Reiner v. Reiner

214 Conn.App. 63

279 A.3d 788

Jeffrey A. REINER et al.

v.Michael D. REINER et al.

AC 44380

Appellate Court of Connecticut.

Argued April 12, 2022

Officially released July 26, 2022

Gary J. Greene, Avon, for the appellant (named defendant).

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

Bright, C. J., and Moll and DiPentima, Js.

BRIGHT, C. J.

In this declaratory judgment action, the defendant Michael D. Reiner appeals from the judgment of the trial court rendered in favor of the plaintiff Jeffrey A. Reiner.¹ On appeal, the defendant claims that the court erred in concluding that the term "interest," as used in the buyout provisions of the parties’ settlement agreement (agreement), meant "equitable interest" and, thus, that the buyout amount for the defendant's interests in certain parcels of real property is equal to his percentage interest in each property multiplied by the difference of the fair market value of the property minus any outstanding mortgage debt. We disagree and, accordingly, affirm the judgment of the trial court.

This dispute between brothers returns to us after our decision in Reiner v. Reiner , 190 Conn. App. 268, 210 A.3d 668 (2019). In Reiner , we affirmed, albeit on different grounds, the trial court's order denying the plaintiff's motion to enforce the parties’ agreement pursuant to Audubon Parking Associates Ltd. Partnership v. Barclay & Stubbs, Inc. , 225 Conn. 804, 811–12, 626 A.2d 729 (1993) ( Audubon ),² after concluding that the buyout provisions in the agreement, which stated that the plaintiff would buy out the defendant's interests in certain properties after the death of the parties’ mother, were not clear and unambiguous.³ See Reiner v. Reiner , supra, at 283–84, 210 A.3d 668.

The plaintiff subsequently filed the underlying action in the Superior Court wherein he sought a declaratory judgment determining "the calculation of the purchase price for the [defendant's] ‘interest[s]’ in [the] properties ...." In its memorandum of decision dated October 30, 2020, the court determined that, "for the purposes of the buyout provisions of the agreement, ‘interest’ shall mean equitable interest, or [the defendant's] share of the fair market value of the property minus the outstanding mortgage debt." This appeal challenges the court's determination.

Our opinion in Reiner sets forth the following relevant facts and procedural history. "The [defendant] and the [plaintiff] are brothers who were two of the three primary beneficiaries of four irrevocable trusts (Reiner Trusts) that were established by their parents, Eleanore Reiner and Leo P. Reiner.⁴ The [plaintiff] was the sole trustee of the Reiner Trusts. The Reiner Trusts owned several parcels of real property (Reiner Trusts properties) that had a substantial value; however, a majority of the properties were encumbered by mortgages. Eleanore Reiner also was the sole member of 711 Farmington, LLC, and Canton Gateway, LLC. 711 Farmington, LLC, and Canton Gateway, LLC, each owned a single parcel of real property, both of which were encumbered by a mortgage. After a dispute arose regarding the Reiner Trusts properties, the [defendant], in 2011, commenced the [prior] action and several other parallel actions against the [plaintiff] alleging that he tortiously had mismanaged the Reiner Trusts properties. On July 5, 2012, the [defendant], the [plaintiff], and several other individuals and entities associated with the Reiner Trusts executed a settlement agreement to resolve the [prior] action, the parallel actions, and other disputes.... The agreement contained several provisions in which the [plaintiff] agreed to buy out the [defendant's] interests in certain properties after the death of Eleanore Reiner. The following buyout provisions are directly at issue ....

"Section 1 (a) of the agreement provides: ‘[The plaintiff] shall buyout [the defendant's] interests in the Reiner Trusts and the Reiner Trusts [p]roperties by paying cash to [the defendant] in proportion to his interests therein no later than 280 days following Eleanore Reiner's death. The buy-out amount payable to [the defendant] for his interests in the Reiner Trusts will be based on the fair market value of each of the Reiner Trusts [p]roperties at the time of Eleanore Reiner's death, multiplied by [the defendant's] interests in each [Reiner] Trust[s] [p]roperty with a deduction of ten (10%) percent to compensate for a minority discount and for the fact that there is no real estate brokerage commission.’ Section 1 (b) of the agreement detailed the manner in which the fair market value for each of the Reiner Trusts properties was to be determined. The parties also agreed that the parties’ ‘interests’ in the Reiner Trusts properties accurately were set forth in the ‘ "Trust Property Schedule," ’ which was attached to the agreement....

"Section 2 of the agreement provides in relevant part: ‘In connection with the execution and delivery of this [a]greement, Eleanore Reiner will immediately transfer, by [w]arranty [d]eeds (i) her interests (as sole member of 711 Farmington, LLC) in [711 Farmington Avenue, West Hartford (711 Farmington)] as follows: two thirds (2/3) to [the plaintiff] and one-third (1/3) to [the defendant] ... and (ii) her interests (as sole member of Canton Gateway, LLC) in [50 Albany Turnpike, Canton (Canton Gateway)] as follows: three fourths (3/4) to [the plaintiff] and one-fourth (1/4) to [the defendant].... Such transfers are being made upon the following conditions ....

" ‘[The plaintiff] shall buy out [the defendant's] interests in each [of] 711 Farmington and Canton Gateway by paying cash to [the defendant] no later than 280 days following Eleanore Reiner's death. The determination of the fair market value of 711 Farmington and Canton Gateway will be based on the same formula and terms used to determine the fair market value of the Reiner Trust[s] [p]roperties provided for in [§] 1 (a) of this [a]greement above except that the valuation shall be subject only to a four percent (4%) discount, not ten percent (10%). [The plaintiff] will have 280 days from the date of Eleanore Reiner's death, to obtain financing and consummate the buyout.’ ...

"On April 7, 2017,⁵ the [plaintiff] filed the motion to enforce the agreement that [was] the subject of [the] appeal [in Reiner ]. Therein, he argued that certain buyout provisions of the agreement had been triggered as a result of the recent death of Eleanore Reiner, and that a dispute existed between himself and the [defendant] as to the interpretation of those provisions. In particular, Eleanore Reiner's death triggered the [plaintiff's] obligation, under § 2 of the agreement, to buy out the [defendant's] one-third interest in 711 Farmington and his one-quarter interest in Canton Gateway. Her death also triggered the [plaintiff's] obligation, under § 1 of the agreement, to buy out the [defendant's] interest in the Reiner Trusts properties, including 603 Farmington Avenue in Hartford [603 Farmington]. The [defendant] and the [plaintiff] were unable to reach an agreement on how to determine the price that the [plaintiff] was to pay the [defendant] for his interests in the properties. The [plaintiff] claimed that the buyout price of the [defendant's] interests is intended to be calculated as the [defendant's] proportionate interest in the equity in the properties, after deducting the debt secured by any mortgages, less the percentage discounts. The [plaintiff] requested that the court adjudicate the dispute by enforcing the agreement in accordance with his interpretation.

"On April 17, 2017, the [defendant] filed an objection to the [plaintiff's] motion to enforce the agreement. Therein, the [defendant] disagreed with the [plaintiff's] interpretation and advanced his own contrary interpretation of the agreement. The [defendant] maintained that the settlement agreement clearly and unambiguously provides that the buyout amount is to be ‘ "based on the fair market value" of each of the properties,’ which amount did not include consideration of the existing mortgages on the properties.

"On August 10, 2017, the [plaintiff] filed a supplemental memorandum in support of his motion to enforce the agreement. In his supplemental memorandum, the [plaintiff] argued that the agreement clearly and unambiguously provides that the amount of the buyout must take into consideration the mortgages on the properties. The [plaintiff] argued that a contrary interpretation would be in conflict with Connecticut mortgage jurisprudence, and would result in an absurd result in the form of a substantial unintended windfall for the [defendant].⁶

"On October 23, 2017, following an Audubon hearing, the court issued a memorandum of decision in which it denied the [plaintiff's] motion to enforce the agreement and concluded that the agreement was clear and unambiguous in conformance with the [defendant's] interpretation [that the buyout amount for the defendant's interests does not include consideration of the existing mortgages on the properties]." (Footnote added; footnotes in original; footnotes omitted.) Reiner v. Reiner , supra, 190 Conn. App. at 270–76, 210 A.3d 668.

The plaintiff appealed to this court, claiming that "the clear and unambiguous language of the agreement specifies that the buyout amount is the [defendant's] equitable interest in the properties, namely, the fair market value of the properties less the amount of any mortgage encumbrances." Id., at 270, 279, 210 A.3d 668. In response, the defendant argued "that the [trial] court properly determined that the agreement clearly and unambiguously provides that the buyout amount is the fair market value of the properties without regard to any debt associated with the properties." Id., at 279, 210 A.3d 668. We disagreed with both parties and instead concluded that, because each party had set forth a reasonable...