First American Title Insurance Company v. 273 LLC (2013)

RULING RE PLAINTIFF'S MOTION TO SET ASIDE VERDICT AND MOTION TO REDUCE VERDICT (REMITTITUR) AND DEFENDANTS' MOTION FOR PREJUDGMENT INTEREST

This case was an action by the plaintiff, First American Title Insurance Company (First American) for declaratory judgment, seeking to determine the amount due under a certain title insurance policy for a title defect discovered by the defendant developers, 273 Water Street, LLC et al. (defendants) after they purchased the subject property:  the beachfront summer estate previously owned by the actress, Katharine Hepburn, located in the Borough of Fenwick, CT. The defendants filed an answer with special defenses and counterclaims.   The defect was a 30–foot–wide discontinued road that ran through the property, which was eventually negotiated down to a 6–foot–wide easement during the long course of this litigation.   The jury rendered a verdict finding the value of the loss, and the amount due, to be $2.2 million.   Pending before the court is the plaintiff's postjudgment motion to set aside verdict and motion to reduce verdict (Doc. No. 193.00) and the defendant's motion for prejudgment interest (Doc. No. 186.00).   For the following reasons, both motions are denied.   In accordance with the verdict of the jury, the court renders judgment for the defendants on the plaintiff's Amended Complaint.   It renders judgment for the defendants on the First and Third Counts of their Counterclaims for breach of contract and for a declaratory judgment in the amount of $2.2 million, plus costs.   It renders judgment for the plaintiff on the Second Count of the defendants' Counterclaims for breach of implied covenant of good faith and fair dealing.¹

I

General Statutes § 52–228b and Practice Book § 16–35 provide for motions to set aside the verdict and for new trials to remedy erroneous jury verdicts.   The standard of review governing such motions is well settled.  “The trial court possesses inherent power to set aside a jury verdict which, in the court's opinion, is against the law or the evidence ․ [The trial court] should not set aside a verdict where it is apparent that there was some evidence upon which the jury might reasonably reach their conclusion, and should not refuse to set it aside where the manifest injustice of the verdict is so plain and palpable as clearly to denote that some mistake was made by the jury in the application of legal principles ․ Ultimately, [t]he decision to set aside a verdict entails the exercise of a broad legal discretion ․ that, in the absence of clear abuse, we shall not disturb.”  (Citations omitted;  internal quotation marks omitted.)  Edmands v. CUNO, Inc., 277 Conn. 425, 452, 892 A.2d 938 (2006).

When considering a motion for remittitur, “[a]lthough the trial court has a broad legal discretion in this area, it is not without its limits ․ Litigants have a constitutional right to have factual issues resolved by the jury ․ This right embraces the determination of damages when there is room for a reasonable difference of opinion among fair-minded persons as to the amount that should be awarded ․ The amount of a damage award is a matter peculiarly within the province of the trier of fact, in this case, the jury ․ Similarly, the credibility of witnesses and the weight to be accorded to their testimony lie within the province of the jury ․

“Furthermore, the size of the verdict alone does not determine whether it is excessive.   The only practical test to apply to [a] verdict is whether the award falls somewhere within the necessarily uncertain limits of just damages or whether the size of the verdict so shocks the sense of justice as to compel the conclusion that the jury was influenced by partiality, prejudice, mistake or corruption ․

“Thus, in ruling on the motion for remittitur, the trial court [is] obliged to view the evidence in the light most favorable to the plaintiff in determining whether the verdict returned was reasonably supported thereby ․ A conclusion that the jury exercised merely poor judgment is an insufficient basis for ordering a remittitur ․ The plaintiff need not prove damages with mathematical exactitude;  rather, the plaintiff must provide sufficient evidence for the trier to make a fair and reasonable estimate ․

“The fact that the jury returns a verdict in excess of what the trial judge would have awarded does not alone establish that the verdict was excessive ․ The court should not act as the seventh juror with absolute veto power.   Whether the court would have reached a different [result] is not in itself decisive ․ The court's proper function is to determine whether the evidence, reviewed in a light most favorable to the prevailing party, reasonably supports the jury's verdict.”  (Citations omitted;  internal quotation marks omitted.)   Johnson v. Chaves, 78 Conn.App. 342, 346–47, 826 A.2d 1286, cert. denied, 266 Conn. 911, 832 A.2d 70 (2003).

II

The case was tried to the jury.   The proceedings were held on March 5, 6, 7, 12, 13, 14, 15, 20, 21 and 22, 2013.   Testimony was provided by Atty. Richard Angelo, Vice President, First American;  Atty. Claudia Kapustia, Vice President and Senior Counsel, First American;  Marc Nadeau, real estate appraiser for the plaintiff;  Albert W. Franke, III, expert witness for the plaintiff;  real estate appraisals;  Robert J. Nocera, expert witness for the defendants, real estate appraisals;  Frank Farricker, expert witness for the defendants, real estate values;  Frank J. Sciame, owner of the defendants.   Over 100 exhibits were admitted into evidence including numerous photographs, maps, correspondence, reports, land records, the policy of title insurance and other records documenting the events in the case.

The jury reasonably could have found the following facts.   The defendants purchased the subject property on September 27, 2004.   The property was the beachfront summer home of Katharine Hepburn located in the Borough of Fenwick, Town of Old Saybrook, CT. The property was offered for sale after Hepburn's death.   They purchased the property for $6 million after it had been on the market for some time.   At times, it had been offered at $12 million.   When they bought the property, it consisted of approximately 3.5 acres of beachfront land, which included 600 feet of frontage on Long Island Sound with a large house.   Originally, the lot was much larger, but the Hepburn estate donated the eastern portion of her land, consisting mostly of wetland, to the Lynde Point Land Trust, Inc., which already owned adjacent acreage.   On the remaining 3.5 acres, the defendants raised the house 5 feet, made extensive improvements costing approximately $3 million, and subdivided the land into three lots.   The house sits on the center lot with the other lots to the west and east.   Plans are for a smaller house on the lot to the east, and another smaller house on the west lot, creating a family compound.   All three lots are waterfront and are on the market for $30 million.   In addition to the large home and large lots, amenities include the fact that the property is bordered on three sides by Long Island Sound, the land trust and a large pond, creating a sense of privacy, seclusion and exclusivity.

When they purchased the property, they also purchased a title insurance policy.   The insured amount was $6 million with an escalator clause that gradually increased the insured amount to over $9 million at the time of trial.   The policy provided:

In case of a claim under this policy, the Company shall have the following additional options:

(a) To Pay or Tender Payment of the Amount of Insurance.   To pay or tender payment of the amount of insurance under this policy together with any costs, attorneys fees and expenses incurred by the insured claimant, which were authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to pay.

* * * * *

(b) To Pay or Otherwise Settle with Parties Other than the Insured or With the Insured Claimant.

(i) to pay or otherwise settle with other parties for or in the name of an insured claimant any claim insured against under this policy, together with any costs, attorneys fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of payment and which the Company is obligated to pay ․

Title Insurance Policy

The defendants discovered, shortly after purchasing the property and commencing improvements to the house, that the Borough of Fenwick claimed a 30–foot–wide discontinued road running through the original lot.   The road was a continuance of Mohegan Avenue.   Mohegan Avenue is a road that leads to the driveway entrance of the subject lot.   Indeed, the address of the property is 10 Mohegan Avenue.   The discontinued road was not visible, but it was a matter of record in the borough records.   It ran from the top of the driveway, along the course of the driveway in part, over the lawn and it terminated at the waterfront at a rock jetty.   It ran straight along the eastern side of the house.   The defendants learned of the borough's claim from a letter from a borough official dated February 18, 2005, and it is that date that the parties agreed constitutes the date of loss under the title insurance policy.

The defendants filed a claim with First American on August 15, 2007.   On October 8, 2008, First American approved their claim and issued a check in the amount of $17,000.00.   The defendants refused to accept the check, countering that they thought the loss was worth approximately $5 million.

Subsequently, the plaintiff brought the instant action for declaratory judgment concerning its obligations under the title insurance policy, originally asking for a ruling that it properly determined the incurred loss at $17,000.00.   By the time of trial, the complaint was amended and it asked the jury for a determination that its obligations would be satisfied by tendering a check to the defendants in the amount of $40,000.00 or less, a position consistent with the testimony of its expert witness appraiser.

During the course of litigation, the parties cooperated in negotiating with the borough over its claimed road rights over the property.   They succeeded in getting the borough to convey fee title to the 30–foot strip to the defendants to be replaced by a limited six-foot-wide easement over the same course of the former discontinued road.   The six-foot easement is limited to pedestrians and bicyclists that are property owners in the tiny borough.   It allows access from Mohegan Avenue to portion of the beach from 5 a.m. to midnight.   The easement is not marked, is not advertised, is not maintained and it is nearly invisible.   It is a footpath mostly covered in vegetation.   However, some people use it.   It is about 80 yards from the house.   It runs along the eastern side of the east lot, next to the land donated to the Lynde Point Land Trust, Inc.

The defendants filed an Answer denying certain of the plaintiff's allegations, and filed special defenses to the plaintiff's Amended Complaint, asking the jury to reject First American's proposed declaratory judgment on the grounds of estoppel, unclean hands and laches.   The defendants also filed counterclaims asking the jury for money damages for breach of contract, money damages for breach of implied covenant of good faith and fair dealing, and they sought a counter-declaratory ruling asking the jury to determine the amount of the loss due under the title insurance policy without a $40,000.00 limit.   Both sides asked, and the court so instructed, the jury to determine the amount of the loss by considering “the diminution in the value of the insured property, if any, caused by the defect in the title as of the legal date of loss [February 18, 2005], subject to the effect, if any, of the conveyance of the discontinued Mohegan Avenue subject to the six foot easement.”   Jury Instructions.

On March 22, 2013, the jury rendered its verdict.   It found against the First American's request for declaratory judgment and, instead, found in favor of the defendants' request and found the loss to be $2.2 million.   It found in favor of the defendants on the counterclaim for breach of contract, finding damages of $2.2 million.   It found for First American on the counterclaim for breach of implied covenant of good faith and fair dealing.

Other factual findings critical for resolving the issues are made below as needed.

III

The issues are discussed seriatim:A

The first issue is whether plaintiff is entitled to a new trial because the court allowed some testimony by Frank Farricker.   Mr. Farricker was offered and accepted as an expert witness on the subject of real estate values.   Mr. Farricker was a licensed real estate broker.   He testified that the subject property was more valuable by reason of it having been previously owned by Katharine Hepburn.

Plaintiff argues that this witness's opinions were based on “junk science” that should have been completely excluded by the court exercising its role as the gatekeeper of evidence under State v. Porter, 241 Conn. 57, 689 A.2d 739 (1997), cert. denied, 523 U.S. 1058 (1998).   The proffered opinion was that the property was more valuable by reason of Hepburn's prior ownership.   She was a renowned actress popular during a career lasting many decades.   The boost was described as a “celebrity status.”   The issue was resolved on the record in response to the plaintiff's motion in limine.   Doc. No. 171.00.   In sum, the court found that the proffered evidence was not junk science;  rather, the witness was using sales and market experience and simple mathematics to justify his opinion.   His opinion did not involve innovative scientific techniques and, thus, was not required to be excluded by Porter.   See State v. Furbush, 131 Conn.App. 733, 756–57, 27 A.3d 497 (2011) (accident reconstruction);  State v. Legnani, 109 Conn.App. 399, 419, 951 A.2d 674, cert. denied, 289 Conn. 940, 959 A.2d 1007 (2008) (tool mark identification).   Moreover, Connecticut has long permitted real estate professionals to give expert opinion on real estate values.   See, e.g., Taylor v. King, 121 Conn.App. 105, 118–20, 994 A.2d 330 (2010) (realtor);  Hutchinson v. Andover, 49 Conn.App. 781, 788–89, 715 A.2d 31 (1998) (broker).   The admissibility of opinion evidence on value by real estate professionals having been established, the court correctly concluded that it did not need to re-test it at a Porter hearing.   See State v. Oral H., 125 Conn.App. 276, 285, 7 A.3d 444 (2010), cert. denied, 300 Conn. 902, 12 A.3d 573, cert. denied, 131 S.Ct. 3003 (2011) (delayed disclosure of sexual abuse);  State v. Reid, 254 Conn. 540, 549, 757 A.2d 482 (2000) (microscopic hair analysis).

Plaintiff also argues that Mr. Farricker's testimony was impermissibly cumulative to defendant's other real estate expert, the appraiser Robert J. Nocera.   This issue was also thoroughly reviewed and resolved during trial.   See Transcript of March 15, 2013, pp. 1–18 and 22–23.   The testimony was found to be supplemental.   Mr. Nocera did not testify as to the value of the property due to its celebrity status because that was an intangible that could not be considered by appraisers.   However, Mr. Farricker was not an appraiser, and he was not so limited by the standards applicable to appraisers.   As such, his testimony was not prejudicially cumulative.  Glaser v. Pullman & Comley, LLC, 88 Conn.App. 615, 627–28, 871 A.2d 392 (2005).

Moreover, the plaintiff was afforded full reign to cross examine the witness and raise appropriate objections.   In fact, although the witness did testify that the property possessed “celebrity status” that would increase its value above the mere appraised value, the court sustained the plaintiff's objection to the witness giving his opinion as to the percentage increase in value, due to lack of evidentiary foundation.   Accordingly, there is no justification for ordering a new trial on this point.   That his testimony did not greatly exceed the testimony of Mr. Nocera was not due to the identical scope of their testimony, rather it was due to plaintiff's well-timed objection.

B

Next, plaintiff argues for a new trial based upon alleged hearsay testimony given by Mr. Sciame.   While on cross examination, plaintiff's counsel showed Mr. Sciame the property disclosure form being shown to prospective buyers of the property.   The form disclosed an easement on the property.   Mr. Sciame was asked, “And is that the easement that we've been discussing in this case?”   Transcript of March 20, 2012, p. 39.   Mr. Sciame responded, “That is the easement that we've been discussing in this case, and that is at the crux of the issue.   You're required to disclose any easements.   And actually this, in talking to real estate brokers, could be why we have not gotten a single offer on the property.   In that small universe of people that are interested, this jumps out ․” Id.

The statement was not hearsay.   He did not repeat an out-of-court statement offered to prove the truth of the matter stated.  Connecticut Code of Evidence § 8–1 (2009).   Rather, his reference to “talking to real estate brokers” merely identified the context for his opinion that the easement detracted from the desirability of the property among the highly discriminating, potential buyers and, thus, damaged its value, which was the issue in the case.   Moreover, the testimony was directly responsive to plaintiff's open-ended question.   Having “opened the door,” the plaintiff cannot object to the responsive testimony.   See Somers v. LeVasseur, 230 Conn. 560, 565, 645 A.2d 993 (1994).

Plaintiff also argues for a new trial based on the court's overruling of its objection to certain allegedly irrelevant testimony by Mr. Sciame.   In that testimony, Mr. Sciame, while chronicling the events that led to the litigation in this case, told a family story about how his father once had to accept a loss on a painting job because he could not afford to go to court to enforce the contract.   Transcript of March 15, 2013, pp. 92–93.   The story was not offered or mistakenly accepted for the truth of the matters asserted.   In context, it was understood and permitted because it was his explanation, in parable form, for his counterclaim for breach of implied covenant of good faith and fair dealing.   He was explaining that the plaintiff's low payment on his claim under the policy was made in bad faith because it was taking advantage of the fact that the average person cannot afford to spend years fighting for his or her rights in court.   Thus, the testimony was relevant.   Moreover, the jury rendered a verdict for the plaintiff on the breach of implied covenant of good faith and fair dealing counterclaim.   Plaintiff has no grounds to complain of an injustice on this point.

C

The plaintiff next asks for a new trial based on the court's sustaining defendants' objection to plaintiff's proffered exhibit of a letter written by Mr. Sciame to neighbors dated June 6, 2011, prior to listing the three lots at $30 million.   The letter attributed a separate price for each lot, with a price of $5.5 million on the eastern lot:  the lot encumbered by the six-foot easement.   It also mentioned plans for a three-home family compound currently being reviewed by borough officials.   The objection was relevancy.   Transcript of March 20, 2013, pp. 52–55.   When the court asked the plaintiff how the exhibit was relevant, the response was circular.   Eventually, plaintiff said it concerned the credibility of Mr. Sciame.   The court ruled that the evidence was not admissible because evidence is not ordinarily admissible on collateral issues.   The ruling was correct.   Where the credibility of a witness is at issue, extrinsic evidence is not admissible for impeachment on a collateral issue.  State v. Carbone, 172 Conn. 242, 262, 374 A.2d 215 cert. denied, 431 U.S. 967 (1977);  State v. Rogers, 9 Conn.App. 208, 212, 518 A.2d 399 (1986), cert. denied, 202 Conn. 806, 520 A.2d 1288, cert. denied, 481 U.S. 1051 (1987).   This point was collateral.   The issue in the case was the value of the loss in 2005, i.e., the diminution in the value of the insured property, if any, caused by the defect in the title as of the legal date of loss [February 18, 2005], subject to the effect, if any, of the conveyance of the discontinued Mohegan Avenue subject to the six-foot easement.   The issue in the case was not the history or nuances of defendants' 2011 marketing efforts and strategies.

D

An additional claim for a new trial is based on the court's action in excluding certain anticipated testimony by plaintiff's witness, Marc Nadeau.   Mr. Nadeau was the appraiser hired by the plaintiff to give an appraisal of the value of the loss after the defendants filed their claim.   He rendered a report valuing the loss at $17,000.00, and his report was a full exhibit in the case.   Defendant's Exhibit H. His appraisal was a basis for the plaintiff's decision to issue a check in the amount of $17,000.00 to the defendants for the loss.   During his testimony, an objection was raised as to a particular question.   But, during argument on that objection, the parties anticipated upcoming issues.   The plaintiff revealed that it planned to ask the witness to explain and defend his $17,000.00 appraisal.   Transcript of March 7, 2013, pp. 98–97;  see also pp. 114–20.   The witness was identified as an expert at one point, but the plaintiff withdrew him as an expert prior to the start of evidence.   Id., p. 90.   Ordinarily, only experts are permitted to give opinions.   Connecticut Code of Evidence, § 7–2 (2009).   If a witness is not testifying as an expert, the witness may not testify in the form of an opinion unless the opinion is rationally based on the perception of the witness and is helpful to a clear understanding of the testimony of the witness or the determination of a fact issue.  Connecticut Code of Evidence, § 7–1 (2009).   In the instant case, since Mr. Nadeau was not called as an expert to value the property, only the fact that he gave the appraisal was relevant.   His explanation and defense of his opinions would be an exercise by an expert in giving opinions.   That he could not do because he was not offered as an expert.   Accordingly, the court correctly prevented the anticipated testimony at issue.

E

Finally, plaintiff argues that the verdict should be set aside because it was so excessive that it shocks the conscience.   It requests the court to order a remittitur and, upon failure of the defendant to remit the amount so ordered, it requests that the verdict be set aside and that a new trial be ordered.   Plaintiff does not suggest the amount that should be remitted.

On the issue of damages, the jury presented a multitude of facts concerning the processing of the claim and the evaluation the loss;  and the parties engaged in a proverbial battle of the experts in an attempt to persuade the jury as to what they should find to be the value of the loss to be in this case.   The jury heard testimony from Atty. Angelo that when the claim came into his office, it was classified as a major claim and eventually assigned to an experienced attorney in the Hartford office.   The company was experiencing staff relocations and reductions at the time.   The jury heard from Atty. Kapustia that, after some administrative delays, the company determined to value the loss at $17,000.00 based on the report of the appraiser that it hired (Mr. Nadeau), and that it issued a check for that amount to the defendants accordingly.   The jury heard from Mr. Nadeau at trial and reviewed his appraisal report, a 29–page report plus addenda, which contained his findings and conclusions setting the value at $17,000.00.   It also had an earlier draft of that appraisal where he earlier set the value at $51,000.00, and it heard him explain the reason for the difference.   The jury heard the testimony of Mr. Franke, plaintiff's expert witness, who valued the loss at $40,000.00 before negotiations over the discontinued road, and $0 now that the encumbrance has been reduced to a 6–foot easement.   His reasons were thoroughly tested on examination and cross examination, and the jury had his 50–page report to review.   The jury heard the testimony of Mr. Sciame, who rejected the check and who demanded that the loss was worth approximately $5 million.   The jury heard the testimony of Mr. Nocera and Mr. Farricker, defendants' experts.   Mr. Nocera valued the loss at $4,101,000.00.   His reasons were thoroughly tested on examination and cross examination, and the jury had his 52–page report to review.   Mr. Farricker testified that the value of the subject property was increased beyond its ordinary value due to its celebrity status, having been previously owned by the famous movie star Katharine Hepburn.   His reasons were thoroughly tested on examination and cross examination, but he did not quantify that extra value, nor was his report in evidence.

On the subject as to how to value the loss in this case, the jury was guided by the following instructions, which were accepted without exception by both sides:

As explained earlier, with respect to the plaintiff's request for declaratory judgment, your role with respect to this issue is to determine the amount of loss, if any.   To determine the amount of the loss, you should only consider the diminution in the value of the insured property, if any, caused by the defect in the title as of the legal date of loss, subject to the effect, if any, of the conveyance of the discontinued Mohegan Avenue, subject to the six-foot easement.   The legal date of loss in this case is the date that the defendants discovered the alleged defect.   There is no dispute as to the date of loss.   It is February 18, 2005.   There will be a place on the jury forms where you may enter that amount, if any.   This should be determined regardless of whether you also award damages on the defendants' counterclaims.

With respect to the value of loss, the parties must prove by a preponderance of the evidence the amount of that value.   The evidence must give you a sufficient basis to estimate the amount of loss to a reasonable certainty.   The value of the loss largely depends upon the change in the value of the real estate caused by the title defect on the date of the loss, subject to the effect, if any of the conveyance of the discontinued Mohegan Avenue, subject to the six-foot easement.   The parties have presented the testimony of expert witnesses on this point.   The methods adopted by those expert witnesses are proper ways of arriving at that value.   In considering their testimony, however, you will have noted that they depend upon the correctness of certain of the factors that the witnesses included in their calculations.   Those factors are not capable of proof by direct evidence, only by estimates or expressions of opinion and it is for you to determine whether to accept those opinions or not.

Jury Instructions

With respect to damages for the breach of contract claim the jury was guided by the following instruction, which were accepted without exception by both sides:

Any damages you award on the breach of contract count should be designed to place the defendants, so far as can be done by money, in the same position as that which they would have been in had the contract been fully performed.   You should determine the fair and reasonable value, in money, of the position the defendants would have been in if the plaintiff had fully performed the contract.   Then you should determine the fair and reasonable value, in money, of the position the defendants were in at the time of the plaintiff's breach of the contract.   The difference between the amount for performance and the amount for breach should be your award.

Any damages you award on the breach of contract count should compensate the defendants for any losses that they incurred because they relied upon the plaintiff to perform the contract.   The defendants must establish the fair and reasonable value of the loss that they sustained.   In this case, their direct damages are the same as the loss you find, if any, under the title insurance policy;  that is, the diminution in the value of the insured property, if any, caused by the defect in the title as of the legal date of loss, subject to the effect, if any, of the conveyance of the discontinued Mohegan Avenue subject to the six-foot easement.

Jury Instructions

The verdict in this case reflected that the jury rejected the plaintiff's argument that it had accurately valued the loss.   Although it did not completely accept the defendants' arguments, it did agree that the plaintiff had failed to live up to its obligations under the contract, and that the value of the loss and defendants' damages were $2.2 million.   There was certainly evidence in the record to support that amount.   There was evidence in the record supporting an even greater amount.   The jury was also apparently persuaded by defendants' theme that privacy was a main feature of the property;  that privacy was an important selling point to those rare prospective buyers affluent enough to be in the market for a $30 million beachfront family compound;  and that this title defect, ultimately reduced to a six-foot easement, resulted in a loss of privacy.   The jury exercised its duty in evaluating the credibility of the witnesses and weighing the evidence on these points.   It found for the plaintiff and for an amount that it found to be proven by the fair preponderance of the evidence.   That amount does not shock the conscience of the court considering all of the circumstances.   There is no indication that the verdict was the result of prejudice, partiality or mistake.   Nor was it brought about by prejudicial evidentiary errors.   A new trial or remittitur, therefore, is not justified.   The plaintiff's motion is denied.

IV

The defendants move for prejudgment interest pursuant to General Statutes § 37–3a arguing that fairness and equity require that they be awarded interest for the period of time during which the amount rightfully due under the title insurance policy was withheld.   They argue that prejudgment is justified because the jury found that the plaintiff delayed paying the defendants the true amount due under the policy.   The court does not agree that prejudgment interest should be awarded.

The statute provides, “․ interest at the rate of ten per cent a year, and no more, may be recovered and allowed in civil actions ․ as damages for the detention of money after it becomes payable.”  General Statutes § 37–3a(a).   This statute provides for interest in cases of the wrongful detention of money.   Although the word “wrongful” is not used in the statute, our case law requires a determination that the party against whom the interest is to be awarded “has wrongfully detained money due the other party.”  (Citations omitted;  internal quotation marks omitted.)  Flynn v. Kaumeyer, 67 Conn.App. 100, 104, 787 A.2d 37 (2001).   It is available in cases of breach of contract.   See West Haven Sound Development Corp v. West Hartford, 207 Conn. 308, 321, 541 A.2d 858 (1988).   It is also sought in cases of declaratory judgment seeking determination as to insurance proceeds.   See Liberty Mutual Insurance Company v. Lone Star Industries, 290 Conn. 767, 781 n.13, 967 A.2d 1 (2009).

The law on point was recently summarized as follows:

“The allowance of prejudgment interest as an element of damages is an equitable determination and a matter lying within the sound discretion of the trial court ․ The determination of whether or not interest is to be recognized as a proper element of damage, is one to be made in view of the demands of justice rather than through an application of an arbitrary rule.”   (Internal quotation marks omitted.)  Stratford v. Secondino & Son, Inc., 133 Conn.App. 737, 749, 38 A.3d 179, cert. denied, 304 Conn. 918, 41 A.3d 305 (2012).

“Although the determination as to whether prejudgment interest under § 37–3a should be awarded may depend on whether detention of money is wrongful, [t]he allowance of interest as an element of damages is ․ primarily an equitable determination and a matter lying within the discretion of the trial court ․ [D]iscretion imports something more than leeway in decision-making ․ It denotes the absence of a hard and fast rule or a mandatory procedure regardless of varying circumstances.”  (Citations omitted;  emphasis in original;  internal quotation marks omitted.)  Id., 750–51.   While “our law recognizes prejudgment interest as a component of damages, it does not follow that it must be awarded.”  Id., 751.

Carrillo v. Goldberg, 141 Conn.App. 299, 318, 61 A.3d 1164 (2013).

The court does not find a wrongful detention in this case.   The plaintiff never contested the defendants' claim.   In fact, it tendered payment, albeit slowly.   The dispute was over whether the tender was adequate.   The plaintiff promptly filed a declaratory judgment action to resolve the bona fide dispute.   The tender was rejected on November 4, 2008.   This case was commenced on December 1, 2008.   The jury found the true amount due to be midway between the respective requests of the parties.   Under the circumstances, justice does not require an award of prejudgment interest.

Having denied the defendants' request on this ground, it is unnecessary to decide the other grounds for denial raised by the plaintiff.

V

For all of the foregoing reasons, the plaintiff's motion to set aside verdict and to reduce verdict is denied.   The defendants' motion for prejudgment interest is denied.   In accordance with the verdict of the jury, the court renders judgment for the defendants on the plaintiff's Amended Complaint.   It renders judgment for the defendants on the First and Third Counts of their Counterclaims for breach of contract and for a declaratory judgment in the amount of $2.2 million, plus costs.   It renders judgment for the plaintiff on the Second Count of the defendants' Counterclaims for breach of implied covenant of good faith and fair dealing.

Robert F. Vacchelli

Judge, Superior Court

FOOTNOTES

FN1. The plaintiff has filed a bill of costs.   The defendants have filed an objection thereto.   Those issues shall be resolved in accordance with the procedures available under Practice Book § 18–5..  FN1. The plaintiff has filed a bill of costs.   The defendants have filed an objection thereto.   Those issues shall be resolved in accordance with the procedures available under Practice Book § 18–5.

Vacchelli, Robert F., J.