MARTIN PRINTING, INC. v. SONE, No. CV02 0281745-S (Apr. 19, 2004)

WIESE, JUDGE.

This is a civil action brought pursuant to a four-count second amended complaint, dated March 8, 2004. The plaintiff is a commercial printing company. It seeks $79,932 in compensatory damages for the costs of printing a golf magazine entitled "Pub Links" for the defendant, Abbey, Inc. Additional named defendants are Gary R. Towler, Rachel Kuhe, Administratrix of the estate of H. James Kuhe and Andres J. Sone.

The defendant, Towler and the defendant, Kuhe have responded to the second amended complaint though their answer and special defenses. The case was tried to the court on October 9, 2003, and March 29, 2004. On October 9, 2003, the defendant Abbey, Inc. stipulated to judgment in the amount of $79,932. The plaintiff and the remaining defendants presented testimony and a number of exhibits. These parties have also filed with the court post-trial memoranda of law and proposed findings of fact.

On March 29, 2004, the court reserved ruling on the plaintiff's objection to the defendants' proposal of exhibit A and the defendant Kuhe's objection to the plaintiff's exhibit 14. The court overrules the objections and admits both exhibits. The objections proffered go to weight as opposed to admissibility.

The court finds the following relevant facts from the credible evidence presented at trial. The Martin Printing Company (Martin) is a commercial printing company. This business is located at 100 Powered Metal Drive, North Haven, Connecticut. Martin prints magazines, brochures and flyers. Martin Santacroce is the president and owner of the Martin. In December 2001, representatives of Martin began negotiations with representatives of Abbey, Inc., concerning the printing of a magazine known as "Pub Links Golfer Magazine." This magazine is distributed on a national basis. The intended magazine readers are persons who play golf on public golf courses. Abbey publishes the magazine six times per year. Gary R. Towler is the president of Abbey, Inc. and H. James Kuhe was the treasurer and vice president of finance of Abbey, Inc. These three individuals were sophisticated businessmen at all times relevant to this action.

In late 2001, representatives of Martin and Abbey, Inc. began negotiating what was intended by the parties to be a long-term business relationship. The parties understood that Martin would print six bi-monthly issues of Pub Links Magazine. In December 2001, Martin submitted a proposal for printing expenses to Abbey, Inc. (Exhibits 3, 5, 8.) A Martin credit application was completed by Abbey, Inc. on December 20, 2001. (Exhibit 4.) It was the intention of the parties that Martin would extend short-term credit to Abbey for printing expenses.

Martin printed the January-February 2002 issue of the Pub Links Magazine. In an invoice dated January 31, 2002, Martin billed Abbey, Inc. $44,459.90 for the printing expenses. (Exhibit 9.) Abbey, Inc. failed to pay this charge within the allocated forty-five-day grace period. Martin incurred substantial costs in printing the magazines. Santacroce became concerned that payment was not forthcoming from Abbey, Inc. because it was a financial burden for Martin, and it was contrary to the expected success of an ongoing mutually beneficial business relationship. Martin began to print the March-April 2002 issue of Pub Links Magazine after issuing the January 31, 2002 invoice. (Exhibit 2.) In an invoice dated March 31, 2002, Martin billed Abbey, Inc. $79,932 for the cost of printing the March-April 2002 issue of Pub Links Magazine. (Exhibit 12.) As of March 31, 2002, Abbey, Inc. had not paid for the printing cost of the January-February 2002 issue of the magazine. This compounded the ongoing detrimental financial impact upon Martin. CT Page 6359

Santacroce requested that Towler and Kuhe personally guarantee past and future printing expenses. On April 5, 2002, both defendants executed a document entitled "Guaranty Agreement." (Exhibits 14, 15, A.) The executed agreement provides in relevant part: "For and in consideration of credit extended or to be extended by Martin Printing Inc., its successors or assigns, to and at the request of . . . [Towler and Kuhe] the undersigned, jointly and severally, do hereby unconditionally guarantee the payment at respective maturity dates if any and all indebtedness of any kind whatsoever, whether now due or which may hereafter become due from Purchaser to Martin Printing, Inc., . . . and hereby agree to pay punctually such indebtedness, plus interest at the maximum rate allowed by law together with all costs of collection (including a reasonable attorneys fee), if default in payment thereof be made by Purchaser." Towler and Kuhe were not forced or coerced into signing the guaranty agreements.

On April 12, 2002, Martin received from Abbey, Inc. a check in the amount of $44,894.90 for payment of the January-February 2002 issue of the magazine. (Exhibit 9.)

On May 27, 2002, Kuhe, on behalf of Abbey, Inc., executed its check in the amount of $79,932 as payment for the March-April 2002 issue of the magazine. (Exhibits 12, 17.)

There were insufficient funds in the account to cover the amount of the check. The remaining outstanding debt is $79,932.

The March-April 2002 issue of the magazine was designed to include a number of advertisement inserts. The inserts were contained within 145 shipping boxes. These boxes were in the possession of Martin. In a letter dated May 5, 2002, Towler made a demand that they be shipped to a printer located in the state of Florida. (Exhibit 19.) Santacroce declined to ship the boxes because he did not want Martin to incur the additional expense. Abbey, Inc. has continued to publish issues of the Pub Links utilizing another printing company.

Martin contends that Towler and Kuhe are individually responsible for the $79,932 debt because of the guarantee CT Page 6360 agreements. (Exhibits 14, 15, A.) In response, the defendants assert in their special defenses that the agreements are not enforceable for two principal reasons. First, they maintain that the guarantees are not supported by contractual consideration. Second, they allege that the guarantees were obtained through duress, specifically, as a result of the wrongful retention of the March-April 2002 advertisement inserts. The court will address these claims separately below.

The law of contracts provides in relevant part that a guaranty is enforceable on the basis of consideration or reliance. See generally Connecticut Bank Trust Co. v. Wilcox, 201 Conn. 570, 518 A.2d 928 (1986); Superior Wire Paper Products, LTD. v. Talcott Tool Machine, Inc., 184 Conn. 10, 441 A.2d 43 (1981), and the law cited therein.

In this matter, the court finds that the guaranty agreements are supported by consideration. The credible evidence demonstrates that Abbey, Inc. retained Martin to print the magazine. Martin extended credit to Abbey, Inc. Abbey, Inc. completed a credit application on December 20, 2001, to facilitate the business arrangement. Martin extended credit to Abbey, Inc. and printed both the January-February 2002 and March-April 2002 issues of the magazine. As of March 31, 2002, Abbey had not paid for the printing costs of the January-February 2002 issue. On April 5, 2002, Towler and Kuhe executed the guaranty agreements which stated in relevant part: "[F]or and in consideration of credit extended or to be extended by Martin Printing Inc., [Towler and Kuhe] . . . jointly and severally . . . unconditionally guarantee payment at respective maturity dates . . ." (Exhibits 14, 15, A.) The availability of credit to cover the printing costs was essential because the parties had contemplated that Martin would print six bi-monthly issues of the magazine. The extension of credit constituted the contractual consideration.

As of March 31, 2002, Abbey had not paid the printing costs of the January-February 2002 magazine issue. Abbey subsequently satisfied this debt on April 12, 2002. On May 27, 2002, nearly two months after the signing of the guarantee agreement, Kuhe on behalf of Abbey, Inc. wrote an overdraft check in the amount of $79,932 for the purported payment of the March-April 2002 issue of the magazine. This debt remains due and owing. The court finds CT Page 6361 that Towler and Kuhe have failed to sustain their burden to prove this special defense.

Towler and Kuhe allege as a special defense that the guarantees are not valid because they were forced to sign them under duress. Specifically, they contend that they signed the guarantees against their will because Martin refused to ship the magazine inserts to a new printer unless the March-April 2002 magazine was paid for and until Towler and Kuhe signed the personal guarantees.

The court finds that the defendants have failed to prove this special defense. To the contrary, the credible evidence unequivocally demonstrates that they knowingly and freely made themselves personally responsible for the $79,932 debt. At the relevant time in question, Towler and Kuhe were sophisticated businessmen. The guarantees were signed for the purpose of receiving credit for the printing costs of future magazine issues. Through a letter dated May 5, 2002, Towler made a demand that 145 shipping boxes containing advertisement inserts be shipped to a printing company located in the state of Florida. Santacroce reasonably declined to ship the boxes because he did not want Martin to incur additional expenses beyond the monies already owed. This conduct did not constitute duress.

Judgment shall enter in favor of the plaintiff as against defendants, Abbey, Towler and Rachel Kuhe, Administratrix of decedent's estate in the amount of $79,932, plus costs.

So ordered.

BY THE COURT

Peter Emmett Wiese, Judge