Starboard Fairfield Dev., LLC v. Gremp

195 Conn.App. 21

223 A.3d 75

STARBOARD FAIRFIELD DEVELOPMENT, LLC, et al.

v.William C. GREMP et al.

AC 41546

Appellate Court of Connecticut.

Argued October 7, 2019

Officially released December 24, 2019

John I. Bolton, for the appellants (defendants).

Colin B. Connor, with whom, on the brief, was Robert D. Russo, III, Southport, for the appellee (plaintiffs).

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

PRESCOTT, J.

In this action arising out of a dispute over real estate investments and the disentanglement of business relationships, the defendants William C. Gremp and W C Gremp, LLC (WCG)¹ appeal, following a bench trial, from the judgment of the trial court rendered in favor of the plaintiffs, Starboard Fairfield Development, LLC (Starboard), and RR One, LLC (RR One), on counts alleging breach of a general release, slander of title, intentional interference with a contractual relationship, and breach of a promissory note.² On appeal, the defendants claim that the court improperly (1) determined that they breached a general release with Starboard by pursuing a civil action against the plaintiffs, (2) found that they slandered RR One's title to certain property by recording a lis pendens and an affidavit of fact pertaining to that property on the Bridgeport land records, (3) found that they intentionally interfered with RR One's contract to sell the property to a third party, (4) awarded RR One interest on $5000 that RR One was forced to hold in escrow due to the defendants' actions, and (5) awarded punitive damages without providing the defendants with adequate notice of a hearing in accordance with Practice Book §§ 7-5, 14-7, and 14-20. After a careful review of the record and the briefs of the parties, we conclude that the defendants' claims are either inadequately briefed or wholly unpersuasive on the basis of the record presented, and, accordingly, we affirm the judgment of the trial court.

The following facts, as found by the trial court, and procedural history are relevant to the defendants' claims. In 2010, Gremp organized RR One as a limited liability company with himself as its sole member. As of 2012, RR One was the record owner of two rental properties in Bridgeport. One property is a seven unit, multifamily residence located on a corner lot at 90 Adams Street and 175-77 Newfield Avenue (Newfield property). The other property is composed of three residential units and is located at 188-90 Deacon Street (Deacon property).

In October, 2012, Starboard and WCG, another limited liability company with Gremp as its sole member, executed documents to amend RR One's operating agreement. Pursuant to the amended operating agreement, Starboard, which made a capital contribution of $99,000, owned 99 percent of the newly constituted RR One, and WCG owned the remaining 1 percent on the basis of a capital contribution of $1000. The operating agreement further provided that no member of RR One was entitled to claim any individual interest in any of the property owned by RR One. After the agreement was executed, Gremp served as property manager for the Deacon and Newfield properties.

In 2015, RR One agreed to sell the Deacon property to Gremp for $140,000. RR One signed a sales contract on November 13, 2015, and Gremp signed the contract on November 15, 2015. Gremp planned to obtain a mortgage of $119,000 to help fund the purchase of the Deacon property. In January, 2016, the parties executed an addendum to the sales contract for the Deacon property. The addendum provided in relevant part: "[RR One] shall provide [Gremp] with title in a form that complies with [Gremp]'s mortgage requirements. Specifically, should lender require title to remain with [RR One], [RR One] agrees to transfer 100 [percent] ownership of [RR One] to [Gremp] provided [RR One] disposes of the Newfield property prior to any such transfer of ownership." The addendum also provided that RR One would pay Gremp for certain outstanding management fees that were in dispute.

Prior to the closing on the Deacon property, Attorney Tyisha Toms, who represented Gremp, and Attorney Bill Gouveia, who represented RR One, discussed the mechanics of the transfer of title. Gouveia drafted a document that, if duly executed, would have assigned Starboard's membership interest in RR One to Gremp in the event that Gremp was unable to obtain financing. Two days before the closing date for the Deacon property, however, Gremp obtained a mortgage.

To obtain his mortgage, Gremp provided the lender with a copy of the 2010 operating agreement that listed Gremp as the sole member of RR One. Gremp, however, failed to inform the lender that the 2010 agreement had been superseded by the 2012 operating agreement. He did not provide the lender with a copy of the sales contract for the Deacon property and failed to disclose to the lender that he intended to purchase and take title to the property individually rather than on behalf of RR One. As the trial court explained, "[t]hrough these machinations, Gremp secured monies based on a mortgage on [the Deacon property] in the name of [RR One], an entity in which his interest was 1 percent under the 2012 agreement. He then used the mortgage proceeds to induce [RR One] to convey title to the [Deacon] property to [himself] individually." In other words, "unbeknownst to [RR One] and [Starboard], which owned 99 percent of [RR One], Gremp financed the purchase of [the Deacon property] with monies obtained from a mortgage on [the Deacon property] in the name of his grantor, [RR One]." Gremp negotiated the mortgage in RR One's name without any aid from his attorney, Toms, and without her knowledge.

At the closing on January 22, 2016, Gremp took title to the Deacon property in his name individually. Because Gremp had been able to secure financing, the assignment of ownership of RR One that Gouveia had prepared as a contingency plan was not needed and never was delivered to Gremp or his attorney.

In connection with the closing of the Deacon property, Gremp executed a general release on behalf of himself and WCG to the benefit of Starboard and its individual members.³ Under the terms of that release, Gremp and WCG waived all rights, "past, present or future ... connected with, related to, or arising from ownership, right to purchase, management or other involvement" in RR One or the Newfield property, which RR One was under contract to sell to a third party, 175 Newfield Avenue, LLC, for $315,000. Gremp further agreed to "cooperate with the sale of [the Newfield property]." The release, which was signed only by Gremp, both individually and in his capacity as manager of WCG, also contained the following language: "The undersigned agree that the transfer of [RR One] takes effect December 31, 2015."⁴

Despite having released any and all claims with respect to the Newfield property, in March, 2016, Gremp and WCG commenced a lawsuit against Starboard and its individual members seeking, inter alia, compensatory damages for an alleged breach of the RR One operating agreement and to temporarily and permanently enjoin the sale of the Newfield property to anyone other than Gremp (March, 2016 action). In conjunction with the March, 2016 action, Gremp and WCG also recorded a lis pendens on the Bridgeport land records. Following an evidentiary hearing on March 30, 2016, the court, Wenzel, J. , denied the application for a temporary injunction, finding that Gremp and WCG had failed to demonstrate that they were subject to any irreparable harm or that they had a probability of success on the merits of any of their alleged causes of action. Following the court's refusal to grant a temporary injunction, Gremp and WCG withdrew the March, 2016 action and recorded a release of the lis pendens.

On March 31, 2016, Gremp sent the individual members of Starboard an e-mail indicating that, although he remained interested in purchasing the Newfield property himself and continued to believe that he had a case for monetary damages, he would cooperate in the sale of the Newfield property to a third party. That same day, however, Gremp filed an "Affidavit of Fact" on the Bridgeport land records claiming that he owned 100 percent interest in RR One. Gremp later contacted the attorney for the third party buyer of the Newfield property, to whom he again misrepresented the extent of his ownership of RR One and indicated that he might be able to obtain the Newfield property through litigation.

The sale of the Newfield property from RR One to the third party buyer closed on April 13, 2016. Proceeds in the amount of $5000 were placed in an escrow account pursuant to an indemnity agreement between RR One and the third party that required RR One to remove any encumbrances on the property and to hold the third party harmless for damages arising from any suit or demand related to any encumbrance.

On May 11, 2016, the plaintiffs commenced the action underlying the present appeal. The operative second revised complaint contained six counts. Counts one and two were brought by Starboard against Gremp and WCG, and alleged, respectively, vexatious litigation and breach of their general release benefitting Starboard and its individual members. Count six was brought by Starboard against Gremp and alleged breach of a promissory note.⁵ Counts three and four were brought by RR One against Gremp and WCG and alleged slander of title and intentional interference with a contract pertaining to the Newfield property. Count five was brought by both plaintiffs against WCG and alleged a breach of fiduciary duty. WCG and Gremp asserted numerous special defenses, including fraud, promissory estoppel, waiver, and accord and satisfaction. They also filed counterclaims alleging two counts of breach of contract against Starboard, and a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., and unjust enrichment against both plaintiffs.

On February 23, 2018, following a...