Opinion
FSTCV156024864S
09-28-2017
Alcon Interactive Group, LLC v. Gate Five, LLC
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTIONS FOR SUMMARY JUDGMENT (#254.00 AND #281.00)
Kenneth B. Povodator, J.
Background/Procedural Posture
This is a lawsuit in which the plaintiff has claimed entitlement--under theories based on contract and equity--to a share of the proceeds of a settlement of litigation concerning a failed multimillion dollar project. The court previously granted motions to strike filed by the defendants, relating to essentially all but the unjust enrichment claims being asserted by the plaintiff. The defendants now have moved for summary judgment on the remaining unjust enrichment claims. There are 2 groups of defendants, and 2 motions have been filed. The plaintiff has filed its objections to the defendants' motions as well as motions attacking the evidentiary submissions.
As was the case with the motions to strike, defendants Segalla, CFC BDJ, CFC Capital Holdings, CFC Capital, and Connecticut Film Center (sometimes collectively referred to as the CFC defendants), filed the original motion; the remaining defendants, sometimes referred to as the BDJ defendants, filed a motion that adopted the arguments of the earlier filing. For purposes of this decision, the court will differentiate among the defendants only as may be necessary.
The factual background is extensive, and a more detailed summary of that background can be found in the court's memorandum of decision relating to the motions to strike (#186.00, filed March 21, 2016; see, also 2016 WL 1444136). In overly-simplified terms, the parties had been engaged in a project to develop a video game using the then-new Kinect technology for console gaming. The plaintiff was to provide financing; the defendants already had a contractual relationship with Beyoncé who was to be the marketing draw, and the financing that was to be provided by the plaintiff was to lead to a new contractual relationship that included the plaintiff. Beyoncé terminated the project on the eve of finalization and execution of the required new written agreement among the parties (to include the plaintiff). Substantially later, Gate Five (the collective enterprise that had been trying to bring the game to market) brought suit against Beyoncé in New York, and the plaintiff provided assistance in successfully resisting a motion for summary judgment that had been filed by the defendant in that proceeding. The New York lawsuit subsequently was settled, and the plaintiff is claiming a right to part of the proceeds of that settlement. As already noted, the only remaining theory of recovery is unjust enrichment.
There is claimed evidence that Beyoncé later expressed a willingness to proceed with the project but on different terms.
Specifically, despite the absence of a viable contract-based claim, the plaintiff is claiming that it is entitled to the 45% share of proceeds that had been contemplated (and tentatively agreed to) in the never-executed contract, under a theory of unjust enrichment. The defendants all contend that the plaintiff is not entitled to any compensation under that (or any) theory.
In Gould v. Mellick and Sexton, 263 Conn. 140, 147, 819 A.2d 216 (2003), while recognizing that complex/complicated cases may be especially difficult to resolve by way of summary judgment, the court stated that the mere complexity of issues and facts do not preclude summary judgment--if there are no material issues of fact in dispute, complexity should not stand in the way of summary resolution of the dispute. In this case, there has been a veritable deluge of submissions in connection with the pending motions--the motions are supported by an affidavit and 50 supporting exhibits; the objection to the motions for summary judgment is accompanied by a motion seeking to strike the affidavit filed in support of the motions, two affidavits, 13 exhibits in support of the first affidavit and 21 exhibits (if the court counted correctly--there are letter and numerical nomenclatures used with nonconsecutive numbers) in support of the other. That initial round of submissions elicited a supplemental/reply affidavit from the original affiant of the defendants, with 11 attached exhibits, coupled with an additional affidavit with 2 further exhibits. The supplemental submissions, in turn, were met with an additional motion to strike the supplemental affidavits, eliciting briefs from both sides. This, in turn, is based on what remains of a complaint which initially contained more than 60 counts covering more than 80 pages, not including 250+ pages of exhibits.
Notwithstanding the voluminous submissions and the extensive battle over the court's ability to consider much of what has been submitted, the court will attempt to work through the merits of the parties' respective claims and arguments.
Discussion
I. Procedural
Before the court can discuss the merits, the court must discuss the procedural issues raised by the plaintiff, challenging the defendants' submissions. The plaintiff has filed motions to strike the evidentiary submissions of the defendants, and as if that were not enough, most of the substance of the initial motion to strike and supporting brief has been incorporated into the plaintiff's objection to the motion for summary judgment itself. As implicit from the foregoing comments, the plaintiff filed a second motion to strike directed to supplemental affidavits submitted by the defendants, attempting to address some of the problems identified in the plaintiff's first motion to strike.
Although the court will address the plaintiff's challenge to the evidentiary submissions, most if not all of the evidence being challenged by the plaintiff goes, at most, to the manner of presentation, rather than to the ultimate admissibility of the information and/or documents. Factually, there is little in dispute. For example, the plaintiff challenges the manner in which certain documents have been authenticated, notwithstanding the fact that the plaintiff has relied on at least some of those documents in its own prior submissions. Thus, a number of the documents submitted in support of the summary judgment motions, the authenticity of which are challenged by the plaintiff, were attached as exhibits to the plaintiff's own complaint; see, e.g., #188, the exhibits submitted in connection with the plaintiff's second amended complaint.
From a different perspective, if the parties had been compelled to submit an agreed stipulation of facts and documents, again, most of the documents and information being challenged probably would have been included. The net result is that the focus on procedural aspects of the defendants' presentation effectively seeks to defer ultimate resolution of issues, rather than matters of substance.
Addressing the challenge to the defendants' evidentiary submission, and especially the affidavit initially submitted: Other than 1 or 2 trial court decisions, the authorities cited by the plaintiff in its motion to strike--and seemingly all of the appellate authorities--stand for relatively unremarkable propositions. For example, the plaintiff cites authorities for the proposition that hearsay evidence generally is inadmissible at trial. Somewhat more narrowly, the plaintiff also somewhat imprecisely discusses the scope of evidence permissible at a summary judgment stage of proceedings, but in part, is citing authorities without specific reference to the issues at hand.
To the extent that the plaintiff argues that in a general sense, hearsay is impermissible in connection with summary judgment, the statement is far too broad. Summary judgment is generally premised on what, at trial, would be considered to be (inadmissible) hearsay evidence, most especially, affidavits. General legal principles about inadmissibility of hearsay (with a possible or actual focus on trial), have no direct unqualified applicability to summary judgment. Practice Book § 17-45(a) specifically contemplates the submission of " appropriate documents, including but not limited to affidavits, certified transcripts of testimony under oath, disclosures, written admissions and other supporting documents." Affidavits and certified transcripts have an inherent hearsay quality--at least from the perspective of a trial--but this is not a trial.
There is nothing in the rules pertaining to summary judgment that restrict the use of documents as has been suggested by the plaintiff, e.g. that depositions can only be used in accordance with the rules in Practice Book Chapter 13. More narrowly, the plaintiff cites Gateway Co. v. DiNoia, 232 Conn. 223, 237, 654 A.2d 342 (1995), for the proposition that " deposition testimony is inadmissible hearsay unless offered by an opposing party, " but that relates to the use of a deposition at trial, and is not an accurate global statement of the relevant law, even under Chapter 13--see, Practice Book § 13-31 which now allows use of deposition testimony in numerous contexts, including the unqualified use of a deposition of a medical provider, regardless of availability (§ 13-31(a)(2)). Given the procedural inability to provide live testimony for summary judgment, there is a need to rely upon sworn testimony and statements, and the court believes that categorical rejection of deposition transcripts--if otherwise authenticated and relevant--is form over substance. Indeed, an affidavit is almost always tailored to fit an advocate position, whereas a deposition presents the deponent's own unscripted words in response to questions, with the answers being recorded in real time. (Affidavits are often reconstituted allegations from a complaint, emphasizing the non-candid nature of the factual statements contained therein.) Does it make any sense to allow a carefully crafted/drafted sworn statement (affidavit) to be considered, but not allow a more candidly worded sworn statement with unrehearsed answers (deposition) to be considered (assuming, of course, appropriately certified)?
More narrowly, it involved a trial court's refusal to allow use of an adverse party's deposition, apparently due to application of the " wrong" subsection of the applicable rule--applying the unavailability requirement of what is now Practice Book § 13-31(a)(4) to an offer of an adverse party's deposition under what is now Practice Book § 13-31(a)(3).
Similarly, the plaintiff's citation to Cogswell v. American Transit Ins. Co., 282 Conn. 505, 534, 923 A.2d 638 (2007), for the proposition that " hearsay is inadmissible on summary judgment" goes to the content of a submission, rather than the hearsay quality of the manner of submission--an unremarkable proposition. An affidavit or transcript may be hearsay for purposes of a trial, but for purposes of summary judgment, the hearsay analysis relating to the affidavit or transcript starts with the content, not the vehicle itself. Practice Book § 17-46 requires an affidavit to " set forth such facts as would be admissible in evidence, " focusing on the content of the affidavit (or other sworn submission).
A comprehensive and useful analysis is set forth in New Haven v. Pantani, 89 Conn.App. 675, 678-79, 874 A.2d 849 (2005):
" Practice Book § 17-45 provides in relevant part that ['a] motion for summary judgment shall be supported by such documents as may be appropriate, including but not limited to affidavits, certified transcripts of testimony under oath, disclosures, written admissions and the like . . .' That section does not mandate that those documents be attached in all cases, but we note that [o]nly evidence that would be admissible at trial may be used to support or oppose a motion for summary judgment. In fact, we have held that Practice Book § [17-45], although containing the phrase 'including but not limited to, ' contemplates that supporting documents to a motion for summary judgment be made under oath or be otherwise reliable . . . The rules would be meaningless if they could be circumvented by filing [unauthenticated documents] in support of or in opposition to summary judgment.
Therefore, before a document may be considered by the court in support of a motion for summary judgment, there must be a preliminary showing of [the document's] genuineness, i.e., that the proffered item of evidence is what its proponent claims it to be. The requirement of authentication applies to all types of evidence, including writings . . . Documents in support of or in opposition to a motion for summary judgment may be authenticated in a variety of ways, including, but not limited to, a certified copy of a document or the addition of an affidavit by a person with personal knowledge that the offered evidence is a true and accurate representation of what its proponent claims it to be. In this case, the plaintiff submitted numerous exhibits in support of its motion for summary judgment. The plaintiff failed, however, either to attach an affidavit attesting to the truth and accuracy of the various submissions or to provide certified copies of any of the documents. (Internal quotation marks and citations, omitted.)
The far-more-common issue is the extent to which the court may rely upon uncertified documents, with a corollary issue of the level of certification that might be required for admissibility if a submission is challenged. Absent a challenge to the level of certification or outright absence of certification, the court may choose to rely upon uncertified transcripts, etc., but if there is an objection to the lack of certification, then the court must take that into consideration in its approach to the submission.
The proper analysis of an affidavit or transcript, assuming it is appropriately certified/sworn, treats the content as if it were the subject of testimony--is the substance of what is being said within the personal knowledge of the affiant/deponent, is the substance of what is being communicated hearsay for the purpose offered, etc. (Practice Book § 17-46.) The purpose of the requirement of certification or sworn " statements" is to ensure reliability--a deponent was sworn at the time the deposition was taken, and the affiant is sworn when the affidavit is executed. That is the proper take-away from the various cases cited by the plaintiff, some of which are noted above.
The somewhat subtler issue presented here and in many other instances is the level of certification required for a certification of a copy of a transcript of the deposition or an excerpt from such a deposition transcript. The " gold standard" of certification would be to order a new formal transcript from the court reporter/stenographer who transcribed the transcript, such that there is an original certification of the document being submitted. What counsel often do is certify that what is being submitted is a true and accurate copy of the certified transcript that was provided shortly after the deposition was taken. It certainly would seem to be within the knowledge of an attorney who is submitting a copy of the transcript to state that what is being submitted is a true and accurate copy of the transcript in his/her file; the issue remaining is whether such a certification is legally adequate/permissible for purposes of summary judgment.
Some of these issues have been addressed in appellate decisions, in varying degrees, generally relying on the discretion of the trial court. In connection with an attorney having certified, by affidavit, various submissions including court documents and transcript excerpts, the Appellate Court stated:
Whether the court should have considered the documentary evidence and the affidavit submitted by the defendants presents an evidentiary issue to which we apply an abuse of discretion standard of review. See Wilderman v. Powers, 110 Conn.App. 819, 828, 956 A.2d 613 (2008) (claim that court should not have considered unauthenticated documents in assessing motion for summary judgment is evidentiary in nature). We are not persuaded by the plaintiff's arguments concerning this evidentiary matter, and we conclude that the court did not abuse its discretion in accepting the affidavit of the defendants' counsel attesting to the authenticity of the submitted documents. See Mac's Car City, Inc. v. American National Bank, 205 Conn. 255, 257-58, 532 A.2d 1302 (1987) (where previous motion for summary judgment on ground of res judicata denied because of lack of supporting documents, court considered attorney's affidavit attesting to authenticity of newly submitted documents, including prior pleadings, in support of renewed motion for summary judgment). Further, we conclude that the affidavit sufficiently provided support for the authenticity and accuracy of documents that had been submitted. (Footnote omitted.) Bruno v. Geller, 136 Conn.App. 707, 716-17, 46 A.3d 974, 983 (2012).
Returning specifically to the motion to strike filed by the plaintiff, directed to the affidavit: The plaintiff states in its motion that " [a] motion to strike is the proper method to [attack] an affidavit that does not comply with the rules, " citing 2830 Whitney Ave. Corp. v. Heritage Canal Development Associates, Inc., 33 Conn.App. 563, [567], 636 A.2d 1377 (1994). More accurately, the proposition was stated in a footnote (footnote 3), amplifying on the statement that an improper affidavit " will be disregarded." The cited decision relied upon McCourt v. Anemostat Corp. of America, 25 Conn.Supp. 462, 207 A.2d 585 (1965), which in turn relies upon Perri v. Cioffi, 141 Conn. 675, 109 A.2d 355 (1954), which in turn relied upon then-existing Practice Book § 53, which explicitly authorized the striking of an affidavit from a court file under certain circumstances. While courts may have inherent authority to strike improper documents from a file, under modern rules which do not contain such an explicit provision, the implicit prerequisite is that the entire document be sufficiently improper that none of it is worthy of (entitled to) consideration. The plaintiff has not demonstrated that level of impropriety, as to every aspect of the proffered affidavit. The court believes that in all but the most extreme circumstances, the more flexible and appropriate approach is reliance on the " will be disregarded" aspect of 2830 Whitney Ave.-- selectively and appropriately applied--rather than the footnoted reference of the ability to file a motion to strike the entire submission.
As this court often observes, it is routine if not near-universal that the court must evaluate affidavits and other submissions in support of (or opposing) summary judgment, filtering those factual assertions that may be considered from those that are hearsay or otherwise not properly considered. (The same exercise is required with respect to factual submissions related to motions to dismiss.) In this case, that exercise applies as well to the plaintiff's submission, notwithstanding its insistence on evidentiary purity in connection with the defendants' submissions. Thus, in ¶ ¶ 17 and 19, of the affidavit submitted in opposition to the motions for summary judgment, the affiant attempts to authenticate communications between two other individuals, based on his having received a copy at some later date--he was not the author nor intended recipient yet claims to be able to authenticate the communications for purposes of admissibility and use of their factual content (without even an explanation as to how they may have come into his possession).
The extreme nature of the plaintiff's arguments in this regard can readily be demonstrated. At page 17 of the brief, the plaintiff lists numerous documents that it claims the defendants' affiant was not competent to authenticate. The court will focus on one in particular:
Without an affirmative showing of personal knowledge, Fields cannot authenticate documents such as, among others . . . discovery responses [id., Ex.50.] These exhibits must be stricken and cannot be used in support of summary judgment.
Exhibit 50, the discovery responses identified in this excerpt, were the plaintiff's discovery responses in this case. What level of " personal knowledge" is required to authenticate discovery responses in an attorney's file, as received from the adverse party, who is now contesting the authenticity of the document? Is there any level of authentication needed other than something in the nature of " this is a copy of what you gave us?" Need the court add its observation that the certification of service at the end of the document specifically identifies the affiant as an intended recipient of the discovery compliance? Conversely, if this does not suffice, what form of authentication does the plaintiff claim would be needed, in order to pass muster?
The plaintiff has conflated the need for personal knowledge as to facts recited in an affidavit, and the question of what is sufficient for authentication of a document that is being submitted, especially one that is not self-authenticating. Again, there are numerous instances where the affidavit being challenged attempts to authenticate copies of documents submitted by the plaintiff as exhibits to various iterations of its complaint, and the blanket challenge to the affidavit and all documents purporting to be authenticated even includes (by implication) a challenge to copies of two versions of the complaint in this case (submitted as Exhibits 47 and 48).
This is made clear on page 17 where in the course discussing the claimed inadequacy of authentication of attached documents in the affidavit submitted by the defendants, the plaintiff states: " An affidavit submitted by the moving party on summary judgment is held to a stringent standard, and 'the evidence must be viewed in the light most favorable to the nonmovant and [it] is given the benefit of all favorable inferences that can be drawn." The court is familiar with such language as directed to the factual content of submissions in connection with summary judgment, but knows of no authority for any such presumption with respect to authentication or admissibility of submissions themselves. (A similar conflation of the need for personal knowledge for factual assertions and the issue of sufficiency of authentication occurs elsewhere, e.g., page 18.) The appellate authorities already quoted make it clear that what is required is a preliminary showing of genuineness, with the goal of ensuring reliability of materials submitted. How does a court draw an inference favorable to the non-moving party when the moving party submits an affidavit asserting that a document is a true and accurate copy of the original, other than by rejecting the submission of the copy--which would then nullify the process entirely?
That is not to suggest that the defendants did not have their moments, e.g. filing a copy of this court's decision on an earlier motion (#186.00) as an exhibit (Exhibit 49) and filing Exhibit 33 which was redacted to the point of being a blank page (although the affidavit authenticating it describes it as excerpts from a deposition, suggesting a two-level error--the wrong document designated as the exhibit and then redaction to the point of non-existence). To the extent that the defendants refer to the content of Exhibit 33 in their memoranda, the court cannot rely on such citations. To complete the circle: in a supplemental affidavit (#358.00), attempting to address claimed deficiencies in the initial affidavit in support of the motions for summary judgment as identified by the plaintiff, an effort was made by defendants to again " authenticate" Exhibit 49. Thus there was an effort to authenticate followed by a claimed lack of proper authentication followed by a renewed effort to authenticate the already-of-record memorandum of decision on the earlier motions to strike (#186.00) that never needed authentication to be considered by the court.
Absent a paragraph by paragraph or claim by claim analysis, establishing that there is nothing in an affidavit that the court could consider relating to the merits of the dispute being considered, the court will not strike an entire affidavit. Of course, if there is too much chaff, a submitting party runs the risk that the court may not be able to discern the information that it can and should be considering, but that is a practical risk that the offending filer must assume--it does not justify total disregard of the submission in the first instance.
In 2830 Whitney Ave, supra, the court engaged in such an exercise, in the main text and related footnote, 33 Conn.App. at 568, n.2.
II. The merits
The court often notes and starts its analysis of summary judgment motions with the observation of the asymmetry between trial and summary judgment. A plaintiff has a burden of proof--usually, preponderance of the evidence--at trial, but a defendant seeking summary judgment on that same claim has the burden of proving, effectively to a certainty (no material issue of fact), that the plaintiff does not have any right to the claim being advanced. Thus, not only is there a higher burden of proof, but there also often is the conceptually difficult obligation to prove a negative.
A useful starting point is the defendants' summary of why they believe they are entitled to summary judgment:
Alcon's unjust enrichment claim fails as a matter of law for the many reasons discussed below. First, the claim fails as to three of the five CFC Defendants--Mr. Segalla, Connecticut Film Center and CFC Holdings--because Alcon has no evidence that any of them received anything from the Settlement. Second, the claim fails as to CFC Capital because Alcon has admitted that it has no basis to contend that it was unjust for Gate Five to have paid its secured and unsecured creditors--like CFC Capital--before Alcon received anything.
More broadly, as discussed infra, Alcon's unjust enrichment claim fails as to all of the defendants because it is not to Alcon's detriment--as it would have to be for a cognizable unjust enrichment claim to exist--that it did not share in Gate Five's Settlement; because any litigation benefit that Alcon may have conferred on Gate Five in the course of negotiating the abandoned financing was an incidental and unintended consequence of Alcon's actions; because Alcon has no proof that the legal argument and Affidavits that its case is based on played any role in Gate Five obtaining the Settlement; because Alcon has no evidence to value its supposed litigation contributions at 45% of the Settlement; and because if Alcon's claim were granted, Alcon would, as its designated deposition representative admitted, receive " an enormous windfall." For these and the other reasons set forth infra, Alcon's unjust enrichment claim should be dismissed.
Based on the asymmetry of process, the issue here is not whether " Alcon has no evidence that any of [certain defendants] received anything from the Settlement" but rather whether the defendants can affirmatively establish the negative of the factual proposition that benefits were received. Similarly, the issue is not merely whether the defendants can establish that certain creditors were entitled to be paid first, but also that any distribution could not be subject to any possible sense of unjustness about such payments. While there might be individual defendants who had an indisputable right (no material issue of fact) to be paid as creditors, the defendants would further have the burden of establishing that payments to such senior creditors could not be subject to an unjust enrichment analysis.
The assertions in the " more broadly" paragraph above present the same need for reformulation. The burden is on the defendants to establish that " any litigation benefit that Alcon may have conferred on Gate Five in the course of negotiating the abandoned financing was an incidental and unintended consequence of Alcon's actions" such that there is no equitable basis for a claim of unjust enrichment. The burden is on the defendants to establish that Alcon's " legal argument and Affidavits [that it provided in the underlying litigation] played [no] role in Gate Five obtaining the Settlement." The burden is on the defendants to negate Alcon's entitlement to 45% of the proceeds or any lesser amount that might be appropriate. It is the defendants' burden to prove that even if a 45% recovery properly would be " an enormous windfall" to Alcon, a lesser amount could not be justified as a matter of equity. All of this must be established without any material issue of fact remaining.
The plaintiff does not reach the ultimate issue of existence of material issue of facts until the bottom of page 18 of its memorandum. (Even then, much of the discussion relates to the mantra that the court cannot rely on anything submitted by the defendants.)
The plaintiff does identify a key issue that the defendants must address--the absence of any benefit to the defendants from the litigation assistance and the earlier commitment to provide financing, in connection with the settlement of the Beyoncé litigation. The issue is framed in a proper manner: " The motion fails to demonstrate that Defendants did not obtain anything of value from Alcon."
Returning to the defendants' claims, it may be helpful to attempt to distill the more detailed arguments made, in support of their motions. The defendants claim that the plaintiff had no legally protected interest, that the settlement of the litigation was an incidental or unintended consequence of the plaintiff's efforts, and that there was what amounts to a voluntary and/or forced exchange. Specifically, the defendants claim that the efforts of the plaintiff were incidental because no one anticipated litigation. Further, the plaintiff did not claim any right to compensation until after it had concluded all of its efforts and the settlement was consummated, thereby depriving the defendants of the option of whether to use/rely upon the plaintiff's efforts.
The defendants further contend that there is no evidence that plaintiff's willingness to finance played a role in the settlement of the Beyoncé litigation. The defendants also address, in some detail, valuation-related issues, including the contention that if the plaintiff were to receive 45% of the proceeds, it would be unjustly enriched. They also contend that some of the defendants received nothing from the settlement and that at least one defendant only received repayment of a loan. Further, the defendants rely on the term sheet of the agreement that was never consummated whereby each party was responsible for its own pre-contract-execution costs (negotiations, due diligence preparation, etc.) and that Mr. Parrish has disavowed certain portions of the claims being advanced by the plaintiff. There also is an assertion that public policy precludes compensation based on the assistance provided in resolving the litigation, and then finally an assertion that there is no evidence of the value to be ascribed to the affidavits submitted.
The court will start with the valuation-related claims, and again refers to the asymmetry already identified. The issue before the court at this time is not whether the plaintiff can prove entitlement to 45% of the proceeds or some lesser amount; the issue is whether the defendants can establish the effective-certainty that the plaintiff cannot recover anything. Can the defendants conclusively refute the contention that the plaintiff's cooperation with respect to providing affidavits for use in opposing summary judgment in the Beyoncé litigation resulted in avoided costs to the defendants in connection with maintaining the viability of that litigation (which would arguably be a benefit)? Can the defendants conclusively negate the contribution of those affidavits to the denial of that summary judgment motion, especially given the New York court's decision alluding to the imminence of the necessary written commitment to financing, which was to be the plaintiff's contribution to the project? And with that as an explicit factor in the denial of the motion for summary judgment, can the defendants conclusively negate any influence of that factor in the eventual settlement of the New York litigation? Unless and until the defendants submit sufficient evidence to carry their burden with respect to any element of their claimed entitlement to judgment, the plaintiff has no burden of offering any evidence to create a material issue of fact--and the facts recited in the foregoing questions essentially constitute sufficient factual issues to preclude summary judgment (had the defendants carried their required prima facie burden).
The court will continue to focus on the affidavits-as-benefit aspect of the plaintiff's claims, because in order to prevail, the defendants would be required to refute/disprove all aspects of the plaintiff's contentions; to the extent that there may be " extra" issues relating to the pre-Beyoncé -breach conduct relating to providing financing, the court need not address those additional concerns if the Beyoncé -litigation assistance cannot be defeated conclusively. There is no " incidental" quality to such efforts, as they clearly were directed to defeating the dispositive motion filed in the New York litigation. There is and can be no claim that there was anything foisted on the defendants, as they chose to submit the affidavits (and do not dispute that they had started the process of seeking to obtain deposition testimony in that regard, which costs were avoided by the plaintiff's cooperation). Certainly, no one compelled the defendants to submit those affidavits and the availability of financing from plaintiff, as established by those affidavits, was recited in the court's eventual decision denying summary judgment.
The concern about ethical prohibitions (public policy) appears to be based on the claim that the plaintiff is entitled to a percentage of the proceeds of the settlement, but again, the issue is not the amount of unjust enrichment that the plaintiff might be entitled to receive--no ethical issue or prohibitory public policy has been identified that would arise if the plaintiff's claim were determined to support a right to reimbursement of its costs in providing assistance. At trial, the plaintiff might have to prove the value of the assistance it provided by way of affidavits; for purposes of summary judgment, the defendants bear the burden of establishing a definitive absence of value, and they do not appear to contest (in any concerted manner) that there was at least a modest amount of avoided cost that could be characterized as a benefit they received.
The issue of 45% as the measure of the plaintiff's claim is pervasive, and excessively time-consuming in the presentations of the parties. At this juncture, the court need not determine whether there is any possibility of such a recovery by the plaintiff, as the precise measure of damages to which the plaintiff might be entitled is not before the court--the defendants are claiming that the plaintiff has no right to recover under a theory of unjust enrichment, without regard to magnitude. For now, the only question is whether the plaintiff is unequivocally entitled to nothing more than $0, or whether there is a material factual issue as to whether the plaintiff is or might be entitled to some level of compensation under an unjust enrichment theory. The court will not entertain any issues relating to the specific amount of possible award, other than zero or non-zero, to the extent that such an issue may arise.
The plaintiff relies upon Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 649 A.2d 518 (1994), but that is a case in which there had been full performance of the terms of a purported agreement, and the " contractual" price for services was deemed an appropriate measure of the value of the services provided and corresponding benefit received. There is nothing suggesting that the plaintiff might have been entitled to any portion of the proceeds of sales generated by virtue of the advertising provided. In other words, it was the actual value of goods and services provided that was sought to be measured and repaid under a theory of unjust enrichment, not how those goods and services might have been used (or were used) after they had been provided. (In a counterfactual sense, starting with the " for want of a nail, the kingdom was lost" scenario, the plaintiff effectively is claiming that if someone had provided the nail (absent a contractual relationship), the " value" of providing that nail, for unjust enrichment purposes, would have been the value of the kingdom that would have been saved.)
Returning to the defendants' claims, it may well be that Mr. Parrish may have made certain statements as claimed by the defendants (and as established by some of their submissions) relating to the scope of unjust enrichment that might be claimed, but the plaintiff also has continued to assert that it is entitled to compensation for its efforts in bringing about a successful settlement of the New York litigation. The existence of conflicting or contradictory statements does not remove the issue from the realm of material factual issues, but instead clearly establishes the existence of material factual issues. (The plaintiff seems to argue, in part, that some of the statements he made have been taken out of context, further reason not to deem his statements as conclusive.)
The defendants also contend that at least initially, the plaintiff did not seek compensation for its efforts, even after the New York litigation first was settled. If that is a claim of waiver or estoppel or reliance, that still remains within the concept of a factual issue, where the defendants seek to draw an inference from conduct (lack of conduct) but an inference that is not mandatory. In other words, the ability of the defendants to draw an inference from that lack of an initial claim for compensation--and assuming it to be an accurate statement of the facts--does not remove the inference from the realm of factfinding. The court does not see the situation as presenting only one permissible inference--the one that the defendants propound--and therefore if the inference sought to be drawn is material, it is a material issue of fact.
The defendants repeatedly emphasize that the settlement of the Beyoncé litigation was a resolution of a claim that belonged to Gate Five, with the plaintiff having no associated rights; see, e.g., page 23 of the defendants' brief. Although this case is, in many ways, atypical, the lack of a direct right (contractual) is essentially a mandatory condition precedent to assertion of a potentially-valid unjust enrichment claim. In an oversimplified sense, the plaintiff and some or all of the defendants were on the verge of a contract with Beyoncé when she allegedly withdrew from the project (or at least did so on a short-term basis), claiming that a deadline had not been met. The lack of a final, signed agreement was the result of that last-minute termination, but for which the plaintiff would have been a contracting party. At least some of the defendants had an already-existing contractual relationship with Beyoncé that was claimed to have been breached by her conduct; the plaintiff did not have such a relationship.
Avoiding any issue as to the proper measure of damages, the question remains: Has the plaintiff articulated a situation coming within the scope of a claim of unjust enrichment, sufficient to withstand the pending motion for summary judgment? An initial inquiry, as recognized above, is whether there was a benefit--and procedurally, the issue is whether the defendants have established the lack of any benefit.
In a literal sense, the defendants were benefited by the conduct of the plaintiff for which the plaintiff has not been compensated. The plaintiff did all of the necessary preparatory work before indicating a willingness to commit to financing (prior to Beyoncé claiming that the time limit for financing had not been met), and did at least some level of work in assisting the defendants in opposing an adverse summary judgment motion with respect to the claim brought against Beyoncé in New York. On that somewhat simplistic level, there was a benefit to the defendant at the expense of the plaintiff. (Again, magnitude is irrelevant.)
The defendants contend that the finer-grained analysis required for an unjust enrichment claim is not so kind to the plaintiff's claims.
The defendants contend that the plaintiff was effectively a volunteer. The plaintiff may have provided assistance willingly, but this is not a situation where unrequested or even unwelcome assistance was provided, followed by a metaphorical bill. The defendants needed (or thought they needed) some level of assistance from the plaintiff to resist summary judgment, and as reflected by the oft-cited excerpt from the New York court's decision, the availability of financing from the plaintiff, coupled with the lack of any indication that there was a hard deadline for obtaining financing, precluded any definitive ruling in favor of Beyoncé, i.e., requiring her summary judgment motion to be denied. This situation bears no resemblance to the prototypical hypothetical whereby a neighbor gratuitously and without anything approaching a request, performs services for a neighbor (painting the house, mowing the lawn) and then seeks repayment on an unjust enrichment basis. There is no quality of " foisting" --or more accurately, the defendants have not attempted to establish, much less have they established to the requisite level of certainty (no material issue of fact), that there was such a foisting of benefit by the plaintiff. To the contrary, there is a material issue of fact as to whether they wanted, or even needed, assistance from the plaintiff (and its personnel) in order to continue to prosecute the claim against Beyoncé .
The defendants also contend that most of the distributees of the proceeds were secured lenders, such that they were entitled to be paid without regard to any claim of unjust enrichment. They also claim that some defendants received absolutely nothing. The problem is the lack of evidence, or perhaps more accurately, comprehensible evidence. Exhibit 15 is a chart showing the distribution of funds--but much of the information (other than percentages) has been redacted. There are no exhibits or evidence reflecting how the percentages of distribution were determined, or whether any or all of the distributees were creditors, or whether any of the creditors also received distributions beyond their debts or anything else that the court might consider in determining whether the defendants satisfied their initial burden of making " a showing that it is quite clear what the truth is." Ferri v. Powell-Ferri, 317 Conn. 223, 228, 116 A.3d 297 (2015). In this regard, the court agrees with the plaintiff that some degree of rigor is required with respect to factual presentation--even if the court were to ignore the lack of details set forth above, there is no clear assertion that none of the parties received any other funds, directly or indirectly.
In part, this problem tracks back to the ease with which parties agree to confidentiality, whether of settlements or otherwise, and then are faced with the question of how to present the confidential information to a court that cannot adjudicate an issue in a subsequent dispute, or in a subsequent phase of the same dispute, without the details. In Alpha Beta Capital Partners v. Pursuit Investment Management, J.D. Stamford/Norwalk at Stamford, FSTCV155014970S, in a memorandum of decision filed on June 16, 2016 relating to an application for a prejudgment remedy, the court attempted to honor the confidentiality of the information provided to the court while also recognizing that any decision addressing the merits of a dispute based on a confidential settlement would necessarily allude to some information contained in the settlement. Thus, in footnote 4 (page 15 of the decision), the court stated:
" The parties to the UBS settlement agreed as a part of the settlement to keep its terms confidential. To date, the court has respected those confidentiality provisions and granted the motion of the UBS parties, who are not parties to this litigation, to seal the UBS settlement agreement. Other documents introduced into evidence purporting to show the terms of the settlement were likewise sealed or redacted to preserve the confidentiality of those settlement terms. However, as the court advised the parties to the UBS settlement, the court in rendering a decision is required to set forth its analysis of damages which necessitates reference to financial data inconsistent with their desire to keep the terms confidential."
In JPMorgan Chase Bank, N.A. v. Cam, 172 Conn.App. 659, 161 A.3d 650 (2017), the trial court initially declined to entertain a motion to enforce a settlement agreement, where the agreement initially had not been submitted to the court due to a confidentiality agreement.
Notwithstanding footnote 3 indicating that an earlier motion had been denied because of the failure to file an unredacted version of the (confidential) settlement agreement, the earlier motion had not provided the court with any version, redacted or otherwise. Eventually, an unredacted version was submitted with a new motion.
The court cannot make assumptions about information not submitted due to confidentiality concerns. Nor does the court presume that simply because litigants have agreed to some level of confidentiality (as to a settlement or otherwise), that is sufficient to warrant sealing or otherwise acting in a manner inconsistent with the policies reflected by the current version of Practice Book § 11-20A.
Further, to the extent that the defendants perceived a need to convey the payment of loans without violating any confidentiality, there could have been a presentation (e.g. via affidavit) of the amounts actually paid as compared to the amounts stated in the relevant instruments, i.e., that whatever was paid to creditors was less than or equal to amounts of the debts. (Conversely, to the extent that Exhibit 15 was a summary-type document (with virtually all useful information redacted), summaries are admissible only if the underlying information being summarized has been submitted or is otherwise available for review.)
Further, details of the claimed creditor payments aside, the court is not " convinced" (in a summary judgment sense) that payments to creditors are somehow " automatically" exempt from unjust enrichment. (The lack of details only makes it more difficult to satisfy such a burden.) A hypothetical example makes this clear. If the aggregate secured creditor debt totaled $1 million, and the " net" proceeds (after litigation/collection expenses) also totaled $1 million, on a superficial level, there would be nothing left to distribute to the plaintiff (under the defendants' interpretation). However, to the extent that the unjust enrichment claim incorporates expenses/costs that had been avoided in obtaining the settlement, then all benefiting creditors might be potentially chargeable for their pro rata shares. Thus, if the avoided expenses due to the plaintiff's efforts totaled $20,000, then the net proceeds " should have been" $980,000 but for the " detriment" to the plaintiff, with the creditors all benefiting from the availability of the extra $20,000 as a direct consequence. Under such a scenario, there is a detriment to the plaintiff and corresponding benefit to the defendants, notwithstanding the characterization of the distributions as loan repayments rather than equity or other such entrepreneurial distributions. Even if the " net" proceeds exceeded the aggregate debt by a substantial margin, such that there seemingly was an amount available for distribution based on equity interests, there still could be the issue of how to allocate avoided expenses on an equitable basis--across all payees, or after payments were made to creditors (effectively charging it entirely to the equity interests) or otherwise.
This is but a particularized instance of the difficulty the court perceives to exist whenever there is an effort to invoke summary judgment with respect to a claim of unjust enrichment (or equity in general). Equitable determinations require balancing of equities, requiring weighing and evaluation of the evidence--but summary judgment is not intended for weighing and evaluation of evidence. Summary judgment is an exercise in issue-identification. Only if there is only one possible (reasonable) outcome based on the facts can the court rule.
Returning to the scope of the defendants' claims, the defendants contend that the plaintiff has not established that the settlement itself was based on the availability of financing from the plaintiff. There are multiple problems with this contention. First, as noted earlier, there are at least two possible components to the unjust enrichment claim--financing and litigation assistance--and the court is focusing on the litigation assistance aspect, for the sake of simplicity. (If the defendants cannot prevail on the assistance claim, it does not matter whether the plaintiff can prevail on the financing claim.) Second, this again goes back to the asymmetry analysis--at trial, the plaintiff may bear the burden of proving that affirmative, but for summary judgment, the defendants must establish the undisputed/indisputable negative proposition. Again referring to prior discussions, does not the explicit reliance of the New York court on the imminence of financing from the plaintiff as a basis for denying summary judgment at least suggest that the imminence of financing from the plaintiff was a material factor in the settlement of the litigation? That financing was a, if not the, major battleground in the New York litigation, and unless the defendants can remove that as an issue, their contention in this regard cannot prevail.
In sum, then, at most, the defendants may have identified areas of potential vulnerability in the plaintiff's claims, but they have not established the existence of any fatal defect, to the requisite standard of certainty--no material issue of fact. They have not established their entitlement to summary judgment.
Conclusion
On a number of levels, the parties have made these motions unnecessarily difficult to decide. The parties unduly focus on the amount of recovery--generally claimed by the plaintiff to be 45% of the proceeds of the settlement of the New York litigation. Here, the summary judgment motions are intended to be directed to " whether" or " if" the plaintiff can prevail, not the " how much" if it does, in fact, prevail.
The parties are at odds over submissions in support of the motions, including disputes as to the level of authentication needed for pleadings in this file --the court is unaware of any authority requiring authentication of filings in the current proceeding (assuming otherwise relevant). To the contrary, the court presumptively can take judicial notice of filings in this file (and also in other court files, if pertinent). So there are pages of briefs and motions devoted to the adequacy of authentication of documents that did not need to be separately (and sometimes duplicatively) filed and did not need to be authenticated at all. The plaintiff further objected to authentication of certain documents, copies of which documents already had been attached to its own pleadings. And notwithstanding all of the foregoing, the plaintiff's position--articulated in two motions to strike--is that the entirety of the defendants' submissions should be disregarded (stricken).
The defendants are entitled to claim that the plaintiff cannot prove its claims--but for summary judgment, the burden is on the defendants to establish that inability in an affirmative sense. Proving a negative can be difficult, but that is the burden that the defendants have assumed, in filing their motions. The court is not allowed to grant a summary judgment motion based on a perception of the weakness of claims--only claims that are demonstrated to be fatally deficient (to a no-material-issue-of-fact level of certainty).
With respect to the claim that certain defendants did not receive any benefit from the plaintiff's conduct because they did not receive any proceeds from the settlement of the New York litigation, the court cannot conclude that the necessary threshold for such a determination has been met. Exhibit 15 is described as a record of the distribution of proceeds, but aside from the redacted nature of the document, there is no affirmative negation that the parties not listed as recipients did not receive anything, e.g. a secondary distribution from one of the indicated recipients. As to the recipients who claim to have received proceeds only as creditors, the court has identified a possible basis for an unjust enrichment claim directed to them, and the defendants have not established--factually or legally--that such an equitable charge would not be permissible. The fact that secured creditors may be entitled to distribution prior to parties with claims based on an equity-interest in the venture does not necessarily mean that there can be no unjust enrichment--there has been no citation to authority for such a blanket proposition. (The BDJ defendants, who filed a motion (#281.00) that adopted the earlier motion for summary judgment (#254.00), submitted no separate affidavits or other evidence warranting separate consideration.)
A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit [that] has come to him at the expense of another . . . With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case [in which] the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard . . . Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy . . . Recovery [for unjust enrichment] is proper if the defendant was benefited, the defendant did not [perform in exchange] for the benefit and the failure [to perform] operated to the detriment of the plaintiff . . . [I]t is contrary to equity and good conscience for the defendant to retain a benefit which has come to him at the expense of the plaintiff. (Internal quotation marks, parentheses and citations, omitted.) Hospital of Central Connecticut v. Neurosurgical Associates, P.C., 159 Conn.App. 87, 96-97, 121 A.3d 750, 756 (2015).
The defendants have not negated the existence of any of the required elements of a claim based on unjust enrichment, sufficient to entitle them to summary judgment.
For all of these reasons, then, the motions for summary judgment are denied.