Opinion
HHDCV185052180S
11-26-2019
Jeffrey R. Levinson v. Krista D. Lawrence
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Taylor, Mark H., J.
MEMORANDUM OF DECISION
Mark H. Taylor, Judge.
I
BACKGROUND
This is an action for the repayment of a loan, in which the plaintiff represented himself and the defendant was represented by legal counsel. The matter was heard by the court on October 23, 2019, and after considering all the evidence and legal arguments of the parties, the court finds for the defendant.
Although the plaintiff graduated from law school, he is not an attorney and he has never practiced law.
The plaintiff alleges in count one of his complaint that the defendant breached an oral contract, by which she promised to repay a loan in the amount of $61,123.50. The parties agree that he provided this money to the defendant on February 19, 2007 for the purpose paying a "balloon mortgage," due to her former husband. In addition to asserting a breach of this oral contract in count one of his complaint, the plaintiff alleges two additional counts based upon these essential facts, inter alia, seeking relief on the basis of promissory estoppel and unjust enrichment, respectively.
Plaintiff’s Revised Complaint, dated November 27, 2018.
The mortgage was on the defendant’s residence, located at 58 Beverly Road, West Hartford, CT.
At the time of the transaction in 2007, no terms of default or repayment were agreed upon and there was no interest rate or maturity date set by the parties. Although the plaintiff originally considered the transaction to be in consideration for a one-half interest in the defendant’s home, the defendant disagreed and considered the transaction to be a loan that she intended to repay if they ever separated and she sold the home. By either account, the transaction was not a gift.
In a previous, 2011 action, Scholl, J., found the following facts regarding this transaction: "When the note became due, Levinson offered to give Lawrence the money to pay her ex-husband the amount owed him on the note. Lawrence agreed to accept the money as the easiest option for her. On February 16, 2007 Levinson gave Lawrence a check for $61,123.50. Even though Levinson is a law school graduate, no documentation was prepared or executed by either party at that time evidencing the nature of the transaction. Lawrence believed that it was a loan that she would repay when the house was sold, if the parties were no longer together. Lawrence then gave her ex-husband a check in the same amount on February 17, 2007 to satisfy the note. Lawrence claimed that she would never have agreed to give Levinson a portion of the house." (Emphasis added.) Levinson v. Laurence, Superior Court, judicial district of Hartford, Docket No. CV-11-5035288-S (September 8, 2014, Scholl, J.), aff’d in part, rev’d in part, 162 Conn.App. 548 (2016).
The defendant has filed eight special defenses, as follows: 1) Res judicata, 2) collateral estoppel, 3) the statute of frauds regarding count one, 4) the applicable statutes of limitations regarding count two and, separately, 5) regarding count three, 6) failure to state a cause of action for promissory estoppel in count two, 7) set off and 8) unclean hands, both as to the plaintiff’s equitable claims in counts two and three.
The plaintiff, Jeffery R. Levinson, is the former romantic partner of the defendant, Krista D. Lawrence. The parties were involved in a non-matrimonial relationship at the time of the alleged loan transaction and, for a short while, they resided together at 58 Beverly Road, West Hartford (her home). The parties’ romantic relationship ended tumultuously in 2008 and the plaintiff was subsequently the subject of an eviction from the defendant’s home in early 2009.
Importantly, the plaintiff brought an earlier action against the defendant in 2011, involving the same transfer of $61,123.50, and that matter went to judgment in 2014. In the 2011 action, the plaintiff sought to enforce an oral promise to transfer a one-half interest in her home to him, in exchange for the $61,123.50. In furtherance of their agreement at that time, the plaintiff asserted that he made substantial repairs and improvements to the defendant’s home. In the 2011 action, the plaintiff sought a resulting trust, a partition by sale based upon the breach of an oral contract, and money damages, claiming unjust enrichment for home improvements.
While the 2011 action was pending, the defendant demanded repayment of the loan and he has provided evidence of formal demands for repayment, beginning on July 25, 2013 through August 18, 2015. Exhibit 4. The first demand is of particular note because it elucidates the fact that the plaintiff understood that the defendant viewed the transaction as a loan before the 2011 action went to trial in 2014. In the July 25, 2013 demand letter, he made a demand of $200,683.03 for repayment of the loan at 12.38% interest, and also for improvements he made to the home at the legal rate of 8% interest.
The 2011 action was tried before the court, Scholl, J., in 2014. In her memorandum of decision, Judge Scholl found for the defendant on all counts and further found for the defendant on her counterclaim for slander of title in the amount of $13,737.81. Levinson v. Lawrence, Superior Court, judicial district of Hartford, Docket No. CV 11-5035288-S (September 8, 2014, Scholl, J.) The plaintiff appealed and the decision of the trial court was affirmed by the Appellate Court in denying all of the plaintiff’s affirmative claims, but was reversed in finding for the defendant on her counterclaim against the plaintiff for damages. Levinson v. Lawrence, 162 Conn.App. 548, 133 A.3d 468 (2016).
The plaintiff now seeks to re-litigate the $61,123.50 transaction, by asserting a new theory of recovery, based upon the defendant’s statements made in her defense of the prior, 2011 action. At the trial, the defendant stated under oath that she considered the $61,123.50 to have been a loan she intended to repay to the plaintiff after selling the home, but denied she agreed to transfer a one-half interest in the title to him in exchange for the money. The plaintiff contends that this promise under oath, inter alia, removes the matter from preclusion under the statute of frauds.
While the earlier action was on appeal, the defendant sold her home on April 29, 2015 for $107,000 over the original purchase price. Since then, however, the parties have been unable to agree upon an appropriate sum of money to settle their respective claims. At various times during the litigation between the parties, demands and offers have been made, but none have been accepted. They include the defendant’s offer of $22,000, sometime after the conclusion of the first trial, which was rejected by the plaintiff. There was also evidence presented that the parties considered settling the plaintiff’s claim of equitable title in exchange for a mortgage in the full amount owed, with undetermined interest. This settlement discussion occurred before the 2011 action was commenced and while the defendant still owned the residence, and is reflected in an email between the parties’ prior legal counsel in 2009. Exhibit 3. The plaintiff asserts, from this settlement negotiation, that the defendant committed fraud when she denied making this mortgage offer with interest during the trial in 2014. Based upon this allegation, inter alia, the plaintiff contends that this fraudulent misrepresentation obviates the application of the doctrine of res judicata.
No evidence was presented, however, of the equity in the home at the time of the sale.
The plaintiff therefore reasserts his right to the $61,123.50, based upon the defendant’s statements under oath and subsequent actions, showing her intent to repay the money to him as a loan. After she prevailed on the plaintiff’s appeal, however, the defendant expended the money for her own purposes, including extensive travel, and now provides for her living expenses from disability payments and gifts from friends.
In summary, the defendant does not dispute the fact that she received $61,123.50 from the plaintiff on February 19, 2007. She does not dispute that she intended to repay the money after she sold her home and said so under oath in 2014. She does not dispute that she tried unsuccessfully to settle the matter with the plaintiff over the course of several years. Once she prevailed on the appeal and spent approximately $50,000 in legal costs, however, she no longer considers the loan to be her obligation and has spent the remaining proceeds from the sale of her home.
DISCUSSION
A
The plaintiff’s essential claim is that he made an oral agreement with the defendant for a loan in the amount of $61,123.50. Although he has previously disavowed the defendant’s characterization of the transaction as a simple loan, he now embraces it, having lost his original claim that the transaction was for an interest in the title to her home. It is clear that the parties did not agree upon the true nature of the transaction, other than the plaintiff was to be repaid, either in full, without agreed-upon interest, or as half the equity of the property when sold. Unfortunately, there was no express agreement on an interest rate, if any, or the terms of repayment, default or time of the loan’s maturity. It appears that the plaintiff, in an act of generosity, saved the defendant’s home where he hoped and expected to make a life together with her.
The court must therefore consider whether the party’s agreement results in an enforceable contract. "The rules governing contract formation are well settled. To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties ... To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties ... If the minds of the parties have not truly met, no enforceable contract exists ... [A]n agreement must be definite and certain as to its terms and requirements ... So long as any essential matters are left open for further consideration, the contract is not complete." Duplissie v. Devino, 96 Conn.App. 673, 688, 902 A.2d 30, 41 (2006); See Glazer v. Dress Barn, Inc., 274 Conn. 33, 51, 873 A.2d 929, 942 (2005).
This transaction is a clear example of the policy reasons, requiring loans of over $50,000 and real estate transactions to be in writing, with certain exceptions, because the transaction here clearly suffers from a lack of specific terms and conditions. Even the underlying nature of the transaction, whether it was a simple loan or an investment in real estate, was not agreed upon by the parties at the time the transaction occurred. Although impressions of these terms may have evolved over time, any terms of interest, repayment, default and maturity were unstated at the time of the transaction and, even now, are not clearly established. There is a reason that such contracts are unenforceable, because the court has no definitive guidance to enforce them. Thankfully and logically, the parties to such ill-defined agreements may pursue alternative theories of law for relief, such as those pleaded in counts two and three.
The court therefore finds for the defendant on count one, regarding his claim of an oral contract.
B
Equitable Estoppel
The second count of the complaint alleges promissory estoppel on a promise to repay the loan, relied upon by the plaintiff to his detriment and is inequitable. This claim is challenged by the defendant’s sixth special defense as insufficient, because the promise the plaintiff claimed that he relied upon for years has now changed, from an interest in title to the repayment of a loan.
"Section 90 of the Restatement Second states that under the doctrine of promissory estoppel ‘[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.’ A fundamental element of promissory estoppel, therefore, is the existence of a clear and definite promise which a promisor could reasonably have expected to induce reliance." (Citation omitted; internal quotation marks omitted.) D’Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 213, 520 A.2d 217, 221 (1987). "[A] mere expression of intention, hope, desire, or opinion, which shows no real commitment, cannot be expected to induce reliance ... and, therefore, is not sufficiently promissory. The requirements of clarity and definiteness are the determinative factors in deciding whether the statements are indeed expressions of commitment as opposed to expressions of intention, hope, desire or opinion ... Finally, whether a representation rises to the level of a promise is generally a question of fact, to be determined in light of the circumstances under which the representation was made." (Citations omitted; emphasis added; internal quotation marks omitted.) Stewart v. Cendant Mobility Services Corp., 267 Conn. 96, 105-06, 837 A.2d 736, 742-43 (2003).
The court finds that the promise, if made, to repay the loan was untimely and insufficiently promissory as a matter of fact. The alleged promise relied upon by the plaintiff in the 2011 action was to share title and, presumably, to share in the home’s equity upon its sale. This claim has been litigated and resolved to the contrary. The plaintiff now asserts that the $61,123.50 involved a loan transaction that should be repaid. Although this has been the stated intention of the defendant for many years, it was vehemently disavowed by the plaintiff throughout the course of the first litigation of this claim. Although he may be relying on this promise now, he did not rely upon it at the time of the transaction on February 19, 2007 and, further, it appears to have been unstated by the defendant at that time. The plaintiff cannot simply assert now that he relied upon a promise he gave no credence to at the time of the transaction, perhaps because it may never have been explicitly stated as either an intention or promise until much later in time. That he relies upon it now is untimely and insufficiently promissory. Id.
Although the plaintiff may have reasonably expected a return for his money, the remedies under his two theories of recovery would have far different results. For the loan, he would get his money back. For a share of equity in the home, the result would have been indefinite. They are different promises with, potentially, far different results.
The court therefore finds for the defendant on count two, on the claim of promissory estoppel.
C
Unjust Enrichment
In the plaintiff’s third count, he alleges unjust enrichment. The defendant denies unjust enrichment and counters with her own claims of res judicata, collateral estoppel, statute of limitations, setoff and unclean hands in special defenses one, two, five, seven and eight, respectively. Although, in the court’s view, the preponderance of the evidence supports this cause of action, the claim is defeated by the doctrine of res judicata.
"The elements of unjust enrichment are well established. Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs’ detriment." (Internal quotation marks omitted.) Rossman v. Morasco, 115 Conn.App. 234, 248, 974 A.2d 1, 12 (2009). "[T]he doctrine of unjust enrichment is grounded in the theory of restitution, not in contract theory ... [B]oth unjust enrichment and quantum meruit are doctrines allowing recovery on the theory of restitution, that is, the restoration to a party of something of which he was deprived because of the unjust enrichment of another at his expense ... Broadly speaking, the availability of restitution is dependent upon unjust enrichment, that is, upon a perceived injustice because one party has benefited at the expense of another. In a narrower sense, unjust enrichment has been the form of action commonly pursued in this jurisdiction when the benefit that the enriched party receives is either money or property." (Citations omitted; internal quotation marks omitted.) Schirmer v. Souza, 126 Conn.App. 759, 765-66, 12 A.3d 1048, 1053 (2011).
There is no doubt that the defendant benefitted from the $61,123.50 transaction. It saved her home and afforded her a place to live for many years until she sold it for over one hundred thousand dollars more than she purchased it for in 1994. The court need not engage in a calculus of the benefit conferred, reduced by the set-off claimed or the sundry allegations of unclean hands, to arrive at a measure of damages. Similarly, the court need not determine the equitable time limitation on this action because the court concludes that the doctrine of res judicata precludes the plaintiff’s remaining claim.
"A right of recovery under the doctrine of unjust enrichment is essentially equitable ... [I]n an equitable proceeding, a court may provide a remedy even though the governing statute of limitations has expired, just as it has discretion to dismiss for laches an action initiated within the period of the statute ... Although courts in equitable proceedings often look by analogy to the statute of limitations to determine whether, in the interests of justice, a particular action should be heard, they are by no means obliged to adhere to those time limitations." (Citations omitted; quotation marks omitted.) Rossman v. Morasco, supra, 115 Conn.App. 256-57.
D
Res Judicata & Collateral Estoppel
The first and second special defenses alleged by the defendant are res judicata and its close cousin, collateral estoppel. The plaintiff counters that res judicata and claim preclusion are inapplicable because the defendant engaged in fraud during the first proceeding, by stating under oath that she considered the $61,123.50 a loan and then falsely denying that she had ever offered to repay the loan with interest, inter alia. As proof of this misrepresentation, the plaintiff points to the defendant’s defense in the present case, in which her attorney argued that the defendant has previously offered to pay interest on the $61,123.50. This perjured misrepresentation, as asserted by the plaintiff, is offered as proof of fraud.
The plaintiff additionally points to other misrepresentations in the first action and others made to the court. In the first action, he points to inconsistent testimony regarding which of the two parties wanted the plaintiff to move into her home in 2008 and, in addition, whether the defendant ever asked the plaintiff if he wanted her as his wife. Additional evidence of fraud asserted, is that the defendant deceived him in another action in 2013, in which she sought to discharge the plaintiff’s lis pendens on her home in exchange for marketing the home for sale. Upon this promise made before Judge Wahla, the plaintiff agreed to release his lis pendens, but the defendant failed to market the property for sale. From these facts, the plaintiff argues that "[d]ue to the aforementioned fraud on multiple instances by [the defendant] and her lack of credibility based on both perjured testimony and intentionally misleading both [the plaintiff] and the Court, she is precluded from asserting the doctrine of res judicata." Plaintiff’s Brief, p. 17.
First, the court concludes that res judicata is the applicable doctrine; not collateral estoppel and, second, the court concludes there is insufficient evidence of fraud to preclude the application of the doctrine of res judicata.
"Although res judicata and collateral estoppel often appear to merge into one another in practice, analytically they are regarded as distinct ... The doctrine of res judicata provides that [a] valid, final judgment rendered on the merits by a court of competent jurisdiction is an absolute bar to a subsequent action between the same parties ... upon the same claim or demand ... Under claim preclusion analysis, a claim- that is, a cause of action- includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose ... Moreover, claim preclusion prevents the pursuit of any claims relating to the cause of action which were actually made or might have been made ... [T]he essential concept of the modern rule of claim preclusion is that a judgment against [the] plaintiff is preclusive not simply when it is on the merits but when the procedure in the first action afforded [the] plaintiff a fair opportunity to get to the merits ... Stated another way, res judicata is based on the public policy that a party should not be able to relitigate a matter which it already has had an opportunity to litigate ... [W]here a party has fully and fairly litigated his claims, he may be barred from future actions on matters not raised in the prior proceeding ... [I]t is significant that the doctrine of res judicata provides that [a] judgment is final not only as to every matter which was offered to sustain the claim, but also as to any other admissible matter which might have been offered for that purpose ... The rule of claim preclusion prevents reassertion of the same claim regardless of what additional or different evidence or legal theories might be advanced in support of it." Independent Party of CT-State Central v. Merrill, 330 Conn. 681, 712-43, 200 A.3d 1118, 1141 (2019).
"Similarly, the fundamental principles underlying the doctrine of collateral estoppel are well established. The common-law doctrine of collateral estoppel, or issue preclusion, embodies a judicial policy in favor of judicial economy, the stability of former judgments and finality ... Collateral estoppel, or issue preclusion, is that aspect of res judicata which prohibits the relitigation of an issue when that issue was actually litigated and necessarily determined in a prior action between the same parties upon a different claim ... For an issue to be subject to collateral estoppel, it must have been fully and fairly litigated in the first action. It also must have been actually decided and the decision must have been necessary to the judgment ... Before collateral estoppel applies [however] there must be an identity of issues between the prior and subsequent proceedings. To invoke collateral estoppel the issues sought to be litigated in the new proceeding must be identical to those considered in the prior proceeding ... In other words, collateral estoppel has no application in the absence of an identical issue ... Further, an overlap in issues does not necessitate a finding of identity of issues for the purposes of collateral estoppel." (Citations omitted; emphasis added and in the original; internal quotation marks omitted.) Independent Party of CT-State Central v. Merrill, supra, 330 Conn. 712-15.
Although the underlying transaction is the same in the present case, involving the transfer of $61,123.50, the cause of action has changed from a claimed interest in title to real property for value, to that of a loan of money. For this reason, the court considers the doctrine of res judicata to be the applicable doctrine of preclusion under the facts of this case. The issue of whether the $61,123.50 transaction was a loan was not decided in the 2011 action. On the other hand, the court concludes that the plaintiff had ample opportunity to alternatively allege that the 2007 transaction was a loan, as claimed here in the present action. In particular, the plaintiff was on notice that the defendant intended to repay the money as a loan, based upon his own demand in 2013. Exhibit 4. In addition, the plaintiff was aware that the house was not sold after he removed his lis pendens in 2013. Any misrepresentations alleged to have been made, were known to the plaintiff at the time the 2011 action went to trial in 2014.
The court has no documentary evidence of this claim.
An important aspect of res judicata is that, for its preclusive effect to apply, a party must also have had a fair opportunity to litigate the merits in the previous action. Generally, "[r]es judicata does not apply to judgments obtained through fraud or collusion ... A party may not, however, circumvent the doctrine by merely alleging fraud." Weiss v. Weiss, 297 Conn. 446, 470, 998 A.2d 766, 782 (2010). The plaintiff asserts that he did not have a fair opportunity to litigate his claim in the prior action, alleging that the defendant’s fraud during the first action defeats the proper application of res judicata in the present case.
"The essential elements of an action in common law fraud ... are that: (1) a false representation was made as a statement of fact; (2) it was untrue and known to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon that false representation to his injury ... [T]he party to whom the false representation was made [must claim] to have relied on that representation and to have suffered harm as a result of the reliance." Simms v. Seaman, 308 Conn. 523, 548, 69 A.3d 880, 894 (2013). "Additionally, [t]he party asserting [a fraud] cause of action must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which higher standard we have described as clear and satisfactory or clear, precise and unequivocal ... Proof by clear and convincing evidence is an intermediate standard generally used in civil cases involving allegations of fraud or some other quasi-criminal wrongdoing, or when particularly important individual rights are involved." (Citations omitted; internal quotation marks omitted.) Saggese v. Beazley Co. Realtors, 155 Conn.App. 734, 752-53, 109 A.3d 1043, 1054 (2015).
It is difficult to comprehend how the plaintiff can assert that he relied upon the defendant’s false statements in the second trial to his detriment. First, stating that the $61,123.50 was a loan, both then and now, does not appear to involve a deception that this court should consider. She did not hide the fact that she believed the transaction was a loan. It may only be said that, over the course of ten years, she has made inconsistent statements on the question of whether interest would be paid on the loan.
Further, if the plaintiff relied upon the statement that the money was a loan, he had the opportunity then to plead, in the alternative, that it was a loan to be repaid. It appears that the opposite is true: he did not rely upon the statement to his detriment and, had he relied upon the statement, true or false, it may have been to his advantage in that action.
Moreover, the plaintiff fails to prove by clear and convincing evidence that a false representation made by the defendant was not only untrue, but also known to be untrue by the party making it and made to induce the plaintiff to act upon it. The overwhelming evidence is there was a dispute of fact over whether the $61,123.50 transaction was a loan to be repaid or made in exchange for an interest in real property. This issue was before the trial court in 2014. The court appeared to understand the transaction to be a loan, but it was immaterial because there was no pleading to act on this ostensible finding of fact, had been formally made by the court. Instead, the only other claim made was for unjust enrichment, pursued by the plaintiff in the first action for home improvements. The trial court, Scholl, J., found for the defendant on this claim.
The plaintiff’s assertion that statements made to Judge Wahla and actions the parties took thereafter are also unavailing. First, this claim arose well before the trial of the original action took place in 2014. Second, the plaintiff has offered no evidence, documentary or otherwise, of the facts he has asserted. No transcript of the proceedings and no copy of the lis pendens or its withdrawal have been entered into evidence.
There is little, if any, Connecticut caselaw defining the scope and specific applicability of the fraud exception to res judicata. In one federal district court case, discussing the related fraud exception to the Rooker-Feldman doctrine, the court stated "[t]he fraud exception ... is limited to cases of extrinsic fraud ... Extrinsic fraud is conduct which prevents a party from presenting his claim in court." (Citations omitted; quotation marks omitted) Quick v. EDUCAP, Inc., 318 F.Supp.3d 121, 135 (D.D.C. 2018). In addition to the above analysis, the court concludes that any misstatements of fact made by the defendant did not reach the level of preventing the plaintiff from presenting his claim in the prior 2011 action. They were issues of fact and claims that could have been raised in the earlier action.
The court finds the defendant has established, by the law and facts of this case, special defense one as to all counts, and the claim is precluded by the doctrine of res judicata.
E
Statutes of Limitation and Frauds
The court need not reach the defendant’s special defenses of the statute of frauds regarding count one and the statute of limitations as to count two, as the court has found for the defendant on those causes of action.
III
CONCLUSION
The court finds for the defendant on the merits of counts one and two and for the defendant’s first special defense as to all counts. Judgment therefore enters for the defendant.