Anastasia v. Beautiful You Hair Designs, Inc.

767 A.2d 118, 61 Conn. App. 471, 2001 Conn. App. LEXIS 29
CourtConnecticut Appellate Court
DecidedJanuary 23, 2001
DocketAC 19052
StatusPublished
Cited by25 cases

This text of 767 A.2d 118 (Anastasia v. Beautiful You Hair Designs, Inc.) is published on Counsel Stack Legal Research, covering Connecticut Appellate Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anastasia v. Beautiful You Hair Designs, Inc., 767 A.2d 118, 61 Conn. App. 471, 2001 Conn. App. LEXIS 29 (Colo. Ct. App. 2001).

Opinion

Opinion

PELLEGRINO, J.

The defendants1 appeal and the plaintiff, Donna Anastasia, cross appeals from the judgment of the trial court adopting the findings and recommendations in the report of an attorney trial referee. The defendants claim that the court improperly accepted the findings and recommendations of the referee because the plaintiff failed to prove her claim of fraud in the inducement of a contract. The plaintiff challenges the calculation of damages. We affirm the judgment of the trial court.

The record discloses the following facts and procedural history. The plaintiff purchased a hair salon from the defendant Deborah Lacerenza in July, 1994. Shortly thereafter, in January, 1995, the plaintiff commenced an action against the defendants, claiming that they had fraudulently misrepresented the value of the salon during negotiations leading to the consummation of the sale, and sought damages and rescission of the contract [473]*473of sale. The matter was referred to an attorney trial referee pursuant to Practice Book (1998) § 19-2.2 After a hearing, the referee, in a report3 dated June 22, 1998, made factual findings in favor of the plaintiff and recommended that the court award her damages in the amount of $20,200.

On July 2, 1998, the plaintiff timely filed a motion to correct the findings in the report,4 which the referee denied without comment on July 24, 1998. On July 31, 1998, the plaintiff timely filed exceptions to the findings in the report 5and, on August 7,1998, she timely filed an objection to the acceptance of the report.6 The plaintiffs [474]*474proposed corrections and her exceptions and objections largely concerned the referee’s findings and recommendations regarding her damages.

On September 3, 1998, the defendants filed motions objecting both to the acceptance of the report and to judgment on the report,7 including the recommendation of the award of damages. Additionally, they challenged the referee’s failure to make separate findings as to each defendant, his finding of fraud and certain evidentiary rulings. On October 21, 1998, the court overruled all objections and exceptions of both parties, and rendered judgment in accordance with the findings and recommendations in the report of the referee.8 The court did not issue a memorandum of decision, and none of the parties sought articulation of the court’s analysis as to the exceptions, objections or acceptance of the referee’s findings and recommendations. This appeal followed.

I

The defendants claim that the court improperly accepted the findings and recommendations of the referee because the plaintiff did not prove that the defendants acted fraudulently. We disagree.

[475]*475The standard of review in cases referred to referees is well settled. “Attorney trial referees are empowered to hear and decide issues of fact. ... It is axiomatic that a reviewing authority may not substitute its findings for those of the trier of the facts. . . . The trial court, as the reviewing authority, may render whatever judgment appropriately follows, as a matter of law, from the facts found by the attorney trial referee. . . . Where legal conclusions are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts found by the [attorney trial] referee.” (Citations omitted; internal quotation marks omitted.) Villano v. Polimeni, 54 Conn. App. 744, 747-48, 737 A.2d 950, cert. denied, 251 Conn. 908, 739 A.2d 264 (1999).

Some additional facts are necessary for our resolution of this issue. The referee found the following to have occurred. In May, 1994, the plaintiff answered a newspaper advertisement in which Lacerenza offered her salon for sale. The plaintiff, a mother of four young children, was in the process of being divorced and was interested in purchasing a business that would generate enough income to support her family. The plaintiff had not worked for several years, had no business experience and had never worked as or trained to be a hairdresser. During the course of negotiations, the plaintiff shared that information with Lacerenza.

While the plaintiff and Lacerenza were reaching agreement on a purchase price for the salon, Lacerenza made a number of representations relating to the business. She told the plaintiff that weekly sales receipts for the salon averaged $2500 and that, after deducting corresponding expenses, the plaintiff could expect a weekly salary of about $900. Lacerenza presented the plaintiff with a brief written statement itemizing receipts and expenses, and repeating the figures that she had relayed orally. Lacerenza also claimed that the [476]*476salon had a client base of at least 2000, that it was a “signature salon,”9 that it could support two full-time manicurists with existing demand and that its utility expenses were approximately $150 per month. She assured the plaintiff that the salon’s monthly rental payments were covered by product sales. Further, Lac-erenza told the plaintiff that the salon’s assets included a tanning bed that had not been advertised to customers but that, given proper promotion, would provide a significant source of additional income. When the plaintiff asked Lacerenza if she could see the salon’s records and tax returns to verify the accuracy of what she was being told, Lacerenza claimed that they were unavailable and that, in any event, they did not reflect matters truthfully since the salon was largely a “cash business” that did not report all of its income to the state and federal tax authorities.

On the basis of those discussions, the parties agreed on a purchase price of $68,000 for the salon. Lacerenza insisted that the plaintiff pay her $23,200 in cash prior to the closing on the sale. The contract subsequently drafted by Lacerenza’s attorney reflected only the balance of $44,800 as the total purchase price. To raise the necessary funds for the purchase, the plaintiff borrowed $65,000 from her relatives. She executed a promissory note to Lacerenza for the balance. At the July 1, 1994 closing, the defendant Charles Raymond assured the plaintiffs aunt, who had lent the plaintiff $60,000, that she need not worry about having her loan repaid because the salon’s business and income were such that she would be reimbursed within a year.10

[477]*477Upon assuming control of the business, the plaintiff found that the salon’s business was much slower than she had been led to believe. An employee who had been away on vacation returned and told the plaintiff that the salon’s client base was at most 300. The employee informed the plaintiff that the tanning bed had never been used because the salon’s insurer refused to cover it and that the salon’s demand was inadequate to support even one full-time manicurist. The revenue from product sales was much less than the cost of rent. Utility bills were substantially higher than represented. The salon was not, in fact, a “signature salon.” Throughout the summer months, business did not improve.

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767 A.2d 118, 61 Conn. App. 471, 2001 Conn. App. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anastasia-v-beautiful-you-hair-designs-inc-connappct-2001.