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THE RESERVE REALTY, LLC, ET AL. v. WINDEMERE
RESERVE, LLC, ET AL.
(AC 38167)
Alvord, Sheldon and Schaller, Js.
Argued January 4—officially released June 20, 2017
(Appeal from Superior Court, judicial district of
Danbury, Truglia, J.)
Daniel E. Casagrande, with whom was Lisa M.
Rivas, for the appellants (plaintiffs).
Christopher Rooney, with whom was Brian A. Daley,
for the appellees (named defendant et al.).
Opinion
SCHALLER, J. This appeal arises from a breach of
contract action in which the plaintiffs, The Reserve
Realty, LLC (Reserve Realty), and Theodore Haddad,
Sr., as executor of the estate of Jeanette Haddad, sought
to recover real estate brokerage fees in connection with
the sale and/or lease of units in an apartment complex
constructed and leased by the defendant BLT Reserve,
LLC (BLT), and of commercial office space not yet
constructed by the defendant Windemere Reserve, LLC
(Windemere). After a trial to the court, judgment was
rendered in favor of the defendants. The plaintiffs
appeal from that judgment, claiming that the trial court
improperly determined that (1) the purchase and sale
agreements upon which they based their claims for
brokerage fees constituted part of an illegal tying
arrangement in violation of the Connecticut Antitrust
Act, General Statutes § 35-24 et seq. (antitrust act), (2)
the listing agreements entered into pursuant to such
purchase and sale agreements did not comply with Gen-
eral Statutes § 20-325a, and (3) such listing agreements
were unenforceable by the plaintiffs because they were
personal to Jeanette Haddad. We affirm the judgment
of the trial court.
The following facts, as found by the trial court in its
memorandum of decision, are pertinent to our review.
The plaintiff, Theodore Haddad, Sr., is the duly
appointed executor of the estate of his wife, Jeanette
Haddad. Prior to her death in January, 2013, Jeanette
Haddad was a successful and highly regarded real estate
broker in the Danbury real estate market, performing
brokerage services under the business name, ‘‘Jeanette
Haddad, Broker.’’1 She employed several licensed sales-
persons, including Theodore Haddad, Sr., and she
engaged the services of her son, Theodore Haddad, Jr.,
who was a licensed real estate broker with his own
broker’s license and business. The plaintiff, Reserve
Realty, a limited liability company organized and
existing pursuant to the laws of Connecticut, was
founded by Jeanette Haddad and Paul Scalzo on Sep-
tember 15, 2003.2 The defendants, BLT and Windemere,
are limited liability companies, the principals and own-
ers of which include Carl Kuehner, Jr., and Paul
Kuehner.3
In early 2002, a group of real estate developers, later
known as Woodland Group II, LLC (Woodland), con-
tacted Jeanette Haddad and Century 21 Scalzo Realty,
Inc. (Scalzo Realty), a real estate franchise owned by
Scalzo,4 to engage their brokerage services in connec-
tion with the negotiations for the purchase of a 546
acre parcel known as the Reserve. As part of the broker/
client relationship, the ‘‘Exclusive Right to Sell–Listing
Agreement’’ (Woodland agreement) was executed by
and between Jeanette Haddad and Scalzo, and two of
the Woodland real estate developers. Pursuant to the
Woodland agreement, Jeanette Haddad and Scalzo
Realty had the exclusive right to sell and/or lease prop-
erty in the Reserve, and the real estate developers were
required to ‘‘make aware to the new purchaser of any
part, or of individual lots, or of land, that this Agreement
shall apply to that new purchaser and [Jeanette Haddad
and Scalzo Realty].’’
On or about June 28, 2002, Woodland purchased the
Reserve. Woodland, which wished to develop the
Reserve, continued to use the services of Jeanette Had-
dad and Scalzo thereafter to market the property.5
Woodland also proposed a master plan for the entire 546
acres, which the Danbury Zoning Commission approved
on or about November 26, 2002. Shortly thereafter, Win-
demere filed an administrative appeal of the plan’s
approval in the Superior Court, which effectively stayed
the approval of the master plan and prevented Wood-
land from moving forward with the development and
sale of the Reserve. Thereafter, representatives of
Woodland, Windemere, and BLT met to negotiate the
sale of two tracts of land, later known as parcel 13 and
parcel 15. Part of the negotiation resulted in Winde-
mere’s withdrawal of the administrative appeal.
On July 17, 2004, Woodland entered into the purchase
and sale agreement with BLT for the purchase of parcel
13 and the purchase and sale agreement with Winde-
mere for the purchase of parcel 15 (purchase and sale
agreements). Paragraph eight of the purchase and sale
agreement for parcel 13 obligated BLT to enter into
a listing agreement with Jeanette Haddad and Scalzo
Realty, pursuant to which Jeanette Haddad and Scalzo
Realty would receive a 3 percent commission on any
subsequent sale and/or lease of parcel 13, either as a
whole or as individual lots. Similarly, paragraph eight of
the purchase and sale agreement for parcel 15 obligated
Windemere to enter into a listing agreement with Jea-
nette Haddad and Scalzo Realty, pursuant to which
Jeanette Haddad and Scalzo Realty would receive a $1
million commission for their efforts in the leasing of
office space that Windemere intended to develop on
the parcel.6
Woodland, BLT, and Windemere also executed an
escrow agreement, pursuant to which the purchase and
sale agreements would be held in escrow by Woodland’s
counsel for ninety days until several conditions were
met. One of the conditions was the execution of listing
agreements and consent to sell the property
agreements, to be executed by Jeanette Haddad and
Scalzo Realty. This condition was included to satisfy
the requirement in the Woodland agreement between
Woodland, Jeanette Haddad, and Scalzo Realty that
Woodland ‘‘make aware to the new purchaser of any
part, or of individual lots, or of land, that this Agreement
shall apply to that new purchaser and [Jeanette Haddad
and Scalzo Realty].’’
Between July 17 and September 10, 2003, representa-
tives of Woodland, BLT, Windemere, and Jeanette Had-
dad7 negotiated the terms of the listing agreements. On
September 10, 2003, a meeting was held, at which sev-
eral documents were executed,8 including the exclusive
right to represent buyer/tenant (buyer’s agreement);9
the consent agreements;10 and the exclusive right to
sell–listing agreement for parcel 13,11 the exclusive right
to sell/lease–listing agreement for parcel 13,12 the exclu-
sive right to sell/lease–listing agreement for parcel 15,13
and the exclusive right to sell–listing agreement for
parcel 1514 (listing agreements).
Despite having executed the listing agreements, the
defendants at no time desired to retain Jeanette Haddad
as the broker for the sale and/or lease of units to be
built on parcel 13 and parcel 15. Rather, the defendants
entered into the listing agreements only to satisfy the
requirements of paragraph eight of the purchase and
sale agreements, and the only reason that the parties
included paragraph eight in the purchase and sale
agreements was to allow Woodland to comply with its
contractual obligation under the Woodland agreement
to require subsequent purchasers of the Reserve to
retain Jeanette Haddad and Scalzo Realty as their
brokers.
Beginning in early 2006, representatives of Jeanette
Haddad and Scalzo Realty, including Theodore Haddad,
Sr., and Theodore Haddad, Jr., diligently marketed and
contacted possible buyers and lessees for the Reserve.
At some point, however, the defendants decided that
the listing agreements were a ‘‘ ‘bad marriage,’ ’’ and,
in January, 2007, Paul Kuehner and Theodore Haddad,
Jr., met to discuss terminating the broker/client rela-
tionship. A buy-out figure was offered to Jeanette Had-
dad and Scalzo, which they both refused. From early
to mid-2007, Jeanette Haddad and Scalzo Realty contin-
ued to make best efforts to find prospective buyers or
lessees for parcel 13 and parcel 15, but ultimately were
unsuccessful. The defendants began to explore other
available options, including the development of parcel
13 into a luxury apartment rental complex.
On or about April 18, 2011, the Danbury Planning and
Zoning Department issued a site plan approval to BLT
for the construction of a rental apartment complex on
parcel 13, which would later be known as Abbey Woods.
Shortly thereafter, the defendants began construction.
BLT subsequently leased the apartment units in Abbey
Woods through its own on-site leasing agent, with the
first lease being entered into in March, 2013. Theodore
Haddad, Jr., upon learning about Abbey Woods, con-
tacted Carl Kuehner, Jr., and asked him if the defen-
dants intended to honor the listing agreements by
allowing Reserve Realty to act as broker and by paying
commissions on those units already leased. Carl
Kuehner, Jr., refused to discuss the issue with Theodore
Haddad, Jr., claiming that the listing agreements for
parcel 13 were personal service agreements between
BLT and Jeanette Haddad.
In July, 2013, the plaintiffs brought this action against
the defendants, claiming compensatory damages for
breach of the listing agreements.15 Specifically, the
plaintiffs sought the commissions for the leasing of
apartments in the Abbey Woods complex built on parcel
13 and for the lease and/or sale of a commercial office
building not yet constructed on parcel 15. The defen-
dants raised five special defenses: (1) the listing
agreements were entered into pursuant to an illegal
tying arrangement; (2) there was a lack of consideration
in that the plaintiffs had failed to perform brokerage
services entitling them to compensation; (3) the listing
agreements were personal service contracts; (4) the
listing agreements, by their express terms, expired on
September 10, 2010; and (5) the listing agreements were
unenforceable because the necessary conditions prece-
dent had not been satisfied. After hearing twelve days
of evidence, the trial court rendered judgment in favor
of the defendants, concluding that the purchase and
sale agreements created an illegal tying arrangement,
the listing agreements did not satisfy the requirements
of § 20-325a, and the listing agreements were personal
service contracts with Jeanette Haddad. The plaintiffs
then filed this appeal. Additional facts will be set forth
as necessary.
On appeal, the plaintiffs claim that the trial court
improperly concluded that (1) the purchase and sale
agreements constituted part of an illegal tying arrange-
ment, (2) the listing agreements did not comply with
§ 20-325a, and (3) the listing agreements were personal
to Jeanette Haddad. In order for the plaintiffs to succeed
on appeal, they must prevail on all three of these claims.
Because we conclude that the trial court properly deter-
mined that the purchase and sale agreements consti-
tuted part of an illegal tying arrangement, we need only
address this antitrust issue in order to affirm the judg-
ment of the trial court.
The plaintiffs claim that the defendants’ agreement
in the purchase and sale agreements to execute the
listing agreements as a condition for purchasing parcel
13 and parcel 15 did not constitute an illegal tying
arrangement in violation of the antitrust act. Specifi-
cally, the plaintiffs contend that the interpretation of
illegal tying arrangements in State v. Hossan-Maxwell,
Inc., 181 Conn. 655, 436 A.2d 284 (1980), upon which
the trial court relied, no longer applies because the rule
of that case has been abrogated by recent federal case
law. In addition, the plaintiffs contend that the defen-
dants failed to plead or prove the existence of a relevant
market, which they claim to be crucial to proving an
illegal tying arrangement claim. Moreover, the plaintiffs
contend that the defendants did not prove that the list-
ing agreements’ requirement that BLT use Jeanette Had-
dad and Scalzo Realty to market Abbey Woods
foreclosed competition in the market for brokerage ser-
vices.16 We disagree.
I
At the outset, we must determine the correct legal
standards to apply to the facts as found by the trial
court, particularly with regard to the alleged invalidity
of Hossan-Maxwell, Inc. Indeed, the plaintiffs argue
that recent federal case law has abrogated the rule of
State v. Hossan-Maxwell, Inc., supra, 181 Conn. 655, the
controlling authority for evaluating a tying arrangement
claim under Connecticut antitrust law, specifically Gen-
eral Statutes § 35-29.17 Furthermore, the plaintiffs con-
tend that General Statutes § 35-44b18 grants this court
the authority to analyze the validity of Hossan-Maxwell,
Inc., in light of recent federal case law, particularly
Jefferson Parish Hospital District No. 2 v. Hyde, 466
U.S. 2, 104 S. Ct. 1551, 80 L. Ed. 2d 2 (1984);19 Concord
Associates, L.P. v. Entertainment Properties Trust, 817
F.3d 46 (2d Cir. 2016; and Smugglers Notch Homeown-
ers’ Assn., Inc. v. Smugglers’ Notch Management Co.,
414 Fed. Appx. 372 (2d Cir. 2011).
As an intermediate appellate court, we must follow
the precedent established by our Supreme Court. As
we have previously noted, ‘‘[o]ur duty is to follow con-
trolling judicial precedent rather than base our decision
on our own view or the popular view of what the law
ought to be.’’ State v. Thurman, 10 Conn. App. 302, 316,
523 A.2d 891, cert. denied, 204 Conn. 805, 528 A.2d 1152
(1987). Moreover, in interpreting § 35-44b, our Supreme
Court has concluded that ‘‘[o]ur construction of the
[antitrust act] is aided by reference to judicial opinions
interpreting the federal antitrust statutes. . . . Accord-
ingly, we follow federal precedent when we interpret
the act unless the text of our antitrust statutes, or
other pertinent state law, requires us to interpret it
differently.’’ (Citations omitted; emphasis added; foot-
note omitted; internal quotation marks omitted.) West-
port Taxi Service, Inc. v. Westport Transit District,
235 Conn. 1, 15–16, 664 A.2d 719 (1995). Our Supreme
Court has further stated that ‘‘§ 35-44b merely gave leg-
islative imprimatur to what this court had been doing
long before its enactment, namely, looking to case law
construing relevant federal statutes as persuasive
authority.’’ Miller’s Pond Co., LLC v. New London, 273
Conn. 786, 809–810, 873 A.2d 965 (2005). Accordingly,
we are bound by the decision of our Supreme Court in
State v. Hossan-Maxwell, Inc., supra, 181 Conn. 655.
We, therefore, apply Hossan-Maxwell, Inc., as a con-
trolling interpretation of § 35-29.
II
Having concluded that § 35-29, as explained and
applied in Hossan-Maxwell, Inc., provides the govern-
ing standard to apply in the present action, we now
consider whether the trial court applied it properly to
the facts. We first set forth the standard of review that
guides our interpretation of the antitrust act. ‘‘The scope
of our appellate review depends on the proper charac-
terization of the rulings made by the trial court. To the
extent that the trial court has made findings of fact,
our review is limited to deciding whether such findings
are clearly erroneous. When, however, 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. . . . This court cannot retry the
facts or pass upon the credibility of witnesses. . . .
Furthermore, [o]ur function is not to examine the
record to see if the trier of fact could have reached a
contrary conclusion. . . . A finding of fact is clearly
erroneous when there is no evidence in the record to
support it . . . or when although there is evidence to
support it, the reviewing court on the entire evidence
is left with the definite and firm conviction that a mis-
take has been committed. . . . Because it is the trial
court’s function to weigh the evidence and determine
credibility, we give great deference to its findings.’’
(Citations omitted; internal quotation marks omitted.)
Westport Taxi Service, Inc. v. Westport Transit Dis-
trict, supra, 235 Conn. 14–15.
Tying arrangements were made illegal by § 3 of the
Clayton Act, which was enacted October 15, 1914; see
15 U.S.C. § 14 (2012);20 after which General Statutes
§ 35-29 was patterned. ‘‘A tying arrangement is an
agreement by a party to sell one product but only on
the condition that the buyer also purchase a different
(tied) product, or at least agree that he will not purchase
that product from another supplier. Northern Pacific
Ry. Co. v. United States, 356 U.S. 1, 78 S. Ct. 514, 2 L.
Ed. 2d 545 [(1958)].’’ State v. Hossan-Maxwell, Inc.,
supra, 181 Conn. 659. ‘‘Tying arrangements are among
the small group of practices which courts have found
to be unlawful in and of themselves; Northern Pacific
Ry. Co. v. United States, supra, 5; International Salt
Co. v. United States, 332 U.S. 392, 396, 68 S. Ct. 12, 92
L. Ed. 20 [1947]; Elida, Inc. v. Harmor Realty Corp.,
[177 Conn. 218, 227–28, 413 A.2d 1226 (1979)]. The justi-
fication for the per se approach is that [t]ying
agreements serve hardly any purpose beyond the sup-
pression of competition. Standard Oil Co. v. United
States, 337 U.S. 293, 305, 69 S. Ct. 1051, 93 L. Ed. 1371
[(1949)]. Nonetheless, [it is only] when certain prerequi-
sites are met, [that] arrangements of this kind are illegal
in and of themselves, and no specific showing of unrea-
sonable competitive effect is required. Fortner Enter-
prises, Inc. v. United States Steel Corp., 394 U.S. 495,
498, 89 S. Ct. 1252, 22 L. Ed. 2d 495 [(1969)]. . . .
[T]ying arrangements [are] deemed per se illegal, when-
ever the party has sufficient economic power with
respect to the tying product to appreciably restrain free
competition in the market for the tied product and
a not insubstantial amount of interstate commerce is
affected. Northern Pacific Ry. Co. v. United States,
supra, 6.’’ (Internal quotation marks omitted.) State v.
Hossan-Maxwell, Inc., supra, 660–61. Because § 35-29
is based on § 3 of the Clayton Act, and § 3 of the Clayton
Act only requires the party to prove either sufficient
economic power or a ‘‘ ‘not insubstantial’ ’’ effect on
commerce, a tying arrangement is illegal if either condi-
tion is met.21 Id., 661–62.
A
An illegal tying arrangement may be found if the tying
party ‘‘has sufficient economic power with respect to
the tying product to appreciably restrain free competi-
tion in the market for the tied product.’’ State v. Hossan-
Maxwell, Inc., supra, 181 Conn. 661. Market power
exists when ‘‘the seller has some special ability . . .
to force a purchaser to do something that he would not
do in a competitive market.’’ Jefferson Parish Hospital
District No. 2 v. Hyde, supra, 466 U.S. 13–14. The United
States Supreme Court has made clear that ‘‘the standard
of sufficient economic power does not . . . require
that the [seller] have a monopoly or even a dominant
position throughout the market for the tying product.’’
(Internal quotation marks omitted.) Fortner Enter-
prises, Inc. v. United States Steel Corp., supra, 394
U.S. 502; see State v. Hossan-Maxwell, Inc., supra, 664.
Moreover, ‘‘[e]ven absent a showing of market domi-
nance, the crucial economic power may be inferred
from the tying product’s desirability to consumers or
from uniqueness in its attributes.’’ (Internal quotation
marks omitted.) Fortner Enterprises, Inc. v. United
States Steel Corp., supra, 503; see State v. Hossan-Max-
well, Inc., supra, 664. ‘‘[T]he proper focus of concern
is whether the seller has the power to raise prices, or
to require other burdensome terms such as a tie-in, with
respect to any appreciable number of buyers within the
market. In short, the question is whether the seller has
some advantage not shared by his competitors in the
market for the tying product.’’ State v. Hossan-Maxwell,
Inc., supra, 664.
In the present case, Woodland, the tying party, has
imposed a tying arrangement upon all of the parcels
that formed the Reserve, the tying product, by tying
the purchase of any of the parcels to the purchase of
Jeanette Haddad’s and Scalzo Realty’s brokerage ser-
vices. This situation is similar to that in Hossan-Max-
well, Inc., where sixty-four subdivision housing lots had
restrictive covenants requiring all purchasers to give
exclusive sales and leasing rights to the named broker-
age services for three months.22 State v. Hossan-Max-
well, Inc., supra, 181 Conn. 657–58. In Hossan-Maxwell,
Inc., our Supreme Court found that, based on federal
precedent and Connecticut case law on property char-
acteristics,23 the tying arrangement met the sufficient
economic power test because the residential property
was sufficiently unique that the tying party had some
advantage in the market not shared by his competitors.
Id., 665. Likewise, the record before this court supports
the conclusion that the Reserve was sufficiently unique
to infer that Woodland held sufficient economic power.
The present action involves a substantially larger area
of land than Hossan-Maxwell, Inc., with the Reserve
being comprised of 546 undeveloped acres. Such a large
area of undeveloped land is rarely available in the
densely populated Northeast. Moreover, the Danbury
Planning and Zoning Department granted flexible zon-
ing for the Reserve, so that both residential and com-
mercial buildings could be constructed. Thus, parcel
13 was zoned for residential development, and parcel
15 was zoned for commercial development. According
to the proposed master plan, the ‘‘plan seeks to achieve
a balance between residential, commercial and other
uses, recognizing that the site is sufficiently large and
physically diverse to accommodate a development of
a new, cohesive residential community . . . .’’ This
flexibility was intended to create a unique community
where people both could live and work within a
short distance.
Consequently, we conclude that the Reserve is suffi-
ciently unique that the trial court logically could have
inferred that Woodland restrained free competition
when it required subsequent purchasers of property in
the Reserve to use the brokerage services of Jeanette
Haddad and Scalzo Realty, because that requirement
forced such purchasers to use a brokerage service that
they would not have used otherwise. In fact, representa-
tives of the defendants testified, and the trial court
found credible, that they did not want to use Jeanette
Haddad and Scalzo Realty, and that the only reason
they did use their brokerage services was that the tying
arrangement compelled them to do so, for the defen-
dants otherwise would have lost the opportunity to
purchase parcel 13 and parcel 15. Accordingly, we con-
clude that the trial court logically determined that
Woodland possessed sufficient market power over the
Reserve, and, therefore, an illegal tying arrangement
existed.
The plaintiffs contend that the defendants did not
successfully prove that Woodland had sufficient eco-
nomic power with respect to the Reserve because they
did not establish the relevant market for the Reserve.
According to the plaintiffs, the establishment of a rele-
vant market is a critical component to an antitrust claim
because it is required to evaluate the extent to which
the plaintiffs exercised power. In Hossan-Maxwell,
Inc., our Supreme Court did not find it necessary to
identify the relevant market in which a unique property
was situated when it determined that ‘‘the uniqueness
of residential property is . . . sufficient evidence of
the market power possessed by the [tying party].’’ State
v. Hossan-Maxwell, Inc., supra, 181 Conn. 665. More-
over, in reaching its conclusion, our Supreme Court
cited to United State v. Loew’s, Inc., 371 U.S. 38, 45
n.4, 83 S. Ct. 97, 9 L. Ed. 2d 11 (1962), in which the
United States Supreme Court, when discussing the
appropriateness of inferring economic power from
uniqueness, noted that ‘‘[s]ince the requisite economic
power may be found on the basis of either uniqueness
or consumer appeal, and since the market dominance
in the present context does not necessitate a demonstra-
tion of market power in the sense of § 2 of the Sherman
Act, it should seldom be necessary in a [tying arrange-
ment] case to embark upon a full-scale factual inquiry
into the scope of the relevant market for the tying prod-
uct and into the corollary problem of the seller’s per-
centage share in that market.’’
Furthermore, in Jefferson Parish Hospital District
No. 2, the United States Supreme Court made it clear
that the establishment of a relevant market is not
required when economic power is proven through a
product’s uniqueness. Specifically, it stated that
‘‘[w]hen the seller’s share of the market is high . . . or
when the seller offers a unique product that competitors
are not able to offer . . . the Court has held that the
likelihood that market power exists and is being used
to restrain competition in a separate market is sufficient
to make per se condemnation appropriate. . . . Thus,
in Northern Pacific R. Co. v. United States, [supra, 356
U.S. 8], we held that the railroad’s control over vast
tracts of western real estate, although not itself unlaw-
ful, gave the railroad a unique kind of bargaining power
that enabled it to tie the sales of that land to exclusive,
long term commitments that fenced out competition in
the transportation market over a protracted period.’’
(Citations omitted.) Jefferson Parish Hospital District
No. 2 v. Hyde, supra, 466 U.S. 17. Consequently, we
conclude that the defendants did not have to prove a
relevant market to succeed on their claim that the
Reserve was sufficiently unique to meet the sufficient
economic power test.
B
Alternatively, an illegal tying arrangement may be
present when a ‘‘not insubstantial’’ amount of com-
merce in the tied product is restrained.24 ‘‘The tying of
brokerage services to the sale of residential develop-
ment of real estate is automatically illegal under § 35-
29 whenever a substantial volume of commerce in the
tied product is restrained. . . . The amount of com-
merce affected is not measured by reference to the
size of the tied product market. . . . [N]ormally, the
controlling consideration is simply whether a total
amount of business, substantial enough in terms of dol-
lar-volume so as to not be merely de minimis, is fore-
closed to competitors by the tie, for as [the United
States Supreme Court] said in International Salt [Co.
v. United States, supra, 332 U.S. 396], it is unreasonable,
per se, to foreclose competitors from any substantial
market through use of a tying arrangement.’’ (Citations
omitted; internal quotation marks omitted.) State v.
Hossan-Maxwell, Inc., supra, 181 Conn. 662–63.
In the present case, the trial court found that ‘‘the
market values of parcel 13 and parcel 15, and the com-
missions that would have been due to the plaintiffs upon
resale or lease of the developed parcels, concerned a
substantial amount of commerce in the tied market.’’
The record before this court supports the trial court’s
finding. BLT paid $15 million for parcel 13, and, pursu-
ant to the Woodland agreement between Woodland,
Jeanette Haddad, and Scalzo Realty, Jeanette Haddad
and Scalzo Realty were owed a 3 percent commission
from the transaction. This calculates to a $450,000 com-
mission. Moreover, paragraph eight of the purchase and
sale agreement for parcel 13 includes language obligat-
ing BLT to enter into a listing agreement with Jeanette
Haddad and Scalzo Realty, pursuant to which the two
brokers would receive a 3 percent commission on any
subsequent sale or lease of all or any portion of the
parcel. After purchasing parcel 13, BLT received the
approval of the Danbury Planning and Zoning Depart-
ment to construct a rental apartment complex con-
taining 470 units. With the units being rented for $1515
to $1910 a month, the total potential commerce involved
for the first month of the initial lease of each unit is
between $712,050 and $897,700, and the real estate com-
mission foreclosed is between $21,361.50 and $26,931.
Moreover, Windemere paid $7 million for parcel 15,
and, also pursuant to the Woodland agreement, Jeanette
Haddad and Scalzo Realty were owed a 3 percent com-
mission from the transaction. This calculates to a
$210,000 commission for Jeanette Haddad and Scalzo
Realty. Furthermore, paragraph eight of the purchase
and sale agreement for parcel 15 included language
obligating Windemere to enter into a listing agreement
with Jeanette Haddad and Scalzo Realty, pursuant to
which the brokers would receive a $1 million commis-
sion for their efforts to sell and/or lease the commercial
office space that Windemere was intending to build on
parcel 15. Thus, between parcel 13 and parcel 15, more
than $1.5 million in brokerage fees was foreclosed,
which is not a de minimis amount. See State v. Hossan-
Maxwell, Inc., supra, 181 Conn. 663–64 ($60,800 was
sufficient amount of money to meet ‘‘not insubstantial’’
test).25 Accordingly, we conclude that the trial court
logically determined that, by restricting the pool of bro-
kers for the sale and/or lease of the Reserve, the
arrangement between Woodland, Jeanette Haddad, and
Scalzo Realty restricted a ‘‘not insubstantial’’ volume
of commerce in the Reserve.
The judgment is affirmed.
In this opinion the other judges concurred.
1
To the extent that ‘‘Jeanette Haddad, Broker’’ is distinct from Jeanette
Haddad, those distinctions are not material to our resolution of the claims
on appeal.
2
When formed, Reserve Realty was named UC Properties, LLC (UC Prop-
erties). On July 22, 2004, Scalzo filed articles of amendment, changing the
name of the company from UC Properties to Reserve Realty.
3
The Kuehner and Haddad families have been personal friends and busi-
ness associates since the late 1970s.
4
The plaintiffs moved to add Scalzo Realty as a necessary party to the
action. The trial court granted the motion, ordering that the complaint be
amended to state facts showing the interest of Scalzo Realty in the action
and that Scalzo Realty appear as a defendant. Thereafter, Scalzo Realty was
defaulted for failure to plead. Subsequently, the plaintiffs withdrew this
action as to Scalzo Realty.
5
Reserve Realty was formed by Jeanette Haddad and Scalzo to market
and sell the Reserve as it became subdivided.
6
Pursuant to paragraph twelve of the purchase and sale agreement for
parcel 15, titled conditions of purchase, Woodland was required to obtain
government approval for the development of a conference center and to
provide Windemere with a site plan sketch for an office building so that
Windemere could petition for a change in the master plan to allow for the
construction of a large office space.
7
Theodore Haddad, Jr., acted on behalf of Jeanette Haddad.
8
The trial court determined that it was not clear precisely how the final,
fully-executed hard copies of the agreements came to be executed by Jea-
nette Haddad. Although Theodore Haddad, Jr., testified that Jeanette Haddad
was faxed the agreements on September 10, 2003, and she subsequently
returned them with her signature via fax on the same day, the trial court
did not find his testimony entirely credible. The trial court found, however,
that Carl Kuehner, Jr., executed the agreements on behalf of both BLT and
Windemere with the intent that the defendants be legally bound.
9
In the buyer’s agreement, the defendants appointed Scalzo Realty, UC
Properties, and Jeanette Haddad as their exclusive agents to assist in the
purchase of parcel 13 and parcel 15.
10
The consent agreements did not address the defendants’ obligation to
use the plaintiffs’ brokerage services.
11
In the exclusive right to sell–listing agreement for parcel 13, BLT granted
Jeanette Haddad and Scalzo Realty the exclusive right to sell and/or lease
parcel 13.
12
In the exclusive right to sell/lease–listing agreement for parcel 13, BLT
granted UC Properties, Scalzo Realty, and Jeanette Haddad the exclusive
right to sell and/or lease parcel 13 or any portion of parcel 13.
13
In the exclusive right to sell/lease listing agreement for parcel 15, Winde-
mere granted UC Properties, Scalzo Realty, and Jeanette Haddad the exclu-
sive right to sell and/or lease parcel 15 or any portion of parcel 15.
14
In the exclusive right to sell–listing agreement for parcel 15, Windemere
granted Jeanette Haddad and Scalzo Realty the exclusive right to sell and/
or lease parcel 15.
15
Subsequently, on May 6, 2014, the plaintiffs commenced two actions
seeking to foreclose liens that they had recorded as to parcel 13 and parcel
15 (foreclosure actions). On September 28, 2015, the parties filed a stipulation
in each of the foreclosure actions, stipulating that the memorandum of
decision in the present action required the conclusion that the plaintiffs
could not establish probable cause to sustain the validity of the liens, as
required by General Statutes § 20-325e. The parties, therefore, stipulated
that judgment be rendered against the plaintiffs in the foreclosure actions,
but that all appellate rights be reserved. The plaintiffs also have appealed
from the judgments ordering the discharge of the liens. See Reserve Realty,
LLC v. BLT Reserve, LLC, 174 Conn. App. , A.3d (2017); Reserve
Realty, LLC v. Windemere Reserve, LLC, 174 Conn. App. , A.3d
(2017).
16
The plaintiffs further argued that the defendants’ illegal tying arrange-
ment claim must fail because it did not pass the rule of reason test. As
subsequently discussed in this opinion, tying arrangements, due to their
manifestly anticompetitive nature, fall under the per se test, not the rule of
reason test.
17
General Statutes § 35-29 provides in relevant part: ‘‘Every lease, sale or
contract for the furnishing of services or for the sale of commodities . . .
on the condition or understanding that the lessee or purchaser shall not
deal in the services or the commodities of a competitor or competitors of
the lessor or seller, shall be unlawful where the effect of such lease or
sale or contract for sale or such condition or understanding may be to
substantially lessen competition or tend to create a monopoly in any part
of trade or commerce and where such goods or services are for the use,
consumption or resale in this state.’’
18
General Statutes § 35-44b provides: ‘‘It is the intent of the General Assem-
bly that in construing sections 35-24 to 35-46, inclusive, the courts of this
state shall be guided by interpretations given by the federal courts to federal
antitrust statutes.’’
19
But see Illinois Tool Works, Inc. v. Independent Ink, Inc., 547 U.S. 28,
31, 43–45, 126 S. Ct. 1281, 164 L. Ed. 2d 26 (2006) (rejecting dicta from
Jefferson Parish Hospital District No. 2 regarding presumption that patents
afforded sufficient market power to restrain competition in tied market).
20
Section 3 of the Clayton Act, 15 U.S.C. § 14 (2012), provides in relevant
part: ‘‘It shall be unlawful for any person engaged in commerce, in the
course of such commerce, to lease or make a sale or contract for the sale
of . . . commodities . . . for use, consumption, or resale within the United
States . . . or fix a price charged therefor, or discount from, or rebate
upon, such price, on the condition, agreement, or understanding that the
lessee or purchaser thereof shall not use or deal in the . . . commodities
of a competitor or competitors of the lessor or seller, where the effect
of such lease, sale, or contract for sale or such condition, agreement, or
understanding may be to substantially lessen competition or tend to create
a monopoly in any line of commerce.’’
21
‘‘Although both tests must be met to constitute a violation of § 1 of the
Sherman [Antitrust Act 15 U.S.C § 1], under § 3 of the Clayton Antitrust Act;
15 U.S.C. § 14; a [tying arrangement] is per se illegal if either condition is
met. Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 608,
609, 73 S. Ct. 872, 97 L. Ed. 1277 [(1953)]; Moore v. Jas. H. Matthews & Co.,
550 F.2d 1207, 1214 (9th Cir. [1977]); Advance Business Systems & Supply
Co. v. SCM Corp., 415 F.2d 55, 61–62 (4th Cir. [1969]), cert. denied, 397 U.S.
920, 90 S. Ct. 928, 25 L. Ed. 2d 101 [(1970)]; ILC Peripherals Leasing Corp.
v. International Business Machines Corp., 448 F. Supp. 228, 230 (N.D. Cal.
[1978]). Since General Statutes § 35-29 is patterned after § 3 of the Clayton
[Antitrust] [A]ct; 14 H.R. Proc., Pt. 9, 1971 Sess., p. 4182 (remarks of Rep.
David H. Neiditz); Brodigan, ‘The Connecticut Antitrust Act,’ 47 Conn. B.J.
12, 15 (1973); and specifically includes the provision of services within its
ambit, we believe that it is appropriate to adopt the Clayton [Antitrust] [A]ct
test in determining whether a violation of § 35-29 has occurred. Thus, the
declaration of covenants and restrictions is unlawful per se if either condition
under Northern Pacific Ry. Co. v. United States, supra, [356 U.S.] 6, is met;
that is, if (1) the party has sufficient economic power in the tying product,
or (2) a not insubstantial amount of commerce is affected.’’ (Footnotes
omitted.) State v. Hossan-Maxwell, Inc., supra, 181 Conn. 661–62.
22
The plaintiffs claim that, even if this court is bound by Hossan-Maxwell,
Inc., the present action is distinguishable. Specifically, the plaintiffs argue
that: (1) the covenants in Hossan-Maxwell, Inc., bound all subsequent pur-
chasers, whereas in the present case only Windemere and the first purchasers
after BLT are bound; (2) the owner in Hossan-Maxwell, Inc., was also the
broker, and therefore had an economic interest in both the tying product
and the tied product; (3) the purchasers in Hossan-Maxwell, Inc., had no
power to negotiate, whereas in the present case the defendants freely entered
into the listing agreements after negotiations; and (4) the illegal clauses in
the present case are part of otherwise valid agreements, and therefore the
rule of reason test, not the per se test, should apply. For the reasons discussed
subsequently in this opinion, we conclude that Hossan-Maxwell, Inc., is
analogous to the present case and, therefore, we are not persuaded by the
plaintiffs’ argument.
23
‘‘In Connecticut, the uniqueness and special characteristics of a particu-
lar plot of land have long been recognized.’’ State v. Hossan-Maxwell, Inc.,
supra, 181 Conn. 665, citing Anderson v. Yaworksi, 120 Conn. 390, 395, 399,
181 A. 205 (1935).
24
The plaintiffs failed to raise the issue as to a ‘‘not insubstantial’’ amount
of commerce test in their main brief. Because this is an alternative test to
finding a tying arrangement and it was a means by which the trial court
found an illegal tying arrangement, however, we still address whether a ‘‘not
insubstantial’’ amount of commerce was affected. In addition, the defendants
argued in their briefs that a ‘‘not insubstantial’’ amount of commerce was
foreclosed in the tied market for brokerage services, and the plaintiffs
addressed the issue in their reply brief.
25
The total amount foreclosed is only a portion of the property of the
Reserve being sold by Woodland with the tied brokerage services. See
Fortner Enterprises, Inc. v. United States Steel Corp., supra, 394 U.S. 502
(‘‘[f]or purposes of determining whether the amount of commerce foreclosed
is too insubstantial to warrant prohibition of the practice . . . the relevant
figure is the total volume of sales held by the sales policy under challenge,
not the portion of [the] total accounted for by the particular plaintiff who
brings suit’’). The record indicates that additional buyers of the Reserve
parcels included White Peterman for $13,931,000, with Jeanette Haddad and
Scalzo Realty receiving a 3 percent commission, and WCI for approximately
$44 million, with Jeanette Haddad and Scalzo Realty receiving a 3 per-
cent commission.