Cohen v. Roll–a–cover Llc

131 Conn.App. 443

27 A.3d 1

James D. COHEN et al.

v.ROLL–A–COVER, LLC, et al.

No. 32430.

Appellate Court of Connecticut.

Argued March 17, 2011.Decided Sept. 20, 2011.

Joseph L. Rini, with whom, on the brief, was Michael P. Morris, Ridgefield, pro se, for the appellants (defendants).James D. Cohen, pro se, the appellee (named plaintiff).Michael T. Bologna, Fairfield, for the appellee (plaintiff Roll–A–Cover of New Jersey, LLC).

DiPENTIMA, C.J., and GRUENDEL and WEST, Js.WEST, J.

The defendants, Roll–A–Cover, LLC, and Michael P. Morris, appeal from the judgment of the trial court rendered in favor of the plaintiffs, James D. Cohen and Roll–A–Cover of New Jersey, LLC.¹ On appeal, the defendants claim that the court improperly (1) found facts that were not supported by the evidence when it determined that the plaintiffs had proven fraud and negligent misrepresentation; (2) found multiple violations of the Connecticut Business Opportunity Investment Act (business opportunity act), General Statutes § 36b–60 et seq.; (3) found a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq.; ² and (4) calculated the damages award in accordance with General Statutes § 36b–74 (a). We affirm the judgment of the trial court.

The following facts, as found by the court, and procedural history are necessary for our resolution of the defendants' appeal. The defendants are engaged in the manufacturing and sales of a product called “Roll–A–Cover,” a retractable enclosure for swimming pools and spas. While traveling in the fall of 2003, Cohen read an in-flight magazine advertisement that described the defendants' products in addition to potential opportunities for distributorships. Cohen, a New Jersey resident, contacted the defendants and set up a meeting at their manufacturing facility located in Bethany to acquire more information. During that initial meeting, Cohen met with Morris, the founder and president of Roll–A–Cover, LLC, in addition to other agents of the defendant company. From November, 2003, through January, 2004, Cohen engaged in negotiations with Morris and agents of Roll–A–Cover, LLC, regarding the possibility of acquiring an exclusive distributorship for Roll–A–Cover, LLC, products in New Jersey. As part of their effort to induce Cohen into purchasing a distributorship for New Jersey, the defendants presented him with a marketing plan and business program that, at the time, they knew, contained a myriad of factual misrepresentations and material untruths. During the negotiations, Cohen was told that the only means of obtaining a distributorship was to pay a fee of $75,000 and to participate in a pyramid marketing program. Morris communicated to Cohen that the defendants were in negotiations with potential distributors worldwide and that Roll–A–Cover, LLC, recently had sold distributorships in Florida and five different countries in Southeast Asia. ³ At the time that those representations were made, there were no such sales of distributorships at any of those locations. The defendants possessed only two distributors of its products, and neither paid a fee for the distributorship, nor were they subject to the type of pyramid marketing program that was being proposed to Cohen. The defendants also purported falsely to have a high volume sales history and a backlog of pending sales. They further represented that they held six patents and at least four trademarks on their products. At the time, the defendants did not possess either patent or trademark rights on any of their products. Moreover, the defendants misrepresented their product's ability to withstand certain wind velocities and snow loads in their attempt to present a superior product. Furthermore, the defendants prepared and presented a marketing and sales brochure that contained false and misleading information.⁴ The brochure also contained photographs and descriptions of pool enclosures that the defendants represented to be their own products. At the time, however, they were fully aware that some of the photographs and descriptions of those enclosures were not manufactured by Roll–A–Cover, LLC, but rather, by a different company. The defendants' website also disseminated a variety of factual misrepresentations that increased the plaintiffs' reliance on the erroneous information.⁵

Relying on the aforementioned misrepresentations, Cohen formed Roll–A–Cover of New Jersey, LLC, and entered into a master distributorship agreement (distributorship agreement) that provided Roll–A–Cover of New Jersey, LLC, with exclusive distributorship rights for the state of New Jersey in return for a fee of $75,000.⁶ Prior to the execution of the agreement, the plaintiffs were denied access to any documentation regarding the sales history of Roll–A–Cover, LLC, because of the defendants' position that the information was proprietary and unavailable. Thereafter, the business relationship between the parties deteriorated quickly and ended in the fall of 2004 with each party sending the other a letter of termination regarding the distributorship agreement.

On April 7, 2005, the plaintiffs filed a nine count amended complaint, alleging, inter alia, fraud or intentional misrepresentation, fraudulent inducement, negligent misrepresentation, multiple violations under the business opportunity act and a violation of CUTPA.⁷ In response, the defendants alleged four special defenses. On August 6, 2009, following a nine day court trial, the court issued a well reasoned memorandum of decision and found in favor of the plaintiffs on all counts. In a subsequent memorandum of decision, the court rendered its final judgment and awarded the plaintiffs $75,000 in compensatory damages, $350,000 in attorney's fees under the business opportunity act and CUTPA, and $150,000 in punitive damages under CUTPA. This appeal followed. Additional facts will be set forth as necessary.

IFRAUD

The defendants first claim that the court improperly made findings of fact that were not supported by the evidence when it concluded that the plaintiffs had proven fraud, fraudulent inducement and intentional misrepresentation by clear, precise and unequivocal evidence.⁸ We do not agree.

We begin by setting forth the appropriate standard of review. “Fraud and misrepresentation cannot be easily defined because they can be accomplished in so many different ways. They present, however, issues of fact.... The trier of facts is the judge of the credibility of the testimony and of the weight to be accorded it.... When the trial court finds that a plaintiff has proven all of the essential elements of fraud, its decision will not be reversed or modified unless it is clearly erroneous in light of the evidence and the pleadings in the record as a whole.... A finding of fact is clearly erroneous when there is no evidence in the record to support it ... or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” ⁹ (Citations omitted; internal quotation marks omitted.) Harold Cohn & Co. v. Harco International, LLC, 72 Conn.App. 43, 50–51, 804 A.2d 218, cert. denied, 262 Conn. 903, 810 A.2d 269 (2002). “[A]s a reviewing court [w]e must defer to the trier of fact's assessment of the credibility of the witnesses that is made on the basis of its firsthand observation of their conduct, demeanor and attitude.... The weight to be given to the evidence and to the credibility of witnesses is solely within the determination of the trier of fact.... In reviewing factual findings, [w]e do not examine the record to determine whether the [court] could have reached a conclusion other than the one reached.... Instead, we make every reasonable presumption ... in favor of the trial court's ruling.” (Internal quotation marks omitted.) 73–75 Main Avenue, LLC v. PP Door Enterprise, Inc., 120 Conn.App. 150, 158–59, 991 A.2d 650 (2010).

In the present case, the court found that the defendants made profuse “factual representations to the plaintiffs that were knowingly false when made, were made with the intent to deceive, and were relied on by the plaintiffs to their detriment in their execution or performance of the [agreement].” The defendants now mount a wholesale attack on all of the court's factual findings, asking this court to substitute its interpretation of the evidence and the credibility of witnesses in place of that of the trial court. “We have repeatedly stated that such wholesale attacks rarely produce results, tend to cloud the real issues, and in themselves cast doubts on the appellants' claims.” Scribner v. O'Brien, Inc., 169 Conn. 389, 391, 363 A.2d 160 (1975); see also Yale Literary Magazine v. Yale University, 4 Conn.App. 592, 597, 496 A.2d 201 (1985), aff'd, 202 Conn. 672, 522 A.2d 818 (1987). Moreover, when there is conflicting evidence, it is left to the discretion of the fact finder to decide which evidence to find credible. Champagne v. Raybestos–Manhattan, Inc., 212 Conn. 509, 530, 562 A.2d 1100 (1989). We have, nevertheless, conducted a thorough review of the record and conclude that the court's findings were supported by evidence in the record and are not clearly erroneous.

Because findings of fact will not be disturbed if they are reasonably supported by the evidence or the reasonable inferences drawn from the facts proven; see id.; we underscore the following evidence presented at trial to support the trial court's findings. In December, 2003, Morris sent an e-mail to Cohen, stating, “[t]oday, I finalized a Master Distributorship in Singapore, Thailand, Malaysia, Indonesia and Brunei. Tomorrow we are entertaining our newly agreed to Master Distributor's of Florida.” (Emphasis added.) When questioned about this correspondence, Morris provided equivocal testimony regarding what he intended by using the words “finalized” and “newly agreed” and...