CCT Communications, Inc. v. Zone Telecom, Inc. , 324 Conn. 654 ( 2017 )

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CCT COMMUNICATIONS, INC. v.
ZONE TELECOM, INC.
(SC 19574)
Rogers, C. J., and Palmer, Eveleigh, McDonald, Espinosa and Robinson, Js.
Argued November 7, 2016—officially released February 21, 2017
Joseph K. Scully, with whom was Jeffrey P. Mueller,
for the appellant (plaintiff).
William M. Murphy, for the appellee (defendant).
Opinion
EVELEIGH, J. The plaintiff, CCT Communications,
Inc., appeals from the judgment of the trial court ren-
dered in favor of the defendant, Zone Telecom, Inc.,1
on the plaintiff’s complaint and the defendant’s counter-
claim for damages. The case arises from a purchase
agreement (purchase agreement) entered into by the
parties in which the plaintiff was to provide various
telecommunications equipment, software, and services
to the defendant for a switch room located in Los
Angeles, California (switch room). On appeal, the plain-
tiff claims that the trial court incorrectly rendered judg-
ment in favor of the defendant on its complaint and
the defendant’s counterclaim. Specifically, the plaintiff
asserts that the trial court incorrectly: (1) concluded
that it breached the purchase agreement; (2) failed to
award the plaintiff certain damages on count one of its
complaint; and (3) awarded damages, costs and attor-
ney’s fees in excess of a limitation of liability clause in
the purchase agreement.2 We disagree with the plaintiff
and, accordingly, affirm the judgment of the trial court.
The following facts, as found by the trial court, are
relevant to the issues on appeal. ‘‘The plaintiff . . . and
the defendant . . . first began doing business together
in September, 2005. [The plaintiff] provided various tele-
communications equipment, software, and services to
[the defendant for the switch room]. This relationship
was memorialized in an original contract and subse-
quent modifications by way of letters of intent.
‘‘By September, 2006, the relationship was deteriorat-
ing. [The plaintiff] is the alter ego of Dean Vlahos, its
president. He was and is the sole decision maker, negoti-
ator, and overseer of [the plaintiff]. . . . Vlahos met
with [the defendant’s] decision makers on September
14, 2006, at [the defendant’s] Cherry Hill, New Jersey
office. Present at the meeting . . . were Daniel Boyn-
ton [the defendant’s senior vice president] and Eamon
Egan [the defendant’s vice president and chief legal
counsel]. The meeting grew heated and ended without
an agreement to continue to do business together. Over
the ensuing weeks, however, the parties finally reached
a meeting of the minds to restructure their relationship.
‘‘The new contract was memorialized in [the purchase
agreement, which was] dated November 1, 2006. . . .
This is the sole document that requires reference
regarding all of the terms and conditions of the parties’
agreement. . . .
‘‘[T]here is a third entity that was involved in the
activities that underlie this case. It interrelated with
both [the plaintiff] and [the defendant] but never was
made a party, namely, Global Crossing Telecommunica-
tion, Inc. [Global].
‘‘[Global] is a supplier of long-distance telephone ser-
vice, providing national and international long-distance
[calling] as well as . . . toll-free service. [Global] mar-
kets its product to industry by varying rates depending
on what services the customer requires. If [a customer]
contracts for [Global’s] services, then calls made under
[that] contract would be run through a . . . DS-3 cir-
cuit [circuit], which would be provided as part of the
transaction for the services. [A circuit] normally is pur-
chased by the consumer as part of [an] agreement to
use [Global’s] long-distance services and rates.
‘‘[Global] was a vital component to the fulfillment of
the [purchase agreement] . . . . By virtue of the [pur-
chase] agreement, [the plaintiff] was acting as a middle
man in providing long-distance . . . service to [the
defendant]. What [the plaintiff] ‘sold’ to [the defendant]
was two . . . circuits [that the plaintiff] owned located
in the [switch room]. In return for [the plaintiff’s] pur-
chase and ownership of the . . . circuits, [the defen-
dant] purchased from [the plaintiff] its long-distance
. . . service at the rates enumerated in the [purchase
agreement] for the specified geographical areas. [The
defendant] needed [one of these circuits] to enable it
to run long-distance service to [Global] for placement
of calls for [the defendant’s] clients. [The plaintiff] was
providing [the defendant] with long-distance service
through its own agreement with [Global]. Stated differ-
ently, [Global] sold long-distance service to [the plain-
tiff] at a certain rate per minute, and [the plaintiff]
resold that long-distance service to [the defendant] at
a marked up rate. Even the marked up rate proved to
be favorable to [the defendant], as it was not a rate
that [the defendant] itself could have acquired from
[Global]. [The plaintiff] profited from the marked up
amount that it was charging to [the defendant] above the
rate it was being charged by [Global]. [The defendant] in
turn provided long-distance service at a marked up rate
per minute based on what it was paying [the plaintiff]
for those minutes. More facts will be provided as needed
in this decision concerning the interplay between the
parties’ reliance on [Global’s] circuitry and the perfor-
mance of the [purchase agreement].
‘‘The [purchase agreement] . . . was executed and
effective on November 1, 2006. Long-distance service
to be provided by [the plaintiff] to [the defendant] was
to commence on December 1, 2006. The [purchase
agreement] had a minimum usage guarantee . . . on a
‘take or pay’ basis. What this means is that [the defen-
dant] was to pay a set amount per month as a minimum
for long-distance service to be provided by [the plain-
tiff]. Any usage above the minimum required amount
would be billed to [the defendant] at the agreed rate
per minute. Also, because the price for use was on a
‘take or pay’ basis, [the defendant] was not required to
use or run any traffic over [its circuit]. Even if [the
defendant] did not run any calls through [its circuit] or
failed to run enough minutes to satisfy the monthly
[minimum usage guarantee, the defendant] neverthe-
less would be obligated to pay [the minimum usage
charge].
‘‘By December 1, 2006, the . . . circuit[s] that [the
plaintiff] purchased [were] moved . . . to [the switch
room] to handle [the defendant’s] long-distance service.
[The defendant] did run enough long-distance service
through [its] circuit in the month of December, 2006,
to meet its minimum usage requirement.
‘‘Also, in December, 2006, [the plaintiff] and [Global]
amended their retail customer agreement [retail cus-
tomer agreement]. After execution of [this amendment],
[the plaintiff] began to run more long-distance service
through [Global]. . . .
‘‘By mid-January, 2007, there was an ongoing dispute
between [Global] and [the plaintiff] about the amount
and scope of the long-distance service being sent by
[the plaintiff] through [Global]. [Global] was concerned
that [the plaintiff] was violating the amended retail cus-
tomer agreement and taking unfair advantage to
exploit [Global].
‘‘The result of [the plaintiff] pushing so many long-
distance calls through the . . . circuit[s] [was] that
there were increasing numbers of service problems
. . . . The calls would not complete . . . would con-
tinue to ring, or the call would result in a fast busy signal
or dead air. These issues were brought to [Global’s]
attention by way of ‘trouble tickets.’ [Global] was
receiving trouble tickets from many of the [plaintiff’s]
calls. [The defendant] was authorized by the purchase
agreement . . . to open trouble tickets directly with
[Global] if [the defendant] had service problems. During
January, 2007, [the defendant] filed trouble tickets with
[Global] because of service problems with calls being
routed through the . . . circuit to their service. These
service issues included calls not completing, fast busy
signals, [and] intermittent no ring back . . . .
‘‘[Global] had grown concerned with [the plaintiff’s]
activities by January, 2007. [The plaintiff] had not been
current with payment [for] the long-distance services
being provided by [Global]. By [January], 2007, [the
plaintiff] owed [Global] approximately $2 million . . . .
In addition, [the plaintiff] was attempting to run more
and more calls through . . . circuits, which . . . was
creating service problems with the calls.
‘‘These issues [regarding traffic and service] patterns
being exploited by [the plaintiff], as well as [the plaintiff]
exceeding its credit limits with [Global], were memori-
alized in a letter from [Global] to [Vlahos] on January
11, 2007. . . . [Global] also put [the plaintiff] on notice
that if a resolution of these problems was not achieved,
[Global] would terminate all services to [the plaintiff]
on January 25, 2007.
‘‘Between January 11, 2007, and January 25, 2007,
[the plaintiff] continued to increase international and
domestic long-distance traffic through the . . . cir-
cuits, causing additional service problems . . . .
[Global] reached a point when it began to ‘throttle down’
[the plaintiff’s] access to its service. By [January 17,
2007], [Global] had blocked any further service to [the
plaintiff] for international long-distance calls. The
domestic long-distance calls were being pushed through
at an excessive rate by [the plaintiff] after [that date].
This influx of domestic long-distance calls caused major
service issues for [Global]—192,000 [calls would not
complete] on [January 19, 2007] and 142,000 [calls
would not complete] on January [20 and 21, 2007].
[Global] blocked all calls generated through [the plain-
tiff] on January 26, 2007. . . .
‘‘On January 25, 2007, [Egan, who had since become
the defendant’s] chief financial officer, sent a letter to
[the plaintiff] advising [it] of multiple service issues
for long-distance calls being transmitted through [the]
circuit. [The defendant] complained of ‘dead air, which
eventually goes to a fast busy.’ [The defendant]
requested assistance from [the plaintiff] to resolve these
issues; otherwise, [the defendant] would not be commit-
ted by [the purchase agreement] to pay the [minimum
usage charge] for January 2007, due to unacceptable
service quality. . . .
‘‘Also, on January 26, 2007, [Global] sent a letter to
[the plaintiff] terminating their relationship, claiming
that [the plaintiff was in breach of contract] because
[it] was reselling the services . . . in contravention of
[the retail customer agreement]. . . . This termination
notice . . . was [faxed to the defendant’s] switch room
[by Global]. [Global] had been given the . . . switch
room fax number as an additional fax number for [the
plaintiff]. This number no longer was [the plaintiff’s],
so [the defendant’s] receipt of this notice from [Global]
was informative but unintended.
‘‘As a result of the termination of service by [Global],
which shut down all of [the plaintiff’s] circuits, [the
plaintiff] on January 29, 2007, filed a voluntary . . .
petition [pursuant to chapter 11 of the United States
Bankruptcy Code; see 11 U.S.C. § 1101 et seq.; in the
United States Bankruptcy Court for the Southern Dis-
trict of New York]. Because of the bankruptcy stay
provisions, the filing of the bankruptcy petition com-
pelled [Global] to reconnect [the] circuits by January
31, 2007.
‘‘On February 5, 2007, [the defendant] notified [the
plaintiff] by letter . . . that it was exercising its right
to terminate their [contractual relationship] . . . pur-
suant to [§] 7 (b) of the purchase agreement. This sec-
tion provided that either party may terminate the
[purchase] agreement upon thirty days written notice
if either party had certain events take place, including
the filing of a voluntary bankruptcy petition. This termi-
nation provision had been added during the drafting of
the purchase agreement at the insistence of [Vlahos].
. . .
‘‘Between the February 5, 2007 termination letter
from [the defendant] and March 24, 2007, there was a
series of letters between . . . Vlahos and . . . Egan
about their positions vis-a-vis the bankruptcy and the
continuation of the [purchase agreement]. . . . [The
plaintiff’s] position was that the bankruptcy [proceed-
ings] stayed the shut off of service by [Global] and,
therefore, [the defendant] was obligated to either use
[its] circuit . . . or pay the [minimum usage charge].
[The defendant’s] position was that it had notified [the
plaintiff] of service problems prior to the shut off by
[Global] and then the shut off took place, which occur-
rence jeopardized service to [the defendant’s] clients.
Because of the instability of the relationship between
[the plaintiff] and [Global], [the defendant] took the
position that it could not continue to use [its] circuit
for long-distance service unless it was given adequate
assurance from [Global] through [the plaintiff] that it
could rely on the service being operational and not
subject to further shutdown. [The plaintiff] insisted that
it was not committed by law to provide any such ade-
quate assurance.
‘‘Also, on March 15, 2007, the . . . circuit . . .
through which [the defendant] would have run long-
distance [calls], had gone into ‘alarm,’ which meant that
the switch and ports were out of service. This event
precipitated an inquiry from [Global], which monitored
all of its switches. Upon confirmation that traffic was
not running through the switch, [Global] removed ser-
vice from the . . . circuit. This meant that the [circuit]
was not operational and could no longer provide long-
distance . . . service. This switch was never restored
to working order; to do so would have required a request
to [Global] by [the plaintiff] as its customer. [Global]
never received such a request from [the plaintiff]. Con-
sequently, as of March 15, 2007, the . . . circuit that
would have run [the defendant’s] long-distance [calls
were] inoperable and [the defendant] could do nothing
directly about this situation because it was [the plain-
tiff’s] obligation to contact [Global] to restore the ser-
vice. . . .
‘‘From March 24, 2007, to November 25, 2009, there
was sporadic correspondence . . . between [the plain-
tiff] and [the defendant]. The dispute between these
parties played out in the [proceedings before the Bank-
ruptcy Court]. The [plaintiff’s] bankruptcy petition was
dismissed on November 25, 2009 . . . . Throughout
the nearly three years that the bankruptcy petition was
pending, [the plaintiff] failed to either assume or reject
the purchase agreement with [the defendant]. [The
Bankruptcy Court] dismissed the [plaintiff’s bank-
ruptcy] petition due [to] the misrepresentations and
misstatements made [by the plaintiff]. Also, [the Bank-
ruptcy Court] declined to retain jurisdiction over the
adversary proceeding between [the plaintiff] and [the
defendant]. [The Bankruptcy Court] did retain jurisdic-
tion of the [plaintiff] and [Global’s] adversary proceed-
ing. Simultaneous with the dismissal of [the plaintiff’s]
bankruptcy petition, [Global] notified [the plaintiff] that
it was electing to terminate and not renew its contract
with [the plaintiff].’’ (Citations omitted.)
In its two count complaint, the plaintiff claimed: (1)
breach of contract for the defendant’s failure to pay
the amounts owed; and (2) account stated. In response,
the defendant filed an answer and counterclaim. In its
three count counterclaim, the defendant: (1) alleged
breach of contract for, inter alia, the plaintiff’s failure
to provide services under the purchase agreement; (2)
sought a declaratory judgment that the defendant’s obli-
gations to the plaintiff were terminated no later than
thirty days after the defendant’s letter to the plaintiff
dated February 5, 2007; and (3) sought a declaratory
judgment that, inter alia, the plaintiff had no right to
continue its utilization of the switch room.
The matter was tried to the trial court, which ren-
dered judgment for the defendant on the plaintiff’s com-
plaint, and count one of the defendant’s counterclaim
in the amount of $694,000. In addition, the trial court
awarded statutory costs in the amount of $655 and
attorney’s fees in the amount of $936,441.18. Finally,
the trial court also rendered declaratory judgment as
requested in count two of the defendant’s counterclaim.
This appeal followed.3
Following oral argument, this court, sua sponte,
ordered the trial court to issue an articulation
addressing the following two questions: (1) ‘‘In addition
to finding in favor of [the defendant] on its declaratory
judgment claim in count [two] of its counterclaim, did
the trial court find that [the plaintiff] had breached [the
purchase agreement by failing] to provide telecommuni-
cation services as alleged in count [one] of [the defen-
dant’s] counterclaim when it stated [that] ‘[t]he court
finds that [the defendant] has presented ample evidence
to establish each of the elements in support of its claim
that [the plaintiff] breached its obligations under the
purchase agreement . . . ?’ ’’; and (2) ‘‘If the answer
to question one is in the affirmative, then were the
damages awarded by the trial court based upon the
breach of contract as found by the court in count [one]
of [the defendant’s] counterclaim?’’
In its subsequent articulation, the trial court
responded to this court’s first question as follows: ‘‘The
response is in the affirmative that this court did find
that [the defendant] had proven that [the plaintiff] had
breached the purchase agreement . . . . [T]his court
noted [in] its original decision [that] [t]he breach took
place when [the plaintiff] filed its voluntary bankruptcy
petition of January 29, 2007. Pursuant to [§] 7 (b) [of
the purchase agreement], [the defendant] exercised its
right to terminate the purchase agreement on February
5, 2007. The court finds for [the defendant] on count
[one] of its counterclaim for breach of contract.’’
In its articulation, the trial court responded to this
court’s second question as follows: ‘‘[T]his court’s
award of damages to the defendant was based upon
the finding of the breach of contract by the plaintiff as
alleged in count [one] of [the defendant’s] counterclaim.
‘‘This court heard evidence on damages both from
[the] plaintiff as to its claims for breach of contract and
the defendant as to its claims for breach of contract.
This court found the supporting evidence favored the
defendant’s claim for breach of contract.
‘‘Although the defendant presented evidence of dam-
ages far in excess of what this court ordered . . . [this]
court found the liquidated damages clause [set forth in
§ 4 (c) of the purchase agreement] limited the extent
of the damages that could be awarded to the defendant
for the plaintiff’s breach of contract. [This] court’s
award of damages to the defendant was based on the
finding of the breach of the purchase agreement as
alleged in count [one] of [the defendant’s] coun-
terclaim.’’
On appeal to this court, the plaintiff claims, inter alia,
that the trial court incorrectly: (1) concluded that it
breached the purchase agreement; (2) failed to award
certain damages on count one of its complaint; and (3)
awarded damages and attorney’s fees in excess of the
limitation of liability in the purchase agreement.
I
BREACH OF CONTRACT
We begin with the applicable legal principles and
standard of review. ‘‘The elements of a breach of con-
tract action are the formation of an agreement, perfor-
mance by one party, breach of the agreement by the
other party and damages.’’ (Internal quotation marks
omitted.) Sullivan v. Thorndike, 104 Conn. App. 297,
303, 934 A.2d 827 (2007), cert. denied, 285 Conn. 907,
942 A.2d 415 (2008). The trial court’s factual findings
as to whether and by whom a contract has been
breached are subject to the clearly erroneous standard
of review and, if supported by evidence in the record,
are not to be disturbed on appeal. See Practice Book
§ 60-5; see also Connecticut National Bank v. Giacomi,
242 Conn. 17, 70, 699 A.2d 101 (1997).
On appeal, the plaintiff claims that the trial court’s
sole factual basis for finding a breach of contract by
the plaintiff was the bankruptcy petition. The plaintiff
then analyzes the question under bankruptcy law and
claims that, because of the bankruptcy petition in the
present case, a question of law is presented which pro-
vides for de novo review. Contrary to the plaintiff’s
position, the defendant claims that the trial court found
that the plaintiff breached the purchase agreement by
failing to provide services and, therefore, the trial
court’s factual findings as to whether the purchase
agreement was breached by either party is subject to
the clearly erroneous standard of review and, if sup-
ported by evidence in the record, are not to be disturbed
on appeal. Crowell v. Danforth, 222 Conn. 150, 156, 609
A.2d 654 (1992). We agree with the defendant and apply
the clearly erroneous standard.
On the issue of breach of contract, the trial court
found as follows: ‘‘[The defendant] has presented ample
evidence to establish each of the elements in support
of its claim that [the plaintiff] breached its obligations
under the purchase agreement . . . . The breach took
place when [the plaintiff] filed its voluntary bankruptcy
petition of January 28, 2007. Pursuant to [§] 7 (b) [of
the purchase agreement], [the defendant] exercised its
right to terminate the purchase agreement on February
5, 2007. The court finds for [the defendant] on count
[one] of its counterclaim for breach of contract.’’
Count one of the defendant’s counterclaim contains
the following allegation: ‘‘[The plaintiff], by failing to
provide the service it contracted to provide to [the
defendant through the circuit], breached its obligations
to [the defendant] under the terms of the [purchase]
[a]greement.’’ It certainly appeared that the trial court
found that the plaintiff had breached the purchase
agreement due to its failure to provide services. Due
to the difference of opinion between counsel for the
plaintiff and counsel for the defendant, however, we
ordered the trial court to articulate its decision. In its
articulation, the trial court left no doubt. ‘‘The response
is in the affirmative that this court did find that [the
defendant] had proven that [the plaintiff] had breached
the purchase agreement . . . .’’ Therefore, we will eval-
uate this claim under the clearly erroneous standard
of review.
There is no question that the trial court’s finding that
the plaintiff breached the purchase agreement by failing
to provide the services is supported by numerous,
detailed factual findings set out in the trial court’s deci-
sion, all of which are, in turn, fully supported by the
record.
The trial court correctly found that, because the pur-
chase agreement called for the plaintiff to resell Global’s
services to the defendant, the relationship between the
plaintiff and Global was central to the plaintiff’s perfor-
mance under the purchase agreement. The trial court
also found that, almost immediately after entering the
purchase agreement, the plaintiff embarked upon a
course of dealing with Global that first jeopardized and
impaired the plaintiff’s ability to provide the services,
and ultimately made the services completely unavail-
able to the defendant. The trial court’s decision recited
at length the facts it found relevant to its ‘‘decision
concerning the interplay between the parties’ reliance
on [Global’s] circuitry and the performance of the [pur-
chase agreement].’’ For example, the trial court found
that ‘‘[b]y mid-January, 2007, there was an ongoing dis-
pute between [Global] and [the plaintiff] about the
amount and scope of the long-distance service being
sent by [the plaintiff] through [Global]’’ and that Global
had become ‘‘concerned’’ that the plaintiff was violating
the retail customer agreement and taking unfair advan-
tage [of Global].’’
The trial court continued to find the following: ‘‘Dur-
ing January, 2007, [the defendant] filed trouble tickets
with [Global] because of service problems with calls
being routed through the . . . circuit to their service.
. . . On January 25, 2007, [Egan] . . . sent a letter to
[the plaintiff] advising [it] of multiple service issues
for long-distance calls being transmitted through [its]
circuit. . . . [The defendant] requested assistance
from [the plaintiff] to resolve these issues; otherwise,
[the defendant] would not be committed by [the pur-
chase agreement] to pay the [minimum usage charge]
for January, 2007, due to unacceptable service quality.’’
The trial court noted the January 26, 2007 letter from
Global to the plaintiff, which claimed that the plaintiff
had breached the retail customer agreement by ‘‘resell-
ing’’ the services Global provided to the plaintiff, and
the fact that, ‘‘[a]s a result of the termination of service
by [Global], which shut down all of [the plaintiff’s] cir-
cuits, [the plaintiff] on January 29, 2007, filed [for bank-
ruptcy].’’ Finally, the trial court noted the following:
‘‘[O]n March 15, 2007, the . . . circuit . . . through
which [the defendant] would have run long-distance
[calls], had gone into ‘alarm,’ which meant that the
switch and ports were out of service. This event precipi-
tated an inquiry from [Global], which monitored all of
its switches. Upon confirmation that traffic was not
running through the switch, [Global] removed service
from the . . . circuit. This meant that the [circuit] was
not operational and could no longer provide long-dis-
tance . . . service. This switch was never restored to
working order; to do so would have required a request
to [Global] by [the plaintiff] as its customer. [Global]
never received such a request from [the plaintiff]. Con-
sequently, as of March 15, 2007, the . . . circuit[s] that
would have run [the defendant’s] long-distance [calls
were] inoperable and [the defendant] could do nothing
directly about this situation because it was [the plain-
tiff’s] obligation to contact [Global] to restore the
service.’’
These detailed and fully supported factual findings
underlie the trial court’s ultimate finding that the defen-
dant had proven the allegations set forth in the first
count of its counterclaim—namely, that the plaintiff had
breached the purchase agreement by failing to provide
services. The trial court also made the explicit findings
about the credibility of witnesses, which support its
conclusion finding in favor of the defendant. Specifi-
cally, the trial court found as follows: ‘‘The court would
be remiss if it did not comment on the credibility of
the testimony and evidence. The principal witnesses
were [Vlahos] for [the plaintiff] and [Egan] for [the
defendant].
‘‘[Vlahos] testified over the course of five days.
[Vlahos’] testimony was lacking in credibility and can-
dor. He failed to answer direct questions, instead
launching into a long narrative where he attempted
to spin a response in justification of his position. His
testimony went beyond self-serving. He was evasive and
obstructive in his responses during cross-examination.
For the most part, [Vlahos’] testimony was disingenuous
and manipulative of the facts.
‘‘[Egan’s] testimony was more logical and supported
by the documentary evidence. [Egan’s] testimony was
more credible than [Vlahos’] as to the pertinent events
that took place between [the plaintiff and the defendant]
regarding the purchase agreement, the eventual breach,
and subsequent events.’’
On the basis of the foregoing, we conclude that the
trial court’s findings are supported by the record and,
therefore, are not clearly erroneous. Because the trial
court’s finding that the plaintiff breached the purchase
agreement by failing to provide the services is sup-
ported by the record and by the trial court’s explicit
credibility findings on the issue of which party breached
the contract, those findings are entitled to deference
by this court and may not be disturbed. See Crowell v.
Danforth, supra, 222 Conn. 156 (trial court’s findings
binding on appeal unless clearly erroneous); see also
United Components, Inc. v. Wdowiak, 239 Conn. 259,
262–63, 684 A.2d 693 (1996) (deference to trial court’s
findings is particularly appropriate where there is con-
flicting testimony).
Our conclusion that the trial court’s finding that the
plaintiff breached the purchase agreement by failing to
provide the services was supported by the record and
was not clearly erroneous makes it unnecessary to
reach the issue of whether the trial court was correct
in also granting the declaratory judgment sought in
count two of the defendant’s counterclaim—namely, a
judgment declaring that the defendant’s exercise of its
contractual right to terminate the purchase agreement
due to the plaintiff’s bankruptcy was valid and effective.
The trial court’s explicit findings that the plaintiff was
responsible for making the services unavailable to the
defendant no later than March 15, 2007, and that the
service remained unavailable to the defendant through
the remainder of the purchase agreement’s term, cou-
pled with the undisputed fact that the defendant made
no use of its circuit after January 25, 2007, mean that
the defendant would be entitled to damages and attor-
ney’s fees regardless of whether the court was also
correct in deciding that the defendant’s February 5, 2007
notice of termination was valid and effective. Therefore,
there is no need for us to discuss the import of the
plaintiff’s bankruptcy petition and, accordingly, we
decline to address that issue. See footnote 2 of this
opinion.
II
DAMAGES CLAIMED BY THE PLAINTIFF
The plaintiff next claims that the trial court incor-
rectly failed to grant the plaintiff any relief on count
one of its complaint for the defendant’s failure to pay
invoices for actual usage, shortfall charges, and interest
for the contract period preceding the termination.4 The
plaintiff claimed damages for the defendant’s failure to
pay invoices for December, 2006, through March, 2007.
It claims that the court erred in failing to award damages
in the amount of $221,390.99 plus interest at a rate of
1.5 percent. We disagree.
In its articulation, the trial court explained as follows:
‘‘This court heard evidence on damages both from [the]
plaintiff as to its claims for breach of contract and the
defendant as to its claims for breach of contract. This
court found the supporting evidence favored the defen-
dant’s claim for breach of contract.’’
The trial court’s finding as to whether the plaintiff
met its burden of proving a breach of contract claim
represents a factual determination. As we have
explained previously in this opinion, ‘‘[t]he trial court’s
findings are binding upon this court unless they are
clearly erroneous in light of the evidence and the plead-
ings in the record as a whole. . . . We cannot retry
the facts or pass on the credibility of the witnesses.’’
(Citations omitted; internal quotation marks omitted.)
Nor’easter Group, Inc. v. Colossale Concrete, Inc., 207
Conn. 468, 473, 542 A.2d 692 (1988). ‘‘A finding of fact
is clearly erroneous when there is no evidence in the
record to support it . . . or when although there is
evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction
that a mistake has been committed.’’ (Internal quotation
marks omitted.) Crowell v. Danforth, supra, 222
Conn. 156.
On the basis of the trial court’s articulation, credibil-
ity determinations and the evidence in the record, we
cannot conclude that the trial court’s finding that the
plaintiff did not establish its breach of contract claim
is clearly erroneous. Nothing in the record establishes
that the plaintiff was damaged by the defendant’s failure
to pay the December, 2006 and January, 2007 invoices.
Specifically, the plaintiff points to nothing in the record
to establish that the plaintiff ever paid anything to
Global for the services resold to the defendant on the
December, 2006 and January, 2007 invoices. Moreover,
any damages pertaining to invoices after January, 2007,
are foreclosed by the trial court’s well supported factual
findings that the plaintiff breached the purchase
agreement by making its services unavailable to the
defendant.5 Accordingly, we cannot conclude that the
trial court’s finding that the plaintiff failed to prove its
breach of contract claim was clearly erroneous.
III
AWARD OF DAMAGES TO THE DEFENDANT
The plaintiff claims that the trial court incorrectly
awarded damages to the defendant in excess of a provi-
sion in the purchase agreement that limited damages.
The plaintiff claims that this court should review its
claim de novo because it involves the interpretation of
the unambiguous language of the purchase agreement,
which the trial court found enforceable. Whereas, the
defendant asserts that the trial court’s damages award,
given the limitation on liability imposed by the purchase
agreement, was based on findings of fact regarding the
damage suffered because of the plaintiff’s breach and
the consideration the defendant paid to the plaintiff
under the purchase agreement. Therefore, the defen-
dant claims that these factual findings are subject to
review under the clearly erroneous standard and may
not be disturbed unless found without support in the
record.
‘‘The standard of review for the interpretation of a
contract is well established. Although ordinarily the
question of contract interpretation, being a question of
the parties’ intent, is a question of fact . . . [however,
when] there is definitive contract language, the determi-
nation of what the parties intended by their . . . com-
mitments is a question of law [over which our review
is plenary]. . . . If the language of [a] contract is sus-
ceptible to more than one reasonable interpretation,
[however] the contract is ambiguous. . . . Ordinarily,
such ambiguity requires the use of extrinsic evidence
by a trial court to determine the intent of the parties and,
because such a determination is factual, it is subject
to reversal on appeal only if it is clearly erroneous.’’
(Citations omitted; internal quotation marks omitted.)
Bristol v. Ocean State Job Lot Stores of Connecticut,
Inc., 284 Conn. 1, 7, 931 A.2d 837 (2007). Once the trial
court interprets the provisions of a contract, however,
the calculation of a party’s specific damages under the
contract is a factual determination, which may only be
reversed if it is clearly erroneous. Gianetti v. Norwalk
Hospital, 304 Conn. 754, 780, 43 A.3d 567 (2012). We
consider the terms of the contract in this case to be
both clear and unambiguous. Therefore, in determining
the meaning of the purchase agreement, we exercise
plenary review.
Section 4 (c) of the purchase agreement provides in
relevant part: ‘‘In no event shall [the plaintiff’s] liability
arising out of this agreement exceed the amount paid
to [the plaintiff] by [the defendant] for the specific pur-
chased equipment or services giving rise to such liabil-
ity. . . .’’
The plaintiff argues that, although the defendant
made an initial payment of $459,000, the purchase
agreement makes clear that this payment was for equip-
ment and not services. It claims that, since the trial
court found the limitation on liability enforceable, the
trial court erred in awarding the defendant damages
and attorney’s fees in excess of the amount paid by
the defendant for services. In response, the defendant
argues that the trial court heard testimony from both
sides about the payment terms of the purchase
agreement, including the defendant’s initial payment of
$459,000, and that, because there was no dispute that
the defendant had paid $459,000 to the plaintiff for
equipment, the trial court properly included that sum
when calculating the limitation of liability under the
purchase agreement.
In the present case, the trial court found that the
defendant had paid the plaintiff a total of $694,000 pur-
suant to the purchase agreement. It reached this sum
by adding the defendant’s initial payment of $459,000
to the $235,000 credit on the defendant’s account.6 The
trial court found the limiation of liability clause in the
purchase agreement enforceable and, accordingly, lim-
ited the damages on the defendant’s breach of contract
counterclaim to $694,000.
The plaintiff argues that, because the defendant never
paid for services, and because the $459,000 the defen-
dant initially paid was for equipment and not services,
the trial court should not have awarded any money to
the defendant.7 We disagree. The purchase agreement
provides that ‘‘[i]n no event shall [the plaintiff’s] liability
. . . exceed the amount paid to [the plaintiff] by [the
defendant] for the specific purchased equipment or
services giving rise to such liability.’’ (Emphasis added.)
This language is unambiguous. There is no question
that the moneys considered by the trial court in calculat-
ing the limitation of damages went to the purchase of
equipment. The plaintiff’s interpretation of the limita-
tion of liability clause would focus only on the term
‘‘services’’ and omit the language relating to equipment.
Since both the credit on the defendant’s account of
$235,000 and the defendant’s initial payment of $459,000
went to equipment, the trial court correctly included
those sums when calculating the limitation of damages.
The trial court’s interpretation of this provision in the
purchase agreement is correct, and its award is fully
supported by the evidence.
In addition, we note that the trial court correctly
considered the applicability of the limitation of liability
clause to the issue of damages. In its articulation the
trial court stated as follows: ‘‘[T]his court’s award of
damages to the defendant was based upon the finding
of the breach of contract by the plaintiff as alleged in
count [one] of [the defendant’s] counterclaim. This
court heard evidence on damages both from [the] plain-
tiff as to its claims for breach of contract and the defen-
dant as to its claims for breach of contract. This court
found the supporting evidence favored the defendant’s
claim for breach of contract. Although the defendant
presented evidence of damages far in excess of what
this court ordered, as referenced in this court’s original
decision, the court found the liquidated damages clause
in the purchase agreement . . . limited the extent of
the damages that could be awarded to the defendant
for the plaintiff’s breach of contract. The court’s award
of damages to the defendant was based on the finding
of the breach of the purchase agreement as alleged in
count [one] of [the defendant’s] counterclaim.’’
Accordingly, we conclude that the trial court’s award
of damages to the defendant in the amount of $694,000
is not only based upon a correct interpretation of the
limitation of liability clause set forth in the purchase
agreement, but is also supported by the record.
The plaintiff also claims that the trial court incor-
rectly awarded the defendant damages and attorney’s
fees in excess of the amount paid by the defendant to
the plaintiff. It claims that contractual limitations on
liability involving telecommunications services are
enforceable except for gross negligence or wilful mis-
conduct. See, e.g., In re CCT Communications, Inc.,
464 B.R. 97, 108–15 (Bankr. S.D.N.Y. 2011). Essentially,
the plaintiff argues that the award of attorney’s fees by
the trial court exceeded the limitation of liability clause
set forth in the purchase agreement. We disagree.
The trial court did not award attorney’s fees under
the limitation of liability clause. The trial court indicated
in its decision that ‘‘[t]here remains the issue of costs
and reasonable attorney’s fees to be awarded . . . pur-
suant to . . . the purchase agreement.’’ Subsequently,
the trial court rendered a judgment for that included
attorney’s fees in the amount of $936,441.18. At the
outset, we note that, to the extent this issue requires
interpretation of the purchase agreement, we apply ple-
nary review. See Bristol v. Ocean State Job Lot Stores
of Connecticut, Inc., supra, 284 Conn. 7. Again, we find
that the relevant terms of the contract clause are clear
and unambiguous.
Section 16 of the purchase agreement is entitled
‘‘Costs & Attorney’s Fees.’’ It provides: ‘‘If either party to
this [a]greement brings any action, claim, or proceeding
against the other party to this [a]greement arising under
this [a]greement, or to enforce any of the terms of
this [a]greement, or otherwise pertaining to the subject
matter of this [a]greement, then the prevailing party
shall be entitled to recover from the other party the
actual costs and reasonable attorney’s fees incurred
thereby, and whether such action, claim, or proceeding
is [prejudgment] or [postjudgment].’’
On appeal, the plaintiff has only challenged the appli-
cability of the limitation of liability clause to the award
of attorney’s fees and has not challenged the reason-
ableness of the award of costs and attorney’s fees.
A review of the purchase agreement demonstrates
that the award of costs and attorney’s fees were not to
be considered by the parties as damages subject to
the limitation of liability clause. First, the limitation of
liability clause does not mention costs or attorney’s
fees. To the contrary, costs and attorney’s fees are
addressed in a separate section of the purchase
agreement. Second, the attorney’s fees clause does not
mention the limitation of liability clause, or otherwise
indicate that it is subject to that clause. Third, the award
of attorney’s fees is only to be paid to the prevailing
party. In the context of this case, that would have only
been decided after a full trial and after all of the evi-
dence of damages had been presented. For this reason,
the trial court held a separate proceeding in order to
award attorney’s fees. Accordingly, we conclude that
the trial court correctly concluded that the award of
costs and attorney’s fees in the present case was not
subject to the limitation of liability clause contained
within the purchase agreement.
The judgment is affirmed.
In this opinion the other justices concurred.
1
We note that, after the present action was commenced, Zone Telecom,
Inc., became ANPI Business, LLC. For the sake of clarity, we note that
references in this opinion to the defendant are to Zone Telecom, Inc.
2
The plaintiff also asserts that the trial court incorrectly determined that
a letter from the defendant dated February 5, 2007, was an effective exercise
of the defendant’s right to terminate and that the plaintiff breached the
purchase agreement by filing a bankruptcy petition. Because we conclude
that the trial court properly determined that the plaintiff breached the pur-
chase agreement by failing to provide the agreed upon services, we need
not reach these issues.
3
The plaintiff appealed from the judgment of the trial court to the Appellate
Court, and we transferred the appeal to this court pursuant to General
Statutes § 51-199 (c) and Practice Book § 65-1.
4
We note that the trial court rendered judgment in favor of the defendant
on count two of the plaintiff’s complaint, which asserted a claim for account
stated. The plaintiff did not appeal from the judgment of the trial court on
count two of the complaint. Its only claim on appeal regarding the defen-
dant’s failure to pay the invoices relates to the trial court’s failure to award
damages for count one of the complaint, which alleged breach of contract.
5
As discussed previously in this opinion, this finding rests on, inter alia,
the service disruptions in January, 2007, the removal of service by Global
on March 15, 2007, and the plaintiff’s subsequent failure to take any steps
to restore service.
6
This credit reflects a loan from the defendant that enabled the plaintiff
to purchase equipment prior to the execution of the purchase agreement.
As discussed previously in this opinion, the plaintiff undertook an obligation
to repay this loan through credits on the defendant’s account. The plaintiff’s
brief does not, however, mention this loan in relation to the limitation
of damages.
7
The plaintiff reaches this conclusion without any discussion of the
$235,000 credit on the defendant’s account. See footnote 6 of this opinion.