Judicial District of Fairfield


†††† †Contracts; Whether Contract Language Unambiguously Established that Execution of a Contract for Sale of Property, and not Closing on Sale, was Intended to Trigger Defendantís Payment Obligation; Whether Postjudgment Interest Properly Awarded. The parties each held a 50 percent interest in a company that owned real property in Trumbull.† They entered into a buyout agreement for the plaintiff to sell his share to the defendant.† The contract contained a contingency clause providing that ď[i]f within one year of the closing hereunder any ownership interest in the Premises . . . is transferred . . . based on a whole property value of more than $3.5 million, Buyer shall pay to Seller an additional purchase price equal to one-half the excess at the same time as the transfer.Ē† The parties closed on the sale of the plaintiffís interest on May 31, 2007.† On March 19, 2008, the defendant entered into an agreement to sell the property for $5.5 million.† On July 1, 2008, the closing of that purchase agreement took place.† The plaintiff brought this action, alleging the defendantís breach of the buyout agreement.† The trial court rendered judgment for the plaintiff, finding that there was a transfer of equitable title to the premises on March 19, 2008, that the transfer constituted a transfer of an ownership interest, and that the contingency clause therefore required the defendant to pay the plaintiff an additional $1 million.† The court declined to award prejudgment interest under General Statutes ß 37-3a, but it awarded postjudgment interest at the rate of 8 percent per year.† On appeal, the Appellate Court (141 Conn. App. 528) rejected the defendantís claim that the contract language was ambiguous because a transfer of an ownership interest is ordinarily associated with the passing of title at closing.† The court noted that, under the doctrine of equitable conversion, the purchaser of land under an executory contract is regarded as the owner, subject to the sellerís lien for the unpaid purchase price, and accordingly that the purchase agreement here unambiguously accomplished a transfer of an ownership interest independent of the physical passing of title.† The court pointed out that the buyout agreement was drafted by attorneys, who could have specified that a closing on the sale would trigger the defendantís payment obligation.† Moreover, the court explained that the additional amount owed the plaintiff was an adjustment of the buyout price and thus was not logically dependent on the receipt of additional proceeds at closing.† Nor was the Appellate Court persuaded by the defendantís argument that the award of postjudgment interest was improper where the trial court, in declining to award prejudgment interest, found that he pursued his defense in good faith.† The court noted that it was aware of no authority for the proposition that a court cannot both award postjudgment interest and deny prejudgment interest and that, in any case, the courtís finding that the defendant pursued his defense in good faith was not inconsistent with a finding that he wrongfully withheld money.† The Supreme Court will decide whether the Appellate Court properly determined that the contract language unambiguously established that the mere execution of a contract for sale was intended to trigger the defendantís payment obligation and whether it properly upheld the award of postjudgment interest.†