Opinion
No. FST CV 05-4006148 S
April 29, 2008
MEMORANDUM OF DECISION
This matter involves a dispute over rental construction equipment owned by the plaintiff, Abele Tractors Equipment Co., Inc., (ATE), which is claimed to have been used at a construction site at 978 Danbury Road, Wilton, Connecticut, also known as Route 7, Wilton, Connecticut and also known as the Bob Sharpe Nissan site. The first three defendants are: the site owner, Motors Group Associated Limited Partnership (MG), the general contractor, A. Pappajohn Company, Inc., (APC), and the excavating subcontractor, Norwalk Excavating Co., Inc., (NEC). ATE's business is the rental of construction and excavating equipment. ATE placed a mechanic's lien on the subject real property. That lien was bonded out by the fourth defendant, Carolina Casualty Insurance Company (CCIC). ATE filed a four-count complaint claiming a foreclosure of its mechanic's lien, breach of contract, unjust enrichment and suit upon a bond under Gen. Stat. § 49-37.
The complaint alleged that ATE and NEC entered into a contract and pursuant to the contract, ATE provided two pieces of construction equipment to the construction site at 978 Danbury Road, Wilton, Connecticut. ATE claimed that the rented construction equipment was used at the construction site and they are due rental fees for the period of January 7, 2004 until September 16, 2004, plus interest and attorney fees.
The ATE filed, served and recorded a mechanic's lien for $31,702.83 on December 15, 2004. In a separate legal proceeding the Superior Court, Nadeau, J., ordered the mechanic's lien dissolved on February 22, 2005 when CCIC posted a bond of $31,702.83.
Three defendants, APC, MG and CCIC appeared by the same counsel of record. NEC was defaulted on February 7, 2007 by a Superior Court Judge in this case.
ATE later amended its complaint and proceeded to trial on two counts: suit on the bond substituted for the mechanic's lien and unjust enrichment. The three appearing defendants answered and filed four special defenses: payment in full, payment to NEC of sufficient monies, no lienable fund since NEC was overpaid and NEC is liable, not the three other defendants. The pleadings were closed and the matter was claimed to the trial list. The bond posted by CCIC was increased to $52,373.11 effective December 15, 2005 (#126.00).
On January 30, 2007, the three appearing defendants filed a six-count cross-claim against NEC for breach of contract, negligent misrepresentation, intentional misrepresentation, CUTPA, breach of fiduciary duty and statutory theft seeking money damages, punitive damages, interest and attorney fees. NEC was defaulted by a Superior Court Judge on February 7, 2007.
This case was consolidated for trial with Norwalk Excavating Co., Inc. v. A. Pappajohn Co., Inc. FST CV 05-4003626-S. Counsel of record for NEC was permitted to withdraw its appearance on April 24, 2006 and no counsel appeared for the defendant NEC thereafter. NEC was non-suited by a Superior Court Judge on September 6, 2006.
Both cases were referred to Kenneth Povodator, an Attorney Trial Referee, in accordance with Gen. Stat. § 52-434(a)(4) and P.B. § 19-2A. Both matters were tried at the same time by the ATR on February 7, 2007. The ATR's report on FST CV 05-4003626-S dated May 25, 2007 has been accepted. The undersigned issued a Memorandum of Decision in FST CV 05-4003626S on November 1, 2007. That case is no longer at issue.
The three defendants, ATE, MG and CCIC and the plaintiff, ATE, appeared at trial on February 7, 2007 and offered evidence. The court had ordered consolidation of the two cases. Post-trial briefs were filed on March 17, 2007. The ATR filed his report in this matter, FST CV 05-4006148S, on May 25, 2007 (#147.00).
The Attorney Trial Referee made the following factual findings;
1. MG as the owner of property at 978 Danbury Road Wilton, Connecticut a.k.a. Route 7, Wilton, Connecticut a.k.a. Bob Sharpe Nissan construction site was desirous of constructing an automobile dealership facility on that site.
2. MG hired APC as the prime contractor for the construction.
3. APC hired NEC as the excavating subcontractor.
4. NEC needed to obtain certain construction equipment to fulfill the terms and conditions of their excavating subcontract.
5. At all times ATE was the owner of two pieces of construction equipment which it leased to NEC.
6. ATE's Exhibit B is the January 8, 2004 Contract 27207 and Exhibits C and E are the delivery documents that contain a description of the first piece of rental equipment, a track excavator/10, rental hours, charges, and notes on the equipment used.
7. The ATE's Exhibit F is the April 2, 2004 Contract 27502 and Exhibit G is the delivery document that contain a description of the second piece of rental equipment, a track excavator/13, rental hours, changes and notes on the equipment used.
8. NEC failed to complete the terms and conditions of its contract and was discharged from the job on October 11, 2007.
9. There was no direct testimony by any employee of MG, NEC, APC or ATE, that the two pieces of equipment set forth in Exhibits B, C, E, F and G were used for excavation for the period of time billed.
10. The Attorney Trial Referee drew the conclusions from Exhibits B, C, E, F and G that these two pieces of rental equipment were actually on the construction site at 978 Danbury Road and used in the construction project.
11. The Attorney Trial Referee found that the rental charges for the equipment as set forth in the invoices Exhibits D and H and the summary sheet, Exhibit I was $31,702.83, none of which was paid.
12. There was no agreement or contract between ATE and MG and/or APC.
13. The Attorney Trial Referee found that the $31,702.83 was not paid for many months and entered an order for 10% interest to run from September 26, 2004 as against MG and CCIC.
14. The ATR found that the $31,702.83 was not paid for many months and entered an order for 2% per month interest to run from September 26, 2004 as against NEC.
15. The Attorney Trial Referee entered no orders of attorneys fees, deferring this issue to the court.
16. Based upon these findings of facts, the Attorney Trial Referee concluded that ATE was owed the sum of $31,702.83 plus prejudgment interest of 10% per annum pursuant to Gen. Stat. § 37-3a as against the defendants, MG and CCIC, and $31,702.83 plus prejudgment interest of 2% per month pursuant to the contractual documents as against the defendant NEC.
17. The issue on the First Count were found for ATE.
Both patties filed objections to the Attorney Trial Referee's report pursuant to P.B. § 19-24. ATE's objections are summarized as follows.
1. The Attorney Trial Referee's report should be corrected.
2. Once the report is corrected, the report should then be accepted and the correction should delete the interest rate pursuant to Gen. Stat. § 37-3a and impose the contractual interest rate of 2% per month set forth in the contract between NEC and APC, as against the defendants, MG and CCIC, pursuant to S.J. Smith Construction Inc. v. Home Depot U.S.A.
The defendant's objections are summarized as follows.
1. There was no evidence of any improvement to the land and the Exhibits offered do not show improvements to the land.
2. The amount of damages is incorrect.
3. No attorneys fees can be ordered as against the bond substituted for a mechanic's lien.
4. The Attorney Trial Referee's report should be corrected due to the ATR's factual findings, "Pappajohn is not liable," and a judgment should not enter as against APC.
All parties appeared before the undersigned and argued their respective objections. This court took the papers. On November 1, 2007 the court issued a Memorandum of Decision in Norwalk Excavating Co., Inc. v. A. Pappajohn Company, Inc. et al., FST CV 05-4003626S. The court accepted the ATR's report of May 25, 2007 as to the defendant's counter-claims. This court thus entered a judgment in favor of the defendants, A. Pappajohn Company, Inc. (APC), Carolina Casualty Insurance Company (CCIC) and Motors Group Associated Limited Partnership (MG) as agent Norwalk Excavating Co., Inc. (NEC) in the amount of $149,284.48 plus interest in the amount of $36,906.45 from February 6, 2005 through July 26, 2007 with $41.47 per diem interest thereafter. As previously stated, that case, FST CV 05-4003626S, is no longer at issue.
On November 1, 2007 this court issued a separate Memorandum of Decision in this instant case, Abele Tractors Equipment Co., Inc. v. Norwalk Excavating Co., Inc. et al., FST CV 05-4006148S. The court ordered: "In accordance with P.B. § 19-17(a) this court cannot accept the report and refers the matter to the same Attorney Trial Referee for a new trial on the issue of calculation of damages only in the above file. Upon submission of a new ATR report the court reserves the right to decide all issues presented by counsel in response to the May 25, 2007 Referee's Report as well as any issues arising from the new Referee's Report." In addition this court posed nineteen specifically numbered questions to the ATR on the issue of calculation of damages. Finally, this court ordered: "The ATR is requested to review the file and attend to any Motions to Correct filed by counsel after May 25, 2007." The court notes that only one Motion to Correct was filed, to wit; Plaintiff's Motion to Correct Referee's Report dated September 28, 2007 (#152.00). This Motion to Correct addressed paragraph 12 of the Findings contained in the ATR's May 25, 2007 Report.
The ATR issued its Referee's Supplemental Report dated December 19, 2007 (#160.10). It corrected mathematical errors in its May 25, 2007 Report and responded to all nineteen of the court's November 1, 2007 questions. No trial or new hearing was scheduled or held by the ATR prior to December 19, 2007. The ATR made the following additional Corrected Findings.
1. The outstanding amount due ATE under contracts 27207 and 27502 is $30,249.23.
2. Interest on the $30,249.23 should accrue at the rate of 2% per month from September 26, 2004 as against NEC as per the terms of the invoices, Ex. D and Ex. H, and the contract, Ex. A. Interest of 2% per month from September 26, 2004 through December 27, 2007 is $23,594.40 with per diem interest of $19.89 based on a 365-day year.
3. Interest on the $30,249.23 should accrue at the rate of 10% per annum from September 26, 2004 as against MC and CCIC as per Gen. Statutes § 37a-3. Interest at 10% per annum from September 26, 2004 through December 27, 2007 is $9,831 with per diem interest of $8.29 based on a 365-day year.
4. APC is not the owner of the premises.
5. Since ATE has recovered in the First Count, the issues in the Second Count of unjust enrichment are found for all three defendants, MG, APC and CCIC.
6. The issues on the Second Count are found for ATE against NEC.
7. The issues on the four special defenses are found for ATE.
ATE did not make any further Objections to the ATR's December 19, 2007 Report and on February 6, 2008 moved for Judgment on the ATR's Supplemental Report (#159.00). The three defendants, APC, MG and CCIC, filed January 11, 2008 objections to the December 19, 2007 Report (#156.00). Plaintiff's Reply to Defendant's Objection to Referee's Report dated February 6, 2008 (#161.10) was filed. These motions appeared on the regular short calendar on February 11, 2008. Neither party requested oral argument and thus the Objections filed in 2007 and the above three motions were submitted to this court. The three defendants claimed the following errors.
1. The ATR did not schedule a new trial on the calculation of damages as ordered by the November 1, 2007 Memorandum of Decision.
2. The defendant's did not waive their right to have evidence considered that would support their position that the ATE's equipment was not used to improve the premises.
3. The ATR errored in finding that the equipment improved the premises and was used in the physical construction of the premises.
4. The amount of damages recommended by the ATR is incorrect.
DISCUSSION OF LAW
P.B. § 19-14 provides that "A party may file objections to the acceptance of a report on the ground that conclusions of fact stated in it were not properly reached on the basis of the subordinate facts found, or that the . . . attorney trial referee erred in rulings on evidence or other rulings or that there are other reasons why the report should not be accepted." P.B. § 19-17(a) outlines the function of this court in reviewing reports of attorney trial referees and provides; "The court shall render such judgment as the law requires upon the facts in the report. If the court finds that the . . . attorney trial referee, has materially erred in its rulings or that there are other sufficient reasons why the report should not be accepted, the court shall reject the report and refer the matter to the same or another . . . attorney trial referee, . . . for a new trial or revoke the reference and leave the case to be disposed of in court."
"The trial court must review the referee's entire report to determine whether the recommendations contained in it are supported by findings of fact in the report." Killion v. Davis, 257 Conn. 98, 102 (2001). Second, the court must insure that the report does not contain "legal conclusions for which there are no subordinate facts." Id., 102. Third, the report must be reviewed to determine if it is "legally and logically correct." Id. 103.
Other principles governing attorney trial referee's report provide that: "a reviewing authority may not substitute its findings for those of the trier of the facts. This principle applies no matter whether the reviewing authority is the Supreme Court . . . the Appellate Court . . . or the Superior Court reviewing the findings of . . . attorney trial referees." Wilcox Trucking, Inc. v. Mansour Builders, Inc., 20 Conn.App. 420, 423 (1989), cert. denied, 214 Conn. 804 (1990). A fact finder's recommendation should be accepted when "there is nothing that is unreasonable, illogical or clearly erroneous in the findings of the factfinder and the reasonable inferences that may be drawn therefrom." Id., 425. "The factual findings of [an attorney trial referee] on any issue are reversible only if they are clearly erroneous . . . A reviewing court cannot retry the facts or pass upon the credibility of the witnesses . . . A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Meadows v. Higgins, 249 Conn. 155, 162 (1999).
A complete transcript of the February 7, 2007 trial was presented to this court along with all exhibits. The court examined both the underlying file Abele Tractors and Equipment Co., Inc. v. Norwalk Excavating Co., Inc., FST CV 05-4006148S and the companion mechanic's lien foreclosure case Norwalk Excavating Co., Inc., v. A. Pappajohn Company Inc., et al., FST CV 05-4003626S. Both cases were tried and presented to the same Attorney Trial Referee on February 7, 2007.
CONCLUSION
The court notes that the ATR did not specifically rule on the outstanding Motion to Correct (#152.00). The court notes that the following Corrected Findings were issued by the ATR: "12. The equipment was delivered to the property/work site on or about January 8, 2004." This is identical to the May 25, 2007 ATR's Report, Finding 12. The court further notes that the "equipment" referred to in this January 8, 2004 delivery finding was based on Contract 27502 dated April 2, 2004. Ex. G. The court has examined Ex. G. The ATR's finding as to Ex. G is accurate but the date of delivery of the equipment to the site is a scrivener's error. It should be an April 2, 2004 delivery not the January 8, 2004 delivery. In any event ATE is not seeking any damages for rental equipment connected with Contract 27502, Ex. G, from January 8, 2004 to April 1, 2004. The court has the authority to correct the ATR's report. "The court may correct a report at any time before judgment . . . upon its own motion, add a fact which is admitted or undisputed or strike a fact improperly found." P.B. § 19-17(b). The court upon its own motion finds that the ATR committed a scrivener's error and that the date in paragraph 12 of the Corrected Finding is uncontested and should be changed. There is no need for this court to refer this correction issue back to the ATR. The court corrects paragraph 12 of the Corrected Finding to: "The equipment was delivered to the property/work site on or about April 2, 2004."
The principle issue in this case is whether or not the equipment that was rented by ATE was actually used on the premises at 978 Danbury Road, Wilton, Connecticut. This case commenced as a statutory foreclosure of a mechanic's lien pursuant to Gen. Stat. § 49-33.
If any person has a claim for more than ten dollars for materials furnished or services rendered in the construction, raising, removal or repairs of any building or any of its appurtenances or in the improvement of any lot or in the site development or subdivision of any plot of land, and the claim is by virtue of an agreement with or by consent of the owner of the land upon which the building is being erected or has been erected or has been moved, or by consent of the owner of the lot being improved or by consent of the owner of the plot of land being improved or subdivided, or of some other person having authority from and rightfully acting for the owner in procuring the labor or materials, the building, with the land on which it stands or the lot or in the event that the materials were furnished or services were rendered in the site development or subdivision of any plot of land, then the plot of land, is subject to the payment of the claim.
Gen. Stat. § 49-33(a).
In order for ATE to satisfy its burden under § 49-33 it must comply with the "physical enhancement test." Ceci Brothers, Inc. v. Five Twenty-One Corp., 51 Conn.App. 703, 780 (1999); Thompson Peck, Inc. v. Division Drywall, Inc., 241 Conn. 370, 374 (1997). There is no lien for businesses "whose services have not enhanced the property in some physical manner, laid the groundwork for the physical enhancement of the property, or whose work was not an essential part in the scheme of physical improvement." Id., 374.
The three defendants claim that there was no evidence that the equipment set forth in Exhibits C G, the two pieces of equipment rented by ATE to NEC, were actually used in site improvement work. They argue that the mere placement of the equipment on the property does not comply with the physical enhancement test.
This court agrees that the plaintiff must comply with the physical enhancement test. The plaintiff therefore must prove more than the delivery of the construction equipment to the property. The evidence of the physical enhancement to the property must be a direct association with a physical construction and improvements on the defendant property.
There was no testimony by NEC at trial. There was no eye witness testimony of the equipment being used on the construction site. The plaintiff presented a witness who had no familiarity with the work that was done. There was no direct testimony to satisfy the physical enhancement test. The court so finds.
The ATR read carefully Exhibits C, E and G. The ATR found that the equipment was placed on the property. There was no countervailing proof. The "hour meter reading/mileage" on both Ex. C, Ex. E and Ex. G., is substantial evidence of the number of hours that the equipment was run. In addition Exhibits C, E and G indicated that the equipment had wear and tear between its initial date of being placed on the property at 978 Danbury Road and when it was picked up. Based upon Exhibits C, E G the Attorney Trial Referee as the trier of fact, drew an inference that both pieces of equipment were used for the physical construction and improvement of the property. The equipment was designed to be used for heavy construction. There was proof the equipment was delivered to the construction site and signed for. NEC was there to provide the excavation of the site. An ATR has a duty to draw reasonable inferences from the testimony and from other evidence. Levy, Miller, Maretz, LLC v. Vuoso, 70 Conn.App. 124, 130-31 (2002); Putman v. Kennedy, CT Page 6881 104 Conn.App. 26, 33 (2007). The court therefore finds there is sufficient evidence in the record to justify the findings of the Attorney Trial Referee that the physical enhancement test was met and that the leased equipment was actually used at 978 Danbury Road, Wilton, Connecticut in conjunction with the physical construction and improvement of the defendant Motor's property for the time period charged in Ex. C, E and G. Weber v. Pascarella Mason Street, LLC, 103 Conn.App. 710, 718-19 (2007).
The Attorney Trial Referee utilizing Exhibits C, E and G determined the amount of hours used. The equipment therefore had to have been used during that period since the evidence established no other reasonable explanation why construction/excavation equipment would be turned on and not used. There were a substantial amount of hours shown on the two meters. Reasonable wear and tear on the rented equipment was established by the exhibits in evidence.
The Attorney Trial Referee's conclusions that $30,249.23 was the amount of time spent for the rental based upon the meter readings in Exhibits C, E and G finds support in the evidence. The Attorney Trial Referee conclusion that $30,249.23 was due is supported by the evidence.
The Attorney Trial Referee concluded that interest was due as against MG and CCIC at the rate of 10% pursuant to Gen. Stat. § 37-3a. That statute does not set a rate of interest at 10% but zaps the rate of interest at 10%. For interest to be awarded there must be a demonstration that an amount was due at a specific time and that the withholding was willful. Cecio Brothers, Inc. v. Feldmann, 161 Conn. 265, 275-76 (1971). The ATR found facts that support those findings. There was evidence before the ATR as to a rate of interest established by the contract between ATE and NEC. Ex. A. "The undersigned agrees to pay 2% per month Finance Charge for Corporate Accounts . . ." None of the three contesting defendants, APC, MG and/or CCIC were parties to Ex. A. "The determination of whether or not interest is to be recognized as a proper element of damage is one to be made in view of the demands of justice rather than through the application of any arbitrary rule." Dowd v. Dowd, 96 Conn.App. 75, 85 (2006). This is a fact bound determination that lies within the ATR's discretion. Spearhead Construction Corporation v. Bianco, 39 Conn.App. 122, 135-36 (1995).
ATE claims that the rate of interest must be the contract rate of interest of 2% per month as set forth between the contract between ATE and NEC. The court examined that contract and finds that none of the three defendants were a party to that contract and had no ability to negotiate the 2% monthly interest rate. The Attorney Trial Referee's rejection of the 2% interest per month is accepted by the court since there was adequate evidence in the record to reject such a contract claim. The ATR's rejection of the 2% per month interest rate and the use of the statutory 10% interest rate was within the ATR's discretion. Id. 134, fn 3.
The Attorney Trial Referee referred this matter to the court in order to determine the amount of attorneys fees. The defendants claim that no attorneys fees are authorized by the statute. This referral to the court is appropriate since the award of attorney fees under Gen. Stat. §§ 49-37 and 52-249(a) is an issue of law. Weber v. Pascarella Mason Street, LLC, supra, 103 Conn.App. 715; Original Grosso Construction Co. v. Shepherd, 70 Conn. 404, 418-19 (2002).
"Connecticut adheres to the `American rule,' which provides that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception." Young v. Vlahos, 103 Conn.App. 470, 479, 929 A.2d 362 (2007), cert. denied, 285 Conn. 913 (2008).
The contract between ATE and NEC contains a provision for attorney fees: ". . . on any past due amounts plus any cost of collection or preservation of Abele's rights that may be necessary, including but not limited to, reasonable attorneys fees, court costs, expenses, and disbursements." Exhibit A. In addition all the invoices upon which this action is based contain a provision for attorney fees, ". . . plus any cost of collection deemed necessary by Abele, including but not limited o attorneys fees, court costs, expenses and disbursements." Ex. D and Ex. H. The ATR was correct that ATE is entitled to an award of attorney fees against NEC based on these contractual provisions. The ATR was correct in concluding that MG, APC and CCIC are not bound by any contractual terms to pay attorney fees to ATE including the above two clauses in the ATE/NEC documents. ATE's claim for attorney fees as against MC, APC and/or CCIC must be based on statutes.
ATE commenced this lawsuit by a complaint dated June 27, 2005. The first count sought the foreclosure of a mechanic's lien under Gen. Statutes § 49-33. That statute provides: "Any mechanic's lien may be foreclosed in the same manner as a mortgage." Gen. Stat. § 49-33(i).
A bond was substituted for the mechanic'
s lien pursuant to General Statutes § 49-37 on February 22, 2005. On June 2, 2006 ATE filed a two-count amended complaint (#124.00). ATE was no longer seeking a foreclosure of mechanic's lien under Gen. Stat. § 49-33. The first count of the June 2, 2006 amended complaint was a suit upon the substituted bond pursuant to Gen. Statute § 49-37. The second count sought damages for unjust enrichment. ATE's Claims for Relief were: Money damages and collection on the bond, an award of costs and attorney fees under General Statutes § 52-249; an award of attorney fees as provided by the agreement, interest, costs and such other further and different relief as this court may deem just and equitable."
Neither Gen. Stat. § 49-33 nor § 49-37 specifically contains attorney fees language. "If the judge is satisfied that the applicant in good faith intends to contest the lien, he shall, if the applicant offers a bond, with sufficient surety, conditioned to pay to the lienor or his assigns such amount as a court of competent jurisdiction may adjudge to have been secured by the lien, with interest and costs, order the lien to be dissolved and such bond substituted for the lien. . ." Gen. Stat. § 49-37(a). "Whenever a bond is submitted for any lien after an action for the foreclosure of a lien has been commenced, the plaintiff in the foreclosure may amend his complaint, without costs, so as to make the action one upon the bond with which the plaintiff may join an action to recover his claim." Gen. Stat. § 49-37(a).
Attorney fees are permitted by statute in foreclosure of mortgages or liens. "The plaintiff in any action of foreclosure of a mortgage or lien, upon obtaining judgment of foreclosure, when there has been a hearing as to the form of judgment or the limitation of time for redemption, shall be allowed the same costs, including a reasonable attorney fees, as if there have been a hearing on an issue of fact. The same costs and fees shall be recoverable as part of the judgment in any action upon a bond which has been substituted for a mechanic's lien. Gen. Stat. § 52-249(a). This statute was amended in 1984 to include reasonable attorney fees as allowable costs. P.A. 84-282. This statute was further amended in 1999 to "allow recover of costs and attorney fees in cases where a bond has been substituted for a mechanic's lien." P.A. 99-153, Sec. 8. This quotation is found in the History section of Gen. Stat. § 52-249. P.A. 99-153 is now codified as the last sentence of Gen. Stat. § 52-249(a).
The issue of attorney fees requires an interpretation of the 1999 amendment to Conn. Stat. § 52-249.
In this state, a "mechanic's lien is a creature of statute and gives a right of action which did not exist at common law . . . The purpose of the mechanic's lien is to give one who furnishes materials or services the security of the building and land for the payment of his claim by making such claim a lien thereon . . . Moreover, [t]he guidelines for interpreting mechanic's lien legislation are . . . well established. Although the mechanic's lien statute creates a statutory right in derogation of the common law . . . its provisions should be liberally construed in order to implement its remedial purpose of furnishing security for one who provides services or materials . . . Our interpretation, however, may not depart from reasonable compliance with the specific terms of the statute under the guise of a liberal construction."
Intercity Development, LLC. v. Joao Andrade, et al., 286 Conn. 177, 183-84 (2008).
"Moreover, we emphasized that, `[t]he General Assembly is always presumed to know all the existing statutes and the effect that its action or nonaction will have upon any one of them . . . as well as the interpretation which the courts have placed upon one of its legislative enactments and of the effect that its own nonaction, thereafter may have,' and we declined to `torture the language of § 35-44b to reach the results, disfavored in our jurisprudence, of overruling past decisions construing § 35-31(b), or impliedly repealing that same statute.'" State v. Marsh McLennan Cos., 286 Conn. 454, 470, fn. 17 (2008).
Postjudgment attorney fees were recently allowed under Gen. Stat. § 52-249 by the Appellate Court in its latest interpretation of § 52-249. "We see no reason why the statutory sections relied on by the plaintiff would not authorize the attorneys fee award requested by the plaintiff, were the court to have concluded the plaintiff were entitled upon balancing of the equities. For the court to have failed to engage in such an analysis, simply concluding that no statutory authority existed, clearly reflects a misconception of the law. See, e.g. Tsitaridis v. Tsitaridis, 100 Conn.App. 115, 916 A.2d 877 (2007) (reversing judgment on trial court's failure to apply applicable statute). Accordingly, we reverse this portion of the judgment and remand for consideration of the plaintiff's claim for attorneys fees." Moasser v. Becker, 107 Conn.App. (2008), Connecticut Law Journal April 22, 2008.
In most mortgage foreclosures attorney fees are claimed pursuant to the specific terms of the promissory note and/or mortgage deed. It is a rare mortgage foreclosure where attorney fees are claimed under Gen. Stat. § 52-249(a). A great many mechanic's lien foreclosures are also governed by attorney fee clauses contained within the construction contracts signed by the parties. So it is not a common occurrence that attorney fees in a foreclosure of a mechanic's lien are determined according to Gen. Sta. § 52-249(c)
Gen. Stat. § 52-249(a) does not authorize attorney fees for all stages of the foreclosure of a mortgage, mechanic's lien or any other lien. A plain reading of Gen. Stat. § 52-249(a) reveals two situations in a foreclosure proceeding where attorney fees may be awarded: (1) "a hearing as to the form of judgment," (2) "a hearing as to . . . the limitation of time for redemption." Gen. Stat. § 1-2Z. The statute by its plain language does not authorize the recovery of attorney fees incurred to litigate the merits of the claim. Federal Hill Builders, LLC v. Tehrani et al., Superior Court, judicial district of Litchfield, docket number LLICVOS-4003860S (Marano, J., August 28, 2007); 44 Conn. L. Rptr. No. 4, 117 (November 5, 2007). The narrowness of Gen. Stat. § 52-249(a) has been confirmed by every case in which the issue has arisen. Able Plumbing, Inc. v. Sandak, Superior Court, judicial district of Stamford/Norwalk at Stamford, docket number FST CV 03-0193854S (Tobin, D., J., January 31, 2006) [ 40 Conn. L. Rptr. 703].
One trial court decision examined the legislative history of the 1999 amendment to Gen. Stat. § 52-249(a) and denied an allowance of attorney fees for a suit upon a bond substituted for a mechanic's lien citing the deficient language of that 1999 amendment.
The last sentence in § 52-249(a), to the effect that the same costs and fees as in the foreclosure of a mortgage or lien shall be recoverable in an action upon the bond which has been substituted for the mechanic's lien is particularly inept because in an action on a bond there is no hearing as to the form of the judgment or the time for redemption. The legislature apparently added that language without an awareness of how it meshed with the rest of the statute. While generally every work of the statute is assumed to have some meaning, this is an example of such poor draftsmanship that this court cannot give that sentence meaning.A.A. Mason, LLC v. Mortgage Construction, Inc., 49 Conn.Sup. 405, 411-12 (2005).
The court in A.A. Mason held a trial on the plaintiff's claims on a bond substituted for a mechanic's lien. The court concluded: "Before this court there was a protracted trial on the plaintiff's claims for the contract prices of the two jobs and on the named defendant's counter-claims of offsets against the contract price. There never was a hearing on the form of the judgment or the time of redemption and so the plaintiff is not entitled to attorneys fees under this statute." Id. 412. A number of trial courts have cited A.A. Mason for the broader proportion that Gen. Stat. § 52-249(a) does not allow attorney fees in a suit once a bond substituted for a mechanic's lien.
S.J. Smith Construction, Inc. v. Home Depot, USA, Superior Court, judicial district of Stamford/Norwalk at Stamford, docket number FST CV 97-0157414S (D'Andrea, J., December 1, 1997) [ 21 Conn. L. Rptr. 80], found that Gen. Stat. § 52-249(a) by its terms did not allow attorney fees in a suit on a bond substituted for a mechanic's lien. It can be argued that the legislature passed P.A. 99-153 in response to S.J. Smith Construction, Inc. v. Home Depot, USA.
This court believes that Gen. Stat. § 52-249(a) does allow an award of attorney fees in a suit on a bond substituted for a mechanic's lien in the limited manner contained in the statute for the following reasons: (1) Mechanic's lien statutes are remedial in nature and are to be liberally construed in favor of the mechanic's liens. Computoro v. Stuart Hardware Corporation, 180 Conn. 545, 550 (1980); (2) The plain language of the one sentence amendment to Gen. Stat. § 52-249(a) requires attorney fees: "The same costs and fees shall be recoverable as part of the judgment in any action upon a bond which has been substituted for a mechanic's lien." P.A. 99-153, S.8; (3) The History notes published with the statute states that P.A. 99-153 § 8 was approved: "to allow recovery of costs and attorney fees in cases where a bond has been substituted for a mechanic's lien"; (4) The trial court has no authority to totally disregard a portion of a statute. Millers Pond Co., LLC v. New London, 273 Conn. 786, 812 (2005) ("To permit them to displace the conclusions that careful interpretation yields . . . would be a disservice to the legislative process, as well as to the judicial exercise of interpreting legislative language based upon the premise that the legislature intends to enact reasonable public policies." Burke v. Fleet Bank, 252 Conn. 1, 23-24 (2000); (5) A.A. Mason applied Gen. Stat. § 52-249(a) to the facts before it after the issue of attorney fees and the limited authority under that statute were subject to a full evidentiary hearing. Even then the trial court in A.A. Mason did not formally declare the 1999 amendment a nullity; (6) The parties are entitled to a hearing in order to offer evidence and legal argument as to whether the two proceedings set forth in Gen. Stat. § 52-249(a) have directly or indirectly occurred and if they have occurred, what amount of attorney fees may be awarded for those limited proceedings; (7) No court decision has been found that interprets the first five words of P.A. 99-153, S. 8: "The same costs and fees." (8) The limitation originally contained in Gen. Stat. § 52-249(a) remained in effect even after the 1999 amendment. Both the limitation and the 1999 amendment are contained within the same subsection of the statute and are required to be read together in order to give meaning to each statutory provision. (9) "Statutes must be construed, if possible, that such that no clause, sentence or word shall be superfluous, void, or insignificant." State v. Szymkiewicz, 27 Conn. 613, 621 (1996). The court shall not construe a statute in such a manner to render it meaningless." State v. Gibbs, 254 Conn. 578, 602-03 (2000). "It is a basic tenet of statutory construction that the legislature did not intend to enact meaningless provisions . . . [i]n construing statutes, we presume that there is a purpose behind every sentence, clause, or phrase used in an act and that no part of a statute is superfluous." (Internal quotation marks omitted.) Sears, Roebuck Co. v. Board of Tax Review, 241 Conn. 749, 765, 699 A.2d 81 (1997).
The defendants claim that the ATR exceeded its authority on remand from the undersigned's November 1, 2007 Memorandum of Decision by not conducting a "trial" or an evidentiary hearing n which all parties participated. This court followed the exact language of Practice Book § 19-17 in its November 1, 2007 Memorandum of Decision: "If the court finds that the committee or attorney trial referee has materially erred in its rulings or that there are other sufficient reasons why the report should not be accepted, the court shall reject the report and refer the matter to the same or another committee or attorney trial referee, as the case may be, for a new trial or revoke the reference and leave the case to be disposed of in court." The court stated in its November 1, 2007 Memorandum of Decision: "In accordance with P.B. § 19-17(a) this court cannot accept the report and refers the matter to the same Attorney Trial Referee for a new trial on the issue of calculation of damages only in the above file." The court set forth nineteen numbered questions for the ATR to answer all relating to the calculation of damages. Many of these nineteen questions directed the ATR to consider a specific exhibit and a specific portion of that exhibit. This court did not revoke the reference on November 1, 2007. Without taking further testimony or holding an evidentiary or any other hearing, the ATR reexamined the file and all exhibits admitted before the ATR. The ATR was able to answer all nineteen of the court's questions on the calculation of damages without the need for further evidence, testimony or parties arguments. This procedure followed by the ATR is in accordance with the mandates of Connecticut law. The ATR was not in error. Original Grosso Construction, Inc. v. Shepherd, 70 Conn. 404, 417-18 (2002).
The May 25, 2007 ATR's report found the amount of unpaid invoices due ATE to be $31,702.38, the exact sum set forth in Ex. I. In response to the court's November 1, 2007 questions 1-7, the ATR found that it made a mathematical error in calculating the amount due and reduced that amount in Ex. I to $30,249.23. The ATR disallowed as damages these "Open" items in Ex. I with the "Type SC" plus the first "Type RI." item in the amount of $69.20. The total of these six disallowed items is $1,453.60. The court assumes "SC" means Service Charges. There were no invoices in evidence supporting the Service Charges reference in Ex. I. The ATR also allowed $2,759.17 credit to the defendants as per Ex. I for the June 16, 2004 invoice #69517. Subtracting these disallowed items of $1,453.60 from the original net invoices due of $31,702.83 as found in the ATR's May 25, 2007 Report leaves the balance as $30,249.23. This is the precise amount of the unpaid invoices found by the ATR in the Referee's Supplemental Report dated December 12, 2007.
The ATR disregarded invoice #75730 contained in Ex. D last page, since it contained a credit line of $3,565.64, additional charges that totaled $4,141.68 and a line at the bottom of the invoice stating: "CONTINUED ON NEXT PAGE." The NEXT PAGE was missing. Since neither party raised this issue and invoice #75730 did not appear on Ex. I, the ATR disregarded invoice #75730. Invoice #75730 stated "Rent End Date 9-17-04 26 DAYS CREDIT." "BILLING PERIOD 9/18/04 through 10/13/04." "DAMAGES TO RENTAL UNIT ARE BILLED ON THIS INVOICE." The first page of invoice #75730 appears to contain a further claim by ATE for damages and thus the three defendants cannot be harmed by the ATR's not considering this invoice either from credit due defendants or amounts due plaintiff.
The ATR found that the beginning date for the calculation of interest was ten days after the last invoice. Invoices, Ex. D and Ex. H., all contain the following phases: "Net payment due upon receipt of invoice" and "The undersigned agrees to pay 2% per month Finance Charge For Corporate Accounts or 1.333% per month Finance Charge for non-corporate accounts and any amounts not paid within 10 days of the date of the invoice." The last invoice in evidence was #75066 dated September 6, 2004 in the amount of $4,070.40. This invoice is part of Ex. D. Ex. I references seven unpaid invoices and the numbers and amounts of these invoices in Ex. I match Exhibits D and H, the actual invoices. The ATR's recommendation that interest begins on September 26, 2004 is consistent with these exhibits.
The court finds that the ATR's answered each of the court's nineteen questions. The ATR's original Findings and Corrected Findings have a basis in the evidence and are mathematically correct.
The total unpaid invoices as of September 16, 2004 were $30,249.83. Interest of 10% per annum as per Gen. Stat. § 37-3a commenced on the $30,249.83 ten days later on September 26, 2004. The court has calculated that interest from September 26, 2004 to December 26, 2007 to be $9,831.18, the exact amount of interest found by the ATR rounded off to the nearest dollar. The court concludes that the ATR properly calculated the 10% interest due on each of the seven separate invoices. So too the court finds that the ATR properly calculated the 2% per month interest due from September 16, 2004 to December 26, 2007 on the $30,249.83 on each of the seven separate invoices.
No judgment will enter in favor of MG, APC and CCIC against NEC on their cross-claim since a judgment already entered in the companion case, FST CV 05-4003626S.
Judgment enters in favor of ATE on its claims against NEC in the amount of $30,249.23 plus $23,594.40 interest (at an interest rate of 2% per month) from September 26, 2004 through December 26, 2007 with per diem interest thereafter of $19.89 plus contractual attorney fees as per Ex. D and Ex. I to be determined in later proceedings before this court.
Judgment enters in favor of ATE and the First Count as against MG and CCIC, jointly and severally, on the posted bond in the amount of $30,249.23 plus $9,831.00 interest (at an interest rate of 10% per annum) from September 26, 2004 through December 26, 2007 with per diem interest hereafter of $8.29 plus statutory attorney fees pursuant to Gen. Stat. § 52-249(a) to be determined in later proceedings before this court.
Costs are to be taxed in favor of the plaintiff ATE by the Clerk of this Court in accordance with Gen. Stat. § 52-257 and P.B. § 18-5.
The parties are to contact Civil Caseflow in order to schedule a hearing on attorney fees and any legal or factual issues related to any award of attorney fees. The court finds that the plaintiff has complied with P. B. § 11-21.