Chioffi v. Martin , 181 Conn. App. 111 ( 2018 )

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MARK P. CHIOFFI v. CHRISTOPHER G.
MARTIN ET AL.
(AC 38443)
Lavine, Elgo and Beach, Js.
Syllabus
The plaintiff sought to recover damages from his law partner, the defendant
M, for, inter alia, breach of fiduciary duty and breach of a partnership
agreement arising out of the dissolution of the limited liability partner-
ship they had formed for the practice of law. The plaintiff claimed, inter
alia, that M, as part of the winding up of the partnership, had improperly
distributed certain assets to himself in violation of the partnership
agreement. M filed a counterclaim, seeking damages and attorney’s fees.
At the time of the dissolution of the partnership, M had a 57 percent
interest in the partnership, and the plaintiff had a 43 percent interest
in the partnership. Under the partnership agreement, revenue was to
be allocated between three capital accounts, namely, a corporate
account for which M was responsible, a trusts and estates account for
which the plaintiff was responsible, and a ‘‘remaining’’ account into
which all other revenues were allocated. The distribution of funds to
the plaintiff and M was governed by § 3.02 of the partnership agreement,
which required that, following any distribution, the balances in the
plaintiff’s and M’s capital accounts be directly proportionate to their
ownership percentages. The partnership agreement also contained
restrictions in § 4.03 on certain actions that the plaintiff and M could
take. Any losses or expenses, including attorney’s fees, arising from a
partner’s actions were to be allocated exclusively to that partner’s capital
account. After a trial to the court, the court rendered judgment for the
plaintiff on his claim for breach of contract. The trial court found that
M had breached the partnership agreement and awarded the plaintiff,
inter alia, damages and attorney’s fees. On M’s appeal and the plaintiff’s
cross appeal to this court, held:
1. The trial court properly found that M breached § 3.02 of the partnership
agreement when he distributed revenues from the corporate account
to himself without regard for the required ratio of partnership assets in
his and the plaintiff’s capital accounts; the clear language of the partner-
ship agreement provided that the allocation of partnership revenues
and expenses was to continue through the time of the final distributions,
and that distributions were to be made such that the plaintiff’s and M’s
capital account balances were to be in proportion to their ownership
interests in the partnership, and there was nothing in that portion of
the partnership agreement to suggest that the specifically designed bal-
ancing of accounts was to be abandoned when one partner gave notice
of his intention to withdraw from the partnership.
2. The trial court improperly concluded that M breached § 4.03 of the partner-
ship agreement when he assigned corporate accounts receivable and
works in progress to a new law firm that he had formed; the restrictions
listed in § 4.03 pertained to the partnership’s dealings with third parties,
there was no actionable breach on the basis of § 4.03, as M’s assignment
of corporate assets did not create additional partnership losses or
expenses, and even if M could be deemed to have breached § 4.03 (b), the
sole remedy was the assignment of that expense to his capital account.
3. The trial court did not abuse its discretion when it ordered a direct
payment from M to the plaintiff rather than a reduction in M’s capital
account; because M breached the agreement by distributing partnership
assets to himself without observing the balance of the corporate
accounts, a reduction in his capital account would have been pointless,
as it would have permitted him to distribute assets to himself without
regard to the relative states of the accounts, and the partnership
agreement provided an exception to the limited liability of a partner
where, as here, M violated an express term of the partnership agreement,
which subjected him to personal liability for his breach of the partner-
ship agreement.
4. The trial court’s award of attorney’s fees to the plaintiff pursuant to § 4.03
of the partnership agreement was improper and could not stand, as that
court erred in finding that M had breached § 4.03, and because the
court found no other basis for its award of attorney’s fees, that award
was vacated.
5. The trial court improperly failed to conclude that M breached his fiduciary
duty to the plaintiff; M took partnership assets over the objection of
the plaintiff, who received no benefit or consideration for the self-dealing
distributions made by M, the partnership agreement did not compromise
or expressly limit the parties’ duty of loyalty, and because the plaintiff’s
complaint had requested attorney’s fees for M’s breach of fiduciary duty,
the case had to be remanded for a determination of whether the plaintiff
was entitled to such fees and, if so, in what amount.
6. The trial court did not abuse its discretion in its method of calculating
damages; that court properly calculated the amount that would have
been distributed by the partnership to the plaintiff if M had adhered to
the requirements of the partnership agreement and the partnership’s
liabilities had not been satisfied predominantly by the plaintiff’s share,
and any additional funds placed in M’s capital account would have
been profits of the corporate department, to which the plaintiff was
not entitled.
7. The trial court did not commit clear error or abuse its discretion in finding
that the plaintiff waived his claim for an accounting; the partnership
agreement contained no absolute requirement for an accounting, which
is discretionary pursuant to statute (§ 34-339 [b]), the plaintiff litigated
his claims at trial and did not mention the request in his complaint for
an accounting until posttrial reargument, and even if there was no
waiver, the trial court’s decision denying an accounting was not an
abuse of discretion, as the trial and discovery constituted a remedy at
law that was available to the plaintiff, and the expense of an accounting
and the resulting delay outweighed whatever benefit would have been
gained by ordering an accounting.
Argued October 12, 2017—officially released April 17, 2018
Procedural History
Action to recover damages for, inter alia the named
defendant’s alleged breach of contract, and for other
relief, brought to the Superior Court in the judicial dis-
trict of Stamford-Norwalk, where the named defendant
filed a counterclaim; thereafter, the matter was trans-
ferred to the Complex Litigation Docket and tried to
the court, Genuario, J.; judgment for the plaintiff on
the complaint in part and on the counterclaim; subse-
quently, the court granted the plaintiff’s motions for
reargument and attorney’s fees, and amended its judg-
ment; thereafter, the court denied the named defen-
dant’s motion for reargument, and the named defendant
appealed and the plaintiff cross appealed to this court;
subsequently, the court, Genuario, J., issued an articu-
lation of its decision. Reversed in part; further pro-
ceedings.
William H. Champlin III, with whom, on the brief,
was Mark S. Gregory, for the appellant-appellee
(named defendant).
Timothy G. Ronan, with whom, on the brief, was
Assaf Z. Ben-Atar, for the appellee-appellant (plaintiff).
Opinion
BEACH, J. This action arises out of the dissolution of
a registered limited liability partnership. The defendant
Christopher G. Martin1 appeals, following a trial to the
court, from the judgment rendered in favor of the plain-
tiff, Mark P. Chioffi, on the count of the plaintiff’s com-
plaint which alleged breach of contract. The trial court
awarded Chioffi $34,120 in compensatory damages,
$103,000 in attorney’s fees, and $6226.73 in costs. The
defendant claims on appeal that the court erred in (1)
finding a breach of § 3.02 of the parties’ partnership
agreement; (2) finding a breach of § 4.03 of the partner-
ship agreement; (3) ordering the defendant to pay dam-
ages directly to the plaintiff rather than ordering a
reduction in the defendant’s capital account in the part-
nership; and (4) awarding attorney’s fees to the plaintiff.
The plaintiff cross appealed, claiming that the court (1)
erred in not finding a breach of fiduciary duty, as alleged
in count one of his complaint; (2) erred in its calculation
of damages; and (3) abused its discretion in holding
that the plaintiff waived his claim for an accounting.
We agree with the defendant’s second and fourth claims
and the plaintiff’s first claim. Accordingly, we reverse
in part the judgment of the court and remand the case
for a hearing on attorney’s fees. We otherwise affirm
the court’s judgment.
The parties, partners in Martin Chioffi LLP, a law
firm, entered into a partnership agreement in 2012; the
agreement by its terms was to be effective retroactively
to January 1, 2010. The agreement comprehensively
described and prescribed the operations of the partner-
ship; a copy of the partnership agreement was an exhibit
before the court.
The agreement contemplated that revenue was to be
allocated between three capital accounts: the corporate
account, for which Martin was responsible; the trusts
and estates account, for which Chioffi was responsible;
and the ‘‘remaining’’ account, into which all other reve-
nues were allocated. See § 3.01 (c). The balance of each
account was to be adjusted periodically by adding to
it the appropriately allocated share of partnership reve-
nue, and subtracting from it the allocable share of
expenses and distributions to partners. See § 2.02.
The process used to determine the ‘‘calculation and
allocation of net profits and losses’’ was set forth in
article III of the agreement. As previously mentioned,
there were three capital accounts corresponding to the
three departments: corporate, trusts and estates, and
everything else. Section 3.02 (b). Revenues were ini-
tially allocated to the appropriate account. Section 3.02
(c). Expenses were also allocated among the three
departments. ‘‘Direct expenses’’ of each department
were to be allocated accordingly; ‘‘indirect expenses,’’
such as rent, utilities, and costs of administrative per-
sonnel, were allocated among the departments ‘‘in pro-
portion to the number of billing professionals’’ in each
department. Section 3.01 (d) (ii). The net profits or
losses for each department were determined by sub-
tracting the direct and indirect expenses attributed to
each department from the revenue so attributed. The
net profits for the corporate account were then allo-
cated to Martin’s capital account, those of the trusts
and estates department to Chioffi’s capital account, and
net profits for the ‘‘remaining,’’ or other, department
were divided between Martin’s capital account and Chi-
offi’s capital account in proportion to the ownership
percentage of each partner. Section 3.01 (e) and (f).
Martin’s ownership interest was 57 percent and Chioffi’s
43 was percent. Schedule 1 of the partnership
agreement.
The allocation process did not in itself cause the
actual, physical transfer of funds; rather, the process
simply sorted revenues and expenses into separate capi-
tal accounts. Distribution of funds to partners was gov-
erned by § 3.02 of the agreement: ‘‘Distributions shall
be made monthly and at such other times as the partners
agree such that, following any such distribution, the
capital account balances of the partners shall be directly
proportionate to the ownership percentages of such
partners. Monthly distributions for determining net
income shall include cash paid to each partner, 401 (k)
contributions, all related expense for business, automo-
bile, and certain entertainment for certain clients not
considered joint as it relates to the firm consistent with
past practices of the partnership.’’
The management of the partnership was consistent
with the allocation of revenues. Martin was the manag-
ing partner. Section 4.01. Article IV, entitled ‘‘Manage-
ment; Restrictions,’’ indicated that the partnership was
to be ‘‘managed and the conduct of its business . . .
controlled (except as otherwise specifically provided
herein) by the partners’’ such that ‘‘any decisions per-
taining to the provision of corporate services [were to]
be made by Martin in his sole discretion,’’ and Chioffi
enjoyed identical authority as to the trusts and estates
department. Section 4.02. Other decisions were to be
made by mutual consent.
Article IV also listed, in § 4.03, seven specific actions
which a partner was prohibited from performing except
with the consent of the other partner. These ‘‘restric-
tions’’ included, in part, compromising partnership
claims, committing the partnership to financial obliga-
tions, and selling or assigning an interest in the partner-
ship. Any losses or expenses, including attorney’s fees,
arising from such transgressions were to be ‘‘allocated
exclusively to such partner’s capital account.’’ Sec-
tion 4.03.
Further sections governed a partner’s withdrawal
from the partnership and its dissolution. Section 7.01
provided that a partner could withdraw at any time,
provided that the withdrawing partner was to give at
least ninety days notice before the effective date of
the withdrawal. Section 7.02 provided that upon the
withdrawal of a partner, ‘‘the partners shall dissolve
and liquidate the partnership pursuant to [article VIII].’’
Article VIII, in turn, set forth the procedures for disso-
lution and liquidation. The partners were to ‘‘work
together in good faith’’ to ‘‘immediately’’ wind up the
affairs and to ‘‘minimize to the greatest extent possible
the costs incurred’’ by the partnership or any partner.
Section 8.01. The costs which were incurred were to
be ‘‘allocated and apportioned to the partners in accor-
dance with the departmental profit calculation.’’2 Id.
Section 8.02 provided for liquidation. If the partner-
ship were dissolved, the partners were to be the ‘‘liqui-
dating trustees’’ and were to take appropriate actions,
including making ‘‘final distributions’’ pursuant to § 8.03
and the Connecticut Uniform Partnership Act (act),
General Statutes § 34-300 et seq. The costs of dissolu-
tion and liquidation were to be expenses of the partner-
ship, and were ‘‘to be allocated and apportioned
between Martin and Chioffi in accordance with their
ownership percentages . . . .’’ Section 8.02. The part-
ners were to continue to operate the affairs of the part-
nership ‘‘until final distributions have been made
. . . .’’ Section 8.02.
According to § 8.03, the assets of the partnership,
‘‘net of partnership liabilities,’’ were to be distributed
‘‘upon liquidation . . . .’’ The net assets to be distrib-
uted at that time included ‘‘all accounts receivable,
works in progress and contingent fees with respect to
any partner [which were to] be allocated in accordance
with the departmental profit calculation,’’3 and any ‘‘spe-
cial allocations’’ were to be determined in accordance
with the respective ownership percentages of the part-
ners, unless otherwise agreed by the parties. Any other
assets were also to be distributed in accordance with
the ownership percentages. Id.
The following facts, as found by the trial court, and
procedural history are relevant to our resolution of the
claims on appeal. As the court stated in its memoran-
dum of decision: ‘‘This action arises out of the dissolu-
tion of a limited liability partnership formed for the
practice of law. The dissolution was occasioned by the
voluntary withdrawal from the partnership of the defen-
dant Martin, who owned a 57 percent interest in the
partnership. The plaintiff was the only other [equity]
partner. He owned a 43 percent interest. . . .
‘‘This dissolution did not occur under the best of
circumstances. Besides . . . deficient communication
between the partners and . . . different points of view,
the dissolution was plagued by two particularly trouble-
some and substantial issues. The first dealt with the
lease, to which the partnership was a party, and the
second dealt with the disproportionate balances
reflected in the partners’ capital accounts.’’ (Foot-
notes omitted.)
In its memorandum of decision, the court described
the partnership’s lease and its ramifications for the dis-
solution as follows: ‘‘In June, 2012, the partnership
entered into a lease that did not expire until December
31, 2017. The base monthly rent of the lease was
$24,916.67. Both parties described the lease as both a
liability and an asset. The lease required substantial
payments and was a substantial liability to the partner-
ship. The rent payable was viewed by the parties to be
below fair market value and therefore was considered
a significant asset. Moreover, the partnership as a tenant
had various subtenants whose rent covered $11,961.67
of this partnership’s monthly rental obligation. Because
each party intended to form [his] own firm upon dissolu-
tion of the partnership, each partner initially had a
desire to remain in the premises or, at least, in a portion
of the premises. The plaintiff and the defendant, how-
ever, could not reach an agreement as to an allocation
of the space contained in the premises. Notably, neither
partner personally guaranteed or signed the lease in
[his] individual capacity, and the only obligor under
the lease was the limited liability partnership. Both the
plaintiff’s new firm . . . and the defendant’s new firm
. . . continued to occupy the space subsequent to the
dissolution of the partnership on November 15, 2013,
until such time as the defendant’s new firm vacated the
premises in June, 2014. From November 15, 2013, the
parties practiced law and operated their new firms inde-
pendently of one another, communicating only when
necessary regarding their shared space and the winding
up process. The defendant’s new firm did not pay any
rent for its occupancy of this space to the partnership
or the lessor during the period between dissolution of
the partnership and its vacating of the premises in June
or, for that matter, thereafter. During the postdissolu-
tion period, the plaintiff contributed $12,600 to assist
the partnership in meeting its rental obligations. The
rent that was due the lessor was fully paid by September
1, 2014, by virtue of certain assets of the partnership
(cash remaining in the partnership accounts, accounts
receivable of the remaining departments, rent from the
subtenants, the plaintiff’s contribution as indicated and
finally by allocation of $35,000 of the partnership’s
$74,750 security deposit). Both [the] plaintiff and the
defendant individually entered into discussions with
the lessor concerning a new lease or leases, but no
agreement was reached until after the defendant’s firm
had vacated the premises. In August, 2014, the plaintiff’s
new firm and the lessor entered into a new lease, effec-
tive September 1, for the same space previously occu-
pied by the partnership and at the same rental price.
The agreement between the plaintiff’s new firm and the
lessor also eliminated liability of the partnership for
the balance of the partnership’s leasehold obligations
and allowed the plaintiff’s new firm to continue to
receive the benefit of the rents payable by the subten-
ants. The partnership’s security deposit of $74,750 was
allocated as follows: $35,000 for the payment of the
partnership rental obligations up and through August
31, 2014, and $39,750 as a portion of the plaintiff’s new
firm’s security deposit.’’
The court found the following facts regarding the
state of the capital accounts and the liquidation of the
partnership: ‘‘[Although] all three departments of the
partnership were financially healthy, the corporate
department generated far more net income and,
because it had more billing professionals, was responsi-
ble for a larger share of the indirect costs of the partner-
ship. During the last two years of the partnership’s
existence, the defendant took distributions from his
capital account [in] excess of the net income that was
allocable to his capital account on a cash basis. In other
words, he took more money than he made during that
time period and, in fact, on the date he gave notice of
his intent to withdraw, his capital account was negative
in excess of $150,000. This excessive distribution was,
at least in part, financed by increases in the partnership
credit line and increases in draws against that credit
line. These excessive distributions were done with the
knowledge and consent of the plaintiff, as was the activ-
ity regarding the partnership credit line. The defen-
dant’s rationale for taking these distributions, as
expressed to the plaintiff, was based upon the fact that
the corporate department had very substantial accounts
receivable that eventually would more than offset the
distributions he was taking. In fact, the corporate
department did have substantial accounts receivable.
‘‘[Although] the plaintiff consented to these distribu-
tions, that consent was based upon the [defendant’s]
representations that draw[s] from the credit line which
financed the distributions would be repaid through the
collection of the corporate department accounts receiv-
able in approximately six months. The credit line was
eventually, though well past the represented time frame,
paid in full through these corporate department assets
shortly before the dissolution of the firm. However, the
practice left the partners’ capital accounts in a relation-
ship that was directly in contradiction to the express
provisions of the partnership agreement. The partner-
ship agreement states that ‘distributions shall be made
monthly and at such other times as the partners agree
such that, following any such distribution, the capital
account balances of the partners shall be directly pro-
portionate to the ownership percentage of such part-
ners.’ In other words, at any given point in time, the
defendant’s capital account balance should be 57 per-
cent of the total capital account balance of the two
partners, and the plaintiff’s capital account balance
should be 43 percent of that total. [Although] the plain-
tiff may have consented to distributions that were tem-
porarily in excess of the amount [that] the defendant
was entitled to receive under the [partnership
agreement], there was no evidence that such consent
was intended to be a permanent amendment to the
partnership agreement. Nor is there any evidence that
such accommodation was intended to alter the financial
relationship between the partners or between the part-
ners and the firm. Nor is there any evidence to suggest
that, upon dissolution and liquidation of the firm, the
plaintiff would not be entitled to be paid 100 percent
of his capital account or, at least, an amount equal to
43 percent of the firm’s capital after payment of the
firm’s liabilities.
‘‘Both partners had firm credit cards and both part-
ners were allowed to use those credit cards for personal
expenses . . . . To the extent they did so, such per-
sonal expenses were treated as distributions to the
respective partner with a corresponding reduction in
the partner’s capital account. The defendant engaged
in this practice to a greater extent than the plaintiff,
particularly subsequent to June, 2013, when, as a result
of disagreements between the partners, the firm sus-
pended monthly cash distributions. [Although] the per-
sonal expenses were properly accounted for, those
expenditures further reduced the defendant’s capital
account in relation to that of the plaintiff.
‘‘The result of all of this was that, on November 15,
2013, the date of the dissolution of the partnership, the
plaintiff’s capital account was $178,436 and the defen-
dant’s capital account was $46,191. Moreover, the
defendant, acting in his capacity as liquidating trustee of
the partnership, assigned to himself all of the accounts
receivable and work[s] in progress of the corporate
department in a document dated November 16, 2013.
The defendant, by document also dated November 16,
2013, offered to assign to the plaintiff all of the accounts
receivable of the trust and estate departments. The
assignment of the corporate department work[s] in
progress and accounts receivable as of November 16,
2013 . . . had the effect of diverting from the partner-
ship cash that would have brought the partners’ capital
accounts back to the proportional relationship required
by the partnership agreement. Moreover, the balance
sheet of the partnership indicates that, as of November
15, 2013, there were insufficient assets, and particularly
liquid assets, remaining in the partnership from which
the plaintiff could be paid the amount due him based
upon his capital account and its relationship to the
defendant’s capital account.
‘‘The plaintiff did not accept distribution of the trust
and [estate department’s] accounts receivable on or
about November 16, 2013. During the weeks following
November 16, 2013, up until at least December 31, 2013,
he continued to deposit the funds generated by those
receivables into the partnership account. This caused
his capital account balance to increase even further.
Accordingly, on December 31, 2013, the capital account
balance of the plaintiff was $279,856 and the capital
account balance of the defendant was $36,734. The
plaintiff did accept assignment of the accounts receiv-
able of the trust and [estate department] on January
15, 2014, and, at that time, he withdrew $113,363 from
the partnership accounts with the consent of the defen-
dant as a distribution of capital.
‘‘The difference in the approach[es] that the parties
took to the accounts receivable between November
15, 2013, and December 31, 2013, is reflective of the
difference in the parties’ approach[es] toward the wind-
ing up of the partnership business. [The defendant]
believed that, upon dissolution, the parties should dis-
tribute the assets as quickly as possible, leaving in the
firm accounts only [those] which [were] necessary to
pay the final expenses of the partnership and, to the
extent there were assets available beyond what was
necessary to pay the remaining obligations of the firm,
they should be distributed immediately to accommo-
date the ongoing business of the successor firms. [The
plaintiff] believed all assets of the firm, including
accounts receivable, should continue to be collected
until such time as all firm obligations had been paid or
otherwise dealt with, until the lease liability was
resolved and until an agreement on capital account
adjustments had been reached. Distribution should
occur subsequently. Whether because of a change in
viewpoint or as a practical necessity, [the plaintiff] in
January, 2014, took a cash distribution of $113,363 with
the defendant’s consent. In the spring of 2014, [the
plaintiff] also took a $64,000 cash distribution without
the defendant’s consent.’’ (Footnotes omitted.)
After the date of the defendant’s withdrawal letter,
but prior to the partnership’s date of dissolution, the
plaintiff brought this action seeking, among other
things, an injunction to prevent the defendant from
winding up the affairs or liquidating and distributing
the assets of the partnership. The injunction was denied.
In the five count operative complaint, the plaintiff
alleged that the defendant breached his fiduciary duty,
breached the partnership agreement and converted
partnership property. He also sought an order for judi-
cial oversight and an accounting. The defendant filed
a counterclaim alleging breach of contract and statutory
theft, and seeking damages and attorney’s fees. After
a trial to the court, the court found that the defendant
breached the partnership agreement and awarded dam-
ages of $30,384 to the plaintiff, which the court later
amended to $34,120. The court also awarded $103,000
in attorney’s fees and $6226.73 in costs to the plaintiff.
The defendant’s claim for attorney’s fees was denied.
The defendant appealed and the plaintiff cross
appealed. We will set forth additional facts as necessary.
I
DEFENDANT’S APPEAL
The defendant claims on appeal that the court erred
in (1) finding a breach of § 3.02 of the partnership
agreement; (2) finding a breach of § 4.03 of the partner-
ship agreement; (3) ordering the defendant to pay dam-
ages directly to the plaintiff rather than reducing the
defendant’s capital account; and (4) awarding attor-
ney’s fees and costs to the plaintiff.
A
The defendant first claims that the trial court erred
in finding a breach of § 3.02 of the partnership
agreement.4 We disagree.
‘‘Except as otherwise provided [in this section], rela-
tions among the partners and between the partners
and the partnership are governed by the partnership
agreement. . . .’’ General Statutes § 34-303 (a).
‘‘Although ordinarily the question of contract interpre-
tation, being a question of the parties’ intent, is a ques-
tion of fact . . . [w]here there is definitive contract
language, the determination of what the parties
intended by their contractual communications is a ques-
tion of law . . . subject to plenary review by this court.
. . . In giving meaning to the terms of a contract, the
court should construe the agreement as a whole, and
its relevant provisions are to be considered together.
. . . The contract must be construed to give effect to
the intent of the contracting parties. . . . This intent
must be determined from the language of the instrument
and not from any intention either of the parties may
have secretly entertained. . . . [I]ntent . . . is to be
ascertained by a fair and reasonable construction of
the written words and . . . the language used must be
accorded its common, natural, and ordinary meaning
and usage where it can be sensibly applied to the subject
matter of the contract. . . . [Where] . . . there is
clear and definitive contract language, the scope and
meaning of that language is not a question of fact but
a question of law. . . . In such a situation our scope
of review is plenary, and is not limited by the clearly
erroneous standard. . . . Whether a contract is ambig-
uous is a question of law subject to plenary review.’’
(Citations omitted; internal quotation marks omitted.)
Schwartz v. Family Dental Group, P.C., 106 Conn. App.
765, 771, 943 A.2d 1122, cert. denied, 288 Conn. 911,
954 A.2d 184 (2008).
There is an animating difference between the parties’
interpretations of the partnership agreement. The
defendant’s position is that once the date of dissolution
arrived, in this case November 15, 2013, he was entitled
to withdraw for his sole benefit all of the assets of the
corporate department without regard to the provisions
other hand, maintains that distributions throughout the
liquidation process were subject to article III, and that,
in general, partnership expenses were to be subtracted
from revenues prior to distribution and that distribu-
tions were to be made such that the 57 to 43 ratio of
partnership assets was to be maintained. We agree with
the plaintiff.
There is no merit to the defendant’s contention that
he was free, during the liquidation process, to assign
all corporate revenue to himself without regard to
expenses and the maintenance of the ratio of partner-
ship assets in the partners’ capital accounts. The
agreement unambiguously required the prescribed dis-
tribution procedures to continue through the period of
liquidation. First, § 8.01, entitled ‘‘Dissolution of Part-
nership,’’ provided that the costs ‘‘in respect of such
dissolution’’ were to be allocated in accordance with
the departmental profit calculation, which, as we have
seen, allocated revenues to the several departments,
then assigned expenses to each department, and finally
provided that the required ratio between the capital
accounts was to be realized immediately following any
distribution (except perhaps the final distribution). Sec-
ond, in § 8.02, the agreement provided that upon disso-
lution, the partners became liquidating trustees and that
the expenses were to be apportioned; the business of
the partnership could be continued until the final distri-
butions were made. Third, as spelled out in § 8.03, upon
liquidation, all assets of the partnership net of partner-
ship liabilities were to be distributed according to the
departmental profit calculation. The agreement, then,
expressly contemplated that the allocation process was
to continue from the date of dissolution—here, Novem-
ber 15, 2013—through the period of liquidation until
and including, at least with respect to the ‘‘remaining’’
capital account, the final distribution. There is nothing
in the agreement indicating that the allocation process
was to cease at the date of dissolution, such that either
partner was free to appropriate partnership assets.5
As previously cited, the specific provisions of article
VIII, pertaining to dissolution and liquidation, refer to
the distribution of net assets and adherence to the
departmental profit calculation. The final distribution
was to be made ‘‘in accordance with the departmental
profit calculation.’’ Section 8.01. Similarly, there is noth-
ing in article III, which details the calculation and bal-
ancing of accounts, to suggest that the specifically
designed balancing of accounts was to be abandoned
when one partner gave notice of his intention to with-
draw. In sum, the clear language of the agreement pro-
vided that the allocation of partnership revenues and
expenses was to continue through the time of the final
distributions, and § 3.02 provided that distributions
were to be made such that, after each distribution, the
capital account balances were to be in proportion to the
partners’ ownership interests. By distributing revenues
from the corporate account to himself without regard to
the required ratio of partnership assets in the partners’
capital accounts, the defendant breached § 3.02 of the
agreement, as the court correctly determined.
The trial court noted that ‘‘[t]he defendant’s assign-
ment to himself of the accounts receivable and work[s]
in progress of the corporate department upon dissolu-
tion, under some circumstances, would be harmless to
the plaintiff’’ because the defendant would have been
entitled ultimately to the net profits under the partner-
ship agreement’s terms. (Emphasis in original.) This is
entirely correct; however, with the capital accounts out
of balance, the plaintiff was left bearing a disproportion-
ate share of the remaining liabilities postdissolution.
Thus, we agree with the trial court that the defendant’s
assignment of the corporate department’s accounts
receivable and works in progress without regard to
the ratio of partnership assets in the partners’ capital
accounts, as reconciled pursuant to the departmental
profit calculation, breached § 3.02 of the partnership
agreement.
B
The defendant also challenges the court’s conclusion
that he breached § 4.03 of the partnership agreement.
Section 4.03, as previously discussed, concerned
restrictions on the partners’ conduct. The defendant
claims that because he had sole discretion regarding
the provision of corporate services pursuant to § 4.02
(a), and that § 4.03 is subject to § 4.02, he did not breach
§ 4.03 by assigning the corporate accounts receivable
and works in progress to his new firm. We conclude
that there was no breach of § 4.03.
‘‘The elements of a breach of contract action are the
formation of an agreement, performance by one party,
breach of the agreement by the other party and dam-
ages.’’ (Internal quotation marks omitted.) Chiulli v.
Zola, 97 Conn. App. 699, 706–707, 905 A.2d 1236 (2006).
If the plaintiff suffers no actual damage, there can be
no recovery. See Waicunas v. Macari, 151 Conn. 134,
139, 193 A.2d 709 (1963).
Article IV of the partnership agreement, entitled
‘‘Management; Restrictions,’’ pertained to governance
of the partnership. Section 4.01 named the defendant
as managing partner, except in cases where he is unable
to act. Section 4.02 provided for decision-making power
pertaining to the provision of services within the three
departments. Section 4.03 was a list of restrictions on
the partners’ activities. The section concluded: ‘‘If a
partner commits any breach of the [restrictions], any
losses or other expenses (including but not limited to
reasonable [attorney’s] and [accountant’s] fees) on
account thereof shall be allocated exclusively to such
partner’s capital account.’’
At trial, the court found that the defendant breached
§ 4.03 (b) by assigning corporate accounts receivable
and works in progress to his new firm. Section 4.03
(b) provided that a partner shall not ‘‘assign, transfer,
pledge, compromise or release any of the partnership’s
claims, or debts, except upon payment in full, or arbi-
trate, or consent to the arbitration of any of its disputes
or controversies . . . .’’
Each of the restrictions listed in § 4.03 pertained to
the partnership’s dealings with third parties, and the
final paragraph of § 4.03 provided that the remedy for
a partner’s breach of a restriction was the allocation
of a resulting loss or expense to that partner’s capital
account. Section 4.03 created an accounting method for
penalizing breaching partners for liabilities they might
incur for the partnership that may not otherwise be
assessed under either General Statutes § 34-327 (c) or
§ 2.04 of the partnership agreement. See footnotes 6
and 7 of this opinion. Principles of limited liability shield
the partners from indemnification for debts and
expenses of the partnership, with some exceptions, but
the list of restrictions in § 4.03 provided specific excep-
tions to immunity, such that only the breaching part-
ner’s account was to be affected, and, when the time
came for distributions, the amount of the breaching
partner’s distribution would be decreased accordingly.
The function of § 4.03, then, was to allocate partnership
losses or obligations to a single partner if that partner
had violated a restriction listed in that section.
When the defendant assigned corporate assets to him-
self or to his new firm, however, he did not create
additional liabilities for the partnership. He instead
altered the balance of corporate accounts and pre-
vented orderly payment of existing liabilities. Thus,
there were no partnership losses or expenses ‘‘on
account’’ of the defendant’s breach, as required in the
partnership agreement. Without partnership losses or
expenses, there was no actionable breach of contract
on the basis of § 4.03. Therefore, the trial court erred in
finding a breach of § 4.03 of the partnership agreement,
which, in itself, caused damages.
Even if the defendant’s assignment of assets to him-
self could be deemed to be a breach of § 4.03 (b), as
found by the court, the sole remedy for the breach was
to be the assignment of that expense to the breaching
partner’s capital account. In the circumstances of this
case, the breach occurred, as we previously held in part
I A of this opinion, when the distributions were made
to the defendant without regard for the balance of
accounts in violation of § 3.02. The breach causing
harm, then, was the breach of § 3.02, and the damages
are the same under either theory of recovery.
C
The defendant also claims that the trial court erred
in ordering the defendant to pay damages to the plaintiff
directly rather than ordering only a reduction in the
defendant’s capital account, contrary to provisions of
both the partnership agreement and the act. We are
not persuaded.
As noted in part I A of this opinion, our review of
unambiguous contract provisions is plenary. Schwartz
v. Family Dental Group, P.C., supra, 106 Conn. App.
771. The interpretation and construction of statutes are
also subject to plenary review. See Magee v. Commis-
sioner of Correction, 105 Conn. App. 210, 214, 937 A.2d
72, cert. denied, 286 Conn. 901, 943 A.2d 1102 (2008).
‘‘Our standard of review of an award of damages . . .
is well settled. [T]he trial court has broad discretion in
determining whether damages are appropriate. . . . Its
decision will not be disturbed on appeal absent a clear
abuse of discretion.’’ (Internal quotation marks omit-
ted.) Aurora Loan Services, LLC v. Hirsch, 170 Conn.
App. 439, 447, 154 A.3d 1009 (2017). ‘‘In determining
whether there has been an abuse of discretion, every
reasonable presumption should be given in favor of the
correctness of the court’s ruling. . . . Reversal is
required only [when] an abuse of discretion is manifest
or [when] injustice appears to have been done.’’ (Inter-
nal quotation marks omitted.) Weiss v. Smulders, 313
Conn. 227, 261, 96 A.3d 1175 (2014).
The defendant contends that § 2.04 of the partnership
agreement, particularly subsections (a) and (b), pre-
vented his being found liable directly to the plaintiff.6
He adds that the language of § 2.04 largely tracked the
language of § 34-327 (c),7 and that these provisions are
both unambiguous.
The defendant quite correctly contends that pursuant
to both the partnership agreement and the statutory
provision, a partner is not personally liable for the debts
of the partnership or another partner. The defendant
also acknowledges that, pursuant to § 34-327 (d), ‘‘[t]he
provisions of subsection (c) of this section shall not
affect the liability of a partner in a registered limited
liability partnership for his own negligence, wrongful
acts or misconduct . . . .’’ The defendant asserts that
in this case the court found no negligence, wrongful
acts, or misconduct. In the context of deciding whether
the defendant was entitled to attorney’s fees, however,
the court found that ‘‘[w]hen the defendant assigned to
himself the corporate accounts receivable, to the extent
that it exceeded the ability of the firm to obtain receipts
necessary to bring the capital accounts back to their
appropriate proportions, he did this over the objection
of the plaintiff and this constituted wilful misconduct.’’
This finding of the court, although enunciated in a sepa-
rate memorandum of decision regarding, among other
issues, attorney’s fees, is clear and relevant, and negates
the defendant’s argument that § 34-327 bars a determi-
nation of liability.8
Similarly, the partnership agreement itself expressly
sets forth an exception to otherwise limited liability:
‘‘[N]o partner shall be liable, responsible, or account-
able in damages or otherwise to the partnership or to
any other partner . . . for any losses, claims, damages,
or liabilities arising from . . . any act performed, or
any omission to perform any act, by such partner in
[his] capacity as a partner, except by reason of acts or
omissions in violation of the express terms of this
agreement . . . .’’ (Emphasis added.) Section 2.04 (a)
(ii). The defendant violated § 3.02, an express term of
the partnership agreement. Thus, pursuant to the terms
of the agreement, the defendant may be personally lia-
ble for his breach of the partnership agreement.
The defendant additionally claims that the only rem-
edy for a breach is a reduction in his capital account;
he points to several sections of the agreement for sup-
port. He urges that § 4.03 provided that the only remedy
for violating that section is a corresponding reduction
of that partner’s capital account, but, as we decided in
part I B of this opinion, there was no actionable breach
of article IV in any event. The defendant also points
out that § 3.03 of the partnership agreement required
that all expenses and losses of the partnership resulting
from a partner’s wrongful act are to be charged to
the partner’s capital account.9 The defendant’s actions,
however, caused an internal maladjustment of accounts
rather than a loss to the partnership.
More to the point, and undermining the defendant’s
claims regarding damages, is the simple proposition
that the defendant breached the agreement because he
distributed partnership assets to himself without
observing the balance of corporate accounts. If the sole
remedy for the breach of a duty to a partner was to
reduce the breaching partner’s capital account, but then
the breaching partner could nonetheless blithely dis-
tribute assets to himself without regard to the relative
states of the accounts, then that remedy would be ren-
dered utterly meaningless. The remedy for most
breaches, to be sure, was reduction of the particular
capital account; when the time came for distribution,
the remedy would functionally be realized. When the
breach is the distribution, however, the situation is
intrinsically different, and the parties’ agreement did
not require merely a further pointless reduction in a
capital account—especially after liquidation. The court
did not abuse its discretion in ordering a direct payment
from the defendant to the plaintiff.
D
The defendant finally claims that the trial court erred
in awarding attorney’s fees to the plaintiff. The court
awarded attorney’s fees pursuant to § 4.03 of the part-
nership agreement and then concluded that Chioffi
should be indemnified for this expense pursuant to
§ 2.04 (c). As we have determined in part I B, however,
the court erred in finding an actionable breach of con-
tract pursuant to § 4.03. The provision in § 4.03 allowing
for attorney’s fees was expressly limited to breaches
of the ‘‘restrictions’’ of that section. Because no other
basis for attorney’s fees was found by the court,10 we
vacate the award of attorney’s fees under § 4.03.
II
PLAINTIFF’S CROSS APPEAL
The plaintiff claims on cross appeal that the court
(1) erred in not finding a breach of fiduciary duty; (2)
erred in its calculation of damages; and (3) abused its
discretion in finding that the plaintiff waived his claim
for an accounting.
A
The plaintiff first claims that the trial court erred in
declining to conclude that the defendant breached a
fiduciary duty. We agree.
‘‘[T]he determination of whether a duty exists
between individuals is a question of law. . . . Only if
a duty is found to exist does the trier of fact go on to
determine whether the defendant has violated that duty.
. . . When the trial court draws conclusions of law,
our review is plenary and we must decide whether its
conclusions are legally and logically correct and find
support in the facts that appear in the record.’’ (Internal
quotation marks omitted.) Biller Associates v. Peterken,
269 Conn. 716, 721–22, 849 A.2d 847 (2004). Alterna-
tively, our Supreme Court has upheld jury instructions
that state that it is a question of law as to what consti-
tutes a breach of a duty, but a question of fact as to
whether such a breach occurred. Dunbar v. Jones, 87
Conn. 253, 258–59, 87 A. 787 (1913); see also Stevens
v. Pierpont, 42 Conn. 360, 361–62 (1875) (‘‘[w]hether
certain facts do or do not constitute a breach may, in
some circumstances, be a question of law; or at least,
a mixed question of law and fact’’). Appellate review
of facts on which a claim of breach of fiduciary duty
is based is subject to the clearly erroneous standard.
See Spector v. Konover, 57 Conn. App. 121, 126, 747
A.2d 39, cert. denied, 254 Conn. 913, 759 A.2d 507 (2000).
‘‘It is a thoroughly well-settled equitable rule that any
one acting in a fiduciary relation shall not be permitted
to make use of that relation to benefit his own personal
interest. This rule is strict in its requirements and in
its operation. It extends to all transactions where the
individual’s personal interests may be brought into con-
flict with his acts in the fiduciary capacity, and it works
independently of the question whether there was fraud
or whether there was good intention. Where the possi-
bility of such a conflict exists there is the danger
intended to be guarded against by the absoluteness of
the rule. The underlying thought is that an agent or
other fiduciary should not unite his personal and his
representative characters in the same transaction; and
equity will not permit him to be exposed to the tempta-
tion, or be brought into a situation where his own per-
sonal interests conflict with the interests of his principal
and with the duties he owes to his principal. The rule
applies [to] partners . . . .’’ (Emphasis added.) Mal-
lory v. Mallory Wheeler Co., 61 Conn. 131, 137–38, 23
A. 708 (1891); Spector v. Konover, supra, 57 Conn.
App. 128.
‘‘[P]roof of a fiduciary relationship imposes a twofold
burden on the fiduciary. First, the burden of proof shifts
to the fiduciary; and second, the standard of proof is
clear and convincing evidence. Once a fiduciary rela-
tionship is found to exist, the burden of proving fair
dealing properly shifts to the fiduciary. . . . Further-
more, the standard of proof for establishing fair dealing
is not the ordinary standard of proof of fair preponder-
ance of the evidence, but requires proof . . . by clear
and convincing evidence . . . . We have recognized
that, generally, partners are bound in a fiduciary rela-
tionship and act as trustees toward each other and
toward the partnership.’’ (Citation omitted; internal
quotation marks omitted.) Oakhill Associates v.
D’Amato, 228 Conn. 723, 726–27, 638 A.2d 31 (1994).
‘‘The fiduciary duty of loyalty is breached when the
fiduciary engages in self-dealing by using the fiduciary
relationship to benefit [his or] her personal interest.’’
Mangiante v. Niemiec, 82 Conn. App. 277, 284, 843 A.2d
656 (2004).
The first count of the operative complaint alleged
that the defendant breached his fiduciary duty. The
count included detailed factual allegations. Included
were allegations that (1) the defendant and the plaintiff
were partners in a limited liability partnership; (2) § 3.02
required any distributions to be made such that, follow-
ing any distribution, the capital accounts balances of the
partners were to be proportionate to their ownership
interests; (3) Martin was the ‘‘managing partner’’; (4)
on dissolution, the partners became liquidating trustees;
(5) the defendant caused distributions such that bal-
ances remained disproportionate, thus violating § 3.02
of the agreement; and (6) the defendant breached his
fiduciary duties as a partner and as a liquidating
trustee.11
As we stated at some length previously in this opin-
ion, the court found the relevant factual allegations to
be true. In its memorandum of decision, however, the
court rendered judgment in favor of the plaintiff only
as to count four, which alleged breach of contract. With
no explanation, the court rendered judgment in favor
of the defendant ‘‘on the remaining counts of the com-
plaint.’’ In the unusual circumstances presented, we
hold that the court erred in not concluding that the
defendant breached his fiduciary duty, in light of the
facts which the court found.12
The elements which must be proved to support a
conclusion of breach of fiduciary duty are: ‘‘[1] [t]hat
a fiduciary relationship existed which gave rise to . . .
a duty of loyalty . . . an obligation . . . to act in the
best interests of the plaintiff, and . . . an obligation
. . . to act in good faith in any matter relating to the
plaintiff; [2] [t]hat the defendant advanced his or her
own interests to the detriment of the plaintiff; [3] [t]hat
the plaintiff sustained damages; [and] [4] [t]hat the dam-
ages were proximately caused by the fiduciary’s breach
of his or her fiduciary duty.’’ (Emphasis omitted; inter-
nal quotation marks omitted.) Rendahl v. Peluso, 173
Conn. App. 66, 100, 162 A.3d 1 (2017). As a partner and
liquidating trustee, the defendant was in a fiduciary
relationship with the plaintiff. See Oakhill Associates
v. D’Amato, supra, 228 Conn. 727. Further, the court
found, on voluminous facts, a breach of § 3.02, from
which it could only be concluded that the defendant
advanced his interests to the detriment of the plain-
tiff’s interests.
Where a fiduciary relationship exists, the burden
shifts to the fiduciary to show fair dealing by clear and
convincing evidence. Id., 726–27. On the facts found,
however, the court could not logically have concluded
that the defendant sustained his burden to show fair
dealing by clear and convincing evidence.
‘‘Important factors in determining whether a particu-
lar [self-dealing] transaction is fair include a showing
by the fiduciary: (1) that he made a free and frank
disclosure of all the relevant information he had; (2)
that the consideration was adequate . . . (3) that the
principal had competent and independent advice before
completing that transaction . . . [and] (4) the relative
sophistication and bargaining power among the par-
ties.’’13 (Citation omitted; internal quotation marks omit-
ted.) Konover Development Corp. v. Zeller, 228 Conn.
206, 228, 635 A.2d 798 (1994). This standard was later
invoked in Spector v. Konover, supra, 57 Conn. App.
121. In Spector, the plaintiff general partner claimed
that his partners, the defendants, had breached their
fiduciary duties by diverting funds from the partnership
to other properties owned by one of the codefendants.
Id., 122–26. The trial court concluded that, although the
defendants owed the plaintiff a fiduciary duty, ‘‘they
proved by clear and convincing evidence that they dealt
with the plaintiff fairly and that they breached no fidu-
ciary duty.’’ Id., 126. This court reversed the trial court’s
judgment in favor of the defendants, holding that ‘‘[t]he
defendants’ practice of diverting [partnership] funds to
other entities and retaining interest earned on [those]
partnership funds constitute[d] a breach of fiduciary
duty.’’ Id., 127–28. Further, this court concluded that
the misuse of partnership property for personal gain
was ‘‘a clear case of self-dealing and a violation of [the
defendants’] fiduciary duty to the plaintiff.’’ Id., 128.
This court then considered the aforementioned Zeller
factors, and held that the defendants’ failure to make
free and frank disclosure thwarted any attempt to claim
fair dealing. See id., 128–30.
Here, the defendant took partnership assets, at least
some of which could have been used to pay partnership
liabilities, and left Chioffi ‘‘holding the bag’’ while the
defendant’s capital account was negative. Although the
defendant did inform the plaintiff of his intentions and
the parties were both sophisticated lawyers, in this case
the defendant proceeded over the objection of the plain-
tiff, who received no benefit or consideration for the
self-dealing distributions made by the defendant.14
The defendant contends that he nonetheless violated
no fiduciary duty. He urges in his brief that the language
of the partnership agreement provided that the parties
have no fiduciary obligations ‘‘except as may be pro-
vided under this Agreement and by other applicable
law.’’ The defendant has omitted a term: § 2.04 (a) (ii)
provided that ‘‘no partner . . . has any fiduciary obli-
gation . . . except as may be provided under this
agreement, the act and by other applicable law.’’
(Emphasis added.)
The act expressly provides that ‘‘[a] partner’s duty
of loyalty to the partnership and other partners is lim-
ited to the following: (1) To account to the partnership
and hold as trustee for it any property, profit or benefit
derived by the partner in the conduct and winding up
of the partnership business . . . .’’; General Statutes
§ 34-338 (b); and General Statutes § 34-303 (b) (3) pro-
vides in relevant part that a partnership agreement may
not ‘‘[e]liminate the duty of loyalty . . . .’’ The duty of
loyalty may also be found in ‘‘other applicable law’’; this
court held in Springfield Oil Services, Inc. v. Conlon,
77 Conn. App. 289, 302, 823 A.2d 345 (2003), that ‘‘[t]he
terms of a limited partnership agreement cannot negate
the fiduciary duty of the general partner even where
the relationship and terms of a contract between the
fiduciary and its affiliate are disclosed and even where
the partnership involves sophisticated parties.’’ The
partnership agreement, then, did not compromise or
expressly limit the duty of loyalty as prescribed by law.
On the facts found by the court, we hold that the court
erred in not concluding that the defendant breached
his fiduciary duty to the plaintiff. The compensatory
damages, however, remain those found by the court for
the breach of contract. Both breaches caused the same
harm, the disproportionate corporate accounts after
distribution. The court awarded compensatory dam-
ages for breach of contract, and courts ought not coun-
tenance duplicative damages.
Breach of fiduciary duty, however, is a tort; Ahern
v. Kappalumakkel, 97 Conn. App. 189, 192 n.3, 903 A.2d
266 (2006); and punitive damages may result from a
breach of fiduciary duty. See Rendahl v. Deluso, supra,
173 Conn. App. 100–101. The complaint requested attor-
ney’s fees for the breach of fiduciary duty, and attor-
ney’s fees may, where found to be appropriate, be
allowed as damages for breach of fiduciary duty. Puni-
tive damages in this context generally are limited to
attorney’s fees and costs. Hylton v. Gunter, 313 Conn.
472, 474, 97 A.3d 970 (2014).15
The court awarded attorney’s fees, but its award was
premised on a breach of § 4.03 of the partnership
agreement and was limited to work performed on that
particular issue. Because any award of punitive dam-
ages would instead arise from a breach of fiduciary
duty, the analysis may differ. Also, ‘‘[a]n award of attor-
ney’s fees is not a matter of right. Whether any award
is to be made and the amount thereof lie within the
discretion of the trial court, which is in the best position
to evaluate the particular circumstances of a case.’’
(Internal quotation marks omitted.) LaMontagne v.
Musano, Inc., 61 Conn. App. 60, 63–64, 762 A.2d 508
(2000). Finally, in order for a court to award punitive
damages, ‘‘the pleadings must allege and the evidence
must be sufficient to allow the trier of fact to find that
the defendant exhibited a reckless indifference to the
rights of others or an intentional and wanton violation
of those rights.’’ (Internal quotation marks omitted.)
Landmark Investment Group, LLC v. CALCO Con-
struction & Development Co., 318 Conn. 847, 878, 124
A.3d 847 (2015). On remand, the trial court is to deter-
mine whether the plaintiff is entitled to attorney’s fees
because of the defendant’s breach of fiduciary duty,
and, if so, in what amount.
B
The plaintiff next claims that the trial court erred in
failing to render judgment against the defendant for the
full amount of damages resulting from the defendant’s
conduct. The plaintiff claims that the defendant should
be ordered to return to the partnership all funds
diverted by him so that the plaintiff in turn can receive
the full amount of his corrected capital account. We
are not persuaded that there was reversible error in
this regard.
The plaintiff cites no authority for this claim other
than a general rule of damages. It appears that the
plaintiff claims that he would be able to obtain more
of the partnership assets if the defendant were required
to return the value of all of the diverted corporate assets
to the partnership. We disagree with his claim.
‘‘The assessment of damages is peculiarly within the
province of the trier and the award will be sustained
so long as it does not shock the sense of justice. The
test is whether the amount of damages awarded falls
within the necessarily uncertain limits of fair and just
damages. . . . There are no unbending rules as to the
evidence by which [damages for breach of contract]
are to be determined. . . . In making its assessment
of damages for breach of [any] contract the trier must
determine the existence and extent of any deficiency
and then calculate its loss to the injured party. The
determination of both of these issues involves a ques-
tion of fact which will not be overturned unless the
determination is clearly erroneous.’’ (Citation omitted;
internal quotation marks omitted.) Chila v. Stuart, 81
Conn. App. 458, 466–67, 840 A.2d 1176, cert. denied,
268 Conn. 917, 847 A.2d 311 (2004).
The court’s theory in awarding damages was to calcu-
late the amount that would have been distributed by
the partnership to the plaintiff if the defendant had
adhered to the requirements of the partnership
agreement, and the liabilities had not been satisfied
predominantly by the plaintiff’s share. The court
engaged in a detailed analysis, which included a consid-
eration of the plaintiff’s benefiting from a transfer of
the security deposit and credit for rent to the plaintiff’s
new firm. Any additional funds placed in the defendant’s
capital account necessarily would have been profits of
the corporate department, to which the plaintiff was
not entitled once the departmental profit calculation
was performed. The trial court did not abuse its discre-
tion in its method of calculating damages.16
C
The plaintiff finally claims that the trial court abused
its discretion by holding that the plaintiff waived his
claim for an accounting. We disagree.
‘‘Waiver is the intentional relinquishment or abandon-
ment of a known right or privilege. . . . Waiver does
not have to be express, but may consist of acts or
conduct from which waiver may be implied.’’ (Internal
quotation marks omitted.) MSO, LLC v. DeSimone, 313
Conn. 54, 64, 94 A.3d 1189 (2014). ‘‘Waiver is a question
of fact. . . . [W]here the factual basis of the court’s
decision is challenged we must determine whether the
facts set out in the memorandum of decision are sup-
ported by the evidence or whether, in light of the evi-
dence and the pleadings in the whole record, those
facts are clearly erroneous. . . . [T]he trial court’s con-
clusions must stand unless they are legally or logically
inconsistent with the facts found or unless they involve
the application of some erroneous rule of law material
to the case. . . . [V]arious statutory and contract rights
may be waived.’’ (Citations omitted; internal quotation
marks omitted.) AFSCME, Council 4, Local 704 v. Dept.
of Public Health, 272 Conn. 617, 622–23, 866 A.2d 582
(2005).
i
We consider (1) whether an accounting can be waived
and (2) whether the court clearly erred in finding a
waiver. We hold that an accounting can be waived and
that the court did not abuse its discretion in finding
that the plaintiff waived his claim.
a
‘‘As a general rule, both statutory and constitutional
rights and privileges may be waived.’’ (Internal quota-
tion marks omitted.) Dinan v. Patten, 317 Conn. 185,
195, 116 A.3d 275 (2015). The remedy of an accounting
is codified in General Statutes § 52-401, which provides:
‘‘In any judgment or decree for an accounting, the court
shall determine the terms and principles upon which
such accounting shall be had.’’ Thus, the remedy is
statutory.
In years past, the common law of our state mandated
an accounting if certain criteria were met, including
the existence of a fiduciary relationship. See, e.g., Zuch
v. Connecticut Bank & Trust Co., 5 Conn. App. 457,
460, 500 A.2d 565 (1985) (‘‘[t]he fiduciary relationship
is in and of itself sufficient to form the basis for [an
accounting]’’). In fact, an accounting was a prerequisite
to any action at law upon the termination of a partner-
ship. See Weidlich v. Weidlich, 147 Conn. 160, 163–64,
157 A.2d 910 (1960). ‘‘A final account is the one great
occasion for a comprehensive and effective settlement
of all partnership affairs. All the claims and demands
arising between the partners should be settled upon
such an accounting.’’ Id., 165.
Over the years, the need for a formal judicial account-
ing has evolved, such that courts of other jurisdictions
have held that ‘‘an action can be maintained by one
partner against another, even where the partnership
transaction is the basis of the suit, if the facts are such
that no complex accounting involving a variety of part-
nership transactions is necessary.’’ Hanes v. Giam-
brone, 14 Ohio App. 3d 400, 404, 471 N.E.2d 801 (1984);
see also Moody v. Headrick, 247 Ala. 455, 457, 25 So.
2d 137 (1946); Lau v. Valu-Bilt Homes, Ltd., 59 Haw.
283, 290, 582 P.2d 195 (1978); Balcor Income Properties,
Ltd. v. Arlen Realty, Inc., 95 Ill. App. 3d 700, 702, 420
N.E.2d 612 (1981); Clarke v. Mills, 36 Kan. 393, 397, 13
P. 569 (1887); Kolb v. Dietz, 454 S.W.2d 632, 636 (Mo.
App. 1970); Auld v. Estridge, 86 Misc. 2d 895, 900–901,
382 N.Y.S.2d 897 (1976), aff’d, 58 A.D. 2d 636, 395
N.Y.S.2d 969, leave to appeal denied, 43 N.Y.2d 641, 371
N.E.2d 830, 401 N.Y.S.2d 1025 (1977); Zimmerman v.
Lehr, 176 N.W. 837, 837 (N.D. 1920); Doyle v. Polle, 121
Vt. 335, 338, 157 A.2d 226 (1960). Our Superior Court,
in Canton West Associates v. Miller, 44 Conn. Supp.
321, 325–27, 688 A.2d 1360 (1995), adopted this more
flexible standard in reaching its decision.
The more flexible approach finds some support in our
appellate precedent. See Mankert v. Elmatco Products,
Inc., 84 Conn. App. 456, 460, 854 A.2d 766 (‘‘[a]n
accounting is not available in an action where the
amount due is readily ascertainable’’ [internal quotation
marks omitted]), cert. denied, 271 Conn. 925, 859 A.2d
580 (2004). Likewise, after Canton West Associates, the
General Assembly revised the act to allow a partner to
‘‘maintain an action against . . . another partner for
legal or equitable relief, with or without an accounting
as to partnership business . . . .’’ (Emphasis added.)
General Statutes § 34-339 (b).
Under current law, an accounting is not mandatory
merely because it is requested: many situations may
require a formal judicial accounting; in others, discov-
ery may suffice. In the absence of an absolute require-
ment in the partnership agreement, § 34-339 (b)
provides that an accounting is discretionary, and the
statutory provision in this regard supersedes vestigial
common law to the contrary. See Brennan v. Brennan
Associates, 293 Conn. 60, 92, 977 A.2d 107 (2009)
(‘‘[w]hen the . . . [statute] articulating a public policy
also includes certain substantive limitations in scope
or remedy, these limitations also circumscribe the com-
mon law’’ [internal quotation marks omitted]). The stat-
utory provision echoes a general principle of equity.
See Papallo v. Lefebvre, 172 Conn. App. 746, 763, 161
A.3d 603 (2017) (‘‘[t]he determination of what equity
requires in a particular case [is] a matter for the discre-
tion of the trial court’’ [internal quotation marks omit-
ted]). An accounting, then, is waivable.
b
We turn to the issue of whether the plaintiff waived
any ability to require an accounting. In MSO, LLC v.
DeSimone, supra, 313 Conn. 64, our Supreme Court
reaffirmed the principle that waiver may be found
‘‘when a party engages in substantial litigation without
asserting its right to arbitrate.’’ Analogously, the court
here found that the plaintiff, having requested an
accounting in his complaint, nonetheless proceeded to
trial, in which the finances of the partnership were
litigated at length. The plaintiff later reasserted the
accounting claim after a decision had been issued.
The trial court, in its articulation, clarified and stated:
‘‘[T]he plaintiff included a . . . count for breach of con-
tract . . . specifically breach of the [partnership
agreement]. Consistent with [that] count . . . during
seven days of trial, the plaintiff and the defendant intro-
duced detailed evidence concerning the obligations and
rights of the parties pursuant to the [partnership
agreement], [and] the financial transactions that had
occurred consistent with and inconsistent with the
terms of the [partnership agreement]. . . . Addition-
ally, both the plaintiff and [the] defendant testified at
length concerning these documents and the various
transactions that preceded the dissolution of the part-
nership, as well as transactions that occurred subse-
quent to the dissolution of the partnership.
‘‘The plaintiff chose a particular approach during the
trial. Rather than merely establish the relationship
between the plaintiff, the defendant, and the partner-
ship, as well as a demand for an accounting . . . the
plaintiff, consistent with [his] breach of contract count,
elected to introduce the detailed evidence [that he]
claimed substantiated his position and damages for
breach of contract. . . .
‘‘Once the introduction of evidence had begun, the
plaintiff never asserted that [he] had insufficient evi-
dence to pursue [his] breach of contract claims to the
fullest. . . . Nowhere in [his] posttrial memorandum
of law does the plaintiff request, expressly or impliedly,
that the court order an accounting. . . .
‘‘Indeed, in the section of [his] posttrial memorandum
of law entitled ’Governing Legal Standards,’ the plaintiff
sets forth three sections [for breach of fiduciary duty,
breach of contract, and conversion]. Nowhere in his
posttrial memorandum of law does the plaintiff argue
or set forth any legal standards, consistent with the
evidence in the case, pursuant to which he would be
entitled to an accounting. Moreover, subsequent to the
section on governing legal standards, the plaintiff sets
forth in the discussion and damages sections of the
brief the detailed nature of the transactions of which the
plaintiff complains, and seeks damages and a detailed
analysis of the damages suffered by the plaintiff. . . .
‘‘In the case at bar, not only did the court find that
the plaintiff had an adequate remedy [at] law, but the
plaintiff, based upon his posttrial briefs, also believed
that [he] had an adequate remedy at law, and seemingly
abandoned [his] request for an accounting. Under the
circumstances of this case, it would have been inequita-
ble to order an accounting subsequent to the plaintiff’s
attempt to persuade the court, in its role as trier of fact,
that the evidence was sufficient to sustain [his] claim
for damages for breach of contract.
‘‘The plaintiff simply did not try or brief his case as
though he was seeking the remedy of an accounting.
Rather, the plaintiff clearly and unequivocally sought
an award of damages from the court consistent with
the evidence he had introduced and he thought was per-
suasive.’’
Thus, the court found that the plaintiff pleaded a
count requesting an accounting, but did not mention
that claim again until posttrial reargument. The plaintiff
proceeded to litigate his claims and was successful on
one of them. He claims, however, that he never actually
abandoned his claim for an accounting and that the
claim was extant until the court declined to order such,
as requested during reargument. After reviewing the
entire record, we do not conclude that the court com-
mitted clear error in its fact-finding or abused its discre-
tion in reaching its conclusion of waiver.
ii
We hold alternatively that even if there was no waiver,
the court did not abuse its discretion in denying an
accounting.
As noted previously, ‘‘[a]n accounting is not available
in an action where the amount due is readily ascertain-
able.’’ (Internal quotation marks omitted.) Mankert v.
Elmatco Products, Inc., supra, 84 Conn. App. 460.
‘‘Courts of equity have original jurisdiction to state and
settle accounts, or to compel an accounting, where a
fiduciary relationship exists between the parties and
the defendant has a duty to render an account. . . . In
an equitable proceeding, the trial court may examine
all relevant factors to ensure that complete justice is
done . . . .’’ (Internal quotation marks omitted.)
Papallo v. Lefebvre, supra, 172 Conn. App. 763.
Here, the trial court considered detailed evidence of
the partnership assets and accounts such that it was
able to ascertain damages.17 It was not until posttrial
reargument that the plaintiff tried to reignite his
accounting claim. The court noted in its November 28,
2016 articulation that because it determined that the
trial, with available discovery, constituted an adequate
remedy at law and that the plaintiff had apparently
concurred, it chose not to exercise its equitable powers
to order an accounting. We observe that the expense of
an accounting and the resulting delay almost certainly
outweigh whatever benefit would have been gained by
ordering an accounting. We do not find an abuse of
discretion in the trial court’s decision denying an
accounting.18
III
SUMMARY
In sum, the court’s conclusion that the defendant
breached § 3.02 of the partnership agreement is
affirmed. The court erred in finding a breach of § 4.03
and in awarding attorney’s fees on that basis. The court
did not abuse its discretion in ordering a direct payment
from the defendant to the plaintiff. The court erred in
finding no breach of fiduciary duty. The court did not
clearly err in its calculation of compensatory damages.
The court did not err in finding a waiver of an account-
ing, nor, in the alternative, did it abuse its discretion
in declining to order an accounting.
The judgment is reversed only as to the findings that
the defendant breached his fiduciary duty and § 4.03
of the partnership agreement, and as to the award of
attorney’s fees, and the case is remanded for further
proceedings on the issue of attorney’s fees; the judg-
ment is affirmed in all other respects.
In this opinion the other judges concurred.
1
The partnership itself, Martin Chioffi LLP (alternatively Martin & Chioffi
LLP), was also named as a defendant, but is unrepresented and has not
participated in the proceedings as a separate entity. All references to the
defendant in this opinion are to Martin alone.
2
The term ‘‘departmental profit calculation’’ appears in the agreement
several times. According to the agreement, the ‘‘calculation’’ was attached
to the agreement as an exhibit. The page so designated was blank. The
parties appear to agree, however, that article III, described at some length
previously, functioned as the ‘‘departmental profit calculation,’’ as it indeed
sets forth the method for determining and allocating department profit
or loss.
3
See footnote 2 of this opinion.
4
The defendant’s argument is premised on the contention that the court’s
analysis of the contractual obligations was erroneous; he does not claim,
for the purpose of this argument, that the court’s fact-finding was deficient.
5
We note that, pursuant to article III, revenues were partnership assets,
subject to allocation to different accounts. Once the accounting was accom-
plished, and expenses allocated as well, distributions could be made, either
monthly or as otherwise agreed, and the capital accounts following each
distribution were to be in the proper ratio. Revenues, then, initially were
the property of the partnership rather than of the individual partner responsi-
ble for an account.
6
Section 2.04 of the partnership agreement provided in pertinent part:
‘‘(a) No Personal Obligation.
‘‘(i) To the fullest extent permitted by the act and by other applicable
law, no partner shall be personally liable for the return or repayment of all
or any portion of the contributions to capital of any partner; any such return
or repayment shall be made solely from the assets of the partnership.
‘‘(ii) To the fullest extent permitted by the act and by other applicable
law, no partner shall be liable, responsible, or accountable in damages or
otherwise to the partnership or to any other partner . . . for any losses,
claims, damages, or liabilities arising from (i) any act performed, or any
omission to perform any act, by such partner in [his] capacity as a partner,
except by reason of acts or omissions in violation of the express terms of
this agreement; or (ii) the acts or omissions of any person other than such
partner. No partner, in [his] capacity as a partner, has any fiduciary obligation
or other duties to the partnership or any other partner, except as may be
provided under this agreement, the act and by other applicable law.
‘‘(b) Limitation of Liability. To the fullest extent permitted by the Act and
by other applicable law, no partner of the partnership shall be liable or
accountable, directly or indirectly (including by way of indemnification,
contribution or otherwise), for any debts, obligations or liabilities of, or
chargeable to, the partnership or each other, whether arising in tort, contract
or otherwise, which are incurred, created or assumed by the partnership
while the partnership is a registered limited liability partnership, solely by
reason of being such a partner or acting (or omitting to act) in such capacity
or rendering professional services or otherwise participating . . . in the
conduct of the other business or activities of the partnership.’’ (Emphasis
added.)
7
General Statutes § 34-327 (c) provides: ‘‘Subject to subsection (d) of this
section, a partner in a registered limited liability partnership is not liable
directly or indirectly, including by way of indemnification, contribution or
otherwise, for any debts, obligations and liabilities of or chargeable to the
Partnership or another partner or partners, whether arising in contract,
tort or otherwise, arising in the course of partnership business while the
Partnership is a registered limited liability partnership.’’
8
The defendant claims that the plaintiff limited his claim to §§ 4.03 and
3.02, eliminating a claim under § 34-327 (d); however, the partnership
agreement limits its provisions to what is allowed under § 34-327. Thus, we
find no merit to the claim that § 34-327 (d) is inapplicable.
9
Section 3.03 of the partnership agreement provided in relevant part:
‘‘[N]et losses of the partnership shall be allocated and apportioned in the
same manner as set forth in section 3.01 . . . provided, however, that all
expenses and losses resulting from the wrongful act or gross negligence of
a partner (to the extent not covered by insurance) shall be charged to such
partner in full.’’
10
The court enunciated and refined its award of attorney’s fees in its third
memorandum of decision, dated September 10, 2015.
11
The complaint contained many other allegations; for the purpose of this
opinion we select those most relevant to the issues presented on appeal.
12
This court similarly directed a judgment on a count alleging breach of
fiduciary duty in Spector v. Konover, supra, 57 Conn. App. 134.
13
The defendant, in his brief, alludes to, but does not explicitly cite, the
Zeller factors.
14
The record does not reflect whether the defendant received any indepen-
dent advice from counsel prior to distributing the corporate assets. Because
the defendant had the burden to prove that fact, the absence of any evidence
in that regard works against him in proving fair dealing.
15
Because punitive damages may include attorney’s fees, we treat this
claim for attorney’s fees as a request for punitive damages. Although the
plaintiff did not claim attorney’s fees in the form of punitive damages but
instead merely as ‘‘attorney’s fees,’’ the defendant ‘‘necessarily [was] on
notice that punitive damages were being claimed because of the type of
conduct pleaded and the fact that attorney’s fees, [for this claim], could
be obtained only through the awarding of punitive damages.’’ Stohlts v.
Gilkinson, 87 Conn. App. 634, 647, 867 A.2d 860, cert. denied, 273 Conn.
930, 873 A.2d 1000 (2005).
16
The court’s reasoning is further supported by its finding that the defen-
dant’s distribution of corporate assets to his new firm would in some circum-
stances be harmless. In other words, any distribution of assets of the
corporate department beyond what was needed to meet existing liabilities
were profits which ultimately would have been distributed to the defendant
in any event in the final distribution, had the liquidation proceeded according
to the agreement.
17
Although absolute precision is ideal, ‘‘a plaintiff is not required to prove
actual damages of a specific dollar amount.’’ (Internal quotation marks
omitted.) Landmark Investment Group, LLC v. CALCO Construction &
Development Co., supra, 318 Conn. 882.
18
We note that this result is not inconsistent with August v. Moran, 50
Conn. App. 202, 717 A.2d 807 (1998). In August, an action for an accounting,
the only issue was whether the trial court had properly rendered summary
judgment in favor of the defendant on the ground that the plaintiff was
collaterally estopped from litigating the amount of his overall partnership
interest, where a prior case had determined the value of his capital account.
Id., 203. This court held that a partnership interest was not necessarily
identical to a capital account, and that the trial court erred in applying the
doctrine of collateral estoppel. Id., 208. August did not address the question
of whether an accounting was required or appropriate in the circumstances
of that case.