Suffield Development Associates Ltd. Partnership v. Society for Savings

BERDON, J.,

dissenting. Although the majority opinion correctly sets forth our standard of review with respect to the jury’s verdict, it misapplies that standard. The standard of review is as follows: “A verdict of a jury prevails unless unsupported by the evidence . . . or unless it is so palpably against the evidence as to indicate prejudice, partiality, corruption, confusion or *847lack of understanding of the issues by the jury. . . . The conclusion of a jury on issues of fact, if it is one at which honest men acting fairly and intelligently could arrive reasonably, must stand, even though the opinion of . . . this court might be that a different result should have been reached. The credibility of each witness and the weight to be accorded to his testimony is for the jury, and the evidence must be given the most favorable construction of which it is reasonably capable.” (Citations omitted; emphasis added.) Harris v. Clinton, 142 Conn. 204, 209, 112 A.2d 885 (1955). “The concurrence of the judgments of the [trial] judge and the jury who saw the witnesses and heard the testimony is a powerful argument for sustaining the action of the trial court. We are to decide only whether there was evidence which the jury could have reasonably credited and from which they could have fairly reached the conclusion they did. In the last analysis, the defendants ask that this court retry the case on the evidence. We do not do this.” Lopez v. Price, 145 Conn. 560, 564, 145 A.2d 127 (1958).

I agree with the trial judge that there was sufficient evidence to support the verdict. “It is a fundamental principle of contract law that the existence and terms of a contract are to be determined from the intent of the parties. Menard v. Gentile, 7 Conn. App. 211, 213, 508 A.2d 456 (1986). The parties’ intentions manifested by their acts and words are essential to the court’s determination of whether a contract was entered into and what its terms were. Finley v. Aetna Life & Casualty Co., 202 Conn. 190, 199, 520 A.2d 208 (1987). Whether the parties intended to be bound without signing a formal written document is an inference of fact for the trial court that we will not review unless we find that its conclusion is unreasonable. Menard v. Gentile, supra, 213.” Steeltech Building Products, Inc. v. Edward Sutt Associates, Inc., 18 Conn. App. 469, 471-*84872, 559 A.2d 228 (1989). “This process of inference is peculiarly a jury function, the raison d’etre of the jury system.” Pierce v. Albanese, 144 Conn. 241, 256, 129 A.2d 606, appeal dismissed, 355 U.S. 15, 78 S. Ct. 36, 2 L. Ed. 2d 21 (1957).

The defendant submitted evidence to the jury that allowed it to conclude that a contract existed between the parties regarding financing for the Suffield Village Project, a shopping center. The basic agreement of the parties was memorialized in a “letter of understanding” issued by the defendant Society of Savings and dated March 3, 1987 (letter of understanding), and agreed to by the plaintiff, Suffield Development Associates Limited Partnership, as evidenced by its signed acceptance by one of the partners on April 20,1987. The agreement provided that the defendant would furnish first mortgage financing in the amount of $3.2 million (including a then existing first mortgage in the amount of $1.2 million) subject to certain conditions, which included evidence of the plaintiff having raised equity capital of $800,000 and having secured satisfactory leases for 30 percent of the space in the shopping center. Although the letter of understanding provides that “[t]his is not a commitment by [the defendant],” there is sufficient evidence in the record that the parties, in fact, intended the letter to set forth their binding agreement on the financing of the Suffield Village Project.

Surely, there was an abundance of evidence from James Sutton, Barrett Krass and James Heneghan, the three principals of the plaintiff’s general partner, Suffield Development Corporation, that the parties intended the letter of understanding to be their binding agreement as of April 20, 1987. Sutton testified that even though the defendant never issued a formal commitment, he understood the countersigned letter of understanding to be a commitment letter. Heneghan testified that if the plaintiff did all the things listed in *849the letter, the letter was a commitment, and if the plaintiff did not do those things, it was not a commitment. Finally, Krass testified that, the plaintiff had a loan commitment from the defendant subject to certain terms and conditions.

Furthermore, the plaintiffs expert witness, Robert J. Nocera, who had twelve years experience in banking, including a position as a lending officer for Waterbury Savings Bank, now known as Centerbank, testified that pursuant to banking practices, the letter of understanding was a commitment to finance the shopping center. Nocera testified that “fve never seen those words [in the letter] used where that doesn’t indicate a firm commitment on the part of the bank. Terms of financing are terms of financing. They are not ‘Maybe we’ll do it. . . .’” After the plaintiffs attorney asked him whether the sentence in the opening paragraph of the letter— “At your request I am sending you this letter to outline the terms of financing” — meant that the defendant was going to provide the financing, Nocera testified, “I will say this. In my twelve years as a banker I never would have written those words or offered them to a client unless I was prepared to also support them with the financing that . . . I’ve offered.” Moreover, the internal memorandum of the defendant, dated April 23,1987, three days after the partners agreed to the letter of understanding issued by the defendant, confirms this initial agreement. That internal memorandum referred to the letter of understanding as a “commitment letter,” and provided that the loan would be “$3.2 million construction/permanent loan to pay-off the [$1.2 million mortgage due the defendant]” and specifically set the interest rate as “a three year variable, 2.75% over 3 year Treasury Notes.”

Subsequent to the issuance of the letter of understanding, the plaintiff and the defendant amended their April 20, 1987 agreement to accommodate changing *850conditions created by the plaintiffs plans for building an expanded shopping center. Specifically, the plaintiff needed the defendant to increase its actual financing— from $2 million of new money to approximately $4.5 million — to allow the plaintiff to remodel the existing site and to acquire additional acreage for the project from nearby Suffield Academy. In May, 1987, the defendant gave its approval of the plaintiffs expansion plans and agreed that the plaintiff needed a larger loan that would consolidate the previously agreed upon financing with the planned rehabilitation and retailing expansion loan. At the July 7, 1987 meeting,1 the defendant reconfirmed its commitment to the plaintiffs to go forward with the project — the office building, retail expansion and renovation and rehabilitation of the existing shopping center. At that meeting of July 7, 1987, the defendant agreed to the increased loan amount of $4.5 milhon.2 Soon after this meeting, the defendant, demonstrating its commitment to the project, advanced to the *851plaintiff $100,000 to pay for the architect and engineer’s cost in redesigning the planned addition to the shopping center.

One year later, the defendant underscored its commitment to the expanded project by advancing the plaintiff $200,000 to use as working capital for its expanded construction plans. In its June 16, 1988 loan brief, the defendant stated that repayment of the $200,000 loan would come “[f]rom the refinance of the shopping center.” The plaintiff introduced the transcripts of prior testimony of John J. Logan, the defendant’s loan officer, in which Logan stated that he anticipated at the time he wrote the loan brief that the refinancing of the shopping center would come from the defendantThe plaintiff *852fulfilled the conditions of the April 20, 1987 contract for $3.2 million ($1.2 million existing first mortgage in favor of the defendant, and $2 million in new money), which conditions were incorporated into the amended loan for $4.5 million in new money, by raising $800,000 of equity capital and by securing leases for 30 percent of the space in the shopping center. The defendant then informed the plaintiff in March, 1990, that it would not finance the project because it now required, contrary to the parties’ agreement, proof that the plaintiff had leased 100 percent of the space. Surely, on the basis of the evidence before it, the jury could have concluded that no agreement existed; but, it did not so conclude. The determination of the parties’ “contractual commitments is a question of the intention of the parties, and an inference of fact. As an inference of fact, it is not reversible unless the [jury] could not reasonably have arrived at the conclusion that it reached.” Bead Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266, 274-75, 439 A.2d 314 (1981). Like Bead Chain Mfg. Co., this “is not the case here.” Id., 275. In my view, there was sufficient evidence to support the jury’s verdict that the parties had entered into a contract and that the defendant breached that contract.

Accordingly, I would affirm the trial court’s refusal to set aside the jury verdict based upon sufficiency of evidence and go on to decide the remaining issues.

In order to reach its conclusion that there was insufficient evidence to support the finding that a contract existed, the majority focuses solely on the July 7,1987 meeting between the parties as if anything before that date constituted a social intercourse between the plaintiff, its constituent partners and the defendant. Although the plaintiff conceded at oral argument that the “magic date” was July, 1987, that concession was for the amendment of the agreement by the parties with respect to the increase of the actual loan amount from $2 million of new money to $4.5 million.

The majority concludes that because the parties never agreed upon a specific loan amount at the July, 1987 meeting, or at any later date, the fact finder reasonably could not have concluded that a contract was formed in July, 1987. In my view the parties had a valid agreement for $2 million in new money prior to July 7, 1987, by their acceptance of the letter of understanding on April 20, 1987. The agreement was extended through subsequent negotiation in their July, 7,1987 meeting, in which specific dollar amounts and square footage figures were addressed and which resulted in an amended agreement for a loan of new money in the amount of $4.5 million. See footnote 2 of this dissent.

The majority would have us believe that there was insufficient evidence to support the specific amount of a $4.5 million loan commitment by the defendant, but that is not the case. The defendant agreed to the original $3.2 million loan to allow the plaintiff to “pay-off” its “$1.2 million assumption of [a then] present [Society for Savings] mortgage on the Suffield Village *851Shopping Center,” and to “provide funds for the construction of a [twenty thousand] square foot office building.” Therefore, under the original loan agreement, the defendant specifically agreed to give the plaintiff $2 million in new money for its planned Suffield Village Project.

On July 7, 1987, the parties met to discuss the plaintiffs capital needs for its planned expansion of the Suffield Village Shopping Center. James Sutton testified that it was agreed at the meeting that the plaintiff would need approximately $900,000 to complete the renovation and rehabilitation of the existing shopping center building, and $1.6 million to purchase additional property, build the addition to the shopping center building and complete site work associated with the retail expansion and the new parking lot. At this meeting, as noted by the majority, John J. Logan, the defendant’s loan officer, “affirmed the reasonableness of those figures, and told the plaintiff to pursue the purchase of the land and the required permit approvals.”

Therefore, there was sufficient evidence upon which the jury could have concluded that the defendant agreed to loan $2.5 million for the expanded project in addition to the prior $2 million, for a total of $4.5 million in new money.

In footnote 11 of its opinion, the majority confuses the basis of the plaintiffs action and the obvious theory upon which this case was tried. The defendant had an existing outstanding loan secured by a first mortgage in the amount of $1.2 million on the Suffield Village Shopping Center, which the plaintiff assumed when it took title to the shopping center. The plaintiff brought this action based upon the defendant’s agreement to lend the plaintiff $4.5 million in new money to complete its planned Suffield Village Project, which, in effect, would have increased the outstanding loan to $5.7 million, to be secured by a mortgage on the shopping center.