Metcoff v. NCT Group, Inc.

Citations: 137 Conn. App. 578; 49 A.3d 282; 2012 WL 3288214; 2012 Conn. App. LEXIS 386Docket: AC 33228

Court: Connecticut Appellate Court; August 21, 2012; Connecticut; State Appellate Court

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Michael J. Parrella, Sr. appeals a trial court judgment following a jury trial that awarded damages to plaintiffs Jerrold M. Metcoff and David B. Wilson due to misrepresentations made during a corporate merger involving their company, Midcore Software Inc., and NCT Midcore, a subsidiary of NCT Group, Inc., led by the defendant. The plaintiffs alleged they did not receive the promised NCT Group stock or royalties as outlined in the merger agreement executed on August 29, 2000. The jury found that Parrella had made negligent misrepresentations regarding the availability of stock and the company’s ability to issue it, leading to damages of $559,982 for Metcoff and $496,318 for Wilson. Additionally, the jury ruled that Parrella intentionally misrepresented operational continuity post-merger, awarding $113,855 to Metcoff and $143,434 to Wilson. The jury also found violations of the Connecticut Unfair Trade Practices Act (CUTPA), leading to additional punitive damages and attorney's fees to be determined by the court. Parrella's motion to set aside the verdict, asserting that the jury's findings were unfounded and that the claims should be barred by the statute of limitations, was denied by the court. The judgment of the trial court was affirmed.

The trial court denied the defendant's motion to set aside the verdict without providing a specific rationale. Following a post-trial hearing, the court awarded the plaintiffs substantial attorney’s fees totaling $540,000 ($270,000 each) and punitive damages of $257,289 ($128,644.50 each), along with common-law punitive damages of $17,089 ($8,544.50 each). The defendant appealed, contesting the denial of his motion and the awards granted to the plaintiffs. The appellate review standard indicates that trial courts have the discretion to set aside jury verdicts deemed contrary to law or evidence; this discretion is respected unless there is clear abuse. The appellate court found sufficient evidence supporting the jury's conclusions and noted the defendant's failure to request an articulation of the trial court's decision, which is crucial for adequate appellate review. The court also clarified that awarding punitive damages and attorney’s fees under the Connecticut Unfair Trade Practices Act (CUTPA) is discretionary and upheld the trial court's decisions as well-reasoned and supported by the record. The judgment of the trial court was affirmed, and other defendants in the action were noted as not being part of the appeal.

Plaintiffs claimed the defendant made intentional misrepresentations regarding the availability of NCT Group stock and its issuance as per their agreement, as well as negligent misrepresentations about the operations of NCT Midcore post-merger. They also alleged that the defendant, as CEO of Artera, tortiously interfered with their right to receive royalties under the merger agreement and conspired to defraud them of these royalties. The jury found in favor of the defendant on all claims. The defendant requested jury instructions on the business judgment rule, which the court denied, noting that he only sought to include this defense shortly before the trial, resulting in the court denying his request to amend his answer. The defendant did not appeal this denial. Consequently, the court correctly refused to instruct the jury on the business judgment rule. Furthermore, the defendant argued that the damages awarded were excessive under Connecticut law, lacking evidentiary support, but his claim was inadequately briefed, leading to its abandonment per legal standards.