1365 WHITTEMORE ASSOCIATES, LLC V. LUIGI PESCE.

2008 Ct. Sup. 13819
No. CV-05-4004816SConnecticut Superior Court Judicial District of Waterbury at Waterbury
August 21, 2008

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]

MEMORANDUM OF DECISION
PELLEGRINO, J.T.R.

Nature of the Proceedings
On April 11, 2005, the plaintiff, 1365 Whittemore Associates, LLC, filed a complaint against the defendant, Luigi Pesce, alleging breach of contract.[1] Specifically, the plaintiff alleges that on December 12, 2003, it entered into a real estate purchase agreement with the defendant, in which the defendant agreed to purchase real property designated as “1365 Whittemore Road” for the sum of $650,000.

A trial was scheduled for August 1, 2008. The plaintiff appeared with its counsel, Joel M. Jolles. The defendant did not appear in court, but his counsel, Edward N. Lerner, was present. Attorney Jolles represented to the court that he was prepared to proceed. Attorney Lerner addressed the court and represented that he was only present because he did not have an opportunity to file a motion to withdraw his appearance. He stated that he had instructions from his client to remain silent and he would adhere to those instructions.

Attorney Jolles called just one witness, Francis Mazzalupo, to testify on behalf of the plaintiff. Mazzalupo, the manager of 1365 Whittemore Associates, LLC, gave testimony and offered six exhibits[2] as to the claim against the defendant. Although the court asked Attorney Lerner after each exhibit was introduced whether he had any objection, he repeatedly reiterated his client’s instructions to remain silent. Attorney Lerner also declined to cross examine Mazzalupo and did not offer any evidence on behalf of his client.

Findings of Fact
The dispute between the parties arouse out of a failed real estate transaction involving property owned by the plaintiff, designated as “1365 Whittemore Road.” The parties entered into a purchase agreement on December 12, 2003, (Plaintiff’s Exhibit 3), wherein the defendant agreed CT Page 13820 to pay $650,000 for the property with the closing to take place on or before December 31, 2003. The agreement provided for an initial deposit of $6,500, with an additional deposit of $65,000 to be paid within five days. The defendant paid the initial deposit of $6,500, but failed to pay the additional deposit of $65,000. In addition, the defendant was unable to close by December 31, 2003.

The parties then agreed to the first extension of the contract, which was an oral understanding entered into on January 21, 2004, extending the closing date to February 16, 2004. In consideration for the extension, the defendant agreed to make an additional deposit of $58,000. The defendant gave the plaintiff a check for that amount on January 21, 2004, but instructed the plaintiff not to deposit it on any date earlier than January 31, 2004. The defendant was unable to cover this check with sufficient funds by January 31, 2004, and, therefore, no deposit was made into the escrow account.

The defendant was unable to close on February 16, 2004.

The parties then entered into a second extension of the contract (Plaintiff’s Exhibit 4). The second extension of the agreement, dated February 17, 2004, extended the closing date to May 31, 2004. In consideration for the extension, the defendant agreed to pay an inducement fee of $15,000 no later than April 27, 2004, to be forfeited in the event that a sale occurred before May 31, 2004, and to make the $58,500 deposit no later than May 20, 2004. The defendant did not pay the inducement fee nor did he deposit the $58,500 into the escrow account. The defendant was unable to close on May 31, 2004.

The parties then entered into a third extension of the contract (Plaintiff’s Exhibit 5). The letter agreement, dated July 1, 2004, extended the closing date to September 15, 2004, provided that the following conditions were met: (1) the defendant immediately pay $10,000 to the plaintiff, to be applied to the $15,000 inducement fee he failed to pay in connection with the second extension; (2) the defendant pay the additional $5000 on or before July 9, 2004; (3) the defendant’s deposit of $6,500 be forfeited and no longer credited toward the purchase price; (4) the defendant’s deposit of $65,000 be provided from the defendant’s sale of a certain piece of property known as “South Main Street”; and (5) the defendant pay an additional $25,000 from the sale of the “South Main Street” property into escrow, to be refunded should the closing take place on or before September 15, 2004. The defendant paid the $15,000 inducement fee; however, he failed to apply the $90,000 ($65,000 plus $25,000) from the sale of “South Main Street” property. The defendant was unable to close on September 15, 2004. CT Page 13821

The parties then entered into a fourth and final extension agreement (Plaintiff’s Exhibit 6). The agreement, dated September 2, 2004, extended the closing date to November 1, 2004. It provided that if the defendant made a payment of $25,000, he would be granted the right to enter the property at 1365 Whittemore Road to remove an underground oil tank and replace it with an above ground storage tank, at his own expense. The defendant paid the $25,000 and removed the underground oil tank, but failed to replace it with an above ground tank. The defendant was unable to close on November 1, 2004. It cost the plaintiff $3,913.52 to replace the oil tank.

Discussion
The plaintiff seeks from the defendant the following: (1) the deposit of $65,000 under the original agreement, or any extension agreement, as liquidated damages; (2) the third inducement/extension fee of $25,000; and (3) the cost of replacing the fuel tank at a value of $3,913.52. The plaintiff also seeks statutory interest from November 1, 2004.

As to the plaintiff’s first claim for $65,000 pursuant to the original agreement, or any extension agreement, this court finds the claim to be without merit. It is true that the fourth and final extension agreement (Plaintiff’s Exhibit 6) provided that the parties agree to reinstate the original agreement, and that paragraph fourteen of the original agreement provided that the plaintiff, in the event of default, shall retain the defendant’s deposit as liquidated damages (Plaintiff’s Exhibit 3); however, the defendant never made the deposit of $65,000. “[A] . . . deposit [that] was never paid [is] not subject to [a] liquidated damages provision because an unpaid deposit is not a deposit . . .” Zimedil Realty, LLC v. Galarneau, Superior Court, judicial district of Hartford, Docket No. CV 08 5017162 (May 1, 2008, Freed, J.), citing Fiorilla v. Moore, 151 Conn. 710, 200 A.2d 488 (1964). The fact that the defendant never made that deposit is fatal to the plaintiff’s claim. Accordingly, the plaintiff has not sustained its burden of proving that it is entitled to liquidated damages in the amount of $65,000, and that claim is denied.

In regards to the plaintiff’s second request — the $25,000 inducement fee provided for in the third extension agreement — this court reads that agreement (Plaintiff’s Exhibit 5) to provide for the payment of that sum from the proceeds of the future sale of the defendant’s “South Main Street” property.[3] Therefore, the court interprets the future sale of the “South Main Street” property to be a condition precedent to the defendant’s deposit of the $25,000. “A condition precedent is a fact or CT Page 13822 event which the parties intend must exist or take place before there is a right to performance . . . A condition is distinguished from a promise in that it creates no right or duty in and of itself but is merely a limiting or modifying factor . . . If the condition is not fulfilled, the right to enforce the contract does not come into existence.” (Internal quotation marks omitted.) Funaro v. Baisley, 57 Conn.App. 636, 640, 749 A.2d 1205, cert. denied, 254 Conn. 902, 755 A.2d 218 (2000). Apparently, the sale of the “South Main Street” property never occurred and the buyer did not place the proceeds from it in escrow. Therefore, the right of the plaintiff to obtain that money did not come into existence because the condition was never fulfilled.

Moreover, as previously discussed, the plaintiff cannot assert a claim to money that was not placed in escrow. The plaintiff’s claim to this $25,000 extension was through “forfeiture.” The deposit was not made and, therefore, could not be forfeited to the plaintiff. Finally, the plaintiff in the fourth and final extension agreement (Plaintiff’s Exhibit 6) recognized that the defendant did not make the $25,000 deposit and effectually waived any claim to it when it provided that the original purchase agreement would be reinstated. The fourth extension agreement states that “despite [the defendant’s] failure to meet the terms and conditions [of the third extension agreement], [4] 1365 Whittemore Associates has expressed [its] willingness to re-instate the [original] [p]urchase and [s]ales contract . . .” The plaintiff did not reinstate any of the terms from the three previous extension agreements. Consequently, this court must deny the plaintiff’s claim for the $25,000 deposit from the sale of the “South Main Street” property as provided for in the third extension agreement.

Finally, in regards to the plaintiff’s third claim concerning the failure of the defendant to replace the tank in accordance with the terms of the final extension agreement, this court finds the testimony of Mazzalupo to be credible that the defendant did in fact fail to replace the tank, in breach of the agreement, and that it cost the plaintiff $3,913.52 to replace the tank. Therefore, this court shall award damages in favor of the plaintiff on this claim. In addition, because the defendant breached the agreement when he failed to replace the tank by November 1, 2004, the court will award the plaintiff statutory interest from that date.

Orders
Judgment shall enter in favor of the plaintiff as against the defendant in the amount of $3,913.52 with statutory interest from November 1, 2004. CT Page 13823

[1] The plaintiff filed a revised complaint on July 26, 2005, which made minor alterations to the original complaint.
[2] The six exhibits are as follows: Plaintiff’s Exhibit 1 — the defendant’s responses to the plaintiff’s request for admissions; Plaintiff’s Exhibit 2 — the plaintiff’s request for admissions; Plaintiff’s Exhibit 3 — the real estate purchase agreement; Plaintiff’s Exhibit 4 — the second extension of the agreement; Plaintiff’s Exhibit 5 — the third extension of the agreement; and Plaintiff’s Exhibit 6 — the fourth extension of the agreement.
[3] The plaintiff seems to agree with this interpretation, as it states in its revised complaint: “In accordance with the [t]hird [e]xtension agreement, defendant paid the sum of [$15,000] which said sum was applied as consideration for the [s]econd [e]xtension [a]greement, however, defendant, despite the sale of the South Main Street Property, failed to provide the sum of $90,000 for the additional deposit and consideration for the [t]hird [e]xtension.”
[4] Again, the third extension agreement is the one that provided for the $25,000 deposit.

CT Page 13824

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