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GENERATION PARTNERS, L.P., ET AL. v.

LLOYD MANDELL

(AC 35042)

DiPentima, C. J., and Sheldon and Flynn, Js.

Argued October 22, 2013—officially released February 18, 2014

(Appeal from Superior Court, judicial district of

Stamford-Norwalk, Hon. Kevin Tierney, judge trial

referee.)

A. Robert Fischer, with whom, on the brief, was Kristin L. Plude, for the appellants (plaintiffs).

Hilary B. Miller, for the appellee (defendant).
Opinion

SHELDON, J. In this case, the plaintiffs, Generation

Partners, L.P. (Generation Partners), and Generation

Capital Partners, L.P. (Generation Capital), claim that

they are entitled to receive from the defendant, Lloyd

Mandell, a ‘‘giveback’’ of certain funds previously paid

to him pursuant to a limited partnership agreement

between the parties. The plaintiffs appeal from the trial

court’s judgment accepting the report of an attorney

trial referee (referee) finding in favor of the defendant.

The plaintiffs claim that the court erred in (1) failing

to apply Delaware law to their claim that the defendant

was bound to give the funds at issue back to them even

in the absence of a signed partnership agreement, and

(2) finding that the plaintiffs had waived their rights

to enforce the ‘‘giveback obligation’’ arising under the

partnership agreement. We affirm the judgment of the

trial court.

After this case was tried before her, the referee found

the following relevant facts. In 1996, the defendant

became an employee of Generation Partners Management, LLC (Generation Management), a Delaware limited liability company that managed a private equity

fund for Generation Capital, which was a Delaware

limited partnership. Generation Partners, which was

also a Delaware limited partnership, was the general

partner of Generation Capital. The defendant was a

‘‘special limited partner’’ of Generation Capital. Generation Capital operated pursuant to a ‘‘Limited Partnership Agreement,’’ which provided that Generation

Partners would receive ‘‘carried interest’’ payments,

which were based upon the estimated profits resulting

from Generation Capital’s investments. Article 7.7 of the

Limited Partnership Agreement contained a ‘‘giveback

obligation’’ setting forth the obligations of those individuals, such as the defendant, who also received ‘‘carried

interest’’ payments. The Limited Partnership Agreement

provided that, in the event that estimated payments of

carried interest exceeded the actual value of the carried

interest, the recipients must return the overpayments.

Section (d) of article 7.7 stated that the giveback obligation ‘‘shall be evidenced by a Giveback Agreement’’ and

that Generation Partners ‘‘shall cause [the defendant]

to execute a Giveback Agreement to or on behalf of

the Limited Partners.’’ The defendant disagreed with

the terms of the Giveback Agreement, and so refused

to sign and execute it. He explained his reasons for

refusing to agree to the terms of the Giveback

Agreement to an agent of Generation Partners before

he received any distributions of carried interest from

Generation Capital. Therefore, Generation Partners

knew or should have known of the defendant’s disagreement with the terms of the Giveback Agreement and

his resulting refusal to sign it prior to making any distribution of carried interest to him. The giveback obliga-
tion in the Limited Partnership Agreement was not

triggered unless the special limited partner signed the

Giveback Agreement, which was a separate agreement

that created an obligation that would not otherwise

exist. The defendant never executed the Giveback

Agreement.

In 2000, in addition to the W-2 wages he received as

an employee of Generation Management, the defendant

received a payment of $858,639 from Generation Capital

as a distribution to him in his capacity as a special

limited partner. Thereafter, in 2001, the defendant’s

employment with Generation Management was terminated. On August 20, 2008, the plaintiffs demanded a

giveback from the defendant in the amount of $200,510

from the $858,639 distribution in carried interest he had

received in 2000. The defendant has not given back all

or any portion of that amount.1

On February 26, 2009, the plaintiffs commenced this

action against the defendant, seeking to recover the full

amount of their alleged overpayment to the defendant,

plus interest, by way of a four count complaint, stating

claims of breach of contract, unjust enrichment, quantum meruit and statutory theft pursuant to General Statutes § 52-564. In response, the defendant asserted three

special defenses: laches, estoppel and waiver; statute

of limitations; and a claim that the second and third

counts of the complaint fail to state a cause of action

upon which relief may be granted. On February 14,

2012, the referee issued a decision recommending that

judgment enter in favor of the defendant on all four

counts of the plaintiffs’ complaint.2

The plaintiffs thereafterfiled an objection to the referee’s report, in which they claimed that several of the

referee’s factual findings were not supported by the

record and that the referee had erred in not applying

Delaware law, which, they contend, provides that the

defendant had an obligation to repay the giveback

amount even in the absence of an executed Giveback

Agreement because the giveback obligation of the

defendant is fully contained in the Limited Partnership

Agreement, which binds the defendant by its terms. The

plaintiffs relied upon the Delaware Revised Uniform

Limited Partnership Act (act) for the proposition that

the lack of a signed Giveback Agreement does not render the provisions of the Limited Partnership

Agreement unenforceable.

Following a hearing, the court issued a memorandum

of decision in which it concluded that the referee’s

report was legally and logically correct. The court

addressed and rejected the plaintiffs’ claim that Delaware law required the defendant to pay the giveback

amount. The court concluded that even if Delaware law

does not require a signature to enforce a partnership

agreement, the Limited Partnership Agreement in this

case did expressly require the execution of a separate
Giveback Agreement. The court further concluded that

the plaintiffs had waived theirright to enforce the terms

of the Giveback Agreement by distributing carried interest to the defendant with full knowledge of the defendant’s objection to the giveback obligation, and

resulting refusal to sign the Giveback Agreement. The

court thus rendered judgment in favor of the defendant

as recommended by the referee. This appeal followed.

The standard of review in cases referred to attorney

trial referees is well settled. ‘‘[B]ecause the attorney

trial referee does not have the powers of a court and

is simply a fact finder, [a]ny legal [determinations]

reached by an attorney trial referee have no conclusive

effect. . . . The reviewing court is the effective arbiter

of the law and the legal opinions of [an attorney trial

referee], like those of the parties, though they may be

helpful, carry no weight not justified by their soundness

as viewed by the court that renders judgment. . . .

[When] legal [determinations] are challenged, [the

reviewing court] must determine whether they are

legally and logically correct and whether they find support in the facts found by the . . . referee.’’ (Internal

quotation marks omitted.) Absolute Plumbing & Heating, LLC v. Edelman, 146 Conn. App. 383, 390, 77 A.3d

889 (2013).

‘‘The trial court’s findings of fact were based entirely

on the record of the proceedings before the attorney

trial referee. Under these circumstances, application of

the clearly erroneous test must reflect the special rules

that govern judicial review of a report of an attorney

referee. While the reports of [attorney trial referees] in

such cases are essentially of an advisory nature, it has

not been the practice to disturb their findings when

they are properly based upon evidence, in the absence

of errors of law, and the parties have no right to demand

that the court shall redetermine the fact thus found.

. . . A reviewing authority may not substitute its findings for those of the trier of the facts. This principle

applies no matter whether the reviewing authority is

the Supreme Court . . . the Appellate Court . . . or

the Superior Court reviewing the findings of . . . attorney trial referees. . . . This court has articulated that

attorney trial referees and factfinders share the same

function . . . whose determination of the facts is

reviewable in accordance with well established procedures prior to the rendition of judgment by the court.

. . . [T]he trial court may not retry the case and pass

on the credibility of the witnesses . . . .’’ (Internal quotation marks omitted.) Id., 392. With these principles

in mind, we turn to the plaintiffs’ claims on appeal.

I

The plaintiffs first claim that the trial court ‘‘erred by

ignoring Delaware law,’’ which provides that a partneris

bound by a partnership agreement whether or not the

partner executes the partnership agreement, and thus
that the absence of an executed partnership agreement

does not render that agreement unenforceable. See Delaware Revised Uniform Limited Partnership Act, Del.

Code Ann. tit. 6, § 17-101 (12) (2012). The trial court

did not, in fact, ignore Delaware law, but, rather,

rejected the plaintiffs’ claims in spite of Delaware law.

As the plaintiffs contend, the act provides that the

failure of an executed partnership agreement does not,

pursuant to the act, render a partnership agreement

unenforceable. As the court pointed out, however, the

Limited Partnership Agreement here at issue expressly

required the execution of a separate Giveback

Agreement to trigger the giveback obligation set forth

in the Limited Partnership Agreement. Thus, even if the

lack of a signed partnership agreement does not render

that agreement unenforceable pursuant to the act, the

Limited Partnership Agreement in this case, upon which

the plaintiffs have based this cause of action, imposed

upon the plaintiffs the duty to obtain from each limited

partner a separate executed Giveback Agreement.

Because the plaintiffs failed to fulfill their obligation

to obtain an executed Giveback Agreement from the

defendant, as required under the Limited Partnership

Agreement, their claim must fail.

II

The plaintiffs also claim that the court erred in concluding that they waived their right to enforce the giveback obligation. Although the plaintiffs attempt to cast

this claim as a legal challenge to the choice of law

employed by the trial court, they are essentially

attacking the underlying factual findings made by the

referee. The court found, and we agree, that much of

the plaintiffs’ argument ‘‘is devoted to characterizing

and restating the facts and evidence in an attempt to

recast them in a light favorable to [their] position, often

in contradiction to the findings of the . . . referee.’’

The plaintiffs are essentially challenging the referee’s

factual determination, upon which the trial court based

its conclusion, ‘‘that the actions of the plaintiffs when

they distributed the funds to [the defendant] were taken

at the time that they knew that [the defendant] had

not executed the Giveback Agreement and that [the

defendant] had objected to the Giveback Agreement all

before the payments were made.’’ In support of this

claim, the plaintiffs suggest that the defendant’s testimony did not have the import attributed to it by the

referee. The plaintiffs cite to various portions of the

defendant’s testimony and to the testimony of other

witnesses in an attempt to undermine the referee’s factual findings. It is well settled, however, that it is not

the role of this court, nor is it the role of the trial court,

to second guess the finding of the referee as to the

credibility of the witnesses. The court properly declined

to retry the case or revisit issues of credibility decided

by the referee. The court found, and we agree, that
‘‘there is evidence in the record that supports each and

every one of the findings of fact and legal conclusions

made by the [referee].’’ Accordingly, the plaintiffs’ claim

in this regard also fails.

The judgment is affirmed.

In this opinion the other judges concurred.

1 The parties stipulated that, as of September 30, 2011, the correct giveback

amount owed by the defendant, as alleged by the plaintiffs, was $219,702.

2 The referee further recommended that the defendant’s special defenses,

claiming statute of limitations and that the second and third counts of the

plaintiffs’ complaint were legally insufficient, be rejected. The referee did

not make any recommendations concerning the defendant’s claim of laches

or estoppel. Those findings are not challenged in this appeal.