Carrara Marble Co. of America, Inc. v. Ferazzoli Imports of New England, Inc. (2014)

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (NO. 124)

The plaintiff/counterclaim defendant, Carrara Marble Company of America, Inc. (counterclaim defendant), commenced this action on October 18, 2011, by service of process on the defendant/counterclaim plaintiff, Ferazzoli Imports of New England, Inc. (counterclaim plaintiff).   The counterclaim defendant alleges the following facts in counts one through six of its eight-count complaint.   In February and March of 2010, the counterclaim plaintiff provided purchase orders to South Marble, S.A.C. (South Marble) for marble materials reasonably valued at $41,629.79 (first property).   On February 8, 2010, South Marble (South) assigned all of its rights and privileges in connection to its account with the defendant to CSA International, S.A.C. (CSA).  CSA then duly transferred all of its rights and privileges in connection to its account with the counterclaim plaintiff to the counterclaim defendant, who is now the actual and bona fide owner of the account.

The counterclaim defendant duly performed all of the conditions of the account and the counterclaim plaintiff accepted and benefitted from the use of the first property.   Thereafter, the counterclaim plaintiff paid $27,422.04 towards the account for the first property, leaving an unpaid balance of $14,207.75 which it has “failed, neglected, and refused to make payment on.”   Based on the fact that the counterclaim plaintiff has failed to pay the remaining balance on the account and has not returned $14,207.75 worth of goods to the counterclaim defendant, the counterclaim plaintiff has been unjustly enriched, converted the goods for its own benefit, committed statutory theft, breached its fiduciary duty to the counterclaim defendant, and failed to account to the counterclaim defendant for proceeds from the sale of the goods.

Additionally, in counts seven and eight of its eight-count complaint, the counterclaim defendant alleges the following facts.   On December 14, 2010, CSA furnished marble material reasonably valued at $27,222.31 (second property) to the counterclaim plaintiff, which accepted and benefitted from that property.   Subsequently, CSA duly transferred all rights and privileges in connection with that account to the counterclaim defendant, who is now the actual and bona fide owner of the account.   The counterclaim plaintiff, however, has “failed, neglected, and refused to make payment on the outstanding balance” to the counterclaim defendant and has thus been unjustly enriched.   The counterclaim defendant is seeking monetary damages, costs and attorneys fees, statutory pre-and postjudgment interest, treble damages, and any other relief the court may deem appropriate.

Thereafter, on February 14, 2012, the counterclaim plaintiff filed a two-count counterclaim/setoff against the counterclaim defendant.   Both counts of the counterclaim were stricken by way of the counterclaim defendant's motion to strike, which was filed on March 30, 2012.   On May 8, 2012, the counterclaim plaintiff requested permission to amend its counterclaim/setoff and filed a three-count amended counterclaim/setoff.   Count one of the amended counterclaim/setoff was intentionally left blank, count two alleges breach of contract, and count three alleges promissory estoppel.   A claim for a setoff is also alleged.   The counterclaim defendant's objection to the counterclaim plaintiff's request to amend the counterclaim was overruled, thereby making the amended three-count counterclaim/setoff the operative document for purposes of this motion for summary judgment.¹

The counterclaim plaintiff alleges the following facts in its three-count amended counterclaim/setoff.   In January of 2010, a customer of the counterclaim plaintiff informed the counterclaim plaintiff that it would need certain materials no later than August of 2010.   Subsequently, the counterclaim plaintiff notified an agent of South, Southwest and/or CSA ² that it would soon be placing an order for the materials it would need to supply to its customer and informed the agent that the order was time-sensitive, as it needed the materials by August 2010.   Multiple agents of South, Southwest, and/or CSA represented to the counterclaim plaintiff that they would be able to provide the materials within the required time period, so the counterclaim plaintiff did not contact other vendors regarding the impending order.   As was common business practice between the counterclaim plaintiff and South, Southwest and/or CSA, the counterclaim plaintiff notified South, Southwest and/or CSA that it would place a purchase order as soon as it received the request from a contractor of the counterclaim plaintiff's customer, CPG Architects (CPG).  On May 19, 2010, CPG's contractor called the counterclaim plaintiff to request the materials, and again noted that it needed the materials by August of 2010.   Thus, the counterclaim plaintiff placed the anticipated order with Southwest.

On June 8, 2010, CSA informed the counterclaim plaintiff that the order could not be completed within the requested time frame.   Thus, the counterclaim plaintiff “incurred additional costs to purchase and prepare similar material in stock in the United States to meet the requested date.”   Despite its effort, the counterclaim plaintiff was unable to find the specific material that CPG and the contractor needed in the United States.   Therefore, it ultimately supplied the contractor with materials that did not meet the contractor's specifications, which caused CPG to cancel four other existing commercial orders it had with the counterclaim plaintiff.

The counterclaim plaintiff alleges that South, Southwest and/or CSA breached their contract with the counterclaim plaintiff because they failed to fulfill the requested order within the time requirement.   Consequently, the counterclaim plaintiff “incurred additional costs, lost profits and suffered a loss in business opportunities.”   Throughout the duration of their relationship with the counterclaim plaintiff, South, Southwest and/or CSA and their agents “acted on behalf of each other in connection with their invoicing, payment and supply of material and disregarded and blurred their corporate identities with respect to [the counterclaim plaintiff].”   As a result of that blurring of corporate identities, as well as the counterclaim defendant's allegations in the original complaint regarding its relationship with South, Southwest and/or CSA, the counterclaim plaintiff alleges that the counterclaim defendant is liable to it for damages, by way of breach of contract and/or promissory estoppel.   The counterclaim plaintiff alleges that the losses it incurred are the result of South, Southwest and/or CSA's failure to provide the materials to it within the time frame originally discussed.   Additionally, the counterclaim plaintiff alleges in the counterclaim that, should the counterclaim defendant succeed on the original complaint, the counterclaim plaintiff is entitled to a setoff for the damages caused to it as a result of South, Southwest and/or CSA's failure to timely perform on the contract.

Thereafter, on September 3, 2013, the counterclaim defendant filed a motion for summary judgment on the counterclaim, accompanied by a memorandum of law in support, arguing that it is entitled to judgment as a matter of law due to the nonexistence of any disputed factual issues.   In support of its motion, the counterclaim defendant submits an affidavit of William Cordova, the president and CEO of the counterclaim defendant corporation, accompanied by the following exhibits:  (A) a purchase order for materials, dated April 14, 2010 (purchase order one);  (B) a bill of lading;  (C) a loan agreement between CSA and South Marble dated February 8, 2010;  (D) a “Share Transfer Agreement” transferring 96 percent of CSA's shares to the counterclaim defendant, including all rights that may derive from ownership of the shares;  (E) an invoice dated December 13, 2010 (purchase order two);  and (F) a bill of lading for purchase order two.

On October 4, 2013, the counterclaim plaintiff filed a memorandum in opposition.   In support of its memorandum in opposition, the counterclaim plaintiff submits an affidavit of Roseann Alwang, the vice president of the counterclaim plaintiff corporation at all relevant times, accompanied by three exhibits:  (A) an e-mail chain between Francene Bransfield, a representative of the counterclaim plaintiff, and Henry Scholten;  (B) an e-mail from Bransfield to Mario Adriani, who is alleged in the amended counterclaim/setoff to be a representative of South, Southwest, and/or CSA, detailing deductions taken for defective materials received with regard to the second property;  and (C) a letter from Roseann Alwang to Adriani, which discusses an enclosed payment.

The court heard oral argument at the short calendar held on October 21, 2013.   The court has also reviewed the memoranda of law, affidavits and all exhibits submitted by the parties.   The court denies the motion for summary judgment for the reasons set forth below.

I. STANDARD OF REVIEW

“[A]ny party may move for summary judgment upon any counterclaim or cross complaint as if it were an independent action ․” Practice Book § 17–44.   “Practice Book [§ 17–49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ․ In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Patel v. Flexo Converters U.S.A., Inc., 309 Conn. 52, 56–57, 28 A.3d 1162 (2013).  “In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact ․ To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue.”   (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11, 938 A.2d 576 (2008).  “A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case.”  (Internal quotation marks omitted.)  Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002).

II. DISCUSSION

In the present case, the counterclaim defendant argues that it is entitled to summary judgment as a matter of law on the amended counterclaim/setoff, as no genuine issues of material fact exist.   Specifically, the counterclaim defendant argues that it is entitled to summary judgment as a matter of law on the grounds that it was not a party to the counterclaim plaintiff's contract with South, Southwest, and/or CSA, and that the counterclaim plaintiff cannot prove the elements of promissory estoppel.   Conversely, the counterclaim plaintiff argues that genuine issues of material fact do exist, and as such, the counterclaim plaintiff's motion for summary judgment on the amended counterclaim/setoff should be denied.   Specifically, the counterclaim plaintiff argues that genuine issues of material fact exist with regard to whether it had a contract with the counterclaim defendant, and as to the counterclaim defendant's “level of involvement” in the South, Southwest, and/or CSA relationship.

A. Count Two:  Breach of Contract

“[T]he obligation of contracts is limited to the parties making them, and, ordinarily, only those who are parties to contracts are liable for their breach.   Parties to a contract cannot thereby impose any liability on one who, under its terms, is a stranger to the contract, and, in any event, in order to bind a third person contractually, an expression of assent by such person is necessary ․ In other words, [a] person who is not a party to a contract (i.e., is not named in the contract and has not executed it) is not bound by its terms.”  (Citation omitted;  internal quotation marks omitted.)  FCM Group, Inc. v. Miller, 300 Conn. 774, 797, 17 A.3d 40 (2011).  “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.)  American Express Centurion Bank v. Head, 115 Conn.App. 10, 15–16, 971 A.2d 90 (2009).

In the present case, based on the evidence presented, it is entirely unclear whether or not the counterclaim defendant was a party to the contracts at issue.   While the counterclaim defendant alleges that it never assumed any liability with regard to the contracts, it claims that it is owed the benefits of those contracts.   The counterclaim defendant argues that it is entitled to judgment as a matter of law on the counterclaim, as it was not involved in the transactions at issue and was not a party to the contracts.   Nevertheless, the evidence presented by the counterclaim plaintiff indicates that throughout the counterclaim plaintiff's relationship with South, Southwest, and/or CSA, there was confusion as to which company was responsible for the alleged contracts.   As the counterclaim plaintiff argues, the evidence presented demonstrates that there may have been a blurring of corporate identities.   The counterclaim plaintiff would place an order with one company, then receive an invoice from and be directed to make payments to another company.   When there were issues with the subject matter of the contracts, the counterclaim plaintiff would be credited by South, Southwest, and/or CSA regardless of which company the counterclaim plaintiff ordered the materials from.   Based on the apparent blurring of corporate identities, the counterclaim plaintiff could have justifiably assumed that all of these entities were affiliated in some way.

Moreover, the counterclaim plaintiff's evidence submitted in opposition to the motion, specifically the affidavit of Roseann Alwang, states that Cordova, the current president and CEO of the counterclaim defendant corporation, “was frequently involved in email conversations concerning shipments and problems with material involving Southwest, South Marble and CSA.” The affidavit further states that “representatives of [the counterclaim plaintiff corporation] met William Cordova ․ who assured [the counterclaim plaintiff corporation] that there would be no problem supplying the materials by the specified date, August 2010.”   In addition to William Cordova, it is entirely unclear based on the evidence which person was representing which entity at any given time.   Additionally, the Share Transfer Agreement between CSA and the counterclaim defendant appears to have been signed in February 2010.   The evidence demonstrates that it was not until May 2010 that the counterclaim plaintiff officially placed the time-sensitive order and June 2010 that the counterclaim plaintiff was informed that the time frame discussed could not be met.   Based on the evidence presented, it is unclear which entity the counterclaim plaintiff was dealing with when the alleged order was placed.

Finally, the share transfer agreement by which the counterclaim defendant alleges it was transferred ownership of the accounts at issue does not specify what rights and responsibilities were transferred and whether liabilities as well as assets of CSA were transferred to the counterclaim defendant.   There was no other evidence introduced in connection with this motion that provides any further clarity.

Viewing the evidence in the light most favorable to the counterclaim plaintiff, genuine issues of material fact exist with regard to whether the counterclaim defendant is a party to the contracts.   Based on the apparent blurring of corporate identities, the lack of clarity in the share transfer agreement and William Cordova's alleged involvement in the contracts at issue, genuine issues of material fact exist with regard to whether the counterclaim defendant was a party to the transactions.   Thus, the counterclaim defendant's motion for summary judgment is denied with regard to count two.

B. Count Three:  Promissory Estoppel

“[U]nder the doctrine of promissory estoppel [a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.   A fundamental element of promissory estoppel, therefore, is the existence of a clear and definite promise which a promissory could reasonably have expected to induce reliance.   Thus, a promisor is not liable to a promisee who has relied on a promise if, judged by an objective standard, he had no reason to expect any reliance at all.”  (Internal quotation marks omitted.)  D'Ulisse–Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 213, 520 A.2d 217 (1987).

As discussed in the preceding section, it is unclear, based on the evidence presented, whether or not the counterclaim defendant was a party to the alleged contract and/or promise.   A genuine issue of material fact therefore exists with regard to whether the counterclaim defendant or any representatives thereof made promises upon which the counterclaim plaintiff justifiably relied to its detriment.   Thus, the counterclaim defendant's motion for summary judgment is denied as to count three.

C. Setoff

Since the court has determined that genuine issues of material fact exist with regard to counts two and three of the counterclaim plaintiff's amended counterclaim/setoff, genuine issues of material fact also exist with regard to whether the counterclaim plaintiff is entitled to setoff, should the counterclaim defendant succeed on the underlying complaint.   Therefore, the counterclaim defendant's motion for summary judgment is denied with regard to setoff.

III. CONCLUSION

For the foregoing reasons, the counterclaim defendant's motion for summary judgment is denied as to the entire amended counterclaim/setoff.

SO ORDERED

Marcus, J.

FOOTNOTES

FN1. Additionally, on June 21, 2012, the counterclaim defendant requested that the counterclaim plaintiff revise its amended counterclaim by deleting counts two and three in their entirety, to which the counterclaim plaintiff objected on August 27, 2012.   The counterclaim plaintiff's objection was sustained..  FN1. Additionally, on June 21, 2012, the counterclaim defendant requested that the counterclaim plaintiff revise its amended counterclaim by deleting counts two and three in their entirety, to which the counterclaim plaintiff objected on August 27, 2012.   The counterclaim plaintiff's objection was sustained.

FN2. It is unclear which company was being dealt with at each relevant time, as the defendant/counterclaim plaintiff alleges that it would place orders only with Southwest, but would receive invoices for that order from either South, Southwest, or CSA..  FN2. It is unclear which company was being dealt with at each relevant time, as the defendant/counterclaim plaintiff alleges that it would place orders only with Southwest, but would receive invoices for that order from either South, Southwest, or CSA.

Marcus, Shelley A., J.