Downing v. Dragone

Citation: Not availableDocket: AC44416

Court: Connecticut Appellate Court; November 1, 2022; Connecticut; State Appellate Court

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In the case of Christine Downing v. Emmanuel Dragone et al. (AC 44416), the plaintiff sought damages for breach of contract and unjust enrichment from a used car dealer, D Co., and its owners, E and G. The plaintiff alleged that she was retained as an auctioneer for a classic car auction, with an agreement that she would receive 1 percent of the gross proceeds, guaranteed at least $30,000. Although a written agreement was prepared, it was left unsigned and included a provision for automatic effectiveness unless rejected. Neither E nor G rejected it, and the plaintiff fulfilled her obligations. After D Co. failed to pay, the plaintiff filed suit. 

At trial, E claimed the plaintiff was only hired to call the auction for a fee of $2,500 plus expenses, asserting he found the written agreement months later. The trial court ruled in favor of the plaintiff on the breach of contract claim but favored the defendants on unjust enrichment. Upon appeal, the court partially reversed the trial court's judgment, leading to a new trial on the breach of contract claim. The trial court ultimately upheld the written agreement as enforceable, finding that D Co. accepted the terms through the plaintiff’s performance and lack of objections, crediting her testimony regarding the agreed-upon services and fee structure.

The trial court determined that E and G did not reject the agreement or attempt modifications but accepted the plaintiff's services as specified. The court's findings were based on the parties' post-agreement conduct rather than discussions of specific terms, supported by the plaintiff's testimony, emails, and meeting minutes. Consequently, there was sufficient evidence for the court to conclude that D Co. assented to the written agreement. 

Judicial estoppel was deemed inapplicable regarding D Co.'s claim against the plaintiff's testimony. While the plaintiff's responses were ambiguous, the trial court found her testimony credible, affirming that essential terms of the contract were agreed upon and documented. 

D Co.’s argument that the written agreement's terms were too ambiguous to be enforceable was not considered since it was not raised in the trial court. Although D Co. questioned the plaintiff about the term "gross auction proceeds," it failed to challenge the ambiguity formally or propose an alternative interpretation.

D Co. could not successfully argue that the trial court mischaracterized the plaintiff’s testimony regarding the preparation of the written agreement. The court's finding was supported by the plaintiff's testimony, which indicated she informed E that the document reflected their agreement.

Furthermore, the trial court correctly applied the burden of proof, and D Co.’s challenge effectively contested the court's factual findings rather than the legal application. Lastly, D Co. could not claim that differing interpretations of the plaintiff's actions created a legal misunderstanding that would invalidate the agreement, as the trial court found D Co. had assented based on credible evidence and favored the plaintiff's account over D Co.'s.

D Co. did not succeed in its argument that the trial court improperly admitted hearsay evidence related to damages. Specifically, D Co. objected to exhibit 57, which presented auction results from an online auction website, claiming it was inadmissible hearsay. However, the court declined to consider this claim as D Co. did not properly brief it or object at trial. Additionally, the plaintiff's testimony regarding exhibit 57 sufficiently established its authenticity under Connecticut evidence rule 9-1(a). Even if the court assumed the admission of exhibit 5, which detailed the cars sold and their prices, was improper, it deemed that ruling harmless since D Co. failed to show that the exhibit's admission influenced the trial's outcome.

The case involved a breach of contract action where the plaintiff, Christine Downing, an experienced auctioneer, claimed damages against the defendant, Dragone Classic Motorcars, Inc., following a series of discussions and agreements about conducting a classic car auction. The court found that a written contract existed between the parties, affirming the judgment in favor of the plaintiff after a trial. The case, initially tried in Stamford-Norwalk, was later transferred to Ansonia-Milford and resulted in the court's ruling being upheld on appeal.

The plaintiff drafted an agreement stipulating her compensation as 1% of gross auction proceeds, plus expenses, with a minimum of $30,000. During a meeting on February 2, 2012, she presented this agreement to George and Emanuel, who instructed her to leave it on Emanuel’s desk. The plaintiff subsequently fulfilled the agreement's requirements, dedicating hundreds of hours to preparations for the auction, which included attending planning meetings, advising on auction technology, and establishing necessary software and materials. The auction, held on May 19, 2012, generated over $4 million, and the plaintiff incurred $1,340.83 in expenses. Following the defendant's failure to pay her, the plaintiff initiated a lawsuit on June 6, 2013, alleging breach of contract and unjust enrichment. The trial court ruled in favor of the plaintiff on the breach of contract claim but sided with the defendant on unjust enrichment. The defendant appealed, arguing the trial court's ruling was based on erroneous factual findings. The appellate court agreed, reversing part of the judgment and remanding for a new trial on the breach of contract claim. On remand, the trial court denied the defendant's motion to dismiss for lack of a prima facie case, asserting that an unsigned contract could be binding if assent was otherwise indicated. The trial concluded on January 29, 2020, with the court issuing a judgment in favor of the plaintiff on October 20, 2020.

The court determined that a written contract existed between the plaintiff and defendant, which the defendant breached by failing to compensate the plaintiff for her services. The court awarded the plaintiff $100,570.54 in damages and interest, comprising $41,673.20 from the contract (1% of gross auction proceeds), $34,727 in prejudgment interest (10% per annum), and $24,170.34 in offer of compromise interest (8% per annum). The defendant's motion to reargue was denied, leading to the current appeal.

The defendant contests the court's finding that the unsigned agreement drafted by the plaintiff constituted an enforceable contract. The court noted that the plaintiff had discussed her services and compensation with the defendants before preparing the written agreement, dated February 2, 2012. This agreement was never rejected or amended by the defendants, who accepted the plaintiff's services without payment. 

Despite the defendant's claims regarding the validity of the contract, including arguments about mutual assent, credibility of testimony, and ambiguity of terms, the court found the testimonies of the defendants, particularly Emanuel's, to be lacking in credibility. The court concluded that the defendants were aware of the plaintiff's contributions and her expectation of payment under the agreement, thus affirming the enforceability of the contract and rendering judgment in favor of the plaintiff. The defendant's claims include assertions about a lack of mutual assent, the supposed perjury of the plaintiff, ambiguity in contract terms, mischaracterization of testimony, improper burden shifting, and legal misunderstanding regarding the parties' intentions.

The applicable standard of review for determining the existence of a contract is a factual question for the court. In assessing any challenges to the trial court's findings of fact, the reviewing court must determine if those findings are supported by evidence or if they are clearly erroneous, with a presumption favoring the trial court's rulings. The defendant contends that there was no evidence of a meeting of the minds or mutual assent to the contract's terms. The plaintiff asserts that the defendant assented to the agreement by accepting services under it and failing to object to the terms. To establish an enforceable contract, mutual assent must be demonstrated through the parties' words and actions, indicating a shared understanding of the agreement, even in the absence of a formal signature. The trial court found that the defendant manifested assent by accepting the plaintiff's services without objection and by acknowledging discussions regarding the agreement's terms. The court supported this finding with testimony that the plaintiff discussed her services and agreed upon a fee structure with the defendant's representatives prior to delivering a written agreement. Parties cannot accept benefits under a contract while disputing its validity, reinforcing the court's conclusion regarding the defendant's assent.

Emanuel and George did not reject or modify the agreement, instead accepting the plaintiff's services as outlined. The court determined that the defendant, through its principals, assented to the written agreement by not objecting to its terms. The defendant contended that the plaintiff failed to establish a meeting of the minds due to a lack of discussion regarding "gross auction proceeds" and a $10,000 payment, but the court found this argument flawed. The defendant's acceptance was evidenced by their conduct from February 2, 2012, through the auction date, during which they allowed the plaintiff to prepare for the auction without objection. This finding was supported by the plaintiff's testimony and documentary evidence, including emails and meeting minutes. Consequently, the court rejected the defendant's claim of non-assent.

Additionally, the defendant argued that the trial court incorrectly credited the plaintiff's allegedly perjurious testimony, suggesting that judicial estoppel should apply. The appellate court disagreed, emphasizing that it reviews trial court proceedings rather than retrying them. Credibility assessments are based on the trial court's firsthand observations of witnesses. The court referenced a dialogue between the court and plaintiff regarding the discussion of the agreement's specifics, with the plaintiff affirming that they had discussed the responsibilities involved before presenting the contract.

The defendant contends that the plaintiff's testimony is inconsistent with her earlier statements from the first trial. During cross-examination, the plaintiff acknowledged that she had not discussed all contract terms with the defendant's principals. The defendant's counsel highlighted contradictions in the plaintiff's testimony regarding discussions about "gross auction proceeds" and whether she had discussed all terms with Emanuel and George Dragone prior to preparing the agreement. The plaintiff initially stated she believed she had discussed the terms but later expressed uncertainty about specific discussions, citing the passage of time since the events occurred. Despite the defendant's attempts to clarify these inconsistencies through questioning and reference to prior testimony, the trial court ultimately accepted the plaintiff's version, affirming that the essential terms of the contract were agreed upon and memorialized in the written agreement she presented to the defendant.

Allegations of inconsistencies were considered by the court, which, as the trier of fact, had the discretion to accept or reject testimony from either party. The doctrine of judicial estoppel was deemed irrelevant, and the court's credibility determinations were upheld. The defendant contended that the term "gross auction proceeds" in the written agreement was too ambiguous to constitute an enforceable contract and argued that expert testimony was necessary to clarify its meaning. The plaintiff countered that the defendant waived this ambiguity claim by not addressing it at the trial level. The appellate court found that the defendant had not distinctly raised this issue during the trial, thus opting not to review it. The principle established is that an appellate court is not obligated to consider claims not distinctly stated at trial, which prevents unfairness to the trial court and opposing parties. The defendant's counsel had suggested various interpretations of "gross auction proceeds" during cross-examination but did not formally request a determination on its ambiguity or propose an alternative definition. Post-trial, the defendant asserted that they were unaware of the written agreement, claiming it did not accurately represent their understanding of the engagement terms. On appeal, the defendant argued that the ambiguity required expert testimony to resolve. However, the appellate court noted that the trial court had not addressed this claim, as it was never raised, and emphasized that speculation about the court's reasoning was inappropriate. The court's role is to review claims based on a complete factual record established at trial.

An appellate tribunal cannot issue a ruling without a complete understanding of the case being appealed, as any decision made without the necessary factual and legal conclusions would be speculative. In the case of R. P Realty Co. v. Peerless Indemnity Ins. Co., the court declined to review a claim because the defendant had not raised it in the trial court. The defendant further contested the trial court's finding regarding the plaintiff's testimony about an agreement, arguing that there was no evidence supporting the court's characterization of her statements. However, the court found that the plaintiff's testimony indicated she did present a written agreement to Emanuel on February 2, 2012, and the trial court's interpretation of her testimony was accurate and supported by the record. The defendant's concerns regarding the wording used by the court were deemed to mischaracterize the significance of the plaintiff's actions. Additionally, the defendant claimed the trial court improperly shifted the burden of proof regarding the written contract’s assent. The review of this issue follows a de novo standard since it involves a question of law.

The burden of proof for establishing an enforceable contract lies with the party asserting its existence, requiring evidence of a mutual agreement. In the case at hand, the defendant challenges the trial court's findings and asserts that the plaintiff failed to provide credible evidence of a written contract. The plaintiff's evidence included her testimony, statements from the defendant’s principals, and a former employee’s transcript, along with several unrelated documents. The court found a lack of evidence supporting the plaintiff's claims, suggesting the trial court improperly shifted the burden to the defendant to disprove the contract's existence. 

Conversely, the plaintiff contends that her evidence was sufficient to establish the contract's existence and argues that the trial court did not shift the burden of proof. The court agrees with the plaintiff, affirming that the evidence presented supported the finding of the defendant's agreement to the written contract. The appellate court emphasized that it would not reweigh the evidence or question credibility, as those determinations are the trial court's responsibility.

The defendant also argues that differing interpretations of the plaintiff's actions indicate a misunderstanding that should invalidate the contract. However, the court maintains that mutual assent is determined by observable actions and words, not by the parties' subjective intentions. The trial court found that there was mutual assent based on the discussions about the contract, the delivery of the agreement, the plaintiff’s performance under the agreement, and the acknowledgment of the work by the defendant’s co-owners.

The court reaffirmed its previous findings, determining that the plaintiff's account of events was more credible than the defendant's, particularly regarding the defendant's claim of an agreement to pay the plaintiff $2,500 plus expenses for calling the auction. The court emphasized that assessing witness credibility is the sole responsibility of the trier of fact and confirmed that the written agreement constituted an enforceable contract. 

The defendant argued that the court improperly admitted hearsay evidence concerning damages, specifically targeting exhibits 5 and 57. Exhibit 5 was a table listing auctioned cars and their sale prices, which the plaintiff claimed to have sourced from the defendant's website. The court allowed its admission after the plaintiff's counsel authenticated the document through witness testimony. Exhibit 57 was another document detailing auction results from the website www.liveauctioneers.com, which the plaintiff also authenticated during her testimony. The court permitted both exhibits into evidence despite the defendant's objections.

The Plaintiff confirmed that the document in question is from www.liveauctioneers.com, clarifying that the Defendant does not control this website. The Plaintiff hired Tammy Sikowsky to provide information to Live Auctioneers during the auction on May 19, 2012. Although the Plaintiff did not input the information on the website, Sikowsky, who was compensated by the Defendant, was hired specifically for this role. The Plaintiff noted that while anyone can participate in auctions on Live Auctioneers, only registered users can run live auctions. The Court acknowledged Sikowsky as an agent of the Defendant, noting that she was hired by the Plaintiff but paid by the Defendant. The Defendant's Counsel objected on grounds of lack of foundation, but the Court overruled the objection. The Plaintiff's Counsel concluded by resting the case, and the Court marked Exhibit 57 as a full exhibit, highlighting that the prices listed include the buyer's premium rather than just the hammer price.

The Court addressed the admission of exhibits 5 and 57 during the trial, specifically focusing on the defendant's appeal regarding their admissibility. The plaintiff's counsel acknowledged the inclusion of memorabilia not listed in exhibit 5, and the court confirmed this. The defendant challenged the admissibility of both exhibits, claiming they were hearsay, but the appeal primarily centered on the authentication of exhibit 57. The defendant argued that the plaintiff did not produce a witness to authenticate the information from a third-party website, violating the Code of Evidence, and asserted that the lack of authentication rendered the exhibits hearsay. The court noted that the plaintiff provided no evidence to substantiate her claims of damages apart from these unauthenticated exhibits.

The court found that the defendant’s main argument related to authentication rather than hearsay. However, the defendant's counsel did not raise hearsay as a basis for objection during the trial, instead citing a lack of foundation. As a result, the court determined that the defendant's hearsay claim was not preserved for review, emphasizing that proper objections must be articulated at trial to alert the court to potential errors. Thus, the court declined to review the hearsay claim regarding exhibit 57 due to the failure to object on those grounds at trial.

The standard of review for the admission of evidence in a trial court is plenary when it involves the interpretation of the Connecticut Code of Evidence, particularly regarding hearsay classifications and exceptions. If the trial court's decision to admit evidence is based on a correct application of the law, it is reviewed for an abuse of discretion. Authentication is necessary for admissibility, which requires sufficient evidence to support a claim that the evidence is what it purports to be, applicable to all evidence types, including electronically stored information (ESI) such as emails and website content. A prima facie showing of authenticity is sufficient, allowing evidence to reach the fact finder for final determination. The proponent does not need to eliminate all doubts regarding authenticity or prove it beyond a reasonable doubt. Traditional methods, like direct testimony or distinctive document characteristics, can be used for authentication. In this case, the plaintiff's testimony established that a specific website hosted auctions, that the defendant engaged a third party to report auction results, and that exhibit 57 was a printed copy of those results, thus providing sufficient prima facie evidence for its admission. The court also ruled that even if exhibit 5 was improperly admitted, it constituted a harmless error.

A party seeking a new trial due to an erroneous evidentiary ruling must demonstrate that the error was both incorrect and harmful. An evidentiary error in a civil case is considered harmless if there is assurance it did not impact the trial's outcome. Evaluating harm requires a review of the evidentiary impropriety in light of all trial evidence. In this case, the defendant did not address the harmfulness of the court's rulings but argued that the plaintiff's evidence of damages was insufficient aside from the disputed hearsay exhibits. The plaintiff relied on exhibit 57, which listed auction proceeds and was deemed more credible than exhibit 5. The court awarded damages based on exhibit 57, which the plaintiff cited in her briefs, while exhibit 5 was neither mentioned by her nor referenced by the court. Consequently, even if exhibit 5 was improperly admitted, its admission was harmless, as the plaintiff's reliance on exhibit 57 provided sufficient evidence for the damages awarded. The judgment was affirmed with the concurrence of other judges.

Key points include the responsibilities outlined for the plaintiff in relation to the auction process, which involve collaborating with the defendant's technology team to establish necessary technology for the auction, spearheading marketing efforts, training staff on the auction database, advising on mandatory forms, directing the physical layout of the auction, and conducting the auction itself. Attorney Jeffrey R. Hellman has represented the plaintiff since April 2016. The plaintiff's claims against Emanuel were dismissed due to his actions being under his corporate capacity. The defendant contends that the court wrongly recognized a written contract based on the plaintiff's failure to plead the existence of an oral or implied contract. However, the court differentiated between implied contracts, noting that an implied in fact contract can arise from conduct rather than explicit agreement. The plaintiff maintained that a written contract was presented, which outlined her duties and compensation, and her performance of these duties suggested the defendant's assent to the agreement, thus supporting the existence of an implied in fact contract. The court affirmed this interpretation, countering the defendant's argument. Additionally, in a testimony exchange, the plaintiff clarified her understanding of "gross auction proceeds," stating it referred solely to the sum of hammer prices from the auction, excluding buyer's premiums, sales tax, and seller’s premiums.

The Plaintiff did not recall discussing specific inclusions in the 1 percent of gross auction proceeds, such as the buyer's premium, sales tax, or seller's premium, prior to preparing exhibit 1 in January 2012. The Plaintiff emphasized that sales tax is not income but a pass-through to the owed entity. When questioned about a $10,000 minimum payment, the Plaintiff acknowledged that while there was a discussion on January 26, 2012, there may not have been any subsequent discussions, though he couldn't confirm this with certainty due to the passage of time. The court retains the discretion to accept or reject the Plaintiff’s ambiguous testimony in its entirety or partially, as indicated in the case of Benjamin v. Norwalk.