Opinion
No. CV06-5002411S
January 23, 2008
MEMORANDUM OF DECISION
FINDINGS OF FACT AND HISTORY
The Court makes the following findings of fact based on the credible and competent evidence admitted at trial starting on September 19th and subsequent dates. The parties submitted post-trial briefs and proposed findings of fact which the Court has taken into consideration.
1. Plaintiff Forino Barbieri, LLC ("Plaintiff LLC") is a Connecticut limited liability company formed in October 2005, by Rocco Forino ("Forino") as its sole member.
2. The business of the LLC was "to conduct painting operations in the State of Connecticut."
3. In 2000, Sal Barbieri (Barbieri) formed his own company, Barbieri Painting and Decorating, LLC, d/b/a Barbieri Painting and Sandblasting.
4. Sal Barbieri (Barbieri) first met Rocco Forino (Forino) in August-September 2005, when Barbieri responded to a newspaper advertisement.
5. Forino suggested to Barbieri that they enter into a joint venture. This proposal was not acceptable to Barbieri.
6. Forino and Barbieri were brought together by the Plaintiff LLC's need for experienced paint crews to fulfill existing contracts. The idea of a partnership emerged from the original contractor-subcontractor relationship between Barbieri and Forino, but there was never a meeting of the minds between Forino and Barbieri sufficient to create an enforceable (much less written) partnership agreement.
7. Barbieri never had an economic interest in the Plaintiff LLC set up by Forino and with which he was alleged to be a partner.
8. In early 2006, Barbieri had already commenced several large projects for the Plaintiff LLC, and had paid on his own for certain necessary expenses for those jobs.
9. Beginning in November 2005, Barbieri regularly requested of Forino that he be made a Member of the Plaintiff LLC and a signatory on its Wachovia bank account.
10. Between November 2005 and March 2006, Barbieri also continually expressed to Forino his concern over the Plaintiff LLC's lack of work. After March 2006, as the initial "big jobs" were completed, the Plaintiff LLC's work dissipated.
11. There were three (3) painting jobs (Petrocine, Cosgrove and Hubbard Hall) which resulted in customers issuing payments to Barbieri's company as opposed to the Plaintiff LLC.
12. On April 11, 2006, Linda Petrocine personally gave Barbieri a $5,000 deposit check made payable to Barbieri Painting and Decorating.
13. Forino paid to an outside vendor $2,500 from Plaintiff LLC funds to have a DVD made of the Fetrocine sandblasting process, supposedly for purposes of marketing the Plaintiff LLC. The finished DVD did not show any painting or sandblasting.
14. On May 3, 2006, Barbieri received from the Petrocines a second $5,520 check (also payable to Barbieri's company) as final payment for the work done.
15. The Cosgrove job was also residential in nature, for which Barbieri received a $7,800 check. That check was made payable to Barbieri Painting and Decorating.
16. Hubbard Hall was a commercial project that was the subject of a June 2005 proposal, i.e., one made by Barbieri prior to the formation of the Plaintiff LLC.
17. At all times Hubbard Hall believed it was dealing only with Barbieri and his company, Barbieri Painting and Decorating, and not with the LLC.
18. Barbieri received his initial $10,000 down payment from Hubbard Hall on April 13, 2005.
19. Barbieri Painting and Decorating subsequently received a $12,925 payment for that phase of the Hubbard Hall job.
20. Upon receipt of each of these checks, Barbieri transferred them (without endorsement) to Forino for deposit into Barbieri's (as opposed to the Plaintiff LLC's) Wachovia Bank account. In July 2006, Barbieri learned for the first time that the checks had been deposited into the LLC's Wachovia account.
21. In July 2006, Barbieri discovered that the Petrocine, Cosgrove, and Hubbard Hall checks had not been deposited into his business account.
22. Barbieri learned that the above deposits were apparently commingled with Plaintiff LLC deposits.
23. When it appeared that unendorsed checks payable to Barbieri Painting and Decorating had been deposited into the Plaintiff LLC's account, Barbieri pursued his claim with Wachovia by means of an Affidavit dated July 12, 2006.
24. In that Affidavit, the claimant is Hubbard Hall, and Barbieri attested as payee that the missing checks were "not endorsed as drawn."
25. None of the checks were properly endorsed with a signature.
26. Wachovia froze the Plaintiff LLC account upon the bank's receipt of Barbieri's claim of his funds having been deposited into the Plaintiff LLC account.
27. Upon obtaining from Barbieri the Petrocine checks, the Plaintiff LLC issued a "Sales Receipt." The Plaintiff LLC did the same after obtaining the Cosgrove check.
28. Wachovia concluded that some or all of the checks were "endorsed other than as drawn" and deemed it appropriate to credit the accounts of the drawers of those checks.
29. After the drawer accounts were credited, and even after the drawers received unsolicited "Sales Receipts" from the Plaintiff LLC purporting to claim credit for the painting work, both Cosgrove and Hubbard Hall issued new checks again made payable to Barbieri's company, not to the Plaintiff LLC. Petrocine did not issue a replacement check thereby causing a direct loss in the approximate amount of $11,000.
30. During the period of the Plaintiff LLC's operation, Forino at various times drew down on a line of credit from TD Banknorth to another LLC set up by Forino called "Rocco Forino Media, LLC", and then applied these funds for the benefit of the Plaintiff LLC. As a result, Plaintiff LLC revenue was used by Forino to repay a non-LLC obligation running from "Media" to TD Banknorth.
31. The Plaintiff LLC filed tax returns for 2005 and 2006. Barbieri received a Form K-1 despite the fact that he was not a Member of the Plaintiff LLC.
32. Barbieri was a successful painting contractor, with clients of his own, prior to Forino's formation of the Plaintiff LLC.
33. Barbieri eventually agreed to "an arrangement" with the Plaintiff LLC where the Plaintiff LLC would obtain the work and run the administrative and financial aspects of the business, and Barbieri would actually do the work and supervise the jobs on-site.
34. From November 2005 through April 2006, Barbieri also considered himself to be a "subcontractor" of the Plaintiff LLC. Barbieri was the "working member"; Forino (in the form of the Plaintiff LLC) was the "administrative, financial" and business development "member."
35. By April 2006, the inventory of work for the Plaintiff LLC was depleted and Barbieri repeatedly voiced his concerns to Forino over (a) his not being made a Member of the Plaintiff LLC, (b) not being made a signatory on the Plaintiff LLC bank account, and (c) the inability of Forino to attract to the Plaintiff LLC more work. As a result, in April 2006, Forino and Barbieri agreed to sever their "relationship" and go their separate ways.
ISSUES
1. Is the business relationship between the plaintiff, which is a Connecticut LLC, and the defendant, Salvatore Barbieri, a legal partnership?
2. Is there sufficient evidence for the court to allocate damages or remaining assets between the plaintiff and the defendant?
DISCUSSION
The credible evidence found by this Court supports the following holdings for the defendant, Sal Barbieri, in the following manner.
Count one of the plaintiff's third amended complaint is not supported by a fair preponderance of credible evidence to establish a breach of contract by the defendant, Barbieri. The evidence indicates a dysfunctional, although somewhat profitable business relationship between the plaintiff and defendant over a seven (7) to eight (8) month period. This relationship never became a valid partnership. Davies v. General Tours, Inc., 63 Conn.App. 17, 29 (2001). Although difficult to define, the court can only find that this relationship was a de facto partnership or "partnership at will" between the parties through the window of an LLC completely controlled by Rocco Forino, who withdrew as a party plaintiff. Travis v. St. John, 176 Conn. 69, 73 (1978); Greenhouse v. Zempsky, 153 Conn. 501 (1966).
Although net profits were being evenly divided and distributed, the sharing of operating expenses appears to be less than even, favoring Rocco Forino.
The allegation that certain loans were made to the Plaintiff LLC by other entities controlled by Rocco Forino was substantiated, but does not shift the equities in favor of the Plaintiff LLC, which was totally controlled by Rocco Forino. These were transactions arranged by Rocco Forino for the benefit of the Plaintiff LLC, which was actually an alter ego of Rocco Forino himself. Whatever Rocco Forino arranged internally for the benefit of the Plaintiff LLC was done without the permission or the apparent knowledge of the defendant, Sal Barbieri. The fact that neither of these individuals communicated properly with one another, nor exhibited the type of fiduciary trust that should exist between partners, the Court can only find that a de facto business relationship existed at will between these two individuals. There was never real "meeting of the minds" between the parties. The day-to-day, job-to-job relationship did not constitute an enforceable contractual relationship. L R Realty v. Conn. National Bank, 53 Conn.App. 524, 536 (1999); Duplissie v. Devino, 96 Conn.App. 673, 687 (2006).
The plaintiff's prayer for relief by way of declaratory judgment is hereby denied. The issue involving the balance held by Wachovia Bank that had been deposited by Rocco Forino stands at $42,250 based on counsel's representation.
The Court further finds that Barbieri's complaint to the Wachovia Bank concerning these said three customer accounts, occurred out of ignorance and/or mutual mistake by each party. Therefore, the parties should share equally in any balance, subject to any adjustments remaining in that particular Wachovia account.
The Court further finds there should be no award of interest to either party based on any unlawful detention beyond what would normally be accrued on the frozen balance at the Wachovia Bank. The fact that both parties lacked allegiance to this supposed "partnership" militates against either of them being treated as partners, interested in advancing the purposes of the business entity. Therefore, neither of their hands can be considered clean, nor are their intents clear or understandable from their respective actions.
As to count two, the court finds that there was no unfair trade practice committed by the defendant, Barbieri. That Barbieri's actions, although not in conformity with the duties of an agent, a subcontractor or putative "partner," did not reflect any level of deceptive, immoral or unethical conduct and were done out of some level of reliance on the Plaintiff LLC, and its sole member and manager, Rocco Forino. Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 17 (2008). It is yet further indicia of how this business relationship failed in so many ways.
CUTPA requires that "the facts found must be viewed within the context of the totality of circumstances which are uniquely available to the trial court." Ancona v. Manafort Bros., Inc., 56 Conn.App. 701 (2000).
The court cannot find that the defendant engaged in any actual deceptive practice or any practice amounting to a violation of public policy. And, therefore, the second count has not been proven by the plaintiff and therefore, judgment enters in favor of the defendant on count two.
CONCLUSION
The court finds that the net available funds in the said frozen Wachovia account are to be divided equally between Rocco Forino and Sal Barbieri.