N.D.R. Liuzzi, Inc. dba v. Cutrufello's Creamery, Inc. (2013)

MEMORANDUM OF DECISION RE APPLICATION FOR PREJUDGMENT REMEDY (# 100.31)

FACTS

The plaintiff, N.D.R. Liuzzi, Inc. DBA Liuzza Angeloni Cheese (“Liuzzi”), seeks a prejudgment remedy from the defendant, Cutrufello's Creamery, Inc. (Cutrufellos), in the amount of $84,994.86.   In its complaint filed with its application the plaintiff alleges a breach of contract, quantum meruit and unjust enrichment and seeks money damages, interest, attorneys fees and costs.   After a hearing on the prejudgment remedy application which occurred on September 12, 2013, the court finds that there is probable cause that the plaintiff will recover the amount of $80,000 from the defendant and grants a prejudgment remedy in that amount based on the following facts.

The plaintiff, Liuzzi, a Connecticut Corporation, is in the business of manufacturing cheese products for wholesale and retail purposes.   The defendant, Cutrufello's Creamery, Inc. was in the business of production and distribution of cheese and other products for wholesale and retail purposes.   Plaintiff had an ongoing business relationship with the defendant dating back to 2008, whereby the plaintiff provided wholesale cheese products to the defendant.   For the last five to six years, the defendant and the plaintiff entered into an oral agreement whereby the plaintiff was to provide wholesale cheese products to the defendant and the defendant was to pay for said products within thirty days.   The plaintiff submitted invoices to establish that there was an agreement between the parties.   The defendant was required to sign the invoices and the majority of the invoices were signed by the defendant's receiver.   The invoices represented material product that was supplied by the plaintiff to the defendant.   At the bottom of each invoice there is a representation that the money would be due in seven days and an interest charge of 1.5% per month would be added after thirty days, and if the account went into collection, the plaintiff would be entitled to attorneys fees and costs.   The plaintiff acknowledged that it never held the defendant to the seven-day time requirement for payment.   The plaintiff further acknowledged that although the invoices stated that the defendant was required to pay within seven days, it accepted payment much later.   The plaintiff accepted payment within thirty days.

When the defendant would fall behind in payment the plaintiff would require cash on delivery (COD) payments regarding any new product provided to the defendant with payments toward the outstanding arrearage.   In August 2012, the defendant fell behind their thirty (30) day payment arrangement.   At that time there was an arrearage due and owing to the plaintiff of approximately $105,000.   Beginning on August 9, 2012, the defendant was again placed on a COD arrangement whereby cash was paid upon delivery of new product and payment was to be made by the defendant to the plaintiff for the outstanding arrearage.

In December 2012, the plaintiff received a call from the defendant stating that starting January 1, 2013, the defendant was going to start selling and distributing their products through Wades Dairy.   The plaintiff had concerns regarding the outstanding arrearage owed by the defendant at that time and therefore met with the representatives of the defendant's company.   At the meeting, a verbal agreement was reached whereby the defendant agreed that it would make minimum payments of at least $500 on a weekly basis towards the outstanding arrearage and once the real property owned by the defendant and located in Bridgeport, Connecticut was sold, if the balance of the arrearage had not been paid by that date, then it would be paid at the time of the sale.   The plaintiff agreed to accept the payment arrangement as long as it received security by way of a mortgage or other attachment on the real property owned by the defendant.   The defendant would not agree to provide security.   Due to the defendant's refusal to agree to provide security, along with its inconsistent payments, the plaintiff decided to seek a prejudgment remedy by way of attachment on real property owned by the defendant and located on Barnum Avenue in Bridgeport, Connecticut.   The plaintiff did not agree that by accepting payments on the outstanding debt from the defendant, it was relinquishing their collection rights including an action to seek a prejudgment remedy.   The defendant agreed that the outstanding debt owed to the plaintiff as of the date of the hearing was $84,994.86, however, the plaintiff agreed to give the defendant a credit in the amount of $5,000 when certain machinery was transferred by the defendant to the plaintiff which, upon transfer of the machinery would reduce the outstanding amount to $79,994.86.   As of the date of the hearing, the transfer of said machinery had not taken place.

DISCUSSION

ALegal Standard

“[P]rejudgment remedy proceedings are not involved with the adjudication of the merits of the action brought by the plaintiff or with the progress or result of that adjudication.   They are only concerned with whether and to what extent the plaintiff is entitled to have property of the defendant held in the custody of the law pending adjudication of the merits of that action ․ This limited evidentiary proceeding contrasts sharply with, for example, the detailed and substantive arguments and conclusions that must be addressed in a motion to strike ․

“The purpose of the prejudgment remedy of attachment is security for the satisfaction of the plaintiffs' judgment, should he obtain one ․ It is primarily designed to forestall any dissipation of assets by the defendant and to bring [those assets] into the custody of the law to be held as security for the satisfaction of such judgment as the plaintiff may recover ․ The adjudication made by the court on [an] application for a prejudgment remedy is not part of the proceedings ultimately to decide the validity and merits of the plaintiffs' cause of action.   It is in dependent of and collateral thereto ․

“General Statutes § 52–278d(a) provides in relevant part that a hearing on a prejudgment remedy shall be limited to a determination of ․ whether or not there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff ․ If the court, upon consideration of the facts before it and taking into account any ․ [defenses] ․ finds that the plaintiff has shown probable cause that such a judgment will be rendered in the matter in the plaintiff's favor in the amount of the prejudgment remedy sought and finds that a prejudgment remedy securing the judgment should be granted, the prejudgment remedy applied for shall be granted as requested or as modified by the court ․

“The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a [person] of ordinary caution, prudence and judgment, under the circumstances, in entertaining it ․ Probable cause is a flexible common sense standard.   It does not demand that a belief be correct or more likely true than false ․” (Citations omitted;  internal quotation marks omitted.).  Marlin Brd. v. Law Office Of Kent Avery, LLC, 101 Conn.App. 638, 646–47, 922 A.2d 1131 (2007).

B

Analysis

“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 ․ [I]n order to form a binding and enforceable contract, there must be an offer and an acceptance based on mutual understanding by the parties ․ The mutual understanding must manifest itself by a mutual assent between the parties.”  (Citations omitted;  Internal quotation marks omitted.)  Ibar v. Stratek Plastic Limited, 145 Conn.App. 401 (2013).

The defendant did not introduce any evidence to refute the existence of an oral agreement between the plaintiff and defendant, the terms of the oral agreement, nor did the defendant submit any evidence to refute plaintiff's testimony regarding the oral agreement reached by plaintiff and defendant in December 2012.   Defendant's counsel conceded that the defendant owes the plaintiff at least $79,994.86.  “Judicial admissions are voluntary and knowing concessions of fact by a party or a party's attorney occurring during judicial proceedings.”  (Internal quotation marks omitted.)  Macy v. Lucas, 72 Conn.App. 142, 153, 804 A.2d 971, cert. denied, 262 Conn. 905, 810 A.2d 272 (2002).”  BHP Land Services, LLC v. Seymour, 137 Conn.App. 165, 171, n. 4, 47 A.3d 950 (2012).   In fact, counsel for the defendant was ready to stipulate to this outstanding amount.

Although the defendant presented no evidence to refute that an oral agreement existed between the plaintiff and defendant for the sale of cheese products, it argues that the oral agreement is invalid because it violates the statute of frauds pursuant to General Statutes § 52–550.  General Statutes § 52–550 provides in relevant part:  “No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged ․ (5) upon any agreement that is not to be performed within one year from the making thereof, or (6) upon any agreement for a loan in an amount which exceeds fifty thousand dollars.”   The defendant's argument that the statute of frauds pursuant to § 52–550 applies is confusing and the court cannot make neither “heads nor tails” of it.   The defendant correctly points out that the plaintiff sold cheese to the defendant for five years on a weekly basis.   In addition, the plaintiff would submit invoices for signature by the defendant upon delivery of the cheese.

Citing Alarmax Distributors v. New Canaan Alarm, 141 Conn.App. 319, 330–32, 61 A.3d 1142 (2013), the defendant further claims that the transactions which occurred between the plaintiff and defendant during this time, occurred in the form of a revolving or open account, where the defendant made partial payments on a periodic basis via installments while continuing to place new orders for cheese.   Although the defendant acknowledges that this type of revolving account would not qualify as a type of loan, it still seems to argue that § 52–550(6) which applies to loans, renders the oral agreement between the plaintiff and defendant invalid because it violates the statute of frauds.   The defendant claims that “[e]ven if a revolving account were viewed as a type of loan, which it is not, Conn. Gen.Stat. § 52–550(a) prohibits civil actions for any verbal agreement for a loan in an amount which exceeds fifty thousand dollars.”   It appears from this argument, that the defendant is claiming that the plaintiff, by allowing the defendant to make payments beyond the seven-day time limit, converted the agreement from an invoice by invoice to an account stated, and therefore a loan, and thus, because the agreement was oral, it is therefore invalid pursuant to § 52–550(a)(6).

In Alarmax Distributors, the plaintiff, a wholesale distributor of fire and home security equipment, sought to recover damages from the defendant for, inter alia, breach of contract.   In connection with the parties' business relationship, the defendant had applied for and received credit from the plaintiff.   Although the initial credit application required that the account be paid in full within thirty days of shipment, the plaintiff often permitted the defendant to exceed the credit limit for longer than thirty days as long as a lump sum payment on the account was made from time to time.   When the defendant stopped making payments on the account, a civil action followed.   The trial court rendered judgment for the plaintiff, from which the defendant appealed to the Appellate Court.   The defendant claimed, inter alia, that the plaintiff's action involved a contract for the sale of goods and, therefore, was barred by the four-year statute of limitations (§ 42a–2–725).   The trial court, after determining that the parties had modified their original agreement and converted their arrangement into an account stated, rather than an invoice by invoice system, determined that the defendant's last payment on February 14, 2006, constituted an acknowledgment of the debt and was, therefore, the trigger date for the running of the statute of limitations, and that the action was brought within four years from that trigger date.   The Appellate Court held, inter alia, that the trial court correctly applied the four-year statute of limitation pursuant to General Statutes § 42a–2–725 of the Connecticut Uniform Commercial Code. The court concluded that the trial court correctly found that the parties had modified their original agreement and converted their arrangement into an account stated, rather than invoice by invoice system, and thus, it was the date of the defendant's last payment which triggered the running of the statute of limitations, therefore rendering plaintiff's action timely.

Although the parties in Alarmax modified their original agreement to an arrangement which is similar to the arrangement the plaintiff and defendant had in the present case, the issue presented in Alarmax was not the applicability of the statute of frauds, but rather whether the UCC statute of limitations barred the plaintiff's breach of contract action.   Additionally, the defendant in Alarmax applied for a line of credit in connection with the arrangement the parties had regarding the purchase of the goods, and, when payment was due.   As part of the parties' initial agreement in Alarmax, the initial credit application required that the account be paid in full within thirty days of shipment.   However, as previously stated, the trial court concluded in Alarmax, that because the parties had modified the original agreement from an invoice to invoice system into that of an open account, which in law, constituted an account stated, the defendant's last payment on the account on February 14, 2006, constituted an acknowledgment of the debt and was therefore, the trigger date for the running of the statute of limitations.

Here, there was no evidence that the defendant applied for credit in connection with the oral agreement it had with the plaintiff to purchase cheese products, and as previously stated, the issue presented in Alarmax was the applicability of the statute of limitations and not the statute of frauds.   In addition, even if the court were to construe the agreement between the parties as an oral loan, such would still be enforceable by our courts.   In construing the language of § 52–550(a)(6) and its applicability to an unwritten contract to repay a loan in the amount of $1,155,000, Judge Taylor noted in his thoughtful decision in Sarfaty v. PNN Enterprises, Superior Court, judicial district of New Haven at Meriden Docket No. CV 02 0280255 (Jul. 24, 2007, Taylor, J.).  “Subsection 6 of the statute of frauds, General Statutes § 52–550, was enacted by the General Assembly in 1989.   See No. 89–338, § 3, of the 1989 Public Acts (P.A. 89–338).   The new language that was enacted at that time closely resembles the existing real estate contract statute of frauds, which requires a written contract ‘upon any agreement for the sale of real property ․’ Under the long standing interpretation of the real estate contracts subsection of the statute of frauds, partially executed contracts for the sale of real property have been determined by our courts to be outside the statute.   Therefore, it appears from the text of the statute, taken as a whole, that a partially executed loan is outside the statute of frauds.   In addition, the legislative history of the Public Act makes it abundantly clear that although a civil action may not be brought to enforce an oral promise to make a loan over $50,000, oral loans actually made over $50,000 are outside the statute and may be enforced by our courts.   Any other meaning would bring the absurd and unjust result of oral loans being transformed into gifts without a writing to the contrary.”  (Emphasis in original.)   Thus, even if the court were to construe the agreement between the plaintiff and defendant in the present case as an oral loan, it would not fall within the statute of frauds because the loan was partially executed.

While again not clear, the defendant also seems to argue, that the oral agreement between the parties falls within § 52–550(a)(5) because it cannot be performed within a year.  General Statutes § 52–550(a)(5) prohibits civil actions for any verbal agreement that is not to be performed within one year from the making thereof.

In Burkle v. Superflow Mfg. Co., 137 Conn. 488, 497–98 (1951), the Supreme Court, in a split decision, did hold to be unenforceable an oral contract bearing some similarity to the contract here at issue.   In Burkle the defendant hardware manufacturer had orally agreed for an unspecified time to supply and the plaintiffs agreed to solicit orders for seven or eight plumbing items, and the defendant further agreed to deliver within thirty days all orders procured by the plaintiffs and to pay them a 10% commission on those orders.   Claiming that the contract could not be performed within one year the defendant raised a statute of frauds defense.   Citing extensive authority in Connecticut and elsewhere, and respected treatises, the court stated the governing principle:  “It is the law of this state and elsewhere that a contract is not within this clause of the statute unless its terms are so drawn that it cannot by any possibility be performed fully within one year.”  Id., 492.   The court reviewed cases where oral contracts of no stated duration had been upheld because full performance might occur within one year through the happening of a contingency upon which the contract depends, such as an agreement to support a person for life (where death of the person might occur within one year), Appleby v. Noble, 101 Conn. 54 (1924), or a promise of marriage, Clark v. Pendleton, 20 Conn. 495 (1850).   Over the dissent of Justice Inglis,¹ the majority of the court held that there were no realistic contingencies whereby the Burkle–Superflow contract could be performed within one year:  “The contract in the present case does not fall within any of these categories.   It binds the plaintiff partnership to solicit orders for an indefinite and indeterminate time in the future.   On its face, it cannot possibly be performed within one year.”  Id., 493.

Burkle, however, was not the last word on the subject of the one-year provision of the statute of frauds.   Subsequent development of the law focusing on the “cannot by any possibility be performed fully within one year” requirement for inclusion in that proscription of the statute, now mandates a different result.   In fact it appears that, although Burkle has not been expressly overruled, it has become an anomaly such that the dissent of Justice Inglis is in all probability today more in tune with applicable law than the Burkle majority.

In C.R. Klewin, Inc. v. Flagship Properties, Inc., 220 Conn. 569, 577–79, 600 A.2d 772 (1991), the Supreme Court provided a thorough history of how the Court has analyzed oral contracts pursuant to the one-year requirement of the statute of frauds, now codified as § 52–550(a)(5).   In Klewin, the court, in answering two very direct questions certified to it by the U.S. Court of Appeals for the Second Circuit, took the opportunity to do a comprehensive review and pronouncement of Connecticut statute of frauds jurisprudence.   The two questions were:  “A. Whether, under the Connecticut statute of frauds, Conn. Gen.Stat. 52–550(a)(5), an oral contract that fails to specify explicitly the time for performance is a contract of indefinite duration, as that term has been used in the applicable Connecticut precedent, and therefore outside the statute's prescription? and;  B. Whether an oral contract is unenforceable when the method of performance called for by the contract contemplates performance to be completed over a period of time that exceeds one year, yet the contract itself does not implicitly negate the performance within one year?”  Id., 573.   The Court answered Question A “Yes” and Question B “No.” In doing so, the court traced the history of the statute of frauds from its origin in a 1677 English statute entitled “An Act for the Prevention of Fraud and Perjury,” ² to modern times with particular attention to the one-year provision here at issue.   Noting extensive and conflicting judicial and academic commentary trying to identify a legitimate rationale for that provision the Court said “In any case the one-year provision no longer seems to serve any purpose very well and today its only remaining effect is arbitrarily to forestall the adjudication of possibly meritorious claims.   For this reason the courts have for many years looked on that provision with disfavor and have sought construction that limited its application.”  Id., 577.   The court reached such a construction in the case before it, acknowledging at least some tension with Burkle:  “Bearing this history in mind, we turn to the questions certified to us by the federal court.   Our case law makes no distinction, with respect to exclusion from the statute of frauds, between contracts of uncertain or indefinite duration and contracts that contain no express terms defining the time for performance.   The two certified questions therefore raise only one substantive issue.   That issue can be framed as follows:  in the exclusion from the statute of frauds of all contracts except those ‘whose performance cannot possibly be completed within a year’;  (emphasis omitted) Finley v. Aetna Life & Casualty Co., supra, 197;  what meaning should be attributed to the word ‘possibly’?   One construction of ‘possibly’ would encompass only contracts whose completion within a year would be inconsistent with the express terms of the contract.   An alternate construction would include as well contracts such as the one involved in this case, in which, while no time period is expressly specified, it is (as the district court found) realistically impossible for performance to be completed within a year.   We now hold that the former and not the latter is the correct interpretation.  ‘The critical test ․ is whether “by its terms” the agreement is not to be performed within a year,’ so that the statute will not apply where ‘the alleged agreement contain[s][no] provision which directly or indirectly regulated the time for performance.’  Freedman v. Chemical Construction Corporation, 43 N.Y.2d 260, 265, 372 N.E.2d 12, 401 N.Y.S.2d 176 (1977).  ‘It is the law of this state, as it is elsewhere, that a contract is not within this clause of the statute unless its terms are so drawn that it cannot by any possibility be performed fully within one year.’  (Emphasis added.)  Burkle v. Superflow Mfg. Co., supra, 492.  Flagship contends, to the contrary, that the possibility to which this court referred in Burkle must be a reasonable possibility rather than a theoretical possibility.   It is true that in Burkle this court rejected the argument that ‘since all the members of a partnership [that was a party to the contract] may possibly die within a year, the contract is not within the statute.’   We noted that ‘[n]o case has come to our attention where the rule that the possibility of death within a year removes a contract from the statute has been extended to apply to the possibility of the death of more than one individual.’  Id., 494.   In Burkle, however, we merely refused to extend further yet another of the rules by which the effect of the provision has been limited.  Burkle did not purport to change the well established rule of narrow construction of the underlying one-year provision.   Most other jurisdictions follow a similar rule requiring an express contractual provision specifying that performance will extend for more than one year.”  (Citations omitted.)  C.R. Klewin, Inc. v. Flagship Properties, Inc., supra, 220 Conn. 579–81.

The Klewin court recapitulated its holding in terms directly applicable to this case:  “We therefore hold that an oral contract that does not say, in express terms, that performance is to have a specific duration beyond one year is, as a matter of law, the functional equivalent of a contract of indefinite duration for the purposes of the statute of frauds.   Like a contract of indefinite duration, such a contract is enforceable because it is outside the proscriptive force of the statute regardless of how long completion of performance will actually take.   The first certified question is answered ‘yes.’   The second certified question is answered ‘no.’  “ Id., 583–84.   In the present case, the oral agreement between the plaintiff and the defendant, does not say in express terms that performance is to have a specific duration beyond one year, and thus the functional equivalent of a contract of indefinite duration.   Therefore, the agreement in the present case would appear to be enforceable because it falls outside the statute of frauds regardless of how long completion would take.

The defendant makes a confusing argument regarding waiver based on course of performance between the parties, course of dealing and usage of trade as defined under the Connecticut UCC General Statutes § 42a–1–303, and, which argument again the court cannot decipher from its poorly drafted memorandum.   The fact remains that there is an outstanding balance on the defendant's account.   The defendant did not offer any evidence that the balance was not owed to the plaintiff.   Although the defendant has alleged some sort of waiver by the plaintiff, it did not submit any evidence to substantiate this assertion.

The defendant also argues that the parties' agreement to reduce the balance owed, by $5,000, in return for transfer of cheese manufacturing equipment, is an accord, not a modification that changes the terms of payment.   The defendant further argues that in lieu of partial payment on amounts owed, the plaintiff accepted certain machinery with an agreed upon value of $5,000 and that such acceptance by the plaintiff of the machinery is “as if the defendant wrote a check for $5,000.”

Our Supreme Court has held that “[w]hen there is a good faith dispute about the existence of a debt or about the amount that is owed, the common law authorizes the debtor and the creditor to negotiate a contract of accord to settle the outstanding claim ․ An accord is a contract between a creditor and debtor for the settlement of a claim by some performance other than that which is due ․ Without a mutual assent, or a ‘meeting of the minds,’ there cannot be a valid accord.”  (Citations omitted;  internal quotation marks omitted.)   Herbert S. Newman & Partners, P.C. v. CFC Construction Ltd. Partnership, 236 Conn. 750, 764, 674 A.2d 1313 (1996).   To prove an accord and satisfaction, the defendant must show that at the time of the agreement there was a good faith dispute over the existence of a debt or over an amount owed, and that the debtor and the creditor negotiated a contract of accord to settle the claim.   Peerless Hosiery Co. v. Northern Ins. Co., 108 F.Sup. 52, 55–56 (D.Conn.), aff'd, 199 F.2d 957 (2d Cir.1952).   The accord must be a new agreement based on new consideration.  Crucible Steel Co. v. Premier Mfg. Co., 94 Conn. 652, 656, 110 A. 52 (1920).   The proponent must be able to show that there was a meeting of the minds, and that the offer by the debtor was clearly tendered as full satisfaction of the debt and that the payment was knowingly accepted.   Id.;  Gillis v. Gillis, 21 Conn.App. 549, 552, 575 A.2d 230, 231–32, cert. denied, 215 Conn. 815, 576 A.2d 544 (1990).  “Indeed, a validly executed accord and satisfaction precludes a party from pursuing any action involving the original, underlying claim.   The defendant bears the burden of proving accord and satisfaction when it is pleaded as a special defense.”   (Citations omitted.)  Schoonmaker v. Brunoli, 265 Conn. 210, 277, 828 A.2d 64 (2003).

In the present case, the plaintiff submitted evidence of what is described as a “Bill of Sale” and states the following:  “Liuzzi Angeloni Cheese will pick up all equipment on Saturday, May 4” except for the Electric Tow Motor which will be used by Cutrufello's Creamery until the Shredded cheese operation is moved to 86 Rossotto Drive.   When we pick up the Electric Tow Motor Liuzzi Angeloni Cheese will deduct this $5,000 Sale from what Cutrufello's Creamery owes Liuzzi Angeloni Cheese.”   Plaintiff's Ex. 4. First, there is no dispute about the amount owed to the plaintiff.   As the court previously stated, the defendant essentially acknowledged the debt and was ready to stipulate to the amount owed to be $79,994.86 which is the $84,994.86 the plaintiff claims is owed minus the $5,000 the plaintiff agreed to reduce on the amount owed for the equipment.   Second, there is no evidence that the parties negotiated an accord to settle the entire outstanding amount owed by the defendant to the plaintiff for $5,000.   Thus, the agreement by the plaintiff to deduct $5,000 from the defendant's arrearage on the account upon transfer of defendant's equipment to the plaintiff is not an accord.

Accordingly, the court therefore finds that there is sufficient evidence that probable cause exists that the plaintiff will succeed on its breach of contract claim.

“Parties routinely plead alternative counts alleging breach of contract, unjust enrichment, [and quantum meruit], although in doing so, they are entitled only to a single measure of damages arising out of these alternative claims ․ Under this typical belt and suspenders approach, the equitable claim is brought in an alternative count to ensure that the plaintiff receives some recovery in the event that the contract claim fails ․ The [moving party's] argument that a party may not, as a matter of law, plead an alternative related count for unjust enrichment or [quantum meruit] when that party has a good faith belief that a valid breach of contract cause of action lies, therefore, is without merit.”  (Citations omitted;  internal quotation marks omitted.)   Stein v. Horton, 99 Conn.App. 477, 485–86, 914 A.2d 606 (2007).

“It has been held in several recent Superior Court cases that if the plaintiff incorporates allegations of a breach of an express contract between the parties into a count stating a claim for unjust enrichment cause, [or quantum meruit], the plaintiff violates the rule that those alternative causes of action must be pleaded in separate counts.   See J & N Electric, Inc. v. Notkins, Superior Court, judicial district of New Haven, Docket No. CV 08 5020144 (May 20, 2009, Keegan, J.) (47 Conn. L. Rptr. 804, 805) (granting motion to strike unjust enrichment claim based upon plaintiff incorporating allegations of breach of express contract between plaintiff and defendant into claim);  Burke v. The Boat–Works, Inc., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 04 4001838 (July 26, 2005, Jennings, J.) (same).  But compare with O'Malley v. Devivo, Superior Court, judicial district of New Britain, Docket No. CV 09 4019885 (May 7, 2010 Trombley, J.) [49 Conn. L. Rptr. 801] (denying motion to strike when plaintiff incorporated allegations of formation of an express agreement, but not its breach, into unjust enrichment count).”   Place v. Connecticut College, Superior Court, judicial district of New London at New London, No. CV 10 6003543 (Sep. 8, 2010, Cosgrove, J.).

Here the plaintiff alleges in count two of its complaint a claim for quantum meruit and in count three of its complaint, unjust enrichment as alternative theories of recovery.   Although the plaintiff has alleged in those counts that there was an express oral agreement between the plaintiff and defendant, whereby the plaintiff would provide wholesale cheese products to the defendant and the defendant was to pay for said products, and that defendant refused to pay, the defendant did not move to strike the quantum meruit and unjust enrichment counts of the plaintiff's complaint.   The defendant did file a request to revise (# 104) but did not move to strike those counts.

The elements for a claim of unjust enrichment are well established.   “Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs' detriment.”  (Internal quotation marks omitted.)  Jo–Ann Stores, Inc. v. Property Operating Co., LLC, 91 Conn.App. 179, 194, 880 A.2d 945 (2005).  “Unjust enrichment is a very broad and flexible equitable doctrine that has as its basis the principle that it is contrary to equity and good conscience for a defendant to retain a benefit that has come to him at the expense of the plaintiff.”  Gagne v. Vaccaro, 255 Conn. 390, 409, 766 A.2d 416 (2001).

“Quantum meruit and unjust enrichment are common-law principles of restitution, which are essentially noncontractual means of recovery without a valid contract ․ Quantum meruit is a theory of contract recovery that does not depend upon the existence of a contract, either express or implied in fact ․ Rather, quantum meruit arises out of the need to avoid unjust enrichment to a party, even in the absence of an actual agreement ․ Quantum meruit literally means ‘as much as he has deserved.’  “ (Citations omitted;  internal quotation marks omitted.)  McCullough v. Waterside Associates, 102 Conn.App. 23, 28 n.4, 925 A.2d 352 (2007).

“Quantum meruit is the remedy available to a party when the trier of fact determines that an implied contract for services existed between the parties, and that, therefore, the plaintiff is entitled to the reasonable value of services rendered ․ The pleadings must allege facts to support the theory that the defendant, by knowingly accepting the services of the plaintiff and representing to her that she would be compensated in the future, impliedly promised to pay her for the services she rendered.”  (Internal quotation marks omitted.)  Schreiber v. Connecticut Surgical Group, P.C., 96 Conn.App. 731, 737, 901 A.2d 1277, 1281 (2006).

The defendant argues that the plaintiff has failed to provide evidence to show probable cause that a judgment will be rendered in its favor on the claim for unjust enrichment.   The defendant claims that the plaintiff has failed to show that the defendant unjustly did not pay the plaintiff for the benefits and/or that the alleged failure was to the plaintiff's detriment.   Although the plaintiff's invoices required payment within seven days, the plaintiff testified that the agreement was that the defendant would pay the plaintiff within thirty days.   The plaintiff acknowledged that routinely the defendant would pay beyond the thirty days and that in 2010 through 2012, the defendant owed the plaintiff money for cheese products purchased, however, the plaintiff continued to sell cheese to the defendant.   The plaintiff further acknowledged that, notwithstanding the invoice stating that payment had to be made within seven days it accepted payment from the defendant much later and on an ongoing basis.   In August 2012, as previously noted the defendant fell behind again beyond the thirty days and was placed on COD for new product with payments to be made towards the outstanding arrearage which at the time was approximately $105,000.   In late December 2012, early January 2013 the defendant advised the plaintiff that it would no longer be purchasing goods from them as they had consolidated their business with Wades.   The plaintiff having concerns with the outstanding arrearage owed by the defendant met with defendant's representatives and the plaintiff agreed that the defendant would make minimum payments of at least $500 on a weekly basis towards the outstanding arrearage and once the real property owned by the defendant was sold, if the balance of the arrearage had not been paid, then it would be paid at the time of the sale.

As previously discussed, in order to recover for unjust enrichment the plaintiff must show that the defendant was benefited;  that is that it received something of value.   Clearly there is evidence that the defendant benefited from not paying the plaintiff for goods sold to it by the plaintiff.   There remains an arrearage on the defendant's account for goods sold to the defendant from which the defendant benefited and has not paid for.   The plaintiff must also show that the benefit was unjust, namely that it was not paid for by the defendant to the detriment of the plaintiff.  Jo–Ann Stores, Inc. v. Property Operating Co., LLC, supra, 91 Conn.App. 194.   Although the evidence demonstrates that the plaintiff, on occasion, accepted payments beyond thirty days, by either COD and/or installment payments, the evidence also demonstrates that there is clearly a balance owed to the plaintiff for goods sold to the defendant from which the defendant has benefited in the amount of $84,994.86.   Further, although the defendant continued to make installment payments through the date of the PJR hearing, the evidence clearly demonstrates that there remains a balance owed to the plaintiff for goods sold to the defendant.   The defendant conceded that this amount was due and owing to the plaintiff with a credit toward that amount upon the transfer of ownership of equipment owned by the defendant to the plaintiff.   The plaintiff is still out of money as well as the cheese product it sold to the defendant.   The court therefore concludes that the plaintiff has produced evidence sufficient to meet the probable cause standard that the plaintiff is still owed monies for goods it sold to the defendant, and that payments made by the defendant were inadequate to cover the amount owed as that amount as of the date of the PJR hearing remained outstanding, and that the defendant unjustly benefited from goods provided to it by the plaintiff to the plaintiff's detriment.

The plaintiff in count two of its complaint alleges a claim of quantum meruit as an alternative theory of recovery.   The defendant claims that the evidence does not demonstrate probable cause that a judgment will be rendered in favor of the plaintiff on its claim of quantum meruit.   The defendant argues that there is no legal basis for a claim of quantum meruit because there has been no breach of an implied contract.   The defendant further argues that the oral arrangement at issue involves the sale of goods and not services.

“Both unjust enrichment and quantum meruit are doctrines allowing damages for restitution, that is, the restoration to a party of money, services or goods of which he or she was deprived that benefitted another ․ Quantum meruit is usually a remedy based on implied contract and usually relates to the benefit of work, labor or services received by the party who was unjustly enriched, whereas unjust enrichment relates to a benefit of money or property ․” United Coastal Industries, Inc. v. Clearheart Construction Co., supra, 71 Conn.App. 506, 511–12, 802 A.2d 901 (2002).   The court concludes that as an alternative theory of recovery, the plaintiff has not demonstrated evidence that probable cause exists that it would be successful on its claim of quantum meruit as that theory of recovery is based on implied contract and usually relates to the benefit of work, labor or services.   Here, the oral agreement between the plaintiff and the defendant which is the subject of this action involves the sale of cheese goods and does not involve work, labor or services.

CONCLUSION

The court concludes that there is sufficient evidence to demonstrate that probable cause exists that the plaintiff will be successful on its claim for breach of contract.   The court also concludes that as an alternative theory of recovery, there is evidence sufficient to establish probable cause that the plaintiff would be successful on its claim for unjust enrichment.   Thus, the court, having considered the $5,000 credit plaintiff agreed to for the transfer of equipment concludes that there is probable cause to find that the defendant owes the plaintiff $80,000.   Based on the foregoing, the court grants a prejudgment remedy in the amount of $80,000.

Wilson, J.

FOOTNOTES

FN1. The dissent said:  “There was no specific agreement between the parties as to how long the contract was to continue in effect and what their intent was in this regard is a matter of interpretation of the contract ․ In the present case there is nothing in the circumstances attending the making of the contract which tends to overcome the presumption that the parties intended the arrangement to continue only so long as was mutually, agreeable.”  Burkle, 501..  FN1. The dissent said:  “There was no specific agreement between the parties as to how long the contract was to continue in effect and what their intent was in this regard is a matter of interpretation of the contract ․ In the present case there is nothing in the circumstances attending the making of the contract which tends to overcome the presumption that the parties intended the arrangement to continue only so long as was mutually, agreeable.”  Burkle, 501.

FN2. The court noted that the British Parliament repealed most of the provisions of the statute in 1954, including the one-year provision.   Klewin, supra, 574..  FN2. The court noted that the British Parliament repealed most of the provisions of the statute in 1954, including the one-year provision.   Klewin, supra, 574.

Wilson, Robin L., J.