GILARDI, J.T.R.
The plaintiff, Arlene Williams, has presently three counts pending against the defendant, The Success Village Cooperative: breach of a written contract, negligent misrepresentation and breach of the implied covenant of good faith and fair dealing. There is one count against the defendant, Eula Sutton: defamation.
Based on the credible testimony, exhibits admitted and briefs of counsel, this court has made the following conclusions.
The plaintiff became a resident of the Success Village Cooperative (Co-Op) in 2004. In 2006 she was elected President of the Board of Directors of the Co-Op. In 2008 she was ineligible to be re-elected President but successfully ran for Vice-President. She also organized a group that was elected to be members of the Board. The President-Elect was a Frances Sabella.
Arlene Williams had decided that she wanted to be hired as a property manager for the defendant, Co-Op. The legal requirements for being hired as the property manager at the Success Village Apartments, Inc. are as follows:
The applicant must be a certified property manager (CAM).
The Board of Directors must vote to hire a property manager and then advertise applications. The Board reviews the applications and then invites several to come in for an interview. Two-thirds of the Board must vote to hire the property manager.
The applicant must not be a member of the Board.
The successful applicant is then given a conditional employment contract with requirements: (One) The applicant provide three satisfactory letters of reference. (Two) Within three weeks of employment CT Page 13079 the applicant must have a physical examination and a drug screen. (Three) Identify crime convictions and submit to state police and criminal history check including finger printing.
Once this is done, two-thirds of the Board must vote on the actual contract and, in addition, two-thirds of the Board must sign the actual contract.
Arlene Williams did not want to bother with this list of cumbersome legal requirements, so she devised a scheme to become property manager without complying with even one of the pre-employment requirements.
The Board of Directors were to hold their initial meeting on April 21, 2008. Prior to that meeting Arlene Williams simply drew up a contract naming herself as property manager. She included a salary of $116,000.00 and signed it as property manager and had her friend, Frances Sabella, the newly elected President, sign, as well as another individual as a witness. Frances Sabella has since passed away and at the time was apparently quite ill. She knew nothing of the operation of the Co-Op. The plaintiff claims that she was actually hired as property manager as a result of a valid authorized contract being executed. This, in spite of the fact that the By-Laws of the Association required under "Directors and Officers, section 9": The business and affairs of the corporation shall be managed by the Board of Directors. Under "Officers, section 6": The President shall execute, in the corporate name, all authorized . . . contracts, however, this shall not preclude the signing or execution by other officers or agents of the corporation when authorized by the Board of Directors.
The plaintiff further claims that on the evening of April 21st at the meeting of the newly elected Board of Directors she was voted to be property manager of the Association. The Court disagrees with both claims.
The minutes of the meeting of April 21, 2008 reflect that there was mention of the plaintiff becoming property manager but no vote was ever taken and a discussion was held as to taking the matter to the membership meeting which was to be held April 22, the following day. There was no mention of any contract.
All of the members of the Board who appeared, including the plaintiff's son, testified that there was never a vote to hire the plaintiff as property manager at the meeting of April 21.
Dolores Lowes served as secretary on that board. She testified that she CT Page 13080 was appalled when there was a reference to a contract for Arlene Williams becoming property manager. "Who submits a contract for a position their going to be considered for?" She testified no vote took place at that meeting to name the plaintiff as property manager and that there was only a reference that the plaintiff wished to be considered for the position.
Eula Sutton appeared as a member of the Board. She testified that it was the first meeting of the Board and that there was never a vote to make Arlene Williams the property manager but only a reference that she was going to apply for the property manager job. That, in fact, she reminded the plaintiff that she could not apply as she was presently an officer of the Co-Op. She testified that when she saw the contract, she noted there were only two signatures when the Co-Op requires two-thirds of the Board vote to approve a contract and two-thirds of the Board must sign it.
Arlene Williams did admit that she never advised the Board as to the contents of the contract nor did they ever actually approve the contract. She further admitted that the necessary signatures were not on the contract but she had assumed that Frances Sabella would obtain the necessary signatures. As can be seen by the events which occurred two weeks later, Frances Sabella did not consider Arlene Williams to be the property manager.
Another exhibit submitted by the plaintiff was a purported copy of an "agenda" for the general meeting of April 22, 2008. As opposed to the minutes of a meeting, an agenda is not an official record of any conduct of a board but simply a schedule of what is to take place at an upcoming meeting. In this "agenda" was a section marked "Hire Property Manager." It contained a sentence indicating a budget availability of $116,000.00 and that board had hired Arlene Williams as property manager.
Dolores Lowes testified that she was secretary at that time. She indicated that she did indeed prepare the agenda for the meeting of April 22, 2008 but testified that she did not enter that section of the agenda. She stated Arlene Williams was not voted as property manager the night before and that someone else added that section to the agenda.
The minutes of the meeting on April 22, 2008 report "Frances Sabella then indicates that the board will be hiring a property manager. Miss Williams stated that she has resigned her position as Vice President on the Success Board of Directors and that she would be interested in taking the position of property manager."
The only significance of the "agenda" is that it exhibits the amount of CT Page 13081 deception involved in this matter.
Although the plaintiff brought up the purported contract at the trial, during this period of time there was never a claim made by the plaintiff that she had a valid enforceable contract and, to the contrary, on May 5, 2008, when the plaintiff was advised that she had not been hired as property manager by the Board, minutes of that meeting reflect that the plaintiff had spoken to her lawyer and he told her that "just because there wasn't a contract in place doesn't mean that Success Village should stop running." In addition, on May 16, and May 22, 2008 she had two attorneys write letters of recommendation with one noting "I understand that she currently is applying for the position of property manager." In summary, there is no record nor any testimony, or claim, of anyone, including three attorneys the plaintiff consulted during this period of time, that she was named property manager of the Co-Op by the Board or by any contract. The one exception was a far-fetched story by her son.
The plaintiff's son testified that there was, in fact, a Board meeting one week before the meeting of April 21, 2008. He claimed that at that meeting the Board voted to name his mother as property manager. He testified the date of the meeting was April 14, 2008. On cross examination a notice was introduced as an exhibit dated April 21, 2008 congratulating the Board for their being seated on April 18, 2008, and announcing the first meeting was to be held on April 21, 2008. None of the board members including the plaintiff, testified as to any meeting before April 21, 2008, and all testified that the first meeting was held on April 21, 2008. Legally, the Board could not have voted to name the plaintiff as property manager as she was an officer of the Co-Op at that time. There were no minutes, no agenda, no witnesses, and, in the opinion of the court, no meeting.
At a meeting held on May 2, 2008, the maintenance manager for the Co-Op was reportedly upset that he had been paid less money that week and that the rest had gone to the plaintiff. He had a contract for an annual salary of $70,000.00.
The plaintiff had apparently obtained a check for $940.00 from the bookkeeper for what she considered her first week's pay. When the Board members questioned the bookkeeper why a check was issued when there was never ever any vote by the Board, she testified that the plaintiff was putting pressure on her and that she was coerced into issuing the check.
The Board voted to have a closed board meeting and not invite the plaintiff but to speak to the maintenance manager and then the plaintiff. CT Page 13082
At the May 5th closed board meeting, the President, Mrs. Sabella, indicated that she had spoken to the plaintiff about staying out of the office until the board made a decision about a property manager but she refused. Apparently there were several additional calls to the plaintiff requesting she stay out of the office until they made a decision. She was advised that one of the issues was that she had a check written out to herself from payroll and wasn't the property manager. The minutes reflect that the plaintiff indicated that if the check were an issue she would return it and that she wouldn't have taken it had she known she was not the property manager.
Mrs. Sabella indicated that she knew the plaintiff would not stay out of the office. She requested a motion that she call the locksmith and have the locks changed. The motion was carried. As confirmation of her opinion that the plaintiff was not the property manager, Frances Sabella paid $480.00 out of her pocket to have the locks changed for the office.
At that time, the Board decided to vote on the inevitable question of whether Mrs. Williams would be the property manager. The motion was passed that "Mrs. Williams not be the property manager." Contrary to the repeated claims of the plaintiff, the motion was not to fire her as property manger, but not to hire her.
With respect to the claim of defamation, the plaintiff claims that the defendant, Eula Sutton, committed defamation by alleging that the plaintiff had taken and deposited a check representing part of the payment due and owing the maintenance manager. A second allegation was defendant stated that when the plaintiff was President she had fined people improperly.
In fact, the plaintiff had pressured and coerced the bookkeeper to actually issue the check which she deposited while not serving as property manager and the proceeds of which came out the contract of the maintenance manager.
With respect to the charge of improperly fining a resident, there were minutes introduced verifying that an improper fine had been levied. There was no defamation.
This is not the only claim the plaintiff has filed against Success Village. In this present lawsuit, the initial complaint listed several counts where the plaintiff actually sought to be compensated for her volunteering to serve as president from years 2006 to 2008. Those counts were dismissed by a motion for summary judgment. Several years ago the CT Page 13083 plaintiff filed a discrimination claim against the Association. In May of 2009, the plaintiff filed a motion for a temporary injunction seeking to remove the board of directors who had recently been elected. On October 15, 2010, Judge Melville dismissed the complaint. At the present times as a result of that complaint, the plaintiff is now a defendant in a claim of vexatious litigation brought by the Association.
The plaintiff claims that the defamation affected her earning ability as well as her reputation. With respect to her earning ability, the plaintiff testified that she is retired and has not applied or even inquired as to any jobs. The only reference to employment is she testified she reads the want ads.
One of the claims the plaintiff made is that her reputation as President was tarnished by complaints of her handling of the finances. The board introduced an audit conducted to review the finances while the plaintiff was President from 2006 to 2008. The accounting firm reached the following conclusions:
The Cooperative did not file Federal and Connecticut Corporate tax returns for the year ending June 30, 2007 thru September 15, 2007 and October 1, 2007 respectively.
There were instances of checks drawn to cash in excess of $100,000.00 when the intention was to draw the check payable to the Co-op. The transfers were accomplished when the transfers being made by check and a back check was being acquired. There was only one signature on the checks making the withdrawal.
None of the minutes prior to June 20, 2008 were either available or had not been taken.
In the year 2007, 17 roofs were replaced and paid for representing a major expenditure of the Cooperative of $750,000.00. The contract was awarded without bidding or competitive bidding and the company hired by the plaintiff was not covered by workers' compensation, thereby requiring the Co-op to pay additional insurance after the fact. After reviewing the contractor's paperwork, it was discovered their certificate of insurance was not for the same entity invoicing the Co-op. They further found that the contractor was not in good standing with the Secretary CT Page 13084 of State now or during the period for which work was performed.
Two independent roofing consultants were engaged to determine whether the Co-Op received fair value for the roof replacements which concluded they did not and that the Co-Op should have had some type of competitive bidding for the process.
The Co-Op's budget is made up of the major components of fuel oil, gas, property and casualty insurance and property taxes to the City of Bridgeport which account for 70% of the budget. The investigation revealed that none of such components were bid, shopped or challenged. They concluded major savings would've resulted had those steps been taken
The audit concluded that an employees payroll was incorrectly computed resulting in overpayment of gross wages giving the employee an overpayment of 7.65% of their gross pay. As a result, the Co-Op's payroll taxes were under paid and caused the Co-Op to incur penalties from both the IRS and the Connecticut Department of Revenue Services.
The investigation revealed that the plaintiff as president received a salary during the quarter end of June 30, 2008 which is prohibited by the Co-Op's By-Laws Article
111, Section 9 and Article IV, Section 3.
A relative of the plaintiff was hired to perform exterminating services although the relative was not registered and without insurance. The contract was given without competitive bidding or shopping. The services of an exterminator are required to be licensed by the State of Connecticut Department of Environmental Protection which was not done.
The Co-Op made duplicate payments for both insurance premiums and employment taxes.
The audit revealed invoices were not pre-approved for payment by the board of directors.
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Property taxes were paid after the due dates to both Stratford and Bridgeport incurring interest, costs, fees even though the funds were available.
A member of the maintenance staff received an increase in salary of 40% of his base pay with no board minutes to approve this change in pay.
It was determined during the year 2007 the National Relation Board discovered that it owed back wages to 4 employees and the co-op did not include those payments as wages in their 1099 reports.
The operating checking account had not been reconciled with the books and records for over two years.
The escrow account used for the sale and purchase of units was not reconciled with the books and records for over two years.
The Co-op fees had not been reconciled with the books and records for over two years. One of the co-op's bank accounts was going to the former treasurer's home which was out of state.
The requirement having three board members sign the checks was not complied with a list of checks attached to the audit.
The co-op had not been able to reconcile its accounts payable system with the books and records for the last two years.
The investigation revealed circumstances where sales taxes were charged but not due and where sales taxes due but not charged.
The conclusion of the audit was that conditions that were uncovered during their investigation were due to poor business practice. Failure to bid for services and materials should have been a standard operating procedure and implemented immediately. It was obvious that a proper bidding profile could have resulted in considerable savings in the co-op. This was a major and costly impropriety.
The plaintiff's reputation as president may have indeed been damaged, CT Page 13086 but all of the damages were self inflicted.
In summary, it is the opinion of this court, based on the credible evidence submitted, that the plaintiff was never hired as property manager for the defendant Cooperative, either by contract or vote, nor was there any defamation by the named defendant.
Judgment is rendered for the defendants.
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