Patrick Baker & Sons, Inc. v. St. Killian Candle Company Limited
Filing
204
FINDINGS OF FACT AND CONCLUSIONS OF LAW: See attached ruling. The Clerk's Office is directed to enter judgment for the defendant and close this case. Signed by Judge Robert A. Richardson on 2/3/2023. (Fries, J.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
______________________________
PATRICK BAKER & SONS INC,
)
) 3:17-cv-0664 (RAR)
Plaintiff,
)
)
v.
)
)
ST. KILLIAN CANDLE CO. LTD,
) February 3, 2023
)
Defendant.
)
RULING
I.
BACKGROUND
The plaintiff, Patrick Baker & Sons, Inc. filed this lawsuit
against the defendant, St. Killian Candle Company, Ltd, alleging
breach of contract, breach of the covenant of good faith and
fair dealing, and unjust enrichment. (Dkt. #1.) The case was
initially filed in Connecticut Superior Court but then removed
to the United States District Court for the District of
Connecticut. (Dkt. #1 and #1-2.)
The case was transferred to
the undersigned on August 5, 2021.
(Dkt. #166.) On August 17,
2021, the parties informed the Court that the case was ready for
trial. (Dkt. #168 and #169.) A bench trial was held from
November 30 through December 3, 2021. (Dkt. #170.) Thereafter,
the parties submitted post-trial briefs on January 24, 2022.
Prior to issuing this ruling, the Court reviewed Plaintiff’s
Pretrial Memorandum, all of the trial transcripts and exhibits,
and the parties’ post-trial briefs. The Court has carefully
1
weighed the evidence as well as the credibility of the
witnesses.
II.
FACTS
The Parties
Patrick Baker & Sons, Inc. is a family-owned business located
in Southington, Connecticut. (Dkt. #179 at ¶1.)
The company was
started in 1965 by Jack Lennon and Patrick Baker under the name
Lennon Baker. (Tr. 11/30/21 at 24-25.) Several years later,
Patrick Baker purchased Jack Lennon’s interest and the company
became Patrick Baker & Sons (hereinafter referred to as “PB&S”).
(Tr. 11/30/21 at 25.)
PB&S has been marketing, selling and
distributing various types of candles, including votive candles,
candle glass, sacramental wines, and clerical clothing for over
fifty-five years. (Dkt. #179 at ¶2; Tr. 11/30/21 at 28.)
For many years, St. Patrick’s Cathedral in New York City
purchased church-related products from PB&S.
(Dkt. #179 at ¶3.)
PB&S also had many customers in New York City, New Jersey and
throughout New England. (Tr. 11/30/21 at 34.)
St. Killian Candle Company Limited (“St. Killian”) is an Irish
company which was founded in 2009 by Michael Baker and Michael
Murphy. (Dkt. #180 at ¶3 and ¶5; Tr. 12/3/21 AM at 16.) St.
Killian manufactures, distributes, and sells votive candles and
candle racks to cathedrals, churches and shrines. (Dkt. #180 at
¶14; Tr. 12/3/21 AM at 12.)
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Michael Barrett and Michael Murphy invented the “St. Killian’s
Candle Burning System.”
(Tr. 12/3/21 AM at 13-15; Dkt. #180 at
¶6.) Under the system, the votive candle burns for approximately
60-90 minutes inside a patented glass. (Tr. 12/3/21 AM at 13-16;
Dkt. #180 at ¶6.) The system was designed to allow churches to
burn candles without causing smoke or fire damage. (Tr. 12/3/21
AM at 13-16; Tr. 12/3/21 PM at 45; Dkt. #180 at ¶6 and ¶9.) The
candle does not emit any smoke or soot. (Id.) Once the candle
finishes burning, the remaining wax falls through a hole and
into a tray of water inside the candle rack. (Tr. 12/3/21 AM at
14-15; Dkt. #180 at ¶8.) The wax in the water hardens and can be
removed easily. (Tr. 12/3/21 AM at 16-17; Dkt. #180 at ¶8.)
At its inception, St. Killian conducted business primarily in
Ireland and Europe. (Tr. 12/3/21 PM at 41-42; Dkt. #180 at ¶15.)
Eventually, St. Killian became interested in expanding into the
United States. (Tr. 12/3/21 AM at 14-17.) At some point, St.
Killian learned about PB&S and became interested in exploring a
potential business relationship. (Dkt. #180 at ¶19.) St. Killian
was aware that PB&S was supplying ecclesiastical products to
several churches and cathedrals, including most prominently St.
Patrick’s Cathedral. (Tr. 12/3/21 AM at 21.)
St. Killian and PB&S Meet Each Other
At all times relevant, Michael Baker has been an owner of
PB&S. (Tr. 11/30/21 at 29.) Around April of 2010, Patrick Kelly,
3
who is Mr. Baker’s nephew, told Mr. Baker that he had met
someone from St. Killian. (Tr. 11/30/21 at 39-42.) After Mr.
Kelly described St. Killian’s product, Mr. Baker thought it
could be a great opportunity. (Tr. 11/30/21 at 39-40.)
Thereafter, on April 20, 2010, Mr. Baker received a phone call
from Jim Ryan, a broker for St. Killian.
(Tr. 11/30/21 at 39.)
The phone call lasted five to seven minutes. (Tr. 11/30/21 at
40.) Since Mr. Baker had a pre-planned trip to Ireland, he and
Mr. Ryan agreed to meet in Ireland. (Tr. 11/30/21 at 39-40.)
Later that day, Michael Murphy, from St. Killian, sent an email to Mr. Baker telling him that he (Murphy) had spent a day
at St. Patrick’s Cathedral, and noticed that the Cathedral
burned a lot of candles and some of the candle glasses had
exploded. (Exh. 5.) Mr. Murphy told Mr. Baker that
Our system is completely safe as it has an inner glass
which sits into an outer glass the candle sits into the
inner glass burns for approx. 2 hours. When the candle
is finished burning the waste drops into a tray of water
or Teflon.
We can show you during your visit to Ireland next month.
(Exh. 5.)
Thereafter, a meeting was held in Ireland. (Tr. 12/3/21 AM
at 21.) Michael Baker attended on behalf of PB&S, and Jim Ryan,
Michael Barrett, and Michael Murphy attended on behalf of St.
Killian. (11/30/21 at 43.)
The representatives of St. Killian
showed Mr. Baker their candle rack, which was setup in a van,
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and the candles were already burning when Mr. Baker arrived.
(11/30/21 at 44-45; Tr. 12/3/21 AM at 21-22.) Mr. Baker was very
impressed because the candles were burning in a closed
environment, but he did not smell any smoke or carbon. (11/30/21
at 45.)
Mr. Baker testified that the pollution in St. Patrick’s
Cathedral was incredible due to the carbon buildup, so he was
extremely interested in St. Killian’s product. (11/30/21 at 48.)
During the meeting, the parties discussed how much money they
could make together. (11/30/21 at 48.)
After returning to the United States, Mr. Baker told his
family business members that there was a new innovative product
line that could benefit the business, and they agreed that St.
Killian’s product could help St. Patrick’s Cathedral and also
PB&S’ other accounts. (11/30/21 at 49.)
PB&S and St. Killian Start Working Together and Discussing a
Business Relationship
On May 27, 2010, Michael Baker received an e-mail from St.
Killian, in response to his own inquiry, which briefly
summarized what St. Killian was hoping to accomplish with PB&S’
assistance. (Exh. 6.) Among other things, the e-mail stated that
St. Killian’s votive candle racks were made in Ireland, but St.
Killian would be very interested in exploring manufacturing
possibilities. (Id.) The e-mail stated that the next possible
step would be for St. Killian’s representatives to visit with
5
Mr. Baker and his team. (Id.) The e-mail stated that PB&S “will
benefit from every candle sold in the North American Market” and
concluded by proposing a meeting in July of 2010. (Id.)
On June 5, 2010, Mr. Murphy e-mailed Mr. Baker and told him
that it was expensive to manufacture the candles in Ireland and
then transport them to the United States, so it would be best to
get the candles made in the United States in the future. (Exh.
7.)
Mr. Murphy also said that St. Killian wanted “Bakers to be
Killians USA and every candle sold [by PB&S] should get
commission just like our agent Jim Ryan. . . .” (Id.) Mr. Baker
testified that, based on conversations, he understood that being
“Killians USA” meant that PB&S would be able to take St.
Killian’s product line, market it, manage it, and ship it to
PB&S’ churches and dealers. (Tr. 11/30/21 at 63.)
During the Summer of 2010, a St. Killian candle rack was
being shipped to the United States and PB&S was going to place
it in a church with whom PB&S had a fantastic relationship – St.
Malachy Roman Catholic Church (hereinafter referred to as “St.
Malachy.”). (Tr. 11/30/21 at 63-64.) Around the same time, St.
Killian and PB&S talked about a manufacturer that could help
make St. Killian’s candle rack look better. (Tr. 11/30/21 at 6566; Exh. 8.)
On July 15, 2010, Mr. Barrett and Mr. Murphy traveled to
Connecticut to meet with Michael and Sean Baker. (Tr. 11/30/21
6
at 68; Tr. 12/3/21 AM at 22-23.) The co-founder of PB&S, Patrick
Baker, was also present, and he told Mr. Barrett that in his
fifty years in the business, he had not seen anything like the
St. Killian votive candle. (Exh. 9.)
On July 20, 2010, Mr. Barrett sent an e-mail to Michael
Baker outlining the topics they had discussed during their
meeting on July 15. (Id.) The e-mail mentioned ten items,
including:
•
St. Killian intended on manufacturing candles in the
United States in the future;
•
PB&S would help St. Killian with the roll out to other
dealers in the United States and would receive ½ of a
cent (U.S.D.) on all candles sold in the United States;
•
St. Killian hoped to have the candle racks made in the
United States with a manufacturer that PB&S knew (“PEP”),
and PB&S would get a commission on those sales; and
•
PB&S would try to convert St. Patrick’s Cathedral to the
St. Killian’s candle burning system. (Id.)
By July 2010, PB&S was serving as a dealer for St. Killian,
which means that PB&S was purchasing candles from St. Killian
and selling them to PB&S’ customers. (Tr. 12/3/21 PM at 2-3 and
5.) In exchange, St. Killian supplied PB&S with the patented
inner glass free of charge. (Tr. 12/3/21 PM at 3.) PB&S could
mark up St. Killian’s products and sell them to customers for
7
profit. (Tr. 12/3/21 PM at 3.) PB&S was St. Killian’s first
authorized dealer in the United States. (Tr. 12/3/21 PM at 5.)
PB&S helps St. Killian with St. Patrick’s Cathedral
At all times relevant, Kevin Donohue was the Director of
Operations for St. Patrick’s Cathedral. (Tr. 12/2/21 at 88.) Mr.
Donohue oversaw all operations and vendors for St. Patrick’s
Cathedral. (Tr. 12/2/21 at 88.)
On July 21, 2010, Sean Baker sent an e-mail to Mr. Barrett
informing him that he (Baker) brought Kevin Donohue to St.
Malachy to demonstrate how St. Killian’s candle burning system
worked. (Exh. H.). Sean Baker told Mr. Barrett that, after
seeing St. Killian’s system at St. Malachy, Mr. Donohue was
excited to show the burning system to Monsignor Ritchie, who was
the Monsignor of St. Patrick’s Cathedral. (Id.) Sean Baker’s email stated that Monsignor Ritchie had just seen the burning
system for himself that day and was equally impressed. (Id.)
Sean Baker informed Mr. Barrett that St. Patrick’s Cathedral was
interested in getting its own test rack. (Id.)
On August 16, 2010, Mr. Barret sent an e-mail to Sean Baker
following up on the ten items that were mentioned in the e-mail
dated July 20, 2010. (Exh. 12.)
Mr. Barrett’s e-mail informed
Sean Baker that St. Killian “will prepare draft copies [of
contracts] for us to navigate through and come up with the best
for a long-term business relationship.” (Id.)
8
With Sean Baker’s assistance, a test rack was installed in
St. Patrick’s Cathedral on October 4, 2010. (Exh. N.)
The
parties agree that St. Killian’s burning system was wellreceived. (Id. at 2-3.)
St. Patrick’s Cathedral Stops Doing Business with PB&S
As Director of Operations, Kevin Donohue oversaw the
invoicing for all vendors of St. Patrick’s Cathedral and gave
approval for work. (Tr. 12/2/21 at 88.)
At all times relevant,
Mr. Donohue reported to Monsignor Ritchie, who was the head of
the Cathedral. (Tr. 12/2/21 at 88.)
When Mr. Donohue became the Director of Operations, St.
Patrick’s Cathedral was ordering its church supplies, including
candles and glass, from PB&S. (Tr. 12/2/21 at 93, 96.)
After
becoming Director of Operations, Mr. Donohue implemented a
change within the Cathedral requiring anyone who wanted to order
items from a vendor to get Mr. Donohue’s approval. (Tr. 12/2/21
at 94, 137.)
Mr. Donohue usually dealt directly with Sean Baker when
dealing with PB&S. (Tr. 12/2/21 at 96.) Sean Baker testified
that Mr. Donohue constantly complained about pricing on most
anything, and not just the price of candles. (Tr. 11/30/21 at
152.)
According to Sean Baker, Mr. Donohue was known for
complaining about pricing. (Tr. 11/30/21 at 152-52.)
9
Shortly after Mr. Donohue became Director of Operations,
St. Patrick’s Cathedral was preparing for a major renovation
that would take about five years and cost around $200,000,000.
(Tr. 12/2/21 at 96-98, 144.)
The church was going to be closed
and there was a concern that the lack of revenue might lead to
layoffs, so Mr. Donohue explored cost-cutting measures. (Tr.
12/2/21 at 96-98.) Mr. Donohue determined how much money the
Cathedral was paying vendors and suppliers by examining the
Cathedral’s monthly expenses for electricity, water, glass,
telephones, etc. (Tr. 12/2/21 at 97-101, 137.)
Regarding the cost of candles, Mr. Donohue Googled candle
companies to determine how much they charged for candles. (Tr.
12/2/21 at 96-97.) One of the candle companies was called A.
Gross Candles Company (hereinafter referred to as “AGCC”). (Tr.
12/2/21 at 96.) Mr. Donohue compared PB&S’ prices with AGCC’s
prices and concluded that there was a significant difference on
an annual basis. (Tr. 12/2/21 at 103.) Mr. Donohue concluded
that AGCC charged about half of what PB&S charged for glass for
the votive candles. (Tr. 12/2/21 at 103-04, 111, 153.)
Based on this analysis, Mr. Donohue concluded that PB&S’
prices were higher than AGCC’s prices and that the Cathedral
would save money by switching companies. (Tr. 12/2/21 at 104.)
Mr. Donohue informed Monsignor Ritchie who, in turn, made the
final decision. (Tr. 12/2/21 at 104, 106.) The Cathedral decided
10
to stop buying votive candles and other products from PB&S. (Tr.
12/2/21 at 104.) The Cathedral started buying candles and glass
for the votive candles from AGCC. (Tr. 12/2/21 at 111.) Mr.
Donohue informed Sean Baker of the Cathedral’s decision. (Tr.
12/2/21 at 106.) Mr. Donohue told Sean Baker that Monsignor
Ritchie made the decision and it was based on price. (Tr.
12/1/21 at 12; Tr. 12/2/21 at 106.)
When Mr. Donohue began his cost-cutting measures, St.
Patrick’s Cathedral had eight to ten vendors. (Tr. 12/2/21 at
88, 138.) However, only one vendor -- the plumbing company –
survived the cost-cutting measures. (Tr. 12/2/21 at 145.)
Monsignor Ritchie was the final decision-maker for all the costcutting measures. (Tr. 12/2/21 at 107.)
Although none of the witnesses could provide an exact date
as to when St. Patrick’s Cathedral stopped doing business with
PB&S, Sean Baker testified that it was about three to four
months prior to February of 2011, which would be around October
or November of 2010. (Tr. 12/1/21 at 12-13.)
St. Killian Learns of the Cathedral’s Decision to Stop Doing
Business with PB&S
St. Killian learned of the Cathedral’s decision to stop
doing business with PB&S in late 2010, when Mr. Donohue informed
St. Killian of the Cathedral’s decision. (Tr. 12/3/21 PM at 78.) Although Mr. Donohue gave St. Killian an explanation for the
11
decision, the explanation did not dissuade St. Killian from
moving forward with the plan to make PB&S St. Killian’s
exclusive distributor for New England. (Tr. 12/3/21 PM at 9.) As
the contemporaneous correspondence shows, St. Killian and PB&S
continued discussing a business arrangement even after St.
Patrick’s Cathedral stopped doing business with PB&S. (Tr.
12/3/21 at 9.)
PB&S continues to work with St. Killian and discuss potential
contract terms; St. Killian also tries to help PB&S get back
into St. Patrick’s Cathedral
On February 8, 2011, Sean Baker e-mailed Michael Baker and
told him that “St. Killians continues to move forward with
negotiations at St. Patrick[’]s Cathedral. . . This will be
Bakers key to getting back doing business at St. Patrick’s even
if it is built in commission for every candle burned at St.
Patrick’s. . . .” (Exh. Q) By the date of the e-mail, PB&S was
no longer involved with the project at St. Patrick’s Cathedral.
(Tr. 12/1/21 at 13.)
On March 4, 2011, Sean Baker sent another e-mail to Michael
Baker advising him that a meeting with St. Killian on March 3,
2011 “went very well.” (Exh. R.) After noting that St. Patrick’s
Cathedral had three candle racks and was planning on getting
five more racks in the summer, Sean Baker’s e-mail purported to
summarize the most important points that were discussed during
12
the meeting with the representatives from St. Killian.
The
first point was summarized as follows:
#1 Baker has exclusive distribution rights for all of
New England. Connecticut and Massachusetts would be our
most concentrated area while we can determine who can be
a dealer in Maine, NH and Vermont, if we want to name a
dealer at all. This term has been agreed to and will be
put in writing.
(Id.)
After mentioning two other items, Sean Baker’s e-mail ended
by saying “[t]hings are moving very quickly for this young
company but we all agree to try and not make hasty decisions and
to get this done correctly.
more. . . .”
I will keep you informed as I know
(Id.)(emphasis added.)
On July 26, 2011, Michael Barrett e-mailed Sean and Michael
Baker and stated
I would like to follow up on our most recent conversation
with regards to the working relationship that both our
companies are about to undertake. As I have confirmed
with you on the phone we are in the process of having
U.S. lawyers who are from Boston draw up the contract
for both of our companies. We are exploring all of what
we have discussed with both Michael Baker and Sean Baker
at our latest meeting in New York with our lawyers to
draw up what will be practical and fit for purpose with
regard for U.S. law and in conjunction with Irish law.
(Exh. U.)
On October 28, 2011, Mr. Barrett and Mr. Murphy met with
Sean and Michael Baker.
After the meeting ended, Sean and
Michael Baker wrote a memo summarizing the discussions. (Exh.
W.)
Regarding St. Patrick’s Cathedral, the memo stated
13
It is becoming quite clear as time goes by how much
[PB&S] has been financially hurt by the loss of the St.
Patrick’s Cathedral Candle [account]. It is going to be
vitally important for [PB&S] to in someway be a part of
the long-term financial consideration with regards to
St. Patrick’s.
The question remains, how can [PB&S]
regain any type of lost revenue to lessen or eliminate
lost revenue at St. Patrick’s.
2 options to consider
A. Once again establish a working relationship to be the
primary dealer. Stock, deliver, invoice, service racks.
B. Be a servicing agent that delivers candles and keeps
racks in top shape but does not invoice, negotiate price.
We would be on call for all needs in regards to the St.
Killian product at St. Patrick’s Cathedral. For this
service we would receive a commission that will be
determined later.
(Exh. W at 1.)
Regarding PB&S’ role as St. Killian’s dealer in the United
States, the memo stated
It was initially discussed that [PB&S] would help St.
Killian’s attract and market the product to other
dealers in the U.S. market. Dealers who would have had
a long standing and trusting relationship for decades.
For these efforts it was discussed that [PB&S] would
receive ½ cent per candle for candles sold by dealers.
If this is not to be the case why not and what would be
considered a fair and attractive alternative plan?
Suggested alternative plan
*[PB&S] receives vastly lower pricing than the rest of
the U.S. market.
*[PB&S] receives ½-1 cent on all dealers candle sales in
the New England and Tristate area as well as Maroney’s
and all original group members. The dealers would be.
[list of 19 dealers omitted]
14
In conclusion, [PB&S] is very proud of what we have done
to help St. Killian Candle company achieve in just this
short amount of time.
We are extremely motivated to
convert as many Cathedrals, Churches, Chapels as we move
forward in partnership with St. Killians and all the
other dealers in the U.S. We feel that the consideration
of this compensation package would only enhance the
motivation and excitement. Thank you for your careful
consideration. Thank you.
Kindest regards,
Sean Baker
Michael Baker
(Exh. W.)
At some point, St. Patrick’s Cathedral stopped buying
traditional candles from AGCC and switched to the St. Killian
candle racks.1 (Tr. 12/2/21 at 114-16) St. Patrick’s Cathedral
became a “factory direct house account” for St. Killian, meaning
the account belonged to St. Killian, not PB&S. (Tr. 11/30/21 at
96.)
On November 11, 2011, Sean Baker sent an e-mail to Mr.
Donohue, stating
Just want to drop a line about how nice the Cathedral
looks with the new Votive stands in place. Sincere
congratulations on taking a concept we spoke about 2
years ago and getting it pushed over the finish line. .
Mr. Donohue was hesitant to switch from AGCC to St. Killian because
they would need to redesign the whole system to match the Cathedral
and he was worried about how the regular visitors might respond to the
change. (Tr. 12/2/21 at 116-17.) Additionally, the owners of Cathedral
Candle visited Mr. Donohue and tried to get the business. (Tr. 12/2/21
at 117-19.) Since Cathedral Candle was an American company, and Mr.
Donohue did not know the owners of St. Killian, he gave Cathedral
Candle 60 days to make a proposal, but he ultimately declined it. (Tr.
12/2/21 at 118-19.) Mr. Donohue’s testimony establishes that, when St.
Patrick’s Cathedral stopped doing business with PB&S, the Cathedral
did not switch to St. Killian and St. Killian was never a shoo-in.
1
15
. . I understand that the votive account is a factory
direct house account between you and St. Killian’s which
I think is the best way to work that. I hope that you
and [Monsignor] Ritchie could reconsider doing some
business with me in the future.
I can guarantee you
both the very best prices and service moving forward.
Thank you and all the best.
(Exh. X)(emphasis added.) Mr. Donohue’s reaction to Sean Baker’s
e-mail was that the e-mail illustrated why the Cathedral stopped
doing business with PB&S. (Tr. 12/2/21 at 116.) As Mr. Donohue
noted, the e-mail said moving forward I will give you the best
prices, as opposed to saying I always tried to give you the best
prices. (Tr. 12/2/21 at 116.) Mr. Donohue never responded to
Sean Baker’s e-mail. (Tr. 12/2/21 at 115-16.)
St. Killian and PB&S Enter into a Written Agreement
On January 28, 2012, Sean and Michael Baker visited Mr.
Barrett and Mr. Murphy in Ireland, and the parties entered into
a written agreement. (Exh. A.)
The agreement was signed by all
four individuals. (Id.)
The agreement provides that PB&S will be the exclusive
distributor for St. Killian within New England.2 (Id.) Mr.
Barrett testified that St. Killian has never given exclusive
distribution or dealership rights to anyone but made an
exception for PB&S. (Tr. 12/3/21 PM at 14 and 73.)
As an
The parties have stipulated that New England includes six states:
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and
Vermont. (Dkt. #177 at 17.)
2
16
exclusive distributor, PB&S would have no competition from St.
Killian within New England. (Tr. 12/3/21 PM at 72.) PB&S would
also receive a special price of 8.5 Euro cent for each St.
Killian candle. (Exh. A, p. 1 at ¶3; Tr. 12/3/21 PM at 15.) Mr.
Barrett testified that this special price was something St.
Killian had not afforded to any other dealer in the United
States. (Tr. 12/3/21 at 15.)
The written agreement requires PB&S to achieve 250 candle
racks in churches within New England by the end of 2012. (Exh.
A.)
Mr. Barrett testified that St. Killian made PB&S the
exclusive distributor in New England, “in return for [PB&S]
achieving an amount of sales for both PB&S and customers.” (Tr.
12/3/21 PM at 15-16.) Mr. Barrett explained that since New
England is a large area, he asked Michael and Sean Baker “to
come up with a really realistic figure as to what they thought
they could achieve to sell in that area in 2012 and the ways
they might achieve it.” (Tr. 12/3/21 PM at 16.) Michael and Sean
Baker asked if they could appoint their own dealers in New
England to help them meet the requirement, and St. Killian said
yes. (Tr. 12/3/21 PM at 15-16.)
Therefore, the agreement
specifically provides that PB&S could appoint dealers within New
England. (Exh. A.)
The written agreement provides that, outside of New
England, PB&S would serve as a representative of St. Killian.
17
(Id.) PB&S agreed to target the top cathedrals and shrines
throughout the United States. (Id.) St. Killian would arrange a
mailing, which would include a full color brochure and DVD, as
well as a cover letter to all churches and cathedrals provided
by PB&S. (Id.) St. Killian would then forward all active leads
generated through this campaign to PB&S. (Id.)
PB&S would then
be responsible for actively pursuing and ultimately closing
those leads. (Id.)
PB&S would receive all profits over 13.5
U.S. cents per candle with the understanding that the price per
candle should not exceed 23 U.S. cents per candle. (Id.)
As
noted in the agreement, “[t]his is a 9.5 cent profit per candle
to [PB&S] for all sales outside of New England.”
(Id.)
At the end of the agreement, there is a handwritten note
which states “[n]ew agreement on .1 per candle for St. Patrick’s
Cathedral will follow.”
(Id.) Michael Baker inserted the note
before anyone signed the agreement. (Tr. 11/30/21 at 80 and 87.)
At trial, Mr. Baker explained that he inserted the handwritten
note because “there really wasn’t anything on that, you know,
for St. Patrick’s Cathedral.
We were trying to, at least after
losing that account, that you did 350 thousand a year with when
you lost that completely, we were hoping to get just something
out of that deal.” (Tr. 11/30/21 at 80.)
On February 9, 2012, Sean Baker sent an e-mail to Michael
Murphy stating
18
I have a quick question in regards to the points we all
agreed upon during our visit. One of the agreements is
that [PB&S] will receive 1 cent per candle for St.
Patrick’s Cathedral. This will continue until we are
really running smoothly with the rest of the country.
The questions we have are #1 when would these payments
be distributed, Monthly/ Quarterly/ twice a year?
Whatever works best for St. Killian’s end is agreeable.
The other option would be to credit the commissions
toward product that is on order.
This is really the
only agreement that we left open before we left,
everything else is very clear. Thanks for your help.
(Ex. CC.)
On February 15, 2012, Michael Murphy responded by stating
As discussed, you will initially receive USD $0.01 (1
U.S. cent) for every candle sold to St. Patrick’s
Cathedral in recompense for your help with the St.
Patrick’s Cathedral account and in particular for
collecting and recycling their waste wax. We would
suggest that we will calculate the commission quarterly
and offset the amount due against amounts owing by you
on your account at that time.
(Exh. EE.)
On February 15, 2012, Sean Baker replied to Mr. Murphy’s email, but said nothing about Mr. Murphy’s statement that the
payment of one cent per candle would be tied to the collection
of the waste wax at St. Patrick’s Cathedral. (Exh. FF.)
On February 25, 2012, Mr. Murphy sent another e-mail to
Sean Baker, which was copied to Michael Baker. (Exh. HH.)
subject line of the e-mail was “waste wax.” (Id.)
The
The e-mail
stated, in relevant part
It is great news in regards to the waste wax Sean in
reply to your question of the wax from St. Patrick’s
Kevin was to organise [sic] the large bin bags for the
19
bins that they use and he was to let us know I will send
him an Email and see if he has this done.
Once he has the bags we are ready to rock and start
getting things moving to have the wax collected every
week.
We don’t have any of the very large bags Sean. Sorry.
(Id.)
On February 26, 2012, Sean Baker replied to the message.
(Exh. II.)
In response to Mr. Murphy’s comments about the
collection of the waste wax, Mr. Baker said “I am still waiting
to hear from the wax salvage companies.
hear from you about St. Patrick’s.
I will also wait to
That’s it for now.
Looking
forward to getting things going.” (Id.) From that point forward,
none of the e-mails that the parties exchanged mentioned any
further need to discuss, clarify, or finalize the “new agreement
on .1 per candle” that was referenced in the handwritten note in
the signed agreement.
PB&S Reorganizes and Forms a New Management Team
Both before and after the parties signed their written
agreement on January 28, 2012, PB&S continued to experience
financial difficulties due to the loss of the St. Patrick’s
Cathedral account. (Tr. 11/30/21 at 92; Exh. W.) PB&S had
trouble paying invoices in a timely fashion and this continued
throughout the summer and fall of 2012. (Tr. 11/30/21 at 94-97.)
20
On July 28, 2012, Sean Baker e-mailed Mr. Barrett and Mr.
Murphy to inform them that PB&S had recently reorganized. (Exh.
LL.) The e-mail stated that David Threlkeld and his wife Mary
had joined the management team as investors and consultants.3 The
new management team consisted of Sean and Michael Baker, David
and Mary Threlkeld, and Maureen Kelly, who is the sister of Sean
and Michael Baker. (Exh. LL; Tr. 12/2/22 at 18) The e-mail
advised St. Killian that the goal of the reorganization was to
make PB&S run in the most efficient and profitable manner
possible. (Exh. LL.) Sean Baker suggested that the parties
should get together when Mr. Murphy and Mr. Barrett next
traveled to the United States. (Id.)
On September 8, 2012, Sean Baker sent another e-mail to Mr.
Murphy and Mr. Barrett.
(Exh. OO.) The subject line of the e-
mail was “Business plan for [PB&S] / St. Killian” and the e-mail
stated that it was intended only to deal with the business of
PB&S moving forward with St. Killian as exclusive dealer of New
England. (Id.) The e-mail said, moving forward, here is what
needs to be done: “Let’s get the current PBS/ St. Killian
balance to $0. Distribute commissions due to [PB&S] for work/
travel/ etc. for both Atlanta & St. Paul, Minnesota.
If there
David Threlkeld is Sean and Michael Baker’s brother-in-law and is
married to their sister Mary. (Tr. 11/30/21 at 97.) Mr. Threlkeld and
his wife loaned PB&S $500,000 and they acquired an ownership interest.
(Tr. 11/30/21 at 98; Tr. 12/2/21 at 17-18, 20.)
3
21
is a balance left if any will be paid by PB[&]S.” (Id.) Next,
the e-mail stated that the companies should “[s]olidify a plan
for the distribution and payment of racks.” (Id.) The e-mail
then proposed two options for the payment of racks. (Id.) The email further stated that PB&S would need a lot of candles so
“[l]et’s come up with terms that are comfortable with both
businesses.” (Id.) At the end of the e-mail, Sean Baker
explained that he wanted to get things sorted out with PB&S
because he was working with PB&S’ management team and needed to
provide answers. (Id.)
Thereafter, on September 14, 2012, Mr. Murphy sent an email to Sean Baker which stated that he (Murphy) was aware that
Mr. Barrett was speaking to Mr. Baker about Mr. Baker’s e-mail
from September 8 and that the two of them were discussing the
best way for PB&S and St. Killian to move forward. (Exh. RR.)
The e-mail stated
let’s start fresh we have calculated that the
commissions due to [PB&S] is $17,347.00 for the racks
and candles that were delivered and installed in ATLANTA
and MINNESOTA. The current balance that [PB&S] owes to
Killians is $21,125.14 less commissions due of
$17,347.00 leaving a balance of $3,778.14.
This balance Sean of $3,778.14 has to be paid by [PB&S]
to close this invoice so we can move forward with the
next container. I expect this small balance to be paid
immediately so we can proceed and move on.
(Id.)(emphasis added.)
Later that day, Sean Baker responded by stating
22
With regards to PB&S I am now part of a management team
as you know. I have to say it is going well but I no
longer call the shots exclusively. I think from prior
discussions we have had you can appreciate my new
position. David Threlkeld has taken over the accounting
and financial management of the company. He has been
around many businesses and has seen the good, the bad &
the very ugly. I can tell you from all of the dozens of
questions that he has asked that he is very interested
and intrigued by the Killian product and it’s potential.
I have of course along with Mike B. been your strongest
advocate in explaining the finer points and potential
for Killian / PBS in New England.
What I have come to realize with David is that he needs
compete [sic] and precise understanding of business
relationships before he is willing to finance them. This
is why the person to person meeting on your next trip to
the U.S. will be so important. David has asked me the
[sic] nail down the finer points of our agreement so
that we have an outline during our meeting. This way we
can wrap up the agreement details and really get going.
We next meet as a group on Monday morning at which time
I will present what you explained here in this e-mail
with regards to the commissions and our remaining
balance. I think the sooner we have exact figures for
commissions on future racks the better.
(Id)(emphasis added.)
On the same day, September 14, 2012, St. Killian mailed a
letter to PB&S informing PB&S that St. Killian was terminating
the agreement dated January 28, 2012. (Exh. QQ.) The letter
started by saying that “over the past number of months, we have
informed you on numerous occasions by email and the phone on the
position with [PB&S] outstanding balance and non-payment
received to date.” (Id.) The letter ended by immediately
terminating the agreement dated January 28, 2012. (Id.) At the
23
time, PB&S owed St. Killian in excess of $26,000 and St. Killian
owed PB&S $13,000. (Tr. 12/3/21 at 75-76.)
PB&S and St. Killian Continue to Interact with Each Other After
the Date of St. Killian’s Termination Letter
The parties disagree as to what happened after St. Killian
sent the termination letter. PB&S questions the authenticity of
the termination letter and argues that it is a fabrication.
(Dkt. #200, at 10 n. 5.) PB&S claims it never received the
termination letter and was never informed that the agreement had
been terminated. (Tr. 11/30/21 at 95, 111.) Mr. Threlkeld
testified that, after September 14, 2012, PB&S continued to
proceed as though the agreement was still in effect, and St.
Killian never said or did anything to make PB&S think otherwise.
(Tr. 12/2/21 at 39-40.) St. Killian asserts that it mailed the
termination letter and then the parties discussed whether they
would be able to do business with each other. (Dkt. 180 at ¶98.)
Wholly unrelated to the termination letter, PB&S “made a
decision to halt any business with [St. Killian]” in midSeptember of 2012. (Tr. 12/1/21 at 56-57.) Thus, PB&S stopped
moving forward with future orders from St. Killian. (Tr. 12/1/21
at 105-06.) PB&S’ decision was based on a dispute it had with
St. Killian regarding a container that had been shipped months
earlier. (Tr. 12/1/21 at 55-56.) According to PB&S, when it
opened the container, candle racks were missing. (Tr. 12/1/21 at
24
55.) PB&S did not inform St. Killian of the alleged problem
until several months later, when St. Killian was trying to
collect money from PB&S.4 (Tr. 12/3/21 at 34; Exh. LLL.) PB&S
decided that it would stop ordering products from St. Killian
until the discrepancy over the container was resolved. (Tr.
12/1/21 at 55.) PB&S never informed St. Killian of its decision
to halt business with St. Killian. (Tr. 12/1/21 at 107.)
Despite the issues that each party had with the other in
mid-September of 2012, the parties continued discussing how they
could do business together. (Exh. BBB; Tr. 12/2/21 at 37-41.)
In late September or early October of 2012, the parties
agreed to schedule a face-to-face meeting. (Exh. BBB at 4.) PB&S
prepared an agenda for the meeting. (Id.) On October 11, 2012,
Mr. Barrett sent an e-mail to Mr. Threlkeld thanking him for the
proposed agenda and telling him “[w]e are looking forward to the
new opportunity with PBS for New England.” (Id.)(emphasis
added.) Mr. Barrett stated that “there was one other point we
talked about during our phone call, and perhaps you and your
team could give this a little thought, coming with the
According to Mr. Barrett, since PB&S waited several months before
notifying St. Killian of the alleged problem, there was nothing St.
Killian could do about it. (Tr. 12/1/21 at 35.) Mr. Barrett stated
that St. Killian transports several containers each week but had PB&S
provided timely notice of the situation, St. Killian could have
investigated the situation and submitted a claim to its insurance
company but, by the time PB&S informed St. Killian of the problem, it
was too late to do anything. (Tr. 12/1/21 at 35.)
4
25
exclusivity for all of New England is the expectation of a
minimum quantity of sales for that area.” (Id.)
On October 19, 2012, Mr. Threlkeld sent an e-mail to Mr.
Barrett telling him “[w]e have to tie up the loose ends so that
the parties understand what they can expect from each other
rather than attempt to operate on a vague best efforts basis
which is the proverbial moving target.” (Id. at 2)(emphasis
added.) Mr. Threlkeld ended his e-mail by stating “[r]est
assured that its PBS objective to make business relationships
work and that is the goal we are working on with Killian.” (Id.
at 2.)
On October 21, 2012, in reference to a container that
needed to be shipped and paid for, Mr. Barrett sent an e-mail to
Mr. Threlkeld proposing an arrangement for splitting the cost.
Mr. Barrett told Mr. Threlkeld that “until we can come to an
agreement on the future of St. Killian and PBS, this is our
suggestion for this container only.” (Id. at 1)(emphasis added.)
On October 22, 2012, Mr. Threlkeld emailed Mr. Barrett and
said “[w]e would like to do a phone conference or even Skype to
go over the various details of the whole relationship and get an
agreement in place which satisfies both parties.” (Exh.
CCC)(emphasis added.)
On October 23, 2012, Mr. Threlkeld e-mailed Mr. Barrett and
told him that PB&S’ management team wanted both companies to get
26
on the same page as quickly as possible but if Mr. Barrett
thought nothing would go amiss before their meeting in November
of 2012, so be it. (Exh. EEE.) Mr. Threlkeld’s e-mail then
stated “[i]n the interim we will rely on the agreement signed in
Dublin during Mike and Sean’s visit in January of this year.”
(Id.)(emphasis added.) At trial, Mr. Threlkeld testified that he
never received a response from St. Killian telling him that the
agreement, dated January 28, 2012, had been terminated so he and
PB&S proceeded as though the agreement was still in effect. (Tr.
12/2/21 at 39-40.)
According to Mr. Barrett, the face-to-face meeting in November
of 2012 did not go well. (Tr. 12/3/21 PM at 32-33.) He claimed
that Mr. Threlkeld was very “aggressive” during the meeting and
by the end of the meeting it was clear that St. Killian could
not work with him. (12/3/21 PM pp. 32-34) Although the witnesses
for PB&S deny receiving the termination letter or notice of the
termination, they did not explain how or when the business
relationship with St. Killian ended.
III. DISCUSSION
A. Breach of Contact
“Because this federal court is sitting in diversity,
Connecticut law governs.” Roh v. Devack, No. 3:07-CV-1901 (CSH),
2009 WL 3347105, at *3 (D. Conn. Oct. 14, 2009).
To prove a
claim for breach of contract under Connecticut law, PB&S must
27
establish: (1) the existence of a contract, (2) a breach of the
contract by the defendant, and (3) damages resulting from the
breach. Chem-Tek, Inc. v. General Motors Corp., 816 F. Supp.
123, 131 (D. Conn. 1993) (citing O'Hara v. State, 218 Conn. 628
(1991).
PB&S argues that there were two contracts in this case: (1)
the written contract dated January 28, 2012, and (2) an implied
contract that was formed prior to January 28, 2012. (Dkt. #200
at 2.)
1. The implied contract that was allegedly formed prior to
January of 2012.
Under established principles of contract law, an
agreement must be definite and certain as to its terms
and requirements.
It is elementary that to create a
contract there must be an unequivocal acceptance of an
offer. The acceptance of the offer must be explicit,
full and unconditional. The burden is on Plaintiff to
prove a meeting of the minds with respect to Plaintiff's
version of the claimed contract. A contract cannot be
enforced
unless
all
essential
terms
have
been
sufficiently agreed upon.
Roh v. Devack, No. 3:07-CV-1901 (CSH), 2009 WL 3347105, at *3
(D. Conn. Oct. 14, 2009)(internal citations and quotations
omitted). “Whether a contract exists is a question of fact for
the court to determine.” Joseph Gen. Contracting, Inc. v. Couto,
119 A.3d 570, 577 (Conn. 2015)(citation omitted).
In Roh v. Devack, No. 3:07-CV-1901 (CSH), 2009 WL 3347105,
at *3 (D. Conn. Oct. 14, 2009), plaintiff Roh was the minority
28
shareholder in a company and defendant Devack was the majority
shareholder.
In 2004, Roh and Devack discussed a potential
buyout. During negotiations, Devack offered to buy Roh’s shares
for $2,000,000 and Roh offered to buy Devack’s shares for
$9,000,000. Roh followed up with an e-mail stating “In the
interest of saving time, if you decide not to take my offer [to
buy your shares for $9 million], I will go ahead and sell my
shares for $2.85 [million], which I believe is a fair
compromise.” Id., 2009 WL 3347105 at *1.
On November 29, 2004,
Devack sent an e-mail stating “I agree to the $2.85 Million. We
will get back to you soon with what terms we can offer.” Id. The
transaction was never completed. Devack claimed that he never
had any further discussions with Roh regarding what terms could
be offered.
Roh argued that an enforceable contract was formed
on November 29, 2004, and that summary judgment should be
granted in his favor. The Honorable Charles S. Haight denied the
motion for partial summary judgment and found that the plain
language of the e-mail militated against Roh’s position. Judge
Haight noted that “[t]he email accepts the price term offered by
[Roh], but clearly contemplates that additional negotiation as
to other terms is still required, and advises [Roh] of such.”
Id., at *3. Judge Haight further noted that
it is not common practice to form contracts for $2.85
million business deals on the basis of two sentence emails stating only the purchase price. “[W]here ‘the
29
memorandum appears [to be] no more than a statement of
some of the essential features of a proposed contract
and not a complete statement of all the essential terms,’
the plaintiff has failed to prove the existence of an
agreement.”
Id. at *3 (citation omitted).
In this case, PB&S argues that the Court can find that the
parties reached an agreement prior to January of 2012.
First,
PB&S argues that the parties had a contractual relationship as
of April of 2010. (Dkt. #200 at 6.) In support of this argument,
PB&S notes that St. Killian told PB&S that it would be “Killians
USA” and would earn commissions on every candle sold and would
benefit from every candle sold. (Id. at 6.) However, Michael
Baker testified that, as of April of 2010, there were only two
interactions with St. Killian: (1) a telephone conversation with
Jim Ryan which lasted five to seven minutes, and (2) an e-mail
from Mr. Barrett which discussed St. Killian’s product and
scheduled a meeting for May of 2010. (Exh. 6.) By April of 2010,
the principals of the two companies had not yet met each other,
and PB&S had not even seen a demonstration of St. Killian’s
product.
The parties had not agreed on any material terms.
In further support of its argument that an agreement was
formed prior to January of 2012, PB&S attempts to rely on
statements in e-mail messages that were sent on May 27, 2010 and
June 5, 2010. In the e-mail from May of 2010, St. Killian stated
that PB&S “will benefit from every candle sold in the North
30
American Market.”5 (Exh. 6). In the e-mail from June of 2010, St.
Killian stated “[w]e want Bakers to be Killians USA and every
candle sold [by] your company should get commission just like
our agent Jim Ryan. . . .” (Exh. 7.) Neither e-mail specifies
the amount of the commission or the benefit that PB&S would
receive from every candle sold. The e-mails are insufficient to
demonstrate the existence of a binding agreement. See Roh, 2009
WL 3347105, at *3 (D. Conn. Oct. 14, 2009).
In further support of the argument that an agreement
existed sometime prior to January of 2012, PB&S relies on an email that Mr. Barrett sent PB&S on July 20, 2010, after the
parties met on July 15, 2010. (Exh. 9.) The e-mail purports to
contain a “general understanding” of what the parties discussed
on July 15, 2010. (Id.)
Mr. Baker described the meeting on July
15 as a “note taking session of kind of hopes.” (Tr. 12/1/21 at
64-65)(emphasis added). Sean Baker testified that the meeting
included a general discussion about structure pricing but
“nothing was set in stone of course.” (Tr. 11/30/21 at 145.)
The e-mail from May of 2010 was sent after the parties had their
first meeting, which is also the first time Michael Baker saw St.
Killians’ product. Mr. Baker testified that, after the meeting, he
told his family members about St. Killian’s product, and they were
“interested in looking at it deeper. And we all agreed that we would.”
(Tr. 11/30/21 at 19) (emphasis added) The fact that PB&S was still
evaluating the product shows that a binding agreement had not yet been
reached.
5
31
Relying on (a) Mr. Barrett’s testimony that he intended to
follow-up on the ten items that were listed in the e-mail, (2)
the fact that PB&S began serving as a dealer for St. Killian
around the same time,6 and (3) an e-mail, from August 16, 2010,
in which Mr. Barrett tells Sean Baker that St. Killian would
prepare draft copies of contracts, PB&S argues that this proves
that the parties were operating under an agreement. (Dkt. #200
at 6.) However, the e-mail from August 16, 2010 states
“Contracts: we will prepare draft copies for us to navigate
through and come up with the best for a long-term business
relationship.” (Exh. 12)(emphasis added). This suggests that
there would be more than one draft contract and the parties
would need to review those drafts to determine which would be
best. The e-mail does not purport to state or summarize any
material terms of an alleged agreement.
Next, PB&S notes that in October of 2010, St. Killian
submitted a report to St. Patrick’s Cathedral, which referred to
PB&S as “authorized dealers.”
(Dkt. #200 at 7; Exh. 3.) Aside
from referring to PB&S as an authorized dealer, the report does
not contain any material terms of an agreement between PB&S and
As discussed later, the parties continued negotiating the ten items
that were mentioned in the e-mail, dated July 20, 2010, for several
more months.
6
32
St. Killian.7 PB&S asserts that if PB&S “was the authorized
dealer for St. Patrick’s Cathedral, that is a contractual
relationship, that carries the obligation of good faith and fair
dealing.” (Dkt. #200 at 7, n.3.) PB&S then argues that “St.
Killian evaded the spirit of that bargain by selling directly to
St. Patrick’s Cathedral for 9 cents less per candle.” (Id.)
There are several problems with this argument.
First, although PB&S asserts that being St. Killian’s
authorized dealer for St. Patrick’s Cathedral was a contractual
relationship, Mr. Barrett testified that St. Killian had twelve
“dealers” and none had contracts. (Tr. 12/3/21 PM at 60, 70-71.)
Given the nature of the dealer relationship, Mr. Barrett
testified that St. Killian did not have contracts with its
dealers. (Tr. 12/3/21 PM at 70-71.) Since PB&S was going to be
St. Killian’s first and only “exclusive distributor,” a contract
was necessary. (Id.) Unlike St. Killian’s other dealers, PB&S
would have the exclusive right to distribute St. Killian’s
products in the six states that make up New England. (Tr.
12/3/21 PM 71-72.) In those six states, PB&S would have no
See Suffield Development Assocs. Ltd Partnership v. Society for
Savings, 708 A.2d 1361, 1366 (Conn. 1998)(quoting Westbrook v. TimesStar Co., 191 A. 91, 94 (Conn. 1937))(“We have also stated that ‘the
memorandum appears [to be] no more than a statement of some of the
essential features of a proposed contract and not a complete statement
of all the essential terms,’ the plaintiff has failed to prove the
existence of an agreement.”).
7
33
competition from St. Killian’s other dealers.8 (Id.)
Although
PB&S argues that the dealer relationship is a contractual
relationship, PB&S has not identified any of the material terms
of the alleged contractual relationship. The evidence shows that
dealers simply purchase candles from St. Killian and then sell
them for a profit.9 (Tr. 12/3/21 PM at 15, 60.)
The documents which refer to PB&S as an authorized dealer
for St. Patrick’s Cathedral were created before the Cathedral
stopped buying products from PB&S. PB&S cites those documents
and relies on the phrase “authorized dealer” to suggest that St.
Killian was only allowed to sell products to St. Patrick’s
Cathedral though PB&S (the authorized dealer for the Cathedral),
even though the Cathedral had terminated its relationship with
PB&S.
Thus, PB&S argues that by selling candles directly to the
Cathedral, St. Killian evaded the spirit of the dealer
agreement. However, St. Killian did not start selling candles
Since PB&S would be operating in New England without competition, the
written agreement imposed a sales quota on PB&S for New England. (Exh.
A; Tr. 12/3/21 PM at 15-16.) No evidence was introduced to suggest
that St. Killian’s other dealers are required to sell or place a
minimum amount of candle racks. Additionally, PB&S was going to
receive a special price that would enable PB&S to earn a higher profit
than St. Killian’s other dealers. The special price was set forth in
the written agreement and there was no evidence that it was agreed to
prior to January of 2012.
8
PB&S’ Post-trial Brief emphasizes that PB&S was selling St. Killian
products by August of 2010. (Dkt. #200 at 6.) However, according to
Mr. Barrett’s credible testimony, St. Killian’s dealers regularly sell
St. Killian’s products and they do so without a contract.
9
34
directly to the Cathedral until several months after the
Cathedral ceased doing business with PB&S. There is no evidence
that PB&S had the option of selling candles directly to the
Cathedral after the Cathedral ended its relationship with PB&S.
PB&S has not presented any evidence that one of the terms
of the alleged dealer agreement required St. Killian to force
St. Patrick’s Cathedral to resume buying candles from PB&S,
despite having terminated its relationship with PB&S. PB&S did
not introduce any evidence to support the notion that if a
customer terminated its relationship with one of St. Killian’s
authorized dealers, the alleged “dealer agreement” prohibited
St. Killian from servicing the customer itself.10
The argument that St. Killian evaded the spirit of the
agreement by selling candles directly to the Cathedral is
further undermined by a memo that PB&S sent to St. Killian on
October 28, 2011.
The memo, which was created before the
parties signed the written agreement, proposed options to help
reduce the financial harm that PB&S was experiencing due to the
loss of the Cathedral’s account. One option was for PB&S to be
a servicing agent that delivers candles and keeps racks
in top shape but does not invoice, negotiate price.
[PB&S] would be on call for all needs in regards [sic]
to the St. Killian product at St. Patrick’s Cathedral.
After St. Patrick’s Cathedral stopped buying products from PB&S, the
Cathedral did not start buying those products from St. Killian. The Cathedral
switched to AGCC and then, months later, switched from AGCC to St. Killian.
PB&S never acknowledges this fact but also never disputes it.
10
35
For this service [PB&S] would receive a commission that
will be determined.
(Exh. W)(Emphasis added.) In other words, under PB&S’ proposal,
St. Killian would sell products directly to the Cathedral and
PB&S would be on-call to service the account for St. Killian and
receive a commission. This is precisely the type of arrangement
St. Killian ended up giving PB&S (See infra Note 12.)
The memo, dated October 28, 2011, also undermines PB&S’
argument that an agreement was reached prior to January 28,
2012. The memo demonstrates that, as of October 28, 2011, the
parties were still discussing and negotiating some of the items
that were mentioned in the e-mail dated July 20, 2010. In the
memo, Sean and Michael Baker wrote
It was initially discussed that [PB&S] would help St.
Killian’s attract and market the product to other
dealers in the U.S. market. Dealers who would have had
a long standing and trusting relationship for decades.
For these efforts it was discussed that [PB&S] would
receive ½ cent per candle for candles sold by dealers.
If this is not to be the case why not and what would be
considered a fair and attractive alternative plan?
(Exh. W)(emphasis added.) As an alternative plan, Sean and
Michael Baker proposed that “PB&S receive vastly lower pricing
than the rest of the U.S. market” and that “PB&S receives ½ - 1
cent on all dealers candle sales in the New England and Tristate
area as well as Maroney’s and all original group members.” (Id.)
The memo ended by stating that “we feel that the consideration
36
of this compensation package would only enhance the motivation
and excitement.
Thank you for your consideration.” (Id.) As the
e-mail and Sean Baker’s testimony confirmed, the parties were
still discussing material terms as of October 28, 2011. (Tr.
12/1/21 at 81.)
The agreement, dated January 28, 2012, provided at least
two important benefits for PB&S: (1) an exclusive territory in
which PB&S would have no competition from St. Killian’s other
dealers, and (2) a special price that would enable PB&S to earn
a higher profit than St. Killian’s other dealers. (Tr. 12/3/21
at 15-16.)
PB&S has not offered any evidence to show that,
prior to January 28, 2012, the parties had agreed on (1) the
number of candles PB&S would need to place in churches in New
England, in exchange for having New England as an exclusive
territory, or (2) PB&S’ special price.
PB&S has failed to establish the existence of an agreement
prior to January 28, 2012.
2. The express agreement dated January 28, 2012
The intent of the parties as expressed in a contract “is
determined from the language used interpreted in the
light of the situation of the parties and the
circumstances connected with the transaction.... [T]he
intent of the parties is to be ascertained by a fair
and reasonable construction of the written words and ...
the language used must be accorded its common, natural,
and ordinary meaning and usage where it can be sensibly
applied to the subject matter of the contract.... Where
the language of the contract is clear and unambiguous,
the contract is to be given effect according to its
37
terms. A court will not torture words to import ambiguity
where the ordinary meaning leaves no room for
ambiguity.... Similarly, any ambiguity in a contract
must emanate from the language used in the contract
rather than from one party's subjective perception of
the terms.”
Connecticut Light & Power Co. v. Lighthouse Landings, Inc., 900
A.2d 1242, 1253 (Conn. 2006)(citation omitted); see also Penske
Truck Leasing Co., L.P. v. Safeco Ins. Co. of Illinois, 457 F.
Supp. 3d 148, 151 (D. Conn. 2020).
The parties agree that there is a written agreement dated
January 28, 2012.
However, the parties disagree on some of the
terms. During trial, witnesses for both parties testified about
the negotiations that led up to the agreement and the meaning of
the final terms.11
However, except for the handwritten note at
the bottom of the written agreement, the Court finds that the
language of the agreement is clear and unambiguous.
11
PB&S objected to Mr. Barrett’s testimony about the meaning of
certain terms in the agreement. As noted during the trial, witnesses
for both parties provided such testimony. “[P]arol evidence is
admissible (1) to explain an ambiguity appearing in the instrument;
(2) to prove a collateral, oral agreement that does not vary the terms
of the writing; (3) to add a missing term in a writing that indicates
on its face that it does not set forth the complete agreement; and (4)
to show mistake or fraud.” Chapco, Inc. v. Hot Tub Prod., LLC, No.
MMXCV166016697S, 2017 WL 5178594, at *5 (Conn. Super. Ct. Sept. 28,
2017). Since (1), (2), and (3) arguably applied, the Court allowed
each party to testify about the meaning of certain terms.
38
a. The Provision Requiring the Collection of Waste Wax
In its post-trial brief, PB&S argues that the collection of
waste wax from St. Patrick’s Cathedral was never part of the
agreement. PB&S argues that the handwritten note that Michael
Baker inserted at the end of the agreement states the actual
agreement regarding the payment of one cent per candle. PB&S
argues that the “January Agreement granted [PB&S] exclusivity in
New England and a one cent commission on every candle sold to
St. Patrick’s Cathedral, among other things.
The January
Agreement did not require [PB&S] to be a garbage collector for
waste wax, as St. Killian contends.”
(Dkt. #200 at 8.)
However, Michael Baker’s handwritten note does not purport
to be the agreement. The note states that a “[n]ew agreement on
.1 per candle for St. Patrick’s Cathedral will follow.” (Exh.
A)(emphasis added.) This plainly shows that the parties reached
an agreement to agree, and the new agreement would soon follow.
At trial, Michael Baker testified that before he added the
handwritten note, the parties had discussed the idea of PB&S
collecting waste wax from the Cathedral, but it did not make
business sense. (Tr. 11/30/21 at 81.)
However, none of the
correspondence indicates that PB&S ever told St. Killian that
PB&S was unwilling to collect the waste wax. Indeed, the
correspondence shows otherwise.
39
In February of 2012, Mr. Barrett sent an e-mail to PB&S
clearly stating that PB&S would “initially receive USD $0.01 (1
U.S. cent) for every candle sold to St. Patrick’s Cathedral in
recompense for your help with the St. Patrick’s Cathedral
account and in particular for collecting and recycling their
waste wax.” (Exh. EE)(emphasis added).12 There is no evidence
that anyone at PB&S ever disagreed with or tried to correct Mr.
Barrett’s articulation of the agreement. (Tr. 12/1/21 at 73.)
Ten days after Mr. Barrett told Michael and Sean Baker that
the payment of one cent per candle required PB&S to collect the
waste wax from St. Patrick’s Cathedral, Mr. Barrett sent an email to Sean and Michael Baker which discussed the logistics of
collecting the waste wax from the Cathedral. (Exh. HH.) The email informed them that Mr. Donohue was going to organize the
large bin bags and once that happened, “we are ready to start
getting things moving to have the wax collected every week.”
Approximately five months earlier, in October 2011, Sean and Michael
Baker prepared a summary of a conversation with Mr. Murphy and Mr.
Barrett. (Exh. W.) One option that PB&S proposed to help reduce the
loss that PB&S was experiencing due to the loss of the Cathedral’s
account was for PB&S to “be on call for all needs in regards to the
St. Killian product at St. Patrick’s Cathedral. For this [PB&S] would
receive a commission that will be determined later.” (Exh. W at
1)(emphasis added.) The agreement described in Mr. Barrett’s email
from February 15, 2012, seems to fall within those parameters (i.e.,
in exchange for being on call to collect the waste wax from St.
Patrick’s Cathedral, PB&S would receive a commission.)
12
40
(Id.)13 Sean Baker replied “I am still waiting to hear from the
wax salvage companies. I will also wait to hear from you about
St. Patrick’s.”
(Exh. II.)
After Mr. Barrett stated the terms of the “one cent per
candle” agreement, none of the subsequent e-mails suggest that
PB&S disagreed with his statement. PB&S never said that the
payment of one cent per candle was not supposed to be tied to
the collection of waste wax.14
After Mr. Barrett stated the
terms of the agreement, none of the subsequent e-mails mention
any further need to clarify or finalize the “new agreement” that
was mentioned in the handwritten note in the agreement.
Mr. Barrett testified that St. Killian needed someone to collect the
waste wax from the Cathedral and it seemed like a good way for Sean or
Michael Baker to be present at the Cathedral and start rebuilding
their relationship with the Cathedral. (Tr. 12/3/21 PM at 22.) PB&S
would pick up the waste wax, keep it, and sell it to a recycling
company. (Id.) Mr. Barrett testified that waste wax is worth about 500
Euros per ton in Europe, plus PB&S would receive the additional
compensation of one cent per candle from St. Killian. (Id.)
13
At trial, Sean Baker explained that he did not respond to Mr.
Barrett’s statement that the payment of one cent per candle was tied
to the collection of the waste wax “[b]ecause it was never agreed
upon.” (Tr. 12/1/21 at 30.) This explanation makes no sense. Mr.
Barrett’s e-mail allegedly misstated the terms of the agreement in a
material way, but Sean Baker made no attempt to correct the mistake.
Shortly thereafter, when Mr. Barrett sent another e-mail discussing
the logistics for collecting the waste wax, Mr. Baker, again, made no
attempt to correct the alleged mistake. Instead, he told Mr. Barrett
that he was still waiting to hear from wax salvage companies. (Exh.
II.) Sean Baker later testified that when he told Mr. Barrett that he
was waiting to hear from wax salvage companies, PB&S was, in fact,
planning on collecting the waste wax. (Tr. 12/1/21 at 74.)
14
41
It is undisputed that PB&S never collected the waste wax at
St. Patrick’s Cathedral. (Tr. 11/30/21 at 91; 12/2/21 at 120-21;
Tr. 12/3/21 PM at 23.) Thus, to the extent that the commission
structure of the written agreement required PB&S to collect the
waste wax to earn the payment of one cent per candle, the Court
finds that St. Killian did not breach the agreement by failing
to pay such compensation.
b. The Termination of the Agreement
St. Killian asserts that, on September 14, 2012, it sent a
letter terminating the agreement due to (1) the amount of money
that PB&S owed St. Killian and (2) PB&S’ failure to place the
required 250 candle racks in churches in New England. Mr.
Barrett testified that the letter terminated the agreement dated
January 28, 2012, but that PB&S could remain a non-exclusive
dealer for St. Killian. (12/3/21 PM at 74.)
PB&S asserts that it never received the termination letter
and was never informed that the agreement had been terminated.
Therefore, PB&S argues that the “termination letter is a
fiction, and its fabrication is merely further evidence of bad
faith.” (Dkt. #200 at 10 n. 5.) PB&S argues that if the letter
is valid, it proves that St. Killian breached the agreement
because the requirement of placing 250 candle racks was for the
year 2012 and St. Killian terminated the agreement with 3 ½
42
months left in 2012, thereby depriving PB&S of the opportunity
to meet the requirement. (Dkt. #200 at 9.)
In response, Mr. Barrett testified that the agreement
required PB&S to place 250 racks in churches in New England, not
just sell 250 racks. (Tr. 12/3/21 PM at 16-17, 66; Exh. A.) Mr.
Barrett testified that, even though there were 3 ½ months left
in 2012, there was no sign that PB&S had enough orders to get
anywhere close to 250 racks.15 (Tr. 12/3/21 PM at 16-17, 66.)
Even after the trial and the filing of the post-trial
briefs, numerous questions remain unanswered regarding the
termination of the agreement. PB&S claims it never learned of
the termination and continued operating as though the agreement
was still in effect. In fact, Mr. Threlkeld testified that PB&S
thought it was still operating under the agreement on October
23, 2012, which is more than one month after the date of the
termination letter. (Tr. 12/2/21 at 39-40.) Notably, PB&S never
explains how or when it learned that the agreement had been
terminated. Thus, it is unclear how the termination letter
adversely affected PB&S’ ability to meet the requirement of
15It
is undisputed that, as of September of 2012, PB&S had not placed
250 candle racks in New England churches and had not appointed any
dealers in New England to help achieve the requirement. (Tr. 11/30/21
at 99 and 107; Tr. 12/1/21 at 66; Tr. 12/3/21 PM at 15-16.) However,
the evidence shows that in mid-September of 2012, unrelated to the
termination letter, PB&S halted business with St. Killian and stopped
processing orders. No evidence was introduced to show that PB&S
resumed processing orders before the end of 2012, or at any time.
43
placing 250 candle racks in churches by the end of 2012.16 If
PB&S thought the contract was still in effect and St. Killian
did not say or do anything to make PB&S think otherwise, it is
unclear what prevented PB&S from continuing to sell St. Killian
products and meet the requirement of placing 250 candle racks.
Some of St. Killian’s arguments raise questions too. St.
Killian claims it terminated the agreement on September 14,
2012. However, as noted earlier, Mr. Threlkeld sent an e-mail on
October 23, 2012, advising Mr. Barrett that he would like both
companies to get on the same page as quickly as possible but “in
the interim we will rely on the agreement signed in Dublin
during Mike and Sean’s visit in January of this year.”
(Exh.
EEE.) Mr. Barrett did not respond to the e-mail by telling Mr.
Threlkeld that the agreement supposedly had been terminated.
Several of the e-mails that post-date the termination
letter create the impression that the written agreement had been
terminated. For instance, on October 11, 2012, Mr. Barrett emailed Mr. Threlkeld and told him that St. Killian was looking
forward to the “new opportunity” with PB&S for New England.
(Exh. BBB at 4.) Mr. Barrett’s e-mail added that one of the
According to an e-mail that Sean Baker sent in September of 2012,
PB&S had only sold 90 candle racks by September 8, 2012. (Exh. QQ)(“We
currently have 76 actively burning racks with 14 pre-sold and dozens
of strong leads for new placements.”) Thus, PB&S had only achieved
about 36% of the annual goal with one quarter of the year remaining.
16
44
topics they discussed was that the exclusivity for New England
carries the expectation of a minimum quantity of sales for New
England, so perhaps Mr. Threlkeld and his team could give that
some thought. (Id.) However, if the agreement from January of
2012 was supposedly still in effect, a quota for the exclusive
territory of New England already existed (i.e., PB&S had to
achieve 250 candle racks). (Exh. A.) Additionally, Mr. Threlkeld
sent an e-mail on October 19, 2022, which told Mr. Barrett “[w]e
have to tie up the loose ends so that the parties understand
what they can expect from each other rather than attempt to
operate on a vague best efforts basis which is the proverbial
moving target.” (Exh. BBB at 4.) This seems like an odd comment
if the agreement from January of 2012, was still in effect.
Finally, Mr. Threlkeld’s e-mail from October 23, 2012, tells Mr.
Barrett that in the interim, the parties should continue to rely
on the agreement that was signed in January of 2012. (Exh. EEE.)
If the agreement was still in effect, it would be unnecessary to
state that the parties should rely on it. And why would they
only rely on it in the interim?17
Mr. Threlkeld addressed one potentially problematic e-mail during
his direct exam. On October 19, 2022, Mr. Threlkeld stated that he had
questions about the proposed contract that Mr. Barrett and Sean Baker
were discussing. (Exh. AAA.) When asked why he would make such a
comment if the agreement from January of 2012 was still in effect, Mr.
Threlkeld testified that his comment about the contract referred to a
particular shipment delivery. (Tr. 12/2/21 at 36.) However, Mr.
Threlkeld did not explain the other e-mails, including the e-mail that
discussed the sales quota for the exclusive territory of New England.
17
45
The Court need not address whether the alleged mailing of
the termination letter breached the agreement or the covenant of
good faith and fair dealing because PB&S has not shown that the
letter had any effect. PB&S claims it never received actual or
constructive notice that the agreement had been terminated. (Tr.
11/30/21 at 95, 111.) Thus, PB&S has not shown what, if
anything, changed due to the termination letter. PB&S has never
asserted that (1) at some point in 2012, St. Killian told PB&S
to stop selling St. Killian’s products in New England or
anywhere else; or (2) that St. Killian allowed another one of
its dealers to service PB&S’ exclusive territory of New England
in 2012; or (3) that PB&S sold products in 2012 but then St.
Killian refused to honor PB&S’ special price. PB&S has never
indicated how it was allegedly harmed by relying on the belief
that the agreement was still in effect after September of 2012.
The fact that PB&S’ new management team decided to stop
processing future orders from St. Killian, in mid-September of
2012, further complicates PB&S’ claim. According to Sean Baker,
this decision was unrelated to the termination letter that PB&S
claims it never received. (Tr. 12/1/21 at 55-57.) PB&S decided
to halt business with St. Killian until the dispute over the
container was resolved. (Tr. 12/1/21 at 106.) However, PB&S
never asserted that the dispute over the container was ever
46
resolved. PB&S also never offered evidence that it resumed doing
business with St. Killian. Under the agreement, PB&S was St.
Killian’s exclusive distributor for New England, and in return,
PB&S was required to place 250 candle racks in churches in New
England. It is unclear why PB&S’ decision to stop processing
orders for St. Killian would not violate PB&S’ obligations under
the agreement.
However, the Court need not address that issue.
B. Breach of the covenant of good faith and fair dealing
Under Connecticut law,
it is axiomatic that the ... duty of good faith and fair
dealing is a covenant implied into a contract or a
contractual relationship. In other words, every contract
carries an implied duty requiring that neither party do
anything that will injure the right of the other to
receive the benefits of the agreement. The covenant of
good faith and fair dealing presupposes that the terms
and purpose of the contract are agreed upon by the
parties and that what is in dispute is a party's
discretionary application or interpretation of a
contract term.
De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 849 A.2d
382, 387-88 (Conn. 2004)(internal quotation and citations
omitted).
To establish a breach of the covenant of good faith and
fair dealing, PB&S must prove three elements: (1) PB&S and St.
Killian were parties to an agreement under which PB&S reasonably
expected to receive certain benefits; (2) St. Killian engaged in
conduct that injured PB&S’ right to receive some or all of the
benefits of the agreement; and (3) St. Killian was acting in bad
47
faith when it committed the acts by which it injured PB&S' right
to receive the benefits that PB&S reasonably expected to receive
under the agreement. Franco v. Yale Univ., 238 F. Supp. 2d 449,
455 (D. Conn. 2002), aff'd, 80 F. App'x 707 (2d Cir. 2003).
“Bad faith in general implies both actual or constructive
fraud, or a design to mislead or deceive another, or a neglect
or refusal to fulfill some duty or some contractual obligation,
not prompted by an honest mistake as to one's rights or duties,
but by some interested or sinister motive.... Bad faith means
more than mere negligence; it involves a dishonest purpose.”
De
La Concha of Hartford, Inc., 849 A.2d at 388 (citation omitted).
PB&S argues that St. Killian acted in bad faith by making
false promises from the outset for the purpose of landing St.
Patrick’s Cathedral as an account and then, after landing the
account, St. Killian convinced the Cathedral to stop doing
business with PB&S. (Dkt. #200 at 3.) PB&S argues that even if
the Court finds that St. Killian did not convince St. Patrick’s
Cathedral to stop doing business with PB&S, St. Killian evaded
the spirit of the agreement with PB&S by stepping into PB&S’
shoes and acting as the authorized dealer for St. Patrick’s
Cathedral. (Dkt. #200 at 3.)
PB&S argues that the bad faith
motive was money. (Dkt. #200 at 3.)
48
1. The termination of the relationship between PB&S and
St. Patrick’s Cathedral
The Court will start by addressing the argument that St.
Killian convinced the Cathedral to stop doing business with
PB&S. The evidence does not support the allegation.
At trial, Mr. Donohue provided detailed testimony about the
efforts he took to help reduce costs for St. Patrick’s Cathedral
in anticipation of the $200,000,000 renovation project. There is
no evidence that Mr. Donohue was motivated by anything other
than a desire to reduce costs when he recommended that the
Cathedral stop buying products from PB&S. More importantly,
there is no evidence that St. Killian asked Mr. Donohue to make
the recommendation. Mr. Donohue credibly testified that St.
Killian played no role in the Cathedral’s decision to stop
buying products from PB&S.18 (Tr. 12/2/21 at 126-27.)
Mr. Donohue testified that he concluded that AGCC’s prices
were significantly lower than PB&S’ prices. Therefore, he
recommended switching from PB&S to AGCC. Exhibit 29 partially
corroborates Mr. Donohue’s testimony. Exhibit 29 is an e-mail
that Mr. Donohue sent to the Cathedral’s building manager on
Additionally, the timeline contradicts PB&S’ theory that after
landing St. Patrick’s Cathedral as an account, St. Killian convinced
the Cathedral to terminate its relationship with PB&S. As noted,
immediately after the Cathedral stopped buying candles and glass from
PB&S, it started buying them from AGCC, not St. Killian. St, Killian
did not land the Cathedral’s account until months later, when the
Cathedral stopped buying from AGCC and switched to St. Killian.
18
49
October 14, 2010. The e-mail instructs the building manager to
look for a new glass company to keep PB&S on its toes.19 (Exh.
29.) The timing of the e-mail coincides with the date that the
Cathedral stopped buying candles and glass from PB&S (i.e.,
October or November of 2010). (Tr. 12/1/21 at 12-13.)
PB&S argues that Mr. Donohue’s assertion that the decision
to stop buying products from PB&S was a cost-based decision is
not credible because the money that the Cathedral saved by
becoming a “factory direct” account of St. Killian was minimal.
PB&S’ argument is inconsistent with the timeline and Mr.
Donohue’s actual testimony. When the Cathedral made the costbased decision to stop buying products from PB&S, it switched to
AGCC, not St. Killian. Eventually, the Cathedral switched from
AGCC to St. Killian, but that was based on yet a different costbased analysis. Mr. Donohue testified that one of the main
reasons for switching to St. Killian was the significant savings
on the price of glass for votive candles. (Tr. 12/2/21 at 14950.)
Mr. Donohue explained that even though St. Patrick’s
Cathedral was paying slightly more money for St. Killian’s
candles, the overall cost decreased by about $75,000 per year.
Sean Baker testified that Mr. Donohue was constantly complaining
about prices and his complaints were not limited to candles. (Tr.
11/30/21 at 152; Tr. 12/2/21 at 96-104, 111.) He also testified that
Mr. Donohue was known for complaining about prices on most anything.
(Tr. 11/30/21 at 152.) This further corroborates Mr. Donohue’s
testimony that he was motivated by a desire to reduce costs.
19
50
The Cathedral had been paying about $75,000 per year for glass
for the votive candles, an expense that is not incurred with the
use of the St. Killian candle burning system. Therefore, the
overall cost for the St. Killian burning system was about
$75,000 less per year for the Cathedral. (Tr. 12/2/21 at 165.)
Mr. Donohue’s explanation is credible and believable.
In further support of its argument that St. Killian asked
the Cathedral to stop buying products from PB&S, PB&S notes that
Mr. Donohue’s wife eventually obtained a job with St. Killian.
(Tr. 12/2/21 at 123.) However, Mr. Donohue’s wife did not obtain
the job until early 2019 – more than eight years after St.
Patrick’s Cathedral stopped doing business with PB&S. (Tr.
12/2/21 at 123.) PB&S failed to introduce any evidence that, in
2010, Mr. Donohue and St. Killian had agreed that if Mr. Donohue
could convince the Cathedral to stop buying products from PB&S,
St. Killian would reward Mr. Donohue by giving his wife a job
eight or nine years later. Additionally, the eight-year gap
between the date that the Cathedral stopped doing business with
PB&S and the date that St. Killian hired Mr. Donohue’s wife is
too attenuated to raise any inference of a causal connection
between the two events. See e.g., Green v. Mount Sinai Health
Sys., Inc., 826 F. App'x 124, 126 (2d Cir. 2020)(quoting Clark
Cty. Sch. Dist. v. Breeden, 532 U.S. 268, 273-74, (2001)(“To
show the inference of retaliation from temporal proximity alone,
51
the temporal proximity must be ‘very close,’ and periods greater
than 20 months, by themselves, suggest ‘no causality at all.’).
As the facts show, even after St. Patrick’s Cathedral
stopped doing business with PB&S in late 2010, St. Killian
continued to negotiate, and eventually signed, a written
agreement in January of 2012 with PB&S which provided PB&S with
an opportunity to earn significant compensation. The agreement
made PB&S St. Killian’s exclusive distributor in New England,
thereby allowing PB&S to sell St. Killian’s products in six
states without any competition from St. Killian’s other dealers.
(Tr. 12/31/21 PM at 72.) PB&S was also given special pricing
that enabled PB&S to earn a larger profit than any other St.
Killian dealer in the country.20 (Tr. 12/3/21 at 73.) It bears
repeating that all of these benefits were set forth in an
agreement that was signed after St. Patrick’s Cathedral stopped
doing business with PB&S. This undermines PB&S’ argument.
Finally, the contemporaneous correspondence shows that,
both before and after the parties signed their agreement, the
parties strategized on ways to try to get PB&S back into the
Cathedral. The Court has already discussed the correspondence
but exhibits Q, W, X, EE, HH, and II illustrate the point.
On October 28, 2011, which was well-after St. Patrick’s Cathedral
stopped buying products from PB&S, PB&S asked St. Killian for vastly
lower pricing than the rest of the U.S. market. (Exh. W.) Thereafter,
in the written agreement, dated January 28, 2012, St. Killian gave
PB&S such vastly lower pricing.
20
52
PB&S has failed to prove that St. Killian acted in bad
faith by allegedly convincing the Cathedral to stop doing
business with PB&S.
2. Whether St. Killian acted in bad faith by selling
candles directly to St. Patrick’s Cathedral
As an alternative theory for proving bad faith, PB&S argues
that St. Killian evaded the spirit of the agreement by stepping
into PB&S’ shoes and acting as the authorized dealer for St.
Patrick’s Cathedral by selling candles directly to the
Cathedral. The Court disagrees.
A claim for breach of the covenant of good faith and fair
dealing requires proof that the parties had a contract or
contractual relationship. Wurtzebach v. Henderson Glob. Invs. (N.
Am.), Inc., No. 3:09CV366(AWT), 2011 WL 13233773, at *2 (D.
Conn. Nov. 17, 2011). It is undisputed that St. Killian started
selling candles directly to the Cathedral before the parties
entered into their agreement on January 28, 2012. To the extent
that PB&S argues that an agreement was formed prior to January
of 2012, the Court has already rejected that argument.
Second, to the extent that PB&S argues that St. Killian
wrongfully stepped into PB&S’ shoes by selling candles directly
to the Cathedral, there is no evidence that PB&S had the option
of selling candles directly to the Cathedral on the date in
53
question. The Cathedral switched from PB&S to AGCC months
earlier.21
Finally, as noted earlier, the memo that Sean and Michael
Baker sent St. Killian on October 28, 2011, contained a proposal
for St. Killian to sell products directly to the Cathedral and
for PB&S to be on-call to service the account. This shows that
PB&S had no problem with St. Killian selling products directly
to the Cathedral.
C. Unjust Enrichment
“The elements of [an unjust enrichment claim] are that,
‘(1) the defendant benefitted; (2) the defendant unjustly failed
to pay the plaintiff for the benefits; and (3) the failure of
payment was to the plaintiff's detriment.’” Lieberman v.
21
Although PB&S argues that its role as St. Killian’s authorized
dealer for St. Patrick’s Cathedral was a contractual relationship that
pre-dated January 28, 2012, PB&S has not stated the material terms of
the alleged contract.
Most courts decline to find a breach of the covenant [of good
faith and fair dealing] apart from a breach of an express
contract term. 23 S. Williston, supra, § 63:22, at p. 516.
Stated otherwise, “the claim [that the covenant has been
breached] must be tied to an alleged breach of a specific
contract term, often one that allows for discretion on the
part of the party alleged to have violated the duty.” Id.
Landry v. Spitz, 925 A.2d 334, 344 (2007). PB&S has not shown that St.
Killian breached a specific term of the contract that was allegedly
formed before January 2012. PB&S has offered no evidence that a nonexclusive dealer agreement somehow prohibits St. Killian from selling
products directly to a customer after the customer has terminated its
relationship with St. Killian’s authorized dealer.
54
Emigrant Mortg. Co., 436 F. Supp. 2d 357, 366 (D. Conn.
2006)(quoting Kull v. Davidoff of Geneva, No. 01–CIV–4821, 2004
WL 1418088, at *15 (S.D.N.Y. June 23, 2004)).
“[T]he
determination of whether a particular failure to pay was unjust
and whether the defendant was benefited are essentially factual
findings for the trial court that are subject only to a limited
scope of review on appeal.” Hartford Whalers Hockey Club v.
Uniroyal Goodrich Tire Co., et al, 649 A.2d 518, 522 (1994).
The remedy of unjust enrichment provides that a
plaintiff may recover the benefit conferred on a
defendant in situations where no express contract has
been entered into by the parties. However, where an
express
contract
exists,
restitution
for
unjust
enrichment, a quasi contractual remedy, is unavailable.
Alstom Power, Inc. v. Schwing Am., Inc., No. 3:04 CV 1311 JBA,
2006 WL 2642412, at *5 (D. Conn. Sept. 14, 2006)(internal
citations omitted).22 “Parties who have entered into controlling
express contracts are bound by such contracts to the exclusion
of inconsistent implied contract obligations. Proof of a
contract enforceable at law precludes the equitable remedy of
unjust enrichment.” Polverari v. Peatt, 614 A.2d 484, 489 (Conn.
App. Ct. 1992) (internal quotations and citations omitted).
22
In Alstom Power, the Court found that there was an enforceable
written contract but the breach of contract action was barred by the
statute of limitations. “Therefore, due to the existence of a written
contract, plaintiff cannot recover on an unjust enrichment theory.”
Alstom Power, 2006 WL 2642412, at *6 (D. Conn. Sept. 14, 2006).
55
PB&S argues that unjust enrichment applies if the written
agreement does not provide a remedy for PB&S delivering the St.
Patrick’s Cathedral account to St. Killian. (Dkt. #200 at 3.)
The Court has already found that, to earn one cent per candle,
the parties’ agreement required PB&S to collect the waste wax
from St. Patrick’s Cathedral. The Court further finds that this
arrangement was also intended to compensate PB&S for helping St.
Killian land St. Patrick’s Cathedral as an account.
The e-mail, dated February 15, 2012, provides that PB&S
would receive one cent for every candle sold to St. Patrick’s
Cathedral “in recompense for [PB&S’] help with the St. Patrick’s
Cathedral account and in particular for collecting and recycling
their waste wax.” Aside from potentially collecting the waste
wax from the Cathedral, PB&S was not doing anything for St.
Patrick’s Cathedral as of February 15, 2012. Therefore, the
reference to PB&S’ “help with the St. Patrick’s Cathedral
account” likely refers to PB&S’ efforts to help St. Killian land
St. Patrick’s Cathedral as an account.
Additionally, although
Sean Baker denied that the collection of the waste wax was part
of the agreement for one cent per candle, he testified that the
agreement for one cent per candle was intended to compensate
PB&S for “everything leading up to this point, the introduction,
56
the introduction to PEP, the introduction to the industry, our
pain staking efforts.”23 (Tr. 12/1/21 37.)
At trial, Mr. Barrett testified that the written agreement
also provided another form of compensation for PB&S’ efforts to
help St. Killian land St. Patrick’s Cathedral as an account. Mr.
Barrett testified that part of the reason St. Killian took the
unprecedented step of making PB&S an exclusive distributor for
New England was in consideration for PB&S’ efforts to help St.
Killian get its foot in the door of St. Patrick’s Cathedral.
(Tr. 12/3/21 at 72.) None of the PB&S witnesses contradicted
this assertion.
The Court finds that the written agreement created methods
for compensating PB&S for its efforts to help St. Killian land
St. Patrick’s Cathedral as an account.
Thus, the agreement
controls the subject matter of PB&S’ unjust enrichment claim
and, therefore, any claim by PB&S for unjust enrichment must
fail.
IV.
CONCLUSION
For the reasons set forth herein, plaintiff has failed to
meet its burden of proof on any of the claims pled in the
complaint.
Therefore, judgement shall enter in favor of the
defendant on all counts.
PB&S’ claim for unjust enrichment also seeks compensation for
introducing St. Killian to Pep Industries. The Court finds that this
conduct was also covered by the same one cent per candle arrangement.
23
57
This is not a recommended ruling.
The consent of the
parties allows this magistrate judge to direct entry of a
judgment of the district court in accordance with the Federal
Rules of Civil Procedure.
Appeals can be made directly to the
appropriate United States Court of appeals from this judgement.
See 28 U.S.C. § 636(c)(3).
SO ORDERED at Hartford, Connecticut, this 3rd day of
February, 2023.
/s/
Robert A. Richardson
United States Magistrate Judge
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