Summary
upholding four to one ratio under CUTPA
Summary of this case from Sawtelle v. Waddell Reed, Inc.Opinion
(11371)
The plaintiffs sought damages from the defendants, their former landlords, alleging violations of the Connecticut Unfair Trade Practices Act ( 42-110b et seq.), the statute ( 47a-21) that prescribes security deposit procedures and the statute ( 47a-4) that prohibits the acceptance of rent for an uninhabitable apartment. The case was referred to an attorney trial referee who filed a report recommending judgment awarding the plaintiffs damages, punitive damages, counsel fees, interest on the damages and punitive damages from the date the apartment was condemned and interest on the counsel fees. The trial court accepted the report of the referee and rendered judgment thereon, from which the defendants appealed to this court. Held: 1. Notwithstanding the referee's finding of "wrongful conduct" on the part of the defendants, rather than reckless or wanton conduct as the defendants claimed was required to support an award of punitive damages, the trial court did not abuse its discretion in determining that the defendants' conduct warranted an award of punitive damages; the evidence established that the defendants were recklessly indifferent to the rights of the plaintiffs and that they intentionally and wantonly violated those rights. 2. The trial court improperly awarded prejudgment interest on the punitive damages award, there being no statutory authority for such an award. 3. There was no merit to the defendants' claim that the trial court should have disqualified the attorney trial referee after the referee had disclosed to the court a possible conflict of interest that arose after the referee filed his original report and before he filed a corrected report; at no time did the defendants file a motion to have the referee recused.
Argued April 27, 1993
Decision released July 20, 1993
Action to recover damages for the alleged breach of a lease agreement, and for other relief, brought to the Superior Court in the judicial district of Stamford-Norwalk, Housing Session at Norwalk, where the defendants filed a counterclaim; thereafter, the matter was referred to David F. Ertman, attorney state trial referee, who filed a report recommending judgment for the plaintiffs on the complaint and the counterclaim; subsequently, the court Leheny, J., rendered judgment in accordance with the referee's report, from which the defendants appealed to this court. Reversed in part; judgment directed.
Geoffrey S. Brandner, with whom, on the brief, was John Lino Ponzini, for the appellants (defendants).
David J. Ordway, for the appellees (plaintiffs).
The defendants appeal from the judgment rendered in favor of the plaintiffs, Richard Nielsen and Joy Nielsen. Following a six day trial before an attorney trial referee; see General Statutes 52-434 (a)(4); Practice Book 428 et seq.; the trial court accepted the reported findings and rendered judgment. On appeal, the defendants claim that the trial court improperly (1) awarded punitive damages, (2) awarded interest retroactively, and (3) allowed the attorney trial referee to rule on a motion to correct. We agree with the defendants' second claim and reverse in part.
The defendants are Stanley R. Wisniewski, Frederick H. Wisniewski and Richard Wisniewski.
The evidence introduced at trial supports the following facts. In November, 1983, the plaintiffs entered into an oral contract with the defendants to lease a third floor apartment at 256 Washington Boulevard in Stamford. The defendants owned that building and several other residential properties and were in the business of renting residential properties. The plaintiffs, along with their four young children, took possession of the apartment. At the time, the plaintiffs were aware that the premises needed substantial renovation. For a long period before and after the plaintiffs moved in, the condition of the leased premises had been in substantial violation of health and safety codes, despite numerous written warnings to the defendants. Among the numerous violations was the lack of smoke detectors on the premises.
The plaintiffs paid a $450 security deposit under the lease. The parties agreed on an initial rent of $250 a month until the defendants completed repairs within approximately three months, after which the parties agreed that the rent would increase and rent subsidies would supplement the plaintiffs' payments.
In February, 1984, after the defendants had failed to perform the agreed repairs, the parties entered into a new agreement by which the plaintiffs were to perform much of the repair work using materials supplied by the defendants. These repairs would not include electrical work. The plaintiffs performed such repairs as they were able through June, 1984. The defendants failed, however, to supply necessary materials and skilled labor. By August, 1984, the relationship between the parties had broken down, and the defendants served the plaintiffs a notice to quit possession because of nonpayment of rent. A summary process trial in November, 1984, resulted in judgment being rendered for the Nielsens; the defendants in the present case were found not to be entitled to collect rent because of the substandard condition of the premises. During the entire period of the plaintiffs' occupancy, from November, 1983, through February, 1985, the leased premises was in substantial violation of Stamford's health and safety code, lacked a certificate of apartment occupancy, and was not an apartment that the defendants were legally entitled to rent. The condition of the apartment was not improved significantly after August, 1984.
Prior to June, 1984, the parties were on friendly terms, and the plaintiffs even invited the defendants to dinner at their apartment on at least one occasion.
The plaintiffs paid the defendants a total of $1715 in rent in addition to the $450 security deposit during this period of occupancy.
Following the judgment in the summary process action, the defendants engaged in a continuing pattern of wrongful conduct with respect to the plaintiffs and the apartment they occupied. Among other actions, the defendants shut off the plaintiffs' gas and electricity, which they used for heat, hot water and cooking. The defendants also cut an electric line that the plaintiffs had installed for substitute electrical service after the defendants had shut off the regular service. The defendants locked the utility control area of the basement thereby preventing the plaintiffs from taking any action to restore the utility services. None of the utility shutoffs resulted from any failure of the plaintiffs to pay their utility bills.
In addition to being deprived of essential utilities, the plaintiffs were deprived of their quiet enjoyment of the apartment and suffered distress and anxiety about their welfare. The named plaintiff sustained a reduction of his income as a result of the time he spent dealing with the defendants' wrongful conduct.
In February, 1985, the building at 256 Washington Boulevard was condemned, and the plaintiffs were relocated. At no time did the defendants return the plaintiffs' security deposit or pay them interest on it; the defendants never notified the plaintiffs as to any disposition of the security deposit. At all times, the defendants had actual knowledge of an address to which they could send mail to the plaintiffs after they had vacated the apartment.
The court adopted the attorney trial referee's corrected report, in which the referee found violations of General Statutes 42-110b et seq., the Connecticut Unfair Trade Practices Act (CUTPA); General Statutes 47a-21, which controls the handling of security deposits; and General Statutes 47a-4 et seq., which controls the acceptance of rent for an uninhabitable apartment lacking a certificate of apartment occupancy. The trial court awarded the plaintiffs damages in the amount of $13,566, punitive damages in the amount of $60,000, counsel fees in the amount of $25,000, interest on the damages and punitive damages at the legal rate from February 28, 1985, to the date that the judgment is fully satisfied, interest on counsel fees at the legal rate from October 4, 1991, to the date the judgment is fully satisfied, and costs of the action.
The court fully accepted the attorney trial referee's recommendation as to damages, interest and counsel fees.
I
The defendants first claim that the trial court improperly awarded punitive damages pursuant to General Statutes 42-110g because there was no specific finding of malicious or evil motive or that the defendants' conduct was reckless, indifferent, intentional, wanton or violent. They argue that the conduct found to have taken place is insufficient to justify punitive damages without a specific finding that uses the words reckless, indifferent, intentional, wanton or violent. They further argue that the trial court's failure to specify what standard of proof it was applying, and the attorney trial referee's application of an elevated "clear and convincing evidence" standard somehow reflects on the requirement of a specific finding. We disagree.
Clear and convincing proof is not the appropriate standard of proof whenever claims of tortious conduct have serious consequences or require the proof of willful, wrongful or unlawful acts. Our Supreme Court has stated that "[a]bsent evidence of legislative intent to the contrary, we continue to presume that when a statutory private right of action includes multiple damages, the plaintiff's burden of proof is the same as that in other tort cases." Freeman v. Alamo Management Co., 221 Conn. 674, 683, 607 A.2d 370 (1992). The ordinary preponderance of the evidence standard was thus appropriate here. Id., 678. The attorney trial referee's application of a higher burden of proof than was required is not relevant to the issue presented on appeal; nor is it relevant that the trial court, in adopting the report and incorporating the referee's findings, did not indicate the standard of proof it employed.
"Awarding punitive damages and attorney's fees under CUTPA is discretionary; General Statutes 42-110g (a) and (d) . . . and the exercise of such discretion will not ordinarily be interfered with on appeal unless the abuse is manifest or injustice appears to have been done." (Citation omitted.) Gargano v. Heyman, 203 Conn. 616, 622, 525 A.2d 1343 (1987). "Punitive damages are awarded when the evidence shows a reckless indifference to the rights of others or an intentional and wanton violation of those rights." Vandersluis v. Weil, 176 Conn. 353, 358, 407 A.2d 982 (1978). The "flavor of the basic requirement to justify an award of punitive damages is described in terms of wanton and malicious injury, evil motive and violence." Venturi v. Savitt, Inc., 191 Conn. 588, 592, 468 A.2d 933 (1983).
Our Supreme Court has perceived the disparity of power between landlords and tenants, and has recognized that the chances of deterring landlords' abuses of power are materially increased by subjecting them to the payment of punitive damages. Freeman v. Alamo Management Co., supra, 683-84. The facts found in this case show such an abuse of the power held by the defendants as landlords and directed toward the vulnerable plaintiffs as tenants. Punitive damages are appropriate because the circumstances of this case satisfy the basic requirements that justify such an award. The facts found lead inescapably to the conclusion that the defendants were recklessly indifferent to the rights of the plaintiffs, and that they intentionally and wantonly violated those rights. See Pullman, Comley, Bradley Reeves v. Tuck-it-away, Bridgeport, Inc., 28 Conn. App. 460, 464, 611 A.2d 435, cert. denied, 223 Conn. 926, 614 A.2d 825 (1992) (use of talismanic words is not required where memorandum of decision contains all necessary subordinate findings to support trial court's conclusion). Under the circumstances, we conclude that the absence of a specific finding other than "wrongful conduct" did not impair the court's ultimate conclusion regarding punitive damages. The trial court did not abuse its discretion in finding that the defendants' outrageous conduct warranted invoking the punitive provisions of CUTPA.
II
The defendants next argue that the trial court improperly awarded interest retroactive to 1985 on the punitive damages awarded to the plaintiffs pursuant to General Statutes 42-110g. We agree.
The purpose of an award of interest is to compensate a party for a wrong. Neiditz v. Morton S. Fine Associates, Inc., 199 Conn. 683, 691-92, 508 A.2d 438 (1986). Such an allowance is primarily an equitable determination within the discretion of the trial court. Milgrim v. Deluca, 195 Conn. 191, 201, 487 A.2d 522 (1985); Bertozzi v. McCarthy, 164 Conn. 463, 467, 323 A.2d 553 (1973). Under General Statutes 37-3a, interest "may be recovered and allowed in civil actions . . . as damages for the detention of money after it becomes payable." For example, interest is awarded at the maturity of a debt from the time the money becomes due. Marcus v. Marcus, 175 Conn. 138, 146, 394 A.2d 727 (1978). Since punitive damages do not become payable before judgment, however, 37-3a is inapplicable.
Where prejudgment interest is expressly allowed by statute, a rate of interest is generally specified in the statute. See, e.g., General Statutes 49-41a (b) and 49-42. Under CUTPA, however, prejudgment interest is not expressly allowed and, therefore, no rate of interest is stated. The relevant part of General Statutes 42-110g (a), on which the trial court relied in awarding interest on the punitive damages, states only that "[t]he court may, in its discretion, award punitive damages and may provide such equitable relief as it deems necessary or proper." (Emphasis added.) We are unwilling to conclude that the trial court may award retroactive interest on punitive damages under the guise of "equitable relief" because this would also require us to conclude that the trial court may determine the proper rate of interest. The trial court awarded interest "at the legal rate." The "legal rate" cannot be determined, however, because there is no statute expressly providing for prejudgment interest in this case. We cannot accept the plaintiffs' argument that the inherent equitable powers of the trier under 42-110g, together with the provisions of 37-3a, support an award of interest at the rate of 10 percent from the date their apartment was condemned until satisfaction of the judgment. We agree with the defendants that the trial court lacked the power, statutorily or equitably, to award prejudgment interest on punitive damages.
III
The defendants' final claim is that the trial court improperly permitted the attorney trial referee to rule on the motion to correct after the referee had brought to the court's attention a possible conflict of interest.
The facts relevant to this claim are as follows. The attorney trial referee filed a report of his findings on October 4, 1991. The parties thereafter filed their respective motions to correct the report. On October 28, 1991, the referee indicated by letter to the clerk of the Superior Court that the law partner of the defendants' counsel was handling a dissolution action on behalf of the referee's son-in-law. Other than this fact, there was no connection between any individual involved in the present action and those involved in the divorce action of the referee's daughter. No party in either action had any interest in the outcome of the other action. The referee indicated in his letter: "I feel these developments will not affect any action I may take in completing my duties as [attorney trial referee]." The writ for the dissolution had been filed by defense counsel's partner on October 9, 1991, five days after the referee's report was filed.
At no time did the defendants file a motion asking to have the referee recused. By its rectification and articulation, the trial court concluded that there was "no reason to deem the original report tainted by improper influence" and found that the attorney trial referee's corrected report "does not substantially differ from the original report and incorporates some of the corrections proposed by the defendants."
The defendants now argue that no evidentiary hearing was held, and that the trial court, sua sponte, should have disqualified the referee and either appointed another state trial referee to decide the motions to correct or revoked the reference and ordered that a new trial be held. This claim has no merit.
When a party raises a claim involving alleged bias on the part of a trial court judge, as a general rule we will not consider that issue on appeal unless the party has made a proper motion for disqualification at trial. "`Failure to request recusal or move for a mistrial can be construed as the functional equivalent of consenting to the judge's presiding over the trial.'" Statewide Grievance Committee v. Friedland, 222 Conn. 131, 146-47, 609 A.2d 645 (1992). Failure to raise a timely objection to the participation of an attorney state trial referee faces similar consequences on appeal. See Rowan Construction Corporation v. Hassane, 17 Conn. App. 71, 76-77, 549 A.2d 1085 (1988), aff'd, 213 Conn. 337, 567 A.2d 1210 (1990). The defendants did not seek to have the referee disqualified, move for a mistrial, or request an evidentiary hearing for that purpose. Instead, they waited to see the results of both their motion to correct and that of the plaintiffs, and now seek relief on appeal. Parties are not permitted to anticipate a favorable decision, reserving a right to set it aside for reasons known to them before the rendering of that decision if their anticipation is incorrect. See Diamond Fertiliser Chemical Corporation v. Commodities Trading International Corporation, 211 Conn. 541, 553, 560 A.2d 419 (1989); Seal Audio, Inc. v. Bozak, Inc., 199 Conn. 496, 517, 508 A.2d 415 (1986); Krattenstein v. G. Fox Co., 155 Conn. 609, 616, 236 A.2d 466 (1967); Fiddelman v. Redmon, 31 Conn. App. 201, 213, 623 A.2d 1064 (1993); Naftzger v. Naftzger Kuhe, Inc., 26 Conn. App. 521, 526, 602 A.2d 606 (1992). Our review of the record here shows no abuse of the trial court's discretion.
After the referee filed a corrected report of findings, the defendants lodged several objections to its acceptance, including an objection based on the referree's alleged conflict of interest. The plaintiffs promptly filed an answer in which they specifically opposed the latter objection.