Court Opinion

ID: 4567307
Source: CourtListenerOpinion
Date Created: 2020-09-21 12:02:39.164687+00
Date Added: 2024-06-11T08:43:18.524601
License: Public Domain

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             JOHN B. CLINTON v. MICHAEL E.
                   ASPINWALL ET AL.
                       (AC 41568)
                       (AC 42396)
                       Lavine, Alvord and Harper, Js.

                                   Syllabus

The plaintiff sought to recover damages from the defendants for, inter alia,
    breach of contract in connection with certain operational decisions the
    defendants made pursuant to a limited liability operating agreement
    with regard to the ownership and operation C Co., of which the plaintiff
    had been a member. The managers of C Co. created a $3 million capital
    reserve. Thereafter, the defendants, who controlled 61 percent of the
    interests of C Co., voted to amend a section of the agreement that
    effected how distributions are to be made. This was done over the
    objections of the plaintiff, who also challenged the necessity of the
    capital reserve. The defendants subsequently voted to remove the plain-
    tiff as a member of C Co. The plaintiff then commenced the present
    action, alleging three counts of breach of contract and two counts of
    breach of fiduciary duty, arising out of the amendment of the company
    agreement, the removal of the plaintiff as a member, and the capital
    reserve. The jury returned a verdict in favor of the plaintiff on his breach
    of contract claims and did not reach the breach of fiduciary duty claims.
    The defendants thereafter filed motions to set aside the verdict and for
    judgment notwithstanding the verdict, which the trial court denied and
    thereafter rendered judgment in favor of the plaintiff. Subsequently, the
    court granted the plaintiff’s motion for attorney’s fees and costs. On
    the separate appeals brought to this court by the defendants, held:
1. The trial court erred in denying the defendants’ posttrial motions as to
    the breach of contract claims regarding the amendment to the agreement
    and the removal of the plaintiff as a member of C Co.; the court misinter-
    preted the company agreement because the defendants could not have
    breached § 3.4 of the agreement in amending that agreement and in
    removing the plaintiff as a member because § 3.4 applied to managers,
    and they were acting in their capacity as members, not managers, in
    undertaking those actions.
2. Although the trial court improperly instructed the jury that the defendants
    owed a duty to act in good faith and without wilful misconduct or
    gross negligence, this court determined that any error was harmless;
    the defendants did have a duty to exercise their best judgment in con-
    ducting the company’s operations and performing their duties and, if
    the jury found that the defendants breached the agreement because
    they acted in bad faith or their actions constituted gross negligence or
    wilful misconduct, then those actions would certainly not have been in
    their best judgment in conducting the company’s operations.
3. The defendants could not prevail on their claim that the trial court improp-
    erly awarded attorney’s fees and costs to the plaintiff pursuant to the
    agreement, which provided for such relief to a party damaged by a
    breach of the agreement: an award of attorney’s fees and costs was
    proper as this court affirmed the judgment in favor of the plaintiff on
    the breach of contract claim related to the capital reserve, but, in light
    of the results obtained by the plaintiff following this appeal, the reversal
    of the judgment with respect to two of the breach of contract counts,
    the judgment with respect to the award of attorney’s fees and costs was
    reversed and the matter the remanded for a new hearing on attorney’s
    fees and costs.
       Argued February 10—officially released September 22, 2020

                             Procedural History

  Action to recover damages for, inter alia, breach of
contract, and for other relief, brought to the Superior
Court in the judicial district of Hartford, where the
court, Robaina, J., rendered summary judgment for the
plaintiff on the defendants’ counterclaim; thereafter,
the matter was tried to the jury before Shapiro, J.;
verdict for the plaintiff, and the defendants appealed
to this court; subsequently, the court, Shapiro, J.,
denied the defendants’ motions to set aside the verdict
and for judgment notwithstanding the verdict and ren-
dered judgment in accordance with the verdict, from
which the defendants filed an amended appeal; there-
after, the court, Hon. Robert. B. Shapiro, judge trial
referee, granted the plaintiff’s motion for attorney’s fees
and costs, and the defendants filed a second amended
appeal and a separate appeal to this court, which con-
solidated the appeals. Reversed in part; further pro-
ceedings.
  Barbara M. Schellenberg, with whom was Garrett S.
Flynn, for the appellants (defendants).
  Glenn W. Dowd, with whom was Howard Fetner, for
the appellee (plaintiff).
                          Opinion

   LAVINE, J. In this breach of contract and fiduciary
duty case, the defendants, Michael E. Aspinwall, Steven
F. Piaker, and David W. Young, appeal from the judg-
ment of the trial court, rendered after a trial to the jury,
in favor of the plaintiff, John B. Clinton. The parties’
dispute arises out of their ownership and operation
of CCP Equity Partners, LLC (CCP). The defendants’
principal claim on appeal is that the court erred in its
construction of the operating agreement that governed
CCP, resulting in multiple erroneous rulings throughout
the course of the litigation. The defendants specifically
claim that the court improperly (1) denied their motion
to strike, (2) denied their motion for summary judg-
ment, (3) denied their motion in limine, (4) charged the
jury, (5) denied their motion for judgment notwithstand-
ing the verdict and motion to set aside the verdict (post-
trial motions), and (6) awarded the plaintiff attorney’s
fees and costs. We agree that the court improperly con-
strued portions of the agreement and reverse the judg-
ment in part and affirm it in part, and remand the case
for a new hearing on the issue of attorney’s fees and
costs.1
   The parties, Gerard Vecchio, and Preston Kavanagh
organized CCP in accordance with the Delaware Lim-
ited Liability Company Act (act), Del. Code Ann. tit. 6,
§ 18-101 et seq. (2005 & Supp. 2012). CCP was to operate
pursuant to an amended and restated limited liability
company operating agreement (agreement) that was
executed by the members on December 29, 2003. CCP
was founded to provide management services to, and
serve as the general partner of, certain private equity
funds. Pursuant to the agreement, each member was
to serve as a manager and on the board of managers
(board).2 CCP, therefore, was manager-managed. See
Del. Code Ann. tit. 6, § 18-402 (2005) (‘‘Unless otherwise
provided in a limited liability company agreement, the
management of a limited liability company shall be
vested in its members . . . .’’). The plaintiff was the
managing partner3 of CCP from its formation in 2003
until March 11, 2008.
   On June 30, 2004, Vecchio left CCP. On August 11,
2005, the managers of CCP created a capital reserve of
$3 million.4 CCP managed two private equity funds. In
2006, the members decided not to raise investor capital
to create another private equity fund. The members
expected all CCP operations to close and that substan-
tially all portfolio companies would be liquidated by
the end of 2012. On March 11, 2008, the defendants,
who controlled 61 percent of the interests of CCP, voted
to amend § 8.1 of the agreement, over the objections
of the plaintiff and Kavanagh. Before the amendment,
§ 8.1 provided that general distributions shall be made
pro rata among the members, in proportion to their
capital accounts. The amendment added language to the
section, providing that distributions could otherwise
be determined by the consent of all members.5 The
defendants made this amendment pursuant to § 2.5 of
the agreement.6
   On September 8, 2008, Kavanagh commenced a law-
suit against CCP and the remaining members of the
company. At a meeting of the members on October 31,
2008, the defendants voted to remove Kavanagh as a
member of the company. Also at that meeting, the plain-
tiff challenged the necessity of CCP’s $3 million capital
reserve. The defendants explained that the reserve was
necessary to meet CCP’s obligations to investors for
several more years, to defend against Kavanagh’s law-
suit, and for the possibility that the plaintiff may take
legal action against CCP.
   On February 20, 2013, the defendants voted to remove
the plaintiff as a member of CCP, also pursuant to § 2.5
of the agreement.7 The plaintiff does not dispute that he
was removed as a member by the consent of members
holding 60 percent or more of the percentage interests.
   The plaintiff commenced the present action against
the defendants on June 13, 2013. His third amended
complaint, filed on October 15, 2014, is the operative
complaint. In this complaint, the plaintiff alleged that
the defendants breached their contractual and fiduciary
duties in three specific ways, by (1) amending the
operating agreement in 2008,8 (2) removing the plaintiff
as a member of CCP, and (3) maintaining a capital
reserve of $3 million.9 The plaintiff alleged that by
virtue of their acts, the defendants breached the fidu-
ciary duties they owed him under Connecticut law and,
alternatively, the fiduciary duties they owed him under
Delaware law. The plaintiff also alleged that, by virtue
of their acts, the defendants breached § 3.4 of the agree-
ment10 because they ‘‘did not exercise their best judg-
ment; did not act in good faith; did not act in a manner
they reasonably believed to be in, or not opposed to,
the best interests of the Company; committed gross
negligence or wilful misconduct . . . .’’
   On December 15, 2014, the defendants moved to
strike the entire complaint, arguing in part that they
did not breach the agreement by (1) amending it in
2008 and (2) removing the plaintiff as a member,
because they took both actions as members pursuant
to § 2.5, and § 3.4 only governs the acts of managers.
The court denied the defendants’ motion to strike
because the plaintiff pleaded facts sufficient to state a
claim for breach of contract.11 The defendants also
filed a motion for summary judgment on December 21,
2016, which the court denied on July 21, 2017.
  On February 14, 2018, the defendants filed a motion
in limine, seeking to preclude the plaintiff from intro-
ducing parole evidence at trial to vary the meaning of
the unambiguous contract language in §§ 3.4 and 8.1 and
also from introducing evidence or making arguments
based on such provisions. The defendants submitted
that the court was ‘‘obligated to perform an independent
pretrial analysis of the [agreement’s] plain meaning and
not to compound the effect of rulings, reached in set-
tings deferential to the plaintiff that cannot yet be
appealed, that are contrary to the law cited herein.’’
The defendants requested that the court rule, as a matter
of law, that the second sentence of § 3.4 cannot form
a basis of a breach of contract. The motion in limine
was heard by the court on March 6, 2018. The court
ruled on the motion in limine on March 8, 2018, and
stated in part: ‘‘The defendants’ arguments regarding
[§§] 3.4 and 8.1 as amended of the LLC agreement at
issue were previously the subject of other decisions in
this case by other judges. The motion in limine, in
essence, seeks reargument as to certain aspects of those
decisions. . . . The court declines to categorically
exclude the general subject matter alluded to in the
defendants’ motion. What evidence is admitted at trial
remains to be determined. The motion is denied.’’
  The plaintiff’s case was tried to the jury over the
course of ten days. The jury verdict form12 first asked
the jury to decide the three breach of contract counts.
Only if the jury found in favor of the defendants on
those counts, was it then asked to address the two
breach of fiduciary duty counts, related to the member
removal and the capital reserve.13 On March 28, 2018,
the jury returned its verdict in favor of the plaintiff on
the three breach of contract counts. The jury, therefore,
did not reach the two breach of fiduciary duty counts.
The jury awarded the plaintiff $146,901 for the breach
of contract related to the 2008 amendment, $672,208
for the breach of contract related to the member
removal, and $303,426 for the breach of contract related
to the capital reserve.
   On April 9, 2018, the defendants filed both a motion
for judgment notwithstanding the verdict and a motion
to set aside the verdict, which were denied by the court.
On July 11, 2018, the plaintiff filed a motion for attor-
ney’s fees and costs, pursuant to § 15.7 of the agree-
ment.14 Following an evidentiary hearing on the motion,
the court issued a memorandum of decision, in which
it awarded the plaintiff $716,200 for attorney’s fees and
$6118.75 for costs.
  These consolidated appeals followed.
                            I
   On appeal, the defendants claim that the court mis-
construed the agreement and, therefore, erred when
it denied their motion to strike, motion for summary
judgment, motion in limine, and posttrial motions, and
when it instructed the jury. Specifically, the defendants
claim that the trial court ‘‘erroneously construed the
second sentence of [§] 3.4 as imposing affirmative con-
tractual duties, rather than as an exculpatory clause
that creates potential immunity.’’ We agree, pursuant
to our plenary review, that the trial court misconstrued
the agreement and, therefore, erred in denying the
defendants’ posttrial motions with respect to the breach
of contract counts related to the amendment and mem-
ber removal, and erred in instructing the jury on the
breach of contract count related to the capital reserve.
   We begin by setting forth the provisions of the agree-
ment, which, we conclude, the trial court erred in inter-
preting. Section 2.5 of the agreement provides: ‘‘In addi-
tion to the other matters specified hereunder, subject
to the prior approval by the Board of Managers, the
consent of Members holding 60% or more of the Percent-
age Interests shall be required for: (i) the admission of
a new Member, (ii) the removal of a Member other than
on account of death or voluntary resignation, (iii) the
determination that a Member is disabled, (iv) the Sale
of the Company, (v) the dissolution of the Company, (vi)
any change in the Subscription or Percentage Interest
of any Member, and (vii) any amendment to this Agree-
ment.’’ (Emphasis added.)
   Section 3.4 of the agreement states in relevant part:
‘‘The Managers shall exercise their best judgment in
conducting the Company’s operations and in per-
forming their other duties hereunder. The Managers
shall not incur any liability to the Company, any Member
or any other Person for any loss suffered by the Com-
pany or such other Member or Person which arises out
of any action or omission of the Managers . . . pro-
vided, however that (i) the Managers . . . acted in
good faith and in a manner such Person reasonably
believed to be in, or not opposed to, the best interests
of the Company and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such
Person’s conduct was unlawful, and (ii) such course of
conduct did not constitute gross negligence or willful
misconduct of the Managers . . . . The Managers . . .
shall be fully protected and justified with respect to
any action or omission taken or suffered by any of them
in good faith if such action or omission is taken or
suffered in reliance upon and in accordance with the
opinion or advice as to matters of law of legal counsel,
or as to matters of accounting of accountants, selected
by any of them with reasonable care. In addition, the
Managers . . . shall be entitled to indemnification by
the Company to the extent provided in Article XIV
hereof.’’ (Emphasis added.)
   The following standard of review and substantive
law15 govern our interpretation of these provisions. ‘‘The
standard of review for the interpretation of a contract
is well established. Although ordinarily the question of
contract interpretation, being a question of the parties’
intent, is a question of fact [subject to the clearly errone-
ous standard of review] . . . [when] there is definitive
contract language, the determination of what the parties
intended by their . . . commitments is a question of
law [over which our review is plenary].’’ (Internal quota-
tion marks omitted.) Alpha Beta Capital Partners, L.P.
v. Pursuit Investment Management, LLC, 193 Conn.
App. 381, 403, 219 A.3d 801 (2019), cert. denied, 334
Conn. 911, 221 A.3d 446 (2020), and cert. denied, 334
Conn. 911, 221 A.3d 446 (2020).
  ‘‘Under Delaware law, the elements of a breach of
contract claim are: 1) a contractual obligation; 2) a
breach of that obligation by the defendant; and 3) a
resulting damage to the plaintiff.’’ (Internal quotation
marks omitted.) Connelly v. State Farm Mutual Auto-
mobile Ins. Co., 135 A.3d 1271, 1279 n.28 (Del. 2016). ‘‘To
determine what contractual parties intended, Delaware
courts start with the text. When the contract is clear and
unambiguous, we will give effect to the plain-meaning
of the contract’s terms and provisions, without resort
to extrinsic evidence. To aid in the interpretation of
the text’s meaning, Delaware adheres to the objective
theory of contracts, i.e. a contract’s construction should
be that which would be understood by an objective,
reasonable third party. The contract must also be read
as a whole, giving meaning to each term and avoiding
an interpretation that would render any term mere sur-
plusage. But general terms of the contract must yield
to more specific terms.
   ‘‘If, after applying these canons of contract interpreta-
tion, the contract is nonetheless reasonably susceptible
[to] two or more interpretations or may have two or
more different meanings, then the contract is ambigu-
ous and courts must resort to extrinsic evidence to
determine the parties’ contractual intent.’’ (Footnotes
omitted; internal quotation marks omitted.) Sunline
Commercial Carriers, Inc. v. CITGO Petroleum Corp.,
206 A.3d 836, 846–47 (Del. 2019).
  We now address the trial court’s interpretation of
these provisions in ruling on the posttrial motions and
in instructing the jury.
                             A
          Amendment and Member Removal16
   We first conclude that the trial court’s improper con-
struction of the agreement caused it to err in denying
the defendants’ posttrial motions with respect to the
breach of contract counts pertaining to the amendment
and member removal.
   ‘‘[D]irected verdicts are disfavored because [l]itigants
have a constitutional right to have factual issues
resolved by the jury. . . . Therefore, [o]ur review of a
trial court’s refusal to direct a verdict or to render a
judgment notwithstanding the verdict takes place
within carefully defined parameters. We must consider
the evidence, including reasonable inferences which
may be drawn therefrom, in the light most favorable
to the parties who were successful at trial . . . giving
particular weight to the concurrence of the judgments
of the judge and the jury, who saw the witnesses and
heard the testimony . . . . The verdict will be set aside
and judgment directed only if we find that the jury
could not reasonably and legally have reached their
conclusion.’’ (Citation omitted; internal quotation
marks omitted.) Riley v. Travelers Home & Marine Ins.
Co., 333 Conn. 60, 70–71, 214 A.3d 345 (2019). It is well
settled that the proper construction of an unambiguous
contract involves a question of law over which our
review is plenary. Alpha Beta Capital Partners, L.P.
v. Pursuit Investment Management, LLC, supra, 193
Conn. App. 403.
   The following additional facts are relevant. On April
9, 2018, the defendants filed a motion for judgment
notwithstanding the verdict and a motion to set aside
the verdict. In those posttrial motions, the defendants
argued, among other things, that (1) there was no con-
tractual qualification that limited their ability to amend
the agreement in the present case, specifically under
§§ 2.1, 2.5, 5.2, and 15.6 of the agreement, and (2) apart
from the requisite percentages to remove a member
under the agreement, which were met in the present
case, nothing in § 2.5 limited their ability to remove
another member. On July 2, 2018, the court denied the
defendants’ posttrial motions and reasoned that, on the
basis of the evidence, the jury reasonably could have
found that the defendants breached § 3.4 of the agree-
ment by amending the agreement and removing the
plaintiff as a member.
   Because the court’s ruling on the defendants’ posttrial
motions involved contractual interpretation of the
agreement, our review is plenary. Upon careful review
of the agreement at hand, we determine that, as a matter
of law, the defendants could not have breached § 3.4
of the agreement by exercising their rights under § 2.5
as members—to amend the agreement in 2008 and to
remove the plaintiff as a member—because § 3.4 gov-
erned the acts of managers, not members. Accordingly,
we conclude that the court erred in denying the defen-
dants’ posttrial motions by misinterpreting the
agreement.
   Pursuant to § 2.5, the defendants amended the
operating agreement in 2008 and removed the plaintiff
as a member of the company in 2013. Section 2.5, titled
‘‘Actions Requiring Member Approval,’’ is located under
article II of the agreement, ‘‘MEMBERS & INTERESTS.’’
In reading the agreement as a whole and giving meaning
to each term, we determine that the contract is unam-
biguous and, therefore, do not consider extrinsic evi-
dence of the parties’ intent.17 We conclude that the
plain language of § 2.5 requires the consent of members
holding 60 percent or more of the percentage interests
for the actions enumerated in § 2.5 to be taken. The
language ‘‘[i]n addition to the other matters specified
hereunder, subject to the prior approval by the Board
of Managers,’’ is not an additional requirement for board
approval, despite the parties’ assertions to that effect
on appeal. Instead, we conclude that the language refer-
ences other provisions in the agreement that specifi-
cally require board approval, in addition to the member
approval required by § 2.5.
   Our construction is supported by the fact that other
provisions of the agreement specify what actions taken
under § 2.5 also require board approval to take effect.
Section 5.5, titled ‘‘Admission of Additional Members,’’
provides that ‘‘subject to Section 2.5, the Board of Man-
agers may admit to the Company one or more addi-
tional Persons as Members. . . .’’18 (Emphasis added.)
Section 10.4, titled ‘‘Obligations in a Company Sale,’’
states in relevant part: ‘‘If the Board of Managers and
the Members in accordance with Section 2.5 authorize
the Sale of the Company, the Board of Managers shall
give written notice describing the terms and conditions
of such proposed sale to all the Members . . . .’’
  By contrast, certain actions provided for by § 2.5 do
not require board approval.
   For example, § 11.1, titled ‘‘Dissolution,’’ provides:
‘‘The Company shall be dissolved and its affairs shall
be wound up upon the first to occur of the following:
(a) The consent of Members holding 60% or more of
the Percentage Interests; or (b) The entry of a decree
of judicial dissolution under the LLC Act.’’ (Emphasis
added.) Section 15.6, titled ‘‘Entire Agreement; Amend-
ments,’’ provides in relevant part: ‘‘This Agreement . . .
constitutes the entire agreement of the parties with
respect to the subject matter hereof and this Agreement
may be amended, modified or supplemented only by
a written instrument duly executed by the Company
and Members holding 60% or more of the Percentage
Interests as required by Section 2.5.’’ (Emphasis
added.)
   Taking these provisions together, it is apparent that
only certain actions taken under § 2.5—i.e., the admis-
sion of a new member and the sale of the company—
require board approval in addition to member approval.
No provision of the agreement requires board approval
to amend the agreement or to remove a member.
   Having construed § 2.5, we now turn to § 3.4—the
provision that the plaintiff alleges the defendants
breached. Section 3.4 applies solely to managers and,
therefore, the defendants could not have breached § 3.4
by amending the agreement and removing the plaintiff
because they took those actions in their capacities as
members, pursuant to § 2.5. We recognize that the par-
ties were both members and managers of CCP, but they
had different rights, powers, restrictions, and liabilities
depending on whether they were acting in their capacity
as either members or managers. See Del. Code Ann. tit.
6, § 18-403 (2005) (‘‘[a] person who is both a manager
and a member has the rights and powers, and is subject
to the restrictions and liabilities, of a manager and,
except as provided in a limited liability company agree-
ment, also has the rights and powers, and is subject to
the restrictions and liabilities, of a member to the extent
of the manager’s participation in the limited liability
company as a member’’). Because we determine that
the defendants were acting as members, not managers,
when they voted to amend the agreement and remove
the plaintiff as a member of CCP, we conclude, as a
matter of law, that the defendants could not have
breached § 3.4, applicable to managers, in doing so.
  For the foregoing reasons, we conclude that the court
improperly construed the agreement and erred by deny-
ing the defendants’ posttrial motions. In other words,
the jury could not legally have concluded that the defen-
dants breached § 3.4 in amending the agreement and
removing the plaintiff as a member because they were
not bound by that section in taking those actions.
Accordingly, we reverse the judgment with respect to
the breach of contract counts regarding the amendment
to the agreement and the plaintiff’s removal as a mem-
ber, and remand the case with direction to render judg-
ment in favor of the defendants.19
                             B
                     Capital Reserve
   The defendants claim that the trial court improperly
instructed the jury on the meaning of § 3.4, which
affected the jury’s verdict on the capital reserve claim.
We agree that the court misconstrued § 3.4 and improp-
erly instructed the jury; however, we conclude that any
such error was harmless.
   We begin with the well settled standard of review
of claimed instructional errors. ‘‘When reviewing [a]
challenged jury instruction . . . we must adhere to the
well settled rule that a charge to the jury is to be consid-
ered in its entirety, read as a whole, and judged by its
total effect rather than by its individual component
parts. . . . [T]he test of a court’s charge is not whether
it is as accurate upon legal principles as the opinions
of a court of last resort but whether it fairly presents
the case to the jury in such a way that injustice is not
done to either party under the established rules of law.
. . . As long as [the instructions] are correct in law,
adapted to the issues and sufficient for the guidance
of the jury . . . we will not view the instructions as
improper.’’ (Internal quotation marks omitted.) Burke
v. Mesniaeff, 334 Conn. 100, 116, 220 A.3d 777 (2019).
‘‘Therefore, [o]ur standard of review on this claim is
whether it is reasonably probable that the jury was
misled.’’ (Internal quotation marks omitted.) Geary v.
Wentworth Laboratories, Inc., 60 Conn. App. 622, 625,
760 A.2d 969 (2000).
   At trial, the court instructed the jury that § 3.4
required the managers to exercise their best judgment
in performing the company’s operations and their other
duties under the agreement, and prohibited them from
taking actions that were done in bad faith, or with gross
negligence or willful misconduct. Specifically, the court
instructed: ‘‘In this case, the plaintiff claims that the
defendants breached [§] 3.4, the duty of care provision
of the LLC agreement on three occasions. Section 3.4
requires the managers of CCP to exercise their best
judgment in conducting the company’s operations and
in performing their other duties under the LLC agree-
ment and prohibits actions that are taken in bad faith
or with gross negligence or wilful misconduct. Bad faith
is synonymous with the absence of good faith which
in turn means honesty . . . and the observance of rea-
sonable standards of fair dealings. A determination will
be considered to be in good faith unless it went so far
beyond the bounds of reasonable judgment that it seems
essentially inexplicable on any ground other than bad
faith. Wilful misconduct means intentional wrongdoing,
not mere negligence, gross negligence or recklessness.
And wrongdoing means malicious conduct or conduct
designed to defraud or seek an unconscionable advan-
tage. Gross negligence means conduct that constitutes
reckless indifference or actions that are without the
bounds of reason. . . .
   ‘‘[T]he plaintiff claims that the defendants . . .
breached the duty of care provision by maintaining a
$3 million capital reserve for CCP, which reduced by
$750,000 the amount that [the plaintiff] was paid upon
his removal. [The plaintiff] claims there was no good
faith basis for a $3 million capital reserve at the time
of his removal and that the defendants maintained the
$3 million capital reserve at that time for the bad faith
purpose of depriving [the plaintiff] of money. . . .
  ‘‘The defendants do not dispute that they maintained
the $3 million capital reserve, but they deny they did
so in bad faith or in breach of the LLC agreement . . . .
   ‘‘The defendants deny that they acted in bad faith,
committed gross negligence or wilful misconduct. And
they allege that they believe their action[s] to be in
CCP’s best interest or not opposed to them. They also
contend that their actions were authorized by the sec-
tions of the agreement which permitted amendment of
the LLC agreement, removal of members, and retention
of the capital reserve.’’
   On appeal, it is undisputed that the defendants main-
tained the capital reserve in their capacity as managers20
and that the first sentence of § 3.4 establishes an
express duty that the managers ‘‘exercise their best
judgment in conducting the Company’s operations and
in performing their other duties hereunder.’’ The defen-
dants, however, claim that the trial court improperly
construed the second sentence of § 3.4 as imposing
affirmative contractual duties upon the managers to act
in good faith, and without gross negligence or wilful
misconduct. Instead, the defendants argue, the second
sentence of § 3.4 is an exculpatory clause that serves
to immunize individuals from liability in certain circum-
stances. The plaintiff counters that § 3.4 contains
explicit requirements that the managers act in good
faith and that their actions not constitute gross negli-
gence or wilful misconduct. We agree with the
defendants.
   We believe that the meaning of § 3.4 is clear and
unambiguous. The first sentence of § 3.4 sets forth a
clear duty of the managers to exercise their ‘‘best judg-
ment’’ when performing the company’s operations. The
second sentence, however, provides that a manager will
not be liable to the company, as long as the manager
acted in good faith, and such action did not amount
to gross negligence or wilful misconduct. This second
sentence does not contain an express duty, as the trial
court so concluded. Rather, it provides circumstances
in which a manager would not be protected from liabil-
ity to the company. Our reading is supported by § 2.3,
titled ‘‘Limitation of Liability,’’ which states in part: ‘‘No
Member shall be liable under a judgment, decree or
order of any court, or in any other manner, for a debt,
obligation or liability of the Company, except as pro-
vided by law or as otherwise specifically provided
herein.’’ Section 3.4 ‘‘specifically provide[s]’’ the circum-
stances in which a manager shall be liable to or for the
company. These provisions taken together mean that
a manager will not be liable to the company, unless he
or she acts in bad faith or with gross negligence or
wilful misconduct.
   Our interpretation of this provision is consistent with
Delaware case law interpreting similar provisions in
limited liability company operating agreements. For
example, in Fisk Ventures, LLC v. Segal, Docket No.
3017-CC, 2008 WL 1961156 (Del. Ch. May 7, 2008), aff’d,
984 A.2d 124 (Del. 2009), the Chancery Court of Dela-
ware addressed a contractual provision similar to the
one at issue in the present case: ‘‘ ‘No Member shall
have any duty to any Member of the Company except
as expressly set forth herein or in other written agree-
ments. No Member, Representative, or Officer of the
Company shall be liable to the Company or to any
Member for any loss or damage sustained by the Com-
pany or to any Member, unless the loss or damage
shall have been the result of gross negligence, fraud or
intentional misconduct by the Member, Representative,
or Officer in question. . . .’ ’’ Id., *9. The counterclaim
and third-party plaintiff in that case, Andrew Segal,
argued that the provision established a ‘‘ ‘duty to act
without gross negligence, fraud or intentional miscon-
duct.’ ’’ Id. The court stated that, ‘‘[u]nder Segal’s read-
ing, a . . . member would be liable to the [c]ompany
or other members for any damage caused by gross
negligence, [wilful] misconduct, or a knowing violation
of law. There is no guidance as to how or when this
‘code of conduct’ applies, and this [c]ourt declines to
follow Segal’s invitation to turn an expressly exculpa-
tory provision into an all encompassing and seemingly
boundless standard of conduct.’’ (Emphasis in original.)
Id. Accordingly, the court in Fisk concluded that the
provision at issue did not create an express duty to act
in a certain way; instead, it exculpated members from
liability for a loss unless the loss was caused by that
member’s gross negligence, fraud, or intentional mis-
conduct. Although not bearing on our resolution of the
claim in this appeal, we find the analysis by the court
in Fisk persuasive.
   The trial court erred, therefore, when it instructed
the jury that ‘‘[§] 3.4 requires the managers of CCP to
exercise their best judgment in conducting the com-
pany’s operations and in performing their other duties
under the LLC agreement and prohibits actions that
are taken in bad faith or with gross negligence or
wilful misconduct.’’ (Emphasis added.) We determine,
however, that this instruction, premised upon an
improper interpretation of § 3.4, constituted harmless
error. A party is entitled to a new trial for an instruc-
tional error only if the error likely affected the verdict.
See Perez v. Cumba, 138 Conn. App. 351, 378–79, 51
A.3d 1156 (‘‘[B]efore a party is entitled to a new trial
. . . he or she has the burden of demonstrating that the
error was harmful. . . . An instructional impropriety
is harmful if it is likely that it affected the verdict.’’),
cert. denied, 307 Conn. 935, 56 A.3d 712 (2012). The trial
court’s instruction to the jury was harmless because if
the jury found that the defendants breached § 3.4 of
the agreement because they acted in bad faith or their
actions constituted gross negligence or wilful miscon-
duct, then any of those actions would certainly not
have been in their ‘‘best judgment’’ in conducting the
company’s operations.
  We conclude that the court erred in instructing the
jury that the defendants owed the duty under the agree-
ment to act in good faith and without wilful misconduct
or gross negligence; however, this error was harmless.
Accordingly, we affirm the judgment with respect to
the breach of contract claim regarding the maintenance
of the capital reserve.
                             II
  The defendants also claim that the trial court improp-
erly awarded attorney’s fees and costs to the plaintiff
pursuant to § 15.7 of the agreement, which provides
for such relief to a party damaged by a breach of the
agreement. See footnote 14 of this opinion. They argue
that because the agreement and the evidence do not
support the notion that the defendants breached an
obligation under the agreement, the award cannot
stand. Because we affirm the judgment in favor of the
plaintiff on the breach of contract count related to the
capital reserve, an award of attorney’s fees and costs
is appropriate in accordance with § 15.7. We reverse
the judgment in part and remand the matter for a new
hearing as to attorney’s fees and costs, however, in light
of the ‘‘results obtained’’ by the plaintiff following this
appeal—that is, the reversal of two breach of contract
counts. See Mahani v. Edix Media Group, Inc., 935
A.2d 242, 245–46 (Del. 2007) (‘‘[t]o assess a fee’s reason-
ableness, case law directs a judge to consider the factors
set forth in the Delaware Lawyers’ Rules of Professional
Conduct, which, include . . . (4) the amount involved
and the results obtained . . . .’’ (footnote omitted)).
   The judgment is reversed with respect to the counts
alleging breach of contract related to amendment and
member removal and the case is remanded with direc-
tion to render judgment on those counts for the defen-
dants and for a new hearing on the plaintiff’s motion
for attorney’s fees and costs; the judgment is affirmed
in all other respects.
      In this opinion the other judges concurred.
  1
     We resolve the defendants’ appeals by concluding that the court improp-
erly denied the defendants’ posttrial motions and improperly charged the
jury. Accordingly, we need not reach the defendants’ claims regarding the
trial court’s rulings on their other motions.
   2
     The agreement provides that ‘‘[t]he Board of Managers shall act and
serve as the manager of the Company and shall be the ‘manager’ of the
Company as defined under Section 18-101 (10) of the [act]. Subject to the
provisions of this Agreement, the management, policies and control of the
Company shall be vested exclusively in the Board of Managers.’’
   3
     The agreement provides that ‘‘[s]ubject to the control of the Board of
Managers, the Managing Partner shall have general charge and control of
the business and affairs of the Company, including, without limitation, setting
the agenda for meetings of the Board of Managers, preparing compensation
schedules and budgets and generally determining the Company’s business
priorities and the manner in which they will be implemented.’’
   4
     On August 11, 2005, the managers were the parties and Kavanagh.
   5
     The amendment pertained to section 8.1 of the agreement:
   ‘‘[Original] Language:
   8.1 General Distributions. Subject to applicable law and except as
otherwise provided in Section 8.5, the Company shall make distributions to
the Members at such times and in such aggregate amounts as may be
determined by the Board of Managers, in its sole discretion. Each such
distribution shall be made pro rata among the Members in proportion to
their relative Capital Accounts as of the date of the applicable distribution.
   ‘‘[Amended] Language:
   8.1 General Distributions. Subject to applicable law and except as
otherwise provided in Section 8.5, the Company shall make distributions to
the Members at such times and in such aggregate amounts as may be
determined by the Board of Managers, in its sole discretion. Each such
distribution shall be made pro rata among the Members in proportion to
their relative Capital Accounts as of the date of the applicable distribution,
unless otherwise determined and agreed by all of the Members and subject
to the remainder of this Section VIII.’’ (Emphasis in original.)
   6
     Section 2.5 of the agreement, titled ‘‘Actions Requiring Member
Approval,’’ provides in relevant part: ‘‘In addition to the other matters speci-
fied hereunder, subject to the prior approval by the Board of Managers, the
consent of Members holding 60% or more of the Percentage Interests shall
be required for . . . (vii) any amendment to this Agreement.’’ ‘‘Percentage
Interests’’ is defined in the agreement by reference to § 5.2, which states:
‘‘Each Member shall have a certain percentage interest for purposes of
apportioning certain allocations and distributions (a ‘Percentage Interest’)
as indicated on his Economic Exhibit attached as Schedule B hereto. Each
Member’s Economic Exhibit shall be automatically amended without the
consent of any Member from time to time to reflect any changes in the
Percentage Interest of such Member made in accordance with the terms of
this Agreement. The sum of all Percentage Interests shall be equal at all
times to 100%. Subject to Section 2.5, each Member’s Percentage Interest
may be increased or reduced prospectively, without such Member’s consent,
from time to time by the Board of Managers.’’
   7
     See footnote 6 of this opinion.
   8
     The plaintiff alleged that the 2008 amendment had the effect of reducing
the percentage of his and Kavanagh’s interests in the company and their
capital accounts, while increasing the comparable interests and capital
accounts of the defendants. The plaintiff also alleges that the 2008 amend-
ment was ‘‘part of a pattern and practice of behavior on the part of [the
defendants] of operating CCP in bad faith so as to advantage themselves
at the expense of [the plaintiff] and Kavanagh and violating [the plaintiff’s]
rights as a minority member of CCP.’’
   9
     By maintaining a capital reserve of $3 million, the plaintiff claims that
the defendants effectively reduced the amount he received when CCP
repurchased his interest upon his removal as a member.
   10
      Section 3.4 of the agreement provides in relevant part: ‘‘The Managers
shall exercise their best judgment in conducting the Company’s operations
and in performing their other duties hereunder. The Managers shall not
incur any liability to the Company, any Member . . . which arises out of
any action or omission of the Managers . . . provided, however that (i) the
Managers . . . acted in good faith and in a manner such Person reasonably
believed to be in, or not opposed to, the best interests of the Company and,
with respect to any criminal action or proceeding, had no reasonable cause
to believe such Person’s conduct was unlawful, and (ii) such course of
conduct did not constitute gross negligence or willful misconduct of the
Managers . . . . The Managers . . . shall be fully protected and justified
with respect to any action or omission taken or suffered by any of them in
good faith if such action or omission is taken or suffered in reliance upon
and in accordance with the opinion or advice as to matters of law of legal
counsel, or as to matters of accounting of accountants, selected by any of
them with reasonable care. In addition, the Managers . . . shall be entitled
to indemnification by the Company to the extent provided in Article XIV
hereof.’’ (Emphasis in original.)
   11
      See Practice Book § 10-39 (a) (‘‘[a] motion to strike shall be used when-
ever any party wishes to contest . . . the legal sufficiency of the allegations
of any complaint’’).
   12
      The jury verdict form stated:
   ‘‘2008 Amendments
   ‘‘1. On the plaintiff’s breach of contract claim concerning the 2008 amend-
ments to the LLC Agreement, we, the jury, find in favor of:
   ‘‘Plaintiff
   ‘‘Defendants
   ‘‘If you have found in favor of the Plaintiff on Question 1, proceed to
Question 2. If you have found in favor of the Defendants on Question 1,
skip Question 2 and proceed to Question 3.
   ’’2. If you have found in favor of the Plaintiff on Question 1, what amount
of damages do you award to [the] Plaintiff on his breach of contract claim
concerning the 2008 amendments?
   ‘‘$
   ‘‘$3 Million Capital Reserve
   3. On the Plaintiff’s breach of contract claim concerning the $3 million
capital reserve, we, the jury, find in favor of:
   ‘‘Plaintiff
   ‘‘Defendants
   ‘‘If you have found in favor of the Plaintiff on Question 3, skip Question
4 and proceed to Question 5.
   ‘‘If you have found in favor of the Defendants on Question 3, proceed
to Question 4.
   ’’4. On the Plaintiff’s breach of fiduciary duty claim concerning the $3
million capital reserve, we, the jury, find in favor of:
   ‘‘Plaintiff
   ‘‘Defendants
   ‘‘If you have found in favor of the Plaintiff on Question 4, proceed to
Question 5.
   ‘‘If you have found in favor of the Defendants on Questions 3 and 4,
skip Question 5 and proceed to Question 6.
   ’’5. If you have found in favor of the Plaintiff on Question 3 or Question
4, what amount of damages do you award to [the] Plaintiff on his claim
concerning the $3 million capital reserve?
   ‘‘$
   ‘‘Removal from CCP
   ‘‘6. On the Plaintiff’s breach of contract claim concerning his removal
from CCP, we, the jury, find in favor of:
   ‘‘Plaintiff
   ‘‘Defendants
   ‘‘If you have found in favor of the Plaintiff on Question 6, skip Question
7 and proceed to Question 8.
   ‘‘If you have found in favor of the Defendants on Question 6, proceed
to Question 7.
   ’’7. On the Plaintiff’s breach of fiduciary duty claim concerning his removal
from CCP, we, the jury, find in favor of:
   ‘‘Plaintiff
   ‘‘Defendants
   ‘‘If you have found in favor of the Plaintiff on Question 7, proceed to
Question 8.
   ’’If you have found in favor of the Defendants on Questions 6 and 7,
skip Question 8.
   ’’8. If you have found in favor of the Plaintiff on Question 6 or Question
7, what amount of damages do you award to [the] Plaintiff on his claim
concerning his removal from CCP?
   ‘‘$
   ‘‘If you awarded damages to the Plaintiff in Questions 2, 5, and/or 8,
proceed to Question 9.
   ’’If you have not awarded damages to the Plaintiff in Questions 2, 5, or
8, skip Question 9 and have your foreperson sign and date this form where
indicated below.
   ‘‘Total Damages
   ‘‘9. If you have rendered a verdict for the Plaintiff on one or more of the
above claims, insert the total amount awarded below.
   ‘‘$        ’’
   13
      The plaintiff withdrew the breach of fiduciary duty claim related to the
amendment to the agreement because the defendants were going to file a
motion arguing that the claim was barred by the statute of limitations and,
the plaintiff’s counsel reasoned: ‘‘[I]t’s an issue that’s largely covered by our
breach of contract claim that it is going to make the jury deliberations and
verdict form and jury interrogatories unduly confusing.’’
   14
      Section 15.7 of the agreement provides in part: ‘‘In the event of a breach
by any party to this Agreement of its obligations under this Agreement, any
party injured by such breach, in addition to being entitled to exercise all
rights granted by law, including recovery of damages and costs (including
reasonable [attorney’s] fees), will be entitled to specific performance of its
rights under this Agreement.’’
   15
      The parties agree that Delaware substantive law governs this claim
because the choice of law provision—§ 15.5 of the agreement—provides:
‘‘This Agreement shall be construed in accordance with the laws of the
[s]tate of Delaware, without giving effect to the principles of conflicts of
law thereof that would cause the application of the laws of any jurisdiction
other than the [s]tate of Delaware.’’
   16
      For the reasons set forth in this part of the opinion, we address the
claims regarding the amendment to the operating agreement and the plain-
tiff’s removal as a member together.
   17
      Following oral argument before this court, we ordered the parties to
file simultaneous supplemental briefs, addressing the following question:
‘‘Whether the defendants were bound by, and therefore could have breached,
[§] 3.4 of the operating agreement, a section applicable to managers, when
they amended the operating agreement and removed the plaintiff as a mem-
ber pursuant to [§] 2.5 of the operating agreement, a section that authorized
them to take certain actions as members.’’
   In addressing this question, the plaintiff relied extensively on extrinsic
evidence, namely testimony at trial, to support his interpretation of the
agreement. We decline the plaintiff’s invitation to consider this evidence
because it is irrelevant in the face of clear and unambiguous language in
the agreement.
   18
      Section 3.1, titled ‘‘Management and Control of the Company,’’ states
that the language ‘‘the Board of Managers may,’’ found in § 5.5 and elsewhere
in the agreement, requires majority consent by the board. Section 3.1 (g)
(i) provides: ‘‘all decisions or actions which this Agreement provides may
be made by ‘the Managers’ or the ‘Board of Managers’, may be made with
the consent of a majority of the entire Board of Managers voting in proportion
to their Percentage Interests . . . .’’ (Emphasis added.)
   19
      The plaintiff argues that, if this court reverses a breach of contract
count, we should remand the case with instructions to render judgment for
the plaintiff on the related breach of fiduciary duty claim. In support of this
argument, the plaintiff quotes the trial court’s statement in its memorandum
of decision on the motion for attorney’s fees and costs: ‘‘The jury was not
required to reach the plaintiff’s breach of fiduciary duty claim since it found
in his favor as to breach of contract and awarded the full amount of damages
sought. There was a substantial identity of the facts required to prove the
breach of contract and breach of fiduciary duty claims, which may not be
readily separated.’’ We decline to remand the case with direction to render
judgment on the related breach of fiduciary duty claim because the plaintiff
did not take an exception to the jury verdict form that instructed the jury
to bypass consideration of the breach of fiduciary duty counts related to
the plaintiff’s removal as a member and the maintenance of the capital
reserve and, therefore, the plaintiff failed to preserve the claim. See McMa-
hon v. Middletown, 181 Conn. App. 68, 76, 186 A.3d 58 (2018) (‘‘[i]t is well
established that an appellate court is under no obligation to consider a claim
that is not distinctly raised at the trial level’’ (internal quotation marks
omitted)). Breach of contract and breach of fiduciary duty are distinct
theories of liability and nothing prevented the plaintiff from prevailing under
both theories, if successful. See Connelly v. State Farm Mutual Automobile
Ins. Co., supra, 135 A.3d 1279 n.28 (elements of breach of contract are ‘‘1)
a contractual obligation; 2) a breach of that obligation by the defendant;
and 3) resulting damage to the plaintiff’’ (internal quotation marks omitted));
contra Chioffi v. Martin, 181 Conn. App. 111, 138, 186 A.3d 15 (2018)
(elements of breach of fiduciary duty are ‘‘[1] [t]hat a fiduciary relationship
existed which gave rise to . . . a duty of loyalty . . . an obligation . . .
to act in the best interests of the plaintiff, and . . . an obligation . . . to
act in good faith in any matter relating to the plaintiff; [2] [t]hat the defendant
advanced his or her own interests to the detriment of the plaintiff; [3]
[t]hat the plaintiff sustained damages; [and] [4] [t]hat the damages were
proximately caused by the fiduciary’s breach of his or her fiduciary duty’’
(internal quotation marks omitted)); Estate of Eller v. Barton, 31 A.3d 895,
897 (Del. 2011) (‘‘[t]o establish liability for the breach of a fiduciary duty,
a plaintiff must demonstrate that the defendant owed her a fiduciary duty
and that the defendant breached it’’).
   20
      Section 3.2 of the agreement, which details the powers of managers,
provides in relevant part: ‘‘(a) Subject to the provisions of this Agreement,
the powers delegated to the Executive Committee and the Investment Com-
mittee and the rules and procedures adopted from time to time by the Board
of Managers, any Manager shall have the power on behalf and in the name
of the Company to carry out and implement any and all of the purposes of
the Company and to exercise any of the powers of the Company, including,
without limitation, the power to . . . (xiii) establish from time to time a
capital reserve for future expenses of the Company.’’