Opinion
No. CV05-4004311S
February 11, 2008
MEMORANDUM OF DECISION
This is an action brought by the plaintiff, DuBaldo Electric, LLC ("DuBaldo") against the Defendants, Montagno Construction, Inc., the general contractor for Burlington Coat Factory ("Montagno"); Burlington Coat Factory ("BCF"); and GGP Brass Mill, Inc. c/o General Growth Properties ("GGP"), the Mall. Counsel for the defense represented all three defendants. This is an action for damages arising out of the alleged breach of a contract between the subcontractor, DuBaldo, and the general contractor, Montagno. The trial of this matter took several days, with more than 100 exhibits, including photos and architectural plans. There were several witnesses, including three lengthy witnesses: the plaintiff, Mr. DuBaldo; one of the defendants, Mr. Montagno; and Mr. Marotti, owner of Globe Electric and Mr. Montagno's successor electric subcontractor. Mr. DuBaldo was substantially credible, Mr. Montagno was often, but not always, credible, and Mr. Marotti's testimony was only sporadically credible. Specifically, Mr. Marotti's recollection as to details and dates was sparse, fluid and especially not credible. Subsequent to trial, in late December 2007, counsel filed briefs as to the law and claims thereunder. The court did not request proposed findings of fact, due to the agreed-upon delayed schedule in filing post-trial briefs. Both attorneys ably represented their respective clients. The court finds for the plaintiff and awards damages in the principal amount of $145,535.30 as more fully discussed below. The court defers ruling on plaintiff's claim for interest and orders both sides to more fully brief that issue, by March 28, 2008.
FACTUAL AND PROCEDURAL HISTORY A. RELATIONSHIP AMONG DEFENDANTS
Montagno is a general contractor with offices located at 75 Progress Lane, Waterbury. Montagno was under contract to provide renovations to space leased by BCF in the Brass Mill Center Mall ("the Mall"). BCF was the tenant of GGP. GGP was the owner of the real estate upon which the Mall is located and the lessor of space to BCF.
B. ALLEGATIONS AT TRIAL
The Second Revised Complaint, the operative pleading, dated February 22, 2007, contains seven-counts and a claim for relief. The court addresses these counts which were argued, in the First Count, DuBaldo alleges that "Despite repeated demands and requests, Defendant Montagno has improperly, unfairly and unjustly withheld, and refused to pay more than $290,000.00 presently due to the Plaintiff. On September 28, 2004, Plaintiff's services were terminated by Defendants Montagno and Burlington without proper cause. Plaintiff has been damaged by the actions of Defendants Montagno and Burlington." (First Count 11-13.) DuBaldo further alleges, in the Second Count, "The acceleration of the job on or about August 14, 2004 required the Plaintiff to incur extra labor charges and carrying costs due to the accelerated work schedule and required overtime. The Defendants Montagno and Burlington have refused, failed [sic] neglected to pay the Plaintiff for these additional costs resulting from the acceleration. Plaintiff has been damaged and claims damages for acceleration and interest on the money wrongfully withheld." (Second Count 12-14.) In the Third Count, DuBaldo claims that "On or about Labor Day weekend, Defendant Montagno allowed Defendant Burlington Coat Factory to clutter the premises with material and equipment for shelving and other trade fixtures . . . This required the Plaintiff's personnel to work around the people, material and stockpiles littering the premises causing greater cost to Plaintiff. Plaintiff has been damaged and claims monetary damages for loss of efficiency and interest for money wrongfully withheld from it by Defendants Montagno and Burlington." (Third Count, 12-14.) In its Answer, dated March 22, 2007, defendant Montagno either denied the allegation or left plaintiff to its proof. Montagno raised as a special defense that "All sums due and owing to the plaintiff have been paid."
FINDINGS OF FACT
Montagno invited DuBaldo, and others, to bid to be the electrical subcontractor for the build-out of the new BCF store in the Brass Mill Center, Waterbury. DuBaldo submitted the lower of the two bids for the job. The base bid of $243,600.00 was submitted by DuBaldo on June 11, 2004, the due date, with certain add-ons bringing the total to $264,810.00. The labor was estimated on April 26, 2004 at 3600 man hours by DuBaldo, then reduced to 3200 man hours 5 men/ten weeks or $176,000 in DuBaldo's conversation with Mr. Franklin of BCF. Sometime in late June 2004, DuBaldo and Montagno entered into a contract for the provision of electrical services and contracting work. Specifically in a letter dated June 21, 2004, signed by DuBaldo June 25, 2004, and received back by Montagno July 1, 2004, Montagno advised DuBaldo that they had decided to "award your firm the contract" for the electrical work at BCF. The contract price was identified as $250,450.00 and a Scope of Work Plan was attached.
Test. 10/24. Def. D is the base bid of $459,000.00 from the only other electrical subcontractor who bid, O.J. Mann Electrical Services, Inc.
Def. C, D.
Def. A and Def. D.
Defendant's Post-Trial Memorandum p. 2-3; Plaintiff's Complaint Count One, para. 5. Even though this June letter stated "This document is not a contract . ." and the award of the electrical work was "subject, however [sic] to the execution of a mutually agreeable contract" and promised "A formal contract will be forwarded to you with [sic] 30 days," the court finds that the parties' actions post the signing of these documents evidence their intention to contract with each other at this time, with these documents.
Pl. 2
On Friday, June 25, 2004, DuBaldo dropped equipment off at the site and told Montagno he would start Monday. DuBaldo applied for an electrical permit with the City of Waterbury on Monday, June 28, 2004. The permit was issued sixteen days later, on July 14, 2004. As testified to credibly by both the City of Waterbury Electrical Inspector, Thomas Wengertsman, as well as the Plaintiff, the Building Permit was delayed due to problems with the defendants' architectural drawings and the delay was also attributed to the workload/under-staffing at the Waterbury Electrical Inspector's Office.
Def. EEE.
Def. EEE.
Excerpt from testimony of Thomas Wengertsman: "[Q] Now, regardless of what system was recommended or asked about for hanging those fixtures, would you have required another plan to show that? [A] Well actually, what you — what you look for is you know, electricians are trained to, in the State of Connecticut anyway supposedly by the laws. Electricians are trained to read diagrams and you know, drawings and so forth and install things. We don't design them. You know, they are supposed to get architects, you're supposed to get engineers. They're the designing people and they're supposed to design these systems and we're just supposed to install what they want. So I mean yes, in the business, in the real world you have to deal with electricians, they come up with ideas and so forth. But I always look for verification from a licensed architect or engineer. [Q] So whatever method was going to be used, you needed something from an architect or an engineer? [A] Yeah, you would look-normally look for that, yes."
Def. EEE, June 28, 2004.
Trans. 11/2/07 Wengertsman p. 17.
The lack of an electrical permit was identified as an issue, by Montagno, at the July 1, 2004 subcontractor start-up meeting. This concern is consistent with Montagno's plans whereby store fixtures and merchandise would begin to arrive August 30, 2004. Despite the architectural issues with the plans which held up issuance of the City of Waterbury permit, DuBaldo began on Monday, June 28, 2004, with layout work, four men, and June 29, 2004 with two men; and July 2, 2004 with two men and thereafter. Finally, consistent with their understanding of their client's aggressive schedule, on July 6, 2004, Montagno made several attempts to get BCF to contact their architects to obtain architectural information crucial to the electric permit. And again on July 9, 2004, Montagno stated "Call Lou Rinaldi to see if he has got answer for electric eng. on use of unsturt, and he said no. We need an answer soon because electric sub cannot get a permit without it." On July 12, 2004, "Ask Lou Rinaldi a few times today if we got anything back on unsturt drawing for architech and he said no. I told Lou that I think that we need to call Michael Shanahan (director of const) for BCF to light some fire under some one to get us answer we are look for." Finally, on July 13, 2004, "DuBaldo meet with building inspector electric inspector and still didn't get permit but was told that he can run unsturt only by building inspector. Got letter from electric eng on using unsturt but it was not stamp and inspector wants to see draw on seismic hanger and how DuBaldo is hanging unsturt. DuBaldo is going to draw up something and send it to the electric eng to stamp and sign off on and then bring it back to electric inspector. I told Lou Rinaldi that we need to get a plumber sign on and get a painter start too." It was not until July 16, 2004 that DuBaldo obtained the electrical permit from the Waterbury Building Department. The court finds this significant delay in the start of electrical work was due primarily to deficiencies in BCF's plans and was not the fault of DuBaldo.
EEE, July 1, 2004.
Def. PPP.
Def. EEE.
Def. E.
Def. EEE, notes 1, 2 3 on July 6, 2004.
Def. EEE.
Def. EEE.
DuBaldo reacted to the severe slippage in the schedule due to electrical permit approval delay. On August 11, 2004, DuBaldo made their "Proposal for overtime rate." Pursuant to DuBaldo's proposal, they would accelerate their performance to a seven day a week schedule with overtime. Significantly, Montagno had failed to pay DuBaldo, as per the June contract, even as late as August 11, 2004. On August 14, 2004, Montagno agreed to the overtime proposal and replied: "1. I talk[ed] to BCF today and they did commit to OT hours for accelerations. 2. Please proceed on the additional phone wiring on a TM bases [sic]. 3. BCF accounting dept. did overnight Recs. 1 2 . . . which should arrive tomorrow." On August 18, 2004, Montagno faxed an "Action Required" note to DuBaldo: "Please be advised that the manpower committed by DuBaldo Electric has not been provided as of August 18, 2004. Please comply to provide adequate manpower . . ." On August 18, there were seven DuBaldo men on the job; on August 19, there were eight and on August 20, there were 10 DuBaldo men on the job. Belatedly, in mid-August, well beyond Montagno's 30-day deadline/time frame, Montagno sent DuBaldo "two (2) copies of our Subcontract Agreement covering the Burlington Coat Factory-Waterbury project." Still, DuBaldo had still not been paid anything for their work on this project. In this "our Subcontract Agreement" document, DuBaldo was directed that "[b]oth copies are to be signed by an authorized representative . . . Please expedite and return . . . The following are instructions for receipt of payments. Please adhere to the following: PARTIAL PAYMENT REQUIREMENTS: (for EACH requisition submitted) A) signed and fully executed contract (this should already be on file) . . ." On August 30, 2004, Montagno faxed to DuBaldo, the "Owner's approval for overtime costs." DuBaldo also submitted change orders for costs of several jobs done outside the contract, e.g. to install emergency ballasts, for $3,072, to Montagno and both parties agreed at the time of trial that between 7/16/04 and the date of termination, 9/28/04, DuBaldo performed $105,867 of work over and above the contract price of $250,450.
Pl. 3.
Pl. 4.
Pl. 5.
Def. EEE.
Def. M.
Pl. 7.
On August 30, 2004, DuBaldo was told by Montagno that Globe Electric was being hired to add electricians to the job. DuBaldo understood from Montagno that Globe's primary job was addressing the fire alarm deficiencies in the BCF plans, and secondarily to supplement the DuBaldo electricians on the original job. While Globe's participation on the job was imposed by Montagno/BCF, DuBaldo did not begrudge the additional help. The payment Globe was to receive for their work, either amount or mode, was never discussed by Montagno with DuBaldo.
It is useful at this time, because it is pivotal to the court's decision in this case, to focus on the facts of Globe's involvement in this BCF project. Many of these facts are undisputed and were testified to by certain credible witnesses and the facts are also reflected in the documentary evidence.
Globe did not submit a bid to be the Electrical Subcontractor on the BCF build-out. The only bidder other than DuBaldo for the job was OJ Mann, whose initial bid was approximately two hundred thousand dollars higher than DuBaldo's bid. Globe's failure to bid on this work was curious, because Globe's CEO, Larry Marotti, enjoyed a reputation among the construction executives at BCF as "a hustler, honest, good people . . . high marks." Furthermore, it was testified that, by late August, "BCF wanted Globe, Globe did a lot of work in their stores, BCF was familiar with Globe, comfortable with him [Marotti] and that he knew what was needed to be done to get out of this jam." According to the testimony of Larry Marotti, Globe CEO, Globe came on the job pursuant to an oral agreement between Globe and the General Contractor, Montagno. This oral understanding was devoid of rigor, there was: no limit on hours to be worked, no bid, no limit on number of workers on the project and an hourly rate of $65 plus an addition of halftime with no cap on overtime hours billed.
Mr. Montagno, 11/1 Test.
Incumbent Dir. of Construction's assessment to new Dir. of Construction, as testified on 11/1.
Mr. Montagno, 11/1 Test.
Mr. Marrotti, 10/16 Test.
Once on the job, Globe's work was subject to no oversight either by Montagno's Project Manager, Lou Rinaldi, or by Montagno's Site Superintendent, Richard Barzda. Globe did most of its work at night and on weekends, when these Montagno personnel were not on site. Even those times when Globe was allegedly working during the day, from October 1 forward, the Montagno Project Manager was simultaneously overseeing another construction project at the Mall and there was no evidence of daytime oversight of Globe either. Under this loose arrangement, Globe provided Montagno any records of what type of work each Globe employee did. Globe was timely paid in full, based upon a list of first names and hours worked: "I went in there to get the Job done, I didn't dissect everything." Globe's CEO maintained that his men put in 1118.25 hours ($322,472) finishing the BCF electrical subcontracting job, but he also testified that he "didn't prepare the bills, he looked them over, he doesn't recall [any specifics such as] when the Fire Alarm was completed, when the TCO was issued or when DuBaldo was terminated."
Mr. Marrotti, 10/12 Test.
Steve Barry, or "SB," Def. EEE.
Mr. Marotti, 10/16 Test
Mr. Marotti, 10/12 Test
Globe not only had free rein to bill unreviewed manpower and hours on this project, Globe also was the final arbiter of what bills were backcharged to DuBaldo, as opposed to the which Globe charges were passed through to BCF. Reflecting the fact that BCF and Globe had historically enjoyed a close working relationship on prior and current projects, and unconcerned as to the conflict of interest, it was Montagno's position that: "I trusted Globe to split the charges fairly between finishing DuBaldo's job, straight time, and BCF change orders . . . I was not concerned that Globe bulk billed with no back up and with no quotes for the jobs." Unlike the rigorous procedure imposed on DuBaldo, Globe needed no contract and no lien waivers in order to get paid timely and in full by Montagno. And for Globe there was no signoff for overtime billing, "because Globe had a relationship with BCF." In fact, the Globe CEO was on vacation in Cancun when the crucial electrical work was being performed and billed. Mr. Montagno, the General Contractor, testified credibly as to why Globe enjoyed such an unusual relationship with its General Contractor: "I had to trust Globe . . . I knew there was going to be a backcharge [to DuBaldo] scenario." Montagno made no effort to check whether or not the work done by Globe, and backcharged to DuBaldo, related to the original contract between Montagno and DuBaldo or to change orders and noncontract work. Montagno simply allowed Globe to bill time and men (by first name), both hourly and lump sums, and Montagno followed Globe's direction to simply backcharge the straight time cost to DuBaldo, and the overtime cost to BCF. None of the professional rigor, which Montagno applied to the DuBaldo contractual relationship, was evident in Montagno's dealings with Globe Electric.
Mr. Marotti, 10/16 Test.
See e.g. Def. QQQ Invoice for Fire Alarm.
See e.g. Def. RRR Invoice 516.
Mr. Montagno, 11/1 Test.
Mr. Montagno, 11/1 Test.
Mr. Marotti, 10/12 Test.
During the month of September 2004, the relationship between DuBaldo's foreman and Montagno's site superintendent deteriorated markedly, clearly, there was a personality clash between these two seasoned professionals. This negative interpersonal relationship of these two construction supervisors resulted in the events of September 27 and 28 involving the disabling of the fire alarm, and then DuBaldo's termination from the project. Specifically, on Monday September 27th, the day before the City of Waterbury inspection for the issuance of a conditional/temporary certificate of occupancy for the upper floor, DuBaldo's foreman, Mr. Monaco, deliberately disabled the fire alarm by unloosening a screw and removing the wire, which had been installed by DuBaldo, from the breaker, in the electrical room. While Mr. Monaco and Mr. DuBaldo failed to testify, convincingly, as to whether the fire alarm was fully operational prior to that point, this action was certainly not pursuant to the terms of DuBaldo's contract, and was the ultimate undoing of the deteriorating professional relationship between general contractor and the electrical subcontractor. Upon discovering the fire alarm issue, Globe was called in by Montagno, and Globe, within a few hours, got the fire alarm system back up and running and the TCO inspection proceeded successfully and as scheduled.
DuBaldo applied for a fire alarm permit on Sept 10, 2004, but no permit had been issued by September 27th, to either DuBaldo, or Globe. Def. BB.
Test. Mr. Montagno 10/30.
DuBaldo was partially paid by Montagno for the contract work completed prior to their termination, and DuBaldo was not paid for any approved Change Order work done prior to their termination. The court finds that as of September 28, 2004, DuBaldo was precluded, by Montagno from doing any further work on the job.
DISCUSSION OF THE APPLICABLE LAW
"The 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.) Rosato v. Mascardo, 82 Conn.App. 396, 411, 844 A.2d 893 (2004). "The rules governing contract formation are well settled. To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties . . . To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties . . . If the minds of the parties have not truly met, no enforceable contract exists . . . An agreement must be definite and certain as to its terms and requirements . . . So long as any essential matters are left open for further consideration, the contract is not complete . . . A contract requires a clear and definite promise. See Suffield Development Associates Ltd. Partnership v. Society for Savings, 243 Conn. [832,] 843 [ 708 A.2d 1361 (1998)]. An agreement must be definite and certain as to its terms and requirements. Fortier v. Newington Group, Inc., 30 Conn.App. 505, 510, 620 A.2d 132, cert. denied, 225 Conn. 922, 625 A.2d 823 (1993). A court may, however, enforce an agreement if the missing terms can be ascertained, either from the express terms or by fair implication." Presidential Capital Corp. v. Reale, 231 Conn. 500, 507-08, 652 A.2d 489 (1994). The court finds by a preponderance of the evidence that both parties understood that DuBaldo and Montagno had a valid and enforceable contract and therefore neither quantum meruit nor unjust enrichment is an appropriate remedy.
"[L]ack of a remedy under the contract is a precondition for recovery based upon unjust enrichment." Gagne v. Vaccaro, 255 Conn. 390, 408-09, supra, 255 Conn. 401.
DuBaldo alleges that Montagno's actions were wilful and intentional in breaching the contract. In addition, the DuBaldo alleges that Montagno engaged in a calculated pattern to attempt to avoid paying for materials or services he knowingly authorized.
General Statutes § 42-110g(a) provides a cause of action for "[a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice . . ." General Statutes § 42-110b(a) provides: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." "A party seeking to recover damages under CUTPA must meet two threshold requirements. First, [the party] must establish that the conduct at issue constitutes an unfair or deceptive trade practice . . . Second, [the party] must present evidence providing the court with a basis for a reasonable estimate of the damages suffered." (Internal quotation marks omitted.) Robichaud v. Hewlett Packard Co., 82 Conn.App. 848, 853-54, 848 A.2d 495 (2004)
"[I]n determining whether a practice violates CUTPA, the Connecticut courts have adopted the criteria set out in the cigarette rule by the Federal Trade Commission . . .: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons]." (Internal quotation marks omitted.) Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 155, 881 A.2d 937 (2005), cert. denied, 547 U.S. 1111, 126 S.Ct. 1913, 164 L.Ed.2d 664 (2006).
"A majority of Superior Court cases support the claim that a simple breach of contract, even if intentional, does not amount to a violation of CUTPA; a claimant must show substantial aggravating circumstances to recover under the Act . . . A simple contract breach is not sufficient to establish a violation of CUTPA." (Citations omitted; internal quotation marks omitted.) Holeva v. MZ Associates, Superior Court, judicial district of New Haven, Docket No. 098403 (November 18, 1998, Levin, J.) [23 Conn. L. Rptr. 601]. "This does not mean that recovering under CUTPA for a breach of contract is impossible . . . the same facts that establish a breach of contract claim may be sufficient to establish a CUTPA violation." (Citations omitted; internal quotation marks omitted.) Slitz v. Pyramid Custom Home Corp., Superior Court, judicial district of Danbury, Docket No. 323247 (April 4, 1997, Stodolink, J.) (finding allegations of several misrepresentations during course of parties' dealings sufficient to state CUTPA and breach of contract claims).
The court finds that while DuBaldo has amply demonstrated that Montagno has failed to compensate DuBaldo for its substantial performance of the contract, DuBaldo has not met its burden of proving that such failure is the result of bad faith, sinister motive or dishonest purpose. Montagno's project planning and lack of project oversight, Montagno's aggressive and erroneous pricing its bid to BCF and Montagno's inability to manage its client's expectations and timetable in the face of City of Waterbury regulatory delay do not equate with bad faith. Thus, the court does not find that Montagno's conduct amounted to an intentional and calculated pattern of attempting to avoid their obligations under the DuBaldo contract. In that the evidence does not disclose that there were any fraudulent or unethical practices by the defendant so as to rise to the level of a CUTPA violation, the court finds that DuBaldo cannot recover under CUTPA.
In its Second Revised Complaint, DuBaldo alleges that "On or about September 28, 2004, Defendant Montagno elected to terminate the services of the Plaintiff although the Plaintiff had reached a point of substantial completion of its services pursuant to the agreement entered into on or about June 21, 2004. From the date of termination to the present, no monies have been paid to the Plaintiff despite repeated requests and demands for payment."
Connecticut adopts the contemporary view that substantial performance of a contract permits recovery by a contractor. Vincenzi v. Cerro, 186 Conn. 612, 615 (1982); see also 2 Restatement (Second) Contracts § 237 comment d. "Substantial performance of a building contract . . . is ordinarily a question of fact for the trier to determine . . . It is peculiarly within the province of the trier of fact to judge the credibility of a witness." (Citations omitted; internal quotation marks omitted.) Edens v. Kole Construction Co., 188 Conn. 489, 494, 450 A.2d 1161 (1982); see also Nor'Easter Group, Inc. v. Colossale Concrete, Inc., 207 Conn. 468, 472-73, 542 A.2d 692 (1988). "The analysis necessarily involves an inquiry into the totality of facts and circumstances surrounding the performance of the contract." Miller v. Bourgoin, 28 Conn.App. 491, 496, 613 A.2d 292, cert. denied, 223 Conn. 927, 614 A.2d 820 (1992).
"Generally, where a time for performance is stated in an agreement, a party's tender of performance within a reasonable time thereafter will be considered substantial performance unless the parties intend that time for performance be of the essence . . . Because delays are typical in transactions involving real property or building contracts, time is ordinarily not of the essence in these contracts . . . The resolution of whether it is part of the contract involves a question of the intent of the parties, to be determined, as a matter of fact, from the language of the contract, the circumstances attending its negotiation, and the conduct of the parties in relation thereto." (Citations omitted; internal quotation marks omitted; emphasis added.) Miller v. Bourgoin, 28 Conn.App. 491, 498, 613 A.2d 292, cert. denied, CT Page 2374 223 Conn. 927, 614 A.2d 820 (1992).
The court finds that time was not of the essence in this contract. Therefore, the next factual question is whether DuBaldo tendered performance within a reasonable time. DuBaldo claims that the defendants' failure to provide the specifications required by the City of Waterbury delayed him from securing the required electrical permit, causing DuBaldo a significant delay in commencement of electrical construction, and ultimately, preventing him from being able to complete the contract within 10 weeks. It is implied "that the contractor shall be permitted to proceed with his construction in accordance with the contract and that he shall be given possession of the premises to enable him to do so." Hartford Electric Applicators of Thermalux, Inc. v. Alden, 169 Conn. 177, 182, 363 A.2d 135 (1975). "In most cases it will not be difficult for the contractor to prove that there was a delay [in commencement]. The contractor will usually encounter difficulty, however, in proving that the delay was the result of some event for which the owner was responsible, that the event actually caused the delay, and that the specific damages claimed resulted from the alleged delay." R. Cushman, Construction Litigation: Representing the Owner (2d Ed. 1990) § 8.17, p. 283. "The owner must provide access rights, easements, rights-of-way, and permits necessary for the commencement of construction, unless the parties agree otherwise . . . Quite often, however, such obligations are delegated by contract." 1 S. Stein, Construction Law (Matthew Bender 1998) § 5.05[2][b]. In Vincenzi v. Cerro, 186 Conn. 612, 442 A.2d 1352 (1982), the defendant claimed, on appeal of a verdict awarding damages for substantial performance of a building contract, that the doctrine of substantial performance was inapplicable . . . because the plaintiffs were guilty of a wilful or intentional breach of contract by failing to complete all of the work required . . . [A] builder who has failed to complete his contract fully may not invoke its benefit unless he was prevented from doing so by some circumstance beyond his control, such as interference by the owner. Id., 615. The court finds that DuBaldo properly attempted to secure the electrical permit at the commencement of the project but was unable to do so for reasons beyond his control and within the control of the defendants. While on July 1, 2004, Montagno distributed a project timeline, setting forth ten five-day weeks, from Monday, June 21 through Friday, August 27, for the electrical work, Montagno failed to update that timeline when, for the first two weeks of July, the electrical work was stalled by the Waterbury Building Department due to the omissions in BCF's electrical plans. Therefore, the court must determine whether DuBaldo substantially completed his performance by the date of September 28, 2004, when he was terminated and precluded from entering the premises to finish the electrical subcontracting work.
In its Setoff and Counterclaim, Montagno alleges "DuBaldo failed to perform its subcontract work in a complete and workmanlike manner." The court, herein, discussed its determination based on the evidence presented, relative to allocation of responsibility for the 13-day delay in obtaining the electrical permit. In support of its allegation, Montagno also introduced evidence as to its counterclaim that the actions of DuBaldo in disconnecting the alarm system — whatever the true motivation — constituted a material breach of the contract and justified Montagno's termination of the contractual relationship. According to Montagno, Globe, and BCF, DuBaldo's unilateral disconnection of the fire alarm system amounted to tampering, vandalism and an intentional destruction of work that had been performed by Globe. And as a result, Montagno issued its September 28, 2004, letter terminating DuBaldo from further involvement in the job, rescinding the letter of intent and canceling the subcontract.
The contemporary view is that even a conscious and intentional departure from the contract specifications will not necessarily defeat recovery, but may be considered as one of the several factors involved in deciding whether there has been full performance. 3A Corbin, Contracts § 707; 2 Restatement (Second), Contracts § 237, comment d. The pertinent inquiry is not simply whether the breach was "wilful" but whether the behavior of the party in default "comports with standards of good faith and fair dealing." 2 Restatement (Second), Contracts § 241(e), and see comment f. Id., 615-16. Under this rule, fault on the plaintiff's part in not completing the contracted work does not preclude recovery, but the court must consider any such fault or lack of good faith or fair dealing in determining the question of substantial performance. It has long been the general rule in the American courts that a contractor who has rendered "substantial performance" of the promised equivalent of the contract price can get judgment for that price, with a deduction for minor defects and nonperformance. Corbin on Contracts (Rev.), Vol. 8, § 36.2. It is not easy to lay down rules for determining what amounts to "substantial performance" sufficient to justify a judgment for the contract price (subject to a counterclaim for injury, if asserted) in any particular case . . . [I]t is always a question of fact, a matter of degree, a question that must be determined relatively to all the other complex factors that exist in every instance. Corbin on Contracts (Rev.), Vol. 8, § 36.5. In order to justify a judgment in favor of the contractor who has been found not to have performed in full, there must be a finding of fact as to what the defects were and that the performance was substantial in spite of them; also, as a matter of course, there must be evidence sufficient to sustain such a finding. Corbin on Contracts (Rev.), Vol. 8, § 36.11.
The court first notes that despite hours of conflicting testimony as to the incident with the fire alarm, the court was unable to find any one witness' rendition of this event totally credible. The court then finds that although the plaintiff's actions in disconnecting the fire alarm finalized the breakdown that led to plaintiff's termination from the job, that incidental action does not negate a finding of substantial performance. Accordingly, the court finds that the proper date by which to measure whether the plaintiff substantially performed would necessarily have to be the date he was precluded from continuing the project, September 28, 2004. As of this date, the court must consider the extent of the plaintiff's non-performance. This is a matter that can be considered and weighed only in relation to the full performance that was promised, taking into account that the delay in starting the electrical work was not the fault of DuBaldo. The ratio between what was left unperformed and the total performance promised will frequently be decisive. In the case of a building contract, it is not easy to find the arithmetical ratio between the unperformed part and the full promised performance. Corbin on Contracts (Rev.), Vol. 8, § 36.6. It is true that when the contractor sues for damages in these cases, the owner can recoup and counter-claim; and when the two claims are liquidated in money, by a finding by the court or jury, an arithmetical subtraction will be made, the judgment being entered for the balance of the larger amount. However, the court must use the credible evidence to compute DuBaldo's damages as a ratio of completed square footage as applied to contract price, plus approved change orders, because the back charging scheme entered into as between Montagno and Globe was without rigor and most obviously manipulated by Globe to its financial advantage. That is no independent or objective evidence, testimonial or documentary, introduced at trial supports the amounts billed by Globe that were back charged, by Montagno, to DuBaldo. "As a general rule, in awarding damages upon a breach of contract, the prevailing party is entitled to compensation which will place in the same position he would have been in had the contract been properly performed." Argentinis v. Gould, 219 Conn. 151, 157 (1991); Sperry v. Moler, 3 Conn.App. 692, 695 (1985). With regard to a breach of a construction contract involving alleged defective or unfinished construction, damages are measured by computing either (i) the reasonable cost of construction and completion in accordance with the contract, if this is possible, or (ii) the difference between the value that the product contracted for would have had and the value of the performance that has been received by the plaintiff, if construction and completion in accordance with the contract would involve unreasonable economic waste. Sperry v. Moler, 3 Conn.App. 692, 696 (1985). As of September 28, 2004, after assessing the credible testimony, the court finds that as of September 28, 2004, when DuBaldo was precluded from finishing the job, Plaintiff completed 90% of the upper level, which contained 65,560 square feet and 50% of the lower level which contained 19,936 square feet. The total job was 85,496 sq. ft. of which the upper level was 76.7%, and the lower level was 23.3% of the total job. Therefore, the job was 81% complete (90% of 76.7% — upper level = 69%, 50% of 23.3% — lower level = 12%).
The testimony on this issue puts one in mind of Winston Churchill, in a radio broadcast, October 1, 1939, when he declared: "I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma."
Ex. JJJ, 298 feet x 220 feet.
Ex. JJJ, 89 feet x 224 feet.
The court finds, that Montagno failed to pay $105,333.40 in accordance with DuBaldo's substantial performance of the June Contract and the approved change orders. Further, the court finds the testimony of DuBaldo, Welburn, and even Marotti credible as to the loss of efficiency due to BCF's fixturing and merchandising the upper floor unreasonably early. That loss of efficiency is 20%, for an additional $40,572.90. Thus the total damages due DuBaldo for substantial completion are $145,535.30.
81% of Contract Price $202,864.50
Approved Extras $105,867.00
Paid to Plaintiff ($121,267.50)
Paid to Evolution for Plaintiff ($14,266.10)
Loss Efficiency 20% + $40,472.90
(Testimony Robert DuBaldo)
Cost to complete ($47,585.50)
Globe prior to 9/28/04 ($20,650.00)
Balance Due Plaintiff $145,535.30
With regard to attorney fees Connecticut has adopted the "American rule" that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception. Marsh, Day Calhoun v. Solomon, 204 Conn. 639, 652 (1987). The parties entered into a contract here which did not provide for attorneys fees for the defendant in the event of a collection matter.