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Dziedzic v. Pine Island Marina, LLC
Citations: 143 Conn. App. 644; 72 A.3d 406; 2013 WL 2994679; 2013 Conn. App. LEXIS 320Docket: AC 34462
Court: Connecticut Appellate Court; June 25, 2013; Connecticut; State Appellate Court
In the breach of contract case involving plaintiff Jeff Dziedzic and defendant Pine Island Marina, LLC, the court upheld a default judgment against the defendant, which did not appear despite being notified of the proceedings. The plaintiff's complaint established that the defendant operated a marina and had executed an employment contract with the plaintiff from May 9, 2008, to May 9, 2013. The contract allowed the defendant to terminate it without cause with a 30-day notice if the marina was sold, obligating the defendant to pay the plaintiff $76,000 if terminated during the third year of the contract. On December 22, 2010, the defendant notified the plaintiff of the contract termination due to a sale, which occurred on January 7, 2011, for approximately $3.8 million. The defendant subsequently failed to pay the plaintiff the owed amount despite his repeated demands, constituting a material breach of contract. The court noted that the defendant's actions reflected a dishonest intent that caused the plaintiff significant emotional distress. The plaintiff initiated legal action on January 21, 2011, seeking a prejudgment remedy against a third party, Stewart Title Company, for property held by the defendant. The court confirmed proper service of process on the defendant's authorized agent and ruled on February 22, 2011, allowing the plaintiff to attach up to $90,000 from a $300,000 escrow fund held by Stewart. Shortly after this filing, the defendant dissolved its business entity with the Connecticut Secretary of State. In April 2011, the plaintiff served the defendant's registered agent with a writ, summons, and complaint, which included four counts: (1) breach of contract seeking $75,000 in damages; (2) breach of an implied covenant of good faith and fair dealing; (3) negligent infliction of emotional distress; and (4) a violation of the Connecticut Unfair Trade Practices Act (CUTPA) due to the defendant’s unfair practices, seeking additional litigation costs and punitive damages. The defendant did not respond, leading the plaintiff to file a motion for default, granted on May 17, 2011. A damages hearing on July 6, 2011, proceeded without the defendant's presence, where the plaintiff testified about his twelve years of work at the marina, detailing his role in facilitating its sale and the contract's provision for a $75,000 payment upon the sale. After the hearing, the court issued a judgment for $150,000, plus attorney's fees and costs. Notice of the judgment was sent to the defendant on July 12, 2011. On November 9, 2011, the defendant filed a motion to open the judgment, claiming it was misadvised not to take action due to its dissolution, leading to its failure to appear. The accompanying affidavit, from Kam H. Wong, a member of the dissolved entity, stated he was informed not to act because of the dissolution but did not specify who provided this advice or their qualifications. The affidavit was not authenticated as a sworn statement. On December 1, 2011, the court denied the defendant's motion to open the judgment, concluding that the defendant failed to demonstrate reasonable cause for its failure to appear and defend the case. The defendant appealed, asserting four claims, but only the denial of the motion to open and the request for Wong's testimony were properly before the court. The court noted that if an appeal is taken after the appeal period for the underlying judgment has expired, it will not consider the merits of the underlying case, focusing instead on whether the trial court abused its discretion in denying the motion to open. Since the motion was filed more than twenty days after the judgment, the appeal could only challenge the discretion exercised by the trial court. The court emphasized that to set aside a default judgment under General Statutes 52-212, the movant must show both a valid defense existed at the time of judgment and that it was not raised due to mistake or reasonable cause. The trial court found that the defendant had been notified of the proceedings but consciously chose to ignore them, partly based on Wong's affidavit, which indicated that he was advised not to take action due to the defendant's dissolution. Consequently, the court determined there was no reasonable cause for the defendant's failure to defend the action. The defendant's regret over its decision to ignore legal proceedings did not suffice to open the judgment, and the court affirmed that the defendant failed to meet its burden of showing reasonable cause. A court will not vacate a default judgment if defendants acknowledge receiving notice but chose to disregard the court's authority. Negligence, whether by a party or their counsel, is not sufficient under General Statutes § 52-212 to justify setting aside a default judgment. While reasonable causes such as mistake or accident may allow for a judgment to be opened, negligence does not meet this criterion. The court rejected the defendant's motion to open the judgment, which included an affidavit suggesting erroneous legal advice. The denial was deemed not an abuse of discretion. Furthermore, the defendant's request to allow testimony from Wong at the hearing was denied. The defendant did not specify a standard of review for this claim and failed to provide legal authority mandating the trial court to permit live testimony alongside an affidavit. During the hearing, the court indicated it would review the written materials submitted rather than hear live testimony unless necessary, to which the defendant's counsel did not object. Appellate review requires that claims be distinctly raised in the trial court, and issues not presented at that level cannot be considered on appeal. Thus, the court upheld the denial of the motion to open the judgment. Issues not raised at the trial court level typically cannot be appealed. In this case, the defendant did not object to the admission of testimony or specify any legal issues when the court stated it would review the matter based on submitted documents, leading to the rejection of the defendant's claim on appeal. The judgment was affirmed, with concurring opinions from other judges. A contract was admitted as evidence during a hearing on damages on July 6, 2011, and a March 13, 2012 order clarified the awarding of prejudgment interest at 10% from January 7, 2011, and post-judgment interest at 4% from July 6, 2011. During oral arguments, the defendant's counsel indicated that the plaintiff would likely receive payment, as funds were held in escrow. The relevant procedural rules state that notices of nonsuit or judgment must be sent to the clerk’s office within ten days. The defendant's motion to open was submitted by Attorney Christopher T. Richtarich, and recourse against an unidentified party was not addressed in this appeal. An amended affidavit submitted after the default judgment was considered by the court. Following the appeal, the defendant sought clarification on the basis for a $150,000 damages award when the claim was for $75,000, which the court addressed. The first count of the plaintiff's complaint established the elements of breach of contract with damages of $75,000, while a fourth count claimed the breach constituted a violation of the Connecticut Unfair Trade Practices Act (CUTPA), leading to punitive damages and equitable relief. The defendant's claims regarding the default judgment’s double damages and arbitration requirements were deemed outside the scope of this appeal, as they related to the merits of the original judgment.