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Christian Brothers, Inc. v. South Windsor Arena, Inc.
Citations: 7 Conn. App. 648; 509 A.2d 1095; 1986 Conn. App. LEXIS 1018Docket: 4274
Court: Connecticut Appellate Court; June 10, 1986; Connecticut; State Appellate Court
The defendants, South Windsor, Arena Operating Company, Inc. Arena, and Richard Grigorian, appeal a trial court judgment based on an attorney referee's report, which they argue incorrectly applied legal principles to pierce the corporate veil and hold them liable for Arena's debts. They contest the findings that South Windsor is merely an extension of Arena and that Grigorian controlled both entities. The referee determined that the plaintiff was owed $7,632.76 for hockey sticks sold to Arena, and awarded interest at 18 percent per annum based on an implied contractual agreement regarding service charges. The appellate court emphasizes that factual determinations made by the trial court are presumed correct unless clearly erroneous, and it does not retry facts. The court finds the referee's factual findings credible and notes the importance of the control exercised by Grigorian over both corporations, which justified holding South Windsor and Grigorian liable under the 'instrumentality rule' or 'identity rule' as established in Zaist v. Olson. The court concludes that the referee correctly applied relevant legal principles and affirms the judgment against the defendants. The trial court's conclusions were upheld as legally and logically sound, supported by factual findings that were not clearly erroneous. The referee's findings justified holding South Windsor and Grigorian liable for Arena's debts, and the court correctly accepted the referee's report. However, the recommendation to award 18 percent interest was challenged by the defendants on the grounds that there was no evidence of an agreement for such charges. Interest is allowed under Connecticut law only with an express or implied contractual basis. Although the referee inferred an implied contract based on Grigorian's acknowledgment of service charges, there was no concrete finding of agreement by Grigorian, who explicitly denied such consent. Consequently, the court erred in awarding interest, necessitating a judgment for the plaintiff in the amount of $7,632.76 plus costs, while the case was remanded for this purpose. The defendants also raised four subordinate issues regarding the referee's findings related to South Windsor's involvement with Arena and the application of corporate law principles, but the report did not address statutory interest for wrongful detention. The appropriateness of awarding interest under these circumstances remains undetermined in this case.