Date: 09-14-2015

Case Style: Santos v. Massad-Zion Motor Sales Co.

Case Number: AC 36986

Judge: Honorable Robert E. Beach, Jr.

Court: Connecticut Judicial Branch

Plaintiff's Attorney: Richard F. Connors

Defendant's Attorney: Catherine L. Creager, Kevin A. Coles

Description: The defendants, Massad-Zion Motor Sales Co., Inc. (Massad-Zion), David Massad, and Steven Zion,1appealfromthejudgmentofthetrialcourtenforcing a settlement agreement purportedly entered into by the defendants and the plaintiff, Valdemiro Santos. The defendants claim that the court erred because the parties had not reached a clear and unambiguous agreementastothetermsofaconfidentialityprovision, an essential component of the parties’ settlement agreement.Weagreeand,accordingly,reversethejudgment of the trial court. The plaintiff instituted an action against the defendants on April 2, 2012. The complaint alleged that, in contravention of the plaintiff’s employment contract, the defendants, a Wallingford retail auto dealership, which was the plaintiff’s former employer, and two of itsowners,knowinglyandintentionallyconcealedfrom the plaintiff the amount of the monthly gross sales of vehicles in order to reduce the amount of bonuses it had to pay to the plaintiff. The defendants denied this claim in their answer. On April 28, 2014, the court, Hon. John W. Moran, judge trial referee, held a pretrial conference during which the parties, represented by counsel, discussed a potential settlement. During the two hour negotiation, thepartiesagreedtoanamounttobepaidbythedefendants’ insurer, an amount to be paid by the defendants themselves,howtheamountwastobedividedbetween attorney’s fees and damages, and to include a mutual nondisparagement and nondisclosure provision (confidentiality provision).2 The parties represented to the court that they had reached an agreement; all that remained was for the defendants’ lawyer, Richard Connors, to draft a confidentiality provision and to submit it to the plaintiff’s lawyer, Catherine L. Creager, for her review. OnMay6,2014,theplaintifffiledamotiontoenforce the settlement agreement. On June 6, 2014, the defendants filed an objection to the motion on the ground that the plaintiff had breached confidentiality—a term of thesettlement agreement—beforethe specificterms could be agreed upon, and, as such, the settlement agreement was unenforceable. On June 9, 2014, the court, Matasavage, J., held an evidentiary hearing on the motion to enforce the settlementagreement.SeeAudubonParkingAssociatesLtd. Partnership v. Barclay & Stubbs, Inc., 225 Conn. 804, 811, 626 A.2d 279 (1993) (holding that settlement agreements may be summarily enforced within framework of original action); see also Vance v. Tassmer, 128 Conn. App. 101, 105, 16 A.3d 782 (2011) (trial court conducted evidentiary hearing to enforce settlement agreement pursuant to Audubon Parking Associates
Ltd. Partnership), appeal dismissed, 307 Conn. 635, 59 A.3d 170 (2013) (certification improvidently granted). The plaintiff offered two witnesses, Creager and Frank McGovern, a former Massad-Zion employee, to refute the allegation that he breached confidentiality. The following evidence was presented to the trial court. BeforeleavingthecourthouseaftertheApril28,2014 settlement negotiation, Creager instructed the plaintiff that ‘‘he shouldn’t talk about the case to anyone and if anyone approached him about the case, all he should say was that it had settled.’’ On May 5, 2014, Connors telephoned Creager and told her that the settlement agreement was ‘‘off.’’ In a subsequent e-mail, Connors explainedthattheplaintiffhadbreachedthe‘‘condition of confidentiality’’ by disclosing to a third party the total settlement amount, the amount that the insurance company was to pay, and the amount the defendants plannedtocontribute.Creagertestifiedthatsheassured Connors that the plaintiff could not possibly have disclosed such information as she had never informed the plaintiff what portion of the settlement the insurance company was supplying and what portion was the defendants’ responsibility. Creagertelephonedtheplaintifftorelaytheconversation. Creager testified that the plaintiff had denied speakingwithanyoneaboutthesettlementamount,but he did mention that Judy Miller had approached him.3 Miller, the former fiance ´e of Zion, was then engaged to McGovern, who was deciding whether to pursue his own claim alleging a similar cause of action against the defendants. The plaintiff told Creager that Miller had approached him and congratulated him on reaching a settlement with the defendants. The plaintiff asserted to Creager that he did not discuss any details of the settlement with Miller; he merely acknowledged the existenceofthesettlementwhenacceptinghercongratulations. Creager replied to Connors in an e-mail reiterating that she had never disclosed the insurance payment information to the plaintiff, and that the plaintiff denied breaching confidentiality. Despite assurances from the plaintiff that he had not discussed the details of the settlement, the defendants maintained that the plaintiff had ‘‘breached the condition of confidentiality’’ by discussing the settlement witheitherMillerorMcGovern.McGoverntestifiedthat he had followed the plaintiff’s case closely by subscribing to an e-mail notification system that reported on case developments, and when the case was taken off thetriallist,heassumedthecasehadsettled.McGovern then telephoned Miller and told her that he thought the plaintiff and the defendants had reached a settlement agreement. The defendants did not introduce any evidence to contradict McGovern’s testimony. At the hearing, both parties acknowledged that they had entered into a settlement agreement subject to the
incorporation of the confidentiality provision. Connors maintained that the terms of the confidentiality provision had yet to be negotiated and agreed upon, while Creager insisted that the terms had already been established and needed only to be ‘‘draft[ed]’’ and ‘‘review[ed].’’4 Thecourtfoundthat(1)therewasaclear and unambiguous agreement as to the amount of the settlement, and (2) there was an agreement for nondisclosure,thememorializationofwhichwasmerelyexecutory.5 Recognizing that, in order to enter an enforceable judgment, the court would have to enter the settlement amount into the record, thereby renderingsuchamountpublicanddefeatingthepurposeofthe confidentiality provision, the court granted the parties additional time to execute a confidentiality agreement ontheirown.SeeSuffieldDevelopmentAssociates,Ltd. Partnership v. National Loan Investors, L.P., 97Conn. App. 541, 560–61 n.19, 905 A.2d 1214 (2006) (judgment mustspecifyanymonetaryamountowedwithcertainty to be enforceable). When the parties returned to court on June 17, 2014, they had not been able to reach an agreement on their own, and the court granted the plaintiff’s motion to enforce the settlement agreement, suggesting that the defendants could not accuse the plaintiff of breaching an agreement while simultaneously claiming there had beennoagreement.Thecourtfoundthatthepartieshad reached a clear and enforceable settlement agreement. The court ordered the defendants to pay the plaintiff $105,000 without costs, and ordered the parties not to disclose the terms of the settlement to anyone other than their attorneys, accountants, or other entities as required by law, and to refrain from mutual disparagement. This appeal followed. Thedefendantschallengethecourt’slegalconclusion thatthesettlementagreementwasclearandunambiguous; they argue that an element of the agreement, the confidentiality provision, was incomplete and that the court, therefore, erred in enforcing the settlement agreement. The plaintiff argues that the court had before it sufficient evidence on which to reach its conclusionthatthesettlementagreementwasenforceable. Such evidence included Creager’s notes from the April 28settlementdiscussion,Creager’snotesfromhertelephone conversation with Connors, and the e-mail sent by Connors alleging the plaintiff ‘‘breached the condition of confidentiality.’’ This evidence does not render the settlement agreement unambiguous, however, because it fails to provide any substantive information as to the terms of the confidentiality provision. We begin with the general principles that guide our review.‘‘Atrialcourthastheinherentpowertoenforce summarily a settlement agreement as a matter of law whenthetermsoftheagreementareclearandunambiguous.’’ Audubon Parking Associates Ltd. Partnership
v. Barclay & Stubbs, Inc., supra, 225 Conn. 811. ‘‘The court’sdeterminationastowhetheracontractisambiguousisaquestionoflaw;ourstandardofreview,therefore, is de novo.’’ (Internal quotation marks omitted.) Electric Cable Compounds, Inc. v. Seymour, 95 Conn. App. 523, 529, 897 A.2d 146 (2006); see Amica Mutual Ins. Co. v. Welch Enterprises, Inc., 114 Conn. App. 290, 294, 970 A.2d 730 (2009). ‘‘A contract is unambiguous when its language is clear and conveys a definite and precise intent. . . . In contrast, a contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself. . . . If the languageofthecontractissusceptibletomorethanone reasonable interpretation, the contract is ambiguous.’’ (Internal quotation marked omitted.) Electric Cable Compounds,Inc.v.Seymour,supra,95Conn.App.529. We agree with the defendants that the settlement agreement was not clear and unambiguous and consequently was unenforceable. Although the parties allow that the settlement agreement was to contain a confidentiality provision, and that the provision needed to be ‘‘draft[ed]’’ and ‘‘review[ed],’’ the agreement itself was not clear and unambiguous because the agreement’s terms were incomplete, and, thus, not certain, nor did the terms ‘‘[convey] a definite and precise intent.’’Id.,529.Further,thelanguageoftheagreement, as stated on the record, was open to more than one reasonable interpretation. Id. The parties agreed, and the court found, that the confidentiality provision was a term of the agreement. Although the parties agreed to the integration of such a provision into the settlement agreement, they did not discussorreporttothecourtanyprecisetermsbeyond the generic modifiers ‘‘confidentiality’’ and ‘‘nondisclosure’’ before the plaintiff filed his motion to enforce the settlement agreement. ‘‘A contract is not made so long as, in the contemplation of the parties, something remains to be done . . . .’’ Klein v. Chatfield, 166 Conn.76,80,347A.2d58(1974).‘‘[N]umerousConnecticut cases require definite agreement on the essential termsofanenforceableagreement.’’(Internalquotation marks omitted.) Coady v. Martin, 65 Conn. App. 758, 766, 784 A.2d 897 (2001), cert. denied, 259 Conn. 905, 789 A.2d 993 (2002); cf. Willow Funding Co., L.P. v. Grencom Associates, 63 Conn. App. 832, 844, 779 A.2d 174 (2001) (‘‘[u]nder the modern law of contract, if the parties so intend, they may reach a binding agreement even if some of the terms of that agreement are still indefinite’’). The only evidence in the record6 as to the terms of the confidentiality provision appears in Creager’s testimony and her notes from the April 28 settlement negotiation, and Connors’ statements at the Audubon hearing. Creager’s notes say, ‘‘mutual nondisparagement and nondisclosure,’’ while, at the hearing, the
defendantsindicatedtheyneededaparticularizedconfidentiality provision to protect themselves and their business against potential future litigation. Creager’s informal notes do not show a ‘‘definite agreement on the essential terms . . . .’’ (Internal quotation marks omitted.) Coady v. Martin, supra, 65 Conn. App. 766. Indeed, when asked at oral argument before this court, Creager was unable to articulate precisely what the confidentiality provision was to entail, other than a nondisparagement clause.7 The trial court made no findings about the terms of the confidentiality provision but instead stated: ‘‘Nondisclosure means you don’t disclose anything.’’ This generalized interpretation of ‘‘nondisclosure’’ does not provideanyguidanceastoeitherparty’srightsorduties under the provision. See id., 767–68 (declaring agreement unenforceable when parties had agreed to assign rights ‘‘at a later date’’ because agreement ‘‘did not delineate the extent of the interests of the defendants’’ [internal quotation marks omitted]). Consequently, the only language on the record before us is ambiguous. Our decision in WiFiland, LLP v. Hudson, 153 Conn. App. 87, 100 A.3d 450 (2014), informs our analysis of the present case. There, an internet provider, the plaintiff, and the operators of a recreational vehicle park, the defendants, entered into settlement discussions to trytoresolvethecase,whicharosefromthedefendants’ allegedfailuretoprovidetheplaintiffwithpropernotice that they had wanted to cancel their internet service. Id., 91, 92, 104. The plaintiff agreed to accept a specific monetary amount from the defendants, subject to the plaintiff’s approval of a confidentiality agreement draftedbythedefendants.Id.,104.Afterthedefendants submittedtheconfidentialityagreementtotheplaintiff, however, the plaintiff rejected it because it no longer wanted to settle for the price previously agreed upon. Id., 105. In a hearing on the defendants’ motion to enforce the settlement agreement, the trial court found that the confidentiality provision was an essential component of the parties’ agreement, and the parties had failed to agree on an essential term. Id., 106. The entire settlement agreement was conditioned upon the drafting of and agreement to the terms of a confidentiality provision. See id., 104. The plaintiff had essentially ‘‘reserved the right to reject the confidentiality provision,’’ and when he exercised this right, the provision failed, and so too did the rest of the contract. Id., 106– 107.Therefore,thiscourtaffirmedthetrialcourt’sdecision to deny the motion to enforce the settlement. Id., 107. Similarly, the settlement agreement in the present case contained an incomplete essential term, the confidentialityprovision,which,asitturnedout,wasneither drafted nor approved. The plaintiff argues that the set
tlement agreement in this case, in contrast to the agreement in WiFiland, LLP, was not conditioned on a future event, such as the drafting of a confidentiality provision. Although the plaintiff did not explicitly reserve his right to reject the confidentiality provision, there was no guarantee that any such provision would havebeenaccepted;otherwise,Creagerwouldnothave needed to ‘‘review’’ the draft of the provision furnished by the defendants. In WiFiland, LLP, the plaintiff rejected the defendant’s provision because it hoped to negotiate a more advantageous settlement, and, here, the defendants declined, under the circumstances, to draft a confidentiality provision because of their professed belief that a confidentiality agreement was, by then, pointless. In either scenario, the terms were incomplete. Furthermore, the settlement agreement is not clear and unambiguous for the related reason that its languageis‘‘susceptibletomorethanonereasonableinterpretation . . . .’’ (Internal quotation marks omitted.) Electric Cable Compounds, Inc. v. Seymour, supra, 95 Conn. App. 529. The parties agree that the confidentiality provision remained to be drafted and reviewed, but the settlement agreement itself lacked definitive language about the executory process, rights, or duties to beincludedintheprovision.Thedefendantsinterpreted the need to ‘‘draft’’ and to ‘‘review’’ the confidentiality provision to mean that the parties had ‘‘another step’’ aheadofthem—agreeingtotheparticularsoftheconfidentiality provision—before finalizing the settlement agreement. The plaintiff argues that ‘‘review’’ meant, simply,thattheplaintiffwouldcheckthedrafttoensure it matched the oral agreement the parties reached in their April 28 settlement negotiation. The plaintiff testified that the specifics of the confidentiality provision needed no further negotiation. Nevertheless, ‘‘mutual nondisparagementandnondisclosure’’or‘‘confidentiality’’ can reasonably be interpreted to mean different things;therefore,weagreewith thedefendantsthatthe agreement is ambiguous. In Ballard v. Asset Recovery Management Co., 39 Conn. App. 805, 810, 667 A.2d 1298 (1995), cert. denied, 236 Conn. 906, 670 A.2d 1306 (1996), relied on by the plaintiff, this court held that a settlement agreement was not enforceable because the contract’s language was not definitive enough to be considered clear and unambiguous. There, the plaintiff purchasers had entered into a contract with the defendant seller to buy real estate in New Milford, but the defendant seller refused to convey the property. Id., 807. The plaintiffs brought an action for specific performance and damages. Id. Before the trial commenced, the parties attempted to settle the case. Id. The defendants agreed to pay the plaintiffs $22,500 in exchange for, inter alia, their withdrawal of the action. Id. The defendants believed they had conditioned the settlement upon the
plaintiffs’ accounting of $11,000 in expenses by including a clause reading: ‘‘In addition, you have agreed to providemewiththereceiptsandcopiesofthecancelled checks for all of the extras your clients have paid for inconnectionwiththesubjectproperty.’’(Internalquotation marks omitted.) Id., 807, 809. When the defendants learned that the plaintiffs had not spent as much as they had represented during the settlement negotiation, the defendants refused to pay the settlement amount.Id.Thedefendantsmaintainedthatthe‘‘extras’’ clause required the plaintiffs to produce receipts totaling their expenses as represented in negotiations, $11,000, but the plaintiffs claimed that the clause did not impose a condition upon their agreement to settle. Id., 809. The clause did not further clarify the meaning, butthetrialcourtnonethelessfoundthatthesettlement agreement was clear and unambiguous.8 Id., 808. This court agreed with the defendants that ‘‘the language of theextrasclauseisnotsufficientlydefinitivetosupport the trial court’s legal conclusion that the contract was clear, unambiguous and, therefore, enforceable summarily.’’ Id. In the present case, the plaintiff and defendants disputed how the confidentiality provision was to be executed and the level of detail it required. To the plaintiff, theexecutionoftheconfidentialityprovisionwasministerial—a mere formality. To the defendants, the confidentiality provision was to be a more nuanced and fastidiousefforttoprotectthedefendants’privacyinterests with, most notably, an articulated enforcement mechanism.Atoralargumentbeforethiscourt,Creager was unable toarticulate what rights, ifany, the plaintiff had under the confidentiality provision. For example, Creager could not specify whether the opportunity to review the provision bestowed upon the plaintiff the authoritytorejecttheconfidentialityprovision,oreven the settlement itself, because the plaintiff indicated he never had an ‘‘opportunity to reject any writing.’’ See Coady v. Martin, supra, 65 Conn. App. 768 (holding contract unenforceable ‘‘because it did not delineate the extent of the interests of the defendants . . . and therefore lacked an essential term’’). Just as this court concluded in Ballard that the settlement agreement was unenforceable because it lacked definitive language, was susceptible to dispute, and was, thus, not clear and unambiguous, the settlement agreement on the record in the present case is unenforceable.

Outcome: The judgment is reversed, and the case is remanded to the trial court for further proceedings.

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