March 2, 2016
from Superior Court, judicial district of Middlesex, Epstein,
Michael F. Dowley, with whom, on the brief, was Melissa S.
Harris, for the appellant (plaintiff).
C. Leary, for the appellees (named defendant et al.).
Alvord, Prescott and Mullins, Js.
plaintiff, Neil Scarfo, appeals from the judgment of the
trial court, rendered in favor of the defendants, Patrick
Snow, Cider Hill Associates, LLC (Cider Hill),  Premier Building
& Development, Inc., Kane Street Associates, LLC,
Cobblestone Associates, LLC, Premier Financial, Inc., Sydney
Property Management, LLC, and Premier Development,
On appeal, the plaintiff claims that the court erred in
concluding that he did not establish his claims of spoliation
of evidence, breach of contract, and breach of fiduciary duty
against Snow. Although the trial court authored a well
written and thorough memorandum of decision, we,
nevertheless, conclude that the form of judgment was improper
because the plaintiff lacked standing to assert these claims
in his individual capacity, and we reverse the judgment and
remand the matter with direction to dismiss the case.
following extensive facts, as specifically found by the trial
court, inform our review. Scarfo ‘‘has been a
licensed realtor in the State of Connecticut for almost
twenty-eight years and works with the Century 21 agency. . .
. Snow . . . has been engaged in construction and real estate
development for more than twenty years. The parties had known
one another for a period of time before [they entered into]
the December, 2004 contract . . . . [Scarfo] had an office
across the hall from [Snow] at the time of the contract, and
the parties continued to have their business offices in the
same building, on the same floor, across from one another,
for the entire period of time at issue. . . .
in 2002 or 2003, Snow saw a Century 21 ad for a
‘raw' piece of land for sale in Cromwell. The owner
was Evergreen Realty [(Evergreen)]. Snow consulted with a
local planning and zoning attorney with regard to a possible
project, but there were difficulties with initial proposals.
In the spring of 2004, Snow submitted to the Connecticut
Secretary of [the] State papers for registering Cider Hill
Associates as a limited liability company, partially for
insurance and liability reasons, with the intent of
development of the property. One of Snow's companies,
Premier Development, entered into a purchase agreement for
the land from Evergreen in April, 2004. Scarfo had discussed
with Snow the possibility of buying a lot in the planned
subdivision, but instead decided to become a partner in the
December 17, 2004, [Cider Hill] filed with the Secretary of
[the] State its Articles of Organization. As memorialized
in their agreement dated December 30, 2004, Scarfo presented
Snow with a cashier's check in the amount of $262, 500 on
December 17, 2004, and, on December 20, 2004, the closing
took place in which [Cider Hill] purchased the property at
issue from Evergreen. As listing agent, Scarfo took a $25,
000 commission on the sale of the property, which Snow admits
was a reduced commission. . . . Scarfo contends that Snow
never contributed his $262, 500 share of the initial
investment. Snow claims that his work in making all of the
arrangements to procure the land, investigation, hiring
engineers and soil scientists, planning, and incurring other
professional fees before the December, 2004 agreement, amount
to costs in the range of $250, 000, plus he contributed the
option moneys from the November, 2004
agreements. . . .
December 30, 2004, [Scarfo] and [Snow] signed a written
[operating] agreement [(agreement)], calling themselves
‘members, ' with each to have a 50 percent interest
in Cider Hill . . . . They further agreed that, as of the
date of the agreement, the value to each member was one half
of the unpaid obligations of the company plus $262, 500.
agreement obligated each of the members, at the end of each
fiscal year, to ascertain a valuation based primarily upon
the opinion of the [certified public accountant] retained by
the company, and further provided that, if the members could
not agree on the valuation, another certified public
accountant was to determine the value of the interest.
Neither member to the agreement ever provided an accounting
and neither member submitted an inquiry for an accounting to
a specially nominated accountant during the pendency of the
agreement. However, Snow arranged for the accounting firm of
Guilmartin, DiPiro & Sokolowskifor [Cider Hill] and Michael
DiPiro of that firm prepared all of [Cider Hill's] tax
returns and [schedule K-1 tax forms]. One might find that
this revealed Snow's compliance with the
‘accounting' portion of the agreement mentioned . .
an ‘Amendment' to the agreement, also dated
December 30, 2004, the parties stated that each of them was
contributing ‘real property to [Cider Hill] with an
agreed upon value of $262, 500.' [Scarfo] and [Snow]
further agreed that they would obtain financing to complete
the acquisition of real property to develop a project in the
estimate amount of $1, 500, 000, and they further agreed to
divide equally the costs associated with debt service, taxes,
and other expenses. The only specific delineation of
responsibilities to either of the partners was that . . .
Snow was to be responsible to ‘obtain all required
approvals, including but not limited to subdivision
approvals, planning and zoning approval, permitting, Cromwell
approvals, Department of Transportation approvals,
architectural rendering.' . . .
has been no allegation that Snow did not perform these
duties. Instead, [Scarfo] has alleged in his amended
complaint . . . that Snow was the ‘managing
partner' and [and that he] failed to value the membership
annually, failed to notify [Scarfo] of the value of his
membership interest, failed to obtain bids, and failed to
distribute profits from the sale of the lots on the
development property [in breach of the amended agreement].
the agreement, nor the [December 30, 2004] amendment . . .
renders [Snow] the ‘manager' of the property. Nor
does the agreement require [Snow] to determine a value of the
membership and provide it to [Scarfo]. Indeed, each partner
had that responsibility to the other. Except for the annual
tax returns and K-1s provided by the [Cider Hill] accountant,
neither party did so and neither inquired of the other.
other provisions of this agreement specifically applicable to
this litigation are paragraphs 7 and 8, which provide:
All aspects of the construction of the housing units and
related structures shall be performed by PREMIER BUILDING
& DEVELOPMENT, INC., at a cost plus 5 [percent]. [Cider
Hill] shall obtain [three] bids for this work to estimate the
fair market value of this work and to agree on the cost of
The cost of work performed by PREMIER BUILDING &
DEVELOPMENT, INC., or its affiliates or assigns, and PATRICK
SNOW, or his affiliates or assigns, shall be paid from the
proceeds of the construction loan as customary . . . .
contends that he entered the agreement because he relied on a
preliminary budget prepared by Snow, which reflected
expenditures of $1, 727, 100. The agreement does not make any
mention of budgets or reliance thereon. In addition, neither
the agreement nor any other document provides any guarantee
of profit nor pay-back to an investor in the event of going
over budget. Nor does the agreement provide that lots should
sell at a certain price or that the partner who actually was
negotiating the sale of the lots could not exercise
discretion in the sale, depending on the benefit to [Cider
Hill] or the difficulty in selling any particular lot on the
devoted full-time effort to the development of the [Cider
Hill] subdivision and sale of the properties. While he was
not designated by the parties in their agreement as the
‘managing partner, ' he was the only one of the two
equal partners who worked on developing the property,
engaging engineers, pavers, land-scapers, etc.; procuring
estimates; considering the contractors and providers to be
hired and used, etc.; negotiating the necessary arrangements
and business transactions, as well as the loans; and,
preparing for and procuring necessary approvals from
appropriate authorities. In essence, he was the ‘de
facto' managing member, or the operation would never have
even begun to get under way. Snow never received any salary
or compensation for his efforts.
November, 2005, the Town of Cromwell Planning and Zoning
Commission approved the subdivision, with special and general
conditions. In 2006, lots began to be sold; indeed
approximately twelve of the twenty-three lots were sold in
that year. The number decreased in 2007 and 2008. The real
estate market, which had been ‘on a roll, ' began
the tumultuous decline from which we are only now beginning
to recover, just as is the general economy. As Snow
testified, he had high hopes in 2004, and before 2008, he
never expected a loss. In an undated supplementary budget,
proposed expenditures had increased to $2, 979, 050. This was
prepared by Snow, and Scarfo did not ask any questions about
it. Snow testified that the property proved to be a very
difficult site on which to work. Among other things, trees
had to be cleared, there were inclines and declines, a hill,
the necessity of the construction of a retaining wall, the
soil was a type that was difficult to control and had to be
income tax returns for [Cider Hill] reflect the following:
2004-no gross receipts or sales; 2005-loss of $455;
2006-profit of $166, 705; 2007-loss of $98, 501; 2008-loss of
$230, 048; 2009-loss of $13, 845; 2010- loss of $157, 472,
and, 2011-loss of $20.
‘bookkeeping' and ‘records' keeping in
this project [were] unique. According to Kathy Lehman, the
woman who was his bookkeeper, customer service representative
and office manager for seven years until 2010, each lot in
the twenty-three lot [Cider Hill] subdivision had its own
folder, containing the plot plan and closing documents. The
records produced at trial certainly confirm that. Invoices
from subcontractors were placed in a ‘to be paid'
pile and she never paid any bill without an invoice.
Thereafter, the payment set-up got confusing. [Cider Hill]
did not have a credit card and had little in the way of
equity at its commencement. In order to benefit from the
delay of having to pay immediately, Snow took advantage of
the sixty day payment plan for vendors [and] on various of
the other entities' and Snow's credit cards, and
those cards were used to pay [Cider Hill] bills. Snow would
then later make the credit card payments. Whenever Snow
needed to be reimbursed for an expenditure, he would give Ms.
Lehman the receipt. According to Ms. Lehman, the credit card
statements were at the office when she left.
the early portion of its existence, [Cider Hill] used a
[particular] software package . . . [but], by the time of the
commencement of this litigation, it was no ...