Opinion
CV126030584S
11-18-2015
Patrick Tennant, M.D. et al. v. Innovative Concepts in Design, Inc. dba the Construction Queen et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Michael Hartmere, Judge Trial Referee.
On October 2, 2012 the plaintiffs, Patrick Tennant, M.D. and Susan Tennant filed a five-count complaint against Innovative Concepts in Design, Inc. d/b/a The Construction Queen and Diane Slovak. An amended complaint was filed on February 20, 2015. At trial, the plaintiffs pursued only count two of the complaint which alleged a breach of contract and a breach of the covenant of good faith and fair dealing. The defendants, Innovative Concepts in Design, Inc. d/b/a The Construction Queen and Diane Slovak filed an answer to the amended complaint, special defenses and counterclaims on March 5, 2015. The matter was tried to the court on eight days between May 19 and June 4, 2015, subsequent to which the parties filed post-trial briefs and reply briefs. The parties stipulated that any judgment against Innovative Concepts in Design would constitute a judgment against Diane Slovak. Based on the evidence submitted, the court makes the following findings.
FINDINGS OF FACT
The plaintiffs, Patrick and Susan Tennant, own a home located at 40 Fieldstone Drive, Easton, CT. Patrick Tennant is a medical doctor and Susan Tennant is a registered nurse. The home, purchased in 1996, is a colonial located on a three-acre flat lot with not many trees. In early spring 2008, the plaintiffs had a long list of home improvements to be done including a kitchen renovation inside the home, and outdoor projects, including construction of a swimming pool, a pergola, a new deck and renovations to an existing deck. Susan Tennant testified that she and her husband were in the process of locating a pool contractor when a friend recommended the defendants Diane Slovak and Innovative Concepts in Design, Inc. d/b/a The Construction Queen (CQ). Susan Tennant met with Diane Slovak and Slovak stated that she could run the project, get good prices, deal with subcontractors, and take Tennant shopping for various materials necessary for the construction. Susan Tennant was interested in all of the foregoing. Slovak's recollection differed. Slovak, a college graduate who had worked in laboratories as a research scientist from 1976 to 1986 before starting her own businesses, began in construction by taking night school classes and doing her own research. She built her own home and then built homes on speculation. She started Innovative Concepts In Design (ICD) in 1995. According to Slovak's records they met on August 15, 2006 concerning the Tennants' leaking roof and the possibility of a pool. CQ used stationery forms for her business called " rapid memos" and " daily progress reports" which she kept in her automobile and a copy of which went to her office assistant. CQ used her automobile as a rolling office. After two other meetings, CQ and Susan Tennant met on March 5, 2008 concerning ideas on a pool at which time Tennant informed CQ that her husband wanted a pool but that she still was not sure.
The plaintiffs decided to move forward with the outdoor project involving the pool construction, deck renovation, new deck and pergola. On April 1, and April 24, 2008, CQ sent proposals to the plaintiffs concerning construction of a 20 by 40 foot gunite swimming pool (gunite being more expensive than fiberglass) and a proposal for renovations to the deck and the construction of a pergola. The pool proposal was for a price of $77,050. The plaintiffs did not ask how the price was arrived at. Susan Tennant went over the proposals with CQ and walked the property to decide where to put the pool. Patrick Tennant testified that during April 2008, CQ informed the plaintiffs that for her compensation she charged a 10% commission above what the subcontractors charged. CQ testified that she never told Patrick Tennant about a 10% markup. She testified that the only way she works is under a fixed price contract and that she has never done cost plus work.
The parties entered into their first written agreement concerning the work which CQ would perform on May 4, 2008. The parties met at the plaintiffs' home and went through the document, at which time the plaintiffs paid 50% of the approximated contract price of $117,217.00, i.e., $58,608.50. The agreement provided that the retainer fee was non-refundable. This May contract set forth the following payment schedule:
Upon signing the agreement $58,608.50
Upon the day back work starts $29,304.25
Upon rough grade work to trench pool $14,652.13
Upon filling of water for pool $7,326.10
Upon test working of all pool equipment systems $3,663.03
Upon substantial completion of deck $3,663.03
Under the May contract CQ assumed multiple roles. She was the design consultant, project facilitator and contractor. She agreed to prepare necessary preliminary studies, obtain preliminary estimates/bids from the subcontractors and evaluate the same, negotiate the best price from subcontractors, supervise the subcontractors and trades people, pay the subcontractors, and complete all permitting necessary for the scope of the work.
The May agreement attached Exhibit A which described the work and anticipated approximate costs for construction. The scope of work included excavation and installation of a 20 x 40 Gunite pool, installation of a 500 gallon propane tank, ceramic tile, loose stone coping for the pool's edge, all water to fill the pool and the electrical work, among other things. It included some specifications for the deck and referred to the pergola as " quoted as drawn." The pergola drawing was attached to the proposals. Listed as options were a winter mesh cover, self-closing gates, patio around pool coping, landscape and lighting requirements, and fencing that is required around the pool. Exhibit A lists the approximate cost of the pool at $77,745, the deck at $20,222, and the pergola at $19,250. All workers were on the job on July 7, 2008, and work on the pool started. The pool was completed on or about July 22, 2008. On the day construction of the pool began, the Tennants requested a motorized retractable solar pool cover for which they paid $22,896 including tax. Also on the day construction began, CQ and RI Pools, the subcontractor, determined that a retaining wall was necessary at the end of the pool closest to the home. In August 2008, Susan Tennant told CQ that she wanted to work with a mason whom her friend had used. However, Ms. Tennant wanted CQ to remain on the job as project facilitator and agreed to pay her in such capacity. Tenant provided CQ with the name and contact information for that mason, John DiMeglio, of DiMeglio Brothers Landscape Contractors. On September 20, 2008, CQ provided plaintiffs with two proposals for a 1, 900 square foot patio, a retaining wall, and other masonry/landscaping work.
After Ms. Tennant decided on the materials for the patio and the retaining wall, the plaintiffs and ICD entered into a second contract dated October 24, 2008, and signed October 26, 2008 pursuant to which ICD agreed to build a stone retaining wall, a 1900 square foot Phoenician Buff Granite flagstone patio, drainage work, a 4 x 4 cement pad for a sliding door, rough grading and seed work. The October contract called for the plaintiffs to pay a fee to ICD of approximately $116,350.90. The October contract set forth the following payment schedule:
Upon signing agreement $60,000.00
Upon the day the work starts $28,175.50
Upon completion of retaining wall $14,087.75
Upon pouring of cement patio $7,043.90
Upon substantial completion of patio $7,043.90
Both the May contract and the October contract (" contracts") provided that all sales taxes would be payable by the plaintiffs. The contracts also provided: " In the event this agreement is terminated before completion of the project, the compensation due to ICD, based upon the following payment schedule, will be applied as compensation for services rendered." The contracts provided that any alteration or deviation from the specified work " involving extra cost will be done only upon written change order." Slovak testified that ICD's practice was to document change orders to a contract by (a) issuing a proposal or quote for the additional work; and (b) issuing an invoice for that additional work upon the owner's approval of the proposal or quote. The payment of the invoice was accepted by ICD as confirmation of the alteration or change. For example, ICD billed the plaintiffs and the plaintiffs paid $22,896 for a motorized retractable solar pool cover on the day work began on the installation of the swimming pool. The May contract specified that a propane gas heater was part of the mechanical equipment to be supplied. An electric " heat pump" was installed for the pool instead of the specified propane heater. The contract contemplated installation of a propane tank, only to the extent necessary to power the pool heater, and for possible future propane uses that the plaintiffs were contemplating but had not yet decided on (an outdoor kitchen and a possibly renovated indoor kitchen). Since the plaintiffs had not decided on any of the potential future uses, when the pool was being installed, a propane tank became unnecessary with the substitution of the electric heat pump. Ms. Slovak testified that the heat pump was a more efficient, longer-lasting, and more expensive pool heater than the originally proposed propane heater. The plaintiffs accepted the heat pump in lieu of the propane heater. The subsequent installation of a propane tank, including trenching for propane pipes to the house, clearly was part of a change order as it was not necessary for the pool. Joseph Carter, a builder, publisher and editor, was called as an expert by the defendant and testified, among other things, that under a written contract if an owner wants something bigger or different, and a proposal is issued by a contractor and accepted by the homeowner, it is the functional equivalent of a change order.
Work began on the matters specified in the October contract on or about October 24, 2008. Within three weeks of signing the October agreement, a number of changes occurred. First, 454 square feet were added to the patio in order to make it rectangular. Second, two 10 foot long, 24 inch high, " return" sections were added to the retaining wall. Third, a landing was added to the ground level slider door with a 4.5 foot wide walkway connecting to the pool/retaining wall steps. The plaintiffs claim that CQ charged far in excess of the cost of these changes. CQ sent a number of additional invoices to the plaintiffs in November 2008. The invoices were for soil, fill and grading work, which the plaintiffs claim was already included in the scope of the work described in the contract. Ms. Slovak claimed that the additional soil, fill and grading work were due to the topsoil being washed away and eroded while awaiting various decisions by the plaintiffs. ICD billed the plaintiffs, and the plaintiffs paid, the progress payments under the October contract for: signing the contract ($60,000); starting work ($28,175.50); completion of the retaining wall ($13,263.25); and pouring the patio cement ($7,043.90).
In early December 2008, soon after the cement for the patio was poured, work on the patio was stopped due to cold weather. Work on the patio resumed in or about April 2009. According to John DiMeglio, of DiMeglio Brothers Landscape Contractors, the Tennants picked the most expensive material of the proposals given to them and added square feet to the patio. As for the retaining wall, Ms. Tennant had a difficult time deciding what type of fieldstone she preferred, which delayed the start of the wall. At the time the cement for the patio was poured, footings for the deck and pergola also were poured. On or about December 7, 2008, CQ emailed Ms. Tennant that she wanted to start work on the deck and pergola. Ms. Tennant responded on December 9, 2008 that her husband wanted to wait to do the deck and pergola until the weather would be more consistently nice in the very late winter or early spring. CQ responded that the weather would not be a problem for the workers, but the plaintiffs maintained their decision not to have work done on the deck and pergola in December 2008. In fact, plaintiffs ultimately decided not to have ICD build the deck and pergola.
In December 2008, CQ insisted on proceeding with the installation of a permanent pool fence. Since completion of the pool in July 2008, it had been enclosed with a temporary construction fence. Although it was extremely cold outside with snow on the ground, CQ insisted that the fence be installed due to safety and liability concerns. ICD had provided the plaintiffs with a July 31, 2008 quote for 270 feet of aluminum fence, with two gates, for a total price of $14,275 which included installation and tax. That fence was not purchased or installed. Ms. Tennant then decided that she wanted the fence to encircle more of the backyard and to run from one corner of the house to the other corner of the house. ICD provided the plaintiffs with a September 22, 2008 invoice to furnish and install approximately 557 feet of fence, with three five-foot arched top matching walk gates with self-closing latching locks. The quoted price was $21,680, plus tax, and a deposit of $8,500 was noted as being received. The plaintiffs paid an additional $8,000 on this invoice on or about November 11, 2008. Ms. Tennant testified that she received the type of fence she wanted and that it was installed where she wanted it. There were a number of inconsistencies between the records of Britain Fence, LLC and the records of ICD, the most relevant being the length of the fence installed. While ICD shows 557 feet of fence, Britain Fence shows 357 feet. There is no question that the quality of the fence and the gates was upgraded and the number of gates increased. The weight of the evidence supports a conclusion that the length of the fence installed was 357 feet. Also, the Britain Fence invoice was doctored to show extra payment for installation in extreme conditions during the winter months. However, no credible evidence was introduced as to what ICD should have charged the plaintiffs for the length of fence that actually was installed. Moreover, Ms. Tennant testified that her primary concern was getting exactly what she wanted, and that cost was a secondary concern. The fence was done to the plaintiffs' satisfaction.
With one exception, prior to signing the contracts, the plaintiffs never discussed with Ms. Slovak how ICD's prices were determined or what ICD's profits would be. Likewise, before paying the invoices, the plaintiffs did not ask what ICD's costs were or what the profit margin would be. ICD provided several proposals to plaintiffs for the work, which was ultimately encompassed by both contracts. None of the proposals set forth ICD's costs or any percentage markup. Rather, each proposal set forth fixed prices for the proposed work. The exception was Dr. Tennant's testimony that during a conversation regarding a possible kitchen renovation, Ms. Slovak told him that ICD charged a 10% above its costs. Dr. Tennant was unsure when that conversation occurred and stated it could have been as early as 2007. Slovak denied making such a statement.
In December 2008, well after the contracts were signed, Ms. Tennant wrote that she did not know how ICD determined its prices. After receiving a December 22, 2008 email from DiMeglio disclosing the prices he had charged ICD for certain work, she responded to DiMeglio: " I'm supposed to see Diane on Wed . . . I guess my first step is to ask her how she bills for her services . . . Something I should have done long ago and I'm not sure why I didn't." This email, written before the relationship between the plaintiffs and defendants broke down, is evidence that Ms. Tennant did not have an understanding or belief, when she signed the contracts, that the contracts provided for cost plus prices.
The plaintiffs' contention that the contracts were cost plus is based, to a large extent, on events which transpired in 2009. Ms. Tennant testified that Ms. Slovak told her in or about January 2009 that the prices were ICD's costs plus a 10% markup, and that Ms. Slovak subsequently gave her subcontractor invoices purporting to support a 10% markup. Ms. Slovak did give Ms. Tennant subcontractor invoices which had been altered from the originals. However, Ms. Slovak disputes much of this.
Ms. Slovak testified that her discussion regarding pricing with Ms. Tennant occurred in May 2009 (not January 2009), and that it was a result of Ms. Tennant's asking Ms. Slovak for assistance in justifying to Dr. Tennant the amount of money Ms. Tennant had spent on the renovations. Ms. Slovak testified that Ms. Tennant asked for help in convincing Dr. Tennant that ICD's profit was only 10%, and that she agreed to assist Ms. Tennant. Ms. Slovak testified that Ms. Tennant requested and understood that Ms. Slovak was going to provide to her, subcontractor " invoices" that did not reflect the true prices charged to ICD, but which were intended only to help Ms. Tennant solve a problem with her husband. Ms. Slovak's May 11, 2009 " Rapid memo" business record supports that testimony. That rapid memo provides:
Susan wanted to know what my percentage is on the work done. Before I said anything. She stated that " Patrick thinks it is 10%." So I told her I would do what will work for her. Susan wanted a meeting for her and Patrick-set for May 14th, 6:00. Will make up mason's papers to reflect the 10% for her needs.
The two written contracts expressly provide for fixed prices. That conclusion is supported by the credible evidence submitted during the trial.
In late 2008, a number of incidents caused Ms. Tennant to question Ms. Slovak's invoices. The length of the fence around the pool listed at 557 feet in the invoice seemed wrong to Ms. Tennant. Ms. Tennant thought the second delivery of topsoil was incorrect. In late November, the gas company left a propane delivery ticket at the Tennant house. Ms. Tennant saw the delivery ticket and compared the propane costs described in the ticket, roughly $918 to the $4,284.22 propane cost appearing in CQ's invoice. After paying a November 20, 2008 invoice for constructing a deck, Ms. Tennant recalled that the deck had been included in the May agreement. Finally, after being informed by DiMeglio as to what he charged CQ and shown the invoices which covered the construction of the retaining wall, the patio, and grading and seeding the pool area, Ms. Tennant had issues with CQ's charges.
Ms. Tennant met with Ms. Slovak to discuss these issues in December 2008. Ms. Slovak described the propane billing and deck billing as mistakes. CQ did not return the money paid in the overbillings. Rather, on December 12, 2008, CQ issued " Credit Memo No. 2307" that purports to credit the Tennants $3,310.42. CQ also issued " Credit Memo No. 2327" in the amount of $20,222 for the unbuilt deck and " Credit Memo No. 2323" in the amount of $19,250 for the unbuilt pergola. CQ never returned the money referred to in the " credit memos."
The issues between the plaintiffs and Ms. Slovak remained unresolved through the winter. The Tennants and Ms. Slovak met on or about April 24, 2009. At that time, Ms. Slovak proposed returning the Tennants' payment for the deck and pergola and that she finish overseeing the patio work. The parties met again on May 15, 2009 and the Tennants accepted Ms. Slovak's proposal to return the $39,472. Ms. Slovak stopped monitoring the work on May 16, 2009, and on May 18, 2009 notified the Easton Building Department to remove her name from all permits for the property. On May 22, 2009, instead of returning the $39,472, CQ offered a check in the amount of $27,307.46 after deducting some disputed charges. An accompanying letter stated, " This is the final settlement of the contract rescinded by the Tennants and honored by the Construction Queen." The check enclosed contained the memo: " Paid in full. Final settlement of any and all claims." The offer to settle all disputes between them was rejected by the plaintiffs. The plaintiffs did not cash the check.
Additional facts will be supplied as necessary.
LEGAL DISCUSSION
In the remaining count of the complaint (count two), the plaintiffs allege a breach of contract by the defendants, Innovative Concepts in Design and Diane Slovak. In order to establish the essential elements for a breach of contract, the plaintiffs must prove by a preponderance of the evidence: (1) the formation of an agreement; (2) performance by one party; (3) a breach of the agreement by the other party; and (4), damages resulting from the breach. Keller v. Beckenstein, 117 Conn.App. 550, 561, 979 A.2d 1055 (2009). The plaintiffs claim that the defendants breached the two written contracts between the plaintiffs and ICD, dated May 4, 2008 and October 24, 2008.
The language of the contracts provided that the plaintiffs agreed to pay fixed prices (subject to changes) for the work ICD agreed to perform. The May contract provides: " The Tennants agree to pay a fee to Innovative Concepts in Design, Inc. (ICD) of approximately $117,217[.]" The October contract provides: " The Tennants agree to pay a fee to Innovative Concepts in Design, Inc. (ICD) of approximately $116,350[.]" Each contract contained specifications of the work to be performed for those prices.
The plaintiffs claim that ICD overcharged them by having them pay more than what ICD's subcontractors charged plus a 10% fee. However, the amended complaint does not allege that either of the contracts provided for such a pricing structure. Rather, the plaintiffs allege that Slovak represented that the defendants' fee for services was 10% over the sum billed by subcontractors for performing the construction work. The plaintiffs do not allege that this is what the written contracts provide.
The principles of contract interpretation are well-established and center on the actual words used by the parties to the contract:
A contract must be construed to effectuate the intent of the parties, which is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction. The intent of the parties is to be ascertained by a fair and reasonable construction of the written words and the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract. Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms. The court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity. Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms.Tallmadge Bros. v. Iroquois Gas Transmission Sys, L.P., 252 Conn. 479, 498, 746 A.2d 1277 (2000) (quotation marks and brackets omitted).
There is no dispute that a cost plus contract is very different than a fixed price contract, and one is not reasonably susceptible to being interpreted as the other. " A cost-plus contract, so-called, is one wherein one of the parties undertakes to pay all costs incurred by the other party in the performance of his contract and a fixed fee over and above such costs." Continental Copper & Steel Indus. v. Bloom, 139 Conn. 700, 703-04, 96 A.2d 758 (1953). There is no mistaking one method of pricing for the other: " The language used by the parties in describing the method of fixing the price and the circumstances under which that language was used leaves no doubt as to the intention of the parties." Id., 139 Conn. at 704; see also, D'Angelo Dev. & Const. Corp. v. Cordovano, 121 Conn.App. 165, 171, 995 A.2d 79, cert. denied, 297 Conn. 923, 998 A.2d 167 (2010) (contract was cost-plus where the builder " was responsible for furnishing the materials and providing the labor necessary to build the new home, and, in return, the [home-owner] agreed to pay for the costs of the material and labor furnished . . . in addition to a contractor's fee equal to 20 per cent of building and material costs").
In the present case, the written contracts contain all of the hallmarks of fixed-price agreements (most notably, specific prices for the services to be rendered), and none of the hallmarks of a cost-plus contract (most notably, no statement of what the costs were, how they would be determined, or what percentage would be added to those costs). There is no ambiguity in the contracts.
The plaintiffs contend that Ms. Slovak made representations about her profit, either years before or months after the contracts were executed. Ms. Slovak denies making such representations. Such evidence cannot modify the written contracts. Parol evidence cannot be used to vary or contradict the terms of an unambiguous contract. Tie Communications, Inc. v. Kopp, 218 Conn. 281, 288, 589 A.2d 329 (1991). There is no evidence in the contracts that, at the time both parties executed the contracts, they mutually intended ICD's profits to be 10% of ICD's costs. The plaintiffs are both well educated, experienced people. They agreed to the prices quoted by Ms. Slovak without asking how they were determined, or whether ICD might be willing or able to charge less. They signed, without negotiation, the contracts proposed by ICD. The same applied to all of the changes requested by the plaintiffs during the course of the construction. The plaintiffs' breach of contract and overcharging arguments include alleged overcharges for the pool, the motorized retractable solar pool cover, the pool fence, work listed in the October agreement including the patio and retaining wall, and the subsequent installation of a propane tank. The procedure used for change orders was valid, Economos v. Liljedahl Bros., Inc., 279 Conn. 300, 303, 901 A.2d 1198 (2006), and there was no violation of the Home Improvement Act. The evidence at trial was clear that the plaintiffs' main concern was getting the renovations and construction exactly as they wanted with high quality materials and that cost was a secondary or minor consideration. Therefore, the plaintiffs' breach of contract arguments based on their contention that the contracts were " cost plus" contracts must fail.
The plaintiffs also contend that ICD breached the implied covenant of good faith and fair dealing. " [E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement to constitute a breach of that duty, the act by which a defendant allegedly impedes the plaintiffs' right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith. Bad faith means more than mere negligence; it involves a dishonest purpose." Collins v. Anthem Health Plans, Inc., 275 Conn. 309, 333-34, 880 A.2d 106 (2005). The duty of good faith concerns the performance of obligations that are already part of the contract; it does not require a party to undertake extra contractual obligations. Capstone Bldg. Corp. v. Am. Motorists Ins. Co., 308 Conn. 760, 795, 67 A.3d 961 (2013). The plaintiffs contend that ICD breached this covenant by charging prices for its services, which were higher than ICD's costs plus a 10% markup. However, the contracts do not provide for cost plus pricing, and the prices charged by ICD are the prices which the plaintiffs agreed to pay. Thus, the plaintiffs failed to establish a breach of the covenant of good faith.
In their post-trial brief, the plaintiffs argue that ICD breached the contracts by charging sales tax for various items that should not have been taxed. This argument is not contained within the plaintiff's amended complaint. Nonetheless, General Statutes section 12-425 provides that a person who has overpaid sales tax may pursue a refund by filing a written claim with the Commissioner of Revenue Services within three years from the end of the month in which the overpayment was made. An administrative appeal to the Superior Court may be taken if the taxpayer is unsatisfied with the result. See General Statutes section 12-422. These administrative and judicial procedures preclude a claim against a retailer that charged and collected the tax. Blass v. Rite Aid of Conn., Inc., 51 Conn.Supp. 622, 632, 16 A.3d 855 (Superior Court 2009) , aff'd, 127 Conn.App. 569, 572, 16 A.3d 737 (2011). Accordingly, plaintiff's arguments, not properly pleaded in its amended complaint, must fail.
The plaintiffs arguments concerning ICD's failure to construct the deck and pergola pursuant to the May contract are on a different footing. In May 2009, Ms. Slovak offered to return the $39,472, which the Tennants had paid a year earlier for the deck and pergola, pursuant to the May contract. In fact, the deck and pergola had not been built. When the parties met for that purpose, CQ delivered a check for a lesser amount that was conditioned on the payment being " in full and final settlement of any and all claims." Deductions on the agreed upon amount were made for disputed items, including the loss of a CQ lawn sign which had been placed on the plaintiffs' lawn. After the plaintiffs did not accept her May 22, 2009 proposal or cash the check in a lesser amount, CQ kept the plaintiffs' money and made no further effort to complete the work or to reach a resolution with the plaintiffs. No matter how the Tennants responded to CQ's May 22, 2009 proposal, CQ had no intention to finish the project in compliance with the contract. On May 18, 2009 CQ issued written instructions to Easton's building officials to remove her name from all permits for the plaintiffs' property. Earlier she had stopped monitoring the work. Upon a breach of contract, the prevailing party is entitled to compensation which would place it in the same position it would have been in had the contract been properly performed. Naples v. Keystone Bldg. and Development Corp., 295 Conn. 214, 224, 990 A.2d 326 (2010). This court concludes that the May 15, 2009 meeting between the parties resulted in an agreement to resolve the deck and pergola issues, and that the Tennants should be awarded the $39,472 which the Tennants had paid CQ in 2008 for the deck and pergola. The court finds the defendants' termination argument pursuant to the May contract unavailing. Clearly, the defendant believed that the plaintiffs were entitled to refunds when, on December 12, 2008, CQ issued " credit memos" to the Tennants in the amounts of $20,222 the unbuilt deck, $19,250 for the unbuilt pergola, and $3310.42 for the propane gas overcharge (ICD does not dispute that plaintiffs are due the $3310.42). Thus, the plaintiffs are awarded damages of $42,782.42 for the breach of contract.
The plaintiffs seek an award of attorneys fees. " The general rule of law known as the American rule is that the attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception. This rule is generally followed throughout the country. Connecticut adheres to the American rule." ACMAT Corp. v Greater New York Mut. Ins Co., 282 Conn. 576, 582, 923 A.2d 697 (2007). In the present case, neither contract provided for an award of attorneys fees. There is no applicable exception which would apply here. The plaintiffs have failed to establish a breach of the covenant of good faith and fair dealing. Thus, there can be no recovery of attorneys fees in this case.
Plaintiffs also seek punitive damages in this case. " Punitive damages are not ordinarily recoverable for breach of contract." L.F. Pace & Sons, Inc. v. Travelers Indem. Co., 9 Conn.App. 30, 47-48, 514 A.2d 766, cert. denied, 201 Conn. 811, 516 A.2d 886 (1986). Pace permitted a claim for punitive damages for tortious misconduct arising out of breach of an insurance contract. The Appellate Court has expressly declined to extend Pace beyond the insurance context at least where there is no allegation of a violation of an important public policy. Barry v. Posi-Seal Int'l, Inc., 40 Conn.App. 577, 587-88, 672 A.2d 514, cert. denied, 237 Conn. 917, 676 A.2d 1373 (1996). In the present case, there has been no proof of a violation of an important public policy. Thus, the plaintiffs' claim for punitive damages is denied.
The defendants filed a number of special defenses addressed to the second count of the complaint. The court has found that the plaintiffs did not repudiate the agreements by preventing defendants from completing performance but rather the termination agreement was mutual. As written above, the defendants terminated the contracts and intended to do so, prior to the final meeting of the parties. While the plaintiffs did repeatedly and intentionally change the scope of the work under the agreements, their actions did not breach their duty of good faith and fair dealing, but simply constituted indecision on their parts. The defendants also made a claim by way of Setoff, which the court will find the defendants have failed to prove by a preponderance of the evidence.
The defendants also filed five counterclaims against the plaintiffs under various theories. The first counterclaim alleges that the plaintiffs breached the duty of good faith and fair dealing, when they " repeatedly, substantially and intentionally changed the Scope of Work, despite knowing that their actions would cause delay and frustrate ICD's ability to complete the agreed-upon Scope of Work." Some of the plaintiffs' actions did cause delay, which was due to the plaintiffs' inability to make decisions. The defendants complained that the plaintiffs directed ICD not to start work on the deck and pergola when ICD was ready to begin. However, the fence around the pool was installed in December 2008 in frigid weather with 2 feet of snow on the ground. It was not unreasonable for the plaintiffs to prefer the work be performed in conditions more suitable for outdoor work. The defendants have failed to prove a breach of the duty of good faith and fair dealing.
The second counterclaim seeks damages for the plaintiffs' failure to comply with the termination provisions of the contracts. The defendants did not brief the termination counterclaim, and thus have abandoned this claim.
The third, fourth and fifth counterclaims seek recovery of sums allegedly billed by ICD, but not paid by the plaintiffs, under theories of breach of contract, account stated and quantum meruit. The court will find that the defendants have failed to sustain the burden of proof on the third, fourth and fifth counterclaims. As to the breach of contract claim, the defendants simply have failed to prove by a preponderance of the evidence that the plaintiffs failed to pay outstanding invoices. Likewise, the defendants have failed to prove amounts billed by ICD which the plaintiffs did not pay under theories of account stated and quantum meruit. There was no agreement between the parties that a definite amount was due. The parties parted ways in May 2009, at which time the patio was not completed. As to the equitable claim of quantum meruit, CQ's conduct in altering documents and making misleading statements shows unclean hands. Thus, the quantum meruit claim will be denied.
CONCLUSION
Based on all of the foregoing, judgment will enter for the plaintiffs on count two of the complaint in the amount of $42,782.42. Prejudgment interest on that amount at the rate of 6%, pursuant to General Statutes § 37-3a, from May 22, 2009 to November 18, 2015 is awarded. The amount of interest is $16,684.98. The total amount of the judgment is $59,467.40. Judgment will enter for the plaintiffs on the defendants' counterclaims and claim for setoff.