Opinion
No. CV07-5002983
May 4, 2009
MEMORANDUM OF DECISION
The plaintiff, Dimitri Willert, commenced this action by writ, summons and complaint dated August 7, 2007 seeking specific performance, monetary damages and other relief arising out of the defendants' refusal to proceed with the purchase of property which they had agreed to purchase pursuant to the terms of a contract between the parties. The case was tried to the court on February 26, 2009, and the parties submitted post-trial briefs on March 7, 2009. The court finds the following facts proven and relevant to its decision herein:
FINDINGS OF FACT:
On July 5, 2007, the plaintiff, Dimitri P. Willert, and the defendants, James Russo and Anna Russo, entered into the contract which is the subject of this action for the purchase of plaintiff's property located at 345 Aspetuck Ridge Road, New Milford, Connecticut. The parties had executed an offer to purchase on May 29, 2007, and the defendants had previously listed their residential property located at 4 Edmund Road, Bethel, Connecticut on June 14, 2007. Defendants provided the $14,400 deposit toward the $480,000 purchase price as required by the terms of the subject contract.
The defendants' obligation to purchase was not contingent upon the sale of other property owned by them in either the July 5 contract of sale (Pl. Exh. 2-"Contract") nor the previously executed offer to purchase (Pl. Exh. 1). Both parties admit that paragraph 14 of the Contract governs remedies available to the plaintiff in the event of default by defendants.
Plaintiff's revised complaint, dated October 22, 2007, sets forth claims for breach of contract, breach of duty of good faith and fair dealing, and for intentional misrepresentation. In his prayer for relief he seeks specific performance, compensatory damages, punitive damages, attorneys fees and such other relief as the court deems fair and just.
By answer, special defense and counterclaim dated November 8, 2007, defendants admitted paragraphs 1-5 and 8-10, and left the plaintiff to his proof as to the allegations of paragraphs 6, 7, and 11 of the first, second and third counts. In response to the third count, intentional misrepresentation, defendants deny paragraph 12 and leave the plaintiff to his proof as to paragraph 13. In essence, defendants admit the basic facts of the failed transaction as alleged, but they deny plaintiff's allegations of bad faith and misrepresentation.
Defendants further allege by special defense that if the plaintiff is entitled to any damages, the amount recoverable is limited to the liquidated damages of $14,400 pursuant to paragraph 14 of the Contract. By way of counterclaim, defendants admit that they failed to perform the Contract because they did not close on July 31, 2007; that they advised plaintiff's attorney in writing on that date and thereafter on August 2, 2007 that they would not proceed with the closing; and assert that they authorized immediate release and forfeiture of their $14,400 deposit pursuant to paragraph 14 of the Contract. Defendants allege that forfeiture of the deposit is plaintiff's only remedy and that plaintiff's refusal to accept the forfeited deposit and prosecution of this lawsuit have caused them to incur attorneys fees and costs for which plaintiff should be held responsible pursuant to the Contract.
The listing history report (Def. Exh. V) indicates that the plaintiff had previously listed the subject property at 345 Aspetuck Ridge Road for a sale price of $495,000 on May 22, 2006. He then relisted it on April 11, 2007 (Pl. Exh. 14). Over one year after the initial listing, on June 2, 2007, plaintiff signed the offer to purchase agreeing to sell the property to the defendants for a purchase price of $480,000, with a July 31, 2007 sale date. Both the plaintiff seller and defendant buyers were represented by counsel and the subject Contract was signed on July 5, 2007.
In anticipation of purchasing plaintiff's property, the defendants listed their 4 Edmund Road, Bethel property for sale with Century 21/Lombardi Realtors from June 14, 2007 through August 17, 2007. Despite assurance from the listing broker that their Edmund Road home would sell quickly, defendants did not receive any offers. The listing history (Def. Exh. D) is signed by only five real estate brokers through July 3 and none between July 3 and July 31. In order to encourage sale of the property, defendants reduced the price twice, from $439,900 to $429,000 on July 16, 2007 and from $429,000 to $419,900 on July 25, 2007, but the lower price failed to attract any potential purchaser. Following notification to plaintiff that they were not going to close on the 345 Aspetuck Ridge Road property, defendants increased the asking price for their property back to $439,900 from August 2, 2007 until August 17, 2007 when they removed it from the market.
Prior to signing the Contract to purchase plaintiff's property, defendants applied for financing. On July 5, 2007, they received approval through Darien Financial Services in the form of a 30-year mortgage for $250,000 and an equity line in the amount of $182,000 on July 5, 2007, $432,000 financing toward the $480,000 purchase price for 345 Aspetuck Ridge Road. (Def. Exhs. A, B.) They paid $640 for a professional building inspection performed on June 9, 2007 (Def. Exh. F), $375 for a septic inspection on June 7, 2007 (Def. Exhs. G, H), conducted a water quality test on June 10, 2007, and arranged for property insurance. They incurred attorney's and title search fees in the amount of $937 (Def. Exhs. J, K). During July, the defendant also requested transfer of their daughter's medical and school records to New Milford in anticipation of moving to the 345 Aspetuck Ridge Road property (Def. Exhs. L, M, N) following the scheduled July 31 closing.
The defendants took these actions, i.e., qualifying for financing, listing their house for sale and reducing the price twice, transferring their daughter's medical and educational records, conducting tests and incurring expenses in anticipation of purchasing the property at 345 Aspetuck Ridge Road on July 31, 2007 as contracted. On July 30, 2007, the defendants observed septic effluent seeping up from the ground at their residence. They did not have the condition professionally evaluated but were concerned that due to the history of septic problems of neighboring properties that the cost of corrective measures would be expensive. The anticipation of septic repair expense and lack of any interest by prospective purchasers in a weakening real estate market, accompanied by their older daughter's engagement announcement caused the defendants to make the decision to withdraw from the purchase of plaintiff's property on the morning of July 31 and forfeit their $14,400 deposit (Def. Exh. R).
Following notice of defendants' decision not to proceed on the morning of July 31, 2007, their attorney Anthony DiPerrio notified plaintiff's counsel by fax that defendants were not willing to close the transaction because they would then have four mortgages on two properties for an indefinite period of time (Pl. Exh. 5). Attorney Alliugham responded that plaintiff reserved the right to retain the $14,400 deposit (Def. Exh. F). On August 1, 2007, defendants confirmed that they were forfeiting their deposit due to their inability to purchase 345 Aspetuck Ridge Road property (Def. Exh. R), and Attorney DiPerrio notified plaintiff's lawyer, Thomas Allingham, by fax on August 2 that defendants were terminating the transaction and authorizing release of the $14,400 deposit in exchange for a general release executed by plaintiff. (Pl. Exh. 9.) On August 6, Attorney Allingham responded refusing to provide a release and reserved the right to retain the $14,400 deposit.
Plaintiff served the subject complaint on defendants on August 8, 2007.
COUNT I: BREACH OF CONTRACT
The court (Shaban, J.) granted the plaintiff's motion for summary judgment as to liability for breach of contract as alleged on Count I, leaving the issue of damages for trial. The court denied the motion for summary judgment as to Counts II misrepresentation, and III fraud, because it found there were material issues of fact to be decided.
The following facts were admitted either in the complaint or in response to plaintiff's request to revise. Defendants admit they breached the Contract to purchase plaintiff's property, but deny any breach of duty of good faith and fair dealing or that they knowingly made any untrue statements of fact. The court has previously held defendants liable on Count I of the complaint for breach of contract, leaving the issue of damages for trial. Defendant buyers acknowledged the breach and forfeiture of the $14,400 at the time on August 1, 2007, and maintain that the terms of paragraph 14 which provide for liquidated damages limit the seller's damages to forfeiture of the deposit. Plaintiff seller seeks consequential damages and the equitable remedy of specific performance arguing that he has the right to elect to accept the deposit as damages or to pursue equitable remedies. Plaintiff further challenges the validity of the liquidated damages clause claiming that the parties did not actually negotiate the amount of the deposit and that he did not intend to accept the deposit as his only measure of damage. Plaintiff's argument ignores the law regarding liquidated damages as well as significant facts of this case.
The Contract of Sale (Pl. Exh. 2) provided for a $14,400 deposit toward a purchase price of $480,000. Paragraph 14 of the July 5, 2007 Contract states:
14. DEFAULT: If the Buyer fails to perform the provisions hereof, the Seller may deem this Agreement to be at an end, in which event the deposit made by the Buyer hereunder shall be forfeited by the Buyer and retained by the Seller as liquidated damages for Buyers' breach hereof. In the event of Seller's default, Buyer may elect to sue for specific performance or pursue other remedies in law or in equity. In the event that either party hereunder brings an action against the other party for breach of this agreement and prevails in such action, the losing party shall pay the prevailing party's costs and reasonable attorneys fees, in addition to such other remedies as may be determined by a court of competent jurisdiction.
Enforcement of liquidated damages clause is subject to well established legal criteria. First, Connecticut recognizes the right of parties to agree to liquidated damages in the form of forfeiture of a deposit or a portion thereof for breach of an agreement to purchase real estate. See Ritucci v. Brandt, 134 Conn. 364, 57 A.2d 728 (1948). Second, a liquidated damage clause in a contract will be upheld if the following requisite conditions are met: (1) The damage which was expected as a result of the breach of contract was uncertain in amount or difficult to prove; (2) there was an intent on the part of the parties to liquidate the damages in advance; (3) the amount stipulated was reasonable. Norwalk Door Closer Co. v. Eagle Lock Screw Co., 153 Conn. 681, 686, 220 A.2d 263 (1966); HH East Parcel, LLC v. Handy Harman, Inc., 287 Conn. 189, 947 A.2d 916 (2008); American Car Rental, Inc. v. Commissioner of Consumer Protection, 273 Conn. 296, 869 A.2d 1198 (2005). The clear language of the Contract as stated in paragraph 14 indicates the parties, who were represented by counsel at the time the contract was drafted, intended to provide for liquidated damages to the seller in the form of forfeiture of the $14,400 deposit. The amount of damages resulting from buyers' breach of the sales contract is difficult to ascertain particularly where a breach may result in removal of the property listing for an uncertain length of time. Liquidated damage provisions are upheld in real estate contracts where ascertaining economic loss is difficult or uncertain. In this case, the plaintiff relying on the agreement for purchase removed his property from listing on July 4, 2007 in anticipation of a July 31 closing. It is reasonable to conclude that the uncertainty of ascertaining actual economic loss suffered by the plaintiff as a result of removing the property from active listing during these 28 days supports enforcement of the liquidated damages clause herein. Further, the amount stipulated was reasonable as to both parties where there were only 28 days from contract to closing date. Finally, it was an amount substantial enough to compensate the seller for the value attributable to removal of the property from active listing status from July 5, 2007 to the date of buyers' notice that they were not willing to close.
Applying the law to the facts of this case and the unambiguous provisions of paragraph 14 of the Contract, the court finds that the parties provided for the $14,400 deposit to be forfeited as liquidated damages in the event that the buyer breached the Contract. The Contract does not provide any further remedy by the seller.
The plaintiff argues that the word "may" in paragraph 14 gives him the option to choose among remedies of consequential contract damages, specific performance or liquidated damages in the event of buyers' breach. However, this is not what the contract states nor is it what the parties intended when they executed the contract.
The intent of the parties as expressed in a contract is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction . . . [T]he 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. A 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.
(Internal quotation marks omitted.) Connecticut Light Power Co. v. Lighthouse Landings, Inc., 279 Conn. 90, 109-10, 900 A.2d 1242 (2006).
Plaintiff misconstrues the language of paragraph 14, which gives the seller the option to deem the agreement to be at an end if the buyer fails to perform, whereupon the seller's sole remedy under the Contract is liquidated damages. Consistent with the terms of paragraph 14, a seller could negotiate further with a non-performing buyer, e.g., extending the closing date, allowing buyer to cure, or modifying terms of sale in order to induce the buyer to perform and thereby enable the parties to proceed under the Contract. This is not, however, what occurred. Here, the defendant buyers unequivocally indicated their refusal to close and agreed to relinquish their deposit. Although they took actions and incurred expenses indicating their intention to purchase plaintiff's property, as noted above, several events occurred after they signed the contract which caused them to realize that they could not afford to purchase the plaintiff's property without first selling their existing home in Bethel. Thus, on the morning of the scheduled sale, the buyers through their attorney gave written notice of their refusal to purchase the subject property acknowledging the consequences of forfeiture of their deposit. Under these facts, the law which applies to the contractual provisions of paragraph 14 is clear. The seller's remedy is limited to the liquidated damages as provided in the Contract. It is well established that a vendor may not retain a stipulated sum as liquidated damages and also recover actual damages. Camp v. Cohn, 151 Conn. 623, 626, 201 A.2d 187 (1964). Having contracted to accept liquidated damages upon the buyers' breach, he cannot seek further monetary damages nor is he entitled to specific performance.
In Greene v. Scott, 3 Conn.App. 34, 484 A.2d 474 (1984), the court held that where the parties had agreed to a liquidated damages clause in the event of buyer's failure to comply with the terms of the Contract, the defendant seller was not entitled to recover for damages that were not covered by the agreement's liquidated damages provision. In that case, the appellate court upheld the trial court's conclusion that the defendant seller had been unjustly enriched to the extent he received over and above the liquidated damages provided in the written Contract.
Plaintiff argues that had he intended the deposit amount to be the limit of his damages for sellers' breach, he would have insisted on a deposit larger than $14,400. However, as stated above, the plain language of the Contract defeats the plaintiff's argument. "Courts do not unmake bargains unwisely made. Absent other infirmities, bargains moved on calculated considerations, and whether provident or improvident, are entitled nevertheless to sanctions of the law . . . Although parties might prefer to have the court decide the plain effect of their contract contrary to the agreement, it is not within its power to make a new and different agreement . . ." (Internal quotation marks omitted.) Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 505-06, 746 A.2d 1277 (2000).
Similarly, the plaintiff's claim for specific performance must fail. Again, the plain language of paragraph 14 defeats his argument. Paragraph 14 specifically states, "In the event of the Seller's default, Buyer may elect to sue for specific performance or pursue other remedies in law or equity." The subject Contract gives this right to the Buyer alone. There is no similar provision relative to Seller's remedies. As a result, it is clear that the seller's remedy is limited to the liquidated damages provision of paragraph 14. Under the law of this state, as applied to the liquidated damage language of paragraph 14, the seller may neither recover consequential damages, nor may he obtain specific performance from the breaching buyer. His sole remedy is to retain the amount which the parties agreed to serve as liquidated damages.
COUNT II: BREACH OF GOOD FAITH AND FAIR DEALING
In Count II of his amended complaint, plaintiff repeats the allegations of Count I, his claim for breach of contract, and adds a claim that this same conduct constitutes a breach of a duty of good faith and fair dealing. The plaintiff makes no further factual allegations in support of his claims in Count II thus relying on the same facts to support his bad faith claim which he asserts in Count I, his breach of contract claim. The initial question for the court is whether a duty of good faith and fair dealing may be imposed on parties to a real estate contract such as the one in this case. Following the reasoning of the Supreme Court in George Magnan, Jr. v. Anaconda Industries, Inc., 193 Conn. 558, 479 A.2d 781 (1984), it would appear that such a duty is properly found in many circumstances and would apply to the subject contractual relationship as well:
The implied covenant of good faith and fair dealing has been applied by this court in a variety of contractual relationships, including: leases; Central New Haven Development Corporation v. La Crepe, Inc., 177 Conn. 212, 413 A.2d 840 (1979); insurance contracts . . . Grand Sheet Metal Products Co. v. Protection Mutual Ins. Co., 34 Conn.Sup. 46, 375 A.2d 428 (1977) (tortious breach of covenant of good faith); and construction contracts . . . See Grenier v. Compratt Construction Co., 189 Conn. 144, 148, 454 A.2d 1289 (1983).
The Restatement (Second) of Contracts similarly recognizes an implied covenant of good faith and fair dealing in every contract without limitation. See 2 Restatement (Second), Contracts 205 (1979); see also General Statutes § 42a-1-203. "Good faith performance or enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party . . ." 2 Restatement (Second), Contracts 205, comment a (1979) . . . Essentially it is a rule of construction designed to fulfill the reasonable expectations of the contracting parties as they presumably intended. The principle, therefore, cannot be applied to achieve a result contrary to the clearly expressed terms of a contract, unless, possibly, those terms are contrary to public policy. See VTR, Inc. v. Goodyear Tire Rubber Co., 303 F.Sup. 773 (S.D.N.Y. 1969); 3 Corbin, Contracts 564, (1960); 11 Williston, Contracts (3d Ed. Jaeger) 1295." (Internal citations omitted.) George Magnan, Jr. v. Anaconda Industries, Inc., 193 Conn. 558, 566-67, 479 A.2d 781 (1984).
The standard of proof required to establish a claim of bad faith is clear and convincing evidence. See Citino v. Redevelopment Agency, 51 Conn.App. 262, 270, 721 A.2d 1197 (1998). "It 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." (Internal quotation marks omitted.) Kronberg Bros., Inc. v. Steele, 72 Conn.App. 53, 63, 804 A.2d 239, cert. denied, 262 Conn. 912, 810 A.2d 277 (2002). "Bad faith means more than mere negligence; it involves a dishonest purpose." (Citation omitted; internal quotation marks omitted.) De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424, 433, 849 A.2d 382 (2004).
The plaintiff has failed to allege or prove any facts which would establish by the required standard of proof, clear and convincing evidence, that the defendants acted in bad faith when they refused to purchase plaintiff's property. To the contrary, the evidence as stated above establishes that the defendants acted in good faith intending to fulfill their responsibilities under the agreement to purchase plaintiff's property. Without repeating defendants' specific actions, it is noteworthy that evidence also indicated that they incurred numerous expenses typical of prospective purchasers of residential real estate, including $300 appraisal fee (Exh. B), $640 building inspection fee (Exh. F), $375 septic inspection fee (Exh. H), water testing fee (Exh. F) and $937 closing attorneys and title search fees for a total of $2,252. The evidence is indisputable that the defendants in their own words, "got cold feet," becoming concerned that their inability to sell their Bethel home would force them into severe debt. Unable to close, they faced the consequence of forfeiting the $14,400 deposit. Had the agreement to purchase been conditioned upon the buyers first selling their home, they may have been able to cancel without losing their deposit. However, this was not the case. The defendants thus accepted forfeiture of their deposit in order to avoid the financial consequences of carrying four mortgages on two properties for an indefinite period of time until they sold their Bethel property. Nowhere is it suggested that there was any other reason for defendants to back out of the purchase of plaintiff's property other than the realization, albeit late, that they could not financially carry two properties. They did not buy another property in lieu of plaintiffs, attempt to renegotiate the Contract terms to their benefit to pressure plaintiff to sell or do anything else which would challenge their good faith in this transaction. They simply realized that they could not afford the financial burden of purchasing plaintiff's property without first selling their own. It is undisputed that they immediately notified plaintiff of their inability to close and agreed to forfeit the deposit. The plaintiff has failed to produce any evidence of improper motive, bad faith or misrepresentation by the defendants to satisfy the burden of proof required to establish a bad faith claim. Accordingly, the court finds for the defendants on Count II.
COUNT III: INTENTIONAL MISREPRESENTATION
Count III is a claim for intentional misrepresentation. Plaintiff relies on the same factual allegations stated in Count I, his breach of contract claim, for Count III to support his claim for intentional misrepresentation. A cause of action for intentional misrepresentation is essentially a claim of fraud. See Statement Grievance Committee v. Egbarin, 61 Conn.App. 445, 454, 767 A.2d 732, cert. denied, 255 Conn. 949, 769 A.2d 64 (2001). It is well established that common-law fraud must be proven by a higher standard than a fair preponderance of the evidence. This middle tier standard has been described as "clear and satisfactory evidence" and as "clear, precise and unequivocal evidence." "A fraudulent representation . . . is one that is knowingly untrue, or made without belief in its truth, or recklessly made and for the purpose of inducing action upon it." (Citation omitted.) Clark v. Haggard, 141 Conn. 668, 673, 109 A.2d 358 (1954).
"Fraud consists [of] deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed . . . The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment . . . Additionally, [t]he party asserting such a cause of action must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which higher standard we have described as clear and satisfactory or clear, precise and unequivocal . . . The determination of what acts constitute fraud is a question of fact . . ." (Citation omitted; internal quotation marks omitted.) Miller v. Guimaraes, 78 Conn.App. 760, 780-81, 829 A.2d 422 (2003).
The facts established at trial as stated above which describe in detail the defendants' efforts to be able to close, support the findings that they did not breach their duty of good faith and fair dealing, and that they did not intentionally or otherwise misrepresent facts to the plaintiff. As previously discussed, testimony and evidence introduced at trial established that when the Russos first submitted their offer to purchase the plaintiff's property, and again later when they signed the Contract, they intended to close without first selling their home because they were initially confident they would be able to do so within a reasonable period of time. Only when it became apparent that they would not be able to sell their Bethel home, even after substantially reducing the asking price twice, did they decide they could not purchase plaintiff's property. Plaintiff has neither alleged in his amended complaint, nor proven at trial any facts which would support findings against the defendants for either intentional or negligent misrepresentation in this transaction. Therefore, the court finds in favor of the defendants on the third count.
DEFENDANTS' COUNTERCLAIM
In their answer, special defense and counterclaim, dated November 8, 2007, defendants deny they are liable to the plaintiff for damages other than the liquidated damages of the forfeited deposit. By way of counterclaim defendants also claim that the plaintiff breached the subject agreement by refusing to accept the forfeited deposit in satisfaction of defendants' breach, instead commencing this action for alternate relief. Defendants further allege that as a result of plaintiff's breach, they have incurred legal expenses and costs in connection with the defense of this action and seek damages on their counterclaim for legal fees and costs. In fact, both sides have requested the court to award attorneys fees and have submitted bills in support of their request.
Plaintiff argues that the defendants' conduct following their breach requesting a general release constitutes an admission that liquidated damages is not his sole remedy and evidence that they come to court with unclean hands. The court's previous findings of fact and analysis of law are dispositive of the issues in this case. The parties agreed in paragraph 14 that the seller's remedy upon the buyers' breach was limited to liquidated damages as provided. The plaintiff refused to abide by the terms of the agreement and accept the deposit. Instead he chose to bring this action against the defendants seeking relief to which he is not entitled as a matter of law, requiring defendants to incur the costs of defense.
In this aspect of the legal relationship between the parties, they are also bound by the terms of their agreement. According to the provisions of paragraph 14 of the Agreement, "In the event that either party hereunder brings an action against the other party for breach of this Agreement and prevails in such action, the losing party shall pay the prevailing party's costs and reasonable attorneys fees, in addition to such other remedies as may be determined by a court of competent jurisdiction."
Exceptions to the general rule that a prevailing party may not recover attorneys fees are based on statutory or contractual provisions authorizing recovery of attorneys fees by a prevailing litigant. O'Leary v. Industrial Park Corp., 211 Conn. 648, 651, 560 A.2d 968 (1989); Matyas v. Minck, 37 Conn.App. 321, 655 A.2d 1155 (1995). Where as stated above quoting paragraph 14, a contract provides for recovery of attorneys fees by a prevailing party, those fees are recoverable solely as a contract right and not as damages. Litton Industries Credit Corp. v. Catanuto, 175 Conn. 69, 76, 394 A.2d 191 (1978). The right of the prevailing party in this case to recover reasonable attorneys fees derives from paragraph 14 of the Contract. Thus, a prevailing party may recover contractually provided attorneys fees. "A contract clause providing for reimbursement of `incurred' fees permits recovery [of such fees] upon the presentation of an attorney's bill, so long as that bill is not unreasonable upon its face and has not been shown to be unreasonable by countervailing evidence or by exercise of the trier's own expert judgment." (Internal quotation marks omitted.) Vespoli v. Pagliarulo, 212 Conn. 1, 5-6, 560 A.2d 980 (1989). When the defendants notified the plaintiff that they were not willing to close as scheduled on July 3, 2007, they breached the Agreement. Their actions entitled the plaintiff to deem the Contract to be ended and to retain the $14,400 as liquidated damages. The court also finds that by his response through counsel prior to initiating this action, the plaintiff deemed the Contract to be at an end. As a result, the terms of paragraph 14 of the Contract limited plaintiff's damages in the event of buyers' breach to retain the amount stipulated as liquidated damages. The plaintiff chose to disregard the clear language of the default clause in the Agreement and served the subject complaint on the defendants August 8, 2007, one week after receiving notice of the breach.
One of the purposes of providing for liquidated damages is to avoid the delay and expense of litigation. To compensate a party who has pursued a lawsuit where the parties have previously agreed to liquidated damages would undermine the validity of the agreement and defeat the very purpose of stipulating to liquidated damages.
By ignoring this clear contractual provision of paragraph 14 and pursuing the claim against the defendants, the plaintiff has caused them to incur attorneys fees and costs of defense which they would not otherwise have incurred. Defendants' Exhibit S is a statement by defendants' trial counsel in the amount of $11,205, for services rendered in defense of this action. Defendants also incurred deposition transcript and witness subpoena fees totaling $363.98 (Exhs. T, U.) To protect their rights, defendants were required to file pleadings including an answer, special defense and counterclaim to oppose plaintiff's motion for summary judgment, to prepare for and attend depositions of the parties and defendants' expert Attorney Deakin and the trial to the court. The services listed on Exhibit S and expenses reflected in Exhibits T and U are reasonably related to defense of this action. But for the plaintiff's refusal to honor the terms of paragraph 14 of the Contract, defendants would not have incurred the expenses of this litigation. Under the subject contract, therefore, the court finds Defendants are entitled to recover attorneys fees stated in Defendants' Exhibit S in the amount of $11,205.00 and $363.98 for deposition transcript fees and witness subpoena fees incurred in connection with this case.
ORDER
It is hereby ordered:
Judgment shall enter for the plaintiff on Count I in the amount of $14,400.
Judgment shall enter for the defendants on Counts II and III.
Judgment shall enter for the defendants on the counterclaim in the amount of $11,568.98.