Meridian Partners, LLC v. Dragone Classic Motorcars, Inc.

171 Conn.App. 355

157 A.3d 87

MERIDIAN PARTNERS, LLC

v.DRAGONE CLASSIC MOTORCARS, INC., et al.

AC 38085

Appellate Court of Connecticut.

Argued October 18, 2016

Officially released March 7, 2017

Edward T. Murnane, Jr., for the appellants-cross appellees (defendants).

Jeffrey Hellman, for the appellee-cross appellant (plaintiff).

DiPentima, C. J., and Keller and Calmar, Js.

CALMAR, J.

The defendants, Dragone Classic Motorcars, Inc., Dragone Vintage Cars, NV, Inc., and Emanuel Dragone, appeal from the judgment of the trial court denying their motion to vacate a settlement agreement that was entered into between the defendants and the plaintiff, Meridian Partners, LLC. The plaintiff has filed a cross appeal, challenging the denial of its motion for contempt. We affirm the judgment of the trial court.

The following facts and procedural history, as found by the trial court, are relevant to this appeal. By a complaint dated February 14, 2014, the plaintiff alleged that it was in the business of arranging financing for specialized businesses. In August, 2012, the defendants, dealers of antique automobiles, engaged the services of the plaintiff to obtain financing and to perform other services for the defendants. The plaintiff performed services for the defendants; the defendants, however, failed to pay the plaintiff for all of the work performed. The plaintiff, therefore, instituted the present action alleging that the defendants owed the plaintiff $170,000 for the services it had performed for the defendants.

On March 12, 2014, the plaintiff filed an application for a prejudgment remedy. A hearing on this application was scheduled for May 29, 2014. On that date, the parties appeared before the court, Stodolink , J ., and stipulated to an agreement of the claims between the parties. The court's order dated May 29, 2014, provided: "The court hereby accepts the following stipulation of the parties as stated on the record: The defendant is to pay the plaintiff $30,000 within twenty-one (21) days of today's date (5/29/2014) in good funds. In exchange the parties agree to mutual releases and the action shall be withdrawn with prejudice. The parties further agree that mutual confidentiality agreements and mutual nondisparagement agreements shall be entered into."

On July 1, 2014, the plaintiff filed a motion to enforce the settlement agreement. In this motion, the plaintiff contended that although it had prepared a settlement agreement reflective of the terms agreed upon in court, the defendants refused to sign the agreement and, instead, insisted upon various new terms that were not included in the stipulated agreement. The plaintiff argued that the defendants insisted that each of the plaintiff's principals and the plaintiff's attorney sign the settlement agreement personally and provide the defendants with the plaintiff's principals' proof of identification. On July 17, 2014, the defendants filed a cross motion to enforce the settlement agreement. In this motion, the defendants requested that the court "enforce the proposed settlement agreement ... incorporating into it the following requirements ... (1) the plaintiff's three principals sign the proposed settlement agreement individually; (2) each of the plaintiff's three principals individually release the defendants; (3) the plaintiff's three principals provide copies of their driver's licenses; and (4) both [counsel for the plaintiff] and [counsel for the defendants] sign the proposed settlement agreement and agree to be bound by the confidentiality provision of the settlement agreement."

Following a hearing on September 4, 2014, the court, Arnold , J ., issued the following order: "The parties shall execute mutual copies of one release form containing the signatures of the three [principal] members of the plaintiff LLC, who shall sign in their capacities as principal members of the plaintiff LLC, as well as, in their individual capacities. The attorneys for the respective parties, by agreement, will also affix their signatures to said release form. At the time of the signing of the release form, the individual parties signing the form whether plaintiffs, defendants or persons authorized to sign for the defendant corporations, shall present to the notary public or duly authorized acknowledging authority, proper legal identification (i.e., valid driver's license). The plaintiff LLC shall also provide a valid tax identification number to the defendants. The parties shall effectuate the exchange of the signed release document and settlement funds within 30 days of today's date. The parties shall file a withdrawal of action form with the clerk of court within 30 days, as well." Neither party appealed from this order.

On October 3, 2014, the defendants filed a motion to vacate the settlement order.¹ In this motion the defendants contended that the parties could not agree on the specific terms of the releases nor on the identities of the parties who should execute the releases. Specifically, the defendants argued that the plaintiff was not in existence in August, 2012, when it alleged that it was engaged by the defendants to obtain commercial financing. The defendants further argued that the three individuals that the plaintiff claimed were principals of the plaintiff were not listed as principals of the LLC in the records of the Connecticut Secretary of State. Instead, two other limited liability companies were listed as principals of the plaintiff and the principals in the other limited liability companies did not include an individual named Michael Petralia (also known as Michael Petraglia), the individual that the defendants had dealt with concerning the underlying transaction. The defendants argued that they had been unable to verify the actual identity of that individual and that without knowing the actual identities of the principals of the plaintiff, they had no way of protecting themselves from future litigation concerning these claims.

On October 7, 2014, the plaintiff filed an objection to the defendants' motion to vacate, arguing that it had complied with all of the terms of the September 4, 2014, order but the defendants had failed to do so. The plaintiff also filed a motion for contempt in which it argued that the defendants' refusal to make the required payment and to sign the required documents constituted wilful contempt of the court's September 4, 2014 order. On November 3, 2014, the court denied the defendants' motion to vacate the settlement order.² The court also ordered the defendants to comply with the September 4, 2014 order within ten days and indicated that if the defendants did not comply, the court would consider whether they should be held in contempt at a hearing scheduled for November 17, 2014. Following a hearing on the motion for contempt on November 17, 2014, the court continued the matter to December 1, 2014, for payment of the settlement funds and the signing of the settlement agreement and releases.³

On December 1, 2014, prior to the hearing before the court, the defendants filed a second motion to vacate the settlement order. In addition to the grounds raised in their first motion to vacate, the defendants argued that the plaintiff did not comply with the court's order to provide a valid tax identification number to the defendants, but, rather, had provided the tax identification number for a different entity. The defendants also argued that the plaintiff had made false, libelous and actionable statements about the defendants in direct contravention of the nondisparagement clause of the proposed settlement agreement. On December 1, 2014, the court rejected the defendants' arguments and claims regarding the plaintiff's tax identification number and, thereafter, ordered the parties to submit briefs on all remaining issues.

By a memorandum of decision dated May 29, 2015, the court denied the plaintiff's motion for contempt, finding that the defendants were not in contempt of the various orders of the court concerning the settlement agreement entered into on May 29, 2014. The court also denied the defendants' second motion to vacate the settlement order, finding that the terms of the May 29, 2014 settlement agreement were clear and unambiguous and should be enforced, despite any disagreement regarding the contents of the release and settlement agreement form.

The defendants appeal from the judgment of the court denying their motion to vacate the settlement order and the plaintiff cross appeals from the denial of its motion for contempt. Additional facts will be set forth as necessary.⁴

I

The defendants argue on appeal that the court erred in concluding that the parties had reached a clear and unambiguous settlement agreement capable of being enforced by the court. According to the defendants, the agreement originally placed on the record was essentially an outline, with the mutual releases, confidentiality agreement and nondisparagement agreement still to be drafted, reviewed, assented to by the parties, and executed. Further, the defendants contend that there was no agreement regarding the identity of the actual parties to be bound by the proposed contract. Finally, the defendants argue that any failure of the parties to perfect the settlement was the result of the plaintiff's bad faith.⁵ The plaintiff counters that the court properly enforced the settlement agreement that the parties placed on the record in court.

Before considering the merits of the defendants' claims, we must address the procedural posture of this case. Specifically, we note that the defendants did not appeal from the court's September 4, 2014 settlement order. On October 3, 2014, the defendants filed their first motion to vacate the settlement order, which the court denied on November 3, 2014. The defendants did not appeal from the denial of this motion to vacate. On December 1, 2014, the defendants filed their second motion to vacate, which argued, in addition to the grounds raised...