Gary's Auto Parts, Inc. v. New Haven Truck & Auto Body, Inc. (2013)

MEMORANDUM OF DECISION REGARDING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT, # 139

I

ISSUE

Whether the court should grant summary judgment to the defendants, New Haven Truck & Auto Body, Inc. (“New Haven Truck”) and William Snow, on the ground that there is no genuine issue that an alleged contract between New Haven Truck and the plaintiff, Gary's Auto Parts, Inc. (“Gary's”), was not supported by consideration.

II

FACTS

This action arises out of an alleged contract between the plaintiff and New Haven Truck.¹  The following facts are undisputed.

New Haven Truck is an automotive body shop.   The plaintiff is a retailer, known in the industry as a “jobber,” that supplies automobile parts and paints to area body shops such as New Haven Truck.

On January 19, 2007, New Haven Truck and E.I. duPont de Nemours & Company (“DuPont”) entered into a purchase commitment contract for automotive paint products (“DuPont contract”).   New Haven Truck committed “to purchase and use only DuPont Refurbish brand automotive paint products ․ for all its refinish products” for five years.   In exchange, DuPont agreed to provide New Haven Truck an “account ․ credit in the amount of $100,000.00 through the jobber (‘Shop Allowance’) ․ The Shop Allowance will be used by [New Haven Truck] solely for shop improvements.”

On March 13, 2007, representatives of the plaintiffs and New Haven Truck signed a document that constituted the alleged contract (“Gary's/New Haven Truck contract”).   In the document, the plaintiff promised to loan certain “items” ² to New Haven Truck.³  The document further provided:  “As a consideration for Gary's Auto Parts Inc. providing these items on loan, [New Haven Truck] agrees to exclusively purchase Dupont products and 99% of all body shop products solely from Gary's.”   The document stated that the agreement will continue for six years and that the equipment “may be removed without notice by Gary's Auto Parts if [New Haven Truck] does not comply with the terms of this agreement ․ All items invoiced will be considered purchased if not returned when this agreement is terminated.”   Under a section titled “Additional Terms of this Contract,” the document provided:  “Dupont and Gary's Auto Parts Inc. will give New Haven Truck & Body $100,000.00 upfront for body shop equipment and upgrades.”

The plaintiff alleges that New Haven Truck breached its agreement with the plaintiff because, since at least mid–2008, it has “not purchased its DuPont paint products and its body shop products from Plaintiff in accordance with the agreement;  it has wrongfully retained the $105,000 ⁴ it was paid in advance;  it has refused to pay rendered invoices for products and merchandise delivered;  it has wrongfully retained DuPont paint products, body shop products, mixing equipment and computer equipment that it has not paid for or returned to Plaintiff.”

The plaintiff filed the operative five-count complaint (# 102) on August 4, 2009.   Count four claims breach of contract against New Haven Truck.   The fifth count seeks to enforce a personal guarantee by Snow on the alleged breach of contract claimed in count four.

On April 15, 2013, the defendants filed a motion for summary judgment (# 139).   The defendants contend that summary judgment must be granted on counts four and five on the ground that the alleged Gary's/New Haven Truck contract is not supported by consideration because the plaintiff had a preexisting duty to provide $100,000 to New Haven Truck pursuant to the DuPont contract.   In support of the motion, the defendants have attached copies of the following documents:  the DuPont contract, the alleged Gary's/New Haven Truck contract, portions of depositions by Snow, Michael Harty, Matthew Cremonni and William Anton and a credit invoice from DuPont to the plaintiff.   The plaintiff filed an objection and supporting memorandum on May 15, 2013 (# 145).   Attached were copies of the following documents:  the defendant's credit application to the plaintiff, Snow's personal guarantee for the defendant's debts to the plaintiff, the alleged Gary's/New Haven Truck contract, the DuPont contract and portions of depositions by Harty and Snow. Oral arguments were heard at short calendar on May 20, 2013.

III

DISCUSSION

“[S]ummary judgment is appropriate only if a fair and reasonable person could conclude only one way ․ [A] summary disposition ․ should be on evidence which a jury would not be at liberty to disbelieve and which would require a directed verdict for the moving party ․ [A] directed verdict may be rendered only where, on the evidence viewed in the light most favorable to the nonmovant, the trier of fact could not reasonably reach any other conclusion than that embodied in the verdict as directed.”  (Citations omitted;  emphasis in original;  internal quotation marks omitted.)  Dugan v. Mobile Medical Testing Services, Inc., 265 Conn. 791, 815, 830 A.2d 752 (2003).  “In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact ․ but rather to determine whether any such issues exist.”   (Internal quotation marks omitted.)  RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 233, 32 A.3d 307 (2011).

The defendants argue that summary judgment must be granted because there is no genuine issue that the plaintiff's alleged contract with New Haven Truck was not supported by consideration.   The defendants contend that the plaintiff had preexisting duty to provide New Haven Truck $100,000 because of New Haven Truck's contract with DuPont.   The plaintiff argues that whether a contract is supported by consideration is a factual inquiry, inappropriate to consider for summary judgment.   The plaintiff further argues that the parties' contract was supported by multiple forms of consideration.

“The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages.”  (Internal quotation marks omitted.)  Pelletier v. Galske, 105 Conn.App. 77, 81, 936 A.2d 689 (2007), cert. denied, 285 Conn. 921, 943 A.2d 1100 (2008).  “The doctrine of consideration is fundamental in the law of contracts, the general rule being that in the absence of consideration an executory promise is unenforceable.”  (Internal quotation marks omitted.)   Connecticut National Bank v. Voog, 233 Conn. 352, 366, 659 A.2d 172 (1995).  “[C]onsideration is [t]hat which is bargained-for by the promisor and given in exchange for the promise by the promisee ․ We also note that [t]he doctrine of consideration does not require or imply an equal exchange between the contracting parties ․ Consideration consists of a benefit to the party promising, or a loss or detriment to the party to whom the promise is made.”   (Internal quotation marks omitted.)  Martin Printing, Inc. v. Sone, 89 Conn.App. 336, 345, 873 A.2d 232 (2005).  “Whether an agreement is supported by consideration is a factual inquiry reserved for the trier of fact ․ The conclusion drawn from the facts so found, i.e., whether a particular set of facts constitutes consideration in the particular circumstances, is a question of law ․” (Citations omitted;  internal quotation marks omitted.)   Willamette Management Associates, Inc. v. Palczynski, 134 Conn.App. 58, 70–71, 38 A.3d 1212 (2012).

“Although an exchange of promises usually will satisfy the consideration requirement ․ a promise to do that which one is already bound by his contract to do is not sufficient consideration to support an additional promise by the other party to the contract.”  (Citation omitted;  internal quotation marks omitted.)  Christian v. Gouldin, 72 Conn.App. 14, 23, 804 A.2d 865 (2002).   “It is an accepted principle of law in this state that when a party agrees to perform an obligation for another to whom that obligation is already owed, although for lesser remuneration, the second agreement does not constitute a valid, binding contract ․ The basis of the rule is generally made to rest upon the proposition that in such a situation he who promises the additional [work] receives nothing more than that to which he is already entitled and he to whom the promise is made gives nothing that he was not already under legal obligation to give.”  (Citations omitted;  internal quotation marks omitted.)   New England Rock Services, Inc. v. Empire Paving, Inc., 53 Conn.App. 771, 776–77, 731 A.2d 784 (1999).

The court notes that “[w]hether a contract was supported by consideration is a factual inquiry reserved for the trier of fact”;  Willamette Management Associates, Inc. v. Palczynski, supra, 134 Conn.App. 71;  which this court is ill-suited to determine when considering a motion for summary judgment.   Nevertheless, at least two factual issues remain unresolved regarding whether there was consideration that supported the alleged Gary's/New Haven Truck contract.

First, unresolved factual issues remain as to whether the plaintiff's promise to consign items to New Haven Truck constituted consideration.   The document that allegedly constituted the Gary's/New Haven Truck contract stated that the plaintiff would provide New Haven Truck with items on consignment.⁵  The document also included details about the care that New Haven Truck would provide for those items.   The defendants' memorandum in support of summary judgment failed to address whether the plaintiff's promise to consign items to New Haven Truck was consideration supporting the alleged contract.   The trier of fact may find that the plaintiff's promise to consign items to New Haven Truck would be beneficial to New Haven Truck, because it would gain access to these items, and be detrimental to the plaintiff, because it would lose any benefits it had from possessing the items.   Thus, there remain unresolved factual issues as to whether the plaintiff's promise to consign items to New Haven Truck was the consideration that supported their alleged contract.

Additionally, there are unresolved factual issues regarding whether the “$100,000 upfront” that the plaintiff promised to New Haven Truck constituted consideration.   Even assuming that the plaintiff had a preexisting duty provide an “account ․ credit in the amount of $100,000.00” as a part of the DuPont contract, which the plaintiff disputes, there is no dispute that the plaintiff promised to provide New Haven Truck $100,000 “upfront” in the alleged Gary's/New Haven Truck contract.   In his deposition, Michael Harty, a representative of DuPont, stated that “[a]ll [DuPont] did was provide $100,000 credit, that was it.”   Harty represented that it was at the sole discretion of the jobber and shop whether to provide $100,000 in the form of cash or an account credit.

“A modification of an agreement must be supported by valid consideration and requires a party to do, or promise to do, something further than, or different from, that which he is already bound to do.”  (Internal quotation marks omitted.)  Harley v. Indian Spring Land Co., 123 Conn.App. 800, 822, 3 A.3d 992 (2010).⁶  Even assuming that the trier of fact found that the plaintiff had a preexisting duty to provide New Haven Truck a $100,000 account credit, the trier of fact may still find that the promise of an upfront payment of $100,000 constituted something further than, or different from, what the plaintiff was already bound to do.   Issues of fact thus remain unresolved as to whether providing cash upfront would be detrimental to the plaintiff, who would no longer have access to the cash.   Moreover, there are unresolved factual issues as whether New Haven Truck would benefit from an upfront payment.   For example, a portion of Snow's deposition, which is attached to the plaintiff's memorandum, indicates that New Haven Truck used approximately $39,000 that it allegedly received upfront from Gary's to add an extra power source to its facility.   The court concludes that genuine issues of material fact remain as to whether the plaintiff's promise to provide cash to New Haven Truck constituted consideration to support the alleged Gary's/New Haven Truck contract.⁷

IV

CONCLUSION

The defendants' motion for summary judgment is denied, and the plaintiff's objection to the motion is sustained.

ZEMETIS, J.

FOOTNOTES

FN1. The plaintiff alleges that Snow signed a personal guarantee where he agreed to guarantee payment to the plaintiff for goods or merchandise purchased by New Haven Truck..  FN1. The plaintiff alleges that Snow signed a personal guarantee where he agreed to guarantee payment to the plaintiff for goods or merchandise purchased by New Haven Truck.

FN2. The plaintiff alleges that the items referred to in the alleged contract were paint mixing and body shop equipment.   The document states that the items are listed to an invoice, which no party has attached to their court filings..  FN2. The plaintiff alleges that the items referred to in the alleged contract were paint mixing and body shop equipment.   The document states that the items are listed to an invoice, which no party has attached to their court filings.

FN3. The document refers to the equipment as “the merchandise.”   The document provides that New Haven will keep the equipment in a “safe and resalable or reusable condition” and that “[a]ll risks of theft or any damage to the merchandise is assumed by [New Haven Truck] and [New Haven Truck] shall keep the merchandise fully insured at its own expense from such risks for the benefit of and in the name of Gary's.”.  FN3. The document refers to the equipment as “the merchandise.”   The document provides that New Haven will keep the equipment in a “safe and resalable or reusable condition” and that “[a]ll risks of theft or any damage to the merchandise is assumed by [New Haven Truck] and [New Haven Truck] shall keep the merchandise fully insured at its own expense from such risks for the benefit of and in the name of Gary's.”

FN4. The plaintiff alleges that it mistakenly paid New Haven truck an extra $5,000, which in actuality received $105,000..  FN4. The plaintiff alleges that it mistakenly paid New Haven truck an extra $5,000, which in actuality received $105,000.

FN5. As noted in footnote two of this decision, the plaintiff has alleged that the items that the alleged contract promised to consign to New Haven Truck were paint mixing and auto body equipment.   Outside of the plaintiff's allegations, however, there are no submitted documents directly attesting to this..  FN5. As noted in footnote two of this decision, the plaintiff has alleged that the items that the alleged contract promised to consign to New Haven Truck were paint mixing and auto body equipment.   Outside of the plaintiff's allegations, however, there are no submitted documents directly attesting to this.

FN6. The court is aware that, like the issue of consideration, “[w]hether the parties to a contract intended to modify the contract is a question of fact ․ The resolution of conflicting factual claims falls within the province of the trial court.”  Harley v. Indian Spring Land Co., supra, 123 Conn.App. 821.   This court, however, is considering a motion for summary judgment and is not a trier of fact.   This analysis is provided merely as an explanation as to why there remain factual issues which are yet to be determined..  FN6. The court is aware that, like the issue of consideration, “[w]hether the parties to a contract intended to modify the contract is a question of fact ․ The resolution of conflicting factual claims falls within the province of the trial court.”  Harley v. Indian Spring Land Co., supra, 123 Conn.App. 821.   This court, however, is considering a motion for summary judgment and is not a trier of fact.   This analysis is provided merely as an explanation as to why there remain factual issues which are yet to be determined.

FN7. The court is aware that this memorandum does not address alternative factual grounds provided by the plaintiff, which purportedly raise issues of fact as to whether the alleged Gary's/New Haven Truck contract was supported by consideration.   Because this court concludes that, even without analyzing the plaintiff's alternative arguments, there are unresolved factual issues concerning the consideration of the alleged contract, it need not address the plaintiff's remaining contentions..  FN7. The court is aware that this memorandum does not address alternative factual grounds provided by the plaintiff, which purportedly raise issues of fact as to whether the alleged Gary's/New Haven Truck contract was supported by consideration.   Because this court concludes that, even without analyzing the plaintiff's alternative arguments, there are unresolved factual issues concerning the consideration of the alleged contract, it need not address the plaintiff's remaining contentions.

Zemetis, Terence A., J.