Opinion
No. CV 08 500 7956 S
December 23, 2008
MEMORANDUM OF DECISION RE MOTION FOR DISCHARGE OF MECHANIC'S LIEN (101.00)
This is an action seeking, among other things, to foreclose a mechanic's lien on real property located at 81 Myrtle Avenue in Westport, Connecticut. The lien was filed by the plaintiff, Lamco Construction, Inc. arising out of work done on the structure at 81 Myrtle Avenue which is variously described as a residence or multi-use structure. The defendant Bin Zhang is the owner of the premises, and his motion to discharge the lien is before the court. A hearing was held on the motion, and the parties have subsequently filed memoranda of law.
Tom Lametta, president of Lamco, testified that Lamco had been in business for twenty-two years and was a licensed home improvement contractor with the State of Connecticut. In late March 2007, Lamco and Zhang executed a letter agreement on Lamco letterhead (Exhibit 2) which contained the following provisions:
1. Work would be done on "your home" at 81 Myrtle street (sic) on a cost plus basis.
2. Lamco to be responsible for all phases of construction, including materials and subcontractors "for the completion of the project according to your drawings, specifications, and wishes."
3. Lamco will submit bi-weekly invoices which will include invoiced expenses from suppliers and subcontractors and for hours of work by Lamco personnel, charged at $65.00 per hour for carpenters and $45.00 per hour for laborers. A 20% overhead and profit charge will be added to each invoice.
4. Zhang "will have three business days" from signing to cancel the contract "for any reason."
Lametta testified that this was a "cost plus" contract. He further testified that Zhang provided no plans or specifications, no formal construction documents, but that this was not unusual with an old house. He said there never was a clear start date because the scope of work was not determined. According to Lametta, the initial project was to renovate a doctor's office in the building into an acupuncture office and to renovate the kitchen which was upstairs in the 250-year old structure. The work, according to Lametta, changed into a job of "renovating and gutting and remodeling the entire home office and residence, all three levels, at this address." Tr. 11, 27. This included bathrooms, electrical work, plumbing, tile work and windows. Tr. 36. Zhang does not dispute that he requested Lamco to do renovations throughout the structure. Tr. 45. However, Zhang testified that the plan always consisted of doing work throughout the structure and that Lametta had said the project would take six months. Tr. 41.
Reference to "Tr." followed by a number are to the pages of the court transcript of the hearing.
The evidence shows that work at 81 Myrtle Avenue commenced some time in April 2007, and that Lamco has billed almost $375,000 and Zhang has paid over $244,000. Exhibits 3 through 10 and Exhibit A. Essentially, invoices were paid timely until the summer of 2007 when Zhang fell behind. Lamco stopped work for a while, but recommenced when Zhang paid virtually all outstanding invoices by October 4, 2007. The present lien is in excess of $135,000 including claimed interest. The invoices which remain unpaid have been signed as agreed to and accepted by Zhang. Exhibits 3, 5 and 6.
Standard of Review
On a motion to discharge a mechanic's lien, the lienor (Lamco) is first required to establish probable cause that the lien is valid; then the lienee (Zhang) in order to prevail must establish by clear and convincing evidence that the lien is invalid or its amount should be reduced. General Statutes § 49-35b(a).
Discussion
In response to Lamco's Demand for Disclosure of Defense made pursuant to Practice Book § 13-19, Zhang disclosed that he had a defense to this action under the Home Improvement Act, General Statutes § 20-418 et seq. (HIA.) General Statutes § 20-429(a) provides:
No home improvement contract shall be valid or enforceable against an owner unless it: (1) it 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.
It is Zhang's contention that the contract signed in March 2007 is unenforceable against him because it fails to comply with subsections (a)(3), (a)(5), (a)(6), and (a)(7) quoted above. The plaintiff contends that at least part of the work it performed was on the commercial and business portion of the 81 Myrtle Avenue building and therefore, was not a home improvement subject to the requirements of General Statutes § 20-429(a). The plaintiff also contends that it substantially complied with HIA.
The court turns first to the claim that since part of the work was to construct an office for Zhang's acupuncture practice, the portion of the lien attributable to that work is not subject to the requirements of HIA, and that portion is not quantifiable. The court rejects this argument as a basis for upholding the lien. There was testimony that the work on the acupuncture practice office was one of, if not the first, parts of the remodeling project undertaken. As noted, Lametta testified that renovation of the "existing doctor's office to suit Mr. Zhang's home acupuncture office" was included as the first goal; Tr. 10; and that was where Zhang told him to start the work, so he could stop paying rent for the office he was presently using. Tr. 10, 38. This testimony was not contradicted by Zhang. In addition, Lamco is in the best position to establish or quantify what amount, if any, of the unpaid bills are attributable to work on the acupuncture office, and it failed to do so. Therefore, it is reasonable to conclude that the balance claimed to be owing, which is essentially the last three of the seven Lamco invoices, arose from the latter part of the project which was clearly home improvement work. Tr. 36.
As to the conflicting claims whether the contract does or does not comply with HIA, the court makes the following findings. Section 20-429(a)(3) requires the contract to contain the entire agreement between the owner and contractor. The contract fails to meet this requirement as it contains no description at all of what work was to be done at 81 Myrtle Avenue. Lametta explained that he did not know what the final scope of the project was at the beginning, and that this was often the case in remodeling old houses. While that may have been true, Lametta was quite clear that the initial understanding was work on the acupuncture office and the kitchen upstairs. At least this information could, and should, have been included in the contract, perhaps with the provision that additional work might be added by mutual agreement. This was not done, nor was the contract amended when the additional scope of work became known. Indeed, Lametta appeared to feel that no description was best when he testified that all the work he did for Zhang was described in the contract (Ex. 2); "everything I do, I feel is covered under this." Tr. 35. This approach is not condoned by HIA.
The provisions of Section 20-429(a)(7) requiring the contract to have a starting date and completion date were not complied with. While an argument can be made that if the full scope of the work is not known, including a completion date in the contract is speculation at best. However, no such argument exists for not including a start date. The parties disagree whether the contract contained proper notice of the homeowner's right to cancel the contract. Section 20-429(a)(6) requires such notice "in accordance with the provisions of chapter 740" of the General Statutes. Chapter 740 of the General Statutes requires Lamco to give Zhang two copies of a statutorily prescribed "Notice of Cancellation." See General Statutes § 42-135a. There is no question that the contract stated that Zhang had three days within which to cancel. See Exhibit 2, p. 1. Zhang and Lametta disagree whether Zhang received any copy of the Notice of Cancellation, but Lametta admitted that he only gave one copy to Zhang. Therefore, the court finds this was, at least, a technical violation of HIA.
There was conflicting evidence as to whether there was compliance with Section 20-429(a)(5) requiring the contract to contain the contractor's name, address and the state registration number as a home improvement contractor. Lametta testified the contract contained a copy of his registration card (see Exhibit 1) and Zhang testified otherwise. The court makes no finding on this issue, as failure to comply with (a)(5) does not necessarily preclude recovery by Lamco. General Statutes § 20-429(f).
In Wright Bros. Builders, Inc. v. Dowling, 247 Conn. 218 (1998), the Connecticut Supreme Court noted that its previous decisions concerning HIA had held that compliance with Section 20-429(a) was mandatory. It went on to say that technically perfect compliance was inappropriate and that an interpretation of the statute that furthers the remedial purpose of HIA was in order. See id., 230-31. The Appellate Court, in discussing the addition of subsection (f) to Section 20-429 affording the possibility of some equitable relief to contractors who met some but not all the requirements of Section 20-429(a), has stated the legislature's express failure to give the trial courts carte blanche to excuse non-compliance with the statute "manifests its acquiescence in our strict construction of the statute in these other respects." Custom Concrete, LLC v. Carvone, 102 Conn.App. 652, 660 (2007).
Based on the foregoing the court concludes that Lamco's failure to include any description of the work or any start date in its contract were substantial non-compliance with HIA. That statute has placed the burden of complying on the home improvement contractors who are in the best position to know the requirements imposed by statute on their business. Therefore, the court finds that the lien based on the contract should be discharged because Lamco has not established probable cause for its validity. Nat'l Landscaping, Inc. v. Church Hill Walk, Inc., Superior Court, judicial district of Stamford-Norwalk, CV 05 4007715, (August 31, 2006, Lewis, J.T.R.)