Opinion
No. NNI CV 08-5003207-S
March 31, 2011
MEMORANDUM OF DECISION
I PROCEDURAL BACKGROUND
The plaintiff, East Coast Custom Builders, LLC, has brought a three-count amended complaint, dated October 12, 2009, against the defendants, William and Kristen Bachman. The amended complaint alleges that the plaintiff performed work on property owned by the defendants relative to home improvement and construction contracts and, in consequence thereof, alleges claims for foreclosure of a mechanic's lien, breach of contract and unjust enrichment. The plaintiff seeks to recover possession of the premises, damages, and reasonable attorneys fees, costs and interest pursuant to the contracts.
On December 2, 2009, the defendants filed an amended answer to the plaintiff's amended complaint, denying the material allegations thereto, and asserted two special defenses and three counterclaims followed by three claims of setoff and three claims of recoupment. The defendants' special defenses alleged that the contracts failed to comply with certain provisions under the Home Improvement Act (HIA), General Statutes § 20-418 et seq., and by incorporation, the Home Solicitation Sales Act (HSSA), General Statutes § 42-134a et seq. The defendants' counterclaims alleged unfair and/or deceptive acts or practices under the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., breach of contract and negligence. The defendants seek actual damages, reasonable attorneys fees, punitive damages and prejudgment interest.
A court trial in this matter commenced on October 6, 2010, and concluded on October 21, 2010. The plaintiff and both defendants were represented by counsel. On January 3, 2011, the parties submitted post-trial briefs. On January 18, 2011, the court heard argument on the parties' respective positions.
CT Page 8174
II FACTS
The court finds the following facts. The plaintiff is a limited liability company and Andrew Vallombroso is the sole managing member. The defendants are the owners of a home located at 33 Rimmon Road in North Haven (defendants' home). In the spring of 2007, Kristen Bachman contacted the plaintiff to obtain a proposal and quote to build an addition to the defendants' home and to remodel the existing kitchen. Vallombroso met with Kristen Bachman and reviewed the defendants' plans. On June 1, 2007, Vallombroso brought multiple copies of a written two-page contract (the June contract) to the defendants' home. At the time of trial, the plaintiff and the defendants each introduced a different copy of the June contract into evidence. Both copies provided for a total construction price of $77,244.50 and an initial deposit in the amount of $25,748.17 upon signing. When Vallombroso realized that Kristen Bachman did not have the initial deposit, he left the defendants' home and left one copy of the June contract with Kristen Bachman.On July 11, 2007, the defendants presented to Vallombroso the initial down payment in the amount $25,748.17. At this time, Vallombroso claims that he changed the cancellation date on the June contract to July 16, 2007, and provided the defendants with a copy of the amended June contract along with the required notice of cancellation. The defendants claim they were never provided with a copy of the amended June contract nor were they provided with any notice of cancellation. After having received the check for the initial deposit, Vallombroso obtained building permits from the town of North Haven, performed site work and removed the existing sidewall and roof on the premises.
Thereafter, Vallombroso discussed with William Bachman the need for additional work to be performed, which called for construction of a new foundation, replacement of defective knee walls and the installation of support columns. On August 20, 2007, Vallombroso presented a written two-page contract (August contract) to William Bachman, which was signed by both Vallombroso and William Bachman. The plaintiff provided William Bachman with a copy of the August contract, which provided for a total price of $6,800 to be paid in two installments. The defendants paid the first installment of $3,400 but later stopped payment on the check for the second installment of $3,400. William Bachman conceded at the time of trial that the foundation work was completed and that the plaintiff is entitled to the second installment on the August contract in the amount of $3,400.
The August contract provided a start date of July 31, 2007, a cancellation date of August 3, 2007, and a completion date of August 12, 2007. See Plaintiff's Exhibit 7. Although this contract is not in dispute, this court notes that the contract was not signed by, or presented to William Bachman until August 20, 2007, and does not comply with HIA requirements and constitutes evidence that the plaintiff consistently failed to recognize a contractor's obligations and responsibilities thereunder.
On September 28, 2007, Vallombroso and Kristen Bachman further agreed and entered into a "change order" on the June contract for additional work at the cost of $2,100. At this point in time, the plaintiff had completed the first stage of work on the June contract, except for hurricane strapping and clips, and the town inspector had completed the first inspection and approved the framing. According to the terms of the June contract, a second payment in the amount of $25,748.16 was due and payable after the framing and inspection was completed. On September 28, 2007, the defendants tendered to the plaintiff the following three checks: (1) $25,748.16, dated September 28, 2007, reflecting the second installment on the June contract; (2) $2,100, dated September 27, 2007, reflecting the payment on the change order; and (3) $3,400, dated September 17, 2007, reflecting the second installment on the August contract. On October 2, 2007, the defendants called their bank and stopped payment on the checks but did not notify the plaintiff.
It is clear from the evidence that, by the end of September, the defendants became increasingly unhappy with the work performed by the plaintiff after a third party indicated to them that the plaintiff had failed to install hurricane clips as part of the framing and that the roof extending from the addition to the original home was not up to workmanlike standards. The defendants, believing the town building inspector had improperly approved the inspection soon thereafter filed a complaint with the town of North Haven. Additionally, the defendants believed that the plaintiff's employee had previously operated a tractor over the existing septic system causing damage thereto.
On October 1, 2007, the defendants hired Terra Mar Construction Company (Terra Mar) to inspect their septic system. Arthur Pires, owner of Terra Mar, advised the defendants that the septic system was damaged and that it was apparent that the damage was caused by pressure from the surface which caused the clay pipes to break. The repairs to the septic system cost the defendants $2,950.00.
On October 3, 2007, Vallombroso appeared at the work site, along with his employees, to continue working on the defendants' home when he observed the Terra Mar workers digging up the septic system. Vallombroso was informed by the Terra Mar workers that they were hired to repair the damage to the septic system and that the defendants claimed that the plaintiff had caused the damage thereto. An altercation between the Terra Mar workers and Vallombroso ensued. Kristen Bachman, from her kitchen heard the altercation, became very upset, and immediately called her husband at work. Mr. Bachman placed a telephone call to Vallombroso and ordered him off the property. Vallombroso removed his property and signs never to return.
III THE PLAINTIFF'S AMENDED COMPLAINT
The plaintiff, in a three-count amended complaint, alleged foreclosure of a mechanic's lien, breach of contract and unjust enrichment. The plaintiff claims that it had a right to finish the contracts and to collect the outstanding balance of money owed on the contracts. The defendants argue that the contracts at issue do not materially comply with the HIA and, therefore, the plaintiff cannot sustain any of its claims. In response, the plaintiff counters that the contracts do materially comply with the HIA and, therefore, it can sustain its claims against the defendants. The applicability of, and compliance with the HIA may be dispositive of all of the plaintiff's claims. Nevertheless, the HIA directly concerns the validity and enforceability of a contract. See General Statutes § 20-429(a). Therefore, the court will first consider the plaintiff's breach of contract claim in light of the HIA.
A Breach of Contract
The plaintiff argues that the defendants owe the plaintiff under a theory of breach of contract. "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.) Chiulli v. Zola, 97 Conn.App. 699, 706-07, 905 A.2d 1236 (2006). Nevertheless, a home improvement contract is subject to the requirements of the HIA. See Rizzo Pool Co. v. Del Grosso, 232 Conn. 666, 676, 657 A.2d 1087 (1995). A home improvement contract that fails to comply with the requirements of the HIA is unenforceable against a homeowner. See General Statutes § 20-429(a). Bad faith on the part of a homeowner, however, can excuse a contractor's failure to comply with the HIA. Habetz v. Condon, 224 Conn. 231, 237-40, 618 A.2d 501 (1992).
1. Applicability of the HIA
The defendants argue that the HIA is applicable to the contracts at issue in the present case. "A contract is subject to the requirements of the HIA if it constitutes an agreement between a contractor and an owner for the performance of a home improvement." (Internal quotation marks omitted.) Rizzo Pool Co. v. Del Grosso, supra, 232 Conn. 676; citing General Statutes § 20-419(5). General Statutes § 20-419(4) provides in relevant part: "`Home improvement' includes . . . the repair, replacement, remodeling, alteration, conversion, modernization, improvement, rehabilitation . . . or addition to any land or building or that portion thereof which is used or designed to be used as a private residence, dwelling place or residential rental property . . . in which the total cash price for all work agreed upon between the contractor and owner exceeds two hundred dollars."
In the present case, the defendants have proven by a preponderance of the evidence that the contracts at the center of this dispute were home improvement contracts made between the plaintiff, a home improvement contractor, and the defendants, the owners of a single dwelling home, and that as such, the contracts are subject to the provisions of the HIA.
2. Compliance with the HIA
The defendants argue that the plaintiff has failed to prove that it has complied with General Statutes § 20-429(a). Under the HIA, "[n]o home improvement contract shall be valid or enforceable against an owner unless it: (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 and the contractor's registration number, (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, except that the commissioner may, by regulation, dispense with the necessity for complying with the requirement that each change in a home improvement contract shall be in writing and signed by the owner and contractor." General Statutes § 20-429(a).
"As remedial legislation, the HIA must be afforded a liberal construction in favor of those whom the legislature intended to benefit [i.e., homeowners]." Rizzo Pool Co. v. Del Grosso, supra, 232 Conn. 678. Therefore, "[i]t is clear that the burden to ensure compliance with the act is on the contractor." MacMillan v. Higgins, 76 Conn.App. 261, 275, 822 A.2d 246, cert. denied, 264 Conn. 907, 826 A.2d 177 (2003); see also Cuda v. Turey, Superior Court, judicial district of Fairfield, Docket No. CV 02 0393361 (April 23, 2004, Karazin, J.) (contractor "has an affirmative burden to prove that . . . his contract complied with the [HIA] provisions"); Creative Waterscapes, LLC v. Maxwell, Superior Court, judicial district of Fairfield, Docket No. CV 02 0395152 (July 6, 2004, Thim, J.) ( 37 Conn. L. Rptr. 440, 443) (contractor "bears the burden of showing that there has been practical compliance with the [HIA]").
In particular, the defendants argue that the plaintiff has failed to prove that it has complied with General Statutes § 20-429(a)(6). "The requirement that a consumer is fully notified and understands his or her right to cancel a contract is central to the act." Kronberg Bros., Inc. v. Steele, 72 Conn.App. 53, 60, 804 A.2d 239, cert. denied, 262 Conn. 912, 810 A.2d 277 (2002); see General Statutes § 20-429(a)(6). With respect to this requirement, "[e]ach home improvement contract entered into shall be considered a home solicitation sale pursuant to chapter 740 and shall be subject to the requirements of said chapter regardless of the location of the transaction or of the signing of the contract." General Statutes § 20-429(e). General Statutes § 42-135a specifies the manner in which the notice of the owner's cancellation rights must be set forth.
In particular, General Statutes § 42-135a(1) requires a seller to provide a receipt or copy of all contracts with language informing the buyer of his or her rights with regard to cancellation of the contract. General Statutes § 42-135a(2) requires a seller to provide two copies of a "Notice of Cancellation," which informs the buyer of the manner in which to cancel the contract. General Statutes § 42-135a(3) requires a seller to include on the "Notice of Cancellation," the date by which the contract may be canceled. "In addition to any right otherwise to revoke an offer, the buyer may cancel a home solicitation sale until midnight of the third business day after the day on which the buyer signs an agreement subject to the provisions of this chapter." General Statutes § 42-137(a).
In particular, § 42-135a(1) provides in relevant part: "No agreement in a home solicitation sale shall be effective against the buyer if . . . the seller shall . . . [f]ail to furnish the buyer with a fully completed receipt or copy of all contracts . . . and in immediate proximity to the space reserved in the contract for the signature of the buyer, or on the front page of the receipt if a contract is not used, and in boldface type of a minimum size of ten points, a statement in substantially the following form:
YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT."
In particular, § 42-135a(2) provides in relevant part: "No agreement in a home solicitation sale shall be effective against the buyer if . . . the seller shall . . . [f]ail to furnish each buyer, at the time such buyer signs the home solicitation sales contract or otherwise agrees to buy consumer goods or services from the seller, a completed form in duplicate, captioned `NOTICE OF CANCELLATION,' which shall be attached to the contract or receipt and easily detachable, and which shall contain in ten-point boldface type the following information and statements in the same language as that used in the contract:
NOTICE OF CANCELLATION
(Date of Transaction)
YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR OBLIGATION, WITHIN THREE BUSINESS DAYS FROM THE ABOVE DATE . . . TO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE, OR SEND A TELEGRAM TO . . . (Name of Seller) AT . . . (Address of Seller's Place of Business) NOT LATER THAN MIDNIGHT OF . . . (Date)
I HEREBY CANCEL THIS TRANSACTION.
(Date)
(Buyer's Signature)"
In particular, § 42-135a(3) provides in relevant part: "No agreement in a home solicitation sale shall be effective against the buyer if . . . the seller shall . . . [f]ail, before furnishing copies of the `Notice of Cancellation' to the buyer, to complete both copies by entering . . . the date of the transaction, and the date, not earlier than the third business day following the date of the transaction, by which the buyer may give notice of cancellation."
"The requirements of the HIA are mandatory and must be strictly construed . . ." Rizzo Pool Co. v. Del Grosso, supra, 232 Conn. 680. Nevertheless, "a construction that would require technically perfect compliance with each subdivision is inappropriate. Rather, an interpretation of that section that acknowledges and furthers the remedial purposes of the statute is in order." Wright Bros. Builders, Inc. v. Dowling, 247 Conn. 218, 231, 720 A.2d 235 (1998).
In Wright Bros., the Supreme Court concluded that the plaintiff had complied with the HIA by advising the defendants of their right to cancel the contract even though the contract did not have a copy of the cancellation notice in duplicate and even though the cancellation notice failed to contain the date of the transaction or the date by which the defendants could cancel the contract. Id., 232. Of most importance, the court concluded that, because the contract contained a transaction date and advised the defendants that they could cancel the contract any time prior to midnight of the third business day after the date of the transaction, the defendants "logically could and reasonably should have deduced" the date by which they had the right to cancel the contract. Id., 233.
In Kronberg Bros., however, the Appellate Court concluded that the plaintiff had not complied with the HIA because the contract itself lacked a transaction date and did not contain the required cancellation notice in immediate proximity to the space reserved in the contract for the signature of the buyer. Kronberg Bros., Inc. v. Steele, supra, 72 Conn.App. 59. The court concluded that "without a transaction date on the contract and cancellation form, the defendants were left to determine for themselves when the cancellation period began and ended. The end result was a transaction rife with confusion, one of the very situations that the act seeks to avoid." Id., 60.
This court recognizes that compliance with the HIA, in particular, compliance with § 20-429(a)(6), does not need to be rigid and technically exact. With regard to the contracts in this case, the plaintiff has failed to prove by a preponderance of the evidence that it has provided a copy of the "Notice of Cancellation" in duplicate in accordance with § 42-135a(2) and (3). While a contractor need not strictly comply with the requirements under § 42-135a(2) and (3) so long as the owner can reasonably ascertain the date by which the contract can be canceled; see Wright Bros. Builders, Inc. v. Dowling, supra, 247 Conn. 231; there is no authority for the proposition that a contractor can completely fail to provide any copy of the "Notice of Cancellation" whatsoever. Most importantly, without a copy of the "Notice of Cancellation," the defendants had no idea how to enforce their cancellation rights. See General Statutes § 42-135a(2).
In the case at hand, neither Kristen nor William Bachman could have reasonably deduced the cancellation date by reference to the requisite language in the respective contracts. With respect to the June contract, Kristen Bachman could not have deduced the cancellation date because the original copy of the June contract signed by Kristen Bachman, and retained by the plaintiff, contained an impermissible and contradictory cancellation date that did not provide her with the requisite three business days in which to cancel the contract. See footnote 2. With regard to the August contract, William Bachman could not have deduced the cancellation date by reference to the requisite language in the August contract because the August contract contained an impermissible and contradictory cancellation date that occurred before the contract had been executed. See footnote 3.
The court takes judicial notice of the fact that June 1, 2007, the transaction date of the June contract, was a Friday while June 4, 2007, the original cancellation date of the June contract, was a Monday.
Furthermore, the plaintiff has failed to prove that he provided a copy of the executed June contract in accordance with § 42-135a(1) after the plaintiff changed the cancellation date outside the presence of the defendants. Under § 42-135a(1), a contractor must furnish an owner "with a fully completed receipt or copy of all contracts . . ." The copy of the contract provided to Kristen Bachman did not contain her signature and was different from the contract retained by the plaintiff in that it contained a different estimated completion date and no cancellation date. Moreover, her copy was confusing in that it contained an estimated completion date that occurred before the start date.
The plaintiff has failed to prove by a preponderance of the evidence that either the June contract or the August contract substantially complied with the HIA. Neither contract contained a copy of the "Notice of Cancellation," and both were rife with confusion. This confusion in exercising one's legal rights fall into the category in which the HIA was intended to prevent. As a result, the plaintiff is unable to enforce either contract under a breach of contract theory.
Since the June contract did not comply with the HIA, the change order is equally unenforceable.
3. Bad Faith
The plaintiff argues that the defendants should not be protected by the HIA because they demonstrated bad faith by manufacturing reasons to terminate the contract. "[P]roof of a homeowner's bad faith will preclude that homeowner from repudiating with impunity a home improvement contract that violates the [HIA]. [The Supreme Court] 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 . . . In other words, bad faith means more than mere negligence; it involves a dishonest purpose." (Citation omitted; internal quotation marks omitted.) Wadia Enterprises, Inc. v. Hirschfeld, 224 Conn. 240, 247-48, 618 A.2d 506 (1992). "There is nothing dishonest or sinister about homeowners proceeding on the assumption that there is a valid contract . . . and later, in defense to a suit by the contractor, upon learning that the contract is invalid, then exercising their right to repudiate it." Id., 249. Furthermore, the "mere disagreement about contract performance does not suffice to establish bad faith." Lucien v. McCormick Construction, LLC, 122 Conn.App. 295, 998 A.2d 250 (2010). Moreover, "[i]t is the burden of the party asserting the lack of good faith to establish its existence and whether that burden has been satisfied in a particular case is a question of fact." Habetz v. Condon, supra, 224 Conn. 237 n. 11.
The plaintiff contends that the defendants' reasons for termination of the contract, in particular the damage to the septic system and the altercation between Vallombroso and the Terra Mar workers, "demonstrate a dishonest purpose by the defendants" to repudiate the contract. The court finds this argument to be unpersuasive. The evidence reveals that the defendants had paid for all the work performed by the plaintiff pursuant to the terms of the contract up and until October 3, 2007. The defendants, after having doubts about the quality of the work and after having received information regarding the necessary repairs needed for the septic system, stopped payment on the second installments on the two contracts. The second installment on the June contract was payment towards the second stage of work, which had yet to be started. Certainly, the defendants could not have contemplated that Vallombroso would show up and engage in an altercation with the Terra Mar workers on the property three days after the defendants had stopped their payments to the plaintiff. Thus, the court finds that the defendants' actions do not constitute bad faith on their part, and therefore, the plaintiff is not excused for its material noncompliance with the HIA.
B Unjust Enrichment
The plaintiff argues that the defendants owe the plaintiff under a theory of unjust enrichment. "[W]herever 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, restitution of the value of what has been given must be allowed . . . Under such circumstances, the basis of the plaintiff's recovery is the unjust enrichment of the defendant . . . Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs' detriment." (Citations omitted; internal quotation marks omitted.) New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451-52, 970 A.2d 592 (2009). A contractor is precluded from recovering in unjust enrichment, however, if there has been a violation of the HIA. See Barrett Builders v. Miller, 215 Conn. 316, 328, 576 A.2d 455 (1990). Nevertheless, "if a court determines that the requirements of [General Statutes § 20-429(f)] are met, it may award damages under a theory of unjust enrichment . . ." Newtown Pool Construction, LLC v. Errico, 103 Conn.App. 566, 570, 930 A.2d 50 (2007).
Section 20-429(f) provides: "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 be inequitable to deny such recovery."
The court finds that the plaintiff has failed to prove by a preponderance of the evidence that it complied with § 20-429(f), in particular, because in order to comply with that section, the plaintiff must comply with § 20-429(a)(6). The court has already found that the plaintiff failed to comply with § 20-429(a)(6) of the HIA. See part IIIA2. As a result, the plaintiff is not entitled to recover under a theory of unjust enrichment for the recovery of payment for work performed based on the reasonable value of services requested.
C Foreclosure of Mechanic's Lien
The plaintiff further seeks foreclosure of a mechanic's lien on the defendants' home. A lien is invalid and unenforceable, however, when it relies upon a contract that is unenforceable under the HIA. See Caulkins v. Petrillo, 200 Conn. 713, 720, 513 A.2d 43 (1986) (enforcement of oral home improvement contract is barred by HIA); see also Magness v. CPI Home T P Business Improvement, LLC, Superior Court, judicial district of New Haven at Meriden, Docket No. CV 04 0286633 (January 23, 2006, Tanzer, J.). The court has already concluded that the contracts are unenforceable under the HIA. See part IIIA2. Therefore, the plaintiff is not permitted to foreclose on the mechanic's lien, which relies upon the alleged breach of an invalid contract.
IV DEFENDANTS' COUNTERCLAIMS
The defendants have filed three counterclaims against the plaintiff. In their first counterclaim, the defendants allege that the plaintiff's failure to comply with the HIA constitutes unfair or deceptive acts or practices under CUTPA. In their second counterclaim, they allege that the plaintiff was in breach of contract in that the contracts between the parties contained an implied covenant of good faith and fair dealing. In their third counterclaim, they allege that, in the course of performing services at the defendants' property, the plaintiff negligently damaged the septic system. The defendants further seek attorneys fees pursuant to General Statutes §§ 42-110g(d) and 42-150bb. Because the defendants' counterclaims primarily concern the plaintiff's actions with regard to the contracts, the court will first consider the defendants' breach of contract claims.
A
CT Page 8183
Breach of Contract
The defendants claim that the plaintiff has breached the contracts in nine different ways based upon an implied covenant of good faith and fair dealing. "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.) Chiulli v. Zola, supra, 97 Conn.App. 706-07. "It is axiomatic that the . . . duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship . . . [E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement . . . The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term . . . In accordance with these authorities, the existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing." (Internal quotation marks omitted.) Miller v. Guimaraes, 78 Conn.App. 760, 772-73, 829 A.2d 422 (2003)."To recover for breach of the duty of good faith and fair dealing, the plaintiffs had to allege and prove that the defendant[s] engaged in conduct design[ed] to mislead or to deceive . . . 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 . . ." (Emphasis in original; internal quotation marks omitted.) Id., 773. Furthermore, the defendants had to themselves perform under the contract. See Chiulli v. Zola, supra, 97 Conn.App. 706-07. "The general rule to be applied in construction cases is that the failure to make progress payments is a breach of contract so substantial as to render the contract nugatory." Silliman Co. v. S. Ippolito Sons, Inc., 1 Conn.App. 72, 75, 467 A.2d 1249 (1983), cert. denied, 192 Conn. 801, 470 A.2d 1218 (1984).
Upon taking into account the totality of the circumstances presented to the court in this matter, the court finds that the defendants have failed to prove by a preponderance of the evidence that the plaintiff breached its duty of good faith and fair dealing under the contracts. Furthermore, the defendants in effect, equally contributed to the termination of the contract when they stopped payment on the checks and ordered the plaintiff off the property. In this regard, the plaintiff cannot be held in breach for conduct occurring after the defendants failed themselves to perform under the terms of the agreement.
B
CT Page 8184
CUTPA
The defendants further claim that the plaintiff's actions constituted a violation of CUTPA, which caused them substantial injury. "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." General Statutes § 42-110b(a). "In order to enforce this prohibition, CUTPA provides a private cause of action to [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 . . ." (Internal quotation marks omitted.) Abrahams v. Young Rubicam, Inc., 240 Conn. 300, 306, 692 A.2d 709 (1997); see also General Statutes § 42-110g(a). "[U]nder General Statutes § 20-427(c), any violation of the [HIA] is a per se violation of CUTPA . . . Once a violation of the [HIA] has been established, however, our cases make clear that the homeowners still must prove that they have suffered an injury or actual loss in order to recover damages under CUTPA." Hees v. Burke Construction, Inc., 290 Conn. 1, 13-14, 961 A.2d 373 (2009).Damages under CUTPA may be calculated under a theory of contract damage rules. See Campagnone v. Clark, 116 Conn.App. 622, 633-34, 978 A.2d 1115 (2009) (concluding "that the court's offsetting of the plaintiffs' damages award by moneys they unilaterally withheld from the defendant was correct as a matter of law"). "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 . . . The concept of actual loss accounts for the possibility that the breach itself may result in a saving of some cost that the injured party would have incurred if he had to perform . . . In such circumstances, the amount of the cost saved will be credited in favor of the wrongdoer . . . that is, subtracted from the loss . . . caused by the breach in calculating [the injured party's] damages." (Internal quotation marks omitted.) Id., 633-34.
Furthermore, the homeowners must prove that the violation was the proximate cause of the injury or actual loss suffered by them. See Abrahams v. Young Rubicam, Inc., supra, 240 Conn. 306. "[P]roximate cause is [a]n actual cause that is a substantial factor in the resulting harm . . . The question to be asked in ascertaining whether proximate cause exists is whether the harm which occurred was of the same general nature as the foreseeable risk created by the defendant's act." (Citation omitted; internal quotation marks omitted.)
While the court has previously found that the plaintiff has failed to prove its compliance with the HIA, and thus, that the plaintiff's actions technically constituted a violation of CUTPA, the defendants have failed to prove by a preponderance of the evidence that they incurred any additional damages as a result. In particular, the defendants submitted a copy of a contract entered into between Kristen Bachman and F D Contractors, signed by Kristen Bachman and dated November 28, 2007. The contract calls for a total price of $49,900 and calls for work that was to be performed under the East Coast Builders contract but it also contains a description of work to be performed that was NOT described in the contract with the plaintiff. Although Mrs. Bachman prepared a compilation of proposed charges and credits to be applied in determining damages this court concludes that after a careful review of her breakdown, the F D contract, and the East Coast Custom Builders contracts, this court is left with analyzing two contracts analogous to comparing apples to oranges.
Defendant's Exhibit K.
Defendant's Exhibit L.
Under the June contract, Kristen Bachman still owed the plaintiff four installments in the amount of $51,496.33 for the completion of the work. Under the change order, Kristen Bachman still owed the plaintiff $2,100.00 for the completion of the work. Under the August contract, William Bachman still owed the plaintiff $3,400 for the completion of the work. The total under the two contracts amounts to $56,996.33. While the defendants were not obligated to pay this amount or continue with their relationship with the plaintiff due to its violation of the HIA, the defendants are not entitled to a windfall. The court finds that the contract with F D Contractors saved the defendants more than $7,000, and as a result they are entitled to no damages under CUTPA. Moreover, to the extent that the defendants could prove any damages, they have failed to prove by a preponderance of the evidence that the plaintiff's material noncompliance with the HIA was itself the proximate cause of their alleged damages.
In fact, William Bachman conceded that the work on the August contract was completed and the balance of $3,400 was due and owing.
C Negligence
The defendants next claim that the plaintiff negligently failed to take precautions to protect the septic system on the property and that the plaintiff's employee damaged the septic line when he drove a John Deer tractor in the front of the property causing damage to the septic pipe. "The essential elements of a cause of action in negligence are well established: duty; breach of that duty; causation; and actual injury." (Internal quotation marks omitted.) Considine v. Waterbury, 279 Conn. 830, 858, 905 A.2d 70 (2006). "It is well established within the construction context that a builder must exercise that degree of care which a skilled builder of ordinary prudence would have exercised under the same or similar conditions . . . A duty to use care may arise from a contract, from a statute, or from circumstances under which a reasonable person, knowing what he knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result from his act or failure to act." (Citation omitted; internal quotation marks omitted.) Sturm v. Harb Development, LLC, 298 Conn. 124, 139-40, 2 A.3d 859 (2010). "The first component of legal cause is causation in fact. Causation in fact is the purest legal application of . . . legal cause. The test for cause in fact is, simply, would the injury have occurred were it not for the actor's conduct . . . The second component of legal cause is proximate cause . . . [T]he test of proximate cause is whether the defendant's conduct is a substantial factor in bringing about the plaintiff's injuries." (Internal quotation marks omitted.) Burton v. Stamford, 115 Conn.App. 47, 75 n. 18, 971 A.2d 739, cert. denied, 293 Conn. 912, 978 A.2d 1108 (2009).
William Bachman testified, and the court finds credible, that prior to the work being performed he walked the property and showed Vallombroso where the septic system was located on several occasions. Kristen Bachman testified that she observed an employee of the plaintiff drive a small tractor over the septic lines and had advised the plaintiff of the problem. The plaintiff denied his people could have caused the damage because the pipes were "too deep" below the surface. William Bachman then called Terra Mar to take a look at the septic system to check the problem. Mr. Pires (Terra Mar) testified that he observed that the existing septic system was losing water and it was coming to the surface. He further testified that he observed the system had clay piping laying about a "foot and one half" under the surface and that the piping was broken most probably by pressure from the surface which is consistent with a vehicle being driven over it. As a result, the defendants had to pay $2,950 for repair. It is clear that at that point in time, after the plaintiff had denied responsibility, the defendants "took matters into [their] own hands" and made the necessary repairs. The plaintiff had a duty under the contract to protect the defendant's existing property and the defendants have proven by a preponderance of the evidence that the negligent supervision of his employees which resulted in the tractor being driven over the septic lines was the sole proximate cause of the damage to the septic system. As a result, the defendants are entitled to the economic damages of repair in the amount of $2,950.00.
V ATTORNEYS FEES
The defendant's claim for attorneys fees under CUTPA § 42-110g(d) is denied based upon the discussion and denial of the defendant's CUTPA claim.
However, the law provides that "Whenever any contract, . . . to which a consumer is a party, provides for the attorneys fee of the commercial party to be paid by the consumer, an attorneys fee shall be awarded as a matter of law to the consumer who successfully prosecutes or defends an action or a counterclaim based upon the contract . . ." General Statutes § 42-150bb. "Under § 42-150bb, the court has no latitude to deny such an award to a consumer who successfully defends an action brought against him by a commercial party." Rizzo Pool Co. v. Del Grosso, 240 Conn. 58, 66, 689 A.2d 1097 (1997) (concluding that trial court acted appropriately in granting attorneys fees under § 42-150bb after defendant successfully defended action involving violations of HIA by contractor).
In the present case, the pertinent language of the contract states the following: "IF THE ABOVE PAYMENTS NOT MADE WITHIN TEN DAYS OF [BILLING], YOU AGREE TO PAY ALL COSTS AND ATTORNEYS FEES FOR COLLECTING ANY DUE AMOUNTS. YOU ALSO AGREE TO PAY ALL CONTRACTORS COSTS AND FEES IN ANY ACTION BROUGHT BY YOU AGAINST CONTRACTORS SHOULD YOU NOT PREVAIL IN SUCH ACTION." Since this contract provided for attorneys fees to the plaintiff, then where the defendants have successfully defended the plaintiff's action for foreclosure of a mechanic's lien, breach of contract and unjust enrichment, the defendants are entitled to an attorneys fee under § 42-150bb. As a matter of law the defendants in this case are entitled to recover attorneys fees in relation to the successful defense to the plaintiff's claims for foreclosure of a mechanic's lien, breach of contract and unjust enrichment and for the successful counterclaim of negligence against the contractor. Attorneys fees are awarded in the amount $13,875.00.
See Plaintiff's Exhibit 5.
CONCLUSION
For the foregoing reasons, the plaintiff is unable to sustain any of its claims because he has failed to meet his burden of compliance with the requirements under the General Statutes § 20-418 et seq., and by incorporation, the Home Solicitation Sales Act (HSSA), General Statutes § 42-134a et seq. The defendants are equally unable to sustain their breach of contract and CUTPA claims, however, they are able to sustain their claim for negligence and are awarded damages in the amount of $2,950.00. Furthermore, the defendants are entitled to reasonable attorneys fees in the amount of $13,875.00.