BASILE TZOVOLOS et al. v. SCOTT WISEMAN et al.;

JASON ROBERTS, INC. v. ALPERT REALTY, LLC, SC 18569

Judicial District of New Haven

Torts; CUTPA; Whether the Plaintiffs Held a Security Interest in Certain Equipment; Whether the Plaintiffs Proved Their Claims of Conversion, Fraudulent Conveyance, Tortious Interference and a Violation of CUTPA; Whether the Court Properly Pierced the Corporate Veil.  The plaintiffs, Basile and Olympia Tzovolos, entered an agreement to sell kitchen equipment to Scott Wiseman and Seawind, LLC, for a restaurant.  Wiseman executed a promissory note in favor of the plaintiffs, who retained a purchase money security interest in the equipment.  Wiseman then entered into a business partnership with Robert Hartmann, Sr., Robert Hartmann, Jr., and Jason Hartmann.  The Hartmanns' corporate entities renovated the restaurant, for which Seawind gave them a promissory note, secured in part by the kitchen equipment.  Wiseman, whose capital contribution to the partnership was the equipment, altered documents to conceal the plaintiffs' security interest.  Thereafter, Wiseman and Seawind failed to pay on the notes for both the equipment and the renovations.  Although the Hartmanns had been informed of the altered documents and the plaintiffs' security interest, they nonetheless removed some of the kitchen equipment from the restaurant, claiming that they had a valid lien on the equipment and had foreclosed on the lien.  The plaintiffs then filed a complaint alleging, among other things, that the Hartmanns and their corporate entities fraudulently transferred the equipment, tortiously interfered with their contractual relations and violated the Connecticut Unfair Trade Practices Act (CUTPA).  They also sought to pierce the veil of the corporate defendants to assert monetary claims directly against the Hartmanns.  After a trial to the court, the court found that the plaintiffs held a superior security interest in the equipment and that defendants' claims to the equipment were not asserted in good faith.  It thus found that the defendants converted the plaintiffs' property, acted with the intent to defraud and tortiously interfered with the plaintiffs' contractual relations.  The court concluded that the defendants had violated CUTPA, rejecting their claim that they did not violate CUTPA since their primary trade or business did not relate to the operation of a restaurant.  Moreover, it found that the instrumentality test for piercing the corporate veil had been satisfied, and it held the Hartmanns personally liable for the conduct of their corporate entities.  Accordingly, it concluded that the plaintiffs were entitled to recovery under several theories of liability and awarded them damages, statutory interest and attorney's fees.  In this appeal, the defendants claim that the trial court improperly denied their request for a jury trial, found that the plaintiffs held a security interest in the equipment and allowed certain testimony regarding the value of the equipment.  They also argue that the court improperly held that they engaged in conversion, fraudulently conveyed the equipment, tortiously interfered with contractual relations and violated CUTPA.  In addition, they claim that the court improperly pierced the corporate veil and found that their claims to the equipment were not asserted in good faith.  In their cross appeal, the plaintiffs claim that the court improperly precluded them from calling the defendants' expert as a witness.