, Jacobson, Tillinghast, Lahan & King, 32 Conn.App. 786, 797 (1993), cert. denied, 328 Conn. 903 (1993).¹³  The conduct of Thomas, known within the Waterbury Jewish community as engaged in the business of real estate investment and trading, was—vis-a-vis the Plaintiff—immoral, unethical, and unscrupulous.   There is no evidence that the Plaintiff knew or should have known Thomas would use the funds to form a separate business entity (consisting only of himself) to hold title to property it purchased—thus depriving Plaintiff of his initial investment and whatever profit may later have been realized through improvement and re-sale.

F. Breach of Fiduciary Duty

Plaintiff's very brief treatment of this cause of action relies solely on Thomas' own trial statement that, when he formed the LLC of which he was the sole member, he was “acting as trustee for Daniel and Isaac.” 1/25/12.   Later, on the same date and in response to a question put to him by Attorney Flynn, he testified to being Altmann's “trustee.”   Thomas was never asked if he knew the legal meaning of that term and the court has no confidence he—untrained as he is in the law—knew or understood the same.  “A fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interest of the other.”  Sherwood v. Danbury Hospital, 278 Conn. 163, 195 (2006).  “The superior position of the fiduciary ․ affords him great opportunity for abuse of the confidence reposed in him ․ Once a [fiduciary] relationship is found to exist, the burden of proving fair dealing properly shifts to the fiduciary.”  Id. at 196, citing to Cadle Co. v. D'Addario, 268 Conn. 441, 445 (2004).  “Thus, proof of a fiduciary relationship, therefore, generally imposes a twofold burden on the fiduciary.   First, the burden of proof shifts to the fiduciary;  and second, the standard of proof is clear and convincing evidence.”  Id., at 456, citing to Murphy v. Wakelee, 247 Conn. 396, 400 (1998).   The basis upon which this burden shifting and enhanced burden of proof rests is, essentially, that undue influence will not be presumed.  Connell v. Colwell, 214 Conn. 242, 252 (1990).  “This rule is somewhat relaxed in cases where a fiduciary relationship exists between the parties to a transaction ․ and where one has a dominant and controlling force and influence over the other.   In such cases, if the superior party obtains a possible benefit, equity raises a presumption against the validity of the transaction or contract, and casts upon such party the burden of proving fairness, honesty, and integrity in the transaction or contract ․” Cadle, 268 Conn., at 456.

It is axiomatic that a party cannot breach a fiduciary duty to another unless a fiduciary relationship exists between them.   This court finds such a relationship to have existed between Thomas and the Plaintiff.   Thomas had been active for some years in Waterbury real estate transactions.  (It was his way of earning a living.)   He had worked on real estate matters with both Halpert and Weisman, both of whom made their living on real estate deals.   His friend, Plaintiff's son, knew this;  the son hoped to become involved in real estate and looked to Thomas as someone from whom he could learn.   The Plaintiff knew of Thomas' real estate experience and knew of—and encouraged—his son to become involved in the field but he himself (the Plaintiff) knew nothing about real estate dealings.   He looked to Thomas to use his money wisely and carefully;  his expectation was that Thomas would be loyal to him and exercise care in expending his money.   That trust in Thomas is the lynchpin of a fiduciary relationship.

Thomas did not meet his burden of proving fairness, honesty, and integrity in the relationship.   In fact, he conceded both Altmanns relied on him for his real estate experience and that he blamed himself for the outcome—though not for owing a certain amount.   Trial testimony—1/25/12.¹⁴  Given the evidence of a fiduciary relationship and Thomas' failure to rebut the presumption, Plaintiff prevails on this claim as well.

Thomas' Counterclaim

Thomas filed a counterclaim alleging malicious prosecution.   The Plaintiff moved to strike the same and cited as authority Connecticut Law of Torts § 161.   The court denied (without prejudice to re-filing) the motion based on the authority cited while agreeing the tort did not lie because there was not a prior criminal action.   Order of 4/15/11.   The Plaintiff chose not to re-plead and the pleadings closed.

Thomas cannot prevail on his counterclaim in the absence of Altmann's having successfully prosecuted a prior criminal action against Thomas.  Bhatia v. Debek, 287 Conn. 397, 404 (2008), citing to McHale v. W.B.S. Corp., 187 Conn. 444, 447 (1982).

Thomas' Special Defenses

Thomas's “First Defense” avers insufficiency of process and service of process—thus, lack of personal jurisdiction over him.   The defendant also filed a Motion to Dismiss (# 105) the action on the same grounds;  that motion was denied by Ozalis, J. on 2/2/11 (# 105.10) and later again by Dooley, J. on 11/28/11.   There is yet another judicial determination of this claim—with which this court agrees given both the certified return receipt of service on defendant at 100 North Main Street, Suite 2901, Memphis, TN. 38103.   See Supplemental Return of Marshal John Firoillo dated 12/29/08 (# 102).   When Thomas entered a “Special Appearance For the Sole Purpose of Contesting” on 1/27/09, he there listed his address as “c/o Al Thomas & Associates, 100 N. Main Street, Suite 2901, Memphis, Tennessee 38103.”   That is the address used consistently on all pleadings he filed to include the filing of a post-trial brief dated 3/22/11 and received 3/27/11.   He has submitted to the jurisdiction of this court and the first Special Defense is unavailable to him.

Thomas' Second Defense is legally insufficient, asserting as it does that he was somehow (earlier in these proceedings) persuaded by Altmann's counsel to help Altmann prosecute the action against Halpert by testifying against Halpert (which he did) and, further, was persuaded it would be “legally advantageous” for him “to be a party-plaintiff” in this litigation;  yet, Altmann filed this suit against Thomas.   In essence, if true, Thomas was the subject of a “sales job.”   It is not a recognizable special defense and, even had there been chicanery as Thomas suggests, it is not of the variety which is actionable.

Damages

Damages are awarded the Plaintiff (in CV08–5011200) as against Yitzchok (Isaac) Thomas as follows:

Eighty–Thousand ($80,000) doubled (to $160,000) on the CUTPA violation of Count Six to which is added attorney fees and costs as yet undetermined until such time as there is submitted a properly documented Request for Award of Costs (as regards this action—the only action in which Thomas is a named party) and a Statement of Attorney Fees listing each date on which service in this action was rendered, a listing of the time involved and service(s) rendered, and the fee claimed.

No additional damages are awarded under Counts IV (Conversion), Count V (Unjust Enrichment), Count VI (the “second” Count VI) for Breach of Fiduciary Duty since the torts there established constitute the same behavior which is the basis of the CUTPA violation and for which damages have here been awarded.

SHEEDY, J.

FOOTNOTES

FN1. No evidence was offered regarding the truth of this claim..  FN1. No evidence was offered regarding the truth of this claim.

FN2. Weisman apparently made no inquiry of Thomas as to the explanation for a French resident wiring funds for Thomas' use..  FN2. Weisman apparently made no inquiry of Thomas as to the explanation for a French resident wiring funds for Thomas' use.

FN3. In his post-trial brief, the plaintiff withdrew counts sounding in fraud and fraudulent conveyance.   P. 12 of Post–Trial Memorandum..  FN3. In his post-trial brief, the plaintiff withdrew counts sounding in fraud and fraudulent conveyance.   P. 12 of Post–Trial Memorandum.

FN4. A claim for fraud was withdrawn.   P. 15 of post-trial brief..  FN4. A claim for fraud was withdrawn.   P. 15 of post-trial brief.

FN5. Nothing in Judge Gormley's PJR decision addressed the legal status of the LLC at any time during its existence.   The cause of action here pled in Count One had not even been asserted or pled when the PJR hearing was conducted nor was Halpert a member of the LLC when it purchased the property..  FN5. Nothing in Judge Gormley's PJR decision addressed the legal status of the LLC at any time during its existence.   The cause of action here pled in Count One had not even been asserted or pled when the PJR hearing was conducted nor was Halpert a member of the LLC when it purchased the property.

FN6. Thomas testified before this court on January 25, 2012, that, when he established the LLC in his name alone, he was “acting as the trustee for Daniel and Isaac Altmann” because they “didn't want anything in their name.”   He never testified that Halpert then was a partner in the LLC..  FN6. Thomas testified before this court on January 25, 2012, that, when he established the LLC in his name alone, he was “acting as the trustee for Daniel and Isaac Altmann” because they “didn't want anything in their name.”   He never testified that Halpert then was a partner in the LLC.

FN7. In his Answer, Halpert admitted to being in the trade or business of real estate sales and development for at least thirty (30) years..  FN7. In his Answer, Halpert admitted to being in the trade or business of real estate sales and development for at least thirty (30) years.

FN8. This was Isaac Altmann's virgin foray into real estate;  Daniel Altmann's role was only to fund the investment..  FN8. This was Isaac Altmann's virgin foray into real estate;  Daniel Altmann's role was only to fund the investment.

FN9. The implication is that Weisman discussed with Plaintiff the details of the transaction—which is not supported by the evidence but permits the “inference” the Plaintiff knew from whom the property would be purchased and at what price..  FN9. The implication is that Weisman discussed with Plaintiff the details of the transaction—which is not supported by the evidence but permits the “inference” the Plaintiff knew from whom the property would be purchased and at what price.

FN10. The cause of action in fraud has been withdrawn.   Pl. Post–Trial Brief, at 15..  FN10. The cause of action in fraud has been withdrawn.   Pl. Post–Trial Brief, at 15.

FN11. Plaintiff does not address the applicability C.G.S. § 52–550(a)(4)—or lack thereof—to the transfer of the LLC from Thomas to Halpert though the only asset of the LLC was 142 Bishop Street.   Thus, the court does not address the Statute of Frauds for that reason as well as for the reasons herein stated..  FN11. Plaintiff does not address the applicability C.G.S. § 52–550(a)(4)—or lack thereof—to the transfer of the LLC from Thomas to Halpert though the only asset of the LLC was 142 Bishop Street.   Thus, the court does not address the Statute of Frauds for that reason as well as for the reasons herein stated.

FN12. The enumerated sub-categories are:  embezzlement;  obtaining property by false pretenses;  obtaining property by false promise;  acquiring property lost, mislaid or delivered by mistake;  extortion;  receiving stolen property;  shoplifting;  conversion of a motor vehicle;  obtaining property through fraudulent use of an automated teller machine;  library theft;  conversion of leased property;  failure to pay prevailing rate of wages;  theft of utility service;  air bag fraud;  theft of motor fuel;  and failure to repay surplus Citizens' Election Fund grant funds..  FN12. The enumerated sub-categories are:  embezzlement;  obtaining property by false pretenses;  obtaining property by false promise;  acquiring property lost, mislaid or delivered by mistake;  extortion;  receiving stolen property;  shoplifting;  conversion of a motor vehicle;  obtaining property through fraudulent use of an automated teller machine;  library theft;  conversion of leased property;  failure to pay prevailing rate of wages;  theft of utility service;  air bag fraud;  theft of motor fuel;  and failure to repay surplus Citizens' Election Fund grant funds.

FN13. Our Supreme Court has repeatedly stated that, with regard to the “cigarette rule” (the test for “unfairness” adopted by this state's decisional law), all three criteria of that test need not be satisfied;  a practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three.  Fink v. Golenbock, 238 Conn. 183, 215 (1996), citing to Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80, 105–06 (1992).   This court finds all three (3) tests were satisfied..  FN13. Our Supreme Court has repeatedly stated that, with regard to the “cigarette rule” (the test for “unfairness” adopted by this state's decisional law), all three criteria of that test need not be satisfied;  a practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three.  Fink v. Golenbock, 238 Conn. 183, 215 (1996), citing to Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80, 105–06 (1992).   This court finds all three (3) tests were satisfied.

FN14. That admission did not, however, prevent Thomas from blaming Halpert or, in fact, blaming Altmann himself for the loss when he testified Altmann was himself at fault because he “trusted” a kid in the business.   The “kid”—Thomas—testified to his prior property management and development experience.   He said, “Nobody would think a 22 year old was experienced.”   There was no evidence Altmann knew Thomas' age or that they had then met..  FN14. That admission did not, however, prevent Thomas from blaming Halpert or, in fact, blaming Altmann himself for the loss when he testified Altmann was himself at fault because he “trusted” a kid in the business.   The “kid”—Thomas—testified to his prior property management and development experience.   He said, “Nobody would think a 22 year old was experienced.”   There was no evidence Altmann knew Thomas' age or that they had then met.

Sheedy, Barbara J., J.