Salce v. Wolczek
The Connecticut Supreme Court explained in the 1985 case of Francis T. Zappone Co. v. Mark, "[u]nder the doctrine of equitable conversion … the purchaser of land under an executory contract is regarded as the owner, subject to the vendor's lien for the unpaid purchase price, and the vendor holds the legal title in trust for the purchaser." Anwalt, LLC owned real property in Trumbull. Under a written agreement, Anthony H. Salce, Sr. sold his 50 percent interest in Anwalt to Walter Wolczek for $1.75 million subject to a contingency clause that provided, relevantly, that "[i]f within one year of the closing hereunder any ownership interest in the Premises…is transferred to a Non-Wolczek Person' based on a whole property value of more than $3,500,000, [the defendant] shall pay to [the plaintiff] an additional purchase price…" A "non-Wolczek person" was defined to exclude Wolczek or certain family members. Anwalt conveyed the premises to Corporate Drive Office Center, LLC, an entity comprising Wolczek and family members. Within one year of the buyout closing, Corporate Drive entered into a real property purchase agreement to sell the premises for $5.5 million to Brian Vaughn, a non-Wolczek person. Closing took place more than one year after the buyout closing. Salce brought a multi-count complaint against Wolczek seeking damages for his alleged breach of the buyout agreement. The court granted the plaintiff's motion for summary judgment on a breach of contract count. The plaintiff withdrew the remaining counts and judgment entered for $1,364,026.20. The defendant appealed claiming, first, that the court improperly determined that the contingency clause was unambiguous. A majority of the Appellate Court disagreed and affirmed the judgment. By its plain terms, the buyout agreement made clear that the transfer of "any ownership interest" to a requisite person for a certain minimum amount triggered the contingency clause. It was uncontested that within the one year deadline, the defendant entered into the Vaughn purchase agreement. Based on the doctrine of equitable conversion, the purchase agreement unambiguously accomplished a transfer of an ownership interest, although physical title was to pass later. Had the drafters intended "transfer of title at closing" to be the trigger, they could have said so. The court properly calculated damages and did not err in awarding postjudgment interest. Judge Borden dissented, finding the contingency clause ambiguous.