Opinion
FSTCV146023805S
01-25-2017
John Zukowski v. Heather Zukowski
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Kenneth B. Povodator, J.
Background
This case involves a recurring theme: parents transfer funds to a married child and his/her spouse. After the married child and spouse go through a divorce, the parents sue their child and " ex-child-in-law" claiming that the funds were a loan to both of them. The child typically acknowledges that the funds were a loan to the then-married couple, and liability is sought to be established as against the " ex-child-in-law." Often, as here, there are no documents whereby the defendant agreed that the transaction should be treated as a loan (at least as to her).
In this case, transfers occurred over a period of years, with the plaintiffs claiming that they borrowed money via a home equity line of credit in order to obtain the funds to send to their son and his then-wife. There were 11 transactions, the earliest being in September of 2006, and the last one claimed being in July of 2009. (There also was an allegedly-provided credit card, at least for a brief period of time.) According to the return of service as on file, the defendant was served on August 21, 2014.
The named plaintiff is John Zukowski and the plaintiffs' son also is named John Zukowski, but with a different middle name/middle initial (plaintiff father is John D. Zukowski; non-party plaintiffs' son is John S. Zukowski). Although the parties generally attempted to rely on that middle-initial distinction, the court will refer to the non-party John S. Zukowski based on his status as the plaintiffs' son and his status as the defendant's former husband, minimizing if not avoiding any possible confusion.
Subject to minor editing, the plaintiffs' initial post-hearing brief accurately states the procedural background:
The plaintiffs commenced this action . . . alleging breach of contract and unjust enrichment. Specifically, the plaintiffs [allege] that on diverse dates between September 19, 2006 and July 20, 2009 they loaned funds jointly to their son, John S. Zukowski (hereinafter referred to as " John S." and his then wife, the defendant . . . The plaintiffs further [allege] that despite repeated demand for repayment, and assurances of same, the defendant has refused and neglected to honor her obligations under the loan agreement. As such, the plaintiffs claim damages.
In response, the defendant, as a self-represented party, filed an answer denying the allegations in the complaint . . . Trial commenced on April 13, 2016 . . . Prior to the introduction of evidence, the defendant moved for a continuance to obtain counsel and prepare for trial. The Court . . . after consideration, permitted the plaintiffs to introduce evidence in their case in chief and granted the defendant a continuance to prepare for cross-examination and/or obtain counsel. The plaintiffs then presented the testimony of John D. Zukowski . . . and Terry Zukowski . . . The defendant reserved the right to cross-examine the plaintiffs' witnesses, and the case was continued to July 19, 2016.
On or about May 26, 2016 counsel appeared on behalf of the defendant and filed a Request for Leave to Amend Answer and Special Defense to Plaintiff's Complaint. The defendant sought to add two Special Defenses: (1) Statute of Limitations, and (2) Estoppel, Waiver, Laches and/or Unclean Hands. On or about June 21, 2016 the plaintiffs filed an Objection to the defendant's Request for Leave to Amend.
Trial resumed in this matter on July 19, 2016. Prior to continuation, the Court heard argument on the defendant's Request for Leave to Amend, and granted that request.
The plaintiffs recalled their three witnesses for further direct examination and cross-examination by defendant's counsel. The plaintiffs then rested. The defendant was her sole witness, and was cross-examined by plaintiffs' counsel. The defendant then rested and the matter was continued for both parties to file briefs.
Although not recited in the foregoing description of the history of the case, and not set forth in the special defense as filed by counsel on behalf of the defendant, as will be discussed below, the defendant also defended the case based upon the claimed applicability of the statute of frauds. The court notes that pursuant to Practice Book § 10-50, " advantage may be taken, under a simple denial, of such matters as the statute of frauds . . ."
Facts and Discussion
Breach of Contract
The court does not believe that, given the scenario presented, it would be especially productive to try to set forth the facts separate from a discussion of the merits. Therefore, the court will identify the facts as found (or not found), in conjunction with a discussion of the merits of the dispute.
Again, there were 11 claimed transactions over a period of almost 3 years, the first four being in the form of physical checks sent by the plaintiffs, followed by seven wire transfers. (The credit card-based claim will be discussed separately.) The identity of the designated recipient of each of these transfers is an essential starting point.
The first two checks were made payable to Z& Z Builders (also and perhaps more accurately identified as Z and Z Building Contractors, Inc.), the son's business which was jointly owned by the plaintiffs' son and the defendant. (The defendant played a limited role in the operation of that business, on relatively infrequent occasions signing checks for business purposes.) The first check received was for $100,000, and the second one was for $25,000. The next two checks were made payable to cash; the first one, for $40,000, was dated September 4, 2007, and the second one, in the amount of $60,000, was dated October 16, 2007. (The back of the $40,000 check indicated that it been endorsed for deposit only into a Z& Z account.)
The plaintiffs' son initially testified that the defendant wrote numerous checks on the Z& Z account, but when confronted with actual checking records (specifically, April of 2007), he acknowledged that she had signed two checks, related to payment of taxes, out of 28 total checks that month.
The first wire transfer, in the amount of $60,000, was dated October 23, 2007, with the designated recipient being the defendant, but according to the son, the account was a joint account (defendant and the son). The remaining wire transfers, the earliest dated November 17, 2008, all were directed to an account in the name of Gemini construction, another business operated by the son, with a total of $41,100. (Gemini was solely owned by the son.)
Before proceeding further, a brief discussion of some of these payments is in order. The initial check in the amount of $100,000 was acknowledged to be for the purpose of the defendant and the plaintiffs' son purchasing a new home--with no explanation as to why such a clearly-personal intended use of the funds warranted a check made payable to the business. (Further, the money does not appear to have been used for such a purpose.)
There was some level of disagreement/confusion concerning the two transfers in October of 2007 in the amount of $60,000, complicated by imprecise testimony that a check in that same amount had (or possibly had) bounced previously. The plaintiff husband testified that the check (Exhibit 4) had gone to the defendant for use in her then-new business, but the plaintiffs' son testified that it was the wire transfer (about a week later) in that same amount which had gone into the family's joint account (joint with the defendant), which ultimately had been intended for the defendant's new business.
Starting in or around January of 2007 and for a period of about a year (somewhat irregularly), checks were drawn on the Z& Z account, payable to the plaintiff wife, representing payments to the plaintiffs to cover the interest/finance charges associated with their having borrowed funds that allow them to send the money described above. The plaintiffs claimed that these checks confirmed that there had been a loan basis for the transactions, including an agreement to pay the plaintiffs' costs (interest) incurred in order to obtain the funds that are the subject of this proceeding.
The January 2007 check appears to have been misdated as having been issued in 2006, but the notations on the back reflect that it had been processed in January of 2007.
The court notes that no evidence was presented as to the aggregate amount of finance charges being claimed, either as a total of interest incurred or as the amount alleged to be owed by the defendant. (Although seemingly not relevant given the plaintiffs' theory of liability--that the defendant was individually responsible for half of the total indebtedness rather than jointly responsible for the entire indebtedness--the court also notes the absence of any evidence as to amounts that have been paid by the defendant's ex-husband.)
The 2006 tax return filed by Z& Z, i.e. for the year prior to the earliest of the above transactions, reflected that the company owed money to the plaintiffs, in the six-figure range. That appears to have been reflective of an earlier arrangement whereby the plaintiffs had provided funds used to purchase a property for the purpose of a relatively quick sale (flipping the property) which had yielded a modest profit. The 2006 tax return, filed in early 2007, reflected a then-balance owed to the plaintiffs of $130,000, with $200,000 having been paid back during the course of that tax year.
There were no analogous records presented to the court relating to the transactions at issue here. No tax returns for the businesses were submitted for any relevant year, so a direct comparison is not possible. When the defendant and the plaintiffs' son filed for bankruptcy in 2009, there was no indication in their joint filing relating to any debt to the plaintiffs--the aggregate of more than $265,000 of reported unsecured debt ranged from over $100,000 for a business loan down to $128 owed to Poland Spring, but nothing reflecting any debt owed to the plaintiffs. (A subsequent filing in bankruptcy court, approximately 2 years later, listed no unsecured creditors.) Likewise, filings in connection with the dissolution of the marriage between the son and the defendant (financial affidavits) made no mention of any debt to the plaintiffs. The defendant's explanation was simple and plausible--she did not list any debt to the plaintiffs because she did not believe she owed them anything. There was no satisfactory explanation from (or on behalf of) the plaintiffs' son other than a generalized reliance on attorneys and/or accountants who actually prepared the records and/or a vague implication that he thought the situation might not have been needed to be reported.
Not surprisingly, the position of the plaintiffs is that they were not focused on the specific account into which funds were deposited, or to whom payments nominally were made, or, given the fungible nature of money, whether the funds were being used for personal or business expenses, but rather they were effectively lending the funds to the couple with the expectation that the couple would repay them. Again, they rely on some interest-reimbursement payments made in 2007 (on a somewhat sporadic basis) as confirming the existence of a loan.
All of the interest-repayment checks (at least as presented via Exhibit A) were signed by the plaintiffs' son, drawn on a business account (Z and Z Building Contractors, Inc.). The court notes that the checks are a bit odd, in that most if not all seem to have two distinct handwritings, one for the amount (words and number) and a different handwriting for date, payee and signature--and in a few instances, in addition to the different handwriting, the date, payee and signature are blue (on the court-filed copies) as opposed to the black color of the check amounts. There is no indication of involvement of the defendant in such payments.
The court certainly appreciates that money is fungible, and understands that the defendant was nominally a 50% owner of one of the businesses actually being operated by the plaintiffs' son. The court cannot ignore that as a practical matter, the businesses functionally were the plaintiffs' son's, and the court cannot ignore the fact that most of the payments were made to, or in the case of checks payable to cash, deposited in the account of, the business entities rather than the individuals, and in particular, rather than to the defendant, with one possible exception--the paperwork for one wire transfer that identified the defendant as the beneficiary of the transfer.
Even as to that possible exception, there is some uncertainty. First, there is the question of whether the $60,000 payment for the defendant's new business was the mid-October check or the later-October wire transfer. The form for the wire transfer identified the defendant as recipient, but the actual account was identified as a joint family account (defendant and plaintiffs' son). Although the plaintiffs claimed that the money was intended for use by the defendant in connection with a new business she was starting, there was undisputed evidence that she had taken out a commercial loan for that purpose (Citibank--reflected on the subsequently-filed bankruptcy petition), and while that does not preclude her seeking additional funds from the plaintiffs, it is consistent with the defendant's repeated assertions that she did not ask the plaintiffs for any financial assistance and never agreed to repay any money that they might have given to their son.
The plaintiffs also claim that they gave the defendant a credit card on which she incurred approximately $15,000 in debt (approximately $12,000 in actual charges with the balance attributable to finance charges), which is claimed as part of the aggregate amount of the debt on which the defendant Is claimed to be half-responsible. Unlike the other aspects of the claimed debt, there was no submission of any records relating to the total amount charged, the nature of individual charges, the timing of the charges, or who actually incurred the charges that allegedly were incurred. Again, the defendant has denied that she was responsible for the charges or that she even was the person who had incurred the charges.
The court cannot conclude that the plaintiffs have carried their burden of proof (preponderance of the evidence) as to the existence of contractual obligations of the defendant--there are too many negatively-reinforcing doubts/inconsistencies/problems. Most of the funds had been transmitted via checks payable to, or directly wired into, accounts associated with their son's businesses. Unlike the prior loan transaction with respect to a real estate deal, there were no business records or other records memorializing the characterization as loans. In the short period of time in which there had been interest-reimbursement payments, those checks had been drawn on their son's business' account and signed by their son--so at least to that indirect extent, the transactions implicated the business not the defendant or the plaintiffs' son. In two bankruptcy filings plus a marriage dissolution proceeding, both the defendant and the plaintiffs' son had submitted sworn paperwork in which there was no mention of any debt to the plaintiffs.
There are further problems/inconsistencies with respect to the claimed agreement(s). The last few transactions for which the plaintiffs claim the defendant is (partially) responsible and for which they claim she agreed to be responsible, are payments that were made after the defendant and her then-husband had separated and after marriage dissolution proceedings had been commenced. There was some testimony that the money was intended for use by the defendant, but it is highly implausible that the defendant would have agreed to repay what amounted to support-type payments from her estranged spouse.
The very nature of the agreement(s) further reinforces the dubious nature of any claimed agreement(s). The plaintiffs clearly assert that the defendant had agreed that she would be personally responsible for one-half of the aggregate money transferred (and there was testimony from the plaintiffs in that regard, as well). As recited in the complaint:
9. Said loans were made with the express understanding that both plaintiffs' son and the defendant HEATHER HENDRICKSON ZUKOWSKI would be equally liable for repayment to the plaintiffs, including a provision for interest on their outstanding obligation.
10. On diverse dates between 2006 and 2010 the defendant HEATHER HENDRICKSON ZUKOWSKI gave repeated assurances to the plaintiffs JOHN D. ZUKOWSKI and TERRY ZUKOWSKI that she would repay her portion of the loans previously made.
Again, while it is possible, the court cannot conclude that it is more-likely-than-not that in 2006 and 2007, long before there was a separation and marriage dissolution proceeding commenced, and in the timeframe in which the overwhelming majority of funds were transferred, the defendant would have agreed to obligate herself for one-half of the money transferred by the plaintiffs--most of it going directly to the plaintiffs' son's business accounts--rather than perceiving it to be a loan to the couple, if not more narrowly a loan to her then-husband (or as has been claimed, a presumptive gift). The court cannot rule out the possibility of transactions structured in that manner, but to invert a metaphor, it is another piece of the puzzle that doesn't fit.
Casting further doubt on the likelihood that the defendant would have agreed to allocated liability on transfers from her then-husband's parents, is the only-partially-disputed testimony concerning the generally-admitted drug problems of the plaintiffs' son. The defendant testified that the drug problems were ongoing throughout the relevant time (if not claimed to have been continuous) and the ex-husband only disputed a portion of that--he denied that there was an active problem in 2006 and 2007, claiming that it came back into the picture in late 2008 (having started in the 90s). His testimony was that his drug problem was funded through personal and business accounts--but that necessarily included the accounts into which the money from the plaintiffs had been transferred. (Further, aside from questions as to the believability of the substance of his denials and distinctions, his credibility was further undermined by his admission of having been convicted (guilty pleas) of felonies implicating veracity--larceny and forgery--in the 2009-10 timeframe.)
S20N-CR09-0245258-T and S20N-CR09-0124216-S.
Finally, there is the manner of claimed assent. The plaintiffs are claiming that even after the defendant and her then-husband had separated, and even after the defendant had filed for dissolution of the marriage, she affirmatively had continued to agree to the transfers of money to the plaintiffs' son's business account and agreed to be responsible for half of the money being advanced. While it may be possible, in light of the defendant's consistent denials of any such agreements and the actual circumstances the court cannot find that the existence of a claimed agreement in that particular context to have been proven--with a spillover effect on the credibility of the broader claim by the plaintiffs of assent by the defendant.
The plaintiffs, then, have failed to prove the existence of an agreement or a series of agreements (or any individual such agreement) to repay half of the funds transferred.
Unjust Enrichment
The failure of the court to conclude that there was a controlling contract sets the stage for the alternate claim of unjust enrichment; see, e.g., Sean O'Kane A.I.A. Architect, P.C. v. Puljic, 148 Conn.App. 728, 742, 87 A.3d 1124 (2014) (unjust enrichment claim only available if no controlling contract).
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. (It 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 and citations omitted.) Hospital of Central Connecticut v. Neurosurgical Associates, P.C., 159 Conn.App. 87, 96-97, 121 A.3d 750, 756 (2015).
With one exception (already discussed in another context), the court has little difficulty in rejecting the claim of unjust enrichment. Most of the transfers were directed to, or deposited in, a business account for a business that was the plaintiffs' son's business, notwithstanding the fact that one of the businesses nominally was half-owned by the defendant. The court could, but won't, speculate on why almost all of the transfers were directed in such a manner, but as structured, almost all of the transfers did not explicitly include the defendant. If the transfers truly were loans to the son's businesses, then that is how they should be characterized. If the transfers actually were for the benefit of the son's family, including the defendant, then the defendant was an implicit but not explicitly intended beneficiary, in the sense that the primary beneficiaries would have been the plaintiffs' son and probably the plaintiffs' grandchildren, with the defendant a beneficiary likely-solely as a consequence of her status as a spouse/mother. Whether she agreed to any claimed terms of a loan or not, it likely would not have made a difference under these circumstances--which, in a sense, is a position implicitly raised by the defendant's claim that there is a presumption that the transfers were gifts, as they were (mostly) transfers to the plaintiffs' son (his business enterprises).
The possible exception is the plaintiffs' claim that $60,000 was transferred specifically for the benefit of the defendant, for use in connection with a new business she was starting. The defendant has denied any such earmarked transfer.
The court finds the denial credible. Further, even if the court were to credit both sides--concluding that there had been some miscommunication or misunderstanding, which might be an appropriate scenario for equity--the court would not conclude that there should be an equitable determination of unjust enrichment. A balancing of equities does not allow a recovery.
Implicating a touch of laches (discussed below), the timing of events cannot be ignored. If the defendant had been aware of a claimed obligation to repay half of the $60,000 (or any other amount) sooner, presumptively that liability would have been extinguished in bankruptcy, after the defendant and the plaintiffs' son had filed their petition during their breakup stage. Further, if any such liability had been known/acknowledged during the marriage dissolution proceedings, there might have been consideration of that liability in any financial orders, whether by agreement or after a trial (particularly if the plaintiffs' son were claiming that the defendant was liable for half of the aggregate amount of all of the subject transfers). In other words, the defendant consistently relied on the absence of any known liability to the plaintiffs and the plaintiffs' son was, in a sense, complicit in furthering that belief/perception, particularly since he claims that it was always understood that there was a separate liability of the defendant to his parents (and no aspect of debt liability to his parents was disclosed on any filings that he prepared, assisted in preparing, or received from the defendant). It would not be equitable to impose liability on the defendant, under such circumstances.
Defenses
Although the court has concluded that the plaintiffs have failed to prove the existence of the agreements claimed to have been breached, the court will address the defenses advanced, for the sake of completeness.
A. Statute of Frauds
As previously noted, the statute of frauds is properly treated as part of a denial of liability, and therefore inferentially the burden is on the plaintiffs to establish its inapplicability, once the defendant has identified its potential applicability. In a more practical sense, the court believes it appropriate to address as a " defense" at this time, rather than as an aspect of the plaintiffs' case in chief. The plaintiffs do not dispute that two of the transactions exceeded the $50,000 threshold set forth in General Statutes § 52-550(a)(5).
The plaintiffs rely on Terlizzo v. Phillips, No. 561673, 2003 WL 1901075 (Conn.Super.Ct. Mar. 28, 2003), but in that case, the existence of a loan had been admitted. (" The defendants agreed that it was a loan, " and later in the same paragraph, " [t]he parties agreed that there was a contract, " Id. at *2.) The court concluded that such an agreement/concession took the case out of the statute of frauds, id. The court then stated that payment of the original amount to the defendants also was sufficient performance to take the case out of the statute. Here, of course, the defendant does not acknowledge that there was a loan or contract (to which she was a party).
The issue has been raised in a number of other cases, but often inconclusively. In Crand v. Addressing Servs. Co., No. CV0850063285, 2010 WL 797169, at *5 (Conn. Super. Ct. Feb. 4, 2010), the plaintiff had agreed that summary judgment could be granted in favor of a defendant who claimed both applicability of the statute of frauds in an analogous situation coupled with a claimed application of the statute of limitations--such a concession may be suggestive but it is devoid of any analysis by the court.
In Benedetto v. Wanat, 79 Conn.App. 139, 152, 829 A.2d 901, 909 (2003), the issue was raised for the first time on appeal, and the Appellate Court declined to address it under such circumstances.
In Amoroso v. Flynn, No. CV9976134S, 2002 WL 172659, at *2 (Conn. Super. Ct. Jan. 7, 2002), the court identified the issue but did not address the issue of applicability of the statute of frauds, already having concluded there had been no meeting of the minds.
In one case, the issue was addressed squarely, and this court agrees with the analysis:
Therefore, it appears from the text of the statute, taken as a whole that a partially executed loan is outside the statute of frauds. In addition, the legislative history of Public Act makes it abundantly clear that although a civil action may not be brought to enforce an oral promise to make a loan over $50,000, oral loans actually made over $50,000 are outside the statute and may be enforced by our courts. Any other meaning would bring the absurd and unjust result of oral loans being transformed into gifts without a writing to the contrary. (Emphasis as in cited case.) Sarfaty v. PNN Enterprises, Inc., No. CV020280255, 2007 WL 2317843, at *5 (Conn. Super. Ct. July 24, 2007).
Accordingly, the court rejects the defendant's attempted invocation of the statute of frauds, in this situation.
B. Statute of Limitations
The statute of limitations is a proper defense, and the burden is on the party asserting it to establish its applicability. As noted earlier, the defendant was served on August 21, 2014, such that the statute of limitations presumptively is measured backwards from that date.
The defendant argues, first, that the three-year period set forth in General Statutes § 52-581 applies. In Hitchcock v. Union & New Haven Trust Co., 134 Conn. 246, 257-59, 56 A.2d 655 (1947), the Court made it clear that the language of what is now § 52-581 only applies to oral contracts that are executory in nature. By contrast, what is now § 52-576 is the statute of limitations applicable to an oral contract where a party has performed. (More recently, see, Cacace v. Morcaldi, 37 Conn.Supp. 735, 741, 435 A.2d 1035 (App.Sess. 1981).) Therefore, since the plaintiffs claim to have performed fully under the oral agreement that they allege existed and the defendant does not dispute the acts of payment, only the characterization of the money sent as loans to her--the three-year period is not applicable.
The defendant does address the more generally (and potentially-correctly) applicable § 52-576 which provides a six-year period. Therefore, with a date of service of process of August 21, 2014, any purported loan prior to August 21, 2008 would presumptively be barred by the statute of limitations. (There was no claim that the payments were interconnected--each was acknowledged by the plaintiffs to be a separate transaction.)
The plaintiffs have articulated a basis for extending the limitations period for transfers, albeit primarily discussing the claim in the context of the wrong statute of limitations. They, and their son, testified that on a number of occasions, after 2008--as late as 2012--the defendant assured the plaintiffs that she would honor her obligation to repay the plaintiffs. Some of these statements were claimed to have been made during a period of time in which the defendant and her ex-husband seemingly were attempting to reconcile notwithstanding the dissolution of their marriage. The plaintiffs correctly argue that an unambiguous reaffirmation of a debt is a basis on which to " restart" the statute of limitations Zatakia v. Ecoair Corporation, 128 Conn.App. 362, 369, 18 A.3d 604 (2011), which would make the 2014 commencement timely of all claims that had been acknowledged--if proven to have been acknowledged. The defendant denies that any such conversations took place.
The text of the defense referred to the " applicable" statute of limitations, and the plaintiffs never sought greater specificity (although the timing of the filing of the defense left essentially no opportunity for a formal request to revise to accomplish that task).
The court must return to the defendant's denial of ever acknowledging an individual indebtedness to the plaintiffs--and to the extent that there are claims of reaffirmation of the liability in the context of attempted reconciliation, the court cannot find such claims credible. Against a backdrop of not acknowledging any debt prior to the divorce, the claimed affirmation in the context of reconciliation is not plausible. That is accentuated by the post-divorce, post-bankruptcy context, i.e., after legal filings in which neither she nor the plaintiffs' son made any mention of indebtedness to the plaintiffs, it is not credible that she would assume such a liability (half of all of the transfers from the plaintiffs). Therefore, even if the plaintiffs had proven initial agreements relating to transfers (which they did not), any transactions prior to August 21, 2008 would be barred by the statute of limitations; the court cannot find the plaintiffs to have proven that any reaffirmations took place.
C. Equitable Defenses
With respect to the unjust enrichment claim, the defendant has asserted a defense that includes laches, estoppel, waiver and unclean hands. The court will focus its attention on the claim of laches, but will discuss estoppel as appropriate as well.
This court has held that (1) [l]aches consists of an inexcusable delay [that unduly] prejudices the defendant, and (2) [t]he burden is on the party alleging laches to establish that defense. (Internal quotation marks and citation, omitted.) Price v. Independent Party 29 of CT --State Central, 323 Conn. 529, 544, 147 A.3d 1032, 1042 (2016).
The court also must recognize the equitable principle that equity follows the law--to the extent that the equitable claim is a substitute for the inapplicable breach of contract claim, an appropriate benchmark for laches is the six-year period set forth in the contractual statute of limitations.
That six-year period is a benchmark or starting point for an equitable analysis--it is not directly applicable. The defendant established that in the years after the last claimed transfer of funds, she and the plaintiffs' son went through a marital dissolution and a bankruptcy. The court does not recall evidence specifically relating to any communications to the plaintiffs as to either legal proceeding (or the second bankruptcy filing), but to the extent that their son was one of the two parties to each of those proceedings, the court believes it to be a reasonable inference that they were aware of at least one of them. Even if they lacked actual knowledge of either/any proceeding, the legal proceedings themselves provide at least a suggestion or hint of estoppel associated with the prejudice to the defendant due to the " delayed" assertion of this claim--both the marriage dissolution proceeding and the bankruptcy proceeding could have afforded her some relief if the claim had been asserted against the defendant in a more timely manner.
The court recognizes that this does not come within the technical parameters of estoppel (which is why the court is not undertaking a true estoppel analysis). " Under our well-established law, any claim of estoppel is predicated on proof of two essential elements: the party against whom estoppel is claimed must do or say something calculated or intended to induce another party to believe that certain facts exist and to act on that belief; and the other party must change its position in reliance on those facts, thereby incurring some injury . . . It is fundamental that a person who claims an estoppel must show that he has exercised due diligence to know the truth, and that he not only did not know the true state of things but also lacked any reasonably available means of acquiring knowledge." (Internal quotation marks and citations, omitted.) Carpender v. Sigel, 142 Conn.App. 379, 389, 67 A.3d 1011, 1017 (2013).
The bankruptcy proceeding, in particular, would have extinguished any legal claim that was known to the defendant (and should have extinguished any claim ostensibly known by the defendant's ex-husband, given the joint nature of the submission), if such a claim had been known and included in the bankruptcy application. Had a legal breach of contract claim been extinguished in bankruptcy, the court does not believe that a claim of unjust enrichment could have been maintained thereafter. The court does not believe it to be equitable to put the plaintiffs in a better position as a result of their not having established that any contract claims against the defendant ever existed. Therefore, even if there were proof sufficient to establish some level of unjust enrichment, the equitable factors including laches would defeat such an equitable claim for recovery.
Conclusion
There is just too much that does not make sense for the court to conclude that the plaintiffs have carried their burden of proof, starting with the framework of the agreements they claim existed when transfers were being made. With the 20-20 hindsight available from a post-marriage-dissolution perspective, an explicit arrangement whereby the defendant and her then-husband each would be responsible for half of the indebtedness being incurred might make sense, but the court finds it difficult to accept the likelihood of such an arrangement from a perspective based on events as they unfolded. That, alone, would be far from dispositive, but the defendant's consistent denials; most of the money going into the plaintiffs' son's business accounts; the claimed agreements extending into a period of time when the defendant was separated from her then-husband and had started marriage dissolution proceedings; the absence of any mention of indebtedness in connection with the dissolution or bankruptcy proceedings; the absence of any indicia of indebtedness other than the transfers themselves; and the backdrop of the plaintiffs' son's drug problems; all point away from the defendant having agreed to liability for half of the amount of each transfer (or to liability for half of the aggregate of transfers), and all diminish the credibility of the plaintiffs' contentions.
Nor have the plaintiffs established a viable claim of unjust enrichment. At most, the court might have focused on the claimed $60,000 that had been intended for the defendant's new business, but the court does not find that the plaintiffs have established that there was such a dedicated payment, by a preponderance of the evidence. Even if they had established the existence of such a dedicated payment, the failure to assert any such claim until after the conclusion of bankruptcy proceedings and after the initial marriage dissolution constituted a delay that, without any fault on the part of the plaintiffs, was prejudicial to the defendant, and the equities arising from the conclusion of those proceedings--and the bankruptcy would have extinguished any such legal claim--preclude any award on this basis. Again, under these unusual circumstances, the court believes it would be inequitable to put the plaintiffs in a better position under the rubric of equity than they would have been in had there been a clear contractual liability that would have been extinguished in bankruptcy.
Beyond the merits of the plaintiffs' claims, the court also finds that if it had been necessary to reach it, the statute of limitations defense would bar most of the plaintiffs' claims. (The court has rejected the attempt by the defendant to claim a bar based on the statute of frauds.)
For all of these reasons, then, judgment enters in favor of the defendant on all claims of the plaintiffs.