BLUMBERG ASSOCIATES WORLDWIDE, INC. v.
BROWN AND BROWN OF CONNECTICUT, INC., et al., SC 18911
Judicial District of Hartford
Contracts; Appellate Review; Whether Appellate Court Improperly Raised, Sua Sponte, an Alternate Ground for Affirmance; Whether Prevention of Performance Doctrine Applies to Conduct that Occurs Prior to Formation of Contract. In 2004, the defendant purchased Blumberg Associates, Inc. (BAI), which was an affiliate of the plaintiff insurance corporation. BAI was relocated to the defendant's office building, and the defendant requested that the insurance department (department) update its records to reflect the change in BAI's address. In response, the department changed not only BAI's address, but also changed the plaintiff's address. Subsequently, the department mailed the renewal notice for the plaintiff's insurance license to the defendant's address. The renewal notice, however, was returned to the department as "unable to forward." The plaintiff's license expired in January, 2006. In July, 2006, the plaintiff and the defendant entered into a contract, pursuant to which the defendant agreed that, in return for the plaintiff's services, it would pay the plaintiff a percentage of commissions that it received from the sale of certain insurance policies. The contract also contained a termination clause providing that the defendant could terminate the contract if the plaintiff's insurance license was suspended. In 2008, the defendant notified the plaintiff that it was terminating the contract based on that clause. Thereafter, the plaintiff brought this action, alleging that, by failing to forward the renewal notice to the plaintiff, the defendant breached a provision of the contract and that the plaintiff's license expired due to that breach. The defendant moved for summary judgment, arguing that there was no genuine issue of material fact that it terminated the contract in accordance with the termination clause. Relying on the prevention of performance doctrine, the plaintiff contended that the defendant's alleged actions, which included changing the plaintiff's address and failing to forward the renewal notice, raised genuine issues of material fact as to whether the defendant prevented or hindered the plaintiff from performing its contractual obligation. The trial court granted summary judgment for the defendant, ruling that, because the plaintiff's license status was a matter of public record, the defendant's conduct could not, as a matter of law, be the cause of the plaintiff's failure to renew its insurance license. On appeal (132 Conn. App. 85), the Appellate Court affirmed the trial court's judgment on an alternate ground not raised by the defendant. Noting that the alleged wrongful conduct by the defendant occurred prior to the contract's formation, the court ruled that the plaintiff's reliance on the prevention doctrine was misplaced because the defendant's obligation not to hinder the plaintiff in its performance of its contractual obligations did not exist at the time of its alleged wrongful conduct. In this appeal, the Supreme Court will decide whether the Appellate Court properly raised, sua sponte, an alternate ground for affirmance and, if so, whether it properly affirmed the trial court's judgment on the merits based on that alternate ground.