2021 Case Updates


In Carolina Casualty Insurance Company v. Connecticut Solid Surface, LLC, 207 Conn.App. 525 (2021), the Appellate Court affirmed the trial court’s grant of summary judgment for the defendant in a claim for vexatious litigation. The underlying case, which included a counterclaim, had been resolved by way of cross motions to dismiss, which had been simultaneously granted by agreement of the parties. The trial court ruled, and the Appellate Court agreed, that upon that record, a party alleging vexatious litigation could not prove an essential element: that the underlying case had terminated in its favor.

For purposes of a vexatious litigation claim, it is true that “final determination on the merits is not necessary to satisfy the favorable termination requirement … [P]roof of a dismissal or abandonment of a prior action is sufficient so long as the proceeding has terminated without consideration.” But here, the parties’ stipulation to mutual dismissals “constituted a contractual agreement supported by consideration akin to a negotiated settlement of the action.” This outcome “was not, as a matter of law, a termination of the action in favor of” the party claiming vexatious litigation.


In Rockstone Capital, LLC v. Caldwell, 206 Conn.App. 801 (2021), a residential foreclosure case, the Appellate Court ruled that the trial court erred when it found that one of the defendants had proven her special defense of unconscionability.

The plaintiff sued the defendant Morgan J. Caldwell, Jr., and his business, Wesconn Automotive Center, LLC, on an unpaid line of credit. To resolve the case, the plaintiff entered into a settlement agreement with Caldwell, Wesconn, and Caldwell’s life partner, Vicki A. Ditri, with whom Caldwell co-owned their residence in Norwalk (property). Ditri had no obligation under the line of credit, but mortgaged her interest in the property as part of the settlement. Following default under the settlement agreement, the plaintiff brought a second action, this time to foreclose the mortgage.

Ditri filed a special defense, claiming that as to her, the settlement agreement was unconscionable and unenforceable. Following a bench trial, the trial court agreed, based on its findings that Ditri “lacked business acumen; the closing was rushed because the defendant was on her lunch break; the defendant was unrepresented at the closing; neither Caldwell nor Caldwell’s attorneys explained the settlement agreement or the mortgage to the defendant; and the documents for the defendant to sign were folded back so that only the signature page was exposed.”

Applying plenary review to the legal conclusion of unconscionability, the Appellate Court reversed. The court noted that, for purposes of analyzing a claim of procedural unconscionability, the relevant factors include “the contracting party’s business acumen, the party’s awareness of material preconditions to the contract, whether the party was represented by counsel during the transaction period … the existence of a language barrier between the contracting parties … the contracting party’s level of education, the party’s ability to read and understand the agreement at issue … the reasonableness of the party’s expectation to fulfill the contractual obligations … [and] the conduct of the parties during the contract’s formation, focusing on the process by which the allegedly unconscionable terms found their way into the agreement.”

Applying these factors to the trial record, the Appellate Court found that Ditri had failed to prove her defense. The court found her level of education and business sophistication to be “largely immaterial” under the circumstances, given that “her alleged surprise regarding the contractual terms derives from her failure to read the agreement. Where a party does not attempt to understand its contractual obligations before signing, considerations such as education level, business acumen, and complexity of the contractual language becomes less relevant to our analysis.”

Furthermore, even if there had been some procedural impropriety, that could not be imputed to the plaintiff, which “was not even present at the time the defendant signed the settlement agreement.” Rather, “the alleged rushed nature of the signing, folded pages, and failure to explain the settlement agreement and mortgage each stem from Caldwell, his attorneys, or the defendant’s own constraints.” There was no showing that Caldwell had somehow acted as an agent for the plaintiff, and “[w]here the claim of unconscionability is directed at the actions and representations of third parties, rather than the plaintiff, we have required that an agency relationship exist between the plaintiff and the third party.”

Finally, the Appellate Court found that the Ditri had failed to prove not only procedural unconscionability, but substantive unconscionability as well. She argued that she had received “no direct consideration” for mortgaging her interest in the property in connection with the loan workout – a loan for which she was not already an obligor. But under settled law, “the intangible benefit of assisting one’s family is sufficient to constitute valuable consideration.” Furthermore, “our courts have upheld contractual agreements as enforceable where one party incurs personal liability for a third person’s debts in exchange for the other party’s offer to forgo pursuing legal action on those debts.”


In Stone v. East Coast Swappers, LLC, 337 Conn. 589 (2021), the Connecticut Supreme Court clarified the standards that apply to awards of attorney’s fees to prevailing plaintiffs in CUTPA cases.

Following a courtside trial, the plaintiff obtained a judgment against the defendant, an automobile repair business, in the amount of $8,300. In the memorandum of decision, the trial court held that the plaintiff had “proven a violation of CUTPA [but had] not proven the evil motive or malice necessary to award punitive damages,” and on the same basis, pre-emptively denied any award of attorney’s fees. On appeal, the plaintiff contended that the trial court abused its discretion in refusing to award attorney’s fees. The Appellate Court affirmed the judgment below.

Following a grant of cert, the Supreme Court agreed with the plaintiff that the trial court erred when it “relied on the same factors to deny attorneys’ fees as it did to deny punitive damages.” In so doing, the court “failed to recognize the different purposes that attorney’s fees and punitive damages serve under CUTPA.” The purpose of the former is “to foster the use of private attorneys in vindicating the public goal of ferreting out unfair trade practices in consumer transactions by commercial actors generally,” while the latter is “focused on deterrence and punishment of particular commercial actors.” “[I]n exercising its discretion, a trial court must consider the purpose of CUTPA attorney’s fees when deciding whether a prevailing plaintiff should be awarded such fees.”

The Supreme Court found that it was an abuse of discretion for the trial court to apply “the more demanding test for awarding punitive damages – intentional, wanton, malicious, or evil conduct – as its rationale for not awarding attorney’s fees.” The court reversed the judgment below with respect to the denial of attorney’s fees, and remanded the case for further proceedings.


In Your Mansion Real Estate, LLC v. RCN Capital Funding, LLC, 206 Conn.App. 36 (2021), the Appellate Court ruled that constitutional constraints on awards of punitive damages do not apply to awards of statutory damages. The plaintiff, the owner of a parcel of real estate, sued the defendant, the mortgagee of the property, for failing to timely tender a release of the mortgage after it had been paid off, in violation of C.G.S. § 49-8(c). The statute provides that, if a mortgagee fails to provide a release within sixty days of a written request for the same, the mortgagee shall thereafter be liable for the greater of actual damages or statutory damages in the amount of $200 per week, up to a cap of $5,000.

The defendant’s delivery of a release was more than two years late. Because the plaintiff stipulated that it had not suffered actual harm, the trial court awarded the plaintiff statutory damages, in the maximum sum of $5,000.

The defendant argued that, given the absence of actual harm, the imposition of statutory damages violated its right to due process under the fourteenth amendment of the constitution, pursuant to the principles articulated by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). Under that decision, one factor a court should consider when reviewing awards of punitive damages is “the disparity between the harm or potential harm suffered by [the plaintiff] and [the] punitive damages award.”

The Appellate Court rejected this argument, holding “Gore is not applicable to this case because the statutory damages available under § 49-8 are not punitive damages for purposes of Gore.” The court observed that punitive damages and statutory damages are “fundamentally different…[P]unitive damages are not compensation for injury. Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence. Statutory damages, on the other hand, not only are subject to limits established by the legislature, but they are at least partly (if not principally) designed to provide compensation to individuals where actual damages are difficult or impossible to determine.”


In Villanueva v. Villanueva, 206 Conn.App. 36 (2021), the Appellate Court affirmed the trial court’s finding that the plaintiff and defendant had entered into an implied partnership, a family landscaping business.

The court noted that an implied contract may be “inferred from the conduct of the parties though not expressed in words.” Here, the trial court found “strong evidence the parties were de facto partners.” While the defendant had initially been hired by the plaintiff as an employee, the court observed that “in later years, they regarded each other as partners compensated by withdrawals from the business accounts for personal expenses, which may be characterized as draws and distributions; not salary. … [T]hey acted as mutual agents and jointly managed the business and shared its profits. … Their joint purchase of real estate using corporate [sic] funds epitomized the informal understanding between the brothers. The informal nature of distributions and draws, and the absence of contrary credible proof, suggests they were equal partners. The totality of evidence satisfied the test for formation of a partnership ….”

The defendant argued that a finding of implied partnership “cannot survive the plaintiff’s own denial that any such agreement existed,” but the trial court had found that “by his conduct, the plaintiff manifested an intent to operate the business alongside the defendant” as a partner. In the trial court’s memorandum of decision, the court had cited the Connecticut Supreme Court’s decision in Connecticut Light and Power Co. v. Proctor, 324 Conn. 245, 259-260 (2016), for the proposition that “conduct of one party, from which the other may reasonably draw the inference of a promise, is effective in law as a promise. … As long as the conduct of [the] party is volitional and that party knows or reasonably ought to know that the other party might reasonably infer from the conduct an assent to contract, such conduct will amount to a manifestation of assent.”

The Appellate Court concluded that the trial court’s factual finding of an implied partnership was not clearly erroneous, and affirmed the judgment below.


In Onthank v. Onthank, 206 Conn.App., 54 (2021), the Appellate Court discussed the principle of “substantial compliance” with a contract requirement, as applied to the method of transmitting a default notice.

The case involved a promissory note, which required notices of default to be transmitted “by certified mail, postage prepaid or personal delivery.” It was undisputed that the plaintiff, the holder of the note, sent a default notice by regular mail, not certified mail, which was actually received by the defendants. In rendering judgment for the plaintiff, the trial court found that the plaintiff had strictly complied, or alternatively had substantially complied, with the notice requirement.

The Appellate Court affirmed, finding substantial compliance while declining to address the alternative conclusion of actual compliance. The court noted that “substantial compliance” is “closely intertwined with the doctrine of substantial performance,” by which “a technical breach of the terms of a contract is excused, not because compliance with the terms is objectively impossible, but because actual performance is so similar to the required performance that any breach that may have been committed is immaterial.” The principle applies “only where performance of a nonessential condition is lacking, so that the benefits received by a party are far greater than the injury done to him by the breach of the other party.”

The Appellate Court found that the trial court had properly applied this doctrine to the situation at hand, given the circumstances that “there is no contractual requirement of proof of actual delivery, actual delivery is not contested, and any noncompliance with the requisite method of delivery did not result in any prejudice to the defendants.”


The Appellate Court’s decision in LPP Mortgage Ltd. v. Underwood Towers Ltd. Partnership, 205 Conn.App. 763 (2021), a commercial foreclosure case involving a large apartment complex, illustrates the difference between a lender enforcing its rights under the mortgage and enforcing its rights under the note secured by the mortgage.

In Underwood Towers, the substitute plaintiff was the assignee of the loan obligation and mortgage, but the promissory note had been lost before the assignment. Accordingly, although the substitute plaintiff retained the right to enforce the mortgage, it was barred from pursuing a deficiency judgment or otherwise enforcing the note.

Aside from seeking foreclosure of its mortgage, the substitute plaintiff sought, in separate counts of its complaint, money damages for the breach of certain mortgage covenants, including an assignment of rents and income. Because the substitute plaintiff lacked the power to seek a deficiency judgment, and because the underlying note had been a nonrecourse obligation, the defendant argued that the substitute plaintiff lacked the right to seek this additional relief.

The trial court rejected this argument, and the Appellate Court agreed. Separate from its rights under the note, “a mortgagee may sue a mortgagor for damages for violation of a covenant or provision in the mortgage.” More particularly, “a mortgagee may proceed with an action for money damages based on a debtor’s failure to pay rents, despite the existence of a nonrecourse clause in the loan documents.” The court rejected the proposition that the substitute plaintiff was in effect seeking to convert a nonrecourse loan into a recourse loan. The substitute plaintiff “is not relying on the mere fact that the defendants owe principal plus interest as provided in the note, as it would in a deficiency proceeding. Rather, the plaintiff relies on a separate provision in a separate document – the covenants in the second mortgage concerning rental income – and must assume the higher burden of proving the contract and tort causes of action it has pleaded.”