?Superior Court of Connecticut.
Vincent J. Freccia, III v. Luigi Cirifalco et al.
FST CV 06 4008113
????Decided: January 13, 2012
MEMORANDUM OF DECISION RE AFTER TRIAL
The plaintiff Vincent Freccia has sued the defendants Luigi and Maria Cirifalco seeking money damages allegedly arising from the defendants’ failure to pay legal fees, interest and costs arising from Freccia’s legal representation of the Cirifalcos in a bankruptcy matter. ? Freccia and the Cirifalcos entered into a retainer agreement by which the Cirifalcos agreed to pay, and Freccia agreed to accept, a flat fee of $1,325.00 plus $250.00 in filing fees. ? However, the flat fee did not include any time spent on matters outside a simple Chapter 7 bankruptcy proceeding, and did not cover adversarial proceedings, objections to discharge or a switch to proceedings under other chapters of the bankruptcy laws.
The Cirifalcos bankruptcy proceeding turned out to be hotly contested, mainly by a creditor of Mrs. Cirifalco, James Slattery. ? The original Chapter 7 petition was filed in bankruptcy court on October 31, 2002. ? Exhibit 2 (bankruptcy court docket sheet). ? Attorney Freccia testified credibly about certain of the difficulties facing the Cirifalcos bankruptcy case because of Slattery’s aggressive conduct, and the tangled proceedings are clearly reflected on the docket sheet. ? A petition to avoid lien pursuant to Bankruptcy Code Section 522(f) was filed by the Cirifalcos, and the case was eventially converted to a Chapter 13 case. ? Both events made the original flat legal fee agreement inoperable and the parties agree that the plaintiff Freccia was permitted under the agreement (Exhibit 1) to charge normal hourly rates. ? The Cirifalcos do not contest that the claimed legal services were rendered nor do they contest the amount of the bill. ? Freccia testified that he was concerned as the bankruptcy proceedings continued through 2003 and 2004, and the billed legal services began to approach the amount allegedly owed Slattery which was about $50,000.00. ? Freccia urged a settlement with Slattery, but that result was not quickly or easily reached. ? Despite some relatively small payments by the Cirifalcos, the amount due to Freccia, including interest charges of one percent per month, (allowed for in the retainer agreement) grew to over $50,000.00 by the time Freccia withdrew from the representation in 2005.
Eventually, the bankruptcy matter ended and the Cirifalcos settled with Slattery. ? In 2006 Freccia commenced this suit claiming $46,040.82 in fees and expenses and $9,998.74 in interest. ? The complaint is in three counts: ?breach of contract, unjust enrichment and quantum meruit. ? A prejudgment remedy of a $75,000.00 attachment on Cirifalcos’ Norwalk residence was ordered in 2006. ? In their proposed amended answer filed in August 2011, and allowed by this court at the commencement of trial, absent objection, the Cirifalcos denied the material allegations of the claim and asserted a special defense of accord and satisfaction. ? The trial of this case took place on December 21, 2011.
The resolution of this case is dependent on the issue of accord and satisfaction. ? Freccia has carried his burden of proving the terms of the retainer agreement and the amount of bills rendered in accordance with that agreement. ? As noted previously, the Cirifalcos have not contested the terms of the agreement or the amount or quality of the legal services rendered. ? The facts involved in the accord and satisfaction defense arise in 2008. ? In the early part of that year Freccia talked and corresponded with Attorney David Greenberg who was representing the Cirifalcos in this litigation. ? In a fax to Greenberg Freccia noted that the unpaid fees and interest exceeded $74,000.00 and his attorneys fees for prosecuting this action (to which he was entitled under the agreement) were over $4,000,00. ? Freccia stated he would accept $50,000.00 plus a second mortgage on the Cirifalcos’ residence securing a promissory note for $16,000.00 at 8% interest in settlement of the Cirifalcos’ debt. ? Exhibit 7. One day later Freccia reiterated the proposal of a $50,000.00 payment plus note and mortgage, and enclosed a proposed $18,000.00 note, mortgage deed and general release of the Cirifalcos. ? Exhibit 6. By fax dated March 3, 2008 Freccia wrote he would release the Certificate of Attachment for $75,000.00 upon receipt of a ?good funds? check for $46,000.00 within 48 hours of the Cirifalcos’ refinancing of their first mortgage. ? Exhibit 8. No mention was made by Freccia in Exhibit 8, of the promissory note or second mortgage, and no mention was made of a general release to the Cirifalcos or a withdrawal of this lawsuit. ? On March 12, 2008 Freccia sent an email message to Greenberg: ??Dave here are the revised note and mtge deed. ? You have schedule A from the last fax. ? Please call when the docs are signed and on their way.? ? Exhibit 9. The attached note was for $204,000.00 payable over ten years at 8% interest per annum.
Freccia admits receiving a check from the Cirifalcos for $46,000.00. ? The exact date of the check is unknown, but that amount was credited to the Cirifalco account on March 14, 2008. ? Exhibit 4. Neither the check, nor any copy of it, was introduced into evidence.
On April 22, 2008 Freccia wrote a letter to Greenberg that was apparently faxed that day referencing this case. ? The letter stated:
This is a follow-up to our conversation in your office on Friday, April 18, 2008, relative to the above referenced litigation matter. ? As you are fully aware, I agreed to settle this litigation along the following terms:
1.?$46,000.00 cash;
2.?$20,000.00 second mortgage obligation to myself at the rate of 8% per annum payable over ten [ten] years; ?and
3.? Reciprocal release to all parties and counsel.
Your clients are in default of their agreement to settle this matter insofar as they have refused to sign the mortgage note and deed. ? This is an obvious indication of their breach of our agreement, their bad faith and unfair dealing.
Consequently, I am disinclined to release the Certificate of Attachment and I will proceed with the litigation. ? While the $46,000.00 received has been credited to the account, I intend to pursue all contractual obligations of your clients, including the full balance due, accrued interest and interest hereinafter due and payable at the rate of 12% per annum, and all legal fees and expenses. ? As of this writing, the balance due my office is in excess of $30,000.00 plus legal fees.
There is no response to this letter in evidence.
The law in this state respecting the common law doctrine of accord and satisfaction has been spelled out by several Connecticut Supreme Court decisions.
?When there is a good faith dispute about the existence of a debt or about the amount that is owed, the common law authorizes the debtor and the creditor to negotiate a contract of accord to settle the outstanding claim ? An accord is a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor’s existing duty ? Upon acceptance of the offer of accord, the creditor’s receipt of the promised payment discharges the underlying debt and bars any further claim relating thereto, if the contract is supported by consideration ? Although the case law presents the more usual use of accord and satisfaction as a defense by the debtor against the creditor, it is evident that accord and satisfaction equally applies to both parties. ? Accord and satisfaction is a method of discharging a claim whereby the parties agree to give and accept something other than that which is due in settlement of the claim and to perform the agreement ? Indeed a validly executed accord and satisfaction precludes a party from pursuant any action involving the original, underlying claim ? The defendant bears the burden of proving accord and satisfaction when it is pleaded as a special defense.? ?(Citations omitted; ?internal quotation marks omitted.) ?Schoonmaker v. Lawrence Brunoli, Inc., 254 Conn. 210, 277, 828 A.2d 64 (2003). ??A contract of accord and satisfaction is sufficiently supported by consideration if it settles a monetary claim that is unliquidated in amount.? ?County Fire Door Corp., v. C.F. Wooding Co., 202 Conn. 277, 282, 520 A.2d 1028 (1987).
Associated Resources, Inc., v. Wall, 298 Conn. 145 (2010).
The Cirifalcos’ special defense as pleaded in their amended answer contends:
The plaintiff’s action is barred by the legal doctrine of accord and satisfaction. ? The plaintiff and the defendants had a clear and distinct dispute about the amount owed, if any, on an unliquidated debt, namely, attorneys fees claimed by the plaintiff. ? On or about March 3, 2008 the plaintiff and defendants negotiated a contract of accord to settle the plaintiff’s claims for the sum of $46,000.00. ? Thereafter the defendants performed their obligations under the contract of accord in that they tendered payment to the plaintiff in the sum of $46,000.00, which constituted adequate consideration for the contract. ? The plaintiff took custody of the check and exercised full dominion over it, depositing it, upon information and belief, into a personal or business account that he controlled. ? The plaintiff has exercised full dominion and control over those monies since that time. ? The plaintiff’s receipt and acceptance of the payment discharges the underlying debt and bars and further claim relating thereto.
At the close of evidence, the defendants argued that Freccia’s retention of the $46,000.00 was evidence of the accord and satisfaction and that the letter of March 3 (Exhibit 8) that omitted reference to the note and mortgage was deliberately worded so that the entity providing refinancing for the Cirifalcos’ residence would not be concerned.
The plaintiff contends there was no agreement to settle the case for only $46,000.00, and that the agreement he thought had been reached included a second mortgage securing a promissory note plus the payment of $46,000.00. ? That latter agreement was not effected as the Cirifalcos did not agree to or sign the note and mortgage.
Having evaluated all the testimony and documentary evidence, the court determines that the Cirifalcos have not met their burden of proving the special defense of an accord and satisfaction by a preponderance of the evidence. ? Specifically, the proof that Freccia agreed to accept a contract of accord that the Cirifalcos pay only $46,000.00 of their indebtedness is not persuasive. ? That proof rests solely on the March 3, 2008 letter’s omission of any reference to a promissory note or second mortgage. ? There was no testimony from the defendants to support the contention that there was a meeting of the minds on a $46,000.00 settlement, or to rebut the plaintiff’s assertion that he did not agree to accept only $46,000.00. ? Freccia testified that the letter’s representations were directed only to the issue of releasing the $75,000.00 attachment on the Cirifalcos residence in order to facilitate the Cirifalcos refinancing. ? In hindsight, it might have been wiser to include references to the note and mortgage, but their omission is not sufficient proof in this context that those elements had been abandoned. ? The court finds the evidence unpersuasive that Freccia would reduce his settlement offer by more than a third. ? Indeed, it is a reasonable inference that Freccia reduced his cash demand by $4,000.00 and increased the amount of the promissory note by $2,000.00.
The Cirifalcos argument that the accord and satisfaction had been established by acceptance of the proceeds of the $46,000.00 check is also not persuasive. ? There is no evidence before this court that the Cirifalcos notified Freccia that they deemed their check to be a satisfaction of the agreement of accord. ? There is no letter, no check with any notation such as ?full payment,? ?accord and satisfaction? or the like. ? Nor is there any evidence before the court that Freccia was notified that the Cirifalcos were not willing to sign the proposed note and mortgage.
Finally, the argument that Freccia deliberately phrased the March 3, 2008 letter to induce the refinancing entity to provide the funds out of which he would be paid, is based on conjecture and surmise rather than evidence. ? It was in everyone’s interest to clear the land records of the attachment lien, and it was an inherent part of Freccia’s proposed settlement that he would be paid part of the settlement in cash raised by the refinancing. ? There is nothing in the record to substantiate the surmise that he was trying to put one over on the refinancing entity. ? Rather, Freccia was willing to make the proposed mortgage to him a second mortgage.
Conclusion
The court finds in favor of the plaintiff on his complaint and against the defendants’ special defense. ? There is undisputed evidence that the amount now due Freccia is $45,344.59 in fees, costs and interest. ? Exhibit 3. This amount reflects the $46,000.000 payment in 2008. ? Exhibit 4. In addition, there is an affidavit of attorneys fees and costs, which was orally revised in open court by Freccias’ counsel. ? Exhibit 11. ? As revised, the amount is $6,938.00. ? Therefore, judgment may enter in favor of the plaintiff in the amount of $52,282.59, plus costs. ? Postjudgment interest shall accrue at six percent per annum.
TAGGART D. ADAMS
JUDGE TRIAL REFEREE
Adams, Taggart D., J.T.R.