Opinion
No. LLI CV 08 5004567S
February 24, 2010
MEMORANDUM OF DECISION
I PROCEDURAL BACKGROUND
The plaintiff, Hugman Company, Inc., has brought a three-count complaint against the defendants, Robert M. Errato and Lauren T. Seder, relative to the installation of interior doors and paint and trim work done on a single-family dwelling at 155 Chestnut Lane, Hamden, Connecticut. In its complaint the plaintiff claims a breach of contract, quantum meruit and unjust enrichment. More specifically, the plaintiff claims that it agreed to perform work at the request of the defendants and that $17,728.17 remains due and owing for the work done (exclusive of interest and costs).
"Parties routinely plead alternative counts alleging breach of contract and unjust enrichment, although in doing so, they are entitled only to a single measure of damages arising out of these alternative claims . . . [C]ounts two and three of the complaint, which seeks damages for unjust enrichment and quantum meruit are meant to provide an alternative basis for recovery in the event of a failure to prove the breach of contract claim in count one." (Citations omitted; internal quotations omitted.) Stein v. Horton, 99 Conn.App. 477, 485-86, 914 A.2d 606 (2007).
The defendants have filed six amended special defenses in response to the complaint. They allege that: the plaintiff cannot claim either quantum meruit or unjust enrichment if it also claims a breach of contract; that the contract is illegal on its face because the plaintiff was not registered as a new home construction contractor as required by the New Home Construction Contractors Act (NHCCA); that they were dissatisfied with the plaintiff's performance of the contract; that a setoff should be allowed for the cost of work to remedy any defects; and that the plaintiff is barred from recovery as it failed to comply with the Home Improvement Act (HIA).
General Statutes § 20-417a et seq.
General Statutes § 20-418 et seq.
The defendants have also filed a four-count amended counterclaim, alleging that the plaintiff breached warranties, violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42a-110b, committed a breach of contract, and violated the HIA. The plaintiff has filed three amended special defenses to the defendants' counterclaim. The first, relative to counts one and three of the counterclaim, alleges that the defendants failed to perform their obligations under the contract in that they did not pay in full for the work done and then prevented the plaintiff from having access to the property to complete the work. The second and third special defenses, as to counts two and four, respectively, are that the CUTPA claims have been made beyond the statute of limitations imposed by General Statutes § 42-110g(f).
This matter was tried to the court over two days, during which the parties were heard and presented evidence and testimony relative to their claims. In order to address the claims raised in the pleadings, the court must necessarily resolve the issue of whether the property being worked on was considered a new construction or an existing private single-family dwelling to which improvements, alterations or repairs were made.
II FACTS
On or about May 4, 2005, the defendants acquired title to property located at 155 Chestnut Lane, Hamden, Connecticut by warranty deed recorded in Volume 2927, Page 120 of the Hamden land records. Plaintiff's Exhibit 31. At the time of their acquisition of the property, there existed a single-family dwelling on the premises. Prior to occupying the dwelling, Errato contracted with Connecticut Home Improvement Construction, Inc. (hereinafter Connecticut Home Improvement) to demolish most of the improvements on the property, which work it commenced almost immediately after the defendants' acquisition of the property. There was no writing that documented the agreement between Errato and Connecticut Home Improvement. To make improvements to the property after the demolition, Errato also engaged the services of a number of different subcontractors and vendors but had no recollection of whether he required written contracts from any of them.
In order to commence the work, Errato applied to the town of Hamden for a building permit which was issued on or after May 9, 2005. Defendants' Exhibits 1 and 4. The permit described the work to be done as follows: "[A]dd second level to existing house. Alterations to existing main level. Addition of foyer, living room, study and master bedroom w/bathroom. Add garage." He also received a permit from the Quinnipiack Valley Health District "approving addition or alteration to a building." The description of the addition or alteration provided that it was a "major renovation including fourth bedroom," and further classified the work as "resid. add/2nd level." Defendant's Exhibit 2. Errato also submitted an affidavit to the town of Hamden that he intended to act as the general contractor of the project. Defendant's Exhibit 3. He also held himself out as a general contractor to Jonathan Huginski and Raymond McMahon, both of whom were officers of the plaintiff.
Tim French of Connecticut Home Improvement testified that at the completion of the demolition phase, about one-third of the old structure remained consisting of portions of the exterior perimeter walls, some framing and the foundation. The paved driveway also remained. These elements were recycled into the new single-family dwelling. In June 2005, the plaintiff, Hugman Company, Inc., was introduced to Errato by Walter Lewis, Jr., a principal in a company known as Legend Builders and Developer, LLC. At the time, Lewis was acting as a project manager for construction activities at a project known as "Banner Lodge Estate" in Moodus, Connecticut, as well as a construction project in Norwich, Connecticut known as "Victoria Landing Condominium." Lewis informed representatives of the plaintiff that Errato was the general contractor for a multi unit condominium project in Norwich and that he was soliciting proposals for work in connection with that project. As a result of the referral, Jonathan Huginski, vice president and secretary of the plaintiff, contacted Errato and expressed an interest in submitting a proposal for the work on the Victoria Landing project. After doing so, Errato, through his office, furnished building plans to the plaintiff, which then submitted a proposal to Errato, including drawings and plans, for the work on that project. Plaintiff's Exhibits 3 and 33.
On or about September 20, 2005, while the plaintiff was attempting to secure work on the Victoria Landing project, Errato contacted Huginski and requested that the plaintiff submit a proposal for work in connection with another project in Hamden, Connecticut. In response to the request, Huginski met Errato at the Hamden location on September 21, 2005. As of that date, work on a single-family dwelling being built there had been ongoing for several months. The concrete floors were in place, the first and second floors were sheetrocked, roofers and electricians were on the premises and the windows, doors, siding, electrical, plumbing, heating and ventilation systems, all new in character, had been, or were being, installed on the premises. Portions of the garage framing and the garage entrance area were visible and appeared to be of new materials. In effect, all of the components of the work that were exposed consisted of new materials, except for some old siding that remained visible. Eventually, however, that siding was also covered with new siding. Following the meeting, Errato requested that the plaintiff furnish a bid to provide and install finish trim, along with interior finish paint, for the building. Huginski measured and examined the structure, including the interior door openings, returned to the office and prepared a bid. At the time of the on site meeting, the structure was not being used or occupied for residential purposes. Moreover, at no time during the meeting or earlier conversation did Errato inform the plaintiff that he intended to use the dwelling on the property as a principal residence for himself or his wife. The defendant Lauren Seder, Errato's wife, was not present or involved in any of the discussions with the plaintiff to this point. In fact, there was no contact between the plaintiff and Seder until mid-October 2005.
On September 27, 2005, the plaintiff submitted a proposal to Errato to do work on the property as detailed and requested by him. Plaintiff's Exhibit 6. All of the work involved the installation of interior doors, interior trim, interior hardware on new surfaces and openings and the application of new paint and wall-covering products on newly installed materials. In response, Errato requested that the plaintiff also include the supply and installation of an undercoating material. On September 28, 2005, the plaintiff increased the scope of its work in accordance with Errato's request and re-submitted a proposal for the work described therein. Plaintiff's Exhibit 7. On September 29, 2005, Errato signed the proposal on that portion of the document that read: "ACCEPTANCE OF PROPOSAL, The above prices, specifications and conditions are satisfactory and are hereby accepted. You are authorized to do the work as specified." Plaintiff's Exhibit 8. The defendant also entered a start date of October 13, 2005, onto the document, where called for, and returned it to the plaintiff by facsimile. Id. The defendants did not return the original document to the plaintiff, nor was it signed by Seder. At the time of the execution of the document by Errato, the plaintiff still did not know that the defendants intended to use the property as their personal residence.
During the contract negotiations, the proposals and written communications between the plaintiff and Errato were typically faxed to and from his office at 3490 Whitney Ave., Hamden, Connecticut. This was true for both the Victoria Landing project and the work on the Hamden property. Even the measuring forms completed by the plaintiff for the Hamden project reflected Errato's business and cell phone numbers, but showed no entry for a home number. Plaintiff's Exhibits 4 and 5. At the time of his dealings with the plaintiff, Errato had more than thirty years of experience in commercial development and in the building industry, and the work on the Hamden project was conducted under his supervision. His biography indicated that he had extensive experience throughout the United States, was an expert in development and design and that he had a "passion in the real estate development field." Plaintiff's Exhibit 35. Errato testified that he was a sophisticated businessman, rating himself as an eight on a scale of one through ten, as a result of his involvement in the construction and development of residential and commercial properties. At one time, he was also a member of a licensed home improvement contracting company known as B B Construction.
His involvement with the plaintiff in seeking bids for the development of the Victoria Landing project and its juxtaposition to his request to work on the Hamden project, along with the implication that work on the Hamden project would lead to further work on the commercial development, more likely than not led the plaintiff to believe that Errato was acting as a "general contractor," rather than as a homeowner. When speaking to Huginski, vice president and secretary of the plaintiff, Lewis had even referred to Errato as the "general contractor" for the Hamden project. Moreover, Errato testified that the plaintiff had a lot to lose if he did not make him happy and that he did not need to remind the plaintiff of that. Also, the plaintiff credibly testified through its officers that, since 2001, it had not engaged in work as a general contractor, but rather restricted itself to work only as a subcontractor on new construction projects. Although the plaintiff was registered with Department of Consumer Protection as a home improvement contractor from June 1, 2001, through November 30, 2008, the plaintiff maintained such a license for the ability to act as a general contractor for home improvements if it decided to seek work in that area. Plaintiff's Exhibit 1.
Although the license expired on November 30, 2008, it was reinstated on May 19, 2009, and remained effective through at least November 30, 2009. Plaintiff's Exhibit 1.
Following Errato's execution of the agreed upon proposal on September 29, 2005, the plaintiff and Errato orally agreed that payment would be made upon the submission of the invoices, and that the invoices were to be issued based on a percentage of the work completed as it progressed. The plaintiff acknowledged at trial that the proposal signed by Errato did not meet the requirements of the HIA.
In October 2005, the first coat material was applied, and the plaintiff submitted an invoice for the work completed in the amount of $2,037.35, which was paid by Errato. Plaintiff's Exhibits 9 and 10. On October 28, 2005, trim materials were delivered and loaded into the building and thereafter the trim work commenced. By November 11, 2005, the plaintiff installed the interior doors and interior trim and submitted an invoice in the amount of $16,854.26, which was paid by Errato. Plaintiff's Exhibits 17 and 18.
While the work was in progress, Errato submitted a list of approximately ten different paint colors for application beyond those originally called for under the contract. Plaintiff's Exhibit 13. On October 31, 2005, Errato signed the change orders submitted by the plaintiff for the additional paint work. Plaintiff's Exhibits 14 and 16. Also, on October 27, 2005, Errato requested that the plaintiff furnish a bid for additional trim and interior paint for the ground/basement level of the structure. In response, the plaintiff prepared and submitted both measure forms and a written proposal to address the requested additional work. Plaintiff's Exhibits 11, 12 and 15. On October 31, 2005, Errato signed the proposal for the work to be performed on the ground/basement level. Plaintiff's Exhibit 15. As with the original contract, neither the plaintiff nor Seder signed the proposal. The plaintiff then commenced the work in a timely fashion. It was not until mid-October that the plaintiff had its first contact with Seder when there was a discussion regarding the paint colors for the "kids" bedroom. Up until that point, the bedrooms had been referenced only as bedrooms 1, 2, etc. This was the first time that any information had been provided to the plaintiff that would lead it to believe the structure was intended to be the defendants' personal residence.
On December 13, 2005, the plaintiff submitted three invoices for work done in the amount of $16,528.98, $15,112.54 and $4,651.25. Plaintiff's Exhibits 19, 20 and 21. On December 22, 2005, Errato made a partial payment toward those invoices in the amount of $25,000.00. Plaintiff's Exhibit 22. All of the payments made to the plaintiff during the course of the work were made by Errato, but the checks issued contained only his name and had no reference to either a business or personal address. See, for example, plaintiff's Exhibits 10, 18 and 22. All of the invoices submitted by the plaintiff were directed to "Bob Errato, 155 Chestnut Hill Road, Hamden, Connecticut" which was the address of the single-family dwelling. Plaintiff's Exhibits 9, 17, 19, 20, 21, 23 and 24.
On December 23, 2005, the town of Hamden issued a certificate of occupancy for the premises. Both defendants took occupancy of the single-family dwelling. Thereafter, Errato raised with the plaintiff, for the first time, issues relative to the quality and extent of its work and insisted that the plaintiff complete additional work to his satisfaction before he would pay the balance due under the agreement. He produced at trial ninety-two photographs depicting the work of the plaintiff he found objectionable. These photos were taken in early 2009, approximately three years after the completion of the work. Generally, the photos attempted to show problems with the painting, the quality and the positioning of the trim work, and the clearance space between the doors and the floor. Errato claimed that the clearance was up to one inch instead of the three-eighths of one inch that he thought was appropriate.
The plaintiff agreed to attempt to address Errato's concerns. The plaintiff's representative met with Errato on site to review the claimed deficiencies, and its employees were allowed to access the site after Christmas 2005 and again in January 2006 to make repairs. Despite Errato's continued assurance that the plaintiff would be paid upon completion of the work, Errato continued to ask the plaintiff to repair more than what was originally identified, even as the plaintiff attempted to complete the work on the original repair issues. Eventually, Errato directed the plaintiff off of the job because of his dissatisfaction with the repair attempt. Although conflicting testimony was presented on this issue, the court finds credible the testimony of Raymond McMahon, the plaintiff's president, that Errato threatened to never pay the plaintiff if it placed a mechanic's lien on his property.
On January 19, 2006, after attempting to complete the work requested, the plaintiff submitted its final invoices in the amounts of $820.81, $3,778.14 and $1,836.55. However, because of Errato's continued dissatisfaction with the quality of the work, he ultimately denied the plaintiff any further access to the property and refused to pay theses invoices as well as the balance due on the prior invoices. On multiple occasions at trial, Errato testified that the property was a "million dollar" property and conveyed both expressly and implicitly that the work done was not up to what he viewed as the standard for such a valuable property. From a review of the evidence, it appears that the items sought to be addressed by the defendants were in the nature of minor "punch list" items; however, no written list was ever provided to the plaintiff by either defendant. The photographs provided at trial by Errato were of the condition of the property three years after the claimed deficiencies. While of some use to the court, they were of diminished evidentiary weight given the passage of time, the effect of the elements and the normal wear and tear on such material. Errato had made it clear that he would not make final payment on the invoices until the items in issue were completed to his satisfaction. He took this position despite the fact that his experience in the industry would have made it clear to him that the amounts withheld far exceeded any amount necessary to address the perceived shortcomings in the work.
Seder did not testify or attend the trial.
Following the submission of the bills, Errato refused to communicate with the plaintiff any further. His office staff even stonewalled an attempt by the plaintiff to make personal inquiry of him at his office about the bills. As a result of that attempted visit, Errato responded by contacting the local police to report "this unfortunate incident," and then wrote a May 26, 2006 letter to the plaintiff whereby he threatened to report the plaintiff to the Department of Consumer Protection. He further directed the plaintiff to stay away from his office and his personal property and threatened to call the police if they did not. Plaintiff's Exhibit 25. On May 30, 2006, Errato issued a follow-up letter in which he insinuated that the plaintiff's representatives had stolen a package from his office containing critical business data and demanded its return. Plaintiff's Exhibit 26.
To support their claim of defective work, the defendants presented the expert testimony of Chad Torrey, a painter and remodeler, who stated that the work done by the plaintiff was of such poor quality that it would cost in excess of $99,000 to complete the job as originally anticipated through replacement and repair. Defendants' Exhibit 15. The plaintiff presented the testimony of Walter Kloss, a licensed real estate appraiser, that the unadjusted current fair market value of the property was $770,000. Kloss further testified that the dwelling was not a "new" home. Although the home was "totally remodeled," the local assessor's card, building plans and physical evidence showed that existing parts of the original structure remained. Kloss also referred to the "original part" of the building as having been built in 1973, even though it was virtually a new house as of 2005 due to the extent of the renovations. He also presented testimony, not subsequently challenged by the defendants, that there were some issues relating to the need for the repair or replacement of some of the plaintiff's work and that the approximate cost of such work was $2,500. Many of the conditions raised as concerns by the defendants were conditions that would normally be found on a newly renovated property due to settling or other normal aging or wear and tear. Adjusting for the diminution in value, he stated the fair market value of the property was $767,500.
From the date of the work done by the plaintiff to the time of trial, the defendants occupied the dwelling, but they did not make any expenditures for the repair or replacement of the work or items claimed defective or problematic.
The court finds Kloss' testimony credible and places the estimated cost of the repair work at $2,500. The court further finds the testimony of the defendant's expert on the issue lacking in any credibility whatsoever. Torrey did not inspect the property until May 2009, nearly three and a half years after the work done by the plaintiff. He stated that he had no personal knowledge of the physical condition of the house in 2005 or 2006 or of the problems associated with it "other than what Mr. Errato says." He acknowledged that he had not measured the square footage of the home or other areas in issue, did not have any documentation as to the contract work called for, did not know the measurements of trim, doors, etc., or the estimated cost to replace or adjust for such items. He acknowledged that his estimate (defendants' Exhibit 15) included, at the direction of Errato, the replacement of twenty of the thirty-six doors in the house, even though a height adjustment in the placement of the doors could alleviate any concerns regarding the potentially improper floor clearance.
Recognizing that there were some deficiencies in the work done by the plaintiff, the cumulative evidence and testimony nonetheless enables the court to find that the plaintiff substantially completed the work agreed to by the parties and that it billed only for the completed work. The principal amount claimed due by the plaintiff on the outstanding invoices is $17,728.27. While there is an estimate of $2,500 for work necessary to repair or complete the work called for, the court finds no evidence that the defendants incurred any actual expenditures for this purpose from the time of the work to the date of trial.
Although Errato testified that he notified the plaintiff at the outset of the work that the Hamden property would be a personal residence for him and his wife, he acknowledged that it was not his personal residence at the time the work started. He noted that deficiencies in the plaintiff's work, both in terms of quality and percentage of completion were extensive, and that monies were withheld by him because the work was substandard and such monies were needed to cover the cost of repairs. The court does not find his testimony credible as a whole. Errato further testified, inconsistently, that the agreement had a completion date of Thanksgiving 2005 and a "drop dead" date of Christmas 2005, but then later claimed the agreement had no end date. He also acknowledged that he never raised the issue of the HIA noncompliance with the plaintiff. Further, he indicated that he cleaned up some of the shortcomings in the work, such as paint spots. He also initially claimed to have spent "a couple thousand dollars" as a result of plaintiff's poor work, but then admitted that nothing had been produced through discovery or at trial to document any of the claimed expenditures. As to one of his biggest claims, the lack of proper floor clearance on the installation of the doors, he acknowledged that there were no industry standards on floor clearance and that he had never measured the doors. Despite withholding over $17,000 in payments, out of a total of nearly $60,000 billed, he claimed to have paid the plaintiff "substantially all of [its] contract."
He also testified that the house was built with funds from a home equity line account drawn against his wife's house. No documentary evidence to buttress this claim was provided, nor, as noted above, did Seder attend or testify at trial.
During his testimony Errato stressed that the work done was a renovation, alteration or repair and not new construction. Nonetheless he acknowledged pleading a special defense of failure to comply with the NHCCA, which, of course, is limited to properties constituting new home construction.
III DISCUSSION
As noted above, in order to address the parties' various pleadings, a preliminary finding must be made as to whether the property being worked on by the plaintiff was new construction (in which case the NHCCA may be applicable), or an existing structure (in which case the HIA may be applicable). If the property is found to be new construction, the provisions of the HIA exclude such structures from its coverage. Specifically, § 20-419(4) of the HIA provides in relevant part: "`Home improvement' does not include: (A) the construction of a new home . . ." Based on the factual findings set forth above, the court finds that while the work on the property was extensive, it did not constitute new construction. As evidenced in part by several documents filed with the town of Hamden, the work was anticipated and geared toward the renovation, alteration or repair of an existing single-family dwelling. Accordingly, the NHCCA is not applicable in this case. The court therefore will address the applicability of the HIA to the facts found as necessary.
For several cases involving a determination of new construction versus home improvement, see Laser Contracting, LLC v. Torrance Family Ltd. Partnership, 108 Conn.App. 222, 905 A.2d 1236 (2008) (relocation of modular home to a new site constituted new construction); Seaport Electric v. Friedlander, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket Nos. CV 91 0120366, CV 90 0112554 (May 24, 1993, Mottolese, J.) (home improvement where ninety percent of old structure demolished and then rebuilt); Kelly v. Thompson, Superior Court, judicial district of Ansonia-Milford, Docket No. CV 95 049283 (November 15, 1995, Curran, J.), (new construction where the only items salvaged were the foundation, a stained glass window, kitchen sink and the bathroom sink and faucet); Fielding v. Spinnato, Superior Court, judicial district of Middlesex, Docket No. CV 97 0081056 (December 14, 2001, Shapiro, J.) (new construction where prior house was completely destroyed and a new home built on foundation as opposed to pillars which the prior house stood upon); Wright Brothers Builders v. Shuldman, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 05 4005897 (December 5, 2007, Tobin, J.) (new construction where of a portion of the old foundation used to build new structure); Claywell v. Moon, Superior Court, judicial district of Hartford, Docket No. CV 01 0812959 (May 20, 2002, Corrigan, J.T.R.) (clearing trees from a lot so as to build a house not a home improvement.).
A Breach of Contract 1 Agreement
In their first count, the plaintiff alleges that the defendants breached the contract. Generally, "[t]he elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." (Internal quotation marks omitted.) Chiulli v. Zola, 97 Conn.App. 699, 706-07, 905 A.2d 1236 (2006).
Although the September 29, 2005 and October 31, 2005 agreements lacked specificity in a number of respects, they nonetheless were sufficient to form and convey a meeting of the minds relative to a mutual intent for the remodeling, alteration or repair of an existing single-family dwelling to be completed within a specific time period and at a specific price as between the plaintiff and Errato. Plaintiff's Exhibit 8. This is supported by the defendants' answer to paragraph twelve of the plaintiff's complaint, which admitted that portion of the paragraph that alleged "[t]he defendant [Errato] failed to pay in accordance with the terms of the agreement." (Emphasis added.)
There is however, insufficient evidence to show the formation of an agreement between the plaintiff and Seder as she was not a signatory to the agreement and did not become involved with the plaintiff until mid-October 2005. The plaintiff has failed to meet its burden of proof as to this element of a breach of contract claim and therefore cannot prevail on the first count as to Seder, even though it has met its burden on this element as to Errato.
2
CT Page 5582
Performance
In considering the second element of a breach of contract claim, the court finds that the plaintiff provided services to Errato that are consistent with the agreements between them. This is evidenced by the accepted proposals and the October 31, 2005 change order. Seder also received the benefit of these services. The billing invoices themselves consistently indicate that the percentage of work done as of the time of the submission was between eighty-five and ninety percent. Errato paid these bills from the commencement of their submission in October 2005 through mid-December 2005. At that time, he made a substantial, partial payment and then, for the first time, raised issues relative to the quality and percentage of the work done. The court finds that the plaintiff substantially performed the agreement, and this performance is sufficient to justify enforcement against Errato.3 Breach
The court finds that the plaintiff substantially performed its contractual obligations as to Errato, regardless of whether those obligations were oral or written. Errato breached the agreement to make payment upon the submission of statements from the plaintiff as the work was completed.
4 Damages
"It is axiomatic that the sum of damages awarded as compensation in a breach of contract action should place the injured party in the same position as he would have been in had the contract been performed . . . The injured party, however, is entitled to retain nothing in excess of that sum which compensates him for the loss of his bargain . . . Guarding against excessive compensation, the law of contract damages limits the injured party to damages based on his actual loss caused by the breach." (Internal quotation marks omitted.) Russell v. Russell, 91 Conn.App. 619, 643-44, 882 A.2d 98, cert. denied, 276 Conn. 924, 888 A.2d 92 (2005).
The plaintiff has established by a preponderance of the evidence its claim to breach of contract and damages under count one of its complaint as to Errato. Those damages consist of $17,728.17, representing the outstanding balance due on the invoices submitted. The court acknowledges that there was some minor work that remained in need of repair or remediation. Despite this, however, the defendants provided no proof of any actual expenditures for repair in the four years since the work was done, all the while physically living in the residence. Further, Errato forced the plaintiff off the job in January 2006, making it impossible to complete any remaining work. Therefore, the defendants are not entitled to any set-off for such purposes.
The plaintiff also contends that it is entitled to interest and attorneys fees per the parties' contractual agreement. Notably, the September 29, 2005 and October 31, 2005 agreements contain no such provision. Plaintiff's Exhibits 8 and 15. For such a claim, the plaintiff relies on a change order regarding the additional paint work to be done at a cost of $5,472.06, executed by Errato on October 31, 2005, which contained the following language: "Payment will be made as outlined above. Amounts due and payable on receipt. Interest of 1-1/2% per month (18% per annum) added to all overdue balances. Customer agrees to pay all costs of collection including a reasonable attorneys fee." Although the language dictates that payment was to be made as "outlined above" there was no specific reference within the text to a manner or time frame for payment. As already noted, the parties orally agreed to the manner and time frame for payment. The document was not signed by the plaintiff. The December 13, 2005 invoice submitted by the plaintiff for this work shows that it billed at $4,651.25, reflecting a completion of eighty-five percent of the work called for in the change order. The invoice also noted that the plaintiff received payment/credits of $4,651.25, leaving a balance of zero. Plaintiff's Exhibit 21. Since there is no outstanding balance due on this invoice, no attorneys fees or interest are awarded.
B Unjust Enrichment
The plaintiff's complaint alleges unjust enrichment as an alternative ground for recovery. The elements for a claim of unjust enrichment are well established. "Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefitted, (2) that the defendants unjustly did not pay the plaintiff's for the benefits, and (3) that the failure of payment was to the plaintiffs' detriment." (Internal quotation marks omitted.) Jo-Ann Stores, Inc. v. Property Operating Co., LLC, 91 Conn.App. 179, 194, 880 A.2d 945 (2005). "Unjust enrichment is a very broad and flexible equitable doctrine that has as its basis the principle that it is contrary to equity and good conscience for a defendant to retain a benefit that has come to him at the expense of the plaintiff." Gagne v. Vaccaro, 255 Conn. 390, 409, 766 A.2d 416 (2001). In reviewing a claim under this theory, it is noted that "[t]he lack of a remedy under a contract is a precondition to recovery based on unjust enrichment or quantum meruit." United Coastal Industries, Inc. v. Clearheart Construction Co., 71 Conn.App. 506, 513, 802 A.2d 901 (2002); see also David M. Somers Associates, P.C. v. Busch, 283 Conn. 396, 408-10, 927 A.2d 832 (2007). Since the court has found that there is a written agreement between the plaintiff and Errato for the work to be done and an oral agreement for the manner and timing of payment, with a remedy available to the plaintiff under the law, the claim for unjust enrichment as to Errato is not viable. As noted in footnote 1, the plaintiff is entitled only to a single measure of damages arising out of alternative claims.
The court also finds, however, that there is no remedy available to the plaintiff under count one for the services rendered as to Seder. The evidence shows, both expressly and implicitly, that although Seder was not involved in the negotiation and execution of documents for the work to be done on the property, she was aware of and had contact with the plaintiff about such work from at least mid-October 2005 into January 2006. Moreover, the evidence established that the value of the work claimed by the plaintiff was for a period of time from late 2005 through January 2006. Given her personal discussions with the plaintiff's representatives in October 2005, along with the fact that she obtained occupancy of the premises shortly before Christmas 2005, Seder had to have known of the work being done on the premises during much of that time. The court can reasonably infer that, as the spouse of Errato, and as a result of having spoken to the plaintiff directly about issues such as paint colors, the number of rooms to be painted, the location of the doors and such work, Seder requested the work performed by the plaintiff for which it seeks recovery. More significantly, she knowingly benefitted from that work to the detriment of the plaintiff. Under these circumstances, the law can imply a legal obligation upon Seder to make payment for the services rendered.
"[A]n implied in law contract is not a contract, but an obligation which the law creates out of the circumstances present, even though a party did not assume the obligation . . . It is based on equitable principles to operate whenever justice requires compensation to be made . . . An implied in law contract may arise due to one party being unjustly enriched to the detriment of the other party . . . Accordingly, an implied in law contract is another name for a claim for unjust enrichment." (Citation omitted; internal quotation marks omitted.) Vertex, Inc. v. Waterbury, 278 Conn. 557, 574, 898 A.2d 178 (2006). "Unjust enrichment applies wherever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract . . . A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another . . . With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard." (Internal quotation marks omitted.) Id., 573.
In this instance, the court finds that the circumstances are such that it would be unjust, inequitable and unconscionable to allow Seder to retain the benefit of the plaintiff's services without paying for them. Accordingly, the court finds that the plaintiff has met its burden of proof as to the third count for unjust enrichment.
In addressing this count, the court notes that the plaintiff's complaint, while titled "unjust enrichment," incorporates counts one through nine of the first count. While the caption of the pleading reads: "First Count: (Breach of Contract) (As to Robert M. Errato and Lauren T. Seder)," a thorough reading of that count finds that it alleges an agreement only with Errato and that "Lauren T. Seder was an intended third party beneficiary [of] the agreements by and between the Plaintiff and the Defendant Robert M. Errato." The third count, therefore, could arguably be considered to have two mutually exclusive causes of action within one count. A liberal reading of the complaint, however, leads away from this conclusion. Despite its heading, the first count does not specifically allege an agreement with Seder, only that she was an "intended beneficiary" of an agreement the plaintiff had with Errato. The heading of the count is not dispositive of what cause of action is alleged. See Blardo v. General Security Indemnity Co. of Arizona, Superior Court, judicial district of Hartford, Docket No. CV 03 0829825 (September 28, 2004, Shapiro, J.) ("[t]he titles which a plaintiff assigns to his causes of action in his complaint are not determinative"). It is the language of the complaint itself that must be analyzed. See Sampiere v. Zaretsky, 26 Conn.App. 490, 494, 602 A.2d 1037, cert. denied, 222 Conn. 902, 606 A.2d 1328 (1992) ("Because we are bound by the four corners of the plaintiff's complaint, we must examine the specific language to determine the particular causes of action alleged."). Moreover, our Practice Book calls upon the court to interpret our rules liberally. "Practice Book § 1-8 provides: `The design of these rules being to facilitate business and advance justice, they will be interpreted liberally in any case where it shall be manifest that a strict adherence to them will work surprise or injustice.'" Barlow v. Palmer, 96 Conn.App. 88, 92, n. 5, 898 A.2d 835 (2006). Any other reading of the third count would work an injustice and be inequitable to the parties. Also, it is noteworthy that the defendants never acted to revise or strike the language from the complaint.
The elements of an unjust enrichment claim have been sufficiently pleaded so as to allow the court, which sat as a fact finder, to determine whether the plaintiff had met its burden of proof as to such a cause of action. In other words, the court was able to segregate the unjust enrichment claim from any overlapping or conflicting cause of action. "We note that in court trials, judges are expected, more so than jurors, to be capable of disregarding incompetent evidence." Doe v. Carreiro, 94 Conn.App. 626, 640 894 A.2d 993 (2006). Based on the above, there is no bar to the court making its findings as to the unjust enrichment claim and entering judgment for the plaintiff against Seder.
C Quantum Meruit
As with unjust enrichment, since the court has found an express written contract between the plaintiff and Errato, with a remedy available to the plaintiff under the law, the alternative claim for quantum meruit as to Errato need not be addressed. Similarly, because the court has found in favor of the plaintiff as to the claim for unjust enrichment as to Seder, the court need not address the quantum meruit claim as to her. Again, as noted in footnote 1, the plaintiff is entitled only to a single measure of damages arising out of alternative claims.
D Defendants' Special Defenses 1
In their first special defense, the defendants claim that the plaintiff's "action of quantum meruit cannot lie given the purported existence of the parties' express contract . . ." The defendants' allegations are not in the nature of a special defense, but rather contest the legal sufficiency of the allegations of the complaint to state a claim upon which relief can be granted. It is therefore, in effect, a motion to strike. Regardless of the title of the pleading, it is the substance of the text which binds the court. The defendants' special defense is procedurally improper, and therefore, it is found to be inapplicable to the complaint.
See Sampiere v. Zaretsky, supra, 26 Conn.App. 494; Blardo v. General Security Indemnity Co. of Arizona, supra, Superior Court, Docket No. CV 03 0829825. This concept is equally applicable to any responsive pleadings such as special defenses.
Moreover, the plaintiff may plead alternative counts given that it would be limited to a single measure of damages arising out of alternative claims. Stein v. Horton, supra, 99 Conn.App. 477, 495-96.
2
In their second special defense, the defendants claim that the plaintiff's "an action of unjust enrichment cannot lie given the purported existence of the parties' express contract . . ." The reasoning set out in part III.D.1 above is equally applicable here.
3
In their third special defense, the defendants claim that the plaintiff's failure to register with the Department of Consumer Protection as a new home construction contractor under the NHCCA is: a) a class A misdemeanor; b) a violation of the CUTPA; and c) entitles the defendants to treble damages under the NHCCA. In that the court has found the property involved does not constitute new construction, the violation of the NHCCA is inapplicable as a special defense.
Although the defendants titled their special defense as "Illegality Not Apparent on the Face of the Pleadings," which is listed as a special defense under Practice Book § 10-50, it is the text of the pleading to which the court must look. The text of the pleading does not support its title. See footnote 9 and its preceding text.
4
In their fourth special defense, the defendants claim that the plaintiff failed to complete the work under the terms of the contract. In the wording of this special defense, the defendants have expressed their dissatisfaction with the plaintiff's work and put into issue whether the work called for was completed. As noted above, such allegations do not constitute "facts which are consistent with plaintiff's statements but show, notwithstanding, that the plaintiff has no cause of action . . ." See Practice Book § 10-50. The defendants' allegations do not constitute a special defense, but rather, form the basis of a general denial. As such, the defendants cannot prevail on this special defense. Even were these allegations to be considered a valid special defense, the defendants have failed to meet their burden of proof in this regard.
5
In their fifth special defense, the defendants claim that they are entitled to a set-off against any amounts found due to the plaintiff as a result of any sums found necessary to remedy the defective workmanship and materials provided by the plaintiff on the property. As noted above, such allegations do not constitute "facts which are consistent with plaintiff's statements but show, notwithstanding, that the plaintiff has no cause of action . . ." See Practice Book § 10-50. The defendants' allegations do not constitute a special defense, but rather, seek a remedy to be provided on the assumption that the plaintiff has at least one viable cause of action and has prevailed on one of them. Even had this been found to be a valid special defense, the defendants failed to meet their burden of proof. As such, the defendants cannot prevail on this special defense.
6
In their sixth special defense, the defendants allege that the contract between the parties is invalid and unenforceable by virtue of the plaintiff's failure to provide and execute a contract in compliance with the statutory requirements of the HIA. Our courts have previously concluded that a contractor's noncompliance with the HIA should be pleaded as a special defense by a homeowner being sued on a home improvement contract. See Sidney v. DeVries, 18 Conn.App. 581, 586-87, 559 A.2d 1145 (1989), aff'd, 215 Conn. 350, 575 A.2d 228 (1990).
For the reasons more fully discussed in part III.E.4 of this opinion, the defendants cannot prevail on this special defense.
E Defendants' Amended Counterclaims 1 Count One: Breach of Contract Warranties
The evidence has established that, as defined by the NHCCA, the work done by the plaintiff did not involve the construction of a new single-family dwelling, and that neither the plaintiff nor the defendants were consumers. The NHCCA is therefore inapplicable to a claim of breach of new home warranties under General Statutes, §§ 47-117, 47-118 and 47-121. Accordingly, judgment may enter for the plaintiff on count one of the amended counterclaim.
2 Count Two: CUTPA
The defendants allege that the plaintiff violated CUTPA through its failure to register with the state of Connecticut as a new home construction contractor, as required under the NHCCA. Since the evidence has established that the work done by the plaintiff consisted of alterations, renovations and improvements to a single-family dwelling, the NHCCA is inapplicable. Therefore, no claim of a CUTPA violation arising from a violation of the registration requirements of the NHCCA is sustainable. Accordingly, judgment may enter for the plaintiff on count two of the amended counterclaim.
3 Count Three: Breach of Contract
In count three, the defendants allege that the "[p]laintiff breached its contract with the [d]efendants by not performing services in a good and workmanlike manner . . ." From the facts and evidence presented to the court as noted above, it is found that the plaintiff substantially completed the terms of the agreement between the plaintiff and Errato. Seder failed to establish the existence of an agreement between herself and the plaintiff. Accordingly, the defendants have failed to meet their burden of proof on this count, and judgment may enter in favor of the plaintiff.
4 Count Four: HIA and CUTPA
In their fourth count, the defendants claim damages based on violations of the HIA and CUTPA. Specifically, the defendants allege that "[i]n or about September 2005, the Defendants hired the Plaintiff to perform certain [work] generally set forth in the Exhibits attached to the Plaintiff's Complaint." Paragraph 1, Fourth Count, defendants' amended complaint (#147). The exhibits referred to are those that constitute the September 29, 2005 and October 31, 2005 agreements referred to in part II of this opinion. Evidence presented at trial shows that the plaintiff failed to include in the contract between the parties certain terms statutorily mandated by the HIA. Specifically, the contract did not include the plaintiff's signatory pursuant to § 20-429(a)(2), a notice of cancellation rights pursuant to § 20-429(a)(6) and a starting date and completion date pursuant to § 20-429(a)(7). Plaintiff's Exhibit 8. MJM Landscaping, Inc. v. Lorant, 268 Conn. 429, 435, 845 A.2d 382 (2004); see also General Statutes § 20-429(f).
Section 20-429(a) in effect at the time the purported contract was entered into between the parties had specific requirements in order for a home improvement contract to be valid. It requires, in relevant part, that the contract: "(1) Is in writing, (2) is signed by the owner and the contractor, (3) contains the entire agreement between the owner and the contractor, (4) contains the date of the transaction, (5) contains the name and address of the contractor, (6) contains a notice of the owner's cancellation rights in accordance with the provisions of chapter 740, (7) contains a starting date and completion date, and (8) is entered into by a registered salesman or registered contractor . . . Each change in the terms and conditions of a contract shall be in writing and shall be signed by the owner and contractor." Subsection (a)(5) was amended by Public Act 06-73 to also require the contract to contain the contractor's registration number. The defendants have alleged this failure as part of their complaint. That is not an issue in this instance, however, as the purported contract was entered into in 2005, and, at that time, there was no statutory requirement for the entry of the plaintiff's registration number onto the contract.
In reviewing the statute, our Supreme Court has held that "[a]s remedial legislation, the HIA must be afforded a liberal construction in favor of those whom the legislature intended to benefit." Rizzo Pool Co. v. Del Grosso, 232 Conn. 666, 678, 657 A.2d 1087 (1995).
General Statutes 20-429(f) states: "Nothing in this section shall preclude a contractor who has complied with subdivisions (1), (2), (6), (7) and (8) of subsection (a) of this section from the recovery of payment for work performed based on the reasonable value of services which were requested by the owner, provided the court determines that it would he inequitable to deny such recovery." The plaintiff's failure to comply with the requirements of § 20-429(a)(2), (6) and (7) precludes it from seeking recovery on equitable grounds. If the requirements of subsection (f) are met, it is possible for a contractor to recover under a common law theory of unjust enrichment, even though the other provisions of the HIA have not been met. Newtown Pool Construction, LLC v. Errico, 103 Conn.App. 566, 569-70, 930 A.2d 50 (2007). Here, the plaintiff has clearly failed to meet the necessary requirements of subsection (f), which would allow a common law cause of action to proceed absent any bad faith on the part of the defendants.
Regardless of the status of the property as new construction, or as alterations and/or improvements to a single-family dwelling, the defendants cannot prevail on their counterclaim for a violation of the HIA because that statute does not provide a private cause of action for its violation. While the court recognizes that there is a split of authority in the superior court decisions on the issue, it finds an absence of statutory language authorizing a right of action on the behalf of a homeowner. Kaczynski v. J. Videira's Paving, LLC, Superior Court, judicial district of Ansonia-Milford, Docket No. CV 05 4003257 (January 23, 2008, Levin, J.); McClain v. Byers, Superior Court, judicial district of Fairfield, Docket No. CV 93 0301761 (April 19, 1995, Hauser, J.) ( 14 Conn. L. Rptr. 98); see also, Pereira v. DeLeon, Superior Court, judicial district of Danbury, Docket No. CV 04 4000637 (August 5, 2005, Bellis, J.) ( 39 Conn. L. Rptr. 723). Moreover, the Supreme Court has recently indicated its support for the proposition that there is no private cause of action under the HIA. See Hees v. Burke Construction, Inc., 290 Conn. 1, 13-15, n. 10, 961 A.2d 373 (2009).
Despite this, however, an action for a violation of the HIA may be brought in the context of a claim under the CUTPA for failure to comply with its terms. See generally Scrivani v. Vallombroso, 99 Conn.App. 645, 916 A.2d 827, cert denied, 282 Conn. 904, 920 A.2d 309 (2007). In this instance, the defendants claim that the violations of the HIA also constituted unfair or deceptive trade practices under CUTPA. In reviewing such claims, our courts have allowed recovery under the CUTPA only when the party seeking to recover damages meets the following two requirements: "First, they must establish that the conduct at issue constitutes an unfair or deceptive trade practice. Second, they must present evidence providing the court with a basis for a reasonable estimate of the damages suffered . . . There is no automatic entitlement to damages." (Citation omitted.) New England Custom Concrete, LLC v. Carbone, 102 Conn.App. 652, 666, 927 A.2d 333 (2007); A. Secondino Son, Inc. v. LoRicco, 215 Conn. 336, 343, 576 A.2d 464 (1990). As to the first requirement, the claim of a breach of contract does not, alone, create a viable CUTPA claim. Paulus v. Lasala, 56 Conn.App. 139, 154, 742 A.2d 379 (1999), cert. denied, 252 Conn. 928, 746 A.2d 789 (2000). A violation of the HIA is, however, a per se violation of the CUTPA. New England Custom Concrete, LLC v. Carbone, supra, 102 Conn.App. 666; General Statutes § 20-427(c).
Before proceeding to determine whether the failure to comply with § 20-429(a)(6) and (7) constitutes separate violations of CUTPA, the court must address the plaintiff's amended third special defense (#150) which alleges that the defendants' claim is beyond the three-year statute of limitations embodied in General Statutes § 42-110g(f). The court has found that the agreements between plaintiff and Errato were dated September 29, 2005 and October 31, 2005. Plaintiff's Exhibits 8, 14, 15. The plaintiff brought the present action to the court on August 20, 2008. The defendants filed an initial answer, special defenses and a two-count counterclaim on December 10, 2008 (#108). The first count alleged a breach of warranties under General Statutes §§ 47-117, 47-118 and 47-121. The second count alleged a violation of the CUTPA by virtue of the plaintiff's violation of the NHCCA, § 20-417g. There was no count alleging a CUTPA violation by virtue of a violation of the HIA.
Though referenced by the court above, the defendants did not allege a violation of § 20-429(a)(2) in its counterclaim.
Section 42-110g(f) provides: "An action under this section may not be brought more than three years after the occurrence of a violation of this chapter."
On October 15, 2009, the defendants filed a request for leave to amend including, for the first time, a count alleging a CUTPA violation by virtue of a violation of the HIA (#146). That counterclaim became operative without objection by the plaintiff. Four days later, on October 19, 2009, the defendants filed a new request to amend which also became operative without objection (#147). The fourth count of the final amended counterclaim also contained the claim of violation of the HIA and CUTPA. From a review of the pleadings, it appears that the first day the defendants made such a claim was on October 15, 2009. The statute of limitations relevant to that claim expired three years from the date of the respective agreements, specifically, September 29, 2008, and October 31, 2008. The defendant's own counterclaim alleges that the hiring of the plaintiff to do the work was "in or about September 2005." Even if the court were to liberally use January 2006 as the last date that work was done on the property by the plaintiff, without an HIA compliant contract, the defendants' claim would still be beyond the three-year statute of limitation for a CUTPA claim.
Beyond any statute of limitations argument, the defendants never raised the issue of noncompliance with the HIA during the course of the plaintiff's performance of the work and were unable to provide any credible evidence to allow the court to conclude that the plaintiff's failure to comply with the HIA was the proximate cause of any claimed damages. Nor were the defendants able to provide any credible evidence that they incurred expenses relative to the claimed work deficiencies. Even had the three year statute of limitations been inapplicable, the court finds that the defendants failed to prove, by a preponderance of the evidence, any proximate cause between any loss the defendants claim to have suffered and the plaintiff's failure to conform the contract to the requirements of § 20-429(a)(6) and (7) of the HIA.
The court notes that, at trial, the plaintiff raised the issue that the defendants could not avail themselves of the protection of the HIA if they invoked the statute in bad faith. "[A] home improvement contractor, in suing for breach of contract that violates § 20-429, can avoid the normal bar to his pursuit of such a cause of action by proving that the homeowner invoked, in bad faith, the contractor's statutory violation as a basis for his own repudiation of the contract." Habetz v. Condon, 224 Conn. 231, 236, 618 A.2d 501 (1992). The court further stated "[t]he central element giving rise to this exception is the recognition that to allow the homeowner who acted in bad faith to repudiate the contract and hide behind the act would be to allow him to benefit from his own wrong, and indeed encourage him to act thusly. Proof of bad faith therefore serves to preclude the homeowner from hiding behind the protection of the act." Id., 237. " Habetz made it clear, however, that mere disagreement about contract performance does not suffice to establish bad faith. Habetz defined bad faith as involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive . . . Bad faith means more than mere negligence; it involves a dishonest purpose." (Internal quotation marks omitted.) New England Custom Concrete, LLC v. Carbone, supra, 102 Conn.App. 661.
Though not necessary to the resolution of the counterclaim because of the applicability of the statute of limitations, the court finds that Errato engaged in bad faith. He neglected or refused to fulfill a contractual obligation, not through an honest mistake, but rather by an interested motive, namely to demand and induce the plaintiff to continue to work on the property while knowing that he and his wife would refuse to pay the plaintiff for the balance of the work. Errato's level of sophistication and experience within the real estate field, as evidenced by his own statements and documentation (e.g., defendant's Exhibit 3; see also, plaintiff's Exhibit 35), make it more likely than not that he led the plaintiff to continue to work on the property, while knowing that he would attempt to hide behind the protection of the HIA. Notably, at the time of the negotiation of the contract and through a significant portion of his dealings with the plaintiff, Errato held himself out as a commercial general contractor, rather than as an owner of a private, single-family residence. He never recalled having any written agreements with any of the other vendors or subcontractors he may have dealt with. Moreover, the monies withheld by Errato and Seder were grossly disproportionate to the value of repair or the percentage of work that remained to be completed. Simply put, Errato acted in bad faith in his dealings with the plaintiff, including his refusal to pay the outstanding amounts due.
In light of the above, judgment may enter for the plaintiff as to the fourth count of the defendants' counterclaim.
F Plaintiff's Amended Special Defenses
The court need not address the plaintiff's amended special defenses as to counts one through three of the defendants' counterclaim as it finds that the defendants have failed to meet their burden of proof on each of those counts. The plaintiff has met its burden of proof as to its amended third special defense to the fourth count of the defendants' counterclaim, for the reasons set forth in part III.E.4 above.
IV CONCLUSION
Having met its burden of proof on count one as to Errato and count two as to Seder, judgment shall enter in favor of the plaintiff in the amount of $17,728.17. As to counts one through three of the defendants' counterclaim, since the defendants have failed to meet their burden of proof, judgment shall enter in favor of the plaintiff as to those counts. As to count four of the defendants' counterclaim, having proven its special defense of the applicability of the statute of limitations under General Statutes § 42-110g(f), judgment shall enter in favor of the plaintiff.
So ordered.