The opinion of the court was delivered by: Lewis A. Kaplan, District Judge.
Plaintiff Myron Schuster is a collector of antique automobiles. He
contends that defendant dealer, Dragone Classic Motor Cars ("Dragone
Classic"), and its two principals, defendants Emanuel Dragone
("Dragone") and George Dragone, defrauded him in two separate
transactions-the first, an alleged loan of $2,125,000, and the second,
the purchase of a 1939 Bugatti Type 57. His claims include breach of
contract based on the defendants' failure to repay the note, fraud,
breach of fiduciary duty, unjust enrichment, and violation of the
Connecticut Unfair Trade Practices Act. Defendants counterclaimed based
on plaintiff's alleged failure to pay for repair and restoration
services performed by defendants on four of plaintiff's automobiles.
During the course of the trial, the parties settled all of their
disputes relating to the 1939 Bugatti Type 57 and defendants'
non-payment claims leaving only the dispute concerning the alleged
$2,125,000 loan for resolution. This opinion embodies the Court's
findings of fact and conclusions of law following trial.
The general background of the dispute is fully set forth in the Court's
opinion denying plaintiff's motion for summary judgment, familiarity
with which is assumed.*fn1 Only the barest essentials need be noted
Dragone was seeking to acquire a number of antique automobiles from an
Italian bankruptcy court. The financing was to come principally from a
foreign investor, one Kogan, who allegedly was to have been a partner in
Dragone's acquisition of the vehicles. At a critical juncture, however,
Kogan was unable or reluctant to come up with the money as promptly as
was required. Dragone approached Schuster for a $2,125,000 bridge loan.
Schuster agreed to lend him the money on the condition that he receive a
short wheelbase Ferrari California Spyder automobile, one of the
vehicles to be acquired in Italy, at a very advantageous price in
partial repayment of the loan, with the balance to be repaid in cash. He
wired the money to Dragone's attorney on June 4, and the attorney
promptly wired it on to Dragone's Italian contact. On June 7, Dragone,
his brother George Dragone, and Dragone Classic executed and delivered
to Schuster a promissory note in the principal amount of $2,125,000.
Under the terms of the note, the obligors were obliged to pay Schuster
$1,675,000 in cash on June 21. The balance of $450,000 was due on
September 3, but the defendants agreed that they would transfer title
and deliver the California Spyder to Schuster by that date, in which
case Schuster would waive his right to payment of the balance.*fn2 So
much is essentially undisputed, but the parties here part ways.
In mid June, Dragone learned that Kogan needed more time to come up
with the money and claims that he contacted Schuster with a view to
Schuster replacing Kogan in the deal. Schuster, according to Dragone,
agreed, although Dragone was vague and inconsistent about the alleged
terms of that agreement.
On direct, Dragone asserted that "Schuster agreed to stay in the deal
if he could get more and better cars," thus implying that Schuster
agreed to become a partner in rather than a lender to the venture.
Schuster, according to Dragone, wanted "a total of three . . . cars: the
short-wheel base California Spyder, the short-wheel base Berlinetta
steel body and the 500 Testarossa." Schuster allegedly said that he did
not want his money back, he wanted the cars.*fn3
But Dragone told a somewhat different story on cross-examination:
"Q. Mr. Dragone, you say had an agreement with Mr.
Schuster that supersedes the original loan, correct?
Q. The agreement to that you have was that Mr. Schuster
was supposed to receive a Ferrari Testarosa and a
Ferrari, the Ferrari California Spyder and the
Q. He was to receive nothing else, correct?
A. Well, you see, the agreement was open-ended, and this has
been the problem right along here. I agreed to give
him a $200,000 discount on each one of these
additional cars and if there was anything else there
that he wanted, he was either going to supplement,
put more money in, or receive just these cars and
maybe get some money back. It was open-ended. None of
us went into this deal having seen any of these ...