Opinion
No. 545124
February 20, 2004
MEMORANDUM OF DECISION
Plaintiff has instituted the present action to recover a real estate brokerage commission claimed to be due from defendants, Albert C. Lodrini and Virginia Lodrini. Since the issue now before the court involves only Virginia Lodrini and does not involve Albert C. Lodrini, for purposes of simplification, Virginia Lodrini will be referred to as the defendant.
The facts underlying this action are fully set forth in Tyler E. Lyman v. Lodrini, 63 Conn. App. 739, cert. den., 258 Conn. 901 (2002). These facts may be summarized as follows:
On November 12, 1994, the defendants entered into an agreement with the plaintiff to list a parcel of real property for sale. Pursuant to the listing agreement, the defendants promised to pay the plaintiff a commission of 10 percent of the sale price if the plaintiff produced a buyer ready, willing and able to purchase the property for a price acceptable to the defendants. The agreement was for a period of six months.
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On January 7, 1995, the parties executed an addendum to that agreement. The addendum provided that the plaintiff may have a potential buyer for the property and, if it would disclose the potential buyer to the defendants and if the buyer purchased the property within two years, then the defendants agreed to compensate the plaintiff 10 percent of the purchase price as commission. The addendum listed one potential buyer as the Connecticut Department of Environmental Protection (department). CT Page 2040
On October 25, 1995, the defendants accepted the department's offer to purchase their property for $735,000. The defendants closed the sale with the department on December 11, 1997. The defendants did not pay the plaintiff any commission on the sale.
On January 16, 1998, the plaintiff commenced this action, seeking $73,500 in commissions to which it believed it was entitled pursuant to the terms of the listing agreement. The summons and complaint were served on Virginia Lodrini in hand. At the time, the Lodrinis were vacating their residence in Stonington as the result of an eviction action. In February 1998, Virginia Lodrini went to live with relatives in Shakopee, Minnesota, and filed a change of address and forwarding order form with the United States Postal Service indicating her new address.
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On February 19, 1998, the court entered a default judgment against the defendants and in favor of the plaintiff in the amount of $73,732, which included the $73,500 commission plus $232 in interest. On February 26, 1998, the plaintiff's counsel mailed a notice of the default judgment to the defendants jointly at their previous address in Stonington. Also, on that date, the plaintiff's counsel filed a judgment lien on property owned by Albert Lodrini in Groton. That lien was certified to the defendants jointly at the Stonington address.
On March 12, 1998, a deputy sheriff served a certified copy of the judgment lien on Virginia Lodrini by sending it via registered mail, return receipt requested, to the same forwarding address in Minnesota that she had given to the postal service. On March 17, 1998, the sheriff received the return receipt card, signed by Virginia Lodrini.
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On July 2, 1998, the court issued a bank execution to the plaintiff. CT Page 2041
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On August 17, 1998, the defendants filed a motion to set aside the default judgment and to restore the case to the civil docket. The court denied that motion without a hearing on October 8, 1998. The defendants then filed a motion to reargue on October 27, 1998. On October 28, 1998, the court granted that motion and scheduled argument for November 23, 1998. On March 16, 1999, following the hearing, the court, in an oral decision, denied the defendants' motion to set aside the default judgment.
Id. 739-43.
Both defendants appealed the decision of the trial court. The judgment against Albert C. Lodrini was reversed and remanded for further proceedings. The default judgment against the present defendant, Virginia Lodrini, was affirmed. Id. 748.
The action against Albert C. Lodrini was subsequently withdrawn.
On May 9, 2002, the defendant, Virginia Lodrini, filed a motion to open the judgment and restore the case to the trial docket claiming that the underlying default judgment was obtained by plaintiff's fraudulent nondisclosure of a material fact. The motion was denied by the trial court without conducting a hearing at which the parties could present evidence on the fraud claim. A motion to reargue was also denied. The defendant then appealed the trial court decision. Tyler E. Lyman, Inc. v. Lodrini, 78 Conn. App. 684, 686 (2003).
The Appellate Court reversed the decision of the trial court and remanded the case for an evidentiary hearing on the factual question as to whether the underlying default judgment was obtained as a result of plaintiff's fraudulent nondisclosure of a material fact. Id. 688.
Pursuant to the remand order, on December 23, 2003, an evidentiary hearing was held at which the parties presented their evidence.
The evidence at the remand hearing disclosed additional facts relevant to the issue now before the Court. The original contract of sale was initiated by a letter dated October 2, 1995 from the State of Connecticut, Department of Environmental Protection offering to purchase, from the Lodrinis, the land which was the subject of the contract between plaintiff and defendants for $735,000. This offer was conditioned upon certain factors, including funds being made available for the acquisition by the State Bond Commission. Closing was to occur within thirty days. The contemplated date of closing was March 31, 1996. In accordance with the terms of the letter, both defendants indicated their acceptance by endorsement on October 26, 1995.
The Bond Commission did not make the funds available to the Department for purchase by March 31, 1996.
On or about July 22, 1997, a second offer was made by the Department with a new closing date. The actual closing took place on December 11, 1997.
On or about December 18, 1997, the plaintiff learned of the sale from a newspaper article. Shortly thereafter, plaintiff's principal, Tyler Lyman, contacted his attorney, David P. Condon.
Attorney Condon did some legal research and sent a letter to Thomas Durivan, plaintiff's agent who had been handling the Lodrini property, dated December 22, 1997, indicating problems with the case. One of the problems was that the Lodrinis were involved with the bankruptcy court.
Attorney Condon drafted a complaint, a copy of which was sent to Lyman on January 12, 1998. The cover letter sent with the draft complaint contained the following paragraphs:
Enclosed please find the draft Complaint we have drafted on your behalf. It seems to us that the best course is to allege the most favorable information we have and ignore (for purposes of the Complaint, anyway) the side issues and countervailing facts.
To that end we have alleged simply that a listing agreement was signed, an amendment extending the listing agreement was also signed, the terms were complied with in that one of the identified entities signed a purchase and sale contract within the extension period and that later (but not exactly how much later) the sale was completed pursuant to the contract. We think this puts about the best spin on it. Let Lodrini argue that he only owes you eight percent rather than ten.
The letter also indicated that the addendum could be read to say that plaintiff's commission could be earned if the property were ever to be sold to the Department so long as the disclosure of the potential buyer was made within two years. The letter indicated that this interpretation would be beneficial to the client, but would not be the usual and customary condition in a listing agreement.
On January 15, 1998, Thomas Durivan went to the Department's office in Hartford. Mr. Durivan reviewed the agency's file and made copies of some of the documents. He subsequently faxed copies of some documents to Attorney Condon's office. It is unclear what documents were copied and what documents were faxed to the attorney.
The summons and complaint were issued on January 16, 1998.
The complaint, by which plaintiff brought this action to recover its commission, alleges in paragraph 5 that the defendants executed the addendum on January 7, 1995, and that under the terms of the addendum defendants agreed to pay a 10 percent commission "in the event that the entity (or any one of the entities) that the agent (plaintiff) will divulge to the owners (defendants) at any time up to a period of two (2) years, purchases the property from owners.
A copy of the addendum was attached to the complaint. In paragraph 6 of the complaint, the addendum states that "owners acknowledge that the potential buyer(s) is/are: State of CT. D.E.P."
Paragraph 7 of the complaint alleges that defendants executed a letter accepting an offer by the State of Connecticut D.E.P. to purchase the subject property for the gross sales price of $735,000. A copy of the purchase agreement was also attached to the complaint.
Paragraph 8 of the complaint alleges that subsequent to the execution of the sales agreement, the State of Connecticut D.E.P. purchased the property from defendants for the gross sales price of $735,000.
In paragraph 9, it is alleged that defendant has neglected and refused to pay the real estate commission as agreed.
The affidavit of debt executed by Tyler E. Lyman, president of plaintiff corporation, and filed with the court in support of plaintiff's motion for default judgment generally follows the allegations of the complaint avers that: "On October 26, 1996, the Lodrinis signed a letter accepting an offer by the D.E.P. to buy the property for a gross sales price of $735,000.00. A copy of the purchase agreement is attached hereto as Exhibit C. Sometime thereafter, the D.E.P. purchased the property for $735,000.00. There is currently owing from the Lodrinis to Lyman Real Estate commission of $73,500.00."
In granting the motion for default judgment, the court must have relied upon the affidavit of debt which tracked the allegations of the complaint. Connecticut Practice Book Section 17-27. A review of the affidavit of debt and the complaint confirms defendant's claim that the date of the closing, December 11, 1997, and the fact that this date was well after the two-year period agreed in the addendum of January 7, 1995, was not disclosed to the court. The second letter from the state to defendant dated July 22, 1997 was also not disclosed as was the date of approval by the Bonding Commission on September 29, 1997.
The question now before the court is whether or not the underlying default judgment against defendant was obtained as a result of plaintiff's fraudulent nondisclosure of a material fact. The fact, the nondisclosure of which, defendant claims constitutes fraud on the court is that, the sale, the actual closing and transfer of title to the real property which was the subject of the contract, took place on December 11, 1997. This closing was well after the two-year period set forth in the addendum executed on January 7, 1995, during which plaintiff would, according to the explicit terms of the addendum, be entitled to a commission. By a subsequent amendment to defendant's motion, it is also claimed that plaintiff knowingly failed to disclose to the court other related and material facts, to wit: "(1) The fact that the initial memorandum of understanding between the D.E.P. and defendants regarding the purchase of sale of land owned by defendants in the Town of Stonington referenced by plaintiff in its complaint and moving papers had been superceded by another memorandum of understanding of later date; and (2) that funding for the purchase of said land was not approved by the state Bonding Commission until September 29, 1997, a date well outside the two-year limitation period set out in the said contract addendum sued on by plaintiff."
The allegations of the amendment to the motion to vacate the judgment claiming that defendant failed to disclose that the original agreement of sale with the Department had been superseded by a later agreement and that the Bond Commission did not approve the funds for the sale until September 29, 1997 have not been proven. There is no evidence to prove what documents were transmitted by Mr. Durivan to Attorney Condon. Attorney Condon testified that he only learned of these matters well after the judgment had been obtained.
The claim here involves the fraudulent disclosure of a material fact. "Fraud consists in deception practiced in order to induce another to part with property or to surrender some legal right in which accomplishes the end designed . . . The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment . . . A marital judgment based upon a stipulation may be opened if the stipulation and the judgment was obtained by fraud." Weinstein v. Weinstein, 79 Conn. App. 638, 642 (2003). "A court will open a marital judgment secured by fraud if: (1) there was no laches or unreasonable delay by the injured party after the fraud was discovered; (2) there is clear proof of the perjury or fraud; and (3) there is a substantial likelihood that the result of a new trial will be different." Billington v. Billington, 220 Conn. 212, 218 (1991). Defendant also points out language in Suffield Development Associates Limited Partnership v. National Loan Investors, L.P., 260 Conn. 766, 779 (2002), discussing "fraud on the court," the court stated "when one party has made fraudulent representation to a court, or cause the court to be misled in some way, it could be said generally that the party has committed fraud on the court." Id., 779.
The fraud on the court in the case at bar could only consist of plaintiff misleading the court by the failure to disclose, either in the complaint or in the affidavit of debt, what is claimed to be a material fact that the closing, the actual payment of the purchase price and the transfer of title, took place well after the two-year period agreed to in the addendum of January 7, 1995. Attorney Condon was aware of these facts at the time the complaint and the affidavit were presented to the court.
Attorney Condon stated that he was proceeding under a theory of equitable conversion under which "the purchaser of land under an executory contract is regarded as the owner, subject to the vendor's lien for the unpaid purchase price, and the vendor holds the legal title in trust for the purchaser . . . The vendor's interest thereafter in equity is in the unpaid purchase price, and is treated as personalty; . . . while the purchaser's interest is in the land and is treated as realty . . . A broker has fully performed his task when he brings the parties to an enforceable agreement . . . If, without any fraud, concealment, or any improper practice on the part of the broker, the principal accepts the person presented . . . upon the terms . . . proposed . . . and enters into a binding and enforceable contract with him for the purchase of the property the commission is fully earned." Francis T. Zappone Co. v. Mark, 197 Conn. 264, 268 (1985). (Citations omitted.)
The fact that plaintiff was proceeding under the theory of equitable conversion is confirmed by language in Attorney Condon's letter to Durivan dated December 22, 1997, where he states: "Because the closing took place after the extension period, we have to take the position that finding a ready, willing and able buyer who signed a purchase and sales agreement is sufficient and that a closing within the extension period is not required."
Under the theory of the Zappone case, the actual date of the closing would not be material. It may well be that if defendant had appeared and defended the case, plaintiff would have had a difficult time obtaining judgment. This we will never know since defendant elected not to follow the rules and suffered a default judgment.
The evidence indicates that Attorney Condon was not confident that he had a strong case. "A party has the same right to submit a weak case as he has to submit a strong one." Strickland v. Vescovi, 3 Conn. App. 10, 15 (1984).
Under the facts of this case, it cannot be found that plaintiff had a duty to allege, or disclose, the actual date of the closing. Consequently, it has not been proven that the underlying default judgment against defendant was obtained as a result of plaintiff's fraudulent nondisclosure of a material fact.
Accordingly, the motion to open judgment against defendant, Virginia Lodrini, and restore the case to the trial docket is denied.
Joseph J. Purtill Judge trial referee