Circulent, Inc. v. Hatch & Bailey Co.

***********************************************
The “officially released” date that appears near the be-
ginning of each opinion is the date the opinion will be pub-
lished in the Connecticut Law Journal or the date it was
released as a slip opinion. The operative date for the be-
ginning of all time periods for filing postopinion motions
and petitions for certification is the “officially released”
date appearing in the opinion.

All opinions are subject to modification and technical
correction prior to official publication in the Connecticut
Reports and Connecticut Appellate Reports. In the event of
discrepancies between the advance release version of an
opinion and the latest version appearing in the Connecticut
Law Journal and subsequently in the Connecticut Reports
or Connecticut Appellate Reports, the latest version is to
be considered authoritative.

The syllabus and procedural history accompanying the
opinion as it appears in the Connecticut Law Journal and
bound volumes of official reports are copyrighted by the
Secretary of the State, State of Connecticut, and may not
be reproduced and distributed without the express written
permission of the Commission on Official Legal Publica-
tions, Judicial Branch, State of Connecticut.
***********************************************
CIRCULENT, INC. v. THE HATCH
AND BAILEY COMPANY
(AC 45277)
Cradle, Clark and Seeley, Js.

Syllabus

The plaintiff technology services provider sought to recover damages from
the defendant for, inter alia, breach of contract on the basis of the
defendant’s alleged failure to pay amounts owed under two agreements,
a managed technologies service agreement and a disaster recovery ser-
vices agreement. The evidence submitted at trial included exhibit 5, a
billing statement from the plaintiff to the defendant representing invoices
generated by the plaintiff and payments made by the defendant, and
exhibit 13, an accounts receivable from the plaintiff showing amounts
unpaid by the defendant. The trial court rendered judgment for the
defendant based on its findings that the defendant paid in full the
amounts due to the plaintiff under the terms of the agreements. On
appeal to this court, the plaintiff argued that the court erred in finding
that the defendant had paid in full the amounts owed on both agreements
and that the term of the disaster recovery services agreement had been
one year rather than three years. Held:
1. The trial court’s finding that the defendant tendered payments in full
under the terms of the managed technologies service agreement was
clearly erroneous: although the court cited to exhibits 5 and 13 in support
of its finding, this court found that those exhibits demonstrated that
the defendant failed to make payments through the end of the agreement,
and no other evidence in the record supported the trial court’s finding;
moreover, a witness for the defendant testified that the defendant
stopped paying the plaintiff under the agreement, and the court’s conclu-
sion that the defendant did not untimely terminate the agreement was
predicated on its clearly erroneous finding that the defendant tendered
payment in full under the agreement; accordingly, because this court
concluded that the trial court’s error was harmful, the plaintiff was
entitled to a new trial on the count of the complaint alleging breach of
this agreement.
2. The trial court’s finding that the term of the disaster recovery services
agreement was one year was clearly erroneous: record evidence, includ-
ing written information on the agreement itself as well as testimony
from the plaintiff’s president and chief executive officer, supported the
plaintiff’s contention that the term of the agreement was three years,
and no evidence supported the court’s finding that the term was one
year; moreover, evidence in the record, including exhibits 5 and 13,
revealed that the defendant did not tender payments in full on the
agreement during the three years following its effective date; accord-
ingly, because the trial court’s clearly erroneous findings undermined
this court’s confidence in the court’s fact-finding process, the plaintiff
was entitled to a new trial on the count of the complaint alleging breach
of this agreement.
Argued November 7, 2022—officially released February 14, 2023

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 Fairfield, where the
plaintiff withdrew certain counts of the complaint;
thereafter, the case was tried to the court, Jacobs, J.;
judgment for the defendant on the remaining counts of
the complaint, from which the plaintiff appealed to this
court. Reversed; new trial.
John L. Cesaroni, with whom, on the brief, was
Aaron A. Romney, for the appellant (plaintiff).
Bruce L. Elstein, for the appellee (defendant).
Opinion

CLARK, J. In this action for breach of contract, the
plaintiff, Circulent, Inc., appeals from the judgment of
the trial court rendered in favor of the defendant, The
Hatch and Bailey Company. On appeal, the plaintiff
claims that the court erred in finding that (1) the defen-
dant paid in full the amounts owed to the plaintiff on
the parties’ managed technologies services agreement
(MTS agreement), (2) the term of the parties’ ‘‘Disaster
Recovery-as-a-Service’’ agreement (DRaaS agreement)
was one year rather than three years, and (3) the defen-
dant paid in full the amounts owed on the DRaaS agree-
ment. The plaintiff argues that, as a result of its errone-
ous findings, the court improperly rendered judgment
in favor of the defendant as to counts one and two of
the plaintiff’s complaint, which alleged a breach of the
DRaaS agreement and a breach of the MTS agreement,
respectively. Because we conclude that the court’s con-
clusions as to those counts rested on clearly erroneous
factual findings, we reverse the judgment of the trial
court and remand the case for a new trial as to those
counts.
The following procedural history and facts, as found
by the court in its posttrial memorandum of decision,
are relevant to our resolution of the plaintiff’s appeal.
The plaintiff commenced this action in July, 2020, alleg-
ing that the defendant (1) breached the parties’ DRaaS
agreement (count 1), (2) breached the parties’ MTS
agreement (count 2), (3) breached the parties’ ‘‘Fire-
wall-as-a-Service’’ agreement (count 3), and (4) tor-
tiously interfered with a contractual relationship
(count 4).
On October 5, 2020, the defendant filed its answer,
special defenses and counterclaims. As to its special
defenses, the defendant alleged that (1) the liquidated
damages clauses in the contracts were unenforceable,
(2) the restrictive covenants in the agreements that
prohibited the defendant from engaging the plaintiff’s
personnel also were unenforceable, (3) it paid all the
sums due under the agreements, and (4) the plaintiff
refused and neglected to approve a modification request
in accordance with the terms of the MTS agreement.
As to its counterclaims, the defendant alleged that the
plaintiff violated 18 U.S.C. § 27071 and Connecticut’s
Unfair Trade Practices Act, General Statutes § 42-110a
et seq.
Prior to trial, the issues to be decided were narrowed.
As to count two, the plaintiff no longer pursued its
allegations that the defendant materially breached the
agreement by engaging the plaintiff’s employees prior
to the termination of the agreement. Rather, count two’s
focus was narrowed to the defendant’s alleged early
termination of the MTS agreement and its failure to
pay the amounts owed on the agreement. The plaintiff
withdrew counts three and four. And the defendant’s
counterclaims were stricken by the court.2
In June, 2021, the case was tried to the court, Jacobs,
J., in a three day remote trial. On December 1, 2021,
the court issued its memorandum of decision, finding
that, ‘‘[o]n September 22, 2017, the parties entered into
the written but unsigned [MTS agreement]. [Trial
Exhibit 2.] Pursuant to the terms of the MTS agreement,
the plaintiff was to provide technology services and
numerous devices to the defendant for three years
beginning on [October 16, 2017] and ending on [October
31, 2020], and the defendant was to pay a monthly fee
of $3875.39 to the plaintiff for said term.
‘‘The MTS agreement included the following provi-
sion for modification of the terms of the agreement:
‘The parties agree that any modifications or additions
to the Work shall be described in a written Modification
of Work order to be approved or denied by [the plain-
tiff].’ [Trial Exhibit 2.] No provision within the [MTS]
agreement specified that a particular form was required
to be submitted in order for the requested modification
to be considered.
‘‘On May 16, 2019, the defendant notified the plaintiff
of its request to reduce the number of devices managed
under the MTS agreement to one device. [Exhibit A.]
The plaintiff responded by stating that, pursuant to the
MTS agreement, reduction requests must be submitted
by a particular form. On July 22, 2019, after the defen-
dant submitted the form provided by the plaintiff, the
plaintiff denied the request. [Trial Exhibit J.] In
response to the defendant’s request, the plaintiff did
not provide the reasons for the denial.
‘‘The MTS agreement also included a provision whereby,
in relevant part, liquidated damages would be awarded
to the plaintiff in the event of the defendant’s untimely
termination of the [MTS] agreement. [Exhibit 2.]
‘‘The defendant tendered payments in full until the
end of the term of the [MTS] agreement. [Trial Exhibits
5 and 13.]
‘‘On December 19, 2017, the parties entered into the
written but unsigned [DRaaS agreement]. [Trial Exhibit
1.] Pursuant to said agreement the plaintiff was to pro-
vide technology services and devices to the defendant
from March 1, 2018, to February 28, 2019, and the defen-
dant would make monthly payments of $572.93 to the
plaintiff for the term of the [DRaaS] agreement.
‘‘The DRaaS agreement included the following provi-
sion for modification of the terms of the [DRaaS] agree-
ment: ‘The parties agree that any modifications or addi-
tions to the Work shall be described in a written
Modification of Work order to be approved or denied
by [the plaintiff].’ [Trial Exhibit 1.] No provision within
the agreement specified that a particular form was
required to be submitted in order for the requested
modification to be considered.
‘‘The defendant tendered payments in full until the
end of the term of the [DRaaS] agreement. [Trial Exhib-
its 5 and 13.]
‘‘The DRaaS agreement included a provision
whereby, in relevant part, liquidated damages would
be awarded in the event of the defendant’s untimely
termination of the [DRaaS] agreement. [Exhibit 1.]’’
In light of these findings, the court stated: ‘‘As to the
allegations set forth in count one and count two of
the complaint, this court concludes that the defendant
performed pursuant to the terms of the two agreements,
rendering payments as per the agreements. This court
concludes that the defendant did not materially breach
either of the two agreements. In addition, the court
concludes that the defendant’s conduct did not consti-
tute untimely terminations of the agreements. The court
does not address the enforceability of the liquidated
damages clause as the liquidated damages clause is not
activated unless, in relevant part, the defendant has
terminated the agreement prior to the agreement expi-
ration date.
‘‘As to the allegation set forth in the first special
defense, this court concludes that the liquidated dam-
ages provision is not activated, as this court has con-
cluded that the defendant did not terminate the agree-
ment. As to the third special defense, this court
concludes that the defendant fully paid all sums set
forth in the agreements.
‘‘As to the allegations set forth in the fourth special
defense, this court concludes that the plaintiff’s failure
to grant the defendant’s reduction request does not
constitute a material breach of contract. Pursuant to
the modification terms of the agreements, the plaintiff
had the authority to deny the request and no obligation
to explain the reasons it did so.’’ Accordingly, the court
rendered judgment in favor of the defendant on counts
one and two of the complaint.
On December 3, 2021, the plaintiff filed a motion to
reargue, arguing, inter alia, that the court erroneously
found that the defendant paid the amounts due to the
plaintiff under the terms of their written agreements.
The plaintiff argued that, ‘‘[b]ecause there is no evi-
dence in the record from which the court could have
made that finding, and it is clear that the court miscon-
strued undisputed evidence, [the plaintiff] respectfully
requests that the court grant reargument and enter judg-
ment in favor of [the plaintiff] as to counts one and
two of the complaint.’’
The defendant filed its own motion to reargue and
an objection to the plaintiff’s motion to reargue. As to
the court’s finding that the defendant paid in full the
amounts owed on the MTS agreement, the defendant
conceded that ‘‘[t]he position on reargument presented
by the plaintiff is correct concerning the defendant’s
proof of payment . . . .’’ The defendant argued, how-
ever, that the court’s mistake did not end the inquiry,
contending that the evidence ‘‘supported that the plain-
tiff materially breached the MTS agreement and that
the defendant did not do so.’’ The defendant argued
that the court’s finding regarding the payment on the
DRaaS agreement was supported by the evidence.
On January 5, 2022, the court, in a summary, one
word order, denied the parties’ motions to reargue. On
January 6, 2022, the plaintiff filed another motion to
reargue, this time directing the court to the defendant’s
motion to reargue, which revealed that the parties
agreed that the court misinterpreted exhibits 5 and 133
with respect to its finding that the defendant paid in
full the amounts owed under the MTS agreement. On
February 1, 2022, the court denied the plaintiff’s second
motion to reargue in a summary, one word order. This
appeal followed.4
We begin by setting forth the relevant legal principles
governing our review of the plaintiff’s claims. ‘‘[W]here
the factual basis of the [trial] court’s decision is chal-
lenged we must determine whether the facts set out
in the memorandum of decision are supported by the
evidence or whether, in light of the evidence and the
pleadings in the whole record, those facts are clearly
erroneous.’’ (Internal quotation marks omitted.) Down-
ing v. Dragone, 184 Conn. App. 565, 572, 195 A.3d 699
(2018). ‘‘A finding of fact is clearly erroneous when
there is no evidence in the record to support it . . .
or when although there is evidence to support it, the
reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been
committed. . . . Under the clearly erroneous standard
of review, a finding of fact must stand if, on the basis
of the evidence before the court and the reasonable
inferences to be drawn from that evidence, a trier of
fact reasonably could have found as it did.’’ (Internal
quotation marks omitted.) NRT New England, LLC v.
Longo, 207 Conn. App. 588, 600, 263 A.3d 870, cert.
denied, 340 Conn. 906, 263 A.3d 821 (2021). ‘‘In
reviewing factual findings, [w]e do not examine the
record to determine whether the [court] could have
reached a conclusion other than the one reached. . . .
Instead, we make every reasonable presumption . . .
in favor of the trial court’s ruling.’’ (Internal quotation
marks omitted.) David M. Somers & Associates, P.C.
v. Busch, 283 Conn. 396, 403, 927 A.2d 832 (2007).
‘‘[W]here . . . some of the facts found [by the trial
court] are clearly erroneous and others are supported
by the evidence, we must examine the clearly erroneous
findings to see whether they were harmless, not only
in isolation, but also taken as a whole. . . . If, when
taken as a whole, they undermine appellate confidence
in the court’s [fact-finding] process, a new hearing is
required.’’ (Internal quotation marks omitted.) Osborn
v. Waterbury, 197 Conn. App. 476, 485, 232 A.3d 134
(2020), cert. denied, 336 Conn. 903, 242 A.3d 1010
(2021).
I
The plaintiff first claims that the court erroneously
found that the defendant paid the amounts owed on
the MTS agreement in full through the end of its term
and that the court’s determination as to count two was
predicated on this erroneous finding. The defendant
concedes ‘‘that it did not prove payment of the MTS
agreement’’ but nevertheless contends that there was
‘‘sufficient support for the court’s judgment.’’ We agree
with the plaintiff.
We have reviewed the record thoroughly and con-
clude that the trial court’s decision as to count two
rests on a clearly erroneous factual finding because
there is no evidence supporting the court’s finding that
‘‘[t]he defendant tendered payments in full until the end
of the term of the [MTS] agreement.’’ Although the court
cited to exhibits 5 and 13 in support of its finding that
payments were made in full under the agreement, our
review of those exhibits reveal the opposite to be true.
Exhibit 5, a May 26, 2021 billing statement, contains
both positive and negative values on it. It was undis-
puted that the positive values on the statement repre-
sented invoices generated by the plaintiff in that amount
and that the negative values on the statement indicated
payments made by the defendant. A simple inspection
of exhibit 5 shows that the defendant ceased making
its regular payments after May, 2019, rather than making
payments in full through the end of the term of the
MTS agreement.5 Exhibit 13, an accounts receivable,
similarly shows that there were amounts unpaid by the
defendant after May, 2019. There is no other evidence
in the record to support the court’s finding. Indeed, the
defendant’s own witness, Christian Dean, the defen-
dant’s general manager and sales manager, testified that
the defendant stopped paying under the MTS agreement
after May, 2019.
The defendant ‘‘acknowledge[s] that it did not prove
payment of the MTS agreement’’ but nevertheless con-
tends that ‘‘the court’s finding . . . that the defendant
did not untimely terminate the MTS agreement was
grounded upon the evidence.’’ It contends that, ‘‘[a]fter
considering the evidence, testimony, credibility, and a
fair interpretation of what the MTS agreement provided,
the conclusion that the defendant did not breach was
properly rendered.’’ The defendant’s contention, how-
ever, ignores the fact that the trial court’s conclusion as
to count two relied exclusively on the clearly erroneous
factual finding that the defendant tendered full pay-
ments to the plaintiff. Indeed, the court’s memorandum
of decision stated in no uncertain terms that the ‘‘defen-
dant performed pursuant to the terms of the two agree-
ments, rendering payments as per the agreements’’
and, therefore, ‘‘the defendant did not materially breach
either of the two agreements.’’ (Emphasis added.)
Immediately following these conclusions, the court
went on to state in its memorandum of decision that,
‘‘[i]n addition, the court concludes that the defendant’s
conduct did not constitute untimely terminations of the
agreements.’’ A fair reading of the court’s conclusion
as to count two reveals that it was predicated on the
court’s clearly erroneous finding that the defendant ten-
dered payments in full under the MTS agreement.
Because we conclude that the trial court’s judgment
as to count two relied exclusively on the court’s clearly
erroneous factual finding that the defendant ‘‘tendered
payments in full until the end of the term of the [MTS]
agreement,’’ we are compelled to conclude that the
court’s error was harmful, requiring a new trial. See,
e.g., Osborn v. Waterbury, supra, 197 Conn. App. 488
(‘‘[b]ecause the trial court’s clearly erroneous finding
that there were ‘perhaps as many as 400 students’ on
the playground was so inextricably intertwined with
the court’s conclusion that the defendants were negli-
gent, we are constrained to conclude that the court’s
error was harmful’’); Downing v. Dragone, supra, 184
Conn. App. 574–75 (new trial required because trial
court’s reasoning substantially relied on clearly errone-
ous factual finding).
II
The plaintiff next argues that the court erroneously
rendered judgment in favor of the defendant on count
one because the court’s conclusion as to that count
also rested on clearly erroneous findings. The plaintiff
claims that trial court’s finding that the defendant ‘‘ten-
dered payments in full until the end of the term of the
[DRaaS] agreement’’ was clearly erroneous because it
was predicated on the court’s erroneous finding that
the term of the DRaaS agreement was one year, instead
of three years. We agree with the plaintiff.
The court found that the term of the DRaaS agree-
ment was one year—‘‘the plaintiff was to provide tech-
nology services and devices to the defendant from
March 1, 2018, to February 28, 2019 . . . .’’ Citing to
exhibits 5 and 13; see footnote 3 of this opinion; the
court found that ‘‘[t]he defendant tendered payments
in full until the end of the term of the [DRaaS] agreement
. . . .’’ (Citation omitted.)
In its appellee brief, the defendant acknowledges that
‘‘the parties agreed that the plaintiff would provide
backup and disaster recovery services for the defendant
for three years,’’ as opposed to one year. (Emphasis
added.) The defendant appears to argue nevertheless
that the court’s factual finding that the defendant fully
paid the DRaaS agreement was ‘‘firmly based upon the
evidence.’’ In particular, it claims that exhibit 5 ‘‘demon-
strates payment in full of the sums claimed due under
the DRaaS agreement.’’ Pointing to four particular
invoices, the defendant claims that when one compares
exhibit 5 to exhibit 13, it corroborates payment in full.
The plaintiff disagrees. It contends that the defendant’s
argument is a ‘‘misrepresentation of the record.’’ The
plaintiff argues that it is not in dispute that the defen-
dant made a few small payments to the plaintiff on
account of the DRaaS agreement after December 1,
2020. The plaintiff argues that ‘‘the uncontroverted evi-
dence showed that the plaintiff applied those payments
to the oldest outstanding invoices that the defendant
had failed to pay prior to December 1, 2020, and there-
fore, any payments made after December 1, 2020, with
respect to the DRaaS agreement were properly applied
to those older invoices.’’
On the basis of our review of the record, we agree
with the plaintiff that the court’s conclusion as to count
one also rested on clearly erroneous factual findings.
We have found no evidence in the record that supports
the court’s finding that that the term of the DRaaS
agreement was for one year—‘‘from March 1, 2018, to
February 28, 2019.’’ Instead, the evidence presented
supports the plaintiff’s contention that the term of the
DRaaS agreement was three years. Indeed, on page 8
of the DRaaS agreement, next to the field titled ‘‘Term,’’
there is a box marked ‘‘3 years.’’ Additionally, testimony
of Marcus Lee, the plaintiff’s president and CEO, con-
firmed that the term of the DRaaS agreement was for
three years.
The court’s memorandum of decision reveals that its
finding that the defendant ‘‘tendered payments in full
until the end of the term of the [DRaaS] agreement’’
and its ultimate conclusion that the defendant did not
materially breach the DRaaS agreement was predicated
on its erroneous finding that the term of the DRaaS
agreement was one year. What is more, the plaintiff is
correct in that the evidence in the record reveals that
the defendant did not in fact ‘‘tender payments in full’’
on the DRaaS agreement during the three years (as
opposed to the one year) following the effective date
of the agreement. The trial court’s clearly erroneous
findings, taken as whole, undermine this court’s confi-
dence in the court’s fact-finding process, requiring a
new trial as to count one.6 See Autry v. Hosey, 200
Conn. App. 795, 801, 239 A.3d 381 (2020) (‘‘[i]f, when
taken as a whole, [the clearly erroneous findings] under-
mine appellate confidence in the court’s [fact-finding]
process, a new hearing is required’’ (internal quotation
marks omitted)).7
The judgment is reversed and the case is remanded
for a new trial on counts one and two of the plaintiff’s
complaint.
In this opinion the other judges concurred.
1
Title 18 of the United States Code, § 2707, creates a private right of
action for a knowing violation of the Stored Communications Act, 18 U.S.C.
§ 2701 et seq.
2
The defendant has not challenged that decision on appeal.
3
Exhibit 5 is a billing statement dated May 26, 2021, that reflects the
amounts billed by the plaintiff and the payments made by the defendant
for the time period December 31, 2018, to May 10, 2021, including amounts
purported to be past due.
Exhibit 13 is an accounts receivable for the defendant dated June 21,
2021, described by Marcus Lee, the plaintiff’s president and CEO, as an
‘‘aging summary,’’ which shows the amounts owed to the plaintiff by the
defendant.
4
On February 18, 2022, after filing its appeal, the plaintiff filed a motion
for articulation with the trial court, asking that it articulate ‘‘how the trial
court determined that the defendant . . . paid the amounts due under the
[MTS agreement] through the end of its term’’; ‘‘how the trial court deter-
mined that the [DRaaS agreement] . . . expired on February 28, 2019’’; and
‘‘how the trial court determined that the defendant paid the amounts due
under the DRaaS agreement through the end of its term.’’ On April 12, 2022,
the trial court issued an order indicating that its memorandum of decision
‘‘references the specific exhibits on which it relied in arriving at each of its
determinations,’’ and that ‘‘its decision is neither ambiguous nor deficient.’’
On April 19, 2022, the plaintiff filed with this court a motion for review,
asking that this court order the trial court to articulate the basis of its
findings that the plaintiff set out in its motion for articulation. On June 15,
2022, this court granted review but denied the requested relief.
5
The court found that, ‘‘[p]ursuant to the terms of the MTS agreement,
the plaintiff was to provide technology services and numerous devices to
the defendant for three years beginning on [October 16, 2017] and ending
on [October 31, 2020], and the defendant was to pay a monthly fee of
$3875.39 to the plaintiff for said term.’’
6
In addition to reversing the trial court’s judgment, the plaintiff invites
this court to ‘‘direct the trial court to enter judgment in favor of the plaintiff.’’
We decline its invitation because we do not have the requisite factual findings
to do so. See United Concrete Products, Inc. v. NJR Construction, LLC,
207 Conn. App. 551, 565 n.17, 263 A.3d 823 (2021) (‘‘[a] trial court’s decision
that ‘rests on a clearly erroneous factual finding’ requires a new trial’’).
7
Although the defendant contends that there are alternative grounds on
which to affirm the court’s judgment, we decline to review them. First,
none of the defendant’s purported alternative grounds for affirmance were
decided by the trial court. It is well known that ‘‘[o]nly in [the] most excep-
tional circumstances can and will this court consider [an alternative ground
for affirmance] . . . that has not been raised and decided in the trial court.’’
(Emphasis added; internal quotation marks omitted.) State v. Juan J., 344
Conn. 1, 12, 276 A.3d 935 (2022). This is not an exceptional circumstance.
Second, even if this court wished to decide those claims, we would be
unable to do so because the trial court did not make the requisite findings
necessary to decide them or because the ones that it did make are ones on
which we cannot rely. See Hartford v. McKeever, 314 Conn. 255, 274, 101
A.3d 229 (2014) (Appellate Court not required to review alternative ground
for affirmance ‘‘when the record was inadequate for review of the claim
because the trial court had not made the requisite factual findings’’); see
also parts I and II of this opinion.