Opinion ID: 484641
Heading Depth: 2
Heading Rank: 4

Heading: TG's Entitlement to Interest on the $250,000 Release Payment

Text: 97 Finally, we turn to TG's argument that in order to obtain rescission of the Release agreement, Woodling should have been required not only to return to TG the $250,000 she had received as consideration for signing the Release, but also to pay TG the legal rate of interest on that amount for the period during which she retained it. We find merit in the contention that Woodling should disgorge whatever interest she earned on the money, up to the legal rate of interest. 98 A plaintiff seeking rescission of a contract must disgorge the fruits of the bargain. Pacelli Brothers Transportation, Inc. v. Pacelli, 456 A.2d at 330; see Kavarco v. T.J.E., Inc., 478 A.2d at 261 (party rescinding contract renounces any property obtained pursuant to the contract and rescission should place both parties as nearly as possible, in the same position as existed just prior to execution of the contract). Such fruits include benefits derived from possession of the property conveyed, see Duksa v. City of Middletown, 192 Conn. 191, 472 A.2d 1, 4, 7 (1984); Restatement (Second) of Contracts Sec. 384 comment a, such as interest on moneys conveyed, see Marr v. Tumulty, 256 N.Y. 15, 21-22, 26, 175 N.E. 356 (1931) (Cardozo, C.J.); Thomas v. Beals, 154 Mass. 51, 27 N.E. 1004, 1005 (1891) (Holmes, J.); Restatement (Second) of Restitution Sec. 29 (Tent. Draft No. 1, 1983), Restatement of Restitution Sec. 159(1)(a) (1937), or net profits from a conveyed business, see Vitale v. Coyne Realty, Inc., 66 A.D.2d 562, 564, 414 N.Y.S.2d 388, 390 (4th Dep't 1979). 99 As to the rate of interest that must be paid on a sum returned in order to obtain rescission, we have discovered no pertinent Connecticut decision. When rescission is based on misrepresentation, the general rule appears to be that the maker of the misrepresentation is entitled to recover no more than the legal rate of interest and that he must bear the risk that the person to whom the misrepresentation was made may have earned less than that rate of interest. See, e.g., Restatement of Restitution Sec. 159 illustration 1; Restatement (Second) of Restitution Sec. 29 comment a (Tent. Draft No. 1, 1983). 100 Accordingly, the district court should enter an order on remand requiring Woodling to pay TG interest on the $250,000 at the rate of interest she received or at Connecticut's legal rate, whichever is lower.