Venture Partners, Ltd. v. Synapse Technologies, Inc.

679 A.2d 372, 42 Conn. App. 109, 1996 Conn. App. LEXIS 348
CourtConnecticut Appellate Court
DecidedJuly 9, 1996
Docket13683
StatusPublished
Cited by17 cases

This text of 679 A.2d 372 (Venture Partners, Ltd. v. Synapse Technologies, 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
Venture Partners, Ltd. v. Synapse Technologies, Inc., 679 A.2d 372, 42 Conn. App. 109, 1996 Conn. App. LEXIS 348 (Colo. Ct. App. 1996).

Opinion

SPALLONE, J.

The defendants, Synapse Technologies, Inc., and its chief executive officer, Floyd Wallace III, (hereinafter referred to jointly as the defendant) having been found hable to the plaintiff pursuant to a contract between the parties, appeal from the judgment of the trial court rendered by a state trial referee. On appeal, the defendant claims that the trial court improperly (1) interpreted the allegedly unambiguous language of the contract, and (2) found an, ambiguity in the contract and resolved that ambiguity in favor of the plaintiff.

The record reveals the following facts. The plaintiff is a midsized company that advises and assists other businesses in strategic and financial planning. Its services include locating new capital to be invested in its clients’ businesses. On August 7, 1991, the defendant entered into a contract with the plaintiff.1 Under the contract, the plaintiff was to provide various financial [111]*111consulting services to the defendant, including assistance in formulating a comprehensive business plan-financing memorandum. In addition, the plaintiff was to aid the defendant in identifying and negotiating with potential investors. The parties agree that a goal of the agreement was to enable the defendant to acquire the assets of Middleburg Corporation (Middleburg). The contract called for the plaintiff to receive three forms of compensation: (1) a monthly retainer of $2500, under part two of the contract; (2) a percentage of the funding obtained by the plaintiff on behalf of the defendant that was payable “[u]pon the consummation of the funding (the ‘closing’),” under part four, paragraph one; and (3) the right to purchase at closing, warrants to purchase a percentage of the defendant’s founder’s stock at a nominal price, under part four, paragraph two.

[112]*112Although Middleburg owned a potentially valuable technology patent, it also had three habilites. First, another company, Teradyne, had an interest in the patent that Middleburg owned. Second, Connecticut Innovations, Inc. (Connecticut Innovations), was a secured creditor in the amount of approximately $600,000. Third, the Bank of Boston, in conjunction with the Small Business Administration (jointly referred to as SBA), was a secured creditor in the amount of $300,000.

The plaintiff and the defendant agreed that reducing the size of Middleburg’s debts to Connecticut Innovations and the SBA was essential if the defendant was to acquire Middleburg’s assets and to attract new capital. Largely through the plaintiffs efforts, Connecticut Innovations agreed to foreclose on Middleburg’s assets, including its right in the technology patent. Connecticut Innovations then sold the assets to the defendant in a private secured party sale for $220,000 on March 11, 1992. Connecticut Innovations maintained a royalty right in the technology and the defendant signed a promissory note for the entire amount. Several days prior to this transaction, the plaintiff and the defendant agreed to modify the portion of the contract that applied to the third form of compensation. Instead of the original percentage, the defendant granted the plaintiff warrants to purchase 15 percent of the founder’s stock as well as warrants to purchase an additional 3 percent of the outstanding shares of the defendant, all of which were due at the closing.

Following this transaction with Connecticut Innovations, which is the gravamen of the present case, the plaintiff continued to work on behalf of the defendant to reduce or eliminate the two other liabilities. Finally, on November 4, 1992, the defendant acquired SBA’s rights in Middleburg’s assets and it settled with Teradyne that company’s right in the technology patent.

[113]*113At trial, the plaintiff claimed that the transaction between the defendant and Connecticut Innovations, in which the defendant acquired Middleburg’s assets, constituted the closing called for in the contract. Therefore, the plaintiff sought the amount due in fees as well as the warrants to purchase 15 percent of the stock of the defendant Synapse Technologies. The defendant, while conceding the importance of the Connecticut Innovations transaction, contended that the closing actually was to be the consummation of funding from other outside investors. The trial court, after rejecting the defendant’s four special defenses and its three counterclaims, agreed with the plaintiff. The trial court awarded to the plaintiff $45,518.75 for unpaid fees, reasonable attorney’s fees, and required the defendant to provide to the plaintiff the warrants for the purchase of 15 percent of the founder’s stock. We disagree with the trial court’s interpretation of the contract.

“Although ordinarily the question of contract interpretation, being a question of the parties’ intent, is a question of fact . . . [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law.” (Citations omitted; internal quotation marks omitted.) Levine v. Massey, 232 Conn. 272, 277-78, 654 A.2d 737 (1995). “In such a situation our scope of review is plenary, and is not limited by the clearly erroneous standard.” (Internal quotation marks omitted.) De Leonardis v. Subway Sandwich Shops, Inc., 35 Conn. App. 353, 357, 646 A.2d 230, cert. denied, 231 Conn. 925, 648 A.2d 162 (1994). When only one interpretation of a contract is possible, “the court need not look outside the four comers of the contract. . . .” Hedberg v. Pantepec International, Inc., 35 Conn. App. 19, 28, 645 A.2d 543, cert. granted on other grounds, 231 Conn. 927, 648 A.2d 879 (1994) (appeal withdrawn February 21, 1995); see Levine v. Massey, supra, 278 n.7. In addi[114]*114tion, “[t]he circumstances surrounding the making of the contract, the purposes which the parties sought to accomplish and their motives cannot prove an intent contrary to the plain meaning of the language used.” Levine v. Massey, supra, 279, citing Connecticut Co. v. Division 425, 147 Conn. 608, 616-17, 164 A.2d 413 (1960). Finally, “[t]he court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity.” (Internal quotation marks omitted.) Levine v. Massey, supra, 279. We conclude that the language of the contract between the plaintiff and the defendant is not ambiguous. Therefore, its proper interpretation is a matter of law.

As an initial matter, we disagree with the trial court’s interpretation of language in the introductory paragraph of the contract. The trial court, in its memorandum of decision, stated that “[t]he agreement in the introductory paragraph sets out as the basic purpose of the agreement the type of services to be provided by the plaintiff to the defendant relating to ‘. . . the acquisition of all or part of Middleburg Corporation . . . .’” (Emphasis added.) Reading the italicized portion in a larger context, however, clearly reveals that the language merely defines the parties to the contract.

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Cite This Page — Counsel Stack

Bluebook (online)
679 A.2d 372, 42 Conn. App. 109, 1996 Conn. App. LEXIS 348, Counsel Stack Legal Research, https://law.counselstack.com/opinion/venture-partners-ltd-v-synapse-technologies-inc-connappct-1996.