Saunders v. Firtel

978 A.2d 487, 293 Conn. 515, 2009 Conn. LEXIS 380, 2009 WL 2901518
CourtSupreme Court of Connecticut
DecidedSeptember 22, 2009
DocketSC 18309
StatusPublished
Cited by45 cases

This text of 978 A.2d 487 (Saunders v. Firtel) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Saunders v. Firtel, 978 A.2d 487, 293 Conn. 515, 2009 Conn. LEXIS 380, 2009 WL 2901518 (Colo. 2009).

Opinions

Opinion

ZARELLA, J.

This appeal1 arises out of three separate actions2 initiated by the plaintiff, Barry Saunders,3 against the defendants, Burton Firtel, Adco Medical [518]*518Supplies, Inc. (Adco), and Barbur Associates, LLC (Barbur),4 in which the plaintiff, a former employee of Adco and a member and 50 percent interest holder in Barbur, sought to recover unpaid wages and double damages from Adco under General Statutes §§ 31-71 c5 and 31-72,6 and a judicial dissolution and winding up [519]*519of Barbur pursuant to General Statutes §§ 34-2077 and 34-208.8 The trial court found in favor of the plaintiff on his unpaid wages claim, awarded the plaintiff double damages pursuant to § 31-72 and ordered a dissolution and winding up of Barbur pursuant to §§ 34-207 and 34-208. On appeal, the defendants claim that the trial court improperly (1) invoked § 31-72 in awarding wages to the plaintiff because the plaintiff was not an “employee” of Adco within the meaning of § 31-72, (2) calculated the amount of wages awarded to the plaintiff for 2004 by failing to prorate the plaintiffs salary on the basis of the number of months that he had worked in that year, (3) awarded double damages to the plaintiff pursuant to § 31-72, and (4) ordered the dissolution of Barbur. The plaintiff responds that the trial court properly (1) found that the plaintiff was an employee of Adco and that the defendants’ argument to the contrary stems from their misinterpretation of § 31-72, (2) calculated the wages awarded to the plaintiff on the basis of the evidence adduced at trial, (3) awarded double [520]*520damages on the basis of its findings of fact, and (4) ordered the dissolution of Barbur because it was not reasonably practicable for the parties to carry on the business together. We affirm the judgment of the trial court.

The trial court’s memorandum of decision and the record reveal the following relevant facts and procedural history. The plaintiff and Firtel began a profitable business relationship and a strong personal friendship in the mid-1980s. Prior to Firtel’s involvement with the plaintiff, Firtel had formed Adco, a pharmaceutical sales company, as a Connecticut corporation in or about 1970. Firtel was the sole owner of Adco. Prior to the plaintiffs involvement with Firtel, the plaintiff had been employed as a sales representative for a medical supply company known as General Medical Corporation, where he had obtained extensive training and sales experience.

In 1986, following a successful initial joint venture, the plaintiff and Firtel sought to formalize their business relationship. The plaintiff joined Adco and obtained a 49 percent shareholder interest in the company, and Firtel retained a controlling 51 percent interest. In September, 1986, the plaintiff and Firtel executed a document entitled “Operational Agreement Regarding Adco Corporation,” which was signed by Firtel as president of Adco and by Firtel and the plaintiff, individually. The agreement provided that the plaintiff “desire[d]” to become a stockholder of Adco, “and to be employed by [Adco]

Paragraph eight of the agreement set forth the respective duties of the parties and the compensation that they would receive. That paragraph provides in relevant part: “The parties agree that they shall each devote such of their time and efforts to the business of [Adco] as shall be reasonably necessary. [The plaintiff] acknowl[521]*521edges, understands and agrees that Firtel may and shall spend considerable time and often for extended periods away and apart from the business of [Adco], and hereby waives any objections thereto. Each of Firtel and [the plaintiff] shall receive an equal combination of compensation and fringe benefits as the [b]oard of [directors shall from time to time determine. . . .”

The agreement also assigned control of the board of directors to Firtel, through an appointment process, which provided: “There shall be a [b]oard of [directors initially consisting of Firtel and [the plaintiff]. PROVIDED, HOWEVER, the parties agree that Firtel may elect to increase the number of directors to three . . . in which event two ... of said [directors shall be selected by Firtel and one ... of said [directors shall be selected by [the plaintiff].”

Following the execution of the agreement, Firtel continued to hold the position of president of Adco, and the plaintiff was appointed vice president and secretary.9 From 1986 through July, 2004, the plaintiff was “in charge of virtually all of Adco’s day-to-day operations.” During each of the years between 1986 and 2003, Adco paid expenses incurred by both Firtel and the plaintiff, in addition to their salaries.10 These expenses included medical and health expenses, automobile expenses, professional services and other related expenses.

Sometime after 2000, the plaintiff became disenchanted with the business arrangement. In March, 2003, [522]*522the plaintiff sought a change in the operational agreement stemming from his perception that he was performing most of the work necessary to guarantee a profit for Adco but was dividing compensation and fringe benefits equally with Firtel. The plaintiff submitted a proposal, suggesting that he be paid 50 percent of the income for running the business and that the next 50 percent be equally divided between the shareholders. Firtel did not engage in any meaningful discussions concerning this suggested change because, apparently, he was satisfied with the status quo.

On May 19, 2004, the plaintiff, through his attorney, formally advised Firtel that operating Adco in accordance with the 1986 agreement no longer was acceptable. The plaintiff offered to submit the dispute to arbitration and indicated an intention to file an action seeking to terminate the business relationship if an agreement could not be reached. Two months later, Firtel, acting in his capacity as president and majority stockholder of Adco, responded by terminating the plaintiffs employment via a July 23, 2004 memorandum. The plaintiff did not perform any work for Adco after July, 2004. He received no salary from Adco in 2004, and since the July 23, 2004 memorandum, the plaintiff has not been compensated by Adco either in the form of salary or most fringe benefits.

Meanwhile, in July, 1999, during what the trial court referred to as their “era of good feeling,” the plaintiff and Firtel had formed Barbur, a limited liability company in which each owns a 50 percent interest. Barbur owns certain real estate located in Hamden, where Adco conducts its business. Barbur leases its property to Adco pursuant to an oral month-to-month lease. Prior to 2004, Adco paid Barbur an annual rent of $18,000. The lease obligated Adco to pay taxes, insurance and maintenance on the property.

[523]*523After July, 2004, when Firtel terminated the plaintiffs employment with Adco, Firtel reduced the rental payments without consulting the plaintiff. In addition, Firtel unilaterally authorized the repair of the floor of the premises at a cost of $8480 and arranged for a $5000 loan from Barbur to Adco. Firtel continues to manage Barbur and to maintain Barbur’s finances.

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Cite This Page — Counsel Stack

Bluebook (online)
978 A.2d 487, 293 Conn. 515, 2009 Conn. LEXIS 380, 2009 WL 2901518, Counsel Stack Legal Research, https://law.counselstack.com/opinion/saunders-v-firtel-conn-2009.