Maureen Thorne et al. v. LLC (2013)

Memorandum of Decision Re Motion For Supplemental Judgment

This matter was tried before a jury and went to judgment on or about May 6, 2013.   The plaintiffs, Maureen Thorne and Chineal Thorne, brought a one-count complaint seeking money damages.   The jury could have reasonably found the following facts.   Maureen Thorne purchased a used car primarily for Chineal Thorne, her daughter.   Maureen Thorne purchased the car from the defendants, Mackeyboy Auto, LLC (Mackeyboy Auto), and William S. McNeilly.   After the plaintiffs made down payments on the car, the defendants admittedly repossessed the vehicle.   The complaint alleged that the defendants violated the Uniform Commercial Code as found in the Retail Installment Sales Finance Act (RISFA), which is codified in General Statutes § 36a–770 et seq.   The plaintiffs also set forth claims of conversion and violation of the Connecticut Unfair Trade Practices Act (CUTPA) pursuant to General Statutes § 42–110a et seq.   The plaintiffs sought compensatory damages, punitive damages, treble damages, and attorneys fees.

The court, Blue, J., prior to trial, determined the defendants violated § 36a–785(c).  On May 6, 2013, upon answering a series of jury interrogatories, the jury returned a general verdict for the plaintiffs and awarded economic damages, which total $6,770.   On June 3, 2013, the plaintiffs filed a motion for supplemental judgment seeking the following:  treble damages of $20,310 pursuant to General Statutes § 52–564;  punitive damages pursuant to General Statutes § 42–110g(d);  and attorneys fees and costs pursuant to General Statutes § 42–110g(d), totaling $38,089 and postjudgment interest at 10 percent per annum.   The parties both filed briefs in support of and in opposition to this motion.   The parties appeared for argument on the instant motion June 24, 2013.   Before addressing the merits of the plaintiffs' motion, it is helpful to set forth further facts as the jury could have reasonably found them.

In March 2010, the plaintiffs went down to a used auto dealership operated by Mr. McNeilly in West Haven, Connecticut.   Chineal Thorne had been attending the University of Connecticut three days a week and needed transportation to and from the Storrs, Connecticut campus and her home in West Haven.   McNeilly was the principal and owner of Mackeyboy Auto. The defendants operated a “[B]uy here, pay here” dealership advertising that no credit or bad credit was “OK” with them.   Chineal Thorne was interested in a used BMW type car.   The defendants were to find her a 1999 BMW with a sale price of $8,000.   The defendants advertised a significant discount on the purchase price if the car was paid in full within sixty days of the original transaction.   Maureen Thorne signed the contract to purchase the car.   The car was to be registered in her name, but was to be used principally by Chineal Thorne.   The plaintiffs initially put down $1,000 as a deposit.   Thereafter, Chineal Thorne paid an additional $3,000.   Sometime thereafter she paid the additional $389.70.   Thus, the plaintiffs paid a nonrefundable deposit of $4,389.70.   The defendants denied that the plaintiffs paid the $4,389.70.   Nevertheless, at trial the plaintiffs produced an original receipt for the cash payment, which receipt was signed by McNeilly.   The plaintiffs would never have purchased the car, which had in excess of 113,000 miles on it, were in not for the deep discounted incentive.   The plaintiffs agreed to pay the balance owing, an additional $2,735 by May 20, 2010.   Chineal Thorne preferred not to go through a credit check, but she had worked at the local Sunglass Hut, had test driven the car, and liked the rims on the sedan.   She was putting her $4,000 tax refund check into the deal.

After making the $4,000 payment, Chineal Thorne took delivery of the car on or about March 13, 2010.   She noted a problem with the sunroof.   An employee of the dealership said they would fix it, even though the contract for sale stated the vehicle was being purchased “as is.”   McNeilly never informed either of the plaintiffs about any kind of weekly or installment payment plan other than the second payment referenced earlier.   Chineal Thorne had every intention of paying the $2,735 balance before May 20, 2010, so that she could get the deep dealer discount.   On May 10, 2010, Chineal Thorne woke up to find her BMW missing.   She did not know her car had been repossessed by the defendants.   She called the dealership.   She was told they took the car because she was not making “payments,” and that she would have to pay $700 to get her car back.   She was irate.   Neither she nor her mother signed any agreement regarding weekly payments.   Her personal effects, including school books, clothes, an iPod, CDs, and speakers were all in the car.   Chineal Thorne valued these items at approximately $200.   She attempted to pay the balance of $2,735 before May 20.   The defendants rebuffed her attempts to pay the balance.   When she offered to pay the balance by check, the defendants refused.   When a friend offered to pay the defendants in cash, the defendants insisted on certified funds.

The defendants were experienced in the auto sales business.   Before working in auto sales for the last four years prior to meeting the plaintiffs, McNeilly sold cell phones and pagers.   McNeilly acted at all times as the agent, servant, and/or employee of Mackeyboy Auto. The defendants had no intent to release and return to the plaintiffs the vehicle, the deposit, or any residual amount from resale of the car.   The defendants withheld the car, thus forcing Chineal Thorne to rent substitute transportation.   Although they had no legal right to do so, the defendants refused to return the car or sell it and return the deposit moneys less any claimed loss to the plaintiffs.   Even after the plaintiffs sought assistance from experienced consumer law counsel, the defendants refused to negotiate.   Instead, the defendants held on to the car without attempting to resell it so that they could return funds to the plaintiffs.   In November 2012, the defendants re-advertised the car for sale.   The car had the same stock number, P2669, with an advertised price of $6,995.

At trial, the plaintiffs testified, as did McNeilly.   Other witnesses also testified.   McNeilly testified that he informed the plaintiffs about a weekly payment plan as part of the purchase.   However, the sales contract, the plaintiffs' exhibit four, did not reference any weekly payment plan or interest to be charged.   Although the defendants tried to exact a $700 charge for repossession, they actually incurred a charge of $350 for that service.   The court, Blue, J., in its memorandum of decision on a motion for summary judgment, determined that the defendants violated RISFA by:  (1) failing to resell the vehicle after retaining the same for fourteen days;  and (2) failing to furnish to the buyers, within three days of the re-taking, a written statement for the un-accelerated sum due under such contract (for sale) and the actual and reasonable expense of the re-taking.   See Thorne v. Mackeyboy Auto, LLC, Superior Court, judicial district of New Haven, Docket No. CV–11–6017210–S (February 28, 2012, Blue, J.).   The court determined that the defendants actually demanded a significantly inflated “total balance due” of $5,294, “plus [a] $700 repossession fee.”  Id. The court also determined that the $700 fee itself was unlawfully inflated and that the fee actually incurred was $350.  Id. At trial, the parties stipulated that Mackeyboy Auto did not provide an executed retail installment sales contract to either of the plaintiffs.   The defendants also agreed that Mackeyboy Auto did not provide an executed retail installment sales contract to either of the plaintiffs.

Discussion

In awarding damages in the amount of $6,770, the jury, through interrogatories, made a number of factual findings.   The jury determined that the defendants' actions surrounding the repossession of the car to be “unfair or deceptive.”   Interrogs. 1, 2. The jury also determined that the defendants intentionally and wrongfully kept the plaintiffs' car.   Interrogs, 9–12.   The jury determined that Mackeyboy Auto was responsible for the loss of Chineal Thorne's personal property in the car.   Interrog. 13.   The jury also determined that the defendants' conduct was not “outrageous” warranting punitive damages.   Interrogs. 15, 16.

Double and Treble Damages Pursuant to CUTPA

The plaintiffs seek an award for treble damages pursuant to General Statutes § 52–564, the treble damages statute for conversion under CUTPA.   The jury's finding of an absence of outrageous conduct warranting punitive damages is instructive, but not binding, on the court.   In its decision granting summary judgment in favor of the plaintiffs regarding the claimed RISFA violations, the court described the defendants' flagrant violations of the consumer statutes in question as “egregious” and “serious rather than trivial.”  Thorne v. Mackeyboy, LLC, supra, Superior Court, Docket No. CV–11–6017210–S.  “In order to award punitive or exemplary damages, evidence must reveal a reckless indifference to the rights of others or an intentional and wanton violation of those rights ․” (Internal quotation marks omitted.)   Thorsen v. Durkin Development, LLC, 129 Conn.App. 68, 76–77, 20 A.3d 707 (2011).   The degree of reprehensibility of the auto dealer is a consideration when determining the reasonableness of a punitive damages award.  BMW of North America, Inc. v. Gore, 517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996).

In the present case, the defendants wronged the plaintiffs.   In so doing, the defendants not only caused economic injury to the plaintiffs, but did so using their position as merchants to abuse the plaintiffs.   The defendants forced the plaintiffs to acquire substitute transportation without even attempting to adhere to the civil law which required them to resell the car after fourteen days and, if possible, to return moneys to the plaintiffs.   Furthermore, there is no logical justification for withholding the vehicle upon being tendered a draft and, in the alternative, cash to fulfill the terms of the written contract for the discounted price.   To then add on bogus repossession charges underscores the only reasonable inference here:  the defendants never really intended to honor their part of the bargain as set forth in the sales contract, but rather, intended to injure the plaintiffs by taking both their down payment and the vehicle.   If not intentional, the conduct can surely be described as reckless and wanton.   There is an imbalance of bargaining power between McNeilly, a sophisticated used car merchant, and the plaintiffs, as buyers.

Awarding treble damages pursuant to CUTPA seeks to accomplish deterrence against flagrant violation of rights of consumers, such as occurred here.   Here, awarding double or treble damages may act as a deterrent to such unscrupulous methods.   That the defendants have stipulated they do not possess a license to resell cars and are no longer in the car resale business is of no moment.   The defendants truly are unrepentant, and, to borrow from the field of psychotherapy, truly lack insight into the consequences of their injurious behavior.   Punitive damages are not to be excessive.   Here, the jury's advice to the contrary notwithstanding, the court finds the conduct of the defendants to be outrageous warranting treble damages.   Pursuant to § 52–564, the court awards treble damages in the amount of $20,310.

Punitive Damages Pursuant to CUTPA

The court has discretion to award punitive damages pursuant to CUTPA.   The exercise of discretion ordinarily will not be interfered with unless the abuse is manifest or unjust.  Creative Masonry & Chimney, LLC v. Johnson, 142 Conn.App. 135, 144, 64 A.3d 359, cert. denied, 309 Conn. 903, 64 A.3d 359 (2013).  “In fact, the flavor of the basic requirement to justify an award of punitive damages is described in terms of wanton and malicious injury, evil motive and violence.”  (Internal quotation marks omitted.)  Gargano v. Heyman, 203 Conn. 616, 622, 525 A.2d 1343 (1987).   Punitive damages may be awarded upon a finding of “reckless indifference to the rights of others.”   United Technologies, Corp. v. American Home Assurance Co., 118 F.Sup.2d 174, 176 (D.Conn.2000), quoting Gargano v. Heyman, supra, 622.

Here, as described in the preceding section on treble damages, the conduct of the defendants was egregious.   The conduct was also in reckless indifference of the rights of the plaintiffs.   The defendants knew this was basic transportation for Chineal Thorne.   That Chineal Thorne was required to rent a car to get around clearly demonstrates an economic loss.   Losing her books and personal items likely caused inconvenience at the very least.   The plaintiffs did virtually everything in their power, including the tendering of the cash balance, to get the car back once Chineal Thorne discovered McNeilly ordered the car seized.   It is not disputed that there was neither a written notice of failure to pay, nor failure to meet the terms of the purchase and sale written agreement.   The defendants made no attempt whatsoever to permit the plaintiffs to remedy what the defendants, unwarrantedly, refer to as the plaintiffs' breach of the agreement.   The defendants, simply put, were intent on keeping the car.   The defendants, through McNeilly, attempted to portray themselves as community “do-gooders,” offering a much needed service to consumers challenged with credit, income, or debt issues.   Arguably, the defendants preyed upon that segment of society least equipped to battle with their experienced counterparts.   Punitive damages are in order based upon the facts of this case.   The preponderance of the evidence demonstrates that the defendants' conduct was egregious with reckless disregard or wilful violation of the plaintiffs' rights.

Although the plaintiffs argue for five times the compensatory damages as a reasonable measure for punitive damages, the court awards a lesser amount.   There is no precise formula for the calculation of punitive damages under CUTPA.   The statute itself simply authorizes the court to award punitive damages in its discretion.   In State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003), the court reaffirmed the guideposts set forth in BMW of North America, Inc. v. Gore, supra, 517 U.S. 559, to be considered by a court in awarding punitive damages.   In Gore, the court established the following guideposts for punitive damages:  (1) the degree of reprehensibility of the defendant's conduct;  (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award;  and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.  BMW of North America, Inc. v. Gore, supra, 574–75.   Taking into account each of these factors, the court awards punitive damages in an amount twice that of the compensatory damages awarded, or $13,540.

Attorneys Fees, Costs, and Interest

The plaintiff seeks an award of attorneys fees and costs pursuant to General Statutes § 42–110g(d) in the sum of $38,089.  Section 42–110g(d) provides in relevant part:  “[i]n any action brought by a person under this section, the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery.”   Awarding attorneys fees pursuant to CUTPA is within the trial court's discretion.  Staehle v. Michael's Garage, Inc., 35 Conn.App. 455, 460, 646 A.2d 888 (1994).   The court's discretionary decision to award attorneys fees should be premised on reasonable determinations and tenable grounds.  Thames River Recycling, Inc. v. Gallo, 50 Conn.App. 767, 800, 720 A.2d 242 (1998).   Here, the defendants aver this was a simple case, involved little, if any discovery, and the issues were very straight forward.   The plaintiffs argue, on the other hand, that much labor was expended, notwithstanding the fact that the parties concede that Joanne S. Faulkner, the plaintiffs' attorney, is quite experienced in consumer law.   Attorney Faulkner attaches to the motion for supplemental judgment thorough time sheets for her efforts and billable time expended.   Jury selection, multiple days of trial, an extended charge conference, phone calls, meetings, and research and writing all appear quite legitimate in terms of billable time.   There is no credible evidence challenging the propriety of such charges for attorney time spent on behalf of the plaintiffs.   This court concludes that an award of attorneys fees is appropriate because of the nature and complexity of this case, as well as the underlying policies of CUTPA.

“[T]he public policy underlying CUTPA is to encourage litigants to act as private attorneys general and to engage in bringing actions that have as their basis unfair or deceptive trade practices ․ In order to encourage attorneys to accept and litigate CUTPA cases, the legislature has provided for the award of attorneys fees and costs.”  (Internal quotation marks omitted.)  Thames River Recycling Inc. v. Gallo, supra, 50 Conn.App. 794–95.  “[T]he amount of attorneys fees that the trial court may award is based on work reasonably performed by an attorney and not on the amount of recovery.”  Jacques All Trades Corp. v. Brown, 42 Conn.App. 124, 131, 679 A.2d 27 (1966), aff'd, 240 Conn. 654, 692 A.2d 809 (1997).   Here, the jury found the defendants' conduct surrounding the repossession of the car to be “unfair or deceptive.”   Jury Interrogs. 1, 2.

“[T]he initial estimate of a reasonable attorneys fee is properly calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate ․ The courts may then adjust this lodestar calculation by other factors [outlined in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir.1974) ].   The Johnson factors may be relevant in adjusting the lodestar amount, but no one factor is a substitute for multiplying reasonable billing rates by a reasonable estimation of the number of hours expended on the litigation.”  (Citation omitted;  footnote omitted;  internal quotation marks omitted.)  Laudano v. New Haven, 58 Conn.App. 819, 822–23, 755 A.2d 907 (2000).  “The Johnson court set forth twelve factors for determining the reasonableness of an attorneys fee award, and they are:  the time and labor required;  the novelty and difficulty of the questions;  the skill requisite to perform the legal services properly;  the preclusion of other employment by the attorney due to acceptance of the case;  the customary fee;  whether the fee is fixed or contingent;  time limitations imposed by the client or the circumstances;  the amount involved and the results obtained;  the experience, reputation, and ability of the attorneys;  the undesirability of the case;  the nature and length of the professional relationship with the client;  and awards in similar cases.”  (Internal quotation marks omitted.)  Carillo v. Goldberg, 141 Conn.App. 299, 317 n.10, 61 A.3d 1164 (2013).   Viewing the Johnson factors in this context, it is clear Attorney Faulkner spent considerable time preparing this case.   Attorney Faulkner bills at $400 per hour.   The reasonableness of this hourly fee went unchallenged in a matter involving this same counsel and the same defendants in this judicial district.   See Torres–Sotelo v. Mackeyboy Auto, LLC, Superior Court, judicial district of New Haven, Docket No. CV–11–6017211–5 (April 22, 2013, Frechette, J.) (order granting plaintiff's motion for attorneys fees).

Here, assuming the defendants desire to contest the reasonableness of the plaintiffs' counsel's hourly fee, the fee is appropriate where all parties agree Attorney Faulkner is very experienced in consumer law cases.   Attorney Faulkner has itemized the time she spent on this case.   The time spent on specific tasks is relatively moderate.   Notably, there are few charges for research, presumably because Attorney Faulkner is already knowledgeable in the substantive law.   The only mention of research in the itemized bill is in the context of an injunction in federal court.   The court finds the original conference time with the new clients to be reasonable.

Attorney Faulkner includes time billed for the apparently related federal court action, which was later withdrawn.   Attorney Faulkner seeks reimbursement for 11.7 hours spent preparing for and litigating these claims in federal court.   The court agrees with the defendants here that to tax them for the costs the plaintiffs incurred for a federal action that was later abandoned seems unreasonable here.   Thus, the court declines to award attorneys fees for the time spent preparing and prosecuting the abandoned federal court action.   That said, the remainder of the charges submitted by counsel all appear necessary and legitimate in the preparation and prosecution of this action.   Time spent drafting pleadings, motions to compel, discovery, court appearances, motions in limine, summary judgment, and attending court for various reasons all are reasonable charges.   The skill requisite to perform the legal services properly is of a high caliber.   The record is bereft of evidence of Attorney Faulkner being precluded from other employment due to her acceptance of this case.   That notwithstanding, logic and simple reasoning dictate that while Attorney Faulkner expended efforts on this matter, she did so to the exclusion of other, and presumably, potentially fee generating business as well as pro bono work.   There was no evidence of a contingent fee arrangement in this matter.   The invoice submitted by Attorney Faulkner suggests strongly that there existed a fixed hourly fee agreement.   There was no evidence of work limitations placed on the attorney from the client.   The results obtained were reasonable, albeit modest.   The experience, reputation, and ability of Attorney Faulkner is unchallenged.   There is no evidence of any “undesirability” of this case, other than the negligible out of pocket economic damages.

One can argue the fact that when relatively little economic damages are sought, that may be a large disincentive for attorneys to take such cases unless they are to be awarded CUTPA attorneys fees.   This underscores language in the case law that addresses the policy reason that society desires private attorneys to act as private attorneys general pursuing such consumer cases.   There exists an uneven bargaining power between a business on the one hand, and an individual consumer on the other.   There is a strong public interest in having private attorneys take these kinds of consumer cases with the hope of obtaining an award for attorneys fees.   Clearly, if attorneys did not have a reasonable prospect of recovering fees, the time they spent prosecuting such actions would certainly swallow up any potential recovery.   An award of counsel fees, therefore, is not predicated on the amount of the actual economic damages sought or received.   Here, the fees charged, less the federal court time, are reasonable.   There was no evidence of a lengthy relationship between the attorney and clients other than this litigation.

Lastly, pursuant to the Johnson analysis, the court is to look at awards in similar cases.   Given Attorney Faulkner's reputation and self-limitation to the area of consumer law, and the fact that Attorney Faulkner's hourly rate of $400 has been awarded previously in this judicial district, the charges, when combined with an analysis of work performed in this case, are reasonable.   See Torres–Sotelo v. Mackeyboy Auto, LLC, supra, Superior Court, Docket No. CV–11–6017211–S.   Examining the record in light of all of the Johnson factors leads this court to find the fees charged here both reasonable and necessary.   The plaintiffs seek $37,220 in counsel fees.   Deducting the amount charged for federal court work, or 11.7 hours, at $400 per hour ($4,680) nets $32,540 in fees.   The plaintiffs also seek courts costs in the amount of $869.   The costs of $869 are both reasonable and necessary.   For the foregoing reasons, the court awards counsel fees in the amount of $32,540 and costs in the amount of $869.

Judgment may enter in the sum of $74,029.   This represents a breakdown as follows:  (1) jury verdict on economic damages in the amount of $6,770;  (2) treble damages pursuant to CUTPA in the amount of $20,310;  (3) punitive damages pursuant to CUTPA in the amount of $13,540;  (4) attorneys fees in the amount of $32,540;  and $869 in costs.   Postjudgment interest in the amount of 10 percent is taxed.

It is so Ordered,

By Nazzaro, J.

Nazzaro, John J., J.