Town of Stratford v. Wilson

TOWN OF STRATFORD v. DEVRON WILSON

AC 35823

COURT OF APPEALS OF THE STATE OF CONNECTICUT

Argued March 7, 2014

Officially released June 17, 2014

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(Appeal from Superior Court, judicial district of

Fairfield, Hon. Howard T. Owens, Jr., judge trial

referee.)

Michael S. Casey, for the appellant (plaintiff).

Frank B. Cochran, for the appellee (defendant).

Opinion

LAVINE, J. This appeal is one of three cases in which the plaintiff, the town of Stratford (town), sought to recoup what it claimed were excessive "cash-out" benefits paid to former town employees that were authorized by the town's then mayor.¹ The town appeals from the judgment of the trial court rendered in favor of the defendant, Devron Wilson, on the town's complaint and the defendant's counterclaim. On appeal, the town claims that the court improperly (1) concluded that the mayor had not exceeded his authority in authorizing the defendant's "cash-out" benefits, (2) found that it had failed to prove that the "cash-out" benefits were paid to its detriment, (3) balanced the equities to conclude that the defendant had retained the "cash-out" benefits in good conscience, and (4) awarded the defendant attorney's fees. We affirm the judgment of the trial court.

The following factual and procedural history is relevant to this appeal. On May 13, 2010, the town served the defendant with a complaint alleging three counts: money had and received, unjust enrichment, and conversion.² In its complaint, the town alleged, in relevant part, that it employed the defendant under a written employment agreement (agreement) pursuant to which it paid the defendant a salary and extended benefits. On December 11, 2009, the town terminated the defendant's employment and paid him his salary and accrued benefits consistent with the agreement. The complaint also alleged that, in addition to the payments made under the agreement, the town paid the defendant moneys in excess of those to which he was entitled. The overpayment was in the amount of $4803.86. Moreover, the complaint alleged that the town was free from any moral or legal obligation to make the overpayment, and the defendant had no right in equity and good conscience to retain the overpayment. Although the town demanded that the defendant return the overpayment, he failed to do so. In his answer, the defendant denied that he received an overpayment to which he was not entitled and that he had no right to retain the alleged overpayment. He also pleaded three special defenses.³

Subsequently, on May 3, 2012, the defendant filed a setoff and counterclaim. The counterclaim alleged, in part, that the plaintiff lacked probable cause to commence the action, which was brought for the "purpose of conducting a political vendetta and with the intended effect of imposing an unacceptable cost of defense." On October 19, 2012, the defendant amended his answer to plead a fourth special defense, namely, collateral estoppel.⁴

Prior to trial, the parties stipulated to the following facts. From March 30, 2009 through December 11, 2009, the defendant was employed as an assistant to JamesR. Miron, who served as the town's mayor from December 11, 2005 through December 12, 2009.⁵ The defendant was a full-time, salaried employee under a written, atwill agreement that entitled him to benefits pursuant to certain policies incorporated into the agreement. Miron terminated the defendant's employment and personally approved the termination notice that listed the categories and hours to be used to determine the accrued benefits to be paid to the defendant. In his last paycheck, the defendant was paid for accrued benefits, referred to as a "cash-out," which were calculated using a nominal hourly rate of $25.6411. The "cash-out" was subject to withholding and other deductions. The defendant made no formal or written claim for the "cash-out" and has made no claim against the town for additional compensation or benefits.

The parties also stipulated that a new town administration took office on December 14, 2009, under John A. Harkins, the newly elected mayor. In January, 2010, the town sent the defendant a W-2 form that included the "cash-out" for social security purposes and itemized deductions. On or about February 1, 2010, the defendant received a written notice from Assistant Town Attorney Kevin Kelley stating that the town claimed a debt of $4802 for "cash-out" benefits to which he was not entitled.

On the first day of trial, December 19, 2012, the court heard evidence and oral arguments on the defendant's collateral estoppel special defense. In a memorandum of decision issued on January 30, 2012, the court declined to apply collateral estoppel to the facts of this case.⁶ The court continued the trial on March 5, 2013, and issued a memorandum of decision on June 10, 2013. The court found the town's essential claim to be that, prior to the end of his term as mayor, Miron disbursed moneys to the defendant beyond that to which he was entitled under the agreement and that the town council had not approved that portion of the "cash-out" that was not authorized under the town charter (charter).⁷ With regard to the town's claim of money had and received, after construing numerous sections of the charter and the agreement, the court concluded that Miron had not exceeded his authority, and therefore, the town had not mistakenly paid the defendant.

The court also found that the town provided the defendant with a W-2 form at the end of Miron's term that included the "cash-out" as part of his wages and that the defendant had paid taxes on the "cash-out." Moreover, the defendant did not receive notice that the town believed that it had overpaid him until he read about it in a newspaper and the newspaper article caused the defendant difficulty in securing new employment.⁸ The court concluded that the defendant had retained the "cash-out" in good conscience. As to the unjust enrichment count, the court found that the defen-dant had paid taxes on the money and that it would be inequitable to apply the doctrine of unjust enrichment to recoup the "cash-out" from him. The court, therefore, rendered judgment in favor of the defendant on the plaintiff's complaint. In adjudicating the defendant's counterclaim, the court found in favor of the defendant and awarded him $3835 for attorney's fees.

The town appealed from the judgment, claiming that Miron did not have the unilateral authority to alter the agreement and that it is inequitable, unconscionable, and unjust for the defendant to retain the "cash-out." The town also claims that the court improperly awarded attorney's fees to the defendant.

We first set forth the applicable standard of review. "[T]he scope of our appellate review depends upon the proper characterization of the rulings made by the trial court. To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous. When, however, the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record." (Internal quotation marks omitted.) Shevlin v. Civil Service Commission, 148 Conn. App. 344, 353-54, 84 A.3d 1207 (2014).

I

In count one of its complaint, the town alleged money had and received against the defendant. On appeal, the town has raised two claims related to that cause of action: the court erroneously concluded that (1) Miron did not exceed his authority when he authorized the "cash-out" and (2) the defendant retained the "cash-out" in good conscience. In an action for money had and received, the plaintiff must prove both the lack of authority to authorize the payment and that it is inequitable for the recipient to retain it. See Stratford v. Castater, 136 Conn. App. 522, 531, 46 A.3d 945, cert. denied, 307 Conn. 903, 53 A.3d 218 (2012). Because there are two prongs to the cause of action, this court may affirm the judgment of the trial court on either prong. Id. We conclude that the court properly determined that the defendant retained the "cash-out" in good conscience, and therefore, we need not determine whether Miron lacked authority to authorize the "cash-out" under the charter, as the plaintiff argues, or that he possessed authority to do so under the agreement, as the defendant claims.

In Castater, this court outlined the development of the common-law cause of action for money had and received. Id., 529. Our Supreme Court has stated that "when money is paid by one on the basis of a...