Opinion ID: 150234
Heading Depth: 3
Heading Rank: 2

Heading: Other Asserted Errors of Law

Text: The central argument in Pratt's briefing, and the focus of its presentation at oral argument, was that the district court overstepped its bounds by faulting Pratt for refusing to consider any savings that came in non-EBIT form. The district court found that Pratt's refusal to consider non-EBIT savings resulted in the undervaluation of alternative plans, including assistance offered by the State, and its insistence on measuring savings only under EBIT resulted in the overvaluation of the savings that could be achieved by the Closure Plan. Pratt argues that its decision to value the Closure Plan and alternative plans exclusively in terms of their projected EBIT savings was a business decision to which the district court was required to defer. The business judgment rule is a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company. In re Citigroup Inc. S'holder Derivative Litig., 964 A.2d 106, 124 (Del.Ch.2009) (internal quotation marks omitted). But it inheres in the nature of a contract relating to the business of a corporation a collective bargaining agreement included that to the extent set forth in the contract the corporation has surrendered the ability to act otherwise than according to its lawful obligations thereunder irrespective of the corporation's subsequent contrary business judgment. Each party fully exercises its business judgment by voluntarily entering into an agreement, thereby surrendering, to some extent, its free exercise thereof thereafter. Pratt cannot, then, by invoking the business judgment rule, effectively insulate from review whether it engaged in a good faith pursuit of work preservation by requiring that we defer to its method of accounting for its measures. The valuation of the Closure Plan and its alternatives was plainly part of the calculus used by Pratt in determining whether to close the two Connecticut facilities. The means of that valuation are subject to review in determining whether Pratt's adoption of the Closure Plan was proper. The district court concluded that the adoption of the Closure Plan was improper. It supported that conclusion with its factual finding that Pratt has used metrics other than EBIT to evaluate business plans. And Pratt does not appear to contest the district court's finding that the consideration of savings other than in terms of EBIT may well have lowered the value of the Closure Plan and increased the value of various alternatives. Pratt also argues that the district court should have deferred to its business judgment to consider only alternative proposals that would generate annual recurring savings at least through 2013. But again, it was contractually bound to use every reasonable effort to preserve work within the bargaining unit. Pratt cannot invoke the business judgment rule to argue that under the contract the sufficiency of the effort must be judged on the basis of recurrent savings for three years. The contract neither says nor implies as much. Pratt contends that the district court erred in attempting to judge its subjective intent, complaining that the court effectively required it to think good thoughts about preserving work within the bargaining unit. Appellant's Br. at 54; see also Koufakis v. Carvel, 425 F.2d 892, 906 (2d Cir.1970) (A breach is a breach; it is of marginal relevance what motivations led to it.). But the district court did not decide whether Pratt's thoughts were good or evil or, in the abstract, whether Pratt's motivation for doing what it did was benevolent. The court analyzed Pratt's subjective intent because Letter 22 bound it to operate with the good faith pursuit of bargaining unit work. Pratt's subjective intent, insofar as it failed to pursue in good faith the goal of preserving work for its Connecticut employees, was the violation of the CBA. The district court did not, moreover, decide whether Pratt wanted to keep the Connecticut facilities open. Indeed, it is clear, but not determinative of whether Pratt breached the CBA, that Pratt wanted to move the operations and attendant employment in question elsewhere for economic reasons. The question, as the district court recognized, was whether Pratt made a genuine effort to keep the work at issue within the bargaining unit as it was contractually bound to do, whether it wanted to or not. Pratt argues that the improvements it made to Cheshire and CARO before the Closure Plan gained traction unambiguously demonstrate such an effort, but Pratt has identified no basis in law for rejecting the district court's finding that such improvements, viewed together with the other factual circumstances, did not require an overall finding of a good faith pursuit of work preservation. Pratt's decision to make short-term operational improvements to the Connecticut facilities in 2008 was not inconsistent with an unwillingness to attempt in good faith to keep the facilities open in 2010. The district court relied, in part, on emails from Pratt and UTC executives to determine whether Pratt was pursuing the goal of work preservation in good faith. That was not an improper method for attempting to gauge corporate intent. [C]orporate intent is shown by the actions and statements of the officers, directors, and employees who are in positions of authority or have apparent authority to make policy for the corporation. United States v. Basic Constr. Co., 711 F.2d 570, 573 (4th Cir.1983). The emails discussed by the district court were sent by officers at Pratt and UTC, including the President of UTC. Nowhere in its briefing does Pratt dispute that these officers were in positions of authority at Pratt or, in the case of the UTC officers, had the authority to make policy that would be binding on Pratt. In any event, the emails discussed by the district court constitute only a small portion of its analysis, and the district court's conclusion was independently supported by the other evidence it discussed. Finally, Pratt argues that the district court erred in finding that Letter 22 required it to accord extra value to options that would preserve work within the bargaining unit before the meet-and-confer process began. The district court based its finding on a close reading of the language of the contract: Letter 22 set forth the extra value requirement before describing the meet-and-confer process, during which Pratt was to describe to the Union the efforts it had already made to comply with Letter 22. This was a reasonable interpretation of Letter 22. Pratt has persuasively argued that the contract was ambiguous as to when the extra value had to be assigned. [4] Whether [] contractual language is ambiguous is [] a question of law subject to our de novo review. Aon Fin. Prods., Inc. v. Sociètè Gènèrale, 476 F.3d 90, 95 (2d Cir.2007). If the language of a contract is susceptible to more than one reasonable interpretation, [] the contract is ambiguous. 19 Perry St., LLC v. Unionville Water Co., 294 Conn. 611, 623, 987 A.2d 1009, 1018 (2010) (internal quotation marks omitted; alterations incorporated); In re Holocaust Victim Assets Litig., 282 F.3d 103, 108 (2d Cir.2002). But the interpretation of an ambiguous contract provision is a question for the finder of fact that we review for clear error. See Tobet v. Tobet, 119 Conn.App. 63, 68, 986 A.2d 329, 333 (Conn.App.Ct.2010); In Time Prods., Ltd. v. Toy Biz, Inc., 38 F.3d 660, 665 (2d Cir.1994). The district court's interpretation of Letter 22, well-grounded in its text and the circumstances under which it was drafted, was not clearly erroneous.