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MaDermid, Inc. v. Leonetti

Supreme Court of Connecticut

May 15, 2018

MACDERMID, INC.
v.
STEPHEN J. LEONETTI

          Argued November 6, 2017

         Procedural History

         Action to recover damages for, inter alia, unjust enrichment, and for other relief, brought to the Superior Court in the judicial district of Waterbury, where the defendant filed a counterclaim; thereafter, the court, Shapiro, J., denied the defendant's motion for summary judgment and granted the plaintiff's motion for summary judgment as to the counterclaim and rendered judgment thereon, from which the defendant appealed to the Appellate Court, Gruendel, Alvord and West, Js., which affirmed the trial court's judgment; subsequently, the case was tried to the jury before Shapiro, J.; verdict in part for the plaintiff; thereafter, the court, Shapiro, J., denied the defendant's motions for judgment notwithstanding the verdict and to set aside the verdict and rendered judgment in accordance with the verdict, from which the defendant appealed. Appeal dismissed in part; affirmed.

          Marc P. Mercier, with whom were Bruce S. Beck and, on the brief, Alexa J.P. Lindauer, for the appellant (defendant).

          John R. Horvack, Jr., for the appellee (plaintiff).

          Palmer, McDonald, Robinson, D'Auria, Mullins and Kahn, Js. [*]

          OPINION

          ROBINSON, J.

         The defendant, Stephen J. Leonetti, appeals from the judgment of the trial court, rendered after a jury trial, in favor of the plaintiff, MacDermid, Inc., on its claim of unjust enrichment.[1] On appeal, the defendant contends the following: (1) the plaintiff's unjust enrichment claim is barred by collateral estoppel on the basis of the proceedings underlying our decision in Leonetti v. MacDermid, Inc., 310 Conn. 195, 76 A.3d 168 (2013); (2) the plaintiff's recovery is precluded by General Statutes §§ 31-290[2] and 31-296 (a), [3] the terms of a termination agreement (agreement) between the parties, and public policy; (3) the trial court's jury instructions were improper; and (4) the trial court improperly excluded certain evidence. The plaintiff disagrees and claims that many of the defendant's arguments are unpreserved, inadequately briefed, or both. We agree with the plaintiff. Accordingly, we affirm the judgment of the trial court.

         The record, including our decision in Leonetti v. MacDermid, Inc., supra, 310 Conn. 195, reveals the following facts and procedural history. "The [defendant] worked for the [plaintiff] for twenty-eight years until he was discharged in early November, 2009. Five years earlier, in June, 2004, the [defendant] sustained a lower back injury during the course of his employment. The [defendant] timely filed notice of a workers' compensation claim related to this injury on April 14, 2005. The parties stipulated to the [Workers' Compensation Commissioner (commissioner)] that the injury suffered by the [defendant] was a compensable injury.

         "At the time that the [plaintiff] informed the [defendant] that he would be discharged from his employment, the [plaintiff] presented the [defendant] with a proposed . . . agreement." Id., 199. Under the terms of the agreement, the defendant's purpose in entering into the agreement was to provide "a binding agreement and understanding" with the plaintiff. As such, the agreement provided that the parties desired "to make the proposed transition as amiable and [trouble free] as possible . . . ." "Article II of the agreement signed by the parties provides that the [defendant] agreed to release the [plaintiff] from the following: ‘any and all suits, claims, costs, demands, attorney's fees, damages, back pay, front pay, interest, special damages, general damages, workers' compensation claims, punitive damages, liabilities, actions, administrative proceedings, expenses, accidents, injuries and any other cause of action in law or equity that [the defendant] has or may have or might in any manner acquire which arise out of, relate to, or is in connection with his . . . employment with, relationship with or business dealings with [the plaintiff] or the termination of that employment, relationship or dealings, or any other act, occurrence or omission, known or unknown, which occurred or failed to occur on or before the date this [a]greement is executed.'

         "Article III of the agreement provides that, in consideration ‘for the agreements and covenants made herein, the release given, the actions taken or contemplated to be taken, or to be refrained from, ' the [defendant] would be paid twenty-seven weeks ‘severance pay, determined solely upon the [defendant's] current base salary, ' which amounted to $70, 228.51, within thirty days of the [plaintiff's] receipt of the properly executed agreement; the [defendant] would continue to earn paid time off through his final day of employment; the [defendant] would be able to continue to obtain medical and dental benefits for up to eighteen consecutive months from his last date of employment under the Consolidated Omnibus Budget Reconciliation Act of 1985; 29 U.S.C. §§ 1161 through 1168 [2006]; and the [defendant] had the option to convert group life insurance to individual life insurance within thirty days of his last day of employment.

         "Article III of the agreement also provided that ‘[the defendant] understands that the payments and benefits listed above are all that [the defendant] is entitled to receive from [the plaintiff]. . . . [The defendant] agrees that the payments and benefits above are more than [the plaintiff] is required to pay under its normal policies, procedures and plans.' . . .

         "Article IV of the agreement also required the [defendant] to enter into a one year noncompete agreement and also contained a clause stating in part that ‘[the defendant] acknowledges that he has been given a reasonable period of time of at least thirty . . . days to review and consider this [a]greement before signing it. [The defendant] is encouraged to consult his or her attorney prior to signing this [a]greement.'" (Emphasis in original.) Leonetti v. MacDermid, Inc., supra, 310 Conn. 199-201.

         Article V (b) of the agreement, entitled "[i]nvalid [c]lauses, " provides: "It is understood and agreed that if any terms or provisions of this [a]greement shall contravene or be invalid under the laws of the United States, such contravention or invalidity shall not invalidate the whole [a]greement, but it shall be construed and enforced as to most nearly give effect to the intentions of the parties as expressed herein as possible."

         "The [defendant] did not want to release his preexisting workers' compensation claim relating to the 2004 injury by signing the agreement. He consulted with his attorney, who contacted the [plaintiff's] counsel and requested that the [plaintiff] remove from the agreement the language that could operate to release the [defendant's] workers' compensation claim. The [plaintiff] refused to modify the language of the agreement. The [defendant's] counsel wrote a letter to the [plain- tiff's] counsel asserting that the release language of article II of the agreement ‘really has no effect without the [c]ommissioner's approval' and scheduled an informal hearing before a workers' compensation commissioner for January 8, 2010. The [plaintiff's] counsel did not attend the informal hearing, although a representative of Liberty Mutual Insurance Group, which administered the claim on behalf of the [plaintiff], did attend. Nothing was resolved on January 8, and, on January 27, 2010, the hearing was rescheduled for March 1, 2010.

         "On January 26, 2010, the [plaintiff] sent the [defendant] a letter stating that, unless the [defendant] signed the unmodified agreement within the next ten days, it would withdraw its offer of $70, 228.51 in severance pay. The [defendant] signed the agreement on February 2, 2010, and the commissioner found that the [defendant] did so because he did not wish to forfeit his severance pay. After the [plaintiff] received the signed agreement from the [defendant], it paid the [defendant] the $70, 228.51. At that time, the commissioner had not approved the agreement as a ‘voluntary agreement' or stipulation as defined in § 31-296.

         "A formal hearing was held several months later to determine the enforceability of the language in article II of the agreement that dealt with the release of the [defendant's] workers' compensation claim. Specifically, the parties asked the commissioner to determine as follows: (1) ‘[w]hether a signed termination agreement between [an] employer and [an] employee can effectively waive the parties' rights and obligations set forth in the [Workers' Compensation Act (act), General Statutes § 31-275 et seq., in the absence of] approval of the agreement by a [commissioner]'; and (2) ‘[i]f the . . . agreement does not waive the parties' rights and obligations set forth in the [act]-whether the [c]om-missioner would issue an order that the . . . agreement be entered as a full and final stipulation of the [defendant's] workers' compensation claim against the [plaintiff].'

         "The commissioner first found that, without approval by a commissioner, the agreement did not effectively waive the parties' rights and obligations under the act. Next, the commissioner found that the agreement should not be approved as a full and final stipulation of the [defendant's] workers' compensation claim. In making this determination, the commissioner credited the [defendant's] testimony that ‘the [agreement] and payment of $70, 228.51 was based on the number of years [the defendant] worked for the [plaintiff] and there was no money paid in this agreement for [the defendant's] workers' compensation claim.' As a result, the commissioner found that the [plaintiff] had paid no consideration to the [defendant] for his accepted workers' compensation claim. In light of these findings, the commissioner found that the Workers' Compensation Commission (commission) retained jurisdiction over the [defendant's] 2004 injury and scheduled a further hearing on the [defendant's] assertion that the injury has rendered a 10 percent permanent partial disability rating to the [defendant's] lumbar spine." Leonetti v. MacDermid, Inc., supra, 310 Conn. 201-203. The plaintiff appealed from the commissioner's decision to the Workers' Compensation Review Board (board), which affirmed the commissioner's decision. Id., 203. Thereafter, the plaintiff appealed from the decision of the board. Id., 199. We then transferred that appeal to this court. Id.

         On appeal, this court concluded that, under § 31-296, a contractual release of a workers' compensation claim is unenforceable until it has been approved by the commissioner. Id., 207. We then upheld the board's decision affirming the commissioner's refusal to approve the release as a full and final settlement of the defendant's workers' compensation claim in light of its finding that the defendant had not intended to release his compensation claim by signing the agreement. Id., 208. Importantly, we went on to explain that the commission "is not competent to rule on the rights and obligations of the parties to a contract when those rights and obligations do not involve the issues that the legislature has authorized the commission to consider." Id., 220. Thus, we noted that "[t]he enforceability of the remainder of the agreement is not a question for the workers' compensation forum. . . . Of course, [the plaintiff] retains the right to seek whatever civil recourses it deems appropriate with respect to the remainder of the agreement, a matter about which we express no opinion." (Emphasis added.) Id., 221.

         On November 30, 2011, while the workers' compensation matter was still pending on appeal, the plaintiff commenced the present action against the defendant, asserting claims of civil theft, fraud, unjust enrichment, conversion, and seeking rescission of the agreement.[4]Specifically, the plaintiff claimed that its promise to pay the defendant under the agreement was rendered unenforceable by the defendant's conduct, false promises, and misrepresentations. The defendant denied the plaintiff's allegations and asserted certain special defenses, including res judicata or collateral estoppel, on the basis of the proceedings underlying this court's decision in Leonetti v. MacDermid, Inc., supra, 310 Conn. 195. The defendant also claimed that enforcement of the worker's compensation release provisions in the agreement would render the contract illegal under §§ 31-290 and 31-296.[5] The plaintiff denied the special defenses.

         The matter was tried to a jury, and, after the close of the plaintiff's evidence, the defendant moved for a directed verdict. The trial court reserved decision on that motion. Both parties filed preliminary requests to charge the jury, which were later supplemented. See part III of this opinion. Thereafter, the defendant took exception to the trial court's jury charge, claiming various errors in the charge given as well as the trial court's failure to instruct the jury in accordance with the defendant's request to charge.

         On February 26, 2016, the jury returned a verdict in favor of the plaintiff on the claim of unjust enrichment, awarding $70, 228.51 in damages, and in favor of the defendant on the remaining counts of the complaint. Thereafter, on March 7, 2016, the defendant filed a motion for judgment notwithstanding the verdict and a motion to set aside the verdict as to unjust enrichment. The trial court denied the defendant's motions in a memorandum of decision dated April 22, 2016, and rendered judgment in accordance with the jury's verdict. The trial court also awarded the plaintiff interest in accordance with a previous offer of compromise in the amount of $24, 689.65 and attorney's fees of $350. This appeal followed. See footnote 1 of this opinion. Additional relevant facts will be set forth as necessary.

         On appeal, the defendant contends that (1) the plaintiff's unjust enrichment claim is barred by collateral estoppel on the basis of the proceedings underlying this court's decision in Leonetti v. MacDermid, Inc., supra, 310 Conn. 195, (2) the plaintiff's recovery is precluded by §§ 31-290 and 31-296, the terms of the agreement, and public policy, (3) the trial court's jury instructions were improper, and (4) the trial court improperly excluded certain evidence. We address each of these claims in turn.

         I

         We first address the question of whether the plaintiff's unjust enrichment claim is barred by the doctrine of collateral estoppel.[6] The defendant argues that the material facts underlying Leonetti v. MacDermid, Inc., supra, 310 Conn. 195, are the same as those at issue in the present case. Specifically, the defendant contends that it has already been finally determined that the agreement's workers' compensation release, upon which, the defendant argues, the plaintiff's claim is based, is unenforceable, and, therefore, his agreement to release his claim was not binding on him and cannot legally constitute a pretense or a promise. As such, the defendant further contends that Leonetti served as a final judicial determination that the agreement was neither enforceable nor effective with respect to the release of the defendant's workers' compensation claim. The defendant argues, therefore, that the principles of collateral estoppel barred the plaintiff from relitigating that same issue in the present case.

         In response, the plaintiff argues, inter alia, that the defendant's collateral estoppel claim is meritless because he fails to identify any element of the plaintiff's unjust enrichment claim that was actually litigated and previously decided.[7] The plaintiff also argues that the defendant's claim "stem[s] from the false premise that [the plaintiff's] unjust enrichment claim is an attempt to enforce the unenforceable workers' compensation release." We agree with the ...


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