Opinion
FSTCV165015981S
06-04-2018
GENERAL LINEN SERVICE, LLC v. Prasad CHIRNOMULA dba Thali Regional Cuisine, Etc. et al.
UNPUBLISHED OPINION
TAGGART D. ADAMS, JUDGE TRIAL REFEREE
I. BACKGROUND AND FACTS
The plaintiff General Linen Service, LLC (General Linen) filed an amended application for a prejudgment remedy (PJR) in the amount of $124,000 against a defendant identified as "Somerpet Raju d/b/a Thali Regional Cuisine of India, India New Canaan and Thali of Ridgefield." Dkt Entry 128.00. The crux of the amended complaint states that General Linen acquired a Rental Service Agreement whereby it would supply and deliver linen products such as napkins and table cloths to various restaurants in New Canaan, Ridgefield, Westport and New Haven, Connecticut, and that the defendant restaurants and their owners and operators were in breach of the Rental Service Agreement. The individual defendants initially included Prasad Chirnomula who apparently had ownership interests in the above restaurants and subsequently went into bankruptcy and is no longer a party to the case. The second individual defendant is Somerpet Raju, a sometime employee of Chirnomula, who for periods of time managed one or more of the restaurants. The restaurant defendants, identified as Best Food Corp., Great Food Corp. and New Food Corp., have not appeared in this case, and there does not seem to have been much effort to pursue them. Although the plaintiff’s most recent memoranda appears to seek a PJR against these corporations this memorandum of decision will focus only on the claims against Raju.
In its memorandum filed after a hearing the plaintiff increased the claim to over $151,000.
The PJR application directed at Raju was heard by the court on April 2, 2018 and the parties and counsel filed post-hearing memoranda on May 2. The only witness for General Linen was Wayne Clark, an employee of and a sales representative for the company. Through Clark, General Linen introduced into the record exhibits evidencing General Linen’s purchase of certain business assets from a Swisher Hygiene USA Operation, Inc. including existing linen supply contracts originally between Savoy Linen Services, Inc. (Savoy) and the three restaurants named Thali located respectively in New Canaan, Ridgefield and New Haven. Exhibits 1, 2, 3, 4. Also, introduced into evidence was the Rental Service Agreement, a two-sided document the front of which contained a price schedule for Savoy’s Linen products such as table cloths and napkins and the back of which contained 32 paragraphs of contract terms in what can only be described as miniscule type. Exhibit 5. The front of the Rental Service Agreement was signed by Raju.
The single document was described by Clark. Tr. 43. References to "Tr." Followed by a number are to a page or pages of the court transcript of April 2, 2018.
The Rental Service Agreement is on a printed Savoy Linen Services form dated March 12, 2010 describing four Thali restaurant located in Connecticut and involving the provision of linen service for those establishments from some time in 2010 (hard to read). The agreement states "[t]he Company agrees to supply to the Customer and the Customer agrees to take from the company and pay for during the term of this Agreement ALL of the Customer’s business for the supply of clean laundered articles."
According to an amended affidavit of Wayne Clark (Dkt Entry 132.00, Exhibit D) Swisher Hygiene acquired all the assets of Savoy in 2012 and General Linen acquired all the assets of Swisher Hygiene in 2013. Clark testified he was a service manager for Savoy for seventeen years prior to working for General Linen. Tr. 28.
Clark testified he reviewed the Rental Service Agreement with Raju. He described the amount of review time as "moderate," "about 15 minutes going over it- among other things." However, he did not go over "Page 2" with Raju, meaning the 32 paragraphs of contract terms. Id., 43-44.
General Linen presented evidence purporting to show that certain General Linen invoices to the New Canaan, Ridgefield and New Haven restaurants, in 2014 and 2015 were unpaid in the amounts $1,343.05 (New Canaan) $1,488.68 (Ridgefield) and $17,588.81 (New Haven). Exhibits 6-8; Tr. 22-25, 29. In addition, Clark testified that General Linen suffered lost profits when the restaurants at issue stopped accepting linen service from the plaintiff. These claims are based on the original five-year contract, the automatic five year renewal thereof and the five percent annual price increase, and supposedly factor in the plaintiff’s costs of providing the service such as drivers, other labor, utility costs and replacement costs. Exhibits 9-11; Tr. 32-36. The plaintiff claims lost profits of $95,806.44 by means of these calculations. Tr. 37-38.
Raju testified in a credible fashion. He was born in India, came to the United States in 1990 and began speaking English in India in the sixth grade. Tr. 91-93. He became manager of the New Canaan Thali restaurant in 2000 and subsequently general manager of the Thali restaurants with responsibility for the day to day service of food and beverages and the general care of restaurant guests along with overseeing what supplies were delivered such as food and liquor. He had the responsibility for signing invoices indicating receipt of supplies. Id., 94-95. He reported to Prasad Chirnomula, the owner of the restaurants for the entire period Raju worked at the restaurants. Raju testified he had no ownership interest in the restaurants and no authority to sign contracts. That authority rested with the owner Chirnomula. Id. 95. Chirnomula corroborated that Raju did not have the authority to sign a contract like the Rental Service Agreement. Tr. 116.
Raju explained there had been discrepancies and inconsistencies in General Linen’s pricing and deliveries to the Thali locations. Raju testified he called "Wayne" about these issues and Wayne replied "we’ll sit and do the pricing." Id., 96. Raju emphasized the whole point of the front side of Exhibit 5 was to fix and clarify the pricing of linen products from General Linen for a period of the next 24 months beginning March 12, 2010. Id., 96; Exhibit 5. When asked twice if he recalled the back of Exhibit 5, Raju said first "we didn’t talk anything on that. This was only for the pricing situation" and then simply "no." Id., 96. Raju testified he only kept a copy of the front of the Retail Service Agreement containing the price information and recopied it for the benefit of the other Thali restaurant managers. Id., 99. On cross examination by General Linen’s counsel Raju reiterated these main points that the Rental Service Agreement (Ex.5) was directed at establishing the pricing for linen items. Id., 107-10.
II. LEGAL STANDARD
This court is authorized to issue a PJR when it determines there is "probable cause" that a judgment in the amount of the prejudgment remedy sought or greater, taking into account any defenses, counterclaims or set-offs, will be rendered in the case in favor of the plaintiff. General Statutes § 52-278d(a). The court may issue a PJR in the amount sought "or as modified by the court." Id. "Probable cause" has been regularly defined by Connecticut courts as a "a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances in entertaining it." See e.g. TES Franchising, LLC v. Feldman, 286 Conn. 132, 137 (2008); Ledge Brook Association, Inc. v. Lusk Corporation, 172 Conn. 577, 584 (1977); Wall v. Toomey, 52 Conn. 35, 36 (1884). This rather distended definition has been held to mean that the burden of proof required to establish probable cause is less than proof by a preponderance of the evidence and it does not demand that belief be correct or more likely true than false. Probable cause must be established both as to the merits of the case, and as to the amount of the damages. TES Franchising, supra, 286 Conn. 146; CC Cromwell Ltd. Partnership v. Adames, 124 Conn.App. 191, 196 (2010). A PJR hearing is not contemplated to be a full scale trial on the merits, and the evidence presented at such hearing will not be as well developed as it would be at trial. State v. Bacon Construction Co., 300 Conn. 471, 484 (2011) (quoting TES Franchising, supra, 286 Conn. 143).
III. DISCUSSION
Despite the lesser burden of proof associated with obtaining a prejudgment remedy the court finds that General Linen, through no fault of its own, has been forced to target its efforts at an individual, Somerpet Raju, who had no ownership interest in the restaurants involved or the corporations or individual that owned them. The Rental Service Agreement clearly identified the "owner" of the Thali restaurants as Prasad Chirnomula. When Chirnomula became an unavailable defendant because of the protections of bankruptcy law, Somerpet Raju "d/b/a Thali Regional Cuisine of India etc." was added as a defendant in a later version of the complaint. The reference that Raju was "doing business as" is, and has been, incorrect from the beginning, because he has had no other relationship with the Thali restaurants other than as employee. Even Clark’s testimony made it clear that he understood Raju was not an owner of any of the subject restaurants. "no he’s not. No it’s not my contention." Tr. 88. Knowing that it is incomprehensible that the plaintiff never sought to obtain Chirnomula’s signature on the Rental Service Agreement, or at least Chirnomula’s acknowledgment that Raju had the authority to sign the agreement.
General Linen contends that Raju executed a personal guarantee of the Rental Service Agreement, relying on testimony from Clark that "[Raju] did sign the personal guarantee portion of this; yes." Tr. 18. In fact, Raju did not sign that "portion" of the Rental Service Agreement because what the plaintiff claims to be the personal guarantee language appears on the backside of the Rental Service Agreement at Paragraph 30 which reads:
Authorized Signature on Behalf of Customer. The parties signing on behalf of Customer represents (sic) that he or she or they is or are authorized to sign this Agreement on behalf of Customer and personally guarantee Customer’s obligations under this Agreement in the event: (a) there is a sale by Customer of its business or its principal assets and the successor does not assume this Agreement or; (b) Customer alleges that the signer of this Agreement is not authorized to sign this Agreement or; (c) this Agreement is wrongfully terminated.
There are several compelling arguments, that Raju made no enforceable obligation to personally guarantee the performance of the Rental Service Agreement. As recounted above there was no focus on, review, or discussion of any of the terms appearing on the backside of the Retail Service Agreement. Both Clark and Raju are in agreement on this point. There was certainly no meeting of minds. Second, there was no consideration paid to by Raju for his personal guarantee. He received literally nothing in return therefore. Third, Raju contends the 32 paragraphs, separately or taken together, comprise what is known as a contract of adhesion. In Brown v. Soh, 280 Conn. 494 (2006) the Connecticut Supreme Court described adhesion contracts in this way, their "most salient feature is that they are not subject to the normal bargaining process of ordinary contracts [tending to involve] standard form contracts prepared by one party, to be signed by a party in a weaker position ... a consumer who has little choice about the terms." Id., 505 [quoting Hanks v. Powder Ridge Restaurant Corp., 276 Conn. 314, 333 (2005) ].
It does not necessarily follow that contracts of adhesion are unconscionable or unenforceable. The United States District Court for the District of Connecticut has stated
under Connecticut jurisprudence, merely showing that an insurance contract is a contract of adhesion does not lead inextricably to its invalidation ... Rather the court must ask whether the disproportionate bargaining power of the parties necessarily results in contractual terms that contravene public policy or are otherwise unconscionable or void.Empire Fire and Marine Insurance v. Lang, 655 F.Supp.2d 150, 160-61 (D.Conn. 2009). Applying the above rule, this court finds that Raju was not a party to the Retail Service Agreement and had no bargaining power. As a consequence the Retail Service Agreement that contained potentially onerous conditions affecting Raju- such as being a personal guarantor of the contract is against public policy and void as to any effect on Raju.
Because the pending PJR application seeks relief only from Raju, the court does not need to, and will not, decide whether the Retail Service Agreement is enforceable against others.
Furthermore, General Linen’s claims for damages are not based on established facts. Exhibits 9, 10 and 11 were presented by Clark as compilations of damages for the Thali restaurants in New Canaan, Ridgefield and New Haven, but Clark testified in response to a question from the court describing the exhibits as "a projection. But ... not an accurate one, based on historical fact" with the answer "that’s a correct statement." Tr. 60.
General Linen’s claims appear to be based on invoices found at exhibits C-1, C-2 and C-3. The invoices directed to the New Haven restaurant (C-1) the New Canaan restaurant (C-2) and the Ridgefield restaurant (C-3). The exhibits include weekly invoices for periods beginning in 2014 and ending in 2015. Clark testified they represent the invoices underlying his employer’s damages claim. Id., 61-63.
However, Raju testified, without contradiction, that he left the Thali restaurants in 2013 to work in New York City and returned to work for Chirnomulo in 2015 as a general manager for Oxaca Restaurant in New Haven (which used paper napkins). Tr. 101-02. The monetary losses claimed by General Linen arose in 2014 and 2015. Exhibits C-1 (invoices dated December 2014 to August 10, 2015) C-2 (invoices dated October 2014 to September 9, 2015) C-3 (invoices dated April 2014 to September 8, 2015). There is no evidence that Raju was working at the Thali restaurants at that time, or signed the invoices.
IV. CONCLUSION
For the reasons stated above the court finds there is insufficient evidence to support the granting of a PJR.