Argued
April 15, 2019
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The
Superior Court of Connecticut, Judicial District of Hartford,
Nina Elgo, J.
Thomas
E. Katon, New Haven, with whom, on the brief, was Adam D.
Miller, for the appellants (defendants).
Kirk D.
Tavtigian, Jr., Farmington, with whom was George M. Purtill,
South Glastonbury, for the appellee (plaintiff).
DiPentima,
C.J., and Keller and Olear, Js.
OPINION
DiPENTIMA,
C.J.
Page 139
[192
Conn.App. 380] The defendants[1] POKO Partners, LLC, POKO
Reservoir Yaremich Developers, LLC, POKO Cape Loom Managers,
LLC, One Morningside Group, [192 Conn.App. 381] LLC, One
Morningside Managers, LLC, One Morningside Owners, LLC,
Capehart Ventures, LLC, POKO Management Corp., Richard K.
Olson, and Pamela Olson, as executrix of the estate of
Kenneth M. Olson,[2] appeal from the judgment of the trial
court rendered in part in favor of the plaintiff, Crosskey
Architects, LLC. On appeal, the defendants claim that the
court (1) improperly pierced the corporate veil, (2)
improperly found that the plaintiff was entitled to damages
on the theory of quantum meruit and (3) abused its discretion
in awarding statutory prejudgment interest pursuant to
General Statutes § 37-3a[3] on the theory of quantum meruit. We
affirm the judgment of the trial court.
The
following facts, as found by the trial court, and procedural
history are relevant. The plaintiff is an architectural firm
owned by William Crosskey, a licensed architect. From 2006 to
2015, Crosskey had a business relationship with Kenneth Olson
and his brother, Richard Olson. The Olsons oversaw between
forty to sixty business entities established for the purpose
of commercial and residential real estate development. The
Olsons managed their business entities by having the
businesses owned by one limited liability company while being
managed and controlled by another. At the top of this
structure are POKO Partners, LLC, in which Kenneth Olson has
a 50 percent ownership interest, Richard Olson has a 40
percent ownership interest and Pamela Olson, Kenneth Olsons
wife, has a 10 percent interest; and POKO Management Corp.,
in which Kenneth Olson has a 60 percent ownership interest
and [192 Conn.App. 382] Richard Olson has a 40 percent
ownership interest. Either Kenneth Olson or the Olsons
together own a majority interest in nearly all of the
defendant entities. The defendant entities owned by the
Olsons operate out of one office in Port Chester, New York.
All of the personnel working out of this office are paid by
either POKO Partners, LLC, or POKO Management Corp. The
Olsons salaries are paid exclusively from POKO Management
Corp.
In the
thirteen count operative complaint, the plaintiff sought
damages for the unpaid work it had performed on four projects
of the Olsons: the POKO office project, the Reservoir
project, the Morningside Drive project and the Capehart
project. The plaintiff alleged breach of contract, quantum
meruit and unjust enrichment regarding each of the four
projects, and sought to pierce the corporate veil.
The
court described the plaintiffs work on the four projects as
follows. Kenneth Olson began communications with Crosskey in
2008, regarding the POKO office project, which involved
renovating the office in Port Chester. Employees of the
plaintiff exchanged e-mails with Richard Olson and an
employee of POKO Partners,
Page 140
LLC, regarding the work requested. The work requested was
done and accepted at the hourly rates that the plaintiff had
charged since the beginning of the plaintiffs business
relationship with the Olsons. After completing the work,
Crosskey sent Kenneth Olson and POKO Partners, LLC, invoices
totaling $4690.24 as of October 15, 2008, but the plaintiff
was not paid. Richard Olson explained that the plaintiff was
not paid because he and his brother assumed that the
plaintiff would write off the costs.
The
Reservoir project involved new construction, mixed-use
housing and commercial space development in the city of
Bridgeport. In September, 2006, Kenneth Olson solicited the
plaintiffs architectural services. [192 Conn.App. 383]
Although the project never went forward, the plaintiff
performed work on the project and submitted invoices. The
plaintiff was never paid.
The
Morningside Drive project involved a group of small office
buildings owned by Kenneth Olson on One Morningside Drive in
Westport. The plaintiff provided architectural services in
connection with this project. POKO Management Corp. was the
property manager for One Morningside Drive, which was being
developed in order to sell to Newmans Own Real Estate, LLC.
Following the sale, POKO Management Corp. continued to use
the plaintiffs services for ongoing projects at One
Morningside Drive. There was an ongoing agreement in which
the plaintiff was solicited to provide architectural services
and the defendants would pay the plaintiffs hourly rates.
Crosskey sent unpaid invoices in the amount of $10,480.10 to
POKO Partners, LLC, and POKO Management Corp. One Morningside
Managers, LLC, was the managing entity of One Morningside
Group, LLC, in which Richard Olson and Kenneth Olson each had
a 37.5 percent interest, respectively, and the remaining 25
percent was owned by employees of the defendant entities. One
Morningside Managers, LLC, was dissolved in 2014, after the
buildings were sold to Newmans Own Real Estate, LLC, for
$5.8 million. At that time, One Morningside Group, LLC, of
which Kenneth Olson was an investor, netted $1,669,702.51. In
reliance on an agreement that he would be paid, Crosskey
continued to accept work from Kenneth Olson, but he was not
paid.
The
Capehart project concerned the development of an old mill
building in Norwich into apartment buildings. Kenneth Olson
signed a contract in which he was identified as the managing
member under the auspices of Capehart Ventures,
LLC.[4] The Capehart project never [192
Conn.App. 384] came to fruition, and the court noted that
Kenneth Olsons deposition testimony revealed that
"close to a million and a half dollars" was lost on
the project. (Internal quotation marks omitted.) POKO
Partners, LLC, the project manager on this project, received
$450,000 in project management fees. The plaintiffs
outstanding bill for the project totaled $31,383.93, with
late charges totaling $63,775.71. The court noted that
Kenneth Olson "rationalized his refusal to pay the
plaintiff for architectural services rendered for the
Reservoir and Capehart projects by claiming that the
plaintiff was on spec. In other words, the plaintiff was
effectively working without compensation for [its] services
unless and until the projects were ultimately approved for
funding. There is, however, no credible evidence that the
plaintiff or Crosskey agreed to this arrangement."
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The
court found in favor of the plaintiff on the first count of
the complaint alleging breach of contract as to the POKO
office project as against POKO Partners, LLC, and POKO
Management Corp. in the amount of $4690.24 plus interest; on
the fifth count of the complaint addressing the Reservoir
project and seeking quantum meruit as to POKO Partners, LLC,
POKO Management Corp. and POKO Reservoir Yaremich Developers,
LLC, in the amount of $23,907.70 plus interest; on the
seventh count of the complaint, alleging breach of contract
as to the Morningside Drive project as against POKO Partners,
LLC, POKO Management Corp., One Morningside Group, LLC, and
One Morningside Managers, LLC, in the amount of $10,480.09
plus interest; and on the tenth count of the complaint
alleging breach of contract as to the Capehart project as
against POKO Partners, LLC, Capehart Ventures, LLC, and POKO
Cape Loom Managers, LLC,[5] in the amount of $31,383.93 plus
[192 Conn.App. 385] interest. The court also found that the
plaintiff prevailed on the thirteenth count of the complaint
and pierced the corporate veil, holding the Olsons ...