Opinion
CV166027438
06-18-2018
EAST CONSTRUCTION, LLC v. Wesley SPEARS dba 1000 Degrees Pizzeria
UNPUBLISHED OPINION
OPINION
Cosgrove, J.
In this action, the plaintiff, East Construction, LLC, seeks to recover from the individual defendant, Wesley Spears, d/b/a/ 1000 Degrees Pizzeria, funds that it claims it is owed under a construction contract that was executed in September 2015 and substantially completed by the end of November 2015. The plaintiff claims that it performed the work called for under the contract in an acceptable manner and is entitled to a payment of the balance of the contract in the amount of $32,107.42. The plaintiff also seeks interest on the amount since the date that the contract was performed on January 1, 2016.
The defendant denies that he is individually liable as he was acting through an LLC and further raises several special defenses including the statute of frauds, defective work and that the Mashantucket Pequot Tribal Courts have exclusive jurisdiction over the plaintiff’s claims because there was no written agreement "signed by the defendant conferring this court jurisdiction over the subject lawsuit."
The court conducted a trial on this case on May 15, 2018. It heard testimony from the construction manager for East Construction, LLC, Shawn East, John Dolishny and Erin Greiner of the Fashion Outlets at Foxwoods, LLC, and Robert Sullivan, Standards Builders, Inc. The defendant Wesley Spears also testified.
In early 2015 the defendant’s LLC, 1000 Degrees of Foxwoods, LLC entered into a lease with the Fashion Outlets at Foxwoods, LLC (hereinafter FOF). FOF is an outlet mall located on the campus of the Foxwoods Casino. The defendant planned to open a restaurant at the mall. Once the lease was entered into the defendant needed to fit out the space. Prior to entering into the contract that is the subject of this litigation, a problem was identified involving the carrying capacity of the structure of the mall and the weight or load created by the pizza oven the defendant intended to install. There were also changes in the ceiling structures to accommodate the vents required by the defendant’s proposed kitchen. These issues were addressed by Standard Builders, the general contractor for FOF.
The plaintiff claims that the defendant entered into the contract on an individual basis rather than in a corporate capacity. The defendant claims that the contract was executed on behalf of his LLC, 1000 Degrees of Foxwoods, LLC
The court finds that, after negotiations in August 2015, the plaintiff and the defendant entered into a contract for a build out of rental space at FOF. This contract was reduced to writing and is dated September 9, 2015 and was signed by the defendant on September 11, 2015. It specifically excluded from the scope of work the following: "Installation of pizza oven and any other ovens ... Supply and installation of cooler." The contract price was $171,161.13. The evidence establishes that the work called for by the contract was substantially completed by the Friday after Thanksgiving in 2015. Certificates of Occupancy and permits from the health department were received on or about that date. The plaintiff sent the defendant their final invoice, dated November 22, 2015 in the amount of $32,107.42.
The defendant complained about the electrical circuitry, the grease disposal, the hot water temperature and the installation of a freezer instead of a cooler by the plaintiff. While the plaintiff acknowledged that there was some difficulty with the electrical circuitry, he claims that an additional outlet was installed and an additional circuit was installed so that there would not be a breaking of circuits. The defendant identified as a problem that the grease trap required frequent checking. The plaintiff testified that it installed the grease trap that was called for by the blue prints that it had and that all grease traps need to be cleaned out on a regular basis. The plaintiff acknowledged that there was an initial problem with the temperature of the hot water, but it was fixed prior to issuance of the certificates of occupancy and health permits and its issuance of its final invoice. The court finds that although the defendant had complaints, they were promptly addressed by the plaintiff.
With regard to the freezer, the difficulty was that a "freezer" rather than a "cooler" was delivered to the construction site. The contract itself indicates that the plaintiff does not have any responsibility for the installation of the cooler. The defendant ordered the make and model of the cooler but failed to determine that the manufacturer had delivered the wrong unit. It was the defendant, not the plaintiff, who had the responsibility to determine that the unit he had ordered was in fact delivered. The plaintiff did install the unit that was delivered at the request of the defendant. The problems arose not from the installation but rather the fact that the wrong machine had been delivered through no fault of the plaintiff.
The final issue that the defendant complained of related to the strength of the floors supporting the location in the restaurant where the pizza oven was to be placed. The evidence produced shows that the insufficiency of the structural support for the pizza oven was identified by the defendant in July 2015, prior to the entry of the contract with the plaintiff. The plaintiff is not authorized to do structural steel work and such work was not a part of the contract. The evidence established that the defendant, through his building allowance with the lessor, paid for the structural modifications necessary to support the pizza oven.
The court finds that the plaintiff has established by the fair preponderance of the evidence that it fully performed its contract with the individual plaintiff that was entered into on September 2015. There is still $31,197.42 due under that contract. The defendant has not met his burden of proof on the special defenses that the plaintiff performed the work in an unworkmanlike fashion or that any of the difficulties with the structural support were the plaintiff’s responsibility.
The next issue the court must address is the defendant’s claim that the plaintiff has sued the wrong entity. He claims that the plaintiff contract was with 1000 Degrees of Foxwoods, LLC. The court will first look at the contract as it was executed.
The initial contract proposal was made on East Construction, LLC paper work and was addressed to Wesley Spears, 1000 Degrees Pizzeria, 455 Trolley Line Bvld., Mashantucket, CT 06338. The defendant, Wesley Spears, signed his name and printed his name under the signature when he accepted this proposal for work on September 15, 2015. There was no indication near the signature line or anywhere on the contract that Mr. Spears was signing in his capacity as a member of 1000 Degrees at Foxwoods, LLC.
The defendant testified that he had practiced law for thirty-eight years, when this contract was signed. He claimed further that everyone knew that the FOF would not deal with an individual but rather required an LLC. He also claimed that the plaintiff must have been aware of his corporate capacity because they had seen blue prints or architectural drawings. Those prints and drawings were not produced in evidence. The plaintiff claims it was unaware that it was dealing with anyone other than the defendant. Emails introduced into evidence between the plaintiff and defendant are from what appears to be the defendant’s personal email account. No where on the contract documents is there a direct or indirect indication that the plaintiff was contracting with an LLC.
"(A) corporate officer can bind the corporation to a contract without also binding himself where he, acting within his corporate authority, signs the contract so as to unambiguously indicate that he is signing in his corporate capacity." (Citations omitted.) Doe v. Odili Technologies, Inc., Superior Court, judicial district of Danbury, Docket No. 327738 (November 18, 1999, Monaghan, J.). "The defendant’s signature does not indicate that he signed in a representative capacity because he did not affix any title beneath his signature. He only signed in his individual capacity on the ‘authorized signature’ line at the end of the written agreement. Northeast Gunite & Grouting Corp. v. Chapman, 20 Conn.App. 201, 204, 565 A.2d 256 (1989); see also Nystrom v. Barker, 88 Conn. 382, 385, 91 A. 649 (1914) (the contract was not signed on the corporation’s behalf and the signatures do not indicate that the signers acted officially or as agents); Mainolfi v. Pacowta, Superior Court, judicial district of Milford, Docket No. CV-980063847-S (June 26, 2000, Mancini, J.) ("[t]here is no evidence that the plaintiffs knew that the defendant was signing as a corporate officer"); see Yellow Book Sales & Distribution Co. v. Valle, 311 Conn. 112, 120-21, 84 A.3d 1196 (2014) ("language appearing immediately below the defendant’s signature and the language contained in [the contract] state clearly that the defendant was individually and personally responsible for the obligations set forth in the contract").
Applying these standards the court finds that the defendant did not take the steps necessary to notify the plaintiff that they were dealing with a corporate or LLC entity. The contract identifies the defendant individually and most crucially when the defendant signed the contract there was no indication that the defendant was signing in a representative capacity. There was no indication of the existence of 1000 Degrees of Foxwoods, LLC. The emails introduced into evidence do not create a question of the existence of an LLC but rather support the conclusion of individual liability. There was reference in the testimony to a lease agreement between the 1000 Degrees Pizzeria at Foxwoods, LLC and Fashion Outlets at Foxwoods, LLC; there was no indication that the lease agreement was provided to the plaintiff.
The court finds that the defendant executed this construction contract in his individual capacity and did not put the plaintiff on notice that he was acting in a corporate capacity.
The plaintiff further claims it is entitled to interest on the amounts it is owed. General Statutes § 37-3a, entitled "Rate recoverable as damages," provides in relevant part: "(a) Except as provided in sections 37-3b, 37-3c and 52-192a, interest at the rate of ten percent a year, and no more, may be recovered and allowed in civil actions ... as damages for the detention of money after it becomes payable ..." Because § 37-3a provides that interest may be recovered, it is clear that the statute does not require an award of interest in every case in which money has been detained after it has become payable, rather, an award of interest is discretionary. See Smithfield Associates, LLC v. Tolland Bank, 86 Conn.App. 14, 26, 860 A.2d 738 (2004), cert. denied, 273 Conn. 901, 867 A.2d 839 (2005) ("an award of ... interest [pursuant to § 37-3a] is discretionary ... rather than automatic" [internal quotation marks omitted] ).
Where a judgment creditor sought an award of prejudgment interest, the district court had discretion to award less than ten percent. Cadle Co. v. Fletcher, 2014 U.S. Dist. LEXIS 111933 (D.Conn. August 13, 2014), aff’d, 848 F.3d 88 (2d Cir. 2017).
"The court’s determination [as to whether interest should be awarded under § 37-3a] should be made in view of the demands of justice rather than through the application of any arbitrary rule ... Whether interest may be awarded depends on whether the money involved is payable ... and whether the detention of the money is or is not wrongful under the circumstances." (Citations omitted; internal quotation marks omitted.) Stephan v. Pennsylvania General Ins. Co., 224 Conn. 758, 765, 621 A.2d 258 (1993); see also LaSalla v. Doctor’s Associates, Inc., 278 Conn. 578, 597, 898 A.2d 803 (2006) ("[w]e have construed [§ 37-3a] to make the allowance of interest depend upon whether the detention of the money is or is not wrongful under the circumstances" [internal quotation marks omitted] ). Although the trial court must determine that the liable party’s detention of money was wrongful in order to award interest pursuant to § 37-3a, neither our Supreme Court nor the Appellate Court has held, for purposes of the statute, that the detention of money cannot be wrongful if the liable party had a good faith basis for nonpayment. See Ferrato v. Webster Bank, 67 Conn.App. 588, 596, 789 A.2d 472, cert. denied, 259 Conn. 930, 793 A.2d 1084 (2002) ("Although bad faith is one factor that the court may look at when deciding whether to award interest under § 37-3a ... in the context of the statute, ‘wrongful’ is not synonymous with bad faith conduct. Rather, wrongful means simply that the act is performed without the legal right to do so."). "Nevertheless, [t]he allowance of interest as an element of damages is ... primarily an equitable determination and a matter lying within the discretion of the trial court." Id.
The holdings of these cases are consistent with the primary purpose of § 37-3a, which is not to punish persons who have detained money owed to others in bad faith but, rather, to compensate parties that have been deprived of the use of their money. See Neiditz v. Morton S. Fine & Associates, Inc., 199 Conn. 683, 691, 508 A.2d 438 (1986) ("interest awarded under [§ 37-3a] is intended to compensate the prevailing party for a delay in obtaining money that rightfully belongs to him"); Paulus v. LaSala, 56 Conn.App. 139, 151, 742 A.2d 379 (1999), cert. denied, 252 Conn. 928, 746 A.2d 789 (2000) (same); Sosin v. Sosin, 300 Conn. 205, 228-30, 14 A.3d 307 (2011) (same).
Here, the balance due, pursuant to the terms of the contract, can reasonably be ascertained and the demand for payment was made on January 31, 2016. The court is of the opinion that the defendant wrongfully retained those funds as of that date. The court finds that reasonable interest at the rate of 3 percent per annum should be included in this judgment.
Judgment may enter in favor of the plaintiff in the amount of $32,107.42 plus interest for 28 months through May 31, 2018 in the amount of $2,247.56 for a total of $34,354.98 plus costs. Interest shall accrue postjudgment at the rate of 3 percent per annum.