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WALTER WHITNEY v. J.M. SCOTT

ASSOCIATES, INC., ET AL.

(AC 36912)

Lavine, Keller and Pellegrino, Js.

Argued November 30, 2015—officially released April 12, 2016

(Appeal from Superior Court, judicial district of

Litchfield, Danaher, J.)

Kenneth J. Bartschi, with whom were Karen L. Dowd

and, on the brief, Bruce L. Elstein, for the appellantsappellees (defendant James M. Scott, Jr., et al.).

Ann H. Rubin, with whom were Sarah Healey, and,

on the brief, Anne D. Peterson, for the appellee-appellant (plaintiff).
Opinion

PELLEGRINO, J. The defendants James M. Scott, Jr.,

and Scott Swimming Pools, Inc. (corporation),1 appeal

from the judgment of the trial court rendered in favor

of the plaintiff, Walter Whitney. We affirm in part and

reverse in part the judgment of the trial court.

On appeal, the defendants claim that the trial court

(1) improperly determined the measure of damages for

breach of the parties’ stock option purchase agreement,

(2) erroneously failed to order the plaintiff to return

his shares of stock as provided in that agreement, (3)

erroneously based its award of common-law punitive

damages on a lodestar analysis, (4) improperly altered

its decision in response to a motion for articulation

by taking evidence and making new findings, and (5)

improperly ordered prejudgment interest pursuant to

General Statutes § 37-3a. We conclude that the trial

court properly determined the measure of damages for

breach of the stock option purchase agreement, but

that the court erroneously failed to order the plaintiff to

return his shares of stock, calculated punitive damages,

and ordered prejudgment interest. We also conclude

that the defendants’ articulation claim is moot.

The following facts as found by the trial court inform

our review. This case arises out of a business relationship between Scott and the plaintiff. Scott is the president and the majority stockholder of the corporation.

On March 20, 2002, the plaintiff entered into three

agreements with the defendants: (1) an employment

agreement; (2) a stock option purchase agreement; and

(3) a supplemental letter agreement. The agreements

documented an arrangement under which the plaintiff

became the owner of twenty shares of corporation

stock and he would work for the corporation for five

years, after which time Scott would retire and the plaintiff would have the right to purchase the remainder

of Scott’s shares in the corporation. The employment

agreement set out the plaintiff’s duties at the corporation and his compensation structure. The employment

agreement provided that beginning July 1, 2002, the

plaintiff could be terminated from employment only for

adequate cause, which was defined in the agreement.2

If the plaintiff were terminated for adequate cause and

he disputed the termination, the employment

agreement provided that the dispute shall be settled by

arbitration. The employment agreement also provided

that if the plaintiff was terminated without adequate

cause, the corporation would pay liquidated damages

and buy back the plaintiff’s twenty shares of stock

for $26,000.3

Under the stock option purchase agreement, after

five years of employment with the defendants, the plaintiff would acquire the right to purchase the balance

of the corporation stock from Scott for $1.27 million,
payable over ten years at 7 percent interest. That

agreement provided that the plaintiff would employ

Scott as a consultant for up to five years. Both the

employment agreement and the stock option purchase

agreement were supplemented by a letter setting forth

additional terms. Before entering into the agreements,

the plaintiff reviewed the corporation’s financial statements, tax returns, and corporate records. The defendants, however, concealed information relating to the

financial statements, including deferred compensation

liabilities owed to Scott, which exceeded $1.6 million.

The agreements were executed in March, 2002, and

the plaintiff began his employment for the corporation.

The plaintiff received bonuses throughout his employment, but he was never given a performance review or

evaluation. In August, 2006, Scott informed the plaintiff

that he no longer intended to sell the corporation stock

to the plaintiff. In October, 2006, over the course of

one day, Scott sent seven memoranda to the plaintiff,

all criticizing the plaintiff’s work. In December, 2006,

approximately three months before the plaintiff was to

have purchased the corporation stock, Scott terminated

the plaintiff’s employment. Scott used the memoranda

sent to the plaintiff in an effort to establish that the

defendants had adequate cause to terminate the plaintiff’s employment for poor job performance.

In January, 2007, the plaintiff claimed a right to arbitrate the dispute with the defendants, pursuant to the

employment agreement and the stock option purchase

agreement. Arbitration began in September, 2007, and

continued until August, 2009, when Scott claimed that

he lacked funds to continue arbitration. The plaintiff

then commenced the present action and filed the operative complaint in June, 2012.

The complaint alleged, inter alia, common-law fraud,

breach of contract, breach of the covenant of good faith

and fair dealing, and a violation of the Connecticut

Unfair Trade Practices Act (CUTPA), General Statutes

§ 42-110a et seq. In response, the defendants’ alleged

multiple special defenses and a multicount counterclaim, which alleged claims of, inter alia, breach of

the employment agreement, breach of the stock option

purchase agreement, and abuse of process.

A trial to the court began in May, 2013, and the court

found in favor of the defendants on the CUTPA claim

and in favor of the plaintiff on the other claims. The

court also found in favor of the plaintiff on all counts

of the defendants’ counterclaim. The court further

found that the plaintiff was terminated from his employment without adequate cause, as defined in the employment agreement, and that the defendants engaged in

common-law fraud. The court based the fraud finding

on the fact that the defendants deliberately failed to

disclose the deferred compensation obligation, which

exceeded $1.6 million, when the plaintiff requested
access to the corporation’s financial statements and

records prior to entering into the agreements with

the defendants.

The court awarded the plaintiff breach of contract

damages, liquidated damages, arbitration costs, punitive damages, and prejudgment interest. This appeal

followed. Additional facts will be set forth as necessary.

I

The defendants first claim that the trial court applied

an improper measure of damages when it calculated

damages for the defendants’ breach of the stock option

purchase agreement. The court calculated damages

under a ‘‘benefit of the bargain’’ theory. The defendants

argue that the calculation under that theory was

improper and that the only proper measure of damages

is the difference between the purchase price of the

stock and the value of the stock. We do not agree. The

measure of damages as determined by the trial court

under the ‘‘benefit of the bargain’’ theory was proper,

and we, therefore, affirm the court’s damages award.

The following additional facts, as found by the trial

court, are necessary for our resolution of this issue.

The plaintiff testified that he planned to own the corporation for ten years. His plan was to work for five years

as owner of the corporation. After five years, he would

replicate what Scott had done with him, in that he would

find an individual to succeed him, train the individual

for an additional five years, and then convey the corporation to the individual under the same terms that Scott

was to convey the corporation to him. Thus, he planned

to own the corporation for a total of ten years.4 He

also testified that while he owned the corporation, he

expected to receive ten years of salary at $175,000 annually, the rate he was receiving when he was terminated.

In proving damages for the breach of the stock option

purchase agreement, the plaintiff presented a ‘‘benefit

of the bargain’’ calculation, which the court used as the

basis for the breach of contract damages award. This

calculation was based on the annual salary the plaintiff

was paid during his employment with the corporation,

plus benefits, for the ten year period he planned to own

the corporation, reduced by the earnings he acquired

from substitute employment and unemployment compensation.

The trial court found that while he was employed by

the corporation, the plaintiff received an annual salary

of $142,153, plus benefits valued at $32,850, for a total

annual compensation of $175,003. That figure over ten

years equaled $1,750,030. The plaintiff’s substitute

employment and unemployment compensation after his

employment was terminated totaled $408,970.60. That

figure subtracted from $1,750,030 equals $1,341,059.40.

The court found this latter figure to be an appropriate

measure of the ‘‘benefit of the bargain’’ damages the
defendants owed to the plaintiff due to their breach of

the stock option purchase agreement. We agree.

We set forth the standard of review applicable to

challenges of damages awards. ‘‘[T]he trial court has

broad discretion in determining damages. . . . The

determination of damages involves a question of fact

that will not be overturned unless it is clearly erroneous.’’ (Internal quotation marks omitted.) Russell v.

Russell, 91 Conn. App. 619, 643, 882 A.2d 98, cert.

denied, 276 Conn. 924, 925, 888 A.2d 92 (2005). ‘‘When,

however, a damages award is challenged on the basis

of a question of law, our review [of that question] is

plenary.’’ (Internal quotation marks omitted.) Robert v.

Scarlata, 96 Conn. App. 19, 22, 899 A.2d 666 (2006).

In determining the damages for a breach of contract,

the applicable principles are well established. ‘‘It is axiomatic that the sum of damages awarded as compensation in a breach of contract action should place the

injured party in the same position as he would have been

in had the contract been performed [by the breaching

party].’’ (Internal quotation marks omitted.) Russell v.

Russell, supra, 91 Conn. App. 643. ‘‘[C]ontract damages

are ordinarily based on the injured party’s expectation

interest and are intended to give him the benefit of the

bargain by awarding a sum of money that will, to the

extent possible, put him in as good a position as he

would have been in had the contract been performed.’’

(Internal quotation marks omitted.) Keefe v. Norwalk

Cove Marina, Inc., 57 Conn. App. 601, 610, 749 A.2d

1219, cert. denied, 254 Conn. 903, 755 A.2d 881 (2000).

‘‘In determining the proper measure of damages, we

are guided by the purpose of compensatory damages,

which is to restore an injured party to the position he

or she would have been in if the wrong had not been

committed.’’ (Internal quotation marks omitted.) Day

v. Gabriele, 101 Conn. App. 335, 346, 921 A.2d 692, cert.

denied, 284 Conn. 902, 931 A.2d 262 (2007).

We conclude that the damages awarded by the court

was a legitimate exercise of the court’s broad discretion. The stock option purchase agreement contained

no provision for liquidated damages in the event of a

breach, unlike the liquidated damages clause in the

employment agreement. Thus, the court had the discretion to determine the measure of damages. The court

explained that it was fashioning a remedy to award the

plaintiff ‘‘an appropriate measure of the ‘benefit of the

bargain’ owed to the plaintiff as damages resulting from

the defendants’ breach of the [stock option purchase

agreement]’’ and the court relied on the correct principles of law in determining contract damages. In its

memorandum of decision, the court stated in pertinent

part: ‘‘ ‘It is axiomatic that the sum of damages awarded

as compensation in a breach of contract action should

place the injured party in the same position as he would

have been in had the contract been performed. . . .
The injured party . . . is entitled to retain nothing in

excess of that sum which compensates him for the

loss of his bargain. . . . Guarding against excessive

compensation, the law of contract damages limits the

injured party to damages based on his actual loss caused

by the breach. . . . In such circumstances, the amount

of the cost saved will be credited in favor of the wrongdoer . . . that is, subtracted from the loss . . . caused

by the breach in calculating [the injured party’s] damages.’ . . . Hees v. Burke Construction, Inc., 290 Conn

1, 7–8, 961 A.2d 373 (2003). It is also well established

‘that the burden of proving damages is on the party

claiming them. . . . When damages are claimed they

are an essential element of the plaintiff’s proof and

must be proved with reasonable certainty.’ . . . FCM

Group, Inc. v. Miller, 300 Conn. 774, 804, 17 A.3d 40

(2011).’’

It was in the court’s discretion to calculate an amount

of damages that it considered sufficient to place the

plaintiff in the same position as he would have been in

if the contract had not been breached. We agree with

the court’s approach. The award of ten years salary

was factually supported because it was based on the

plaintiff’s actual earnings prior to and at the time of

the breach. Furthermore, it was legally correct insofar

as it resulted from the court’s determination of the

benefit of the bargain owed to the plaintiff and what

was necessary to put him in as good a position as he

would have been in had the contract been performed.

We therefore conclude that the defendants’ claim is

without merit and affirm the court’s damages award.

II

The defendants next claim that the court erroneously

failed to enforce the stock option purchase agreement,

which required the plaintiff to return his shares of stock

if he was terminated from employment. We agree with

the defendants.

The following additional facts are necessary for our

resolution of this issue. Pursuant to the stock option

purchase agreement, on March 20, 2002, the plaintiff

obtained twenty shares of stock in the corporation.

The stock option purchase agreement provided that the

plaintiff must return his stock in the corporation if his

employment was terminated.

Section 2.3 of the stock option purchase agreement

states in pertinent part: ‘‘(a) If [the plaintiff’s] employment by the Company terminates or[the plaintiff] terminates his employment with the Company for any reason

other than death, then [the plaintiff] shall be obligated

to sell his Common Stock, and the Company and Scott

shall be jointly and severally obligated to [the plaintiff]

to purchase all his Common Stock, as provided below.

. . . (f) If [the plaintiff’s] employment is found to have

been terminated without Adequate Cause and he is paid
the damages provided for in Section 8.4 of the Employment Agreement5 between [the plaintiff] and the Company of even date herewith, the shares shall be returned

to Scott. The purchase price for such shares shall be

$26,000 plus the amount of any taxes due upon transfer

of such shares. The purchase price shall be in addition

to the amount of damages set out above. Upon delivery

of such payment to [the plaintiff], [the plaintiff] shall

deliver his Common Stock as directed by Scott and

the Company.’’

In count two of the defendants’ counterclaim, the

defendants sought specific performance of § 2.3 of the

stock option purchase agreement. The court found that

the defendants could not prevail on count two of their

counterclaim because the courtfound that the plaintiff’s

termination was fraudulent.6 The court cited Phoenix

Leasing, Inc. v. Kosinski, 47 Conn. App. 650, 654, 707

A.2d 314 (1998), for the proposition that the court will

not enforce a contractual provision when the party

seeking enforcement of that provision engaged in fraud.

The defendants argue that because the court found

that the plaintiff had been terminated without adequate

cause and ordered the liquidated damages provided for

in § 8.4 of the employment agreement, under the plain

language of the stock option purchase agreement, the

plaintiff was required to return the twenty shares of

corporation stock he acquired in 2002 upon payment

of the liquidated damages and payment of $26,000 as

provided in § 2.3 (f) of the stock option purchase

agreement. We agree.

The plaintiff chose to enforce the stock option purchase agreement and seek damages forits breach. Thus,

that agreement remains in force. ‘‘A defrauded party

has the option of seeking rescission or enforcement of

the contract and damages. Fraud in the inducement

of a contract ordinarily renders the contract merely

voidable at the option of the defrauded party, who also

has the choice of affirming the contract and suing for

damages. . . . If he pursues the latter alternative, the

contract remains in force . . . .’’ (Internal quotation

marks omitted.) Harold Cohn & Co. v. Harco International, LLC, 72 Conn. App. 43, 49–50, 804 A.2d 218,

cert. denied, 262 Conn. 903, 810 A.2d 269 (2002).

Accordingly, ‘‘[w]here the language of the contract

is clear and unambiguous, the contract is to be given

effect according to its terms. . . . Although ordinarily

the question of contract interpretation, being a question

of the parties’ intent, is a question of fact . . . [w]here

there is definite contract language, the determination

of what the parties intended by their contractual commitments is a question of law. . . . Our standard of

review, therefore, is plenary.’’ (Citations omitted; internal quotation marks omitted.) ARB Construction, LLC

v. Pinney Construction Corp., 75 Conn. App 151, 154–

55, 815 A.2d 705 (2003).
The principles governing contract interpretation are

well settled. ‘‘The intent of the parties as expressed

in a contract is determined from the language used

interpreted in the light of the situation of the parties

and the circumstances connected with the transaction.

. . . [T]he intent of the parties is to be ascertained by

a fair and reasonable construction of the written words

. . . .’’ (Internal quotation marks omitted.) Sullo Investments, LLC v. Moreau, 151 Conn. App. 372, 380, 95 A.3d

1144 (2014)

The liquidated damages clause in the employment

agreement stated that damages shall be the lesser of

the plaintiff’s actual damages or $150,000, plus ‘‘the

amount of the purchase price provided for in Section

2.3 (f) of the Stock Option Purchase Agreement . . . .’’

Section 2.3 of the stock option purchase agreement

clearly and unequivocally states that if the plaintiff’s

employment is terminated without adequate cause and

he is paid the liquidated damages provided for in § 8.4

of the employment agreement, then the shares of stock

shall be returned to Scott for a purchase price of

$26,000. The trial court found the plaintiff’s termination

to be without adequate cause and awarded him liquidated damages in the amount of $138,461.77. Consequently, the plaintiff was required to return his shares

of stock upon receipt of a $26,000 payment from the

defendants.

In finding that the plaintiff was not required to return

the stock because the plaintiff’s termination was fraudulent, the court relied on Phoenix Leasing, Inc. v. Kosinski, supra, 47 Conn. App. 654. Such reliance is

misplaced. Phoenix Leasing, Inc., concerned the

enforcement of a choice of forum clause, not the remedies for a breach of contract. In recognizing the due

process concerns when personal jurisdiction was at

issue, this court stated ‘‘[a]bsent a showing of fraud or

overreaching, such forum clauses will be enforced by

the courts.’’ (Internal quotation marks omitted.) Id. The

procedural question at issue in Phoenix Leasing, Inc.,

is thus not applicable to the contractual provision at

issue here.

We conclude that the trial court’s decision not to

enforce § 2.3 of the stock option purchase agreement

and not to require the plaintiff to return the stock was

erroneous, and, therefore, we reverse the judgment in

that respect and remand the case with direction to

order the plaintiff to return the stock upon receipt of

a payment of $26,000 from the defendants.

III

The defendants next claim that the court erroneously

based its award of common-law punitive damages on a

lodestar analysis. The defendants argue that the proper

measure of damages is the plaintiff’s actual litigation

costs plus attorney’s fees. We agree that the court
improperly determined the punitive damages award and

remand the case for a hearing on punitive damages.

The following additional facts inform our review. The

court found in favor of the plaintiff on his commonlaw fraud count and awarded him $250,000 in punitive

damages, without articulating the basis of that sum.

Although the court indicated that the defendants would

have an opportunity to challenge the amount of attorney’s fees in a posttrial hearing, the court did not afford

the defendants the opportunity to do so. The defendants

filed a motion for articulation, asking the court to set

forth the legal and factual basis forthe $250,000 punitive

damages award. In its articulation, the court indicated

that the plaintiff had introduced an exhibit at trial that

showed attorney’s fees billings of $138,616.19 up to June

19, 2013. The court further noted that the trial was not

complete as of that date, so it did not reflect the total

attorney’s fees and ordinary litigation expenses in the

case. Therefore, the court awarded the plaintiff

$250,000 in punitive damages, which, ‘‘in the court’s

opinion, were reasonable fees for the entirety of the

legal services provided to the plaintiff, through to completion of the trial and posttrial briefing.’’

We first set forth the relevant standard of review and

the legal principles that inform our analysis. ‘‘Appellate

courts review the trial court’s decision to award attorney’s fees for abuse of discretion. . . . This standard

applies to the amount of fees awarded . . . and also

to the trial court’s determination of the factual predicate

justifying the award. . . . Under the abuse of discretion standard for review, [an appellate court] will make

every reasonable presumption in favor of upholding the

trial court’s ruling and only upset it for a manifest abuse

of discretion. . . . [Thus] review of such rulings is limited to the questions of whether the trial court correctly

applied the law and reasonably could have reached

the conclusion that it did.’’ (Internal quotation marks

omitted.) Perez v. D & L Tractor Trailer School, 117

Conn. App. 680, 701–702, 981 A.2d 497, cert. denied,

294 Conn. 923, 985 A.2d 1062 (2009).

With respect to common-law causes of action, ‘‘[t]o

furnish a basis for recovery of punitive damages, the

pleadings must allege and the evidence must show wanton or wilful malicious misconduct, and the language

contained in the pleadings must be sufficiently explicit

to inform the court and opposing counsel that such

damages are being sought.’’ (Internal quotation marks

omitted.) Label Systems Corp. v. Aghamohammadi,

270 Conn. 291, 335, 852 A.2d 703 (2004). ‘‘It is clear in

our law that an award of punitive damages cannot

exceed the amount of the plaintiff’s expenses of litigation in the suit, less his taxable costs.’’ (Internal quotation marks omitted.) R.I. Pools, Inc. v. Paramount

Concrete, Inc., 149 Conn. App. 839, 876, 89 A.3d 993,

cert. denied 312 Conn. 920, 94 A.3d 1200 (2014). ‘‘[T]he
initial estimate of a reasonable attorney’s fee is properly

calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable

hourly rate. . . . The courts may then adjust this lodestar calculation by other factors [outlined in Johnson

v. Georgia Highway Express, Inc., 488 F.2d 714, 717–19

(5th Cir. 1974)]. . . . The Johnson factors may be relevant in adjusting the lodestar amount, but no one factor

is a substitute for multiplying reasonable billing rates

by a reasonable estimation of the number of hours

expended on the litigation.’’ (Footnote omitted; internal

quotation marks omitted.) Carrillo v. Goldberg, 141

Conn. App. 299, 317–18, 61 A.3d 1164 (2013).

When the court awarded the plaintiff $250,000 in punitive damages, it provided no numerical analysis of how

it reached that number. At the time of the award, the

court only had evidence of attorney’s fees billings of

$138,616.19, which reflected billings up to June 19, 2013.

The court provided no analysis of how it reached an

award of an additional $111,383.81, other than stating

that it was based on ‘‘reasonable fees for the entirety

of the legal services provided to the plaintiff . . . .’’

This does not comport with the proper way of doing a

lodestar analysis under our case law. See Laudano v.

New Haven, 58 Conn. App. 819, 822–23, 755 A.2d 907

(2000). We conclude that the $250,000 punitive damages

award was erroneous, and, therefore, the judgment is

reversed in that respect and the case is remanded for

a new hearing on punitive damages.

IV

The defendants next claim that the court improperly

took evidence and made findings as to the plaintiff’s

litigation costs in a hearing on the defendants’ motion

for articulation. The defendants argue that the court

lacked authority to make new findings in response to

the motion for articulation, and, therefore, its findings

as to the plaintiff’s actual litigation costs should be

disregarded. Because we hold that the court’s punitive

damages award was improper and remand the case for

a new hearing on punitive damages, this issue is moot.

‘‘[I]t is not the province of appellate courts to decide

moot questions, disconnected from the granting of

actual relief or from the determination of which no

practical relief can follow.’’ (Internal quotation marks

omitted.) Wells Fargo Bank, N.A. v. Cornelius, 131

Conn. App. 216, 219, 26 A.3d 700, cert. denied, 302 Conn.

946, 30 A.3d 1 (2011).

V

The defendants’ final claim is that the trial court erred

when it awarded prejudgment interest on the damages

for the breach of the stock option purchase agreement

and the breach of the arbitration provisions found in the

employment and the stock option purchase agreements

(arbitration agreement).7 The defendants argue that
such interest is only appropriate where damages are

liquidated, and here, the damages were not liquidated,

but instead are intended to make the plaintiff whole

for the breach of contract found by the court. We agree

with the defendants.

The following facts are pertinent to our resolution

of this issue. In addition to breach of contract damages

for the breach of the stock option purchase agreement,

the court also awarded the plaintiff $65,000 for his arbitration costs because the court found that the defendants had breached the arbitration agreement. The

court initially awarded the plaintiff interest pursuant

to § 37-3a (a) at the rate of 10 percent annually. The

defendants filed a motion for articulation asking that

the court indicate the date on which interest was to

start, as well as the legal and factual basis for that

date. In its articulation, the court explained that the

defendants breached the contract at various points

beginning on the date the employment agreement was

signed on March 20, 2002, when the defendants did not

supply the plaintiff with the complete financial information that he had requested prior to signing that

agreement. The court further explained that it intended

for interest on damages to begin on March 1, 2007—

the date on which the plaintiff sought to have statutory

interest commence as provided in its posttrial memorandum—and interest on punitive damages to begin on

the date of judgment and continue until the judgment

was paid. The court noted its award was based on

the authority provided by § 37-3a (a) and DiLieto v.

Country Obstetrics & Gynecology Group, Inc., 310

Conn. 38, 49 n.11, 74 A.3d 1212 (2013).

We begin by setting forth the standard of review.

‘‘Parties claiming damages for breach of contract must

have a statutory basis for a claim of interest. . . . We

must, therefore, determine whether as a matter of law,

such a basis existed here.’’ (Citations omitted.) Foley

v. Huntington Co., 42 Conn. App. 712, 739, 682 A.2d

1026, cert. denied, 239 Conn. 931, 683 A.2d 397 (1996).

The decision to grant interest pursuant to § 37-3a is

reviewed under an abuse of discretion standard. Sosin

v. Sosin, 300 Conn. 205, 227, 14 A.3d 307 (2011).

Section 37-3a (a) provides in relevant part: ‘‘Except

as provided in section 37-3b, 37-3c and 52-192, interest

at the rate of ten per cent a year, and no more, may be

recovered and allowed in civil action . . . as damages

for the detention of money after it becomes payable.

. . .’’ ‘‘The statute, therefore, applies to claims involving

the wrongful detention of money after it becomes due

and payable.’’ (Emphasis in original.) Foley v. Huntington Co., supra, 42 Conn. App. 740. ‘‘To award § 37-3a

interest, two components must be present. First, the

claim to which the prejudgment interest attaches must

be a claim for a liquidated sum of money wrongfully

withheld and, second, the trier of fact must find, in its
discretion, that equitable considerations warrant the

payment of interest.’’ Ceci Bros., Inc., v. Five TwentyOne Corp., 81 Conn. App. 419, 428, 840 A.2d 578, cert.

denied, 268 Conn. 922, 846 A.2d 881 (2004). When the

damages awarded to the plaintiff are for the loss of the

benefit of the bargain and do not involve liquidated

damages, § 37-3a does not apply and the plaintiff is not

entitled to prejudgment interest. Foley v. Huntington

Co., supra, 742.

In the present case, the damages at issue for the

breach of the stock option purchase agreement and the

arbitration agreement are not liquidated damages that

fall within the scope of § 37-3a. These damages were

uncertain at the time of the breach, and the defendants

could not know the amount owed until the court determined them. Accordingly, § 37-3a does not authorize

an award of prejudgment interest on these damages.

We conclude that the prejudgment interest award with

respect to damages for the breach of the stock option

purchase agreement and the arbitration agreement was

erroneous, and, therefore, the judgment is reversed as

to that award.

The judgment is reversed with respect to the defendants’ counterclaim of specific performance of the

stock option purchase agreement, the award of punitive

damages and the award of prejudgment interest, and

the case is remanded with direction to render judgment

ordering specific performance of that agreement and

for a hearing on punitive damages. The judgment is

affirmed in all other respects.

In this opinion the other judges concurred.

1 All claims against the named defendant, J.M. Scott Associates, Inc., were

withdrawn or resolved, and it is not a party to this appeal. Accordingly, we

refer in this opinion to Scott and Scott Swimming Pools, Inc., collectively

as the defendants and individually by name when necessary.

2 Section 8.3 of the employment agreement states in relevant part: ‘‘ ‘Adequate Cause’ for termination of [the plaintiff] is limited to conviction of or

a plea of guilty to a felony or misdemeanor, dishonesty, any other criminal

conduct against the Corporation, or a continued breach of the [plaintiff’s]

duties and obligations arising under this Agreement or of any written policy,

rule, or regulation of the Corporation, for a period of 5 days following his

receipt of written notice from the President specifying such breach. If the

Corporation terminates the [plaintiff] for ‘Adequate Cause’ and the [plaintiff]

disputes the termination, such dispute shall be settled by arbitration as set

out in Section 9 of this Agreement . . . .’’

3 The employment agreement provided that the plaintiff was to be paid

‘‘the purchase price provided for in Section 2.3 (f) of the Stock Option

Purchase Agreement.’’ The stock option purchase agreement specified a

purchase price of $26,000.

4 The plaintiff testified: ‘‘My plan was to work in the company for five

years, five years subsequent I would, as owner, work and benefit from

ownership of the company, and then in the final five years I would replicate

it, to the best of my ability, what Jim Scott had done, namely, find an

individual that could succeed me, train them over a period of five years,

convey the company to thatindividual under,for purposes ofthis calculation,

the same terms as were conveyed to me, just for the sake of clarity and

simplicity, and then at age 66, 65 and 66, I would retire and be in the same

condition of receiving a payout on a note for the same amount that Jim

Scott had sold the company to me for.’’

5 Section 8.4 of the employment agreement states: ‘‘If the [plaintiff] is

found to have been terminated without Adequate Cause, the amount of his
damages shall be limited to the lesser of his actual damages or the sum of

$150,000 plus the amount of the purchase price provided for in Section

2.3 (f) of the Stock Option Purchase Agreement among the President, the

[plaintiff] and the Corporation of even date herewith. The damages paid to

the [plaintiff] set out under this Section 8.4 shall be reduced by the amount

of the Unconditional Payment made by the Corporation to the [plaintiff] as

set forth in Section 8.3 above.’’

6

In addition to finding for the plaintiff on his common-law fraud claim

because the defendants did not disclose certain critical financial information

before the plaintiff signed the agreements, the court also found that Scott

engaged in fraud when he sent the plaintiff seven memoranda, all criticizing

the plaintiff’s work, over the course of one day in October, 2006, in an effort

to ‘‘paper the file’’ and to establish adequate cause for termination.

7 The defendants do not dispute the award of prejudgment interest as it

relates to the liquidated damages awarded for the breach of the employment agreement.