Opinion
Nos. FST CV 08 5005953, FST CV 08 5005954 S
June 9, 2011
MEMORANDUM OF DECISION
The defendants have filed their objection to the report of Attorney Trial Referee, John R. Downey, (hereinafter "ATR") which report was submitted in the form of a "Memorandum of Decision with Findings of Fact and Law." The objection breaks down into six subject matters.
I. The Defendants' Proposed Amendment
On the first day of trial, August 13, 2010, the defendants sought to file two special defenses alleging (1) that the defendants paid in excess of the contract price and paid additional sums to another contractor to fix incomplete and improper work; and (2) the plaintiffs had not presented a claim to the Executrix of the Estate of Claudia Pearl, in accordance with Gen. Stat. § 45a-358a and therefore were not entitled to enforce payment of their claims. The plaintiffs objected to the filing of the special defenses at trial and in their post-trial memorandum of law filed with the ATR. In his memorandum of decision, the ATR ruled that the special defenses were untimely and procedurally defective and accordingly disallowed them.
P.B. § 10-60(a)(1) requires that a proposed amendment to a pleading made at the time of trial be permitted only by order of the judicial authority. P.B. § 19-7 provides: "No case shall be referred to a committee or attorney trial referee until the issues are closed and a certification to that effect has been filed pursuant to § 14-8. Thereafter no pleadings may be filed except by agreement of all parties or order of the court or the attorney trial referee." (Emphasis added.)
Curiously, these special defenses were not accompanied by a request for leave to file pursuant to P. B. § 10-60(a)(3) but permission was sought orally. Nonconsensual amendments to pleadings are addressed to the sound discretion of the court and in this case the ATR. Intercity Development, LLC v. Andrade, 286 Conn. 177, 190 (2008). In declaring this practice procedurally defective the ATR was legally correct because of the defendants' failure to comply with P.B. § 10-60(a)(3). The ATR also found that the amendments were untimely. In a factually similar case our Supreme Court upheld the trial court's denial of leave to amend pleadings on the eve of trial.
"The plaintiffs assign error in the court's refusal to permit them to amend their pleadings. While our courts have been liberal in permitting amendments; Johnson I v. Toscano, 144 Conn. 582, 587 (1957); this liberality has limitations. Amendments should be made seasonably. Factors to be considered in passing on a motion to amend are the length of the delay, fairness to the opposing parties and the negligence, if any, of the party offering the amendment. Cummings v. General Motors Corporation, 146 Conn. 443, 449-50 (1959). The motion to amend is addressed to the trial court's discretion which may be exercised to restrain the amendment of pleadings so far as necessary to prevent unreasonable delay of the trial. Freccia v. Martin, 163 Conn. 160, 164 (1972).
The present case was the oldest nonjury civil case on the court's docket. The motion to amend was filed the day before the case was scheduled for trial. The proposed amendment added counts containing three new theories of legal liability. Counsel for the plaintiffs had decided to amend the complaint about five weeks before the date of trial, but had felt it unnecessary to notify either the court or opposing counsel of this specific intention. At the hearing on the motion counsel for the plaintiffs acknowledged that if his proposed amendment were allowed the case could not go forward at that time. In these circumstances the court's refusal to permit the amendment on the eve of trial was a proper exercise of its discretion and cannot be disturbed. Lawson v. Godfried, 181 Conn. 214, 216 (1980)." (Alternate citations omitted.) Beckman v. Jalich Homes, Inc., 190 Conn. 299, 302-03 (1983).
The present case was already two and one-half years old at the time of trial which considerably exceeds time standards for nonjury cases in this judicial district. The oral request was made just before the commencement of evidence. The proposed special defenses asserted new theories of defense which were or should have been well known to the defendants long before they were raised. At least the first special defense warranted, if not required, discovery by interrogatories and document production, which in turn would have necessitated a continuance. The ATR did not abuse his discretion in denying the request on the grounds of untimeliness.
FUNCTION OF THE COURT
The basic function of the court in reviewing the report of an ATR is set forth in P.B. § 19-17. This section has been interpreted by our appellate courts on numerous occasions such that the governing principles are very well established.
"[T]he 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. Third, the report must be reviewed to determine if it is "legally and logically correct." (Internal quotation marks omitted. Alternate citations omitted.) Id., at 103.
Other principles governing attorney trial referee reports 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." (Citations omitted.) Wilcox Trucking, Inc. v. Mansour Builders, Inc., 20 Conn.App. 420, 423 (1989), cert. denied, 214 Conn. 804 (1990). A fact finder's recommendations should be accepted when "there is nothing that is unreasonable, illogical or clearly erroneous in the findings of the fact finder and the reasonable inferences that may be drawn therefrom." Id., at 425.
"The factual finding of a (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." (Internal quotation marks omitted.) Shapero v. Mercede, 262 Conn. 1, 6 (2002).
In contrast, "because the attorney trial referee does not have the powers of a court and is simply a fact finder, [a]ny legal conclusions reached by an attorney trial referee have no conclusive effect . . . [T]he legal opinions of [an attorney trial referee], like those of the parties, though they may be helpful, carry no weight not justified by their soundness as viewed by the court that renders judgment." (Internal quotation marks omitted.) Alliance Partners, Inc. v. Oxford Health Plans, Inc., 263 Conn. 191, 202 (2003).
"The trial court, as the reviewing authority, may render whatever judgment appropriately follows, as a matter of law, from the facts found by the attorney [referee] . . . Where legal conclusions are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts found by the [attorney referee]." (Internal quotation marks omitted.) Mitchell v. Guardian Systems, Inc., 72 Conn.App. 158, cert. denied, 262 Conn. 903 (2002). "[T]he trial court cannot accept an attorney trial referee's report containing legal conclusions for which there are no subordinate facts." (Internal quotation marks omitted.) Killon v. Davis, supra, 257 Conn. at 102. (Alternate citations omitted.)
II. The Format
The defendants attack the format of the ATR's "report" for failing to comply with P.B. § 19-8(a). In this case the ATR submitted only a memorandum of decision which is optional under subsection (b) of § 19-8 but failed to submit a report "in separate and consecutively numbered paragraphs" stating "the facts found and the conclusions drawn therefrom." The court notes that the memorandum of decision actually includes the title "with findings of facts and law."
While talismanic adherence to P.B. § 19-8(a)a is not required, the memorandum of decision must be the functional equivalent of the report prescribed by this section. Whether a written decision can serve as a substitute for the carefully structured report contemplated by P.B. § 19-8(a) depends upon whether a reading of the memorandum of decision fairly discloses the ultimate facts found and the conclusions drawn therefrom. National Elevator Industry Pension Welfare and Education Fund v. Scrivani, 31 Conn.App. 728, 732 (1993).
With respect to similar statutory provisions applicable to a workers' compensation commissioner our Supreme Court has stated:
"It is also well settled in our practice that "[t]he finding [of the commissioner] should contain only the ultimate, relevant and material facts essential to the case in hand and found by him, together with a statement of his conclusions and the claims of law made by the parties. It should not contain excerpts from evidence or merely evidential facts, nor the opinions or beliefs of the commissioner, nor the reasons for his conclusions. The opinions, beliefs, reasons and argument of the commissioner should be expressed in the memorandum of decision, if any be filed, so far as they may be helpful in the decision of the case." Practice Book, 1978 § 435 (now § 19-8(b); see Balkus v. Terry Steam Turbine Co., 167 Conn. 170, 173 (1974). (Alternate citations omitted.) Adzima v. UAC/Norden Division, 177 Conn. 107, 118 (1979).
The court must examine the memorandum of decision to determine if it contains ultimate facts and conclusions drawn therefrom. There were several issues presented by these two cases both through the evidence and the arguments of counsel which demanded a clear recitation of factual findings.
III. Home Improvement Act
The defendants contend in their objection that the ATR should have applied the Home Improvement Act ("HIA"), G.S. § 20-48 et seq. to this case. As the plaintiffs point out, the defendants failed to raise the HIA as a special defense and never mentioned it in their "proposed findings of fact and conclusions of law" filed with the ATR, post-trial. While the record shows there was some discussion of it at trial, by his comments the ATR regarded it as "side issue" and properly understood his function as not including a determination of the enforceability of the prime contract between the owner and the general contractor. The first and only time the issue was raised in any kind of a formal submission is in the defendants' objection to the ATR report which of course was filed after the report was filed with the court. Without asserting the HIA as a special defense or addressing it in a post-trial brief the ATR cannot be held accountable for failing to make a recommendation to the court as to its applicability. Claims must be adequately briefed and cannot be raised for the first time at oral argument (or in the post-report objection) before the reviewing court. Grimm v. Grimm, 276 Conn. 377, 393 (2005). And because this court is a reviewing court that principle applies here. Post Road Iron Works, Inc. v. Lexington Development Group, Inc., 54 Conn.App. 534 (1999). The court agrees with the ATR that the HIA is inapplicable to this case.
IV. Lienable Fund
The term has been described as "an identifiable fund which appropriate claims for mechanics liens may reach, since the owner has retained an unpaid balance due under his contract with the general contractor that exceeds in amount the totality of the mechanic's lien claims." Seaman v. Climate Control Corp., 181 Conn. 582, 596 (1980). The ATR found that the contract sum as modified by "construction summaries" totaled $605,458.83 and of that sum all but "approximately $100,000" had been paid to the general contractor. Apart from their attack on the validity of the contract based on the HIA, the defendants claim that the evidence showed that the contract price was the original, unmodified amount of $454,341.88 and that they paid the general contractor $510,755.53, thus overpaying him by $56,413.73. The ATR implicitly rejected this evidential claim and found that the total of the subcontractors' claims was "significantly less than the amounts that were unpaid to Schott Construction (the general contractor) at the time Schott Construction was terminated." Thus, the ATR found a lienable fund sufficient to cover the aggregate liens without labeling the fund as such. There is also testimony in the record to support the ATR's acceptance of the claim that the work had been substantially performed. Such a determination is a question of fact for the trier. Intercity Development, LLC v. Andrade, 96 Conn.App. 608, 613 n. 5 which cannot be disturbed unless clearly erroneous. There is ample evidence in the record to support a finding of sufficient funds as well as the state of completion of the project.
The ATR also found that the defendants' had paid $503,755.63 at the time of termination thus leaving a lienable fund of $94,703.30.
V. Validity of Mechanic's Liens A. Service of Process
The ATR stated the ultimate fact that "Absolute, JR . . . have satisfied the requirements of state law for the enforcement and foreclosure of mechanic's liens." The ATR also found that the defendants admitted in their answer that each plaintiff caused a separate notice of intent to lien to be served on each defendant in accordance with the statute. The defendants do not challenge this.
The defendants contend that the ATR's factual finding of service process is limited to the notice of lien but does not include the certificate of lien. While it is true that the language chosen by the ATR was imprecise, namely "Notice to Lien," as to each plaintiff he included reference to the returns of service in each case, namely "Pls Exhs. 4, 7" as to Absolute and "Plfs Exhs. 3, 6" as to J.R. Examination of these returns discloses that on December 15, 2006 abode service was made of both the "notice of intent" and "later that day," the mechanic's lien certificate itself. Thus, the court concludes from both the ATR's statement of compliance with the mechanic's lien laws as set forth in Section G of his report and the inclusion of the exhibit references in this finding, that a proper determination was made on the issue of service of process.
In the context of the Home Improvement Act the Appellate Court has approved a finding by an ATR that a general contractor did not comply with the act, without more, as a sufficient statement of a factual and legal conclusion. Macmillan v. Higgins, 76 Conn.App. 261 (2003).
"`The general rule putting the burden of proof on the defendant as to jurisdictional issues raised is based on the presumption of the truth of the matters stated in the officer's return. When jurisdiction is based on personal or abode service, the matters stated in the return, if true, confer jurisdiction unless sufficient evidence is introduced to prove otherwise." Knutson Mortgage Corp. v. Bernier, 66 Conn.App. 768, 771 (2002).
Here, the defendants argued in their post-trial filing to the ATR that the plaintiffs had the burden of proving proper service of the certificates of mechanic's lien on the defendants. The plaintiffs had no such burden but are entitled to rely on "the matter stated in the return." It is the defendants who have the burden to "introduce evidence to prove otherwise." The defendants point to no evidence in the record to support their claim.
B. Technical Deficiencies 1. Dates
In their post-trial briefs to the ATR the defendants claim that the certificates of mechanic's lien are inaccurate because they fail to state the correct commencement dates upon which services and materials were furnished. In their present objection they complain that the ATR report is silent as to the plaintiffs' compliance with the technical requirements of G.S. § 49-34. While it is true that the ATR did not address this issue separately, his conclusion states that "the plaintiffs have satisfied the requirements of state law for the enforcement and foreclosure of mechanic's liens." The obvious implication is that the certificates of lien were valid in all respects.
In Absolute Plumbing Heating, LLC, the certificate recites a commencement date of April 6, 2006 whereas Absolute's witness testified that it commenced work in January 2006. In the case of JR Remodeling, LLC the certificate recites a commencement date of June 5, 2006 whereas JR's witness testified that the actual commencement date was August 24, 2006.
"Our courts have been liberal in validating liens despite claimed errors on the face of the lien certificate where the mistake was made in good faith and no resulting prejudice was claimed (emphasis added). See, e.g., H S Torrington Associates v. Lutz Engineering Co., supra, 155-56 (copy of certificate served on owner by a subcontractor failed to state its intent to file a lien); Morici v. Jarvie, 137 Conn. 97, 102, 75 A.2d 47 (1950) (misstatement of amount due); Pierce, Butler Pierce Mfg. Corporation v. Enders, 118 Conn. 610, 615, 174 A.169 (1934) (subcontractor mislabeled as contractor and agent); Burque v. Naugatuck Lumber Co., 113 Conn. 350, 353, 155 A. 414 (1931) (defect in description); Peck v. Brush, 89 Conn. 554, 556-57, 94 A. 981 (1915) (inclusion of extra land in certificate); Westland v. Goodman, 47 Conn. 83, 86 (1879) (erroneous date of completion of work.") JC Penney Properties, Inc. v. Peter M. Santella Co., 210 Conn. 571, 515 (1989).
The defendants have provided no analysis of how they were prejudiced by the erroneous commencement dates nor have they alleged prejudice in any of their papers.
The purpose of the certificate is "to give reasonable notice to creditors and purchasers of the existence and extent of the lien." New England Savings Bank v. Meadow Lakes Realty Co., 243 Conn. 601, 616 (1998). The case of Probuild East LLC v. Poffenberger, 2010 WL 3025 178 (2010), Corridino, J., informs the court's analysis. In Probuild the defendant homeowner, in defense of an action to foreclose a mechanic's lien, argued that the lien was invalid because it stated an incorrect date for commencement of services. The lien stated a commencement date of January 28, 2009 whereas the lienor's testimony established that he began work in October 2008. It is helpful to quote from the opinion of the court as it is squarely on point.
"It is difficult to see how the property owner or anyone else could be said to be injured by inclusion of an incorrect commencement date for providing the material and supplies here. Query whether the commencement date is even aimed at protecting the property owner. And perhaps more to the point this is not a case where the property owner for example, is an out of state owner that contracted for a construction project in our state. The evidence indicates the Poffenbergers (defendants) lived at the home in question and were at least aware of the work being done or which they wanted done, — they would have been aware of when the work commenced. No evidence was presented contradicting these suppositions or indicating how the defendants were prejudiced, certainly there was no evidence or reason offered to show that in placing a wrong commencement date in the lien there was a fraudulent intent. How would Probuild have benefitted from that, it just exposes it to a "gotcha" analysis asking for invalidation of the mechanic's lien because the statute's terms were not literally complied with to no one's harm where the defendant homeowner had received the benefit of materials and supplies delivered to their home." Id. at 4. Judge Corradino's analysis is consistent to our appellate case law.
Therefore, "[w]here the misstatement of the claim is intentional, that is, where the statement of the claim is intentionally false, or where it is fraudulent, the lien will be void; but where it is the result of a mistake, the misstatement of the claim will not invalidate the lien. We apprehend that it would be impossible to differentiate between the mistake in the statement of the claim and the mistake in the description of the property claimed to be covered by the lien." Tramonte v. Wilens, supra, CT Page 13337 89 Conn. 524; see also Rose v. Persse Brooks Paper Works, 29 Conn. 256, 266 (1860) (Mistake as to claim will be treated like mistake as to description of property). Where, however, there has been "no attempt to give an accurate and true description, then . . . the certificate ought to be held void, as no better than a total omission to attempt to comply with its provisions." (Emphasis added; internal quotation marks omitted.) Tramonte v. Wilens, supra, 525. First Constitution Bank v. Harbor Village Ltd. Partnership, 230 Conn. 804, 816-17 (1994).
This court discerns from these cases that in order to invalidate a mechanic's lien for failure to comply with the content requirements of Section 49-34, three conditions must be present, viz: (1) the misstatement cannot be intentional or fraudulent but must be the result of a mistake, (2) there must be no proof that the lienor made no attempt to give an accurate statement, and (3) there must be no prejudice caused to the complaining party. In other words, the inaccuracy must have been made in good faith. Id. at 816-18. Applying these principles, there is no evidence whatsoever to support any of these conditions.
All of this is consistent with the principle that the purpose of requiring a commencement date is to put purchasers, lienors and other encumbrancers on notice of the priority status of the lien. Here, no other encumbrancers have challenged the validity of the liens on these grounds.
C. Amounts
Morici v. Jarvie, 137 Conn. 97, 102 (1950) disposes of the claim that the liens are unenforceable because they contain incorrect amounts. The ATR findings in each case were based upon oral contracts which the ATR found to be "completed in a good and workman like manner and passed all inspections." Such a finding necessarily includes a determination that the work was substantially performed. Both plaintiffs satisfied the requirements set forth in Intercity Development LLC v. Andrade, supra, that when a contract exists the amount of the recovery is fixed by the contract's sum. The ATR found that a contract existed for both plaintiffs and determined the balance due under each. Under Morici and related cases discussed above a good faith, innocent mistake in the amount stated in the certificate of lien which causes no prejudice does not invalidate the lien.
At page 13 of his report the ATR used the term "contracted" to describe each plaintiff's relationship with the general contractor. JR Remodeling contracted to bill on a time and material basis after the general contractor had agreed to his estimate (Ex. 27). Absolute presented a proposal (Ex. 31) to which the general contractor agreed orally.
After reviewing the report the court finds that the memorandum of decision contains sufficient ultimate factual findings and conclusions to enable the court to perform its function properly. The court accepts the report in as far as it relates to these plaintiffs and enters judgment thereon.
On May 24, 2011 the court entered a judgment of dismissal in the other two cases for lack of subject matter jurisdiction.
VI. Attorneys Fees
The defendants have attacked a joint representation agreement pursuant to which plaintiffs' counsel is to be compensated because such an arrangement violates the public policy of the state. The defendants rely on Rice v. Farrell, 129 Conn. 362 (1942), as authority for that proposition. Defendants' claim does not arise out of any claimed conflict of interest on the part of attorney O'Rourke which might form the basis for an ethical violation but rather asserts that Schott, the general contractor, had an agreement with the plaintiffs that he would pay their attorneys fees and that the consideration for this is the plaintiffs' agreement not to make a claim for attorneys fees against his company. The plaintiffs' counsel refers to the provisions of the "joint representation agreement" in his brief. The agreement is not evidence and was not attached to the affidavit of attorneys fees which plaintiffs submitted to the ATR and therefore the court is unable to adjudicate this issue on the present record. Additionally, because the affidavit of attorneys fees was not filed until after the close of evidence the defendants had no opportunity to contest it. Smith v. Snyder, 267 Conn. 456, 472-73 (2004). Therefore, an evidentiary hearing will be held to include all aspects of the requested attorneys fees on July 6, 2011 at 9:30 a.m. Counsel will serve defendant's counsel with a copy of the joint representation agreement within one week.