Konover Dev. Corp. v. Waterbury Omega, LLC

214 Conn.App. 648

281 A.3d 1221

KONOVER DEVELOPMENT CORPORATION

v.WATERBURY OMEGA, LLC

AC 44537

Appellate Court of Connecticut.

Argued March 1, 2022

Officially released August 30, 2022

Richard P. Weinstein, West Hartford, with whom, on the brief, was Sarah Black Lingenheld, West Hartford, for the appellant (named defendant).

Richard F. Wareing, Hartford, with whom were Angela M. Vickery and, on the brief, Anthony J. Natale, Glastonbury, for the appellee (plaintiff).

Alvord, Clark and Harper, Js.

ALVORD, J.

The defendant Waterbury Omega, LLC¹ appeals from the judgment of the trial court granting the application for a prejudgment remedy in favor of the plaintiff, Konover Development Corporation, upon a finding of probable cause that the defendant had breached an oral agreement for the plaintiff's procurement, management and accounting of building/rooftop wireless telecommunications agreements on behalf of the defendant. On appeal, the defendant claims that the court improperly concluded that the plaintiff had established probable cause in light of its defenses that

enforcement of the oral agreement was barred by (1) General Statutes § 20-325a, (2) the rule against perpetuities, and (3) the statute of frauds. We affirm the judgment of the court.

The court found the following facts, which are undisputed.² "[The defendant] is the owner of property located at 330 Bishop Street, Waterbury (property), on which is present a multistory building (building). In 2005, [the parties] entered into an oral contract, for no specified term, in which [the plaintiff] agreed to act as the property's exclusive telecommunications managing agent for the licensing of rooftop telecommunication[s] equipment including antennas ([oral management] agreement).³ Pursuant to the terms of the [oral management] agreement, [the plaintiff] was to market, license and collect usage payments in exchange for a commission of 30 percent of monthly receipts generated by any license.

"In 2005, [the plaintiff] procured two contracts for the placement of wireless telecommunications equipment on the building's rooftop [collectively, the two original leases]. The first was dated March 3, 2005, with Nextel Communications of Mid-Atlantic, Inc. [(Nextel), later Sprint] and the second was dated July 20, 2005, with New Cingular Wireless PCS, LLC [(New Cingular), later AT&T] .... In the two original leases, [the defendant] acknowledged that ‘[the plaintiff] has been appointed as [the defendant's] telecommunications managing agent⁴ for the [p]roperty and is compensated

by [the defendant] based on a percentage of the revenue generated by this [l]ease and any future telecommunications leases pertaining to the [p]roperty.’ [The plaintiff] was identified specifically as the third-party beneficiary of the two [original leases], each identified as an ‘Antenna Facility Lease.’ The [two original leases] differed, pertinently, in that the contract with New Cingular included an equipment shelter adjacent to the building on the ground. ...

"Unbeknownst to [the plaintiff], [the defendant] entered into additional, similar [building/rooftop wireless telecommunications agreements], with [Omnipoint Communications, Inc., now known as T-Mobile (Omnipoint)] in 2006, with [Youghiogheny Communications-Northeast, LLC, doing business as Pocket Communications (Pocket)] in 2009 and with [Cellco Partnership, doing business as Verizon Wireless (Verizon)] in 2015. At no time did [the defendant] pay [the plaintiff] a commission for these additional contracts.⁵ From 2005 through 2016, [the plaintiff], without interruption, collected the rent from the two original leases, remitted 70 percent to [the defendant] and reserved for itself the 30 percent commission. In August of 2016, [the defendant] began to collect the monthly payments for the two original leases as a consequence of a freeze on [the plaintiff's] banking account that prevented [the plaintiff] from issuing payments from its bank. Thereafter, between August of 2016 and February of 2018, [the defendant] only intermittently remitted the 30 percent commission from the two original leases to [the plaintiff]. Repeated communications between [Matthew Guglielmo, an agent of the plaintiff] and [the defendant's] representatives took place, in which payment of the commissions was requested. The present action

was commenced on April 9, 2018. Ultimately, the commissions due pursuant to the two original leases were paid through April of 2018. No further payment has been made." (Footnotes in original.)

The following procedural history is also relevant. The plaintiff commenced this action in April, 2018, by way of a complaint seeking a declaratory judgment. In the complaint, the plaintiff alleged that the defendant had made required payments "only under the threat of legal action and only after counsel was engaged for both parties ...." The plaintiff alleged that the defendant had "repudiated its obligations under the [two original] leases." The plaintiff additionally alleged that, "[g]iven [the defendant's] repudiation of the parties’ [oral management] agreement, there is an actual bona fide and substantial question or issue in dispute, which requires settlement between the parties."

The plaintiff filed its third amended complaint in August, 2019.⁶ In the nine count complaint, the plaintiff alleged, inter alia, that the defendant had "not made any payments to [the plaintiff] since April of 2018." The defendant filed an answer and asserted several special defenses, including that the plaintiff had violated § 20-325a and that enforcement of the oral management agreement was barred by the statute of frauds and the rule against perpetuities.

On August 2, 2019, the plaintiff filed an application for a prejudgment remedy to "secure the sum of at least $351,184," which was accompanied by an affidavit of the plaintiff's president, Michael Konover.⁷

The court,

Noble, J. , held a hearing on the application on August 20 and 21, 2020. The court heard the testimony of Guglielmo, an agent of the plaintiff; Brian Allen, a wireless and telecommunications consultant/expert for the plaintiff; and Moishe Schwartz, a member of the defendant.

The parties filed posthearing briefs. The defendant argued therein: "First, the plaintiff's claims are barred by [§] 20-325a because [ General Statutes §] 20-329 (9) provides that [§] 20-325a is applicable and there can be no dispute that the plaintiff did not have a written agreement with [the defendant] that would fulfill the requirements of such statute. Second, considering that the plaintiff claims the purported oral management agreement is perpetual (and in fact is seeking an order that it is entitled to a percentage of revenue from any future telecommunications agreements), enforcement of the purported oral management agreement is barred by the rule against perpetuities. Finally, the purported oral management agreement is unenforceable pursuant to the statute of frauds because the terms put forth by the plaintiff (even if they could be proven) are inconsistent with completion of the agreement within one year such that the statute of frauds requires a written agreement. Because all of the plaintiff's claims (regardless of the cause of action) are barred as a matter of law by [§] 20-325a, the rule against perpetuities, and/or the statute of frauds, the plaintiff is not entitled to a prejudgment remedy even under the more lenient ‘probable cause’ standard applicable thereto." (Emphasis in original.) The plaintiff argued that the defendant's special defenses with respect to § 20-325a and the statute of

frauds both failed and that the trial court already had rejected the defendant's special defense regarding the rule against perpetuities in its memorandum of decision denying the parties’ cross motions for summary judgment.⁸

In its February 9, 2021 memorandum of decision, the court granted the application for a prejudgment remedy on the plaintiff's breach of contract count. The court determined that the plaintiff had "proven probable cause that the parties entered into a valid and enforceable oral agreement for [the plaintiff] to provide the exclusive marketing, licensing and management of accounts for the placement of wireless telecommunication[s] equipment on the property and building in exchange for payment of 30 percent of monthly receipts therefrom. [The plaintiff] has also proved that the [oral management agreement] was breached by [the defendant's] failure to remit the contracted for commission from the subsequently obtained agreements with Omnipoint, Pocket, and Verizon." The court expressly considered and rejected the defendant's special defenses, concluding that § 20-325a, the rule against perpetuities, and the statute of frauds did not bar the plaintiff's action.

The court then turned to the question of the amount of damages that had been established by probable

cause. The court rejected the plaintiff's contention that it was entitled to recover not only past damages but also "future damages extending throughout the life of the Omnipoint, Verizon, and Pocket agreements." The court determined that the oral management agreement, which was of indefinite duration, was terminable at will and found that it was terminated by the defendant no later than April, 2018. The court noted that it had been presented with "no evidence of an express termination" but had determined that termination was evident "by the conduct of [the defendant] inconsistent with its perpetuation." The court found that "[n]o payments of any sort have been made by [the defendant] since April of 2018, the date this action was commenced, and there was no evidence received to indicate that [the defendant] asked [the plaintiff] to perform any obligations under the [oral management] agreement, all indicative of an implicit termination of the [oral management] agreement."

The court found that the plaintiff had proven probable cause that it would recover damages based...